Crnogorski Telekom

2015 Annual Report

Crnogorski Telekom - 2015 Annual ReportContents:To Our ShareholdersAbout Crnogorski TelekomSelected Financial and Operational Data of Crnogorski Telekom for 2015Letter to Our Shareholders

Management reportManagement Report for the Financial Year 2015Crnogorski Telekom’s Management

Board of Directors Executive Management Board

Vision and StrategyRegulatory EnvironmentPromotions and Offers

Human Resources

Corporate Responsibility

Financial StatementsIndependent Auditor’s ReportStatement of Financial PositionStatement of Comprehensive IncomeStatement of Cash FlowsStatements of Changes in EquityNotes to the Financial Statements

Further Information

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Crnogorski Telekom - 2015 Annual Report

To Our ShareholdersAbout Crnogorski TelekomCrnogorski Telekom (CT) is the largest telecommunications company in Montenegro. It provides a full range of fixed and mobile telecommunication services (voice, messaging, internet, TV, leased-line circuits, data networks and ICT solutions).

Crnogorski Telekom fully digitalised the fixed-line network in 2007 and brought ADSL coverage of PSTN customers close to a 100% base by the end of 2012. In December 2007, Crnogorski Telekom started an IPTV service. At the end of 2011 CT started offering ICT solutions, promoted under the name “Integris”.

CT was the second entrant into the mobile market in Montenegro. From its founding in 2000, it has always offered innovative and advanced services to the Montenegrin market and has been experiencing dynamic growth. Telekom uses mobile technologies such as UMTS, HSDPA, GPRS and EDGE. A 3G network was launched in the summer of 2007, while 4G service was launched in 2012.

In 2006, the T-Com and T-Mobile brands were launched.

In May 2009, Crnogorski Telekom a.d., T-Mobile Crna Gora d.o.o and Internet Crna Gora d.o.o were merged into one legal entity, Crnogorski Telekom a.d.

In 2012, the T-Com and T-Mobile brands were replaced by the Telekom brand, under which all products are now marketed.

On 1 April 2005, Magyar Telekom obtained a 76.53% interest in Crnogorski Telekom. Deutsche Telekom AG holds 59.21% of the Magyar Telekom shares. Deutsche Telekom and Magyar

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Crnogorski Telekom - 2015 Annual ReportTelekom have a number of subsidiaries worldwide, with which Crnogorski Telekom has regular transactions. Details of related party transactions are given in the company’s Financial Statements, Note 28.

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Crnogorski Telekom - 2015 Annual Report

Selected Financial and Operational data of Crnogorski Telekom

Main financial KPIs (m€) 2014 2015 Δ Δ%Revenues 104,6 98,6 -6,0 -6EBITDA w/o SI 41,1 36,8 -4,3 -10EBITDA w/o SI margin (%) 39,3 37,3 -2,0EBITDA 41,0 34,4 -6,7 -16EBITDA margin (%) 39,2 34,8 -4,4Operating profit 23,0 16,7 -6,4 -28Net profit 21,6 15,9 -5,7 -26Total Assets 186,9 190,6 3,7 2CAPEX 16,2 17,0 0,7 4Number of employees 698 588 -110 -16

Fixed line operations KPIs (in thousands)

Dec 31,

2014

Dec 31,

2015Δ Δ%

Fixed-voice connections, Total 162,0 148,6 -13,5 -8Fixed voice Market share (%) 98,4 95,7 -2,6

Fix broadband connections, Total 77,8 76,4 -1,4 -1,8BB Internet Market share (%) 81,7 77,5 -4,2

IPTV connections, Total 64,3 62,9 -1,4 -2,1Pay TV Market share (%) 41,8 37,4 -4,4

Mobile line operations KPIs (in thousands)

Dec 31,

2014

Dec 31,

2015Δ Δ%

Number of customers, Total 346 330 -16 -5Prepaid 197 175 -23 -11Postpaid, Total 149 155 7 4Mobile customers market share (%) 34,1 32,7 -1,4Mobile internet customer number 114 119 5 5Mobile Internet customers market share (%) 38,3 36,7 -1,6

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Crnogorski Telekom - 2015 Annual ReportMobile penetration (%) 163 163 -1

Dear Shareholders,

Time flies when you're working a lot on new challenges and innovations! It seems like it was yesterday when I shared with you my impressions on 2014 and now it’s again that time of year: time to inform you about Crnogorski Telekom’s most significant moments in 2015 when it comes to business developments, plans for the coming year and our related strategic directions. This is the time to share with you some of our concerns about the tough times coming, but also to assure you that, regardless of the tests to which the market have put us over the last year, we still have enough creative energy and strength to deal with all the challenges ahead of us. But first let me provide you with an overview of the most significant points of our activities in the previous year. In 2015 we went through many developments, in sometimes less than favourable circumstances, with many complex and challenging projects (All–IP, Managed Services, One Billing & CRM, etc.) being implemented in parallel. But we’ve also achieved a lot. Once again it was confirmed that a team, if really committed, can achieve its best results during the toughest times.

Speaking of our financial achievements let me inform you that our revenues, amounting to EUR 98.6 million, were in line with expectations. We experienced a YoY decrease of EUR 6.0m or -6%, driven by lower Service revenues, which was partly compensated by higher ICT and Equipment revenues. Furthermore, EBITDA before Special Influences was in line with expectations and EUR 4.3m or 10% lower YoY, while the operating Cash Flow was 17% lower YoY, but still exceeded expectations. As the overall telecommunication market is shrinking every year, I am proud that we have been achieving our targets.

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Crnogorski Telekom - 2015 Annual ReportThe 2015 business year was successful, with results justifying the efforts and resources that we have invested, in spite of all the challenges embodied in the continuously increasing regulatory requirements, more aggressive competition and customers who are always looking for more benefits at lower costs.

Speaking of our 2015 achievements in more details, our primary focus was intensive fiber network rollout, expanding ICT business, further network modernisation, completion of our Hybrid Access project, minimising the negative effects of the extensive regulatory changes and completion of the Managed Service and One Billing & CRM project.

Regarding the fiber network rollout, I am glad to inform you that we ended the year with 11,600 customers and coverage of more than 42,000 households. This means that every sixth home in Montenegro is now capable of connecting to our high-quality fiber network.Recognising the importance of this service, in 2016 we will make the biggest step since the beginning of the project. We plan to cover 11,000 households and increase the number of customers by almost 3,000. Furthermore, besides the existing 10 cities, fiber will come to three new cities: Pljevlja, Rožaje and Ulcinj. This speed-up of our fiber rollout is part of our strategic initiative to cover all households in urban areas by 2018. In parallel with coverage, we are also planning to increase utilisation of the fiber network from the current 27% to 29% by the end of 2018.

Let us continue this series of success stories with the results from comparative testing of all three mobile networks done by independent P3 Communications Company. According to the results, Crnogorski Telekom was certified as the operator with the best results in 2015! Such remarkable results were achieved thanks to the efforts and investments in the expansion of our 3G and 4G networks in 2015. We were primarily focused on keeping our leadership position in 4G and

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Crnogorski Telekom - 2015 Annual Reportexpanding coverage in densely populated areas. We also have deployed new 3G sites to support growing traffic demand. We have also developed ambitious plans for 2016. Namely, we will continue with 4G coverage expansion, aimed at providing better service quality in large cities. We also plan capacity expansion in the 3G network in order to be able to fulfil customers’ demands in the best possible way.

Speaking of our ICT business, I am happy to inform you that we maintained the successful pace in 2015. Four years after entering this field, we keep on growing, with revenues of more than EUR 5 million generated in 2015. It is not only that we earned a lot, we have also positioned ourselves as a reliable ICT partner for important investment projects in Montenegro, such as Porto Montenegro and the Hilton Hotel, as a result of which I can proudly inform you that we successfully completed implementation of the biggest ICT contract, for Porto Montenegro, worth EUR 2.5 million.

After comprehensive testing throughout the year, in November we commercially launched Hybrid Access. Being the first operator in DT Europe to achieve this, we are blowing a strong wind into others’ backs, making Hybrid Access a success story. By the end of 2015 there were 205 Hybrid customers, while in 2016 we expect that more than 2,000 customers will enjoy the benefits of this new technology.

One of our most recent successes was completion of the PSTN transformation project, after which Montenegro became the third All-IP country in the DT group. The process was very complex, but we still managed to completely retire our PSTN technology in November. Many benefits have been provided through implementation of this project, with special emphasis on convergent solutions for fixed and mobile networks, readiness for new or optimised products and services such as BB internet, faster service activation, etc.

Now, looking forward to the future, I have to underline that, regardless of the fact that the current circumstances are quite

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Crnogorski Telekom - 2015 Annual Reportchallenging, we must not lose sight of our priority: to be a strong and financially sustainable company, putting our customers at the heart of everything we do, showing them how we can assist them in their communication and their overall lifestyle by providing support when needed, flexibility where possible and a range of attractive and simple products. Such an example in 2015 was the launch of Pickbox, which represents the new way of watching TV and which has already obtained a reputation as a service offering excellent content and absolute freedom to watch anything, anywhere and at any time. We must spoil our customers with the best service and most comprehensive solutions in the market, keep on being innovative and exploring new revenue streams and ways to maximise the benefits obtained from the existing ones.

Unfortunately, as we announced last year, our watchword in the previous period had to be ‘cost control’. That is why we were forced to implement the Managed Services project and outsource a part of our activities. However, I can assure you that the management did everything as promised to preserve the interests of all our colleagues transferred to Ericsson, with whom we signed a seven-year contract in the area of network and service maintenance. This is for sure one of the Company’s biggest projects, enabling us now to additionally focus on new products and services on our strategic road of preserving our leadership position in the field of technology and creating a superior customer experience.

Apart from the Managed Services, there was another crucial project we were predominantly occupied with in 2015: the One Billing & CRM project. The project was successfully concluded with the "go-live" on 5 October, after 2 years and 3 months of extensive work. This included the full migration of all existing customer segments (consumer, business) for all lines of business: postpaid/prepaid mobile, fixed voice, internet and IPTV. The One Billing & CRM project was the first project in the Deutsche Telekom Group (and beyond) to succeed in the implementation of a fully convergent system.

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Crnogorski Telekom - 2015 Annual ReportThe system provides unmatched capabilities to support strategic initiatives like FMC products, best customer experience, the PAN-European network and e-Company.

Also, in 2016 the management intends to propose to the General Assembly to pay dividends. This is the best way to show to our shareholders that we care about their interests and it is the best basis to motivate our shareholders for further investments into the infrastructure of the country.

Finally, I would like to take the opportunity to thank all of our employees for a job well done in 2015. I’m really proud of the results of our joint work efforts, making me calm and confident that we have a strong foundation to build on in the coming years, which will for sure impose on us new tests of our capacity. I guess it would be enough to mention the upcoming auction for new spectrum bands – 800 MHz and 2600 MHz – as a regulatory challenge imposing a very complex type of auction requiring hard work and extensive knowledge and expertise.

Dear shareholders, let me now also thank you, for the fifth time, for your contribution to the success of our Company. We would never be this successful without your trust and confidence, and this is why we will keep on counting on your support in our efforts to maintain and improve our position in the market and in our customers’ lives.

Rüdiger J. SchulzChief Executive Director

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Crnogorski Telekom - 2015 Annual Report

Management reportManagement Report for the Financial Year 2015Highlights

In 2015, revenue performance was in line with expectations. Total revenues decreased YoY by EUR 6.0 million or 6%, to a level of EUR 98.6 million. This amount includes EUR 0.9 million of Other operating income, mainly related to Dark fiber long term lease. Revenue decrease was driven by lower service retail and wholesale revenues, which was partly compensated by the increase in ICT and equipment revenues.

EBITDA before special influences was also developing according to expectations. It decreased by 10% YoY to EUR 36.8 million, with a margin of 37.3% (39.3% in 2014).

Net profit decreased YoY by EUR 5.7 million or 26%, to EUR 15.9 million. Besides a decrease in operating profitability, CT had significant restructuring costs in 2015, mainly related to severance payments of EUR 2.5 million (as opposed to EUR 0.1m in 2014).

Capital expenditure was EUR 17.0 million. In 2015 CT completed implementation of One Billing & CRM and migration to IMS.

A dividend of EUR 21.5 million was paid out.

Revenues and Profitability

In 2015, Crnogorski Telekom focused on further extending its 4G mobile network, on fibre network rollout, on expansion of the ICT service, on the sale of equipment and on the improvement of voice services. CT retained a stable fixed broadband and TV customer base. In the mobile segment CT

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Crnogorski Telekom - 2015 Annual Reportwas able to retain leadership positions in overall postpaid and in business-segment postpaid. Revenues and profitability were negatively impacted by regulation of fixed voice and fixed broadband retail prices.

Despite stable development of the number of customers, CT’s revenues decreased YoY by 6% and reached EUR 98.6 million. Retail revenues were down 5%, while wholesale revenues decreased by 11%. The major revenue downsides compared to 2014, related to:

- Interconnection revenues (-16%), driven by decreased mobile termination rate and lower incoming traffic, as well as by lower revenue from visitors;

- Fixed-line voice retail revenues (-13%), influenced by retail price regulation and decreasing usage;

- Fixed broadband revenues (-6%), also impacted by retail price regulation;

- Mobile prepaid revenues (-17%).The main positive revenue developments were related to:

- IPTV revenues (+3%);- Data service revenues (+15%), driven by the growth

of ICT services;- Equipment revenues (+10%), mainly driven by

handset sales.

Continuous efforts to increase efficiency and improve the cost base resulted in a YoY decrease in operating expenses before special influences of EUR 1.6 million or -3%, to a level of EUR 62.1 million.

YoY revenue decrease and cost efficiency resulted in a 10% YoY decrease of EBITDA before special influences, to the amount of EUR 36.8 million.

Operating profit (EBIT) decreased YoY by EUR 6.4 million to EUR 16.7 million, due to lower EBITDA and due to higher severance payments in 2015. Net profit decreased by EUR 5.7 million to EUR 15.9 million.

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Crnogorski Telekom - 2015 Annual ReportMain Non-Financial KPIs

In 2015, the number of fixed-line connections decreased by 8%, mainly due to purging of the inactive customer base through migration to IMS. The number of fixed broadband connections and of IPTV connections was stable.

Fixed-line operations KPIs (in thousands)

31 Dec 2014

31 Dec 2015

Δ Δ%

Fixed-voice connections, Total 162.0 148.6 −13.5 −8

Residential 141.0 129.7 −11.4 −8Business 21.0 18.9 −2.1 −10

Fixed voice Market share (%) 98.4 95.7 −2.6

Fix broadband connections, Total 77.8 76.4 −1.4 −2Residential 69.5 68.1 −1.4 −2Business 8.2 8.2 0.0 0

BB Internet Market share (%) 81.7 77.5 -4.2

IPTV connections, Total 64.3 62.9 −1.4 −2Residential 62.1 60.7 −1.4 −2Business 2.2 2.2 0.0 1

Pay-TV Market share (%) 41.8 37.4 −4.4

At the end of 2015 Crnogorski Telekom customers were using 330,000 SIM cards, which is a drop of 16,000 or 5% compared to the previous year. The total SIM market share decreased by 1.4pp and amounted to 32.7%. The prepaid SIM base decreased by 23,000 or 11%. The postpaid SIM base increased YoY by 7,000 or 4%. Crnogorski Telekom remained the market leader in the postpaid segment.

Mobile line operations KPIs (in thousands)

31 Dec 2014

31 Dec 2015

Δ Δ%

Number of customers, Total 346 330 -16 −5Prepaid 197 175 -23 −11Postpaid, Total 149 155 7 4

Postpaid Residential 42 43 1 4Postpaid Business 107 112 5 5

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Crnogorski Telekom - 2015 Annual ReportMobile customers market share (%) 34.1 32.7 −1.4Mobile internet customer number 114 119 5 5Mobile Internet customers market share (%) 38.3 36.7 −1.6Mobile penetration (%) 163 163 −1

Main Investments

In October 2015, after 27 months of implementation, CT launched the first Converged Billing/CRM (Customer Relations Management) Platform in the DT Group. The new system, with real-time charging, will support all services (Postpaid/Prepaid, Fixed, Voice, Internet and IPTV) and all customer segments (consumer, SMB, business and communities). The new system enables a fully convergent business model and supports the best customer experience.

In 2015, Montenegro has become the third market in the DT footprint to have an All-IP network. CT started the transformation in 2011, when the IMS platform was implemented. Customer migration began in 2012 and in November 2015 the PSTN technology was completely retired. Numerous benefits have been achieved, such as: a convergent solution for fixed and mobile networks, readiness for new or optimised products/services, like Broadband on Demand (Internet on Click) that had already had great commercial success.

In line with the Mobile Access Strategy, the major focus was on Mobile Broadband coverage and capacity extension. 4G and 3G rollout for 2015 was successfully finished, resulting in a 4G population coverage of 65% and 94% for 3G. CT is the market leader in 4G. CT was given a prestigious award by the independent P3 Communication Company – as the Best in the Test for 2015 in the Montenegrin market.

In accordance with the Integrated Network Strategy, CT continued the development of its FTTH network, resulting in a

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Crnogorski Telekom - 2015 Annual Report17% coverage of flats at the national level, out of which 26% of customers were enjoying the services of this supreme technology.

CT commercially launched Hybrid access in November 2015, after impressive pilot results showing that 84% of customers would recommend the product and 87% reported improvements in speed. This innovative access technology is merging fixed and mobile access for simultaneous use of both technologies, boosting access bandwidth. At the end of 2015, there were 205 commercial customers.

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Crnogorski Telekom - 2015 Annual Report

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Crnogorski Telekom - 2015 Annual ReportCrnogorski Telekom's Board of Directors

- János Szabo, Chairman- Susanne Krogmann- Michael Frank- Jovica Gjorgjeski- Tripko Krgović

János Szabó

János Szabó was born in Hódmezovásárhely (Hungary) in 1961. He graduated at the Budapest University of Economics in 1986, majoring in international relations.After working in foreign affairs for three years, he continued in various finance and consultant positions in the private business sector. He became Director of Finance at Delco Remy Hungary (a subsidiary of the US-based automotive supplier) in 1995. Later he became Deputy General Manager of the operation, responsible for sales, purchasing and operations. In 1998 he moved to the position of Director of Finance for Europe, in charge of the finance activities and acquisitions of European operations. Later he became CFO and Managing Director of a joint venture between Delco Remy and Hitachi. From 2003 he was the Finance Director of the Wireline Services LOB of Magyar Telekom (later T-Com). The role was extended to the fixed-line network and IT operations in 2006. Since 2008, he has been the Director of Group Planning & Controlling of the Magyar Telekom Group. From April 2013, he holds the position of the CFO of Magyar Telekom. For the past few years he was elected member of the Board of Directors of Crnogorski Telekom, which he’s chairing since May 2013.

Susanne Krogmann

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Crnogorski Telekom - 2015 Annual ReportSusanne Krogmann, born 1964, holds a diploma in Economics from Georg-August-University Göttingen, Germany and studied European Integration at the College of Europe, Bruges, Belgium. Susanne Krogmann started her career at Treuhandanstalt, the state-owned agency responsible for the privatization of the enterprises and assets of the former Democratic Republic of Germany. During her five years at Treuhandanstalt she worked in the controlling department and in the contract management department. For the last 2 years at Treuhandanstalt she held the position of key account manager for several companies in the chemical industry. Susanne Krogmann joined Deutsche Telekom in 1999. For more than 8 years she worked in different positions in the Regulatory and Public Affairs division, especially in the field of regulatory economics and regulatory strategy. She then took over the position of Head of the group “Corporate Responsibility Strategy and Controlling” where she developed a new Corporate Responsibility strategy for DT group. Following the increasing awareness of data security and data protection at Deutsche Telekom she later worked in a data security project with her personal focus on customer data security. Since the end of 2009 she holds the position of Vice President Corporate Governance Europe within Board Area Europe at Deutsche Telekom. She has become member of the Board of Directors of Crnogorski Telekom in 2011. Since 2012 she is also member of the Board of Directors of Makedonski Telekom and the Board of Directors of T-Mobile Macedonia (in T-Mobile Macedonia until legal merger in 2015). In 2013 Susanne Krogmann also became a member of the Supervisory Board of T-Mobile Czech Republic.

Michael Frank

Michael Frank was born in 1977. He graduated as an Industrial Engineering with Business Studies from the Technical University of Karlsruhe in 2003 before gaining an additional Master degree in International Relations from the Andrássy

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Crnogorski Telekom - 2015 Annual ReportUniversity Budapest in 2006. He started his career in 2004 with T-Mobile Hungary as a Regulatory Manager, then joining Detecon in 2007 as a Strategy Management Consultant with global project assignments. From 2010, he worked at Deutsche Telekom’s Headquarter as a Senior Manager, first in International Public & Regulatory Affairs and later in the International Business Unit. In 2013, Mr. Frank joined Magyar Telekom as Head of Portfolio Management. Since January 1, 2014, he was heading Magyar Telekom’s Corporate Strategy and Portfolio Management Department and is currently an advisor to the CEO of Magyar Telekom. Besides membership in Crnogorski Telekom’s Board of Directors, he is a member of the Board of Directors of Makedonski Telekom as well.

Jovica Gjorgjeski

Jovica Gjorgjeski was born in Skopje, Republic of Macedonia. He studied Management at the Faculty of Economics on the University of Ss. Cyril and Methodius in Skopje. He started his career in 2004 at Makedonski Telekom where until 2007 he held several positions within the finance area. Between 2007 and 2010 he held the position of General Coordinator in the Cabinet of the Chief Executive Officer of Makedonski Telekom. In 2010, Mr. Gjorgjeski joined Magyar Telekom as Country Manager for the Macedonian operations (Makedonski Telekom, T-Mobile Macedonia, Stonebridge Communications and Telemacedonia) being responsible for the business and corporate governance issues. Since 2011, he is a permanent invitee to the Board of Directors and the Audit Committee of Makedonski Telekom and the Board of Directors of T-Mobile Macedonia. During 2014, he was representing Magyar Telekom at the Shareholders' Assembly of Crnogorski Telekom, exercising all voting rights on its behalf. Since January 2015 he is member of the Board of Directors of Crnogorski Telekom.

Tripko Krgović

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Crnogorski Telekom - 2015 Annual ReportTripko Krgović was born in 1977 in Belgrade. He finished his undergraduate and Master’s studies at the Faculty of Economics in Podgorica. His professional career began in 1996 at his family business. From 2004 he worked in the Securities Commission, in the Market Supervision Department. In 2005, he held the position of Investment Manager in Moneta Investment Fund. From 2006 to 2008, he was the Chief Executive Officer of Moneta Broker–Diler AD, Podgorica. From 2008 to 2011, he was a member of the Board of Directors of the Moneta privatisation fund and of Otrantkomerc AD, Ulcinj. From 2013 to 2014 he was a member of the Board of Directors of Central Depository Agency, while during the 2014 he was a member of the Board of Directors of Budvanska Rivijera AD Budva as well. He was elected a member of Crnogorski Telekom’s Board of Directors, Audit Committee and Compensation Committee in 2008.

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Crnogorski Telekom - 2015 Annual ReportThe Executive Management Board of Crnogorski Telekom

- Rüdiger Schulz, Chief Executive Officer and Chairman of the Executive Management Board

- Vladan Peković, Chief Technology and Information Officer - Manfred Knapp, Chief Financial Officer - Vladimir Beratović, Chief Corporate Affairs Officer - Milija Zeković, Chief Commercial Officer

Rüdiger Schulz, Chief Executive Officer and Chairman of the Executive Management Board

Rüdiger Schulz, who is an internationally experienced business leader, completed his studies in electrical engineering at the University of Hamburg and business management studies at the University of Koblenz. His professional career began with service in the German Navy as Chief Engineer on Vessels, after which he joined Deutsche Telekom Group in 1991. To begin with, he was responsible for technology platforms, and later became responsible for marketing and sales in the residential and corporate segment.In 2005, he began working for T-Systems as Senior Executive Vice President of Business Customers and Large Enterprises in the north-eastern region of Germany, one of six in the country and developed his experience in the area of IT. He joined Slovak Telekom in November 2006, taking over the position of Senior Executive Vice President for Marketing, Sales and Technology/COO and was a member of the Executive Management Board being responsible for T-Com's product and service portfolio in the business, residential and wholesale segment. In 2010 he was appointed Chief Operating Officer for Networks and IT of Slovak Telekom. In 2011 he joined Crnogorski Telekom in his current position.

Vladan Peković, Chief Technology and Information Officer

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Crnogorski Telekom - 2015 Annual ReportVladan Peković took over the position of Chief Technology and Information Officer in January 2014. He came from T-Mobile Poland, where he was Technology and Platforms Director and Chairman of the Supervisory Board of Networks.Before joining DT group in 2009, he gained vast experience during long-lasting international carrier working for major telco companies on projects of development, implementation and management of telecommunications networks in the Czech Republic, Mexico and the USA.

Manfred Knapp, Chief Financial Officer

Born in 1955 in Frankfurt am Main, Germany. He holds a degree in Business Administration and Management. Before joining Deutsche Telekom Group in 1997, Manfred Knapp covered several senior controlling and finance management positions in different industries where he gained broad experience in all areas of finance management, mergers and acquisitions and turnaround management. In 1998, Manfred Knapp was assigned to the mobile operator Wind, in Italy, as Controlling Director. From 1999, he managed the controlling department of the Deutsche Telekom Carrier Services Business. In 2001, he joined Slovak Telekom as Controlling Director and Deputy CFO. Since 2009, he has been responsible for the Finance Department of Crnogorski Telekom as CFO.

Vladimir Beratović, Chief Corporate Affairs Officer

Born in 1970 in Podgorica, he graduated in international management, and is currently undertaking postgraduate studies. His 17-year-long career in telecommunications started in the Montenegrin mobile operator Promonte (today’s Telenor). During his last 10 years at Telenor, he held various directorial positions and was a member of the top-level management. He left Telenor as Chief Corporate Affairs Officer, in charge of government relations, legal, regulatory, interconnection and wholesale and corporate communication departments. His career at Crnogorski Telekom started in

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Crnogorski Telekom - 2015 Annual ReportSeptember 2010 as advisor to the Chairman of the Board. He was appointed Corporate Affairs Officer in November 2010. He currently holds the position of Chief Corporate Affairs Officer, which includes the wholesale area.

Milija Zeković, Chief Commercial Officer

Born in 1971, he holds a degree in economics from the University of Montenegro. After completing his studies in 1995, he started his career at “Kartonka”, Podgorica as Production and Sales Manager. He started working as Sales Manager in T-Mobile (formerly Monet) in 2000. In 2006, he became the Director of Sales for residential customers and small and medium enterprises. In 2008 he was appointed as the Chief Sales Officer of Crnogorski Telekom. From 2013 he held the position of Chief Commercial Officer for Business segment, until 2015, when he took the position of Chief Commercial Officer.

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Crnogorski Telekom - 2015 Annual Report

Our VisionIn a fast changing world,we are your first choice to live in a fully digital lifestyle wherever you are, whatever you do; by aspiring to be the best in class.

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Crnogorski Telekom - 2015 Annual ReportOur StrategyCrnogorski Telekom, as the largest telecommunications company in Montenegro, aims to maintain its leading position and to continue to be one of the most successful companies in the country. Building on the previous framework, we defined a new Corporate Strategy for 2015 and beyond.This strategy is based on our modern, state-of-the-art network infrastructure that will offer the best customer experience. At the same time we are proactively committing ourselves to new growth opportunities for the company. The new strategy is based on the following pillars:

Technology leadership Best customer experience New businesses

Technology leadership

Being a technology leader in this period of rapid change in the telecommunications industry implies constant technological improvement and orientation towards future trends. With our new program of Strategy Implementation we want to strengthen our technological leadership by focusing on FTTH, 4G, Hybrid Access, All-IP and the best IT systems. First of all, we focused on further FTTH and mobile network rollout. We finished 2015 with more than 11,600 fiber customers and covered more than 42,000 households. This means that every sixth home in Montenegro is now capable of connecting to a super-fast fiber network. In mobile, we were primarily focused on maintaining our leadership position in 4G and expanding 3G and 4G coverage to support growing traffic demand. Comparative testing of all three mobile operators’ networks carried out by the international company P3 Communications certified CT as the operator with the best results in 2015. And on top of that, we launched Hybrid Access, which combines fixed and mobile access technology into one, especially suited for suburban areas of Montenegro.Secondly, we partnered with Ericsson and implemented the Managed Services project, in which Ericsson took over part of

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Crnogorski Telekom - 2015 Annual Reportour activities in the area of network operations. This will allow us to additionally focus on new products and services. Thirdly, we successfully concluded implementation of the new Billing and CRM system. It covers all lines of business (fixed/mobile, postpaid/prepaid, business/residential) and it will allow for better customer service and introduction of many new innovative products and offerings. Finally, we completed our PSTN transformation project, after which Montenegro became the third All-IP country in the DT group. To do that, we migrated our entire customer base, more than 147,000 customers, to new IP-based technology.

It was a very intensive year for us, since we were running these important investment projects in parallel, but we managed to successfully implement all of them. This will further strengthen our position as technology leader, which is the basis for the best customer experience.

Best Customer Experience

The best and the most stable network gives us an opportunity to create a superior experience for our customers. We are operating in an industry in which the situation and circumstances are changing very fast. Our competition is changing, as well as customers’ expectations. Meeting customers’ expectations and increasing customer satisfaction strongly influences the success of the company and through our Strategy Implementation program a set of initiatives is defined so that we can provide simple, innovative and personalised offers. Telekom, as an integrated operator, has started offering products that combine fixed and mobile services, providing additional benefits to our customers. Also, we are continuously working on new sales channels, promoting e-Sales, improving the Webshop experience of our customers, but also working on new ways of communication through social networks, online chats, etc. This is how we are differentiating ourselves from the competition and this is how

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Crnogorski Telekom - 2015 Annual Reportwe are improving the customer experience and providing added value for our customers. New Businesses

Being at the forefront of technology, it is natural for CT to partner with successful companies from other industries such as banking, the hotel industry, entertainment and many more. ICT services and hardware sales continue to be an important part of our revenues. We are the preferred choice in the ICT market, with an expanding network of valued enterprise customers that are top brands in their respective fields. Beside participation in the most important investment projects in the country, we are present in the software and application market too. In 2015 we refreshed and rebranded our Premium program that is being realised in cooperation with Hipotekarna banka and launched a mobile banking application – mPremium. Also, partnerships with Airbnb and Pickbox have enhanced our portfolio, providing for our customers the possibility of using some worldwide-famous services. Through all these partnerships we are leveraging on the opportunities of the digital era, which together with superior technology and the best customer experience will enable us to keep and strengthen our leading position in the Montenegrin telecommunications market.

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Crnogorski Telekom - 2015 Annual Report

Regulatory EnvironmentThe regulatory environment is characterised by implementation of the Law on Electronic Communications that is based on the EU regulatory 2009 framework, as well as number of bylaws adopted in accordance with the Law. The new regulatory framework is dedicated to ensure competitiveness in the market as well as obtaining a higher level of protection of consumer rights.

Out of all products offered to the market, based on the resolutions on SMP operators from 2010, 2013 and 2015, interest was shown only for duct rental.

The Cost Accounting and Accounting Separation obligations were implemented for both fixed and mobile services. Revised reports for 2014 based on LRIC model were approved by the National Regulatory Authority (NRA) in October 2015.

In 2013, the NRA completed second round of market analysis of seven relevant markets already analysed in 2010. Crnogorski Telekom was identified as an Significant market player (SMP) in all seven markets again. Additionally in 2012 the NRA applied a three-criteria test on two retail markets: broadband and mobile services, to find out if those markets are susceptible to ex-ante regulation. The retail market of mobile services was found sufficiently competitive, while Crnogorski Telekom was designated as an SMP in the fixed broadband market. Upon approval of the 2013 and 2014 Regulatory reports for the fixed network, the NRA performed retail price regulation of the following services provided at fixed locations: access to the network, broadband, as well as voice services (local, national and international calls) on a cost basis. Price adjustment implied a decrease based on the Crnogorski Telekom cost model.

Universal Service

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Crnogorski Telekom - 2015 Annual ReportUniversal Service (US) was commercially launched in December 2011, but without significant interest from customers for the service. However, after introducing changes to the US regulatory framework, customer interest significantly increased, especially for voice services and internet access. Interest for the US Inquiry and Directory Service was not very high. Consequently, Montenegrin operators compensated a rather significant net cost to USOs for the period 2011–2015. Following the results of the public tender for a selection of USOs for the period 2016–2021 the NRA designated Crnogorski Telekom as the USO for access to the network, voice and internet access service.

Number Portability

The Number Portability service was commercially launched in 2011. In 2015 interest in the service significantly increased compared to 2014 (44%). The majority of all ported mobile numbers have been ported into the CT network (43%). Interest in porting numbers into the fixed-line segment was not significant. The new Rulebook on Number Portability adopted in 2013 provides for fewer restrictions on the porting of numbers.

Regulatory Fees

Under the regulations currently in effect, Crnogorski Telekom pays fees for market supervision and use of radio frequencies, numerations and addresses.

Sharing of Infrastructure

The Reference Interconnection Offer (RIO) defines the terms and conditions of collocation, for the purpose of interconnection realised in Crnogorski Telekom’s premises. This includes rental of space in buildings, masts and cable ducts. The RIO conditions are valid only for operators looking for interconnection/access, while usage of infrastructure by operators for other purposes is subject to commercial

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Crnogorski Telekom - 2015 Annual Reportnegotiations. Apart from the RIO, the Reference Unbundling Offer defines the terms and conditions of collocation for the purpose of local loop unbundling, including also rental of collocation space in Crnogorski Telekom premises and ducts. Regulated prices for duct rental do not encourage investments in new duct deployment.

Termination of Calls

Based on the relevant SMP resolutions adopted by the NRA in November 2014, fixed termination rates (FTRs) were reduced from 0.93 to 0.74 cents/min (for local) and 1.07 to 0.94 cents/min (for single transit), while the mobile termination rate (MTR) for voice traffic after approving the 2014 Regulatory Reports of all three operators was reduced from 1.9 cents to 1.0118 cents/min.

Future Regulatory Developments

In the process of implementation of the 2013 Law on Electronic Communications, the Government, responsible ministries and the NRA will work on further regulatory framework developments through harmonisation of existing bylaws and adoption of new ones. In 2016 the NRA planned to perform four relevant market analyses proscribed by the EU Commission 2014 Recommendation as susceptible for ex ante regulation.

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Crnogorski Telekom - 2015 Annual Report

Promotions and OffersResidential Customers

Postpaid

The main campaigns in the postpaid segment in 2015 were variations of the included promotional content at the beginning of a new contract for both new customers and those renewing their contracts, including different amounts of free on-net minutes and texts, as well as unlimited surfing (with a certain amount of full-speed data included, followed by free reduced-speed surfing). These promotions were a good complement to the current Smart tariffs which included only all-net minutes. A more extensive offer redesign has been postponed until 2016, after the launch of the new billing system. Even with these challenges and with challenges from competition side, Crnogorski Telekom has managed to secure stability in the residential postpaid segment.

Prepaid

The year kicked off with a new prepaid campaign which included benefits in the form of 30 times as much top-up credit, valid for seven days. In April, a new prepaid package was introduced – Telekom prepaid with a campaign for new customers – two favourite numbers within any network in Montenegro, with seven days’ validity. In December, this campaign was updated adding one extra gigabyte of data to the offer. During the summer season, visitors were targeted with a special Holiday Offer.

Fixed Telephony

IMS (IP Multimedia Subsystem) migration, a key technical transformation project, was finished in 2015. The new system is based on IP protocols and will set the stage for a new

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Crnogorski Telekom - 2015 Annual Reportgeneration of fixed services, with new functionalities for customers. In December 2015, based on retail price regulation, prices for local, national and international calls were reduced.

Extra TV

The Pay-TV market in Montenegro saw consolidation through mergers and acquisitions carried out by new market entrants. New offers from CT focused on increasing the available content to its customers. CT introduced Pickbox, a regional subscription-based video-on-demand service, with new blockbuster TV shows and classic movies. CT also introduced a regional package with the most popular channels from the neighbouring countries.

At the end of 2015, there were 62,900 connections, which is a decrease of 2% compared to the previous year.

Fixed Broadband

CT introduced Extra Mix, an extension of its Extra Trio package, offering customers more TV channels for the same price, along with a prepaid number with monthly top-ups.

In December 2015, as a result of regulation, CT decreased the prices of its ADSL packages.

CT holds a 77.5% market share in the broadband internet market. At the end of the period, CT had 76,400 connections.

Fibre to the Home (FTTH) project

Crnogorski Telekom has been intensively developing its fibre infrastructure, currently with coverage of 17% of the country’s flats and a utilisation rate of 27% in covered areas. The number of FTTH customers increased over 2015 by more than 2,000, reaching 11,600 active customers at the end of the year.

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Crnogorski Telekom - 2015 Annual Report

Loyalty Program

Premium program activities in 2015 were focused on rebranding of the Premium program. The idea was to build a deeper connection between the Premium card and CT. A new Premium banking card was made in Telekom’s (magenta) colours and with T-branding. The Premium card offers up to 30% discounts in the Premium program partners’ stores. In order to support the logic as well as be in line with the rebranding of the offer, the Premium Application was updated. On top of this, new sales channels were introduced, further improving the reach of the programme (customers can apply for the Premium card in T-centres, via the website, SMS, Premium Application, etc.).

Business CustomersPostpaid

In Q1 2015 a new postpaid tariff portfolio was introduced, called “Smart Business”, in order to maintain CT’s position in this segment. During 2015, 10,000 customers migrated to the new packages.

Besides this campaign, which was supported by strong communication, throughout the year there were promotions for the SOHO segment. This customer segment was focused on in 2015 in order to increase CT’s share in this segment and to partially compensate for the decrease in revenues in the Key and Large Accounts segment.

Roaming

In order to protect customers using its services in roaming, CT continued with the promotion of internet data roaming tickets. The number of activated daily and weekly roaming tickets increased by 33% compared to 2014.

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Crnogorski Telekom - 2015 Annual Report

Fixed Broadband

Strong telesales activities during the entire year helped us to maintain a stable number of fixed broadband connections at 8,200.

Fixed Voice

In Q1 2015 flat on-net voice options (in CT fixed and mobile networks) were introduced. They represent a retention tool for fixed-voice customers and a way to make fixed-voice usage more attractive, especially for the SME and SOHO segments.

Integris (ICT)

Integris continued its success story during 2015. Great progress made in the hotel/resort segment and the area of retail helped us achieve YoY revenue growth of more than 40%. In June 2015, CT finished implementation of the largest ICT contract, for Porto Montenegro Marina’s phase II, with a value of EUR 2.5 million.

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Crnogorski Telekom - 2015 Annual ReportHuman ResourcesHR Role in Organisational Development HR activities in 2015 were focused on supporting business transformation, implementing further organisational development by uniting the Commercial Area and by bringing HR functions into the CEO Area. In addition, HR supported the implementation of the Managed Services Project and One Billing & CRM. These and other measures will result in streamlined, efficient and sustainable operations in the longer run. Future activities with the goal of further transformation will have special emphasis on company’s supporting functions.

Survey Topics and Employer Positioning

In May 2015 Crnogorski Telekom conducted an integrated Pulse Check and a bi-annual Employee Survey. Along with implementation of organisational changes, we managed to increase interest in the survey up to a high 84% response rate. Positive development was visible in most of the questions, as well as a great commitment to continuous improvement. In the second round of the Pulse Check in November 2015, CT remained above the EU average with a high response rate. Improvement activities between the two survey rounds yielded results. Therefore, we were very pleased that the understanding of changes in the Company has been significantly improved, as the outcome of extension of communication channels through different forms of meetings with employees. Additionally, the results showed an increase in satisfaction with training and development, due to tailor-made opportunities which were developed based on the new Training and Development Strategy.

We continued to have an active role in advocating HR topics through numerous business organisations in Montenegro (the Employer Federation of Montenegro, American Chamber of Commerce, Montenegrin Foreign Investor Council, etc.) thus

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Crnogorski Telekom - 2015 Annual Reportsupporting open communication, gathering HR professionals and being in a position to recognise and shape the trends in workforce management and the related legal environment in a timely manner. Additionally, Crnogorski Telekom was awarded for the project “Crnogorski Telekom in the service of sustainable development”, which confirmed our leading position in the field of corporate social responsibility. In 2015, our company also received the DEKRA Health, Safety and Environment International Certificate which confirmed that the management system in this regard is also at a high level.

Commitment to One DT Europe

CT continued to actively participate in cascading down the One DT (Europe) story, making the best use of the employee survey results. We invested significant efforts in the ongoing global One DT Transformation project, through direct and active participation in various projects, such as the HR Future Operating Model, One.HR and HR Suite implementation. The aforementioned should ensure a local contribution and footprint in the global transformation and change. At the same time, we made sure that our employees were able to understand the changes, which was confirmed by the survey results. In order to align our corporate culture with new business and strategic demands, One DT Transformation, new market conditions and new challenges, we performed preparations for research on organizational culture, to be conducted in Q1 2016. Social Dialogue and Employee Benefits

The year 2015 was perceived as a very productive one from the perspective of dialogue with trade unions at both the company and branch level, having signed the agreements in both environments.

A long negotiation process with the Trade Union at the company level was successfully finalised by reaching an agreement and closing all open key points from the Collective

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Crnogorski Telekom - 2015 Annual ReportBargaining Agreement (CBA) and signing the Annex to the CBA. The Management and the Trade Union have also agreed the rules and principles of the new housing loan allocation. As was the case in the previous years, cooperation with the Trade Union continued to be strong in providing and improving a wide range of employee benefits, ensuring that CT is perceived as one of the most attractive employers in Montenegro. Both the employer and Trade Union undertook the obligation to have a new round of structured negotiations in 2016.

Collective Bargaining Discussions for the telecommunications branch at the country level were finalised in October 2015 by signing the Collective Bargaining Agreement for the telecommunications branch. CT representatives actively participated in this social dialogue, investing their rich experience in this industry-wide initiative.

Training and Development

For the first time we developed a Training and Development Strategy, derived from HR strategy and aligned with local business needs, driven by the strategic pillars: Service Excellence, PanNet Leaders, e-Learning/e-Company, and Knowledge Sharing. As a result of successful realisation of the Training and Development Plan we can proudly report the following key elements:

Focus on business relevant skills and tailor-made offers New target groups such as: Line Management (team

leaders and supervisors), Internal Trainers, Project Managers, social media/e-business experts, CX ambassadors

Increase in digital hours, thus supporting DT’s priority in this regard

Preparation for comprehensive research on organisational culture, which will be conducted in 2016, with the aim of changing the mindset towards Customer Centricity

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Crnogorski Telekom - 2015 Annual ReportOur efforts produced tangible results in 2015:

Around 300 employees covered by training offers – more than 50% of organisation

10,069 training hours An 18:82 ratio of digital vs. F2F training hours Personal feedback (evaluation rates) at an

extraordinarily high level – Pulse Check feedback positively changed, compared to May 2015

Living Culture and Effective Communication

HR continued to take part in initiatives and actions with the aim of strengthening trust, collaboration and communication as the foundations of a targeted corporate culture.

HR monthly reports were submitted to the Executive Management Board on a regular basis with the intention of improving understanding of employee-related activities and of creating conditions for efficient and precise communication being cascaded down from the management level.

HR continued organising the so-called CEO Circle of Trust – informal meetings between the CEO and employees from non-managerial positions.

HR continued to support the communications portfolio with the Company newsletter T-NEWS to enhance trust and closer communication within the Company.

Preparations for implementation of the Cultural Survey were performed, as the first comprehensive and scientific-based research on organisational culture, with the aim of identifying the current and desired culture and our service orientation.

Regulations Review - We Make it Lean and Simple

HR finalised a review of all HR-related internal regulations to make sure they are consistent, with the aim of reducing complexity, supporting implementation of a leaner

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Crnogorski Telekom - 2015 Annual Reportorganisation and efficient business operations in accordance with the new HR organisational set-up. We performed the review of the rules on the preparation and enactment of internal regulations on a company level, ensuring solid grounds for standardisation of the company regulations and focusing on the importance of timely communication of enacted regulations.

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Crnogorski Telekom - 2015 Annual Report

Corporate ResponsibilityCorporate responsibility has been part of our corporate culture for many years. It is an integral component of all our business activities. As one of the leading companies in the country, Crnogorski Telekom aims to be involved in all areas that are important to Montenegrin society. Besides striving to offer the most advanced telecommunication services for our customers, we wish to actively contribute to the development of the community within which we do business and of which we are a part.

Crnogorski Telekom is a company that has always maintained a balance between economic, environmental and social goals, while being accountable to the community and positioning itself in a socially responsible manner. The areas on which we are focusing are: education, health and the environment, culture and community support.

“Za svako dobro”

For the second year in a row, Crnogorski Telekom organised the contest “Za svako dobro”, which supports and funds socially responsible projects of special importance for the community. The goal of the project is to support socially responsible projects that are contributing to the welfare of the community, engagement of important stakeholders and the gaining of their trust, and also an increase in transparency in the company’s social engagement. In order to ensure transparency and the selection of the best projects, beside Telekom employees, representatives from the NGO "Fund for Active Citizenship", the Montenegrin TV station “TV Vijesti” and the local UNDP office participated in the selection of the winning projects.

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Crnogorski Telekom - 2015 Annual ReportThe total amount of funding for this year’s contest was EUR 35,000, which is an increase of 67% compared to the previous year.

The contest was open to all non-governmental organisations from Montenegro that could apply their projects in the fields of education, arts and culture, environmental protection and the creation of equal opportunities for inclusion in a digital society.Out of the 50 NGOs that applied for grants, six projects were selected and awarded funds for implementation.

“Website Star” – development of a website for elderly people;

“Accessibility and Montenegro” – development of an online application which provides an overview of the accessibility of public institutions for persons with disabilities.

“We want to socialise” – a project supporting inclusion of children and young people with special needs;

“Calendar of child development” – development of an online application of a calendar of child development from birth until 15 years old;

“Robotic laboratory for talented children and youth” – creation of a laboratory where talented children and young people can practise robotics and similar technologies

“This is my responsibility too” – a project designed to increase awareness of environmental protection through the education of people and the education of transportation companies.

Development of an Information Society in Montenegro

Being the leading broadband provider in the country, Crnogorski Telekom has the responsibility of being the country's first partner on its way to becoming an information society.

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Crnogorski Telekom - 2015 Annual ReportFor the ninth year in a row, Crnogorski Telekom is enabling free internet access via ADSL to all preschool institutions, elementary and high schools in the country. During 2015, around 150 Montenegrin schools benefitted from this. The project was implemented together with the Ministry of Education and Science.

In 2015 Crnogorski Telekom was very active in promoting and fostering the Montenegrin start-up community and young entrepreneurs. Together with hub:raum, the innovation centre of the Deutsche Telekom Group, we organised two events – a Start-up Info Day and WARP, a four-day start-up acceleration programme. This was the first time that hub:raum organised WARP outside of Krakow, which is a privilege for Montenegro and Crnogorski Telekom. This program was jointly organised by hub:raum, Crnogorski Telekom and the organisation Digitalizuj.Me. We selected 10 teams, mainly from Montenegro, but also from the region, which came up with innovative ideas in the area of IT, internet and mobile technologies. During the intensive workshop, the entrepreneurial teams expanded their knowledge and gained valuable experience in every aspect important for business development, thanks to international mentors and lecturers who came to Podgorica. At the end of WARP, our jury selected the three best start-ups. These teams received USD 5,000 worth of Amazon Cloud Services, while the best one, Bee Happy, which created a solution for smart beehives using new technologies in beekeeping, got the chance to pitch its start-up to investors and mentors in Krakow in 2016.

Telekom also supported Spark.me, one of the most famous tech/business conferences in the Balkan region.

Sports, Music and Culture Move People

Our sponsoring platform focuses on sports, music and culture – which is perfect for underlining our brand promise “Life is for sharing” and providing a wide range of memorable moments to share.

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Crnogorski Telekom - 2015 Annual ReportWithin the company’s sponsorship strategy, sports have a special place, since this is an important area for developing a healthy, modern and advanced society. The company is the golden sponsor of the Montenegrin national football team and a general sponsor of the Telekom Montenegrin Football First League. Additionally, in 2015 Telekom supported and sponsored Budućnost Basketball Club.

Music is one of the main areas within our sponsorship strategy, since music is considered to be the universal language for all generations. We sponsored numerous musical events and activities in 2015. We partnered with organisations across Montenegro and supported the Southern Soul Festival in Ulcinj, Sea Dance in Budva and After Beach Parties along the Montenegrin coast. In September 2015, with the support of Deutsche Telekom, Crnogorski Telekom organised Electronic Beats, a festival of electronic music in Podgorica.

In the field of culture, Crnogorski Telekom was a sponsor of FIAT, the festival of alternative theatre in Podgorica. Also, our company supported the International TV Festival in Bar.

Environmental Protection and Energy Efficiency

In 2015, Crnogorski Telekom continued to implement a range of measures to save energy and to make its operations more energy-efficient. Energy consumption was reduced through a number of different measures in the reporting period.

In March 2015, the company participated in the Earth Hour and Earth Day global campaigns with the aim of raising awareness about climate change issues. The company is constantly promoting the use of sustainable solutions among its customers and employees such as promoting e-mail bills, online registration instead of filling in paper forms, etc.

Crnogorski Telekom owns three state-of-the art base stations that use renewable energy sources, the power of the sun and

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Crnogorski Telekom - 2015 Annual Reportwind. The project is part of a broader company initiative to address global warming issues and protect the environment.

Community Support

Besides the donation contest “Za svako dobro”, in 2015 Telekom supported a number of initiatives dealing with the problems of socially vulnerable groups or promoting good causes for our society. These include a donation for the purchase of a steriliser for the Danilovgrad Primary Health Centre and a donation for the purchase of a telephone exchange for the Special Hospital for Orthopedics, Neurosurgery and Neurology in Risan. Both devices were urgently needed for the daily activities of the public medical institutions. We also supported the national Breast Cancer Awareness Month Campaign in Montenegro.The company also participated in disaster relief activities by supporting collection of aid for migrants in Southeast Europe, through a donation line. The donation line was opened in cooperation with Red Cross Montenegro, in order to enable our customers to give a contribution and help those in need. In 2015 Crnogorski Telekom awarded all pupils that won state competitions for their elementary and high schools with access to the internet free of charge for one year. Crnogorski Telekom made a donation of used networking and IT equipment to the Faculty of Electrical Engineering in Podgorica. Although used, this equipment can be used to set up an IP laboratory at the Faculty of Electrical Engineering, where students can practice the basic settings for configuration of networking equipment.

Volunteering

In 2015 the company continued to organise blood donor activities. In cooperation with the Montenegrin Centre for Blood Transfusion, our employees donated blood and helped to raise awareness of this important social issue. In 2015 two humanitarian actions by employees were organised in order to support people in need. Employees collected food and clothing on the occasion of the

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Crnogorski Telekom - 2015 Annual ReportInternational Day for the Eradication of Poverty (October 17). The collected goods were given to the Red Cross in Podgorica, which distributed it to families in need. Also, in December 2015 employees participated in collecting sweets, toys, children books and school items, and then packed New Year’s gifts for children from families in need or children with special needs. Two hundred and thirty New Year’s gifts were donated to three NGOs supporting children with special needs and children from families in need, across Montenegro.

Awards

In November 2015, the Employee’s Union of Montenegro awarded Crnogorski Telekom the Annual Award for Social Responsibility in 2015, in the area of environmental protection, thanks to our efforts to reduce CO2 emissions by introducing new technologies and removing obsolete ones.At the traditional Annual Awards Ceremony for Philanthropy, Iskra, in December 2015, Telekom received recognition for its donation project “Za svako dobro”. These kinds of awards are a great motivation and something to be proud of. We will continue to give to our society, through our sponsorships of sports and music, through support of those in need with the “Za svako dobro” project, as well as through our volunteer activities. 

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Crnogorski Telekom - 2015 Annual Report

Further InformationContacts

Crnogorski TelekomMoskovska 2981000 PodgoricaMontenegroTel: + 382 20 433 433Fax: + 382 20 225 752e-mail: office@telekom.mewww.telekom.me

Stock trading information:

Crnogorski Telekom stock code: TECG

Montenegroberza a.d.PodgoricaMoskovska 7781000 PodgoricaMontenegroTel/Fax: +382 20 228 502E-mail: mberza@t-com.mewww.montenegroberza.com

Published by:Crnogorski Telekom © 2016

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