Pannon GSM Telecommunications Plc. Sustainability Report 2009 Contents

Welcome note – Anders Jensen 3 Company Introduction 5 About Pannon 5 About Telenor Group 5 Governing Bodies and Corporate Structure 6 Awards and recognition 7 We Moved! 7 New Way of Working – completely different approach 7 Economic Performance 9 Business Results 9 Strategy 9 Products and Services 11 Customers 13 Pannon’s stakeholders 14 At the Customer’s Service 15 Customer Satisfaction Surveys 15 Call Center 15 Pannon Retail shops 15 Data protection 17 Responsible marketing 17 Employees 19 Employment – Facts 19 Fluctuation 20 Employment – Internal programs 20 Training, Career, Performance Management 20 Internal Value Creation – IVC 21 Suppliers 25 Pannon Supplier Code of Conduct 25 Selection of Suppliers 25 Cooperating with the Administration and Authorities 27 Associations, memberships 27 Environmental Protection 29 Strategy to Protect the Environment 29 Pannon’s Environmental Policy 29 Energy Consumption And Carbon-Dioxide Emission 30 Waste Management 31 Paper Recycling 31 Transport 31 Pannon and sustainability – the Pannon House 33 Conference on the Protection of the Environment 33 Social responsibility 35 Innovation 35 Helping the most in need 36 Responsibility for Culture 39 Responsibility for Sports 41 Safe use of mobiles 41 Internal Regulations, Policies 43 Code of Conduct 43 Telenor Way 45 Technical Information about the Report 47 GRI content index 49 3

Dear Reader,

As one of the first companies to one of the biggest capacity thermal We started to buy “green”, renewable be measured and ranked by the pumps of the country, a huge solar energy. And we are proud, that Dow Jones Sustainability Index, panel surface and an intelligent our contribution to society, sports, Telenor Group and Telenor Hunga- building management system. This culture, health and education ry continually strive to improve its saves electricity equivalent to the was powered by strong business performance in all fields of corporate total annual consumption of 500 performance and improving client responsibility and sustainable Hungarian households. satisfaction. development. In Hungary we have improved our ’eco-system’ in many But we are not yet satisfied with our Finally, while the business areas from workplace security to results in electricity consumption, environment remains prone to supporting people with medical the main driver in our CO2 emission, the adverse effects of recession surveillance tools in remote areas. which increased due to a few one-off and new regulatory challenges events. While the number of base and opportunities, it is crucial that In 2009, which this report is stations did not change significantly, Telenor works even more closely dedicated to, we had a unique we used more equipment in our with all stakeholders to ensure that opportunity to build our new network than in previous years, and the socio-economic benefits of headquarters from scratch, and for a while we had to operate two a digitally-enabled Hungary are in doing so we demonstrated our headquarters prior to moving into understood and realised. Going corporate philosophy. Our award- the Telenor House. However, our goal forward our corporate responsibility winning new headquarters is as to decrease CO2 emissions by 24% activities we will have an even much in harmony with the nature as until 2011 and by 40% until 2017 on stronger focus on our core bu- with our internal working culture. It a relative basis remains unchanged siness of mobile voice and data supports success through promoting and on-track. communications, and on the better human interactions, more power of internet access to create inspiration and innovation in product We are improving our processes economic growth, jobs and social and service development. and sustainability indicators year by well-being, what we call ‘Digital year. Last year, we made significant Hungary’. We applied all current architectural improvements in our waste best practices. Telenor House has management processes. Anders Jensen, CEO 5

Company Introduction

Figures relating to Pannon’s activity

Number of Subscribers 3.6 million

Revenue HUF 177 billion

EBITDA HUF 73.4 billion

Capital Investments HUF 12.9 billion

Number of Employees - average statistical number 1214

Own Points of Sale and Customer Service Offices 6

Data from 31, December 2009

About Pannon1 About Telenor Group

As the member of the Telenor Telenor Group is one of the largest Group, Pannon GSM Private Limited mobile operators in the world, with Company provides services to more 174 million mobile subscribers, a than 3.6 million customers in Hunga- yearly net revenue of NOK 107 ry and therefore has a 34.52% share billion and over 40 thousand of the Hungarian mobile market.2 The employees. With its headquarters company is a pioneer in the field of in Norway, Telenor Group is present mobile broadband internet services in 13 countries in Scandinavia, and technologies, and offers efficient, Central Eastern Europe and Asia, easy-to-use and affordable mobile providing high quality services in voice and data transmission solutions telecommunication and media. to its residential and business customers. Pannon is connected to the roaming services of 306 mobile operators in 125 countries. The company is fully owned by Telenor Group since 2003. The official name of the company since 18 May 2010 is Telenor Hungary Telecommunications Plc, which replaces the name Pan- non GSM Plc used from the time of foundation in 1994. The company began to use certain elements of the Telenor brand identity for some timee, like the blue Telenor logo used since February 2006. As a result of the name change, the international aspect of the brand has become clearly apparent as well as the advantages this has to offer to customers. Simultaneously with the name change, new products and services were introduced which all indicate that the company intends to continue to provide simple, intelligent and affordable access for the Hungarian public to mobile technology.

1 This report is intended to introduce the 2009 activities of the company, therefore the name Pannon, used at that time, will be used here as well. 2 Calculated on the basis of the total number of customers as of 31, December 2009. 7

We Moved! between the employees. The café CEO Awards and recognition designed in the working areas is a In 2009, one of the biggest events good example of this; this is where Anders Jensen Pannon was awarded the and environmental landmarks for colleagues can socialize, exchange Good CSR award in 2009 Pannon was the construction and the information and brainstorm. for outstanding role in the takeover of the Pannon House. The strategic dialogue between building was handed over by Crown The pillars of the New Way of companies and NGOs. The Prince Haakon, in an extravagant Working objective of Good CSR is to and solemn ceremony. The new promote the practice of non- office building is the symbol of the There is a desk-sharing system in the financial reporting (based on environmentally conscious corporate new office building which means that Commercial Human Corporate Technical Corporate Finance Djuice the principles of GRI) in the governance of Pannon. the employees choose a desk within Division Resources Affairs Division Sales Fridtjof Dr. Balázs CEE region, thereby enhancing The environmentally conscious their work units each morning and that Gergely Anne Birgitte Gyz Drozdy György Koller Attila Ggh Rusten Bíró responsible corporate approach of Pannon is reflected and is where they will be working that day. Laczkó Tóth Kverum governance. emphasized in the new office building There are certain special departments ”The biggest high-hanging and in everyday work. The employees which are an exception to this system fruit” – Recognition of the are invited to selectively collect (e.g. the Legal or certain parts of The company structure of Pannon as of 31, December 2009 Pannon House waste, to manage the documents the Financial Departments). The The heat pump heating and electronically, to print documents office building is characterized by cooling system integrated on recycled paper and to share with open spaces; even the CEO sits Governing Bodies and Members of the Board of the company was Ove Fredheim who in the Pannon House was each other their environmentally in an open office. Everybody has Corporate Structure Directors was followed by Anders Jensen. recognized in 2009 by conscious ideas and know-how in a identical chairs and desks. As part of In 2009, the governance principles the award of the KÖVET green newsletter. Environmentally the environmental consciousness, • Jan Edvard Thygesen, Telenor emphasized the importance of Association, handed out for conscious mentality is Pannon’s new Pannon introduced the electronic The supreme body of Pannon • Pål Mork, Telenor combining the knowledge of Hungarian sustainable environmental approach to work as defined in the document management prog- GSM Plc is the Shareholders’ • Tibor Veres market characteristics with the know- investments and projects international strategy of Telenor ram. This program not only serves Meeting comprised of three owners • Eivind Kristoffersen, Telenor how and procedures employed by aiming to reconcile economic Group called “New Way of Working”. to protect the environment, but (shareholders). The management • Yogesh Malik, Telenor Telenor Group. 75% of executives (CEO, and environmental purposes. has further advantages as well: body of the company is the Board CXOs and directors) were Hungarians, KÖVET acknowledged that New Way of Working the employees have access to all of Directors with five independent Members of the Supervisory while 25% were non-Hungarians. This this investment of Pannon – a completely different documents, e-mails and files used for members who are not employed Board trend is also reflected by the data of the improves and reduces the approach work which means less storage space by Pannon. In addition to the previous years: in 2008, this ratio was impact on the environment and with less use of paper, more four Norwegian members of the • Torbjørn Mogård Wist 73-27%, while in 2007 it was 71-29%. and at the same time reduces Pannon House advocates and working area. Pannon strives to create Board of Directors, there is also • Asbjørn Michelet Bakke operational costs. supports a new work-culture. Telenor a healthy balance between work and one Hungarian member who is • László Csilling, Pannon Companies with significant The Dow Jones Sustainability Group introduced “New Way of private life. The company ensures independent from Pannon and from Pannon ownership stake Index - The international Working” by constructing new office special access rights and mobile Telenor. The Shareholder’s Meeting Management of the staff and the daily survey also highlighted the buildings, the first of which was internet to its employees to allow elects one of the three members operation of Pannon in accordance with • Step Ahead Kft. – 100 % ownership, performance of Telenor Group. built in Fornebu, and later in other remote work. This new way of working of the Supervisory Board from the the resolutions of the Shareholder’s terminated by dissolution with Telenor, the parent company countries as well. The essence of this is built on the unconditional trust and employees of Pannon. This board Meeting and the Board of Directors effect from 1 September, 2009. of Pannon, was among the concept is that working in an inspiring cooperation of the management and member represents the employees are the responsibilities of the CEO. The • Netrekész Kft. – 33 % ownership, first companies ranked by Dow environment creates new ideas, a close tie between the superior and in supervising the operation of the CEO is not a member of the Board of terminated by dissolution with Jones Sustainability Indexes benefits creativity thereby increasing its subordinate. company. Directors. Until 1, April 2009, the CEO of effect from 26 August, 2010. (DJSI) in 2009-2010, which the efficiency of the work and the Pannon House has a gym with ranks the companies on the satisfaction of the employees. ping-pong tables and two saunas basis of their overall economic, At the planning phase, the company welcoming the employees who wish social and environmental first defined the new work culture and to refresh and exercise, even during performance. In comparison what it meant in everyday life and then working hours. The two foosball with 2008-2009, Telenor examined what type of building could tables in the lobby help workers has improved its overall support this concept. When designing unwind. Employees regularly organize performance index in 2009- the building, the aspects of the new in-house tournaments where they 2010 which was also owed to work culture were taken into account: can try their talent individually or in the considerable contribution the special design and construction of teams. Employees are also provided of Pannon. the building stimulates and supports fresh fruit everyday free of charge to the flow of information and interaction protect their health. 9

Economic Performance

Financial Data pursuant to the rules of the International Financial Reporting Standards 2006 2007 2008 2009 Revenue (HUF million) 194 659 192 547 188 363 177 048 EBITDA (HUF million) 72 135 77 058 76 445 73 362 EBITDA rate (%) 37,1 40 40,6 41,4 EBIT (HUF million) 45 777 55 441 55 369 50 606 CAPEX (HUF million) 19 702 14 822 17 879 12 928 ARPU-index (HUF) 5028 4630 4292 3913

Business Results

The economic crisis dominated The decrease of the revenue from Pannon however plans on a long- the business environment in 2009 termination fees and retail voice term; we believe that modern confronting the telecommunications services were only compensated in communication is essential for sector with challenges. part by the sales revenue of the mo- efficient business, therefore we The revenue of Pannon in 2009 bile internet service. Investment levels continue to develop our network and decreased by HUF 11.3 billion decreased considerably, with nearly services. compared to the previous year. 28% compared to the previous year.

Strategy

Pannon aims to provide excellent when launching the Pannon build a brighter tomorrow for quality services to its customers, Difference program. As a result, the themselves and their families which meet their needs at an entire organization was involved 3. Price-Value: achieving that acceptable price and are at the in defining and implementing Pannon is viewed overall by the same time environment friendly the brand strategy. Five focus customers as a service operator and live up to the expectations areas were defined which are worthy to subscribe to of the owner, while also ensuring the long-term guidelines of the 4. Commitment and outstanding working environment company’s development and which Responsibility for the for its employees. Pannon simultaneously underline why the Environment/Society: Pannon determined the following Must Win customers should choose Pannon. is a human-centered operator Battles in 2009: The primary goal of the company is with recognition and adequate to provide all of its services to the management of its own impact on • Clearly differentiated core brand full satisfaction of its customers, the environment and society (Pannon), with a stable growth in thereby distinguishing itself from its 5. Reliable Network Coverage revenues and market leadership competitors. and Capacit: The customers are in valued segments able to use the voice and data 2• Leadership in the mobile internet The five strategic pillars/focus areas: services in a simple way, wherever market they need it 3• Number one youth brand (djuice) 1. The Service Experience: easily accessible, fast customer service The long-term aim of Pannon is to 2. Useful Products and Services: be the favourite mobile operator in products and services which Hungary. make everyday life easier for Pannon brought its brand strategy customers and which are easy to a whole new level in 2009 to use, helping the customers 11

Products and Services to voice calls, customers may surf developing a number of services the internet, send text and MMS where mobile devices can be By using the opportunities offered messages at favourable prices. used for machine-to-machine by mobile technology, Pannon communication. Examples aims to offer mobile products and • Data services include DataMed, a health data services which ease everyday With our mobile internet service, communication system, and the communication and which are - at 99% of Hungary’s population can Mobile Payment service. the same time - advanced and access the mobile broadband By the end of 2009, the popular contribute to developing society and network (EDGE). Installing the mobile parking system was the economy. The company revived HSUPA capability to the entire accessible in 24 cities in addition the communication market of voice network was completed at the to Budapest. calls dominated almost entirely by beginning of 2009, and the effort As of August 2009, Pannon landline connections in 1994, at the to deploy the new infrastructure introduced the electronic invoice time of its foundation. Soon after, it required for the 14.4 Mbps service by which the customers introduced the first SMS service in throughput rate was continued. have simple, fast and comfortable Hungary, which has become one of At the end of the year, access to access to their accounts without the primary means of communication. the 3G/HSDPA network, currently the paperwork therefore making The now available spectrum of with the highest throughput rate, this service is also environment mobile telecommunication services was available in 535 towns and friendly. are the result of the development of villages. existing services and the introduction Pannon’s internet packages Types of offering of new ones. 2009 was all about enable customers to access continuing the development of mobile internet from a laptop, PC or • Permanent offers services with special regard to mobile mobile phone. In addition to the The services and packages that broadband Internet, to which the packages with various download are continuously available to our company paid special attention when limits, the company offers to customers. developing its network. This service its customers the internet Flexi • Promotional offers has by now proven its legitimacy. package with unlimited traffic Pannon always has seasonal and e-mail access. As most of offers in voice and data services. The products and services offered by the telephones are now suitable Such were the offer of “0 after Pannon are grouped along different for surfing and e-mail access, the first 5 minutes” package factors. the company introduced three offered for a price of HUF 0 for internet service packages in three months, or the summer Based on the type of services order to meet the growing season promotional offers for customer needs: Mobil Online S, mobile internet services. • Voice services Mobil Online M and Mobil Online Pannon’s various packages L. Pannon was the first on the ensure that everybody finds Hungarian mobile internet market the one suitable for their needs. to introduce the fee reduction Post-paid customers have a guarantee in 2009. This wide selection of packages with guarantee ensures that in case favourable monthly fees to a certain package previously choose from; pre-paid customers introduced by the company is can enjoy the freedom of phone offered again at a lower fee, not calls without a monthly fee, only the new customers benefit and New Generation pre-paid from such reduced price, but customers can benefit from the existing customers may also the very best of both types of change to this new tariff at any subscriptions. Pannon offers Pannon retailer, free of charge. a wide range of handsets at Hence our customers can always special prices for these packages: benefit from the best that Pan- from entry-level phones to non has to offer. sophisticated smart phones. In August 2009, Pannon • Other non-voice services introduced a new subscription The company is a market leader type called MobilKvartett, which in using mobile technology offers various advantages for the in areas that go beyond customers. Four types of services traditional people-to-people are offered at a discount rate for communication. The company only one monthly fee: in addition has taken an active role in 13

Customers

It is a high priority for Pannon to Mobile phones have become a part tariff portfolio in 2009, all of our ensure that all of its customers of everyday life in all consumer business customers’ employees can are satisfied with both the quality segments. At the same time, use up the monthly fee according to and the price of its services. In each group defines different their communication habits. order to provide a high quality expectations vis-á-vis their mobile Micro and small enterprises form service, Pannon has grouped its operator. an extremely heterogeneous group customers along the lines of their with a diverse scope of activities. needs, differentiating between the Distinction of customers based There is no clear distinction following subscriber segments. on age between work and private life • Pannon for them. Their ways of thinking • Residential subscribers the Pannon brand is the umbrella and their purchasing decisions • Corporate subscribers under which the company’s are similar to those of residential – One-man companies and services are accessible for all. subscribers. Always being available small businesses • Djuice is necessary for their work. In the – Mid-size and large enterprises the brand developed especially case of medium size enterprises, the for the needs of young people. distinction between work and private Residential customers The communication needs and life is more clear cut. Flexibility is habits of the under-25 age group important as they have to adapt Pannon strives to provide simple, are markedly different from those quickly to changing circumstances. easy-to-use and affordable of other age groups, therefore The bigger they are, the more cost communication services to its djuice packages and services are conscious they become. residential customers. The company based specifically on the needs of Large corporations form a aims to reduce the communications this age group. special group. They seek their costs of its customers by offering suppliers and service providers services such as the new Family Corporate customers as large accounts,. They are Package with free calls to a chosen usually provided with customised group of numbers, the one week of Pannon’s portfolio of business service packages meeting their free calls per month, or the HUF 0 services has something for all firms, individual needs. As these are our after the first 5 minutes services.. from one-man companies to large most important customers, we Two groups are distinguished in corporations. With our cost-cutting appoint a special contact person to the residential segment: young solutions (such as “EU Country”, handle and manage their enquiries adults who have an active social ”Unique Area”, “Multiarea”, “HUF and problems and to meet their life and are open to novelty, and 0 Intracompany” etc./) companies individual needs. active families who constantly try can optimise their communication to balance family, work and private costs and thereby increase their life and wish to create a comforting competitive edge and the efficiency environment and ensure a safe of everyday operations. With the future for their family. introduction of the Business Frame 15

Pannon’s stakeholders Customer Satisfaction Customer Satisfaction – Call Center Customer Service – Retail Shop Customer Service Stakeholder Why is liaising important for (average points on a scale of 1-10) (average points on a scale of 1-10) Form of dialogue Results group Pannon? 10,0 10,0 Owner We have to comply with the • regular reports 9,8 9,8 Telenor ASA parent company’s ethical, • providing data 9,6 9,6 economic, environmental and 9,4 9,4 social norms. Achievements 9,2 9,2 in this area have an indirect 9,0 9,0 effect on the shareholders of 8,8 8,8 Telenor Group. 8,6 8,6 8,4 8,4 Employees The company’s success • Intranet site • articles open for 8,2 8,2 depends on them. • a segment on the site comments on the site 8,0 8,0 for public surveys, where • the attendance data opinion polls can be done shows that the most 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 on specific matters; popular content are • Internal Value Creation – those which are related IVC – survey among the to changes in the internal employees which aims to organization, benefits and At the Customer’s Service vice, together with the legal and not only in the customers’ overall develop the organization in-house events other professional departments, satisfaction, but also in seeing • the results of the IVC It is a high priority for Pannon to created the strategy for complaint how easy it was to navigate in the survey are detailed in the satisfy its customers to the greatest management on a company level. automatic menu when reaching chapter on Employees extent possible and therefore The company introduced a new the call center, how long customers customer service is subject to alternative identification process have to wait for an operator to Retailers Represent Pannon vis-à-vis • charity team building and • please see the Chapter on continuous improvement. In 2009, whereby the operators in the call answer if they wish to speak to one, the customers, the company training “Social responsibility” we launched numerous programs center do not ask for the secret PIN and how many customers manage acquires new customers related to training and surveys. code in certain cases but instead to resolve their problems via the call through them. Our colleagues at customer ser- ask 3-5 personal questions. As a center. vice attended regular individual result, the management realized the The results of the survey show that Customers Pannon’s aim with all voice • satisfaction surveys • see the Chapter titled or group trainings (personal commercial potential of incoming overall the call center provides high and data services is to “Our Customers” development, personal coaching, calls and therefore a group of quality service: the customers are improve their quality of life. change management, decision twenty operators from customer generally satisfied and our opera- making support trainings and other service commenced the training for tor colleagues were highly rated. Suppliers It is important that the • Vendor Forums organized • The suppliers presented technical trainings). The customer sales activity in December 2009. Customers were less satisfied with partners understand the by the Development their proposals to improve service underwent an internal the length of time they had to values and governance Department which cooperation which were audit in 2009 the subject of which Customer Satisfaction Surveys wait, therefore improvement in this principles of Pannon and that is attended by the implemented by the was the supervision of compliance respect is required. they identify with these. Procurement Director Development Department with the requirements of ISO In order to establish the solid in next year’s strategy. 9001:2008 Quality Management foundation of a successful business Pannon Retail Shops Non- One of the target groups of • taking an active role System.3 Following this internal activity, Pannon regularly surveys governmental Pannon’s activity whilst at in the NGOs of the audit, an independent company the satisfaction of its customers Pannon regularly surveys the sector the same time being a force telecommunication (DNV Hungary Kft.) carried out an regarding the products, the network overall satisfaction of its customers in defining and impacting the sector external audit which was completed and pricing. Satisfaction surveys of regarding the Pannon retail operation of the company. successfully. different subdivisions were made shops, the staff and the various In the last quarter of 2009, the several times in 2009. The company administrative services. Although Public sector One of the target groups of • continuous dialogue with management of Pannon initiated evaluated separately whether the the company has been conducting Pannon’s activity whilst at authorities and ministries a call center benchmarking survey customers coming across any of such surveys for some time now, due the same time being a force regarding regulatory with the involvement of international the customer service channels (call to certain methodological changes, in defining and impacting the matters advisers, aiming to identify the centre, Pannon retail sellers) are left the data is not always comparable operation of the company. opportunities to improve the activity satisfied with the given service. with those acquired before 2008. of customer service. As a result, a The results show that customers are Media It is through them that • regular press work, series of full scale trainings began Call Center overall satisfied with this service; Pannon reaches Hungarian informing the media of in November 2009 for all of our customers find that the staff is stakeholders most frequently the activities of Pannon colleagues at customer service, The telephone customer service polite and helpful. Even though in the most efficient manner. regarding customer orientation was reviewed through a separate administrative procedures were and complaint management. investigation. In respect of the rated highly, these procedures could Simultaneously, customer ser- call center, Pannon was interested still be simplified.

3 The following matters are subject to the Quality Management System at Pannon: Mobile Telecommunication Services for Business Customers 17

Data Protection Complaint Management

2006 2007 2008 2009

The number of complaints filed with the Data Protection 247 632 1160 851 and Abuse Prevention Office

Founded complaints regarding data protection 6 7 3 5

Inspection conducted by the Data Protection Commissioner 1 1 2 3

via mail to the Data Protection and employees of Pannon are aware of Data protection Abuse Prevention Office. the prevailing rules and expectations The Data Protection Commissioner of the Telenor Group. In addition, When handling personal data, conducted an inspection regarding these documents also intend to Pannon is under obligation to comply three subject matters related to demonstrate this complex field in with the respective provisions the data management practice of a pragmatic and comprehensible of law and in particular with Act Pannon. Neither of these inspections manner. When preparing these LXIII of 1992 on the Protection of was based on a customer complaint. documents, Pannon’s intention was Personal Data and the Publication As a result of the inspections, Pannon to elaborate simple, transparent and of Public Data (hereinafter the Data continuously adapts the respective easy to understand policies and to Protection Act) and Act C of 2003 areas of its data management provide a description of special cases on Electronic Communications practices which were subject to and demonstrate them with practical (hereinafter the Electronic inspections. examples. Communications Act). Our activity relating to marketing Pursuant to the provisions of law, Responsible marketing communication is monitored by Pannon sets out all rules of handling several authorities pursuant to the the personal data of its customers In respect of marketing activities prevailing legislation, namely the in its General Terms and Conditions Pannon always adheres to the National Communication Authority, and in the respective internal data effective legal provisions and the National Consumer Protection protection policy. Subscribers and takes into full account the market Authority and the Competition Office. all persons regarding whom Pan- environment and the feedback from These authorities are entitled to non handles personal data for sales consumers and the authorities. require information from Pannon purposes (concerned parties and Pannon’s marketing activity is regularly and on an ad hoc basis. potential customers) can read an primarily governed by the provisions These authorities may not only abridged version of the rules of data of the Act CLV of 1997 on Consumer initiate inspections pursuant to management on the company’s Protection, the Act XLVIII of 2008 consumer complaints but may act ex website. on the Fundamental Conditions officio. Pursuant to the applicable law, and Limitations of Commercial During 2009, these authorities Pannon notifies the Data Protection Advertising, the Act XLVII of 2008 on requested the company to provide Commissioner responsible for the Prohibition of Unfair Commercial information on several occasions, keeping the Data Protection Practices, the Act LVII of 1996 on however only on two occasions did Registry of all data management Unfair Market Practices and the they identify a breach of rules and activity subject to the obligation of Prohibition of Restricting Competition impose a fine. notification. and the Act C of 2003 on Electronic As part of the audit aimed to ensure Communication. that personal data management of As a member of Telenor Group, customer’s data is a closed system, Pannon prepared internal policies an external auditor company (Matrix and programs on the elaboration Tanúsító Kft.) regularly monitors the and use of correct communication management of personal data. practices. The company ensures In 2009, Pannon reviewed in that all of its employees and all substance all submissions and persons acting on behalf of Pan- complaints regarding personal data non are familiar with the content of management and informed the these policies and that they have person concerned regarding the a competent response to all their results of the review. A total of 851 related queries. One of the goals of cases were filed electronically or the documents is to ensure that the 19

Employees

Proportion of women and men 2009 100% 1 14 6 21 80% 569 60% 7 40% 34 14 55 642 20%

0% Total Headcount Heads of Department Managers Board of Directors All Executives Men Women

„Pannon considers the creation organisation, while senior colleagues Distribution of employees in 2009 of unity between employees contribute to results with their and the company to be a long- invaluable work experience. under 25 term investment which is vital in between 25 and 45 maintaining the company’s results The proportion of women and men 45 or over and responsible work culture. We wish to provide an opportunity for The proportion of men amongst 3% 6% our employees for self-development active workers is traditionally higher by various trainings and educational than women (53%). However the programs. By providing an inspiring number of women in leading positions work environment in Pannon House, does not follow this pattern. In the our aim was to considerably expand case of middle-managers the gender the boundaries of personal and ratio is also associated with the timing teamwork. Under the scope of the of childbearing. This also explains the new approach called New Way of increase of the number of employees Working launched concomitantly with working under fixed term employment the construction of the office building, contracts (12%): Pannon enters into we have also implemented various fixed term employment contracts 91% changes so that our colleagues can with employees hired to replace enjoy mobility and cooperation.” – those who start a family, allowing Anne Birgitte Kverum, Chief Human them to return to the company after Resources Officer. the maternity leave. Distribution of managers in 2009 As equal opportunities are laid down Employment – Facts in the company values, the culture of under 25 the organisation and, most importantly between 25 and 45 In 2009, Pannon had 1211 employees Pannon’s Code of Conduct, the 45 or over and 212 temporary agency workers4. men-women ratio and women’s 0% The majority of the staff is in the career management is continuously 16% 25-45 age group (91%), which is monitored by those responsible for characteristic to the industry but organisational development. In order also partly result of the history of the to encourage mothers raising their company. Pannon has always been children to return to work as fast as a preferred employer among young possible, the company provides the people in the 18-30 age group, who possibility of remote work and flexible were more attracted by, and familiar hours. The construction of the new with, the world of telecommunications. office building also supports this Cooperation of different age groups objective. The results of these efforts has several advantages: career can only be assessed after a period of starters can integrate in the existing several years. 84%

4 Data from 31, December 2009 21

Number and Distribution of Employees Subordinates and their direct outstanding work performance and ambitions of the employee collide superior analyse together their busi- later nominate them to participate with the requirements. In 2009, 2007 2008 2009 ness and behavioural goals and the in programs which help their twenty employees from various Number of Employees 1279 1423 1423 implementation of the development promotion. divisions of the company enrolled in agenda designed to achieve the the three module programme series Number of direct employees 1089 1241 1211 above defined goals, and in addition, Telenor Academy which focused on the improvement Number of hired employees 190 182 212 they also evaluate the performance of management skills. of the previous period. Telenor Academy is the training Type of contract centre of the Telenor Group in Oslo. Internal Value Creation – Leadership Expectations in the It also functions as an internal hub Indefinite term contract 946 1093 1066 IVC Spotlight of know-how where the reliable Fixed term contract 143 148 145 professional contacts acquired IVC is a yearlong process which The performance of senior throughout the years are gathered, has been implemented by Pannon Distribution by gender executives of Pannon is evaluated in order to ensure the highest level with the guidance of the parent Women 482 573 569 along the lines of the TDP, just training of employees. company for the past nine years. as the performance of any other Telenor is responsible as a group The primary objective of the prog- Men 607 668 642 employee. While employees only to ensure the continuous supply ram is to involve employees in the define and evaluate individual of managers through its manager shaping of the corporate culture goals at their review meetings, development programme. The and in the life of the organisation, the business goals of executives talented colleagues of Pannon and also to define and implement Fluctuation include the annual strategic goals attend regularly the series of organisational development Net Fluctuation set at company level as well, and programmes comprising of three objectives on a company and Total fluctuation during the past their behavioural goals also cover modules of three different levels. working group level based on the three years was 9% which is 2007 2008 2009 the company-level organisational The first level (Core) is attended opinion of the employees. The considered healthy for a company development goals. by direct superiors, team leaders, employees engaged by Pannon involved in commercial and Net Fluctuation* 9% 8% 9% The conduct of executives not only which is followed by the next level of for more than three months can customer service activities. has to comply with Pannon’s four the heads of department, directors share their opinion regarding the * Ratio of employments terminated by the employee and the average number of employees core values and the guidelines of (Accelerate) and topped off by the events of the past year which had the Code of Conduct - as these are senior executive level (Expand). an impact on the organisation (e.g. Employment – Internal learning period. Employees with All of our colleagues with talent basic requirements to be complied When naming the greatest organisational changes, corporate programs special skills frequently share their have the chance to attend with by every employee - but they advantage of the programme, events, efficiency of internal knowledge with their colleagues international and local development also have to meet the requirements participants usually mention the procedures), and on Pannon as within the group or even the seminars and trainings based on set out by the applicable leadership high professional standards and the a workplace. Just like in previous Training, Career, Performance employees of other units. Employees nomination by their direct superiors expectations of the Telenor exchange of experience with other years, attendance was quite high in Management are entitled to 2–3 days a year for for their performance or for their Group (the Telenor Leadership participants from various other 2009 as well, which is a constructive training, but the number of days potential. Expectations). countries with colourful and diverse feedback for the HR Department as All company employees are available for vocational purposes experience and backgrounds. well as for the senior management. responsible for their own careers may vary according to the job profile. Performance management: Performance Management at a In 2009, 11 Pannon employees This internal survey provides an and all managers must provide to Our colleagues must duly be From Setting Goals to Achieving Company Level attended one of the international opportunity for the employees to their subordinates the possibility of prepared to ensure the successful Results manager programmes. provide feedback on their superiors. self-improvement with the help of the implementation of organisation The next step in the TDP process The employees are provided While the sections of the survey global programs of Telenor and the development projects involving all Performance evaluation and following the performance a chance to attend certain regarding teams and company level local initiatives. The different divisions employees. The extensive programs staff development at Pannon is evaluation meeting is the professional trainings as well, of feedback are prepared globally, the may decide freely about trainings make use of all information conducted under the auspices of executive level Review Meeting, which the most popular are the evaluation of managers has been organised from internal resources. channels: in addition to individual the Pannon Development Process where the direct superior Brand Academy and the Finance performed locally for the past two One of the key elements of the presentations, e-learning materials (TDP), which was initially introduced reviews the performance of his/ School. years, to ensure that the senior organisational culture of Pannon is accessible via the intranet and by the parent company and then her subordinates, joined by his/ executives of Pannon receive the cooperation, which comprises not group discussions help our recommended to the subsidiaries. her peers and superior. These Prepare Programme for the Local maximum feedback regarding their only of the exchange of information colleagues understand and get Pannon has been applying this discussions prove to be useful for Talent activities. and results, but it is also about accustomed to the changes. procedure for the past seven years, our employees: they are provided The results of the team and the sharing of know-how. When New colleagues learn about initially only on management information regarding their work The talent of High Potential company level surveys are introducing new products and Pannon’s corporate values, level, then gradually extended it to performance and personal conduct colleagues (HiPo) are nurtured accessible to all employees at services, the training of “key-users” objectives and mission through on- employee performance evaluation as they receive feedback from by Pannon through the Prepare the Business Planning Workshop is a standard practice. These key boarding trainings, where they also as well. their colleagues and their superior Program. The employees who have organised especially for this users will then pass their knowledge learn about the rules of the Code of which they may integrate in their outstanding performance, skills purpose. During the course of these onto their immediate colleagues. Conduct with the help of e-learning Performance Evaluation of personal development plan. This and experience may be nominated half-day / one day workshops, Professional mentors and in-house material. Based on the feedback from Employees: regular monitoring system carries another advantage for the local programs, if the the teams define yearly business trainers are responsible for training the various divisions, expansion and within, as the attendees of such participants of the Review Meeting and organisation development new employees engaged to work in renewal of the on-boarding trainings Yearly evaluation of the employees discussions are given a chance also see the employee fit for such targets which is tracked by the HR fields of expertise requiring a longer is amongst the aims defined for 2010. is based on quarterly cycles. to meet their colleagues with promotion. It is important that the Department. 23

Number of days lost due to workplace accidents (sick-pay)

2007 2008 2009

Central site 19 212 20

West 0 0 0

East 157 0 0

Total 176 212 20

Healthy and Safe Working Work Safety work under safe conditions which Conditions, Health Preservation do not jeopardize their personal programs To ensure work safety, the health. When choosing protective occupational physician inspects gear for employees who perform Preserving the health of employees workplace hygiene regularly at alpine technical works, the company and ensuring a safe working Pannon’s offices and showrooms. aims to provide the best quality gear environment are fundamental issues Upon any changes affecting the available without any compromise for Pannon. The company operates offices, the work environment is as required by law or the company a health improvement program that re-examined. Such inspections regulations. Pannon inspects and focuses primarily on prevention. involve an expert who assesses checks the equipment at prescribed Continuously updated information whether the environmental, material frequency, and arranges for about programs and opportunities and organisational conditions replacement if necessary. This task is available to colleagues on the ensure a safe and healthy working is supported by an ISO-certified company’s intranet portal so that environment. The risk assessment professional consultant partner. they are informed immediately of all is revised annually. Despite the Employees who do not perform new initiatives. fact that only the most recent alpine technical works but their In addition to the compulsory amendment of the Labour Safety work nonetheless justifies the use occupational medical checkups, Act provided for the importance of protective gear are also provided health screening tests, outpatient of assessing psychosocial factors, with excellent quality protective care and dentist checkups are also Pannon has been reviewing these equipment. available to all employees. The factors separately for several years The regular work safety and screening tests allow the timely now. industrial alpine technical training detection of many problems and All personal, material and sessions cover fire protection dysfunctions. Besides professional organisational requirements of first training and issues related to the medical advice, colleagues aid are provided readily available. use and maintenance of individual receive advice and answers on High standards are guaranteed by protective equipment as well. change of lifestyle. On health regular training sessions. The first There have been no fatal workplace issues, physicians at two excellent aid kits are supplied to Pannon by a accidents at Pannon and there are private clinics and several dentists market leader in Europe. no absences due to work-related are available for consultation. Colleagues responsible for the illness. Workplace accidents usually Our employees also have the maintenance of the transmission arise from slipping or stumbling opportunity to receive vaccination towers working on site pursue resulting from the negligence of the free of charge or at a discount price, their activity in a special work employees. such as the flu shot in 2009, and environment. Pannon’s own vaccines for ticks or HPV. Work Safety Regulations and the Industrial Alpine Technique Regulations ensure that they, too, 25

Suppliers

„The Telenor Supplier Code of intended to govern the related Selection of Suppliers Conduct used by the Telenor Group procedures, rights and obligations sets out the human rights, labour, thereby ensuring the compliance Suppliers are selected according health, safety and environmental of subcontractors therewith. These to a regulated process the aim standards and practices we are rights and obligations are set out of which is to ensure that Pan- committed to and which we expect in the “Agreement on Responsible non disposes of all supplies and to see observed by our suppliers. Business Practices”. Pursuant to services necessary for its business Therefore we evaluate these the agreement, Pannon regularly and support functions, by selecting aspects as well when selecting inspects as to whether the suppliers reliable and professional suppliers. our suppliers beyond traditional comply with the rules of conduct. Through the tender procedures, criteria such as the quality and The company concludes supplier Pannon endeavours to address price of service and the financial contracts only if the Agreement has the broadest range of suppliers in stability and professional references been accepted and executed. order to achieve the best market of the candidate. Environmental Concerning suppliers that do not conditions available. consciousness is given increasing sign the Agreement, Pannon pursues These tender procedures are emphasis. This is a very conscious discussions to identify whether there coordinated by the Procurement decision of Pannon which will be is a similar company policy in place at and Logistics Department. The strengthened in the future.” – the supplier which can be considered representatives of the affected Andrea Kovács, Procurement as equivalent to the Agreement and units are invited to participate in the Director at Pannon if so, whether such policy can be process. The decision is made by the accepted as a replacement. It is the managers of the affected units who Pannon Supplier Code competency of the CEO to resolve on evaluate the bids. Senior executives of Conduct the adoption of such an alternative. are also invited to participate in In case there is no such policy, the decision if the purchasing of In 2009, Pannon continued the Pannon’s primary goal is to convince supplies represents a considerable implementation of the Supplier Code the supplier that the Agreement value. of Conduct, the aim of which is to has only positive impact on its In addition to traditional selection ensure that suppliers comply with and business and operation. Pursuant to criteria such as quality, services, are committed to the requirements the company regulations, Pannon price, financial stability and of Telenor Group such as the respect terminates the business partnership references, environmental aspects of human rights, labour standards, with suppliers with whom a consensus are considered with increasing health and safety, the environment is not reached. Our statistics show emphasis. The Procurement and and the prohibition of unfair business that our suppliers agree with the Logistics Department prepared a practices. The document reflects the aim of the Agreement as we did sustainable procurement guidelines principles and fundamental values of not have to terminate any business aimed at enforcing environmental the company’s Code of Conduct and partnerships due to the refusal of considerations when resolving sets out the de minimis requirements conclusion thereof. on the purchasing of assets, which must be met by each supplier in products and services having major the future. environmental impact, thereby At the end of 2009, 110 of the largest reducing as much as possible the suppliers were audited as to what overall environmental impact of extent they respect the provisions Pannon. These guidelines have of the Supplier Code of Conduct. been successfully employed Deficiencies were remedied with the by the department in case of help of a so called development plan if many tenders. By decreasing the such was required. placement of purchase orders in a Simultaneously, the provisions of paper format and the increased use the general terms and conditions of electronic purchase orders, paper pertaining to responsible busi- use in the company has decreased ness practices were prepared, even further. 27

Cooperating with the Administration and Authorities

Pannon cooperates and maintains dialogue with the authorities and other bodies responsible for Associations, memberships regulatory matters and enacting the rules pertaining to the busi- Pannon is the member of • Telemanagement Forum ness environment. The company the following associations: • Treasury Club participates in these discussions • American Chamber of and negotiations directly as well • Scientific Association Commerce (AmCham) as indirectly through NGOs and for Infocommunications • GSM Association trade associations. During 2009 Hungary • Association for the most important regulatory • Association of IT Electronic Billing matters for the company and for Companies • ACCA – Association the telecommunication sector as a • Communication of Chartered Certified whole were frequency management, Conciliation Committee Accountants caller-ID management and the • International Association • Hungarian Alliance of regulations regarding payment for Shell and Spatial Public Relations services. Throughout the Structures • KÖVET Association professional and regulatory • Hungarian Donors Forum for Sustainable dialogue, Pannon consistently • Committee Management advocated a regulatory environment for Self-regulating • Hungarian Business which stimulates investments, Advertising Leaders Forum the increase of broadband mobile • International Advertising • PMI Project internet coverage, technological Association Management Institute development and the introduction of new, consumer-friendly services. 29

Environmental Protection

Pannon puts strong emphasis on convened. This Manifesto draws attention Environmental principles the respect of the environment to the battle of the mobile industry Pannon introduced its policy on the being one of the fundamental against climate change. The signatories protection of the environment in values of sustainability. In addition to believe in the special role of the mobile 2009 which will also be the basis environmental conscious operation, the industry in the race against climate of the environment management company intends to contribute to the change thereby helping other industries system to be put in place in 2010. development of a sustainable society to reduce their energy consumption and through its products and services. carbon-dioxide emissions. Pannon House symbolizes the commitment of Pannon to sustainability which is considered to be the foundation of our future when Pannon’s Environmental Policy it comes to sustainable environment and society and which features many Pannon’s aim is to minimize the development by creating, qualities which are outstanding in the impact of its operations upon the simplifying and bringing protection of the environment. environment, comply with legal environmentally effective requirements and seek achievable communication solutions to Strategy to Protect the higher standards through the marketplace. Environment continuous improvement.. • Energy Consumption In order to achieve this goal Telenor shall be energy Pannon’s goal is to contribute to the management of Telenor efficient, seek renewable the creation and maintenance of a has implemented and has been energy resources and strive sustainable society and to reduce operating the international for effective energy solutions. its own environmental impact to standard for Environmental • Waste Management the minimum by improving energy Management System, ISO Telenor shall reduce efficiency, using renewable energy, 14001, and takes responsibility resource consumption, involving our employees and for its operation and continuous reuse equipment rather exploiting the opportunities entailed improvement. than dispose and promote by mobile telecommunication. Our • Radiation recycling. Telenor shall strategy to protect the environment is Telenor is committed to secure sustainable waste founded on two pillars: the health and safety of its management within its customers, employees and own activities and seek • Pannon aims to reduce its communities using the “WHO” to ensure that suppliers carbon-dioxide emission by safety limits for planning, and contractors follow 24% by 2011, and by 40% until installation and safety warnings environmental standards 2017 compared to the emission at antenna installations. that are comparable to measured in 2007 and taking Telenor shall seek to provide Telenor’s own standards. into consideration the potential its stakeholders with objective • Environmental Effective expansion of the company. information regarding any Purchasing • Pannon is committed to develop effect of radiation from our Telenor shall consider and sell telecommunication installations, services and environmental consequences solutions and services which products. when planning to purchase help to reduce the carbon- • Emissions to Water and Air a product or service. dioxide emission and the energy Telenor shall seek to Environmental requirements consumption of its customers. use telecommunication to the performance or solutions as an alternative to function of the product GSM Association Green Manifesto – traveling and thereby reduce should be made, if relevant. the Manifesto of the Mobile Industry transportation. Telenor shall • Mast, Antenna and Installation seek to prevent or reduce Telenor and its A koppenhágai klímacsúcs eltt a polluting emissions in its subcontractors shall seek Telenor Csoport tagjaként a Pannon is activities and any emissions to minimize visual and csatlakozott a GSM Association Green caused by transportation and aesthetic impact on the local aPannon, as the member of Telenor business traveling. environment when locating Group adhered to the Green Manifesto Telenor shall contribute to a and constructing its buildings, of the GSM Association before the sustainable social structures and equipment. Copenhagen Summit on climate was 31

power plants generating electricity. protection of the environment were Energy Consumption By using a carbon-dioxide emission a success. Waste Management of them to waste management model developed in early 2008, companies for the purposes of And Carbon-Dioxide Pannon calculated its carbon- Among these are: Pannon provides the possibility to recycling, thereby increasing the dioxide emission for 2009 as well. its customers to get rid of their used ratio of recycling and reuse to 100%. Emission Unfortunately despite all efforts, • Merging network headquarters handsets; even a campaign was The company also decreased its intentions and successful projects, and closing the old ones launched in the Christmas season of communal waste considerably by The two major impacts on the both the energy consumption and • Implementing new IT 2009. introducing the selective waste environment projected by Pannon the carbon-dioxide emission of infrastructure and facilities to Pannon either sold all of its network collecting system and therefore the is electric power consumption and the company increased. The main replace the old ones which are and IT equipment or deposed amount of recycled waste increased. electronic waste generation. Of reasons for this is that the expansion less energy efficient course the company impacts the of the network was greater than • Launching of a new function of Number of recycled handsets the network which results in lower Electricity consumption 2007 2008 2009 energy consumption in case of 2007 2008 2009 reduced use Recycled handsets (kg) 32 100 850 245 Electric Power (kWh) 52 942 53 975 62 266 • Replacement of 2G equipment with 3G which results in the Total quantity of waste environment in other ways as well initially planned by the company, reduction of the energy which we try to reduce, but the and also because before moving consumption on the network level 2007 2008 2009 main focus areas of environmental into the Pannon House and for a and in respect of data traffic Communal waste (tonnes) 423 399,8 183.8 protection remain the above two. while thereafter, two office buildings • With the intelligent facility Pannon’s energy consumption in were operated simultaneously. management system, the specific Electronic waste (tonnes) 15 23,3 8,9 a large part is the consumption of Notwithstanding, many initiatives energy consumption of the Pan- Waste water (m3) 12 997 16 932 27 145 electric power. Although this does for energy efficiency and for the non House decreased not require the direct use of natural Reused waste 7% 18% 20,4% resources, and the base stations, Direct energy consumption distributed by primary energy sources shops and the Pannon House does 2007 2008 2009 not emit any pollution related Paper Recycling electronic document management to the production of electricity Gas (m3) 147 442 281 912 217 198 system and partly to the approach either, but Pannon is responsible Oil (l) 412 014 576 063 657 825 In 2009, Pannon continued to of our workers who try to shape for considerable carbon-dioxide reduce its paper use. This is partly environmental consciousness with emission through the operation of Fuel (l) 321 808 252 378 195 260 owed to the introduction of the their activity.

• The purchase of “green” electric Directly or indirectly emitted carbon-dioxide Amount of paper used and the ratio of recycling power started in 2009 by which 2007 2008 2009 the company supports indirectly 2007 2008 2009 CO (tonnes) 23 874 23 411 25 444 the generation of renewable 2 Paper (tonnes) 83.1 70.7 69.3 Grid 84,4% 82,5% 80,4% energy • Free cooling system used in 90% Reused paper 0 100 % 100% Office and IT 8,1% 7,9% 10,2% of the network in the previous Recycled Paper 0 58 % 100% Traffic 7,5% 9,6% 9,5% years has been introduced in further base stations as well

Transport At the same time, the company improved the calculation technique In 2009, travelling by car so the average number of flights was reduced and the number can be determined more of plane flights increased. accurately.

The number and length of trips on land and in the air 2007 2008 2009 Distance (on land) (km) 11 718 908 12 284 580 979 523 Number of flights 579 350 642 Average distance of flights (km) 4900 4923 2814

5 However the recycled handsets are not shown in the yearly stock as these were transported from the stores to storage only in 2010. 33

Pannon and sustainability What are the other devices – We have designed a selective waste – the Pannon House unique in Hungary, requiring collection system which enables the great investment – have been collecting of paper, plastic, metal, (Interview with Richárd Halmay, used when designing the Pannon glass, electronic waste and used Manager for the Protection of the House in order to increase energy batteries separately from communal Environment at Pannon) efficiency? waste.

How does the company’s idea of – The heating and cooling of the Are there any preliminary the protection of the environment House is provided by Hungary’s most estimates as to what results can manifest in the Pannon House? powerful heat pump, with a cooling be achieved in saving energy with capacity of 960 kW and a heating this new system? – The office building is an capacity of 850 kW. The energy unequivocal proof of the required to produce sufficient hot – Yes we have conducted commitment of Pannon to protect water for the staff is provided by estimations in this respect. We the environment. We have planned solar collectors. The total surface of evaluated the amount of energy the House with a view to achieve this the collectors is 168 m2. The building we can save by the environment goal which we tried to accomplish is equipped with exceptionally high friendly facilities used in Pannon by using energy efficient furniture efficiency insulation to minimise House. We have concluded that and equipment which use renewable heat loss and external shades keep with the building, the heat pump, energy. Then during the construction the Pannon House cooler during the the sun collector and the intelligent of the House, we tried to avoid summer and external heat recovery management system, we can save disturbing the local ecosystem, equipment ensures that the bu- energy equivalent to the yearly therefore we only used 7.55% of the ilding does not lose much energy consumption of 500 Hungarian available eight hectares situated in through ventilation. The use of light families. the proximity of Törökbálint instead and motion sensors guarantee that of the permitted 30%. Further, we only those rooms and premises use Conference on the have built subterranean parking lighting which absolutely need to. Protection of the spaces and our IT machinery is also underground. The area around the What other solutions – possibly Environment Pannon House functions as a park. controllable by the workers as At the time of the official well – have been used to increase inauguration of the Pannon House, What are the most important energy efficiency? Pannon organised a conference on energy efficiency measures the protection of the environment accomplished during the planning – The energy efficiency of the building called Sustainability and and constructing of the House? is controlled by an intelligent building Architecture. Presentations at the management system that allows conference included Sándor Fülöp, – One of the crucial aspect was to efficient measuring and control of the Future Generation Commissioner, place the server rooms underground various equipment parameters. Mrs. Szigetiné Márta Bonifert, in order to reduce overheating during managing director of Regional the summer. We relocated our ser- Most of us associate the protection Environmental Center, Diana Ürge- vers to optimize heat emission and of the environment with selective Vorsatz, senior associate professor therefore to reduce the necessity of waste collection. What solutions at the Department of Environmental cooling. We set out to purchase and have been employed in the new Science and Environmental use the best and the most efficient office building to achieve this? Policy, CEU and András Reith, air conditioners and other building deputy chairman of the Hungarian engineering devices available which – We tried to find the most suitable Association Of Environmental save the most energy. solution which is also simple for all. Conscious Architecture. 35

Social responsibility

Innovation is mature enough to enable the two farms is five hundred meters. development of the systems for Under these circumstances, remote Mobile Healthcare and Remote home use and is suitable to prevent healthcare is the most favourable Monitoring by Pannon diseases, to assist in home- solution for both the doctors - who healthcare in a safe, simple and spend most of their time taking care Pannon has been conducting affordable manner. of administrative tasks - and the research for years with the aid population of the region. of professionals, to assert how Telemetry belt designed for the Without the remote healthcare telecommunication solutions Hungarian Ice Hockey Federation system, the number of visits to the may help to solve yet unresolved doctor’s office are of an average of problems. One of the novelties of The telemetry belt is a wireless 50/week, and the time spent with 2009 was the solution developed medical device which transmits one patient in average and including together with Omron Healthcare the vital signs of the athletes, administration is half an hour. This Hungary which could improve the even during training sessions. means a total of 25 hours per week, quality of life of people suffering The athletes of the Hungarian Ice whereas the time needed to check from cardiovascular diseases by Hockey Federation were the first the data series transmitted by the using mobile telecommunication ones to test the telemetry belt. device is 5 hours/week: which is a solutions and allowing them to This development is suitable to daily 4 minutes per patient. receive professional help in a timely transmit the electrical signal of the In summary, this means that this manner. heart telemetrically, as well as skin medical device could save 80 hours The application called Medistance temperature, outside temperature of work every month in respect of was developed with the co- and also movements and turns. The each patient. During the experiment, financing of Pannon and considered professionals can then analyse the the researchers used already even on an international level as data by a special mathematical existing non-medical signalling an innovative product. It provides method and evaluate just how much devices and even these proved to assistance in monitoring the the athlete may be strained in the be successful and brought results symptoms of such cardiovascular given situation. The vital signs of despite the restraint of time. Medical diseases by professionals thereby the athletes can also be monitored experience shows that the devices reducing the risk of connected during the training sessions based can be used efficiently and both the complications. The system regularly on which the intensity of the training doctors and the patients were happy measures and transmits the data can be increased or decreased. to participate in the experiment of the patients, evaluates the risks, and were open minded in respect helping to avoid the occurrence of Mobile Signalling Device for of using new technologies and cardiovascular catastrophes (heart Remote Medical Supervision regarding home-healthcare. attack, stroke, heart failure, kidney failure). Pannon appointed the Department Pannon Legends Cardiovascular disease is the of Software Development at the number one cause of death in University of Sciences of Szeged In addition to voice services, the Hungary. Every initiative which to do some research for innovative role of mobile internet in Pannon’s may improve the care taking purposes. The subject of the activity is increasing. The company of people suffering from such research was M2M, in other words continues to develop the 3G/ disease and which may help in the seamless machine-to-machine HSDPA network which has the avoiding unexpected events, has communication, with respect highest throughput rate and which a considerably positive impact on to home-healthcare. For these functions simultaneously with individuals as well as society on a purposes, the research used an AAL the EDGE network accessible in whole. (Ambient Assisted Living) system most parts of the country, making Mobile telecommunication and based on M2M applications. Many surfing and e-mail access possible. IT solutions of our days enable EU partners and the doctors of the Pannon’s aim with project Pannon information technologies to become micro region of Homokhát helped Legends was to draw attention of part of our everyday lives and gain the researchers in elaborating small townsmen to mobile internet ground in our homes, fundamentally the system, with Mohanet Kft. services, as use of internet in these changing our lifestyles and manufacturng the signalling areas is quite low despite the fact opportunities without us even devices. that the said service is otherwise noticing. These technologies In the micro region of Homokhát, available. made their appearance in home- every other person lives on a farm The elementary schools of small healthcare as well. The technology and the average distance between towns, where the population does 37 not exceed 1500 persons, were them to the designated locations. they teach a team of students and that such operation is mutually to support two disadvantaged roma needy and the role models of the under eligible to participate in project The locations of Pannon’s 2008 teachers all the methods of Big Plan. beneficial for the community on a students on a long term, meaning 25 generation. Pannon Legends by telling a legend charity team buildings received The team then commits to pass on long-term. The company not only 4-6 years, until they obtain their As of 2004, the Role Model Foundation tale of their village. Iván Kamarás the donations, namely the families the knowledge to the elementary provides information to its employees university degree. salutes once every quarter year the and Krisztina Goda helped us in in need of Andocs, Budapest XX. schools and kindergartens in the regularly but also tries to establish a Understanding the importance of people whose achievements can set judging the applications. Pan- District., Fajsz, Jánoshida, Kisszé- neighbourhood and to promote direct relationship with its partners the education of roma students an example in Hungarian society. The non created a website to support kely, Kunszentmiklós, Magyarkeszi, environmental consciousness. founded on trust and to involve them of outstanding talent with a elected role models receive a custom the project, (http://legendak. Nagyszékely, Ozora, Pomáz, in its activities and initiatives. disadvantaged background designed role model statue and HUF 1 pannon.hu/), where the schools Sarkadkeresztúr, Tenk, Tiszaigar, Community Service Teambuilding The reason why Pannon involves therefore in need of support, million each. could upload the history of their Tomajmonostor and Törökbá- its partners actively in the Hungarian Business Leaders’ Forum In the first quarter of 2009, the Board town imitating a film synopsis with lint. In addition to the above It is important for Pannon that implementation of its social (HBLF) together with IBM first of Trustees of the Foundation awarded photographs. Pannon insured a locations, the employees of the its employees understand the responsibility strategy is because launched in 2007 the Romaster for their outstanding achievements modem and mobile internet for all two companies participating in the responsibility the company bears these partners are the ones who are Programme. The primary goal of the in Hungarian sciences, culture and registering villages to assist them in rally could nominate institutions, in respect of its closer and wider in daily contact with the customers programme is to allow the students arts the following: Diana Ürge- their research and in uploading their child protection agencies or other environment and that they also and therefore they are an authentic to get acquainted with the operation Vorsatz, energy efficiency researcher, application, thereby familiarizing social service centres anywhere in participate in activities of such intermediary of the Pannon values. and culture of the company and László Gz, patron of Hungarian them with the possibilities offered by the country. The donations were nature. It is also important that These fundamental values are the therefore be prepared to integrate contemporary music and Dániel Rátai, this new device. primarily collected to help families these teambuilding trainings, reason why Pannon organised on in the corporate world of labour. a young inventor in the field of compu- The project was a great success in with small children and those most which have a great role in the 25 June, 2009 the traditional but As part of this cooperation, two ter technology. mobilizing these towns: 87 teams in need. business success of the company, unconventional partners meeting, employees of Pannon are appointed In the second quarter, the Board from 69 towns registered from all are organized in accordance with where the company beautified the to be supporting mentors of of Trustees of the Foundation over the country and applications The Big Plan company values and interests. sites of the surrounding forests with the two students pursuing their awarded laureates under 25 were sent by 69 teams from 55 As the synchrony of these two the help of its partners. As a result university studies. As a result of who demonstrated outstanding towns. During the three weeks of the Charity continued into the Christmas considerations, for several years of the hard work of the seven teams, such continuous mentoring, the achievements in matters essential public vote, 8351 votes in total were holiday season. In 2009 Pannon now, Pannon organizes these the areas of Fellegvár, Paprét, employees of the company learn for society. The following persons cast. The winner of the vote was a once again took a stand to spread teambuilding events so that the Barátság park, Telgárthy-meadow, about the student’s background, were elected as role models: Martin town called Vereb in Fejér county environmental conscious approach community also profits from the Mócsay farm, Mogyoróhegyi parking circumstances, culture which Bukovics, student journalist, Mónika with 646 votes, and the judges and conduct in which our company activity. and Vándortábor were renewed. The experience may help to create Takáts environment activist and Zsu- awarded the application of Noszlop believes in profoundly: this year On 9 October, 2009, almost 100 teams painted the forest benches, a tolerant and diverse working zsanna Zöldi, senior mentor of the in Veszprém county. the Christmas donation - which of Pannon’s employees helped tables and lavatories and cleaned up atmosphere. Erasmus Office at ELTE University. Pannon considers that this is a great has become a tradition in the life of the Ócsai Madárvárta Association the designated fire places. In the third quarter of 2009, the success; this project revealed the Pannon - was given to the Big Plan for the protection of birds, where Pannon Role Model Foundation Board of Trustees of the Foundation opportunities of mobile internet Youth Programme for the Protection they replaced the missing planks Romaster Programme was looking for candidates who are to people who live in areas where of Nature and the Environment from the educational trail, cleaned In 2009, the activity of Pannon Role actively involved in integrating socially the use of internet was not widely which was conceived by Mónika Ta- them, rebuilt a bridge and did some One of the key points of the Model Foundation was continued disadvantaged groups into majority spread. kács, one of our Pannon Role Model gardening on site. international vision of the Telenor along different guidelines. As of this Hungarian society. Barbara Czeizel, laureates. The Association operates on Group is the appreciation and year a new awarding procedure was director of the Early Intervention Cent- The goal set out by the Programme the territory of the Ócsa Natural respect of the values and lifestyles implemented according to which the re, Tibor Derdák, professor - sociologist Helping the most in need is to educate children in a fun Reserve where they observe over of others. Keeping this in mind, in Role Models were chosen from pre- and Gábor Dombi, civil activist were and playful way about why the 150 bird species. The open-end 2008, Pannon joined the Romaster defined areas once every quarter year. chosen as role models. Pannon – Masped Rally to Collect protection of the environment is Association founded in 1992 now Programme launched earlier upon Hence the awards for the laureates In the last quarter of 2009, the Board Clothing important. With the motto “the world has over 200 members who play the initiative of the Hungarian Bu- in the field of sports, science, culture, of Trustees of the Foundation was is what you make it”, the volunteers an outstanding role in not only the siness Leaders’ Forum (HBLF). With arts and those with achievements looking for candidates who struggle As part of social responsibility, visit schools and kindergartens preservation of the bird wildlife, this programme, Pannon undertakes on bettering the opportunities of the to improve Hungarian sport life and Pannon collected donations for where they play environmental but also with the help of the trail sports achievements and who are the people in need. In addition conscious games created especially constructed on the area, help to Pannon’s social investment in 2009 not so widely know as of date. The to financial aid, in 2009 we also for this purpose and with this self teach the future generation to 2007 2008 2009 following persons were elected from organized a rally to collect clothing made method, they can bring even appreciate nature. the candidates as role models: Mrs. Social investment 37 800 000 76 812 373 34 537 825 with the assistance of one of our the smallest children to understand Angyal Józsefné (Ms. Erika), director suppliers, Masped Kft. who helped the notion of protecting the Pannon and Partners for Park- Sponsorship 225 647 221 264 250 023 205 050 110 of Hársfa Association for the Disabled, us in the collection as well as the environment and the importance like Forests Other expenditures 12 545 447 3 391 108 1 800 000 Géza Dávid, senior kayak-canoe coach freight. this notion carries within. The and Tamás Pintér, national mountain Over 1700 employees of the two organizers of the Programme try A dominant element of the Pan- Total 275 992 668 344 453 504 241 387 935 bike champion. companies participated in the rally to involve as many youngsters as non mentality is thinking locally, as a result of which close to ten possible and teachers as well as in other words close cooperation containers were filled with adult and participants. with the community based on children’s clothing and toys. The With our donations, the volunteers common goals and interests. This contents of the containers were of Big Plan will be able to visit one is how Pannon creates values as sorted by the volunteers of the high school every week, chosen from a member of the community and companies and Masped transported the received applications, where ensures sustainable operation and 39

Responsibility for Culture Hungarian National Gallery was the start and the first taste of success. The importance of the Fine Art in the Pannon House In addition to designing its own Artist House is well reflected by office building, Pannon intends the fact that many of the artwork It is very important for Pannon to to ensure that fine arts are more introduced on this exhibition are now integrate contemporary fine art accessible for the general public. part of the permanent exhibition at into the work culture and create That is why the company has been the Hungarian National Gallery and harmony. The initial concept was the main sponsor of the Hungarian the Museum of Fine Arts, and are to emphasize art by exhibiting National Gallery for the past 15 also displayed to the public in the innovative, unconventional and years and has been helping the work permanent exhibitions in museums sometimes monumental pieces of the Gallery in its own way. During from St. Petersburg to Berlin, from in the Pannon House. Pannon the last fifteen years many classic Vienna to New York. published a tender to make this and contemporary exhibitions have come to life and almost one been brought to life with the help of Night of Museums hundred pieces of artwork were Pannon, for example the exhibitions sent in response. The artworks showing Mednyánszky, Munkácsy, In 2008, Pannon was the main were selected in several rounds the Hungarian Fauves, Vaszary, sponsor for the first time of the by a professional jury made of two Zichy or the heritage of King nationwide festival of events judges: Gábor Kopek, the president Matthias, which worthily attracted called the Night of Museums. of Moholy- Nagy University of Arts hundreds of thousands of visitors. At this event organized for the and Zsolt Petrányi, president of Pannon continued to support seventh time in a row, offering Mcsarnok (Art Gallery). the Hungarian National Gallery more than two thousand events The six meter high head profiles in 2009. One of the main events in 200 museums, the company of István Kulinyi which are located of the Gallery was the opening contributed as the main sponsor of around the Pannon House focus of the exhibition called “Artist the Hungarian National Gallery. on communication and humanity. House 1909-1914”. The company Pannon provided visitors with The led ribbons made by Ventus led by Miklós Rózsa organized help so that they could choose Graminis Art Group tangle all over approximately forty exhibitions in its programmes and venues on the the interior of the building and with four and a half years of existence Pannon W@P page, moreover the help of small cameras, these which were designed to show the they could check the schedule of led ribbons transmit the animated works of less known young artists the buses running especially for movement of the people inside. and to allow them to present this event. As our contribution to These forms are also echoed on smaller, independent collections. the design of the Gallery venue, the gigantic painting located in the Despite the fact that the Artist House modern information desks were auditorium. was open only for a short period, it available and projectors, mood The artist duo of Ravasz-Szarka achieved what it was destined for: the lamps and deck chairs created created a unique and unconventional Hungarian public became familiar a cosy atmosphere for those system of icons to mark the different with the most recent Hungarian and yearning to unwind. Video and premises in the building. These green international initiatives and aroused photo footage was recorded lit figures and stylized signs all reflect curiosity regarding progressive at the event, of the night’s the innovative and unconventional trends. Furthermore, many artists cultural extravaganza and of the way of thinking which appears even had the chance to introduce special guided tours and other in the smallest details. themselves – and for some this programmes. 41

Responsibility for Sports giving a one hundred percent with the support of the European performance. Furthermore this Commission. Ice Hockey team finished first place in its The European Framework for Safer group at the European qualification Mobile Use by Children and Young Pannon is the proud main sponsor tournaments therefore qualifying Teenagers is the self-regulatory of the Hungarian Ice Hockey for the European Championship to initiative of the European mobile Federation and of the Hungarian be held in Norway and Denmark. At operators which is implemented men’s team since 2004. Thanks the World Championships in China, through individual codes of conduct to the stable finances – a rarity in the new coach, Eszter Mátéfi led the in each country. With the signing of Hungary – during the last few years, team made up of young players and the Code, Pannon has undertaken the team has managed to work its won the ninth place. to help and empower parents with way up alongside the world’s elite. The men’s team also closed this year various services and information so Under foreign coaches, they worked with great success: after the sixth as to ensure safer use of mobiles hard for years on so that they would place at the World Championships for their children by determining have the chance to play against in Croatia, it qualified for the World what content may be accessible for the world’s best. The team took the Championships to be held in January them. first step on this road when it won 2010 in Austria as second in their In accordance with the undertakings the Division I World Championship in group at the European qualification of the Code, Pannon launched Sapporo and a place in Group A. tournaments. The team finished new services which limit access to After these impressive second at the Pannon cup - which premium rate services and adult achievements, a year later was also a tournament in memoriam content which are available via the unfortunately the qualifications Marian Cozma, held in October with various channels such as SMS, MMS, for the 2010 Vancouver Winter the participation of three other WAP, voice call or the internet. Olympics did not end with such teams from Romania, Tunisia and The access restrictions to adult success. Nonetheless in April 2009, Serbia. content comprises of two service during the preparations for the packages available together or World Championship organized with Teddy bear toss separately. One of these is the three participating countries, when restriction of SMS, MMS, WAP playing against the giants of the Pannon and the Hungarian Ice and voice call access, where the sport, the Hungarian team proved Hockey Federation made the customer may restrict access to that it rightfully owns a spot in the children in hospitals smile with a premium rate adult content, access elite club of ice hockey. rather unconventional initiative. to services over HUF 1000, SMS The Group A World Championships At the Pannon Hockey Gala held and MMS traffic from premium rate in Switzerland was a great on 2 April, 2009, the fans were numbering ranges and the content adventure for the players, the invited - in a previous notice - accessible through the PannonGo coach and the fans - as this was to throw teddy bears or other website. The other package ensures the biggest event in the history of stuffed animals they have brought that only those websites and Wap Hungarian ice hockey. with them in the rink when the sites are granted access to which Hungarian team scores its first are contained in the so called white Handball goal against Finland, as a result of list, previously compiled by the which 4532 pieces were collected subscriber, which does not contain Pannon signed another sports by the organizers. The toys were adult content. The access control sponsorship agreement in the same given personally by the players of packages are available to Pannon year of 2004, becoming the main the team and by the sister of Gábor customers free of charge. sponsor of the Hungarian Handball Ocskay to the little patients of the In addition to the above, Pannon Federation. The company extended Heim Pál Children’s Clinic, the SOTE published an information leaflet the sponsorship agreement with the 1 Children’s Clinic and the Children’s on the safe use of mobiles which Hungarian Handball Federation for a Clinic in Tzoltó Street. contains useful information for further two years so the cooperation parents about Pannon’s safe was prolonged until 31 December, content provision, restriction of 2010, thereby providing assistance Safe use of mobiles certain content and useful services for the women’s and men’s team to for minors. prepare for the great international Pannon, together with Hungarian Furthermore, the leaflet provides championships. mobile operators signed a Self- information on where and how 2009 was exceptionally successful, regulatory Code in February 2007, customers can acquire further as both the men’s and the women’s intended to ensure the safe use of information about the matters team provided outstanding mobiles by children and teenagers. and how they can file a complaint performance. The women’s team The Code was prepared pursuant concerning illegal content. won both Pannon Cups organized to the Framework Agreement locally without any loss of points, of the GSMA (GSM Association) 43

Internal Regulations, Policies

Due to the increasing role of the regulations discuss any related consistent management of the social responsibility, governance matters at the management various intellectual products principles are becoming more and meeting held each week. elaborated in the course of more important in the life of every the company’s activity. This company including Pannon. The Scope of competence: document defines the various regulations therefore fulfil several types of intellectual property functions. First of all, they are • Chief Financial Officer: and the different procedures destined to guarantee the lawful accounting and financial reports, applicable to their handling within operation of the company by delegation of competence, risk the company. Furthermore, the regulating the various applicable management, tax, Treasury policy sets out in respect of the procedures. At the same time it is • Chief Corporate Affairs Officer: relation between the parent also an important goal to define regulatory and legal regulations, company and Pannon, the rules common principles, values and anti-corruption provisions, ethical of allocating competence and the concepts for the company and the and safeguarding of assets relevant procedures applicable to entire company group which help to • Chief Technical Officer: IT policies trademarks. meet the demands of stakeholders • Chief Human Resources Officer: in the business environment. Setting HR policies Code of Conduct common principles and rules and • Procurement Director: raising awareness about them in the Procurement Policy All employees of Pannon, all other company culture are indispensable • Chief Corporate Communications persons acting on behalf of the for Pannon to achieve the envisaged Officer: Communications Policy company and all members of the future, goals and values. Board of Directors must comply Important policies and with the provisions of the Code of Pannon’s system of policies programmes: Conduct and any other applicable operates at three basic levels: • Legal risk assessment policy - the regulations and procedures prepared policy aims to draw attention to pursuant to the provisions of the • Corporate governance principles: the types of legal risks potentially applicable Hungarian laws. The containing the Telenor Group arising during normal operation Code of Conduct of Pannon sets policies and the local regulations of the company and to prevent out the most fundamental and derived therefrom. These are the the occurrence of any legal most important values, ethical most important policies which problems arising therefrom. norms of the company. The Code of are binding for all (e.g. Code of For the sake of prevention, the Conduct regulates the behaviour of Conduct, Anti-corruption Policy, policy highlights the importance employees towards each other and Delegation of Competence, of training employees and of third parties during or in connection Procurement Handbook etc.). regular consultation to identify with their daily work. In addition, all • The policies prepared by Pannon legal risks and to avoid them. Pannon employees must ensure independently which are binding The document is intended to that all employees comply with the upon all persons at the company raise employee awareness of the rules, directives and forms of conduct and the policies pertaining to legal risks entailed by their work which are based on the values of the various business areas. through practical problems in company. • Special internal instructions which every field and to illustrate how The respect of human rights, working help the daily operation of specific they can avoid or resolve any conditions, health and safety are departments, offices and groups. such problems. considered as vital values by Pannon. • Competition compliance Respect of the values and the work The senior executives of Pannon are programme - In this document, of others is a key element of the responsible to regularly review the Pannon presents the prevailing company’s philosophy. policies pertaining to the of specific legal regulations and emphasizes Loyalty to the company group business areas and to ensure that the importance of practical and its interests is also of primary the provisions thereof are complied training: the document is intended importance. The company’s interests with. The internal audit group of to demonstrate through a list of are best served if the decisions are Telenor supervises compliance with examples permitted and prohibited adopted in accordance with the the policies at the subsidiaries (like conduct when contacting third rules of competence. Therefore it is Pannon) biannually. They specify persons or authorities. forbidden to undertake obligations the date and time of the audit of • Intellectual property on behalf of the company without specific business areas. The senior management policy – The express authority or to take executives appointed to supervise aim of the policy is to ensure measures or acquire interests that 45 potentially obstruct objective and to achieve business or personal Telenor Way efficient work. advantages. Nor may agreements The service rendered for Pannon must with middlemen be used to channel The Telenor Way connects the never be subjected to personal gains payment to anyone in such a way that different elements of the corporate or advantages. Conflicts of interests may be interpreted as corruption. culture of Telenor Group and also are to be avoided when practically Extreme caution should always be defines and systematically organizes possible. Such conflicts of interest taken when offering or accepting the basic elements of the business may potentially arise in connection gifts and business courtesies. No activity. The founding pillars of this with activities of customers, suppliers, gifts or other remunerations may be system are specified by the Vision entrepreneurs mandated by the accepted if there is reason to believe and Values, the Code of Conduct, the company, present or future employees, that its purpose is to influence busi- Group Policies and Procedures and competitors or third party businesses. ness decisions. the Leadership Expectation. All employees assess possible conflicts Pannon does not endorse political Telenor Way means that the company of interest individually and must inform parties, neither in the form of direct grants the freedom to the employees their direct superiors immediately financial support nor in the form of to make decisions and find solutions about the possibility of bias or a conflict paid working time. but requires on the other hand that of interest. If an employee becomes aware of an they comply with the Telenor rules All persons working for Pannon infringement of any of the Pannon and that they understand clearly what should proceed with due diligence rules or guidelines, or if a question is considered as a company value and regarding confidentiality, the arises regarding the interpretation or what is unacceptable. protection of personal data and the application of the Code of Conduct, Telenor’s goal is to enable and management of intellectual property such query must be addressed to encourage its customers to take and valuable assets. This includes the employee’s direct superior. If this full advantage of the available information that may affect the is not possible, the case should be telecommunication solutions. We stock exchange rate of Telenor and reported directly to the designated are here to help. any publicly available information Compliance Manager of the company. Telenor serves the customers along in respect of which only authorised Every colleague must be familiar with the following guidelines: persons are entitled to comment or the provisions of the Pannon Code of • make it easy by bringing mobile disclose information. Conduct. Newly employed colleagues communication closer to the user Pannon’s objective and task is to confirm by their signature that they by developing simple and easy- satisfy demand, in the course of were made aware of the provisions to-use solutions. which the company must obey the of the Code of Conduct. The Code of • keep promises, principle of respect, impartiality, Conduct is accessible electronically • be respectful our differences, fairness and professional on the internal information website • be inspiring and encourage new ways. competence. The company makes and e-learning material is also sure that the relationship with available to help with the practical The Telenor Group level Policies and customers, suppliers, the competition implementation of the guidelines of Procedures determine the general and the authorities is dealt with along the Code of Conduct. The learning requirements of business activity. The the above guidelines. material presents life-like and Leadership Expectations define the Pannon strongly condemns all problematic practical situations that basic principles of attitude, approach forms of corruption. It is forbidden help colleagues identify possible and behaviousr of our executives. for company staff to offer or accept ethical problems that they may The Code of Conduct defines the illegal or inappropriate pecuniary eventually come across during the principles and ethical standards based gifts or other remuneration in order course of their work. on which the company creates value. 47

Technical Information about the Report

2.4 Location of organization's headquarters. H-2045, Törökbálint, Pannon u. 1., Hungary 2.5 Number of countries where the organisation operates, and names of countries with either major Hungary operations or that are specifically relevant to the sustainability issues covered in the report. 3.1 Reporting period (e.g., fiscal/calendar year) for 2009 information provided 3.2 Date of most recent previous report July 2008 3.3 Reporting cycle Yearly

Dr. Krisztina Baracsi 3.4 Contact point for questions regarding the report or its contents Telenor Magyarország Távközlési Zrt. [email protected]

The content of the report, the order of the chapters 3.5 Process for defining report content were determined by the employees who have participated in the preparation thereof. The report is applicable to Pannon GSM 3.6 Boundary of the report Telecommunications Plc. The report does not contain the balance sheet data 3.7 State any specific limitations on the scope or pursuant to the guidelines of the parent company, boundary of the report however these information may be acquired individually at the Registry Court. 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other The report does not contain the achievements of the entities that can significantly affect comparability two subsidiaries. from period to period and/or between organizations. 3.9 Data measurement techniques and the bases of As a basic situation, the reported data are based on calculations, including assumptions and techniques measurements. It is indicated if such is not the case in underlying estimations applied to the compilation of respect of certain data. the Indicators and other information in the report. 3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the Concerning certain elements of the report there were reasons for such re-statement (e.g., mergers/ no changes compared to last year’s report, acquisitions, change of base years/periods, nature of business, measurement methods). 3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods N/A applied in the report. 3.13 Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of The report was not certified by an external party. any external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s) 49

GRI content index

GRI ind. Summary Chapters 1. Strategy and analysis Statement from the most senior decisionmaker of the organization 1.1 (e.g., CEO, chair, or equivalent senior position) about the relevance of Welcome note sustainability to the organization and its strategy 2-3-4. Introduction of the company, 1.2 Description of key impacts, risks, and opportunities strategy and business performance

2. Organisational profile

2.1 Name of the organisation 2. Company Introduction

2.2 Primary brands, products, and/or services 4. Strategy

Operational structure of the organization, including main divisions, 2.1.3 Governing Bodies and 2.3 operating companies, subsidiaries, and joint ventures Corporate Structure

2.4 Location of organization’s headquarters 2. Company Introduction

Number of countries where the organization operates, and names of 2.5 countries with either major operations or that are specifically relevant 2. Company Introduction to the sustainability issues covered in the report 2.1.3 Governing Bodies and 2.6 Nature of ownership and legal form Corporate Structure Markets served (including geographic breakdown, sectors served, and 2.7 2. Company Introduction types of customers/beneficiaries) Scale of the reporting organization, including the number of 2.8 employees, the net sales, total capitalization broken down in terms of 2. Company Introduction debt and quantity of products or services provided There were no substantial Significant changes during the reporting period regarding size, 2.9 changes in2009 at Pannon in structure, or ownership respect of the said segments

2.10 Awards received in the reporting period 2.1.4 Awards and recognition

3. 3.6 Parameters of the report

12. Technical Information about 3.1 Reporting period (e.g., fiscal/calendar year) for information provided the Report

12. Technical Information about 3.2 Date of most recent previous report the Report

12. Technical Information about 3.3 Reporting cycle the Report

12. Technical Information about 3.4 Contact point for questions regarding the report or its contents the Report 51

12. Technical Information about Internally developed statements of mission or values, codes of 3.5 Process for defining report content the Report 4.8 conduct, and principles relevant to economic, environmental, and 11.1 Code of Conduct social performance and the status of their implementation 12. Technical Information about 3.6 Boundary of the report Procedures of the highest governance body for overseeing the the Report organization’s identification and management of economic, 12. Technical Information about 4.9 environmental, and social performance, including relevant risks and 11. Internal Regulations, Policies 3.7 State any specific limitations on the scope or boundary of the report the Report opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles Basis for reporting on joint ventures, subsidiaries, leased facilities, 12. Technical Information about Processes for evaluating the highest governance body’s own 3.8 outsourced operations, and other entities that can significantly affect the Report 4.10 performance, particularly with respect to economic, environmental, 6. Employees comparability from period to period and/or between organizations and social performance Data measurement techniques and the bases of calculations, Explanation of whether and how the precautionary approach or including assumptions and techniques underlying estimations applied 12. Technical Information about 4.11 10. Responsibility and Safety 3.9 principle is addressed by the organization to the compilation of the Indicators and other information in the the Report report Externally developed economic, environmental, and social charters, 4.12 10. The Pannon interests principles, or other initiatives to which the organization subscribes or endorses Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement 12. Technical Information about Memberships in associations (such as industry associations) and/ 3.10 (e.g., mergers/acquisitions, change of base years/periods, nature of the Report 4.13 or ational/international advocacy organizations in which the 2.1.1 Associations, memberships business, measurement methods) organization Significant changes from previous reporting periods in the scope, 12. Technical Information about 4.14 List of stakeholder groups engaged by the organization 5.1 Pannon’s stakeholders 3.11 boundary, or measurement methods applied in the report the Report 4.15 Basis for identification and selection of stakeholders with whom to engage. 5.1 Pannon’s stakeholders Table identifying the location of the Standard Disclosures in the 3.12 13. GRI content index Approaches to stakeholder engagement, including frequency of report 4.16 5.1 Pannon’s stakeholders engagement by type and by stakeholder group Policy and current practice with regard to seeking external assurance Key topics and concerns that have been raised through stakeholder for the report. If not included in the assurance report accompanying 12. Technical Information about 4.17 engagement, and how the organization has responded to those key 5.1 Pannon’s stakeholders 3.13 the sustainability report, explain the scope and basis of any external the Report topics and concerns, including through its reporting assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s) EC Procedures for local hiring and proportion of senior management 2.1.3. Governing Bodies and 4. Management, Undertakings and obligations EC7 hired from the local community at locations of significant operation Corporate Structure Governance structure of the organization, including committees 2.1.3 Governing Bodies and EN 4.1 under the highest governance body responsible for specific tasks, Corporate Structure such as setting strategy or organizational oversight 9.1.1. Energy Consumption And EN1 Materials used by weight or volume Carbon-Dioxide Emission Indicate whether the Chair of the highest governance body is also an 2.1.3 Governing Bodies and 4.2 executive officer (and, if so, their function within the organization’s 9.1.1. Energy Consumption And Corporate Structure EN3 Direct energy consumption by primary energy source management and the reasons for this arrangement) Carbon-Dioxide Emission For organizations that have a unitary board structure, state the 9.1.1. Energy Consumption And 2.1.3 Governing Bodies and EN4 Indirect energy consumption by primary source 4.3 number of members of the highest governance body that are Carbon-Dioxide Emission Corporate Structure independent and/or non-executive members Initiatives to provide energy-efficient or renewable energy based 9.1.1. Energy Consumption And Mechanisms for shareholders and employees to provide 2.1.3 Governing Bodies and EN6 products and services, and reductions in energy requirements as a 4.4 Carbon-Dioxide Emission recommendations or direction to the highest governance body Corporate Structure result of these initiatives Linkage between compensation for members of the highest Initiatives to reduce indirect energy consumption and reductions 9.1.1. Energy Consumption And EN7 governance body, senior managers, and executives (including 6.2.1 Training, Career, achieved Carbon 4.5 departure arrangements), and the organization’s performance Performance Management 9.1.1. Energy Consumption And EN16 Total direct and indirect greenhouse gas emissions by weight (including social and environmental performance) Carbon-Dioxide Emission 11.1 Management Directives Processes in place for the highest governance body to ensure Initiatives to reduce greenhouse gas emissions and reductions 9.1.1. Energy Consumption And 4.6 in the Spotlight, Code of EN18 conflicts of interest are avoided achieved Carbon-Dioxide Emission Conduct EN22 Total weight of waste by type and disposal method 9.1.2 Waste Management Process for determining the qualifications and expertise of the members of the highest governance body for guiding the Significant environmental impacts of transporting products and other 4.7 11.1 Code of Conduct organization’s strategy on economic, environmental, and social EN29 goods and materials used for the organization’s operations, and 9.1.4. Transport topics transporting members of the workforce 53

Sociological performance indicators PR Product liability

LA Labour practices and fair working conditions Practices related to customer satisfaction, including results 5.2.1. Customer Satisfaction PR5 of surveys measuring customer satisfaction Surveys Total workforce by employment type, employment LA1 6. Employees contract, and region Programs for adherence to laws, standards, and voluntary PR6 codes related to marketing communications, including 5.4 Responsible marketing Total number and rate of employee turnover by age group, LA2 6. Employees advertising, promotion, and sponsorship gender, and region Total number of incidents of non-compliance with Benefits provided to full-time employees that are not regulations and voluntary codes concerning marketing LA3 provided to temporary or part-time employees, by major 6. Employees PR7 5.3 Data protection communications, including advertising, promotion, and operations sponsorship by type of outcomes Rates of injury, occupational diseases, lost days, and Total number of substantiated complaints regarding LA7 absenteeism, and number of workrelated fatalities by 6. Employees PR8 5.3. Data protection breaches of customer privacy and losses of customer data region Education, training, counseling, prevention, and risk- Telecommunication sector indicators control programs in place to assist LA8 workforce members, their families, or community members 6. Employees Programmes to provide and maintain telecommunication regarding serious diseases PA6 products and services in emergency situations and for 5.4. Responsible marketing disaster relief Average hours of training per year per employee by Policies and practices to manage human rights issues LA10 6. Employees employee category relating to access and use of telecommunications products and services. For example: participation in industry Programs for skills management and lifelong learning that initiatives or individual initiatives related to Freedom of LA11 support the continued employability of employees and 6. Employees Expression; legislation in different markets on registration, assist them in managing career endings PA7 5.4. Responsible marketing censorship, limiting access; interaction with governments Percentage of employees receiving regular performance on security issues for surveillance purposes; interaction LA12 6. Employees and career development reviews with national and local authorities and own initiatives to restrict criminal or potentially unethical content; protecting Composition of governance bodies and breakdown of vulnerable groups such as children employees per category according to gender, age group, LA13 6. Employees minority group membership, and other indicators of PA10 Initiatives to ensure clarity of charges and tariffs 5.4. Responsible marketing diversity

HR Human Rights Report Application Levels Percentage of significant suppliers and contractors that HR2 have undergone screening on human rights and actions 7. Suppliers 2002 C C+ B B+ A A+ taken in Accordance

Total hours of employee training on policies and Mandatory Self Declared procedures concerning aspects of human rights that HR3 6. Employees are relevant to operations, including the percentage of Third Party Checked employees trained Optional GRI Checked SO Society Report Externally Assured Report Externally Assured Report Externally Assured

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of SO1 10. Responsibility and Safety operations on communities, including entering, operating, and exiting

SO4 Actions taken in response to incidents of corruption 11. Internal Regulations, Policies

Public policy positions and participation in public policy SO5 11. Internal Regulations, Policies development and lobbying. Total value of financial and in-kind contributions to political SO6 11. Internal Regulations, Policies parties, politicians, and related institutions by country This report has been prepared with the help of the employees of Telenor under the coordination of the Company Communication Department

Responsible publisher: Anders Jensen, CEO Editor in chief: Telenor Hungary Telecommunications Plc. Layout: Createam Concept Kft. Closure of the report: 22 October, 2010

Telenor Magyarország Távözlési Zrt. 2045 Törökbálint, Pannon út 1. Phone: (20) 930 4000 E-mail: [email protected] Web: www.telenor.hu