Board of Directors

The activity of the Board of Directors is governed by the Charter, the Corporate Governance Code, the Regulations on the Board of Directors, and other documents adopted by the General Shareholders Meeting.

The Chairman directs the Board of Directors, organizes and ensures the effective operation of the Board of Directors, conducts its meetings, and performs other functions stipulated by the Charter and Regulations on the Board of Directors.

Members of the Board of Directors — Shareholders’ Representatives — represent the interests of major shareholders when the Board of Directors performs its activity.

The Company holds regular thematic events for interaction of members of the Board of Directors and top management with shareholders (including minority shareholders). In 2022 such events include the Issuer Day on KASE by the results of 2021, the Issuer Day on KASE according to the results of the first half of 2022, the Hearing at the Public Council of Samruk-Kazyna JSC.

Independent directors of the Board of Directors are members of all committees, review all issues and accept recommendations for the Board of Directors. The Audit Committee, which consists solely of independent directors, considers, and takes decisions on financial reporting, internal and external audit, risks, and other important areas of activity. In addition, independent directors are also responsible for making decisions on the conclusion of transactions in which there is an interest due to their independence.

Members of the Board of Directors shall be elected by the annual General Shareholders Meeting and reelected by the extraordinary General Meeting in the event of the early termination of the authorities of previously elected members of the Board of Directors of the joint-stock company pursuant to the procedure established by the legislation of the Republic of Kazakhstan, the Charter of the joint-stock company and the Regulations on the Board of Directors of Kazakhtelecom JSC.

The election of members of the Board of Directors shall be performed by shareholders through cumulative voting using ballots, except for cases where one candidate is run for one place on the Board of Directors.

Candidates for election to the position of a member of the Board of Directors may be nominated from among:

• Individual Shareholders;
• Persons proposed (recommended) for election to the Board of Directors as shareholder representatives;
• Individuals who are not a shareholder of the Company and are not proposed (not recommended) for election to the Board of Directors as a representative of the shareholder.

Candidates and members of the Board of Directors should have the relevant experience, knowledge, qualifications, positive achievements and impeccable reputation in the business and/or industry environment necessary to perform their duties and organize the effective work of the entire Board of Directors in the interests of shareholders and the Company.

The Board of Directors consists of 7 people, 3 of whom are independent (43% of the total number).

Key competencies of members of the Board of Directors:

• Baidauletov Nurzhan Talipovich — management of the Board of Directors, telecommunications, strategy, implementation of decisions of a major shareholder;
  
• Yessekeyev Kuanyshbek Bakytbekovich — telecommunications, strategy, business planning;
  
• Auganov Gibrat Kairatovich — strategy, personnel issues, implementation of decisions of the major shareholder;
  
• Kazutin Nikolay Yurievich — audit, finance, marketing, implementation of decisions of a major shareholder;
  
• Independent directors: Buyanov Alexey Nikolayevich, Jubaev Armanbay Saparbaevich and Zaika Dmitriy Alexandrovich are specialists in the fields of audit, finance, marketing, telecommunications, strategic management, human resources and others. As part of the activities of the Board of Directors and its committees, they perform a wide range of duties.
  

Due to the launch of the state policy in the field of ESG, the Company has become an active participant in this program and has taken the path of gradual implementation of standards in its activities. The members of the Board of Directors, who have sufficient experience in the field of sustainable development, play an important role in this process. In particular, the entire current Board of Directors is constantly immersed in the social sphere, corporate governance and environmental issues. The social side is particularly relevant in the current time of unstable economic conditions. Board members review the areas covered by ESG standards both at the Board of Directors level and at the levels of the relevant committees. The company conducts training events, including for members of the Board of Directors in order to further the qualitative growth of the management body in the implementation of ESG standards.

Key changes in the composition of the Board of Directors in 2022:

• On April 13, 2022, Naizabekov Timur Kurmangazievich terminated the powers of a member of the Board of Directors on his own initiative.
• On May 30, 2022, by resolution of the annual General Shareholders Meeting the powers of authorities of Saudabayev Serik Bolatovich were terminated, Auganov Gibrat Kayratovich was elected as the representative of the interests of the major shareholder of Kazakhtelecom JSC — Samruk-Kazyna JSC.
• On July 4, 2022, by the resolution of the extraordinary general shareholders’ meeting, the Company’s Board of directors changed its composition: the powers of Kussainov Erulan Aitashovich, Alimov Abay Savitovich, Alexander von Gleich were prematurely terminated and Kazutin Nikolai Yurievich was elected as a representative of Samruk-Kazyna JSC and Zhubaev Armanbai Saparbaevich as independent director for the rest of the term of Kazakhtelecom’s Board of directors.

Composition of the Board of Directors:

• Baidauletov Nurzhan Talipovich;
• Auganov Gibrat Kairatovich;
• Kazutin Nikolay Yurievich;
• Yessekeyev Kuanyshbek Bakytbekovich;
• Buyanov Alexey Nikolayevich;
• Jubaev Armanbay Saparbaevich;
• Zaika Dmitriy Alexandrovich.

According to the requirements of the Law on Joint Stock Companies, the number of independent members of the Board of Directors should be at least 30%. This proportion in the Company is 43%.

Independent Director — member of the Board of Directors who:

• is not an affiliate of this joint-stock company and has not been an affiliate for the three years preceding his election to the Board of Directors (except where he is an independent director of this joint-stock company);
• is not an affiliate of this joint-stock company;
• is not subordinate to the officers of the given joint-stock company or organizations that are affiliates of the given joint-stock company, and was not related to subordination to these persons during the three years preceding his election to the Board of Directors;
• is not a government official;
• is not a representative of the shareholder at meetings of the bodies of the given joint-stock company and has not been the shareholder for the three years preceding his election to the Board of Directors;
• does not participate in the audit of this joint-stock company as an auditor working on the audit firm and did not participate in such audit for the three years preceding his election to the Board of Directors.

In 2022, the Company’s independent directors met the independence criteria in full.

Kazakhtelecom JSC has a Conflict of Interest Policy. The Policy determines the procedure for preventing, identifying and regulating conflicts of interest; procedures for interaction and coordination of the Company’s bodies and/or persons in the event of the appearance or likelihood of the appearance of a conflict of interest.

In accordance with the Conflict of Interest Policy, the Board of Directors monitors and, where possible, eliminates potential conflicts of interest of members of the Board of Directors and shareholders, including the misuse of Company property and the abuse of transactions in which there is an interest.

Members of the Board of Directors do not have any family or other relations with members of the executive body and other responsible employees of the Company, which could affect the quality of their decisions.

No conflicts of interest in the work of the Board of Directors were recorded in 2022.

The Company has Rules for assessing the activity of the Board of Directors and its committees, members of the Board of Directors and the Corporate Secretary. According to this document, the assessment of the Board of Directors is performed once a year using the internal resources of the Board of Directors and at least once every three years with the involvement of independent consultants.

The Board of Directors’ performance evaluation for 2022 was carried out in-house by the Board of Directors. The list of evaluation criteria included questions assessing the level of strategic thinking, knowledge of the industry, about professional experience, commitment to teamwork, adherence to the principles of sustainable development and others. In general, all directors received high marks; each member of the Board of Directors acted reasonably, skillfully, efficiently, which was also reflected in high financial and operating results of the Company. The evaluation report was presented to the Board of Directors for review and familiarization, and Board members discussed the results of the evaluation and measures for further improvement.

The last external evaluation of the Board of Directors was carried out in 2021. According to its results, PricewaterhouseCoopers consultants noted the strong composition of the Board of Directors of Kazakhtelecom JSC. Moreover, because of this assessment the measures related to the Board of Directors’ activity were included into the Corporate Governance Improvement Plan.

The Company has a Policy on professional development and attraction of external experts by members of the Board of Directors. This policy has been developed considering best practice of corporate governance in order to improve the efficiency of the work of the Board of Directors through the implementation of a system of skills development and professional development of members of the Board of Directors and the exercise of their right to engage external experts if the issues considered by the Board of Directors require external professional and independent expert analysis.

In 2022, a training program in the field of sustainable development, ESG and climate change was held with the participation of members of the Board of Directors, the Management Board of Kazakhtelecom JSC and representatives of the top management of subsidiaries.

In 2022, meetings of the Board of Directors were held in an online format using existing video conferencing platforms.

14 meetings of the Board of directors were held during the year, at which 117 issues were considered.

The key decisions in 2022 were the approval of the Development Strategy of Kazakhtelecom JSC for 2023-2032, the business plan for 2023-2027, the parameters of the Group’s investment activity for 2023, the resolution of the issues of subsidiaries functioning. The Management Board also heard, on a regular basis, the issues of implementation of the Development plan, safety and labor protection, implementation of strategic projects, risks, implementation of the Strategy, activity of mobile operators.

The Board of Directors of Kazakhtelecom JSC pays special attention to the issues on consideration of major transactions and related-party transactions.

Kazakhtelecom JSC strictly complies with the requirements of the legislation when making decisions on conclusion of major transactions, as well as related party agreements. When preparing materials, the Board of Directors is provided with detailed information on the proposed transactions, their nature, financial and other conditions. To ensure objective and full consideration of issues on transactions, the Board of Directors makes decisions on them only in person in the presence of the entire Board of Directors, the Management Board and other participants. Decisions on related-party transactions are made exclusively by independent directors, and the Chairman of the Board of Directors constantly emphasizes this when considering transactions by the Board of Directors. Once decisions on such transactions have been made, information about them is published in the relevant media to notify interested parties.

Summing up the results of the Board of Directors’ activity for 2022, no cases of corporate disputes between the Company and members of the Board of Directors were revealed, as well as facts of their misconduct.

The Audit Committee of the Board of Directors of Kazakhtelecom JSC was established by the resolution of the Board of Directors in 2006. In July 2022, the Board of Directors renamed the Audit Committee into the Committee for audit and sustainable development and carries out its activity in accordance with the Provision on the Committee approved by the Board of Directors on 19.07.2022.

Composition of the Committee in 2022²⁵:

1. From January 01 to April 13, 2022: Naizabekov Timur Kurmangazievich (Committee Chairman), Buyanov Alexey Nikolayevich, Alexander von Gleich, Zaika Dmitry Alexandrovich.
2. From April 18 to July 04, 2022: Alexander von Gleich (Acting Committee Chairman), Buyanov Alexey Nikolayevich, Zaika Dmitry Alexandrovich.
3. From July 08, 2022 — Jubaev Armanbay Saparbaevich (Committee Chairman), Buyanov Alexey Nikolayevich, Zaika Dmitry Alexandrovich.
4. On July 4, 2022, by the decision of the extraordinary General Shareholders Meeting the composition of the Board of Directors of the Company was changed, and on July 8, 2022, the composition of the Committee was renewed by the decision of the Board of Directors.

Pursuant to the Code of corporate governance of Kazakhtelecom JSC, the Committee for audit and sustainable development consists entirely of independent directors who meet the criteria of recognition of independence of directors provided for by subparagraph 20) of article 1 of the Law of the Republic of Kazakhstan “On joint stock companies”.

In accordance with the Statute of the Committee, the Chairman of the Committee was invited to the meetings to provide information on issues on the agenda:

• members of the Board of Directors;
• Heads of the Internal Audit Service and the Compliance Service;
• representatives of the external auditor of Ernst & Young LLP;
• Company employees (top management, heads of structural divisions, specialists) and employees of subsidiaries.

The Audit and Sustainability Committee holds regular meetings in presential at least once a quarter and extraordinary meeting as necessary.

In 2022, nine meetings were held, at which 31 issues were considered and relevant recommendations were given to the Company’s Board of Directors, including the activities of the Internal Audit Service, the Compliance Service, internal controls and risks, financial reporting, external audit and other important issues. The Committee worked in accordance with the Work Plan for 2022.

²⁵ On April 13, 2022, T.K. Naizabekov terminated the powers of a member of the Board of Directors on his own initiative.
²⁶ percent participation during the term of office of a member of the Committee.

The Human Resources, Remuneration and Social Issues Committee of the Board of Directors was established by decision of the Board of Directors of Kazakhtelecom JSC in 2015.

In its activities, the Committee is fully accountable to the Board of Directors and operates in accordance with the Regulations on the Human Resources, Remuneration and Social Issues Committee of the Board of Directors of Kazakhtelecom JSC, approved by the decision of the Board of Directors Minutes No. 2 dated 18.03.2015.

The members of the Human Resources, Remuneration and Social Issues Committee of the Board of Directors of Kazakhtelecom JSC were determined in 2022²⁷:

1. from 1 January to 13 April: Buyanov Alexey Nikolayevich (Committee Chairman), Kussainov Erulan Aitashovich, Saudabaev Serik Bolatovich, Zaika Dmitriy Alexandrovich, Alexander von Gleich, Naizabekov Timur Kurmangazievich;
2. from 31 May to 04 July: Buyanov Alexey Nikolayevich (Committee Chairman), Kussainov Erulan Aitashovich, Auganov Gibrat Kairatovich, Zaika Dmitriy Alexandrovich, lexander von Gleich;
3. from July 08: Buyanov Alexey Nikolayevich (Committee Chairman), Auganov Gibrat Kairatovich, Jubaev Armanbay Saparbaevich, Zaika Dmitriy Alexandrovich.

²⁷ On April 13, 2022 Naizabekov Timur Kurmangazievich terminated the authority of a member of the Board of Directors on his own initiative. On May 30, the decision of the Annual General Shareholders Meeting terminated the authority of Saudabaev Serik Bolatovich. Auganov G.K. was elected to the composition of the Committee on May 31, 2022 by the decision of the Board of Directors. On July 04, 2022, by the resolution of the extraordinary General Shareholders Meeting changes took place in the composition of the Board of directors of Kazakhtelecom JSC, and on July 08, 2022 the composition of the Committee was renewed by the resolution of the Board of directors.

In accordance with the Regulations on the Human Resources, Remuneration and Social Issues Committee, the Chairman of the Committee was invited to the meetings as speakers and observers, and to provide information on items on the agenda:

• members of the Board of Directors;
• Company employees (top management, heads of structural divisions, specialists);
• candidates for management positions in accordance with the List of Management Positions.

In 2022, the Committee for Human Resources, Remuneration and Social Issues held 9 meetings in presential, which considered 32 issues on which the relevant recommendations were given to the Company’s Board of Directors. These are the issues of social nature (indexation, increase of salaries of branch employees), changes in the structure of the Central Administration Office, election of employees to the Management Board of Kazakhtelecom JSC, appointment to the positions of first heads of subsidiaries, approval of KPI of executives, labor remuneration, personnel management and other issues.

²⁸ % of participation during the term of office of a member of the Committee.

The Strategic Planning Committee of the Board of Directors of Kazakhtelecom JSC was established by the decision of the Board of Directors in 2010. The Committee for Strategic planning is an advisory and consultative body of the Board of directors and carries out its activity in accordance with the Provision on the Committee for strategic planning approved by the decision of the Board of directors on 19.11.2010.

Composition of the Committee for Strategic planning of the Board of directors of Kazakhtelecom JSC in 2022²⁹:

1. Zaika Dmitriy Alexandrovich (Chairman of the Committee), Alexander von Gleich — independent director, Buyanov Alexey Nikolayevich, Naizabekov Timur Kurmangazievich, Kussainov Erulan Aitashovich, Saudabaev Serik Bolatovich, Alimov Abay Savitovich.
2. from July 08 Zaika Dmitriy Alexandrovich (Committee Chairman), Buyanov Alexey Nikolayevich, Jubaev Armanbay Saparbaevich, as well as non-voting experts Sharipov Timur Sabrzhanovich and Mukanova Almagul Umurzakovna.

The Chairman of the Committee was invited to the meetings as observers, speakers, and to provide information on issues on the agenda:

• members of the Management Board;
• management and other employees of the Company, as well as subsidiaries;
• representatives of Samruk-Kazyna JSC.

The Strategic Planning Committee shall hold meetings on the annual plan approved by decision of the Committee, but at least once a quarter, and extraordinary meetings as necessary.

The Strategic Planning Committee held 11 face-to-face meetings in 2022 at which 18 issues were considered and the relevant recommendations were given to the Board of Directors of the Company. These include issues of strategy, business planning, the attraction of advisory services, the Company’s Development Plan, and other important issues of the Company’s operations.

³⁰ % of participation during the term of office of a member of the Committee.

Pursuant to the Policy of remuneration of independent members of the Board of Directors of Kazakhtelecom JSC approved by the decision of the extraordinary General Shareholders Meeting of Kazakhtelecom JSC as of 29 December 2011 No. 46 (with amendments as of 09.07.2012, as of 12.08.2021) the independent director is paid a fixed annual fee and additional fee for membership/presidency in committees of the Board of Directors by the decision of the General Shareholders Meeting of Kazakhtelecom JSC dated 12.08.2021:

• for non-residents of the Republic of Kazakhstan — fixed annual remuneration in the amount of USD 45,000 (forty-five thousand) and additional remuneration for membership/chairing of committees of the Board of Directors of the Company in the amount of USD 11,000 (eleven thousand) after withholding taxes and other mandatory contributions in accordance with the legislation of the Republic of Kazakhstan;
• for residents of the Republic of Kazakhstan — fixed annual remuneration in the amount of KZT 16,650,000 (sixteen million six hundred fifty thousand) and additional remuneration for membership/chairing of Committees of the Board of Directors of the Company in the amount of KZT 4,000,000 (four million) after withholding taxes and other mandatory contributions in accordance with the legislation of the Republic of Kazakhstan.

In accordance with the decision of the General Shareholders Meeting of Kazakhtelecom JSC of 12.08.2021, the amount of the fixed annual remuneration to the Chairman of the Board of Directors of the Company is KZT 16,000,000 (sixteen million) after withholding taxes and other mandatory contributions in accordance with the laws of the Republic of Kazakhstan.

The total remuneration paid to the resident members of the Board of Directors in 2022 amounted to KZT 52,577,341. The total remuneration paid to non-resident members of the Board of Directors in 2022 amounted to USD 56,608.

In accordance with the Regulations on the Board of Directors, in the event of termination of the powers of an Independent Director (including early termination) before the end of the six-month period, the Independent Director shall be paid remuneration and compensation for the period of actual membership on the Board of Directors.

In accordance with the Regulations on the Board of Directors and the Policy of remuneration of independent members of the Board of Directors of Kazakhtelecom JSC, the Independent Director may be paid additional remuneration based on the results of the year by the decision of the General Shareholders’ Meeting of Kazakhtelecom JSC.

The Corporate Secretary shall report to the Board of Directors and shall act in accordance with the provisions of the laws of the Republic of Kazakhstan, the Charter, the Corporate Governance Code, other internal documents, as well as decisions of the General Shareholders Meeting and the Board of Directors.

As part of his activity, the Corporate Secretary shall control preparation and holding of General Meetings of Shareholders and meetings of the Board of Directors, organize record keeping and ensure document flow of the Board of Directors, ensure convening of meetings of the Board of Directors and keep minutes of such meetings, provide members of the Board of Directors with necessary information.

The Corporate Secretary of Kazakhtelecom JSC, Abdykalykov B. K, holds state awards and a sectoral title of “Үздік байланысшы” (Best Communicator). He was recognized as one of the best corporate secretaries of the Samruk-Kazyna Group of Companies, a permanent participant in various measures to further improve corporate governance and the institute of corporate secretaries.

The Regulations on the Corporate Secretary are available on the Company’s corporate Internet resource in the section “Corporate Governance”.