Compliance of human rights and equal opportunities

The Company complies with the requirements of the labor legislation of the Republic of Kazakhstan in this area, under which no one can be subject to any discrimination in exercising labor rights based on religion, gender, language, age, national origin, disability, family status, social origin or other individual characteristics that are not related to the business qualities of an employee.

Kazakhtelecom JSC is continuously improving its practices in the field of human rights and equal opportunities. Thus, the Company participates in negotiations with employees on conclusion, amendment, and supplementation of the collective agreement, observes terms of negotiations and ensures work of relevant joint commissions, provides information necessary for negotiations, strictly complies with provisions of the collective agreement. According to labor legislation, any employee has the right to participate through his/her representatives in collective bargaining and drafting of the collective agreement, as well as to get acquainted with the signed collective agreement.

Kazakhtelecom JSC, being a major employer, makes a significant contribution to social and economic development of the regions of its presence. In the reporting year, the number of personnel made up about 20 thousand people, which imposes a high responsibility in the field of observing human rights, which the Company is fully aware of. Kazakhtelecom JSC is developing practices of human rights observance in accordance with the legislation of the Republic of Kazakhstan and international standards. The main document that regulates approaches to observance of human rights in the Company is the Code of Business Ethics of Kazakhtelecom JSC. In the field of human rights, the Company adheres to the following principles of the Code of Business Ethics:

• respect for human dignity, rights and personal freedom, a trusting attitude towards employees, providing everyone with equal opportunities to realize their own potential;
• exclusion of any forms of discrimination or harassment in the workplace, facts of offensive or unacceptable behavior from the position of universal moral and ethical values.

To develop human rights practices, in 2023 and in the medium term the Company plans to consider the following goals and objectives:

• development and approval of Kazakhtelecom JSC’s Human Rights Policy;
• implementation of the methodology for conducting due diligence practices in the field of human rights;
• conducting risk assessment in the field of human rights.

In December 2022, to enhance diversity of personnel and ensure equal opportunities, Kazakhtelecom JSC launched the program “Support for women in the regions” aimed at improving knowledge and competencies of the Company’s female personnel. Within the framework of this program, in the cities of Astana and Almaty the Company held 2–3-day trainings on the topic “Women’s Leadership” led by women top managers and executives of the Company.

Kazakhtelecom JSC ensures equal opportunities in the level of salaries regardless of position and gender affiliation. The level of the Company’s average monthly salary does not depend on the employee’s position and is determined in accordance with the wage rules of the organization.

The Company monitors non-discrimination on any grounds and ensures a fair and equal approach to remuneration. No facts of discrimination were registered in Kazakhtelecom JSC during the reporting period. The average salary of women compared to the average salary of men was 107.5% in 2022.

The structural unit that regulates the approach to remuneration of Kazakhtelecom JSC’s employees is the Remuneration and Organizational Effectiveness Service. The main objectives of this division are the creation of a cost-effective remuneration system required for attracting, retaining, and motivating employees.

The motivation system adopted in Kazakhtelecom JSC provides for a clear relationship between remuneration of employees and results of their work, including the system of assessment of personnel performance that has been introduced.

Kazakhtelecom JSC has a system of grades according to Hay Group’s methodology. There are unified approaches to remuneration, additional payments, allowances, current and one-time bonuses, differentiation of grade/category of the position with application of inter-grade coefficient. The focus is on the total income of employees, which includes, in addition to wages and bonuses, benefits and intangible motivation.

During the reporting period, the Company developed and updated the following approaches to financial remuneration of employees:

• Regulations on additional remuneration of employees of branches of Kazakhtelecom JSC for excess of EBITDA (Profit Distribution Plan);
• Rules on current and quarterly bonuses to employees of Kazakhtelecom JSC’s affiliated branches;
• the branch or separate large structural subdivisions of the branch (for example, TNLN, SSC by direction, etc.) for calculation of current bonuses;
• Map of general KPIs of the branch or separate large structural subdivisions of the branch (for example, TNLN, SSC by direction, etc.) for quarterly bonus payment;
• Rules for remuneration of labor and motivation of experts of Kazakhtelecom JSC’s digital transformation team.

Remuneration of labor in Kazakhtelecom JSC is based on the principle of gender equality, including in the ratio of salaries by categories of employees.

¹⁶ Ratio of basic salary of women to men by category of employees of Kazakhtelecom JSC.

¹⁷ Remuneration (base salary + bonuses).
¹⁸ Ratio of remuneration (base salary + bonuses) of women and men by category of employees of Kazakhtelecom JSC.

In 2022, the minimum wage of Kazakhtelecom JSC’s male and female employees is KZT 84,000. Considering the minimum wage in the country at the level of KZT 60,000, the ratio of the minimum wage of the Company’s employees to the minimum wage in the country in 2022 is higher by 40%.

1. Development and approval of the Policy on Equal Opportunity, Inclusion and Diversity.
2. Continuation of the implementation of the program “Supporting Women in the Regions”.
3. Introduction of the economic model of management of the Wage Fund.
4. Introduction of compulsory indexation of employees within the framework of updating the Collective Agreement of Kazakhtelecom JSC.
5. Automation of processes for increasing the efficiency of motivational programs.
6. Development of operational efficiency program.
7. Reduction of annual bonus payments at grade levels B5 and above.