Key Corporate Governance principles

In accordance with the Corporate Governance Code of the Company (hereinafter - the Code) approved by the decision of the General Meeting of Shareholders of Transtelecom JSC dated August 4, 2016 (Minutes No.1), the corporate governance in the Company is based on the principle of shareholders' rights and legitimate interests protecting and respecting and contributes to effective operation of the Company, including the growth of the Company's assets and maintenance of the Company's financial stability and profitability.

The basic principles of the Code are the following:

  • The principle of shareholders' rights and interests protection;

  • The principle of effective management of the Company by the Board of Directors and the Management Board;

  • The principle of independent activity of the Company;

  • The principle of transparency and objectivity of information disclosure on the Company's activities;

  • Principles of legality and ethics;

  • Principles of the dividend policy effectiveness;

  • Principles of effective personnel policy;

  • Principle of environmental protection;

  • Policy of corporate conflicts and conflicts of interest regulation;

  • Principle of responsibility.

Thus, the Company acts in full compliance with international corporate governance standards, which provides shareholders with the ability to effectively control and monitor management activities and helps increase investment attractiveness

Corporate Governance Improvement

Key events aimed at improving corporate governance practices in 2018:

  • Preliminary approval of the new version of the Company's Development Strategy;

  • Adoption of the report on the work of the Board of Directors of Transtelecom JSC for 2017;

  • Consideration of the results of performance evaluation of the Board of Directors of Transtelecom JSC for 2017;

  • E-voting method for Board of Directors of the Company;

  • Disclosure of remuneration of members of the Management Board and Board of Directors;

  • Timely disclosure of information on a corporate website;

  • The Company's report on the results of financial and economic activities in accordance with the IFRS Guide “Management's Comment”.

Major and related party transactions

The interested-party transactions are governed by Article 71 of the Law of the Republic of Kazakhstan "On Joint Stock Companies" dated May 13, 2003 № 415-II. In accordance with the requirements of the legislation, a decision to enter into transaction in which there is an interest of shareholders, members of the Board of Directors or members of executive bodies is made by the Board of Directors or the General Meeting of Shareholders.

In accordance with the Charter of the Company, the exclusive competence of the Board of Directors includes the decision to conclude major transactions, as well as interested-party transactions, as well as the consideration of quarterly reports on major transactions and interested-party transactions

Pursuant to Clause 10 of the Rules of Transactions between Samruk-Kazyna JSC group's member-organizations, conclusion of which is subject to special conditions established by the Republic of Kazakhstan Law "On Joint Stock Companies", adopted by the Board of Directors of Samruk-Kazyna JSC in its resolution passed on April 27, 2009 (Minutes No.18), in the frameworks of procurements, the transactions are concluded in the manner determined by the Board of Directors of Samruk-Kazyna JSC pursuant to Article 19 of the Republic of Kazakhstan Law "On the Sovereign Wealth Fund".

Thus, pursuant to Article 19 of the Republic of Kazakhstan Law "On the Sovereign Wealth Fund", the procurement of goods, works and services by the Fund and organizations, where fifty or more percent of shares (participatory interests) directly or indirectly belong to the Fund are made on the basis of the rules approved by the Board of Directors of the Fund. Pursuant to Procurement Rules of Samruk-Kazyna Sovereign Wealth Fund Joint Stock Company and organizations in which Samruk-Kazyna JSC directly or indirectly owns fifty or more percent of shares (participations) under the ownership or trust management, which have been adopted by the Board of Directors on January 28, 2016 Minutes No.126 (hereinafter - the Procurement Rules) a corporate resolution is not required with regard to interested-party transactions.

The Company pays close attention to the identification of interested party transactions and control over their commission. Pursuan to clause 2-2 of Article 79 of the Law of the Republic of Kazakhsta “On Joint-Stock Companies” dated May 13, 2003 No. 415-II and resolution of the Management Board of the National Bank of th Republic of Kazakhstan dated August 27, 2018 189 On the Approva of the Rules for Issuer's Disclosure of Information, Requirements for Information Content, as well as the deadlines for informatio disclosure by the issuer on the Internet resource of the financia reporting depository, the Company in its Order approved the procedure for posting information on the Internet resource of the financial reporting depository. Using the Unified Reporting System the Company posts information about corporate events.

The list of major transactions and interested-party transactions concluded by the Company in 2018 is available on the Company's website at: www.ttc.kz in the section “Information on Transactions”

Information about Shareholders

In accordance with the Decree of the Government of the Republic of Kazakhstan dated March 31, 2014 No. 280 “On approval of the Comprehensive Privatization Plan for 2014-2016” Transtelecom JSC was included in the list of companies subject to privatization and alienation in the competitive environment. According to the register of securities holders as of December 31, 2017: KTZ NC JSC owns 51%, M. Mukhanov - 49% of the shares

Shareholders' General Meeting

The supreme management body of the Company is the General Meeting of Shareholders. According to the Charter of the Company and the current legislation of the Republic of Kazakhstan, the participation of shareholders is necessary for making various most important corporate decisions.

The procedure for holding the General Meeting of Shareholders is set out in the "Regulations on the General Meeting of Shareholders", which is available on the Company's website at: http: //www.ttc.kz

The annual General Meeting of Shareholders is held no later than five months after the end of the financial year. The said period shall be deemed extended up to three months if it is impossible to complete Company's audit for the reporting period.

In 2018, the General Meeting of Shareholders was held on May 3.