General
nformation on corporate
management
Transtelecom JSC ensures equal rights of all shareholders and continuously improves the corporate management system.
The Board of Directors and the executive body of Transtelecom JSC build an effective corporate management, which is designed to ensure the successful development of Transtelecom JSC while balancing the interests of shareholders, investors and management.
Transtelecom JSC has a mechanism for collection and confidential consideration of information on violations. The hotline provides an opportunity to confidentially report known facts of corruption, fraud, discrimination, as well as other violations of the norms of the legislation of the Republic of Kazakhstan on the part of the Transtelecom JSC employees.
Main principles
of corporate
management
In accordance with the Corporate Governance Code of Transtelecom JSC, approved by the decision of the General Meeting of Shareholders of Transtelecom JSC dated March 2, 2022, corporate management in Transtelecom JSC is based on the principle of protection and respect for the rights and legitimate interests of shareholders. It contributes to the effective activity of Transtelecom JSC, including the growth of Transtelecom JSC assets and the maintenance of financial stability and profitability of Transtelecom JSC. The fundamental principles of the Code are:
- The principle of protecting the rights and interests of shareholders;
- principle of effective management of the Board of Directors and the Management Board;
- principle of independent activity of Transtelecom JSC ;
- the principle of transparency and objectivity of disclosure of information on the activities of Transtelecom JSC ;
- principles of legality and ethics;
- principles of dividend policy efficiency;
- principles of effective staff policy;
- principle of environmental protection;
- policy of regulation of corporate conflicts and conflict of interests;
- principle of responsibility.
Thus, Transtelecom JSC operates in full compliance with international standards of corporate management, which provides shareholders with an opportunity for effective control and monitoring of management activity and contributes to the increase of investment attractiveness.
Corporate
management
structure
Corporate management is a key factor in ensuring sustainable business development and one of the most important criteria in making managerial and investment decisions. High-quality and effective corporate management contributes to the efficiency of financial and economic activities of organizations, ensures effective risk management and a reliable internal control system.
Transtelecom JSC pays significant attention to the improvement of the corporate management system and observance of shareholders’ interests.
Share
capital structure
and
securities
In accordance with the Resolution 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 expropriation in a competitive environment.
As of December 31, 2023, the shareholders of Transtelecom JSC are: Kazakhstan Temir Zholy National Company JSC – ownership interest of 25% plus 1 share, Unit Telecom LLP – ownership interest of 75% minus 1 share.
The total number of authorized common shares of Transtelecom JSC is 6,471,089 shares, including: placed 5,638,097 shares, not placed 832,992 shares. Par value of one share is 1,000 KZT. Preferred shares are not provided for.
During 2023 there were no changes in the authorized capital of Transtelecom JSC and no additional shares were placed.
- Number of authorized common shares – 6,471,089 shares.
- Number of placed shares – 5,638,097 shares.
- Number of shares not placed – 832,992 shares.
- Par value of one share is – 1,000 KZT.
- Amount of cash raised from placement of shares – 12,241,487 thousand KZT.
Additional
paid-in capital
By the decision of the Board of Directors dated July 22, 2019, it was decided to issue bonds on the domestic market in the amount not exceeding 22,000,000 thousand KZT. According to the prospectus of the bonds issue, the circulation term of the issued bonds is 12 years.
On January 10, 2020 National Management Holding Baiterek JSC purchased bonds of Transtelecom JSC issued on the Kazakhstan Stock Exchange in the amount of 10,000,000 thousand KZT with a coupon rate of 11.5% per annum. In January 2023, Transtelecom JSC made an early redemption of bonds in the amount of 2,000,000 thousand KZT.
On November 19, 2021, in accordance with the decision of the Board of Directors dated October 27, 2021, bonds in the amount of 15,000,000 thousand KZT with a coupon rate of 13.0% per annum for a term of 7 years were placed.
Transtelecom JSC strives to respect the interests of shareholders by ensuring the growth of long-term value and sustainable development of activities. The Dividend Policy was approved by the decision of the General Meeting of Shareholders dated August 04, 2016. The purpose of the Dividend Policy of Transtelecom JSC is to ensure the balance of interests of Transtelecom JSC and Shareholders, predictability and transparency of the approach in determining the amount of dividends, terms and procedure of their payment. By the decision of the General Meeting of Shareholders dated July 25, 2023, it was decided not to pay dividends on common shares following the results of 2022.
Major transactions
In 2023, Transtelecom JSC continued to demonstrate high results in key business areas. The Company concluded long-term contracts and prolonged revenue contracts with the main client KTZ NC JSC and its subsidiaries. Traditional services were successfully provided and new services were introduced for the railroad industry, such as IAAS, information security, and digital radio communications.
It is important to note that the company is actively differentiating its revenue sources, reducing dependence on revenues from KTZ NC JSC and its subsidiaries. Income from the sale of services to third parties for 2023 increased by 2 billion KZT, which confirms the success of the strategy to expand the client base and increase market share. Thus, the block on business development in corporate and public sectors (B2BG) implemented projects on technical maintenance and modernization of telecommunication infrastructure, as well as providing services of lease of cloud resources and Co-location for such clients as the National Bank of Kazakhstan, NIT JSC, Intergas Central Asia, Kazakhstan Petrochemical Industries Inc., Kazakhmys Corporation and others. Transtelecom JSC is the second in the number of OFD clients, occupying more than 40% of the OFD services market with more than 1 million connected cash register machines («CRMs»).
As part of the development of its operator business, the Company strengthened its positions in the international transit and channel lease market in Kyrgyzstan, Uzbekistan, Russia and China. Revenue growth in this business segment amounted to more than 10%. Also, revenue growth of 34% was achieved in the retail business segment, where the company provides Internet, telephony and OTT TV services.
General
Meeting of
Shareholders
The General Meeting of Shareholders is the supreme body of the company. General Shareholders’ Meetings are subdivided into annual and extraordinary.
The activity of the General Meeting of Shareholders is regulated by the Regulations on the General Meeting of Shareholders of Transtelecom JSC dated August 4, 2016, Minutes No. 1. The Regulations define the procedure for convening, preparing and holding the General Meeting of Shareholders of Transtelecom JSC, rights and obligations of the Shareholders, decision-making procedure and control over their fulfillment.
The Company ensures equal rights and fair treatment of all Shareholders.
The competence of the General Meeting of Shareholders is regulated by the Law «On Joint-Stock Companies» and articles of association.
During the reporting period, the Company held 4 meetings of the General Meeting of Shareholders, where key issues of the Company were considered.
Board
of Directors
Activities of the Board
of Directors
The work of the Company’s Board of Directors is carried out on the basis of approved annual work plans. A total of 8 meetings of the Company’s Board of Directors were held in the reporting year.
Composition of the Board of Directors
as of December 31, 2023
Members of the Board of Directors of the Company are elected by the General Meeting of Shareholders of the Company.
| № | Member of the Board of Directors | Date of election | Status |
| 1 | Nurali Rakhatovich Aliyev – Chairman | November 15, 2019 | Shareholder's representative |
| 2 | Anuar Muratovich Akhmetzhanov | July 25, 2023 | Shareholder's representative |
| 3 | Eldar Mukhtarovich Gumarov | July 25, 2023 | Shareholder's representative |
| 4 | Dmitry Alexandrovich Pokupatelev | February 6, 2020 | Shareholder's representative |
| 5 | Berik Mustayuly Otemurat | February 6, 2020 | Independent Director |
| 6 | Vyacheslav Anatolyevich Anikhovsky | July 25, 2023 | Independent Director |
| 7 | Galymzhan Ualkhanovich Ibraimov | July 25, 2023 | Independent Director |
Risk
management
Transtelecom JSC realizes the importance of risk management as a key component of the corporate management system of Transtelecom JSC aimed at timely identification and taking measures to reduce the level of risks that may negatively affect the value and reputation of Transtelecom JSC.
In order to ensure effective functioning of the CRMS, Transtelecom JSC is guided at all levels of its activities by the following interrelated components corresponding to the business life cycle:
- management and culture;
- strategy and goal setting;
- performance efficiency;
- monitoring and implementation of change;
- information, communication and reporting.
Risk management is an integral part of strategic planning and corporate management of Transtelecom JSC and maintenance of financial stability. Transtelecom JSC has integrated the corporate risk management system (CRMS) into the key business and management processes of the Company, and the CRMS Policy applies to all activities of Transtelecom JSC.
Key risks
- Risk of liquidity deficit
- Risk of violation by Transtelecom JSC of the requirements of banks and financial institutions
- Currency risk, in terms of temporarily free cash
- Occupational injuries
- Risk of increase of overdue (over 3 months) accounts receivable