07-5

Work of Committees under the Board of Directors

In order to support the work of the Board of Directors, the Company has established the following committees, the duties of which include consideration of issues and development of recommendations on a particular issue within the framework of their functional duties:

  • Audit Committee;
  • Nominations and Remunerations Committee;
  • Strategic Planning Committee.

Pursuant to the Regulation on the Committees under the Board of Directors, each of the committees submits to the Board of Directors an annual report on the work done.

Work of the Audit Committee under the Board of Directors in 2017

The Audit Committee under the Board of Directors of Transtelecom JSC (hereinafter referred to as the Committee) operates in accordance with the Regulations on the Audit Committee under the Board of Directors of Transtelecom JSC, adopted by the Board of Directors of the Company in its resolution dated March 17, 2017 (Minutes No. 2/2017).

In accordance with the resolution of the Board of Directors of Transtelecom JSC dated August 31, 2016. No.6/2016 the new composition of the Audit Committee was defined:

Composition of the Audit Committee
# Full name Job title Member of the Committee from:
1 Hexter David Richard Independent Director of Transtelecom JSC, Committee member August 31, 2016
2 Kanat Mukhametkarimovich Dosmukametov Independent Director of Transtelecom JSC, Committee member August 31, 2016
3 Yerlan Orentayevich Issekeshev Independent Director of Transtelecom JSC, Committee member August 31, 2016

During the reporting period, the Committee held 6 meetings, all of which were in-person ones. Pursuant to the agendas of the meetings, the Committee considered 17 issues, and issued relevant recommendations to the Board of Directors of the Company on the issues discussed.

During the reporting period the Committee discussed all the issues within the competence of the Committee at its meetings.

Regarding internal audit issues

The Committee reviewed and made advices to the Board of Directors on the following issues:

  1. Development of recommendations on determining the number, terms of office of the Internal Audit Service, the appointment of its head, the amount of the salary of the head of the Internal Audit Service and qualification requirements for the head and employees of the Internal Audit Service.
  2. Preliminary adoption of the Regulations on the Internal Audit Service of Transtelecom JSC.
  3. Preliminary adoption of the Audit plan 2018 of the Internal Audit Service of Transtelecom JSC.
  4. Development of recommendations on the appointment, determination of the term of office and the amount of the official salary of an employee of the Internal Audit Service of Transtelecom.
  5. Appointment of the Secretary of the Audit Committee under the Board of Directors of Transtelecom JSC.
  6. Preliminary adoption of the Guidelines for the organization of internal audit in Transtelecom JSC.
  7. Development of recommendations on the appointment, determination of the term of office and the amount of the official salary of an employee of the Internal Audit Service of Transtelecom JSC.
  8. Preliminary adoption of the report of the Internal Audit Service of Transtelecom JSC for the 2nd quarter of 2017.
  9. Taking into account the audit report of the Internal Audit Service of Transtelecom JSC based on the results of "Audit of key performance indicators of management".
  10. Preliminary adoption of the Audit Plan 2018 of the Internal Audit Service of Transtelecom JSC.

On financial reporting issues

The Committee reviewed and made advices to the Board of Directors on the following issues:

  1. On the preliminary adoption of the annual financial statements of Transtelecom JSC.
  2. On the preliminary adoption of a new version of the Tax Accounting Policy of Transtelecom JSC.

On organizational issues and issues related to the work of the Board of Directors:

The Committee reviewed and made advices to the Board of Directors on the following issues:

  1. On election of the Chairperson of the current meeting of the Audit Committee under the Board of Directors of Transtelecom JSC.
Presence of the members of the Audit Committee at the meetings held in 2017
# Full name Total number of meetings Presence at the meetings Presence at the meetings (%)
1 Hexter David Richard 6 4 67
2 Kanat Mukhametkarimovich Dosmukametov 6 5 83
3 Yerlan Orentayevich Issekeshev 6 5 83

In general, during the reporting period, the Audit Committee regularly supervised the work of the Internal Audit Service and also held meetings with representatives of the Company on the issues being supervised.

Work of the Nominations and Remunerations Committee under the Board of Directors in 2017

The Nominations and Remunerations Committee under the Board of Directors of Transtelecom JSC (hereinafter - the Committee) was established in accordance with the resolution of the Board of Directors of Transtelecom JSC dated August 31, 2016 and operates in accordance with the Regulations on the Nominations and Remunerations Committee under the Board of Directors of Transtelecom JSC, adopted by the Board of Directors of the Company in its resolution dated August 31, 2016, Minutes No. 6/2016.

Pursuant to the resolution of the Board of Directors of Transtelecom JSC dated August 31, 2016, No.6/2016 the new members of the Nominations and Remunerations Committee have been elected:

Composition of the Nominations and Remunerations Committee
# Full name Job title Member of the Committee from:
1 Yerlan Orentayevich Issekeshev Independent Director of Transtelecom JSC, the Chairperson of the Committee August 31, 2016
2 Kanat Mukhametkarimovich Dosmukametov Independent Director of Transtelecom JSC, Committee member August 31, 2016
3 David Richard Hexter Independent Director of Transtelecom JSC, Committee member August 31, 2016

During the reporting period, the Committee held 6 meetings: 5 in-person meetings and 1 in-absentee meeting. Pursuant to the agendas of the meetings, the Committee considered 17 issues, and provided relevant recommendations to the Board of Directors of the Company on the matters discussed.

During the reporting period the Committee discussed all the issues of the business within the competence of the Committee at its meetings.

On personnel matters

The Committee reviewed and made recommendations to the Board of Directors on the issues of:

  1. early termination of powers, election, determination of the term of office and amount of the official salary of CEO and members of the Management Board of Transtelecom JSC;
  2. adoption of a new version of the Regulations on the Audit Committee under the Board of Directors of Transtelecom JSC;
  3. appointment, determination of the term of office of the Corporate Secretary, early termination of his/her powers;
  4. making changes to the resolution on the third agenda issues of Transtelecom JSC's Board of Directors meeting as of January 20, 2017 (Minutes No.1/2017).

On remuneration matters

The Committee reviewed and provided recommendations to the Board of Directors on the following issues:

  1. approval of the official salaries schemes of Transtelecom JSC's Central Office employees;
  2. amendment of the official salaries scheme of the administrative, managerial and production personnel of Transtelecom JSC's Central Office;
  3. approval of the new Rules of performance evaluation and bonus payment to the top-level managers of Transtelecom JSC;
  4. approval of the KPIs Map with actual values and calculation of the amount of bonus payable to CEO and members of the Management Board of Transtelecom JSC based on the results of work in 2016;
  5. approval of the Rules of performance evaluation and bonus payment to the head of the Internal Audit Service of Transtelecom JSC;
  6. approval of KPIs Motivational Map of the Head of the Internal Audit Service of Transtelecom JSC for 2017;
  7. approval of a new version of the Integrated Management System Manual "Rules of performance evaluation and bonus payment to top-level managers of Transtelecom JSC";
  8. approval of the Motivational Map 2017 and amendment of the Motivational Map 2017 of some members of the Management Board of Transtelecom JSC";
  9. approval of a new version of the Integrated Management System Manual "The policy of salaries payment to administrative and production personnel of the Central Office of Transtelecom Joint Stock Company";
  10. bonus payment to the Chairman, members of the Management Board, Corporate Secretary, employees of the Internal Audit Service of Transtelecom JSC to the Independence Day of the Republic of Kazakhstan.

On organizational issues

On organizational issues and issues related to the work of the Board of Directors:

  1. provision of the necessary explanations to the Management Board of Transtelecom JSC (explanation of the admissibility of the Board of Directors' meeting initiation by the Management Board of Transtelecom JSC, with the inclusion of the issues of the Internal Audit Service discussed earlier in the meetings of the Nominations and Remunerations Committee to the meeting agenda, without the right to consider the relevant materials by the Management Board of Transtelecom JSC in essence);
  2. approval of the agenda of the Nominations and Remunerations Committee under the Board of Directors of Transtelecom JSC;
  3. election of the Chairman of the current meeting of the Nominations and Remunerations Committee under the Board of Directors of Transtelecom JSC.

Committee's meetings in 2017:

Presence of the members of the Nominations and Remunerations Committee at the meetings held in 2017
# Full name Total number of meetings Presence at the meetings (number) Presence at the meetings (%)
1 Yerlan Orentayevich Issekeshev 6 5 83
2 Kanat Mukhametkarimovich Dosmukametov 6 5 83
3 David Richard Hexter 6 5 83

Over 2017, the Committee has fully executed its missions, tasks and functional responsibilities pursuant to the Regulations on the Committee.

The Work of the Strategic Planning Committee in 2017

The mission of the Strategic Planning Committee under the Board of Directors (hereinafter referred to as the Committee) is a deep and thorough consideration of issues and making advices to the Board of Directors on the quality of the decisions made.

Pursuant to the resolution of the Board of Directors of Transtelecom JSC as of August 31, 2016, Minutes No. 6/2016, the following persons were appointed as members of the Strategic Planning Committee under the Board of Directors of Transtelecom JSС:

Composition of the Strategic Planning Committee (as of 31.12.2017)
# Full name Job title Member of the Committee from:
1 Kanat Mukhametkarimovich Dosmukametov Independent Director of Transtelecom JSC, the Chairperson of the Committee August 31, 2016
2 David Richard Hexter Member of the Board of Directors of Transtelecom JSC, Committee member August 31, 2016
3 Yerlan Orentayevich Issekeshev Member of the Board of Directors of Transtelecom JSC, Committee member August 31, 2016
4 Askar Baimyrzauly Member of the Board of Directors of Transtelecom JSC, Committee member August 31, 2016

During 2017 the Committee held 7 in-person meetings. Pursuant to the meetings agendas, the Committee considered 14 issues and presented relevant recommendations to the Board of Directors.

During the reporting period the Committee discussed all the issues within the competence of the Committee at its meetings.

The Committee reviewed and provided recommendations to the Board of Directors on such issues as:

  • Making up the recommendations on the adoption of the Development Strategy of Transtelecom JSC until 2026;
  • Preliminary adoption of the budget execution report of Transtelecom JSC for 2016;
  • Preliminary consideration of additions and changes to the Charter of Transtelecom JSC;
  • Preliminary adoption of the Adjusted Budget 2017 of Transtelecom JSC;
  • Preliminary review of documents submitted to the Board of Directors for consideration, which contain information on the strategies execution, achievement of the target values of strategic KPIs;
  • Preliminary adoption of the Budget 2018 of Transtelecom JSC;
  • Preliminary adoption of the Development Plan 2018-2022 of Transtelecom JSC.

Meetings of the Strategic Planning Committee in 2017:

Presence of the members of the Strategic Planning Committee at the meetings held in 2017
# Full name Total number of meetings Presence at the meetings (number) Presence at the meetings (%)
1 Kanat Mukhametkarimovich Dosmukametov 7 6 86
2 David Richard Hexter 7 6 86
3 Yerlan Orentayevich Issekeshev 7 5 71
4 Askar Baimyrzauly 7 7 100

Over 2017, the Committee has fully executed its missions, tasks and functional responsibilities pursuant to the Regulations on the Committee.

The Committee has examined in detail all the issues of the Committee's agenda, provided weighted and detailed recommendations, which were adopted by the Board of Directors.