08-2

Dividend policy and profit distribution

According to the resolution of the General Meeting of Shareholders of August 4, 2016 the Company adopted a Dividend Policy (Minutes No.1)

The purpose of the Company's dividend policy is to ensure the balance of interests of the Company and Shareholders, predictability and transparency of the approach when determining the amount of dividends, terms and procedure for their payment.

The main principles of the Company's dividend policy are:

  1. the principle of a guaranteed payment of dividends for the entire block of shares of the Company in circulation, as well as making payments and expenses on the instructions of the General Meeting of Shareholders;
  2. the principle of the Company's operation funding, including financing of new types of activities and investment projects implemented at the expense of the Company's funds.

The conditions for payment of dividends by the Company are the following ones:

  1. the Company has a net income (total profit) for the year in accordance with the financial statements, confirmed by independent auditors or retained earnings;
  2. no restrictions on the dividends payment provided for by applicable law;
  3. recommendation of the Board of Directors of the Company on the amount of dividends;
  4. resolution of the General Meeting of Shareholders of the Company.

In compliance with the legislation of the Republic of Kazakhstan, the Company's Charter and the Regulations on Dividend Policy, the Board of Directors of the Company makes a proposal on the procedure for the Company's net profit distribution for the reporting financial year and dividend amount per one ordinary share of the Company based on the audited financial statements.

The final decision on the amount of dividends is made by the General Meeting of Shareholders.

On August 31, 2017, according to the resolution of the General Meeting of Shareholders, the decision on dividends payment following the results of operation during 2016, in the amount of KZT 4,336,550 thousand in proportion to the existing shareholding, is as follows:

  • transfer of funds in the amount of 2,124,910 thousand tenge to M.S.Mukhanov;
  • offsetting of the counterclaim and a proportionate reduction in overdue debts of KTZ NC JSC for the amount of KZT 2,211,640 thousand.

On November 16, 2017 M.S.Mukhanov received a part of dividends in the amount of 500,000 thousand tenge. As of December 31, the dividend payable to M.S.Mukhanov in the amount of KZT 1,518,664 thousand was recorded within short-term payables for dividends.

On November 30, 2017, the amount of dividends with accounts payable of the subsidiaries of KTZ NC JSC was offset by KZT 2,211,640 thousand.

As of December 31, 2017 and 2016, the dividend payable to KTZ NC JSC in the amount of KZT 644,160 thousand was recorded in the composition of short-term payables for dividends.