Samruk-Energy JSC has built an effective corporate governance system in accordance with the requirements of the laws of the Republic of Kazakhstan, the principles and provisions of the Corporate Governance Code of Samruk- Kazyna JSC, as well as taking into account the world's leading practices. The Company considers improving the efficiency of corporate governance as a key factor in ensuring sustainable business development and making balanced management and investment decisions.

The corporate governance system of Samruk-Energy JSC ensures a clear separation of powers and responsibilities between management bodies, officials and personnel, compliance with the hierarchy of the procedure for considering issues and making decisions, as well as compliance with the legislation and internal documents.

Corporate governance principles of Samruk-Energy JSC

• Respect the rights of shareholders, investors and other stakeholders
• Segregate powers and responsibilities between the Company’s bodies and divisions
• Improve the efficiency of the Board of Directors/Committees, as well as the Executive Body/Committees
• Avoid corporate conflicts and conflicts of interest
• Improve the management reporting system
• Apply the best global corporate governance practices by implementing the principles and provisions of the Corporate Governance Code
• Adhere to the information transparency principles for shareholders and stakeholders (formalised and transparent policy and procedure for remuneration of directors and managers, transparent dividend policy, publication of the Annual Report in accordance with GRI and IFRS standards, etc.)
• Ensure the existence of effective planning processes, internal control systems, compliance and internal audit, risk management systems, sustainable development management systems

The Company’s fundamental internal documents on corporate governance are the Samruk-Kazyna Corporate Governance Code, and Samruk-Energy Corporate Governance Improvement Action Plan 2022-2023.

SAMRUK-ENERGY’S KEY CORPORATE GOVERNANCE POLICIES

The Company guarantees the effectiveness of its operations by properly structured corporate governance processes at each levels, ensuring transparency, control and separation of powers, and timely response to risks.

Using the best world practices, we strive to improve continuously the corporate governance system to ensure a reliable system of internal control, effective risk management, easier access to external capital and improvement of our reputation.

GRI 2-9

To increase transparency, control and powers separation, Samruk-Energy JSC introduced a three-level management system.

ORGANIZATIONAL STRUCTURE OF SAMRUK-ENERGY

Approved by the resolution of the Samruk-Energy JSC Board of Directors dated February 25, 2022 (Minutes No. 02/22)

Corporate Governance Rating

In 2021, Samruk-Kazyna JSC engaged an independent consultant, PWC LLP, to conduct a corporate governance assessment to rate the corporate governance system at entities 50+ percent owned or managed, directly or indirectly, by Samruk-Kazyna JSC. Based on the Corporate Governance Assessment Methodology, they examined the main aspects of corporate governance at Samruk- Energy: the efficiency of the Board of Directors and the executive body, risk management, internal control and audit, sustainable development, shareholder rights and transparency.

Following the assessment, the Company's corporate governance was assigned a BB rating (the level of maturity is “medium”). In accordance with the independent consultant’s recommendations, the Company developed and approved a 2022-2023 Action Plan to improve the corporate governance of Samruk-Energy JSC (hereinafter referred to as the Corporate Governance System Plan)³³.

The Corporate Governance System Plan provides for 85 activities aimed at the development of both the areas requiring improvement and corporate governance practices in general.

Corporate management system of Samruk-Energy JSC

To manage efficiently and transparently, Samruk-Energy JSC introduced a corporate management system centres around ESG: sustainable development, quality management, H&S, environmental protection, energy efficiency, anti-corruption and anti-fraud.

The key document of Samruk-Energy JSC in this area is the Corporate Governance Policy (for more details, go to Samruk-Energy’s website at www.samruk-energy.kz/ru/corporategovernance/corporate-documents#6

To objectively assess the corporate management system as well as to increase the interaction level, ensure the audit principles implementation and the formation of the necessary knowledge base, the Company uses the cross-functional audit approach involving audits within the Samruk-Energy’s group of companies both by specialists of subsidiaries and affiliates and the head office.

In December 2022, Samruk-Energy JSC successfully confirmed the compliance of the corporate management system with the requirements of international standards: ISO 9001 Quality Management System, ISO 14001 Environmental Management System, ISO 45001 Occupational Health and Safety Management System, ISO 50001 Energy Management System, ISO 37001 Anti-Corruption Management System.

The Company carries out the certification on the basis of MS Certification Services procedures, engaging the auditors of international class. The certification covered the following assets of the Company: Ekibastuz GRES-1, Ekibastuz GRES-2, Almaty Power Plants, Moynak HPP, Samruk Green Energy, Alatau Zharyk Company JSC, AlmatyEnergoSbyt, Shardarinskaya HPP, First Wind Power Plant, as well as the head office of Samruk- Energy JSC.

The certification audit findings showed positive aspects of the development and functioning of the Company's corporate management system, in particular:

• high degree of leadership orientation towards achieving the company's goals;
• arrangement and performance of cross-functional corporate audits of the management system in subsidiaries and affiliates;
• a good level of electronic exchange of documented information in the company's operation;
• application of information systems for planning and managing processes;
• support for the development of the corporate management system at subsidiaries and affiliates;
• amendments to the applicable legislation to establish requirements aimed at protecting the interests of all participants in the energy market.

Compliance with the Corporate Governance Code

The results of the self-assessment show that in 2022 the Company ensured compliance with the basic principles and provisions of the Code. Of the 64 provisions of the Code, 60 provisions fully complied with the Code and four provisions partially complied. Partial inconsistencies are recorded in the sections The Government as a Fund shareholder and Efficiency of the Board of Directors and the Executive Body.

According to the Code, entities should seek to simplify their asset structures and organisational and legal forms as much as possible. In November 2022, Samruk-Energy JSC partially eliminated the inconsistencies with the provisions of the Code in the section The Government as a Fund shareholder.

The Company created a subsidiary Qazaq Green Power PLC within the jurisdiction of the Astana International Financial Centre to consolidate the perimeter of its “green” assets. In December 2022, the assets of Samruk- Green Energy, First Wind Power Plant, and Moynak HPP were transferred udner management of Qazaq Green Power PLC.

According to the Code, it is necessary to ensure diversity in the composition of the Board of Directors in terms of experience, personal characteristics and gender composition. As part of the elimination of partial inconsistencies with the provisions of the Code in the section Efficiency of the Board of Directors and the Executive Body, the Board of Directors approved the induction programme for newly elected members of the Board of Directors and the professional development programme for each member of the Board of Directors. The Corporate Secretary provides the implementation of these programmes.

In the reporting period, the Company implemented the procedure for inducting newly elected members of the Board of Directors into office. Due to optimisation of costs for maintaining the Board of Directors in 2022, we did not approve the professional development programme for each member of the Board of Directors³⁴.

Company plans to improve the corporate governance system

The key priorities for the corporate governance development of Samruk-Energy JSC in 2023 and in the short term:

• Application of the best corporate governance practices through further implementation of the principles and provisions of the Corporate Governance Code.
• Efficient risk management and internal controls to improve reputation.
• Development of an integrated business continuity system.
• Observance of the rights of shareholders, investors and other stakeholders.
• Separation of powers and responsibilities between bodies and departments.
• Improvement of the efficiency of the Board of Directors/Committees, as well as the Executive Body/ Committees, management bodies of subsidiaries and affiliates.
• Prevention of corporate conflicts and conflicts of interest.
• Counteraction to all types of corruption and compliance with business ethics.
• Improvement of the management reporting system, including in the field of sustainable development at different levels of management.
• Efficient interaction with shareholders and other stakeholders, improving the principles of information transparency.
• Assurance of effective processes and systems for planning, internal control, compliance and internal audit, risk management, sustainable development management.
• Implementation of the sustainable development principles and application of a risk-based approach to the practice of project management at all investment stages: assessment and management of the impact on social, environmental and economic spheres (involuntary resettlement, biodiversity, cultural heritage, etc.) in accordance with the Guidelines for Company’s sustainable development.
• Growth of financial sustainability Promotion of responsible procurement based on the principles of fair and free competition, mutual benefit, transparency and full responsibility for the obligations assumed, as well as introduction of a requirement for suppliers to comply with ethical standards and guiding principles for the Company's suppliers, fixed in the Guidelines for Company's sustainable development.
• Execution of the assessment and implementation of best ESG practices, including:
  • analysis and updating of documents/policies for compliance with ESG criteria (Environmental Policy, Occupational Health and Safety Policy, documents on social responsibility, interaction with stakeholders, Policy on quality and safety of products/services, human rights, etc.), development of non-financial reporting;
  • assessment of the Company's risks associated with climate change;
  • determination of requirements for suppliers using ESG criteria;
  • monitoring the compliance of the Company's activities with the requirements of PRI (UN Principles for Responsible Investment) to attract investments;
  • assessment of the current development of ESG management practices and improvement of the Company's positions by participating in ESG ratings;
  • definition of ESG criteria along with standard financial analysis - assessment of both ESG risks and opportunities;
  • development of a system of motivation and remuneration of personnel related to indicators of ESG criteria.

Shareholder

Samruk-Energy JSC is wholly owned by the Sole Shareholder, Samruk-Kazyna www.www.sk.kz

Integrity, accountability, responsibility and transparency lie at the heart of the relationship of Samruk- Energy JSC with the Sole Shareholder, with the Company striving to protect and respect its rights and legitimate interests.

The Sole Shareholder governs the Company by setting priority objectives and strategic directions of operation. The Charter regulates activities, exclusive competencies, rights and obligations of the Sole Shareholder. The Company aims to comply with the interests of the Sole Shareholder, ensuring the long-term value growth and sustainable development.

The Company carries out implementation of the Sole Shareholder’s rights in accordance with the Law of the Republic of Kazakhstan On Joint Stock Companies and the Charter of Samruk-Energy JSC. Shareholder’s rights include, but are not limited to:

• timely receipt of information sufficient to make a decision, as set by the laws of the Republic of Kazakhstan, the Company’s Charter and internal documents on the information disclosure;
• voting on issues within their competence;
• participation in determination of the number of members, the term of office for the Board of Directors, the election of its members and the termination of their powers, as well as determination of the amount and the terms and conditions of remuneration payment;
• receipt of dividends based on a clear and transparent dividend policy.

In the reporting period, the Sole Shareholder considered key issues:

• 28 April 2022 – approval of the annual financial statements of Samruk-Energy JSC for 2021; the procedure for distribution of the net income of Samruk-Energy JSC for 2021 and the amount of dividends per one ordinary share of Samruk-Energy JSC; the information on the appeals of the Sole Shareholder of Samruk- Energy JSC on the actions of Samruk-Energy JSC and its officials and the results of their consideration for 2021;
• 30 June 2022 –approval of the corporate standard for the Compliance function in portfolio companies of Samruk-Kazyna JSC.

Board of Directors of Samruk-Energy JSC

GRI 2-9

The Board of Directors ensures strategic management of the Company and long-term performance by making informed decisions, taking into account the interests of all stakeholders based on the sustainable development principles.

In 2022, Nikolay Kazutin, a Shareholder’s representative, was appointed the Chairman of the Board of Directors and Valeriy Ogay was appointed a senior independent director

In the reporting period, Alexey Repin and Yernar Zharkeshov were elected to the Board of Directors, being Shareholder’s representatives with deep knowledge in energy, strategic planning.

In 2022, the Board of Directors of the Company consisted of seven members. Three independent directors – Arman Kashkinbekov, Armanbay Jubaev, Valeriy Ogay – are significantly experienced in finance, accounting, auditing, engineering, strategic management, energy, including the development of green energy, ESG.

The current composition of the Company’s Board of Directors is well-balanced in terms of industry experience, skills, international relations and independence, but does not provide diversity in terms of the gender component.

Members of the Board of Directors do not own the Company’s shares (stakes in the Company), affiliated companies, and do not own shares of the Company’s suppliers and competitors.

Selection and re-election policy

GRI 2-9, 2-10

The procedure for the activities and competence of the Board of Directors, the rights and obligations of its members are determined by the Company’s Charter and the Regulations on the Board of Directors. The Company carries out formation, search and selection of candidates until the expiration of the entire Board of Directors’ term of office and the individual members’ authority.

The General Meeting of Shareholders elects members of the Board of Directors, following clear and transparent procedures, taking into account competencies, skills, achievements, business reputation, professional experience of candidates, characteristics and gender composition. When re-electing individual members of the Board of Directors or its entire composition for a new term, Samruk-Energy takes into account their contribution to the effectiveness of the Board of Directors’ activities.

When selecting Board member candidates, Samruk-Energy takes the following criteria into account:

• experience in senior roles, including as a member of the Board of Directors;
• length of service;
• educational background, specialty, availability of international certificates and competencies in the focus areas of the Company's operations;
• business reputation;
• assessment of direct or potential conflicts of interest.

The Sole Shareholder or the Nomination and Remuneration Committee may initiate the issue of electing the entire Board of Directors or its individual members.

Members of the Board of Directors are elected from among:

• individual shareholders;
• persons nominated/recommended for election as shareholder representatives;
• individuals who are not the Sole Shareholder of the Company and are not nominated/recommended for election to be elected as a representative of the Sole Shareholder.

Independent directors should constitute at least one third of the Board of Directors. An independent director is a person who has sufficient professionalism and independence to make independent and objective decisions, free from the influence of individual shareholders, the executive body and other interested parties. Independent directors are elected as chairpersons of key committees of the Board of Directors – on matters of audit, nomination and remuneration, and in other committees. In addition, an independent director should monitor the possible loss of independence status and inform the Chairman of the Board of Directors in advance of such a situation. In the event of circumstances affecting the independence of a member of the Board of Directors, the Chairman of the Board of Directors immediately brings this information to the attention of the Sole Shareholder to make an appropriate decision. By the end of 2022, the Company’s Independent Directors fully met the independence criteria.

In the companies owned and managed by Samruk-Kazyna Fund, election of members of the Board of Directors follows specific rules:

• the Chairman of the Board of Directors is elected by the Sole Shareholder;
• if the Chairman of the Board of Directors is elected from among the representatives of the Fund, the Board of Directors elects a senior independent director from among the independent directors;
• the Fund together with the Chairman of the Board of Directors and the Chairman of the Nomination and Remuneration Committee of the Company’s Board of Directors carries out the process of recruiting and selecting candidates for the Board of Directors .

Members of the Government of the Republic of Kazakhstan, officials of government authorities may not be appointed to the Board of Directors.

Members of the Board of Directors are elected for a three year term.

In the future, subject to satisfactory performance, they may be re-elected for another term of up to three years. Any term of election to the Board of Directors for a period of more than six consecutive years (two three-year terms) is subject to special consideration, taking into account the need for a qualitative renewal of the Board of Directors. The term of office for members of the Board of Directors coincides with the term of office for the entire Board of Directors and expires at the time the Shareholders General Meeting makes a decision to elect a new composition of the Board of Directors.

An independent director cannot be elected to the Board of Directors for more than nine consecutive years. In exceptional cases, election for a term of more than nine years is allowed. The election of an independent director to the Board of Directors takes place annually with a detailed explanation of the need to elect this member of the Board of Directors and the impact of this factor on the independence of decision-making.

No person participates in making decisions on his own appointment, election and re-election.

Role of the Board of Directors in promoting the ESG principles

GRI 2-12

The Board of Directors implements the sustainable development policy and reviews the key ESG documents. The Board of Directors approved the Guidelines for sustainable development, being the key document in this area aimed at systematising the sustainable development processes in Samruk- Energy JSC group. The Board of Directors approved the Plan of Initiatives in the sphere of sustainable development for the medium-term period until 2023. The plan contains initiatives in three areas - economic, environmental and social, which include activities, timing and efficiency of the implementation of these initiatives. The Company considers the initiatives annually at a special strategic session with the participation of the Management Board members.

Evaluation of Board of Directors’ performance

GRI 2-18

The performance of the Board of Directors, Committees and members of the Board of Directors is evaluated on an annual basis through a structured process approved by the Board of Directors. Evaluation methods are the self-evaluation or the engagement of an independent consultant to improve the evaluation quality. At the same time, an external independent evaluation takes place at least once every three years.

In 2021, as part of an independent assessment of the Company’s corporate governance, an independent consultant assessed the performance of the Board of Directors, Committees and members of the Board of Directors. The overall performance of the Board of Directors rated BB, which is up from the 2018 rating (B). The activities of the Company’s Board of Directors in all material respects meet most of the established criteria.

Based on the results of the Board of Directors performance evaluation, the Company formed the Action Plan for 2022 to improve corporate governance.

In accordance with the best international corporate governance practice, the Company conducted a selfassessment of the Board of Directors performance in 2022. The self-assessment is based on the Methodology for Assessment of Performance of the Board of Directors and its Committees in accordance with the Corporate Governance Evaluation Methodology, as well as the best corporate governance practices.

According to the methodology, the evaluation technology included a survey of all members of the Board of Directors and Committees of the Board of Directors. The results of the Board of Directors performance evaluation showed directions for further development of the corporate governance practice. Based on the assessment results, the Company formed an Action Plan aimed at elimination of weaknesses to improve the Board of Directors level and the Company’s corporate governance as a whole.

GRI 2-16

The procedure for escalating critical financial and non-financial issues to the Board of Directors is regulated by the applicable law and internal regulations. According to the results of 2022, these were no such cases.

Training and development of members of the Boards of Directors

GRI 2-17

To improve awareness of the senior management about sustainable development and corporate governance, we held the following events in the reporting period:

• PWC held a training session on ESG corporate reporting system;
• the Company held an advanced training, as well as a corporate training for members of the Board of Directors, members of the Management Board and managers on the implementation of ESG principles across Samruk-Energy Group as part of updating the Samruk-Energy Development Strategy;
• the Corporate Governance and Sustainable Development Department arranged an online meeting with portfolio companies and held a special session on sustainable development for members of the Management Board and heads of the Company’s structural divisions;
• PWC held a training session on pressing ESG issues for the executives of the Company;
• the Company held an annual special session engaging the Company’s Management Board with for critical assessment and discussion of the Company’s sustainable development.

Composition of the Company’s Board of Directors as of 31 December 2022

GRI 2-9, 405-1, GRI 12: Coal Sector: 12.19.6

Activities of the Board of Directors

The Board of Directors meets in accordance with the working plan as approved before the calendar year and including the list of issues under consideration and a schedule of meetings. The Board of Directors considers and decides on issues of an important and strategic nature only at meetings in person. Materials for meetings of the Board of Directors are provided for in advance – at least seven calendar days prior to the meeting, and on more important issues not less than 15 working days prior to their consideration.

In 2022, the Company’s Board of Directors held 17 meetings, of which 11 were held in person, and 6 in absentia. The attendance of meetings by members of the Board of Directors was 100%.

MEETINGS ATTENDANCE BY MEMBERS OF THE BOARD OF DIRECTORS IN 2022

At their meetings, the Board of Directors considered 194 issues, including:

• on the internal rate of return;
• on the strategy of information technology and digitalisation;
• Regulations on the IT architecture;
• on the Company’s dividend policy in relation to subsidiaries;
• on entering amendments to the Regulations on the Management Board;
• on the approval the Company's Energy Transition Programme for 2022-2060;
• on the approval of the talent pool and succession programmes for Samruk-Energy JSC key positions of CEO- 1 (non-members of the Management Board) and СЕО-2;
• on the approval of the Roadmap for improving the sustainable development management system.

As part of the quarterly reporting in 2022, the Board of Directors considered the following reports:

• on the investment development and investment projects;
• on the Action plan for corporate governance improvement;
• on health and safety, industrial injuries and environmental protection;
• on the Development Strategy Action Plan implementation;
• on risk management (with a description and analysis of key risks, information on plans and programmes for risk minimisation).

The Board of Directors also considered the following reports:

• on interaction with stakeholders and feedback mechanism for 2021;
• on the Action Plan implementation to eliminate H&S violations as identified by the Company’s Internal Audit Service;
• on compliance/non-compliance with the Corporate Governance Code principles and provisions;
• on the Plan for sustainable development initiatives;
• on the information security (cybersecurity), as well as on the analysis and assessment of the Company's internal control sufficiency in terms of protecting and maintaining IT systems and infrastructures.

In 2023, the Board of Directors will focus on strategic issues, in particular on the reduction of corporate issues of an administrative and operational nature.

In accordance with the Regulations on the Board of Directors, the Chairman of the Board of Directors is responsible for the overall management of the Board of Directors, ensures full and effective functioning of the Board of Directors and creates a constructive dialogue between the members of the Board of Directors, the Shareholder and the Management Board.

The role and functions of the Chairman of the Board of Directors and the head of the executive body are clearly separated by the Company’s Charter, the Regulations on the Board of Directors and the Regulations on the Management Board.

THE BOARD OF DIRECTORS’ COMPETENCE MATRIX

Committees of Samruk-Energy Board of Directors

GRI 2-9

The Board of Directors delegates powers to its Committees for fulfilling certain tasks, efficient functioning and due attention to in-depth examination and high-quality study of issues and decisions made. The Committees act in accordance with the Regulations on the Committee.

The current Committees under the Board of Directors are responsible for preparing recommendations in the economic, environmental and social areas:

• Production Safety (HSE) Committee.
• Audit Committee.
• Nomination and Remuneration Committee.
• Strategic Planning Committee.

The Board of Directors decides on these aspects, taking into account the sustainable development principles and based on an in-depth study of the recommendations developed by the Committees.

In the reporting period, there were no changes in the functions of the existing Committees under the Board of Directors or the Management Board, and no new Committees were created.

The Audit Committee

The Committee aims its activity to assist the Board of Directors in profound study of issues on effective system of control over the Company’s financial and economic operation. This includes the control over the completeness and reliability of financial statements, the reliability and efficiency of internal control and risk management systems, execution of corporate governance documents, independence of external and internal audit, as well as compliance with the laws of the Republic of Kazakhstan.

COMPOSITION OF THE COMMITTEE:

Among the main ones: the work of the Internal Audit Service, the Compliance Service and the Risk Management and Internal Control Department. The voting Committee members’ attendance made up 100%.

Also in the reporting period, the Committee held meetings with external auditors and the executive body on the financial statements preparation.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee is a consultative and advisory body of the Board of Directors providing recommendations on the appointment and remuneration of members of the Board of Directors, the Management Board, the Corporate Secretary, as well as other employees in accordance with the Company’s internal regulatory documents.

COMPOSITION OF THE COMMITTEE:

Among the main ones:

• recommendations to the Board of Directors on the issues of electing members of the Supervisory Boards/ Boards of Directors for Samruk-Energy JSC group of companies;
• recommendations on the approval of individual development plans for the Chairman and members of the Company’s Management Board for 2022;
• Report on the Ombudsman’s activities for 2021;
• the approval of job descriptions for the Managing Director on Production and Asset Management, Managing Director on Economy and Finance, Managing Director on Development, Sales and Changes, Managing Director on Legal Support, Procurement and Risks;
• Report on the Company's HR policy implementation for 2021;
• approval of the Company's organisational structure in a new wording;
• actual values of key performance indicators of the Management Board members, the Head of the Internal Audit Service and the Corporate Secretary of Samruk-Energy JSC, the motivational KPIs of the Management Board members, the Head of the Internal Audit Service and the Corporate Secretary of Samruk-Energy JSC.

The voting Committee members’ attendance made up 100%

Strategic Planning Committee

The purpose of the Committee’s activity is to prepare recommendations on the development of priority activities (development), the Company’s strategic goals (development strategy), the introduction of a sustainable development management system. This includes HSE issues, investment projects implementation, a master plan and measures contributing to improvement of the efficiency of the Company's long-term operation.

COMPOSITION OF THE COMMITTEE:

Among the main ones are quarterly Reports:

• on preliminary consideration of the Development Strategy for 2022-2031;
• on implementation of the Corporate Governance Action Plan and the Corporate Governance Code of Samruk-Energy JSC;
• on consideration of the Company's Development Strategy Action Plan for 2018-2028;
• on implementation of the Company's Development Plan;
• on the development of investments and investment projects;

The voting Committee members’ attendance made up 100%.

Production Safety (HSE) Committee

The Committee aims at the growth of the Company's efficiency through the preparation of recommendations, assessment, analysis and effective work on occupational health and safety and environmental protection.

COMPOSITION OF THE COMMITTEE:

Among the main ones are quarterly reports on:

• health and safety and occupational injuries;
• 2022 Action Plan for the elimination of H&S violations as identified by the Company’s Internal Audit at Almaty Power Plants JSC and Alatau Zharyk Company JSC for Q4’2021;
• 2022 Action Plan for the HSE management in the Company;
• 2023 Action Plan to achieve zero injuries;
• 2023 Action Plan for the environmental protection management.

The voting Committee members’ attendance made up 100%.

Management Board

The Management Board, a collegial executive body, manages the current Company’s operation, cooperates with the Board of Directors and interacts with all stakeholders. The Management Board ensures the compliance of the Company's operation with the development strategy, development plan and the decisions taken by the Sole Shareholder and the Managing Body.

The Charter of Samruk-Energy JSC and the Regulations on the Management Board determine the procedure on the Management Board formation, the rights, duties and responsibilities of its members, as well as the rules of its activities.

In accordance with the Charter, the Board of Directors determines the number of members, the term of office of the Management Board, elects members of the Management Board, terminates their powers ahead of schedule (except to the Chairman of the Management Board). At the same time, the issue of appointment (election) and early termination of powers of the Chairman of the Company’s Management Board relates to the Sole Shareholder’s competence.

The Chairman and members of the executive body have sufficient knowledge, skills and experience required for performing their functions, as well as an impeccable business and personal reputation.

The key role of the Management Board is to ensure the prompt and effective solution of the Company's daily tasks, as well as the implementation of both the strategy and the development plan. The Board ensures:

• operations in compliance with the law requirements, the Company’s Charter and internal documents, decisions of the Sole Shareholder and the Board of Directors;
• proper risk management and internal control;
• allocation of resources for the implementation of decisions of the Sole Shareholder and the Board of Directors;
• occupational health and safety;
• creation of an atmosphere of interest and loyalty of employees, development of corporate culture.

Management Board composition

The Management Board saw changes in the reporting period. Arman Adylkerimov³⁵, Yelena Ivchenko³⁶, Ruslan Turgambayev³⁷ were elected to the Management Board of Samruk-Energy JSC.

GRI 2-9, 405-1, GRI 12: Coal Sector: 12.19.6

The Management Board of Samruk-Energy JSC includes five members. In 2022, the share of senior executives hired from among the local community was 100%.

The Management Board performance

In the reporting period, the Management Board limited holding its meetings in absentia.

They held 46 meetings in person and considered 376 issues. In particular, the issues on the Development Strategy implementation and operational activities, the Sole Shareholder’s and the Board of Directors’ decisions.

The Management Board paid special attention to issues on occupational health and safety (instructions for using the Safe Production information system), information security (cyber security). They also analysed and assessed the sufficiency of the Company's internal controls in terms of protecting and maintaining IT systems and infrastructures - Regulations for the architecture of information technologies of the Company. The Board preliminary considered the Company’s Energy Transition Programme for 2022-2060, the Rules for modelling business processes in the Group of companies of Samruk-Energy JSC and the Roadmap for improving the sustainable development management system.

In addition, the Board approved internal regulatory documents of subsidiaries and affiliates, the total number of personnel, organisational structure, staff list and salary schemes of the Group of companies. They considered the issues related to investment projects of subsidiaries and affiliates, on changes in their authorised capitals and amendments to their charters. The Board makes voting instructions by representatives of Samruk-Energy in the bodies of subsidiaries and affiliates.

Management Board committees

GRI 2-9

The Board has four Committees and a Council of the Board - consultative and advisory expert bodies created to assist the Board members in solving the most difficult objectives. All Committees are accountable to the Company’s Management Board and operate within the competence granted to them by the Management Board in accordance with the Regulations on the Committees.

Risk Committee

The Committee assists the Management Board in making decisions on the risk management and internal control of the Company. They prepare recommendations and proposals on the effective risk management and internal control system, ensuring their functioning and development of processes to identify, measure, monitor and control risks. The Committee also prepares proposals for monitoring coordination of activities in these areas.

Composition of the Committee:

• Chairman of the Committee – Managing Director for Legal Support, Procurement and Risks
• Members of the Committee – Managing Director for Development, Sales and Changes, Managing Director for Economy and Finance, Managing Director for Production and Asset Management, Director of the Risk Management and Internal Control Department, Head of the Internal Audit Service (non-voting), a Compliance Officer (non-voting)

In 2022, the Committee held four meetings in person and considered seven issues. Among the main ones are the Reports on:

• preliminary approval of the Risk Management Report (containing description and analysis of key risks, as well as information on the implementation of plans and programmes to minimise the risks of Samruk-Energy JSC) for Q4’2021, Q1’2022, Q2’2022, and Q3’2022);
• preliminary approval of the consolidated Risk Register, the consolidated Risk Map, the Key Risk Management Action Plan with the determination of tolerance levels for each key risk, the Passports of key risk indicators of Samruk-Energy JSC for 2023;
• consideration of the Report on the implementation of the Department's Working Plan for 2022;
• consideration of the Report on the implementation of the Risk Committee Working Plan for 2022 and approval of the Risk Committee Working Plan for 2023;
• approval of the Department's Working Plan for 2023.

The Committee members’ attendance was 90%.

Planning and Evaluation Committee

The Committee aims at the improvement of the operation efficiency of the Samruk-Energy JSC Group of companies, including assets and costs structure optimisation, efficiency monitoring, consideration of their Development Plans, financial reporting.

Composition of the Committee:

• Chairman of the Committee - Managing Director for Economy and Finance
• Deputy Chairman of the Committee - Managing Director for Development and Sales
• Members of the Committee - Managing Director for Production and Asset Management, Managing Director for Development, Sales and Changes, Managing Director for Legal Support, Procurement and Risks, Head of the Procurement Management Department, Chief Auditor of the Internal Audit Service (non-voting)

In 2022, the Committee held 53 meetings in person and considered 106 issues. They agreed the revised budget of the Head office and subsidiaries and affiliates within the approved annual budget indicators for the first calendar year. They also considered reports on the implementation of the Development Plan for subsidiaries and affiliates for the first half of 2022 and the draft Development Plan for subsidiaries and affiliates for 2022-2026.

The Committee members’ attendance was 100%.

Investment and Innovation Council

The Council contributes to improving the efficiency of investment and innovation activities in the Samruk-Energy JSC Group of companies. They develop recommendations on investment and innovation, on the implementation of certain stages of the pre-investment and investment project, and on the next stage transition. The Council carries out the acquisition and alienation of shares (participation interests) of other legal entities by the Company, including priority acquisition of the right to subsoil use of an object associated with the right to subsoil use. The Council accompanies the processes of merging of the Samruk-Energy JSC Group of companies with third-party legal entities and the creation of legal entities within the investment projects.

Composition of the Council:

• Chairman of the Council – Chairman of the Management Board
• Deputy Chairman of the Council – Managing Director for Production and Asset Management
• Members of the Council – Managing Director for Development and Sales, Managing Director for Economy and Finance, Managing Director for Legal Support, Procurement and Risks, Director of the Project Portfolio Management Department, Head of the Compliance Service (non-voting), Chief Auditor of the Internal Audit Services of Samruk-Energy JSC (non-voting)

In 2022, the Council held nine meetings in person and considered 16 issues. They approved the development of a feasibility study for the project of Construction of CHPP-3 in Semey. They also approved the revised design estimates for the project of Restoration of power unit No. 1 with the installation of new electrostatic precipitators.

The Council members’ attendance was 80%.

Credit Committee

The Credit Committee ensures timely and high-quality decision-making on issues related to attracting, providing loans, financial assistance and issuing guarantees, minimising risks. They develop recommendations for the effective management of the Samruk-Energy JSC asset and liability structure.

Composition of the Committee:

• Chairman of the Committee – Managing Director for Economy and Finance
• Members of the Committee – Managing Director for Production and Asset Management, Managing Director for Legal Support, Procurement and Risks, Director of the Treasury and Corporate Finance Department, Director of the Risk Management and Internal Control Department, Director of the Project Portfolio Management Department
• Independent expert – Head of the Compliance Service

In 2022, the Committee held 14 meetings in person and considered 16 issues. Among them are the issues on attracting / providing loans and financial assistance, placement of free cash funds of Samruk- Energy JSC on deposits in second-tier banks.

The Committee members’ attendance was 86%.

Committee for occupational health and safety and environmental protection (HSE)

The Committee aims at effective solution of HSE issues by providing appropriate recommendations on the effectiveness of policies and systems for identifying and managing risks related to occupational health and safety and environmental protection. The Committee analyses all fatal and serious incidents and the actions taken as a result of such accidents and incidents. They examine the results of independent HSE audits, review strategies and action plans developed in response to the issues raised and make recommendations to the Board of Directors in relation to these issues.

Composition of the Committee:

• Chairman of the Committee – Chairman of the Management Board
• Deputy Chairman of the Committee – Director of the H&S Department
• Members of the Committee – Director of the Generation and Fuel Department, Director of the RES and Distribution Department, Director of the Corporate Governance and Sustainable Development Department, Chief Manager of the H&S Department

In 2022, the Committee held four meetings in person and considered five issues including the Reports on occupational health and safety and industrial injuries and on the environmental protection activities. They also considered the annual report on the Committee performance.

The Committee members’ attendance was 95%.

Conflict of interests

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The Company takes measures to create an effective system for managing conflict of interest, as well as to determine the rules of the employees’ conduct. Compliance with the requirements minimises the risks of making decisions influenced by personal interests and relationships.

Samruk-Energy JSC implemented a Policy on settlement of corporate conflicts and conflicts of interest, according to which executives and heads of structural divisions fill out a declaration of the absence of a conflict of interest.

Nominees for vacant positions in Samruk-Energy JSC and senior positions in subsidiaries and affiliates (according to the list of positions) are checked both for compliance with qualification requirements and affiliation with officials of the Samruk-Kazyna JSC Group of companies.

Following the Policy on settlement of corporate conflicts and conflicts of interest, the members of the Board of Directors had no conflict of interest in 2022. There were no situations when the personal interest of the Board of Directors’ members could affect the proper performance of their duties. The Company recorded no situations of a conflict of interest affecting and/or those that could potentially affect the impartial decisionmaking. The members of the Board of Directors did not discuss and make such decisions.

Internal and external audit

Samruk-Energy Internal Audit Service provides independent advice and objective audit guarantees to the Board of Directors aimed at improving the risk management, internal control and corporate governance systems to achieve the Company’s strategic goals and objectives. (More details about the work of the Internal Audit Service of Samruk-Energy JSC.

www.samruk-energy.kz/ru/corporate-governance/internal-audit

In 2022, the Service performed 28 audits, including unscheduled audits and audits in accordance with the Annual Audit Plan. As part of the audit reports, the Service provided 106 recommendations: 55 of A category, 40 of B category and 11 of C category.

The highest risk processes as well as requests for audit from the Sole Shareholder and the Board of Directors of Samruk-Energy JSC are the priority of audit tasks.

Within the reporting period the Audit Service made:

• assessment of HSE processes;
• assessment of the management efficiency;
• audit of financial and economic activities;
• assessment of the risk management and internal control systems efficiency;
• assessment of current and major repairs and investments;
• evaluation of procurement processes.

The Audit Service performed all audit assignments in accordance with the International Standards for the Professional Practice of Internal Auditing. The assignments contain conclusions, findings and recommendations aimed at taking corrective / preventive measures to improve risk management, internal control and corporate governance systems.

At the end of 2022, the Board of Directors rated the Internal Audit Service performance to be efficient.

External Audit

Since 2012, the Company's external auditor has been the global network of firms PricewaterhouseCoopers (hereinafter referred to as PwC).

THE COST OF AUDIT SERVICES PROVIDED BY THE EXTERNAL AUDITOR OF PWC IN 2022 (VAT EXCL.)

THE FEE PAID TO THE AUDIT FIRM IN 2022 FOR AUDIT SERVICES (VAT INCL.)

In 2022, PWC did not provide non-financial audit services.

Remuneration

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According to the Company’s Charter, the Sole Shareholder’s decision determines the amount and procedure for paying remuneration to members of the Board of Directors. The amount, procedure and conditions for paying remuneration to the Chairman and members of the Management Board are determined in accordance with the Rules for assessing the performance and remuneration of executive and managerial employees of Samruk-Energy JSC.

Remuneration to members of the Board of Directors

The independent directors receive an annual fixed remuneration for performing the duties of the Samruk-Energy JSC Board of Directors’ members.

The Company indemnifies independent directors for expenses (travel, accommodation, daily allowance) associated with their attending meetings of the Samruk-Energy JSC Board of Directors and its Committees held outside their permanent residence.

Remuneration to Independent Directors for 2022 amounted to KZT 48,737,000. As of 31 December 2022, there are four independent directors in the Board of Directors. They were two as of 31 December 2021. There are no other payments.

Share capital

Based on the results of the Company’s performance, as of 31 December 2022, the number of announced securities is 8,602,187, which makes 5,632,537 of the placed ones.

The nominal value of one ordinary share as of 31 December 2022 was KZT 10,000.

Basic earnings per share is calculated as the ratio of profit due to the shareholders of Samruk-Energy JSC Group of companies to the weighted average number of ordinary shares outstanding during the year.

The Samruk-Energy JSC Group of Companies does not have dilutive potential ordinary shares, therefore, diluted earnings per share are the same as basic earnings per share.

SHARE CAPITAL OF SAMRUK-ENERGY JSC

As per a decision made by the Exchange Council of Kazakhstan Stock Exchange JSC (KSE) on 4 October 2010, the consolidated financial statements should contain data on the book value of one share (ordinary and preference) as of the reporting date, calculated in accordance with the rules approved by the KSE.

As of 31 December 2022, the book value of one share (ordinary and preference), calculated by the management of Samruk-Energy JSC Group of companies based on the consolidated financial statements, amounted to KZT 93,987 (KZT 88,985 as of 31 December 2021).

BOOK VALUE PER SHARE, ‘000 KZT

Dividend policy

The Samruk-Energy dividend policy is based on the principles of observing the Sole Shareholder’s interests, increasing the long-term value, transparency of the mechanism for determining dividend amount and ensuring the Company’s financial stability.

Samruk-Energy calculates dividend amount on the basis of the Company's net income reflected in the annual audited financial statements prepared in accordance with the requirements of the laws of the Republic of Kazakhstan on accounting and financial reporting, as well as international financial reporting standards.

To make a decision on the dividend payment the Board of Directors submits for the Sole Shareholder’s consideration their proposals on the distribution of the Company's net income for the past financial year and the dividend amount for the year per one ordinary share.

The Company pays dividends within the period set by the Sole Shareholder’s decision.

DIVIDEND PAYMENT, BILLION KZT

The effective risk management and internal control system is one of the most important objectives of the Company in the near future. It aims at achieving the strategic and operational goals of the Samruk- Energy JSC Group of companies. Compliance with the norms and principles of corporate governance allows us to effectively control functioning of the company's management bodies, reduces risks in their activities.

The Company's risk management system aims at accurate and timely risk identification, assessment, monitoring and response. This allows the management makes decisions on the basis of a comprehensive vision and taking into account the risks in the medium and long term.

The Company adheres to the COSO standard, using the model of Three Lines of Defense.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

We regularly analyse key trends and risks in the context of the three pillars of sustainable development: economic, environmental and social. We also study the experience of countries related to the low-carbon economy transition and regularly hold meetings engaging energy and ecology experts.

Our risk management system allows the Management Board and the Board of Directors to effectively manage and allocate resources in priority areas. This ensures a risk level acceptable for the Company and gets the most return on such investments by identifying, assessing, managing and monitoring risks.

The internal control system provides for a quick respond to risks and control over the main and auxiliary business processes and daily operations of the Company. This system ensures immediately informing the management on any significant shortcomings and improvements.

The Board of Directors has set the Company's risk appetite in quantitative and qualitative terms, including restrictions on core activities. The Company monitors the risk appetite compliance on a quarterly basis.

The owners of key business processes regularly update the risk and control matrices, including those for the financial reporting process, and submit them for consideration and approval to the Board of Directors.

We annually form and submit for consideration and approval to the Board of Directors the Risk Register, the Risk Map, Key Risk Indicators (KRI) and the Key Risk Management Action Plan.

Based on the results of the risks identification of the Samruk-Energy JSC Group of companies in 2022, the Company identified and assessed 34 risks inherent in its activities, updated the KPI thresholds. The risk owners updated the risk factors and measures to reduce them.

According to the reassessment results, nine risks fell into the key zone of the Risk Map of Samruk- Energy JSC companies for 2022 (in 2021, there were 10 key risks).

SAMRUK-ENERGY JSC RISK MAP 2022

MAIN CHANGES IN 2022 (KEY RISKS MITIGATION)

New risk management model

In 2022, the Company continued a project to introduce a new risk management model to improve the risk management system.

Last year, the subsidiaries updated the previously developed internal regulatory documents – the Rules for the Organisation and Implementation of Internal Control, the Rules for Business Continuity. The subsidiaries and affiliates also revised Business Continuity Plans and the Business Continuity Recovery Plans.

As part of the project implementation, Samruk-Energy JSC developed and applies the method for testing the internal control system based on the current Rules for the organisation and implementation of internal control for key subsidiaries and affiliates. The Company developed and applies the method for testing the business continuity management system based on the current Rules for business continuity for key subsidiaries and affiliates.

In 2022, the business continuity management system was tested at all key subsidiaries and affiliates: Ekibastuz GRES-1, Ekibastuz GRES-2, Almaty Power Plants, Moynak HPP, Alatau Zharyk Company, Shardarinskaya HPP, and AlmatyEnergoSbyt.

We seek to become an efficient operating energy holding of Eurasian significance, the market leader in Kazakhstan. To achieve our strategic goals, we maintain and improve confidence of all our stakeholders, including the Sole Shareholder, employees and business partners. The Company protects its reputation and the interests of all stakeholders by implementing high ethical standards and corporate culture based on zero tolerance for corruption.

Corporate ethics and concern for reputation

The Code of Ethics³⁸ and the Code of Conduct³⁹ are underlying documents that enshrine high professional and ethical standards. All employees of Samruk-Energy JSC should adhere thereto regardless of their position.

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For clarification of the requirements of the Codes and/or ethical issues, for violations of requirements, corruption and other illegal actions, the Company’s officials and personnel, business partners and stakeholders have the right to contact:

The Board of Directors considers facts of the doing business principles violation. Upon the results of 2022, the Company did not record any violation of the Code of Business Ethics and the Code of Conduct by the members of the Samruk-Energy JSC Board of Directors and the executive body.

Compliance policy

Compliance is one of the principles of Samruk-Energy JSC operation. The main task is to identify, assess, prevent and control compliance risks in the activities of the Samruk-Energy JSC Group of companies. We form a zero-tolerance policy for corruption and bribery as well as develop the anti- corruption culture.

Basic principles of our compliance approach:

• involvement and support from the management in terms of the compliance system development - the Board of Directors considers reports on the compliance programme implementation;
• regular identification and updating corruption risks;
• development and implementation of anti-corruption procedures corresponding to the level and nature of the identified risks, improvement and updating of internal policies and procedures;
• implementation and support of training programmes for employees regarding the principles and standards of compliance with anti-corruption laws;
• monitoring the effectiveness of the procedures implemented to prevent corruption.

The Compliance Service of Samruk-Energy JSC, being an independent structural unit, reports to the Board of Directors. The Service reports on a quarterly basis. The Board of Directors evaluates the Service’s performance. As part of anti-corruption activities, the organisational structures of the Group’s subsidiaries and affiliates contain the positions of compliance officers reporting to the Board of Directors / Supervisory Board of subsidiaries and affiliates.

In the reporting period, the Management Board of Samruk-Kazyna JSC approved the Corporate Compliance Standard in portfolio companies. Samruk-Energy JSC and its subsidiaries and affiliates adhere thereto.

In December 2022, the Company successfully passed certification, confirming compliance with the requirements of ISO 37001 Anti-Corruption Management Systems. Requirements and recommendations for use.

To minimise the risk of the Company's involvement in corrupt activities, we have developed and implemented due diligence procedures for both counterparties and individuals. One of the key tools of our compliance programme is due diligence of third parties, partners and contractors entering into cooperation with us.

According to the decision of Samruk-Energy JSC Board of Directors⁴⁰, the Company carried out internal analysis of corruption risks of the Market Development and Sales Department on electricity sales in the reporting period. According to the results of the analysis we identified no violation.

There were no facts of unlawful interference in the Company's operations or other impact in violation of the requirements of the Agreement between the Government of the Republic of Kazakhstan and Samruk-Kazyna JSC.

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The Company’s compliance service verifies reliability of third parties to eliminate corruption risks as well as risks of business reputation loss. To extend the provisions of the Code of Conduct to business partners, suppliers and other third parties cooperating with the Company, standard business contracts include the Anti-Corruption Clauses.

Training and informing employees

To form anti-corruption culture and zero tolerance for any form of bribery and corruption, we conduct regular compliance and anti-corruption training sessions for personnel to explain the requirements, adopted compliance policies and anti-corruption laws.

In 2022, as part of the implementation of anti-corruption activities, the Company carried out training sessions to form the anti-corruption culture among employees of the Company and subsidiaries and affiliates. We held meetings with authorized employees to explain current changes in anti-corruption legislation.

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TRAINING AND INFORMING EMPLOYEES, 2022

In the reporting period, all subsidiaries and affiliates carries out more than 34 training sessions to explain changes in anti-corruption legislation, tax declarations and the hotline operating procedure.

INFORMING ABOUT THE SAMRUK-ENERGY JSC ANTI-CORRUPTION POLICY

NUMBER OF EMPLOYEES TRAINED IN ANTI-CORRUPTION

Hotline

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As part of the compliance programme, all stakeholders can report actual and alleged violations of the law, regulatory requirements, and internal documents on ethics and compliance issues to the Initiative Information Line (whistleblowing hotline).

COMPLIANCE SERVICE

According to the best international practices and to protect the interests of whistleblowers, an independent company administers the hotline. The Compliance Service ensures professional and confidential consideration of all complaints and reports duly registered and transferred. Anonymous reports are subject to respond to the independent company to be forwarded to the applicant.

STATISTICS OF REPORTS AND COMPLAINTS

In 2022, the Compliance Service received 91 reports. The Hotline received 78 messages, the office of the Company received 9 ones, the head of the Compliance Service – 4 personal reports.

All the reports were answered in proper time. The Company took appropriate measures regarding the confirmed facts of non-compliance / violations. We guaranteed confidentiality and anonymity of calls.

We consider the growth of incoming reports and complaints within the reporting period as the increased confidence both to the Compliance Service and compliance officers at all subsidiaries and affiliates. They hold explanatory meetings with personnel and monitor incoming reports, as well as promote feedback channels.

Ombudsman

To protect the rights of employees, the Company has the position of the Ombudsman, designed to prevent / settle corporate conflicts, conflicts of interest and reports of illegal actions. The Ombudsman promotes the establishment and development of corporate values and culture, high standards of professional behaviour and business ethics in the Company. The Ombudsman is a high-level independent manager reporting only to the Board of Directors.

On 30 March 2021, the Board of Directors of Samruk-Energy JSC appointed Nariman Akylov as the Company’s Ombudsman as from 1 April 2021.

The major priorities of the Ombudsman:

• assistance in resolving labour disputes, conflicts, problematic issues of a social and labour nature control of compliance with the principles of business ethics by the personnel;
• assistance in improving the rating and image of the supervised Company;
• prevention and settlement of disputes and conflicts;
• informal communications between officials and employees of the Company for timely identification of problems and areas for improvement;
• proposals to improve the policies and procedures of the Company;
• information of the Board of Directors about the identified problematic issues of systemic nature and requiring the appropriate comprehensive measures, submission of constructive proposals for their solution.

The Ombudsman’s basic principles are:

• independence, transparency and impartiality;
• objectivity, honesty and conscientiousness;
• informality and confidentiality.

In accordance with the Regulations on the Ombudsman (clause 15), the Ombudsman should ensure the anonymity of the employee or official who reported for violation of the provisions of the Code of Business Ethics, the laws of the Republic of Kazakhstan and the Company’s internal documents.

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EVERYONE CAN REPORT THE FACTS OF ILLEGAL ACTIONS OF OFFICIALS AND OTHER EMPLOYEES OF THE COMPANY BY

In the reporting period, the Ombudsman received more than 165 reports, 65 of which were received through official channels for filing complaints and reports (office, e-mail, hotline, personal reception). More than 100 reports were registered via helplines and the WhatsApp mobile application. Most of the reports relates to consultations on labour legislation and the provisions of the Code of Conduct. The requests also concerned the issues on social and labour relationship, dissatisfaction with wages and bonuses, social status (positions), etc.

The Ombudsman conducted consultations on all reports, gave comprehensive answers and recommendations, held personal meetings (conversations) with the personnel and the heads of subsidiaries and affiliates. According to the results of 2022, the registered reports and responses to them do not have a negative impact on the social stability of the Company as a whole.

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The Company did not record a single case of discrimination on racial, religious, national, gender, age, political and other grounds either.