CORPORATE
GOVERNANCE AND
BUSINESS ETHICS
Kazatomprom JSC continues to develop an effective corporate governance system in line with the laws of the Republic of Kazakhstan and world's best practices. The Company makes ongoing efforts to improve its governance practices so that they support the current operations of the Company, meet changing needs that emerge as the business grows, and ensure respect for the rights of shareholders and all stakeholders.
KEY PERFORMANCE INDICATORS
AND ACHIEVEMENTS
"А"
Kazatomprom's
corporate governance
system was
independently rated
%
Women account
of the Board of
Directors
UN SUSTAINABLE DEVELOPMENT GOALS
EN RU KZ

Corporate Governance System

Company's corporate governance system seeks to ensure proper management and control, growth of long-term shareholder value, and sustainable development. Corporate governance rests on three pillars: efficiency, effectiveness, and transparency. Company continues improving its corporate governance system, ensuring the rights of shareholders and all stakeholders.

Principles
Objectives

Kazatomprom's key corporate governance policies

Document name Effective date of the latest version
Charter 20 May 202168
Regulations on the Board of Directors 18 May 2020
Regulations on the Management Board 26 June 2019
Regulations on Committees 30 April 2019
Corporate Governance Code 27 May 2015
Management policy for Kazatomprom's subsidiaries and affiliates 19 March 2020

CORPORATE GOVERNANCE RATING

In 2021, Samruk-Kazyna JSC, a major shareholder of Kazatomprom JSC, engaged an independent consultant "PricewaterhouseCoopers" to conduct a corporate governance assessment to rate the Company's corporate governance system.

Following the assessment, Kazatomprom's corporate governance system was assigned an A rating.

This serves as a proof of an enhanced efficacy of the Company's internal management system. Adherence to the principles of respect for shareholder rights, transparency, and disclosure have resulted in a significant progress of the Board of Directors and Management Board’s function.

Company has developed a 2022 action plan to further improve its corporate governance system.

KEY IMPROVEMENTS IN 2021

In the reporting period, the majority of the planned measures for 2021 has been implemented, which were developed following the results of independent assessment of corporate governance system based on corresponding Methodology of Samruk-Kazyna JSC. Particularly, Company has implemented the following key measures:

Corporate Governance Code

The Corporate Governance Code of the Company has been developed in accordance with the laws of the Republic of Kazakhstan, policies of Samruk-Kazyna JSC and Samruk-Kazyna JSC Transformation Programme. The Code adheres to the Kazakhstani and international corporate governance practices and sets principles for the corporate governance system within the Company.

Company’s corporate governance system complies with the key listing rules of the stock exchanges on which its securities are traded and the corporate governance principles recognised by the global business community (such as the OECD Principles of Corporate Governance).

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

In line with the Corporate Governance Code, the Office of the Corporate Secretary has analysed compliance with the principles and provisions of the Corporate Governance Code across the Company in 2021.

According to its findings, 88% of the provisions of the Code were fully complied with, and 2% were partially complied with69. The remaining 10% of the provisions do not apply to the Company.

Compliance with the Corporate Governance Code

Section In compliance Partly in compliance Non-compliant Not applicable
Shareholders' rights and fair treatment of shareholders 83 13 - 4
Efficiency Board of Directors and Executive Body 96 1 - 3
Risk management, internal control and audit 97 3 - -
Transparency 97 - - 3
Adherence to the AIX corporate governance principles

AIX has the general principles of corporate governance in place for listed companies. Kazatomprom's Corporate Governance Code is largely consistent with these principles. Moreover, the Company's Code contains certain provisions ensuring the compliance with Samruk-Kazyna's goals and projections. Any Group's initiatives that relate to its non-core business are subject to review and verification by the Board of Directors chaired by an independent director.

Compliance with KASE’s corporate governance principles

In 2013, KASE adapted the International Finance Corporation's (IFC) corporate governance scorecard, allowing joint stock companies listed on KASE to use this tool for assessing their level of corporate governance. Assessed against the six categories, the Company mostly meets the criteria set out in the score card.

Differences between the Company’s Corporate Governance Code and the UK Corporate Governance Code70

The main differences between the Company’s Corporate Governance Code and the provisions of the UK Corporate Governance Code are described below.

General Meetings of Shareholders

Company treats and communicates to all shareholders equally, including minority shareholders, regardless of their shareholdings.

The General Meeting of Shareholders is the highest governing body of the Company. On 20 May 2021, Kazatomprom held the annual General Meeting of Shareholders of the Company in absentia and considered the following agenda items:

In addition, on June 22 and 10 November 2021, Kazatomprom held an Extraordinary General Meetings in absentia. The meetings were convened by the Board of Directors of the Company at the initiative of its major shareholder, Samruk-Kazyna JSC. Composition of the Board of Directors of Kazatomprom JSC was the only issue on the agenda.

Board of Directors

GRI 102-24

Members and the Chairman of the Board of Directors are appointed according to procedures prescribed by the Law of the Republic of Kazakhstan On Joint Stock Companies and the Company's Charter.

Candidates are recruited and selected according to objective criteria and needs for diversity in the composition of the Board of Directors. Only individual can be selected a member of the Board of Directors. The Board members shall be elected from among:

Persons nominated as Board member candidates must have the knowledge, skills, and expertise needed for the Board of Directors to perform its functions effectively and ensure long-term value growth and sustainable development of the Company, as well as an impeccable business and personal reputation.

When selecting Board member candidates, Kazatomprom takes the following criteria into account:

Members of the Management Board, except for the Chairman of the Management Board, may not be elected members of 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.

TRAINING AND DEVELOPMENT OF MEMBERS OF THE BOARDS OF DIRECTORS

In accordance with the Policy on advanced training for the members of Kazatomprom’s Board of Directors and engagement of external experts by the Board of Directors, the Board decides on advanced training for its members either for all members in general or for its individual members based on:

Recommendations that followed the assessment of Kazatomprom's corporate governance system were given a due consideration when developing training programme for the members of the Board of Directors.

In 2021, Company held training sessions on pressing issues of compliance and risk management.

MEMBERS OF THE BOARD OF DIRECTORS

GRI 102-22

As of 31 December 2021, the Board of Directors consisted of eight directors, including four independent directors. The Board of Directors is chaired by an independent director 71. This guarantees the respect for rights of minority shareholders.

The composition of the Board of Directors of the Company is balanced in terms of members' qualifications, expertise, knowledge, business qualities, and diversity. Board members have an impeccable business reputation, expertise in the nuclear industry, finance and investment, corporate governance, as well as in other areas important for the management of the Company, including extensive experience in senior roles, as partners and members of the governing bodies of big international companies.

The diversity of the composition and the quota of independent directors are in the limelight. The Board is represented by both men and women, as well as citizens of various countries, which ensures gender and sociocultural diversity.

Independence of the Board of Directors:

  • total number of the Board members - 8
  • independent directors - 4
  • the Board members do not hold any shares in the Company or equity interests in affiliates, nor do they hold any shares/equity interests in the Company's suppliers and competitors.

Age diversity within the Board, %

30-50

50+

Gender diversity, %

Men

Women


Members of the Board of Directors

Audit
Committee

HSE
Committee

Strategic Planning
and Investment
Committee

Nomination and
Remuneration
Committee

Neil Longfellow

Chairman of the Board of Directors
(independent)

Date of election

201772

Year of birth

1958

Citizenship

United Kingdom


Educational background

Chartered electrical engineer and Fellow of the Nuclear Institute and the Institute of Measurement and Control.


Professional experience

Since 2015 – Independent Consultant to the international nuclear sector.

2013 – Director of Major Projects for the nuclear, oil and gas sectors, Costain PLC, the UK.

2009 – Managing Director of Springfields Fuels Limited and Vice President of the European Fuel Business, Westinghouse Electric Company.

2007 – Deputy Managing Director, British Nuclear Fuels Limited.

1991 – Head of Processing, Sellafield nuclear reprocessing plant in West Cumbria, British Nuclear Fuels Limited.

He started his career in electrical engineering in the UK.

Russell Banham

Member of the Board of Directors
(independent)

Date of election

201873

Year of birth

1954

Citizenship

Australia


Educational background

Bachelor of Commerce degree from the University of New South Wales, fellow of the Institute of Chartered Accountants Australia and New Zealand, and graduate of the Australian Institute of Company Directors.


Professional experience

2018 – Member of the Board of Directors of NAC Kazatomprom JSC.

2011-2014 – Energy and Resources Industry Group Leader of Deloitte CIS, Moscow, Russia.

2007 – Audit Function Leader and Executive Committee member of Deloitte CIS, Almaty, Kazakhstan.

2002-2007 – Advisory Services Practice Leader of Ernst & Young, Brisbane, Australia.

2002 – Audit Partner, Andersen, Australia.

1974 – Auditor, Andersen, Australia.

Marc Kasher

Member of the Board of Directors
(independent)

Date of election

202074

Year of birth

1970

Citizenship

United States


Educational background

1997 – Master of Business Administration from Georgetown University.

1992 – Bachelor of Science in Soviet Studies, Tufts University.


Professional experience

2022 – Member of the Board of Directors and Chairman of the Audit Committee, Softline Digital Lab.

2018-2021 – Independent Director, National Investment Corporation of the National Bank of Kazakhstan.

2013-2019 – Independent Director of Luxoft, Chairman of three committees: Audit Committee, M&A Committee, and Compensation Committee.

2013 – the Founder of Sapiens Advisors.

2010-2013 – Managing Director and Chairman of the Board, PineBridge Investments Russia.

1997 – an Associate Private Equity Officer, AIG Capital Partners (later renamed PineBridge Investments).

Assem Mamutova

Member of the Board of Directors
(independent)

Date of election

202175

Year of birth

1975

Citizenship

Republic of Kazakhstan


Educational background

1999 – Master's degree in economics from the University of Essex, the UK.

1997 – graduate of Al-Farabi Kazakh National University.


Professional experience

2013-2022 – President, Ust-Kamenogorsk Titanium Magnesium Plant.

2007 – CFO, Ust-Kamenogorsk Titanium Magnesium Plant.

2002-2007 – Executive Director, National Company Kazakhstan Temir Zholy.

1999-2002 – Senior Economic Advisor of the European Union in London.

Bolat Akchulakov

Member of the Board of Directors

Date of election

202176

Year of birth

1971

Citizenship

Republic of Kazakhstan


Educational background

1993 г. – Bachelor's degree in Economics, Alma-Ata Institute of National Economy.


Professional experience

2021 – Managing Director for Asset Management, Samruk-Kazyna JSC.

2019-2021 – CEO of KAZENERGY Association.

2017-2019 – Vice Minister of Energy of the Republic of Kazakhstan.

2016 – General Director of KAZENERGY Association of Oil and Gas and Energy Sector Entities.

2014-2016 – CEO of Almex Petrochemical.

2012 – Vice Minister of Oil&Gas of the Republic of Kazakhstan.

2010-2011 – General Director of PSA LLP and President of KazMunayGas JSC.

2009 – Managing Director for Energy, Oil&Gas Asset Management, Samruk-Kazyna JSC.

2006-2008 – Vice Minister of Energy & Mineral Resources of the Republic of Kazakhstan.

1993-2006 – work for oil companies and banks: Kazmunaygas, Commonwealth and British Services Ltd., Kazakhoil, and Alem Bank Kazakhstan.

Yernar Zhanadil

Member of the Board of Directors

Date of election

202177

Year of birth

1984

Citizenship

Republic of Kazakhstan


Educational background

2009 – Master's degree from the University of Manchester.

2006 – Bachelor's degree, Accounting and Finance Department, KIMEP University, Almaty.


Professional experience

2022 – Managing Director for Investment, Privatisation, and International Cooperation, Samruk- Kazyna JSC.

2018-2021 – Co-Managing Director for Economics and Finance, Samruk-Kazyna JSC.

2017 – Managing Director for Economics and Finance, Samruk-Kazyna JSC.

2016 – Financial Controller, Samruk-Kazyna JSC.

2010-2016 – Head of the Internal Audit Service.

2006 – Senior Consultant, PricewaterhouseCoopers.

Nazira Nurbaeva

Member of the Board of Directors

Date of election

202178

Year of birth

1975

Citizenship

Republic of Kazakhstan


Educational background

2000 – graduate of Kazakh State Academy of Management in Almaty, majoring in finance and credit.

1997 – Assistant, Tax Department, PricewaterhouseCoopers Kazakhstan.

1996 – Degree in Business Administration from the University of Wisconsin–Platteville Richland.

1994-1998 – Studies at Kazakh State University of International Relations and World Languages.


Professional experience

2021 – Managing Director for Economics and Finance, Samruk-Kazyna JSC.

2020 – Partner of Deloitte TFC, Tax and Legal Services Department.

2017 – Executive MBA from KIMEP in Almaty.

2014 – Director of Tax and Legal Services Department, PricewaterhouseCoopers.

2004-2014 – Senior Manager, Tax and Legal Services Department, PricewaterhouseCoopers.

2003 – Senior Tax Consultant, LUKOIL Overseas Service.

1998-2003 – Tax and Legal Services Department, PricewaterhouseCoopers.

Mazhit Sharipov

Member of the Board of Directors,
Chairman of the Management Board

Date of election

202179

Year of birth

1964

Citizenship

Republic of Kazakhstan


Educational background

A degree in Heat Power Engineering from Nuclear Power Plants and Installations Department, Obninsk Nuclear Power Engineering Institute.


Professional experience

2021 – Chairman of the Management Board, NAC Kazatomprom JSC.

2021 – Chief Director for Nuclear Fuel Cycle, Kazatomprom.

2017 – Managing Director for Nuclear Fuel Cycle, Kazatomprom.

2015 – Director of Nuclear Fuel Cycle Projects, Kazatomprom.

2013-2014 – Chairman of the Atomic Energy Committee of the Ministry of Industry and New Technologies of the Republic of Kazakhstan.

2008-2013 – Director of Nuclear Energy and Industry Department, the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, the Ministry of Industry and New Technologies of the Republic of Kazakhstan, and the Atomic Energy Agency of the Republic of Kazakhstan.

1992-2008 – various positions in the Atomic Energy Agency of the Republic of Kazakhstan, later transformed into the Atomic Energy Committee of the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan.

1988 – Engineer, the Operation Service of the Experimental Reactor, the Institute of Nuclear Physics of the Academy of Sciences of the Kazakh SSR.

CHANGES IN THE BOARD OF DIRECTORS IN 2021

On 20 May 2021, the Annual General Meeting of Shareholders decided to appoint Assem Mamutova an independent director and a member of the Board of Directors of the Company.

On 22 June 2021, the Extraordinary General Meeting of Shareholders terminated early the powers of the following Board members who represented Samruk-Kazyna JSC: Beybit Karymsakov, Almasadam Satkaliyev, and Kanat Kudaibergen, and appointed Bolat Akchulakov, Ernar Zhanadil, and Nazira Nurbayeva the Board of Directors members.

On 10 November 2021, the Extraordinary General Meeting of Shareholders terminated early the powers of Galymzhan Pirmatov, a member of the Board of Directors of the Company and appointed Mazhit Sharipov a member of the Board of Directors of the Company.

There were no refusals or any agreements on the refusal by members of the Board of Directors from remuneration or future remuneration.

ACTIVITIES OF THE BOARD OF DIRECTORS

In 2021, the Board of Directors met 14 times (13 in-presentia meetings) to consider 234 issues.

The attendance of meetings by Board members was 100% on average in 2021.

Meetings attendance by members of the Board of Directors

Name 18 Feb 2021 15 Mar 2021 01 Apr 2021 07 Apr 2021 05 May 2021 20 May 2021 24 Jun 2021 06 Aug 2021 25 Aug 2021 03 Sept 2021 24 Sept 2021 06 Oct 2021 04 Nov 2021 18 Nov 2021 %
Neil Longfellow + + + + + + + + + + + + + + 100
Russell Banham + + + + + + + + + + + + + + 100
Marc Kasher + + + + + + + + + + + + + + 100
Assem Mamutova - - - - - + + + + + + + + + 100
Bolat Akchulakov - - - - - - + + - + + + + + 88
Yernar Zhanadil - - - - - - + + + - + + + + 88
Nazira Nurbaeva - - - - - - + + + + + + + + 100
Mazhit Sharipov - - - - - - - - - - - - - + 100

The most pressing issues considered by the Board of Directors in 2021:

EVALUATION OF BOARD OF DIRECTORS’ PERFORMANCE

GRI 102-28

The performance of the Board of Directors is subject to external independent evaluation every three years. As part of the general assessment of the Company’s corporate governance, the Board's performance was evaluated and rated “A” in 2021. Evaluation of the Board of Directors took into account the sustainable development issues, and these recommendations were included in the Corporate Governance Improvement Plan.

The assessment process included:

IMPROVEMENT PLANS FOR 2022

Quality of documents submitted to the Board
Succession plans for the Board of Directors and the Management Board

COMMITTEES OF THE BOARD OF DIRECTORS

GRI 102-22, 102-24


The Board of Directors has four committees:

Audit
Committee

Production
Safety (HSE)
Committee

Strategic Planning
and Investment
Committee

Nomination and
Remuneration
Committee

The Committees 80 are accountable to the Board of Directors in line with their mandate granted by the Board of Directors and the relevant Regulations on the Committees. Members of the Committees are elected by the decision of the Board of Directors in accordance with the Law On Joint Stock Companies, the Code of Corporate Governance of Samruk-Kazyna JSC, and Kazatomprom Charter.

PERFORMANCE OF THE BOARD COMMITTEES IN 2021



Report of the HSE Committee

Composition of the Committee and quantity of meetings

Name Meeting attendance, % Reasons for absence
Neil Longfellow, Chairman 100
Russell Banham 100
Kanat Kudaibergen 100 Resigned from the Board on 22 June 2021
Assem Mamutova 100 Appointed to the Committee on 24 June 2021

in-presentia meetings in 2021

issues considered

Issues considered by the Committee in 2021:
  • Report on the implementation of the 2020 Action Plan for the social and working conditions of the production staff
  • Report on the implementation of the H1 2021 Action Plan for social partnership and enhancement of social stability at Kazatomprom's enterprises
  • H1 2021 Overview of sustainable development efforts
  • Quarterly Occupational Safety Status Reports and Quarterly ESAP Implementation Status Reports


Report of the Audit Committee

Composition of the Committee and quantity of meetings

Name Meeting attendance, % Reasons for absence
Russell Banham, Chairman 100
Neil Longfellow 100 Resigned from the Committee on 20 May 2021
Marc Kasher 100
Assem Mamutova 100 Appointed to the Committee on 20 June 2021

in-presentia meetings in 2021

issues considered

Issues considered by the Committee in 2021:

Q1:

  • Preliminary approval of the 2020 annual financial statements of NAC Kazatomprom JSC
  • Preliminary approval of the Report (based on the 2020 results) on compliance with the principles and provisions of the Corporate Governance Code
  • Preliminary approval of the Corporate Governance Improvement Plan 2021
  • Preliminary approval of the Report on the operational efficiency of the internal control system over the preparation of Kazatomprom's 2020 financial statements

Q2:

  • Preliminary approval of Kazatomprom’s interim financial statements 3M 2021 (consolidated and separate)
  • Preliminary approval of Kazatomprom Integrated Annual Report 2020
  • Preliminary approval of amendments to Kazatomprom’s Corporate Accounting Policy
  • Consideration of cybersecurity matters across the Group

Q3:

  • Preliminary approval of Kazatomprom’s interim financial statements 6M 2021 (consolidated and separate)
  • Preliminary approval of Kazatomprom's Whistleblowing Policy

Q4:

  • Preliminary approval of Kazatomprom’s interim financial statements 9M 2021 (consolidated and separate)
  • Preliminary approval of Kazatomprom Risk Register and Map 2022
  • Preliminary approval of Kazatomprom Auditor Engagement Policy

In 2021, members of the Committee reviewed regular reports of the Internal Audit Service and the Compliance Service, as well as reports on risk management and hotline reports on a quarterly basis.


Report of Strategic Planning and Investment Committee

Composition of the Committee and quantity of meetings

Name Meeting attendance, % Reasons for absence
Neil Longfellow, Chairman 100
Russell Banham 100
Marc Kasher 100 Resigned from the Committee on 24 May 2021
Almasadam Satkaliyev 25 Resigned from the Board on 22 June 2021
Assem Mamutova 100 Appointed to the Committee on 20 June 2021.
Excluded from the Committee on 24 May 2021
Yernar Zhanadil 25 Appointed to the Committee on 22 June 2021

in-presentia meetings in 2021

issues considered

Issues considered by the Committee in 2021:

Q1:

  • Kazatomprom’s 2020 Digital Transformation Programme Report
  • The 2020 Report of Kazatomprom’s Management Board on the implementation of major investment projects
  • Global Uranium Demand and Supply Report

Q2:

  • Annual Report on implementation of Kazatomprom’s 2018-2028 Development Strategy in 2020
  • Kazatomprom’s Asset Restructuring Plan 2020-2022 and List of Non-Strategic Assets
  • Establishment of a uranium resources fund by making a deal with Genchi Global Limited
  • The results of Kazatomprom’s 2020 benchmarking against other uranium companies
  • Kazatomprom’s Q1 2021 Digital Transformation Programme Report
  • Q1 2021 Report of Kazatomprom’s Management Board on the implementation of major investment projects
  • Proceeding to the operational stage of Ulba FA LLP investment project
  • Establishment of a uranium resources fund

Q3:

  • Kazatomprom’s H1 2021 Digital Transformation Programme Report
  • Q2 2021 Report of Kazatomprom’s Management Board on the implementation of major investment projects
  • TH Kazakatom AG Performance Report 2020

Q4:

  • Kazatomprom’s Q3 2021 Digital Transformation Programme Report
  • Q3 2021 Report of Kazatomprom’s Management Board on the implementation of major investment projects
  • 2020 Report about implementation of Kazatomprom’s strategic KPIs
  • List of Kazatomprom's strategic, analytical and sectoral KPIs 2022-2026
  • Results of Kazatomprom’s H1 2021 benchmarking against other uranium companies
  • Amendments to Kazatomprom's Articles of Association to reserve corporate transformation matters for the Board of Directors

In 2021, the Committee reviewed Kazatomprom Transformation Programme Reports and reports of the Management Board on the implementation of major investment projects on a quarterly basis.


Report of Nomination and Remuneration Committee

Composition of the Committee and quantity of meetings

Name Meeting attendance, % Reasons for absence
Marc Kasher, Chairman 100
Neil Longfellow 100
Russell Banham 100 Resigned from the Committee on 20 May 2021
Beybit Karymsakov 33 Resigned from the Board on 22 June 2021
Assem Mamutova 100 Office in the Committee assumed on 20 June 2021
Bolat Akchulakov 100 Office in the Committee assumed on 24 June 2021

in-presentia meetings in 2021

issues considered

Issues considered by the Committee in 2021

Q1:

  • A new candidate for the Board of Directors of the Company
  • Bonuses for the Corporate Secretary and the Ombudsman of the Company

Q2:

  • Candidates for CEO-1 position
  • 2020 Report on implementation of KPIs by the Chairman and members of the Management Board
  • Payment of bonuses based on 2020 performance to the Chairman and members of the Management Board
  • Board members' individual development plans 2021 (IDPs)

Q3:

  • Structure of the headquarters and the total headcount of NAC Kazatomprom JSC
  • Management Succession Plan
  • Election of Kazatomprom's Board Chairperson

Q4:

  • Appointment of CEOs of subsidiaries and affiliates
  • Preliminary approval of 2022 KPIs of Kazatomprom's Board Chairman and members

In 2021, the Committee reviewed regular reports of the Ombudsman and the Corporate Secretary on a quarterly basis.

Management Board

The Management Board is Kazatomprom's executive body acting in line with the laws of the Republic of Kazakhstan, Articles of Association, Corporate Governance Code, and the Regulations on the Management Board. These documents outline the role and accountability of the Management Board, as well as the rights and responsibilities of the Management Board members.

Matters reserved for the Management Board are:

CHANGES IN THE MANAGEMENT BOARD

The Management Board saw changes in the reporting period.

From 1 January 2021, the Management Board included six members.

Name Position Year of joining
Galymzhan Pirmatov Chairman of the Management Board 2009
Dauren Kunanbayev Chief Operations Officer 2011
Birzhan Duisembekov Chief Strategy and Development Officer 2017
Beksultan Bekmuratov Chief HR and Transformation Officer 2018
Marat Yelemesov Managing Director for Legal Support and Risks 2018
Kamila Syzdykova Chief Economic and Financial Officer 2009

The Management Board included the following members from 25 April 2021.

Name Position Year of joining
Galymzhan Pirmatov Chairman of the Management Board 2009
Mazhit Sharipov Chief NFC Officer 2015
Kamila Syzdykova Chief Economic and Financial Officer 2009
Askar Batyrbaev Chief Commerce Officer 2006
Birzhan Duisembekov Chief Strategy and Development Officer 2017
Beksultan Bekmuratov Chief HR and Communications Officer 2018
Marat Yelemesov Managing Director for Legal Support and Risks 2018

On 20 May 2021 the following members joined the Management Board.

Name Position Year of joining
Askar Kasabekov Chief Operations Officer 1999
Alibek Aldongarov Chief Transformation Officer 2017

On 24 September 2021, the Board of Directors decided to reconfigure the Management Board with the following members.

Name Position Year of joining
Mazhit Sharipov Chairman of the Management Board 2015
Aslan Bulekbay Chief Operations Officer 2021
Dosbolat Sarymsakov Chief NFC Officer 2011
Kamila Syzdykova Chief Economic and Financial Officer 2009
Askar Batyrbaev Chief Commerce Officer 2006
Yerlan Tuleugozhin Chief Strategy and Development Officer 2018
Alibek Aldongarov Chief HR and Transformation Officer 2017
Marat Yelemesov Managing Director for Legal Support and Risks 2018

MANAGEMENT BOARD (as of 31 December 2021)

Mazhit Sharipov

Chairman of the Management Board

Year of birth

1964

Citizenship

Republic of Kazakhstan


Educational background

A degree in Heat Power Engineering from Nuclear Power Plants and Installations Department, Obninsk Nuclear Power Engineering Institute.


Professional experience

September 2021 – present – Chairman of the Management Board, NAC Kazatomprom JSC.

January 2021 – September 2021 – Chief Director for Nuclear Fuel Cycle, Kazatomprom.

2017 – 2020 – Managing Director for Nuclear Fuel Cycle, Kazatomprom.

2015 – 2017 – Director of Nuclear Fuel Cycle Projects, Kazatomprom.

2013 – 2014 – Chairman of the Atomic Energy Committee of the Ministry of Industry and New Technologies of the Republic of Kazakhstan.

2008 – 2013 – Director of Nuclear Energy and Industry Department, the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, the Ministry of Industry and New Technologies of the Republic of Kazakhstan, and the Atomic Energy Agency of the Republic of Kazakhstan.

1992 – 2008 – various positions in the Atomic Energy Agency of the Republic of Kazakhstan, later transformed into the Atomic Energy Committee of the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan.

1988 – 1992 – an Engineer, the Operation Service of the Experimental Reactor, the Institute of Nuclear Physics of the Academy of Sciences of the Kazakh SSR.

Aslan Bulekbay

Chief Operations Officer

Year of birth

1982

Citizenship

Republic of Kazakhstan


Educational background

A degree in Mining Engineering from Satbayev University, postgraduate programmer of Data Science and Machine Learning at the McComb School of Business, University of Texas. He is currently continuing his studies under the PhD programme (Petroleum Engineering) at Robert Gordon University (Aberdeen, Scotland).


Professional experience

September 2021 – March 2022 – Chief Operations Officer, Kazatomprom

2013 – 2021 – various positions in international companies: OMV Exploration & Production (Vienna, Austria), Saudi Aramco (Saudi Arabia), and DNO Exploration and Production (Dubai, UAE).

2009 – 2013 – a Senior Lecturer, Kazakh-British Technical University, CEO of Bulekbay Consulting, Vice Chairman of the Board, Kazgeology.

2004 – 2012 – an Inflow Intensification Engineer, Halliburton Energy Services.

Dosbolat Sarymsakov

Chief NFC Officer

Year of birth

1971

Citizenship

Republic of Kazakhstan


Educational background

A degree in Physics from Al-Farabi Kazakh National University, a degree in International Relations from the Diplomatic Academy of the Ministry of Foreign Affairs of the Republic of Kazakhstan.


Professional experience

2021 – present – Chief NFC Officer.

2017 – 2021 – Director of Nuclear Fuel Cycle Projects, Kazatomprom.

2011 – 2017 – Manager of Nuclear Fuel Cycle Projects, Kazatomprom.

2008 – 2011 – Executive Director of Nonproliferation Centre.

1996 – 2011 – an Engineer at the Institute of Atomic Energy of the National Nuclear Centre of the Republic of Kazakhstan; a Manager at the Institute for Nonproliferation (later renamed Nonproliferation Centre).

May 1995 – December 1995 – a Lead Specialist, the Ministry of Industry and New Technologies of the Republic of Kazakhstan.

Kamila Syzdykova

Chief Economic and Financial Officer

Year of birth

1981

Citizenship

Republic of Kazakhstan


Educational background

Bachelor's degree in business administration from KIMEP University, Executive MBA from Nazarbayev University.


Professional experience

2020 – present – Chief Financial Officer.

2018 – 2020 – Managing Director for Economics and Finance, Kazatomprom.

2012 – 2018 – various positions in Kazatomprom's partner companies, Cameco LLP and UrAsia Energy Holding Ltd, a subsidiary of UraniumOne Uranium Holding. Kamila Syzdykova held senior roles in Halyk Bank of Kazakhstan and Kyzylkum, a subsidiary of NAC Kazatomprom JSC. She started her career in 2002 as a business valuation consultant at Rice Group Central Asia.

Yerlan Tuleugozhin

Chief Strategy and Development Officer

Year of birth

1982

Citizenship

Republic of Kazakhstan


Educational background

A degree in Business Administration from Süleyman Demirel University, Executive MBA degree from KIMEP University, Master's degree in Finance from London Business School.


Professional experience

2021 – present – Chief Strategy and Development Officer.

2020 – Chief Strategy and Development Officer (replacement of an absent employee).

2019 – 2020 – Managing Director for Asset Management, Kazatomprom.

2018 – 2019 – Deputy Executive Director for Finance, JV Katco LLP.

2006 – 2018 – senior roles in JV Kazgermunai LLP and Karazhanbasmunaigas JSC.

2004 – 2006 – an Economist at Embaenergomunai.

Alibek Aldongarov

Chief HR and Transformation Officer

Year of birth

1983

Citizenship

Republic of Kazakhstan


Educational background

A degree in Computer Science, Communication Networks and Switching Systems from Almaty College of Communications, Kazakh-American University; a degree in Multichannel Telecommunication Systems from Satbayev University.


Professional experience

September 2021 – present – Chief Director for HR and Transformation.

May 2021 – Chief Director for Transformation, NAC Kazatomprom JSC.
Prior to his appointment, he held the position of General Director of KAP Technology LLP.
Seven-years’ experience in the nuclear industry in senior roles at Bailanys NAK LLP and KAP Technology LLP.
Extensive experience in the field of telecommunication systems design in the representative office of Iskratel LLC, as well as in the field of information system support and development as the Director of the Technical Support Department and Vice Chairman of the Board of NBK Banking Service Bureau JSC.

2004 – he started his career as a linear Structure Electrician at Kazakhtelecom JSC.

Askar Batyrbayev

Chief Commerce Officer

Year of birth

1983

Citizenship

Republic of Kazakhstan


Educational background

Master's degree in Physics from Al-Farabi Kazakh National University. Currently, he is taking an Executive MBA course at Nazarbayev University.


Professional experience

April 2021 – present – Chief Commerce Officer, Kazatomprom.

January 2021 – Chief Marketing Officer.

2019 – 2021 – Managing Director for Marketing and Sales, Kazatomprom.

2017 – 2019 – various senior roles at Kazatomprom.

2006 – 2017 – various positions in marketing, sales and logistics at APPAK LLP and JV Inkai LLP, subsidiaries of Kazatomprom.

2001 – 2004 – a Laboratory Assistant at the Institute of Nuclear Physics of the Republic of Kazakhstan.

Marat Yelemesov

Managing Director for Legal Support and Risks

Year of birth

1985

Citizenship

Republic of Kazakhstan


Educational background

A degree in International Law from Al-Farabi Kazakh National University; Department of Public Policy and Administration, New York State University.


Professional experience

2020 – present – Managing Director for Legal Support and Risks.

2019 – Managing Director for Legal Support and Risks, Kazatomprom.

2018 – Legal Department Director, Kazatomprom.

2013 – 2018 – an Expert, Chief Expert, Head of the Arbitration Department, Deputy Director of the Department, Ministry of Justice of the Republic of Kazakhstan.

2012 – 2013 – work in the Akimat of West Kazakhstan Region, Uralsk.

2009 – he started his career as a GR Specialist, British American Tobacco.

GRI 405-1


Age diversity within the Management Board, %

30-50

50+

Gender diversity, %

Men

Women


GRI 202-2

100% of top managers were hired in 2021 from among the local community representatives 81.

MANAGEMENT BOARD PERFORMANCE REPORT

in-presentia meetings in 2021

issues considered

Key issues considered by the Management Board
  • 422 issues were submitted to the Board of Directors for consideration and approval. They included: approval of the Company's internal and planning documents; conclusion of related-party transactions; decisions on the transfer of subsoil use rights; acquisition/disposal of stakes in the authorised capital of other legal entities; preliminary approval of annual financial statements and preparation of proposals on dividend distribution. The issues also included the Management Board’s reports: on risk management; on the occupational safety situation, on the implementation of Kazatomprom’s Business Plans, on the implementation of the corporate governance improvement action plans, on the implementation of major investment projects, on the conclusion of related-party transactions considered by Kazatomprom’s Management Board, on implementation of Kazatomprom’s Asset Restructuring Plan; approval of amendments to current subsoil use contracts; approval of 2022 KPIs of Kazatomprom's Management Board Chairman and members; approval of Kazatomprom's 2022 Risk Register, Map and Appetite; Approval of the organizational structure of Kazatomprom's headquarter and the total headcount; approval of limits of balance-sheet and off-balance sheet liabilities in regard to tier 2 banks for Kazatomprom’s enterprises where the limits exceed the internal limits of Kazatomprom; the adoption of decisions and establishment of the Company's position as the Sole Shareholder (Participant) of the subsidiaries and as one of the shareholders/participants of the legal entities in which Kazatomprom is not the Sole Shareholder (Participant) for subsequent voting by the Company's authorised representatives at the general meetings of shareholders (participants) on certain issues of the operations of the subsidiaries and affiliates.
  • The Management Board made decisions on the conclusion of 96 related-party transactions of which the parties were representatives or intermediaries of the Company's affiliates. The decisions on the conclusion of the related-party transactions were taken by the Management Board in accordance with Article 21 of the Law of the Republic of Kazakhstan No. 550 dd. 1 February 2012 IV On the Sovereign Wealth Fund, Articles 64, 71 of the Law of the Republic of Kazakhstan No. 415-II dd. 13 May 2003 On Joint Stock Companies, and clause 3 of the Rules for concluding transactions between organisations under the umbrella of Samruk-Kazyna, where the Law of the Republic of Kazakhstan On Joint Stock Companies sets special conditions for conclusion of such transactions as approved by the decision of the Board of Directors of Samruk-Kazyna on 27 April 2009 (Minutes No. 18).
  • 61 transactions where Kazatomprom alienated and/or acquired property with the value being less than 10% of the total value of Kazatomprom’s assets, as well as decisions made by the Company's Management Board in accordance with Article 180. 2 of Law of the Republic of Kazakhstan No. 413-IV dd. 1 March 2011 On State Property.
  • 39 issues were decided to establish the Company's position as a shareholder (participant) of legal entities in which NAC Kazatomprom JSC is not the Sole Shareholder (Participant) for the subsequent voting by the Company's authorised representatives at the general meetings of shareholders of such entities (voting on the operations of Baiken-U LLP, JV SKZ Kazatomprom LLP / SSAP LLP, and Uranium Enrichment Centre JSC).
  • 33 decisions to approve Kazatomprom's internal regulatory documents. They included: Regulation on the “I HAVE AN IDEA” Idea Management System at Kazatomprom; Kazatomprom Standard ST NAC 22-2021 “Capital Project Management Procedures”; Restated Regulations on Kazatomprom Scientific and Technical Council; Regulations on Kazatomprom Integrated Annual Reports; Restated rules for managing procurements at Kazatomprom and entities 50+ percent directly or indirectly owned or managed by Kazatomprom under a trust agreement; Regulations on Kazatomprom Development Strategy Update; Regulations on implementation and evaluation of the implementation of Kazatomprom Development Strategy; Regulations on Kazatomprom Integrated Annual Reports, etc.
  • 120 decisions on other matters, including payment of the membership fee to the Nuclear Energy Institute for 2021, changes in the composition of the Risk Management Committee of the Management Board; sending Kazatomprom's employees for training; decisions on matters reserved for the sole participant (shareholder), the 2021 Implementation Plan for Major Objectives, etc.

GRI 102-25
The Management Board members had no conflict of interests in 2021.

Attendance of meetings by Management Board members

Management Board members Meeting attendance % Time of sitting on the Management Board
Galymzhan Pirmatov 15 34.8 1 Jan - 2 Sept 2021
Mazhit Sharipov 30 69.7 3 Sept - 31 Dec 2021
Alibek Aldongarov 27 62.7 20 May - 31 Dec 2021
Askar Batyrbaev 25 58.1 21 Apr - 31 Dec 2021
Beksultan Bekmuratov 26 60.4 1 Jan - 24 Sept 2021
Aslan Bulekbay 12 27.9 24 Sept - 31 Dec 2021
Birzhan Duisembekov Study leave 00.0 1 Jan - 24 Sept 2021
Askar Kasabekov 10 23.2 20 May - 2 Sept 2021
Dauren Kunanbayev 8 18.6 1 Jan - 4 March 2021
Dosbolat Sarymsakov 10 23.2 24 Sept - 31 Dec 2021
Kamila Syzdykova 41 95.3 1 Jan - 31 Dec 2021
Yerlan Tuleugozhin 10 23.2 24 Sept - 31 Dec 2021
Marat Yelemesov 20 46.5 1 Jan - 19 Jul 2021

Remuneration

GRI 102-36

According to the Company's Charter, the remuneration of the Board of Directors’ members is established by the General Meeting of Shareholders, while the remuneration of the Chairman and members of the Management Board is established by the Board of Directors. Consultants are not involved in remuneration allocation process.

The procedures, terms and conditions of remuneration payment are outlined in the Company's Management Remuneration, Bonus and Social Support Policy adopted on 28 June 2017. The executive pay and bonus system as now in effect has been developed in line with the recommendations of Samruk-Kazyna JSC, which was the sole shareholder of the Company in 2017.

In 2021, members of the Management Board and independent directors of the Board of Directors at Kazatomprom received a total of KZT 1,088 million in pre-tax remuneration.

Total remuneration paid to members of the Management Board and the Board of Directors, KZT billion

2019 2020 2021
1.1 1.2 1.1

Risk Management and Internal Control

RISK MANAGEMENT SYSTEM

GRI 102-12

Key international standards and practices in risk management and internal control applied by the Company:

GRI 102-11

The existing risk management system was established in 2010 and since then has lied at the core of the Company’s operations and development strategy. The management of the Company believes that accurate and timely risk identification, assessment, monitoring, and response make it possible to effectively make decisions at all levels of management and ensure the achievement of strategic goals and key performance indicators of the Company.

Risk Management Department is the key structural subdivision responsible for methodological guidance and coordination of all risk management efforts. The Risk Management Committee under the Management Board implements the overall management of the system, through reviewing, agreeing and approving key issues. At the level of the Company's subsidiaries and affiliates, there are Risk and Compliance Officers responsible for organizing risk management.

Detailed information about the structure, participants, and powers of participants in the risk management system is outlined in the Risk Management Policy posted on the Company's Internet resource, see Risk Management Policy.

The basis of the Company's risk management system is the risk culture fostered through the engagement of all key subdivisions and stakeholders, as well as the effective exchange of information in the risk management process between the Board of Directors, the Management Board, and the Company's divisions.

To improve the quality of the risk management system, Kazatomprom conducts corporate training on risk management and internal control for heads of subdivisions and other employees who are responsible for risk management, and an annual roundtable discussion dedicated to topical issues with employees responsible for risk management at enterprises.

The risk management and internal control system relies on the three lines model.

As part of ongoing insurance activities, the Company added nine mining SDCs and Trade and Transport Company LLP to its corporate property insurance programme launched in February 2021.

According to the guidelines for uranium sale counterparty risk management, the Company's Management Board approved a list of counterparties and limits for counterparties in relation to uranium sale contracts. According to the list and limits, the Sales Department follows procedures for the sale of uranium products of NAC Kazatomprom JSC and quarterly submits reports on counterparties to the Risk Management Department of the Company. The Risk Management Department conducts an independent risk assessment of counterparties and informs the Board of Directors of the Company as part of its quarterly risk management reports.

In addition, the Company and its subsidiaries and affiliates have a business continuity management system in place, and test business continuity plans on an annual basis.

In April 2021, the Business Continuity Rules were updated to introduce a drill and emergency training mechanism. The Company tested its business continuity plans and conducted drills with subsidiaries and affiliates over the year. Meetings of the Emergency and Epidemic Response Centre took place in 2021.

Plans for 2022:

RISKS OF NAC KAZATOMPROM JSC

GRI 102-15

Under the COSO methodology, all of the Company's identified risks fall into five main categories: strategic, financial, operational, investment, and legal.

Risk registers and maps of subsidiaries and affiliates are developed and approved on an annual basis. Kazatomprom’s risk map is divided into zones of impact and likelihood.

According to the Company's Risk Register, 27 risks were identified for 2021:

A risk is assessed according to its position on the Risk Map:

Risk Map 2021
high risks
medium risks
low risks
negligible risks
Risks
Strategic risks (s)
S-1 Decrease in uranium sales price below target
S-2 Increasing social tensions
S-3 Failure to implement the company's asset restructuring plan
S-4 Reputation risk
Operational risks (o)
О-1 Failure to meet the uranium product sales plan
О-2 Failure to meet the planned uranium mining and/or uranium product output (UPO)
О-3 Increase in the cost of products and services above target
О-4 Shortage of qualified staff or low qualifications
О-5 Compliance risk
О-6 Occupational injuries
О-7 Economic damage to the Company's group of companies, caused by unfair acts of employees or third parties
О-8 Reduced information security
О-9 Failure to meet planned production/sales of beryllium, tantalum, niobium and other UMP products
О-10 Environmental risk
О-11 Risk of a pandemic
Legal risks (l)
L-1 The occurrence of legal consequences of non-compliance/different interpretations of legislation
Financial risks (f)
F-1 Liquidity deficit
F-2 Credit risk vis-à-vis counterparty banks
F-3 Failure to perform on issued guarantees and on obligations that do not have the legal form of a guarantee
F-4 Currency risk
F-5 Interest rate risk
F-6 Non-compliance with covenants under loan and guarantee agreements
F-7 Counterparty default risk
Investment risks (i)
I-1 Failure to meet the planned targets for the implementation of the FA project in Kazakhstan
I-2 Untimely performance / non-performance of Kazatomprom's Digitalisation and Transformation Strategy/ Digital Transformation Programme
I-3 Untimely implementation of DWH project (Stage 1)
I-4 Failure to achieve targets of the Building 600. Reconstruction. Uranium Refining. Ulba Metallurgical Plant JSC. North Site project

Risks and mitigation measures

Risk Description Measures
S-1 Decrease in uranium sales price below target
  • Exploring the opportunity to hedge uranium prices through transactions with TH Kazakatom AG subject to provision of the necessary funding:
    • Participating in tenders and conclusion of new medium-term and long-term contracts at fixed and partially indexed prices.
  • Media monitoring of incidents, accidents and their consequences at nuclear and uranium facilities.
  • Market analysis.
  • Fixating quotas of contracts.
S-2 Increasing social tensions
  • Developing and supervising the implementation of the Action Plan for the social and working conditions of the production staff.
  • Allocating funds to support the socio-economic development in the regions of operations under subsoil use contracts.
  • Local government relations and cooperation.
  • Overseeing compliance with labour laws through the reporting of subsidiaries and affiliates.
  • Reaching out to the public through the media, press conferences, and public hearings.
S-3 Failure to implement the company's asset restructuring plan
  • Prompt interaction with shareholders/participants of the companies subject to reorganisation (developing a Roadmap, engaging the consultants for financial, economic, legal analysis, risk identification, development of reorganisation models, development of risk mitigation measures, etc.)
  • Timely follow-up with government agencies on the pressing issues of asset restructuring.
S-4 Reputation risk
  • Professional and timely communication and disclosure management.
  • Building effective internal communications in the central office, subsidiaries and affiliates.
  • Media and social networks monitoring.
  • Building and maintaining relations with local and international media.
O-1 Failure to meet the uranium product sales plan
  • Entering into long-, short- and medium-term contracts for the sales of finished products (including contracts with KazakAtom TH AG).
  • Monitoring the performance of the contracts by the counterparties.
  • Exploring the uranium market environment and needs in the current year, using up-to-date information to assess the possibility to sell the output made available in the current year from the Uranium Sales Plan, because existing buyers refused to purchase natural uranium in view of the reduced demand for uranium products.
  • Estimating potential swap volumes in the event of a ban on uranium exports.
  • Selecting counterparties carefully, analysing and negotiating contract terms and conditions with the concerned structural units, etc.
O-5 Compliance risk
  • Monitoring changes in the stock exchange rules.
  • Informing the management and employees about changes in listing requirements.
  • Monitoring the compliance with disclosure rules.
  • Training and regular testing of employees in line with the Code of Ethics and Compliance, awareness-raising about the insider information.
  • Updating the list of insiders up to date, collecting insider's notices of insider trading liability under applicable laws, including liability in transactions with the Company's securities.
  • Notifying employees of the Company in advance about closed/open periods.
  • Timely informing stock exchanges and regulators about insider transactions.
O-6 Occupational injuries
  • Monitoring compliance with the HSE laws of the Republic of Kazakhstan and corporate regulatory documents.
  • Conducting scheduled audits of the Company's operations to ensure the compliance with health and safety regulations.
  • Monitoring timely training, briefing and checking personnel's knowledge of HSE.
  • Conducting and analysing behavioural safety audits, identifying near-misses.
  • Controlling the provision of employees of subsidiaries and affiliates with overalls and PPE.
O-8 Reduced information security
  • Protecting information by means of a confidential data leakage prevention system (DLP), Cryptographic Information Protection System (CIPS), and Comprehensive Information Security System (CISS).
  • Testing the Business Continuity and Disaster Recovery Plans.
  • Developing an action plan to eliminate identified IS threats and shortcomings.
  • Introducing SAP IS tools.
  • Ongoing monitoring and analysis of changes in the information security laws of the Republic of Kazakhstan.
O-9 Failure to meet planned production/sales of beryllium, tantalum, niobium and other UMP products
  • Controlling the execution of the Production Plan.
  • Carrying out preventive maintenance and overhauls to prevent breakdowns.
  • Conducting ongoing negotiations with suppliers of raw materials (beryllium, tantalum).
  • Controlling the availability of standard stock (raw materials).
  • Controlling the sales of beryllium, tantalum and niobium products against targets.
  • Making contracts with consumers of beryllium, tantalum and niobium products.
  • Analysing the beryllium, tantalum and niobium market (by segment, region, product, competitor, consumer) on an ongoing basis.
O-10 Environmental risk
  • Calculating emission standards and obtaining timely emission permissions from government agencies.
  • Ensuring non-exceedance of permitted emissions.
  • Implementing waste management system.
  • Complying with sulfuric acid transportation specifications.
  • Monitoring compliance with sanitary rules and radiation safety standards.
  • Hedging environmental risks.
O-11 Risk of a pandemic
  • Implementing a phased quarantine exit plan with due regard to the possible second COVID-19 wave, updating the plan if necessary.
  • Supporting employees' families affected by coronavirus/pneumonia.
I-1 Failure to meet the planned targets for the implementation of the FA project in Kazakhstan
  • Exploring procedures to start pre-commissioning works at the FA plant together with equipment manufacturers, taking into account the pandemic situation in Kazakhstan and globally, ensuring the completion of these works before the certification.
  • Preliminary assessment of the FA plant by Framatome.
  • Conducting the certification of a production line at by Framatome.
  • Choosing nuclear fuel refuelling at NPPs in China and receiving relevant orders for the fuel assembly supplies.
  • Obtaining a license for the design and transportation of a shipping container in Kazakhstan.

The management is confident that Kazatomprom has an effective risk management system in place, implementing measures to prevent the materialisation of risks and reduce the consequences of the risk materialisation. Reports on the implementation of preventive measures are generated on a regular basis as part of the risk register.

Risk limitation practices are in place. Level of risk appetite is determined and approved by the Board of Directors on an annual basis. Kazatomprom has introduced tolerance levels to control processes preventing from potential negative financial consequences and reduction of the Company's value.

In 2021, Kazatomprom updated the Rules for setting limits for second-tier banks. Approved by the Board of Directors on 18 November 2021, the rules establish and ensure control over the level of credit risk arising in relation to the Company's counterparty banks.

Key changes and additions related to the limit calculations, the rating model, and the monitoring procedures. The application of supervisory response measures and imposition of sanctions were added as the evaluation criteria into limit calculations and the rating model. Off-balance sheet requirements were included into the credit risk monitoring report. It should be noted that it is unacceptable to set a limit for a counterparty bank in case of a negative opinion of the Compliance Service of the Company.

In addition, Kazatomprom has introduced the routine analysis and assessment of risks in investment projects, as well as in other initiatives submitted by the Company's enterprises for consideration by their governing bodies.

The Company's senior management is directly engaged in risk management on an ongoing basis. In particular, the Risk Management Department prepares quarterly risk management reports for the Management Board and the Board of Directors, disclosing information on materialised risks, preventive and reactive measures taken to reduce risks, projected risks, and financial risks.

ESG RISK MANAGEMENT

Kazatomprom strives to factor in the risks and opportunities in the area of sustainable development in its operations and make informed and ethical decisions related to sustainable development. The Company works to improve its risk management and internal control system and aligning it with ESG factors and the climate change agenda to meet the expectations of socially responsible investors, sustainability promoting communities, and other stakeholders.

ESG risks

ESG area at risk Risk Impact Probability
Increasing social tensions
  • Employee dissatisfaction with working conditions
  • Employee dissatisfaction with pay
  • Residents dissatisfaction with the social infrastructure in localities where the Company's subsidiaries and affiliates are based
  • Ineffective internal communications
  • Ineffective external communications
  • Negative media coverage of the Group's operations
Strategic risks 3 3
Compliance risk (non-compliance with internal or external regulatory requirements/standards)
  • Insider trading with the Company's securities
  • Non-compliance with listing and legal regulations
  • Internal (corporate) fraud, bribery, corruption (corruption risks associated with procurement, human resource management, government relations, gifts, hospitality, charity, and other activities)
  • Inadequate implementation of hotline call management procedures
Operational risks 2 3
Occupational injuries
  • Failure to comply with H&S standards
  • Inadequate qualifications and skills of production personnel
  • Low occupational safety culture
  • Poor workplace management by employer
Operational risks 4 5
Reduced information security
  • Failure to comply with information security standards
  • Poor Information security awareness and/or qualifications of personnel (human factor, negligence, inattention)
  • Targeted cyberattack
  • Lack of systems for accounting, monitoring, responding and managing information security incidents
  • Lack of control over Internet access
  • Vulnerabilities in IS systems
  • Lack of control and analysis of the actions of privileged users
  • Lack of a centralized access management and user control system in the Company's IS
Operational risks 3 3
Environmental risk
  • Excess of emission limits (air emissions, discharges, waste)
  • Authorized/unauthorized disposal of production waste
  • Sulphuric acid spillover
  • Increased attention from the public and political parties based on the green politics principle
  • Exceeding the radiation background limits in buffer zones
  • Tightening of the environmental laws
Operational risks 2 3
Risk of a pandemic
  • Spread of COVID-19
Operational risks 4 5

INTERNAL CONTROL

Our internal control system focuses on risk prevention in three key areas, including financial and management reporting, compliance with legal and internal regulations, and improving the operational efficiency.

Relying on the COSO Internal Control – Integrated Framework standard, the Company's internal control system consists of five interdependent components:

In 2021, the Company developed Kazatomprom Internal Control Policy 82, 83, which outlines key medium-term aspirations and focus areas for the development of the internal control system at Kazatomprom.

As part of the internal control system, the Company regularly implements the following measures:

To implement and promote the principles of segregation of duties (SoD) within SAP Governance, Risk and Compliance, Access Control (GRC AC), the Risk Management Department has been designated as a business owner responsible for the SoD coordination. In 2021, the Company engaged consultants to develop SoD rules and configure SAP GRC AC solutions for the Procurements at the headquarters and Kazatomprom- SaUran LLP. The efforts will continue in 2022-2023.

To improve the internal control procedures undertaken to assure financial reporting in the Company, we developed a methodology in 2021 to assess the design, test operational efficiency, identify and document significant shortcomings/lack of control procedures in financial reporting of Kazatomprom.

In accordance with the methodology, the structural subdivisions, involved in the preparation of financial statements, updated the risk and process control matrixes. The Risk Management Department of the Company has updated the description of controls in the risk and control matrix and assessed the effectiveness of the design of controls. Evaluation of the effectiveness of the design of controls showed that the control procedures were properly designed and implemented to mitigate risks in the preparation of financial statements, and are sufficient for the corresponding risks.

As part of the internal control system, the Company regularly implements the following measures:

Internal Audit

Company has an independent Internal Audit Service (the IAS) accountable directly to the Board of Directors. The Board of Directors determines the composition of the Service, the remuneration of its staff, and approves the internal audit policies and procedures, as well as the annual audit plan and budget.

Key outcomes 2021:

External audit

GRI 102-56

In 2019, the Extraordinary General Meeting of Shareholders decided to engage PricewaterhouseCoopers LLP as an auditor of the Company. The total auditor’s fee for audit services under the audit contract for 2020-2022 is KZT 908,005,400 (nine hundred eight million five thousand four hundred, incl. VAT.

,,000
KZT
EXCLUDING VAT,
WAS THE AMOUNT PAID BY THE
GROUP IN NON-AUDIT SERVICES IN 2021

The auditor assured the company's financial statements 2021.

Shareholder Engagement

SHARE CAPITAL

Kazatomprom's total issued shares, including global depositary receipts (GDRs), is 259,356,608, with 64,839,152 shares/GDRs currently on free float, which makes 25%. Samruk-Kazyna JSC holds 75% of the issued capital, or 194,517,456 shares.

Percentage of issued shares issued and free float

Share of NWE Samruk-Kazyna
JSC shares

Free float/GDR share

INFORMATION ABOUT LISTING

As part of Comprehensive Privatisation Plan 2016-2020 approved by the Government of Kazakhstan, Kazatomprom sold 25% of its shares through initial and secondary public offerings on AIX (shares and global depositary receipts) and the London Stock Exchange (global depositary receipts) in 2018-2020.

As a result, the shareholding of the majority shareholder, Samruk-Kazyna JSC, is 75%.

Listing data

Instrument Currency ISIN AIX LSE KASE
Ordinary shares KZT KZ1C00001619 KAP
GDRs USD US63253R2013 KAP.Y KAP
Bonds KZT ISIN KZ2C00006153 - KZAPb2

OUTREACH POLICY

Kazatomprom works consistently to build a positive image and business reputation of the Company, as well as to inform stakeholders about the Company's operations through external and internal communications channels.

Kazatomprom has an Information Disclosure Council, the Information Disclosure Policy and Rules, Communications Strategy and other internal regulations in place.

Pursuing the Policy, Kazatomprom follows fundamental principles:

In 2021, the Company published/held:

OFFICIAL CHANNELS FOR SHAREHOLDER ENGAGEMENT

To ensure the exercise of equity rights and the effective shareholder engagement, the Company operates several communication channels:

Corporate Ethics and Compliance

Kazatomprom recognises the role of high professional and ethical business standards and transparency of operations. We have a zero-tolerance policy for corruption. Corruption prevention is among the Company's priorities. Corrupt actions impede the development of business, and therefore Kazatomprom seeks to prevent these violations.

Key regulations underlying the Company's anti-corruption and compliance efforts:

The Anti-Corruption and Anti-Fraud Policy is the key document that defines major anti-corruption measures, goals, and principles of NAC Kazatomprom JSC.

Company has approved anti-corruption principles underlying the corresponding strategy. Compliance with these principles is key to effective operations of the Company in the present and to its sustainable development in the future.

Basic principles of combating corruption and fraud:
GRI 205-2
100% of employees of NAC Kazatomprom JSC have read and familiar with the Anti- Corruption and Anti-Fraud Policy and regularly confirm compliance with the principles and requirements enshrined in it.

ETHICS AND DOING BUSINESS PRINCIPLES

The general principles of employees' conduct in relations with other team members, business partners, shareholders, government agencies and other stakeholders are enshrined in the Kazatomprom Code of Ethics and Compliance.

GRI 102-16

Corporate values lie at the heart of the Code. As the backbone of the Group's corporate culture and employees' unity of views and actions, the values contribute to the effective achievement of the Company's goals.

Kazatomprom's corporate values:

Every employee of the Company must adhere to the Code of Ethics and Compliance, regardless of their position.

This Code is binding on the management and third parties related to the Company. All employees of the Company get familiar with the Code of Ethics and Compliance when they are hiring and when the Code is amended.

In 2021, Kazatomprom approved a supplier Code of Ethics as an annex to procurement contracts. The code obliges suppliers to follow the ethical principles and approaches of the Company.
Suppliers and contractors shall comply with the following principles:

Company thus promotes ethical values and helps instil the ethical standards in daily activities not only at Kazatomprom JSC, but also by suppliers.

ANTI-CORRUPTION TRAINING

To raise employees’ awareness about compliance and the latest changes in anti-corruption laws, NAC Kazatomprom JSC conducts regular compliance and anti-corruption training sessions. In 2021, the Company held eight outreach events on compliance and anti-corruption for employees of the central office, subsidiaries and affiliates. In particular, a meeting was held for production staff to discuss fight against corruption, with the participation of the Company's management and CEOs of subsidiaries and affiliates.

In September 2021, each of the companies under Kazatomprom’s umbrella conducted annual employee testing on the principles of ethics. The responses analysed to identify areas of poor or insufficient understanding translated into a training schedule for the next year to improve knowledge.

There is a standing column on compliance in the QazatomNews corporate magazine.

WHISTLEBLOWING CHANNELS

GRI 102-17

Kazatomprom has the Hotline in place that is designed to receive reports from the Company's employees and third parties on corruption and fraud-related issues, violations of the Code of Ethics and Compliance, and other non-compliance with the laws regulating the Group's operations.

Anyone can report violations, using the following channels:

Telephone:

8 800 080 4747

An online form on the website:

https://sk-hotline.kz/#/


The Hotline received 55 reports in 2021. All the reports were reviewed within the time established by the laws of the Republic of Kazakhstan and internal documents of the Company.

Topics raised in reports, %

Topics 2020 2021
Procurement 49 25
HR issues 38 53
Other 13 22

OMBUDSMAN

Kazatomprom has the Office of the Ombudsman responsible for consulting employees on the Code of Corporate Ethics, initiating procedures to consider disputes over violations of the Code, participating in their settlement, and promoting compliance with business ethics by employees.

Every employee can contact the Ombudsman through special communication channels: the helpline, internal communication channels at subsidiaries and affiliates, and WhatsApp mobile application, e-mail of the Ombudsman.

In 2021, the Ombudsman considered 23 complaints according to the laws of the Republic of Kazakhstan.

Topics raised in reports, q-ty

Topics 2021
Discrimination 3
Pay 4
Employee rights 9
Violations of ethics 2
Poor quality of meals 3
Other 2
GRI 412-1

In H2 2021, the Ombudsman's office conducted its annual anonymous survey among employees of the subsidiaries and affiliates. The anonymous survey was structured into three main blocks, which diagnose knowledge of the Code of Ethics and Compliance, the state of the moral and ethical climate within a team and awareness of the possibility of resolving conflicts at work.

The anonymous survey also provided an opportunity to identify the level of employees' awareness of the possibility to protect their rights and interests, the state of anxiety within a team, the manifestation of discrimination, and the existing problems in communication with managers. In total, 72.34% of respondents at Kaztomprom believe that their relations with colleagues rely on mutual respect and management behaves correctly with employees.

According to the survey, 86.52% believe that the Ombudsman acts in accordance with the principles of independence and neutrality when dealing with complaints. In total, 92.88% of survey participants say they are aware of the possibility to contact hotline in case of unethical behaviour by colleagues or supervisors.

INTERNAL COMMUNICATIONS FOR OMBUDSMEN

In March 2021, training classes titled “A Negotiator. Negotiations at Production Plants” were organised for the Ombudsmen of the subsidiaries and affiliates to introduce international negotiation practices to trainees. Trainees reviewed various cases regarding conflicts within teams, and learned how to negotiate with protesters and aggressive employees.

In May 2021, Company conducted mediation training that helped the Ombudsmen improve their mediation skills and reinforce their knowledge in conflict resolution at work.

MANAGING CONFLICTS OF INTEREST

GRI 102-25

Kazatomprom's Code of Ethics and Compliance obliges employees report a conflict of interest, if any, according to procedures established by internal documents.

All potential or actual conflicts of interest are carefully analysed, and measures are developed to minimise the risks arising from the conflicts of interest.

Moreover, Kazatomprom has Regulations on the settlement of corporate conflicts and conflicts of interest in place. The document outlines causes of corporate conflicts and conflicts of interest, prevention procedures, as well as regulates conflict settlement actions of the Company's bodies.

GOVERNMENT RELATIONS AND SPONSORSHIP

Company’s approach to stakeholder communications excludes any form of bribery or corruption and applies to relations with both private entities and government authorities.

GRI 415-1

As per the Code of Ethics and Compliance, Kazatomprom does not make any payments to political parties, organisations, or their representatives, nor does it participate in political activities. Acting privately, employees may support and make contributions to political parties.

No valuables, products, services, and benefits may be received or provided to influence decision-making, as prescribed by the Regulations on giving and receiving gifts and branded souvenirs, as well as the Law of the Republic of Kazakhstan On the Civil Service of the Republic of Kazakhstan and the Law On Combating Corruption.

Kazatomprom is engaged in charity work and philanthropic activities though through the Samruk- Kazyna Trust Social Development Fund, which implements socially significant projects through competitive selection.