Corporate governance system

A responsible approach to doing business is our priority. We build our work on the basis of a transparent and efficient corporate governance system that complies with industry standards and best international practices. Its continuous improvement allows us to take into account the interests of all stakeholders and contribute to the sustainable development of the entire Group of companies of Samruk-Energy JSC.

The main goal of effective corporate governance is to create conditions for making balanced and wellfounded decisions. Samruk-Energy JSC achieves high performance of due to the established corporate governance processes at all levels that ensures transparency, control, clear distribution of powers and timely response to risks.

Corporate structure and distribution of responsibilities

The Company has reached a mature level of corporate governance as reflected in a clear governance structure and allocation of roles and responsibilities. The Board of Directors provides strategic guidance, oversees the activities of the Executive Body and protects the interests of shareholders. The Company's management effectively manages operations, maintaining high standards of business ethics and transparency. The Charter clearly defines and enshrines competence of the bodies and decision-making procedures.

The corporate governance system ensures that:

• adherence to the hierarchy of issues and decisionmaking procedures;
• clear delineation of authority and responsibility between bodies, officials and employees;
• timely and quality decision-making by the bodies of Samruk-Energy JSC and its subsidiaries and affiliates;
• efficiency of processes in the activities of Samruk- Energy JSC and its subsidiaries and affiliates;
• compliance with the legislation, Corporate Governance Code and internal documents of Samruk-Energy JSC and its subsidiaries and affiliates.

Corporate governance structure

Samruk-Energy JSC and its subsidiaries and affiliates have approved regulations on management bodies, executive bodies, structural subdivisions and job descriptions for respective positions. Compliance with the provisions of these documents ensures systematic and consistent corporate governance processes.

The Company's fundamental internal documents in the area of corporate governance are:

• Corporate Governance Code of Samruk-Energy JSC;
• Asset Management Policy of Samruk-Energy JSC;
• Regulations on interaction with subsidiaries and affiliates of Samruk-Energy JSC;
• Roadmap for improvement of the sustainability management system for 2024.

Samruk-Energy JSC key corporate governance policies

We are guided by the principles of transparency, accountability, responsibility and fairness. All decisions are made taking into account the interests of stakeholders and the long-term sustainability of the Company. We have developed a policy to prevent conflicts of interest and ensure the independence of the Board of Directors.

The Company adheres to international information disclosure standards, providing shareholders and stakeholders with timely, reliable and complete information. Annual reports and non-financial statements are prepared in accordance with the GRI Standards and ESG reporting frameworks (more details in the section About the Report).

Training and development in the field of corporate governance

In 2024, Samruk-Energy JSC continued systematic work on training and development of employees in the field of corporate governance, sustainable development and risk management. Educational events were held with participation of external experts and international organisations which made it possible to ensure a high level of personnel training.

We paid special attention to sustainability issues. In September 2024, an online meeting was held for portfolio companies on the topic of annual reporting with a review of best practices. In December 2024, we held a discussion session dedicated to the global context of sustainable development, national challenges and contribution of the Samruk-Energy JSC Group of companies based on the results of 2024 and oriented towards the tasks of 2025.

One of the key areas was training on climate change issues. In November of the reporting period, we organised a corporate seminar on climate risks for the energy sector. In December 2024, McKinsey held a training session for members of the Board of Directors and top management on climate change and energy development prospects.

As part of strengthening the corporate culture and values, training sessions on professionalism, effective communication, conflict management, and negotiation skills using the Harvard methodology were held during the reporting period. These activities were aimed at developing personal and professional competences of employees.

Additionally, in November 2024, the Compliance Service organised a training seminar on the formation of anti-corruption culture in the Company. This emphasises Samruk-Energy JSC's aspiration to comply with ethical standards and principles of fair business conduct.

Corporate governance in the Samruk-Energy JSC Group of companies

In 2024, Samruk-Energy JSC approved the Asset Management Policy aimed at increasing efficiency and transparency in the management of subsidiaries and affiliated organisations.

The Group implementes asset management on the basis of the Development Strategy. This includes coordination of activities of subsidiaries to achieve common strategic goals, contributes to the efficiency and competitiveness of each company within the Group.

The main objective is to ensure the strategic alignment of the Group's companies, their financial stability and operational efficiency. Special attention is paid to the implementation of modern corporate governance standards, risk management, development of internal control, integration of ESG principles as well as promotion of innovations and human capital development.

The key objective of asset management is to strengthen the country's energy security and improve the efficiency of production facilities through infrastructure modernisation, optimisation of the asset structure, sustainable development and risk minimisation. The policy also aims to strengthen engagement with shareholders, investors and partners in the interests of long-term sustainable growth.

Principles of the Group's management

• Balance: Ensuring a balance between management carried out by Samruk-Energy JSC in the Group and granting independence in making operational decisions to companies to carry out their activities.
• Transparency and accountability: Ensuring openness in decision-making and accountability to shareholders and stakeholders.
• Efficiency and effectiveness: Continuous improving operational efficiency and achievement of strategic goals.
• Independence and objectivity: Forming Boards of Directors with participation of qualified independent directors, shareholder representatives for objective control and decision-making.
• Integration of ESG factors: Implementing environmental, social responsibility and corporate governance standards in the Group's operations.

Samruk-Energy JSC forms a unified policy for the Group of companies and approves methodological guidelines and corporate standards for subsidiaries and affiliates. Such directions include issues of human resources management, information technologies, investments, risks, as well as planning, economics, finance and corporate governance.

Objectives of the asset management system:

• Adhering the hierarchy of issues and decision-making procedures;
• Timely decision-making by corporate bodies of the Samruk-Energy JSC Group of companies;
• Improving process manageability for the bodies of subsidiaries and affiliates;
• Increasing the rating of compliance of the level of corporate governance of subsidiaries and affiliates with the best international practices.

Priority management tools for subsidiaries and affiliated organisations of Samruk-Energy JSC:

• Improving the level of corporate governance of subsidiaries and affiliates by forming professional Boards of Directors/Supervisory Boards, ensuring the performance of the Boards of Directors/Supervisory Boards and managers of subsidiaries and affiliates;
• Ensuring effective management of subsidiaries and affiliates by defining strategic goals (KPIs) of subsidiaries and affiliates, monitoring and assessing the efficiency of the implementation of the Development Strategy and Development Plan of subsidiaries and affiliates;
• Forming unified policies, corporate standards and methodological recommendations to ensure unified approaches to key issues in the Samruk-Energy JSC Group of companies, promotion of best management practices and current activities in subsidiaries and affiliates;
• Providing support and expertise to subsidiaries and affiliates in compliance with the applicable corporate governance principles and within the Company's competences to implement policies, standards and methodological recommendations, build competences, improve performance and/or resolve problematic issues of subsidiaries and affiliates;
• Promoting interests of the Company's Group and individual subsidiaries and affiliates to achieve the Company's strategic goals, increase the value of the investment portfolio of the Samruk-Energy JSC Group of companies on such issues as interaction with state authorities, antimonopoly regulation, tariff policy, attraction of investors, etc.;
• Searching and implementing business synergy to achieve synergy effect at the level of the Samruk- Energy JSC Group of companies by searching for and offering opportunities for cooperation between subsidiaries and affiliates, for example, through complementary activities, creation of service factories, common service centres, in order to optimise costs, introduction of new functional standards, etc.

Key management mechanisms of the Samruk-Energy JSC Group:

Organisational structure of Samruk-Energy JSC

The Board of Directors approved the current organisational structure and headcount of Samruk- Energy JSC by its decision dated 27 August 2024 that comprises of 174 staff units.

Within the framework of updating the structure aimed at implementation of Bogatyr Coal LLP's key projects, strengthening monitoring of industry trends, attracting investors, as well as improving industrial safety and reducing injuries, the previously approved structure was amended:

• the position of Co-Managing Director for Development was introduced;
• the staff of the Occupational Health and Safety Department was increased by 5 units.

Improving the efficiency of the corporate governance system

In accordance with the diagnostics of the corporate governance system conducted in 2021 by Samruk‑Kazyna JSC according to the approved methodology in the organisations in which Samruk- Kazyna JSC owns directly or indirectly more than 50% of voting shares, the corporate governance rating of Samruk-Energy JSC was set at BB level ("average" maturity level). Key aspects of corporate governance were analysed:

• Effectiveness of the Board of Directors and the Executive Body;
• Risk management;
• Internal control and audit;
• Sustainable development, shareholders' rights;
• Transparency.

In accordance with the Development Strategy, we focuse on improving the efficiency of corporate governance through the prism of the sustainable development concept and ESG principles, covering such areas as health and safety, environmental protection, energy efficiency, anti-corruption and anti-fraud.

To ensure a management approach that takes into account the social and environmental impact of activities on people and the environment, in 2024, we approved the Roadmap for the improvement of the sustainable development management system of Samruk‑Energy JSC for 2024. It includes measures aimed at improving our activities in environmental and social aspects as well as in corporate governance issues formed basing on the results of independent diagnostics of the Company's corporate governance and the results of ESG processes assessment by leading international rating agencies.

The 2024 Roadmap for the Improvement of Sustainability Management System envisages the implementation of 106 actions aimed at developing areas requiring, among other things, the improvement and development of corporate governance practices.

By the decision of the Management Board of Samruk- Kazyna JSC dated 10 November 2023, Samruk- Energy JSC approved a new version of the Corporate Governance Code.

In order to apply unified standards, the updated Corporate Governance Code in a new edition for the Samruk-Energy JSC’s Group of companies was approved by the decision of the Management Board of Samruk-Energy JSC dated 15 December 2023.

The Corporate Governance Code is available at: https://www.samruk-energy.kz/images/Corporate_documents/KKU_2024_eng.pdf

Corporate Governance System Policy of Samruk-Energy JSC

To manage our operations effectively and transparently, we have implemented a corporate management system centred on the concept of sustainable development.

The key document of Samruk-Energy JSC in this area is the Corporate Governance System Policy (more details on the website of Samruk-Energy JSC – https://www. samruk-energy.kz/images/Corporate_documents/ Politika_KSM_08_2024_en.pdf).

To ensure an objective assessment of the current state of the corporate management system as well as to increase the level of interaction, ensure implementation of audit principles and form the necessary knowledge base, we use the cross-functional audit approach which implies audits within Samruk-Energy JSC by both specialists of subsidiaries and affiliates and the corporate centre.

In 2024, the external surveillance audit successfully confirmed the compliance of the corporate management system with the requirements of international standards ISO 9001, ISO 14001, ISO 45001, ISO 50001 and ISO 37001.

The certification was carried out in accordance with the procedures of MS Certification Services, an international conformity assurance body, with the involvement of international class auditors and covered the Company’s following assets (production sites): Ekibastuz GRES‑1 LLP named after B. Nurzhanov, Ekibastuz GRES‑2 Station JSC, Almaty Electric Stations JSC, Moynak HPP JSC, Samruk Green Energy LLP, Alatau Zharyk Company JSC, AlmatyEnergoSbyt LLP, Shardara HPP JSC, First Wind Power Plant LLP, as well as the corporate centre of Samruk-Energy JSC.

Based on the results of the certification audit, positive aspects of the development and functioning of the Company's corporate management system were noted, in particular:

• A high degree of management focus on achieving the Company's goals;
• Organising and conducting cross-functional corporate audits of the management system in dependent organisations;
• Good level of exchange of documented information electronically in the Company's operations;
• Application of information systems for planning and process control;
• Support for the development of the corporate management system by affiliated organisations;
• Amending the current legislation to establish requirements aimed at protecting the interests of all energy market participants.

Compliance with the Corporate Governance Code

In the reporting period, the Company was guided by the Corporate Governance Code approved by the decision of the Management Board of Samruk-Kazyna JSC dated 10 November 2023 (Minutes No. 54/23), (hereinafter referred to as the Code).

The Company has carried out self-assessment and analysed the actual compliance of current operations.

The results of the self-assessment show that in 2024 the Company ensured compliance with the main principles and provisions of the Code. At the end of 2024, 117 out of 120 provisions of the Code were in compliance, 3 provisions were in partial compliance.

Thus, the following paragraphs have been determined to be partially compliant with the provisions of the Code:

The Company's plans to improve its corporate governance system

In 2025, Samruk-Energy JSC will focus on strengthening corporate governance taking into account climate challenges, integrating ESG principles and increasing transparency. The main areas include: