THE JOINT STOCK COMPANY
«NATIONAL COMPANY «KAZAKHSTAN TEMIR ZHOLY»
ENDORSED
by the Board of Directors of the JSC «NC «KTZ»
Minutes № 7 from «12 » December 2011 year
REGULATIONS ON THE BOARD OF DIRECTORS OF THE JOINT STOCK COMPANY «NATIONAL COMPANY «KAZAKHSTAN TEMIR ZHOLY»
Astana 2011 year
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CONTENTS
1. GENERAL PROVISIONS ………………………………………..…………....3
2. PURPOSES AND PRINCIPLES OF THE ACTIVITY OF THE BOARD OF DIRECTORS …………………………………………………….3
3. COMPETENCE OF THE BOARD OF DIRECTORS …………………………...4-6
4. ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS OF THE COMPANY……………...... 6-8
5. TERM OF AUTHORITIES OF MEMBERS OF THE BOARD OF DIRECTORS………………...... 8
6. THE CHAIRMAN OF THE BOARD OF DIRECTORS ……..…………...... 9
7. RIGHTS AND DUTIES OF MEMBERS OF THE BOARD OF DIRECTORS ...9-12
8. CALLING OF A SESSION OF THE BOARD OF DIRECTORS...…………....12-13
9. A SESSION OF THE BOARD OF DIRECTORS …...…………………………13-19
10. CONTROL FOR FULIFLLMENT OF DECISIONS OF THE BOARD OF DIRECTORS …...…………………………………………………………………....19
11. COMMITTEES OF THE BOARD OF DIRECTORS .………………………..19-20
12. CORPORATE SECRETARY……..………………………………………..…...20
13. INTERRELATIONS WITH THE SOLE SHAREHOLDER AND EXECUTIVE COMMITTEE OF THE COMPANY...………………………………………..…20-21
14. RESPONSIBILITTY OF MEMBERS OF THE BOARD OF DIRECTORS …….21
15. APPRAISAL OF THE ACTIVITY OF THE BOARD OF DIRECTORS ….....21-22
16. REWARDS OF MEMBERS OF THE BOARD OF DIRECTORS ………...... 22
17. LEGAL FORCE OF THE REGULATIONS…..…………………………...... 22
18. FORM OF MINUTES OF A SESSION OF THE BOARD OF DIRECTORS (ATTACHMENT 1)……………………………………………………………....23-25
19. FORM OF MINUTES OF AN ABSENTEE SESSION OF THE BOARD OF DIRECTORS (ATTACHMENT 2) ...25-28
20. FORM OF BULLETIN OF ABSENTEE VOTING MEMBERS OF THE BOARD OF DIRECTORS (ATTACHMENT 3) ...29-30
21. FORM OF MEMORANDUM ON THE ITEM OF AN AGENDA (ATTACHMENT 4)…...………………………………………………………...…...31
22. FORM OF THE PROJECT OF A DECISION OF THE BOARD OF DIRECTORS ON THE ITEM OF AN AGENDA (ATTACHMENT 5) ..32
1. General provisions
1. The present Regulations of the Board of Directors of the Joint Stock Company «National Company «Kazakhstan Temir Zholy»
(the JSC «NC «KTZ») (hereinafter – the Regulations) has been elaborated in accordance with the Law of the Republic of Kazakhstan «On joint stock companies», «On Sovereign Wealth Fund», Charter of the JSC «NC «KTZ», Code of corporate governance of the JSC «NC «KTZ».
2. The Regulations details procedures of the activity of the Board of Directors as a body of management in the JSC «NC «KTZ» (hereinafter – the Company), defines status, purposes, principles, order of election and competence of members of the Board of Directors of the Company (hereinafter – the Board of Directors), authorities and responsibility of the members of the Board of Directors, order of calling, holding of sessions of the Board of Directors, making and forming of its decisions.
3.The Board of Directors – is a body of the Company, realizing general activities management of the Company, for exclusion of solution of items, related by the Law and Charter of the Company to exclusive competence of the Sole Shareholder of the Company (hereinafter – the Sole Shareholder).
4.In its activities the Board of Directors is guided by the legislation of the Republic of Kazakhstan, Charter of the JSC «NC «KTZ» (hereinafter – the Charter), Code of corporate governance of the JSC «NC «KTZ» (hereinafter – the Code), present Regulations and other internal documents of the Company.
2. Purposes and principles of the activities of the Board of Directors
5. Purposes of the activities of the Board of Directors are general activities management of the Company, providing of realization of interests of the Company and protection of rights of the Sole Shareholder, and as well providing of understanding and observance of obligations of the Company before the Sole Shareholder and other persons.
6. For realization of purposes of the activities the Board of Directors is guided by the following principles:
1)decisions making on the basis of collective and weighted discussion of items using of trustworthy and full information on the activities of the Company;
2)maximum observance and realization of interests of the Sole Shareholder and Company, and as well protection of rights of the Sole Shareholder;
3) providing of achievement of balance of interests of the Sole Shareholder and making by the Board of Directors maximum objective decisions in interests of the Company;
4) realization of the activities on principles of reasonableness, effectiveness, activity, conscientiousness, honesty, responsibility and accuracy;
5) other principles stated in the Code.
3. Competence of the Board of Directors
7.The following items are related to exclusive competence of the Board of Directors:
1) approval of the strategy of development of the Company;
2) decision making on placement (realization), including on quantity of placement (realization) shares in the range of quantity of the announced shares, method and price of their placement (realization);
3) decision making on purchasing by the Company of the placed shares and other securities and price of their purchasing;
4) definition of quantity composition, terms of authorities of the Executive Committee, election, and as well ahead of schedule termination of authorities of members of the Executive Committee of the Company (for exclusion of the Chairman of the Executive Committee);
5) definition of volumes of official salaries and conditions of remuneration of labor and giving premium of the Chairman and members of the Executive Committee of the Company;
6) definition of quantity composition, terms of authorities of the Internal Audit Service, assignment of its head and members, and as well ahead of schedule termination of their authorities, definition of order of work of the Internal Audit Service, volume and conditions of remuneration of labor and giving premium to employees of the Internal Audit Service (on recommendation of the Committee on audit of the Board of Directors);
7) approval of the annual audit plan of the Internal Audit Service;
8) consideration of quarter and annual reports of the Internal Audit Service and decision making on them (on recommendation of the Committee on audit of the Board of Directors);
9) assignment, definition of the term of authorities of a corporate secretary, ahead of schedule termination of his authorities, and as well definition of volume of an official salary and conditions of reward of the corporate secretary and employees of the staff of the corporate secretary;
10) approval of documents, regulating internal activities of the Company (for exclusion of documents, adopted by the Executive Committee in the purposes of organization of the activities of the Company), including an internal document, establishing conditions and order of holding of auctions and subscription of securities of the Company;
11) definition of order and terms of information accessing by members of the Board of Directors on the activities of the Company, including of the financial information;
12) decision making on conclusion of big deals and deals, in making of which the Company has interest, in accordance with the legislative acts of the Republic of Kazakhstan;
13) approval of accounting policy of the Company;
14) approval of the Plan of development of the Company;
15) approval of key indicators of the activities for members of the Executive Committee of the Company and their target meanings (on recommendation of the Committee on reward of the Board of Directors);
16) decision making on consent concerning of possibility for members of the Executive Committee of the Company to work in other organizations;
17) definition of conditions of issue of bonds and derivative securities of the Company;
18) preliminary approval of the annual financial statement of the Company;
19) preliminary approval of the annual report (statement) of the Company;
20) decision making on creation and closing of foreign subsidiaries and representatives of the Company, and as well approval of regulations on them;
21) choice of registrar of the Company in case of termination of a contract with previous registrar of the Company;
22) decision making on participation of the Company in creation of other organizations;
23) decision making acquisition by the Company of ten or more percents of shares (shares of participation in the chartered capital) of other juridical persons;
24) approval of total number of employees and the structure of the central staff of the Company;
25) approval of internal procedures of the Company on risks management (for exclusion of items, related by the internal documents of the Company to competence of other bodies of the Company);
26) approval of the Policy of risks management;
27) decision making on items of acquiring, transfer (assignment) of rights of use of subsoil, making changes in contracts on use of subsoil (for exclusion of changes of contracts, connected with changes in legislative acts of the Republic of Kazakhstan or decision of the Government of the Republic of Kazakhstan, changes of details of sides and making changes, bearing editorial character), conclusion of contracts with strategic partners;
28) submission of items on consideration of the Sole Shareholder of the Company;
29) presentation of offers to the Sole Shareholder on the order of distributions of net profit of the Company for past financial year and volume of dividend for a year per one ordinary share of the Company;
30) creation and definition of quantity composition of committees of the Board of Directors, definition of terms of authorities of committees, election of a Chairman and members of committees, approval of regulations on them;
31) other items, envisaged by acts of the Sole Shareholder, legislation of the Republic of Kazakhstan and Charter of the Company, do not related to the excusive competence of the Sole Shareholder of the Company.
8.The Board of Directors has the right on accessing in full volume and timely basis from the Executive Committee and Internal Audit Service of information, explanations and elucidations.
9.The Board of Directors quarterly considers the report of a head of the Risks management department with description and analysis of key risks of the Company, and as well data on realization of plans and programs on minimization of risks of the Company.
The Board of Directors annual appraises effectiveness of risks management system of the Company.
10.Items, related to the exclusive competence of the Board of Directors, cannot be transferred for decision to the Executive Committee.
11.The Board of Directors is not competent to make decisions on items which in accordance with the Charter are related to competence of the Executive Committee, and as well to make decisions, contradictory to decision of the Sole Shareholder of the Company.
4. Election of members of the Board of Directors of the Company
12.Only a physical person is able to be a member of the Board of Directors.
- The Sole Shareholder in decision making on election (assignment) of members of the Board of Directors is guided by the following requirements to selection of candidates members of the Board of Directors:
1) Trust of the Sole Shareholder and other members of the Board of Directors of the Company to a candidate;
2) Positive achievements and stainless reputation of a candidate in a business and branch environment;
3) Professional knowledge and qualification of a candidate, allowing him making weighted decisions, maximum equitable to the interests of the Sole Shareholder and Company. At that additional advantage of a candidate is presence of an academic degree in the field, appropriating to the basic activities of the Company;
4) Presence of experience of leading work no less than 3 (three) years, preferably in the field, appropriating to the basic activities of the Company;
5) Presence of sufficient amount of time, allowing effectively performing entrusted on him/her functions. A candidate member of the Board of Directors in decision making on participation in bodies of other joint stock company or employment in other organization should act on the premise that for fulfillment of entrusted on him/her duties properly, he/her should have sufficient amount time available.
14.Members of the Executive Committee, for exclusion of a Chairman of the Executive Committee of the Company are not able to be elected in the Board of Directors. A Chairman of the Executive Committee of the Company is not able to be elected as a Chairman of the Board of Directors.
15.Requirements, made to persons, elected in a composition of the Board of Directors are established by the legislation of the Republic of Kazakhstan and Charter of the Company.
16.Candidates members to the Board of Directors and a member of the Board of Directors should possess with appropriate experience of work, knowledge, qualification, positive achievements and stainless reputation in a business and branch environment, necessary for fulfillment of duties and organization of effective work of all Board of Directors in interests of the Sole Shareholder and Company.
17.A person is not able to be a member of the Board of Directors:
1) Having no higher education;
2) Having uncleared or not expunged convictions in the order established by legislation of the Republic of Kazakhstan;
3)Earlier having been a chairman of the Board of Directors, first head (a chairman of the Executive Committee), deputy head (a deputy chairman of the Executive Committee) chief accountant of other juridical person in the period of no more that before one year up to the decision making on compulsory liquidation or compulsory redemption of stock, or closedown of other juridical person, recognized bankrupt in the established order. Indicated requirement is used during five years after the date of decision making on compulsory liquidation or compulsory redemption of stock, or closedown of other juridical person, recognized bankrupt in established order.
4)Other requirements, made to persons, elected in a composition of the Board of Directors established the legislation of the Republic of Kazakhstan.
18.Numbers of members of the Board of Directors of the Company should make up no less of six persons. No less of one third of numbers of members of the Board of Directors should be independent directors.
Numbers of members of the Board of Directors are not residents of the Republic of Kazakhstan should not exceed fifty percents from total numbers of members of the Board of Directors.
19.A director is recognized as independent in cases, if he:
Is not an affiliated person of the Company and was not during three years, preceded his election in the Board of Directors (for exclusion of a case of his period of an independent director of the Company);
Is not an affiliated person in regards to the affiliated person of the Company;
Is not connected to subordination with official persons of the Company or organizations - affiliated persons of the Company and has not been connected to subordination with these persons during three years, preceded his election in the Board of Directors;
Is not an auditor of the Company and has not been the auditor during three years, preceded his election in the Board of Directors;
Is not participated in an audit of this joint stock company as an auditor, working in composition of an audit organization, and has not been participated in such audit during three years, preceded his election in the Board of Directors;
Is not a state employee (public servant).
20.All directors should officially enter upon his duties as Directors and regularly improve his professional knowledge and ability.
21.The Board of Directors in composition of the annual report on his activities, presented to the Sole Shareholder should indicate each member of the Board of Directors whom he considers as an independent. The Board of Directors should establish, whether a member of the Board of Directors was independent in decisions making; to indicated reasons of recognition of a member of the Board of Directors independent, reflecting at that fitting of a member of the Board of Directors criterion of independency on legislation of the Republic of Kazakhstan, and as well existing of relations or circumstances which able to influence on recognition of a member of the Board of Directors independent, including, whether a member of the Board of Directors:
Is an employee of the Company or its subsidiary organization during last five years;
Has got or gets additional reward from the Company, to the exclusion of reward of a member of the Board of Directors;
Holding such position in other organizations or bodies has important relations with other members of the Board of Directors through such participation in other organizations and bodies;
Present of the Sole Shareholder or the state authority bodies;
Has been an independent member of the Board of Directors more than ten years running.
5. Term of office of members of the Board of Directors
22.Persons, elected in composition of the Board of Directors are able to be reelected unlimited time, if other does not envisaged by legislation of the Republic of Kazakhstan and the Charter of the Company.
Members of the Board of Directors are elected on the term of no more than three years. Any term of election of the Board of Directors on a term of more than 6 years running is subject to special consideration with taking into account of necessity of quality refresh of composition of the Board of Directors. One and the same person is nor able to be elected in the Board of Directors more of ten years running. In exceptional cases election on term of more ten years is allowed but at that election of such person in the Board of Directors should occur annually.
23.Term of authorities of the Board of Directors is established by the Sole Shareholder of the Company.
Term of authorities of the Board of Directors expires on the day of election of new composition of the Board of Directors.
24.The Sole Shareholder of the Company has right to discontinue ahead of time authorities of all or separate members of the Board of Directors, including in case of participation of a member of the Board of Directors less than in half of held presentee and absentee sessions of the Board of Directors in the report period, for exclusion of absence on presentee sessions on a reason of illness, being in a holiday (labor leave), business trip.
25.Ahead of schedule termination of authorities of a member of the Board of Directors on his initiative is realized on the basis of written announcement of the Board of Directors.
Authorities of such member of the Board of Directors are terminated from the moment of receipt of the indicated announcement by the Board of Directors.
26.In case of ahead of schedule termination of authorities of a member of the Board of Directors, authorities anew elected member of the Board of Directors expire simultaneously with authorities term expire of the Board of Directors in whole.
6. A Chairman of the Board of Directors
27.A Chairman of the Board of Directors is elected by the Sole Shareholder. The Sole Shareholder has right in any time to re-elect a Chairman of the Board of Directors.
28.A Chairman of the Board of Directors in order established by the Law and Charter:
1)organizes the Board of Directors’ work;
2)calls and presides over a session of the Board of Directors;
3)concludes in the name of the Company labor agreement with a Chairman of the Executive Committee, envisaging direct ordinal relation of tangible reward and responsibility of a Chairman of the Executive Committee of the Company from results of the activity and fulfillment of the Plan of development of the Company;
4)presents to a Chairman of the Executive Committee of the Company a candidature for assignment on a position of a head of the Internal Audit Service, approved by the Board of Directors;
5)informs the Sole Shareholder on volume and size of reward of members of the Board of Directors and Executive Committee of the Company;
6)annually informs the Sole Shareholder on the activities of the Board of Directors;
7)approved an agenda of a session of the Board of Directors;
8)jointly with a Corporate secretary provides timely receipt by members of the Board of Directors trustworthy and clear information;
9)provides effective contribution of members of the Board of Directors in activities of the Board of Directors and constructive relations between members of the Board of Directors and Executive Committee;