Principles of corporate governance

Principles of corporate governance

Compliance with the principles of corporate governance

The Company in its activities is guided by the Code of Corporate Governance, which provides for respect for the rights and interests of all stakeholders for the successful operation of the Company, including the growth of its value, maintaining financial stability and profitability.

The Corporate Governance Code provides for the observance of 6 fundamental principles: the principle of protecting the rights and interests of the Sole Shareholder, the principle of effective management of the Company by the Board of Directors and the Management Board, the principle of independent activity of the Company, the principle of transparency and objectivity of disclosing information about the Company's activities, the principle of legality and ethics, the principle of responsibility to stakeholders parties. Based on the analysis for 2019, 5 principles are fully observed, 1 principle is partially complied with.

PRINCIPLE OF PROTECTING THE RIGHTS AND INTERESTS OF THE SOLE SHAREHOLDER

The corporate governance of KazAgroFinance JSC ensures the protection and respect of the rights and legitimate interests of the Sole Shareholder and contributes to the efficient operation of the Company, including in achieving the strategic goals of the Company and maintaining financial stability

Complied with
The rights, obligations and competence of the Sole Shareholder are determined by the legislation of the Republic of Kazakhstan and the Charter of the Company.
Interaction with the Sole Shareholder is carried out in accordance with the Charter of the Company, which sets out the responsibilities, competence of the Sole Shareholder and the procedure for providing information on activities affecting the interests of the Sole Shareholder, and with the Corporate Governance Code.
The Regulation on the Company's Dividend Policy regulates the rights of the Sole Shareholder related to participation in the management of the Company, including the rights to receive dividends and participate in the distribution of net income.

PRINCIPLE OF EFFECTIVE COMPANY MANAGEMENT BY THE BOARD OF DIRECTORS AND MANAGEMENT BOARD

The activities of the Board of Directors are based on the principles of maximum observance and implementation of the interests of the Sole Shareholder and the Company, rationality, efficiency, activity, integrity, honesty, accuracy and responsibility within its competence.

Complied with
In accordance with the Regulations on the Board of Directors of the Company, the activities of the Board of Directors are based on the principles of professionalism, rationality and discretion, honesty and objectivity and the principles of protecting the rights of the Sole Shareholder.
In 2019, the Board of Directors of the Company held 14 meetings, of which 11 in person and 3 meetings in absentia, at which issues were considered and decisions were made on key areas of the Company's activities.
In 2019, KazAgro Holding JSC carried out an assessment of corporate governance in KazAgroFinance JSC for 2018.

The Management Board manages the current activities of the Company in order to solve problems and implement the Company's Development Strategy.

Complied with
The Management Board of the Company manages the current activities and is responsible for the implementation of the Strategy, Development Plan and decisions adopted by the Board of Directors and the Sole Shareholder. The Regulation on the Management Board of the Company clearly defines the rights and obligations of the Management Board.
During 2019, 36 meetings of the Management Board were held, in person, meetings were held on a regular basis - every ten days of the month.
In 2019, all strategic performance indicators of the Company were met in full.

THE PRINCIPLE OF THE INDEPENDENT OPERATION OF THE COMPANY

The company operates independently.

Partially complied with
In accordance with the Charter of the Company, the Management Board exercises effective and actual control over the activities of the Company and is not subject to interference of the Sole Shareholder and the state in the operational activities. The company independently builds work planning throughout the year, defines internal procedures and documents, makes decisions on project financing, as well as on other operational issues.
However, during the year, the Sole Shareholder's influence on the independent activities of the Company was observed, expressed in a moratorium on spending funds from the Company's budget regarding the acquisition of intangible assets, fixed assets of the Company, as well as on improving the qualifications of the Company's employees.

PRINCIPLE OF TRANSPARENCY AND OBJECTIVITY OF DISCLOSURE OF INFORMATION ABOUT THE COMPANY'S ACTIVITIES

The Company, in order to ensure that the Sole Shareholder makes well-grounded decisions, as well as to bring information about the Company's activities to the attention of stakeholders, ensures timely disclosure to the Sole Shareholder and stakeholders of reliable information about the Company, including about its financial position, economic indicators, results of its activities, structure of ownership and management.

Complied with
To comply with the rules of information disclosure, the Company is guided by the legislation of the Republic of Kazakhstan in the field of the securities market, joint stock companies, listing rules, a resolution of the National Bank of the Republic of Kazakhstan, as well as other documents in the field of transparency of information disclosure.
The company brings to the attention of interested parties information on corporate events through the Internet resources of the Kazakhstan Stock Exchange, the Financial Reporting Depository, a corporate Internet resource and the portal of the KazAgro holding.
In 2019, information on 85 corporate events was posted on the Internet resource of the Kazakhstan Stock Exchange, on the website of the Financial Reporting Depository - about 42. During this period, the Company was not brought to administrative responsibility for violation of the terms for providing information specified by law. In 2019, all tabs on the corporate Internet resources of the Company are updated on an ongoing basis depending on changes in legislation, internal documents governing lending and other activities of the Company. No violations were recorded in posting information on corporate Internet resources.
By the decision of the Sole Shareholder of the Company - the Management Board of “Holding“ KazAgro ”JSC dated August 7, 2019 No. 34, the Company's annual report on the results of 2018 was approved. The structure of the annual report was drawn up in accordance with the information policy of the Company and the Listing Rules, approved by the decision of the Exchange Council of Kazakhstan Stock Exchange JSC. The annual report presents a balanced picture of the Company's activities, including conclusions based on the results of the reporting period and further actions arising from them.

PRINCIPLE OF LEGALITY AND ETHICS

The Company acts in strict accordance with the legislation of the Republic of Kazakhstan, generally accepted principles of business ethics, the Charter of the Company, the Code of Corporate Governance and its contractual obligations.

Complied with
The company acts in accordance with the legislation of the Republic of Kazakhstan, the Charter, the Corporate Governance Code and other internal documents. The company carries out constant and systematic activities to monitor changes in legislation and timely update the internal documents and standard contracts of the company. The Company also has a compliance risk management process.
The Company has a Code of Corporate Ethics that applies to all employees and officers of the Company. The Company ensures that all employees and officers of the Company are familiar with the Code of Conduct, and also takes measures to regularly update and check knowledge of the provisions of the Code.

PRINCIPLE OF RESPONSIBILITY TO THE INTERESTED PARTIES

The company recognizes and respects the rights of all stakeholders and seeks to cooperate with them in order to develop and ensure financial stability. Interested parties should be able to receive compensation for violation of their rights in cases stipulated by the legislation of the Republic of Kazakhstan. Where a stakeholder participates in the corporate governance process, the stakeholder should have access to material, sufficient and reliable information on a timely and regular basis. Interested parties should be able to freely report to the Board of Directors about violations of legislation or internal documents of the Company by the Management Board, and their rights should not be infringed upon in the event of such a report.

Complied with
The Company is guided in its activities by the Code of Corporate Governance, which provides for respect for the rights and interests of all stakeholders for the successful operation of the Company, including the growth of its value, maintaining financial stability and profitability.
The Company's Internet resource is the key and most accessible source of information for the majority of stakeholders. In this regard, it contains the maximum possible public information, it is well structured, easy to navigate and accessible to all interested parties. The Internet resource of the Company contains all the necessary and necessary information so that interested parties can have an idea of the Company as a whole.