«APPROVED»

decision of the general meeting of shareholders

JSC "Uzkishlokelektrkurilish"

dated June 15, 2019

protocol No. 1

POSITION

ABOUT DIVIDEND POLICY

joint stock company

"Uzkishlokelektrkurilish"

GENERAL PROVISIONS

1. This regulation on the dividend policy of the joint stock company "Uzkishlokelektrkurilish" (hereinafter referred to as the "Regulation") has been developed in accordance with the current legislation of the Republic of Uzbekistan, the charter of the joint stock company "Uzkishlokelektrkurilish" (hereinafter referred to as the "Company"), the Corporate Governance Code approved by the minutes the meeting of the Commission on improving the efficiency of joint stock companies and improving the corporate governance system dated 31.12.2015. No. 9 and other internal documents of the Company.

This Regulation contains general issues that should be reflected and disclosed in the dividend policy of the JSC. 

2. The dividend policy of the Company is aimed at increasing the welfare of shareholders and ensuring the growth of the capitalization of the Company. The main purpose of these Regulations is to inform shareholders and other interested parties about the dividend policy of the Company.

This Regulation is intended to determine the approach of the Company's Supervisory Board to the development of recommendations on the amount of dividends on shares and the procedure for their payment.

If any issues related to the payment of dividends to the shareholders of the Company are not regulated by the norms of the Law of the Republic of Uzbekistan "On Joint Stock Companies and Protection of Shareholders' Rights", other regulatory legal acts of the Republic of Uzbekistan, the Charter of the Company and this Regulation, then they should be resolved on the basis of from the need to ensure the rights and legitimate interests of shareholders.

3. This dividend policy was developed for the period 2019-2024.

The Company intended to allocate at least 5% of its net profit to the payment of dividends during this period. Most of the remaining funds will be spent on the development of the Company (further modernization (renewal) of mechanisms and capitalization of the charter capital), 7% on the preparation and holding of the general meeting of shareholders, the Supervisory Board, the Audit Commission and the Counting Commission. financial incentives for employees and at least 5% to replenish the reserve fund.

4. The Company considers the growth of capitalization as the main way to satisfy the legitimate property interests of shareholders to extract income from the Company's shares. The dividend policy is to optimize the proportions between the consumed and capitalized parts of the profit received by the Company in order to increase the market value of shares.

5. The dividend policy of the Company is based on the following basic principles:

the principle of transparency, which means the definition and disclosure of information about the obligations and responsibilities of the parties involved in the implementation of the dividend policy, including the procedure and conditions for making a decision on payment and the amount of dividends;

the principle of timeliness, implies the establishment of time limits in the implementation of dividend payments;

principle of justification, which implies that a decision to pay and the amount of dividends can be accepted only if the Company achieves a positive financial result, taking into account development plans and its investment programs based on the real financial situation of the company;

the principle of fairness, implies ensuring equal rights for shareholders to receive information on the decisions made on the payment, the amount and procedure for the payment of dividends;

principle of consistency, implies strict execution of procedures and principles of dividend policy;

development principle, implies continuous improvement of the dividend policy as part of improving corporate governance procedures and revising its provisions in connection with the change in the strategic goals of the Company;

the principle of sustainability implies the Company's striving to ensure a stable level of dividend payments.

6. It is the right of the Company to make a decision (announcement) on the payment of dividends on outstanding shares. The general meeting of shareholders has the right to make a decision on payment or non-payment of dividends on shares.

7. Payment of the declared dividends is the responsibility of the Company.

Expenses related to the payment of dividends (including expenses for calculating and withholding taxes, remittance of dividends, postage) cannot be imposed on the shareholder receiving the dividend by decision of the governing bodies. The company is liable to shareholders for failure to fulfill this obligation in accordance with the current legislation of the Republic of Uzbekistan.

8. Dividends are not charged or paid on shares:

not posted;

acquired and / or redeemed by the Company itself;

in other cases stipulated by the legislation of the Republic of Uzbekistan.

9. In the cases provided for in part one of Article 54 of the Law “On Joint Stock Companies and Protection of Shareholders' Rights”, the company is not entitled to pay and make decisions on the payment of dividends on shares.

SIZING PROCEDURE AND DIVIDEND PAYMENTS

10. The Company has the right, based on the results of the first quarter, six months, nine months of the financial year and (or) based on the results of the financial year, to make decisions (declare) on the payment of dividends on shares, except for those specified in clause 8.

The decision to pay (declare) dividends based on the results of the first quarter, six months and nine months of the financial year may be made within three months after the end of the relevant period.

Dividends are paid out of the company's net profit remaining at the disposal of the company, and (or) retained earnings of previous years. Dividends on preferred shares (if any) may be paid out of the company's funds specially designated for this. At the same time, in order to timely pay dividends and prevent deterioration of the financial condition of the Company due to the withdrawal of funds from circulation for the payment of dividends, the Company creates a reserve for bad accounts receivable at the expense of the company's profit.

The General Meeting of Shareholders of the Company makes a decision to pay (declare) dividends on shares of each category. The Supervisory Board of the Company submits recommendations to the general meeting of shareholders on the amount of dividends on shares and the order of their payment. The amount of dividends may not exceed that recommended by the Supervisory Board.

11. By the decision of the general meeting of shareholders on payment (declaration) of dividends, the following shall be determined:

category (type) of shares on which dividends are paid (declared);

the size of the dividend per share of a certain type;

term, procedure and frequency of dividend payment.

At the same time, the Company is not entitled to make a decision on the accrual (payment) of dividends in cases established by law, as well as the impossibility of full payment of dividends on ordinary shares within the time frame established by law.

12. The amount of dividends on shares recommended to the meeting of shareholders is determined by the Supervisory Board based on the following factors:

the amount of net profit according to the financial statements, the reliability of which is confirmed by the auditor's report;

financial and business plans of the Company for subsequent periods;

structure of the Company's working capital at the end of the relevant period;

debt burden of the Company at the end of the corresponding period.

13. When determining the amount of the recommended dividends, the Supervisory Board should take into account the financial and business plans of the Company for subsequent periods, the current and future state of the Company's current assets and liabilities. The payment of dividends recommended by the Supervisory Board to the General Meeting of Shareholders of the Company should not lead to the attraction by the Company of additional debt financing or other costs not provided for in the approved financial and business plan for subsequent periods.

ORDER AND TERMS OF PAYMENT OF DIVIDENDS

14. 14. The company pays dividends in cash or other legal means of payment, or in the company's securities. Declared dividends are paid in the national currency of the Republic of Uzbekistan or at the written request of a non-resident shareholder of the Republic of Uzbekistan, the company is obliged to convert the dividends accrued to it into freely convertible currency, with the transfer of funds to a bank account provided by the non-resident shareholder.

15. The term for the payment of dividends is established by a decision of the general meeting of shareholders of the Company, but cannot exceed 60 days from the date of the decision on the payment of dividends by the general meeting of shareholders.

16. If the holders of the Company's securities were unable to receive the accrued dividends within the timeframe established by the general meeting of shareholders, the Company continues to pay such (unclaimed) dividends. The period for the payment of unclaimed dividends cannot be more than three years from the date of the end of the period for the Company to fulfill its obligation to pay the declared dividends.

17. In case of non-payment (non-receipt) of dividends through the fault of the company within the time frame established by the general meeting of shareholders, a penalty is charged on unpaid (unreceived) dividends based on the refinancing rate established by the Central Bank of the Republic of Uzbekistan. The amount of the penalty charged on unpaid (unreceived) dividends should not exceed 50 percent of the amount of unpaid (unreceived) dividends.

18. The structural subdivision of the Company, which has among its functions the organization and conduct of work with shareholders, together with the accounting department of the Company, prepares, coordinates and conducts all measures to organize the payment of dividends by the Company provided for by these Regulations.

19. Any shareholder has the right to contact the Company with a request for information on the procedure for calculating dividends on shares, the procedure for calculating and taxation of the amount of dividends, on the terms of payment. 

20. To receive dividends on shares are entitled to persons registered in the register of shareholders of the company, formed for the general meeting of shareholders, at which a decision was made to pay dividends to shareholders.

21. If the shares are in shared ownership, the dividend is distributed among the shareholders in proportion to their share, in accordance with the established procedure.

22. The shareholder is obliged to promptly inform the investment intermediaries and / or the Central Securities Depository providing services for the registration of rights on his shares, on changes in his data. In cases where a shareholder fails to provide information on changes in his Company data, the Central Securities Depository and / or an investment intermediary providing services for recording rights to its shares shall not be liable for any losses caused to the shareholder in this connection.

23. If a shareholder incorrectly indicated his bank details or address for transferring dividends, or did not inform the Company about these details, or did not promptly inform about them, the Company is not responsible for the losses caused to the shareholder in this connection. After the return to the Company of the incorrectly transferred amounts of dividends due to the fault of the shareholder for the reasons specified in this clause, their re-transfer to the shareholder according to the specified details is carried out minus the costs of their return and re-transfer.

24. The Company is a tax agent when paying income to shareholders on shares held by them and pays accrued dividends minus taxes on income from securities established by the current legislation of the Republic of Uzbekistan. The shareholder, who should not be subject to standard tax rates, provides the supporting documents established by the current legislation of the Republic of Uzbekistan to the Company (the Paying Agent involved by him).

RESPONSIBILITY FOR PAYMENT OF DECLARED DIVIDENDS

25. The company is obliged to pay declared dividends on shares of each type.

26. When paying dividends, none of the shareholders has advantages in terms of payment terms.

The payment by the Company of the accrued dividends on ordinary shares is carried out in compliance with the equal rights of shareholders to receive dividends. Moreover, the Society

is not entitled to pay dividends to a major shareholder if, as a result, the payment of dividends to minority shareholders is not ensured within the established time frame.

27. The executive body of the Company is responsible for full and timely payment of dividends to the shareholders of the Company. Control over the actions of the executive body is carried out by the Supervisory Board of the Company jointly with the Audit Commission of the Company.

28. In order to ensure the payment of accrued dividends, the Supervisory Board considers at its meetings the issue of the progress of dividend payment. In the event of incomplete or untimely payment of dividends due to the fault of the executive body of the Company, the Supervisory Board determines the measures of responsibility of the guilty persons and imposes the appropriate sanctions or initiates their imposition.

29. If the Company does not fulfill its obligations, shareholders have the right to demand payment of the declared dividends on shares of each type in court.

30. For non-fulfillment or improper fulfillment of the duties of a tax agent assigned to the Company to withhold and transfer tax from dividends, the Company shall be liable in accordance with the legislation of the Republic of Uzbekistan.

INFORMATION DISCLOSURE PROCEDURE

31. These Regulations, as well as amendments and additions to it, are disclosed by the Company on its corporate website on the Internet within ten days after the signing of the minutes of the meeting of the company's management body, at which the corresponding decision was made.

32. When the general meeting of shareholders makes a decision on the payment of dividends, the Company discloses information in the form of statements of material facts within the time limits established by law. In this case, the Company sends a notification to shareholders by e-mail about the accrual of dividends.

33. Upon the fact that the Company fulfills its obligations to pay dividends, the Company discloses the relevant information in the form of messages on material facts within the time limits established by law.

FINAL PROVISIONS

34. This Regulation, as well as changes and additions to it, are approved by the decision of the general meeting of shareholders.

35. Changes and additions to these Regulations are made at the suggestion of members of the Supervisory Board of the Company, the Audit Commission of the Company, the Internal Audit Service of the Company, and the head of the executive body of the Company.

36. If certain articles of this Regulation conflict with the current legislation of the Republic of Uzbekistan and / or the Charter of the Company, these articles become invalid and in terms of the issues regulated by these articles, one should be guided by the norms of the current legislation of the Republic of Uzbekistan and / or the Charter of the Company until the appropriate changes are made to this Regulation.