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ASHGABAT, DECEMBER 2017

Revised: December 20, 2022

PERSONNEL POLICY (WORKING POLICY)

1.0. OBJECT Definition of «MERDEM» ES policy in mutual relations between the Company
and employees that determines the exact and clear rules intended to achievement of national
and international organizational standards, and is the basis of personnel management.
2.0. SCOPE OF APPLICATION This policy is applied for «MERDEM» ES and its
subdivisions as the internal document.
3.0. POLICY. «MERDEM» ES is the admitted leader of industry and is co-operating with the
talented, professional and attached personnel with high motivation. The personnel of such
level is the basis for implementation of successful activity by the Company. Therefore
«MERDEM» ES pursues a policy providing the participation of employees in achievements
and in constant advancement of the Company in the future.
Management of «MERDEM» ES has specified and has confirmed the policies and the
principles intended to advancement in prosperity of all employees. Objects and tasks
awareness of employees of the Company will allow employees not only to deliver a benefit
from labour relations with the Company, but also to fulfil the functions more effectively.
Therefore, following provisions are accepted in interests of all employees, and all employees
should try to observe and apply all principles stipulated below without exception,
4.0. PRINCIPLES OF PERSONNEL POLICY «MERDEM» ES
Main purpose
Main purpose of personnel policy of the Company is creation of conditions for high-efficiency
work, efficient use and development of the personnel.
Personnel management
«MERDEM» ES is accepted by the employees as the human capital asset which is a key
component of value of the Company and for which development the investments are necessary.
«MERDEM» ES Policy is management and development of the human capital asset in form
which provides for all employees the possibility to implement the potential taking into account
their interests, capabilities, experience and wish to work and, therefore, it promotes the
professional advancement of employees and economic development of the Company.
Corporate culture

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The company welcomes and stimulates the behaviour of employees corresponding to corporate
culture principles.
«MERDEM» ES confirms and applies the corporate culture principles intended to increase of
value of the Company and implementation of its strategic targets. It is culture of initiative and
responsibility, results orientation and high ethical standards, professionalism and cooperation.
The company keeps up the modern methods of work organization, organizational structure and
safety; optimisation of the working equipment and processes and observance of high industrial
standards.
In «MERDEM» ES the employees are related with each other with advantage and mutual respect
and support the freedom of thought, variety of cultures and experience. Employees daily create
atmosphere, where each employee feels the value as the individual. By means of it the company
creates a climate encouraging and allowing to use talents and ideas of all employees and energy,
and adherence of each employee for the purpose of success obtaining. The success of the
Company directly depends on participation of employees. Participation of employees allows
«MERDEM» ES to reach higher business results, to support a safe working environment and to
improve the competitive position.
Responsibility of managers
Each manager bears responsibility for the following:
 effectiveness of labour costs management;
 Provision of safe working environment and observance of all rules and resolutions;
 Management of staff number owing to optimisation of business processes, enhancement
of control systems, equipment automation and renovation;
 Provision of competitive salary level of employees and payment of remuneration on the
basis of the achieved results;
 Provision of personnel reserve availability and training of new employees.
Employment opportunity
During the work period in the Company the same possibilities to potential employees and all
employees are provided taking into account any requirements and restrictions of Labour code of
Turkmenistan and any other laws of Turkmenistan, since the moment of hiring and employment,
during training, development, payment of remuneration and compensations, transfer and
advancement, including any other conditions and employment privileges, regardless of a
nationality, race, skin colour, religion, gender (including pregnancy), marital status, age, physical
capabilities, nationality or any other characteristics provided by the legislation.

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Responsibility of the person holding executive position is individual observance of this policy,
introduction of all employees with this policy and management provision by all actions of the
personnel according to requirements of this policy.
Mobbing on workplace
All employees of «MERDEM» ES should be free from any forms of mobbing in connection with
nationality, race, skin colour, religions, gender (including sexual harassment and other), marital
status, age, physical capabilities or nationality of any employee or any other characteristics
provided by the legislation, mobbing in any form are prohibited both from executive staff, and
from all other employees, contractors, suppliers or clients. Examples of the prohibited behaviour
include:
 Verbal actions (for example racist or sexual epithets, foul language, undesirable flirtation,
comments on a body of the person, ethnic jokes, pejorative comments or offensive hints);
 Physical actions (for example inadequate contact or encroachment);
 Visual harassments (for example the racist or sexually painted or pejorative posters,
caricatures, electronic images or drawings, obscene gestures).
As well as, it is forbidden to do obvious or implied offers for employment in exchange for sexual
services. Reprisals in connection with refusal in reply to sexual offers are prohibited also. Any
head or the manager cannot obvious or implied to threaten or hint that the consent or refusal of
the employee in reply to sexual offers can affect in any way to any personnel decision
concerning such employee.
Complaints and hostile actions
Any employee, who has a basis to believe that such or any other employee is a victim of
discrimination, mobbing or other action in infringement of this policy, can notify a management
accordingly. Any such notification should be sent to the shortest terms so as, if possible, to
eliminate a problem in due time. All misbehaviour notifications and reports should be properly
investigated, should be considered as confidential, if possible, during investigation performing,
and should be settled in proper manner. Employees accepted as violated requirements of this
policy, are subject to disciplinary measure up to termination of employment contract.
Threats or hostile actions, or revenge against employees who use the established procedures of
making of a complaints or who provide the information on such complaints, are prohibited.
Selection and appointment of the personnel
The most acceptable employees are selected and appointed to posts to which the qualification of
such employees is corresponded. The selection of employees is made on the basis of results of
work, education, experience and knowledge of modern technologies and business practice, and
on the basis of personal behaviour. The selection should coincide with personal behaviour of
employees as much as possible and earlier accepted individual career plans and development plans

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of employees. Consequently, selection criteria are intended to provide the involvement and
reservation of the qualified employees focused to the result.
Training and development
Intention of the Company is affording the opportunities to all employees to accept the
responsibility corresponding to capabilities of employees. In this regard «MERDEM» ES
provides the training and the recommendations promoting successful work of employees, and
assists employees who have the capabilities required for career development. It is necessary to
accept that the most important factor of development is the efforts of the employee directed on
self-improvement. Therefore, employees should use the best efforts to renew the knowledge and
to improve abilities to implement the purposes of career development and to satisfy requirements
of the Company.
For training and development of employees the training system, material and moral motivation is
created and working in «MERDEM», which unites various resources and modes of education
and career planning to provide career development of employees of the Company.
Training programs provide the cooperation with educational institutions in the country and
abroad.
Management of employee’s results of work
Personal results of employees are estimated by direct supervisor not less than an once a year, and
at personal meeting the results of such estimation are given to employees. Such estimation
includes an efficiency rating of the employee for previous period, knowledge and qualification
of employees and further growth potential, as well as provides the personal development plan
into next year. The company determines the exact and reasonable work objectives on which the
supervisor should inform employees. The indicator system necessary for an estimation of results
of work is developed for each purpose. Besides, the contribution to implementation of the
personal purposes, and the contribution of the employee to results of business-division activity is
estimated.
Career development
«MERDEM» ES pursues a policy of internal rotation and consecutive appointment of employees
to more responsible posts in the Company, whenever practicable and reasonable. Advancement
is based on personal interests, technical skills, capabilities, results of work, initiative, knowledge
and career development potential of employees.
Communications
Communications within the scope of «MERDEM» ES represent bilateral process. The
management bears responsibility for providing of the information to employees about social,
political and economic aspects affecting to activity of the Company and working environment.
In turn, employees should depend on the understanding of such aspects, ideas, opinion and sense

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concerning such information provided by managers to strengthen and enrich labour mutual
relations. Such open communication channels allow employees to fulfil the obligations much
better, to promote the implementation of the purposes and objectives of the Company and to be
ready to act as representatives of the Company in places and in society as a whole.
Remuneration
Policy of «MERDEM» ES is definition and use of levels of remuneration of employees which
are similar to the levels of remuneration, offered by leading companies in Turkmenistan. Either
way, remuneration rate is based on the obligations connected with the post, and results of work
of the employee. Remuneration includes the fixed salary and can include alternating component
of a salary.
The fixed salary represents the remuneration for performance of job functions connected with the
post held by the employee, and area of responsibility of the employee. The arrangement between
the employee and the Company concerning the rate of fixed salary is registered by way of
employment contract. The rate of remuneration of the employee can be changed as a result of an
estimation of results of work, qualifying requirements, certifications, transfer to other post or in
connection with applicable legal requirement in Turkmenistan.
The variable component of salary is formed on the basis of achievement of special planned results
and related indicators providing value appreciation and improvement of the effectiveness of the
Company. The estimation method of the size of variable component of salary of the employee
should be clear and understandable.
The company applies all existing forms of stimulation, as well as means of material and non-
material motivation of employees. The company applies various means of motivation and
encouragement depending on business activity and area of responsibility of each individual
employee.
Social responsibility
«MERDEM» ES conducts the activity according to Labour code of Turkmenistan and effecting
collective employment contracts. Besides the obligatory social insurance provided by the
legislation, the Company voluntary has undertaken the additional obligations for voluntary
medical insurance and parity pension coverage.
The company insures the fulfilment of all obligations anyway, except as specified actions of
force majeure circumstances which include: unexpected change of state policy, failure of
payment obligations, bankruptcy, impossibility to provide financial results sufficient for
execution of voluntary obligations.
«MERDEM» ES converts or monetizes some components of social privileges as a part of
voluntary obligations (i.e. to increase a salary so that employees could provide independently

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own needs). Thus, it gradually reduces the size of voluntary obligations of the company within
the limits of separate social programs.
Civil responsibility
The company welcomes participation of employees in society life and in civil events, as well as
participation in political life. Besides, supporting the participation of employees, the Company
accepts and supports the organizations rendering the voluntary services to society, thus raising
the life quality of all participants.

Business ethics
«MERDEM» ES accepts that, considering the scale, the company is the important factor in
industry activity. Thus, the company conducts the business according to regulations of business
ethics. The obligation of «MERDEM» ES to observe regulations of business ethics means
observance of resolutions, laws and policies and any other requirements. Such requirements are
included the business-practices and principles which the company develops for employees taking
into account interests of clients and suitable carrying out of activities. Ethical rules of the
company consolidate all employees, determine them as the company and as community.
Standards, policies and procedures stipulated in Code of business ethics of «MERDEM» ES
determine rules of ethical conduct for the company. These standards are applied for all
employees of the Company in any region of company’s location. Rules of ethical conduct
represent not just rules and regulations; there is described the suitable method of conducting of
activity and mutual relations. Often these standards reflect the legal requirements. And these
standards always reflect the fundamental values and representations about mutual relations with
employees, clients, suppliers and inhabitants of regions where the Company performs activity.
Any situation which creates the conflict between interests or visibility of conflict between
personal interests of the employee and interests of the company should be prevented or
eliminated.
Employees of the company should not take or give any gifts, favours or entertainments if it
obliges the receiver or gives appearance of creation of obligations to the company. Granting or
taking of bribes or inappropriate excessive or repeating gifts in any case is forbidden, even
though it is permitted by local practices. Similarly, it is forbidden to ask any personal gifts or
services or instalments from sellers, suppliers or other business partners. Granting or taking of
the non-commercial advertising goods, payments of food or other not monetary items of
commercial cost are acceptable. Employees should report to the managers about granting or
reception of such gifts.
Civil laws of employees

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In the activity «MERDEM» ES in any time observes civil laws of employees fixed by laws of
Turkmenistan and aspires to protection of human rights everywhere and considers it as a priority.
In particular, it means that we do not suppose the employment of children, force, physical
repressions or violence.
We are observing the legislation of Turkmenistan regarding establishment of public
organisations, and we recognize the legal right of employees for freedom of associations
(including in labour organizations) and conclusion of collective agreements. With these
organisations we build relationships taking into account mutual interests and compliance with
law.
Health and safety
«MERDEM» ES accepts that health and safety of employees are necessary condition for
implementation of the purposes of the Company and represent a subject of care of employees and
their families. «MERDEM» ES is committed to provide a healthy and safe working environment
that means compliance with the applicable health, safety, and environment legislation, as well as
standards of the Company which are higher often. It also means the exact and timely reporting
about any cases, the information about which should be provided.
The company actively participates in programs and activity of the responsible organisations
which provide health protection and safety of employees and protect employees from casual
traumas and fatal accidents. Each division of the Company should conduct the safety program.
«MERDEM» ES prohibits any actions, statements or behaviour which can lead to violence in
work place.
Health and safety of employees and quality requirements of clients and shareholders provide that
each employee on workplace should not be under operation of any substances which can prevent
or negatively affect to operational efficiency.
To provide a safe workplace for all employees, «MERDEM» ES prohibits any actions,
statements or behaviour which can lead to violence in work place. The company undertakes all
possible actions for creation of safe working environment. Ant and all employees which
participate in menacing actions or violent incidents are subject to disciplinary measure up to
dismissal.
About any actions or violence threat in work place it is necessary to inform immediate supervisor
and (or) the representative of HR department.
The manager of each division should appoint the person or group of persons responsible for
adequacy of physical security system and estimation of any threats by violence or actions in
workplace about which they will be informed.
Company requirements to employees

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Main characteristic of the successful employee of the company is result orientation. The valuable
employee is capable to act as appropriate, to achieve results and promptly to make decision of
any questions or to solve such questions without bureaucratic acrimonies.
Company’s standards include:
• Professionalism - unique and actual knowledge and capability to apply such knowledge;
competent opinion and judgments; the capability to achieve necessary results.
• Initiative - advancement of proposals on new projects, optimization of functions and business
processes; desire to participate in new projects and working groups; contribution to improvement of
results of activity.
• Responsibility - achievement of results in fixed terms; readiness for responsibility for failure to
carry out of official duties; compromise achievement between the personal goals/interests and the
Company purposes/interests.
• Enterprise and capability to find non-routine decisions - enterprise capacities, proposal of new
decisions and projects beyond the borders of usual responsibility, official functions or activity on
the basis of combination of traditional position and processes and their non-standard application.
• Adherence - participation in activity of the Company and its trade mark; prevention of
destructive criticism and readiness to participate in the decision of problems of the Company. All
employees and managers of the company are obliged to use company assets only for
improvement and development of activity of the Company, and not for self-interest or career
development.
• Cooperation with colleagues - readiness to participate in multifunctional groups and projects;
responsiveness on inquiries of colleagues from other divisions of the Company; readiness to
share the information. Creation of barriers between divisions, struggle for the information and
the status, influence on functional divisions, sabotage of inquiries and requests are regarded, as
destructive actions.
5.0. COMPLIANCE WITH THE REQUIREMENTS
All positions of personnel policy and documents describing procedures of its realization should
conform to requirements of Turkmen legislation and labour code, as well as requirements of
laws of other countries where the Company conducts activity. If any section of this policy is
nullified, illegal or unliable to observance in any respect, it does not influence the validity,
legality and feasibility of any other sections of the Policy.
6.0. CONTACT PERSON
All questions under this policy or interpretation it is necessary to address to Deputy Director
General of «MERDEM» ES.
7.0. PROCEDURES

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Managers of all structural divisions of "MERDEM" ES jointly with human resource management
services should organize, and employees should be trained on meaning and application of this
policy within one year after its statement.
Personnel employment department of «MERDEM» ES acceptance for employment of new
employees should lead the familiarization of candidates with this Policy.

MERDEM Economic Society

Address: 744027, Ashgabat,
86, Garashsyzlyk Avenue

December 12, 2017

CHOLYYEV H. A.
Director General

Merdem’s Personnel Policy (Working Policy)