“SAMRUK-ENERGY” JSC | Integrated ANNUAL REPORT

The Board of Directors

The Board of Directors, as a management body, ensures strategic management of the Company and long-term business performance by making informed decisions taking into account the interests of all stakeholders based on the principles of sustainable development.

International experience evidences that the Board of Directors can significantly increase the value of an organization. Therefore, “Samruk-Energy” JSC considers that balanced composition of the Board is important and strives for a high-quality balance in terms of experience, diversity of skills. knowledge and thinking styles, “Samruk-Kazyna” JSC Rules for the formation of the Board of Directors composition govern criteria for quality composition of the Board of Directors.

As of 31.12.2018, the Composition of the Company’s Board of Directors was as follows:

  • Chairman of the BoD – Aidarbayev Alik Serikovich
  • Chairman of the Management Board – Zhulamanov Bakitzhan Tolevzhanovich
  • Representative of the Sole Shareholder – Rakhmetov Nurlan Kusainovich
  • Independent director – Luca Sutera
  • Independent director – Spitsyn Anatoliy Tikhonovich
  • Independent director – Andreas Stoerzel
  • Independent director – Joaquin Galindo Velez

Powers of Aidarbayev Alik Serikovich were terminated in 2019 by the Resolution of the Sole Shareholder. Karymsakov Beibit Yerkinbayevich was appointed Chairman of the Board of Directors by the resolution of the Sole Shareholder dated January 28, 2019.

Main information about members of the Board of Directors are provided below. Full resume of each Board of Directors member is available on the website: www.samruk-energy.kz.

Karymsakov Beibit Yerkinbayevich

Chairman of “Samruk-Energy” JSC Board of Directors, representative of the Sole Shareholder’s interests

Citizenship: the Republic of Kazakhstan

Date of birth: October 31, 1962

Date of the first election: January 28, 2019

Does not hold the company’s as well as suppliers and competitors’ shares

Managing Director for Economy and Finance, member of “Samruk-Kazyna” JSC Management Board.

Expert in strategic and corporate governance, economics, finance and auditing


Zhulamanov Bakitzhan Tolevzhanovich

Member of the Board of Directors, Chairman of the Board

Citizenship: the Republic of Kazakhstan

Date of birth: December 23, 1966

Date of the first election: September 24, 2018

Does not hold the company’s as well as suppliers and competitors’ shares.

Expert in strategic planning, corporate governance, finance, market development and law


Rakhmetov Nurlan Kusainovich

Member of the Board of Directors, representative of the Shareholder’s interests

Citizenship: the Republic of Kazakhstan

Date of birth: September 24, 1965

Date of the first election: January 28, 2017

Does not hold the company’s as well as suppliers and competitors’ shares.

Managing Director for transformation, privatization and restructuring of “Samruk-Kazyna” JSC.

Expert in strategic management, economics, finance and audit


Luca Sutera

Senior Independent Director of “Samruk-Energy” JSC Board of Directors

Nationality: the Italian Republic

Date of birth: July 7, 1971

Date of the first election: May 8, 2012

Date of election as Senior Independent Director from October 14, 2016

Reelected: July 5, 2016

Does not hold the company’s as well as suppliers and competitors’ shares.

Chairman of the Audit Committee, member of the Appointment and Remuneration Committee, member of the Strategic Planning Committee, member of the Committee for Occupational Health and Safety and Environmental Protection

Expert in the following areas:

  • Accounting, finance, audit, (holds the CPA certificate)
  • Risk management and internal control
  • Corporate strategy
  • Mergers and acquisitions
  • Investment valuation
  • HR and organization
  • Performance management
  • Corporate Governance (Chartered Director of IoD UK)
  • Commissioning, integration and turnover of companies.
  • Large-scale transformation programs of the company.

Combining jobs and membership in the BoD:

Vice President for Finance of the Group. Member of the Executive Board at Nebras Power (Qatar Sovereign International Power Company)

From April 2011, member of the Russian Association of Independent Directors.

From April 2014, member of the British Institute of Directors (IoD)

From August 2015, Group Chief Financial Officer at Nebras Power, Qatar Sovereign International Power Company


Joaquin Galindo Velez

Independent Director of “Samruk-Energy” JSC Board of Directors

Citizenship: The Kingdom of Spain

Date of birth: August 27, 1957

Date of the first election: January 28, 2017

Does not hold the company’s as well as suppliers and competitors’ shares

Chairman of the Health, Safety, and Environmental Protection Committee, member of the Strategic Planning Committee, member of the Appointment and Remuneration Committee, member of the Audit Committee

Expert in the following areas:

  • Conventional and Renewable generation: O&M and Energy Management
  • Engineering and Construction
  • Strategic Development
  • Business Development
  • Environmental Matters
  • Integration and Transformation Programs

Combining jobs and membership in the BoD:

Member of the Spanish Institute of Directors (ICA)

Member of the Spanish Energy Club


Andreas Stoerzel

Independent Director of “Samruk-Energy” JSC Board of Directors

Citizenship: Federal Republic of Germany

Date of birth: October 12, 1963

Date of the first election: July 5, 2016

Does not hold the company’s as well as suppliers and competitors’ shares

Chairman of the Strategic Planning Committee, member of the Appointment and Remuneration Committee, member of the Audit Committee, member of the Health, Safety, and Environmental Protection Committee

Expert in business management, strategy, finance, investments, and mergers & acquisitions.

Combining jobs and membership in the BOD:

From 2014 to present, Chief Executive Officer of innogy Middle East & North Africa, Dubai, UAE

From 2012 to 2014 CEO, RWE Middle East Ltd. Dubai, United Arab Emirates.


Spitsyn Anatoly Tikhonovich

Independent Director of “Samruk-Energy” JSC Board of Directors

Citizenship: the Russian Federation

Date of birth: May 24, 1939

Date of the first election: May 8, 2012

Reelected: 5 July, 2016

Does not hold the company’s as well as suppliers and competitors’ shares

Chairman of the Appointment and Remuneration Committee, member of the Audit Committee, member of the Strategic Planning Committee, member of the Health, Safety, and Environmental Protection Committee

Expert in economics, finance, management and strategic development.

Doctor of Economics, Professor, Member of the Presidium of the Russian Academy of Natural Sciences (RANS), a member of the Union of Architects of the USSR and the Russian Federation.

Combining jobs and membership in the BOD:

Currently, he is a professor of economics and finance of the public sector of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation, Director of the Institute for Strategic Studies of Integration Problems of the Eurasian Economic Community.

Vice President of the Russian Academy of Natural Sciences, First Vice President of the International Academy of Investments.


Director’s job requires profound practical knowledge, experience and constant improvement. With this aim, «Samruk-Energy» JCS conducts performance appraisal of the Board of Directors as one of key processes in corporate governance.

In 2018, PricewaterhouseCoopers’ experts analyzed the effectiveness of “Samruk-Energy” JSC Board of Directors as part of evaluation of corporate governance; according to results of such analysis, the contribution of the Board of Directors and each of its members to the growth of the long-term value and sustainable development of the Company was determined, as well as recommendations for improvement were developed. The results of the assessment are taken into account when re-electing or early termination of powers of the Board of Directors members.

The Board members are personally responsible to the Company for the quality of their job responsibilities in accordance with the Charter, legislation and the Corporate Governance Code, in particular, emphasizing the duty to promote business success. in making decisions that, in his/her opinion, complies with the Company’s mission and vision.

The presence of the Independent Director in the current team is a guarantee of making unbiased decisions that best complies with the Company’s interests.

The main criterion for the selection of Independent Directors is to have sufficient professionalism and autonomy to make unbiased decisions free from the influence of any parties. Independent directors actively share their experience and knowledge to apply the best international practice standards at the Company, Independent directors chairs the committees of the board of directors and bring in international management experience.

At the end of 2018, the Independent Directors of the Company fully met the independence criteria.

Activities of the Board of Directors

Number of the Board of Directors’ meetings

 

2016

2017

2018

Number of meetings

11

11

14

In person

7

9

11

In absentia

4

3

3

Attendance of the Board of Directors’ members

 

2016

2017

2018

General statistics

100 %

100 %

96 %

Aidarbayev A.S.

100 %

Luca Sutera

100 %

100 %

100 %

Spitsyn Anatoly Tikhonovich

100 %

100 %

93 %

Andreas Stoerzel

100 %

100 %

93 %

Joaquin Galindo Velez

100 %

93 %

Rakhmetov Nurlan Kusainovich

100 %

93 %

Zhulamanov Bakitzhan

Tolevzhanovich

100 %

In 2018 the Board of Directors of the Company held 11 meetings in person. 3 meetings were held in absentia. 222 items were considered during meetings.

Main items considered

The Board of Directors reviewed the following reports every quarter: risk management; corporate governance improvement; report on plans for meeting the shareholder’s expectations; report on utilization of investments in investment projects; report on the execution of the development plan; report on the action plan for the Company entry into the green risk zone; report on activities in the area of OHS, workplace injuries and environment.

It also approved the Strategy for 2018–2028. Personnel Policy for 2018–2028. Code of Conduct, Innovation and Technology Strategy for 2018–2028. Initiative Information sharing Policy, Corporate Conflict Resolution and Conflict of Interest Policy, Compliance Risk Management Policy, Security. Occupational health and Safety and Environmental protection Committee was established, Sustainable Development Guide. Stakeholder Map and Sustainable Development Initiatives Plan were updated.

Remuneration of the Board of Directors members

The representatives of the Sole shareholder and the Chairman of the Board as members of the Board of Directors receive no remuneration.

Independent directors receive annual fixed remuneration for performing their duties as members of the Company’s Board of Directors and additional remuneration for participating in each meeting in presentia of the Committee of the Company’s Board of Directors as members of the committee.

An independent director is reimbursed for expenses (transport. accommodation and daily allowance) related to departure for meetings of the Board of Directors and committees of the Board of Directors held outside the place of his/ her permanent residency.

Remuneration to independent directors for 2018

Independent directors

Total paid

Spitsyn Anatoly Tikhonovich

 

USD

87,502

Sutera Luca

 

USD

87,502

Stoerzel Andreas

 

USD

87,502

Joaquin Galindo Velez

 

USD

86,113

The Board delegates the authority to its committees for performance of certain tasks on its behalf, so that it can perform its roles effectively and pay due attention in order to explore the matters in depth and make sound decisions.

The Company has Committees under the Board of Directors: the Audit Committee, the Appointment and Remuneration Committee and the Strategic Planning Committee, as well as Occupational health and safety and Environmental protection Committee.

Report on performance results of the Board of Directors’ Committees

Number of items considered at meetings broken down by committees

 

2016

2017

2018

The Audit Committee

43

48

81

The Remuneration and Appointment Committee

37

40

68

The Strategic Planning Committee

19

30

30

Occupational health and safety and Environmental protection Committee

8

The Audit Committee

The work of the Committee is aimed at assisting the Board of Directors for in-depth study of matters regarding the creation of an effective system of control over the Company’s financial and business operations, including the completeness and accuracy of financial reporting, control over the reliability and effectiveness of internal control and risk management systems, as well as corporate governance documents, as well as monitoring the independence of external and internal audit, as well as the process of ensuring the observance of the Republic of Kazakhstan law.

The Committee’s composition:

  • Luca Sutera – Senior Independent director, Chairman of the Committee;
  • Spitsyn Anatoly Tikhonovich – Independent director, member of the Committee;
  • Andreas Stoerzel – Independent director, member of the Committee;
  • Joaquin Galindo – Independent director, member of the Committee.

Number of the audit committee meetings

 

2016

2017

2018

Number of meetings

8

9

12

In presentia

8

9

12

In absentia

0

0

0

Attendance of the Committee members with voting rights

100 %

100 %

91 %

Number of items considered in 2018

81

Main items considered

Meetings with the executive body regarding the preparation of financial statements, meetings with external auditors were held. The issues of the work of the Internal Control Service, the Compliance Service and risks were considered.

The Regulation on the Committee was updated.

The Appointment and Remuneration Committee

The Nomination and Remuneration Committee is an advisory body of the Board of Directors that provides guidance on the appointment and remuneration of members of the Board of Directors, the Management Board, the Corporate Secretary, as well as other employees in accordance with the internal regulatory documents of the Company.

The Committee’s composition:

  • Spitsyn Anatoly Tikhonovich – Independent director, Chairman of the Committee
  • Andreas Stoerzel – Independent director, member of the Committee
  • Luca Sutera – Senior independent director, member of the Committee
  • Joaquin Galindo – Independent director, member of the Committee

Number of meetings of the Appointment and Remuneration Committee

 

2016

2017

2018

Number of meetings

11

9

12

In presentia

11

9

12

In absentia

0

0

0

Attendance of the Committee members with voting rights

100 %

100 %

93 %

Number of items considered in 2018

68

Main items considered

The Board of Directors was provided with recommendations on the election of members of the Supervisory Boards / Boards of Directors for “Samruk-Energy” JSC group of companies. The Sole Shareholder was provided with recommendations on the composition of “Samruk-Energy” JSC Board of Directors.

Recommendations were provided for the following positions: Director General of “Kazhydrotechenergo” LLP, “AlmatyEnergoSbyt” LLP, “Yereymentau Wind Power” LLP, “Energy Solutions Center” LLP, on the composition of the “Samruk-Energy” JSC Management Board.

The Committee considered the actual values of key performance indicators of the Management Board members, the Head of the Internal Audit Service and the Corporate Secretary of “Samruk-Energy” JSC, the motivational KPIs of the Management Board members, the Head of the Internal Audit Service and the Corporate Secretary of “Samruk-Energy” JSC.

The Regulations on the Committee, the Rules for the management of talents, the Rules for job evaluation were updated.

The Strategic Planning Committee

The Committee’s work is aimed at ensuring the preparation of recommendations to the Board of Directors regarding the development of priority areas of business (development), strategic objectives (development strategy) of the Company, implementation of a sustainable development management system, including occupational health and safety and environmental protection issues, investment projects, a master plan for the Company and activities contributing to the increase of the Company’s efficiency in the long term.

The Committee’s composition:

  • Andreas Stoerzel – Independent drector, Chairman of the Committee;
  • Spitsyn Anatoly Tikhonovich – Independent director, member of the Committee;
  • Luca Sutera – Senior Independent director, a member of the Committee;
  • Joaquin Galindo – Independent Director, member of the Committee.

Number of the Strategic Planning Committee meetings

 

2016

2017

2018

Number of meetings

6

7

10

In present

6

7

10

In absentia

0

0

0

Attendance of the Committee members with voting rights

100 %

100 %

90 %

Number of items considered in 2018

30

Main items considered

Consideration of the following Reports every quarter: on work in the field of occupational safety and health and workplace injuries, on the execution of the Action Plan for improvement of corporate governance and the introduction of the Corporate Governance Code of “Samruk-Energy” JSC for 2016–2017, on the execution of the Roadmap for implementation of “Samruk-Energy” JSC Long-term Development Strategy, on the execution of the Action Plan for meeting expectations of the shareholder, on utilization of investments in the Company’s investment projects, approval and subsequent control over achievement of strategic KPI.

Consideration of the Progress Report and submitting to external consultants PricewaterhouseCoopers for independent diagnostics of the Company’s corporate governance, Development Strategy for 2018–2028, Digitization, Innovation and Technology Strategy for 2018–2028.

The Committee for Occupational health and safety and environmental protection

The Committee was established on March 31, 2018 for the purpose of introduction of sustainable development principles and paying sufficient attention to environmental protection, occupational health and safety issues.

The purpose of the Committee is to ensure the improvement of the Company’s performance through the preparation of recommendations to the Board of Directors. Assessment, analysis and effective work of the Board of Directors on occupational health and safety and environmental protection issues.

The Committee’s composition:

  • Joaquin Galindo – Independent director, Chairman of the Committee;
  • Spitsyn Anatoly Tikhonovich – Independent director, member of the Committee;
  • Luca Sutera – Senior Independent director, a member of the Committee;
  • Andreas Stoerzel – Independent Director, member of the Committee.

Number of Occupational Health and Safety and Environmental Protection Committee meetings in 2018

Number of meetings

4

In present

4

In absentia

0

Attendance of the Committee members with voting rights

93 %

Number of items considered in 2018

8

Main considered items

Quarterly review of the Report on activities carried out in the field of occupational safety and health and workplace injuries.

Consideration of amendments and additions to the Regulation on the Committee for Occupational health and safety and Environmental protection of the Company’s Board of Directors, to the 2019 Action Plan for management of occupational health and safety and environmental protection issues at the Company’s group.

Changes and additions to “Samruk-Energy” JSC occupational health and safety policy were previously approved.

Recommendations on imposing a moratorium on taking disciplinary measures against those responsible for the incidents in the field of occupational health and safety were given.