Audit of operations

The Internal Audit Service

The Internal Audit Service helps the Company to achieve strategic goals and tasks by providing independent, objective guarantees and advice aimed at improving risk management, internal control and corporate governance systems at the Company.

The mission of the Service is to provide the Board of Directors and the Executive Board with necessary assistance in performing their responsibilities to achieve strategic goals across “Samruk-Energy” JSC group of companies.

The new head of the IAS was appointed in March 2020 – Kasymbekov Bekzhan Beisenovich. The head of the IAS holds bachelor’s degree from the Almaty University of Energy and Communications. Holds master’s degree from Lancaster University (Great Britain, scholarship from the state program “Bolashak”). He has various international professional certificates, including Dip ICFM (DipCPIA), the International Institute of Financial Managers of Great Britain, EXIN International Institute (ITIL). Over the years, he worked at international audit companies (Ernst & Young, PricewaterhouseCoopers), at the internal audit service of “Baiterek” National Management Holding Company” JSC, etc.

In 2020, 20 scheduled audit assignments were completed across “Samruk-Energy” JSC (the Company) Group in accordance with the Annual Audit Plan:

• Audit of the efficiency of procurement process across the Company’s group;
• Assessment of achievement of digital transformation program goals across the Company’s group;
• Evaluation of achievement of executives KPI across the Company’s group;
• IT audit, assessment of human resource management processes, etc.

All audit engagements were performed in accordance with the International Standards for the Professional Practice of Internal Auditing. Recommendations, which are based on results of audits conducted, were made to improve internal control, risk management and corporate governance systems.

The priority of audit assignments was determined by selecting the processes with the highest available risks, as well as with priority requests for auditing from the Sole Shareholder and the Board of Directors of “Samruk-Energy” JSC.

As part of improvement of the Company’s corporate governance system, in 2020 IAS continued working on the implementation of action plans for:

• The IAS strategic development plan;
• Quality Assurance and Improvement Program;
• A three-year plan for the transition to audits based on testing internal controls.

Moreover, the IAS monitors the implementation of recommendations of external auditors and evaluates the effectiveness of actions aimed at implementing the IAS recommendations on a quarterly basis.

In the 4th quarter of 2020, an external performance appraisal of the IAS was conducted by an independent company “KPMG Tax and Advisory” LLP. Based on the results of the IAS, it meets the requirements of international standards. At year-end 2020, the Board of Directors evaluated the IAS performance as “EFFECTIVE”.

Quality management system audit

The Company has introduced corporate governance system in line with international standard ISO 9001:2015.

Focusing on the needs and expectations of stakeholders, “Samruk-Energy” JSC ensures effective management of the Company’s operations.

To confirm the compliance of the corporate governance system with ISO 9001:2015 international standard requirements, the Company passes external audit every year. It is conducted in compliance with the TÜV NORD CERT procedures with confirmation of the scope of management system as regards services for corporate management of energy assets.

In 2020, an external recertification audit confirmed compliance with the international standard ISO 9001 at “SamrukEnergy” JSC. The experts from the international independent company “TUV Nord” conducted the procedure.

The external audit of the Company

The Company’s audit organization is selected in line with the Rules for selection of an audit organization for “SamrukKazyna” JSC and organizations, more than fifty percent of voting shares (equity stake) of which are directly or indirectly held by “Samruk-Kazyna” JSC under ownership or trust management, approved by the decision of “SamrukKazyna” JSC Management Board.

Quality and cost of services are the main criteria determining the choice of an audit organization.

PricewaterhouseCoopers (“PwC”) network of firms has been the external auditor of the Company since 2012.

PwC holds a leading position in the provision of audit and consulting services: the audit clients include almost half of the companies entered into the FTSE 100 and Fortune 500 ratings. To improve the quality of services delivered to fuel and energy industry enterprises in different countries of the world, the Global Energy Center was established as part of PwC firm, with more than 4,000 professionals.

Visit www.pwc.kz for more information.

According to “Samruk-Energy” JSC Policy in engaging audit organizations services, the Company applies the principle of rotation of a partner bearing the main responsibility for the audit, every five years. Baurzhan Burkhanbekov was the partner who had main responsibility for the audit in 2016– 2017. Dana Inkarbekova has been the partner since 2018.

Furthermore, there are special conditions at “SamrukEnergy” JSC group of companies relating to hiring of audit organizations’ employees. Therefore, in the event of expected appointment of an audit organization employee who participated in the compulsory audit of the Company as an employee of an audit organization within two years preceding the date of his/her appointment (election) to the Company as a member of the Management Board, managing director and chief auditor, it is required to obtain a preliminary approval of the Audit Committee in order to avoid conflicts of interest.

PwC conducts audit at the following SA of the Company:

Fees paid to the audit firm for auditing services for 2020

PWC did not provide services unrelated to financial statements audit during 2020