Risk management

Corporate risk management and internal control system effectively perform its roles and is regularly improved at the Company.

The Board of Directors sets the Company’s risk appetite both in quantity and quality terms every year; the risk appetite includes restrictions on core activities, and compliance with such restrictions is monitored every quarter.

The Risk Register, the Risk Map, KRI (key risk indicators) and the Action Plan for managing key risks are prepared annually and submitted to the Company’s Board of Directors for approval. After considering the results of performed work on identification of “Samruk-Energy” JSC group’s risks for 2020, 33 risks involved in operations of “SamrukEnergy” JSC group of companies were identified and assessed, KPI thresholds were updated, risk owners updated risk factors and activities aimed at their mitigation. According to the results of revaluation, 10 risks were included into the key zone of the Risk Map for 2020 (in 2019 – 13 key risks):

RISK MAP

As we have seen from the experience, risks, which needs to be assessed and prevented, arise in any types of business.

Today, various solutions that aim to improve risk management systems, are available, one of which was adopted by “Samruk-Energy” JSC.

Works on implementation of the project “Introduction of the new risk management model” have commenced since November 2018; the project is an important part of corporate governance, and consists of 3 integrated subsystems subject to the following changes:

• risk management system (system improvement);
• internal control system (refinement of the system in terms of design assessment and testing of the operational efficiency of control procedures);
• business continuity support system (system implementation).

At year-end 2020, as part of implementation of the project “Introduction of the new risk management model” (the Project), a number of activities have been carried out in stages, such as:

• subsidiaries and affiliates that are key in the implementation of the Project were identified;
• the plan for implementation of the Project was determined, which outlines the activities for “Samruk-Energy” JSC and its key subsidiaries and affiliates;
• the processes that are involved in the implementation of the Project (production and IT processes) have been identified;
• people responsible for ensuring the continuity of operations as part of the Project were appointed at “SamrukEnergy” JSC and its SA selected for 2020 (“Ekibastuz SDPP-1 named after Nurzhanov” LLP, “Almaty Power Plants” JSC, “Moynak Hydropower Plant” JSC, “Shardarinsk hydropower plant” JSC);
• the processes identified at subsidiaries and affiliates chosen for 2020 (“Ekibastuz SDPP-1 named after Nurzhanov” LLP, “Almaty Power Plants” JSC, “Moynak Hydropower Plant” JSC, “Shardarinsk Hydropower Plant” JSC), were allocated into criticality groups;
• internal regulatory documents have been developed (Internal control arrangement and implementation rules, business continuity rules) at subsidiaries and affiliates chosen for 2020 (“Ekibastuz SDPP-1 named after Nurzhanov” LLP, “Almaty Power Plants” JSC, “Moynak Hydropower Plant” JSC, “Shardarinsk Hydropower Plant” JSC);

Key changes in 2020 (key risks mitigation, pandemic)