The аudit of operations

The Internal Audit Service

The Internal Audit Service of “Samruk-Energy” JSC (hereinafter – the IAS) contributes to achieving 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 Service, when performing its tasks and roles in line with international professional standards, is independent owing to a corresponding status at the company, which provides organizational subordination and functional reporting of the IAS to the Board of Directors. 

The Board of Directors, being the supreme governing body of the Company, is responsible for control and supervision over operations and management staff of the Company. 

For an in-depth study of issues within the competence of the Board of Directors, to supervise the performance of the Management Board and develop the necessary recommendations to the Management Board and the Board of Directors, the Audit Committee performs its roles under the Board of Directors, which is a permanent consultative and advisory body.

The Company has control processes – policies, procedures (automated / non-automated), and activities that are part of the control system, designed and implemented to ensure the level of risk, which the Company intends to take.

In its work, the IAS:

• assesses the efficiency of risk management processes and contributes to their improvement;
• regularly reports about the results of the quality assurance and improvement program to the Board of Directors and the Management Board;
• regularly provides the Board of Directors with progress reports and communicates information on the implementation of internal and external audit recommendations to the Management Board;
• prepares the IAS Annual Audit Plan based on risk assessment, considering the opinions of the Board of Directors, the Management Board and the Sole Shareholder.

The frequency of reporting and its content are determined in discussions with senior management and the Board of Directors and depend on the importance of the information reported and the urgency of action required by senior management and the Board of Directors of the Company.

The Internal Audit Service completed all 22 audits in 2021 in accordance with the Annual Audit Plan.

The audit tasks are prioritized by selecting processes with the highest inherent risks, as well as with priority requests for conducting audits from the Sole Shareholder and the Board of Directors of “Samruk-Energy” JSC.

The main directions of audits of the reporting period:

• evaluation of health, safety, and environmental protection processes;
• assessment of the degree of achievement of KPI by executive staff;
• audit of the business and financial performance;
• assessment of current and capital repairs and investments;
• diagnostics of corporate governance;
• evaluation of procurement processes.

All audit assignments are performed in accordance with the International Standards for the Professional Practice of Internal Auditing and contain conclusions, findings, and recommendations aimed at taking corrective/preventive measures to improve risk management, internal control, and corporate governance systems.

The IAS provided 191 recommendations as part of audit reports, those included 79 – category A, 102 – category B, and 10 – category C.

Following the results of 2021, the Board of Directors rated the IAS performance as “EFFICIENT”.

The external audit

The Company's audit organization is selected in line with the Rules for selection of an audit organization for “Samruk-Kazyna” 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 "Samruk-Kazyna" 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 Company, the largest centers of which are located in Moscow, London and Houston. PwC's World Energy Service, with more than 4,000 professionals.

More detailed information is available on www.pwc.kz website.

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 “Samruk-Energy” 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 audit services in 2021

PWC did not deliver services not associated with an audit of financial statements during 2021.