“Samruk-Energy” JSC | Integrated annual report
Corporate governance

The board of directors

The Board of Directors provides strategic management of the Company and controls over performance of the Company’s executive body. The Board of Directors is responsible to the shareholder for the efficient management, growth of the long-term cost, sustainable development and operation of the entire Samruk-Energy group of companies and makes decisions associated with the management of the group. The Board of Directors performs its functions according to the Charter, Corporate Governance Code and legislation of the Republic of Kazakhstan. The Board of Directors consists of seven directors.

The members of the Company’s Board of Directors are elected by the General Meeting of Shareholders/ Sole Shareholder.

Composition of the Board of Directors:

The Board of Directors as of 31.12.2016:

  • Bektemirov Kuanysh Abdugaliyevich – Chairman of the BOD
  • Spitsyn Anatoly Tikhonovich
  • Аndreas Stoerzel
  • Luca Sutera
  • Satkaliyev Almassadam Maidanovich

The following persons were appointed to the Board of Directors by the decision of “Samruk-Kazyna” JSC dated January 28, 2017, Minutes No. 03/17: 

  • Rakhmetov Nurlan Kusainovich
  • Joaquin Galindo Velez

Bektemirov Kuanysh Abdugaliyevich

Chairman of the Board of Directors of “Samruk-Energy” JSC

Citizenship: the Republic of Kazakhstan
Date of birth: May 24, 1970
Date of first election: May 8, 2012
Reelected: July 05, 2016

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

Managing Director at “Samruk-Kazyna” JSC, has many years of experience in management of enterprises of the Republic’s power industry

  • Graduated from al-Farabi Kazakh State University in 1993, physical scientist.
  • Graduated from Kazakh National Agrarian University in 2004, electrical engineer
  • Graduated from Nazarbayev University Graduate School of Business under Executive MBA program in 2016.
  • Since January, 2012 – Managing Director at Sovereign Wealth Fund “Samruk-Kazyna” JSC
  • Since 2014 – Senior Director for Asset Management at SWF “Samruk-Kazyna” JSC.
  • In 2003 he was elected as Maslikhat Deputy of Taldykorgan, awarded the merit certificate of the Minister of Energy and Mineral Resources “For contribution to the development of the RK power sector”, the award pin “Honorable Power engineer of the Republic of Kazakhstan” and the anniversary medal dedicated to the 10th anniversary of Astana.

Combining jobs and membership in the BOD:

  • Chairman of “KEGOC” JSC Board of Directors
  • Chairman “National Mining Company “Tau-Ken Samruk” JSC Board of Directors
  • Member of “Kazatomprom” JSC Board of Directors

 

Rakhmetov Nurlan Kusainovich

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

Citizenship: the Republic of Kazakhstan

Date of birth: September 24, 1965
Date of first election: January 28, 2017

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

Managing Director for RK Government Relations at “Samruk-Kazyna” JSC, has many years of experience in financial management of leading companies of the Republic, was vice-minister of state revenues of the Republic of Kazakhstan, vice- minister of finance of the Republic of Kazakhstan

  • He graduated from M.V. Lomonosov Moscow State University in 1987. Candidate of physical and mathematical sciences.
  • Holds Global Executive MBA Diploma (IE Business School, Madrid)
  • Since November 2008 – Managing Director at “Samruk-Kazyna” JSC.
  • From May 2011 to March 2014 – Managing Director – Member of the Management Board of “Samruk-Kazyna” JSC.
  • From March 2014 to January 2016 – financial director – member of the Management Board of “Samruk-Kazyna” JSC.
  • Since January 2016 – managing director for the RK Government relations

Combining jobs and membership in the BOD: from October 2012 to March 2016 – was a member of “KazMunaiGas” JSC Board of Directors

 

Luca Sutera

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

Nationality: Citizen of the Italian Republic

Date of birth: July 7, 1971

Date of first election: May 8, 2012

Date of election as Senior Independent Director from 14.10. 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

  • Group Chief Financial Officer, Member of the Executive Board at Nebras Power (Qatar Sovereign International Power Company), has 19 years of experience in economics and finance in energy sector.
  • Holds Master’s Degree in Business Economics, specialization in finance, received in “L.Bocconi” University (Milan), as well as Global Executive MBA received in “I.E. Business School” (Madrid)
  • Luca Sutera holds CPA international certification (Certified Public Accountant), and is also the holder of international certification for board of directors members from the British Institute of Directors (Chartered Director IoD).
  • From August 2015, Group Chief Financial Officer at Nebras Power, Qatar Sovereign International Power Company. The main activity of the company is to manage and invest globally in electricity assets.
  • From March 2011 to July 2015, Mr. Sutera was the Group Vice President and Chief Financial Officer of power division of Abu Dhabi National Energy Company (TAQA).
  • TAQA is a global energy company. The main activity of the company TAQA consists of two business directions:
  • oil & gas exploration and production in the Middle East, North America and Northern Europe.
  • power generation in the Middle East, North and West Africa, India and the United States, the total installed capacity is 17 500 MW.

In addition, during his career Mr. Sutera served as a board member of several electricity companies in Europe, Russia, Africa, India

  • From April 2011, Luka Sutera is a member of the Russian Association of Independent Directors.
  • From April 2014, Luca Sutera is a member of the British Institute of Directors (IoD)

 

Spitsyn Anatoly Tikhonovich

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

Citizenship: the Russian Federation

Date of birth: May 24, 1939

Date of first election: May 8, 2012

Reelected: July 5, 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

  • Vice President of the Russian Academy of Natural Sciences, First Vice President of the International Academy of Investments, Director of the Institute for Strategic Studies of EurAsEC Integration Problems, Independent Director “KEGOC” JSC.
  • He has 33 years of experience in economics, finance and management.
  • 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.
  • Honored Power Engineer of the Republic of Kazakhstan, a member of the Union of Architects of the USSR and the Russian Federation, winner of the contest for the best research of the III Astana International Economic Forum. He was elected Honorary Professor of the Eurasian Club of Scientists, Kazakhstan National Academy of Natural Sciences, Kazakh National University.
  • He is the author of more than 170 scientific publications, 12 individual and 14 collective monographs.
  • 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.
  • He was awarded three Orders of the Red Banner of Labor (1976, 1981, 1986), the RK Order “Dostyk” (Friendship) (2014), the Order “Professional of Russia”, the Order of the Russian Academy of Natural Sciences “Knight of Science and Art”, the Medal of Honor “For Achievements in Economics” named after VV Leontiev, 7 state and 12 public medals.

 

Andreas Stoerzel

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

Citizenship: the Germany

Date of birth: October 12, 1963

Date of 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

  • Chief Executive Officer of RWE New Energy, Dubai, United Arab Emirates.
  • He is an expert of RES, has many years of experience in management of power companies in Europe, led strategic projects, was a management consultant.
  • He holds a Master’s Degree in Business Administration, Open University, Newcastle upon Tyne, Great Britain, Ph.D. in Geophysics, Wyoming University, Laramie, USA, and holds Diploma in Geophysics from Goethe University, Frankfurt am Main, Germany.
  • From 2014 – to present, CEO, RWE New Energy Ltd, Dubai, UAE
  • From 2012 to 2014 CEO, RWE Middle East Ltd, Dubai, United Arab Emirates.

 

Joaquin Galindo Velez

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

Citizenship: the Spain

Date of birth: August 27, 1957

Date of first election: January 28, 2017

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

Member of the Strategic Planning Committee, member of the Appointment and Remuneration Committee, member of the Audit Committee.

  • Chief Executive Officer of the leader generation company (16,000 MW) in LATAM, with operations in Argentina, Brazil, Colombia, Chile and Peru.
  • Graduated from Seville Engineering School – Industrial engineer, holds Bachelor’s degree in business and economics by UNED university, Madrid, as well as MBA by Deusto Business School, Bilbao c.
  • 2006–2008 – Chief Executive Officer of the third electrical company (7,000 MW) in Italy that operates hydroelectric, natural gas and coal power plants.
  • 2004–2006 – Chief Executive Officer of the second electrical company (3,000 MW) in France that owns coal fired power plants.

 

Satkaliyev Almassadam Maidanovich

Member of “Samruk-Energy” JSC Board of Directors

Citizenship: the Republic of Kazakhstan

Date of birth: October 31, 1970

Date of first election: May 8, 2012

Reelected: July 5, 2016

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

Member of “Samruk-Energy” JSC Board of Directors, Chairman of the Board of the Company. He has 24 years of experience in the management of energy companies in Kazakhstan

  • He graduated from al-Farabi Kazakh National University in 1992, mechanical engineer, applied mathematician.
  • Doctor of Economic Sciences. Honored Power Engineer of the CIS.
  • Graduated from the International Institute of Public Service and Management of the Russian Academy of National Economy and Public Service under the President of the Russian Federation in 2013, Master of Economics
  • In 2014 he graduated from Nazarbayev University Graduate School of Business upon Executive MBA program
  • In 2016 – Graduated from Stanford Graduate School of Business under the Stanford Executive Program (Stanford Program for Executive Personnel).
  • From June 2011 – Managing Director at “Sovereign Wealth Fund “Samruk-Kazyna” JSC
  • From January 2012 – Chairman of the Board of “Samruk-Energy” JSC.

 

CORPORATE GOVERNANCE STRUCTURE OF “SAMRUK-ENERGY” JSC

Criteria for selection to the Board of Directors

To date, the Company has approved the Rules for selection and remuneration of members of “Samruk-Energy” JSC Board of Directors. “Sovereign Wealth Fund “Samruk-Kazyna” JSC continuous work aimed at improving the corporate governance system creates the prerequisites not only for enhancing the internal regulatory framework from year to year in accordance with best practices, but also for improving the efficiency of the Company’s business processes.

  • The Board of Directors includes:
  • Experts in economics, finance and audit – Luca Sutera, Rakhmetov N.K.;
  • Expert in RES – Andreas Stoerzel;
  • Expert in generation and engineering – Joaquin Galindo Velez
  • Expert in corporate social responsibility – Satkalyiev Almassadam Maidanovich, Chairman of the Board, directly supervises Human Resources Department and matters related to sponsorship and charity.

The Company’s independent directors fully met independence criteria over the reporting period

Number of the Board of Directors’ meetings
2016 2015 2014
Number of meetings 11 8 11
In person 7 8 9
In absentia 4 0 2
Attendance of the Board of Directors’ meetings
2016 2015 2014
Bektemirov Kuanysh Abdugaliyevich 100 % 100 % 100 %
Satkaliyev Almassadam Maidanovich 100 % 100 % 100 %
Luca Sutera 100 % 100 % 100 %
Spitsyn Anatoly Tikhonovich 100 % 100 % 100 %
Andreas Stoerzel 100 %

In 2016, the Company’s Board of Directors held 11 meetings, including 7 meetings in person, 4 meetings in absentia. 165 items were considered as part of the meetings.

In particular, the following items were considered:

  1. About actions on implementation of the decree of the Republic of Kazakhstan Government No. 1,141 d/d December 30, 2015 “On some matters of privatization for 2016–2020”
  2. On preliminary approval of amendments to the Company’s Charter.
  3. On approval of the Rules for provision of social support to the Company’s employees.
  4. On approval of the Company’s Rules for hedging risks.
  5. On updating the Roadmap for implementing the Company’s long-term Development Strategy for 2015–2025 and approval of the Roadmap for implementing the Company’s long-term Development Strategy for 2016.
  6. Evaluation of the effectiveness of implementing activities in the field of corporate social responsibility.
  7. On consideration of the current implementation status of the Company’s Business Transformation Program.
  8. On approval of Induction Program for the newly elected Board of Directors members of the Company in the new edition.
  9. On the approval of the Company’s Occupational health and safety policy in the new edition.
  10. On approval of the Company’s Development Plan for 2017–2022.
  11. On approval of the Company’s Environmental Policy in the new edition.
  12. On evaluation of CEO–1 level executives (candidates) compliance with qualification requirements for the new organizational structure’s positions (Job matching).
  13. On approval of job descriptions of the Management Board members, evaluation of positions and wages scheme of the Chairman and members of the Management Board, employees of the Internal Audit Service, Corporate Secretary of the Company.
  14. On approval of the Company’s anti fraud and corruption policy.
  15. On election of the Senior Independent Director.
  16. On conducting independent evaluation of the Board of Directors by an external expert (“ARG Group” LLP), which has resulted in the approval of the Action Plan for implementation of recommendations regarding the performance improvement of the Company’s Board of Directors.

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.

If an independent director participates in less than half of the meetings in presentia and meetings in absentia of the Board of Directors within the accounting period, excluding cases of absence at meetings in presentia due to illness, vacation or business trips, fixed remuneration will not be paid.

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 2016 (as of 31.12.2016)

Annual fixed remuneration Remuneration for attending in present meetings Total
Stoerzel Andreas 8,284,849 2,777,417 11,062,266
Sutera Luca 14,347,201 9,607,877 23,955,078
Spitsyn Anatoly Tikhonovich 14,347,201 9,607,877 23,955,078

The Board of Directors committees

In order to support the activity of the Board of Directors, the Company established the following committees responsible for considering the items and making recommendations for certain items within the scope of their responsibilities:

  • Audit Committee.
  • Appointment and Remuneration Committee.
  • Strategic Planning Committee.

In accordance with the Provisions on committees under the Board of Directors, each committee presents an annual progress report to the Board of Directors.

Number of items considered at meetings by committees

2016 2015 2014
The Audit Committee 43 33 47
The Appointment and Remuneration Committee 37 28 32
The Strategic Planning Committee 19 15 15

The Audit Committee

The Audit Committee is an advisory and consultative body of the Board of Directors and was established for an analysis and preparation of recommendations on items of internal and external audit, internal control system and risk management.

The Audit Committee of the Board of Directors was established with the following composition:

  • Luca Sutera – Senior Independent Director, Chairman of the Audit Committee;
  • Spitsyn Anatoly Tikhonovich – independent director, member of the Audit Committee and the Appointment and Remuneration Committee;
  • Andreas Stoerzel – independent director, member of the Audit Committee.

Number of the Audit Committee meetings

2016 2015 2014
Number of meetings 8 10 10
In presentia 8 10 10
In absentia 0 0 0
Attendance of the Committee members with voting rights 100 % 100 % 100 %

The main items considered at the meetings of the Audit Committee:

  1. On discussion of significant adjustments in “Samruk-Energy” JSC consolidated financial statements for 2015.
  2. On the recommendation of “Samruk-Energy” JSC external auditor for 2016–2018.
  3. Evaluation of the independence and impartiality of “Samruk-Energy” JSC external auditor.
  4. On introducing changes to the Methodology for evaluating the effectiveness of the corporate risk management system of “Samruk-Energy” JSC.
  5. On approval of “Samruk-Energy” JSC Rules for hedging risks.
  6. On preliminary approval of making changes and additions to the Policy on notification of alleged violations at “Samruk-Energy” JSC.
  7. On preliminary approval of “Samruk-Energy” JSC Policy in engaging the services of audit organizations in the new edition.
  8. Preliminary approval of the Program for development of accounting personnel of “Samruk-Energy” JSC and its subsidiaries for 2014–2020 in the new edition
  9. On preliminary approval of engagement of “PricewaterhouseCoopers” LLP as a financial adviser.

Appointment and Remuneration Committee

Appointment and Remuneration Committee is an advisory and consultative body of the Board of Directors and was established to give recommendations on appointing the members of the Board of Directors, to determine the amounts and terms of salary and bonus payment to members of the Board of Directors, members of the Board and the Corporate Secretary, as well as the qualification criteria for the Board of Directors, members of the Board and the Corporate Secretary.

The Appointment and Remuneration Committee of the Board of Directors was established with the following composition:

  • Spitsyn Anatoly Tikhonovich – independent director, Chairman of the Appointment and Remuneration Committee, member of the Strategic Planning Committee;
  • Andreas Stoerzel is an independent director, a member of the Appointment and Remuneration Committee.
  • Luca Sutera – Senior independent director, member of the Appointment and Remuneration Committee.

Number of meetings of the Appointment and Remuneration Committee

2016 2015 2014
Number of meetings 11 9 9
In present 11 9 9
In absentia 0 0 0
Attendance of the Committee members with voting rights 100 % 100 % 100 %

The main items considered at the meetings of the Appointment and Remuneration Committee:

  1. On certain matters of “Samruk-Energy” JSC Management Board.
  2. On approval of the wages scheme of the Chairman and members of the Management Board, employees of the Internal Audit Service and Corporate Secretary of “Samruk-Energy” JSC.
  3. Consideration of the motivational KPI of the members of the Management Board, the Internal Audit Service Head and the Corporate Secretary of “Samruk-Energy” JSC for 2016.
  4. On providing recommendations to the Sole Shareholder regarding the composition of “Samruk-Energy” JSC Board of Directors.
  5. Consideration of results of evaluating the effectiveness of the remuneration policy of the Company’s Management Board members.
  6. On preliminary consideration of the assessment of CEO-1 level executives (candidates) compliance with qualification requirements for the new organizational structure positions (Job matching).
  7. On preliminary consideration of job descriptions of the Management Board members, evaluation of jobs and wages scheme of the Chairman and members of the Management Board, employees of the Internal Audit Service, Corporate Secretary of the Company.
  8. Evaluating the effectiveness of the succession planning process for key positions of the Company for 2016.
  9. Consideration of results of evaluation of the effectiveness of remuneration policy of Company’s Board of Directors members.
  10. On providing recommendations to the Sole Shareholder concerning remuneration of independent directors of the Company’s Board of Directors.

The Strategic Planning Committee

The Strategic Planning Committee is a consultative and advisory body of the Board of Directors and was established to provide recommendations on strategic issues of the Company’s activities.

The Strategic Planning Committee of the Board of Directors is composed of the following members:

  • Andreas Stoerzel – independent director, Chairman of the Strategic Planning Committee;
  • Spitsyn Anatoly Tikhonovich – independent director, member of the Strategic Planning Committee;
  • Luca Sutera – Senior independent director, member of the Strategic Planning Committee.

Number of the Strategic Planning Committee meetings

2014 2015 2016
Number of meetings 8 9 6
In present 8 9 6
In absentia 0 0 0
Attendance of the Committee members with voting rights 100 % 100 % 100 %

The main items discussed at the meetings of the Strategic Planning Committee:

  1. On preliminary consideration of the Roadmap for implementation of the Company’s long-term Development Strategy for 2015–2025 in the new edition and the Roadmap for implementation of the Company’s long-term Development Strategy for 2016.
  2. On approval of the results of the feasibility study of “Diversion of the Kensu River flow to the Bestyubinsk Reservoir of the Moynak HPP” project.
  3. On adjustment of the feasibility study for “Construction of 60 MW wind power plant in Shelek corridor with the prospect of expansion to 300 MW” project.
  4. On approval of the implementation of the investment phase of “Transfer of the load of 220/110 / 10kV SS # 131A ”Gorny Gigant” to 220/110 / 10kV substation No. 160A” Yermensay “ via 110kV grids with subsequent dismantling of SS–131A” project
  5. On approval of the postponement of the implementation of “Modernization and Reconstruction of Ekibastuz SDPP-1. Restoration of the power unit No.1“ project.
  6. On preliminary consideration of the Guidelines in the field of sustainable development of the Company.
“Samruk-Energy” JSC | Integrated annual report
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