About the report
The Company adheres to the following approaches in determining the content and quality of the Report.
Interaction with stakeholders and materiality.
The Company’s pursuance of high standards of social responsibility at interaction with stakeholders.
The purpose of stakeholder interaction is to choose the strategic development of the Company and ways to improve its performance, as well as to assist it in achieving a level of sustainable development that benefits everyone and the Company, its stakeholders, and society since the Company strives for high standards of social responsibility at interaction with stakeholders:
— the needs, expectations and opinions of internal and external stakeholders;
— challenges and prospects from stakeholders’ perspective;
— the most significant issues of concern to internal and external stakeholders.
The basis of interaction with stakeholders is the identification of stakeholders that have a significant impact on the Company and the degree of stakeholder dependence on the Company, creation of a materiality matrix and preparation of the Stakeholder engagement plan (please see “Sustainable development” section).
Every year the Company, after the issuance of its annual business report, checks the balance and completeness of the information disclosed in the annual report, as well as identifies topics and aspects that significantly affect the Company’s operations and its stakeholders, and which should be taken into account when creating the structure of the annual report of the following reporting cycle.
To implement these activities, we collected opinions and have taken into account the interests of a wide range of stakeholders, including the Sole Shareholder, members of the Board of Directors, financial institutions, clients, nongovernmental organizations, professional communities, subsidiaries, top management and key employees, etc.
We used a structured process that included:
— identification of significant topics. The Company considered the most complete list of topics that are significant from the perspective of sustainability for the Company and its stakeholders and that takes into account specifics of the Company’s operations, the general trends of foreign and Kazakhstani companies, GRI standards, the Company’s Development Strategy, Corporate Governance Code, risk register, etc. The list comprised 39 topics (aspects) related to the sustainability of the Company.
— a survey of external and internal stakeholders for exploring the importance and priority of topics and aspects for the Company’s operations and its stakeholders. Moreover, for the maximum coverage of all stakeholders, the Company, in the framework of the published interactive version of the Company’s 2018 Annual Report, posted an online questionnaire for all stakeholders https://ar2018.samruk-energy.kz/ru/index.html
— updating the materiality matrix, which gives a visual representation of sustainable development topics that are essential for the Company and its stakeholders, and their position regarding the degree of stakeholder interest and potential impact on the Company’s activities. An assessment of the materiality of aspects for the Company is provided along the horizontal axis, along the vertical axis - an assessment of the materiality of aspects for stakeholders. The topics that received a rating of significance above 4 points for stakeholders and for the Company were recognized as the most significant in 2019 and will be shown in the text of the Company’s annual report.
The analysis shows that topics related to the development of innovations, energy efficiency, ensuring compliance with environmental obligations, efficient use of materials, energy and water, ensuring the safety and health of employees and contractors, and reducing greenhouse gas emissions and other pollutants, combating all forms of corruption, including extortion and bribery, and etc remain important topics for both the Company and stakeholders.
Aspects associated with such issues as cybersecurity and information technologies development, compliance risk management, occupational injuries, tariff regulation and financial stability are new and were not considered as separate aspects in the 2018 Materiality matrix.
Also, in 2019 when compared to the 2018 Materiality matrix, the Company and its stakeholders highlighted the importance of issues related to waste management, investments in renewable energy sources, investments and environmental protection costs, enhancing the reputation and positive attitude towards the company, reducing energy consumption, etc.
Issues associated with interaction with open local communities, staff recruitment including an increase in staff employed from the local population, equal opportunities, costs for local suppliers and the transformation of procurement activities by interested parties, were not rated highly, but were disclosed in the Company’s annual report.
«Samruk-Energy» JSC 2019 Materiality Matrix
The Context of Sustainable Development
The report provides information on the Company’s contribution to the economic, environmental, social aspects. The economic component of the sustainable development of the Company is aimed at increasing long-term value, ensuring the interests of shareholders and investors, increasing the efficiency of processes, increasing investments in the creation and development of more advanced technologies, and performance improvement..
The environmental component aims to reduce the impact on biological and physical natural systems, effectively use limited resources, use environmentally friendly, energy and materialsaving technologies, create environmentally acceptable products, minimize, process and dispose waste.
The social component focuses on social responsibility principles, which include, among other things: ensuring employees occupational health and safety, fair remuneration and respect for the rights of workers, individual development of staff, implementation of social programs for staff, creation of new jobs, sponsorship and charity, environmental and educational promotions.
The audited consolidated financial statements of the Company for 2018 as of December 31, 2019 and as of 31 December 31, 2018, specified in this Report are the result of an independent audit of “PricewaterhouseCoopers” LLP (“PwC”).
This Report provides information on financial and operating results and sustainable development. Qualitative and quantitative information were presented for 2019, in order to compare and analyze information in indicators, data for 2017 and 2018 were used where applicable. The Company determined the Report scope in accordance with GRI Standards.
The equity method is applied in consolidation during the preparation of the report on financial and operating performance of “Samruk-Energy” JSC group of companies for the purpose of a unified approach. Furthermore, as required by the current accounting policy, property, plant and equipment and intangible assets are reported at historical cost, that is, without revaluation.
Subsidiaries are included in the consolidated financial statements using the acquisition method. Purchased identified assets, as well as liabilities and contingent liabilities received in a business combination are measured at fair value at the acquisition date, regardless of the size of the non-controlling interest.
Based on the above mentioned, when using the equity method in the consolidated balance sheet, turnovers of such large companies like “Ekibastuz SDPP-2 Plant” JSC, “Forum Muider B.V.” coal assets company, where “Samruk-Energy” JSC owns 50 equity stake, are excluded. At generation of “Samruk-Energy” JSC consolidated financial result, the share of profit for these companies is reported in the article “share of profit / loss of organizations accounted for using the equity method and impairment of investments”.
The indicators of the following subsidiaries and affiliates were used in the audited consolidated financial statements of the Company for 2019: