Corporate Governance

World class corporate governance is of vital importance to the success of companies in a free and increasingly competitive market. Companies need an efficient structure, defining the relationships between the Board of Directors, management and shareholders and offering assurance to investors that their funds are being used to strengthen the company, create value and increase market capitalisation. Compliance with these principles has taken on particular relevance since the Company’s IPO in 2006. While the IPO was primarily a capital–raising exercise for the Company, it was also a sign of the commitment to complying with all the financial reporting and corporate governance standards now expected of a truly international oil and gas producer. The system of Corporate Governance at KMG EP is determined by a number of documents issued and decisions made in 2006.|

As per the Company’s Corporate Governance Code, the Chair, with the help from the Company Secretary, must regularly make sure that Directors are trained as necessary for them to be able to discharge their duties on the Board and in the Committees properly. The Chair must regularly consider and have agreed with each Director if they require training. The following training courses have been arranged so far for the Directors:
- Corporate governance training;
- Training on most recent changes in the regulatory environment; and
- Risk management training. 

Kazakhstan Corporate Management Code

The Company adopted the Kazakhstan Corporate Management Code, modified to include certain provisions from the Combined Code (which governs UK listed companies), as its Corporate Governance Code.

Corporate governance best practice in Kazakhstan is set out in the Kazakhstan Corporate Governance Code. The Kazakhstan Corporate Governance Code is based on existing international best practice in the area of corporate governance and sets out recommendations for applying the principles of corporate governance by Kazakhstan joint-stock companies. It was approved by the Expert Council for Securities Market Matters under the National Bank of the Republic of Kazakhstan in September 2002. The Code was also approved by the Association of Financial experts of Kazakhstan in March 2005 and by the Board of Emitters in February 2005.

The Kazakhstan Corporate Management Code is based on existing international best practices in corporate governance and sets out recommendations for applying the principles of corporate governance by Kazakhstan joint-stock companies. It was approved by the Expert Council for Securities Market Matters under the National Bank of the Republic of Kazakhstan in September 2002.

Relationship with the Majority Shareholder

The relationship with the controlling shareholder is one of the key corporate governance issues. KMG EP signed a Relationship Agreement with its parent company NC KMG to ensure that the two companies conduct business in a transparent manner and on an arms-length basis. Under the Relationship Agreement the Company can operate its business independently and in the interests of all its shareholders.

Independent directors Philip Dayer, Francis Sommer and Alastair Ferguson assist the Company in implementing good corporate governance arrangements. 

The three Independent Non-Executive Directors work closely with other Directors and the Management Board to ensure that the Company complies with its corporate governance obligations. The Directors have adopted terms of reference for and have formed an Audit Committee, a Nominations Committee, a Remuneration Committee and Strategic Planning Committee.

Audit, Nominations, Remuneration and Strategic Planning Committees

The Audit Committee focuses in particular on compliance with international and internal legal and accounting standards and controls. It is comprised only from Independent Directors: Philip Dayer (Chairman of the Committee), Francis Sommer and Alastair Ferguson.

The Nominations Committee considers the composition of the Board of Directors, retirements and appointments as well as making appropriate recommendations on these issues. Members of this committee are Philip Dayer (Chairman of the Committee), Igor Goncharov, Alastair Ferguson and Francis Sommer.

The Remuneration Committee has responsibility for making recommendations to the Board of Directors on the Company’s policy on the remuneration of key senior members of the Board and for maintaining reports for corporate governance purposes. This committee members are Francis Sommer (Chairman of the Committee), Philip Dayer and Alastair Ferguson.

The Strategic Planning Committee is focused on making recommendations to the Board of Directors on the Company’s priority directives and its development strategy. The Committee’s members are Alastair Ferguson (Chairman of the Committee), Kurmangazy Iskaziyev, Dauren Karabayev, Philip Dayer and Francis Sommer.

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