In order to improve activities efficiency and confidence of shareholders and stakeholders, management of the CAEPCO JSC has decided to introduce Enterprise Risk Management (ERM) system in the subsidiaries of the Company – PAVLODARENRGO JSC, SEVKAZENERGO JSC and ASTANAENERGOSBYT LLC.

Enterprise Risk Management is a process, effected by the Company’s Board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the Company, and manage risk to be within its risk appetite to provide reasonable assurance regarding the achievement of the Company objectives.

For smooth introduction of ERM system, management of the Company has involved experienced international consulting company – KPMG. As a result, a project team consisting of the specialists from both KPMG and CAEPCO has been created for realization of the project.

Members of the project team within the period from June 19 to July 8 conducted the work on introduction of ERM system. The work included:

1. Trainings on Enterprise Risk Management

For development of risk culture in subsidiaries of CAEPCO JSC, the project team conducted trainings on Enterprise Risk Management in the energy sector for key employees of ASTANAENERGOSBYT LLC, PAVLODARENERGO JSC and SEVKAZENERGO JSC. Trainings took place in Astana, Pavlodar and Petropavlovsk and covered main principles of risk identification, risk assessment and methodologies of Risk register and Risk map development. Apart from theory, trainings included practical part. Thus, participants of the trainings could strengthen their knowledge in the sphere of Enterprise Risk Management by doing practical assignments.       

2. Expanded interviews with key employees

Expanded interviews with key employees of ASTANAENERGOSBYT LLC, PAVLODARENERGO JSC and SEVKAZENERGO JSC were conducted in order to identify main risks typical to the activities of CAEPCO JSC subsidiaries.

3. Expert risk assessment

All identified risks were assessed qualitatively (expert method) by key employees. This allowed making ranging of risks according to their significance. In addition, a Risk Management Action plan for risk factors and a Risk Management Action plan for risk consequences were developed for each identified risk.  

4. Improvement of Internal Controls System

Improvement of Internal Controls System was conducted as an extra work in SEVKAZENERGO JSC. Within this work participants of the project team developed flow-chart and Risk and controls matrix for the process of Inventory accounting.

The final stage of the project represents development of internal regulatory documentation that defines approaches, responsibilities of participants and order of work for effective functioning of Enterprise Risk Management system in CAEPCO JSC.