In the reporting period, we consistently implemented measures aimed at ensuring long-term fruitful relations with the regions where we operate and strengthening the image of a socially responsible Company.
We make a significant contribution to the well-being and socio-economic development of the regions where we operate by:
- providing the population with electricity, heat, and coal;
- providing jobs for the local population, paying social taxes and deductions, making pension and insurance payments, costs of medical services for employees and offering other forms of employee support;
- implementing investment projects that affect the development of the regions where the Company operates, improving the lives of the population, and creating jobs;
- maintaining public infrastructure to ensure significant revenues to regional budgets through tax payments;
- investing in local communities through donations to charitable and non-governmental organizations, and research institutions through a single operator Samruk-Kazyna Trust Social Project Development Fund;
- supporting of social programs, cultural and educational events.
GRI 203-1
We have a portfolio of investment projects that are in line with the country's national economic development programs and responsible investment principles. In addition, we have identified 3 significant* investment projects, the implementation of which will create new jobs and develop infrastructure in the regions where we operate:
During the reporting period, no investments were made in infrastructure projects. However, in 2023, the Company allocated funds for activities and projects aimed at the socio-economic development of local communities totalling
125
KZT million
* Significant projects are projects that involve an increase in existing electric generating capacity of 500 MW or more in 2024-2026.
Adhering to the principles of responsible investment, we consider environmental, social and governance (ESG) factors when making investment decisions, to effectively manage risk. The Company's stakeholder engagement varies depending on the scale and nature of the project, potential risks and negative impacts on affected communities and the environment, and the degree of public interest.
When implementing new projects, we consult with the local population in the format of public hearings with the preparation of relevant materials, within the framework of legislation, and interaction with the authorities. Disagreements are resolved within the legal framework, and the overall assessment of projects considers the interests of local communities.
We create economic value for employees and local communities, and as a socially responsible Company, we support the well-being of the country by paying taxes, creating jobs, and developing infrastructure.
The economic value created reflects our primary sources of revenue generation, namely revenue from generation, transmission, and marketing of electricity, as well as from coal sales and fees received.
The created value is distributed among suppliers and contractors, employees of the Group of companies of Samruk-Energy JSC, shareholders and creditors, the state, as well as local communities.
Distributed economic value
Payments to suppliers and contractors
Operating expenses — cash payments to counterparties for materials, product components, equipment and services, lease payments, etc.
Employee benefits
Salary fund, social taxes and deductions, pension and insurance payments, costs of medical services to employees and other forms of employee support
Payments to capital providers
Dividends to all categories of shareholders and interest paid to creditors
Investing in local
communities
Donations to charitable and non-governmental organizations and research institutions, costs of supporting public infrastructure, as well as direct financing of social programs, cultural and educational events
GRI 201-1
Economic value created and distributed,
KZT million
* Previously the figures were calculated on an accrual basis. In order to exclude non-cash transactions, including depreciation and amortization, the current figures are calculated using cash flow statement data.
Figures are based on ownership interests in joint ventures.
Being a major taxpayer and strictly complying with the regulatory and legal legislation of the Republic of Kazakhstan in the field of taxation, we contribute to the overall development of the regions of the country.
Kazakhstan tax legislation and practice are in a state of continuous development and therefore are subject to varying interpretations and frequent changes, which may be retroactive. In some instances, tax legislation refers to IFRS provisions to determine the tax base and the interpretation of the relevant IFRS provisions by the Kazakhstani tax authorities may differ from the accounting policies, judgments and estimates applied by management in the preparation of these consolidated financial statements, which may result in additional tax liabilities for the Group of companies of Samruk-Energy JSC. Tax authorities may conduct retrospective audits for a period of five years after the end of the tax year.
Since July 2020, the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan (hereinafter — the SRC) has launched a pilot project on the introduction of horizontal monitoring, which lasted until December 31, 2023. Thus, in 2021-2022, within the framework of the pilot project on horizontal monitoring, SRC examined historical data at EGRES-1 LLP and Samruk-Energy JSC (Corporate Center) for a five-year period, following the results of which tax audits were conducted and Notices on the results of tax audits were issued. The main violations identified included deductions for loan interest, as well as understatement of CIT at source. We disagreed, and lawsuits and complaints were filed with the courts and the Appeals Commission of the Ministry of Finance of the Republic of Kazakhstan. In December 2023, the Appeal Commission of the Ministry of Finance of the Republic of Kazakhstan decided on the Corporate Center in favor of the Group of companies of Samruk-Energy JSC, while the contestation in the courts continues for EGRES-1 LLP.
GRI 207-1, GRI 12: Coal Sector: 12.21.4
In order to regulate tax accounting based on the principles of obligation, certainty and unity of the tax system, we implemented the Tax Accounting Policy of Samruk-Energy JSC24,
developed on the basis of the Tax Code of the Republic of Kazakhstan and legislative acts in the field of taxation of the Republic of Kazakhstan, as well as taking into account the requirements of international financial reporting standards. developed based on the Tax Code of the Republic of Kazakhstan and legislative acts in the field of taxation of the Republic of Kazakhstan, as well as taking into account the requirements of international financial reporting standards.
The Tax Policy of Samruk-Energy JSC shall be approved by the Company's Management Board. Decisions on amendments and additions to the Tax Policy are made by the Company's Management Board. Heads of structural subdivisions of the financial and economic block may be the initiators of changes. Control over the implementation of the requirements is exercised by the Deputy Chairman of the Management Board for Finance and Economics. Responsibility for management and fulfillment of the requirements, for compliance and reliability of information presentation is borne by the Director of the Financial Accounting Department — Chief Accountant.
24 Tax accounting policy of Samruk-Energy JSC was put into effect on January 1, 2018 based on the Law of the Republic of Kazakhstan “On Enactment of the Code of the Republic of Kazakhstan ‘On Taxes and Other Obligatory Payments to the Budget’ No. 121-VI of the LRK dated 25.12.2017.
Changes in the Company's Tax Policy may be initiated in cases: when changes are made to the Tax Code affecting changes in tax accounting, as well as if these changes will lead to a more reliable representation of events and business transactions in the Company's tax reporting.
The adopted Tax Policy is consistent with the overall business strategy and approach to corporate governance and risk management.
The approach to taxation is to fully comply with the requirements of applicable tax laws, treaties, regulations and other tax instructions, ensuring proper control over tax accounting and tax reporting.
In 2023, we transferred
71,838
KZT million
in favor of the state
To support and manage risk across our business units, we have put in place a process to regularly review our risk management policies and procedures to incorporate new developments and implement best practices.
Ongoing changes in international and local tax laws, as well as changing practices in the application of these laws in the courts, may result in tax disputes and potential additional tax liabilities, and we continuously monitor and analyze domestic and international tax laws, case law, guidance and practice. We regularly evaluate our tax positions to ensure that they are adequately reflected in our financial statements.
Tax accounting in the Company is based on accounting data, which is performed by the Financial and Tax Accounting Department in accordance with regulatory legal acts and internal documents:
- The Code of the Republic of Kazakhstan “On Taxes and Other Obligatory Payments to the Budget”;
- Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”;
- International Financial Reporting Standards;
- The Model Chart of Accounts of Accounting approved by the Order of the Minister of Finance of the Republic of Kazakhstan;
- Corporate accounting policy of the Company;
- Corporate Chart of Accounts of the Company;
- Methodological recommendations, instructions, internal regulations and other normative acts on organization and maintenance of accounting.
The tax policy has a low tolerance for tax risk — we seek to minimize the risk of disputes with the tax authorities by being open and transparent about our tax operations. We seek to mitigate tax risk arising from operations to the extent practicable, by giving due attention to processes that could materially affect compliance with tax obligations.
Our approach is based on managing tax risks and tax payments in accordance with applicable legal requirements and the highest long-term expectations of our shareholders, taking into account operational, economic and reputational factors. Maintaining an open dialog with tax authorities at various levels allows us to avoid adverse tax consequences and is an integral aspect of our Tax Policy.
We maintain an active dialog with stakeholders on tax-related issues. We advocate transparent interaction and open communication with the tax authorities, ensuring that all reporting required by applicable law is provided within the established deadlines.
In connection with tax risks arising during implementation of the SRC MF RK Horizontal Monitoring project, work was carried out with the state authorities to clarify the correctness of attributing the equipment for generation and conversion of electric power in accordance with the Fixed Assets Classifier to the Equipment group, which resulted in a favorable opinion for the Company.
We also take part in discussions on amendments to the Tax Code regarding VAT and CIT at source. Proposals are made to discuss the issues of inclusion in the New Tax Code.
We do not use unfair tax evasion schemes in carrying out our activities.
GRI 207-3
You can report any occurred and/or suspected facts of tax law violations to the “24/7 hotline” by sending a message: to mail@sk-hotline.kz, to WhatsApp 8 771 191 88 16, by phone 8 800 080 47 47, or use the feedback form on the website https://www.samruk-energy.kz/ru/navigation-and-support/hotline.
We regularly analyze the applicability of statutory tax incentives to investment projects of the Company and its subsidiaries and affiliates, as they are an important mechanism for attracting investment in priority sectors and stimulating economic growth.
Thus, from 2012 to 2021, in accordance with the investment agreement25 and the Resolution of the Government of RK26 Moynak HPP JSC had preferences related to exemption from corporate income tax.
25 Investment Agreement No. 0622-12-2005 dated December 31, 2005.
26 Resolution of the Government of the Republic of Kazakhstan “On Determination of the Validity Period of Investment Tax Preferences” No. 1239 dated December 13, 2005.
On the eve of Victory Day, members of the labor front were awarded for their contribution during the Great Patriotic War, in addition, Bogatyr Komir LLP organized a festive dinner for its mining veterans for Miner's Day. 30 mining veterans had an opportunity to relax at the Zhasybay Recreation Center, where excursions were organized for them.
On 27 September 2023, World Labour Day, veterans of the power industry were invited to Ekibastuz GRES-1. The veterans were given the opportunity to visit the production facilities and return to their workplaces to share their valuable experience with young specialists. In addition, the veterans were presented with commemorative gifts from the plant.
We also organized festive programs dedicated to Children's Day, which included a short course for children on the rules of the road “Beware of the Car”, drawing and creative activities, and sports competitions. Among other things, cooking master classes and educational programs were organized for children. In summer 2023, children of the Company's employees also had a vacation at the Edelweiss children's health camp.
As part of supporting children with disabilities, orphans and children from large families, we implemented a number of programs, including arranging transportation of students to school, organizing New Year celebrations and presenting gifts. Together with the Central Asian Cerebral Palsy Life Foundation, a charitable project aimed at involving children with disabilities in sports was organized.
Our employees actively participate in charitable activities, including as blood donors. Employees participate in the annual Donor Day event and help raise awareness of the need to help those in medical need.
In Solnechny settlement on the basis of Ekibastuz GRES-2 JSC a physical fitness and recreation complex is functioning on a permanent basis. The complex is open to both station employees and residents of the settlement. Free swimming lessons for different age groups are held in the swimming pool of the complex under the guidance of a trainer.
In 2023, the trade union committee of Ekibastuz GRES-2 JSC organized an annual winter fishing contest “Golden Fish”. Also in the reporting period, a 4 km track and field race was held at the city stadium “Miner”, where EGRES-2 employees took prize-winning places.
In the period from June 16 to 18, 2023, the Spartakiade among employees of the Group of companies of Samruk-Energy JSC was held in the city of Shchuchinsk. VIII Spartakiada among the employees of the Group of companies of Samruk-Kazyna JSC in honor of the 15th anniversary of the Fund was held in Astana. On the eve of the International Women's Day, the Youth Activity of GRES-2 organized the action “Vitamin Day” to promote healthy lifestyle and proper nutrition.
Within the framework of celebration of Nauryz meiramy and the Day of Unity of the People of Kazakhstan, AlmatyEnergoSbyt LLP “Zhas Kuat” was organized on April 30, 2023. Within the framework of this event there were solemn events, team competitions and contests. Outdoor team building for young specialists in order to develop youth policy and strengthen the image of Bulat Nurzhanov Ekibastuz GRES-1 LLP included winter sport fishing competitions, which are traditionally held at the plant every winter. This year the competitions were held on February 18 at the city reservoir. A total of 27 people competing in various disciplines took part in them.
Also in 2023, solemn events were held in honor of the Independence Day of the Republic of Kazakhstan and the Power Engineer Day, as well as a corporate party in honor of the Power Engineer Day and the New Year. Employees took an active part in creative competitions in vocal and fine arts organized for the 15th anniversary of Samruk-Kazyna JSC.
In the reporting period, we organized educational excursions for students of K.I. Satpayev KazNITU, Al-Farabi KazNU, G. Dukeev AUES, and the college of G. Dukeev AUES.
Educational institutions have the opportunity to send their students to the largest power plants in Kazakhstan to practice practical skills.
In 2023, 47 students were enrolled in the dual training program, as well as 20 people under the “Bogatyr Komir LLP Name Scholarship” program. A total of 374 students completed training internships at Bogatyr Komir LLP in 2023. Information meetings were also organized with students of KSTU, Geological Exploration College of Semey, higher educational institutions and specialized secondary educational institutions of Ekibastuz.
In 2023, our employees took an active part in the “Road to School” campaign organized by the Samruk-Kazyna JSC jointly with the Committee for Protection of Children's Rights of the Ministry of Education of the Republic of Kazakhstan. As part of the campaign, all necessary stationery was purchased for schoolchildren from low-income families.
From December 6 to 9, 2023 in Almaty, the Youth Educational Forum was held with the participation of young specialists, chairmen, supervisors and activists of youth councils of the Fund's portfolio companies responsible for youth policy. At the forum, there were Challenges on the development of physical, intellectual and emotional abilities.
Bogatyr Komir LLP implements programs for training of personnel reserve and development of managers and mid-level specialists. “Zhas talap” and “Orleu” programs are aimed at finding talented and efficient employees among highly qualified workers and specialists to train the personnel reserve. In 2023, 110 people were trained under the “Zhas talap” program, 11 people — under the “Orleu” program, of which 66 were enrolled in the personnel reserve. 20 middle managers were trained under the “Effective Manager” program.
A Women's Energy Club was established at Ekibastuz GRES-2 to bring together representatives of the plant's female staff. The meeting, held on June 8, this year gathered representatives of women from different shops and departments. Also, during the reporting period, the plant worked to inform employees about the International Action “16 Days of Activism against Gender Violence” through the placement of informational materials and meetings to discuss measures to prevent and counteract violence.
We pay significant attention to supporting vulnerable social groups. For example, in 2023, we actively participated in the program to ensure electricity affordability for the population by providing benefits for electricity, heat, and coal.
During the reporting period, the Company informed the local population in a timely manner about various issues such as planned power outages, line reconstruction works, transformer maintenance and relocation of poles from land plots. Residents were informed about upcoming scheduled outages related to substation maintenance and cleaning of high-voltage line routes.
We strive to provide our employees with comfortable living and working conditions. Housing, including 77 houses, is provided in the areas where Moynak HPP JSC is located. The total number of residents is 235 people, including 100 employees and 135 of their families. All employees of the company are provided with housing with amenities, including 3-, 4- and 5-room houses with homestead plots of 6 hectares and outbuildings. In addition, there is a kindergarten for 30 children on the territory of the settlement, which is supported by the Company.
APP JSC won the Senim-2023 contest in the nomination “Best Labor Protection Service”. This competition is the only one in Kazakhstan for labor protection professionals. At the award ceremony within the framework of the Kazakhstan International Conference and Exhibition on Occupational Health and Safety “KIOSH 2023” in Astana city, the Chairman of the Committee of Labor and Social Protection and Migration of the Republic of Kazakhstan T. Ospankulov, the representatives of APP JSC were presented with a statuette and Diploma “Best Occupational Safety Service” on behalf of the First Vice-Minister of Labor and Social Protection of the Republic of Kazakhstan A. Sarbasov. Rasul Onalbaev and Karim Sartaev from APP JSC participated in the XI International Conference and Exhibition on Labor Protection and Industrial Safety KIOSH-2023.
The Group of companies of Samruk-Energy JSC actively participates in initiatives to improve the environment and enhance the territory. This includes participation in actions to clean snow from the yards of pensioners, participation in global and national initiatives on improvement, and holding months of sanitary cleaning and territory improvement.
In 2023, APP JSC also carried out landscaping in various districts of Almaty by planting 527 tree seedlings and 150 shrubs on an area of 2.72 hectares, as well as creating sanitary zones with various types of trees and shrubs.
Employees of various stations held subbotniks, during which they cleaned and collected garbage in the areas of 9.9 hectares and collected 48.5 cubic meters of garbage. Since 2020, employees of Samruk Green Energy LLP have been involved in eco-volunteering, collecting items for the needy, wastepaper and plastic containers, and then handing them over to collection points. In April 2023, Bogatyr Komir activists held a clean-up day at the Berezka Recreation Center, and in September they organized a similar event at the Karlygash Recreation Center. As a result of the efforts of the employees of Bogatyr Komir LLP, city subbotniks were held, during which the work on cleaning the territory from garbage, tree trimming, and cleaning from fallen leaves on Kunayev Avenue and adjacent streets was carried out. A total of 700 square meters of territory was cleaned, and the volume of garbage removed outside the city was 180 cubic meters.
