KMG EP website

RESPONSIBILITY OF THE BOARD OF DIRECTORS AND THE MANAGEMENT BOARD

Responsibilities between the Board of Directors, Management Board and Director General of the Company are allocated in accordance with the Charter of the Company, Sections 12 and 13.

The Board of Directors is responsible to shareholders for effective management and proper control over the activities of the Company and acts in accordance with the approved decision making system. The most important functions of the Board of Directors is to identify areas of strategic development and policy of the Company, making decisions about potential acquisitions of oil and gas assets and other significant issues.

The Board, in turn, is responsible for developing an action plan to implement these functions and for the daily operational activities of the Company. The Board reports to the Board of Directors for the state of progress towards the objectives of the Company.

The Board of Directors meets on a regular basis and as necessary.

During 2011 the Board of Directors held 20 meetings, including seven meetings – withvoting in person, 10 sessions – with absentee voting, and three meetings – via telephone conferencing.

During the year the Board of Directors considered, among other things, the following issues:

  • Purchasing oil and gas assets by the Company: 100% share in JSC “Karpovsky Severniy”, a 50% share in the company “Ural Group Limited” (Block Fedorovskiy), 100% right to use subsoil under the four contracts for exploration of hydrocarbons in the Republic of Kazakhstan (Temir, Teresken, Karaton, Sarkamys)
  • Program for repurchase of common shares of the Company
  • Risk Management Policy
  • Company’s Risk Insurance Program
  • Approving budgets and business plans of the Company
  • Adoption of the Strategic Map of the Company for 2011
  • The policy of sponsorship and charitable assistance of the Company
  • Preliminary approval of the Company’s consolidated financial statements for the previous year
  • Issues of relationships with affiliated entities – subsidiaries of NC KMG
  • Conclusion of transactions by the Company of related parties
  • Matters within the competence of the supreme bodies of subsidiaries
  • Issues of Compliance
  • Policy on securities transactions
  • Disclosure Policy
  • Observance of the law of the United Kingdom on corruption (UK Bribery Act)
  • Election of the Chairman of the Board of Directors
  • Formation of committees of the Board of Directors
  • Issues of labour collectives
  • Election of the Director General (Chairman of the Management Board) and members of the Management Board
  • Determining the amount of salaries and conditions of remuneration and bonuses of the members of the Management Board
  • Report of the Board of Directors and Management Board for 2010
  • Report on assessment of performance of the Board of Directors for 2010
  • Review of plans and reports of the Internal Audit Service, the status of implementation of the recommendations of the Internal Audit Service
  • The final performance of key performance indicators (KPIs) of the Management, Head of Internal Audit Service and Corporate Secretary of the Company
  • Hiring and staffing issues of the Internal Audit Service and Corporate Secretary
  • Providing options in accordance with the Option Program

The Board of Directors in 2011 approved the following documents:

  • The rules of compensation of employees.
  • Risk management policy
  • Policy on securities transactions
  • Disclosure policy
  • Internal documents regulating internal audit
  • Changes and additions to Cash management policy
  • Provisions on affiliates of subsidiaries of the Company

The Board of Directors also reviewed and recommended to the General Meeting of shareholders to make amendments to the Charter of the Company.

Presence of members of the Board of Directors and committee members at meetings of the Board of Directors and committees

Number of meetings

held in 2011

Board of Directors

Audit

Committee

Nomination Committee

Remuneration Committee

Strategic Planning Committee

Sisengali Utegaliyev

16

 

 

 

2

Alik Aidarbayev

13

 

 

 

4

Askar Balzhanov

19

 

2

 

4

Kenzhebek Ibrashev

6

 

 

 

1

Asiya Syrgabekova

18

 

 

 

3

Tolegen Bozzhanov

1

 

 

 

 

Yerzhan Zhangaulov

19

 

 

 

 

Paul Manduca

20

9

2

6

5

Philip Dayer

20

9

2

6

5

Edward Walshe

20

9

2

6

5

The Management Board is an executive authority and regulates the Company’s current activities. In 2011 46 meetings of the Board of the Company were held on a regular basis and as necessary.

In 2011 the Board of Directors of the Company considered the following key issues related to the Company’s operating activities:

  • transactions on participation in share acquisition and 100% right to subsoil use in a number of Kazakhstan oil and gas companies were approved;
  • the project for Company’s participation in the public licensing round in Vietnam was approved;
  • projects to assess the acquisition of 100% participation share in a number of foreign companies were approved to be implemented;
  • the medium-term production program of JSC “EP “KazMunaiGas” for 2011-2013 was approved;
  • the production plan of JSC “EP “KazMunaiGas” for 2011 -2015 was approved;
  • the related party transaction – the merger agreement between JSC “EP “KazMunaiGas” and LLC “NSC” was approved;
  • the production plan of JSC EP KazMunaiGas for 2012-2016 was approved;
  • the 2012 budget and the business-plan for 2012-2016 were approved;
  • a number of procedures regulating internal operations of the Company in accordance with the Integrated Management Standards was approved.

The Management Board also makes decisions on other issues of the Company’s operations, not pertaining to the exclusive competence of the General Meeting of Shareholders, the Board of Directors and Officials of the Company.