Outcome of the «Samruk-Kazyna’s» session: New guidelines for the Fund’s group of companies

February 13, 2012

Samruk-Kazyna’sToday, the expanded meeting of «Samruk-Kazyna» JSC and its subsidiaries took place in Astana. According to the Chairman of the Fund Mr U. Shukeev: «The main purpose of today’s meeting – is to organize the work on the instructions of the President  of the country.»

«Samruk-Kazyna» Fund and its subsidiaries amust qualitively and timely perform tasks that was given by the Head of State of Head of State. The main one is to provide real growth of national prosperity, the strengthening of the state, improving the lives of people of Kazakhstan», – he explained in his speech.

At the meeting Peter House, the Fund’s managing director, introduced a new approach to the development strategy of the Fund and assessed the level of corporate governance in companies.

In his report Peter House identified medium-term priorities of the Fund’s.

Firstly, it is a partial implementation of particular industrial companies («The People’s IPO» program). Secondly, it is an active involvement of the private sector into solving problems of diversification and modernization of the economy, full or partial implementation efficient banks to private owners, as well as housing development support, etc.

Peter House also proposed to divide companie’s reports into commercial and non-commercial parts. According to him, «this will help to evaluate the performance on non-commercial tasks.»

He also reported on the results of diagnostic a systems of corporate governance in seven subsidiaries of the Fund: «Kazakhstan Temir Joly» JSC, «KazPost», «Kazakhtelecom» JSC, «Samruk-Energo» JSC, «KazMunayGas» JSC, Real Estate Fund “Samruk –Kazyna” JSC and «Tau-Ken Samruk» in 2011. In his speech, Mr. House has noted a positive trend in the general level of corporate governance in the Fund’s group of companied. He explained that the quality assessment of corporate governance in companies is based on the three components: structure, transparency, and processes. As a result of 2011 diagnosis, most companies comply with best practice results for more than 60%.

At the meeting on the financial performance of the Fund’s development plan,  the managing director Nurlan Rakhmetov made a speech. He noted that  the goals of 2011 – to increase the efficiency and effectiveness of the Fund’s group of companies has been achieved.

- According to preliminary estimates the consolidated 2011 income of the Fund, excluding commercial banks (which are, according to the law, not the part of the Fund’s group of companies) is 594 billion, that is 13% or 68 bln more than in 2010 year, he stated.

Moreover,  he said, according to preliminary results of 2011 almost all major subsidiaries and the majority of production and financial performance the over-fulfillment of the plan is achieved and growth compared to 2010. Therefore, all the Fund’s subsidaries, according to preliminary data, topped up their profit, except for: «Tau-Ken Samruk» JSC, «Joint Chemical Company », » International airport «Aktobe» JSC  and «Development Bank of Kazakhstan» JSC.

Acording to the Mr. Rakhmetov’s forecast, «consolidated income of the Fund not regarding the second-tier banks, calculated on the basis of macroeconomic forecasts of the Government and moderate oil prices forecast, will in 2015 reach 736.3 billion, that 40% or 210 bln more than in 2010. »

Nurlan Rakhmetov also described some future changes in the sponsorship policy of the Fund. According to him, the cost of sponsorship and charitable assistance to the Fund’s group of companies will not be less than 3% of consolidated net income. «This will reduce the cost of sponsorship 2.5 times, will make them, efficient and effective for the Fund,» – he explained.

The reports and presentations were presented by the heads of national companies: L. Kiinov (JSC «NC» KazMunayGas »), V. Shkolnik (JSC» NAC «Kazatomprom»), A. Satkaliev («Samruk-Energo») and Vice-President of «KazakstanTemirZholy» E. Kizatov. They spoke about the companies’ plans of how companies they are in charge of are planning to carry out the President’s instructions.

Besides, reports are also being made by  Sir Richard Evans, Independent Director of  “Samruk-Kazyna” JSC and Kuandyk Bishimbaev, Deputy Chairman of the Board of Directors. They spoke about the problems of a financial unit, development institutions, as well as work on the implementation of investment projects, development of innovation in the group of companies.

Thus, Mr. Bishimbayev elaborated on the development of the 2020 «Affordable Housing» program. According to it the annual construction will provide at least 1 million square meters of rental housing, of which the Fund’s is prepeared to build  500 thousand square meters of rental with a purchase option.

He told that, 2 pilot projects are launched at the moment in the cities of Astana and Shymkent,  according to them 91 thousand square meters will be built in 2012; in 2013 – 55 thousand square meters. Also in the current year two new pilot projects in Almaty and Akmola regions will be launched.

Overall, according to the program over  3.5 million square meters will be built in Astana and Akmola region, Almaty and Almaty region, Shymkent and Aktobe.

He predicted that that housing will be affordable – third class comfort and the cost of building one square meters in the regions will be no more than 120 thousand tenge, and in Almaty and Astana – not more than 150 thousand tenge per 1 sq. m.

Kuandyk Bishimbayev also elaborated on the investment portfolio of the Fund. He identified and outlined the new directions for the Fund – the development of network projects around major projects of national companies in order to create related industries in conjunction with private business development projects aimed at increasing the local content by entering into long-term contracts and joint ventures, as well as development of new directions, aimed at increasing export potential.

Аt the end of the meeting the Chairman of the Board of «Samruk-Kazyna»  U. Shukeyev made a speech on key objectives and activities of the Fund.