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INTERACTION WITH STAKEHOLDERS

ASSESSMENT METHODOLOGY AND STAKEHOLDER MAP OF "KAZAGRO" HOLDING" JSC

 

is developed in accordance with the recommendations of GRI G4 and AA1000SES standard, Charter of "KazAgro" Holding" JSC, Corporate Management Code of "KazAgro" Holding" JSC for the purposes of determination and assessment of stakeholders of "KazAgro" Holding" JSC, their ranking in terms of specifics of interaction with the Holding, as well as subsequent active interaction with interested parties of the Holding. Terms used, but not defined in this Methodology, are used in sense in which they are used in the legislation of the Republic of Kazakhstan (hereinafter – RoK), Charter and internal documents of the Holding.

The stakeholders are people (organizations) or groups of people, who have or believe that they have legal requirements to certain aspects of the activity. The purpose of interest may be provision of personal interest, share in participation, or the requirements for business processes. The purpose may vary from satisfaction of interest in the process of participation in activities and to making legal claims.

Internal stakeholders of the Holding:

 

  1. Sole shareholder
  2. Board of Directors of the Holding
  3. Executive Board of the Holding
  4. The Holding's personnel
External stakeholders are:

 

  1. The Parliament of RoK is the highest representative body of RoK, which exercises legislative functions;
  2. Ministry of Agriculture of RoK - Ministry of Agriculture of RoK - state body engaged in the implementation of state programs in the field of agro-industrial complex;
  3. NB of RoK - National Bank of RoK, the central bank - which, within its competence, represents the interests of RoK in relations with central banks and banks of other countries, in international banks and other financial and credit organizations;
  4. Customers - any natural or legal person, to whom postal, financial and agency services are provided by the Holding in accordance with norms and regulations, Charter and other internal regulatory documents of the Holding;
  5. Suppliers - organizations or individuals supplying goods to customers, providing the Holding or its competitors with material resources necessary to organize the production and marketing of products;
  6. Competitors - the enterprises competing in achievement of identical purposes, in aspiration to possess the same resources, blessings, to occupy position in the market. Holding that provide postal services, second-tier banks in terms of provision of financial, agency services, as well as organization of distribution of printed publications;
  7. The population (potential customers) is the aggregate of people living in the Republic of Kazakhstan, including both citizens and residing foreigners and stateless persons who are potential customers of the Holding;
  8. Public, non-governmental organizations - various associations of public and non- commercial nature and non-governmental organizations;
  9. Mass media - sources of daily news and analytical information and one of the main advertising media (newspapers and magazines, electronic media - Internet, radio and television).
METHODOLOGY AND TOOLS OF STAKEHOLDER IDENTIFICATION AND ASSESSMENT

 

The company is the most important stakeholder and carries out a self-assessment with x/y parameters, determining the degree of its interest in business processes and subjective assessment of management possibility. Therefore, at the first stage, a survey to identify stakeholders was conducted among "KazAgro" Holding" JSC employees. The survey form is shown in the table on the next page Employees of Holding with 5-point scale evaluated the importance and influence of the Holding's stakeholders.

«IMPORTANCE» IS ASSESSED WITH TWO SCALES (X/Y), WHERE - 5 ≤ X ≤ 5, X = -5 ÷ +5, IN INCREMENTS OF 1 (WHOLE FIGURES) CHARACTERIZES THE DEGREE OF SUPPORT /RESISTANCE OF THE INTERESTED PARTY TO THE COMPANY PERSONALLY (-5 IS THE EXTREME DEGREE OF OPPOSITION, +5 IS THE HIGHEST DEGREE OF SUPPORT), Y = 0 ÷ 5 WITH A STEP OF 1 (OR SMALLER) CHARACTERIZES THE DEGREE OF INFLUENCE OF THE INTERESTED PARTY ON THE SOCIETY.

Stakeholders with zero support/ resistance or influence forces are triggers (signals) of risks coming from the environment of the Holding. Based on received evaluation of degree of support / resistance of interested party of the Holding, assessment of strength of its influence on the Holding, as well as evaluation of possibility of influencing the interested party, a strategy of interaction with this party is being developed.
The strategy of the Holding's interaction with each interested party, as well as the instruments of influence, are determined by the Holding's structural subdivisions independently, depending on specifics of the activity.
The values of the table are subject to change (not static), depending on implementation of interaction strategy at least once a year. Based on the change in indicators of the table, the indicators of Stakeholder Map are updated.

  

ММүдделі тараптардың маңыздылығын бағалау параметрі қарсы әрекетті қолдау және әсер ету күші деген екі негіз-ден тұрады. Бизнес-процестерге кейбір мүдделі тараптардың кері әсерін төмен-дету үшін олармен іс-қимыл стратегиясы қолдауды арттыруға немесе олардың әсер ету күшін төмендетуге бағытталған болуы мүмкін. Қолдау/қарсы әрекет және әсер ету күші кестесінің мәліметтері негізінде стейкхолдердің (stakeholder's map) карта-сы жасалды. Мүдделі тараптардың карта- сы - Холдингтің мүдделі тараптарының жағдайын анықтау немесе мүдделі тарап-тар тобының графикалық ұсыну бейнесі.

АТАЛҒАН ФОРМУЛА БОЙЫНША ПАЙЫЗДЫҚ МӘЛІМЕТТЕРДІҢ АРАҚАТЫНА СЫН ПАЙДАЛАНУ ҮШІН ЖЕҢІЛДЕТІЛГЕН ТҮРІМЕН КӨР СЕТЕМІЗ , (±X + Y) = Δ.

Осылайша, Холдинг үшін әрбір мүдделі тараптардың маңыздылық параметрі -5-тен 10-ға дейінгі мәнді құрайды, ол мүд-делі тараптар картасында және Холдингтің мүдделі тараптарының қызығушылығы мен өзараәрекет ету кестесінде көрсетілген.

The evaluation parameters of stakeholders' importance have two components: strength of support/ resistance and power of influence. In order to reduce negative impact of an interested party on business processes, the strategy of interaction with it can be aimed either at increasing the support, or at reducing the force of influence. Based on the data of support / resistance table and the power of influence, a Stakeholder's Map is drawn up. Stakeholder Map is an image to clarify the position of the Holding's stakeholders or a graphical representation of stakeholder groups.

THE PERCENTAGE DATA CALCULATED BY THE ABOVE FORMULA IS INDICATED IN A SIMPLIFIED FORMULA (± X + Y) = Δ.

Thus, the importance parameters of each stakeholder of the Holding are from -5 to 10, and are indicated on Stakeholder Map and in the table of interests and interaction of the Holding's stakeholders.

Business processes initiated «from below» integrally receive a much smaller degree of support, despite the formal approval of management, compared with the processes initiated «from above».
Also, the Holding should not neglect the work with stakeholders with a minimum influence power, but with an extreme degree of opposition to business (competitors) for a reason that these «minor» stakeholders can be used as an instrument of pressure on the Holding by other interested parties, whose positions are not clarified or expressed for political reasons, and the power of influence is great enough.
Thus, the zero values of «importance parameters» x and y can signal potential risks.

ESSENTIAL ASPECTS IDENTIFIED

METHODOLOGY

 

In order to identify essential aspects of sustainable development from the point of view of the Holding's important stakeholders, they were interviewed during 2 weeks. In total, about 100 people participated in survey: employees of the Holding, a member of Executive Board, a member of Board of Directors, customers. Significant aspects of sustainable development were identified using the matrix of influence and importance of aspects.

The survey identified such significant aspects of sustainable development as financial, environmental and social.

All identified significant aspects are on the right side of the diagram. The aspects that are on the left side are identified as insignificant. The following pages will describe the Holding's indicators for identified significant aspects.

FINANCIAL ASPECTS

CONTRIBUTION OF ENTERPRISE TO FORMATION OF COUNTRY'S BUDGET

 

The Holding received

 

23,67MILLION KZT

from the republican budget and
 

30 139,5MILLION KZT

in property in the form of grain. In 2017, subsidies in the amount of

11 230,76MILLION KZT
were received

FINANCIAL IMPLICATIONS AND OTHER RISKS ASSOCIATED WITH CLIMATE CHANGE

 

According to the calculations of weather forecasters, the warming should be expected throughout the entire territory of Kazakhstan, with the largest temperature increase in Kazakhstan on average expected in winter and summer seasons (2-4 degrees before the end of the century), with no significant increase in precipitation, which increases the likelihood of drought and the movement of desert lands to the north.

According to experts, climate change affects the state of forests, water resources, pasture land (and therefore, on the state of animal husbandry) and, of course, grain production - perhaps the most significant segment for domestic agrarian sector. When planning AIC development, it is important to take this fact into account. Therefore, in its work, the Holding does not approve loans to projects that provide a significant negative impact on environment.

PROCUREMENT PRACTICE

 

In 2017, the Holding purchased goods and services to the amount of

59,169BILLION 
KZT
of which
57,2BILLION 
KZT

fall to local suppliers. 
share of local suppliers in total volume of purchases is

96,6%

The total number of contracts is

189

Environmental aspects

 

The Corporate Governance Code of the Holding defines the main principles in the field of sustainable development. The investment projects financed by the Holding use modern and advanced technologies aimed at saving water and minerals; water-lifting installations use alternative energy sources, such as wind and sun; the principles of a «green» economy are being implemented. This allows to significantly improve the taste of produced products, ecological compatibility of the product, which positively affects the health of the nation.

SOCIAL ASPECTS

PERSONNEL POLICY

 

The Holding "KazAgro" strictly complies with the requirements of the labor legislation of the Republic of Kazakhstan and internal documents. Labor contracts are concluded with all employees of the Holding. There are no freelance and seasonal employees in the Holding.

HUMAN RESOURCES. INFORMATION ON STAFF NUMBERS AND STATISTICS ON GENDER AND AGE CRITERIA.

 

HUMAN RESOURCES. INFORMATION ON STAFF NUMBERS AND STATISTICS ON GENDER AND AGE CRITERIA.

73 PEOPLE

the actual number

69 PEOPLE

The number on the list is

78 PEOPLE

including workers on parental and maternity leave (in 2017, 2 women got back from maternity leave).

According to the list, the number of men is 30, women - 48. At the end of the year, of the actually working staff were 39 women (57%) and 30 men (43%). The average age of workers is 39.1 years. At the end of the year, the share of family workers of actually working staff was 78%, unmarried - 22%.

GOVERNING BODIES

 

The composition of executive bodies by gender, age group, belonging to groups of national minorities:

  • by gender: 2 - men, 3 – women;
  • by age: from 31 to 35 years old - 2, 41-45 years old - 2, 46-50 years old– 1;
  • belonging to national minorities: all 5 – Kazakhs.

HUMAN RIGHTS AND SOCIAL GUARANTEES

 

Social payments are provided in the Holding in accordance with the Labor Code of the Republic of Kazakhstan. Labor contracts are concluded with all employees.The provision of social benefits provided for by the Labor Code of the Republic of Kazakhstan is observed in Tthe Holding.
The procedure and conditions tostart a maternity leave by Holding's employees are carried out in accordance with the legislation of the Republic of Kazakhstan, as well as the internal regulatory documents of the Holding. In 2017, 2 of 9 women on maternity leave got back to work.

INFORMATION ON WAGES AND BONUSES

 

The remuneration of the Holding's employees is based on the principles of fairness (conformity of wages amount to volume and quality of work of an individual employee) and transparency (existence of clear principles for determining the value of individual wages).

Remuneration based on performance of work for the year to senior employees is paid on condition that there is a net consolidated profit for the reporting year after approval of the results of financial and economic activities.

The bonus payments to employees depend on their achievement of individual key performance indicators, and payment rates correspond to the Limits of certain types of administrative expenses of "KazAgro" Holding" JSC, approved by resolution of Board of Directors dated December 30, 2014 No. 11.

In 2017, a bonus was paid on the basis of results of achievement of individual key performance indicators for the 1-4 quarters of the reporting year.

HEALTH AND SAFETY

 

Health and safety are priority areas of the Holding's activities. The Executive Board of the Holding approved the Instruction on health and safety for the Holding's employees (resolution dated November 22, 2017 No. 68). The employees of "KazAgro" Holding" JSC are provided with such social guarantees as voluntary medical insurance, compulsory insurance of workers against accidents in the performance of their work (official) duties, payment of social benefits for temporary in capacity for work, health benefits for annual paid leave, maternity leave payment. In order to provide medical services, the employees of the Holding concluded a voluntary insurance contract in case of illness with «Oil Insurance Company» JSC.

STAFF DEVELOPMENT

 

The funds for staff development are provided annually in the Holding's budget. The programs are aimed at improving the skills and knowledge of employees in accordance with the qualifications. In 2017, 59 employees passed professional trainings in various seminars, trainings and courses.

OPERATIONS INVOLVING LOCAL COMMUNITY, IMPACT ASSESSMENT AND DEVELOPMENT PROGRAM

 

At year-end 2017, the Holding's portfolio included

570
PROJECTS
31
PROJECTS
in last year
with a total value of
376
BILLION KZT
16,5
THOUSAND JOBS
were created
530
PROJECTS
were put into operation, of which

The Holding annually carries out work to provide sponsorship and charitable assistance, including to low-income citizens. In the reporting year, "KazAgro" Holding" JSC provided such assistance for the amount of

44,7MILLION KZT