External audit

In order to independently assess the reliability of KMG Group’s accounting (financial) statements, each year the Company engages an external auditor to conduct an audit of financial statements prepared in accordance with the IFRS. The external auditor is approved by the General Meeting of Shareholders following the approval by KMG’s Board of Directors.

Appointment of the auditor and its independence

The auditor is selected in line with the procurement procedure for Samruk-Kazyna Sovereign Wealth Fund and organisations with at least fifty percent of voting shares (equity interest) directly or indirectly owned or held in trust management by Samruk-Kazyna.

Selection of the auditor is based on the principles of:

  • acquiring high-quality audit services for financial statements and related services;
  • ensuring transparency of the selection process, control and responsibility for the decisions made;
  • ruling out conflicts of interest and respecting independence.

In order to implement the selection of the external auditor, a Joint Commission consisting of members of the Fund’s and KMG’s Audit Committees is set up. The Join Commission determines the strategy for selecting the external auditor and implements the procedures for selecting the external auditor for KMG, including its material companies, and the Fund. The Audit Committee assesses the independence of the external auditor on an ongoing basis; the audit firm is rotated every five years. Partners and executives involved in the audit of KMG may not be hired by the Company.

Provision of non-audit services by the external auditor

When the external auditor provides non-audit consulting services, the external auditor is required to obtain approval from the Audit Committee to do so. KMG annually submits to the Audit Committee for approval the information on non-audit services authorised for the external auditor and the audit and non-audit services provided by the external auditor during the reporting year. According to the Auditor Engagement Policy, the share of fees for non-audit services may not exceed 50% of the total cost of audit services provided by the external auditor. Non-audit services rendered by an external auditor in 2022 amounted to 2.1% of the total cost of audit services.

According to the resolution of shareholders represented by the Management Board of Samruk-Kazyna dated 20 January 2022, an independent audit firm Ernst & Young LLP was selected as the external auditor of KMG’s financial statements for 2022–2024.