As the business environment around LLP Rano Oil evolves on a daily basis and uncertainties grow, LLP Rano Oil’s competitiveness is critical to responding correctly to change and clearly identifying opportunities and dangers as they arise. As a global corporation, LLP Rano Oil manages varied risks using a variety of methodologies, including macro, micro, quantitative, and qualitative views. The Company has a fundamental policy and internal regulations in place to manage risks from all perspectives, and it keeps its organizations, management structures, and management processes up to date to ensure successful risk management.

Integrated Risk Management

LLP Rano Oil employs integrated risk management across its diversified operations, which span a wide range of sectors and geographical areas. When undertaking integrated risk management, LLP Rano Oil assesses maximum downside risk (risk assets) as a multiple of the expected maximum loss based on the risk profile of each asset type in order to understand its overall risk exposure. The Group’s fundamental philosophy is to retain risk assets within the scope of its equity, which indicates its risk-bearing capacity. Currently, the amount of risk assets determined in this manner falls within its equity.

Management of Individual Deals, Investment Decision-Making Process

For particular transactions, such as substantial corporate investments, LLP Rano Oil has a risk management regime that includes everything from entry to exit-based consensus decision-making and monitoring. Business organizations must present project descriptions and business plans before pursuing new deals. In response, the relevant corporate staff groups provide feedback on the results of risk studies, both quantitative and qualitative. They are then reviewed by the Investment and Credit Committee. The Investment and Credit Committee uses risk-adjusted earnings after tax as one guideline for quantitatively evaluating acquisitions, while also considering the viability of particular transactions, risk analysis, and company-wide concentration hazards.

The transaction is subsequently sent to the Corporate Management Committee for further review and approval by the President. A Board of Directors resolution approves deals that exceed a particular materiality level. LLP Rano Oil created a performance indicator that assesses if returns exceed a minimal risk-adjusted target. After an investment is made, the business group watches it. However, highly material investments are continuously monitored in order to spot problems early and take corrective action. The Investment and Credit Committee, Corporate Management Committee, and Board of Directors receive investment status reports on a regular basis. The strategic, growth, and profit potential of these investments is assessed, with essential investments considered from a range of diverse perspectives, and the decision to revise and move forward or withdraw made in accordance with a consensus-based decision-making procedure.

Business Continuity Plans (for business continuity in the event of a major disaster)

LLP Rano Oil has modified its Business Continuity Plan (BCP)*1 as of April 1, 2022. Previously, management built the BCP based on scenarios such as earthquakes, developing infectious diseases, and the complete loss of company services in Kazakhstan. As hazards have diversified in recent years, the prior BCP’s scenario-based approach proved unable to cover all possible threats. As a result, LLP Rano Oil established an All-Hazards BCP, an impact-based strategy that enables rapid response to a wide range of crisis occurrences. Management has identified important resources in this BCP, including workers, systems, offices (buildings), payment functions, and critical resources for Group company management. By recognizing common responses to these important resources, our BCP will be better positioned to face diverse.

LLP Rano Oil has newly founded an organization dedicated to establishing and promoting a BCM system during normal times to effectively implement the BCP during a risk event. This organization periodically conducts trainings for the Headquarters crisis management team and improves the BCP. Moreover, in the event of possible damage to a critical resource of our Group companies, said damage might impact our customers and LLP Rano Oil consolidated financial statement. For this reason, LLP Rano Oil believes it is necessary to support business continuity at our Group companies and is helping domestic Group companies establish their own BCM systems.

BCP (Business Continuity Plan): A plan to quickly recover from damage and to minimize the loss of critical resources during a risk event.

BCM (Business Continuity Management): A management system for developing, implementing, and improving the BCP and for conducting trainings during normal times.