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2012

CONTENTContentIntegrated Report 2012 1

CONTENTMessage from the Chairman of the Board of Directors of JSC “Samruk-Energy”Dear Colleagues!Head of State, Government ofthe Republic of Kazakhstan andJSC “Sovereign Wealth Fund“Samruk-Kazyna” (hereinafterreferred to as the Fund) place aspecial emphasis on boosting thepower energy of the country.The task was set to the powerindustry to satisfy the growingneeds of the economy in thesphere of electric energy.Modernization and reconstruction of existing 7 GWgenerating capacities and introduction of new 14 GWcapacities is required to be completed by 2030.JSC “Samruk-Energy” (hereinafter referred to as theCompany), the largest electric power holding companyin Kazakhstan, plays an important role in reaching of theabove goals.The Board of Directors and management team of JSC“Samruk-Energy” employs cutting edge methods andtechniques to achieve sustainable growth of the Companyand power industry as a whole.In 2012, due to joint efforts of JSC “Samruk-Energy” and itspartners the operation of Moinakskaya HPP and 8 th powerunit of Ekibastuzskaya GRES-1, as well as constructionof Balkhash TPP were started, and modernization ofelectrical networks of Almaty is being performed.Effective work of JSC “Samruk-Energy” team allowsachieving an annual growth of financial and economicactivity, increased assets, and most importantly – formacohesive team of professionals.Last year JSC “Samruk-Energy” celebrated its fifthanniversary. However, in such a short period of time theCompany made a significant contribution to the industry,and launched a series of large projects. All strategicprojects of the Company are included in the State Programof Forced Industrial-Innovative Development of the countryand the Industrialization Map.In August 2012, 50% stake in the share capital of LLP“Ekibastuzskaya GRES-1 named after Bulat Nurzhanov”was transferred to the share capital of the Company. Inaddition, in 2012, 100% of shares of JSC “East KazakhstanElectricity Distribution Company” were transferred to thetrust management of the Company and later in 2013 thesaid shares will be transferred to the share capital of theCompany.Thus, the Company acquired and combined power stationswith a total installed capacity of about 9.7 GW, or 47.3% ofinstalled capacity of the Unified Electric Power Systemof Kazakhstan, as well as the two largest electricitydistribution companies.In 2012, with the adoption of new strategic assets, ahuge work was performed by JSC “Samruk-Energy”to update the long-term development strategy of theCompany reflecting the vision of its development, aswell as the Company’s position and value in the industry.The approval of the strategy by the Board of Directors isscheduled for the beginning of 2013 and further submittedto the Management Board of JSC “Sovereign Wealth Fund“Samruk-Kazyna” and the Prime Minister of the Republicof Kazakhstan.In order to protect the interests of the Shareholder,increase performance efficiency, and to enhance the valueof the company, JSC "Samruk-Energy” is working on theimprovement of corporate governance and implementationof risk management and internal control systems inaccordance with the leading international practices.Along with the main production activity, improvement ofsocial policy is an important direction of the developmentof the Company. In 2012, funding of social paymentsand guarantees as provided in collective bargainingagreements of subsidiary and affiliated organizations ofthe Company significantly increased. Following the 2012evaluation results, the level of staff satisfaction within theSamruk-Energy Group of Companies was 83%.In the reporting period JSC “Samruk-Energy” hassuccessfully passed the first supervisory audit of CorporateManagement System on compliance with internationalstandard ISO 9001:2008.According to the diagnostics results on compliance withthe best international practices, the level of corporategovernance of the Company in 2012 was 65%, andJSC “Samruk-Energy” was ranked 3 rd among the Fund’sorganizations. The task is set to the Company to furtherimprove corporate governance and achieve the level ofcompliance of 75% in the year 2015.In 2012, following independent evaluation results, theperformance of the Company’s Board of Directors wasconsidered efficient, and recommendations for its furtherdevelopment were provided.The Shareholder defined the importance and responsibilityof the Board of Directors for strategic management, andannounced its expectations for the coming 2013 year onmajor activities of the Company. In particular, in respectof long-term strategy, definition of strategic objectives ofinnovative technological development and mechanisms ofimplementation of innovative strategies of the Company,approval and monitoring of the program to reduce costs,construction of an appropriate strategy for sustainabledevelopment and social responsibility, and implementationof corporate policies and standards.I am confident that the above plans, despite of theirimmensity, will be achieved by the highly professional anddedicated team of the Group of Companies of Samruk-Energy.Bektemirov Kuanysh AbdugaliyevichChairman of the Board of Directors of JSC "Samruk-Energy”Integrated Report 2012 2

CONTENTMessage from the Chairman of the Management Board of the CompanyDear Colleagues!The year 2012 was a successful yearfor the Company. All tasks set to theteam of Samruk-Energy Group ofcompanies were completed.Close attention of the Governmentof the Republic of Kazakhstanand JSC “Sovereign Wealth Fund“Samruk-Kazyna” to the issues ofconsistent development of domesticpower industry contributed to thissuccess.Electricity production amounted to 17,418 million kW/h,exceeding the planned target.Electricity sale was also ahead of schedule and reached5,626 million kW/h.Projected target for services on transmission anddistribution of electricity was beaten as well; and the planfor coal production was over-fulfilled by 9%.During the reporting period, JSC “Alatau ZharykCompaniyasy” and LLP “AlmatyEnergoSbyt” were withdrawn from loss.As a result, the total profit for the year 2012 accordingto the audited financial statements is 18,632 mln tenge,exceeding the target by 19%. The profit will be reinvested inthe modernization and maintenance of technical conditionof power plants, and in financing a number of investmentprojects.The year 2012 was marked by a number of significant eventsfor the Company, including commissioning a unique highpressureMoinakskaya HPP with a 300 MW capacity, andthe recovery of 500 MW power unit No.8 of EkibastuzskayaGRES-1.On September 13, 2012 in the framework of official visit ofthe President of Korea Lee Myung Bak to the Republic ofKazakhstan, the official ceremony for construction of thefirst module of Balkhashskaya TES with 1,320 MW capacitywas conducted. The ceremony was held in the format ofvideo conference Astana – Ulken with the participation ofthe heads of the two states.In November last year, the international rating companyStandard & Poor’s has assigned the Company a long-termcredit rating at “BB+” level and a “kzAA-” national scalerating. The outlook is “Stable”.In addition, the international rating company Fitch Ratingshas assigned the Company a long-term issuer defaultrating (IDR) in foreign and local currency at “BBB”and “BBB+” levels respectively, and a short-term foreign currencyIDR at “F3” level, while national long-term rating was “AAA(kaz)”.The outlook for long-term rating is “Stable” as well.As a result, the Company has successfully placed five-yearEurobonds worth 500 million US Dollars with the yield setat 3.75% per annum on the Irish Stock Exchange (ISE) andthe Kazakhstan Stock Exchange (KASE).This has been the best placement of Kazakh issuers inthe history of the financial market of Kazakhstan, and thefigure became a benchmark for many companies, includingthe development institutes of the country.JSC “Samruk-Energy” recognizes its social responsibilityfor providing reliable and stable operation of enterprisesand compliance with the existing legislationin respect ofenvironmental protection and labor safety, in matters ofliability to consumers for the quality of services provided.In order to minimize environmental pollution the Companyconducts systematic work to reduce harmful emissionsinto the atmosphere and water facilities, as well asmodernization of technological processes and explores thepossibility of application of clean coal technologies.Measures were taken to prevent accidents. As a result, in2012 the number of accidents in the Group of companiesof Samruk-Energy, as compared to 2011, significantlydecreased. In 2013, this work will be continued.The Company will promote its business activities associatedwith providing reliable power supply and creation of properconditions for sustainable development of the real sectorof the economy of Kazakhstan, and meeting the needs ofpeople in power and heat.Satkaliyev Almasadam MaidanovichChairman of the Management Board of JSC “Samruk-Energy”Integrated Report 2012 3

CONTENTAbout the ReportIntegrated Report 2012 4

CONTENTReporting period to which the presented information is applicable andthe date of publishing of the previous ReportThe Integrated Reportof JSC “Samruk-Energy” (hereinafter referred to as the Report) represents theoverview of performance results and achievements of Samruk-Energy Group of Companies for theperiod from January 1, 2012 to December 31, 2012.The present Report provides information in the spheres of economy, environment, industrial safety,labor protection, corporate social responsibility and financial activity. All information and quantitativedata are presented for the year 2012; however, the figures for 2010 and 2011 were used for comparisonand analysis purposes where applicable.The previous Annual Report was published in August, 2012.Reporting cycleThe present Report is the first Integrated Report in the history of the Company and includessustainable development and financial indicators of Samruk-Energy Group of companies for the year2012.The history of preparation of non-financial reports of the Company dates back to 2010, when the firstAnnual Report of the Company was published covering the activity results of the year 2009.In 2011, along with the Annual Report, the Company published the Sustainable Development Reportof Samruk-Energy Group of companies for the period from January 1, 2010 to December 31, 2010.JSC “Samruk-Energy” (hereinafter – the Company) intends to publish the Integrated Report on anannual basisContact information for questionsin respect of the Report or its contentAddress of the Central Administrative Office of Samruk-Energy Group of companies:010000, Astana, 17 Kabanbay batyr Ave.,Lukoil Business Center, Block ETelephones: + 7 (7172) 55-30-00,+ 7 (7172) 55-30-21Fax: +7 (7172) 55-30-30Е-mail: info@samruk-energy.kzFor any questions regarding the Report or its content please contact:Mukusheva Madina Sheriyazdanovna, DirectorCorporate Governance DepartmentTelephone: +7 (7172) 55-30-05Process for defining the Report contentThe present Report is prepared in accordance with the “Global Reporting Initiative” (GRI3.1) principlesof the International Integrated Reporting Committee and the International Financial ReportingStandards. The Report is developed on the basis of the version 3.1. of the Sustainable DevelopmentReporting Guidelines (Global Reporting Initiative, G3.1) and Industry Protocol in the field of ElectricUtility, EU. The table indicating standard elements of the Report is provided in Annex 1: Table ofCorrespondence of the Report to the GRI Guidelines.When determining the materiality of the Report the Company was considering the actual spheres ofinterest of the involved parties.Scope of the ReportThe Company is amanaging company and does not perform operational activity, thus exerting littleimpact on the environment. As at December 31, 2012 the structure of JSC “Samruk-Energy” consistedof 37 organizations. For the purposes of full disclosure of sustainable development indicators, theReport contains consolidated information on the Group of companies of Samruk-Energy, comprising 25subsidiary and affiliated organizations, excluding the following:• Forum Muider B.V.-Managing company;• JSC “Bukhtarminskaya HPP”, JSC “Shulbinskaya HPP” and JSC “Ust-Kamenogorskaya HPP” – onlease and concession;• LLP “Kaaragandagiproshakht and K” and JSC “East-Kazakhstan “Regional Electric Company” –under trust management;• 12 other companies;• JSC “KazKuat” and JSC “KMG-Energo” – in the process of liquidation.Methods of data calculation including suggestions and methodologiesused for preparation of indicators and other information includedin the ReportCalculation, collection and consolidation of performance, social and ecological indicators providedin the Report of the Company were performed in accordance with the reporting principles andrequirements of the Global Reporting Initiative, G3.1 and corporate governance procedures of JSC"Samruk-Energy”. A margin of quantitative data errors for each sustainable development indicatoris minimized. Ratios and specific values are supplemented with absolute values. Quantitative datais presented using a common system of measurement and calculated using standard coefficients.Policy and current practice with regardto seeking external assurance for the ReportThe Report has been prepared in accordance with the “B” level of GRI 3.1 reporting system:SelfdeclarationThird partycheckС С+ B B+ A A+ExternalassurancepassedExternalassurancepassedExternalassurancepassedAbout the ReportIntegrated Report 2012 5

CONTENTSignificant events and state awards for 2012State awards24 JanuaryBy the decision of the Management Board of JSC “SovereignWealth Fund “Samruk-Kazyna” Satkaliyev AlmasadamMaidanovich was appointed to the position of Chairman ofthe Management Board of the Company.27 January“Kurmet”medal“Eren enbegiushin”medalCertificateof Honor ofKazakhstanPresident of the Republic of Kazakhstan in his Message“Social-economic modernization – the main vector ofdevelopment of Kazakhstan” set task to start constructionof the first module of 1,320 MW “Balkhashskaya TES” in2012.13 FebruaryNew composition of the Company’s Management Boardwas appointed at the meeting of the Board of Directors ofthe Company (Minutes #55).22 MarchBaimukhambetov Kalaubek,acting General DirectorJSC “Moinakskaya HPP”Guzovskaya Nadezhda, driverof steam turbinesJSC “AlES”Zhurgarayev Mukhtar,chief senior station shiftsupervisorJSC “Zhambylskaya GRES”Kuzhaliyev Zhaksylyk,Deputy Head of the ElectricEquipment Repair departmentJSC “Alatau ZharykCompaniyasy”Release of the audited financial statements for the year2011.27 MarchDuring the official visit of the Head of State to the Republicof Korea held in the framework of the Kazakhstan- KoreanBusiness Council the signing ceremony of the contractofsale of shares of JSC “Balkhashskaya TES” was held inSeoul.A Memorandum of Understanding was signed between theCompany and Hyundai Corporation17 AprilThe Company completed the deal on sale of shares ofJSC “Balkhashskaya TES” to Samsung Corporation in theamount of 755,691 shares, constituting 75% -1 share ofcharter capital.26 MayThe President of the Republic of Kazakhstan NursultanNazarbayev visited Moinakskaya HPP (Raiymbek districtof Almaty oblast). The Head of state flew over Bestyubinskreservoir, got acquainted with hydroelectric productionfacilities and operation of the first 150 MW hydraulic unit,after which had officially started the ceremony for launchof the second hydroelectric generating set of MoinakskayaHPP.About the ReportIntegrated Report 2012 6

CONTENT29 MayA Memorandum on Cooperation was signed in the city ofTaldykorgan between the Company and Akimat of Almatyoblast as part of the “Construction of Wind Power Plants(WPP) with 60 to 300 MW capacity in Shelek Corridor ofYenbekshi kazakh District of Almaty Oblast” project.25 JuneA turnkey contract between JSC “Balkhashskaya TES”and Samsung Engineering Company Limited for theconstruction of the first module of Balkhashskaya TES wassigned in Astana.3 JulyDuring the online nation wide teleconference “StrongKa zakhs tan will build together!” President NursultanNazarbayev approved the start of operation of the eighthpower unit of LLP “Ekibastuzskaya GRES-1 named afterBulat Nurzhanov”.17 AugustApproval of the 2011 Annual Report of the Company.24 AugustJSC “Shardarinskaya HPP” and the European BankforReconstruction and Development (hereinafter – EBRD)signed a loan agreement amounting to 9,150 billion tenge.The funds will be used to finance the investment project“Modernization of Shardarinskaya HPP”.29 AugustIn accordance with the Resolution of the Government of theRepublic of Kazakhstan #1103 the Company’s shares with a5.6% participation of JSC “KazTransGas” were transferred toJSC “Sovereign Wealth Fund “Samruk-Kazyna”.JSC “Sovereign Wealth Fund “Samruk-Kazyna” became a100% shareholder of the Company.August-SeptemberFollowing the diagnostics results on compliance withthe best international practices the level of corporategovernance of the Company in 2012 was 65%.12 SeptemberA Memorandum of Understanding was signed between theCompany and Korea Electric Power Corp. (KEPCO, Republicof Korea) on cooperation in the field of nuclear energy.13 SeptemberAn official ceremony for the construction of the first moduleof 1320 MW Balkhashskaya TES was held during the officialvisit to the Republic of Kazakhstan of the President of theRepublic of Korea Lee Myung Bak.The ceremony, which was held in the format of videoconference“Astana- Ulken village”, was attended by thePresident of Kazakhstan Nursultan Nazarbayev and thePresident of Korea Lee Myung Bak.31 OctoberIn accordance with the act of acceptance, 50% shares ofparticipation of JSC “Sovereign Wealth Fund “Samruk-Kazyna” in the charter capital of LLP “Ekibastuzskaya GRES-1 named after Bulat Nurzhanov” was transferred to the sharecapital of JSC “Samruk-Energy”.20 NovemberInternational rating agency Standard & Poor’s has assignedthe Company a long-term credit rating at “BB+” level and a“kzAA-” national scale rating. The outlook is “Stable”.26 NovemberInternational rating company Fitch Ratings has assignedJSC “Samruk-Energy” a long-term issuer default rating(IDR) in foreign and local currency at “BBB” and “BBB +”levels respectively, and a short-term foreign currency IDRat “F3” level, while national long-term rating was at “AAA(kaz)” level. The outlook for long-term ratings is “Stable”.4–5 DecemberThe Company successfully completed the first supervisoryaudit of Corporate Management System on compliancewith international standard ISO 9001:2008.14 DecemberChanges in the composition of the Management Board ofthe Company.21 DecemberFive-year Eurobonds for 500 million US Dollars with theyield of 3.75% per annum were placed on the Irish StockExchange (ISE) and the Kazakhstan Stock Exchange (KASE).About the ReportIntegrated Report 2012 7

CONTENTMain indicators of the Society for 2012thous. Gcal7 471Production of thermalenergymln kW/h17 418Production of electricitymln tons44Coal outputmln kW/h5 626Electricity salesmln kW/h8 395Electricity transmission43,2%Share of investmentsfor development andimplementation of newproducts and technologies (in% to the Company’s expenses)bln tenge18,76Net income65%Corporate governanceratingmln tenge1206.2%6.4%20%Sponsorship andcharitable expensesROACEROEEBITDA MarginAbout the ReportIntegrated Report 2012 8

CONTENTKey performance indicators of the CompanyProduction indicators*IndicatorUnit ofmeasurement2010 20112012(actual)2013(planned)2015(planned)Production of electricity mln kW/h 12 686 13 397 17 418 31 004 33 708Electricity sales mln kW/h 4 993 5 330 5 626 5 833 6 459Electricity transmission mln kW/h 7 548 7 961 8 395 8 697 9 394Production of thermal energy thous. Gcal 7 460 7 756 7 471 7 568 7 574Coal output mln tons 38,9 40,64 44 49,47 51,67Labor productivity in coal mining tons/person 5 677 5 796 5 939 5 762 6 113Labor productivity in coal miningthous. tenge/person11 902 12 609 17 377 17 728 20 282Labor productivity in electricity productionthousand kW/h/person2 062 2 195 2 383 4 261 4 580Labor productivity in electricity productionmln tenge/person- - 13 834 30 691 38 322Labor productivity in electricity transmissionthousand kW/h/person1 908 1 897 1 919 1 616 1 674Number of process failures unit 1 613 1 748 1 712 4 877** 4 389**IndicatorUnit ofmeasurement2010 20112012(actual)Financial indicators*2013(planned)2015(planned)ROACE % 8,9 7,8 6,2 15,5 11,93EBITDA Margin % 21 20 20 22,4 41,9Net income bln tenge 10,86 14,79 18,76 55,3 108,1ROE % 9,67 9,0 6,4 15,0 16,6About the ReportIntegrated Report 2012 9

CONTENTIndustrial and innovation indicatorsIndicatorShare of investments for developmentand implementation of new products andtechnologies (in % to the Company’s expenses)Unit ofmeasurement2010 20112012(actual)2013(planned)2015(planned)% 3 4 43,21 13 11Corporate Governance indicators*IndicatorUnit ofmeasurement2010 20112012(actual)2013(planned)2015(planned)Corporate governance rating % 39,7 61,9 65 66 75IndicatorUnit ofmeasurement2010 20112012(actual)Social indicators*2013(planned)2015(planned)Staff involvement degree % - - - 60 68Staff annual turnover % 8 8 8,6 11 10Number of accidents at work per thous andpeopleShare of local content in procurement ofgoodsShare of local content in procurement ofworks and servicesnumber/1000people1,18 1,49 0,85 - -% 62 70 64 65 65% 57 87 73 76 76* Projected figures (plan for 2013–2015) are presented in accordance with the Development Strategy of JSC “Samruk-Energy” for 2012–2022** increase in the number of process failures was due to LLP “Ekibastuzskaya GRES-1” and “East-Kazakhstan “Regional Electric Company” joining the Group ofCompanies of JSC “Samruk-Energy”About the ReportIntegrated Report 2012 10

CONTENTABOUT THE COMPANYGeneral InformationMarket Overview and the Company's Position in the MarketAssets Structure of the Company as of December 31, 2012Priority Activity Directions and Main Products:Production CapacityProduction Goals and ObjectivesSubsidiary and Affiliated Organizations of the CompanyInnovation ActivityIntegrated Report 2012 11

CONTENTGeneral informationJSC “Samruk-Energy” was established on April 18, 2007 in the framework of developmentand implementation of a long-term state policy on modernization of existing andintroduction of new generating facilities, and pursuant to the decision of the GeneralMeeting of Founders. The Company’s founders at that moment were JSC “KazakhstanState Assets Management Holding “Samruk” and JSC “KazTransGas”.The Company was registered on May 10, 2007 with its Central office located in Almaty.On November 3, 2008, due to the merge of JSC “Kazakhstan State Assets ManagementHolding “Samruk” and JSC “Sovereign Wealth Fund “Samruk-Kazyna”, the Company’sShareholder became JSC “Sovereign Wealth Fund “Samruk-Kazyna”, the successor of JSC“Kazakhstan State Assets Management Holding “Samruk”.In May 2010, the Company moved from Almaty to Astana.The Company is a holding that manages energy and coal enterprises in the RepublicofKazakhstan. As of December 31, 2012, asset structure of JSC “Samruk-Energy” included37 organizations. JSC “KazKuat” and JSC “KMG-Energo” are in the process of voluntaryliquidation.Market overview and the Company’sposition in the marketKey sales markets (electric power wholesale and retail markets, thermal power local markets)and the services of subsidiary and related organizations of JSC “Samruk-Energy” by zones ofthe Unified Electric Power System of the Republic of Kazakhstan:• Northern Zone – Akmola, Aktobe, West Kazakhstan, Karagandy, Kostanay, Pavlodar,North Kazakhstan oblasts, and Astana.80% of electricity of the total value of production in Kazakhstanis generated in the Northernzone.This is mainly due to the fact that the main coal deposits of Kazakhstan and hydro powerresources are located in the Northern zone, which significantly reduces the cost ofelectricity generation.Excess of electricity is transmitted to the power-hungry Southern zone and exported toRussia.• Southern Zone – Almaty, Zhambyl, Kyzylorda and South Kazakhstan oblasts, and the cityof Almaty. This zone is characterized by power shortages and high prices for it.The deficit is covered by electricity transmission from the Northern Zone and theConsolidated Power System of Central Asia.• Western Zone–Mangistau, Atyrau, West Kazakhstan oblasts. Most of the projects in theoil and gas sector belong to Western oblasts.Despite the significant hydrocarbon resources, part of the needs in the electric energy iscovered by imports from Russia. In the future, to fully cover its own needs and for powerexport abroad new power generating capacities are planned to be established in the region.ABOUT THE COMPANYIntegrated Report 2012 12

CONTENTPetropavlovskKostanaiKokshetauUralskPavlodarAstanaAktobeSemeyUst-KamenogorskKaragandaAtyrauTaldykorganAktauKyzylordaCaspian SeaShymkentTarazAlmatyABOUT THE COMPANYIntegrated Report 2012 13

CONTENTJSC “Samruk-Energy”Asset structure of the Companyas of December 31, 2012LLP “AlmatyEnergoSbyt” – 100%LLP “Samruk-Green Energy”JSC “Alatau Zharyk Kompaniyasy”– 100%JSC“Aktobe CHP”JSC“AlES”LLP “Energy of theSemirechye”LLP “The First WindPower Station”JSC “MREC”1 shareLLP “Teguise Munai”JSC “ZGRES”JSC “Ekibastuzskaya GRES-2 Station”LLP “Ekibastuzskaya GRES-1”JSC “Balkhashskaya TES”LLP “AlmatyEnergoSbyt” – 100%1 shareLLP “Mangyshlak-Munai”JSC “Shulbinskaya HPP”JSC “Ust-Kamenogorskaya HPP”JSC “Bukhtarminskaya HPP”JSC “Moinakskaya HPP”LLP “Bogatyr Komir”LLP “Samruk-Energy Stroy-Service”LLP “TPEP”JSC “KMG-Energy”JSC “Shardarinskaya HPP”JSC “KazKuat”at the stage of liquidationIn the process of acquisition for direct controlABOUT THE COMPANYIntegrated Report 2012 14

CONTENTToday the Company represents the largest diversified energy holding successfullyintegrated into the international power balance, forming a highly efficient system of energysupply, and ensuring the sustainable development of all sectors of Kazakhstan.Priority Activity Directions and Main Products:• production of electric energy• production of thermal energy• transmission and distribution of electric energy• extraction of power-generating coal• reconstruction, expansion and construction of energy facilitiesProduction capacitiesThe available capacity of electric power station was 9,665.2 MW, or 47.3% of the grossinstalled capacity of the UES of the republic.Electric power generation was 34,749.3 mln kW/h, or 38.5% of the gross installed capacityof the UES of the republic in 2012.Length of 0.4-220 kV, km power transmission lines (hereinafter the PTL):• Overhead transmission lines – 63,535;• Cable transmission lines – 5,749;• total length of transmission lines – 69,285 (including JSC “EK REC”).220 kV and below substations:• substations of 35kV and above; Number – 575; full capacity – 11200 МVA• substations of 6-10/04 kV; Number – 13861; full capacity – 3792.2 МVAInstalled (production) capacity brokendown by energy sourceand by regulatory regimeName 2010 2011 2012 Unit of measurementHPP and RES 2.2 2.2 2.5 GWGRES* 2.230 2.230 6.230 GWCHP* 0.930 0,930 0.916 GWCoal mines** 42 42 42 mln tons/year*unit of measurement capacity in GW, including LLP “Ekibastuzskaya GRES-1”** Bogatyr (32 mln tons a year) and Severnyi (10 mln tons a year) coal minesABOUT THE COMPANYIntegrated Report 2012 15

CONTENTGeneration (production) broken down by energy source and by regulatory regimeName 2010 2011 2012 Unit of measurementHPP and RES 7,834.8 7,685.3 7,607.5 GW/hGRES* 5,896 6,785.6 22.676 GW/hCHP 4,122.3 4,410.1 4,642.28 GW/hCoal mines 38.9 40.6 44 mln tons*including LLP “Ekibastuzskaya GRES-1”ABOUT THE COMPANYIntegrated Report 2012 16

CONTENTIn 2012, the increased production of electric power in relation to the planned figures wasobserved at the Company’s power plants by the amount of 701 million kW/h (2.5%), includingdue to the new equipmentand more intense boot of LLP “Ekibastuzskaya GRES-1” for 508million kW/h or 3.46%.Key performance indicators of LLP “Ekibastuzskaya GRES-1” show a decrease in fuelconsumption from 368.5g/kW/h to 368.2 g/kW/h, and an increase in installed capacityutilization index from 41.7% to 43.16%, which was achieved by increase in the averagestation load in 2012.As far as JSC “EGRES-2” is concerned, production increased from 5,968 mln kW/h to 6,134mln kW/h due to the reduced number of downtime of power generating units in the plannedand unplanned repairs. The increase in the specific consumption of fuel from 357.05 g/kW/h to 372.24 g/kW/h was connected with repair of high pressure heaters (hereinafter –HPH), and, as a consequence, reduced efficiency of turbine units of stations #1,2. However,the installed capacity utilization index significantly improved from the planned 67.955% tothe actual 69.83%.Electricity generation at Zhambyl GRES in the Southern Zone of Kazakhstan in 2012increased by 171 million kW/h (14.2%) and amounted to 1,377.9 million kW/h. From April toOctober Zhambyl GRES suspended its activities in connection with the end of the autumnwinterperiod. There were from one to four units operating at the station. Specific energyconsumption for own needs decreased from 7.1% to 6.75% as compared to the previous yearand set targets due to increase of the average station load in 2012 to 286 MW, comparingto 241 MW in 2011. Specific fuel consumption in 2012 corresponded to the planned figureand was 386.3 g/kW/h.Electricity generation at JSC “AlES” in comparison to the year 2011 decreased by 138 millionkW/h, or 2.53% to 5,311.2 million kW/h. Generation decreased due to lower generation athydropower plants. Operating mode of the HPP was determined by the water managementbalance and hydrological conditions.Due to the reduce of water resources consumption compared with 2011 production atKapshagay HPP in 2012 decreased by 27% and was 1090.2 billion kW/h.Following the results of the analysis of performance indicators of JSC “Aktobe CHP”, theplant has reduced the production of electric energy from 677,214.439 thousand kW/h in2011 to 631,356.263 thousand kW/h in 2012, which is by 1% less than the production planin 2012 (637,728 thousand kW/h). Decrease in electricity generation as compared to thetarget is connected with disposal of facilities in connection with the replacement of turbineunit at station #3.In percentage, consumption of electricity for own needs in 2012 was 17.7%, higher than 16%in 2011, which is due to lower average load for the year as a whole. Capacity utilization indexincreased by 73% in comparison with the target 71%.The main fuel of JSC “Aktobe CHP” is oil associated gas of Zhanazhol field. Supply of fuelwas carried in full and on time, total gas consumption in 2012 was 423,344 thousand cubicmeters. Consumption of fuel per unit of delivered products in 2012 was as follows:• for electric energy output – 375.8 g/kW/h, by 1.3 g/kW/h higher than in 2011;• for thermal energy output – 174.2 kg/Gcal, by 1.7 kg/Gcal higher than last year.Coal was the main type of fuel for Samruk-Energy Group of companies burned in thermalelectric stations, as in the previous year.Coal consumption by electric stations in 2012 amounted to 16,772,830 tons of naturalfuels,and increased in comparison with 2011 by 1,576 thousand tons, or 9.3%. The main typeof solid fuel burned in thermal electric stations of JSC “Samruk-Energy” was Ekibastuzcoal.Water storage in Kapshagay long-term storage reservoir in 2012 decreased by 1.12 billion m 3 ,compared to the previous year.ABOUT THE COMPANYIntegrated Report 2012 17

CONTENTNumber of accounts of households,industrial, institutional and businessconsumersName 2010 2011 2012Unit ofmeasurementHouseholds 644 937 676 909 689 956 accountIndustrial consumers 1 834 1 881 1 948 accountBudget consumers 1 313 1 318 1 218 accountOther (including commercial consumers) 20 741 21 733 21 745 accountTOTAL: 688 825 701 841 714 929 accountABOUT THE COMPANYIntegrated Report 2012 18

CONTENTLength of the above-ground and undergroundpower lines and distribution lines broken downby regulatory regimeAbove-groundUndergroundTotal length30000500030000250004000250002000015000100005 98824 4666 13924 481300020003 9654 2112000015000100006 05728 4316 25028 69250001000691115000002011 2012 2011 2012 2011 20120Length oflines morethan 35 kVLength oflines lessthan 35kVProduction goals and objectives of the Company:• Producing target outputs of electric and thermal power;• Minimization of adverse environmental impact;• Reducing specific fuel consumption and optimization of the equipment operation;• Ensuring the operation of the power-generating equipment is in compliance with theapplicable regulatory requirements;• Restoration, modernization and reconstruction of the existing and construction of newpower facilities.ABOUT THE COMPANYIntegrated Report 2012 19

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesJSC “Almaty Electric Stations”JSC “Almaty Electric Stations” (hereinafter – JSC “AlES”) isa legal entity established in accordance with the legislationof the Republic of Kazakhstan. In the course of its activityJSC “AlES” is governed by the existing legislation of theRepublic of Kazakhstan and the Charter of JSC “AlES”.Location: Republic of Kazakhstan, Almaty.Shareholders of JSC “AlES” are:• JSC “Samruk-Energy” – 43.65% shares;• JSC “Alatau Zharyk Companiyasy” – 56.35% shares.• Almaty Coordinated Hydroelectric System• Energoremont• Fuel Filling and Unloading CenterThe installed/ rated capacity of JSC “AlES” is 1,238.9 MWand 3,922.2 Gcal/h.In 2012, the enterprises of JSC “AlES” generated 5,311.3million kW/h of electric power and 5,532 thousand Gcal ofthermal power.Electricity and thermal power sales market for JSC “AlES”is Almaty region.JSC “AlES” consists of the following facilities:• Almaty CHP-1• Almaty CHP-2• Almaty CHP-3• Kapshagaiskaya HPP• Western Thermal Power ComplexABOUT THE COMPANYIntegrated Report 2012 20

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesJSC “Aktobe CHP”JSC “Aktobe CHP” is a legal entity established in accordance withthe legislation of the Republic of Kazakhstan and is governedby the existing legislation of the Republic of Kazakhstan and itsCharter.Location: Republic of Kazakhstan, Aktobe.The sole shareholder of JSC “Aktobe CHP” is JSC “AlatauZharyk Companiyasy”.Aktobe CHP is a supplier of electric and thermal power toconsumers of Aktobe.Its rated capacity is as follows:• thermal power – 1,139 Gcal/h• electric power – 102 MW.In 2012, the station generated 631.4 million kW/h of electricpower and 1,835.2 thousand Gcal of thermal power.ABOUT THE COMPANYIntegrated Report 2012 21

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesJSC “Balkhash TPP”JSC “Balkhashskaya Thermal Electric Station” (herein after – JSC “Balkhashskaya TES”) is a legal entityestablished in accordance with the legislation of theRepublic of Kazakhstan and is governed by the existing legaland regulation acts, the Charter and internal documents ofJSC “Balkhashskaya TES”.Location: Republic of Kazakhstan, Almaty oblast, Zhambylregion, Ulken village.Shareholders of JSC “Balkhashskaya TES” are:• JSC “Samruk-Energy” – 25%+1 shares;• SAMSUNG (South Korea) – 75%-1 shares.Construction of two-block unit with 1320 MW capacityis being held to cover energy shortage in the Republic ofKazakhstan through the production of 9.2 billion kW/h peryear.Commissioning period: 2010-2018.In February 2012 in order to attract investments forconstruction of Balkhashskaya TES, 75%-1 shares of JSC“Balkhashskaya TES” was sold to SAMSUNG Corporation(South Korea).ABOUT THE COMPANYIntegrated Report 2012 22

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesLLP “Ekibastuzskaya GRES-1named after B. Nurzhanov”Limited Liability Partnership “Ekibastuzskaya GRES-1named after Bulat Nurzhanov” a legal entity establishedand operating in accordance with the legislation of theRepublic of Kazakhstan.Location: Republic of Kazakhstan, Pavlodar oblast,Ekibastuz.During 2012, total volume of production of EkibastuzskayaGRES-1 was 15.164 bln kW/h. Electric energy sales marketsin Kazakhstan: Northern, Central, Eastern, Southernregions, and Aktobe oblast.Along with electricity supply to Kazakh consumers,Ekibastuzskaya GRES-1 supplies the energy system ofRussia in the framework of the contract concluded betweenthe station and OJSC “Inter RAO UES” in the amount of up to300 MW hourly.Partners of Ekibastuzskaya GRES-1 are:• JSC “Samruk-Energy” – 50% shares in charter capital;• LLP “Ekibastuz Holdings B.V.” – 50% shares in chartercapital.Installed capacity of the station is 4000 MW (8 units 500MW each).ABOUT THE COMPANYIntegrated Report 2012 23

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesJSC “Station Ekibastuzskaya GRES-2”JSC “Station Ekibastuzskaya GRES-2” is a legal entityestablished in accordance with the legislation of theRepublic of Kazakhstan. In the course of its activity thecompany is governed by the existing legislation of theRepublic of Kazakhstan and the Charter of JSC “StationEkibastuzskaya GRES-2”.Location: Republic of Kazakhstan, Pavlodar oblast,Solnechnyi village.Shareholders of JSC “Station Ekibastuzskaya GRES-2”are:• OJSC “Inter RAO UES” (Russia) – 50% shares;• JSC “Samruk-Energy” – 50% shares.The installed/ rated capacity of the station is 1,000 MW.Electric power output in 2012 was 6134.2 million kW/h.Electric power sales markets: Northern, Central, Easternand South regions, and Aktobe oblast of Kazakhstan.ABOUT THE COMPANYIntegrated Report 2012 24

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsGenerating companiesJSC “Zhambylskaya GRES namedafter T.I. Baturov”JSC “Zhambylskaya GRES named after T.I. Baturov” (hereinafter– JSC “ZGRES”) is a legal entity established and operating inaccordance with the legislation of the Republic of Kazakhstan.Location: Republic of Kazakhstan, Zhambyl oblast, Taraz.Shareholders of JSC “Station Ekibastuzskaya GRES-2”are:• JSC “Samruk-Energy” – 50% shares;• LLP “TarazEnergo-2005” – 50% shares.Core activities: electric power generation.Rated capacity: 1230 MW (3х200 MW + 3х210 MW).Electric power sales market: Southern region of Kazakhstan.Electric power output in 2012 was 1,377.8 million kW/h.JSC “KMG-Energo”The company is under liquidation and is not operating.ABOUT THE COMPANYIntegrated Report 2012 25

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Moinakskaya HPP”JSC “Moinakskaya HPP”on the Charyn River in the Almaty oblasthas a capacity of 300 MW and is the fifth largest hydroelectricpower plant in Kazakhstan and the first power generatingfacility of the country which entered into servicein the years ofindependence of the Republic of Kazakhstan.JSC “Moinakskaya HPP” started operation in December 2012.The largest shareholder of JSC “Moinakskaya HPP” is JSC“Samruk-Energy” – 51% of shares.JSC “Moinakskaya HPP” is one of the three power plants in theCIS the elevation difference of which is about 500 m and tunneldiameter – up to 5.5 m.Electricity production in 2012 was 501.4 million kW/h.ABOUT THE COMPANYIntegrated Report 2012 26

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Bukhtarminskaya HPP”JSC “Bukhtarminskaya HPP” was established in accordancewith the decision #1053 dated December 19, 1996 “OnEstablishment of Joint Stock Company “BukhtarminskayaHPP” Released from the Reorganized Joint Stock Company“Altayenergo” of East Kazakhstan Territorial Committee onManagement of the State Property.According to the Resolution of the Government of theRepublic of Kazakhstan #1020 dated October 24, 2006 “Onthe Transfer of State Shares of Some Joint Stock Companiesto the Authorized Capital of JSC “Kazakhstan Holding forManagementof State Assets “Samruk”, on December 28,2006 the state-owned shares of JSC “BukhtarminskayaHPP” were transferred to the authorized capital of JSC“Holding “Samruk”. On January 4, 2008 JSC “Samruk-Energy” became the owner of the state-owned shares ofJSC “Bukhtarminskaya HPP”.“Bukhtarminskaya HPP” is located 15 km downstream fromthe mouth of the river Buhtarmy, 350 km from the head ofthe Irtysh River. Back pressure created by the BHPP damoverrides the natural levels of Zaysan Lake for 5-6 meters,forming a reservoir with 49.6 billion cubic meters capacity.Surface area is 5490 square kilometers.The largest shareholder of JSC “Bukhtarminskaya HPP” isJSC “Samruk-Energy” – 90% of shares.Electricity production in 2012 was 2,315.5 million kW/h.ABOUT THE COMPANYIntegrated Report 2012 27

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Ust-Kamenogorskaya” HPPThe station is located in the north-eastern suburb of Ust-Kamenogorsk and has now four turbines (82.8 MW) with aninstalled capacity of 331.2 MW.The composition of HPP:• concrete spillway dam with crest length of 92 m whichhas four spillway holes;• deaf concrete dams of 300 m;• appurtenant HPP building length 129 m;• single-lift shipping lock.The installed capacity of the plant is 331.2 MW, but due tothe fact that the bridge was not completely removed andchanged the calculated level of the downstream by 1.5meters approximately, available capacity is 315 MW.Long-term average annual generation of the plant is 1,580million kW/h, and in low-water year – 1200 million kW/h.Electricity production in 2012 was 1396.4 million kW/h.The largest shareholder of JSC “Ust-KamenogorskayaHPP” is JSC “Samruk-Energy” – 89.9% of shares.ABOUT THE COMPANYIntegrated Report 2012 28

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Shulbinskaya HPP”JSC “Shulbinskaya HPP” is located in the middle reachof the Irtysh River, 70 km above the city of Semey.Construction of hydropower plant started in 1976 and thefirst hydroelectric set was launched into operation onDecember 23, 1987, while the last of six hydroelectric setswas put into operation on December 19, 1994.The capacity of hydro system objects is designed toaccept 240 m maximum flood under normal waterlevel with 1% probability of exceedance – 7770 m 3 /sec,andunder maximum water level of 243 m of 0.01%probability – 8770 m 3 /sec.The structure of Shulbinskaya HPP includes:• power house;• earth dam;• navigation lock;• water reservoir;• grade-control structure;• 220 kV outdoor switchgear.The major shareholder of JSC “Shulbinskaya HPP” is JSC“Samruk-Energy” – 92.14% of shares.Electricity production in 2012 was 1347.9 million kW/h.ABOUT THE COMPANYIntegrated Report 2012 29

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Shardarinskaya HPP”JSC “Shardarinskaya HPP”is located in the middle reach ofthe Syrdarya River and is the last HPP of Naryn-Syrdaryasystem.Site of Shardarinskaya HPP is located at Zhaushikumhighland where the riverian degradation narrows to 5 km.Shardar hydrosystem with seasonal regulation reservoirwas designed and builtas a complex, one of the maindirections of its use is the irrigation of agricultural landsalong the banks of the middle and lower reaches of theriver.46x107.8 m power house of run-of-river-type is combinedinto a single structure with two hole (5x6m) drafts on theleft and right sides of the units. Grade-control structuresinclude apron and retaining walls of the upper and tailwater. Pipe drainage is located along the upper and leftbanksides of power house footing.The sole shareholder of JSC “Shardarinskaya HPP” is JSC“Samruk-Energy” – 100% of shares.Electricity production in 2012 was 569.3 million kW/h.Construction of Shardar hydro system allowed releasingthe HPP of overlying cascade from irrigation functions,ensuring that they work in a power mode.ABOUT THE COMPANYIntegrated Report 2012 30

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesJSC “Samruk-Green Energy”LLP “Samruk-Green Energy” was established on January25, 2012 to handle projects in the field of renewable energysources and is a fast growing company operating in thisarea.The only partner of LLP “Samruk-Green Energy” is JSC“Samruk-Energy” – 100% ownership.The main activity of LLP “Samruk-Green Energy” is toimplement the following strategic objectives:• Design and construction of facilities for the use ofrenewable energy sources, separate technical unitsand related facilities for production of electricity and/orheat using renewable energy sources;• production and sale of electricity and heat withrenewable energy sources;• ensuring efficiency (operation) of systems for transmission of electricity produced using renewable energysources, from production location to the distributionsy stems;• organization and provision of consulting services,participation in research and development works in thefield of renewable energy.Location: Republic of Kazakhstan, Astana.ABOUT THE COMPANYIntegrated Report 2012 31

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesLLP “Energy of the Semirechye”LLP “Energy of the Semirechye” is a joint venture establishedto carry out activities on construction of wind power plant(hereinafter – WPP) with 60 MW to 300 MW capacity inShelek corridor of Yenbekshikazakhskiy district of Almatyoblast. The partners of LLP “Energy of the Semirechye” are:• LLP “Samruk-Green Energy” – 51%;• JSC “National Company “Socio – EntrepreneurialCorporation “Zhetysu” – 49%.Location: Republic of Kazakhstan, Almaty.Electricity generation in 2012 was not carried out.ABOUT THE COMPANYIntegrated Report 2012 32

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsHydropower plants and renewable energy sourcesLLP “First Wind Power Plant”LLP “First Wind Power Plant”was established on June 27,2011 and is a wholly owned subsidiary of LLP“Samruk-Green Energy”. The company is a legal entity established inaccordance with the legislation of the Republic of Kazakhstanand operates under the applicable regulation and legal actsof the Republic of Kazakhstan and the charter of LLP “FirstWind Power Plant”.LLP “First Wind Power Plant”is a dynamically developingcompany operating in the field of energy production usingrenewable energy sources.Location: Republic of Kazakhstan, Astana.Electricity generationin 2012 was not carried out.JSC “KazKuat”The Company is under liquidation and is not carryingoperational activity.ABOUT THE COMPANYIntegrated Report 2012 33

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsProducing and service companies“Forum Muider B.V.” CompanyForum Muider B.V. is a joint venture with United CompanyRUSAL with equal 50% / 50% shares of ownership,registered in the Netherlands, and is a holding companythat owns 100% stakes in the authorized capital of LLP“Bogatyr Komir”.LLP “Bogatyr Komir”Bogatyr Komir LLP is the largest open-pit coal miningcompany in Kazakhstan: the share of the company’s coaloutput in the total volume of coal mining in the country is38%.The only member of LLP “Bogatyr Komir” is Forum MuiderB.V.At present, production capacity of mines of LLP “BogatyrKomir” is 42 million tons of coal per year (Bogatyr coalminingfield – 32 million tons, Severnyi coal-mining field– 8 million tons).Taking into account the implementation of productionmodernization program with the transition to an automaticconveyor coal mining at Bogatyr mine (until the end of2017), the production capacity of Bogatyr coal mining fieldwill be 40 million tons. Similar project shall be implementedat Severnyi coal mining field as well.Coal production volume in 2012 was 44 mln tons.ABOUT THE COMPANYIntegrated Report 2012 34

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsProducing and service companiesLLP “Teguise Munai”The main activity of LLP “Teguise Munai” is organization ofgeological exploration.In accordance with the decision of the Board of Directorsof JSC “Samruk-Energy”dated December 22, 2011 andaccording to the Share Sales Agreement of 30.10.2012, theCompany acquired 100% interest in the share capital of LLP“Teguise Munai”, including 100% interest in the chartercapital of LLP “Mangishlak-Munai”.LLP “Mangishlak-Munai” owns all rights for development ofPridorozhnoye gas field.ABOUT THE COMPANYIntegrated Report 2012 35

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsDistribution and sales companiesJSC “Alatau Zharyk Kompaniyasy”JSC “Alatau Zharyk Companiyasy” (hereinafter – JSC“AZC”) represents a large power system of the south ofthe republic for transmission and distribution of electricpower to consumers, industrial and agricultural facilitiesin Almaty and Almaty oblast. The company’s area ofoperation stretches from the shores of Lake Balkhash tothe border with China.Balance sheet attribution of JSC “AZC” includes electricalnetwork voltage classes: 220-110-35-10-6-0.4 kV.The Company consists of:• overhead power lines of 220 kV length of 438.57 km;• 110 kV air lines length 2829.8 km;• 35 kV electrical network length 2590.53 km;• 6-10 kV air and cable lines total length 12433, 82 km;• 0.4 kV power lines length 10,650.13 km;• 35-220 kV substations and 6-10/0, 4 kV transformersubstations;• 210 electrical substations of 35 kV and above, with aninstalled capacity of 6588.48 MVA;• 6967 transformer substations of 6-10/0, 4 kV, with aninstalled capacity of 2332.67 MVA.Sole shareholder of JSC “Alatau Zharyk Companiyasy” isJSC “Samruk-Energy”.JSC “AZC” is included in the Kazakh energy system whichjointly with the energy companies of Uzbekistan andKyrgyzstan form a Unified Energy System of Central Asia(UESCA), which works in parallel with Russia.Over the last 5 years the company has implementeda number of large-scale projects. More than 20 newsubstations were built; a number of electrical networkswas reconstructed and modernized. As a result, thecapacity of the energy company has grown to 2,633 MVA.All new and reconstructed substations and transmissionlines are equipped with the most advanced technology tomeet all the criteria of international standards of quality.The company for the first time in Kazakhstan has adopteda composite wire on the lines of 110 kV (manufacturercompany Merkur, USA).The volume of electricity transmission for 2012 was 5917million kW/h.ABOUT THE COMPANYIntegrated Report 2012 36

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsDistribution and sales companiesJSC “Mangistau Electric DistributionCompany”JSC “Mangistau Electric Distribution Company” (hereinafter– JSC “MEDC”) is mainly engaged in transmission anddistribution of electricity to legal entities and the populationand is the only company in Mangistau oblast operating inthis field.About 90% of electricity consumption through the networksof JSC “MEDC”constitute the largest oil companies ofMangistau region (JSC “Mangistaumunaigaz”, JSC “NC“KazMunaiGas”, JSC “Karazhanbasmunai”, etc.).The company includes:• overhead power lines of 220 kV length of 665.1 km;• 110 kV overhead lines length 1348.595 km;• 35 kV overhead power lines with total length of 777.5 km;• 0.4 kV power lines length 601.781 km;• 35-220 kV substations and 6-10/0, 4 kV transformersubstations;• 57 electrical substations of 35 kV and above, with aninstalled capacity of 1,956.4 MVA;• 428 transformer substations of 6-10 kV, with an installedcapacity of 66.845 MW.The largest shareholder of JSC “Mangistau ElectricityDistribution Company” is JSC “Samruk-Energy” – 75% +1share.The volume of electricity transmission for 2012 was 2478million kW/h.ABOUT THE COMPANYIntegrated Report 2012 37

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsDistribution and sales companiesLLP “AlmatyEnergoSbyt”LLP “AlmatyEnergoSbyt” was established in June 2006 tocarry out activities on power supply in accordance with theLaw on Power Energy.Starting from November 1, 2006 LLP “AlmatyEnergoSbyt”is the electricity supplier and delivers energy to consumersof Almaty and Almaty region.LLP “AlmatyEnergoSbyt” is included in the state registerof market entities with dominant position in the relevantproduct market for electricity supply of Almaty and Almatyregion. The company provides electricity to about 2.3million residents and 21 thousand enterprises.The only member of LLP “AlmatyEnergoSbyt” is JSC“Samruk-Energy” – 100% interest.At present, in addition to its own power plants, LLP“AlmatyEnergoSbyt” purchases over 50% of the requiredelectricity from other energy sources: from northernsources along the North-South line – 16.1%, from CentralAsia – 7.7%.One of the main activities of AlmatyEnergoSbyt is toimprove the quality of service to energy consumers.As part of implementation of the Consumer ServiceCenters program (hereinafter – the “CSC”) which aims toimprove the quality and enhance the culture of customerservice in every area, and starting from the establishmentof LLP “AlmatyEnergoSbyt”, the CSCs were opened in fourdistricts of Almaty: ROES #1, ROES #2, ROES #5, as well asregular CSCs opened in Kaskelen, Esik, Uzynagash village,Kegen village and Shelek village of Almaty oblast.Electricity sales for 2012 amounted to 5,626 million kW/h.ABOUT THE COMPANYIntegrated Report 2012 38

CONTENTInformation about the Company’s Subsidiary and Affiliated OrganizationsDistribution and sales companiesLLP “Samruk-EnergoStroyService”LLP “Samruk-EnergoStroyService” was established in 2009 to provideconstruction services and services for the design, manufacture, installationand repair of electrical power equipment.The only member of LLP “Samruk-EnergoStroyService” is JSC “Samruk-Energy” – 100% interest.The company provides high-quality construction, installation, repairand technical solutions for the power industry facilities, using advancedtechnology and international expertise of its specialists and partners.The company performs design and research activities in the electricitysector.ABOUT THE COMPANYIntegrated Report 2012 39

CONTENTInnovation activity of the CompanyInnovation activity in the sphere of renewable energysourcesIn general, for the effective implementation of renewable energy sources potential it isnecessary to:• Improve the legislation on the support of RES;• Create the Competent Authority responsible for determining the need in RES;• Create Kazakhstan Intelligent Energy System (hereinafter – KIES).Creating a highly efficient and technological smart grid will improve the quality of life of thepopulation, receive benefits from the available privileges and meet all the global challenges:• Energy security and redundancy;• Use of transit and export potential;• Use of renewable energy sources potential (wind power plants, solar power plants, smallhydro power plants, etc.);• Complete coverage of the Republic of Kazakhstan – solving the problem of remoteness ofenergy resources and generating sources from the industry and the public;• optimization of the energy structure in view of available reserves of energy resources;• energy sustainability, energy efficiency and energy saving;• innovation and scientific development;• increase of the value added of the economy of Kazakhstan;• increasing the role of the state in the energy sector.Creation of KIES will contribute to the integration into the SuperGrid global system ofEurope, Russia and China, initiated by the World Energy Council (WEC).In the world there is a tendency to reduce the cost of electricity from renewable energysources and the simultaneous increase in the cost of electricity from conventional sources,taking into account the ever-increasing fuel prices, and the need to implement measuresto reduce the burden on the environment.At present, the Company is implementing the following projects in the field of renewableenergy:• 2 MW Kapshagay Solar power plant expandable to 100 MW.In the medium term the Group of Companies of Samruk-Energy plans to implement thefollowing projects in the field of green energy:• Construction of a 60 MW wind power plant in Shelek corridor with the possibility ofexpanding to 300 MW, employment during operation – 12 people, producing more than180 million kW/h of electricity per year;• Production of electricity using straw. Capacity – 5 MW of electricity;• Construction of the second phase of wind power plant near the town of Yereimentauwith 50 MW capacity. Production of more than 150 million kW/h of electricity per year,employment in operation – 8 people;• Construction of counter regulating Kerbulakskaya HPP with 33 MW capacity. Electricityproduction in the amount of 221 million kW/h per year. Employment during construction– 550 people and employment during operation – 64 people.Innovation activity in the sector of coal and natural gasgenerationDevelopment of coal generation provides for the use of the following “clean coaltechnologies” that will improve the efficiency of energy facilities, reduce fuel consumptionand specific emissions of greenhouse gases (carbon dioxide) and hazardous substances(ash, nitrogen oxides and sulfur):1. Increased steam parameters in the steam cycle, circulating fluidized bed boilers, coalwaterfuel boilers, etc.2. The use of CHP – combined heat and power generation through construction of modernthermal power stations in places where there are appropriate heat loads.3. The introduction of modern methods of ash collection and reduce emissions of oxides ofnitrogen and sulfur.4. Disposal of ash waste – usage in construction and road building industry.Gas generation provides for the application of steam cycle which is characterized by highefficiency and low emissions of carbon dioxide and pollutants.In the sphere of coal generation the Company intends to implement the following projects:• Construction of the third power unit at Ekibastuzskaya GRES-2 with 600-660 MWcapacity with higher steam parameters – temperature of 566°C and a pressure of 24MPa. Implementation is scheduled for 2010–2015.In 2012, the adjustment was carried out for those parts of design and estimate documentationsubject for approval; priority works for the main building and the construction yard wereperformed.ABOUT THE COMPANYIntegrated Report 2012 40

CONTENT• Construction of Balkhashskaya TES of 1320 MW capacity with higher steam parametersand the modern system of ash removal and desulfurization. Implementation dates –2010–2018.Development of design and estimate documentation is being carried out for the EPCContract signed in 2012, and providers of boiler plant and steam turbine generator wereidentified on the basis of an open tender.• Installation of electrostatic precipitators at Ekibastuzskaya GRES-1 with 99,4-99,6%efficiency.Electro filters at energy blocks #4 and #8 of Ekibastuzskaya GRES-1 were put into operationin 2012.Promising projects include construction of modern CHPs in Semey, Kokshetau andTaldikorgan with combined production of heat and electricity.In the sector of gas generation the below project is being implemented:• Reconstruction and expansion of Almatinskaya CHP-1 of JSC “AlES” with the transferto gas and installation of gas turbines and heat recovery boiler. Project implementationperiod – 2011–2016 years. In 2012 the development of design estimates was started.Innovation activity in the sector of transmission,distribution and sale of electricityIn 2011-2012 as part of the project for power supply of the Asian Games and Almaty Metrofacilities JSC “AZC” commissioned Ermensay, Medeu, Shymbulak, Kazakh State University,Alatau and Otyrarsub-stations, equipped with the latest GIS (gas insulated switchgear)technology and microprocessor manufacturing protection devices of such internationalcompanies as ABB, Siemens, etc. Also, for the first time in Kazakhstan, JSC “AZC” startedto use composite cables at 110 kV lines.For an accurate accounting and operational control over the consumption and transmissionof electricity, as well as to provide access to the data obtained for calculation purposes,JSC “MEDC” has finalized the project on implementation of the automated system forcommercial accounting of electricity (ASCAE).Collectively, all these events contributed to the gradual introduction of highly integratedintelligent backbone and distribution networks of the new generation (Smart Grid), dynamiccontrol over power grids, improve safety and cost savings.ABOUT THE COMPANYIntegrated Report 2012 41

CONTENTFinancial and operating resultsAssets StructureIncome Forecast for 2013-2015Infrastructure Development and ModernizationAssets restructuring, reorganization, acquisition and creation of new businessesPromotion of Local ContentIndirect Economic ImpactIntegrated Report 2012 42

CONTENTOperating activitiesThe Management and the Board of Directors of JSC “Samruk-Energy” take considerablemeasures to increase economic efficiency of Samruk-Energy Group of companies. Oneof the steps to achieve the set goals was the decision on restructuring of Samruk-EnergyGroup of companies – in 2011 the voluntary liquidation of JSC “KazKuat” and JSC “KMG-Energo” was initiated with the transfer of their assets to the ownership of JSC “Samruk-Energy”.Operational and financial performance indicators№ Indicator, thousand tenge2010Actual2011Actual2012Planned2012Actual% ofachievement1. Income 76 939 880 85 549 944 96 218 297 94 557 811 98%2. Cost of sales 60 932 911 68 823 661 78 941 345 77 064 207 98%3. Gross income 16 006 969 16 726 283 17 276 952 17 493 604 101%3.1. • Distribution costs 124 375 112 733 190 847 153 180 80%3.2. • Administrative expenses 4 881 940 6 405 338 6 944 042 6 770 266 97%3.3. • Financial income 2 654 737 834 330 949 076 1 701 666 179%3.4. • Financial expenses 5 553 261 5 365 512 6 734 430 5 300 112 79%4.Expense /income from exchange ratedifferencesShare in profit of investment objects- - - - -5. accounted by the equity method in- - - - -6.associated organizationsShare in profit of investment objectsaccounted by the equity method in3 449 023 10 024 877 11 079 058 13 176 583 119%jointly-controlled entities7. Other income 745 124 1 444 122 2 356 372 1 945 330 17%8. Other expenses - - 198 488 - -9. Income tax expenses 1 214 688 2 219 436 2 301 888 3 522 120 153%10.Profit for the year from discontinuedoperation- - - 60 100 -11. Profit for the year 10 862 599 14 794 170 15 177 027 18 631 605 123%12. Minority share 218 990 132 422 114 736 126 175Consolidated financial indicators for the year 2012 considerably exceeded the results of theyear 2011. Positive growth by 31% of the Company’s performance in 2012 was due to theincreased volumes of production, transmission, distribution and sale of electricity, as wellas the increase inincome from companies accounted by the equity method at 31% (stronglyinfluenced by the acquisition of a 50% stake in LLP “Ekibastuzskaya GRES-1 named afterBulat Nurzhanov”).Financial and operating resultsIntegrated Report 2012 43

CONTENT№Cost of salesIndicator, thousand tenge 2010 2011 20121. Raw materials 28 693 404 32 767 261 37 941 3082. Processing and other services 13 510 434 13 729 569 13 035 3453. Wages and salaries 11 213 359 13 076 988 13 705 9885. Depreciation and amortization of equivalents 4 988 441 6 607 741 8 145 9736. Taxes excluding income tax 966 337 876 681 1 741 6577. Other 1 560 936 1 765 421 2 493 936TOTAL: 60 932 911 68 823 661 77 064 207Significant growth of actual expenses in 2012 compared to 2011 occurred mainly due tohigher prices for purchased fuel (gas, oil, coal) in the amount of 5,174,047 thousand tenge,amortization growth (through the acquisition of fixed assets and intangible assets) in theamount of 1,538,232 thousand tenge, as well as tax increases by 864,976 thousand tenge(property tax, social tax and social payments, fees for emissions into the environment).Financial and operating resultsIntegrated Report 2012 44

CONTENTDistribution costs№ Indicator, thousand tenge 2010 2011 20121.Remuneration costs and social benefits ofpersonnel associated with the process of32 788 32 675 47 228distribution2.Taxes and other obligatory payments to thebudget3 043 3 161 4 6823.Other services and activities related todistribution84 824 71 860 95 8844. Travel and business trip expenses 314 597 5775. Other distribution expenses 3 407 4 441 4 809TOTAL: 124 375 112 733 153 180Increase in expenses occurred due to the increase of electricity production. The increaseinlabor costsand social benefits of personnel associated with sale process was due to annualindexation.Financial and operating resultsIntegrated Report 2012 45

CONTENTAdministrative expenses№ Indicator, thousand tenge 2010 2011 20121. Wages and salaries 2 489 282 2 616 851 3 278 8872. Taxes excluding income tax 706 559 849 007 458 5373. Consulting, audit and informational services 422 645 681 312 677 3974. Depreciation and amortization 181 232 258 949 383 5995. Lease 353 857 291 311 284 1586. Raw materials 114 942 112 585 144 1677. Business trip expenses 130 088 156 848 153 40410. Technical maintenance and repair 94 377 89 687 61 28611. Bank charges 123 710 120 590 128 85212. Communication 66 381 85 545 84 79816. Other 198 867 1 142 653 1 115 18117. Total 4 881 940 6 405 338 6 770 266The increase in staff salaries was due to annual indexation.The main part of the tax is property tax.Tax cuts in 2012 occurred due to the inclusion of property tax in cost value structure for JSC“Alatau Zharyk Companiyasy”. In 2011, property tax was included in the tax on cost value,where as in 2012 it was divided between the cost value and administrative costs.Change in depreciation and amortization was due to purchase of fixed assets and intangibleassets.Financial and operating resultsIntegrated Report 2012 46

CONTENTFinancial income1 274 923834 012 1 698 368863 875500 69015 249 318 3 298Interest income on bankdepositsRevision of the repaymentschedule of the loan fromthe ShareholderForeign exchange gain, netOther2010201120122010 2011 2012(TOTAL 2 654 737 tenge)(TOTAL 834 330 tenge)(TOTAL 1 701 666 tenge)The increase in income from financing as a whole was due to income derived from theplacement of deposits by JSC “Alatau Zharyk Companiyasy”, as well as due to interest ondeposits placed by the Company in 2012 after receipt of funds from the issue of Eurobonds.Foreign exchange gainsin 2011 and 2012 were not obtained due to downward changes ofexchange rate.Financial and operating resultsIntegrated Report 2012 47

CONTENTFinancial expenses№ Indicator, thousand tenge 2010 2011 20121. Interest expenses on loans 3 397 146 2 501 074 1 780 9122. Foreign exchange loss, net profit 0 0 173 8393. Dividends on preferred shares of subsidiaries 135 379 134 724 155 4934. Unwinding of discount of present value of:4.1 Loans and financial support from shareholders 1 673 414 1 823 635 2 445 5084.2 Note payable 28 279 30 053 36 5904.3 Employee benefit obligations 21 969 37 626 47 1454.4 Provision for restoration of ash disposal 37 001 29 722 27 5084.5 Loans from customers 253 898 642 179 585 1394.6 Bonds issued 2 153 44 623 40 1635. Other 4 022 121 876 7 815TOTAL: 5 553 261 5 365 512 5 300 112Reduction of interest expenses in 2012 was due to decrease of interest rate from 12% to7.55% on the loan of JSC “Development Bank of Kazakhstan”and repayment of loans by JSC“AlES” during 2012.The increase in foreign exchange loss occurred because of downward exchange ratechanges in 2012.Assets structureTotal income for 2012 was 102,837.4 mln tenge (approved budget – 99,523.8 mln tenge),which is 103% of the planned figure. Comparing to similar period of last year, incomeincreased by 15,541.3 mln tenge or 17.7%.Income from sales of goods and rendering of services was 94,557.8 mln tenge (approvedbudget – 96,218.3 mln tenge) or 98.3% of the plan. Comparing to similar period of last year,income from the main activity increased by 9,007.9 mln tenge or 10.5%.Financial and operating resultsIntegrated Report 2012 48

CONTENT№ Indicator, mln tenge 2011Planned2012Actual 2012 Deviation, %1 Total income 87 795 99 524 102 837 103%2 Income from production and services 85 550 96 218 94 558 98%3 JSC “Bukhtarminskaya HPP” 1 476 1 485 1 495 101%4 JSC “KazKuat” 165 – – –5 JSC “Shardarinskaya HPP” 1 614 1 704 1 975 116%6 JSC “Moinakskaya HPP” – 2 446 413 81%7 LLP “AlmatyEnergoSbyt” 57 201 65 688 67 368 103%8 LLP “Samruk-EnergoStroyService” 11 391 13 587 11 000 81%9 JSC “MDEC” 4 546 5 617 5 853 104%10 JSC “AZC”, including: 61 905 66 669 65 161 98%11 JSC “AZC” 19 196 22 000 22 393 102%12 JSC “AlES” 47 284 48 858 47 014 96%13 JSC “Aktobe CHP” 4 308 4 646 4 520 97%14 Internal Group turnover (eliminated) for AZC - 8 883 - 8 835 - 8 766 99%15 Internal Group turnover (eliminated) - 52 583 - 60 978 - 58 706 96%Decrease in income from sale of products and provision of services by 1,660 million tengeoccurred mainly due to lower revenues in a number of subsidiaries. The reasons wereabsence of legal entity status of JSC “Moinakskaya HPP” until December 13, 2012, insufficientreceipt of revenue by LLP “SamrukEnergoStroyService”, decrease in production and salesin the Group of companies of JSC “AZC” and JSC “AlES”, decrease in electricity generationby Aktobe CHP due to the nature of combined production of electricity and heat.When eliminating the income of JSC “Samruk-Energy” as a whole the following internalturnover are excluded: purchase of electricity by LLP “AES”from JSC “AZC” (JSC “AlES”)and JSC “Moinakskaya HPP”, as well as services of JSC “AZC” for energy transit; purchaseof services of LLP “Samruk-EnergoStroyService” by JSC “AlES” and JSC “AZC”.However, along with a total decrease of income for the Group of companies of JSC “Samruk-Energy”, some companies showed an increase in income associated with an increase inpower generation, transmission and sale of electricity, as well as growth of tariffs.Financial and operating resultsIntegrated Report 2012 49

CONTENTIncome forecast for 2013-2015№ Indicator, million tenge planned 2013 planned 2014 planned 20151 Total income 147 376 154 263 172 1832 Income from production and services 139 151 153 249 171 1893 JSC “EK EDC” 8 046 9 116 10 3234 LLP “ShygysEnergoTrade” 23 870 26 767 29 7885 JSC “Bukhtarminskaya HPP” 1 484 1 486 1 4866 JSC “Shardarinskaya HPP” 1 756 1 685 1 8057 JSC “Moinakskaya HPP” 7 607 7 600 7 6008 LLP “AlmatyEnergoSbyt” 77 346 85 983 95 4959 LLP “Samruk-EnergoStroyService” 0 0 010 JSC “MDEC” 6 634 6 862 7 20211 LLP “Samruk-Green Energy” 196 247 4 26112 JSC “AZC”, including: 73 283 81 283 89 82813 JSC “AZC” 27 145 30 497 34 26314 JSC “AlES” 50 760 54 200 59 36715 JSC “Aktobe CHP” 5 134 7 031 7 38416 Internal Group turnover (eliminated) for AZC -9 756 -10 445 -11 18617 Internal Group turnover (eliminated) -61 071 -67 780 -76 598Growth in revenues is due to the inclusion in the consolidation of new assets (JSC “EK REC”,LLP “ShygysEnergoTrade”), the growth in electricity production (JSC “ShardarinskayaHPP”) and growth of tariffs (JSC “MEDC”).In addition, there has been an increase in the amount of intercompany sales by 6,576 milliontenge, associated with an increase in electricity purchase volumes of LLP “AES” from JSC“Moynakskaya HPP”, and with the inclusion of intercompany sales between the JSC “EKREC” and LLC “ShygysEnergoTrade” to the total amount.Growth of the above index compared to the previously approved figure is scheduled by 2015as follows: 2013 – 16%, 2014 – 14%, 2015 – 15%.Financial and operating resultsIntegrated Report 2012 50

CONTENTEfficiency indicatorsEBITDA (thousand tenge)EBITDA margin (%)3500000025300000002025000000200000001500000010000000500000024 120 63728 687 16033 300 7001510521%20%20%02010 2011 201202010 2011 2012The dynamics of earnings before interest, taxes, depreciation and amortization (hereinafterEBITDA) for the last few years is positive. The figure for 2012 was 33,300,700 thous andtenge and increased compared to 2011 by 16%.Relatively high level of EBITDA in 2012 compared with 2011 was due to the increaseinoperating profit due to increased gross profit (revenue growth from core operations) as wellas higher depreciation charges in connection with the implementation of the investmentprogram.EBITDA marginis at the same level as in 2011.Financial and operating resultsIntegrated Report 2012 51

CONTENTLiquidity and financial stability:• Debt / EBITDA indicator (if calculated by proportional method) for 2012 amounted to4.43. Compared to the actual figure of the same period of last year (3.00) the worsening ofthe indicator was due to the rapid growth of debt compared to EBITDA;• Interest coverage indicator for 2012 was 3.6, improvement in comparison with the actualfigure for 2011 (3.26) was due to an increase in EBITDA and lower financing costs;• Financial leverage indicator in 2012 was 0.58, i.e., at the level of actual data for 2011 (0.58);• Current liquidity indicator amounted to 2.31, the improvement in comparison with theactual data of the same period of last year (1.68) was due to the growth of cash at the endof the reporting period.Cash flow retrospective№ Indicator, mln tenge 2010 2011 20121. Cash flows from operating activities 12 553 754 26 430 633 21 920 5742. Cash flows from / used in investing activities (54 764 699) (44 231 671) (44 234 153)3. Cash flows used in/ generated from financingactivities4. Net increase/ (decrease) in cash and cashequivalents45 215 431 55 448 609 67 135 3283 004 486 37 647 571 44 821 749Significant factors that affected cash flows from operating activities:In 2011, the Company treated the dividends received from subsidiaries and jointly controlledentities as cash flows from investing activities.In 2012, the Company conducted an evaluation and came to conclusion that treating ofdividends received from joint business as part of the operating activity in the consolidatedstatement of cash flows, more accurately discloses the nature of operations as theCompany and other members of joint ventures are actively involved in the daily activities ofthe joint ventures.In respect of financial activity, the main part of proceeds belongs to funds received in theform of dividends (4 bln tenge) and obtained by placing on the Irish Stock Exchange (ISE)and the Kazakhstan Stock Exchange (KASE) of five-year Eurobonds (75 bln tenge) andloans (17.2 bln tenge) attracted for the purpose of implementation of investment projects.Cash outflow consists of repayment of short-term and long-term loans (24.1 bln tenge)and dividend payments (4.5 billion tenge) to shareholders, including those in favor of JSC“Sovereign Wealth Fund “Samruk-Kazyna” (4.4 bln tenge).Financial and operating resultsIntegrated Report 2012 52

CONTENTStructure of own and borrowed capital1 981 484 2 142 287 1 998 3216 771 848110 320 700 169 683 385 289 930 60926 833 77476 715 0782010(TOTAL 112 302 184 tenge)120 294 884 222 868 95719 917 339 34 236 86729 471 162 32 824 7852010 20112012(TOTAL 171 825 672 tenge)2012(TOTAL 291 928 930 tenge)Shareholder capitalOther reserve capitalUndistributed profitEquity attributable to shareholders of the GroupofCompanies of Samruk-EnergyNon-controlling interestSignificant impact on the growth of the share capital occurred due to the acquisition of 50%share of LLP “Ekibastuzskaya GRES-1 named after Bulat Nurzhanov” in the amount of 101,620million tenge.The increase in other capital reserves was due to the fact that the Group of companies of JSC“Samruk-Energy” received from JSC “Sovereign Wealth Fund “Samruk-Kazyna” unattributednetworks cost 3,353 million tenge as a contribution to the capital of the Company.Long-term liabilities 31 December 2010 31 December 2011 31 December 2012Loans 77 411 510 83 506 212 155 187 362Short-term liabilitiesLoans 9 079 618 16 060 628 14 986 698In December 2012 the Company placed five-year Eurobonds (75 bln tenge) with a yield of3.75% per annum on the Irish Stock Exchange (ISE) and the Kazakhstan Stock Exchange(KASE).Financial and operating resultsIntegrated Report 2012 53

CONTENTInvestment activityInvestment program of the Company for 2012The investment activity of JSC “Samruk-Energy” is aimed at providing reliable energysupply and meeting the needs of the population in electrical and thermal energy.The main directions of the Company’s investment activity are modernization, reconstructionand construction of new generating facilities using modern technological solutions,equipment meeting international ecological standards; modernization and reconstructionof distribution networks of electric power, and coal mining.During 2010–2012 the Company finalized a number of investment projects, three ofwhich were implemented as part of the State Program of Forced Industrial-InnovativeDevelopment (hereinafter – the SPFIID) and the Industrialization Map:• Finalization of construction of four substations of JSC “Alatau Zharyk Companiyasy” withtotal transformer capacity of 832 MW for the power supply of the Asian Games of 2011and the city of Almaty (the project is included in the SPFIID and the IndustrializationMap);• Launch of unique high-pressure Moinakskaya HPP with 300 MW capacity (the projectis included in the SPFIID and the Industrialization Map), which has become a key andmobile facility during peak loads at Southern electric zone of the country;• Launch of the 8 th power unit at Ekibastuzskaya GRES-1 with 500 MW capacity (the projectis included in the SPFIID and the Industrialization Map), which allowed the country’senergy system to solve the problem for the autumn-winter period of 2012–2013;• installation and launch of electrostatic precipitators at 3 blocks of Ekibastuzskaya GRES-1in order to reduce particulate emissions.The investment activity of the Company is capital intensive. Financing of projects isperformed and planned to be performed in the future both by means of own funds ofthe Company and SAO, the Republican budget and the National Fund and by borrowingsfrom local and international financial institutions. Due to the large size of investments,as well as long term nature of projects, Kazakh and foreign banks are paying specialattention to economic efficiency indicators of projects and compliance with environmentalrequirements.these, four projects are being implemented within the framework of SPFIID, and sevenprojects – within the Industrialization Map. The following are the key ongoing projects ofthe Group of Companies of Samruk-Energy.Project “Construction of Balkhashskaya TES”Construction of the first module of Balkhashskaya TES with 1320 MW capacity (the projectincluded in the SPFIID and the Industrialization Map) was started in September 2012.Implementation of the project will produce around 9.2 billion kW/h of electricity per yearand cover electricity and electrical capacity shortfall in Kazakhstan.Construction of the plant is scheduled for completion in 2018.Project “Modernization of Shardarinskaya HPP”Modernization of Shardarinskaya HPP (the project is included in the SPFIID and theIndustrialization Map) involves the replacement of obsolete and worn-out equipment toimprove productivity and safety of operation of the plant, which will increase the installedcapacity to 116 MW and produce an additional 57 million kW/h per year.Modernization of the station is scheduled for completion in 2016.Project “Modernization and Expansion of EkibastuzskayaGRES-1”The Project on modernization and expansion of Ekibastuzskaya GRES-1 (the projectisincluded in the SPFIID and the Industrialization Map) involves the restoration of blocks #8,2, 1 at Ekibastuzskaya GRES-1 and, respectively, an increase in available capacity of thestation to 1,500 MW. Recovery of block #8 was completed in 2012.Recovery of block # 2 is scheduled for completion in 2014, and block #1– in 2016.The portfolio of ongoing investment projects of the Company consists of 12 investmentprojects, which will allow Kazakhstan to cover the deficit of electricity and energy capacityby increasing the installed capacity of existing plants and creation of new facilities. OfFinancial and operating resultsIntegrated Report 2012 54

CONTENTProject “Expansion and Reconstruction of EkibastuzskayaGRES-2 with the Installation of Energy Unit #3”Expansion and reconstruction of Ekibastuzskaya GRES-2 with the installation of energyunit #3 (the projectis included in the SPFIID and the Industrialization Map) is beingimplemented to increase the installed capacity of the station by 600-660 MW, which willlead to the production of about 4.5 billion kW/h additional electric energy per year.Construction of energy unit is to be completed in 2015.Projects on construction of substations in AlmatySeven substations with a total transformer capacity of 1070 MVA are scheduled forconstruction to supply public utilities sector, metro system and Free Economic Zone Parkof Investment Technologies of Almaty.Construction of substations is scheduled for completion in 2013.Projects for the modernization of Aktobe CHP, reconstruction of combined ash removalsystem at Almaty CHP-2, construction of counter regulating Kerbulakskaya HPP, and solarpower plant near the city of Kapshagay are under implementation.The following is scheduled for implementation in 2013:• completion of the projects for construction of substations with total transformer capacityof 1070 MVA to provide energy supply to metro system, Free Economic Zone Park ofInvestment Technologies of Almaty and public utilities sector;• completion of reconstruction and expansion of Almatinskaya CHP-2 with theconstruction of the boiler room;• launch of the 2 MW solar power plant near the city of Kapshagay;• start of wind power plant construction in the region of Yereymentau with a plannedcapacity of 45 MW.cyclic-flow technology of extraction of coal from Bogatyr coal mine and construction ofsmall hydro power plants, wind power plants and gas turbine electric stations.Sources for investment projects financingFor attraction of financial resources the Company uses such instruments as loans andobligations and also attracts funds from the republican budget reserves for financingsocially important projects. At that, both internal and external financing sources(Vnesheconombank (Russia), State Development Bank (Korea), etc.) are used.In 2012, the credit agreement was signed with the European Bank for Reconstruction andDevelopment to finance modernization of Shardarinskaya HPP.On December 21, 2012 the Company placed five-year Eurobonds worth 500 million USDollars with the yield set at 3.75% per annum on the Irish Stock Exchange (ISE) and theKazakhstan Stock Exchange (KASE). Total nominal value of the bonds placed through KASEreached 101.5 million dollars.The Company has successfully closed the order book for the debut issue of Eurobonds at acoupon rate of 3.75%, which is historically the lowest level at the initial offering of domesticissuers in the international capital markets. The proceeds of the Eurobond issue will beused to refinance existing loans and investment programs approved by JSC “SovereignWealth Fund “Samruk-Kazyna” and the Government of the Republic of Kazakhstan.At the same time the Companyis actively working to include new investment projectsin its portfolio and is planning to start implementation of ten investment projects.Theyinclude projects for the construction of thermal electric stations in Semey and Kokchetau,reconstruction and expansion of the Almaty CHP-1 and CHP-2, switch to auto-pipelineFinancial and operating resultsIntegrated Report 2012 55

CONTENTInfrastructure development and modernizationIn 2012, construction of 220/110/10 Kensay substation with the transmission line – 220 kVKensay – CHP-3 was completed and placed under tension.Construction of 110/10 kV Altay, 110/10 kV Mamyr and 100/10/6 kV New 3A substation wasstarted in 2012 to provide power supply to housing and utilities sector of the city of Almatyand Almaty oblast.Electronegative gas metal-clad switchgears of 220 kV and 110 kV substations are madewith the use of modern equipment of leading manufacturers. XLPE cable was used forhigh-voltage power lines. Microprocessor protection and automation devices were applied.In 2012, the replacement of two VMT-220 kV switches to electronegative gas switches atUzen-220 kV substation of JSC “Manghistau REC” was completed; equipment for installationand start-up works of Outdoor Metal-Clad Switchgear at 110/35/6 kV East Zhetybaysubstation was fixed and installation and start-up works were carried out; design andestimate documentation for “Reconstruction of 110/35/6 kV Severnaya with Replacementof 6 kV Outdoor Metal-Clad Switchgear” was developed; etc.Reconstruction of distribution networks of Almaty and Almaty oblast with the transfer ofcable lines from 6 kV to 10 kV is being performed.In 2012, more than 201 km of cable lines were reconstructed. For 0.4 kV network,modernization of 468 km overhead transmission lines was performed with the replacementof bare aluminum wires to self-supporting insulated wire (SIW); 143 Packaged TransformedSubstations were replaced or reconstructed.Construction of 220 kV transmission line from Kensay substation to Ermensay substationis scheduled for completion in 2013, thus closing the 220 kV ring around the city of Almaty,which will significantly increase the reliability of the external power supply of the city.Assets restructuring, reorganization, acquisition andcreation of new businessesLLP “Ekibastuzskaya GRES-1”In accordance with the decision of the Management Board of JSC “Sovereign Wealth Fund“Samruk-Kazyna” of October 31, 2012, a 50% stake in LLP “Ekibastuzskaya GRES-1” wastransferred to the Company’s share capital from JSC “Sovereign Wealth Fund “Samruk-Kazyna”.JSC “Balkhashskaya TES”In order to attract investment for construction of Balkhashskaya TES and pursuant to thedecision of State Commissionon Modernization of the Economy of Kazakhstan dated April17, 2012, 75% -1 share of JSC “Balkhashskaya TES” was sold to SAMSUNG (South Korea).JSC “Almaty Electric Stations”In order to fulfill the requirements of the Law “On Natural Monopolies and RegulatedMarkets” prohibiting natural monopoly entity to possess shares (stakes) or other wiseparticipate in the activities of business organizations and to transfer under direct controlof the Company, in accordance with the approved plan of activities for the transition tothe target asset structure, the shares of JSC “Almaty Electric Stations” which belong tothe natural monopoly JSC “Alatau Zharyk Companiyasy”, are currently in the process ofacquiring by the Company.On August 1, 2012 the Company acquired 6.273% shares of AlES from JSC “Alatau ZharykCompaniyasy”.As of December 31, 2012 the Company’s share was 43.65%.Further gradual acquisition of 56, 35% of shares of AlES belonging to JSC “Alatau ZharykCompaniyasy” is scheduled for 2013.LLP “TeguiseMunai” and LLP “Mangyshlak-Munai”In accordance with the decision of the Board of Directors of JSC “Samruk-Energy” datedDecember 22, 2011 and pursuant to the share sales contract of October 30, 2012, theFinancial and operating resultsIntegrated Report 2012 56

CONTENTCompany acquired 100% interest in the share capital of LLP “TeguiseMunai”, which in turnholds 100% interest in the share capital of LLP “Mangishlak-Munai”.LLP “Samruk-Green Energy”Pursuant to the task of the President of the Republic of Kazakhstan and the developmentstrategy specified by the Government of Kazakhstan, the Company started to developrenewable energy sources (RES). For implementation of RES projects, the Companyestablished its daughter company LLP “Samruk-Green Energy” on January 25, 2012 with a100% interest in the share capital.LLP “First Wind Power Plant”With the purpose of implementing the project in the field of renewable energy, on October3, 2012 LLP “Samruk-Green Energy” acquired 100% interest in the share capital of LLP“First Wind Power Plant”.JSC “East-Kazakhstan “Regional Energy Company”JSC “East-Kazakhstan “Regional Energy Company” (hereinafter – EK REC) is one of themajor companies operating in the field of transmission and distribution of electric energyand is a natural monopoly across the East Kazakhstan region.EK REC is the 100% owner of the power supply company LLP “ShygysEnergoTrade”.On May 7, 2012 the Committee of State Property and Privatization of the Ministry of Financeof the Republic of Kazakhstan transferred 100% of shares of EK REC to trust managementof JSC “Samruk-Energy”.On November 27, 2012 in accordance with the resolution of the Government of the Republic ofKazakhstan “On Some Issues of National Property” 100% of shares of EK REC were transferredfrom the Republican ownership in payment for the shares of JSC “Sovereign Wealth Fund“Samruk-Kazyna”, in this context, the Company’s rights as trustee were terminated.In 2013 JSC “Sovereign Wealth Fund “Samruk-Kazyna” plans to transfer 100% shares of EKREC to the share capital of the Company.Promotion of local contentMission in the sphere of local content developmentIn the framework of the state program for the development of the share of local content(hereinafter – the SLC), the Company, as the operator for modernization of existing andintroduction of new generating capacities, is to ensure gradual development of localcontent share, as well as to ensure participation of domestic producers (hereinafter – theDPs) in the implementation of production and perspective projects in the electricity sector,as well as creation of new industries.Visionin the sphere of local content developmentThe Company is positioned as a leader for domestic producers in the energy sector,in terms of presence and development of DPs in the electricity sector of the economy,including through the work on foundation and implementation of the strategy of “green”economy, development of renewable energy, improving resource and energy efficiency ofenterprises.Financial and operating resultsWays and methods of local content developmentFor the purposes of execution of its mission for the development of the share of localcontent and participation of DPs in industry projects, the Company in the course of itsactivity offers and implements a number of consecutive measures for the execution of thestate program of support of DPs and development of SLC, and program tasks as set by ofJSC “Sovereign Wealth Fund “Samruk-Kazyna”:• transfer of advanced technologies;• creation of joint ventures with leading owners to gain access to the know-how, advancedtechnologies and industries;• increase in the share of localization of DPs;• creating the necessary conditions for preferential financing of DPs in the banking sector;• co-financing of DPs projects by the state as part of public-private partnership in thedevelopment institutions and the real sector of economy.Integrated Report 2012 57

CONTENTExpected resultsThe implementation of this package of measures will improve the competitiveness of theDPs, more comprehensively and systematically involve local businesses in electricity,create new jobs and productions, improve innovation and efficiency of the industry asa whole. Thus, proper conditions will be created for establishment of new industries,increase the proportion of the localization of production, manufacture of components tothe supplied equipment, obtain conditions for the transfer of technology from the world’sleading owners and the development of a segment for servicing the equipment supplied.New jobs and relevant conditions for training of local staff in terms of operation, serviceand repair of produced and delivered equipment will serve as a separate positive effectcreated as a result of the above activities. Issues of guaranteed sales of products will beresolved – long-term contracts will be signed with the DPs.Number of agreements signed with domestic producersduring 2012In 2012 the Company signed 3918 agreements for goods to the total amount of 168 blntenge, including 237 agreements with the DPs for 37 bln tenge.Share of local content in the procurement of 2010-2012, in thousand tenge (without VAT)Actual 2010 Actual 2011 Actual 2012TotalamountAmountof LC% LC Totalnumber ofagreementssignedAmountof LC% LC Totalamount ofactuallydeliveredgoods,works andservicesAmountof LC% LCGoods 89,108,819 55,516,962 62% 87,877,266 61,554,715 70% 157,097,919 100,376,161 64%Works 86,287,618 24,911,111 29% 28,779,727 16,157,933 56% 59,184,840 23,379,083 40%Services 60,611,955 59,304,194 98% 78,622,327 77,425,969 98% 87,577,845 84,448,665 96%total 236,008,392 139,732,267 59% 195,279,319 155,138,617 79% 303,860,604 208,203,908 69%The share of local content in cash equivalent is growing each year due to the fact that theCompany is purchasing goods, works and services from domestic suppliers. The majorityof goods manufacturers receive and provide ST-KZ certificates for the produced goods.Financial and operating resultsIntegrated Report 2012 58

CONTENTIndirect economic impactManagement and the Board of Directors of the Company aim at creating a sustainable company.The term “sustainable” refers to the efficient use of resources, both of Samruk-Energy Groupof Companies, and public.To this end, integrated management systems, technical re-equipment of plants are beingimplemented at a number of enterprises of the Group, and personnel and suppliers’ qualificationrequirements are increasing. At the same time, great attention is paid to economic aspectsas corporate social responsibility projects, environmental improvement and growth of thecompany are financed from the Group’s own operating profit.In accordance with the foregoing, management analyzes all other aspects of sustainabledevelopment in terms of their economic efficiency. For example, labor productivity (labororganization), raw materials used (impact on the environment), and other aspects are takeninto account when planning the activity of Samruk-Energy Group of Companies.The philosophy of sustainability and efficiency is present in such aspect as charity, which,apparently, is not to be considered from the position of economics. However, the quality andsize of the changes affected are taken into account when determining priority social projects.As a result, in 2012 the Company showed record-breaking profit (more details provided in thefinancial statements and the management report on the results of financial and economicactivities posted on the Company’s website).Financial and operating resultsIntegrated Report 2012 59

CONTENTDevelopment strategyand its resultsMissionVisionAnalysis of External EnvironmentAnalysis of Internal EnvironmentSWOT-AnalysisStrategic Directions, Goals and ObjectivesIntegrated Report 2012 60

CONTENTDevelopment strategyThe strategic importance of the development of power sector lays in its important role in thesocio-economic development of each country. To achieve the set objectives and to implementcertain initiatives of the Government of the Republic of Kazakhstan the Company is engagedin modernization and further improvement of the energy complex of Kazakhstan.MissionFor maintaining high growth rates of the economy and improving the living standards ofKazakhstan, to ensure reliable and high quality heat, electricity and coal supply as part ofglobal energy and ecological initiatives through sustainable development.VisionCompetitive Eurasian electricity holding.Analysis of external environmentEconomic EnvironmentElectricity complex plays an important role in the socio-economic sphere of Kazakhstan andis identified as one of the priority sectors of the economy. Given further development of theelectricity industry a steady growth in demand for electricity sector products – electricity, heatand carbon is expectedin the next ten years. Under the most likely scenario the increase inelectricity consumption from 88.1 bln kW/h in 2011 to 121 bln kW/h by 2022 (an average annualgrowth of about 3%) is expected in the power sector of the country.This situation creates very favorable conditions for further growth of production volumes andprofitability of the Company.Social environmentThe State is conducting a balanced policy on corporate social responsibility. In 2011, theCompany entered into the UN Global Compact and approved the Strategy of CorporateSocial Responsibility, which aims to organize, improve and implement social programs.The Company intends to further develop the social sector through participation ingovernmental social responsibility and charity programs, as well as take care of the safetyof people in each region where it operates.Technological environmentThe level of technological development is one of the most important indicators for powerindustry. Given the importance of renewable energy projects and energy efficiencyprograms, further effectiveness of the Company will depend on the degree of success ofthe modernization of existing facilities and the introduction of energy efficient technologiesin the production process.Ecological environmentImproving environmental policy leads to a tightening of legislation, including the regulation ofemissions and liability for non-compliance. At present, the number of quotas under the KyotoProtocol for each power generating organization is defined by the National Plan, which theCompany is to meet both by reducing emissions of CO 2into the atmosphere, and by obtainingadditional quotas in exchange for the construction of renewable energy sources. Emissionsto the atmosphere of harmful substances such as nitrogen oxide, sulfur and particulatematter (ash) are limited to the maximum allowable, the excess of which is punishable byfines 1 .In addition, the Company shall take into account other possible consequences of the adoptionof amendments to the Environmental Code of the Republic of Kazakhstan in terms ofgovernment regulation of emissions and removals of greenhouse gases.Legal EnvironmentRegulatory framework of the Company is established by the Law of RK “On ElectricPower Industry”. The Act leaves uncertainty in the mechanism of setting maximum tariffsfor electricity and services to maintain the availability of electrical power after 2015. Inaddition, legislation in the area of transmission and distribution of electric power reservesthe definition of the list and size of reimbursable expenses in the discretion of the regionalregulatory authorities. These gaps in the legislation are the major source of the financialrisks of the Company.1 Resolution of the Government of the Republic of Kazakhstan #1232 dated 14.12.2007.Development strategy and its results Integrated Report 2012 61

CONTENTKazakhstan’s entry into the Common Economic Space and the planned accession tothe WTO will expand opportunities for mutually beneficial transactions for import andexport of electricity and coal, and will help increase the investment attractiveness ofthe assets. However, it could also lead to higher fares and prices of resources towardsalignment with the major trading partners of the CIS and the West.IndustryAs of December 31, 2012, the production of electric energy in Kazakhstan was carried by 70power plants. The total installed capacity of power plants in Kazakhstan is 20,442.0 MW andavailable capacity – 16,425.0 MW 2 .Kazakhstan has significant potential for renewable energy: solar, geothermal, wind andbiomass. In accordance with the Strategic Plan of the Republic of Kazakhstan until 2020, theshare of renewables in total energy consumption should be more than 3% by 2020.The decisive factor for the further development of renewable energy sources is the study ofthe law to specific mechanisms to support alternative energy sources. In addition, we needto develop an appropriate network infrastructure, solve issues of integrating large amountsof non-regulating capacity in the power system of Kazakhstan, as well as issues of land useunder the RES, including the use of protected areas.Electricity marketElectricity market consists of two levels: the wholesale and retail. Wholesale market playsthe most important role for the Company.The structure of the whole sale market includes the market for decentralized energypurchase, the market for centralized electricity trade, balancing market in real time modeand the market of system and auxiliary services.In 2016, the introduction of a capacity market, in which the individual tariffs will be set forthe service to maintain readiness of electrical power, will be envisaged.The competitive environment in the electricity marketKazakhstan’s power generation companies not included in the structure of the Company,are part of large financial-industrial groups and have regional significance, and thus do notcompete with the Company at the wholesale level.Investment programs of energy-producing organizations of industrial and regionalimportance are currently focused on maintaining existing facilities and meeting thegrowing demands of consumers connected, which leads to further strengthening the roleof the state. As a result, the Company’s role as a conduit for government policy in theenergy sector of Kazakhstan is expected to increase.ConsumersThe greatest amount of electricity consumed accounts by industry (54.8%) 3 . The rest of theshare is occupied by households, transport and process losses. The industrial structureis dominated by black and non-ferrous metallurgy, in the aggregate, consuming 44% of allelectricity attributable to industrial needs.Analysis of internal environmentProduction activityAs at 31 December 2012, the installed capacity of power plants that are part of the Company,was 9,665.2 MW, representing 47.3% of the total installed capacity of power plants of UPSof RK.Financial and economic activityAs of December 31, 2012, the amount of the consolidated assets of the Company amountedto 521.6 billion tenge. Of these, current assets amounted to 135.8 billion tenge and long-termassets – 385.8 billion tenge. Equity capital was 291.9 billion tenge. Revenues for the 12 monthsof 2012 amounted to 94.6 billion tenge, profit after tax for the same period – 18.6 billion tenge.2 National Dispatcher Center of System operator.3 Master-plan of power industry development upto 2030.Development strategy and its results Integrated Report 2012 62

CONTENTInvestment activitiesCurrent investment activity is aimed at modernization, renovation and constructionof production facilities, as well as the acquisition and expansion of interests in energycompanies.The most important investment projects being implemented by the Company are theconstruction of the first module of Balkhashskaya TES, unit number 3 at GRES-2,recovery of blocks number 1 and number 2 at GRES-1 plant, modernization of CHP-1 ofAlES, Shardariniskaya HPP, Aktobe CHP, Yereymentau wind farm and Kerbulakskaya HPPconstruction, introduction of auto-pipelined cyclic-flow technology for extraction of coal atBogatyr mine of LLP “Bogatyr Komir”.The projects are being investigated on the acquisition and further development of gas andcoal deposits, as well as the expansion of ownership in enterprises of Ekibastuz fuel andenergy complex.The current system of risk management of the Company provides for a phased processof identifying risks, their causes and consequences, ranging in probability, consequencesand time of impact, determining the owners and developing activities. The strengths of thesystem should include the attribution of risksto relevant directions’ managers.InnovationsAn innovative feature of the Company is limited by resourcing and decentralization. In orderto increase the value, the Company plans to increase the innovation component in its activity,not only by increasing the gross investment in the investment projects, but also throughparticipation in support of innovative ideas and innovations, as well as the establishment of acentralized process of cooperation with universities, research and design institutes.SWOT-analysisIn accordance with the analysis of the external and internal environment the SWOT-analysishas been prepared in Table 1, which determines the potential and future prospects of theCompany.Corporate governance and risk management systemFollowing the results of the diagnostics of corporate governance system of the Companycarried out in 2012 using the methodology of JSC “Sovereign Wealth Fund “Samruk-Kazyna”, the level of compliance of the corporate governance system with best internationalpractices was 65%.Development strategy and its results Integrated Report 2012 63

CONTENTTable 1. SWOT-analysis of the Company123Positive effectStrengthsSignificant inventory stock and supply of electricityproduction with own low cost Ekibastuz coalSignificant management experience of personnel ofthe Company and its SAOSupport from the government and JSC “SovereignWealth Fund “Samruk-Kazyna”Negative effectWeaknesses1 High degree of wear and tear of equipment2 Presence of marginal assets3Absence of a mechanism to implement innovationsand return on investment for them4 Tariff RegulationThreatsOpportunities1Presence of capacity to develop all types ofgeneration1 Excessive tightening of environmental regulations2Strengthening the role of the Company in theelectricity market2 Unfavorable legal environment in the electricity sector3 Creation of favorable legal and regulatory framework 3 Growth of gas prices4Implementation of projects in related industries(diversification)StrengthsThe Company is the largest electricity producer in Kazakhstan, present in all elements ofelectricity value added chain.The Company is distinguished by its strong assets portfolio, a large market share andrelatively high economic efficiency due to the high share of electricity production at lowcostEkibastuz coal, which create a competitive advantage.Management personnel of the Company and its SAO have significant experience in theindustry, including operation and construction of generating capacity.Many projects for the construction of new power plants are included in the State Programof Forced Industrial-Innovative Development, supported by the state and the Fund throughthe allocation of funds from the Republican budget and the National Fund of the Republic ofKazakhstan, as well as have the opportunity to enter into state contracts with investmentpreferences.WeaknessesTo date, the Company’s portfolio contains low-margin assets and assets with a significantnumber of equipment of high degree of wear and tear, waiting for replacement or repair.Legislation requirements in respect of allocation of free cash exclusively on implementationof investment programs of stations limit the ability of the Company to redistribute financialflows between the subsidiaries.Development strategy and its results Integrated Report 2012 64

CONTENTWeaknesses also include low level of automation, imperfection of knowledge managementsystems and, as a consequence, limitation of the opportunities for innovation. Hightechnology innovation and implementation of large-scale innovation development programare required to support further growth of performance.OpportunitiesThere is the opportunity to participate in further development of the electricity marketin the Republic of Kazakhstan. This possibility is caused by the transitional nature of theelectricity market, the expected increase in electricity demand, the expected increase of theCompany’s role in the electricity market, as well as the available potential of the Company inthe development of all types of generation.ThreatsThere are threats of reduced profitability as a result of stricter environmental requirementsand projected growth in gas prices in the framework of the Common Economic Space.The long-term regulatory framework in the electricity sector still leaves too much risk indetermining the revenue base.Strategic directions, goals and objectivesIn order to translate of its mission – “For maintaining high growth rates of the economyand improving the living standards of Kazakhstan, to ensure reliable and high quality heat,electricity and coal supply as part of global energy and ecological initiatives through sustainabledevelopment” – into reality and to achieve the desired results the Company requires theimplementation of the following three strategic directions:1. Ensuring energy security in Kazakhstan.2. Increase in the cost of equity capital.3. Social responsibility.Ensuring energy security of KazakhstanThe Company’s activity is aimed at ensuring energy security, which is one of the mainpriorities for further economic development of Kazakhstan. The main purpose of thisdirection is to ensure security of supply of electricity and coal, as well as maintainingstability of UPS RK.This goal will be achieved by the Company through the following tasks:1. Establishing control over the stations of national importance.The Company intends to establish the highest possible degree of control over the stationsof national importance, which will lead to the strengthening of the role of state in thesefacilities and will help maintain the stability of the UPS RK.2) optimizing the structure of the generation.Provides for an increase in the proportion of flexible capacities in the generationalportfolio in order to reduce dependence on expensive imported energy supplies.3) Provision of reserve capacities.The Company plans to ensure availability of reserves by increasing the availablecapacities that will enhance the safety of the electric power system of the country.4) Centralization of sales of exported/imported electricity and development of exportpotential.This will provide new opportunities for exports of electricity to Belarus and energysupplies from Central Asia to the CEP countries.Increase in the cost of equity capitalIn view of high profitability of electricity market in the foreseeable future, increasing thecost of equity capital is also one of the strategic directions of development of the Company.The main goals and objectives to improve shareholder value include:1. Protecting the interests of shareholders and the successful initial publicoffering (the People’s IPO):For the successful IPO the Company intends to take part in a number of measures toimprove the legislation in order to ensure its financial attractiveness for investors:1) Participation in the creation of stable tariffs system;2) Changes in dividend policy;3) Improvement of corporate governance.Development strategy and its results Integrated Report 2012 65

CONTENTThe Company will participate in the improvement of tariff legislation for energy-producing,energy-transmitting and energy-supplying companies by eliminating existing gaps andcentralizing industry regulation at the national level. Also, active work to include payment ofdividends in the approved cash flow plan of energy producing companies will be performed.In terms of corporate governance the goal is set to achieve the corporate governance levelof 85% by 2022.2. Financial stability of the holding:1) Diversification into related industries;2) Participationin the creation of a stable tariff system.The main focus of diversification will be the development of production of cokingconcentrate for export to the CIS countries (Russia, Ukraine). In addition, the abovementionedmeasures to improve tariff legislation will ensure growth in profit and return oninvestments, which, in turn, will contribute to the financial stability of the holding.3. Participation in commercially viable projects:1. Innovative development.High capital and research intensity of electricity sphere determines the particularimportance of this task. The Company recognizes the importance of innovation andtechnological development, and conducts systematic work to improve the existing base ofequipment, integrated automation of the entire company and the application of advancedglobal technologies for the energy efficiency of its own production.Social responsibilityAs indicated in the Strategy of JSC “Sovereign Wealth Fund “Samruk-Kazyna” 4 , thegrowth of long-term value is impossible without taking into account the interests of allstakeholders, including the interests of the Company, therefore raising the standardsof social responsibility is a key strategic focus. This direction provides for the activitiesfocused on the execution of the initiatives of the Government of the Republic of Kazakhstanand JSC “Sovereign Wealth Fund “Samruk-Kazyna” in the area of social responsibility.The following aims and objectives were set to the Company in respect of social responsibility:1. Ensuring social sustainability.Fulfillment of social initiatives of JSC “Sovereign Wealth Fund “Samruk-Kazyna” throughthe following directions and activities:1) Sponsorship;2) Educational programs;3) Construction of training centers (AlES and AZC).4) Provision of a sustainable supply chain by introducing a system of social and environmentalstandards.2. Reduction of occupational injuries.This goal provides for the implementation of measures to improve safety through the useof modern equipment, training, and bring working conditions in line with internationalstandards in the field of occupational safety.3. Environmental protection:1) Implementation of the strategy of “green economy” and development of “clean” coaltechnologies and renewable energy sources.Energy efficiency is one of the most important aspects of environmental protection.To eliminate the “energy poverty” of remote consumers the Company plans to engagerenewable energy sources (wind and solar power plants and small hydro power plants).2) Reduction of losses in electrical and heating systems.This task will be carried out by upgrading the technological base of electrical networks,as well as the introduction of Smart Metering System and integrated automation in theCompany.3) Reducing harmful effects.4 Development Strategy of JSC “Sovereign Wealth Fund “Samruk-Kazyna” approved on September 14, 2012.Development strategy and its results Integrated Report 2012 66

CONTENTIn order to minimize contamination of the environment, emissions filtering equipment, aswell as modern methods of disposal of ash waste will be implemented.4) Implementation of social and environmental standards.The Company is systematically implementing the environmental management systemaccording to ISO 14001 in all its enterprises.5) Improving energy efficiency.Energy efficiency is one of the most important aspects of environmental protection. Measuresto be taken to more efficient use of electricity and fuel, as well as energy-saving measurescan enable sustainable economic growth with little or no increase in power consumption, and,consequently, without increasing the amount of emissions of harmful substances into theatmosphere. At the same time, it is expected to increase fuel utilization rate (hereinafter – FUR)and reduce electricity consumption for own needs.Such measures as establishment of Kazakhstan Intelligent Energy System, construction ofmodern cogeneration power plants and the development of renewable energy sources areaimed at increasing the energy efficiency. In future the Company plans to consider the issueson usage of secondary energy resources (e.g. rejected heat of waste flue gas, industrial waterand steam, natural gas overpressure energy, etc.). For implementation of these directionsa research is needed to assess the economic and technical potential of secondary energyresources, and to develop an action plan for their development.In connection with the quantitative commitments to the Kyoto Protocol up to 2020, Kazakhstanis introducing a system of quotas for greenhouse gas emissions. Number of quotas foreach power generation company will be determined by the National plan, approved by theGovernment of the Republic of Kazakhstan. In the next ten years the Company plans todecrease emissions of CO 2, as well as to obtain additional quota through the construction ofrenewable energy sources.Development strategy and its results Integrated Report 2012 67

CONTENTKey risk factorsand risk management systemIntegrated Report 2012 68

CONTENTRisk management systemThe Company’s activity is characterized by the presence of objective threats and problemsassociated with wear and tear of fixed assets, low-gain assets, growth of energy prices,tightening environmental requirements, the imperfection of energy legislation, etc.These and other factors determine the important role of risk management in corporategovernance system.Implementation and improvement of risk management system is one of the most importanttasks, and a necessary condition to achieve strategic and operational objectives of theCompany.The Company’s risk management systemis based on the Concept of Corporate RiskManagement System of JSC “Sovereign Wealth Fund “Samruk-Kazyna” and theregulationson risk management, approved by the Board of Directors of the Company – RiskManagement Policy, the Rules of Identification and Assessment of Risks, the Regulationson Management of Certain Types of Risks.In accordance with the Risk Management Policy, the Company identifies the following risks:• strategic;• financial;• operational;• legal.As part of the development of risk management system, the Company is working on theintroduction of uniform methods, techniques and approaches of risk management in allcompanies belonging to the Group of Companies of Samruk-Energy.When identifying risks, the Company relies on international experience, comparison tosimilar companies in the industry, expertise with the involvement of internal and externalexperts.Given the high depreciation of the main technological equipment, the Company and itssubsidiaries pay special attention to ensuring reliable operation of power equipment,and in general, the provision of uninterrupted operation of energy supply of theeconomy. In order to minimize technological risks continuous monitoring of reliabilityof auxiliary equipment and the potential for technological failures is performed inthe subsidiaries of the Company, as well as major national investment programs areimplemented aimed at upgrading existing equipment.Significant results have been achieved by reducing the effects of the risk of excessivelosses.In order to minimize the risk of adverse changes in the regulatory framework, the Companyis involved in the development and review of drafts of legal acts, including throughparticipation in industry associations.Considerable attention is paid to the risk of accidents at work. The relevant articles of thebudgets of subsidiaries provide for the necessary funds. Training on occupational safety,regular and surprise coachingand checks, pre-shift medical examination and medicalcheck-ups are carried on a regular basis.The Company is subject to foreign currency risk associated with long-term loans, includingfor the implementation of investment projects.As part of currency risk the Company’s management performs quarterly monitoring ofcurrent currency position of the Group of Companies of Samruk-Energy. According to theconsolidated financial statements as of December 31, 2012 currency positionin US dollarsamounted to 59,210,929 thousand tenge.Due to the limited choice of derivative financial instruments in the Kazakh market andtheir expensiveness, in 2012 hedging of financial risks was not applied, because benefitsfrom these tools do not cover relevant costs. Despite this, the Company continues tomonitor changes in financial derivative instruments market for implementing the hedgingstructure in the future.It is also planned to develop limits on foreign currency position.In order to comply with the best international practices in the field of risk managementin 2012 the Company conducted assessment of the effectiveness of its risk managementsystem, based on the results of which recommendations on further improvement of riskmanagement system were obtained.Key risk factors and risk management systemIntegrated Report 2012 69

CONTENTCorporate governanceCorporate Governance Structure of JSC “Samruk-Energy”Improvement of Corporate GovernanceShareholdersBoard of DirectorsCommittees of the Board of DirectorsInternal Audit ServiceManagement BoardCommittees of the Management BoardCompliance with the principles and corporate governance processesInteraction With StakeholdersIntegrated Report 2012 70

CONTENTCorporate governance structure of JSC “Samruk-Energy”Sole ShareholderBoard of DirectorsManagement BoardChairman of the Management BoardCommittees of the Board of DirectorsInternal Audit ServiceCorporate SecretaryAudit CommitteeCommittee for Appointments andAwardsCommittee on the strategic planningПервый First Deputy Заместитель Chairman Председателя of the Management Правления BoardDeputy Chairman of theManagement BoardDeputy Chairman of theManagement BoardAdvisorsService of Protection ofState SecretsManager of Division“Generation”Manager of Division“Hydro Power Plantsand RenewableEnergy”Manager of Division“Fuel, Logistics andService”Manager of Division“Distribution andSales”Managing Directorfor Economics andFinanceManaging Directorof StrategyHead of the StaffManaging Directorof the CorporateGovernanceAdministrationfor SAOAdministrationfor SAOAdministrationfor SAOAdministrationfor SAOAsset ManagementDepartment (M&A)Department ofEconomics and TariffPolicyDepartment of RiskManagement andInternal ControlDepartment ofCorporate ManagingDocument ProcessingDepartmentDepartment of HumanResource ManagementPublic RelationsDepartmentManaging Director forProductionManagementMonitoring ofProduction Programsand CapitalConstructionManagementMonitoring ofProduction Programsand CapitalConstructionManagementMonitoring ofProduction Programsand CapitalConstructionManagementMonitoring ofProduction Programsand CapitalConstructionInformationDepartmentDepartment ofFinancial and TaxAccountingDepartment ofInvestment AnalysisDepartment of LaborAdministrativeDepartmentDepartment ofSecurity, Civil Defense,EnvironmentalProtectionRepresentationManaging Directorfor DevelopmentManagement ofTechnologicalDevelopment,Innovation, InitiationManagement ofTechnologicalDevelopment,Innovation, InitiationManagement ofTechnologicalDevelopment,Innovation, InitiationManagement ofTechnologicalDevelopment,Innovation, InitiationCorporate FinanceDepartmentTreasuryDepartmentDepartment ofStrategicDevelopmentDepartmentof ProjectManagementDepartment ofProcurementDepartment ofMarketingLegalDepartmentIn accordance with the Charter of JSC “Samruk-Energy” approved by the General Meetingof Founders on April 18, 2007, the Company’s governing bodies are:1. Highest governing body – General Meeting of Shareholders;2. Managing body – Board of Directors;3. Executive body – Management Board;4. Internal Audit Service.Corporate governance Integrated Report 2012 71

CONTENTImprovement of Corporate GovernanceOne of strategic objectives of the Company is to improve corporate governance and achievethe best results of its compliance with leading international practice.In the reporting period the Company implemented and effectively operated with the basicstandards and principles of corporate governance.As a result of measures taken in 2012, the level of the Company’s of corporate governancecompliance with best practices was 65% in accordance with the diagnostics methodologyof JSC “National Welfare Fund "Samruk-Kazyna”, and was ranked 3 rd among the Fund’scompanies that passed corporate governance diagnistics in 2012.Work on improving corporate governance will be continued and aimed at reaching 75% in2015, and 85% – in 2022.Information about the ShareholderPursuant to the Resolution #1103 of the Government of the Republic of Kazakhstan theCompany’s shares owned by JSC “KazTransGas” were submitted to JSC “Sovereign WealthFund “Samruk-Kazyna” on August 29, 2012. Thus, currently the only shareholder of theCompany is JSC “Sovereign Wealth Fund “Samruk-Kazyna”.Board of DirectorsThe Board of Directors implements general management over the Company’s activitiesexcept for the issues falling within the competence of General Meeting of Shareholdersand the executive body in accordance with the Law of the Republic of Kazakhstan “OnJoint-Stock Companies” and the Company’s Charter.Actual and projected growth ofCorporate Governance Rating of theCompany:9080706050402 13020102011201220152022The Board of Directors of the Company is composed of six directors. Members of theBoard of Directors are appointed by the General Meeting of Shareholders.In accordance with the leading corporate governance practices, the presence of thedirectors independent from the company shareholders and management, which are theguarantee of making objective decisions that best meet the interests of the company,is required. In accordance with the Law of the Republic of Kazakhstan “On Joint-StockCompanies”, the number of independent directors shall not be less than one third of thenumber of the members of the board of directors. Criteria of independency are determinedby the legislation, the Company’s Charter and the Regulation on the Board of Directors.302039.7% 61.9% 65.0% 75.0%85.0%100Corporate governance Integrated Report 2012 72

CONTENTComposition of the Board of Directors as at December 31, 2012:Bektemirov Kuanysh AbdugaliyevichManaging Director of JSC “JSC “Sovereign Wealth Fund“Samruk-Kazyna”, Chairman of the Board of Directors ofJSC “Samruk-Energy”.He was born on May 24, 1970.Citizenship: Republic of KazakhstanDate of first election: 31.01.2012 (Minutes of JSC “SovereignWealth Fund “Samruk-Kazyna” #08/12 of 31 January 2012).Work and membership of the Board of Directors of otherorganizations: Chairman of the Board of Directors of JSC“KEGOC”. He is also a Member of the Board of Directors ofJSC “Kazgeologia”, JSC “SMC “Tau-Ken Samruk” and JSC“NAC “Kazatomprom”.Employment history:1993 – Graduation from Kazakh State University named after Al-Farabi, specialization –physicist.2004 – Graduation from Kazakh National Agrarian University with specialization inelectrical engineering.1993 – 1999 – Corporation “Atameken”, Almaty; JSC “Altyn”, Tekeli, Almaty oblast, LLP“East Service”, Taldykorgan.1999 – 2000 – Deputy Director General at GKPO “Taldykorgakommunenergo”.2000 – 2004 – First Deputy Head of GGKP “Taldykorganteploservis”.2004 – Deputy Chairman of the Board of Astanaenergoservice, Astana.2004 – 2008 – Director of LLP “Astanaenergosbyt”, Astana.2008 – 2009 – Head of the State Organization “Management of Energy and Utilities inSouth Kazakhstan region”.2009 – 2010 – Deputy, First Deputy General Director of RSO “Kazhydromet”.2011 – 2012 – Director General of Astanaenergokontrakt.Since January 2012 – Managing Director of JSC “Sovereign Wealth Fund “Samruk-Kazyna”.In 2003 he was elected Deputy for the maslikhat in Taldykorgan, awarded a certificate ofthe Minister of Energy and Mineral Resources “For contributions to the development ofthe electric power industry of Kazakhstan”, “Honorary Power Engineer of the Republic ofKazakhstan” and a Jubilee Medal “10 years of Astana”.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 73

CONTENTComposition of the Board of Directors as at December 31, 2012:Satkaliyev Almasadam MaidanovichChairman of the Management Board of the Company,Member of the Board of Directors of JSC “Samruk-Energy”.He was born on October 31, 1970.Citizenship: Republic of KazakhstanDate of first election: 4.07.2007 (order #79-п of theChairman of the Board of JSC “Holding Samruk” as of July4, 2007).On June 15, 2011 by the decision of the Management Boardof JSC “National Welfare Fund “Samruk-Kazyna” (Minutes#26/11), he was appointed to the position of the Member ofthe Board of Directors and Chairman of the ManagementBoard of JSC “Samruk-Energy”.Work and membership of the Board of Directors ofother organizations: Member of the Board of Directors ofJSC “KEGOC”, “Forum Muider B.V.”, JSC “Station Ekibastuzskaya GRES-2”. He is also aMember of the Supervisory Council of LLP “Ekibastuzskaya GRES-1”.Employment history:1992 – Graduation from Al Farabi Kazakh National University, major in Mechanics, AppliedMathematics.Ph.D. in Economics. Honored power engineer of CIS.From August 1992 – Director, “TaSSaT” LLC.From September 1997 – Manager, Head of Clearing Department, Head of ProjectManagement Department, “KazTransOil” JSC.From January 2001 – Finance Director, Vice President for Economy, JSC “KEGOC”.From November 2003 – First Vice President, JSC “KEGOC”.From May 2006 – Director-Head of group for “KEGOC” JSC, “Kazakhstan Holding of StateAssets Management “Samruk” JSC.From December 2006 – Director of Electric-power Assets Management, “KazakhstanHolding of State Assets Management “Samruk” JSC.From January 2007 – Deputy Minister of Energy and Mineral Resources of the Republicof Kazakhstan.From September 2007 – President, from October 2008 – First Vice President of JSC“KEGOC”.From December 2009 – Chairman of the Board of JSC “KEGOC”.From June 2011 – Managing Director, JSC “Sovereign Wealth Fund “Samruk-Kazyna”.From January 2012 -Chairman of the Management Board of the Company.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 74

CONTENTComposition of the Board of Directors as at December 31, 2012:Ogay Alexey VladimirovichDirector of the Directorate for Energy Assets Management ofJSC “Sovereign Wealth Fund “Samruk-Kazyna”, Member of theBoard of Directors of JSC “Samruk-Energy”.He was born on December 1, 1970.Citizenship: Republic of KazakhstanDate of first election: 22.01.2008 (Minutes #01/08 as of January22, 2008 of JSC “Holding “Samruk”).On June 15, 2011 by the decision of the Management Board ofJSC “Sovereign Wealth Fund “Samruk-Kazyna”(Minutes #26/11)was appointed to the position of the Member of the Board ofDirectors.Work and membership of the Board of Directors of otherorganizations: Chairman of the Board of Directors of JSC“KOREM”, Member of the Board of Directors of JSC “KEGOC”.Employment history:1995 – Graduation from Almaty Energy Institute (base higher education), major in Electric PowerStations, qualification of Electrical Engineer.1995 – 1998 – Researcher at LLP “Energy Problems Research Laboratory of Kazakhstan”.1998 – 2006 – Specialist, Leading Specialist, Senior Specialist, Head of unit at JSC “KEGOC”.From June 2006 – Senior Expert, Deputy Head for Energy Assets Management, KazakhstanHolding for Management of State Assets “Samruk” JSC.From October 2008 – Senior Expert, JSC “Sovereign Wealth Fund “Samruk-Kazyna”.From May 2007- Chairman of the Board of Directors of JSC “KOREM”.May 2011 – present – Director of the Directorate for Energy Assets Management of JSC “SovereignWealth Fund “Samruk-Kazyna”.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 75

CONTENTComposition of the Board of Directors as at December 31, 2012:Daukeyev Gumarbek ZhusupbekovichChancellor of Almaty University of Energy and Communications,independent director of the Board of Directors. Chairman of theAppointments and Awards Committee, member of the StrategicPlanning Committee of JSC “Samruk-Energy”.He was born on July 31, 1978.Citizenship: Republic of KazakhstanDate of first election: 22.01.2008 (Minutes #01/08 of 22.01.2008of JSC “Holding “Samruk”).Was re-elected on April 2, 2009 in accordance with the decisionof the Management Board of JSC “Sovereign Wealth Fund“Samruk-Kazyna” (Minutes #26/09).Work and membership of the Board of Directors of otherorganizations: Member of advisory councils on the tariff policyin electro- and power system at the Agency of the Republicof Kazakhstan on Regulation of Natural Monopolies, Member of the Advisory Council on theTariff Policy in power area at Akimat in Almaty city, Member of Union of Power Engineers ofKazakhstan, Chairman of the Revision Committee, Member of Universities Association ofKazakhstan; Member of Almaty Regional Universities Rectors Council. Independent Director ofthe Board of Directors of “KEGOC” JSC.Employment history:1971 – Graduation from Kazakh Polytechnical Institute named after V.I.Lenin, specialty: powerengineer. PhD in technical sciences (1982). The Professor (from 1999).1971 – Assistant, post-graduate student of Kazakh Polytechnical Institute named after V.I.Lenin.1975 – Post-graduate student, Assistant, Chief Lecturer, Chairman of the professional committee,Associated Professor of Almaty Power Institute.1988 – Instructor of Science and Educational Institutions of the Central Committee of KPK.1989 – Secretary of Communist Party Committee, pro-rector of Almaty Power Institute.1994 – Division Manager, Head of the Device of the Higher Advisory Council on Science andTechnics at the President of the Republic of Kazakhstan of the Administrative office of theMinisters’ Cabinet of the Republic of Kazakhstan.1996 – Director of educational-scientific complex on power and telecommunications of KazNTUnamed after K.I.Satpaev.Since 1997 – Chancellor at Almaty University of Energy and Communications.Deputy of Kalininsky Regional Council of National Deputies (1990-1993).Awarded “10 years of Kazakhstan’s Constitution” (2006), “For valorous work”, “In commemorationof the 100 th anniversary from the date of V.I.Lenin’s birth” (1970), “10 years of Kazakhstan’sIndependence” (2001) medals, signs “Honour pupil of formation of the Republic of Kazakhstan”(2000), RAO UPS of Russia “80 years of GOELRO Plan” (2000). Honorable educational worker ofthe Republic of Kazakhstan (2005).The author of more than 60 scientific publications on theory and practice of burning of gas andheat exchange in power coppers and industrial furnaces; methodology of formation of tariffs onelectric and thermal energy by their combined manufacture.Possesses five copyright certificateson inventions of industrial furnaces and burning devices designs.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 76

CONTENTComposition of the Board of Directors as at December 31, 2012:Luka SuteraVice-President of the Group and Financial Director (CFO) ofGlobal Power & Water Division, member of the team leadersof the Group ABU DHABI NATIONAL ENERGY COMPANY,Independent Director of the Board of Directors, Chairman ofAudit Committee of JSC “Samruk-Energy”.He was born on June 7, 1971.Citizenship: ItalyDate of first election: on 8.05.2012 by the decision ofthe Board of JSC “Sovereign Wealth Fund “Samruk-Kazyna”(Minutes #21/12) was elected as an independentmember of the Board of Directors.Work and membership of the Board of Directors of otherorganizations: Independent Director of the Board ofDirectors of JSC “KEGOC”, Member of the Board of Directorsof Jorf Lasfar Energy Company of the Group Abu Dhabi National Energy Company, Memberof Russian Association of Independent Directors.Employment history:1996 – Graduated from Milan University “L.Bokkoni”, Italy, Bachelor’s Degree in BusinessAdministration, Expertise in accounting.2012 – Graduated from IE Business School in Madrid, Executive MBA InternationalProgram (strategic management).January 2005 – September 2007 – Deputy Chief Financial Officer of the European Division,Endesa.October 2007 – March 2011 – Financial Director, Deputy Director General of JSC OGK-5(ENEL Group)Since March 2011 – Vice-president of the Group and Chief Financial Officer of InternationalWater Management and Energy of National Energy Company of Abu Dhabi (TAQA).Since April 2011 – Member of the Russian Association of Independent Directors.Atpresent – Member of the Board of Directors of Jorf Lasfar Energy Company (DaughterCompany of National Energy Company, Abu Dhabi).Has more than 15 years’ experience in power sector.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 77

CONTENTComposition of the Board of Directors as at December 31, 2012:Spitsyn Anatoly TikhonovichVice-President of Russian Academy of Natural Sciences,Doctor of Economics,Professor, Member of the Presidiumof Russian Academy of Natural Sciences(RANS), Memberof the Union of Architects of the USSR andthe RussianFederation, First Vice-President of International Academyof Investments, Director of the Institute of Strategic Studiesof the Integration Problems of the Eurasian EconomicCommunity, Independent Director of the Board of Directors,Chairman of Strategic Planning Committee, Member of theCommittee for Appointments and Awards, Member of theAudit Committee of JSC “Samruk-Energy”.He was born on May 24, 1939.Citizenship: Russian Federation.Date of first election: On May 8, 2012 by decision of the Management Board of JSC“Sovereign Wealth Fund “Samruk-Kazyna”(Minutes #21/12) was appointed to the positionof an independent member of the Board of Directors.Work and membership of the Board of Directors of other organizations: IndependentDirector in the Board of Directors of JSC “KEGOC”.Employment history:1962 – Graduated from Odessa Civil Engineering Institute, majoring in civil engineering.1972 – PhD student of Academy of Social Sciences.2009 – special course at the University of Washington (USA).He is currently Professor of Economics and Public Finance of Russian Academy ofNational Economy and Public Service at the President of Russia, Director of StrategicStudies Institute of the Integration Problems of the Eurasian Economic Community.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 78

CONTENTCriteria for the selection to the Board of DirectorsTo date, the Company has no formal document regulating the selection of potential candidatesto the Board of Directors. Ongoing work of JSC “Sovereign Wealth Fund “Samruk-Kazyna”,aimed at improving corporate governance creates conditions every year to improve not onlythe internal regulatory framework in line with the best practice, but also to improve theefficiency of business processes of the Company.As at December 31, 2012 the Board of Directors included:• Expert in the field of economics, finance and audit – Group Vice President and ChiefFinancial Officer (CFO) of Global Power & Water Division, Member of the team leaders ofthe Group ABU DHABI NATIONAL ENERGY COMPANY, Luka Sutera;• Expert in the field of strategy and power – Rector of Almaty University of Energy andCommunications Daukeyev Gumarbek Zhusupbekovich;• Expert in the field of corporate social responsibility – Chairman of the Board SatkaliyevAlmasadam Maidanovich, directly in charge of the Department of Human ResourceManagement and aspects related to sponsorship and charity.Changes in the composition of the Board of DirectorsOn January 24, 2012 by the decision of the Management Board of JSC “Sovereign WealthFund “Samruk-Kazyna” (Minutes #06/12) the powers of the Chairman of the Board ofDirectors Satkaliyev A.M. and a member of the Board of Directors Upushev E.E. wereprematurely terminated. By the same decision Satkaliyev A.M. was elected to the positionof Chairman of the Management Board and a member of the Board of Directors of theCompany.In addition, on January 31, 2012 by the decision of the Management Board of JSC“Sovereign Wealth Fund “Samruk-Kazyna” (Minutes #08/12) Bektemirov K.A. – ManagingDirector of JSC “Sovereign Wealth Fund “Samruk-Kazyna”, was appointed to the positionof a member and a Chairman of the Board of Directors.Criteria of independency of the members of the Board ofDirectorsIn accordance with the leading corporate governance practices, the presence of thedirectors independent from the company shareholders and management, which are theguarantee of making objective decisions that best meet the interests of the company,is required. In accordance with the Law of the Republic of Kazakhstan “On Joint-StockCompanies”, the number of independent directors shall not be less than one third of thenumber of the members of the board of directors.Criteria of independency are determined by the legislation, the Company’s Charter and theRegulation on the Board of Directors and indicate the following:Independent Director is a member of the Company’s Board of Directors who:1) is not, and during five years preceding his election to the Board of Directors has notbeen an employee of the Company oraffiliates of the Company;2) not a member of, and within five years preceding his election to the Board of Directors,has not been a close relative (parent, brother, sister, son, daughter), married to, andrelative (brother, sister, parent, son or daughter, husband (wife)) with the Company’semployees;3) is not affiliated with a noncommercial organization that receives funding from theCompany or its affiliates;4) does not render the Company and its affiliates any kind of paid services (consulting,etc.);5) is not an officer of the legal entity (organization), in which an employee of the Companyis a Board of Directors’ member;6) has not been, and is not affiliated with an employee of the present or former auditor ofthe Company or its affiliates in the past five years;7) has not been and is not a manager or employee, as well as a spouse (wife), one of theparents, children, brothers and (or) sisters of a manager or employee of the Companyand its subsidiaries and affiliated companies during the last five years;8) is not an affiliated person of a particular shareholder;9) is not a person who is appointed or elected, holding a legislative, executive, administrativeor judicial position of a foreign country, as well as a person who performs a publicfunctionfor a foreign country;10) has not been a member of the Board of Directors of the Company for more than seven(7) years;11) meets other criteria, approved by the General Meeting of Shareholders.It should be noted that in the process of selection of candidates for the post of independentdirectors the Company is guided by the Rules for Selection of Independent Directors ofJSC “Sovereign Wealth Fund “Samruk-Kazyna” which were approved by the decisionof the Management Board (Minutes #36/10) of JSC “Sovereign Wealth Fund “Samruk-Kazyna”on June 8, 2010.During the reporting period independent directors of the Company fully met the criteriafor independence.Corporate governance Integrated Report 2012 79

CONTENTNumber of meetings of the Board of Directors2012 2011Number of meetings 13 12In presence 8 6In absentia 5 6Attendance of the Board of Directors’ members2012 2011Bektemirov Kuanysh Abdugaliyevich 100 % –Satkaliyev Almasadam Maidanovich 100 % 100 %Ogay Alexey Vladimirovich 92 % –Daukeyev Gumarbek Zhusupbekovich 100 % 100 %Luka Sutera 92 % –Spitsyn Anatoly Tikhonovich 100 % –In 2012, the Board of Directors held 13 meetings, including 8 meetings in presence and 5meetings in absentia. In the course of these meetings 198 issues were discussed.In particular, the following topics were considered:1) increase of the number of authorized shares of JSC “Balkhashskaya TES”;2) increase of the authorized capital of LLC “Samruk-GreenEnergy”;3) acquisition by the Company of 294,050 common shares of JSC “AlES”;4) approval of the Dividend Policy of the Company with respect to its subsidiaries for 2012–2015;5) participation of LLP “Samruk-Green Energy” in the European Wind Energy Association(EWEA);6) acquisition by LLP “Samruk-Green Energy” of 51% stake in the authorized capital of LLC“Energy of the Semirechye”;7) acquisition by LLP “Samruk-Green Energy” of 100% interest in the share capital of LLP“The First Wind Power Plant”.Measures taken by the Board of Directors to incorporatethe views of the Sole ShareholderThe Board of Directors takes all possible measures to incorporate the positions and viewsof the Sole Shareholder including:• representatives of the Sole Shareholder are the members of the Board of Directors andall issues considered at the meetings of the Board of Directors are submitted to them fortaking final decisions;• those representatives of the Sole Shareholder who are not the members of theBoard of Directors are part of the Board of Directors’ Committees (as experts with anadvisory capacity) and express the position of the Sole Shareholder at the meetings ofCommittees and the Board of Directors;• members of the Board of Directors participate in corporate governance diagnostics andall meetings with representatives of the Sole Shareholder.Corporate governance Integrated Report 2012 80

CONTENTIn accordance with the Resolution on the Company’s Board of Directors, the Chairmanof the Board of Directors ensures effective communication with the Sole Shareholder,bringing his views and positions to the notice of the Board of Directors and providinganswers and feedback to the Sole Shareholder on his requests.Results of evaluation of the Board of Directors’performanceIn 2012, in line with the best international practice of corporate governance an assessmentof the Board of Directors’ performance was conducted for the first time in the Company.The evaluation was conducted by an independent consultant that met the most advancedrequirements to ensure the effectiveness and transparency of corporate governance. TheCompany attracted Consortium of the Russian Association of Independent Directors andthe British Institute of Directorsas consultants, which have considerable experience in theassessment of boards of directors of public and private international companies.The evaluation was conducted based on the methodology for assessing the performance ofthe board of directors, developed by the Consortium in conjunction with the JSC “SovereignWealth Fund “Samruk-Kazyna” and based on the requirements of the legislation of theRepublic of Kazakhstan, as well as the requirements of the best international practicesin corporate governance, in particular the OECD corporate governance principles and theUK Corporate Governance Code. According to the methodology, technology of assessmentincluded a survey of all the members of the Board of Directors and interviews conductedby an independent consultant with the Chairman of the Board of Directors, the members ofthe Board of Directors, the Chairman of the Board and Corporate Secretary.The result of the evaluation has shown directions for further development of corporategovernance practices. In particular, such areas as: participation of the Board of Directorsin strategic planning, appointment and remuneration of senior executives, organizationof work of the committees, the optimal allocation of powers between shareholders andthe Board of Directors, were defined. A plan of practical measures aimed at improvingthe efficiency of the Board of Directors, committees and members of the Board ofDirectors, was developed.Remuneration of the Board of Directors’ membersRepresentatives of the Sole Shareholder and Chairman of the Management Board beingthe members of the Board of Directors are not entitled for the remuneration.Independent Directors, for their performance of duties as the Board of Directors’ members,receive annual fixed remuneration, and additional remuneration for participation in eachmeeting in presentia of the Board of Directors’ Committee as the Committee member.In case the Independent Director participates in less than half of the meetings in presentiaand meetings in absentia of the Board of Directors in the reporting period, except forabsence due to illness, vacation and business trips, the fixed remuneration is not paid.Expenses of the Independent Director (transportation, accommodation, daily allowances)connected with participation in the meetings of the Board of Directors held outside of hispermanent residence are reimbursed.Combining the powers of the Chairman of the Board ofDirectors and the Chairman of the Management BoardIn order to separate the powers and avoid conflict of interests, the positions of the Chairmanof the Board of Directors and the Chairman of the Management Board are not combined.In 2012 the Chairman of the Board of Directors of JSC “Samruk-Energy” was BektemirovKuanysh Abdugaliyevich, and the Chairman of the Management Board was SatkaliyevAlmasadam Maidanovich.Corporate governance Integrated Report 2012 81

CONTENTCommittees of the Board of DirectorsIn order tosupport the activities ofthe Board of Directors, the following committeeswere established in the Company aimed at consideration of issues and providingrecommendations onany issues within the framework oftheir competence:• Audit Committee• Committee for Appointments and Remuneration• Strategic Planning Committee.In accordance with the Resolution on the Committees of the Board of Directors, eachCommittee on an annual basis provides to the Board of Directors relevant activity reports.Number of issues considered at the meetings broken down by Committee2012 2011Audit Committee 38 38Committee on Appointments and Awards 29 11Strategic Planning Committee 10 -Corporate governance Integrated Report 2012 82

CONTENTAudit CommitteeAudit Committee is the advisory body of the Board of Directors and is engaged in analyzingand developing recommendations on internal and external audit issues, internal controlsystem and risk management system.Members of the Audit Committee are:• Luka Sutera – Independent Director, Chairman of the Audit Committee• Spitsyn Anatoly Tikhonovich – Independent Director, Member of the Audit Committeeand the Committee for Appointments and Awards• Kuzmin Vladimir Mikhailovich – Chief Manager of Audit and Control department of JSC“Sovereign Wealth Fund “Samruk-Kazyna”, the Committee’s expert.number of meetings of the Audit Committee2012 2011Number of meetings 10 10In presence 8 8In absentia 2 2Attendance by the Committee members with voting rights 100% 100%Main issues considered at the meetings of the AuditCommittee:4. Approval of the Strategic Plan of Internal Audit Service of JSC “Samruk-Energy” for theperiod of 2012–2014;5. Initial approval of remuneration scheme of the Internal Audit Service of JSC “Samruk-Energy”.1. 2011 Report of Internal Audit Service of JSC “Samruk-Energy”;2. Revision and approval of consolidated and separate financial statements of JSC“Samruk-Energy” for the year ended December 31, 2011;3. Report on Implementation of Management Reporting System of JSC “Samruk-Energy”for the period of July-August 2012;Corporate governance Integrated Report 2012 83

CONTENTCommittee for Appointments and AwardsCommittee for Appointments and Awards is the advisory body of the Board of Directorsset up with the purpose to develop and analyze recommendations on the issues of electionand appointment of the Board of Directors’ members, determine the amount and termsof remuneration and bonuses to members of the Board of Directors, members of theManagement Board and Corporate Secretary, as well as qualification requirements formembers of the Board of Directors, members of the Management Board and CorporateSecretary.The Company’s Committee for Appointments and Awardsiscomposed of:• Daukeyev Gumarbek Zhusupbekovich – Independent Director, Chairman of theCommittee for Appointments and Awards of the Company, member of Strategic PlanningCommittee;• Spitsyn Anatoly Tikhonovich – Independent Director, Member of the Committee forAppointments and Awards.Number of meetings of the Committee for Appointments and Awards2012 2011Number of meetings 6 4In presence 6 4In absentia 0 0Attendance by the members of the Committee with voting rights 100% 100%Main issues considered at the meetings of the Committeefor Appointments and Awards:1) Providing recommendations to the Board of Directors on appointment of the Chairmanof the Management Board, determining the size and conditions of remuneration of theChairman of the Management Board of JSC “Samruk-Energy”;2) Providing recommendations to the Board of Directors on the possibility of the Chairmanof the Management Board of JSC “Samruk-Energy” to held the position of a member ofthe Board of Directors in other organization;3) Providing recommendations to the Board of Directors on defining the size ofremuneration of the Corporate Secretary of JSC “Samruk-Energy”;4) Providing recommendations on approval of appointment of managerial staff of JSC“Samruk-Energy”;5) Approval of appointment of the Chairman of the Management Board of JSC “AlmatyElectric Stations”.Corporate governance Integrated Report 2012 84

CONTENTStrategic Planning CommitteeStrategic Planning Committee is the advisory body of the Company set up with the purposeto develop and analyze recommendations on the issues of strategic directions of theCompany’s activity.The members of the Strategic Planning Committee are:• Spitsyn Anatoly Tikhonovich – Independent Director, Chairman of Strategic PlanningCommittee, Member of the Committee for Appointments and Awards• Daukeyev Gumarbek Zhusupbekovich – Independent Director, Member of StrategicPlanning Committee, Chairman of the Committee for Appointments and Awards of theCompany• Yelekeyev Yerzhan Irakovich – Chief Manager of Strategic Planning Department of JSC“Sovereign Wealth Fund “Samruk-Kazyna”, the Committee’s expert without voting rights.Number of meetings held by the Strategic Planning Committee2012 2011Number of meetings 2 0*In presence 2 0*In absentia 0 0*Attendance by the Members of the Committee with voting rights 100 % -** - in 2011 the Committee did not held any meetings as it was established on December 22, 2011 (Minutes #54).Main issues considered at the meetings of the StrategicPlanning Committee:1) Consideration of the approved Technical specifications document for the development ofalong-term Development Strategy of JSC “Samruk-Energy” for the period of 2012–2022,including Innovation, Technology and IT strategies;2) Report for implementation of strategic KPIs based on the resultsof the Company’sactivity in 2011 and the first half of 2012;3) Consideration of the predicted values of strategic KPIs up to 2015;4) Report on Phase 3 of the Strategy, which includes defining the vision, mission, strategicobjectives andkey development directionsofthe Company;5) Rules of Development, Coordination, Approval, Execution, Monitoring and Adjustmentof Long-term Development Strategy of JSC “Samruk-Energy”.Corporate governance Integrated Report 2012 85

CONTENTInternal Audit ServiceInternal Audit assists the Company’s Board of Directors and the Management Board intheir activities on achieving of the Company’s strategic goals.The main goal of the Internal Audit lays in provision to the Board of Directors of independentand objective information for efficient managing the Company by applying a systematicapproach to the improvement of risk management, internal control and corporategovernance systems.The Head and members of the Internal Audit Service are appointed by the Board ofDirectors. Supervision over the Internal Audit is exercised by the Audit Committee of theBoard of Directors of the Company.In 2012 the Company’s Internal Audit Service consisted of five people, headed bySeydigaliyeva A.K.The Service operates under the key principles of international professional standards ofinternal auditing.In the reporting year the Service conducted an audit of ten subsidiaries/affiliatedorganizations and the eight departments of the Corporate Center of the Company.Audit of subsidiaries and affiliates was mainly conducted in the following areas:• Compliance with the requirements of the Procurement Rules;• Compliance with deadlines for implementation of investment projects;• Cash management, utilization of loans and funds allocated from the republican budgetreserves;• Controls over the timing of execution of contracts for the supply of goods, works andservices;• Compliance with the legislation of Kazakhstan, including the laws “On NaturalMonopolies and Regulated Markets”, “On Competition”.The Internal Audit Service held diagnostics of corporate governance, performanceevaluation of risk management and internal control systems of the Company.In the reporting period, the Board of Directors approved the Strategic Plan of Internal AuditService for the medium term (2012–2014 years).The effectiveness of the performance of Internal Audit Service and its head is evaluated ona quarterly basis in accordance with a methodology approved by the Board of Directors andby the decision of the Audit Committee of the Board of Directors.The efficiency of the Internal Audit Service’s performance in 2012, in accordance with thedecision of the Board of Directors of the Company, is rated as “effective”.Corporate governance Integrated Report 2012 86

CONTENTManagement BoardManagement over the everyday activity of Company is performed by a collegiate bodyestablished in the form of Management Board, headed by the Chairman of the ManagementBoard. The activities of the Management Board are aimed at pursuing the interests ofthe shareholders as well as implementing the goals, objectives and the strategy of theCompany.Organization of work of the Management Board of the Company, the procedure ofconvocation and holding of its meetings, as well as decision-making procedures aredetermined by the Regulations of the Management Board of the Company as approved bythe Board of Directors on September 7, 2012 (revised edition).The main principles of the Management Board’s activity are: honesty, integrity, intelligence,diligence, and regularity.The activity of the Management Board is based on the best interests of shareholders andis fully accountable to the Shareholder and the Board of Directors.The Management Board meets regularly in the form of physical voting.In particular, the following issues were considered:1) conclusion of transactions in which the Company has an interest, including issuance ofguarantees to associated organizations, providing them financial assistance and creditfacilities, acquisition of shares of SAO;2) signing agreement on purchase and sale of shares of LLP “TeguiseMunai”;3) implementation of the project “Construction of Wind Power Plants at the Site Yereymentauwith 45 MW Capacity”;4) implementation of the project for transition to the cyclic-flow technology of extraction,transportation, loading, and averaging of coal at Bogatyr coal mine;5) consideration of various reports, including reports on the results of execution of theplan for development and efficient use of funds allocated for sponsorship and charity,compliance with the requirements of the Code of Conduct of the Company;6) approvalof 24 internal regulations for effective regulation of the activities of the Companyand the Company’s business processes;7) approval of the Concept of distribution of powers of the subsidiaries and affiliates of theCompany.The composition of the Management Board is determined by the Board of Directors atthe suggestion of the Chairman of the Board, and, as of December 31, 2012 involved ninepeople.In 2012, the Board held 21 meetings and considered 139 issues. All sessions were conductedin presentia.Corporate governance Integrated Report 2012 87

CONTENTComposition of the Management Board as at December 31, 2012Satkaliyev Almasadam MaidanovichChairman of the Management Board of the Company,Member of the Board of Directors.PhD in economics. Honored Power Engineer of the CIS.He was born on August 31, 1970.Citizenship: Republic of Kazakhstan.Employment history:1992 – Graduated from Al Farabi Kazakh National University,major in Mechanics, Applied Mathematics.From August 1992 – Director, “TaSSaT” LLC.From September 1997 – Manager, Head of ClearingDepartment, Head of Project Management Department,“KazTransOil” JSC.From August 1998 – Managing Director, Vice-President for Economics of JSC “KazTransOil”.From January 2001 – Finance Director, Vice President for Economy, “KEGOC” JSC.From November 2003 – First Vice President, “KEGOC” JSC.From May 2006 – Director-Head of “KEGOC” JSC Group, “Kazakhstan Holding of StateAssets Management “Samruk” JSC.From December 2006 – Director of Electric-power Assets Management, “KazakhstanHolding of State Assets Management “Samruk” JSC.From January 2007 – Deputy Minister of Energy and Mineral Resources of the Republic ofKazakhstan.From September 2007 – President, from October 2008 – First Vice President of “KEGOC”JSC.Since June 2011 – Managing Director, JSC “Sovereign Wealth Fund “Samruk-Kazyna”.From January 2012 – Chairman of the Management Board of the Company.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 88

CONTENTComposition of the Management Board as at December 31, 2012Оspanov Serik KenesbekovichFirst Deputy Chairman of the Management Board of JSC“Samruk-Energy”.He was born on September 2, 1973.Citizenship: Republic of Kazakhstan.Employment history:1996 – Graduation from Kazakh State University “Semey”, amechanical engineer.2003 – Graduated from Kazakh State Academy ofManagement, economist.1993 – 1994 – Engineer for the production of FSC “Zhetysu”RAO “Agropromenergo”.1994 – 1996 – Executive Director of JSC “Nazar”.1997 – 1998 – General Director of LLP “Sapar”1998 – 2000 – Director of Marketing of LLP “Electrim”2000 to 2001 – Vice President of Marketing and Finance, Corporation “TSC-group”.2001 – 2006 – Director of Commercial Department, Commercial Director, ManagingDirector for Economy of JSC “KEGOC”.2006 – 2008 – First Vice-President of JSC “KEGOC”.2008 – 2009 – President of JSC “Alatau Zharyk Companiyasy”June – December 2009 – Chairman of the Supervisory Board of JSC “Saiman”.2009 – 2012 – First Vice-President of JSC “KEGOC”, First Deputy Chairman of the Board ofJSC“KEGOC”.February 2012 – present – First Deputy Chairman of the Management Board of JSC“Samruk-Energy”.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 89

CONTENTComposition of the Management Board as at December 31, 2012PazylkhaiRova Gulbanu TazhibayevnaEconomy.Deputy Chairman of the Management Board of the Company.Doctor of Economics.She was born on July 13, 1972.Citizenship: Republic of Kazakhstan.Employment history:1994 – Graduated from Kazakh State National Universitynamed after Al-Farabi, an economist, professor of politicaleconomy.1997 – Graduated from Graduate School of Law “Adilet”, alawyer.1994 – 1995 – Assistant of the Department of Market1995 – 1996 – Head of the analysis of internal regulations, Head of evaluation and sale ofcollateral of JSC “Halyk Savings Bank of Kazakhstan”.1997 – 1998 – Senior Financial Analyst of JSC “Kazkommerts Securities”.1998 – 2011 – Vice-President of JSC “Company for Pension Assets Management“Ak Niet”.2002 – 2009 – Vice-President of Corporate Development, Member of the Board of Directors,Chairman of the Board of JSC “Corporation“Ordabasy”.2007 – 2010 – President (head of the supervisory authority of the company) of LLP “KazakhUtility Systems”.2008 – 2010 – Chairman of the Board of Directors of JSC “Insurance Company “AmanatInsurance”.2010-2012 – General Director of LLC “New Smart Energy”.February, 2012 – present – Deputy Chairman of the Management Board of JSC “Samruk-Energy”.She does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 90

CONTENTComposition of the Management Board as at December 31, 2012Moldabayev Kanysh TanirbergenovichManaging Director for Development.He was born on October 23, 1963.Citizenship: Republic of Kazakhstan.Employment history:1987 – Graduated from Pavlodar Industrial Institute, anelectrical engineer.2002 – Graduated from Karaganda State TechnicalUniversity, economist and lawyer.2004 – Graduated from Academy of Public Administrationunder the President of the Republic of Kazakhstan, managerof the public service.1987 – 1997–Electrician, Master, Manager, Chief Engineer, Head of Bayanaul area ofelectrical networks.1997 – 1999 – President of the company, Bayanaul area of electrical networks.1999 – 2004 – Deputy Akim of District, Administration of Bayanaul area of Pavlodar oblast.2004 – 2007 – Head of Electricity, Ministry of Energy and Mineral Resources.2007 – 2009 – Director of the branch “Northern MEA”, JSC “KEGOC”.2009 – 2011 – Director of the Department of the RV, JSC “KEGOC”.2011 – 2012 – Director for the industrial assets of JSC “Sovereign Wealth Fund “Samruk-Kazyna”.March 2012 – November 2012 – Director of Innovation and Technology Policy andDevelopment of JSC “Samruk-Energy”.November 2012 – present – Managing Director for Development, JSC “Samruk-Energy”.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 91

CONTENTComposition of the Management Board as at December 31, 2012Li Valery KonstantinovichManager of Division “Generation”.He was born on August 20, 1951.Citizenship: Republic of Kazakhstan.Employment history:1974 – Graduated from Moscow Energy Institute, mechanicalengineer.1993 – Graduated from Alma- Ata Institute of NationalEconomy, economist.1974–1977 – chief engineer of “Sredazenergomontazh”Trust.1979–1989 – master, foreman of the start-up station,Department Head of “Sredazeneromontazh” Trust.1989 – 1992 – HPNU “Kazcommunoenergonaladka”, engineer-adjuster1992 – 1993 – Deputy Director for Economics in ISK “Aiu”1993 – 1994 – Deputy General Director in JSC “Kazmetallstrahovanie”.1994 – 1995 -Director, “Lira” firm.1995 – 1996 – Chief engineer,“Sredazenergomontazh” Trust.1996 – 1997 -Chief engineer,NES “Kazakhstan energo”1997 – 2012 – Head of the Office of Commercial Chief Manager of Contracts Administrationand Commercial Balances, Head of the Administration of Sales, Deputy Director ofCommercial Department, Director of Sales Department, Managing Director, Vice –President, Managing Director for system services in JSC“KEGOC”.February 2012 – November 2012 – Managing Director of the Company;November 2012 – present – Manager of Division “Generation” of the Company.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 92

CONTENTComposition of the Management Board as at December 31, 2012Salimzhuarov Gani GaliollaulyManager of Division “Distribution and Sale”.He was born on March 20, 1954.Citizenship: Republic of Kazakhstan.Employment history:1982 – Graduated from Pavlodar Industrial Institute,majoring in Electrical networks and systems.1971 – 1972 – Electrician at Volodarskaya RES, KokchetavPES.1974 – 1975 – Electrician of 2 level at Kokchetav substation,Volodarskaya RES, overhead lines electrician of 2 level.1975 – 1978 – Electrician for RZA 4 level, 3 level equipmentrepair.February – June 1978 – Electrician of s/s220/110/35/10 “Kokchetavskaya”.1978 – 1980 – Duty Engineer KGPP, Kokchetavskoye PES.1980 – 1981 – Manager UDF, Kokchetavskoye PES.1981 – 1986 – Senior Engineer, Head of Volodarsky RES.1986 – 1989 – Manager UDF PES.1989 – 1990 – Acting Chief Engineer, Volodarsky PES.1990 – 1996 – Deputy Chief Engineer, Kokchetav intersystem power transmission 1150kW, Deputy Head of Service Operation, Chief Engineer ODG, Ministry of Energy andElectrification of the USSR PO “Long Distance Power Transmission”.1996 – 1999 – Chief Engineer of Akmola intersystem electrical networks branch, NES“Kazakhstanenergo”, Director AF MES “KEGOC”, Director CF MES “KEGOC”.1999 – 2001- Branch Manager of Akmola MES, JSC “KEGOC”, Astana.2001 – 2003 – Director of the Department of the National Power Grid Operation, JSC“KEGOC”, Almaty.2003 – 2006 – Director of the Department of Modernization of Capital Construction, JSC“KEGOC”, Almaty.2006 – 2008 – Director of Capital Construction Department of JSC “KEGOC”, Astana.February -October 2008 – Deputy Chairman of the Board for the production anddevelopment of agriculture, JSC “APC of Almaty”.2008 – 2009 – Deputy Chairman of the Board, JSC “Almaty Power Consolidated”, Almaty.2009 – 2011 – Deputy Chairman of the Board for Production and Development, JSC “AlatauZharyk Companiyasy”.2011 – 2012 – Chairman of the Management Board of JSC “Ekibastuzskaya GRES-2”.February – November 2012 – Managing Director of JSC “Samruk-Energy”.November 2012 – present – Manager of Division “Distribution and Sale” of the Company.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 93

CONTENTComposition of the Management Board as at December 31, 2012Makulbekov Rustem NurlanovichManager of Division “Hydro Power Plant and RenewableEnergy”.He was born on Augut 27, 1979.Citizenship: Republic of Kazakhstan.Employment history:2002 – Graduated from APU Cambridge, UK.2002 – 2003 – Manager Production and TechnicalDepartment, CJSC “KazTransGaz” LNG.2003 – 2006 – Manager Production and TechnicalDepartment, Deputy Director of Transportation andMarketing, JSC “Intergas Central Asia”.April – June 2006 – Executive Sales Director, JSC “APC”.2006 – 2007 – Vice-President for Development JSC “Altynalmas”.2006 – 2010 – General Director of LLP “Altyn Tet”.August – November 2010 – Deputy General Director for Long-Term Development, LLC“Almatyenergosbyt”.2011 – 2012 – Deputy General Director for Commerce LLP “Astana Solar”.February – November 2012 – Managing Director of JSC “Samruk-Energy”.November 2012 – present – Manager of Division “Hydro Power Plant and RenewableEnergy” of the Company.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 94

CONTENTComposition of the Management Board as at December 31, 2012Platonov Sergey ViktorovichManager of Division “Fuel, Logistics and Service”.He was born on July 28, 1955.Citizenship: Republic of Kazakhstan.Employment history:1980 – Graduated from Karaganda Polytechnic Institute,mining engineer and mechanic.1980 – 2000 – PO “Karagandaugol”, mine named afterKostenko, Engineer, Deputy Chief for the extraction of coal.2000 – 2005 – LLP “Topaz 2000”, Director of the mine.2005 – 2008 – APUP “Gefest”, Director of the mining department.2008 – 2011 – LLP “Goal Trade Company”, Chairman of the Committee on Mineral Resources.2011 – 2012 – Director of the Department of Fuel and Logistics of JSC “Samruk-Energy”.November 2012 – present – Head of Division “Fuel, Logistics and Service”.He does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 95

CONTENTComposition of the Management Board as at December 31, 2012Auezova Mira ZhaksylykovnaHead of Legal Department.She was born on September 7, 1977.Citizenship: Republic of Kazakhstan.Employment history:1998 – Graduated from Kazakh State Law University.1998 – 1999 – Senior Specialist, Department for Organizationof Legal Services, Ministry of Justice of the Republic ofKazakhstan.1999 – 2000 – Senior Specialist of the Committee on Implementation of Court Decisions ofthe Ministry of Justice of the Republic of Kazakhstan.2000 – 2002 – Chief Specialist, Deputy Head of the Personnel / HR Management andOperation of the Certification Commission of Justice, Ministry of Justice of the Republic ofKazakhstan.2002 – 2004 – Deputy Head of the Department of Personnel and Public Service of theMazhilis of Parliament of the Republic of Kazakhstan.February – December 2004 – Head of Personnel and Civil Service Office of the Mazhilis.2005 – 2006 – Executive Director of the Union of Lawyers of Kazakhstan.March – October 2008 – Corporate Secretary of JSC “KEGOC”.2008 – 2012 – Director of Legal Department of JSC “KEGOC”.February 2012 – present – Director of Legal Department.She does not hold any shares of the Company, its suppliers or competitors.Corporate governance Integrated Report 2012 96

CONTENTNumber of meetings of the Management Board of the Company2012 2011Number of meetings 21 31Share of meetings in presence 100% 100%Number of issues considered 139 123Changes in the composition of the Management BoardOn February 13, 2012 pursuant to the decision of the Board of Directors of the Company(Minutes #55) the following persons were appointed to the positions of members of theManagement Board of the Company:• Ospanov Serik Kenesbekovich – Fisrt Deputy Chairman of the Management Board of theCompany;• Pazylkhairova Gulbanu Tazhibayevna – Deputy Chairman of the Management Board ofthe Company;• Li Valery Konstantinovich – Managing Director (assets and project management) of theCompany;• Maksutov Kairat Berikovich – Managing Director (finance and economy) of the Company;• Shunayeva Saltanat Amangosovna – Director of Project Management Department of theCompany.On December 14, 2012 pursuant to the decision of the Board of Directors of the Company(Minutes #67) the powers of the Management Board Members Maksutov Kairat Berikovichand Shunayeva Saltanat Amangosovna were terminated ahead of time.It was decided that the Management Board of the Company shall consist of nine people.The following persons were elected to the new composition of the Management Board:• Moldabayev Kanysh Tanirbergenovich – Managing Director for Development;• Salimzhuarov Gani Galiollauly – Manager of Division “Distribution and Sales”;• Platonov Sergey Viktorovich – Manager of Division “Fuel, Logistics and Service”;• Makulbekov Rustem Nurlanovich – Manager of Division “Hydro Power Plants andRenewable Energy”;• Auezova Mira Zhaksylykovna – Head of Legal Department.Criteria for the selection of members of the ManagementBoardDetermination of the number and term of powers of the Management Board, election ofBoard members, as well as appointment of its Chairman, provided such appointment isduly approved by the shareholder, fall under the exclusive competence of the Board ofDirectors.When electing and appointing to the Management Board, the Board of Directors is guidedby the internal documents defining requirements for candidates for these positions and theprocedure for their election.Candidates for the Management Board’s positions should have the experience, knowledgeand qualifications relevant for the proper performance of their duties, have good reputationand obtain approval from the majority of directors.The selection and appointment of the members of the Board are made on the basis ofmaximum transparent and clear procedures determined by the Board of Directors.Evaluation of performance of the Management BoardEvaluation of performance of the Management Board and its Committees in 2012 was notconducted.Corporate governance Integrated Report 2012 97

CONTENTEvaluation of the Board members is based on the motivational key performance indicators(hereinafter – KPIs), characterizing the efficiency of financial and economic activities ofthe Company and the level of achievement by the Board’s member of the results of his/herperformance.Remuneration to the Management Board members is paid at year-end following the KPIevaluation results provided that the Company received a consolidated profit for the year,calculated taking into account the projected remuneration amount.Measures to incorporate the views of the Board ofDirectors by the Management Board in respect of theCompanyThe Board of Directors, exercising its managing functions defines the strategic objectives,development priorities and establishes the basic activity guidelines of the Company.Committees of the Management BoardAs at December 31, 2012 there were six constantly operating advisory bodies in theCompany, three of which were established in 2012:• Planning and Performance Evaluation Committee• Credit Committee• Investment and Innovations Committee• Risk Committee (established in 2012)• Management Systems and Corporate Governance Committee (established in 2012)• Assets and Liabilities Committee (established in 2012).All Committeesare accountable to the Management Board of the Company and operate inthe framework of their competence as provided by the Management Board in accordancewith the relevant regulations.The Management Board, in turn, executes all the decisions and orders of the Board ofDirectors.Opinions of the Board of Directors are also taken into account when considering the investmentand innovation activities of the Company, provided that one of the members of the Board ofDirectors is a member of the advisory body.Corporate governance Integrated Report 2012 98

CONTENTPlanning and Performance Evaluation CommitteePurpose of establishment – increasing efficiency of the Company and its subsidiary andaffiliated organizations, including optimization of their assets structure and expenses.Regulating document – Regulation of the Committee approved by the Management Boardon April 18, 2011.Chairman’s deputies – deputies of the Chairman of the Management Board of the Companyof the real and financial sector.Composition of the Committee – members of the Management Board, managing directorsin charge of strategy and investments, department heads responsible for production,strategy, economy and budgeting, finance, investments, treasury, human resources andprocurement.Chairman – Satkaliyev A.M., Chairman of the Management Board of the Company.Total In presence In absentiaNumber of meetings 59 59 0Number of issues considered 59Revision of development plans of SAO of the Company for 2012-2015,considering adjustments.Key issues considered by the Committee Revision of development plans of SAO of the Company for 2013-2015.Approval of adjustments to the Company’s corporate center development planfor 2012.Corporate governance Integrated Report 2012 99

CONTENTCredit CommitteePurpose of establishment – ensuring timely and qualitative decisions on issues associatedwith loans, financial aid, guarantees and risk minimization.Regulating document – Regulation on Credit Committee approved by the ManagementBoard of the Company on April 5, 2012 (new edition).Chairman – Pazylkhairova G.T., Deputy Chairman of the Management Board of the Company.Deputy Chairman – Maksutov K.B., Managing Director.Composition of the Committee: members of the Management Board, managing directors incharge of asset and production management, department heads responsible for corporatefinance, risk management, investments and legal support.Total In presence In absentiaNumber of meetings 8 8 0Number of issues considered 14Issuance of guarantees under the liabilities of JSC “Zhambylskaya GRES”, JSC“Moinakskaya HPP”, JSC “AlES” and JSC “Shardarinskaya HPP”.Key issues considered by the CommitteeProvision of temporary financial aid on return basis until the end of 2012 to JSC“Ust-Kamenogorskaya HPP” and LLP “Samruk-Green Energy”.Granting of loan till the end of 2012 to LLP “Samruk-EnergoStroyService” andJSC “Zhambylskaya GRES”.Corporate governance Integrated Report 2012 100

CONTENTInvestment and Innovations CommitteePurpose of establishment – increasing efficiency of investment and innovationalactivity and increase of local content in the Company and its SAO.Regulating document – Regulation of the Committee approved by the ManagementBoard of the Company on October 10, 2011.Deputy Chairman – Ospanov S.K., First Deputy Chairman of the Management Boardof the Company.Composition of the Committee: members of the Management Board, managingdirectors in charge of production, assets and project management, finance andeconomy, representatives of SAO of the Company, members of the Board of Directorsof the Company and independent experts.Chairman – Satkaliyev A.M., Chairman of the Management Board of the Company.Total In presence In absentiaNumber of meetings 11 11 0Number of issues considered 30Key issues considered by the CommitteeApproval of projects “Reconstruction and Expansion of Almatinslkaya CHP-1” ofJSC “AlES” with the Transition to Gas and Installation of CCGT/GTU”, “Constructionof 45 MW Wind Power Station at Yereymentau Site”.Approval of development and financing of feasibility document “Construction ofBulakskaya HPP”, “Construction of CHP-3 in Semey”.Approval of implementation of pre-investment stage of the projects on“Construction of Kokshetau CHP”, “Construction of Bartogaisky HPP-27 andHPP-28”.Approval of wind power engineering development concept during the transitionof the Republic of Kazakhstan to “green” economy.Corporate governance Integrated Report 2012 101

CONTENTManagement System and Corporate Governance CommitteePurpose of establishment – taking decisions on the Company’s important activitydirections to identify processes and implement the Company’s Policy and achieve the Goalsin the sphere of corporate management and improvement of corporate governance.Regulating document – Regulation on the Committee approved by the Management Boardof the Company on June 14, 2012.Chairman – Pazylkhairova G.T., Deputy Chairman of the Management Board of the Company.Composition of the Committee: managers and heads of departments responsible forstrategic development, financial and economic issues, production and technical issues,project and asset management, human resources management, risk management, legalsupport, security, procurement and innovational and technological development.Total In presence In absentiaNumber of meetings 1 1 0Number of issues considered 7Evaluation of the status of execution of measures on the improvement ofcorporate governance and actualization of internal regulating documents of theKey issues considered by the Committee Company.Approval of single criteria for objectives maps of the employees of theCompany.Corporate governance Integrated Report 2012 102

CONTENTRiskCommitteePurpose of establishment – coordination of risk management system organization in theCompany.Regulating document – Regulation of the Committee approved by the Management Boardof the Company on June 14, 2012.Chairman – Pazylkhairova G.T., Deputy Chairman of the Management Board of theCompany.Composition of the Committee: managers and heads of departments responsible forstrategic development, financial and economic issues, production and technical issues,project and asset management, human resources management, risk management, legalsupport, security, procurement, innovational and technological development, Head ofinternal audit service.Total In presence In absentiaNumber of meetings 1 1 0Number of issues considered 7Report of the head of risk management structural division.Key issues considered by the Committee Consideration of drafts of risk management policy, Register and Map of risks,Action plan on managing the key risks.Corporate governance Integrated Report 2012 103

CONTENTAssets and Liabilities CommitteePurpose of establishment – defining the Company’s assets and liability management policyaimed at growth of interest income at maintaining adequate liquidity, meeting internalregulations and minimization of financial market risks.Regulating document – Regulation on the Committee approved by the Management Boardof the Company on August 31, 2012.Chairman – Pazylkhairova G.T., Deputy Chairman of the Management Board of the Company.Composition of the Committee: Deputy Chairman of the Management Board of theCompany, Managing Director for economy and finance, as well as employees of structuraldivisions responsible for treasury, corporate finance, risk management and internalcontrol, financial and tax accounting.Total In presence In absentiaNumber of meetings 8 8 0Number of issues considered 11Minimization of currency risks connected with placement of the Company’sbonds.Key issues considered by the CommitteeAcquisition of coupon bonds of JSC “AZK” and JSC “AlES”.Opening of bank deposit and transfer of funds received from placing Eurobondsof the Company, to the interest accruing account opened in Kazkommertsbank.Corporate governance Integrated Report 2012 104

CONTENTCompliance with the principles and corporate governance processesCorporate Governance Code was approved by the Sole Shareholder of the Company (theapplication to the order #165-П dated 12 November 2007).The main principles ofthe Code are:• The principle of protecting the rights andinterests of shareholders;• The principle of effective management of the Company by the Board of Directors;• The principle of effective management of the Company by the Management Board;• The principle of self-activity of the Company;• The principles of transparency and fairness of information disclosure on the activities ofthe Company;• The principles of law and ethics;• The principles of effective dividend policy;• The principles of effective human resources policies;• The principle of environmental protection;• The policy of regulating corporate conflicts and conflicts of interest;• The principle of responsibility.A report on compliance with corporate governance principles is published on the websiteof JSC “Samruk-Energy”.Mechanisms for stakeholders or employees to providerecommendations or direction to the highest governancebodyInteraction between the members of the Board of Directors of the Company is governedby the Procedure for Interaction on Issues of Activity of Representatives of JSC “SovereignWealth Fund “Samruk-Kazyna” in Boards of Directors and Supervisory Boards of Samruk-Kazyna Group of Companies (approved by the Management Board of JSC “Samruk-Kazyna”on September 3, 2010, Minutes #53/10).Specific mechanisms for the employees to provide their recommendations to members ofthe Board of Directors of the Company are not applicable. At the same time, there are norestrictions in the governance system to bring the views and concerns of the staff to theBoard of Directors.Linkage between compensation for members of theManagement Board and the Board of Directors and theCompany’s performancePayment of compensation to the members of the Management Board is performed on thebasis of approved KPIs. Following the evaluation results of the approved KPIs the ratioand the size of remuneration is determined for each member of the Management Board,considering the projected amount and based on the year-end results. Additional conditionfor the payment of remuneration is the presence of the consolidated profit for the period.Payment of compensation to the independent directors of the Board of Directors isbased on the mechanisms set out in employment contracts. In accordance with the saidagreements a fixed fee for attending meetings of the Board of Directors is determinedfor each of the independent member of the Board of Directors, and the variable portion,paid for membership in the committees of the Board of Directors of the Company. Inparticular, remuneration of the members of the Board of Directors shall not be paid incase of participation in less than half of meetings as well as in the event of deterioration inthe financial and economic performance of the Company and failure to achieve the goalsand efficiency indicators following their evaluation.Procedures for monitoring of execution of set goalsProcedures for monitoring economic, environmental and social performance of theCompany, as well as the implementation of set strategic objectives will be implementedthrough the execution of the Company:Action Plan on the Development Strategy of JSC “Samruk-Energy” in 2012 – 2022 years,on a long term basis;Plan for development of JSC “Samruk-Energy” up to 2015 on a monthly, quarterly andannual basis.The precautionary principlehttp://www.samruk-energy.kz/index.php?option=com_content&view=article&id=128&Itemid=148&lang=enThe Company adheres to the 15 th of the precautionary principle, stated in the Declaration adoptedat the UN Conference on Environment and Development in Rio de Janeiro on June 3-4, 1992.Corporate governance Integrated Report 2012 105

CONTENTIn the framework of environmental protection, the Government of the Republic ofKazakhstan took the decision #1232 dated December 14, 2007 of to approve the TechnicalRegulations “Requirements to the Emissions into the Environment at Burning of Fuels inBoilers of Thermal Power Stations”, which will come into force on January 1, 2013.The Company’s Group, recognizing that in the course of its activity it causes certaindamage to the environment, is implementing measures that reduce emissions into theenvironment. For the purposes of compliance with the Technical Regulations, Samruk-Energy Group of companies is seeking to reduce harmful emissions into the atmosphereandhas actively started the installation of smoke catching filters to significantly reducepollution.Participation in the charters and initiativesMany of the problems of the modern world, such as climate change, environmental pollution,poverty, and others, encompass all aspects of human life and concern all countries of theworld.The Company, being one of the largest companies in the Republic of Kazakhstan, shallassume the responsibility for the proper solution of these problems.To demonstrate its commitment to corporate social responsibility principles, the Companyentered into the UN Global Compact on October 5, 2011 and to date supports the tenprinciples of the UN Global Compact.Human rightsPrinciple 1: Businesses should support and respect the protection of internationallyproclaimed human rights; andPrinciple 2: Businesses should not be complicit in human rights abuses.Labor relationsPrinciple 3: Businesses should uphold the freedom of association and the effectiverecognition of the right to collective bargaining;Principle 4: Businesses should uphold the elimination of all forms of forced and compulsorylabor;Principle 5: Businesses should uphold the effective abolition of child labor, andPrinciple 6: Businesses should uphold the elimination of discrimination in respect ofemployment and occupation.EnvironmentPrinciple 7: Businesses should support a precautionary approach to environmental issues,based on the precautionary principle;Principle 8: Businesses should undertake initiatives aimed at increasing the responsibilityfor the environment, andPrinciple 9: Businesses should encourage the development and diffusion of environmentallyfriendly technologies.Anti-corruptionPrinciple 10: Businesses should work against all forms of corruption, including extortionand bribery.Since 2012, the Company started to provide information on the progress achieved,confirming its continued support for the principles of the UN Global Compact and describingactions to comply with its principles and their results.Membership in associations and/or national andinternational advocacy organizationsJSC “Samruk-Energy” is a member of the following associations/organizations:• Kazakhstan Association of Oil, Gas and Energy Complex “KAZENERGY”;• Electricity Council of the CIS;• Kazakhstan Electricity Association;• Global electricity Council.Conflicts managementThe practice of preventing conflict of interests is strictly observed by all employees,regardless of their status and position, and covers all aspects of the Company’s activity,from hiring to procurement. Deliberate actions for breaching a Code of Business EthicsCorporate governance Integrated Report 2012 106

CONTENTand Corporate Governance are considered by the Company as a disciplinary offense, whichcould lead to prosecution under the law of the Republic of Kazakhstan.In order to increase the employees’ awareness, the Company has developed a Policyfor Settlement of Corporate Disputes and Conflicts of Interest stating the policy in thesphere of conflict of interests. The standard contract contains obligations of employees oncompliance with the Code of Conduct and the Code of Corporate Governance.An example of compliance with the provisions of the Code of Conduct and the Code ofCorporate Governance is the practice of discussing the remuneration of the executive bodyat the meetings of the Board of Directors of the Company; the Chairman of the ManagementBoard is not participating in the determination of his remuneration and other additionalbonuses.Responsibility for monitoring compliance with the Code of Corporate Governance restswith the Department of Corporate Governance. Following the 2012 results, the Companyhas developed a Report on compliance with the principles of corporate governance whichwas further placed on the Company’s web-site. In particular, to avoid conflict of interests,the list of affiliated persons of the Fund’s Group of companies is prepared in the Companyand submitted to the members of the Board of Directors and the Management Board of theCompany, and is also published at the intranet portal of the Company.In 2012, there were no cases of conflict of interests in Samruk-Energy Group of Companies.Quality ManagementIn 2010, the Company’s management adopted the decision on Development andImplementation of the Corporate Management System (hereinafter – CMS) meeting theinternational standard ISO 9001:2008.As part of this project in 2011 a large-scale job was conducted. The Company has developedand approved the Policy in the field of CMS, CMS Guidelines, CMS Mandatory procedures(Rules for Managing Internal Regulatory Documents, Records, Discrepancies; Rules forDeveloping Corrective and Preventive Actions, organizing and conducting internal auditsof CMS, organization and analysis of CMS by the management, corporate managementsystem business process analysis); Maps of all existing internal processes of structuraldivisions, and started the process of unification of the internal regulations of the Companyand conducted planned internal audits of CMS.On July 29, 2011 the Management Board of the Company adopted a decision onimplementation of the CMS of the Company.On December 14, 2011 the Company’s CMS was successfully certified by the certificationbody TUV Rheinhland to comply with the relevant international standard ISO 9001:2008applicable in the field of services in the corporate management of energy assets.The introduction of the CMS has built a clear system of interaction between structuralunits based on formalized processes and procedures. In the end, this was reflected inimproving the quality of internal processes and services provided.In 2012, the Company had successfully passed the first supervisory audit for complianceof the Corporate Management System with the international standard ISO 9001:2008.Also in the past year, all the subsidiaries of the Company have passed the supervisoryand some companies – recertification audits, receiving confirmation of compliance ofall management systems with international standards. In 2012, JSC “AlES” and JSC“Alatau Zharyk Companiyasy” have successfully joined certified organizations of theCompany’s Group confirming their compliance with the integrated management systemrequirements of ISO 9001, ISO 14001 and OHSAS 18001 international standards. JSC“Shardarinskaya HPP” and JSC “Mangistauskaya REC” are working on the introductionof an integrated management system.As of December 31, 2012 management systems were operating in 10 organizations of theCompany’s Group including Corporate Center:Six subsidiaries (LLP “Ekibastuzskaya GRES-1”, JSC “Ekibastuzskaya GRES-2”, JSC “AlES”,JSC “Alatau Zharyk Companiyasy”, JSC “EK REC”, JSC “Aktobe CHP”) were certified onthree standards (ISO 9001, ISO 14001 and OHSAS 18001).One subsidiary (LLP “Bogatyr Komir”) – certified on two standards (ISO 9001 and ISO14001);The Company and two subsidiaries (JSC “AlmatyEnergoSbyt” and LLP “ShygysEnergo-Trade”) – certified on ISO 9001 standard.Improvement of management systems based on international standards is an importantfactor in dynamic development and strengthening the position in the energy market of thecountry.Corporate governance Integrated Report 2012 107

CONTENTInteraction with stakeholdersJSC “Samruk-Energy” considers its stakeholders as a group of individuals ororganizations that have an impact on the Company’s activity or affected by the activitiesof the Company. The main stakeholders are reflected in the below table.Stakeholders List of issues Methods of interactionShareholdersSubsidiaryand affiliatedorganizationsEmployeesState bodiesConsumersBanks andother financialorganizations• Performance effectiveness;• Dividends;• Transparency and disclosure ofinformation.• Profitability of the companies;• Reduction of harmful emissions;• Efficient use of water resources;• The use of high technology.• Wages;• Social benefits;• Safe working conditions;• Career growth opportunities.• Industry Development Program;• Social issues;• Tariffs.• Meeting the growing demand forelectricity and heat;• The quality of services provided;• Energy saving.• Credit lines;• Bank accounts;• Collaboration on projects.• General Meeting of Shareholders;• Annual Report;• Meetings and negotiations;• Internet site;• Correspondence and requests;• Exhibitions, forums and presentations.• Meetings;• Internet site;• Procurement;• Non-financial reports;• Working visits;• Round tables, summits.• Opinions and wishes sent through departmentheads;• Internet site;• Questionnaires and interviews;• Mass media;• Meetings of the Management Board.• Participation in government working groups;• Working through industry organizations;• Consultation with the state authorities in the fieldof electricity.• Surveys and interviews;• Mass media;• Internet site;• Non-financial reporting.• Internet site;• Correspondence and requests;• Exhibitions, forums and presentations;• Financial accounts.Corporate governance Integrated Report 2012 108

CONTENTStakeholders List of issues Methods of interactionOther affiliatedpartiesCompetitorsCommunity,including massmediaSuppliersPartners• Non-discrimination;• Respect for human rights;• Stable employment.• Increased industrial efficiency;• Support at peak loads.• Promotion of socio-economicdevelopment of the activity;• Effective natural resources management;• Protection of the environment.• Long-term cooperation;• LocalContent;• Reduction of harmful emissions.• Safety of equipment;• Company development plans;• Compliance with contractual obligations.• Non-financial reports;• Web site.• Working through industry organizations.• Internet site;• Non-financial reports;• Press releases;• Corporate events;• Press conferences.• Concluded contracts and memorandums.• Non-financial reports;• Working visits;• Business meetings;• Internet site;• Advertising.Corporate governance Integrated Report 2012 109

CONTENTSustainable developmentEnvironmental ProtectionHuman RightsPersonnel PolicySocial ResponsibilityLabor OrganizationInteraction with the CommunityProduct LiabilityIntegrated Report 2012 110

CONTENTEnvironmental protectionorganizational structure of JSC “Samruk-Energy” the Chairman of the Management Boardof the Company directly supervises the department responsible for environmental issues.Currently the Company is defining priority development directions and objectives in theenvironmental field which will be further reflected in thelong-term Development andEnvironmental Policy of the Company.JSC “Samruk-Energy” plans to work consistently to reduce the impact of its operationson the environment through the introduction of new technologies using renewable energysources.Brief description of management approach to every aspect of the environment is providedbelow.Materials usedIn the course of its activity Samruk-Energy Group of Companies acquires natural resourcesused for further conversion into electricity and heat. Along with the natural resources theGroup also uses less significant in terms of consumption chemical products, lubricants andcoolants.Being one of the largest energy companies in Kazakhstan, JSC “Samruk-Energy” is awareof its important role in sustainable development processes. Protection of the environmentand rational resource management play an important role in the activities of the Companyand its subsidiaries and affiliates. Considering the above and in accordance with the newIn particular, some subsidiaries and affiliated organizations of the Group use equipmentcontaining polychlorinated biphenyls (hereinafter – the PBs). The PBs are used as dielectricfluids in transformers, capacitors and other electrical equipment, posing a threat to humanhealth. To avoid the risk of poisoning by the PBs, our country signed the Stockholm Conventionon Persistent Organic Pollutants (hereinafter – the POP). In accordance with the Conventionprovisions, the Republic of Kazakhstan, as one of the parties of the Convention, shall carry outthe following activities:• prohibit the import, export and production of POP-containing substances in the Republicof Kazakhstan;• stop using the equipment containing the PBs (i.e. transformers, capacitors or otherreceptacles containing liquid stocks) by 2025;• take measures to reduce unintentional releases of POP;• take efforts to develop appropriate strategies for identifying sites contaminated by POP;• inform the public about the dangers of POP on human health and the environment.Sustainable developmentIntegrated Report 2012 111

CONTENTTo minimize the impacton the environment ofthe materials used, the Group of Companiesof Samruk-Energy plans in futureto make greater useof renewable energy sources,particularly solar and wind power, which will significantly reduce harmful emissionsin tothe atmosphere.Adherence to the above measures under the Convention will improve environmentalcondition as a whole, which will generally have a positive impact on the health of citizens ofthe Republic of Kazakhstan.PowerSamruk-Energy Group of Companies uses its best endeavors to promote energy efficiency.Priority activities in this regard are the improvement and modernization of old-fashionedelectrical equipment, increasing efficiency in the production, transmission and distributionof electricity and heat, as well as instilling the conservation mentality to the population inrespect of consumption of electricity and heat.In order to implement priority activities and minimize environmental impact the followingmeasures were carried out by the Group of Companies of Samruk-Energy in 2012:1. Installation of electrostatic filters at power units #4 and #8 at Ekibastuzskaya GRES-1with ash collection coefficient of 99.6% and higher (currently scrubber ash collectionrate is 88%);2. Installation of new generation of emulsifiers on boilers of CHP-2 and CHP-3 with ashcollection level of not less than 99.4%.• CHP-2 –installed on two boilers.Environmental effect: reducing inorganic dust emissions by 2,135 tons.• CHP-3 – installed on one boiler.Environmental effect: reducing inorganic dust emissions by 1,000 tons.3. Modernization of burners on boiler units of CHP-1 and CHP-3 departments in order tomatch the level of emissions of nitrogen oxides in accordance with the requirements ofthe Technical Regulations• CHP-1 – installed on one boiler.Environmental effect: reduction of NOx concentrations to 680 mg/m 3 , reduction ofemissions by 50 tons / year from one boiler.• CHP-3 – installed on two boilers.Environmental effect: reduction of NOx concentrations to 680 mg/m 3 , reduction ofemissions by 60 tons / year from one boiler.4. Protection and sound management of water resources and soils at JSC “AlES” CHP-1.Implementation of measures for sluice discharge pipelines repair and replacement,repair of pumping equipment in boiler, turbine, chemical houses, and wastewatertreatment facilities.5. JSC “AlES” CHP-2Restorative and repair works of ash disposal systems, production facilities, storagetanks for clarified water.Also planned:1) Installation of electrostatic precipitators (in 2013 – in all 6 active by the time power unitsof Ekibastuzskaya GRES-1) with ash collection coefficient of 99.6% and higher (currentlyscrubber ash collection rate is 88%);2) Use of low-emission burners to reduce nitrogen oxide emissions to 500 mg/m 3 at atechnical rate of 650 mg/m 3 and in the future – up to 200 mg/m 3 by means of reductionof nitrogen oxides (selective non-catalytic reduction system – SNCRS);3) For coal thermal power stations, which mainly use Ekibastuz coal with an ash contentof 43%;4) Increase productivity at thermal power plants and central heating power plants based onthe implementation of automated process control systems (APCS);5) Upgrade of hydropower and hydraulic equipment at Shardarinskaya HPP with theincrease of installed capacity (now – 100 MW) by 16 percent or more; electricityproduction- by 57 million kW/h/year;6) Increase the accuracy, reliability and timeliness of commercial energy accounting,obtaining full energy balance for each of the power plants by implementing automatedelectricity metering system (AMR).WaterWater in Samruk-Energy Group of Companies is primarily used for cooling electricalequipment, circulation systems and auxiliary technological water recycling processes athydropower stations, thermal power plants and governmental district stations. A smallportion of water evaporates in the technological process. The main volume of water afterSustainable developmentIntegrated Report 2012 112

CONTENTits usage in production processes and during mechanical, physical, chemical and biologicaltreatmentis returned to the environment.Local water and environmental authorities regulate water intake issues, paying specialemphasis to the level of water in the regional ecosystems where subsidiary and affiliatedorganizations of JSC “Samruk-Energy” operate. The reduction in loss of water used intechnological process is a priority in the medium term perspective.BiodiversitySamruk-Energy Group of Companies seeks to minimize the impact of its activities onthe flora and fauna. Special attention is given to those regions where electricity assetsof Samruk-Energy Group of Companies are located on the territory of national parks andnature reserves.At the moment the Group has not developed regulatory documents in the field ofbiodiversity management.Despite the lack of documentation on biodiversity management,each company of Samruk-Energy Group recognizes the importance of a lean productionprocess and the introduction of new technologies increasing the safety of the animaland plant world. With the increasing role of the dimensions of sustainable development,both in the world and in Kazakhstan, the Group intends to improve the control andmanagement over the biodiversity in the regions it operates.EmissionThe main greenhouse gas released into the atmosphere as a result of Samruk-EnergyGroup activities is carbon dioxide (CO 2), which is generated by the production of heat andelectricity, as well as coal mining. Undoubtedly, the increase in the production implies anincrease in the emissions of greenhouse gases in the atmosphere.In order to minimize environmental pollution Samruk-Energy Group performs systematicwork on the modernization of technological process, including:1) Reduction of harmful emissions and improving environmental conditions in Almaty inthe framework of the project “Expansion and Reconstruction of Almaty CHP-1 with theinstallation of CCGT”;2) Installation of smoke filters to restrain considerable part of particulate pollutants to theatmosphere at power plants;3) at gas turbine power plants (GTPP) – introduction of combined cycle with an increase inpower generation per unit volume of gas by 35% or more and an increase in efficiencyof up to 55%;4) Construction of renewable energy sources, particularly wind and solar power plants.DischargesEnvironmental safety and sound managementof natural resources, including water, playan important role in the activities of the companies of JSC “Samruk-Energy”.The reduction in intake and discharge of water needed for the normal functioning of a powerplant is the first priority in order to progressively reduce discharges into the ecosystem ofthe Republic of Kazakhstan.Prior to water sources of the Republic of Kazakhstan, discharges from generation stationsare assessed in terms of exceeding the maximum allowable contaminants in wastewaters.As a result of this analysis, all of the emissions produced by Samruk-Energy Group ofCompanies comply with the environmental legislation of the Republic of Kazakhstan.WasteThe most common waste from the production activities of Samruk-Energy Group ofCompanies are ash, slag from coal burning, transformer oils, used mercury lamps andbatteries. At present, there is no single approach to waste management in the Group ofcompanies of JSC “Samruk-Energy”.Products and servicesThe main products and services of Samruk-Energy Group of Companies are productionof electricity and heat, distribution and transportation of electricity, coal mining,reconstruction and modernization of the electric power industry facilities. A key goal isto maintain the achieved level of services and products, as well as further improving thequality and parameters using world standards with respect to products and services in theelectricity and coal industries.As a result, the Group complies with all requirements regarding the quality of its productsand services in the Republic of Kazakhstan.Sustainable developmentIntegrated Report 2012 113

CONTENTCompliance with requirementsManagement of JSC “Samruk-Energy” pays close attention to compliance withenvironmental legislation.One of the first measures to ensure compliance with environmental legislation isconduction of environmental audits. In the medium term, the Group plans to continue theimplementation of a certified environmental management system, in order to minimizenegative impacts on the environment and improve the environmental and economicperformance, as well as reduce waste production and reprocessing.TransportThe priority for Samruk-Energy Group of Companies is to minimize greenhouse gasemissions produced as a result of its subsidiaries’ and affiliates’ activity. Greenhouse gasemissions caused by the use of transport, are minor compared to the emissions derivedfrom the generation of electricity and heat. Transportation of electrical energy in mostcases is not leading to emissions of harmful substances into the air and discharges towater objects.Materials used, in volumesUnit of measurementVolumeRaw materials (i.e. natural resources used forconversion into products or services)Coal ton 16 767 214Wood ton 0Fuel oil ton 61 644Gas Thousand m 3 804 365Water ton 16 623 048 000Materials related to production process ton 1 000Sustainable developmentIntegrated Report 2012 114

CONTENTDirect energy consumption, indicatingprimary sourcesUnit of measurement 2012Coal GJ 133 029 285Natural gas GJ 33 071 111Fuel oil GJ 396 313Gasoline GJ 31 040Diesel GJ 30 192Liquefied gas GJ 420Energy saved due to lower consumptionand increasing energy efficiencyUnit of measurementAmountBy means of:Modernization of production process GJ 57 384Conversions orreplacement of equipment GJ 2 886 192Change in behavior of staff GJ 17 736Energy saving in Samruk-Energy Group is the result of optimization of the auxiliary electricalequipment, replacing old equipment with energy-efficient equipment, and prudent attitudeof the Group employees towards the usage of electricity.Sustainable developmentIntegrated Report 2012 115

CONTENTTotal water withdrawal by sourceUnit of measurementVolumeTotal water withdrawalfrom surface water thousand m 3 ³ 37 109 294,41from underground sources thousand m 3 ³ 5 221wastewater of other organizations thousand m 3 ³ 452,3from municipal and other water systems thousand m 3 ³ 91 958Percentage and total volume of waterrecycled and reusedUnit of measurementVolumeTotal water withdrawal thousand m 3 ³ 37 206 925,41Volume of reused or recycled water thousand m 3 ³ 971 870Share of recycled or reused water %³ 7,3Sustainable developmentIntegrated Report 2012 116

CONTENTLocation and size of land owned, leased, managed in, oradjacent to, protected areas and areas of highbiodiversity outside protected areasObjects of Samruk-Energy Group of companies which are taken into account in thisindicator are mainly reservoirs, electric power lines, thermal power plants, state districtpower plants and hydro.Among the Group of companies of Samruk-Energy, only JSC “Almaty Electric Stations”has production assets, which include CHP1, CHP-2 and CHP-3, located on the territory ofthe Ili-Alatau National Natural Park with an area of 48.8 hectares. This park is in the list ofspecially protected natural territories of the Republic of Kazakhstan.NO x, SO x, and other significant air emissions, in type and volumeUnit of measurementValueNO xton 66 877,762SO xton 180 367Persistent organic pollutants (POPs) ton -Volatile organic compounds (VOCs) ton 89,52Hazardous air pollutants ton -Emissions from point and fugitive sources ton 173 548Solid particles ton 24 934Other standard category emissions used in the regulations ton 7 561Total water discharged by quality of waste water and accepting objectUnit of measurementVolumeAccepting objectsRivers m 3 ³ 11 177 944 158Lakes m 3 ³ 2 071 861,02Man-made objects m 3 ³ 38 054 755Total: m³³ 11 218 070 774Sustainable developmentIntegrated Report 2012 117

CONTENTIn the case of slight contamination of water abstracted not leading to the excess ofmaximum allowable limit, the Group of Companies of Samruk-Energy does not conductwaste water treatment.This type of waste water is referred to as the regulatory clean waste water that does notlead to a violation of water quality standards in monitored or water consumption point.Monetary value of significant fines and total numberof non-monetary sanctions for non-compliance withenvironmental laws and regulationsDuring 2012, in the course of the Samruk-Energy Group’s activity there have been casesassociated with penalties imposed for non-compliance with environmental laws of theRepublic of Kazakhstan.The penalty for the Group of Companies of Samruk-Energy was recorded in 2012 in theamount of 8,120,992 tenge.Sustainable developmentIntegrated Report 2012 118

CONTENTHuman rightsThe main strategic capital and the Company’s main asset is its human resource, whichefficient operation allows the Company to successfully resolve and achieve the setobjectives.Human rights issues are crucial in the employment relationship between the Companyand its employees. In this regard, the policies and procedures of Samruk-Energy Groupof Companies are being developed considering the rights of employees, customers andbusiness partners. Basic regulative documents outlining procedures to consider humanrights are the Code of Business Ethics, Employment Contracts, Internal Labor RoutineRules, Rules for Granting Leaves to Employees and Regulation on Business Trips.Collective bargaining agreements are signed with the employees of Samruk-Energy Groupof Companies containing social guarantees, benefits and compensations.In order to regulate and protect the professional, economic, social and labor rights andprofessional interests of employees ten trade unions of more than 18,000 people areoperating in the Group of Companies of Samruk-Energy.Trade union organizations of the Group of Companies of Samruk-Energy play an importantrole in the development of proposals for legislative and other regulatory legal acts affectingsocial and labor rights of employees, as well as in social and economic policy, formationof social programs and other issues in the interests of trade union members, participatein the implementation of social protection measures of the employees – union memberslaid off as a result of reorganization or liquidation of the company and are involved in thesettlement of collective labor issues.Along with the trade union organizations, as part of regulation of social and labor relationspermanent commissions on the regulation of social and labor disputes are operating inthe Group of Companies of Samruk-Energy, and relevant Plans for regulation of social andlabor relations are approved.In order to diagnose the psychological climate of the teams, employee satisfaction surveysare conducted on an annual basis.Sustainable developmentIntegrated Report 2012 119

CONTENTThe position of Ombudsman was duly introduced in JSC “Samruk-Energy to registerinternal complaints of the employees. Hotlines, special boxes for complaints and appealsare introduced in the Group of companies of Samruk-Energy; personal blogs of the headsof organizations are operating. For example, in 2012 internal complaints of employeessubmitted to the blog of the Chairman of the Board, boxes for complaints and appeals, aswell as reconciliation commission were registered in LLP “Bogatyr Komir”, JSC “AlmatyElectric Stations”, JSC “Ekibastuzskaya GRES-2” and LLP “AlmatyEnergoSbyt”.In addition, the Company respects religious views and political preferences of theemployees, provided that they are within the current laws of the Republic of Kazakhstan.The Company also does not preclude participation of its employees in political, religiousand social activities during their personal and business hours. During 2012, the Group ofCompanies strictly complied with the requirements prohibiting the employment of personsunder the age of 18 to work with harmful and (or) hazardous working conditions, and triedto avoid any kind of discrimination against employees and business partners.Absence of regulations, rules and policies governing the evaluation of suppliers andcontractors in terms of human rights has no impact on running responsible business.• JSC “Samruk-Energy” pursues legislation requirements to prevent any form of humanrights violation in its everyday activity.• In 2012, there were no any incidents of human rights abuse and/or discrimination againstworkers in the Group of Companies of Samruk-Energy.• In 2012, there were no cases of compulsory labor usage in the Group of Companies ofSamruk-Energy.• In 2012, there were no any cases of violations involving rights of native and indigenouspeoples in the Group of Companies of Samruk-Energy. The Company recognizes theprinciple of equality of rights and opportunities. The employees have the right to formassociations and handle collective negotiations within the existing legislation.• JSC “Samruk-Energy” and its SAO support the abolition of forced and child labor and donot perform any activities associated with these types of labor.Sustainable developmentIntegrated Report 2012 120

CONTENTPersonnel policyProcedures for local hiring and proportion of seniormanagement hired from the local community at locationsof significant operationOne of the main goals of the Company’s Personnel Policy for 2011–2015 is creation of auniform system of selection and appointment contributing to the efficient implementation oforganizational structure in the Group corresponding to the strategic development directions,as well as allow effective planning of human resource needs and making timely selection ofspecialists who have relevant knowledge, skills, business and personal qualities.Additionally, the Company introduced the principles of open competitive selectionprocess, which involves the best trained and talented professionals. The basic principleof the competitive selection is the transparency of tender procedures, the emphasis onprofessionalism and competence of the candidate.Staff promotion and trainingThe lack of personnel with relevant knowledge, qualifications and skills leads to significanteconomic losses, as manifested both in restrictions of production development andincrease in labor costs. The lack of qualified personnel is defined as the main risk toprevent the growth of cost and efficiency. Therefore, constructing an effective system ofprofessional development of staff aimed at meeting the needs of the Company for skilledworkers is the most important priority for the Company.The system of professional development of employees of JSC “Samruk-Energy” Group ofcompanies includes in-house and external training, and provides for the participation ofemployees in professional training courses, internships and conferences in key areas ofindustrial activity.As part of these activities in 2012 13,841 employees were trained, including: workers – 10,185people, officers and experts – 1,646 people, executives and top management – 2,010 people.At that, the cost of training per employee amounted to more than 25,000 tenge, thepercentage of costs on staff training and development as at the year-end was 1.1% fromthe payroll pool.Sustainable developmentIntegrated Report 2012 121

CONTENTAverage training hours per employee per year, by employee category№ Employee categoryTotal headcount as ofthe end of 2012Number of training hoursfor 2012Average training hoursper employee per year1. Top management 89 1 528 17,22. Middle management 2 734 111 052 40,63. Administrative personnel 2 385 83 655 35,14. Operational personnel 17 439 816 109 46,85. Support personnel 604 14 150 23,4Development of personnel of Samruk-Energy Groupof companies (people)WorkersOfficers and expertsExecutives and top-management2,010 1 64610,185Employee headcountNumber of employees in the Group of Companies of Samruk-Energy at the end of 2012 amounted to 23,251 people.In 2012, the number of the Group’s staff despite theoptimization of the number of administrative staff increasedby 25%. Growth in the number of personnel was associatedwith the acquisition of new assets, such as the LLP“Ekibastuzskaya GRES-1 named after B.Nurzhanov” andLLP “ShygysEnergoTrade”.The vast majority of employees of Samruk-Energy Groupof Companies are working in the manufacturing sector onfull-time basis and under permanent contracts. High levelof full-time employees in manufacturing plants shows theeffective use of the workforce.Due to the nature of its activity the majority of employees ofSamruk-Energy Group of Companies are men.Sustainable developmentIntegrated Report 2012 122

CONTENTTotal workforce by employment type,employment contract and regionTotal workforce by employment type for 2012 Total workforce by employment contract in 2012EmployeesSupervised staff (personperforming regular work at theterritory of and for the organizationpreparing the report, oron its behalf, but not defined asemployee in accordance withthe local legislation or generalpractice).Permanent contractTemporary contractSustainable developmentIntegrated Report 2012 123

CONTENTTotal workforce by regionEmployee turnover in 2012 by regionNorthernSouthernEasternWesternMenWomenSustainable developmentIntegrated Report 2012 124

CONTENTTotal number of employees and turnover by age, gender and region№ Indicator Value, people Portion1. Total number of staff as at the end of year 23251 100%2. Total number of staff resigned 2970 12,7%2.1. Men 50 years 335 1,4%Employee turnover by age in 2012 Employee turnover by region in 2012From 30 to 50Below 30Above 50NorthernSouthernEasternWesternSustainable developmentIntegrated Report 2012 125

CONTENTSocial responsibilityThe Company follows the Development Strategy and Corporate Social ResponsibilityStrategy in its social policy. The main goals and objectives of the Company’s social policyinclude implementation of social state programs, labor and environment protection,sponsorship and charitable donations, satisfying personnel requirements and improvingpersonnel health care, development of staff potential and efficient investments toproduction development.In 2011 the Company joined the UN Global Compact, following, within its sphere of influence,the Ten Principles of the Global Compact in its strategy and everyday activity.The Company, as a socially-oriented enterprise pays great attention to implementation ofvarious social projects, interacts with Akimats of regions and cities in the framework ofagreements on social partnership.Concern about the health of employees, ensuring protection of employees and theirfamilies is the main objective of the Company’s social policy.Also one of the main tools to ensure a decent standard of living of employees of the Companyand its subsidiaries are social benefits and privileges. Thus, in 2012, the main componentsof social support were the following: insurance against accidents during performance oflabor (official) duties, annual medical examination of staff, paid sick leaves, leave to carefor a child (under 3 years), one-time aid for recreation, health insurance and treatment,financial assistance for injuries at work.The employees of the Company’s subsidiary and related organizations, in accordance withthe labor contract, are paid overtime compensation, bonuses for work on weekends andpublic holidays and for night work; other premiums and increments of a compensatory andincentive nature; compensation for work under arduous and harmful labor conditions; andannual paid vacation. One-time bonus is paid in connection with the jubilee (50, 60 years)with continuous work experience in the power industry of 10 years or more.Employees combining work and studying at educational institutions are provided withadditional vacations for the period of examinations or overview lectures, preparing andpresentation of graduation projects (works), and taking final exams.Sustainable developmentIntegrated Report 2012 126

CONTENTThe Company uses its best endeavors to promote and encourage a healthy lifestyle of itsemployees and their families. Jointly and in cooperation with the trade unions Samruk-Energy Group of companies every year arranges and holds sporting events and outdooractivities.In general, the indicators are in positive zone (involvement of> 60% – positive zone) andare characterized by a high level of corporate emotional commitment of the majority of theteam to the Company’s mission and values.Following the employee involvement survey, conducted by independent experts, the indexof involvement in the Corporate Center of the Company amounted to 72%, satisfaction index– 78.0%, loyalty index – 74%, initiatives support index – 65%.Sponsorship and charitable expenses in 2012, in mln tengeALE in the form of association “Kazakhstan Boxing Federation” 75Association KAZENERGY 40Astana branch RPO “Organization of Veterans” 5Total 120Sustainable developmentIntegrated Report 2012 127

CONTENTBenefits provided to full-time employees that are not provided to temporary orpart-time employees, by major operations№ Indicator For full-time employees1. Payments and benefits1.1. Life insurance Provided ProvidedFor temporaryor part-time employees1.2. Health (medical insurance) Provided Provided1.3. Compensations for disability/incapacity Provided Provided1.4. Maternity/paternity leave Provided Provided1.5. Pension payments (one-time payment at retirement) Provided Not provided1.6. Transfer ofthe ownership of the company’s shares Not provided Not provided1.7.Other (spa treatment, financial assistance in connectionwith the birth of a child, financial assistance for medicaltreatment of family members, financial assistance forrehabilitation)ProvidedNot providedSustainable developmentIntegrated Report 2012 128

CONTENTLabor organizationThe main objectives of Samruk-Energy Group of Companies include productivityimprovement, decent remuneration and safe working conditions. These goals demonstratea commitment to social responsibility principles for shareholders, employees and localcommunities.Salaries of employees of the Group of Companies of Samruk-Energy are set accordingto the approved staffing table, depending on the qualifications of the employee and thecomplexity of the job.Remuneration system of the Group of Companies of Samruk-Energy is based on thefollowing principles:• Motivating employees to achieve the Company’s objectives by improving the efficiencyof individual activities, activity of the department and the achievement of the strategicobjectives of the organization;• Competitive ability of benefits package in the labor market, taking into account regionalpeculiarities and specifics of the business;• Transparency – ensuring all employees understand the principles of formation of thestructure and level of remuneration, subject to confidentiality;• Compliance of the wage system with applicable law.In 2012, the average salary of employees of the Group of Companies of Samruk-Energyhas grown in relation to that of 2011 by 8.9% – from 117,737 tenge to 128,278 tenge. Thegrowth of the average wage of production staff in 2012 to 2011 was 9% (from 119,486 tengeto 109,612 tenge). Labour productivity growth in 2012 to 2011 was as follows: production andtransmission of electricity – 5.1%, production of coal – 12.2%. At that, labor productivity inthe production of heat was 3.6%.Sustainable developmentIntegrated Report 2012 129

CONTENTRange of ratios of standard entry level wage compared tolocal minimum wage at significant locations of operationJSC “Samruk-Energy” and its subsidiaries and associates perform annual monitoring ofthe labor market in the regions they operate and adjust the wage size of their employeesrespectively. The average salary for an entry-level professional in Samruk-Energy Group in2012 amounted to 53,107 tenge, which is by 7% higher than the previous year. The minimumwage in 2012, according to the Law of the Republic of Kazakhstan “On Republican Budgetof the Republic of Kazakhstan” was 17,439 tenge.Programs for skills managementAs part of the implementation of professional development of the employees of the Group,Training centers are operating in some of its companies along with external educationand training. Professional training in the Training centers include theoretical and practicalstudies.For example, there is a Training center established at JSC “AlES” aiming at coordinationand delivery of staff training, re-training, and conducting training courses on key energyqualifications, and organization of corporate seminars for those workers engaged inoperation of hazardous industrial facilities.In JSC “Almaty Zharyk Kompaniyasy” there are 6 educational and training sites providingtraining in respect of improvement of professional skills, promotion and disseminationof best practices and techniques of maintenance activities, introduction of advancedtechnology, new devices and devices used for maintenance of substation equipment, powerdistribution networks.There is a training center operating at LLP “Bogatyr Komir” that meets modern requirementsand is aimed at teaching in health and safety, as well as testing of knowledge. There aremining equipment and machinery classrooms, rail transport and lifting equipment rooms,plumbing and electrical installation business rooms, health and safety classrooms fullyequipped and available in the training center. The main objectives of the training center areto provide an entry-level training and further staff development.In addition, in 2013 – 2014, it is planned to implement projects on the establishment andopening of two new modern training centers. These centers will focus on training anddevelopment of both the production and the management team. New training programsemploying latest innovative technologies in the field of electric power, as well as attractionof leading experts of large energy companies from near and far abroad as lecturers arescheduled for implementation as well.In order to effectively achieve the objectives of the Company, Samruk-Energy Group ofcompanies is embedding a system of staff performance assessment. Thus in 2012, formalperformance reviews were conducted for 6% of the employees of the Group.Percentage of employees receiving regular performance and career development reviews№ Indicator Value Unit of measurement1. Total number of staff as of the end of year 23 251 people2. Number of staff passed formal performance review 1 300 people3. Percentage of staff passed formal performance review 6 % %Sustainable developmentIntegrated Report 2012 130

CONTENTDiversity and equal opportunityThe Company provides all employees equal opportunities to realize their potential inthe workplace, gives an impartial and fair evaluation of their results, selects employeesand moves them up through the ranks solely on the basis of their professional skills andknowledge.Composition of governance bodies and breakdown of employees per category according to gender, age group,minority group membership and other indicators of diversityMenWomenBelow 30From 30 to 50Above 50Sustainable developmentIntegrated Report 2012 131

CONTENTManagement bodies of Samruk-Energy Group of CompaniesBelow 30From 30 to 50Above 50MenWomenCollective bargaining agreementsCollective bargaining agreements operate in most of the companies of Samruk-EnergyGroup to ensure social protection of staff and provision of social guarantees. Developmentand signing of collective bargaining agreements are carried out in accordance with Article282 of the Labor Code of the Republic of Kazakhstan. Collective agreements are developedwith the participation of the heads of union committees, whose experience in the tradeunions is estimated between 10 and 35 years. Collective agreements are concluded for aperiod of three years. Prior to the signing of collective agreements, legal due diligence iscarried out.Percentage of employees covered by collective bargaining agreementsIndicator Value Unit of measurementTotal number of employees at the end of 2012 23 251 PeopleIncluding covered by collective agreements in 2012 22 096 PeopleShare of total number of employees covered by collectiveagreements95% %Sustainable developmentIntegrated Report 2012 132

CONTENTMinimum notice period(s) regarding operational changes,including whether it is specified in collective agreementsPursuant to paragraph 2 of Article 48 of the Labor Code of the Republic of Kazakhstan,management of JSC “Samruk-Energy” and its SAO shall notify in writing the employee and/ or his representatives on the changes in working conditions not later than one monthbefore such changes occur. This condition is defined in the collective agreement and isstrictly observed by every organization of Samruk-Energy Group of Companies.Labor protection and safetyRates of injury, occupational diseases, and number of work related fatalities2012 2011Samruk-Energy Group of companiesTotal number of working hours 32 519 397 32 647 381Total number of injuries 19 33Production injury coefficient (PIC) 0.117 0,202Total number of occupational deceases 0 2Occupational deceases coefficient (ODC) 0 0.012Total number of lost days 1 185 1381Lost day rate (LDR) 7.29 8.46Number of work related fatalities 3 4Sustainable developmentIntegrated Report 2012 133

CONTENTIn 2012 work related injuries in the SAO of the Company reduced as compared to 2011.Measures taken in SAO to prevent accidents at workTo reduce and eliminate occupational injuries the following measures are taken in allsubsidiary and affiliated organizations of the Company:1. The circumstances and causes of accidents are communicated to all employees.2. Additional trainings are provided to all production personnel.3. Unscheduled checking of knowledge of safety and operating rules and safety and laborprotection instructions are conducted for the workers in those departments where theaccident occurred.4. Safety Days are held on a monthly basis with participation of top managers. Followingthe complex tests results measures are duly developed to address the violations.5. Security and safety offices organize complex examination of equipment, buildings andfacilities and work places. According to the results of due diligence activities, relevantaction plans with deadlines and responsible persons are developed.6. A planned replacement of obsolete equipment that poses a serious threat to productionstaff is being performed.7. Training for the entire production staff is performed in accordance with training,instructions and knowledge assessment rules in terms of health and safety.8. Assessment of working conditions at workplaces is conducted not less than once everyfive years.9. In accordance with the Labor Code of the Republic of Kazakhstan and safety standardsthe “Regulation on Safety Management System” has been developed and implementedin JSC “Alatau Zharyk Kompaniyasy” and JSC “Almaty Electric Stations”.10. International standard “System of Management of Health and Safety OHSAS-18001”is being introduced in JSC “Alatau Zharyk Kompaniyasy” and JSC “Almaty ElectricStations”.11. Seminars and meetings with engineering and technical personnel that have the rightto issue orders, be leaders and producers are being held in all subsidiary and affiliatedorganizations with practical training for admission to the production and issuing orders.Education, training, counseling, prevention, and riskcontrolprograms in place to assist workforce members,their families, or community members regarding seriousdiseasesAccording to the Resolution of the Government of the Republic of Kazakhstan as of January25, 2012 #166 “On Approval of the List of Harmful Factors and Occupations which RequireCompulsory Medical Examinations, the Rules of the Mandatory Medical Examinations” theemployees of Samruk-Energy Group of Companies pass preliminary and periodic medicalexaminations carried by the institutes of health, which have licenses for medical evaluationactivities to examine professional suitability. According to the results of preliminary andperiodic medical examinations the commission recommends a set of measures aimedat improving the employee’s health, in particular, inpatient assessment and treatment,rehabilitation, and sanatorium treatment.Samruk-Energy Group of Companies on a regular basis arranges vaccination for theiremployees, and also uses other forms of medication to maintain immunity to preventdiseases.Sustainable developmentIntegrated Report 2012 134

CONTENTThe number of employees working under conditions with high risk of such diseases as hearing loss,ischemic heart disease and hypertensionNumberJSC “AlES” 2 445JSC “Aktobe CHP” 297LLP “Bogatyr Komir” 5061JSC “Ekibastuzskaya GRES-2 Station” 1 084JSC “ZGRES named after T.I.Baturov 286JSC “Shardarinskaya GES” 119JSC “MREC” 25JSC “AZK” 164LLP “Samruk-EnergoStroyService” 51LLP “AlmatyEnergoSbyt” 0Action Plans to improve working conditions for those employees working in hazardous anddangerous conditions are developed in all the companies.Policies and requirements regarding health andsafety of employees and employees of contractors andsubcontractorsEach company of Samruk-Energy Group in the selection of contractors and subcontractorsis guided by its internal documents, as well as a security documents, adopted inaccordance with the laws of the Republic of Kazakhstan, such as “Safety Rules for theOperating Mechanical Equipment of Power Plants and Heating Systems of the Republic ofKazakhstan” and “Safety Regulations for the Operating Electricity Generating Equipmentin the Republic of Kazakhstan”.Some requirements of Samruk-Energy Group of Companies in the selection and admissionof contractors and subcontractors are as follows:• Availability of own contractor or subcontractor base;• Qualification requirements and experience;• Availability of qualified vehicles (cranes, hydraulic lifts, TV towers) and drivers;• Availability of proper license or certificate;• A list of persons responsible for the safe conduction of operations;• A qualification certificate confirming:• passing exams in safety and operating rules;• passing knowledge test on the rules of Gosgortekhnadzor;• passing exams on special rules;• medical examinations.• availability of policy on Labor, Safety and Environment;• execution of Labor, Safety and Environmental Protection policy and conduction of propermonitoring;Sustainable developmentIntegrated Report 2012 135

CONTENT• other organizations’ reviews on contractors or subcontractors (regarding the experience,the staff, the quality of work performed);• relevant permission for the equipment supplied for use in the Republic of Kazakhstan.Share of employees of contractors and subcontractorsthat have undergone labor and safety trainingContractors and subcontractors prior to admission to the workplace must necessarilypass induction training conducted by the Security and Safety office of the respectivecompany of Samruk-Energy Group. If the contractor’s staff failed the induction, they arenot allowed to work at the Company’s facilities. Thus, all contractors and subcontractorsrendering services to Samruk-Energy Group of Companies should be properly trainedinlabor andsafety.Contingency planning measures, disaster/emergencymanagement plan and training programs, and recovery/restoration plansIn any production activity there is a risk of accidents that could cause harm both to theCompany and its employees and the environment in general. In the event of such accidents,Samruk-Energy Group of Companies implements certain programs to minimize theirimpact and protect employees.These programs are developed in accordance with the Law of the Republic of Kazakhstanas of May 7, 1997 “On Civil Defense” and approved by the relevant authorized body of thoseregions where the SAO of the Group operate.Based on the above mentioned action plans, all employees of Samruk-Energy Group ofCompanies pass periodical trainings conducted by security and labor safety offices givingthe priority to practical study of the most relevant emergency issues. To get practicalskills on how to protect and act in emergency situations, all the trainees are systematicallyinvolved in exercises and studies conducted at different levels and organized by theDepartment of Emergencies in the region where subsidiary and affiliated organizationsof the Group operate. In particular, apart from internal trainings and participation inexercises, subsidiaries and affiliated companies of the Group are closely interacting withthe centers of education and training of the Department of Emergencies of those citieswhere they operate.Number of injuries and fatalities of the public involvingthe Company’s assets including legal judgments,settlements and pending legal cases of diseasesAlong with the advantages associated with the use of electricity, there are also risks, whichsometimes lead to incidents and accidents involving the public. These events are mainlyassociated with the failure, unintentional coming into contact with power lines, electricalwiring and closures of tampering with electrical equipment.• In 2010, there were five accidents, four of which were fatal. These incidents occurred onMay 2, June 5, June 11, June 18 and August 23, 2010 respectively. Based on the above,internal investigations were conducted and a proper acts of the official investigationwere prepared.• In 2011, there was one fatal accident. A proper act of the official investigation wasprepared on November 04, 2011.• In 2012, there were four accidents with fatalities that occurred on March 2, April 3, April14 and June 26, 2012. Official investigation acts were developed.Sustainable developmentIntegrated Report 2012 136

CONTENTInteraction with the communityJSC “Samruk-Energy” reflected this process in the Development Strategy and the Strategyof Development of Corporate Social Responsibility. The criteria for providing assistanceinvolve creating new opportunities for the maximum number of people in cities and villages,as well as improving quality of life.The Republic of Kazakhstan pays special attention to the issues of fair competition. TheAgency of the Republic of Kazakhstan for Competition Protection and its regional officesperform regular monitoring of the market in order to discourage collusion of producersand suppression of unfair competition.The Group of Companies of Samruk-Energy seeks to conduct its business in compliancewith the best international practices. Increasing the market share and growth in operatingprofit are achieved by using fair and competitive practices. In 2012, the Group of Companiesof Samruk-Energy did not receive any notices from the regulatory bodies on creatingcompetitive barriers.Contingency planning measures and disaster/emergencymanagement plan and training programs, and recovery/restoration plansIn order to interact with the community and comply with the principles of corporate socialresponsibility, Samruk-Energy Group of Companies determined relevant priority directionsfor sponsorship and charity.In any production activity there is a risk of accidents that could cause harm both to theCompany and its employees and the environment in general. In the event of such accidents,Samruk-Energy Group of Companies implements certain programs to minimize theirimpact and protect employees. These programs are developed in accordance with the Lawof the Republic of Kazakhstan #100-I as of May 7, 1997 “On Civil Defense” and approved bythe relevant authorized body of the regions where subsidiary and affiliated organizations ofthe Group operate. Based on these action plans, all employees of Samruk-Energy Group ofCompanies pass periodical trainings conducted by security and labor safety offices givingthe priority to practical study of the most relevant emergency issues. To get practicalskills on how to protect and act in emergency situations, all the trainees are systematicallyinvolved in exercises and studies conducted at different levels and organized by theDepartment of Emergencies in the region where subsidiary and affiliated organizationsof the Group operate. In particular, apart from internal trainings and participation inexercises, subsidiaries and affiliated companies of the Group are closely interacting withthe centers of education and training of the Department of Emergencies of the cities wherethey operate.Sustainable developmentIntegrated Report 2012 137

CONTENTPercentage and total number of business units analyzedfor risks related to corruptionIn its everyday activity Samruk-Energy Group adheres to the principles of fairness,integrity, transparency and accountability, as reflected in paragraph 2 of the Code of Ethics.Additionally, in accordance with paragraph 7.2 of the Code of Ethics, any interested personhas the right to report through a corporate secretary to the Board of Directors of the illegaland unethical actions of the Board members and his/her rights should not be harmed inthe event of such a message.Therefore, the Company believes that the daily activities of its employees and contractorsare based on the principle of transparency, thus confirming its negative position in respectof corruption and bribery within the Group of Companies of Samruk-Energy.For the prevention of corruption in the Group, some subsidiary and affiliated organizationsperform measures to identify unscrupulous activities of the Group’s departments. However,the results of inspections showed that there were no cases of direct or indirect violation ofinternal policies and conducting unfair practices.The Company expects that third parties will make similar commitments.The Code of Ethics of JSC “Samruk-Energy” is the founding document of the Company,ensuring compliance with applicable laws of the Republic of Kazakhstan, as well asadherence to business ethics standards.Sustainable developmentIntegrated Report 2012 138

CONTENTProduct liabilitywhich specifies requirements to the quality of electrical energy. This national standard ismandatory for all Companies of Samruk-Energy Group.Marking of products and servicesProduct marking is not applicable for Samruk-Energy Group of Companies.Marketing CommunicationsDue to monopoly or dominant position of the Group, marketing communications make noeconomic sense.Consumer privacyThe Group of Companies of Samruk-Energy places a special emphasis on the issues ofprivacy and protection of customer information. For this purpose, a number of employeesare assigned in each of the Group Company to have authorized access to the data ofconsumers and customers. Moreover, for a number of companies of Samruk-EnergyGroup, customer base represents a strategic and commercial secret.Disclosure of client database to third parties may be performed only at the request of thecompetent authorities of the Republic of Kazakhstan.During the reporting period there were no cases of loss of customer data in the Group ofCompanies of Samruk-Energy.Compliance with requirementsConsumer health and safetyIn order to improve technical regulation and consumer safety, GOST 13109-97 “Standardsof quality of electric energy in general electric energy supply systems” was developedSamruk-Energy Group of Companies operates within the current law. Legal Departmentof JSC “Samruk-Energy” performs constant work to comply with all applicable laws andconducts regular monitoring of existing and newly enacted laws and technical regulationsin the field of electricity, environment, health and safety, and product quality.Commitment of the Group of Companies of Samruk-Energy to norms and requirements ofthe legislation is supported by the fact that at present the Group’s Companies are workingSustainable developmentIntegrated Report 2012 139

CONTENTon installing smoke capturing devices to retain much of particulate emissions to theatmosphere.These actions are regulated by the technical regulation which will come into force in 2013to reduce the negative impact on the environment.Total number of incidents of non-compliance withregulations and voluntary codes concerning health andsafety impacts of productsIn the reporting period there were no cases of non-compliance with regulations concerninghealth and safety impacts of products in the Group of Companies of Samruk-Energy.Total number of incidents of non-compliance withregulations and voluntary codes concerning marketingcommunicationsIn the reporting period there were no cases of non-compliance with regulations concerningmarketing and advertising in the Group of Companies of Samruk-Energy.Total number of complaints regarding breaches ofcustomer privacyDuring the reporting period there were no cases of breaches of customer privacy andlosses of customer data in Samruk-Energy Group of Companies.Sustainable developmentIntegrated Report 2012 140

CONTENTInformation about the auditorand auditor’s reportMain Selection Criteria for External AuditorInformation About the AuditorHiring Employess of Audit OrganizationIntegrated Report 2012 141

CONTENTMain criteria for selection of external auditorThe main criteria determining the choice of audit firm are:• The quality of services;• The cost of services.Quality of service of an audit firm is determined by:• the level of qualification of its specialists;• work experience, both in Kazakhstan and in the international market;• efficiency in the provision of services;• knowledge of the energy and coal industries.Information about the audit companyStarting from 2012 the external auditor of the Company is a network of companies ofPricewaterhouseCoopers (hereinafter PwC).PwC provides audit, tax and consulting services, which are aimed at increasing the value ofbusiness of its customers.PwC is a leading company providing services to multinational oil, gas and energy companies.Integration of products and resources into a single, focused on the industry practice allows usto provide the highest quality services and bring additional value to the customer activity. PwCattracts worldwide resources to working on sites, so that customers could take advantage ofknowledge and practicesin their everyday activities.More than 2,500 heat and power companies worldwide use audit services of PwC, including:• AGL Resources Inc.;• National Fuel Gas Company;• BG Group Plc;• British Energy Plc;• PECO Energy Company;• Union Electric Company;• Exelon Corporation.In addition, the company operates in the Central Asian region: Baku (Azerbaijan), Yerevan(Armenia), Tbilisi (Georgia), Bishkek (Kyrgyzstan), Tashkent (Uzbekistan), Ashgabat(Turkmenistan) and Ulan Bator (Mongolia).Over the past 19 years PwC has been a leading provider of audit and advisory services in theKazakh energy sector. PwC works with the largest Kazakh mining and power companies,which in the past few years have been provided or are currently providing services for theaudit of financial statements prepared under IFRS. Among the largest customers of PwC inKazakhstan in terms of audit services are:Information about the auditor and auditor’s report Integrated Report 2012 142

CONTENTCompany Type of activity periodJSC “Samruk-Energy” Holding company 2008–2010, 2012JSC “Alatau Zharyk Companiyasy”Electric power transportation services, technical distribution of electricityfor the city of Almaty and Almaty oblast2010,2012JSC “Almaty Electric Stations”Production of electric and thermal energy for the city of Almaty and Almatyoblast2010,2012LLP “AlmatyEnergoSbyt” Electricity sale in the city of Almaty and Almaty oblast. 2008–2010, 2012JSC “KazKuat”Holding company managing subsidiaries of JSC “Shardarinskaya HPP” andJSC “Moinakskaya HPP”.JSC “Shardarinskaya HPP” Electricity production. 2007JSC “Moinakskaya HPP” Construction of hydro power plant at the Charyn River. 2008JSC “Mangistau ElectricDistribution Company”JSC “Station EkibastuzskayaGRES-2”Electric power transportation services, technical distribution ofelectricityfor oil and other companies, as well as services for the sale ofelectricity to remote rural areas of Mangistau oblast.Production of electricity and thermal energy from coal, produced at thecoal mines “Bogatyr” and “Severnyi”.20082008–2010, 20122005–2009JSC “Eurasian Power Corporation” Open-pit coal mining at “Vostochnyi” mine and the production of electricity. 2005–2012LLP “Bogatyr Komir” Open-pit coal mining at “Bogatyr” and “Severnyi”. 2008–2010, 2012JSC “Ust-Kamenogorsk HeatingNetworks”Previous auditor was a group of companies of KPMG.Generation, transmission and distribution of thermal energy in the city ofUst-Kamenogorsk.2006Hiring the employees of the auditorIn case of an expected appointment to the position of a member of the Board, ManagingDirector and Chief Auditor of the Company of the Auditor’s employee, participating in theobligatory audit of the Company as an employee of the audit company during two yearspreceding the date of his/her appointment (election), prior approval of the Audit Committeeis required to avoid conflict of interests.Information about the auditor and auditor’s report Integrated Report 2012 143

CONTENTIndependent Auditors’ ReportTo the Shareholders and the Board of Directorsof JSC “Samruk-Energy”We have audited the attached ConsolidatedFinancial Statements of JSC “Samruk-Energy”(hereinafter referred to as the “Company”)and its subsidiary organizations (hereinafterjointly referred to as the “Group”) whichincludes Consolidated Statement of FinancialPosition as at December 31, 2012, ConsolidatedStatement of Comprehensive Income,Consolidated Statement of Changes in Owners’or Stockholders’ Equity and Consolidated CashFlow Statement for the year then ended, as wellthe Statement of General Accepted AccountingPrinciples and other Notes to the ConsolidatedFinancial Statements.March 15, 2013Almaty, KazakhstanApproved and signed:Responsibility of the Group Management forPreparation of the Financial Statements:The Group’s Management is responsiblefor the preparation and fair presentation ofthese Consolidated Financial Statements incompliance with the International FinancialReporting Standards (IFRS), and for theexercise of internal control to the extent, whichthe Management considers necessary inorder to adequately prepare and present suchConsolidated Financial Statements to be freefrom any material misstatements, whethercaused by fraud or other irregularity or error.Responsibility of the Auditors:It is our responsibility to form an independentopinion, based on our audit, on the presentedConsolidated Financial Statements. We havecarried out our audit in compliance with theInternational Auditing Standards. According tothe above Standards, we planned and performedour audit with adherence to high ethicalstandards, so as to obtain all the informationand explanations, which we considerednecessary in order to provide us with sufficientevidence to give reasonable assurance that theConsolidated Financial Statements are freefrom any material misstatement.The audit includes the procedures aimedat obtaining of the audit evidence relevantto the amounts and disclosures in theConsolidated Financial Statements. Selectionof the procedures is based on the auditor'sprofessional judgments, including assessmentof the risk of any material misstatements in theConsolidated Financial Statements, whethercaused by fraud or other irregularity or error.In the course of assessing the above risks, theauditors have also evaluated the internal controlsystem connected with the preparation andfair presentation of the Consolidated FinancialStatements, in order to work out the auditingprocedures necessary in and appropriate tothe circumstances, but not with the purposeto express their opinion on efficiency of suchinternal control system of the Group. The auditalso includes an assessment of significantestimates and judgments made by theManagement in preparation of the ConsolidatedFinancial Statements and of whether theaccounting policies are appropriate to theCompany’s circumstances, as well as evaluationof the overall adequacy of the presentationof information in the Consolidated FinancialStatements.We believe that the evidence obtained by us isadequate and sufficient to express our opinion.Auditor's OpinionIn our opinion, the Consolidated FinancialStatements give a true and fair view in allmaterial respects of the financial positionand the state of affairs of the Group as at 31December 2012, and its performance results,cash flow and changes in its equity capital forthe year then ended, in compliance with theInternational Financial Reporting Standards.Zhanbota T.BekenovaManaging DirectorLLP “PricewaterhouseCoopers”(General State Audit License #0000005, issued by the Ministry of Finance ofthe Republic ofKazakhstan on October 21, 1999)Signed:Dana InkarbekovaAuditor(Qualifying Certificate #0000492of January 18, 2013)Information about the auditor and auditor’s report Integrated Report 2012 144

CONTENTJSC “Samruk-Energy”Consolidated Statement of Comprehensive Incomein thousand tenge Notes 2012 2011 2010Revenue 25 94,557,811 85,549,944 79,939,880Cost of sales 26 (77,064,207) (68,823,661) (60,932,911)Gross Income 17,493,604 16,726,283 16,006,969Expenses on sales (153,180) (112,733) (124,375)General and administrative expenses 28 (6,770,266) (6,405,338) (4,881,940)Share in profit of joint ventures and associatedorganizations11 13,176,583 10,024,877 3,449,023Financial income 29 1,701,666 834,330 2,654,737Financial expenses 30 (5,300,112) (5,365,512) (5,553,261)Other income, net 27 1,945,330 1,444,122 745,124Income before taxation 22,093,625 17,146,029 12,296,277Income tax expenses 31 (3,522,120) (2,219,436) (1,214,688)Income for the period 18,571,505 14,926,593 11,081,589Income for the year from discontinued operations 60,100 - -Other comprehensive income - - -Total comprehensive income for the period 18,631,605 14,926,593 11,081,589Total comprehensive income due to:Group shareholders 18,757,780 14,794,171 10,862,599Minority shareholders (126,175) 132,422 218,990Total comprehensive income for the period 18,631,605 14,926,593 11,081,589Information about the auditor and auditor’s report Integrated Report 2012 145

CONTENTJSC “Samruk-Energy”Consolidated Statement of Financial Positionin thousand tenge Notes 2012 2011 2010AssetsLong-term assetsFixed assets 7 200,338,181 164,025,004 116,876,601Investment activity 10 928,061 1,031,179 1,134,297Intangible assets 8 1,148,248 711,149 331,676Assets for exploration and evaluation 9 8,464,970 - -Investments in joint ventures and associated companies 11 168,230,037 55,703,630 53,736,079Other long-term assets 12 6,686,058 11,901,377 27,190,622Total long-term assets 385,795,555 233,372,339 199,269,275Information about the auditor and auditor’s report Integrated Report 2012 146

CONTENTJSC “Samruk-Energy”Consolidated Statement of Financial Positionin thousand tenge Notes 2012 2011 2010Short-term assetsInventory/ stock 13 7,627,354 10,604,059 7,922,951Accounts receivablesOther receivables14 7,974,882 6,704,174 11,393,253Other short-term assets 15 23,535,392 11,294,781 6,206,597Advance payment of income tax 1,661,005 382,415 362,156Cash and cash equivalents 16 94,665,896 49,844,147 14,988,160Assets of disposal group classified as available for sale 17 320,000 10,126,416 3,906,929Total short-term assets 135,784,529 88,955,992 44,780,046Total assets 521,580,084 322,328,331 244,049,321CapitalEquity capital 18 222,868,957 120,294,884 76,715,078Other reserve capital 18 32,824,785 29,471,162 26,833,774Undistributed profit 34,236,867 19,917,339 6,771,848Group’s shareholders’ equity capital 289,930,609 169,683,385 110,320,700Share of minority shareholders 1,998,321 2,142,287 1,981,484Total capital 291,928,930 171,825,672 112,302,184Information about the auditor and auditor’s report Integrated Report 2012 147

CONTENTLiabilitiesLong-term liabilitiesReserves for ash-disposal area restoration/rehabilitation19 121,031 352,350 362,234Staff compensation and benefits liabilities 20 948,300 889,962 240,558Loans 21 155,187,362 83,506,212 77,411,510Other long-term liabilities 22 7,874,835 7,550,074 8,106,869Deferred income tax liabilities 31 6,764,948 5,154,614 5,035,181Total long-term liabilities 170,896,476 97,453,212 91,156,352Short-term liabilitiesReserves for ash-disposal area restoration/rehabilitation19 244,059 - -Loans 21 14,986,698 16,060,628 9,079,618Staff compensation and benefits liabilities 20 52,287 59,025 42,577Provisions forliabilities and charges 23 9,373,056 8,312,179 8,244,672Accounts payables and other payables 24 32,866,038 27,361,186 22,428,521Taxes payable and other budget payments 31 1,094,334 678,769 692,621Income tax payable 31 138,206 448,150 55,263Liabilities for disposal group classified asavailable for sale17 - 129,510 47,513Total liabilities 58,754,678 53,049,447 40,590,785TOTAL LIABILITIES 229,651,154 150,502,659 131,747,137TOTAL LIABILITIES AND CAPITAL 521,580,084 322,328,331 244,049,321Information about the auditor and auditor’s report Integrated Report 2012 148

CONTENTJSC “Samruk-Energy” Consolidated Cash Flow Statementin thousand tenge Notes 2012 2011 2010Cash Flow From Operating ActivitiesReturn on taxation 22,093,625 17,146,029 12,296,277Adjustments for:Impairment of fixed assets 7 316,109 366,237 -Depreciation and amortization 8,529,572 6,894,402 5,187,453Losses on disposal of fixed assets 239,239 900,214 404,248Income from sale of assets available for sale - (6,969) -Recovery of reserves for impairment of accountsreceivables and other receivables(374,944) (88,711) (734,567)Recovery of impairment of other long-term assets - (85,000) -Reserves for decline in value of inventories 249,877 (13,348) (431,576)Depreciation of income for the connection of additionalcapacities(539,121) (537,262) (518,732)Unrealized gains, net foreign exchange losses - 122,133 (424,109)Loss onwriting-off the cost of housing 272,000 - -Current service cost and actuarial losses on employeebenefits406,006 488,862 275,976Provisions for liabilities and expenses - 67,507 970,000Financial losses 30 5,300,112 5,365,512 5,553,261Financial income 29 (1,701,666) (880,562) (2,154,047)Share of income in joint ventures and associations 11 (13,176,583) (10,024,877) (3,449,023)Income from property received free (200,565) - -Other adjustments 5,382 - -Other provisions - 44,372 -Recognition of previously unrecognized employeebenefit obligations- 242,174 -Information about the auditor and auditor’s report Integrated Report 2012 149

CONTENTin thousand tenge Notes 2012 2011 2010Cash flows from operating activities before changes inworking capital21,419,043 20,000,713 16,975,161Decrease/(increase) in receivables on main activity,other receivables and other short-term assets(5,361,004) (1,903,577) (6,415,847)Decrease in inventory 2,976,705 (2,668,139) (1,696,710)Decrease in accounts payable on main activity and otheraccounts payables3,961,589 4,632,355 3,416,567)Increase in employee benefits liabilities 51,600 - -Increase in taxes payable - 12,922 (173,971)Cash inflow from operating activity 23,047,933 23,881,428 12,105,200Income tax paid (3,291,365) (2,174,713) (2,069,968)Interest paid (3,686,802) (3,333,408) (3,506,772)Dividends received 5,850,808 8,057,326 6,025,294-Net cash inflow from operating activity 21,920,574 26,430,633 12, 553,754Information about the auditor and auditor’s report Integrated Report 2012 150

CONTENTJSC “Samruk-Energy”Consolidated Cash Flow Statementin thousand tenge Notes 2012 2011 2010Cash flow from investment activityAcquisition of fixed assets (34,108,375) (54,587,067) (51,057,828)Acquisition of intangible assets (80,103) (500,059) (225,012)Acquisition of subsidiaries (9,347,772) - -Acquisition of share in associated companies (1,562,500) - -Capitalized income 3,694,165 6,748 2,324Cash advances to acquisition of long-term assets, net (104,197) 13,192,320 (852,371)Interest income received - - (1,500,000)Proceeds from sale ofshares in associated companies 1,189,488 933,613 1,224,761Net changesin assets and liabilities of disposal group 7,556,910 61,902 -Placement of bank deposits, net - 9,180 -Loans provided (8,331,572) (1,737,805) (2,324,609)Repayment of loans provided (7,052,246) (1,904,503) -Other 3,731,129 294,000 -Cash flow from investment activity 180,920 - (31,964)Net cash flows used in investment activities (44,234,153) (44,231,671) (54,764,699)Information about the auditor and auditor’s report Integrated Report 2012 151

CONTENTCash flow from financial activityProceeds from share issue 18 954,008 43,579,806 42,459,978Proceeds from bond issue 74,921,344 - 17,678Receipt of loans 17,170,939 21,171,950 (60,667,829)Sale of shares in subsidiaries - 21,500 102,514Financial aid from shareholders - 7,000,000 32,346,834Repayment of loans (24,095,506) (10,915,594) (47,142,830)Repayment of financial aid from shareholders - (2,381,109) (42,459,952)Repayment of bonds (500,000) (700,000) (489,225)Dividends paid by shareholders (4,438,251) (1,629,350) -Dividends paid to minority shareholders (110,053) (12,449) (31,234)Receipt of loans from consumers - 6,896 26,989Repayment of loans from consumers (815,132) (693,041) (283,150)Other receipts from shareholders 3,990,000 - 32,346,834Other 57,979 - -Net cash flow from financial activity 67,135,328 55,448,609 45,215,431Net increase in cash and cash equivalents 44,821,749 37,647,571 3,004,431Cash and cash equivalents at the beginning of the year 16 49,844,147 14,988,160 11,983,674Cash of disposal group - (2,791,584) -Cash and cash equivalents at the year end 16 94,665,896 49,844,147 14,988,160Information about the auditor and auditor’s report Integrated Report 2012 152

CONTENTJSC “Samruk-Energy” Consolidated Statement of Changes in EquityIn thousand tengeDue to the Company’s ShareholdersNotesEquityCapitalOtherReserveCapitalUndistributed/ RetainedprofitTotalMinorityShareholders’ShareTotalCapitalBalance as of January 1,201176,715,078 26,833,774 6,771,848 110,320,700 1,981,484 112,302,184Income for the period - - 14,794,171 14,794,171 132,422 14,926,593Other comprehensiveincome- - - - - -Total comprehensiveincome14,794,171 14,794,171 132,422 14,926,593Issue of shares 18 43,579,806 - - 43,579,806 - 43,579,806The result of transactionswith a shareholder in the- 2,637,388 - 2,637,388 - 2,637,388non-market conditionsChanges in share interestin subsidiary- - (19,330) (19,330) 40,830 21,500Dividends - - (1,629,350) (1,629,350) (12,449) (1,641,799)Balance asof 31 December 2011120,294,884 29,471,162 19,917,339 169,683,385 2,142,287 171,825,672Balance as of 1 January2012120,294,884 29,471,162 19,917,339 169,683,385 2,142,287 171,825,672Income for the period - - 18,757,780 18,757,780 (126,175) 18,631,605Other comprehensiveincome- - - - - -Total comprehensiveincome- - 18,757,780 18,757,780 (126,175) 18,631,605Issue of shares 18 102,574,073 - - 102,574,073 - 102,574,073The result of transactionswith a shareholder18 - 3,353,623 - 3,353,623 - 3,353,623Dividends - - (4,438,252) (4,438,252) (17,791) (4,456,043)Balance as of31 December 2012222,868,957 32,824,785 34,236,867 289,930,609 1,998,321 291,928,930Information about the auditor and auditor’s report Integrated Report 2012 153

CONTENTAnnex 1: Abbreviations usedJSCLLPCompanySamruk-EnergyGroup of CompaniesAZKAlESLLP “AES”BenchmarkingRESWTOWESGWGRESGTESHPPSAOUPS RKZGRESKPIsDevelopment PlanIndicatorsProcurement planUNO, UNGRIISOIMSMADMAEСО 2POPPDsJoint Stock CompanyLimited Liability PartnershipHolding company JSC “Samruk-Energy” registered in the Republic of Kazakhstan and performing management over its subsidiary and affiliated organizationsJSC “Samruk-Energy”, its subsidiary, affiliated and jointly controlled organizationsJSC “Alatau Zharyk Kompaniyasy”JSC “Almaty Electric Stations”LLP “AlmatyEnergoSbyt”The analysis method by which JSC “Samruk-Energy” compares its activity with that of other companies in order to implement specific changes that improve itscompetitivenessRenewable energy sourceWorld Trade OrganizationWind Electric StationGiga-watt, unit of electricity capacity measurementState district electric stationGas Turbine Electric StationHydro Power PlantSubsidiary and affiliated organizationsUnified Power System of the Republic of KazakhstanJSC “Zhambylskaya GRES named after Baturov”Key Performance Indicators, the indicators (indices) that characterize the level of the Company’s performance to assess the effectiveness of the Company as awhole, and its executivesThe indicators characterizing the production, operating and financial activities. Indicators are of quantitative value to be approved by the Development Plan andcorrespond to the results of operations for the reporting and planned periods.The document prepared in the established forms, reflecting the planned purchasing by the Companyof goods, works and services requiredfor theoperationand fulfillment of statutory activitiesUnited Nations OrganizationGlobal Reporting InitiativeInternational Organization for StandardizationIntegrated Management SystemMaximum admissible dischargeMaximum admissible emissionsCarbone dioxidePersistent Organic PollutantsPolychlorinated biphenylIntegrated Report 2012 154

CONTENTTSRTMRFSRRiskCISStrategyStructural divisionsof the CompanySEZ PITTESCHPFundEGRES-1EGRES-2EBITDAKEGOCSWOTTechnical Safety RulesTechnical maintenance rulesFire Safety RulesExposure to uncertainty related to events or activities that may affect the achievement of goals and objectivesCommonwealth of Independent StatesLong-term Development Strategy of JSC “Samruk-Energy”Divisions of the Company, responsible for the implementation of certain activities, as reflected in the organizational structure of the Company(departments,services)Special Economic Zone “Park of Informational Technologies”Thermal Electric StationCombined Heat and Power plantJSC “Sovereign Wealth Fund “Samruk-Kazyna”LLP “Ekibastuzskaya GRES-1 named after Bulat Nurzhanov”JSC “Station Ekibastuzskaya GRES-2”Earnings Before Interest, Tax, Depreciation and AmortizationJSC “KEGOC” (Kazakhstan Electricity Grid Operating Company)An analysis of the positive and negative impact of factors of external and internal environmentUnits of measurementKmMm 3kW/hGW/hGcalkVthous.mlnmWGJMVAKilometermeterCubic meterkilowatt per hourGiga-watt per hourGigacalorieKilovoltthousandMillionmegawattGigajouleMega Volt-Ampere% PercentIntegrated Report 2012 155

CONTENTAnnex 2: Table of correspondence of the Report to GRI GuidelinesGRI IndexIndicatorDescription ofIndicator1.1 Statement from the most senior decision-maker of the organization + 2-31.2 Description of key impacts, risks and opportunities + 69Page2.1 Name of reporting organization + 122.2 Primary brands, products and or services + 13, 152.3 Operational structure of the organization including main divisions, operating companies, subsidiaries and joint ventures + 712.4 Location of organization’s headquarters + 52.5Number of countries where organization operates, and names of countries with either major operations or that are specifically relevant to thesustainability issues covered in the report+ 122.6 Nature of ownership and legal form + 122.7 Markets served (including geographic breakdown, sectors served and types of customers/beneficiaries). + 122.8 Scale of the reporting organization + 142.9 Significant changes during the reporting period regarding size, structure or ownership + 56-572.10 Awards received in the reporting period + 63.1 Reporting period for information provided + 53.2 Date of most recent previous report-Not applicable3.3 Reporting cycle + 53.4 Contact point for questions regarding the report or its contents + 53.5 Process for defining report content + 53.6 Boundary of the report (for example, countries, departments, subsidiaries, leased facilities, joint ventures, suppliers) + 53.7 State any specific limitations on the scope or boundary of the report + 53.8Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affectcomparability from period to period and/or between organizations+ 53.9Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to thecompilation of the indicators and other information in the report+ 53.10Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (for example,-merger/acquisition, change of reporting periods, business nature, evaluation methods)Not applicable3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report-Not applicableIntegrated Report 2012 156

CONTENTGRI IndexIndicator3.12 Table identifying the location of the Standard disclosures in the report + 1563.13 Policy and current practice with regard to seeking external assurance for the reportDescription ofIndicator-Not applicable4.1Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as settingstrategy or organizational oversight+ 714.2 Indicate whether the Chair of the highest governance body is also an executive officer + 794.3For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/ornon-executive members+ 73-784.4 Mechanisms for stakeholders and employees to provide recommendations or direction to the highest governance body + 1054.5Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements)and the organization’s performance (including social & environmental performance)+ 1054.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided + 106, 1074.7Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, includingany consideration of gender and other indicators of diversity+ 794.8Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental and social performance,and the status of their implementation+ 61, 1054.9Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental and socialperformance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and+ 105principles4.10Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and socialperformance+ 814.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization + 105-1064.12 Externally developed economic, environmental, and social charters, principles or other initiatives to which the organization subscribes or endorses + 1064.13 Members in associations (such as industry) and/or national/international advocacy organizations + 1064.14 List of stakeholder groups engaged by the organization + 108-1094.15 Basis for identification and selection of stakeholders with whom to engage + 108-1094.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group + 108-1094.17Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics andconcerns, including through its reporting+ 108-109PageЕС Management approach + 43EC1Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other communityinvestments, retained earnings, and payments to capital providers and governments+ 43EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation + 130EC6 Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation + 57-58Integrated Report 2012 157

CONTENTGRI IndexEC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation + 121EC8IndicatorDevelopment and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro-bonoengagementDescription ofIndicator+ 127EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts + 59PageEN Management approach + 111-114EN1 Materials used by weight or volume + 114EN3 Direct energy consumption by primary energy source + 115EN5 Energy saved due to conservation and efficiency improvements + 115EN8 Total water withdrawal by source + 116EN10 Percentage and total water volume of water recycled and reused + 116EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity outside protected areas + 117EN20 NOx, SOx, and other significant air emissions by type and weight + 117EN21 Total water discharged by quality and destination + 117EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations + 118LA Management approach + 121LA1 Total workforce by employment type, employment contract and region + 123-124LA2 Total number and rate of employee turnover by age group, gender and region + 125LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations + 128LA4 Percentage of employees covered by collective bargaining agreements + 132LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements + 133LA7 Rates of injury, occupational diseases, lost days, absenteeism, and number of work related fatalities by region + 133LA8Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or communitymembers regarding serious diseases+ 134LA10 Average hours of training per year per employee by employee category + 122LA12 Percentage of employees receiving regular performance and career development reviews + 130LA13Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and otherindicators of diversity+ 131Integrated Report 2012 158

CONTENTGRI IndexIndicatorDescription ofIndicatorHR Management approach + 119HR4 Total number of incidents of discrimination and actions taken. + 120HR5Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken tosupport these rights+ 120HR6Operations identified as having a significant risk for incidents of child labour, and measures taken to contribute to the elimination of forced orcompulsory labour+ 120HR7Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forcedor compulsory labour+ 120HR9 Total number of incidents of violations involving rights of indigenous people and actions taken + 120PageSO Management approach + 137SO2 Percentage and total number of business units analysed for risks related to corruption + 138PR Management approach + 139PR2Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and serviceduring their life cycle, by type of outcomes+ 140PR7Total number of incidents of non-compliance with regulations and voluntary codes of concerning marketing communications, including advertising,promotion, and sponsorship by type of outcomes+ 140PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data + 139EU1 Installed capacity broken down by energy source and by country or regulatory regime + 15EU2 Net energy output broken down by energy source and by country or regulatory regime + 16EU3 Number of residential, industrial, institutional and commercial customer accounts + 18EU4 Length of transmission and distribution lines by voltage + 19EU16 Policies and requirements regarding health and safety of employees and employees of contractors and subcontractors + 135EU18 % of employees that have undergone health and safety training + 136EU21 Contingency planning measures and disaster/emergency management plan and training programs, and recovery/restoration plans + 136EU25 Number of injuries and fatalities to the public involving company assets including legal judgments, settlements and pending legal cases of diseases + 136Integrated Report 2012 159

CONTENTCompliance with the principles and corporate governance processeshttp://www.samruk-energy.kz/index.php?option=com_content&view=article&id=128&Itemid=148&lang=en010000, Astana, 17 Kabanbay batyr Ave., Block ETelephones: +7 (7172) 55 30 00, 56 30 21,Fax: +7 (7172) 55 30 30e-mail: info@samruk-energy.kzwww.samruk-energy.kz