KEGOC Annual report on the regulated services provided

KEGOC Annual report on the regulated services provided in 2018 by KEGOC

Transmission system operator functions q Provision of the following system services: § Transmission of electricity across the National Power Grid; § Technical dispatching of the electricity supply and consumption in the grid; § Management of the electricity production and consumption balancing. q Management of synchronous operation with CIS power systems; q Coordination of the cross-border power flows with the System Operators of the neighbouring power systems. 1

Main developments and achievements of the Company in 2018 § 500 k. V OHTL Semey - Aktogai - Taldykorgan - Alma with total length of 884. 7 km and 220 k. V cross-connection lines for connection with 500 k. V Taldykorgan SS with total length of 183. 9 km have been constructed. New 500 k. V Aktogai SS and Taldykorgan SS have been constructed, 500 k. V Alma SS and Semey SS have been extended and rehabilitated. § As part of the Business Transformation Programme, approved by the President of Kazakhstan and implemented in accordance with the Business Transformation Road Map for 2018 KEGOC has 8 projects in progress to improve the efficiency of the Company's operations. § The Company has been recognised the best in terms of: Operational staff social stability index, administrative and administrative staff involvement index, and corporate governance rating among the subsidiaries of Samruk-Kazyna Fund. 2

General § 90% plus one share owned by Samruk-Kazyna Sovereign Wealth Fund, 10% minus one share belong to minority shareholders. § Natural monopoly § System Operator of the Unified Power System of Kazakhstan § Member of Electric Energy Council of CIS countries and Council of Integrated Power Systems of Central Asian Countries. § KEGOC has the following electric grid facilities: 26 thousand km of overhead transmission lines and 78 substations with 36. 66 GVA capacity § Equity as on 31 December 2018: KZT 470. 962 billion § Number of staff: 3 960 employees 3

Operating structure Executive administration BRANCHES NDC SO the National Dispatch Centre of the System Operator Tsentralnye Interconnection Electric Networks (MES) Aktyubinskiye Interconnection Electric Networks (MES) Sarbaiskiye Interconnection Electric Networks (MES) Severnye Interconnection Electric Networks (MES) Almatinskiye Interconnection Electric Networks (MES) Akmolinskiye Interconnection Electric Networks (MES) Yuzhnye Interconnection Electric Networks (MES) Vostochnye Interconnection Electric Networks (MES) Zapadnye Interconnection Electric Networks (MES) Energo. Inform JSC Financial Settlement Centre for Renewable Energy Sources Support LLP 4

Main financial and economic performance indicators KZT million 2017 actual 2018 actual Deviation, % Revenue from the regulated services 131 136 148 381 13, 2 Expenses on the regulated services 81 081 91 327 12, 6 Net revenue (loss) 31, 997 39, 719 24. 1 Accounts receivable 13, 400 14, 600 9. 0 Accounts payable 185, 232 188, 838 1. 9 5

Amount of rendered regulated services million k. Wh 8% 9. 2% 9% * Total amount of electricity transmission services 4. 3% 5. 1% 6

Cap tariffs for regulated services of KEGOC for 2016 -2020 KZT/k. Wh 2016 2017 2018 2019 2020 H 1 (appr. ) H 2 (TCT) H 1 (TCT) H 2 (appr. ) Electricity Transmission 2. 080 2. 079 2. 2457 2. 4957 2. 4928 2. 496 2. 797 Technical Dispatch Control 0. 231 0. 230 0. 2339 0. 2482/ 0. 237* 0. 237 0. 306 0. 088 0. 098 Electricity Balancing 0. 084 0. 086 0. 091/ 0. 088* * KEGOC, upon approval received from CRNMPCCR, has reduced the cap tariffs for: technical dispatch of supply to the network by 5% (from 0. 2482 to 0. 237 tenge / k. Wh), and managing of electricity production and consumption balancing by 3. 4% (with 0. 091 to 0. 088 tenge / k. Wh), effective from 1 August to 31 December 2018 7

Main financial and economic performance indicators of KEGOC, revenue Structure of revenue from the regulated services for 2018 Revenue from the regulated services 13. 2% Increase in % vs. the previous year 8

Main financial and economic performance indicators of KEGOC, expenses Structure of expenses on the regulated services for 2018 Expenses on the regulated services 1) depreciation: 29% 2) technical losses of electricity: 22% 12. 6% 3) labour expenses with mandatory deductions: 12% 4) other expenses: 9% 5) expenses for purchasing electricity to compensate for hourly deviations in the actual power flow balance vs. the planned one: 8% 6) tax: 8% 7) operation associated services delivered by third parties: 5% 8) loan interest expenses: 3% 9) repair and operation costs: 2% Increase in % vs. the previous year 10) power control costs rendered by the third parties: 2% 9

Investment programme progress in 2018 KZT million Project name 500 k. V OHTL Shulbinsk HPP (Semey) - Aktogai - Taldykorgan - Alma Construction Project Pavlodar Electricity Transmission Reinforcement Project Kazakhstan Electricity Transmission Rehabilitation Project, phase 2 Rehabilitation of 220 -500 k. V OHTLs at KEGOC branches (National Power Grid Rehabilitation Project) Construction of 500 k. V Yu. KGRES - Zhambyl transmission line Balkhash Electricity Transmission Project Approved 13, 336 1, 248 5, 398 47 26, 634 1, 280 35 Local and pilot projects Total 24, 284 4, 935 Re-enforcement of the electric network in Zone West of Kazakhstan UPS Costs for maintaining the current level of operations Construction of the kindergarten for 240 children in Astana Actual 2, 995 8, 696 8, 713 34 55, 344 42, 291 10

Regulated service contract management 2017 2018 Total contracts concluded with customers 592 648 Number of technical disturbances 52 49 Total electric power undersupply, thousand KWh 246. 7 274. 18 Annual peak load, MW 14, 194 14, 823 Network frequency, Hz 50 0. 2 11

Main consumers of electricity transmission services Item Consumer Volume, million Deviatio % of the KWh n total Approve Actual Absolute d 0 3, 758 % 1 Ekibastuz GRES-1 LLP 2 Almaty. Energo. Sbyt LLP 3, 999 2, 869 -1, 130 6. 4 3 Temir. Zhol. Energo LLP 3, 530 2, 538 -992 5. 7 4 3, 082 2, 361 -722 5. 3 4, 930 2, 217 -2, 713 5. 0 6 Kazchrome Transnational Company JSC Federal Grid Company of Unified Energy System (FGC UES) OJSC Kazphosphate LLP 1, 914 2, 096 182 4. 7 7 Energo. Potok LLP 843 2, 014 1, 170 4. 5 8 Kaz. Zinc LLP 1, 677 1, 924 247 4. 3 9 Shygys. Energo. Trade LLP 1, 936 1, 492 -443 3. 3 5 8. 4 12

Temporary reduction factors (discounts) Temporary reduction Temporary Discount, KZT factor period reduction factor million Consumer Ekibastuz GRES-1 named after Bulat Nurzhanov LLP Kaz. Phosphate LLP 01 Jan. 2018 - 30 Sept. 2018 0. 71 1, 219. 08 01/02/2018 -31 Dec. 2018 0. 932 110. 06 0. 85 30. 29 0. 90 19. 59 0. 94 6. 77 23 May 2018 -31 Dec. 2018 0. 75 2. 30 1, 388. 088 26 Feb. 2018 - 30 Jun. 2018 01 Jan. 2018 - 30 Sept. 2018 Temirtau Electrometallurgical Works JSC ТОО «Таразский металлургический завод» ТОО «Ferrum-Vtor» Shymkent Temir LLP Total: Consumer amount million k. Wh Renewable energy producing organizations 814. 078 tax expenses CIT (20%): 406. 107 VAT (12%): 243. 664 losses from renewables KZT million 649. 772 13

The main consumers of technical dispatching services Item Consumer 1 Ekibastuz GRES-1 LLP 2 Eurasian Energy Corporation JSC 3 Amount, million Deviatio % of k. Wh n the total Approve Actual Absolute % d 12, 421 18, 174 5, 753 18. 6 14, 102 14, 286 184 14. 6 Ekibastuz GRES-2 Power Station JSC 5, 068 5, 162 94 5. 3 4 Almaty Power Stations JSC 4, 508 4, 918 410 5. 0 5 MAEK Kazatomprom LLP 4, 467 4, 049 -418 4. 1 6 Karaganda Energocenter LLP 3, 619 3, 987 368 4. 1 7 Kaz. Zinc LLP (Bukhtarminskaya HPP) 2, 683 3, 242 559 3. 3 8 Pavlodar. Energo JSC 3, 230 3, 218 -12 3. 3 9 Sev. Kaz. Energo LLP 2, 715 2, 821 106 2. 9 14

The main consumers of services on balancing generation and consumption of electricity Item Consumer Amount, million Deviatio % of k. Wh n the total Approve Actual Absolute d % 1 Eurasian Energy Corporation JSC 24, 015 23, 804 -211 13. 0 2 Ekibastuz GRES-1 LLP 12, 421 18, 174 5, 753 9. 9 3 Astana Electricity Distribution Company 5, 859 6, 175 316 3. 4 4 Kaz. Zinc LLP 5, 576 5, 958 382 3. 2 5 Almaty. Energo. Sbyt LLP 6, 660 5, 905 -755 3. 2 6 Arcelor. Mittal Temirtau JSC 6, 769 5, 822 -947 3. 2 7 Ekibastuz GRES-2 Power Station JSC 5, 013 5, 117 104 2. 8 8 Almaty Power Stations JSC 4, 433 4, 987 554 2. 7 9 MAEK Kazatomprom LLP 5, 138 4, 584 -553 2. 5 15

Itemized execution of electricity transmission tariff estimates approved by an authorized body Indicators Unit of measure Tariff estimate progress in 2018 Plan Absolute % Actual The cost of production of goods and delivery of services, total, including KZT million 55, 808 55, 144 -664 -1 Material costs Payroll expenses Repairs Depreciation Technical losses of electricity Third-party company services Other costs Expenses for the period, total, including General and administrative expenses Salaries of administrative personnel Taxes Other costs Interest expenses Total costs for service rendering Revenue = (Regulated base of engaged assets) * (Return rate) Total revenue The amount of rendered services (goods, works) Tariff (exclusive of VAT) KZT million KZT million KZT million KZT million million k. Wh KZT/k. Wh 605 4, 329 1, 319 18, 000 27, 427 3, 461 667 8, 752 6, 820 1, 339 4, 326 378 1, 931 64, 559 44, 307 108, 867 43, 612 2. 496 854 5, 116 1, 413 21, 247 20, 362 4, 704 1, 448 11, 073 8, 954 1, 532 5, 204 1, 347 2, 119 66, 217 41, 882 108, 099 43, 339 2. 494 249 787 94 3, 247 -7, 065 1, 244 780 2, 321 2, 134 193 879 969 188 1, 657 -2, 425 -768 -274 -0. 002 41 18 7 18 -26 36 117 27 31 14 20 256 10 3 -5 -1 -1 -0. 1 16

Itemized execution of electricity technical dispatching tariff estimates approved by an authorized body Indicators Unit of measure Tariff estimate progress in 2018 Plan Absolute % Actual The cost of production of goods and delivery of services, total, including KZT million 8, 699 10, 622 1, 923 22 Material costs Payroll expenses Repairs Depreciation Third-party company services Other costs Expenses for the period, total, including General and administrative expenses Salaries of administrative personnel Taxes Other expenses Interest expenses Total costs for service rendering Revenue = (Regulated base of engaged assets) * (Return rate) Total revenue The amount of rendered services (goods, works) Tariff (exclusive of VAT) KZT million KZT million KZT million KZT million k. Wh KZT/k. Wh 191 2, 846 156 3, 701 1, 272 532 3, 811 3, 125 880 1, 556 246 686 12, 510 9, 979 22, 490 90, 292 0. 249 250 2, 880 236 4, 468 1, 732 1, 056 4, 752 3, 999 886 1, 882 757 753 15, 373 8, 452 23, 826 97, 646 0. 244 59 34 80 767 460 524 940 874 6 326 511 67 2, 863 -1, 527 1, 336 7, 353 -0. 005 31 1 51 21 36 98 25 28 1 21 207 10 23 -15 6 8 -2. 0 17

Itemized execution of electricity balancing tariff estimates approved by an authorized body Indicators The cost of production of goods and delivery of services, total, including Material costs Payroll expenses Repairs Depreciation Third party services, total, including Unit of measure Tariff estimate progress in 2018 Plan Absolute % Actual KZT million 8, 867 9, 537 670 8 KZT million KZT million 5 146 10 134 8, 552 7 151 17 195 9, 127 2 6 7 62 575 46 4 71 46 7 KZT million 460 1, 381 921 200 Costs for purchase of electricity to compensate for hourly KZT million deviations of the actual cross-border balance flows vs. the plan. 7, 994 7, 624 -370 -4. 6 21 452 344 45 243 13 109 9 319 6, 340 15, 660 172, 015 0. 091 40 541 421 46 292 41 119 10 078 6, 379 16 457 183, 358 0. 090 19 89 78 1 48 28 11 759 39 797 11, 343 -0. 001 87 20 23 3 20 211 10 8 1 5 7 0 Costs of power control service provided by third parties Other costs Expenses for the period, total, including General and administrative expenses Salaries of administrative personnel Taxes Other expenses Interest expenses Total costs for service rendering Revenue = (Regulated base of engaged assets) * (Return rate) Total revenue The amount of rendered services (goods, works) Tariff (exclusive of VAT) KZT million KZT million KZT million k. Wh KZT/k. Wh 18

Business outlook (development plans) § Investment Programme Implementation § As part of the business transformation programme, KEGOC plans to put into commercial operation the extended business processes of the ERP and information technology service management systems, and begin commercial use of fibre optic communication lines for data transmission. § Enhance the integrated management system in accordance with ISO 9001, ISO 14001, OHSAS 18001 and ISO / IEC 27001 standards § Engagement in the process of enhancement of tariff policy applied to natural monopolies 19

KEGOC 2018