NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC MAIN RESULTS

NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC MAIN RESULTS OF ACTIVITIES FOR THE FIRST HALF OF 2019 AND MAIN TASKS FOR THE SECOND HALF OF 2019

Report content 1. VOLUMES OF REGULATED SERVICES PROVIDED 2. KEY FINANCIAL AND ECONOMIC INDICATORS OF THE COMPANY 3. ITEMIZED EXECUTION OF RATE ESTIMATES FOR BRN SERVICES 4. IMPLEMENTATION OF THE INVESTMENT PROGRAMME 5. QUALITY OF SERVICES PROVIDED 6. ONGOING WORK WITH CONSUMERS OF REGULATED SERVICES 7. PROSPECTS OF ACTIVITIES (DEVELOPMENT PLANS ) NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC

LIST OF REGULATED SERVICES OF NC KTZ JSC AS A NATURAL MONOPOLY HOLDER 1 BACKBONE RAILWAY NETWORK SERVICES 2 BRANCH LINE SERVICES 3 • for rolling stock traffic, • for shunting operations, loading and unloading, other technological operations of the transportation process, as well as for idle hours of rolling stock not provided for by technological operations of the transportation process, etc. ELECTRIC ENERGY TRANSMISSION SERVICES NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 3

VOLUME OF SERVICES PROVIDED for the first 6 months of 2019 Plan for 2019 Actual performance for the 1 half of 2019 FREIGHT TURNOVER NET RATE, (million t-km) 198 064 106 497 54 % MILEAGE PASSENGER CARS (thousand car-km) 830 144 373 871 45 % Indicators % NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 4

VOLUME OF SERVICES PROVIDED Actual performance for the 1 half-year INDICATORS 2018 Freight turnover net rate, 2019 % 106 512 106 497 100, 0% in domestic traffic 45 069 44 786 99, 4% in export traffic 37 252 38 023 102, 1% in import traffic 8 455 9 832 116, 3% in transit traffic 15 735 13 857 88, 1% Freight transported, 136 644 134 115 98, 1% in domestic traffic 81 020 77 861 96, 1% in export traffic 39 360 40 644 103, 3% in import traffic 7 425 8 052 108, 4% in transit traffic 8 839 7 558 85, 5% 387 976 373 871 96, 4% (million t-km) including: (thousand tons) including: Passenger cars mileage, (thousand cars-km) NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 5

QUALITY INDICATORS OF WORK 1 st half of 2019 INDICATORS Unit of measure ment Actual performance for the 1 half-year 2018 2019 Improvement result (%) Average service speed км/h 43, 78 44, 25 +1, 1% Average turnaround of a working car day 5, 13 4, 97 +3, 2% Average daily performance of a car т-км 9 521 9 943 +4, 4% Average daily mileage of freight cars км 283, 5 293, 7 +3, 6% Freight car loaded run км 858 867 +1% NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 6

KEY FINANCIAL AND ECONOMIC INDICATORS for the 1 st half of 2019 Item BRN services Branch line services Electric energy transmission services TOTAL INCOME (thousand tenge) 176 161 951 28 184 873 166 177 063 301 EXPENSES (thousand tenge) 168 968 195 22 807 1 114 750 170 105 752 7 193 756 5 377 - 241 584 6 957 549 PROFIT/LOSS (thousand tenge) INFORMATION ON THE APPROVED TEMPORARY DOWNWARDADJUSTING FACTORS (TDF) FOR BRN SERVICES for the 1 st half of 2019 PASSENGER TRAFFIC LOST INCOME– 7 930 MILLION. TENGE TDF LEVEL – 0, 01; 0, 2 NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 7

REPORT ON EXECUTION OF RATE ESTIMATES For BACKBONE RAILWAY NETWORK SERVICES following the results of the 1 st half of 2019 № I Indicators Cost of goods manufactured and services rendered 1 Tangible costs, total, including 1. 1 materials 1. 2 fuel 1. 3 electricity 2 Labour costs, total, including 2. 1 salary 2. 2 social tax 3 Depreciation of fixed assets and intangible assets 4 Repairs, total, including 4. 1 operating repairs 5 Other expenses, total, including 5. 1 Payment for works and services 5. 2. Other expenses II Period expenses, total 6 General and administrative expenses, total, including 6. 1 administrative personnel salary 6. 2 social tax 6. 3. taxes 6. 4 Other expenses, total, including 6. 4. 1 depreciation of fixed assets and intangible assets 6. 4. 2. third-party organizations services 6. 4. 3 Repairs, including operating repairs 6. 4. 4 auditing, consulting and information services 6. 4. 5 travel expenses 6. 4. 6 representation expenses 6. 4. 7 other expenses 7 Expenses for remuneration payment III Total expenses IV Total income V Profit VI Freight turnover (million t-km) Passenger cars mileage (thousand cars-km) for the 1 st half of 2019 Actual performance Plan 252 746 799 140 649 081 33 041 899 9 056 441 21 978 624 3 466 318 5 216 235 3 008 957 5 847 040 2 581 166 120 501 162 46 674 742 107 763 697 40 985 814 12 737 465 5 688 928 67 348 411 35 952 001 216 356 387 124 31 638 971 48 578 773 21 622 547 42 659 315 10 016 424 5 919 458 35 842 236 28 319 114 33 133 260 22 151 926 12 693 679 7 045 189 1 256 674 783 663 11 831 085 10 823 951 7 351 822 3 499 123 2 169 672 1 159 279 533 389 502 908 160 5 533 108 160 5 533 245 177 170 789 870 558 249 121 20 538 9 325 3 404 328 1 402 168 2 708 976 6 167 188 288 589 035 168 968 195 371 449 031 176 161 951 82 859 996 7 193 756 198 064 106 497 830 144 373 871 % 56% 27 % 16 % 58% 44% 39% 38% 45% 53% 179% 154% 197% 59% 79% 67% 56% 62% 91% 48% 53% 94% 5% 5% 70% 29% 45% 41 % 228% 59% 47% 9% 54 % 45% 8

Report on execution of the Investment Programme for 2019 following the results of the 1 st half-year and the main areas of its implementation Superstructure modernization Infrastructure projects under Nurly-Zhol programme ü 53. 4 thousand tons of new rails for ü Completion of development of 15, 252 million tenge were supplied the Astana station railway junction including construction ü The track was overhauled using of the railroad complex, the 204. 4 km of new materials implementation for the 1 halfü The overhaul in 2018 for 868 km year is 535 million tenge resulted in the increased speeds on container routes ü It is planned to purchase 193 sets of railroad switches with reinforced concrete bars for 4, 076 million tenge Modernization, reconstruction and overhaul of BRN facilities Digital infrastructure development activities ü Works on the project “Overhaul ü Long-term project for 2018 -2025 for 14, 950 million tenge, in 2019, it is of the steel bridge at 657 km of planned to perform works for a total Semipalatinsk-Zhana-Semey” of 1, 200 million tenge have begun, following the results of 2019, it is planned to perform ü Contract for design and estimate works for 1, 500 million tenge documentation for modernization of 3 stations for 41 million tenge was ü It is planned to purchase 300 concluded units of electric drives for 1, 285 ü Tendering procedures for million tenge introduction of a microprocessor ü Tendering procedures for system for traffic control with the overhaul and roundhouse Traffic Control Modular System in 5 servicing with the extension of dispatch areas, purchase of rolling stock operational life in software for the AWS PDD design the amount of 131 units for 1, 760 module, replication of an million tenge are held automated rolling stock monitoring ü 14 loader-excavators were system, and modernization of purchased for 2, 019 million regional communication centers tenge are held. ü A rail welding machine was purchased for 228 million tenge EXPECTED RESULTS: 1. 2. 3. Increased train speeds Traffic safety Centralized control over the rolling stock condition from the single dispatch center 9

WORK WITH SERVICE CONSUMERS following the results of the 1 st half of 2019 DIGITAL OPERATIONAL COMMUNICATION SYSTEM (ОСS) WAS INTRODUCED REGISTRATION OF TRANSPORTATION DOCUMENTS IN ELECTRONIC FORM About 70% of transportation documents in the provides increased communication stability and security THE FIRST BATCH OF MOBILE DIAGNOSTIC FACILITIES WAS PUT INTO OPERATION provides comprehensive diagnostics of railway tracks intrarepublican communication are issued by the means of ACS ССW using paperless technology AGREEMENTS ON BRN SERVICES WERE CONCLUDED with 11 carriers, in passenger traffic with 3 carriers, in freight traffic DIGITAL TECHNOLOGICAL RADIO COMMUNICATION WAS INTRODUCED ensures safety of the production process, as well as the efficiency of the implementation of planned work RATES FOR OTHER TERRITORIES Work with the railway administrations of Turkmenistan, Uzbekistan and Russia was carried out and preferential rate conditions were established for Kazakhstani exporters in the territories of those states NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 10

ONGOING AND LONG-TERM TASKS FOR 2019 -2020 § Complete the implementation of projects under Nurly-Zhol State Infrastructure Development Programme for 2015 -2019; § Participate in the development of Nurly-Zhol State Infrastructure Development Programme 20202025, ensuring inclusion and implementation of new projects within the programme; § Participate in the development of the draft Concept of the Law of the Republic of Kazakhstan “On Railway Transport”; § Continue the work on updating and rehabilitating the facilities of the backbone railway network to ensure train traffic safety and infrastructure capacity; § Achieve a reduction in the level of wear of BRN facilities to 54% by the end of 2019; § In 2020, NC KTZ JSC plans to submit applications to the Committee for Regulation of Natural Monopolies, Protection of Competition and Consumer Rights to approve the rate limit values and rate estimates for regulated monopoly services for 2021 -2025. NATIONAL COMPANY KAZAKHSTAN TEMIR ZHOLY JSC 11

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