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. Q U A L I T Y O F S E R V I C E S P R O V I D E D 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 2 3 BACKBONE RAILWAY NETWORK SERVICES BRANCH LINE SERVICES • 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 116, 497 373, 871 thou. cars-km mln. tons-km FREIGHT TURNOVER MILEAGE NET RATE PASSENGER CARS Approved for 2019 - 198, 064 million t-km, actual performance for the 1 st half-year 54% Approved for 2019 - 830, 144 thousand car-km, actual performance for the 1 st half-year 45% National Company KAZAKHSTAN TEMIR ZHOLY JSC 4

VOLUME OF SERVICES PROVIDED Actual performance for the 1 half-year INDICATORS 2018 Freight turnover net rate, (million t-km) including: 2019 % 106, 512 106, 497 45, 069 44, 786 99. 4% in export traffic in import traffic 37, 252 8, 455 38, 023 9, 832 102. 1% 116. 3% in transit traffic 15, 735 13, 857 88. 1% 136, 644 134, 115 98. 1% 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% in domestic traffic Freight transported, 100. 0% (thousand tons) including: in domestic traffic Passenger cars mileage, (thousand cars-km) National Company KAZAKHSTAN TEMIR ZHOLY JSC 5

QUALITY INDICATORS OF WORK 1 st half of 2019 Average daily performance of a car +1. 1% Average turnaround of a working car +4. 4% +3. 6% +3. 2% +1% 44. 25 9, 943 293. 7 4. 97 867 КМ/H Т. КМ КМ DAY КМ Average service speed Average daily mileage of freight cars Freight car loaded run National Company KAZAKHSTAN TEMIR ZHOLY, JSC 6

KEY FINANCIAL AND ECONOMIC INDICATORS for the 1 st half of 2019 Electric energy transmission services Item BRN services Branch line services I N C O M E (thousand tenge ) 176, 161, 951 28, 184 873, 166 177, 063, 301 E X P E N S E S (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) TOTAL INFORMATION ON THE APPROVED TEMPORARY DOWNWARDADJUSTING FACTORS (TDF) FOR BRN SERVICES for the 1 st half of 2019 PASSENGER TRAFFIC LOST INCOME – 7, 930 МILLION 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 No. Indicators I Cost of goods manufactured and services rendered Tangible costs, total, including materials fuel electricity Labour costs, total, including salary social tax 1 1. 2 1. 3 2 2. 1 2. 2 3 Depreciation of fixed assets and intangible assets 4 Repairs, total, including 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 4. 1 III IV V VI Total expenses Total income Profit Freight turnover (million t-km) Passenger cars mileage (thousand cars-km) Plan for 2019, thousand tenge 252, 746, 799 33, 041, 899 21, 978, 624 5, 216, 235 5, 847, 040 120, 501, 162 107, 763, 697 12, 737, 465 Actual performance for the 1 half of 2019, thousand tenge 140, 649, 081 9, 056, 441 3, 466, 318 3, 008, 957 2, 581, 166 46, 674, 742 40, 985, 814 5, 688, 928 % 56% 27 % 16 % 58% 44% 39% 38% 45% 67, 348, 411 35, 952, 001 53% 216, 356 387, 124 179% 31, 638, 971 21, 622, 547 10, 016, 424 35, 842, 236 33, 133, 260 12, 693, 679 1, 256, 674 11, 831, 085 7, 351, 822 2, 169, 672 533, 389 108, 160 245, 177 870, 558 20, 538 3, 404, 328 2, 708, 976 48, 578, 773 42, 659, 315 5, 919, 458 28, 319, 114 22, 151, 926 7, 045, 189 783, 663 10, 823, 951 3, 499, 123 1, 159, 279 502, 908 5, 533 170, 789 249, 121 9, 325 1, 402, 168 6, 167, 188 154% 197% 59% 79% 67% 56% 62% 91% 48% 53% 94% 5% 5% 70% 29% 45% 41 % 228% 288, 589, 035 371, 449, 031 82, 859, 996 198, 064 830, 144 168, 968, 195 176, 161, 951 7, 193, 756 106, 497 373, 871 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 Modernization, reconstruction and overhaul of BRN facilities Digital infrastructure development activities ü 53. 4 thousand tons of new rails for ü Completion of development of 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 15, 252 million tenge were supplied the Astana station railway planned to perform works for a total Semipalatinsk-Zhana-Semey” junction including construction ü The track was overhauled using of 1, 200 million tenge have begun, following the results of the railroad complex, the 204. 4 km of new materials of 2019, it is planned to perform ü Contract for design and estimate implementation for the 1 halfworks for 1, 500 million tenge ü The overhaul in 2018 for 868 km year is 535 million tenge documentation for modernization of resulted in the increased speeds 3 stations for 41 million tenge was ü It is planned to purchase 300 on container routes concluded units of electric drives for 1, 285 ü Tendering procedures for million tenge ü It is planned to purchase 193 sets introduction of a microprocessor of railroad switches with reinforced ü Tendering procedures for system for traffic control with the concrete bars for 4, 076 million overhaul and roundhouse Traffic Control Modular System in 5 tenge 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 AGREEMENTS ON BRN SERVICES WERE CONCLUDED with 11 carriers, in passenger traffic with 3 carriers, in freight traffic DIGITAL OPERATIONAL COMMUNICATION SYSTEM (ОСS) WAS INTRODUCED THE FIRST BATCH OF MOBILE DIAGNOSTIC FACILITIES WAS PUT INTO OPERATION provides increased communication stability and security REGISTRATION OF TRANSPORTATION DOCUMENTS IN ELECTRONIC FORM DIGITAL TECHNOLOGICAL RADIO COMMUNICATION WAS INTRODUCED provides comprehensive diagnostics of railway tracks About 70% of transportation documents in the intrarepublican communication are issued by the means of ACS ССW using paperless technology. 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 National Company KAZAKHSTAN TEMIR ZHOLY JSC preferential rate conditions were established for Kazakhstani exporters in the territories of those states 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 2020 -2025, 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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