ATTACHMENTS

About the report

The Company adheres to the following approaches in determining the content and quality of the Report.

Interaction with stakeholders and materiality.

The Company’s pursuance of high standards of social responsibility at interaction with stakeholders.

The purpose of stakeholder interaction is to choose the strategic development of the Company and ways to improve its performance, as well as to assist it in achieving a level of sustainable development that benefits everyone and the Company, its stakeholders, and society since the Company strives for high standards of social responsibility at interaction with stakeholders:

— the needs, expectations and opinions of internal and external stakeholders;

— challenges and prospects from stakeholders’ perspective;

— the most significant issues of concern to internal and external stakeholders.

The basis of interaction with stakeholders is the identification of stakeholders that have a significant impact on the Company and the degree of stakeholder dependence on the Company, creation of a materiality matrix and preparation of the Stakeholder engagement plan (please see “Sustainable development” section).

Every year the Company, after the issuance of its annual business report, checks the balance and completeness of the information disclosed in the annual report, as well as identifies topics and aspects that significantly affect the Company’s operations and its stakeholders, and which should be taken into account when creating the structure of the annual report of the following reporting cycle.

To implement these activities, we collected opinions and have taken into account the interests of a wide range of stakeholders, including the Sole Shareholder, members of the Board of Directors, financial institutions, clients, nongovernmental organizations, professional communities, subsidiaries, top management and key employees, etc.

We used a structured process that included:

— identification of significant topics. The Company considered the most complete list of topics that are significant from the perspective of sustainability for the Company and its stakeholders and that takes into account specifics of the Company’s operations, the general trends of foreign and Kazakhstani companies, GRI standards, the Company’s Development Strategy, Corporate Governance Code, risk register, etc. The list comprised 39 topics (aspects) related to the sustainability of the Company.

— a survey of external and internal stakeholders for exploring the importance and priority of topics and aspects for the Company’s operations and its stakeholders. Moreover, for the maximum coverage of all stakeholders, the Company, in the framework of the published interactive version of the Company’s 2018 Annual Report, posted an online questionnaire for all stakeholders https://ar2018.samruk-energy.kz/ru/index.html

— updating the materiality matrix, which gives a visual representation of sustainable development topics that are essential for the Company and its stakeholders, and their position regarding the degree of stakeholder interest and potential impact on the Company’s activities. An assessment of the materiality of aspects for the Company is provided along the horizontal axis, along the vertical axis - an assessment of the materiality of aspects for stakeholders. The topics that received a rating of significance above 4 points for stakeholders and for the Company were recognized as the most significant in 2019 and will be shown in the text of the Company’s annual report.

The analysis shows that topics related to the development of innovations, energy efficiency, ensuring compliance with environmental obligations, efficient use of materials, energy and water, ensuring the safety and health of employees and contractors, and reducing greenhouse gas emissions and other pollutants, combating all forms of corruption, including extortion and bribery, and etc remain important topics for both the Company and stakeholders.

Aspects associated with such issues as cybersecurity and information technologies development, compliance risk management, occupational injuries, tariff regulation and financial stability are new and were not considered as separate aspects in the 2018 Materiality matrix.

Also, in 2019 when compared to the 2018 Materiality matrix, the Company and its stakeholders highlighted the importance of issues related to waste management, investments in renewable energy sources, investments and environmental protection costs, enhancing the reputation and positive attitude towards the company, reducing energy consumption, etc.

Issues associated with interaction with open local communities, staff recruitment including an increase in staff employed from the local population, equal opportunities, costs for local suppliers and the transformation of procurement activities by interested parties, were not rated highly, but were disclosed in the Company’s annual report.

«Samruk-Energy» JSC 2019 Materiality Matrix

The list of substantial topics in 2019:
1. Innovation development and digitization 21. General expenses for investments and environmental protection (broken down by types)
2.Cybersecurity and information technologies 22. Efficient use of materials, energy and water
3. Prevention and elimination of natural disasters and emergency situations in the course of business 23. Compliance with environmental laws and regulations
4. The Company's contribution to the country's economy (including created and distributed economic value) 24. Waste management
5. Tariff regulation 25. Sources of water, which are significantly affected by water withdrawal
6. Financial stability 26. Percentage and total volume of water recycled and reused
7. Effective investment activity 27. Water bodies that are significantly affected by discharges of an organization and surface runoff from its territory
8. Interaction with local communities 28. Conservation of biological diversity
9. Implementation of social programs and initiatives 29. Fair remuneration and social support for employees
10. Transformation in procurements 30. Professional and personal growth of staff
11. Social responsibility in procurements 31. Increase in the share of staff from local population
12. Share of expenses for local suppliers in significant regions of operation 32. Staff recruitment
13. Fight against all types of corruption, including extortion and bribery 33. Diversity and equal opportunities, including gender equality
14. Timely risk identification and quality risk management 34. Grievance mechanism
15. Compliance risk management 35. Elimination of all forms of forced labor
16. Enhancing the reputation and a positive attitude towards the Company 36. Elimination of discrimination in respect of employment and occupation
17. Investments in renewable energy sources 37. Support and respect the protection of internationally proclaimed human rights
18. Energy efficiency 38. Employee and contractors safety and health
19. Reduction of energy consumption 39. Workplace injuries
20. Reducing emissions of greenhouse gases and other pollutants (NOX, SOX, ozone-depleting and other significant pollutants)

The Context of Sustainable Development

The report provides information on the Company’s contribution to the economic, environmental, social aspects. The economic component of the sustainable development of the Company is aimed at increasing long-term value, ensuring the interests of shareholders and investors, increasing the efficiency of processes, increasing investments in the creation and development of more advanced technologies, and performance improvement..

The environmental component aims to reduce the impact on biological and physical natural systems, effectively use limited resources, use environmentally friendly, energy and materialsaving technologies, create environmentally acceptable products, minimize, process and dispose waste.

The social component focuses on social responsibility principles, which include, among other things: ensuring employees occupational health and safety, fair remuneration and respect for the rights of workers, individual development of staff, implementation of social programs for staff, creation of new jobs, sponsorship and charity, environmental and educational promotions.

01

Completeness

The indicators and content of the Report are sufficient to reflect the significant impact of the Company on the economy, the environment and society during the reporting period.

02

Balance

This Report reflects the positive and negative aspects of the Company’s results for the reporting year. Certain indictors were disclosed in 3-year dynamics.

03

Comparability

Stakeholders using this Report can compare the information provided on the Company’s financial and operating performance with the results for previous periods and its objectives. The report was prepared in accordance with GRI Standards, which allows stakeholders to compare the Company’s operations with those of other companies.

04

Accuracy

The information provided in the Report is accurate enough and detailed so that stakeholders can evaluate the results of the Company’s operations for the reporting period. Information is expressed both in quality descriptions and in figures.

05

Timeliness

The report is provided on an annual basis within the shortest possible time after the approval of the audited financial statements and no later than July 30, which allows assuming that the information reflected in this Report is relevant. The report is posted on the company’s website in Kazakh, Russian and English, simultaneously for all stakeholders.

06

Clarity

The information in the Report is set out in an understandable and accessible form to the interested parties.

07

Reliability

In preparing this Report, the information provided was preliminarily analyzed and disclosed in such a way that stakeholders could check this report and assess the degree of reliability of its content. Data sources are official reporting forms, which are submitted to government agencies every year. A number of indicators are collected and calculated in accordance with the forms of internal reporting, which are checked by responsible representatives of companies during internal audit procedures. Production, social and environmental indicators presented in the Company Report were calculated, collected and consolidated in accordance with principles of reporting and recommendations of Sustainability Reporting Guidelines and the Company’s corporate governance procedures. The probability of an error in figures for each category of indicators in the area of sustainable development is minimized. Ratios and specific values are supplemented by absolute values. Figures were indicated by using generally accepted system of measurement units and are calculated using standard coefficients. The report provides all stakeholders with an overview of operations results and achievements of “Samruk-Energy” group of companies from January 1 to December 31, 2019 in electronic, paper form or online. The date of publication of previous Integrated Annual Report of the Company – July 30, 2019.

Limitation of the scope and boundaries of the Report

The audited consolidated financial statements of the Company for 2018 as of December 31, 2019 and as of 31 December 31, 2018, specified in this Report are the result of an independent audit of “PricewaterhouseCoopers” LLP (“PwC”).

This Report provides information on financial and operating results and sustainable development. Qualitative and quantitative information were presented for 2019, in order to compare and analyze information in indicators, data for 2017 and 2018 were used where applicable. The Company determined the Report scope in accordance with GRI Standards.

The equity method is applied in consolidation during the preparation of the report on financial and operating performance of “Samruk-Energy” JSC group of companies for the purpose of a unified approach. Furthermore, as required by the current accounting policy, property, plant and equipment and intangible assets are reported at historical cost, that is, without revaluation.

Subsidiaries are included in the consolidated financial statements using the acquisition method. Purchased identified assets, as well as liabilities and contingent liabilities received in a business combination are measured at fair value at the acquisition date, regardless of the size of the non-controlling interest.

Based on the above mentioned, when using the equity method in the consolidated balance sheet, turnovers of such large companies like “Ekibastuz SDPP-2 Plant” JSC, “Forum Muider B.V.” coal assets company, where “Samruk-Energy” JSC owns 50 equity stake, are excluded. At generation of “Samruk-Energy” JSC consolidated financial result, the share of profit for these companies is reported in the article “share of profit / loss of organizations accounted for using the equity method and impairment of investments”.

The indicators of the following subsidiaries and affiliates were used in the audited consolidated financial statements of the Company for 2019:

Subsidiaries and affiliates of Samruk-Energo JSC
Abbreviations used