refining marketing jsc 2015 contents

1. About the Company

1.1 History of establishment

1.2. Mission

1.4. Main types of activity

1.5. Strategy goals and objectives of KazMunaiGaz-RM JSC for the period of 2014–2022

2. Corporate governance (composition of the Board of Directors and the Management Board of KazMunaiGaz-RM)

3. Consolidated financial and economic indicators of KazMunaiGaz-RM at the end of 2015

3.1. Key financial and operating performance results

3.2. Key events of 2015

3.3. Current assets structure of KazMunaiGaz-RM JSC to level IV

3.4. FFC networks of KazMunaiGaz-RM JSC

4. Oil refining

4.1. Oil refining in Kazakhstan

5. Investment projects aimed at development of oil refineries

6. Sales of oil products

7. Export and transportation

8. Sustainable Development

8.1. Personnel

8.2. Sponsorship and charity

9. Environmental safety

9.1. Occupational health, industrial and fire safety

10. Management structure

11. Corporate governance

11.1. Selection criteria for the members of the Board of Directors and the Management Board and determination of their independence

11.2. Share capital

11.3. Plans of KMG-RM for 2016

12. Risk management

13. Consolidated financial statements

Appendix No. 1 List of major transactions and related-party transactions

Contact information

NOTE

The following abbreviations: KazMunaiGaz-RM JSC, KMG–RM and Company as used in the Annual Report refer to the parent company of KMG-RM Group – KazMunaiGaz – refining and marketing joint stock company. KMG-RM group means a set of companies consisting of KazMunaiGaz – refining and marketing joint stock company and its subsidiaries and affiliates.

The following names: JSC NC KazMunayGas, KMG and Sole Share-holder refer to the National Company KazMunayGas Joint-Stock Company. Accordingly, the word combination “KazMunayGas Group” means JSC NC KazMunayGas and its subsidiaries.

The term “downstream” refers to activities aimed at processing and marketing of hydrocarbons.

ANNUAL REPORT

KAZMUNAIGAZ – REFINING MARKETING JSC

2015

CONTENTS

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ABOUT THE COMPANY

STRATEGIC GOALS AND OBJECTIVES OF KAZMUNAIGAZ-RM JSC FOR THE PERIOD OF 2014-2022Strategic direction No. 1 – Oil refining and production of oil products. u Increase in oil refining capacity and efficiency, and quality of output;

— Increase oil refining capacity up to 17.6 mln. tons per year

— Increase the oil refining efficiency up to 87-90 % — Achieving the products quality at the level of К-4, К-5 standards

— Increase a share in the oil products retail market up to 32 %

u Bringing the oil refinery’s business process manage-ment to the level of leading peers in the industry.

Strategic direction No. 2 – Marketing of oil and oil products. u Achieve a stabilizing share in the oil products retail market;

u Ensure quality and stability in supplying oil products to KMG-RM Group;

u Develop extensive channels for oil products market-ing.

Strategic direction No. 3 – Innovation and technolog-ical development. u Improvement of the innovative and technological development management system;

u Enhancement of operational processes efficiency through the introduction and implementation of new technologies and new production facilities.

Strategic direction No. 4 – Corporate governance. KMG-RM sets a goal to improve the efficiency of cor-

porate management within KMG-RM group. To achieve this goal, KMG-RM will focus on imple-

menting the following objectives: u Increase in the value of the Company; u Centralization of subsidiaries management on the basis of the corporate center of KMG-RM;

u Creation of common information space; u Cost management; u Financial stability management; u Formation of the assets target structure; u Development of the risk management system; u Rendering assistance in the local content develop-ment.

Strategic direction No. 5 – Social responsibility. KMG-RM will focus efforts to implement necessary

measures with the aim to achieve the required level of the “Social Stability Rating” in accordance with the methodology of Samruk-Kazyna JSC.

The strategy of KMG-RM as part of improvement of corporate social responsibility and human capital development will be implemented through the follow-ing goals: u Regulate social-labor relationships on the basis of social partnership;

u Improve the personnel policy and human resource development;

u Ensure occupational safety and reduction of envi-ronmental risks;

u Render assistance in the development of the sports and tourism cluster.

HISTORY OF ESTABLISHMENT

In 2002, a subsidiary of the National Company KazMu-nayGas Joint-Stock Company – KazMunayGas Trading House Limited Liability Partnership (LLP) was established for the purpose of facilitating oil and oil products trans-portation and trading operations in the territory of the Republic of Kazakhstan and abroad. Shortly thereafter it

was transformed into a closed joint-stock company and subsequently into a joint-stock company.

In 2010, KazMunayGas Trading House JSC was renamed into KazMunaiGaz – refining and marketing joint stock company.

MISSION

u Development as a competitive, innovative and high-performance “downstream” company;

u Ensuring capacities for oil refining and production of high-quality oil products;

u Stabilization of the domestic oil products market of the Republic of Kazakhstan by means of oil products marketing through the extensive marketing channels.

MAIN TYPES OF ACTIVITY:

u Analysis and forecast of changes in the overall situa-tion in the world and the domestic markets of oil, gas and refined products;

u Participation in the development and implementation of state and industry-specific programs of oil and gas industry development;

u Carrying out export and import of oil products and other goods (works, services);

u Wholesale and retail sales of oil products, gas (includ-ing lubricating oils, fuels and lubricants) and other goods (works, services);

u Sales of compressed, natural (dry) gas and lique-fied gas (LHCG) propellant, pentane-hexane fraction (PHF);

u Operation of compressors, boilers, pipelines and gas pipelines working under pressure;

u Performance of construction and installation works aimed at gasification of populated areas and commis-sioning of fuel filling stations;

u Construction, maintenance, operation and repair of fuel filling stations (FFS), oil depots, gas filling stations (GFS), automobile gas filling compressor stations (AGFCS), gas-filling points (GFP), intermediate depots of cylinders (IDC), group tank units (GTU), stationary and mobile automatic gas filling stations (AGFS);

u Refueling of all types of cylinders, AGFS, road tanks and motor vehicles with compressed and liquefied gas, including as a motor fuel.

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1. About the Company1.1 History of establishment1.2. Mission1.4. Main types of activity1.5. Strategy goals and objectives of KazMunaiGaz-RM JSC for the period of 2014–2022

2. Corporate governance (composition of the Board of Directors and the Management Board of KazMunaiGaz-RM)3. Consolidated financial and economic indicators of KazMunaiGaz-RM at the end of 2015

3.1. Key financial and operating performance results3.2. Key events of 20153.3. Current assets structure of KazMunaiGaz-RM JSC to level IV3.4. FFC networks of KazMunaiGaz-RM JSC

4. Oil refining4.1. Oil refining in Kazakhstan

5. Investment projects aimed at development of oil refineries6. Sales of oil products7. Export and transportation8. Sustainable Development

8.1. Personnel8.2. Sponsorship and charity

9. Environmental safety9.1. Occupational health, industrial and fire safety

10. Management structure11. Corporate governance

11.1. Selection criteria for the members of the Board of Directors and the Management Board and determination of their independence11.2. Share capital11.3. Plans of KMG-RM for 2016

12. Risk management13. Consolidated financial statementsAppendix No. 1 List of major transactions and related-party transactionsContact information

CONTENTS

CORPORATE GOVERNANCE

COMPOSITION OF THE BOARD OF DIRECTORS OF KMG-RM (as of December 31, 2015):

Syrgabekova Assiya NarimanovnaChairman of the Board of Directors.

Managing Director for investments and risks management of JSC NC KazMunayGas

Born on June 22, 1960 in Kara-ganda oblast.

— Managing Director for Economy and Finance of NC KazMunayGas CJSC;

— Deputy General Director for Economy and Finance of KazTransGas CJSC;

— First Deputy General Director of Intergas Central Asia CJSC;

— First Deputy Chairman of the Management Board, Chairman of the Management Board of Halyk Bank of Kazakhstan JSC;

— Managing Director for Economy and Finance of JSC NC KazMu-nayGas;

— Financial Director of JSC NC KazMunayGas;

— Member of the Board of Direc-tors of JSC KazMunayGas EP;

2013 - till present Managing Direc-tor for investments and risks man-agement of JSC NC KazMunayGas.

Tiyessov Daniyar SuinshlikovichMember of the Board of Directors

General Director at KazMunaiGaz-RM JSCConcurrently – Deputy Chairman of the Management Board for oil refining and marketing at JSC NC KazMunayGas.

Born on December 6, 1970 in Tselinograd.

— Deputy Director of the Petrochemis-try Development Department at NC KazMunayGas CJSC;

— Financial Director at Atyrau Refinery LLP;

— Head of the Capital Construction Department at Atyrau Refinery LLP;

— Deputy General Director for production at KazMunayGas TH JSC, KazMunay-Gas Onimderi JSC;

— Managing Director for refining and marketing at JSC NC KazMunayGas;

— Deputy Chairman of the Management Board for refining and petrochemistry at JSC NC KazMunayGas;

Till the present - General Director (Chair-man of the Management Board) of KazMu-naiGaz-RM JSC. Concurrently – Deputy Chairman of the Management Board for oil refining and marketing of JSC NC KazMu-nayGas.

Abduov Nurlan KanatovichMember of the Board of Directors

Born on February 3, 1977 in Almaty.

— Vice-President of the Union of the Chamber of Commerce and Industry;

— General Director of GazImpeks CJSC;

— General Director of KazStroy-Servis CJSC;

— General Director and thereaf-ter – Chairman of the Manage-ment Board of SAT & Company;

— Chairman of the Board of Direc-tors of Kazakhstan PetroChemi-cal Industries JSC;

— Member of the Board of Direc-tors, Independent Director of Intergaz Central Asia JSC;

Till the present — Chairman of Pre-sidium of Kazakh Geographical Soci-ety

Okayev Yerkebulan KabievichMember of the Board of Directors

Born on June 10, 1970 in Almaty.

— Chairman of the Management Board of Kazakhstan Investment Bank OJSC;

— General Director of New way investment LLP;

— Member of the Management Board, First Deputy Chairman of the Management Board of Eura-sian Bank JSC;

— Member of the Supervisory Board of Allur Auto LLP;

— Independent member of the Board of Directors of Troika Dia-log Kazahstan JSC;

— Independent Director of KazMu-nayGas Onimderi JSC;

Till the present - member of the Management Board, First Deputy Chairman of the Management Board at Eurasian Bank JSC

TanatarovaShara BakytzhanovnaMember of the Board of Directors

Born on November 30, 1978 in Zha-na-Ozen of Mangistau oblast.

— Chief Specialist of the Corporate Financing Department, Man-ager of the Corporate Financ-ing Department, Chief Man-ager of the Corporate Financing Department, 1st category man-ager of the Corporate Financing Department of JSC NC KazMu-nayGas;

— Director of the Corporate Financing Department, Manag-ing Director of KazMunaiGaz– refining and marketing joint stock company;

— Director for Corporate Finance and Assets Management of JSC NC KazMunayGas;

Till the present – Director of the Assets Management Department of JSC NC KazMunayGas.

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Khodzhalakov Rufat TursynovichDeputy General Director for marketing (Member of the Management Board)

Born on October 31, 1976 in Almaty.

— General Director of KMG-Zhaiyk LLP;

— Commercial Director of Atyrau Refinery LLP;

— Managing Director for marketing of Petroleum Operating LLP;

— Deputy General Direc-tor for commerce and supply of Atyrau Refin-ery LLP;

— Deputy General Direc-tor for marketing of Atyrau Refinery LLP;

Till the present – Deputy General Director for mar-keting of KazMunaiGaz-RM JSC.

Bektenov Bekzhan MukhtasifovichDeputy General Direc-tor for development and Transformation (Member of the Management Board)

Born on December 13, 1969 in Almaty.

— President of the National Insurance Company JSC;

— Director of Almaty regional branch of KazAgroFinance CJSC;

— Chairman of the Man-agement Board of KazAgroFinance JSC;

— Executive Director of Risk-Business LLP;

— Advisor to General Director of KazMunai-Gaz – refining and mar-keting joint stock com-pany;

— Executive (Managing) Director – Head of the Central Staff of KazMu-nayGas – Onimderi JSC;

Till the present – Deputy General Director for devel-opment and transforma-tion of KazMunaiGaz-RM JSC.

Kabdushev Asset Daurenbek-ovichManaging Director for legal support (member of the Management Board)

Born on April 12, 1982 in Kokshetau oblast.

— Chief Manager of the claim sector of the Legal Support Department of KazMunayGas – Onim-deri JSC;

— Manager of the Legal Support Department, acting Director of the Legal Support Depart-ment, Director of the Legal Support Depart-ment of KazMunai-Gaz-RM JSC;

Till the present – Managing Director for legal support of KazMunaiGaz-RM JSC.

Utembayeva Aizhan NuralievnaManaging Director for economy and finance (member of the Manage-ment Board)

Born on February 13, 1981 in Almaty.

— Chief Auditor of Ernst & Young LLP;

— Deputy Head of the Internal Audit Service of JSC NC KazMunayGas;

— Head of the Internal Audit Service of JSC NC KazMunayGas;

Till the present – Manag-ing Director for economy and finance of KazMunai-Gaz-RM JSC.

COMPOSITION OF THE MANAGEMENT BOARD OF KMG-RM (as of March 31, 2016)

Tiyessov Daniyar SuinshlikovichGeneral Director (Chairman of the Management Board) of KazMunai-Gaz-RM JSC.

Born on December 6, 1970 in Tselinograd.

— Deputy Director of the Petro-chemistry Development Depart-ment of NC KazMunayGas CJSC;

— Financial Director of Atyrau Refinery LLP;

— Head of the Capital Construction Department of Atyrau Refinery LLP;

— Deputy General Director for production of KazMunayGas TH JSC, KazMunayGas Onimderi JSC;

— Managing Director for refin-ing and marketing of JSC NC KazMunayGas;

— Deputy Chairman of the Man-agement Board for refining and petrochemistry of JSC NC KazMunayGas;

Till the present - General Direc-tor (Chairman of the Management Board) of KazMunaiGaz-RM JSC. Concurrently – Deputy Chairman of the Management Board for oil refining and marketing of JSC NC KazMunayGas.

Kozhabayev Yerbolat OmirserikovichFirst Deputy General Director (member of the Management Board)

Born on November 30, 1977 in Aktogay village of Karaganda oblast.

— Director of the Legal Support Department and Contract Mon-itoring Department at KazMu-nayGas TH JSC;

— Executive Director (for legal support) of KazMunayGas TH JSC;

— Executive Director (for retail network development) of KazMunayGas TH JSC;

— First Deputy General Director of KazMunayGas Onimderi JSC;

— General Director of KazMunay-Gas Onimderi JSC;

Till the present – First Deputy Gen-eral Director of KazMunaiGaz-RM JSC.

Bekturov Rustem SabitovichDeputy General Director for produc-tion (Member of the Management Board)

Born on January 1, 1963 in Almaty.

— Executive Director of Pavlodar Oil Chemistry Refinery JSC;

— Deputy General Director of KazRosGas CJSC;

— Deputy General Director for oil refining and petrochemistry of EP KazMunayGas JSC;

— Chairman of the Board of Direc-tors of Pavlodar Oil Chemistry Refinery JSC.

Till the present – Deputy Gen-eral Director for production of KazMunaiGaz-RM JSC.

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CONSOLIDATED FINANCIAL AND ECONOMIC INDICATORS OF KAZMUNAIGAZ-RM AT THE END OF 2015

CONSOLIDATED FINANCIAL AND ECONOMIC INDICATORS OF KAZMUNAIGAZ-RM AT THE END OF 2015

LABOR PRODUCTIVITY KAZMUNAIGAZ–RM JSC

Description Unit of measurement 2015

Consolidated labor productivity tons/person 2,204

Labor productivity, sale of oil products tons/person 600

Labor productivity, oil refining tons/person 1,604

Refining volume thous. tons 14,171

Sales volume thous. tons 3,091

Number persons 8,834

Refinery yield % 68.69

Atyrau Refinery 59.17

POCR 72.46

PKOP 74.89

Share of local content in the total procurements of goods % 72

Share of local content in works and services % 49

KEY FINANCIAL AND OPERATING PERFORMANCE RESULTS

Financial results for 2013–2015Indicators(thous. tenge) 2013 2014 2015

Consolidated financial statements



Assets 670,969,632 855,384,154 1,141,845,128

Equity 392,496,237 414,442,181 245,794,098

including:

attributable to a shareholder 392,025,318 414,031,979 246,152,328

minority interest 470,919 410,202 (358,230)

Income from sales 572,713,328 416,923,410 423,640,485

Expenses (461,551,307) (312,060,989) (352,934,428)

Income (loss) before taxation 40,433,811 23,346,895 (199,578,766)

Total income (loss) 25,265,730 18,399,941 (166,905,267)

including:

attributable to a shareholder 25,223,114 18,429,985 (166,135,500)

minority interest 42,616 (30,044) (769,767)

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JANUARY

The EPC contract was signed for implementation of the second Phase of “Moderni-zation and reconstruction of Shymkent Refinery” project.

The Decree of the Government of the Republic of Kazakh-stan No. 17 dated January 26, 2015 established quotas for issue of permits for employ-ment of foreign nationals under “Reconstruction and modern-ization of Shymkent Refinery” project for 2015-2016.

FEBRUARY

The Business Processes Re-en-gineering Program of KazMu-nayGas Onimderi LLP was approved.

MARCH

By the Decree of the Govern-ment of the Republic of Kazakh-stan No 147 dated March 19, 2015 quotas were established for attraction of foreign labor force for the “Reconstruction and Modernization of Atyrau Refinery” priority project for 2015-2016.

KMG-RM acquired 50 % inter-est in CASPI BITUM JV LLP from Aktau Plant of Plastic Mass LLP.

MAY

During the meeting held on 26.05.2015 the Interdepartmental Commission on development of oil and gas and energy industries of the Republic of Kazakhstan approved the optimization of the Project “Modernization of Pavlodar Oil Chemistry Refinery” with a decrease in the scope of work and cost of the project (Minutes of the Interdepartmental Commission No. 17-5/07-425-dsp dated 26.05.2015).

By the Decree of the Government of the Republic of Kazakhstan No 147 dated March 19, 2015 quotas were established for attraction of foreign labor force for the “Reconstruction and Modernization of Atyrau Refinery” priority project for 2015-2016.

JULY

Production of a trial batch of gaso-line at the catalytic reforming plant including a benzene extraction unit at Atyrau Refinery.

Within the framework of the Kazakh-stan-China cooperation in the field of industrialization and investment, Karagandy CCI Joint Venture LLP (hereinafter – JV) with 25 % inter-est of KMG-RM was registered in Karaganda for the purpose of imple-menting the “Construction of the coal processing complex in the Republic of Kazakhstan” project.

KazMunayGas PKOP Finance BV was liquidated.

SEPTEMBER

As part of implementing Phase 1 of the project “Mod-ernization and reconstruction of Shymkent Refinery”, a distil-late hydro-treatment unit with a capacity of 1.5 mln tons per year was commissioned.

State regulation of prices for retail sales of motor gasoline AI-92 was cancelled from Sep-tember 4, 2015.

Implementation of CODO pro-gram – transfer of 151 FFSs of KazMunayGas to private entre-preneurs for management.

OCTOBER

70s anniversary of Atyrau Refinery.

Production of a trial batch of paraxylene at the aromatic hydrocarbons production plant of Atyrau Refinery.

An external compliance audit of the IMS was carried out by TUV NORD certification body.

CASPI BITUM JV LLP started producing modified bitumen.

NOVEMBER

The Shareholders’ Agreement for establishment of a JV for technical gas production was signed between KazMunaiGaz-RM JSC and Air Liq-uide in Paris.

The Innovation Support System of KMG-RM JSC was awarded 2nd place in the Republican contest “Ratsionalizator.kz”

The Agreement on cooperation in the field of innovation activity sup-port was signed between KMG-RM JSC and the Development Fund of Skolkovo Center in Moscow.

The Agreement on cooperation was signed between KMG-RM JSC and PetroChina in Beijing for the further development of Shymkent Refinery.

Gasoline and fuel filling stations of KazMunayGas were recognized as the best ones in the competition “Choice of the Year in Kazakhstan”

DECEMBER

The first start-up complex (cata-lytic reforming plant with contin-uous catalyst regeneration and benzene extraction unit) of the APC project was put into opera-tion at Atyrau Refinery.

As part of implementing Phase 1 of the “Modernization and recon-struction of Shymkent Refinery” project, a sulphur production unit with a capacity of 4 thous. tons per year was put into operation.

A positive opinion was obtained from Gosexpertiza RSE for the design and estimate documenta-tion of the Start-Up Complex 1 of the “Modernization of Pavlodar Oil Chemistry Refinery” Project.

KEY EVENTS OF 2015

The Analytical System of the Dis-patch Center was put into commer-cial operation.

Obtaining a certificate of state reg-istration of rights to the copyright object “Analytical System of the Dis-patch Center in the group of com-panies of KazMunaiGaz – refining and marketing joint stock company (No. 2461 dated 30.12.15).

Conduct of an energy audit at refin-eries of the Republic of Kazakhstan as part of enforcement of the Law of the Republic of Kazakhstan “On Energy Saving and Enhancement of Energy Efficiency” as well as a tech-nical audit to determine the actual residual life of equipment.

Development of the equipment clas-sifier and reference book for com-modities and materials as part of introducing the Unified commodities and materials accounting system, physical stock-taking and filling of warehouses of the Company’s group.

The following normative and tech-nical documents were developed in the form of non-governmental standards: u “Refining and petrochemical industry. Oil equipment and ven-tilation equipment. Determina-tion of consumption rates for spare parts and materials”;

u “Refining and petrochemical industry. Pump and compres-sor equipment. Determination of consumption rates for spare parts and materials”;

u “Refining and petrochemical industry. Shut-off and con-trol valves, safety spring valves. Determination of consumption rates for spare parts and mate-rials”.

Development of a preliminary national standard of the Republic of Kazakhstan “Inter-repair cycle. Structure and duration of repair cycles, overhaul periods, repair downtime of process units of refin-eries in the Republic of Kazakhstan. General provisions”.

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Kaskor Transservice JSC (12.87%)

Samruk-Kazyna Corporate University (9.99%)

Karagandy CCI LLP (25%)

TH KMG N.V. (100 %)

100 %

TH KMG AG* (100 %)

SEMURG INVEST – Temir Zholy LLP (100 %)

CURRENT ASSETS STRUCTURE OF KAZMUNAIGAZ-RM TO LEVEL IV (as of March 1, 2016)

POCR LLP (100%)

KazMunayGas-Onimderi LLP (100%)

KazMunayGas-Aero LLP (100%)

Atyrau Refinery (99.53%)

RTI-Atyrau Refinery LLP (30%)

PKOP LLP (50%)

Gassyr-Mangistau LLP (100 %)

Atyrau Refinery LLP (97.80058%)

Valsera Holdings B.V. (50%) PKOP LLP (99.43%)

Caspi Bitum LLP (50%)

Controlled assets

Jointly

controlled assets

Western network

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FFS NETWORK OF KAZMUNAIGAS–RM JSC: REGIONAL DISTRIBUTION AND SALES VOLUMES

321 FSS and AGFSS80 OIL DEPOTS FFS – 309 units

AGFS – 12 units

11 own oil depots

69 leased

235 oil tank trucks 17 gas tankers

3,240 PERSONS

Sales over 300 tons

Sales less than 300 tons

KMG

CODO

4 73

8

8

5

6

12 215

16

18

8

14

10

10

26

7

11

9

17

13

4

4

931

6

2

526

2221

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OIL REFINING

Pavlodar Oil Chemistry Refinery JSC

Shymkent Refinery

Caspi Bitum

OIL REFINING IN KAZAKHSTAN

u Established in 2013 u Current refining volume: 375 thous. tons u Installed capacity: 1 mln tons

u Established in 1985 u Current refining volume: 4.5 mln tons u Installed capacity: 5.25 mln tons

Oil refining

In 2015, the consolidated volume of raw materials processing at three oil refineries of the Republic of Kazakhstan amounted to 14,171,485 tons.

Indicators of hydrocarbon raw materials processing following the results of the last three years and plans for 2016

Production KPIUnit of measure-ment

2013 (actual)

2014(actual)

2015(actual)

2016(plan)

Oil refining, total thous. tons 14,296 14,911 14,171 12,760

Atyrau Refinery LLP thous. tons 4,429 4,920 4,867 4,810

POCR LLP thous. tons 5,010 4,925 4,810 4,467

PKOP LLP thous. tons 4,857 5,065 4,493 4,253

Refinery yield % 69.80 71.11 68.69 70.4

Atyrau Refinery LLP % 59.77 62.77 59.17 61.3

POCR LLP % 74.18 76.27 72.46 77.4

PKOP LLP % 74.44 74.19 74.98 72.5


Atyrau Refinery


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INVESTMENT PROJECTS AIMED AT DEVELOPMENT OF OIL REFINERIES

Project “Construction of the aromatics production complex at Atyrau Refinery” (APC)

Implementation of this project involves the construction of Paramax BTX technology package licensed by the French company “Axens” (xylol pre-fractionation section, xylol isomerization section, toluene transalkylation section, refined oil separation section) as well as the construction of the catalytic reforming unit with continuous catalyst regeneration and benzene extraction unit.

The project is implemented as part of the State Pro-gram of Forced Industrial-Innovative Development of the Republic of Kazakhstan for 2010-2014 approved by the Presidential Decree No. 958 dated 19.03.2010.

As part of the APC, it is planned to produce 133 thous. tons of benzene and 496 thous. tons of paraxylene per year; the complex units can also produce a high-octane component of motor gasoline.

Project purpose: u Ensure the production of motor fuels of K3 environ-mental class in accordance with the requirements of the Technical Regulations of the Customs Union;

u Produce products with high added value – benzene and paraxylol.

Project implementation period: 2010 – 2015.

Project cost: 1,270.5 mln US dollars.To implement the project, borrowed funds were raised from Kazakhstan Development Bank JSC in the amount of 1,063.7 mln US dollars, including a credit facility from

Export-Import Bank of China in the amount of 884 mln US dollars.

Project participants: JSC NC KazMunayGas, Atyrau Refinery, Sinopec Engineering Group (China), KazStroy-Service OGCC JSC (Kazakhstan).

Completed activities: w Feasibility study was developed by EC KazGiproNeft-eTrans LLP. A positive opinion No. 2-12/08 dated January 18, 2008 was obtained from Gosexpertiza RSE.

w Omskneftekhimproekt OJSC developed design estimate documentation. A positive opinion No. 01-393/09 dated August 20, 2009 was obtained from Gosexpertiza RSE.

w EPC contract was signed on October 29, 2009 with Chinese company “SINOPEC Engineering Group” (Gen-eral contractor). Subcontractor – KazStroyService OGCC JSC (Kazakhstan).

Current status:The first start-up complex (catalytic reforming plant with continuous catalyst regeneration and benzene extraction unit) w was put into operation on December 4, 2015.

The second start-up complex(aromatic hydrocarbons production unit): w a trial batch of paraxylene was produced on October 2, 2015;.

INVESTMENT PROJECTS AIMED AT DEVELOPMENT OF OIL REFINERIESIn accordance with the State Program of Industrial and Innovative Development of the Republic of Kazakhstan, investment development and modernization projects are implemented at all three refineries of the Republic.

Modernization of the refineries will replace obsolete and worn-out equipment, improve the quality of oil products that meet К4 and К5 environmental standards, increase

secondary processes capacity and refining yield, and reduce harmful environmental impact.

As a result of reconstruction and modernization, oil refin-ing capacities will amount to 16.6 mln. tons per year. Basic products for the oil chemistry industry will appear – ben-zene and paraxylene.

Atyrau Refinery LLP (Atyrau Refinery)

Atyrau Refinery was put into operation in 1945. The design capacity of oil refining is 4,906 thous. tons. KMG-RM holds 99.53 % equity interest in Atyrau Refinery.

Production of basic oil products in 2013-2015

Description Atyrau Refinery

Unit of measurement 2013 2014 2015

Oil refining tons 4,429,517 4,920,005 4,867,719

Motor gasoline tons 505,197 613,855 604,733

Diesel fuel tons 1,221,659 1,344,089 1,207,299

Jet kerosene TS-1 tons 38,230 22,526 20,570

Benzene tons 0 0 1,147

Furnace oil tons 124,395 165,967 160,336

Fuel oil tons 1,512,016 1,510,269 1,649,712

Vacuum gasoil tons 652,492 778,604 739,344

Coke tons 95,119 137,356 111,226

Liquefied gas tons 19,638 28,415 29,484

Sulphur tons 1,345 2,449 2,651

In 2015, the refinery processed more than 4,868 thous. tons of crude oil.

The plan was overfulfilled by 1.1 thous. tons.

Production of a new product – benzene was established.

Achievement of target indicators was observed for all socially significant oil products except jet kerosene.

In 2015, production of motor gasoline amounted to 604.7 thous. tons, which was 9.1 thous. tons less than the level of 2014.

In 2015, production of diesel fuel amounted to 1,207.3 thous. tons, which was 136.8 thous. tons less than the indicator of 2014.

In 2015, production of TC-1 fuel amounted to 20.6 thous. tons, which was 2.0 thous. tons less than the indicator of 2014.

The decline in production volumes of the said oil products can be explained by a general decline in oil refining, reduc-tion in the proportion of light oil in raw materials and per-formance of commissioning works at the new continuous catalytic reforming (CCR) unit.

In 2015, the refining yield was equal to 59.17 %.

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Pavlodar Oil Chemistry Refinery LLP (POCR)

Pavlodar Oil Chemistry Refinery is one of the largest and most technologically advanced oil refineries in Kazakhstan. The plant is technically oriented to refining of West Siberian oil. KMG-RM holds 100 % equity interest in POCR.

Production of basic oil products in 2013-2015

Description POCR



Motor gasoline tons 1,117,045 1,259,249 1,248,841

Diesel fuel tons 1,472,749 1,508,711 1,457,329


Furnace oil tons - - -

Fuel oil tons 762,763 668,283 822,130


Coke tons 146,439 151,756 126,173


Sulphur tons 22,692 25,419 29,886

Bitumen tons 186,265 218,523 246,049

In 2015, the refinery processed 4,810 thous. tons. The plan was overfulfilled by 0.5 thous. tons.

In 2015, production of motor gasoline amounted to 1,248.8 thous. tons, which was 10.4 thous. tons less than the level of 2014. At the same time, the yield increased by 0.4 %.

In 2015, production of diesel fuel amounted to 1,457.3 thous. tons, which was 51.4 thous. tons less than the indi-cator of 2014.

In 2015, production of TC-1 fuel amounted to 10.7 thous. tons, which was 114.1 thous. tons less than the indicator of 2014.

Decline in the volumes of light oil production was caused by a general decline in oil refining and deterioration of quality indicators of delivered oil (due to increase in ele-mental sulphur content).

In 2015, the refining yield was equal to 72.46 %.

“POCR Modernization” Project

The project is implemented within the framework of the State Program of Industrial-Innovative Develop-ment of the Republic of Kazakhstan for 2015-2019 (SPIID) approved by Presidential Decree No. 874 dated 01.08.2014.

Purpose: Ensuring the production of motor fuels of K4 environmental class in accordance with the requirements of the Technical Regulations of the Customs Union.


Project cost: 830.8 mln US dollars.To implement the project, borrowed funds were raised from JSC NC KazMunayGas (short-term loan) and Kazakhstan Development Bank JSC (long-term loan) in the total amount of 409 mln US dollars.

Current status: In May 2015, the project was optimized with the aim to reduce the scope of works and the project cost; the deci-sion was agreed upon by the Interdepartmental Commis-sion on development of oil and gas and energy industries of the Republic of Kazakhstan

On December 3, 2015 a positive opinion was obtained from Gosexpertiza RSE for the design and estimate docu-mentation of the Start-Up Complex 1.

DED for the Start-Up Complexes 2 and 3 is under review by Gosexpertiza RSE.

45 % of equipment has been delivered to the construction site of the Start-Up Complex 1.

Construction and assembly works are being performed at units of the Start-Up Complex 1: installation of founda-tions, assembly of equipment and metal structures.

Project “Construction of the advanced oil refining complex at Atyrau Refinery” (AORC)

AORC complex involves the construction of 13 individ-ual processing units. The main unit is a catalyst cracker designed for conversion of atmospheric distillation resi-dues, heavy gas oil, vacuum gas oil and heavy delayed cok-ing gas oil into more valuable oil products such as liquefied hydrocarbon gas, gasoline and light cracking gas oil. Pro-cessing of low-value residual oil products will allow Atyrau Refinery to increase production of high-octane gasoline, jet and diesel fuel.


Project purpose: u Ensuring the production of motor fuels of К4, К5 envi-ronmental classes in accordance with the require-ments of the Technical Regulations of the Customs Union;

u Increase in crude oil refining capacity of the plant up to 5.5 mln. tons per year;

u Increase in oil refining depth.


Project cost: 2,050 mln US dollars.

Funding:To implement the project, borrowed funds were raised from Kazakhstan Development Bank JSC, Export-Import Bank of China, JBIC (Japan) and JSC NC KazMunayGas in the total amount of 1,741 mln US dollars.

Project participants: JSC NC KazMunayGas, Atyrau Refinery, EPC contractor – Sinopec Engineering Group Consortium (China)/Marubeni Corporation (Japan)/KazStroyService (Kazakhstan).

Current status: w 96 % of detailed design documentation has been developed;

w works on piling, installation of foundations, assembly of tanks, equipment, reinforced concrete columns and steel structures are performed at 53 construction sites;

w completion of placement of orders for delivery of large-size equipment with prolonged manufacturing period; 668 units have been delivered.

П А В Л О Д А Р М � Н А Й - Х И М И Я З А У Т Ы

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Current status: u Diesel fuel hydrotreatment unit: the unit has been put into operation.

u Sulphur production unit: the unit has been put into operation.

u Isomerization unit: w 40.3 % of detailed design documentation has been developed

w Orders for 144 out of 149 units of long lead time equipment have been placed;

w Installation of foundations for equipment, assem-bly and installation of segment equipment, place-ment of orders for manufacturing and supply of equipment are in progress.

Phase 2: w On January 16, 2015 EPC contract was signed for implementation of Phase 2;

w development of detailed design documentation and placement of orders for equipment are in progress;

w earth works have been commenced.

“Production of road bitumen at Aktau Plant of Plastic Mass”

A bitumen plant was built in accordance with the State Program of Forced Industrial-Innova-tive Development of the Republic of Kazakhstan for 2010-2014 to meet the needs for quality road bitumen during the road construction in the Republic of Kazakhstan.

CASPI BITUM JV LLP (hereinafter – CaspiBitum) was established in 2009. CaspiBitum is a plant for road bitu-men production using heavy Karazhanbas oil. The design refining capacity is 1.0 mln. tons per year. The plant was put into operation at the end of 2013.

The founders are Aktau Plant of Plastic Mass LLP – 50 % and CITIC Kazakhstan LLP – 50 %.

Volumes of raw material processing and production of marketable oil products in 2015 in CASPI BITUM JV LLP

Description CASPI BITUM

Unit of measurement 2014 2015

Hydrocarbons processing volume thous. tons 623 375

Production volume thous. tons 610 369

Road bitumen thous. tons 153 69

Mixture of oil products thous. tons 456 299

Heavy distillate liquid oil thous. tons 299

Following the results of production activities of CaspiBitum for 2015, the actual volume of raw mate-rial processed amounted to 375,046 tons with the oil processing target of 592,000 tons; the plan fulfillment was equal to 63.3 %.

The oil refining plan was not fulfilled for the following rea-sons:

— lowered volumes of oil supplies to the bitumen plant against those specified in the Production Program. While the oil production volumes meet the “portfolio” of orders of the “processor”.

On October 22, 2015, CaspiBitum officially produced a commercial batch of polymer-modified bitumen using

SBS polymer (China) with the participation of Chinese experts.

On January 2016 a new standard for polymer-modified bitumen was brought into effect instead of the existing one. The work on introduction into effect and content of the document was performed by CaspiBitum jointly with KazDorNii JSC. To date, the document has passed all stages of approval. The indicator “penetration at 0°C” has been deleted from the new edition of the standard. After introduction of the new standard into effect CaspiBitum will be able to certify the manufactured polymer-modified bitumen.

PetroKazakhstan Oil Products LLP (PKOP)

PetroKazakhstan Oil Products LLP (PKOP LLP) Refinery was commissioned in 1985 and is one of the three major refineries in Kazakhstan with a design capacity of 5.2 mln tons/year. Management of PKOP is carried out on a parity basis: by the National Company KazMunayGas represented by Kaz- MunaiGaz – refining and marketing joint stock company and CNPC – China National Petroleum Corporation. Raw materials processed are mostly Kazakh oil from the Kumkol and Kenkiyak fields and West Siberian oil.In 1994, the enterprise was privatized. In 2000, the refinery was acquired by a Canadian company. On October 26, 2005, PKOP was acquired by CNPC through its subsidiary. In 2007, KazMunayGas became an indirect holder of 50 % of shares of PKOP, which provides ownership on a parity basis and current management of the refinery.

Production of basic oil products in 2013-2015 (without regard to 50 % interest of KMG-RM in PKOP)

Description PKOP



Motor gasoline tons 1,038,183 1,126,072 987,964

Diesel fuel tons 1,375,583 1,346,166 1,192,445


Fuel oil tons 968,231 1,013,213 888,785



In 2015, the refinery processed 4,493 thous. tons.

In 2015, production of motor gasoline amounted to 988.0 thous. tons, which was 138.1 thous. tons less than the level of 2014.

In 2015, production of diesel fuel amounted to 1,192.4 thous. tons, which was 153.7 thous. tons less than the indicator of 2014.

In 2015, production of TC-1 fuel amounted to 253.9 thous. tons, which was 24.7 thous. tons less than the indicator of 2014. At the same time, the yield increased by 0.2 %.

Reduction in light oil production volumes is explained by the general decline of oil refining.

In 2015, the refining yield was equal to 74.98 %, which was 0.79 % higher than the same indicator of 2014.

Project “Modernization and Reconstruction of Shymkent Refinery”


Project purpose: u Restoration of the design capacity up to 6 mln tons/year;

u Ensuring the production of motor fuels of К4, К5 envi-ronmental classes in accordance with the require-ments of the Technical Regulations of the Customs Union.

The project is divided into two phases:Phase 1 is aimed at ensuring quality of oil products in accordance with K-4, K-5 environmental standards and includes the following units: isomerization unit, diesel fuel

hydrotreatment unit and sulphur production unit with a capacity of 4 thous. tons per year.

Phase 2 is aimed at increasing oil refining yield and the plant’s capacity up to 6 mln. tons per year. This phase includes the following units: catalyst cracker RFCC, cat-alytic cracking gasoline hydrotreatment unit Prime G +, demercaptanization unit for unsaturated and saturated LPG, sulphur production unit, hydrogen purification unit (PSA 1, PSA 2).


Project cost: 2,043 mln US dollars.To implement the project, borrowed funds were raised from the PKOP Participants (KazMunaiGaz-RM JSC and CNPC E&D Holding Cooperatief UA) in the total amount of 800 mln. US dollars.

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SALES OF OIL PRODUCTS

KazMunayGas–Aero JSC (KMG-Aero)

Within the framework of strengthening the positions of KazMunayGas group of companies in the fuel market of the Republic of Kazakhstan, as well as development of

an alternative jet fuel distribution scheme the Board of Directors of KazMunaiGaz-RM JSC decided to establish KMG–Aero.

Indicators Unit of measurement 2014 2015

Volume of jet fuel sales thous. tons 7 61

Total income thous. tenge 1,072,852 9,025,691

Total expenses thous. tenge 1,302,411 8,153,352

Net income/(loss) thous. tenge –229,559 872,339

Key events of 2015:1. KMG-Aero was granted the status of a strategic IATA

partner in the Republic of Kazakhstan;2. KMG-Aero timely and fully executed the responsibil-

ities entrusted by the Government of the Republic of Kazakhstan for supply of jet fuel to the Armed Forces

of the Republic of Kazakhstan, the Border Service of the National Security Committee of the Republic of Kazakhstan and the National Guard of the Republic of Kazakhstan;

3. At the end of 2015, the market share of KMG-Aero in the jet fuel supply market was equal to about 10 %.


KazMunaiGaz – refining and marketing joint stock com-pany sells a wide range of oil products, both for export and for the domestic market of the Republic of Kazakhstan (wholesale and retail).

Retail sales of oil products in the domestic market of Kazakhstan are carried out through a network of fuel fill-ing stations under KazMunayGas brand (KazMunayGas Onimderi LLP) located in all regions of Kazakhstan, in the cities of Astana and Almaty.

As of January 1, 2016 the Company’s share in the domes-tic retail market of oil products was equal to 16 %. The market share is planned to be increased by at least 20 % by 2018, and by 2022 – up to 32 %. At the same time, according to the Company’s Strategy the sales volume will be increased up to 2,000 thous. tons per year by 2018.

The program for expansion of its own retail network under KazMunayGas brand is implemented both through the construction of new fuel filling stations and through the acquisition and re-equipment of existing plants. During the construction of FFSs KMG applies the best interna-tional practices, installs modular structures, the latest fuel dispensers and advanced software. As of December 31, 2015, KMG-RM manages 321 FFSs, including 305 own stations, 1 leased station, 3 combined FFSs-AGFS, 12 AGFSs, including 1 AGFCS as well as 11 oil depots and 2 camps.

Alongside with that, in the fourth decade of 2015 imple-mentation of CODO program was started to transfer the functions on FFSs management to individual entrepre-neurs.

Indicator Unit of measurement 2013 2014 2015

1 2 3 4 5

Sales of oil products thous. tons 1,265 1,500 1,332

retail thous. tons 1,191 1,443 1,269

AI-80 thous. tons 125 137 91

AI-92 thous. tons 508 527 519

AI-95 thous. tons 40 43 45

AI-98 thous. tons 0.1 0.9 0.8

Diesel fuel thous. tons 518 735 613

Sales of gas thous. tons 16 20 24

retail thous. tons 16 20 24

JSC NC KazMunayGas being a national operator in the field of oil and oil products performs shipments of socially significant oil products at reduced prices in accordance with the schedules of the Ministry of Oil and Gas of the Republic of Kazakhstan. Every year, during the sowing and harvesting KMG-RM supplies diesel fuel at reduced prices for agricultural producers, and during heating seasons – fuel oil to meet the heating needs of social and industrial facilities and institutions of the Republic of Kazakhstan. In 2015, to meet the agricultural needs the Company shipped diesel fuel in the volume of 120 thous. tons and fuel oil for heating needs in the amount of 24 thous. tons.

In addition, by the Decree of the Government of the Republic of Kazakhstan No. 1304 dated 12.12.2014 sin-gle operators were identified to supply the following goods to the Armed Forces of the Republic of Kazakhstan, the Border Service of the National Security Committee of the

Republic of Kazakhstan, the National Guard of the Repub-lic of Kazakhstan, the authorized body in the field of civil protection and the authorized body in the field of public material reserve:1. Gasoline and diesel fuel – KazMunayGas Onimderi

JSC;2. Jet fuel – KazMunayGas – Aero JSC;3. Oil fuel – KazMunaiGaz – refining and marketing joint

stock company.

In 2015, KazMunaiGaz – refining and marketing joint stock company delivered fuel oil in the amount of 22 thous. tons by rail/motor transport to the recipient’s ware-house (DDP terms – Incoterms 2010) for the benefit of the Armed Forces of the Republic of Kazakhstan and the Border Service of the National Security Committee of the Republic of Kazakhstan.

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EXPORT AND TRANSPORTATION

EXPORT OF OIL

In accordance with the Agreement between the Govern-ment of the Republic of Kazakhstan and the Government of the Russian Federation on trade and economic coop-eration in the field of supplies of oil and oil products to the Republic of Kazakhstan dated December 9, 2010 (here-inafter – the Agreement) and the Methodology for coun-ter oil supplies to the Russian Federation for oil products imported from the Russian Federation to the Republic of Kazakhstan, which is an integral part of the Agreement,

KMG-RM has been determined as an operator of counter oil supplies to the Russian Federation.

In pursuance of the Agreement, during the period from August 2014 through August 2015 KMG-RM sold a total of 2.95 mln tons of crude oil of Kazakhstan oil producing organization to Russian oil companies.


Export of oil products

Since November 2013, KMG-RM JSC has been selling heavy oil products for export from Atyrau Refinery.

During the period from January to December 2015, Atyrau Refinery sold heavy oil products for export in the total volume of 1,281 thous. tons, including :

Description Unit of measurement KMG-RM

2013 2014 2015

Fuel oil tons 25,820 536,471 767,249

VGO tons 50,509 314,340 379,740

Furnace oil tons - 67,020 81,456

Sulphur tons - 1,100 976

Coke tons 11,727 55,546 51,520

During the period from January to December 2015 the Company sold heavy oil products from POCR for export in the total volume of 37,558 thous. tons, including :

Description Unit of measurement KMG-RM

2015

Fuel oil tons 32,698

VGO tons 4,860

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SUSTAINABLE DEVELOPMENT

PERSONNEL

One of the fundamental values of KMG–RM is experienced and highly qualified personnel. The Company is striving to evaluate more objectively professional contribution of each individual specialist and provides equal opportunities for career development to all its employees.

KMG–RM pays close attention to the human resource development. For the purpose of maintaining and increas-ing a professional level of employees, the Company organ-izes annually training for operational and administrative personnel, re-training and advanced training for spe-cialists in the training center of KazMunayGas group of companies – Samruk-Kazyna Corporate University. Approaches used for personnel training and re-training allow the Company to manage effectively the person-nel knowledge and build human capacity able to ensure achievement of strategic objectives.

As of December 31, 2015, the total number of employ-ees of KMG-RM group of companies was equal to 8,834

persons. Efficiency coefficient of employees engage-ment within KMG-RM group of companies for 2015 was amounted to 73 %.

The level of turnover within KMG-RM group of companies was 49 %. As part of activities related to staff number optimization within KMG-RM group of companies, namely, pursuant to the “Program of staff number optimization and withdrawal of non-core assets and ancillary activi-ties from the structure of refineries (Atyrau Refinery LLP and POCR LLP) for the period of 2014- 2016 approved by the resolution of the BoD of KMG-RM dated 29.04.2014 (Minutes No. 6/2014), 1,328 persons were taken out into outsourced employment from Atyrau Refinery LLP and POCR LLP in 2015.

The employee incentive program combines material and non-material incentives and is aimed at attracting and retaining qualified personnel and increasing employees’ interest in job performance.

SPONSORSHIP AND CHARITY

Since its establishment, the KMG-RM group of compa-nies actively participates in supporting vulnerable groups, renders assistance in implementation of state and indus-try-specific social development programs, nationwide events, and provides sponsor support to organizations and specialists engaged in science, healthcare, culture and sports.

Issues relating to provision of sponsorship and charity by KMG-RM are stipulated in the Sponsorship and Charity Support Regulations of KazMunaiGaz-RM JSC and its subsidiaries and affiliates.

In 2015, POCR LLP provided sponsor support to the non-governmental fund Yertys-Pavlodar Sports Club (hockey) for effective club management, attraction of prospective legionaries to the team, promotion of image of KMG group of companies in the Republic of Kazakhstan and CIS countries.

Results achieved:1. leadership in the Championship of the Republic of

Kazakhstan and the Cup of the Republic of Kazakhstan (defending 3-times hockey champions of the Republic of Kazakhstan);

2. leadership in the basketball Championship of the Republic of Kazakhstan (defending 15-times champi-ons of the Republic of Kazakhstan).

In addition, the Company provided support for socially important projects to Degdar Humanitarian Foundation and KAZENERGY Kazakhstan Association of Oil and Gas and Energy Sector Organizations.

Pensioners were also provided with support by granting material aid. At the same time, Atyrau Refinery provided support to the statutory activities of organizations of veterans, disabled persons, children’s homes and centers and other non-profit organizations in the social sphere, and POCR LLP supported organizations of the Council of Veterans activity (former employees of the plant) and rendered material aid to pensioners.

KMG–RM is aware of the social responsibility of business and makes every effort to conduct its business activi-ties on the basis of ethics and contribution to economic development while improving the living standards of its employees and their families, and society as a whole.

KMG–RM is striving to ensure sustainable and successful development of its business focusing on its social com-ponent, the main areas of which are: implementation of social programs for personnel, sponsorship and charity, performance of environmental and educational activities.

The corporate website of KMG-RM contains “Sustain-able Development” section (http://www.kmgrm.kz/ru/social-projects), which reflects the information on social and charitable projects, environment, labor protec-tion and industrial safety. Besides, the section includes sub-sections on local content, human resource and inno-vation development. The code of corporate social respon-sibility is placed separately.

For the purpose of preventing social and labor conflicts and providing social stability, as well as rendering assistance in the improvement of working conditions, strengthen-ing labor and production discipline, occupational health and safety, promoting productivity and quality of work KMG-RM is developing the communication system in accordance with the internal documents, which allows establishing feedback with the Company’s management.

The Company provides regular trainings to employees classified as “production personnel” according to quali-fication requirements of the work and standards estab-lished by the legislation of the Republic of Kazakhstan.

On January 13, 2012, the Law of the Republic of Kazakh-stan No. 541-IV “On energy saving and enhancement of energy efficiency” was adopted. Enforcement of this Law is aimed at reducing power consumption of a gross mar-ketable product, which will allow solving a problem related to reduction of power consumption of the gross domes-tic product of the Republic of Kazakhstan in accordance with the Strategic Development Plan of the Republic of Kazakhstan till 2020.

Enterprises within the group of companies of KazMu-naiGaz – refining and marketing joint stock company, which include Atyrau Refinery LLP, Pavlodar Oil Chemistry

Refinery LLP and KazMunayGas – Onimderi LLP, started performing works on the energy audit and investigation of oil and oil products losses with the aim to take measures aimed at improving the energy efficiency of production processes.

In October 2015, TUV NORD certification body con-ducted an external supervisory audit of KMG-RM IMS.

The purpose of the external supervisory audit is to deter-mine compliance of KMG-RM IMS with international standards ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, as well as continuous enhancement of its effectiveness.

In 2015, the following activities were carried out to improve IMS:

— Conduction of training for KMG-RM management (training seminar on the topic: “Familiarization of CEO with the process-oriented integrated management system based on ISO 9000, ISO 14000 and OHSAS 18000 standards”).

— Certification of internal auditors (training workshop on the topics; “Practice of creating a management system in accordance with ISO 9001, ISO 14000 and OHSAS 18000 standards”; “Training of internal audi-tors of the integrated management system”);

— Updating/description of main and auxiliary business processes in process maps;

— Internal audit of KMG-RM IMS; — Monitor of processes effectiveness; — Evaluation of satisfaction among customers of KMG-RM and its subsidiaries (questioning);

— Implementation of environmental protection and occupational safety measures;

— Formation of objectives of KMG-RM; — Analysis on the part of top management; — Updating internal regulations.

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ENVIRONMENTAL SAFETY

2. Data on volumes of production and domestic wasteSubsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery tons 43,744 33,944 87,501

POCR tons 5,015 4,725 6,828

PKOP tons 550 546 557

KazMunayGas Onimderi tons 7,545 7,592 6,677

TOTAL tons 56,854 46,807 101,563

Atyrau RefineryIncrease in waste generation volume in 2015 was caused by additional removal of production waste from the con-struction sites of the advanced oil refining complex and bottom sediments from mechanical treatment facilities in connection with preparation for the upcoming recon-

struction. In addition, new types of waste such as plastic containers and waste catalysts, generation of which is provided by the Waste Generation and Disposal Limits Project and Waste Management Program for 2015-2019 years, were also removed for disposal (in 2014 the said types of wastes were not removed).

3. Data on volumes of waste water discharge Subsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery thous. m3 2,561 2,821 2,763

POCR thous. m3 1,635 1,681 1,797

PKOP thous. m3 1,326 1,331 1,242

KazMunayGas – Onimderi thous. m3 20 26 25

TOTAL: thous. m3 5,542 5,859 5,827

4. Information on the work performed to reduce greenhouse gas emissions

The Kyoto Protocol (KP) is an international agreement developed as part of the UN Framework Convention on Cli-mate Change, which was adopted on December 11, 1997 in the city of Kyoto (Japan). It entered into force on Febru-ary 16 2005 and has been ratified by 183 countries of the world, including Kazakhstan.

Kazakhstan signed the Kyoto Protocol on March 12, 1999 and ratified it on March 26, 2009.

Ratification of the Kyoto Protocol have direct conse-quences for enterprises in the form of obligations of the Parties: u Regulation of certain sectors of economy taking into account the participation in the Kyoto Protocol regime;

u Quantitative reduction of greenhouse gas (GHG) emis-sions;

u Accounting and reporting on greenhouse gas emis-sions.

Atyrau Refinery There is a certificate for greenhouse gas emissions for the period of 2014-2015 in the volume of 1,521,709 tons. An inventory of greenhouse gas emission sources was carried out for 2014. A verified report was submitted and registered in the Ministry of Energy of the Republic of Kazakhstan.

During the reporting period, additional quotas were received in the amount of 73,982 tons for newly com-

missioned facilities from the Committee of Environmen-tal Regulation, Control and State Inspection in Oil and Gas Sector of the Ministry of Energy of the Republic of Kazakh-stan.

A contract was signed for inventory of GHG emission sources for 2015 as well as for verification of the report.

POCRThere is a certificate for greenhouse gas emissions for 2014-2015. In 2014, greenhouse gas emissions amounted to 1,258,125 tonnes, while the quota for 2014 was established in the volume of 1,276,018 tons. At the end of 2014, inventory of greenhouse gases for 2014 was carried out pursuant to the contract. A verified report was submitted and registered in the Ministry of Energy of the Republic of Kazakhstan. According to the greenhouse gas emission reduction program for 2014-2015, certain measures are carried out for improvement of thermal insulation and modernization of the existing non-residen-tial buildings including the use of modern household and office equipment, and replacement of light lamp with ener-gy-saving ones. In 2015, greenhouse gas emissions were within the limits of the established quota.

PKOP PKOP LLP has a Certificate for greenhouse gas emissions in the volume of 1,273,653 tons for the period of 2014-2015. Greenhouse gas emissions for 2014 amounted to 603,711 thous. tons. PKOP LLP conducted greenhouse


During 2015, there were no environmental accidents at production facilities of KMG-RM and its subsidiaries and affiliates.

1. Data on volumes of atmospheric pollutant emissions. Subsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery tons 3,179 3,632 8,236

POCR tons 20,096 22,548 23,639

PKOP tons 17,520 17,300 16,507

KazMunayGas – Onimderi tons 1,483 1,658 1,658

TOTAL: tons 42,278 45,138 50,040

Atyrau RefineryIncrease in the amount of atmospheric pollutant emis-sions in 2015 as compared to 2014/2013 was caused by the development of the new draft MPE for the period of 2015-2019, namely due to adding u other contaminants: Diethylbenzene, Isopropylbenzene, 2-methylpropylbenzene, 1,3,5-trimethylbenzene, 1,2,4–trimethylbenzene,

3-methyl-l-ethylbenzene, 2-methyl-1-ethylbenzene, 4-methyl-1-ethylbenzene;

u sources of atmospheric pollutant emissions from the catalytic reforming unit CCR and atmospheric pro-duction unit PX.

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PKOP:In 2015, industrial safety costs of PKOP LLP increased by 15 mln tenge due to postponement of the plant overhaul planned in 2014 to 2015. During the overhaul the work was performed to inspect the plant equipment for exten-sion of the period of its safe operation.

KMGOReduction in industrial safety costs was caused by the frequency of obtaining the Industrial Safety Declaration (once every 5 years). In 2015, the Industrial Safety Dec-laration was updated only at 1 oil depot, in 2014 – at 5 oil depots, and 4 oil depots were subject to risk and damage assessment.

Training and retraining of workers, engineers and technicians in safe work practicesSubsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery persons 1,127 599 721

POCR persons 3,626 3,825 3,460

PKOP persons 662 1,082 1,398

KazMunayGas Onimderi persons 698 720 2,306

Medical examination of employeesSubsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery persons 1,751 1,819 1,841

POCR persons 3,509 3,524 2,928

PKOP persons 1,305 1,385 1,411

KazMunayGas Onimderi persons 3,975 3,989 2,842

Fire safety expenditures Subsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery thous. tenge 95,116 339,274.8 636,299

POCR thous. tenge 71,900 561,027 796,621

PKOP thous. tenge 737,310 581,147 752,162

KazMunayGas Onimderi thous. tenge 83,805 105,702 469,522

gas emissions inventory for 2014. An accredited inde-pendent organization carried out verification of materials of PKOP LLP. A verified report was submitted and regis-tered in the Ministry of Energy of the Republic of Kazakh-

stan. According to preliminary estimates, greenhouse gas emissions of PKOP LLP for 2015 did not exceed the quota specified by the certificate for greenhouse gas emissions.

Innovations in the field of environmental protection

In 2015, PKOP took the third place in the competition “Best innovative ideas and practices in the field of health, safety and environment” among the group of companies of KazMunayGas JSC.

The idea of using biological remediation of oil contami-nated soils and decontamination of pyrophoric iron sul-

phides for the purpose of significant reduction of oil prod-ucts content in soils and restoration of vegetation cover at biologically reclaimed areas was highly appreciated. The relevance of the presented technology for western regions of Kazakhstan in terms of minimum consumption of water resources was noted.

OCCUPATIONAL HEALTH, INDUSTRIAL AND FIRE SAFETY

The average number of employees of KMG-RM and its subsidiaries and affiliates employed in hazardous work-

ing conditions during for 12 months of 2015 amounted to 6,382 persons.

1. Occupational health and safety expendituresSubsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery thous. tenge 352,441 325,530 299,291

POCR thous. tenge 303,791 308,683 97,873

PKOP thous. tenge 145,019 146,064 214,704

KazMunayGas Onimderi thous. tenge 254,596 340,128 347,082

POCR:In connection with withdrawal of production shops into outsourcing (more than a thousand people), occupational health and safety expenditures reduced in 2015 as com-pared to 2014.

PKOP:In 2015, expenses increased as a result of providing pro-tective clothing, footwear and other PPE to new employ-ees of the Engineering and Project Management Depart-ment as well as due to considerable writing-off of winter overalls.

2. Industrial safety expendituresSubsidiaries and affiliates Unit of measurement 2013 (actual) 2014 (actual) 2015 (actual)

Atyrau Refinery thous. tenge 156,577 139,255 270,176

POCR thous. tenge 143,979 286,385 309,528

PKOP thous. tenge 28,969 59,000 74,000

KazMunayGas Onimderi thous. tenge 64,744 48,215 962

Atyrau Refinery:In 2015, expenses increased almost two times in connec-tion with the technical audit of technological plants of the refinery for the purpose of implementing further meas-ures and transfer of Atyrau Refinery LLP to increased overhaul period. In addition, the following works were per-formed during the turnaround overhaul: w comprehensive survey of the rotary furnace C-3421 and coke calciner refrigerator.

w examination of the technical condition of the reaction pipe of the steam reforming furnace 78-F-001 UPOV.

POCR:In 2015, POCR carried out additional audit and expert examination of industrial safety of process pipelines hav-ing hard-to-reach sections.

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MANAGEMENT STRUCTURE (as of December 31, 2015)

Atyrau RefineryIncrease in the amount of fire protection expenses in 2015 as compared to 2014 is explained by the fact that the business plan for 2015 was elaborated taking into account the inflation rate of 7 % of the budget amount of 2014 as well as conclusion of a long-term contract with Ort Sondirushi JSC for provision of fire protection ser-vices and performance of rescue and salvage operations at facilities of Atyrau Refinery (on an outsourcing basis).

The contract signed with Ort Sondirushi JSC provision of fire protection services and performance of rescue and salvage operations at facilities of Atyrau Refinery became effective from August 1, 2014.

POCR:Increase in fire safety expenditures in 2015 as compared to 2014 was caused by: w the conclusion of a contract for the facility fire pro-tection services in 2015, for a period of 12 months

from January, 1, and in 2014 the Company signed a contract for the facility fire protection services for a period of 8 months, i.e. from May, 1;

w increase in the number of purchased fire equipment and facilities equipped with automatic fire fighting means.

PKOP:As part of modernization, the works were carried out for installation of fire protection equipment at the liquefied gas loading rack (No. 326).

The main scope of works on replacement of pipes of fire water line of the plant was carried over from 2014 to 2015.

KMGO:Increase in fire safety expenditures in 2015 as compared to the amount of expenditures of 2014 occurred in con-nection with the withdrawal of fire services into outsourc-ing in 2014 and purchase of fire safety services in 2015.

The following internal regulations were approved in 2015:

u Requirements for special clothes, special footwear, personal protective equipment for employees of KazMunaiGaz-RM group of companies;

u Regulations on the standing Occupational Health, Industrial and Fire Safety Commission of KazMunai-Gaz-RM JSC;

u Rules for functioning of the corporate information management system for data on occupational health and the environment, industrial and fire safety and prevention of emergency situations of KazMunai-Gaz-RM JSC.

Project within the framework of enhancing the efficiency of the existing occupational and industrial safety management system.

In 2015, as part of the transformation program of the group of companies of JSC NC KazMunayGas, Rominserv S.R.L. started the work for introduction of an integrated occupational safety system in KazMunaiGaz-RM JSC and its subsidiaries and affiliates: Atyrau Refinery LLP, Pavlo-dar Oil Petrochemical Plant LLP, PetroKazakhstanOil LLP, KMG – Onimderi LLP: u Implemented phase No. 1 “Assessment of efficiency of existing occupational safety management processes and the level of development of production safety cul-ture in KazMunaiGaz-RM JSC and its subsidiaries and

affiliates: Atyrau Refinery LLP, POCR LLP, PKOP LLP, KMG- Onimderi LLP.

u In 2016 the Company is planning to implement phase No. 2 “Creation and implementation of the integrated labor protection system design”.

Sole Shareholder of NC KazMunayGas JSC

Corporate Secretary

Marketing UnitProduction UnitDevelopment and

Transformation Unit

Board of Directors

Secretary of the Management Board

Management Board

Corporate safety Secretariat Press ServiceOccupational safety and environmental

protection

General Director (Chairman of the Manage-

ment Board)

Economy, Finance and Business Support Unit

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Composition of the Internal Audit Committee of the Board of Directors of KMG-RM (did not hold meetings in 2015):

Abduov Nurlan Kanatovich Independent Director, Chairman

Okayev Yerkebulan Kabievich Independent Director

Syrgabekova Assiya Narymanovna Representative of the Sole Shareholder in the Board of Directors of KMG-RM

The main objectives of the HR and Remuneration Com-mittee of the Board of Directors of KMG-RM are: planning of succession of the composition of the Board of Directors and the Management Board of KMG-RM, ensuring con-stant and objective assessment of activities of the Man-agement Board, Corporate Secretary and other employ-ees of KMG-RM in accordance with a list determined by the resolution of the Board of Directors, ensuring effec-tive HR policy, remuneration and bonus payment system as well as social support, professional development and training of employees of KMG-RM.

Meetings of the HR and Remuneration Committee of the Board of Directors of KMG-RM are held as and when required: During 2015, the HR and Remuneration Com-

mittee of the Board of Directors of KMG-RM held two meetings, at which the following issues were addressed: u On changes in the composition of the Management Board of KMG-RM;

u On payment of remuneration to managerial employ-ees of KMG-RM based on the performance results for 2014;

The voting took place both in absentia and in presentia. All members of the HR and Remuneration Committee of the Board of Directors of KazMunaiGaz – refining and marketing joint stock company cast their votes. The HR and Remuneration Committee addressed those issues and provided recommendations to the Board of Directors regarding the voting.

Interaction with subsidiaries and affiliates

KMG-RM is a parent company for a group of subsidiar-ies and affiliates, cooperation with which is carried out as follows: u Participation of representatives of KMG-RM in the work of superior bodies, Boards of Directors/Super-visory Boards of subsidiaries and affiliates;

u Making individual decisions in accordance with the current legislation by a relevant body of KMG-RM with

regard to activities of subsidiaries, in which KMG-RM is the sole participant/shareholder;

u Adoption of common corporate rules and stand-ards, implementation of the coordinated and effective strategy and investment policy of KMG-RM and its subsidiaries and affiliates;

Composition of the Board of Directors

By the resolution of the Sole Shareholder of KMG-RM dated July 18, 2014 the composition of the Board of Directors was re-elected in the number of 5 (five) mem-bers for a period of 3 (three) years.

By the resolution of the Sole Shareholder of KMG-RM dated July 15, 2014, Syrgabekova Assiya Narimanovna was elected as Chairman of the Board of Directors of KMG-RM.

As of December 31, 2015, the Board of Directors of KMG-RM was composed as follows:

Chairman of the Board of Directors:

Syrgabekova Assiya Narymanovna Financial Director of KMG, Representative of the Sole Shareholder

Members of the Board of Directors:

Tiyessov Daniyar Suinshilikovich General Director (Chairman of the Management Board) of KMG-RM

Okayev Yerkebulan Kabievich Independent Director

Abduov Nurlan Kanatovich Independent Director

Tanatarova Shara Bakhytzhanovna Director of the Assets Management Department of KMG

Information on meetings of the Board of Directors.

The Board of Directors holds its meetings on the basis of the principle of rationality, efficiency and regularity pursu-ant to the Work Plan of the Board of Directors approved by Chairman of the Board of Directors.

The key corporate governance (hereinafter – CG) princi-ples of KMG-RM are set in the CG Code being in effect since 2008 and comply with the generally acknowledged standards of the best corporate governance practice.

Corporate governance of the Company is based on the principles of responsibility, transparency, fairness, pro-fessionalism and competence. KMG-RM understands that efficient CG is one of the determining factor of increasing competitiveness.

Thus, KMG-RM carries out its activities in strict com-pliance with the highest standards of corporate govern-ance, the essence of which is to provide a shareholder the possibility to carry out effective control and monitoring of management and thereby contribute to increasing the Company’s capitalization. Such control involves both internal management procedures and external legal and control mechanisms, which promote the responsibility, integrity and transparency of the Company.

Corporate governance bodies

The Company’s governance structure consists of the fol-lowing bodies:1. The Sole Shareholder – a superior body. 2. The Board of Directors – a management body elected

by the Sole Shareholder and responsible for making decisions.

3. The Management Board – an executive body consist-ing of professional managers responsible for imple-mentation of strategic initiatives and operational management.

Relationships with the Sole Shareholder

KazMunaiGaz-RM JSC is a subsidiary of the National Company KazMunayGas JSC, which holds 100 % of shares of KazMunaiGaz-RM JSC.

The National Company KazMunayGas JSC and KazMu-naiGaz-RM JSC cooperate pursuant to the Law of the

Republic of Kazakhstan “On Joint-Stock Companies, in accordance with the Companies’ Articles of Association as well as in accordance with the corporate governance principles set out in internal regulations.

Corporate governance mechanisms within KMG-RM group of companies:

u Building a vertical governance system for subsidiaries and affiliates on the basis of fundamental principles of the best corporate governance practice;

u Introduction of unified corporate standards for sub-sidiaries and affiliates;

u Promotion of representatives to managerial bodies of subsidiaries and affiliates;

u Exercise of control over activities of subsidiaries and affiliates through representatives and supervisors, auditing financial and operational activities, election of the auditor, etc.

Committees of the Board of Directors of KMG-RM

For the purpose of promoting efficient fulfilment of its functions, the Board of Directors has established the HR and Remuneration Committee and the Internal Audit Committee of the Board of Directors of KMG-RM.

In accordance with the requirements of the Corporate Governance Code, each Committee consists of three members, two of which are independent directors. Chair-man of the Committees is elected by the Board of Direc-tors from among independent directors.

The terms of office of members of the Committees coin-cide with their terms of office as members of the Board of Directors, however, may be revised annually by the Board of Directors.

On October 7, 2014, the Board of Directors decided to elect new members of the Committees of the Board of Directors:

Composition of the HR and Remuneration Committee of the Board of Directors of KMG-RM:

Okayev Yerkebulan Kabievich Independent Director, Chairman

Abduov Nurlan Kanatovich Independent Director

Tanatarova Shara Bakhytzhanovna Representative of the Sole Shareholder in the Board of Directors of KMG-RM

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Remuneration of independent directors

The procedure for payment of remuneration and reim-bursement of expenses of independent directors has been established by the Regulation for Remuneration and Reimbursement of Expenses of Independent Directors of joint stock companies of JSC NC KazMunayGas.

Independent directors receive fixed remuneration deter-mined by the Sole Shareholder of KMG-RM.

Remuneration is paid to independent directors subject to the following conditions: u Proper fulfillment of powers of a member of the Board of Directors using methods that reflect the interests of KMG-RM to the fullest extent;

u Compliance with the laws of the Republic of Kazakh-stan and the Charter of KMG-RM in making decisions;

u Participation in meetings in presentia, except for the absence due to illness, vacation, business trip, and participation in all meetings of the Board of Directors of KMG-RM.

By the decision of the Sole Shareholder dated August 16, 2011 and July 18, 2014, the amount of fixed remu-neration was determined for independent directors of KMG-RM and relevant contracts were concluded with independent directors Okayev Ye.K. and Abduov N.K.

Amounts of remunerations accrued to independent directors for the year ended on December 31, 2015:

Independent Director Annual remuneration (tenge)

Okayev Yerkebulan Kabievich 7,250,000

Abduov Nurlan Kanatovich 7,250,000

Total: 14,500,000

Other members of the Board of Directors do not receive any remunerations for their work as members of the Board of Directors.

Activities of the Management Board of KMG-RM

Management of the day-to-day activities of KMG-RM is carried out by the executive collegial body – the Manage-ment Board.

The Management Board of KMG-RM is headed by Gen-eral Director (Chairman of the Management Board).

Formation and election of members of the Management Board are carried out in accordance with the legislation of the Republic of Kazakhstan and the Charter with due regard for the requirements of the Regulations on the Management Board.

The Management Board of KMG-RM is composed of at least 5 (five) persons. Members of the Management Board of KMG-RM may be representatives of the Sole Shareholder and employees of KMG-RM, who are not representatives of the Sole Shareholder.

The Management Board shall have the authority to make decisions on any issues related to the Company’s activ-ities, which are not attributed by the legislation of the Republic of Kazakhstan and the Company’s Charter to the competence of other bodies and officers of KMG-RM.

In 2015, the Management Board of KMG-RM held 28 meetings (27 meetings in presentia and 1 meet-ing in absentia) and addressed 268 issues, including: those attributed to the competence of the Manage-ment Board of KMG-RM – 86, on preliminary approval of issues attributed to the competence of the Sole Share-holder of KMG-RM – 8, on preliminary approval of issues attributed to the competence of the Board of Directors of KMG-RM – 53, on conclusion of transactions – 9 (Appendix No.1), as well as other issues attributed to the competence of the Sole Shareholder, General Meeting of Participants, General Meeting of Shareholders of subsid-iaries and affiliates -112.

Changes in the composition of the Management Board of KazMunaiGaz-RM JSC in 2015: u By the resolution of the Board of Directors of KazMu-naiGaz-RM JSC dated 26.05.2015 (Minutes No. 05/2015) the powers of a member of the Manage-ment Board M.Zh. Mussaibekov were terminated

u B.M. Bektenov was elected (appointed) as a member of the Management Board.

During the year, the Board of Directors addressed, among other things, the following issues: u Preliminary approval of the consolidated financial statements and separate financial statements for the previous year;

u Making a proposal to the Sole Shareholder for the pro-cedure of distribution of the KGM-RM’s net income for 2014 and the amount of dividend for 2014 per one ordinary share of the Company;

u Changes in the composition of the Management Board of KMG-RM;

u Approval of the consolidated and separate business plan of KMG-RM for 2016-2020;

u Payment of remuneration to executive and manage-rial employees of KMG-RM based on the performance results for 2014;

u Issues attributed to the competence of general meet-ings of participants/shareholders of subsidiaries and affiliates of KMG-RM;

u Progress reports of the Board of Directors and the Management Board for 2014;

u Annual report of KMG-RM for the previous year;

In 2015, the Board of Directors approved the following documentation of KMG-RM:

u Regulations on the Management Board of KazMunai-Gaz-RM JSC;

u Policy for settlement of a conflict of interests between employees and/or officers KazMunaiGaz-RM JSC;

u Credit Policy of KazMunaiGaz-RM JSC; u Amendments to the Treasury Policy of KazMunai-Gaz-RM JSC;

u Rules for secondment of employees KazMunai-Gaz-RM JSC;

u Rules for disposal and restructuring of assets of KazMunaiGaz-RM JSC and its subsidiaries;

u Policy for settlement of a conflict of interests between employees and/or officers KazMunaiGaz-RM JSC;

u Business Processes Re-engineering Program of KazMunayGas Onimderi LLP (I phase);

u Transformation Road Map of KazMunaiGaz-RM JSC; u Format of transformation implementation in KazMu-naiGaz-RM JSC;

In addition: — preliminary approval of amendments to the Charter of KazMunaiGaz-RM JSC;

The Board of Directors made the following major reso-lutions: w On acquisition of 50 % interest in Caspi Bitum JV LLP by concluding a purchase and sale contract between KMG-RM and KPI in the amount of 2,817,026,434 (two billion eight hundred and seventeen million twen-ty-six thousand four hundred thirty-four) tenge;

w On participation in the establishment of Karagandy CCI Limited Liability Partnership (hereinafter – the Partnership) with the authorized capital of the Part-nership in the amount of 400,000,000 (four hundred million) tenge, and determination of KMG-RM’s inter-

est in the authorized capital of the Partnership at the rate of 25 % and relevant proportional contribution of KMG-RM to the authorized capital in the amount of 100,000,000 (one hundred million) tenge;

w On acquisition by KMG-RM of 25 % interest in the authorized capital of Bio Operations LLP by signing a contract for purchase and sale of 25 % interest in the authorized capital of Bio Operations LLP with the Investment Fund of Kazakhstan JSC in the manner prescribed by legislation.

w In 2015, the Board of Directors adopted a decision on conclusion of the following five related-party transac-tions: w A transaction with Kazakhstan Petrochemical Industries JSC, Caspi Bitum JV LLP, CITIC Corpo-ration Limited Company by signing a supplemen-tary agreement No. 2 to the Pledge Agreement No. СВ-11/33/3 dated August 30, 2011;

w A transaction with KazMunayGas Engineering B.V., Rompetrol Financial Group SRL, Rominserv SRL and Rominserv-Kazakhstan LLP by signing a Con-tract for management of the Project “Moderniza-tion of Pavlodar Oil Chemistry Refinery”;

w A transaction with Rominserv SRL by signing a Contract for secondment of Deputy General Director of KMG-RM for development M.Zh. Mus-saibekov to Rominserv S.R.L.;

w A transaction with Caspi Bitum JV LLP by signing a Contract for trust management of 50 % interest in the authorized capital of Caspi Bitum JV LLP to Karazhanbasmunay JSC;

w A transaction with Caspi Bitum JV LLP by signing a Pledge Contract for 50 % interest in the author-ized capital between KMG-RM and an authorized person of CITIC Corporation Limited.

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SHARE CAPITAL

As of December 31, 2015, the authorized capital of KMG-RM amounted to 863,139,880 thous. tenge

(665,056,150 ordinary shares). 100 % of shares of KMG-RM are owned by JSC NC KazMunayGas.

PLANS OF KMG-RM FOR 2016

Within the framework of KMG-RM Development Plan, the following performance indicators of KMG-RM were approved for 2016:

thous. tenge

KazMunaiGaz–RM JSC

Description Unit of measurement 2016

Oil refining volume thous. tons 12,760

Oil products sales volume thous. tons 3,328

Asphaltic cement production thous. tons 770

Refinery yield % 70.4

Atyrau Refinery 61.3

POCR 77.4

PKOP 72.5

As of December 31, 2015, the Management Board of KazMunaiGaz-RM JSC was composed of 7 (seven) members from among the employees of KazMunaiGaz-RM JSC:

Chairman of the Management Board:

Tiyessov Daniyar Suinshilikovich General Director;

Members of the Management Board:

Kozhabayev Yerbolat Omirserikovich First Deputy General Director;

Bektenov Bekzhan Mukhtasifovich Deputy General Director for development;

Bekturov Rustem Sabitovich Deputy General Director for production;

Koibagarov Yerlan Alykhanovich Deputy General Director for marketing;

Mazhenov Mukhit Muratovich Deputy General Director for transformation;

Kabdushev Asset Daurenbekovich Managing Director for legal support

SELECTION CRITERIA FOR THE MEMBERS OF THE BOARD OF DIRECTORS AND THE MANAGEMENT BOARD AND DETERMINATION OF THEIR INDEPENDENCEThe process of selection and election of members of the Board of Directors, including independent directors, is carried out in a manner prescribed by the Law of the Republic of Kazakhstan “On Joint-Stock Companies”, the Company’s Charter and the Corporate Governance Code, in accordance with the established internal procedures on the basis of sufficient information on the candidate to a position of director, information on relationships between the candidate and the Company (affiliation, collaboration, etc.), the independence criteria, information on relevant work experience, knowledge level, qualifications, positive achievements and impeccable reputation.

A candidate to the Board of Directors and a member of the Board of Directors shall be only an individual person who shall have credibility of shareholders and other mem-bers of the Board of Directors, professional knowledge and qualification, experience in executive positions for at least three years preferably in the area corresponding to the core activities of the Company, positive achievements and impeccable reputation in the business and indus-try-specific environment.

An elected independent director of the Board of Directors shall be a person:

— who is not and was not an affiliate of the Company dur-ing three years prior to his/her election to the Board of Directors (except for his/her tenure as an inde-pendent director of the Company) and was not affili-ated with affiliates of the Company;

— who is not accountable to the Company’s officers or organizations-affiliates of the Company and was not accountable to such persons during three years prior to his/her election to the Board of Directors;

— who is not a public officer;

— who is not a representative of a shareholder at meet-ings of the Company’s bodies and did not act as such during three years prior to his/her election to the Board of Directors;

— who is not involved in auditing the Company as an audi-tor employed with an audit organization, and did not participate in such audits during three years prior to his/her election to the Board of Directors.

Management of day-to-day activities of KazMunaiGaz – refining and marketing joint stock company is carried out by the executive collegial body – the Management Board. The Management Board of KMG-RM is headed by General Director (Chairman of the Management Board). Functions of General Director are determined by the legislation of the Republic of Kazakhstan, the Charter, resolutions of the Sole Shareholder and the Board of Directors.

Formation and election of members of the Management Board are carried out in accordance with the legislation of the Republic of Kazakhstan, the Charter and internal regulations.

Members of the Management Board of KMG-RM may be representatives of the Sole Shareholder and employ-ees of KMG-RM, who are not representatives of the Sole Shareholder.

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RISK MANAGEMENT

KEY RISKS FOR THE PERIOD UNTIL 2017No. Key risks Risk management activities

1. Risk of decline in oil refining volume 1. Oil supply control and monitoring in accordance with the production pro-gram.

2. Timely notification and application for rendering assistance in regulation of oil deliveries to the refineries.

3. Prevention of overstocking and development of transport logistics.

2. Adverse change in price for oil products/POL

Monitoring. Marketing. Upon occurrence of this risk – cooperation between KMG-RM and the Ministry of Oil and Gas of the Republic of Kazakhstan and the Agency on Regulation of Natural Monopolies regarding regulation of prices for realizable oil products.

3. Currency risk 1. Consideration of currency hedging practicability, if required.2. Credit contracts indexation.

4. Processing tariffs control on the part of state authorities

1. Formation and submission of applications to the Agency on Regulation of Natural Monopolies for increase in tariffs (rates).

2. Preparation of documents for the investment tariff substantiation.

5. Rescheduling of investment projects for reconstruction and modernization of oil refineries

Control and monitoring of: 1. Timely completion of development of detailed design documentation

(detailed engineering).2. Timely placement of equipment purchase orders.3. Timely conclusion of contracts with suppliers.4. Comprehensive logistics for delivery of equipment oil refineries.5. Timely project financing.

6. Appreciation of investment projects Monitoring and timely implementation of investment projects.

7. Violation of the Company’s financial/non-fi-nancial covenants

1. Monitoring and execution of all financial and non-financial covenants.2. Monitoring the borrowing capacity.3. Interaction with banks in case of probable violations of covenants.

RISK MANAGEMENT

KMG–RM considers risk management as one of the most important elements of strategic and corporate govern-ance. This is the process in the course of which KMG-RM regularly identifies, assesses and monitors the risks as well as possibilities of their occurrence, adapts its activ-ities with the aim to reduce the probability and potential impact of risks occurrence.

The purpose of the risk management system is to achieve a balance between the maximum use of opportunities for the purpose of obtaining benefits and preventing possible losses.

The main objectives of the risk management system are: u Formation of a full-fledged information and organi-zational framework for decision-making and planning processes;

u Provision of a continuous coordinated risk manage-ment process based on timely identification, assess-ment, analysis and monitoring to ensure the achieve-ment of the specified objectives;

u Enhancement of efficiency of using and allocation of resources;

u Prevention of losses and damages through enhance-ment of the performance efficiency.

For the purpose of systematization and unification of the risk management process the Company has developed and updated internal regulatory documents:1. Risk management policy of KazMunaiGaz-RM JSC

(resolution of the Board of Directors of KazMunai-Gaz-RM JSC No. 3 dated 29.03.2013).

2. Rules for organization of the risk management pro-cess of KazMunaiGaz-RM JSC (resolution of the Board of Directors of KazMunaiGaz-RM JSC No. 08/2011 dated 11.05.2011).

3. Methodology for risk identification and assessment, selection of risk management methods of KazMu-naiGaz-RM JSC (resolution of the Board of Direc-tors of KazMunaiGaz-RM JSC No.08/2011 dated 11.05.2011).

4. Procedure for notification and submission of reports of incidents in business processes of KazMunaiGaz-RM JSC (resolution of the Board of Directors of KazMun-aiGaz-RM JSC No.08/2011 dated 11.05.2011).

For the purpose of providing insurance coverage of prop-erty interests of KazMunaiGaz-RM JSC and its subsid-iaries and affiliates, the Company concludes contracts for voluntary comprehensive property damage insurance and civil liability insurance on an annual basis.

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CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S OPINION

INDEPENDENT AUDITORS’ REPORT

To: Management and Shareholder of KazMunaiGaz – refining and marketing joint stock company

We have audited the attached consolidated financial statements of KazMunaiGaz – refining and marketing joint stock company and its subsidiaries (hereinafter – the “Group”), which includes the consolidated statement of financial position as at December 31, 2015, the consolidated statement of total income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year ended on the above stated date as well as information on sig-nificant aspects of the accounting policy and other explanatory information.

The management’s responsibility in respect of the consolidated financial statements

The Group management is responsible for preparation and fair presentation of these consolidated financial statements in accordance with the International Financial Reporting Standards as well as for internal control procedures that are necessary, in the management’s opinion, for preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion regarding these consolidated financial statements based on audit carried out by our company. We have conducted the audit in accordance with the International Auditing Standards. The said standards require that we comply with ethical norms and plan and perform the audit to obtain reasonable assurance regarding the absence of material misstatement of the consolidated financial statements.

The audit involves the execution of procedures aimed to obtain audit evidence with respect to amounts and information disclosed in the consolidated financial statements. The procedures have been selected based on the auditor’s judge-ment, including the assessment of risk of material misstatement of the consolidated financial statements whether due to fraud or error. In assessing this risk the auditor considers the aspects of internal control relating to preparation and fair presentation of the consolidated financial statements so as to define audit procedures that are appropriate in spe-cific circumstances rather than to express an opinion regarding the effectiveness of the company’s internal control sys-tem. The audit includes also the assessment of appropriateness of the selected accounting policy and reasonableness of accounting estimates made by the management as well as the assessment of overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate for expressing our opinion.

77/7, Al-Farabi ave., Esentai TowerAlmaty, 050060Republic of KazakhstanTel.: +7 727 258 5960Fax: + 7 727 258 5961

77/7, Al-Farabi ave., Esentai TowerAlmaty, 050060Republic of KazakhstanTel.: +7 727 258 5960Fax: + 7 727 258 5961

Opinion

In our opinion, the consolidated financial statements discloses in all material respects the consolidated financial position of KazMunaiGaz – refining and marketing joint stock company and its subsidiaries as of December 31, 2015, as well as their consolidated financial performance and cash flows for the year ended on the above stated date in accordance with International Financial Reporting Standards.

Bakhtiyor EshonkulovAuditor/Audit Partner

Auditor’s qualification certificate No. МФ-0000099 dated August 27, 2012

February 23, 2016

Yevgeniy ZhemaletdinovGeneral DirectorErnst & Young

State license for execution of audit activities in the Republic of Kazakhstan: Series МФЮ-2, No. 0000003 issued by the Ministry of Finance of the Republic of Kazakhstan dated July 15, 2005

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continue)As of December 31, 2015

Thousand tenge Note 20152014

(recalculated)*2013

(recalculated)*

Capital and liabilities

Capital

Authorized capital 16 863,139,880 863,139,880 858,364,480

Accumulated loss (623.570.825) (453,377,235) (470,272,795)

Other reserve capital (318,326) (718,401) (773,596)

Reporting currency translation provision 6.901.599 4,987,735 4,707,229

Attributable to a parent company's share-holder

246,152,328 414,031,979 392,025,318

Non-controlling interest 16 (358,230) 410,202 470,919

Total capital 245,794,098 414,442,181 392,496,237

Non-current liabilities

Loans 17 703,594,407 324,482,852 148,380,022

Deferred income tax liability 27 9,375,120 13,500,187 14,696,649

Provisions 18 1,162,723 1,527,081 1,704,614

714,132,250 339,510,120 164,781,285

Current liabilities

Loans 17 81,518,338 51,921,291 54,227,190

Trade payables 19 67,026,620 19,907,011 22,190,261

Other taxes payable 1,415,515 2,733,918 2,957,013

Advances received 9,503,086 4,943,945 16,613,231

Provisions 18 9,183,823 9,197,570 9,395,739

Income tax payable 22,081 587,863 34,456

Deferred income 20 5,728,385 5,223,170 3,240,719

Other current liabilities 21 7,520,932 6,917,085 5,033,501

181,918,780 101,431,853 113,692,110

Total liabilities 896,051,030 440,941,973 278,473,395

Total capital and liabilities 1,141,845,128 855,384,154 670,969,632

* Certain amounts given in this column do not correspond to the amounts given in the consolidated financial statements for the year ended on December 31, 2014 and reflect adjustments made, details of which are disclosed in Note 4.

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs of December 31, 2015


(recalculated)*2013

(recalculated)*

Assets

Non-current assets

Fixed assets 6 516,082,336 412,923,367 356,327,359

Goodwill 7 90,003,639 90,003,639 90,003,639

Intangible assets 2,205,684 2,345,408 2,497,875

Investments in joint ventures 8 21,851,391 24,653,727 15,172,762

Other long-term investments 2,662,665 3,361,562 734,141

Advances paid for non-current assets 9 125,336,873 67,452,734 33,392,418

Loans granted to related parties 10 136,133,663 73,168,985 367,329

VAT recoverable 4,015,150 4,255,411 276,214

Long-term loan fee 11 10,965,683 16,548,913 18,443,755

Deferred income tax asset 27 37,612,444 2,450,997 1,882,754

Other long-term assets 12 5,158,141 5,176,791 5,599,312

952,027,669 702,341,534 524,697.558

Current assets

Inventories 13 37,399,591 45,173,787 39,798,994

Trade receivables 14 4,720,818 7,274,745 13,657,454

Advances paid 7,351,807 13,024,251 5,764,359

VAT recoverable 44,765,311 21,705,118 16,585,329

Income tax prepayment 4,469,618 3,462,315 1,020,926

Loans granted to related parties 10 1,267,808 1,220,096 –

Other current assets 2,481,360 4,873,540 3,914,305

Short-term bank deposits 15 5,537,640 15,064,622 15,880,219

Cash and cash equivalents 15 81,806,996 41,221,964 49,600,958

189,800,949 153,020,438 146,222,544

Assets classified as held for sale 16,510 22,182 49,530

189,817,459 153,042,620 146,272,074

Total assets 1,141,845,128 855,384,154 670,969,632

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(recalculated)*

Cash flows from operating activities

(Loss)/gain before taxation from continuing operations (199,578,766) 23,346,895

Loss before taxation from discontinued operations – (44,618)

(Loss)/gain before taxation (199,578,766) 23,302,277

Adjustments for:

Depreciation and amortization 27,855,163 26,540,123

Share in income of joint ventures (180,571) (7,333,427)

Share in income of associated companies (19,804) –

Financial costs 26 10,342,142 6,154,070

Financial income (5,742,193) (4,069,669)

Loss from impairment of property, plant and equipment 4,281,314 3,131,109

Increase/(decrease) in provisions 165,968 (268,045)

Accumulation of provision for doubtful debt and other current assets 25 363,545 2,680,445

Income from disposal of a subsidiary – (2,811,312)

Accumulation of provision for non-liquid inventories 25 156,312 215,895

Loss/(gain) from disposal of property, plant and equipment 870,010 (140,414)

Unrealized loss from exchange rate difference 202,277,900 30,200,821

40,791,020 77,601,873

Change in inventories 7,506,597 (7,003,633)

Change in trade receivables and other current assets 10,238,877 (14,850,012)

Change in VAT recoverable and other taxes payable (24,300,721) (9,322,998)

Change in trade payables and other current liabilities 51,970,909 5,068,776

86,206,682 51,494,006

Income tax paid (8,186,100) (8,555,023)

Interest paid (20,276,514) (12,517,526)

Interest received 5,237,700 1,328,468

Net cash flow from operating activities 62,981,768 31,749,925

Cash flows from investing activities

Placement of bank deposits with maturity of more than three months and more than one year

(16,439,088) (108,252,667)

Proceeds from bank deposits with maturity of more than three months and more than one year

28,209,318 108,522,907

Acquisition of property, plant and equipment and intangible assets (27,561,676) (39,805,048)

Cash receipts from sale of property, plant and equipment and intangible assets

837,042 30,405

Acquisition of an associated company (100,000) (55)

Investments in a joint venture 8 – (2,200,000)

Long-term advances paid (29,264,964) (47,450,539)

Loans granted to related parties 10 – (72,344,000)

Providing financial assistance (7,970) –

Payment of borrowing costs – (6,175,585)



(recalculated)*

Continuing operations

Income from goods sold and services rendered 22 423,640,485 416,923,410

Income from goods sold and services rendered 23 (352,934,428) (312,060,989)

Gross profit 70,706,057 104,862,421

Transportation and selling expenses 24 (46,794,646) (44,752,829)

General and administrative expenses 25 (19,147,328) (17,750,902)

Other operating income 4,915,591 4,626,029

Other operating expenses (5,926,916) (1,549,808)

Operating profit 3,752,758 45,434,911

Net foreign exchange loss (198,931,950) (30,148,354)

Financial income 5,742,193 4,069,669

Financial costs 26 (10,342,142) (6,154,070)

Share in income of joint ventures 180,571 7,333,427

Share in income of associated companies 19,804 –

Income from disposal of subsidiaries – 2,811,312

(Loss)/gain before taxation from continuing operations (199,578,766) 23,346,895

Income tax saving/(expenses) 27 32,673,499 (4,902,336)

Net (loss)/gain for the year from continuing operations (166,905,267) 18,444,559

Discontinued operations

Loss after taxation for the year from discontinued operations – (44,618)

Net (loss)/gain for the year (166,905,267) 18,399,941

Attributable to:

Shareholder of a parent company (166,135,500) 18,429,985

Non-controlling interest (769,767) (30,044)

(166,905,267) 18,399,941

Other comprehensive income

Reporting currency translation 1,913,864 280,506

Actuarial gains under defined benefit plans 401,410 55,195

Total comprehensive (loss)/gain for the reporting year less taxes (164,589,993) 18,735.642

Attributable to:

Shareholder of a parent company (163,821,561) 18,765,686

Non-controlling interest (768,432) (30,044)

(164,589,993) 18,735,642


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Attributable to the Shareholder of the Company

Thousand tengeAuthorized

capital

Other reserve capital

Reporting currency

translation provision

Accumulated loss Total

Non-con-trolling

interest Total

As of December 31, 2013 (recalcu-lated*)

858,364,480 (773,596) 4,707,229 (470,272,795) 392,025,318 470,919 392,496,237

Net profit for the year – – – 18,429,985 18,429,985 (30,044) 18,399,941


– 55,195 280,506 – 335,701 – 335,701

Total comprehen-sive income for the year

– 55,195 280,506 18,429,985 18,765,686 (30,044) 18,735,642

Dividend (Note 16) – – – (10,890,555) (10,890,555) (30,673) (10,921,228)

Contributions to capital (stock issue) (Note 16)

4,775,400 – – (4,775,400) – – –

Transactions with the Shareholder (Note 17)

– – – 14,131,530 14,131,530 – 14,131,530

As of December 31, 2014 (recalcu-lated*)

863,139,880 (718,401) 4,987,735 (453,377,235) 414,031,979 410,202 414,442,181

Net loss for the year – – – (166,135,500) (166,135,500) (769,767) (166,905,267)


– 400,075 1,913,864 – 2,313,939 1,335 2,315,274

Total comprehen-sive loss for the year

– 400,075 1,913,864 (166,135,500) (163,821,561) (768,432) (164,589,993)

Dividend (Note 16) – – – (4,000,000) (4,000,000) – (4,000,000)

Other transactions with the Shareholder (Note 16)

– – – (58,090) (58,090) – (58,090)

As of December 31, 2015

863,139,880 (318,326) 6,901,599 (623,570,825) 246,152,328 (358,230) 245,794,098

* Certain amounts given in these columns do not correspond to the amounts given in the consolidated financial state-ments for the year ended on December 31, 2014 and reflect adjustments made, details of which are disclosed in Note 4.


(recalculated)*

Dividends received 8 2,993,004 –

Net cash flow from investing activities (41,334,334) (167,674,582)

Cash flows from financing activities

Proceeds from long-term loans 17 57,661,642 184,463,028

Repayment of long-term loans (48,662,881) (46,276,643)

Dividends paid 16 (4,000,000) (10,921,228)

Net cash flow from financing activities 4,998,761 127,265,157

Net foreign exchange difference 13,938,837 280,506

Net increase/(decrease) in cash and cash equivalents 26,646,195 (8,378,994)

Cash and cash equivalents at the beginning of the year 15 41,221,964 49,600,958

Cash and cash equivalents at the end of the year 15 81,806,996 41,221,964


SIGNIFICANT NON-CASH TRANSACTIONS – ADDITIONAL DISCLOSUREThe following non-cash transactions have been excluded from the consolidated cash flow statement:

Acquisition of property, plant and equipment

During 2015 the Group: 1) capitalized accrued interest expenditures and amortization of fees on loans received for the construction of the aromatic hydrocarbons com-plex and construction of the advanced oil refining complex at Atyrau Refinery in the amount of 22,803,973 thousand tenge (in 2014: 18,231,016 thousand tenge); 2) acquired property, plant and equipment at the cost of increase in payables in the total amount of 12,184 thousand tenge (in 2014: 197,455 thousand tenge); 3) the bank letters of credit from the Export-Import Bank of China and the Japan Bank for International Cooperation in the amount of 74,338,538 thousand tenge and 11,149,297 thou-sand tenge, respectively (2014: 15,146,448 thousand tenge and zero, respectively); 4) accepted capital con-struction works at the cost of previously paid advances in the amount of 28,619,175 thousand tenge (in 2014: 13,390,223 thousand tenge), which were charged to construction in progress.

Acquisitions of property, plant and equipment and intan-gible assets include advances paid for non-current assets in the amount of 41,883,379 thousand tenge (in 2014: 29,306,779 thousand tenge), of which the amount

spent for property, plant and equipment and construc-tion works – 41,772,379 thousand tenge (in 2014: 29,271,344 thousand tenge) and intangible assets – 111.000 thousand tenge (in 2014: 35,435 thousand tenge).

Investment property was acquired by repayment of the previous receivables in the amount of 491,071 thousand tenge.

In 2015, the Group offset income tax in the amount of 217,170 thousand tenge against other taxes payable (in 2014: zero). During 2015, Atyrau Refinery offset prepay-ment of corporate income tax in the amount of 747,387 thousand tenge against other tax liabilities (in 2014: zero).


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CONTACT INFORMATION

KazMunaiGaz – refining and marketing joint stock company1, Turan avenue, Astana city, 010000, Republic of KazakhstanPhone number: +7-7172-95-97-01

Atyrau Refinery LLP1, Kabdolov St., Atyrau city, Republic of KazakhstanPhone number: +7-7122-259-335

Pavlodar Oil Chemistry Refinery JSC1, Khimkombinatovskaya St., Pavlodar city, Republic of Kazakhstan.Phone number: +7- 7182-39-65-44

PetroKazakhstanOilProducts LLP5, Kapal Batyr St., Shymkent city, Republic of KazakhstanPhone number: +7- 7252-94-01-00

KazMunayGas – Onimderi LLP1, Turan avenue, Astana city, 010000, Republic of KazakhstanPhone number: +7- 7172-97-44-52

KazMunayGas – Aero LLP13 Abay St., Astana city, Republic of KazakhstanPhone number: +7- 7172-73-17-27

CASPI BITUM LLP Promzona, Aktau city, Republic of KazakhstanPhone number: + 7- 7292- 42-41-02

APPENDIX NO. 1

List of related-party transactions (2015)

1. On conclusion of a contract for provision of financial aid No. 23-2015/12156.21 dated 29.01.2015 with POCR LLP.

2. On conclusion of a supplementary agreement No. 9 dated 02.03.2015 to the Agreement for granting a credit facility No. KS 01-11-24//395-2011 dated 23.12.2011 with Halyk Bank of Kazakhstan JSC, KazMunayGas Onimderi LLP, POCR LLP and KazMunayGas Aero LLP.

3. On conclusion of a Contract of Mutual Guarantees and Responsibility of the Parties No. 162-2015//572-2015 dated April 9, 2015 with KazMunayGas Onimderi LLP and Autogas Trade LLP.

4. On conclusion of a contract for gratuitous transfer of vehicles No. 256-2015 dated 27.05.2015 with TH KazMunai-Gaz N.V.

5. On conclusion of a transaction with Astana Branch of KMG Global Solutions B.V. and a contract for secondment No. 276-2015//40-1 dated 09.06.2015 between KazMunaiGaz-RM JSC and Astana Branch of KMG Global Solutions B.V.

6. On conclusion of a supplementary agreement No. 7 dated 24.06.2014 to the Contract on pledge o non-cash money (on a current account) No. 1616 with Halyk Bank of Kazakhstan JSC, KazMunayGas Onimderi LLP, KazMunayGas-Aero LLP and Atyrau Refinery LLP (related to accession of Atyrau Refinery LLP to the Agreement for granting a credit facil-ity No. KS 01-11-24 dated 23.12.2011).

7. On conclusion of a supplementary agreement No. 10 dated 24.06.2014 to the Agreement for granting a credit facility No. KS 01-11-24 dated 23.12.2011 with Halyk Bank of Kazakhstan JSC, KazMunayGas Onimderi LLP, KazMunay-Gas-Aero LLP and Atyrau Refinery LLP (related to accession of Atyrau Refinery LLP to the Agreement for granting a credit facility No. KS 01-11-24 dated 23.12.2011).

8. On conclusion of a loan agreement No. for gratuitous transfer of vehicles No. 270-2015 dated 08.06.2015 with TH KazMunayGas N.V.

9. On conclusion of a contract for purchase and sale of a feasibility study for the project “Construction of an Advanced Oil Refining Complex at Atyrau Refinery” No. 539-2015 dated 05.11.2015.

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