Sound investments into your future

TheThe RepublicRepublic ofof KazakhstanKazakhstan is a transcontinental country in Central Asia and EasternEurope, the vast majority of its territory being located in Central Asia. With its territory of2,727,300 sq km (1,053,000 sq mi) ranked as the 9th largest country in the world, it is also theworld's largest landlocked country. Kazakhstan is a member of the CIS.Capital city – Astana; largest city – Almaty (former capital). National currency – Tenge (KZT).

Country Overview

Country Overview (continued)

Politics and Economy

The Republic of Kazakhstanis a unitary state withpresidential regime

Population

Population: 16.8 mln. peopleAge 0-15 – 10%

Structure 16-62(57) – 64% (2012) 63(58) & older – 26%

Working population (APFs’ members)(Feb. 2012): 8.5 mln . People

Main industry: Oil & Gas

(9th place in the world)

GDP: (Jan-Jun) 2012 – 105.6%

2011 – 107.5%, or $186.2 bn2010 – 107.0%, or $148.05 bn2009 – 101.2%, or $115.31 bn2008 – 103.3%, or $133.44 bn2007 – 108.9%, or $104.85 bn

(Feb. 2012): 8.5 mln . People

Average monthly income (Jul. 2012):USD 712

Retirement age: men – 63 women – 58

Longevity ( 2011):average – 69.01 yearsmen – 64.23 women – 73.79

Natural population growth rate increased from 6.22% (2003) to 13.79% (2011)

Pension System in KazakhstanPension System in Kazakhstan

19971997 -- reform of the pension system in Kazakhstan and establishment of the first “StateAccumulative Pension Fund” (Gosudarstvenny Nakopitelny Pensionny Fond) which thenbecame the APF “GNPF”, JSC

New pension system is based on the three pillars:

PAYGPAYG pillarpillar , the former Soviet Union heritage based upon the “solidarity of generations” where theState budget is a source of pension distributions by means of taxes and other budgetary receipts.Pension distributions amount depends on the employment duration. Currently, this pillar coversPension distributions amount depends on the employment duration. Currently, this pillar coversthose who had been employed for at least six months prior to January 1, 1998.

CompulsoryCompulsory defineddefined contributionscontributions accumulativeaccumulative pensionpension planplan (99.81% of all accumulatedpension assets as of 1 Oct 2012). Pension contributions fixed at 10% of the gross monthly incomeare paid by all employed citizens of Kazakhstan and foreign stateless individuals who establishedpermanent residence in Kazakhstan, to their individual accounts in one of the APFs selected incontributors’ discretion. Contributors have the right to transfer their savings from one APF toanother twice a year, but all savings of each member must be kept in one APF at a time.

VoluntaryVoluntary accumulativeaccumulative pensionpension planplan embracing voluntary and voluntary-occupational pensioncontributions. This pillar is less developed.

Currently there are 11 Accumulative Pension Funds (APF) operatingin Kazakhstan. The APFs in Kazakhstan are licensed to act also as

the Asset Management Companies (AMC). They manage pensionassets of their members (contributors), and also have their ownassets and capital that are accounted for separately (ChileanChileanmodelmodel).

Pension assets are accumulated and accounted for based on theUnitUnit--LinkedLinked PlanPlan, i.e. the cash value of pension contributions

Pension System in Kazakhstan (continued)Pension System in Kazakhstan (continued)

Unit -Linked Plan

Accumulation of Pension Assets &

Asset Management

UnitUnit--LinkedLinked PlanPlan, i.e. the cash value of pension contributionsvaries according to the current net asset value of the underlyinginvestment assets. It allows protection and flexibility in investment.

The APFs have three income sourcesthree income sources:

1. Monthly commission fee on accumulated pension assets (≤0.05%, GNPF’s current fee is 0.0375%)

2. Monthly commission fee on investments return (≤15%, GNPF’s current fee is 12%)

3. Return from investments of own assets

Unit -Linked Plan

Income Structure

Pension Market PerformancePension Market Performance

Pension Assets 20 476 mln. USD (01.11.2012) 3 079 356 mln. KZT

Average annual growth rate for the last 3 years – 18 %

Individual Contributors’ Accounts

Compulsory VoluntaryVoluntary

Occupational

1998 3 752 386

1999 2 994 513

2000 3 715 535

2001 4 630 205 22 071

2002 5 399 320 25 084

2003 6 164 316 27 364

2004 6 974 437 30 157 2 764

2005 7 613 369 32 336 3 297

2006 8 537 712 32 978 3 752

2007 9 223 712 40 904 3 848

2008 9 613 112 41 499 4 030

2009* 7 732 128 41 682 4 076

2010 7 989 782 39 534 4 045

2011 8 137 395 38 318 4 102

0%20%40%60%80%100%120%140%160%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Pension assets, mln. KZT Pension assets growth rate, %

2011 8 137 395 38 318 4 102

01.11.2012 8 389 053 37 894 4 117

USD 1 = KZT 150.39 (average ForEx rate for October 2012)

Average Pension Savings Per 2 429 USD Contributor (01.11.2012) 365 ths. KZT

* Elimination of zero-balance and double accounts

Accumulated Net Investment 4 354 mln. USD Income (01.11.2012) 654 849 mln. KZT

0.01 0.02 0.03 0.04 0.05 0.06 0.070.08

0.110.13

0.15

0.24

0.28

0.32

0.37

Average Pension Savings Per Сontributor, mln. KZT

-20%-10%0%10%20%30%40%50%60%70%80%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Net investment income, mln. KZT Net investment income growth rate, %

GNPF is the only APF with direct GRK participation through the National Bank’s share

GNPF ShareholderGNPF Shareholder

The National Bank of the Republic of Kazakhstan

100100%%

NBRK intends to privatize GNPF and, therefore, is lo oking for a strategic investor that will acquire the control st ock and help to further improve the Fund’s already strong position by:

improving the Fund’s corporate governance;

refining the existing risk management system;

bringing in know-how in investing pension assets; a nd

providing access to international capital markets

GNPF Network

20092009 20102010 20112011 01.11.201201.11.2012

EmployeesEmployees 436436 658658 823823 13131313

BranchesBranches 1818 1818 1818 1818

Sales pointsSales points 5353 100100 117117 119119

Service centersService centers 22 22 22

Pension Assets 3 952 mln. USD (01.11.2012) 594 331 mln. KZTAverage annual growth rate for the last 3 years – 27 %

Contributors

Compulsory VoluntaryVoluntary

professional1998 3 092 3741999 1 697 2922000 1 811 9912001 2 143 1042002 2 299 4162003 2 332 9002004 2 431 1252005 2 302 9662006 2 378 890 42

2007 2 439 137 752008 2 417 306 1022009* 1 742 157 119 52010 1 786 633 143 32011 1 810 993 178 3

GNPF Performance

0%10%20%30%40%50%60%70%80%90%

0100,000200,000300,000400,000500,000600,000700,000

Pension assets, mln. KZT Pension assets growth rate, %

USD 1 = KZT 150.39 (average ForEx rate for October 2012)

Average Pension Savings Per 2 045 USD Contributor (01.11.2012) 307 ths. KZT

2011 1 810 993 178 301.11.2012 1 932 667 201 3

* zero-balance and double accounts were eliminated

Accumulated Net Investment 1063 mln . USD

Income (01.11.2012) 159 915 mln. KZT

0%5%10%15%20%25%30%35%40%45%50%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Net investment income, mln. KZT Net investment income growth rate, %

0.010.02 0.02 0.03 0.03 0.04 0.04 0.05

0.070.08

0.10

0.17

0.21

0,26

0.31

0.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350Average Pension Savings Per Сontributor, mln. KZT

2008 2009 2010 01 Aug.2011

Employees 430 436 658 760

Branches 18 18 18 18

Agent points 31 53 100 117

Service centers 2 2

GNPF Market ShareGNPF Market Share ((01.01.1111.201.20122))

GNPF; 19%

($3 952

mln)

Pension Assets

GNPFGNPF ranks 2nd

among the Kazakhstan APFs

GNPF;

23%

(1 932k)

MembersGNPF; 24%

($1063 mln.)

Accumulated Net Investment

Return

Investment PortfoliosInvestment Portfolios ((01.01.1111.201.20122))

Pension Assets $3 952 mln.Pension Assets Moderate Portfolio

Structure, %Pension Assets Conservative Portfolio

Structure, %

GRK Securities

PPN

2.4%

Deposits

19.2%

REPO and Cash

1.1%

REPO and

Cash

8.04%GRK Securities

40.6%

Foreign Gov.

Securities

6.5%IFO Securities

1.9%

RK Corporate

Bonds

16.6%

Foreign

Corporate

Bonds

1.2%

Stocks and

Depositary

Receipts

2.0%

Gold

8.5%

2.4%

GRK

Securities

65.7%

Deposits

26.3%

8.04%

Investment PortfoliosInvestment Portfolios ((01.01.1111.201.20122))

Pension Assets $3 952 mln.Pension Assets Moderate

Portfolio, Currency Structure, %Pension Assets Conservative

Portfolio, Currency Structure, %

USD 21.7%

EUR 0.3%RUB 3.3 %

MYR

0.5 %

GBP 0.1 %

GNPF Own Assets Portfolio $ 153 mln. (all denominat ed in KZT)

KZT 100%KZT 74 %

GRK Securities

52.96 %

Deposits

42.85%

CAsh and REPO

4.19%

GNPF Basic Financial Indicators

2009 2010 2011 01.11.2012

Equity, mln. 98 14 473 121 17 888 139 20 327 153 23 073

Assets, mln. 101 14 899 125 18 369 146 21 363 159 23 949Assets, mln. 101 14 899 125 18 369 146 21 363 159 23 949

Net income,

mln.22 3 215 22 3 291 15 2 154 21 3 170

ROA, % 24.9 19.8 11.3 13

ROE, % 25.5 20.3 10.8 13.6

EPS 3 370 3 379 1.7 248 2.4 365

RegulationRegulation

There are threethree mainmain prudentialprudential regulationsregulations established and controlled by theCommittee:

The APFs’ activity is licensed and regulated by the CommitteeCommitteeofof thethe NationalNational BankBank ofof thethe RepublicRepublic ofof KazakhstanKazakhstan forforControlControl andand SupervisionSupervision ofof thethe FinancialFinancial MarketsMarkets andandFirmsFirms

Committee:

��KK11 - minimum capital requirement

��KK22 - annual average weighted investment returnbenchmark for the last 60 months

��LimitsLimits onon pensionpension assetsassets investmentsinvestments

Foreign Investor: Legal IssuesForeign Investor: Legal Issues

� be a legal entity

Per the Law of the Republic of Kazakhstan On the Pension Provisions in the Republic of Kazakhstan (The Law), Article 36:

A nonA non--resident investor shallresident investor shall:

� have a minimum rating as set below:

� Legal entity registered in an off-shore zone* or the one having affiliates registered in off-shore zones shall not act as a shareholder of any pension fund in Kazakhstan

*All restricted off-shore zones are listed in the Appendix A

Standard and

Poors

Moody's

Investors

Service

Fitch

Dominion

Bond Rating

Service (DBRS)

Japan Credit

Rating Agency

(JCR)

Rating and

Investment

Information

(R&І)

Capital

Intelligence

ВВ- Ва3 ВВ- BBL BB- BB- BB-

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