Risk management system of JSC AlES

The Company is aware of the importance of developing a risk management system and procedures as a key element of corporate governance aimed at timely identification, assessment, monitoring and reduction of potential events that may negatively affect its financial stability and reputation.

In order to organize risk-oriented management, timely response to changes in the external and internal environment, as well as reduce possible losses in the implementation of risks, the Company ensures the implementation and improvement of the corporate risk management system: risk coordinators of structural divisions responsible for risk management are appointed, a Risk Committee is formed for preliminary consideration and approval of issues related to risk management, quarterly reports on key risk management are generated, internal regulatory documents on risk management are updated.

The Company's Board of Directors approved a consolidated register, a risk map, and quarterly reports on key risk management with a description and analysis of key risks. In order to apply a risk-oriented approach, the Company's Board of Directors approved restrictions (risk appetite) for the types of the Company's activities – investment, operational and financial.

When identifying risks, the Company relies on expert assessment, statistical data, a database of losses that have occurred, the results of audit and other inspections, etc. The identified risks are formed in the register and the risk map of the Company for their subsequent assessment, management and monitoring. The risks included in the register and the risk map are regularly (annually) reviewed to determine the relevance and level of materiality.

In accordance with the Risk Management Policy, the Company identifies the following risks: strategic, operational, financial, legal. Cases of a decrease in the growth rate of the economy of the Republic of Kazakhstan, a weakening of the national currency, a change in the structure of the electric power market and tariff optimization have a key impact on the conditions of the Company's functioning. At the same time, the presence of support from the state and the Sole Shareholder makes it possible to develop and increase competitiveness in the domestic market. Thus, based on the results of the work carried out to identify the risks of JSC "AlES" for 2021, 32 risks inherent in the Company's activities were identified and evaluated, the efficiency thresholds were updated, risk factors and measures to reduce them were updated by the risk owners.