Information on the risk management system of JSC «AlES»

The Company realizes the importance of development of risk management system and procedure as a key element of corporate governance aimed at timely identification, assessment, monitoring and mitigation of potential events that may adversely 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 to reduce possible losses in case of risk realization, the Company ensures implementation and improvement of the corporate risk management system: risk coordinators of structural subdivisions responsible for risk management have been appointed, a Risk Committee has been formed for preliminary consideration and approval of issues related to risk management, quarterly reports on management of key risks are drawn up.

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

When identifying risks, the Company relies on expert judgement, statistical data, database of incurred losses, results of audits and other inspections, etc. Identified risks are formed in the register and map of risks of the Company for their further assessment, management and monitoring. Risks included in the register and risk map are regularly (annually) reviewed to determine their relevance and materiality level.

In accordance with the Risk Management Policy, the Company identifies the strategic, operational, financial, legal risks.

Cases of decrease in growth rates of the economy of the Republic of Kazakhstan, weakening of the national currency exchange rate, changes in the structure of the electric power market and tariff optimization have a key impact on the Company's operating conditions. At the same time, support from the state and the Sole Shareholder provide an opportunity for development and increase of competitiveness in the domestic market. Thus, according to the results of the work on identification of risks of JSC "AlES" for 2024, 36 risks inherent in the Company's activity were identified and evaluated, threshold values of efficiency were updated, risk owners actualized risk factors and measures for their reduction.