Consolidated financial statements

INDEPENDENT AUDITOR’S REPORT

IFRS Accounting Standards Consolidated Financial Statements and Independent Auditor’s Report

31 December 2024

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Financial Position

Signed and approved on behalf of management on 5 March 2025.

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Signed and approved on behalf of management on 5 March 2025.

Consolidated Statement of Changes in Equity

Conslidated Statement of Cash Flows

Cash outflows for purchase of property, plant and equipment include capitalised interest paid in the amount of Tenge 11,781,462 thousand (2023: Tenge 10,355,729 thousand).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2024

1. Samruk-Energy Group and Its Operations

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards for the year ended 31 December 2024 for Samruk-Energy JSC (the “Company”) and its subsidiaries (together referred to as the “Group”).

The Company was incorporated on 18 April 2007 and registered on 10 May 2007. The Company is a joint stock company and was set up in accordance with regulations of the Republic of Kazakhstan. The Group was established for the purpose of consolidation of entities in power and utilities industry of the Republic of Kazakhstan (“RoK”).

As at 31 December 2024 and 2023 the Company’s sole shareholder is Samruk-Kazyna National Welfare Fund JSC (“Samruk-Kazyna”). The Company’s ultimate controlling party is the Government of the RoK.

Principal activity

The Group’s principal activities are production of electricity, heating energy, hot water on the basis of coal, hydrocarbons and water resources, and renewable energy sources (‘RES”), and then subsequently the sale to households and industrial enterprises, the transmission of electricity and technical distribution of electricity within the network, as well as leasing of property of hydro power plants.

The operations of the Group’s subsidiaries and joint ventures are regulated by the Law of the Republic of Kazakhstan On Electric Power Industry, the Law On Natural Monopolies, the Law On Support of the Use of Renewable Energy Sources, and the Commercial Code of the RoK. Tariffs, based on the type of activities of a company, are regulated by the Committee on Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan (“Committee”) or by the relevant ministry – Ministry of Energy of the Republic of Kazakhstan (“ME”).

Electricity tariffs for energy producers are approved by order of the Minister of Energy of the Republic of Kazakhstan No.160 On Approval of Cap Tariffs for Electricity for a Group of Energy Producing Organizations dated 27 February 2015 and subsequent amendments to it. Tariffs for the supply of electricity produced by renewable energy sources are fixed and approved by the Decree of the Government of the Republic of Kazakhstan dated 12 June 2014 No.645 On Approval of Fixed Tariffs, according to the Renewable Energy technology used (separately for wind, solar and other sources), and are subject to annual indexation. In addition, Settlement and Financial Center for Support of Renewable Energy Sources LLP (“RFC”) acts as a buyer, and the power producer acts as a seller. Tariffs for electric power transmission and distribution for energy transmission companies, heating energy production and power supply (“PSE”) are regulated by the Committee. Regulation and control by the Committee are performed strictly in accordance with the legislation and regulations of the Republic of Kazakhstan.

The tariff related decisions are significantly exposed to social and political issues. Economic, social and other policies of the Government of the Republic of Kazakhstan may have a significant effect on the Group’s operations.

Registered address and place of business

The registered address and place of Company’s Head Office is: Block B, 15A, Kabanbay Batyr Avenue, Astana, Republic of Kazakhstan.

2. Basis of Preparation and Material Accounting Policy Information

Basis of preparation of the consolidated financial statements

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards under the historical cost convention. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

Going concern

Management prepared these consolidated financial statements on a going concern basis.

Changes in presentation of financial statements

On 2 May 2024 Samruk-Kazyna transferred to the Group shares of NPS Shulbinskaya HPS LLP and NPS Ust- Kamenogorskaya HPS LLP (hereinafter “Shulbinskaya HPS” and “UK HPS”) for the issuance of shares (Note 14). These transactions represent business combinations under common control and are accounted for retrospectively under the pooling of interest method based on the carrying value of assets and liabilities of Shulbinskaya HPS and UK HPS in predecessor’s accounting books, i.e. Samruk-Kazyna. Accordingly, these consolidated financial statements were presented as if the shares of Shulbinskaya HPS and UK HPS were transferred at the beginning of the earliest presented period. As a result, the comparative information was restated. The carrying amount of the net assets of Shulbinskaya HPS and UK HPS was presented as of 31 December 2023 and 1 January 2023 as part of Other reserves. As a result of these transactions, the Group's Share capital was increased in 2024 by Tenge 59,730,227 thousand. The difference between the nominal value of the shares issued and the carrying value of the net assets of Shulbinskaya HPS and UK HPS was recognized as part of Retained earnings in these consolidated financial statements.

Impact on comparative information due to acquisition of Shulbinskaya HPS and UK HPS is presented below:

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Cash Flows

The net cash flows effect for the year ended 31 December 2023 were as follows:

Consolidated financial statements

(i) Subsidiaries

Subsidiaries are consolidated from the date on which control is transferred to the Company (acquisition date) and are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.

The Group measures non-controlling interest that represents present ownership interest and entitles the holder to a proportionate share of net assets in the event of liquidation on a transaction by transaction basis, either at: (a) fair value, or (b) the non-controlling interest's proportionate share of net assets of the acquiree.

Non-controlling interests that are not present ownership interests are measured at fair value.

The Company and all of its subsidiaries use uniform accounting policies consistent with the Group’s policies.

(ii) Joint arrangements

Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.

(iii) Investments in associates

Associates are entities over which the Group has significant influence (directly or indirectly), but not control, generally accompanying a shareholding of between 20 and 50 percent of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost.

Foreign currency translation

(i) Functional and presentation currency of consolidated financial statements

All amounts in these consolidated financial statements are presented in thousands Tenge, unless otherwise stated.

Functional currency is the currency of the primary economic environment in which the entity operates. The functional currency of subsidiaries, joint ventures, associates and the parent is Tenge.

(ii) Transactions and balances in foreign currency

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of transactions.

Foreign exchange gains and losses resulting from the settlement of such transactions or from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

At 31 December 2024, the principal rate of exchange used for translating foreign currency balances was US Dollar per Tenge 523.54 (31 December 2023: US Dollar per Tenge 454.56). Exchange restrictions and currency controls exist relating to converting the Tenge into other currencies. Currently, Tenge is not freely convertible in most countries outside of the Republic of Kazakhstan.

Financial instruments

Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition and includes transaction costs. Measurement at cost is only applicable to investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured and derivatives that are linked to, and must be settled by, delivery of such unquoted equity instruments.

(i) Financial assets

As at 31 December 2024 and 31 December 2023 the Group’s financial assets were carried at amortised cost.

Debt instruments measured at AC are presented in the consolidated statement of financial position net of the allowance for ECL.

The Group applies a three stage model for impairment, based on changes in credit quality since initial recognition. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter (“12 Months ECL”). If the Group identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but considering expected prepayments, if any (“Lifetime ECL”). If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL. For financial assets that are purchased or originated credit-impaired (“POCI Assets”), the ECL is always measured as a Lifetime ECL.

The Group derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets otherwise expire or (b) the Group has transferred the rights to the cash flows from the financial assets or entered into a qualifying pass-through arrangement whilst (i) also transferring substantially all the risks and rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all the risks and rewards of ownership but not retaining control. Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to impose additional restrictions on the sale.

(ii) Financial liabilities

Financial liabilities are derecognised when they are extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors are also considered. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.

Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch up method, with any gain or loss recognised in profit or loss, unless the economic substance of the difference in carrying values is attributed to a capital transaction with owners.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and provision for impairment, where required.

Asset retirement obligation is capitalised to the cost of property, plant and equipment.

Land is not depreciated. Depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

The residual value of an asset set equal to zero, if the Group intends to use the object till the end of its physical useful life. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Intangible assets

All of the Group’s intangible assets have definite useful lives and primarily include capitalised computer software and licenses. Acquired computer software is capitalised on the basis of the costs incurred to acquire and bring it to use.

All intangible assets are amortised using the straight-line method over their useful lives, estimated by the management as from 2 to 25 years.

Impairment of non-financial assets

Assets that are subject to depreciation and amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

Investment property

Investment properties are stated in the consolidated financial statements at cost less accumulated depreciation and provision for impairment, where required.

Depreciation on investment property is calculated using the straight-line method to allocate its cost to its residual values over their estimated useful lives, as follows:

Earned rental income is recorded in profit or loss for the year within revenue.

Right-of-use assets

The Group leases various offices, equipment and vehicles. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and nonlease components and instead accounts for these as a single lease component.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Depreciation on the items of the right-of-use assets is calculated using the straight-line method over their estimated useful lives as follows:

Inventories

Inventories are recorded at the lower of cost and net realisable value. The cost of inventory is determined on the first-in, first-out basis.

Trade and other receivables

Trade and other receivables, except for prepaid taxes and advances to supplies, are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest method.

Advances to suppliers are carried at cost less provision for impairment. Advances are classified as non-current when the goods or services relating to the advances are expected to be obtained after one year, or when advances relate to an asset which will itself be classified as non-current upon initial recognition. Advances to acquire assets are transferred to the carrying amount of the asset once the Group has obtained control of the asset and it is probable that future economic benefits associated with the asset will flow to the Group. Other advances are written off to profit or loss when the goods or services relating to the advances are received. If there is an indication that the assets, goods or services relating to advances will not be received, the carrying value of the advances is written down accordingly, and a corresponding impairment loss is recognised in the profit or loss for the year. Prepaid taxes are stated at actual amounts paid less impairment provision

Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash at current bank accounts and purchase and repurchase agreements ("reverse repo") with other banks with an original maturity of less than ten days (secured debt instruments). Cash and cash equivalents are carried at AC because: (i) they are held for collection of contractual cash flows until maturity and those cash flows represent SPPI, and (ii) they are not designated at FVTPL.

Restricted balances are excluded from cash and cash equivalents for the purposes of the consolidated cash flow statement.

Balances restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period are included in other non-current assets; balances restricted for more than three months but less than twelve months after the reporting period are included in other current assets.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. The Board of Directors of the Company determines value per share and a number of shares to be issued on each individual share issue based on the statutory rules. Any excess of the fair value of consideration received over the par value of shares issued is recorded as share premium in equity.

Other reserves

Other reserve capital includes business combination reserve, result of transactions with shareholder and other comprehensive income/loss.

The accrual of expenses or the distribution of assets at the discretion of the shareholder, including fixed assets, business combinations, interests in other entities and disposal groups, cash and other, are recognised within the equity as "Other reserves". Other reserves also include gain on initial recognition of loans received from the shareholder with non-market terms.

Earnings per share and carrying amount of one share

Basic earnings per share are calculated by dividing the profit or loss attributable to owners of the Group by the weighted average number of ordinary shares in issue during the year. The Group has no dilutive potential ordinary shares; therefore, the diluted earnings per share equals the basic earnings per share (Note 32).

In accordance with the decision of the Exchange Council of Kazakhstan Stock Exchange JSC (hereinafter referred to as the “KASE”) dated 4 October 2010, the consolidated financial statements must contain data on the book value of one share (common and preferred) as of the reporting date, calculated in accordance with the approved KASE rules.

Value added tax

Value-added tax (“VAT”) related to sales is payable to the tax authorities when goods are shipped, or services are rendered. Input VAT can be offset against output VAT upon the receipt of a tax invoice from a supplier.

Tax legislation allows the settlement of VAT on a net basis. Accordingly, VAT related to sales and purchases is stated in the statement of financial position on a net basis. Recoverable VAT is classified as non-current if its settlement is not expected within one year after the reporting period.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are not recognised for future operating losses.

Asset retirement obligation

Asset retirement obligation, including ash dump restoration provision is recognised when there is a high certainty of incurring the costs and those costs can be measured reliably. Estimated restoration costs are added to the cost of an item of property plant and equipment when incurred in the accounting period when the obligation arising from the related disturbance occurs, based on the net present value of estimated future costs. Asset retirement obligation does not include any additional obligations which are expected to arise from future disturbance.

Ash dump restoration costs include dismantling and demolition of ash dump infrastructure, environmental clean-up and discharge monitoring.

The costs are estimated on the basis of a restoration plan. The cost estimates are calculated annually during the operating life to reflect known developments, such as updated cost estimates and revisions to the estimated lives of operation and are subject to formal review at regular intervals.

Although the ultimate cost to be incurred is uncertain, the Group estimates the respective costs based on feasibility and engineering studies using current restoration standards and techniques for conducting works on restoration and remediation of waste polygons. The amortisation or “unwinding” of the discount applied in establishing the net present value of provisions is charged to profit and loss in each accounting period. The amortisation of the discount is shown as finance costs.

Employee benefits

(i) Long-term employee benefits

The Group companies provide the long-term employee benefits to employees before, on and after retirement, in accordance with a Collective Labour Agreement. The agreement provides for one-off retirement payments, financial aid for employees’ disability, significant anniversaries and funeral aid to the Group’s employees. The entitlement to some benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period.

The expected cost of these benefits is accrued over the period of employment using the same accounting methodology as used for the defined post-employment benefit plan. The Group does not have any funded pension plans. The liability recognised for the end of each reporting period represents the present value of defined benefit obligations. Actuarial gains and losses arising in the year are taken to other comprehensive income for the year. For this purpose, actuarial gains and losses comprise both the effects of changes in actuarial assumptions and experience adjustments arising because of differences between the previous actuarial assumptions and what has actually occurred.

The main assumptions used in accounting for defined benefit obligations are the discount rate and the personnel turnover assumptions. All movements in post-employment benefit obligations when incurred are accounted for as follows: (i) cost of services and net interest costs are included in profit or loss; and (ii) restatements are recorded in other comprehensive income.

These obligations are valued annually by independent qualified actuaries

(ii) Staff costs and related contributions

Wages, salaries, contributions to pension and social insurance funds, paid annual leave and sick leave, bonuses, and nonmonetary benefits are accrued in the year in which the associated services are rendered by the employees of the Group.

On behalf of its employees, the Group withholds and transfer those statutory pension and post-employment benefit amounts prescribed by the legal requirements of the Republic of Kazakhstan to Unified Accumulative Pension Fund JSC (“Fund”). For those employees, not covered by the Collective Labour Agreement payments, upon retirement, the financial obligations of the Group cease and all subsequent payments to retired employees are administered by the Fund.

Lease liabilities

Liabilities arising from a lease are initially measured on a present value basis.

Extension and termination options are included in a number of property lease agreements across the Group. These terms are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor. Extension options (or period after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases of the Group, the Group’s incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, collateral and conditions.

Lease payments are allocated between principal and finance costs.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at amortised cost using the effective interest method.

In accounting for loans from the shareholders with off market terms, the Group records gain/(loss) on origination in equity as a capital contribution/(distribution). The method used reflects the transaction's economic substance and is applied consistently to all similar transactions and is disclosed in the consolidated financial statements.

General and specific borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial time to get ready for intended use or sale (qualifying assets) are capitalised as part of the costs of those assets.

Trade and other payables

Trade and other payables are accrued when the counterparty performed its obligations under the contract. Trade and other payables, except for advances received, are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Advances received are stated at actual amounts received from the third parties.

Revenue recognition

Revenue is income arising in the course of the Group’s ordinary activities.

Revenue is recognised in the amount of transaction price. Transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring control over promised goods or services to a customer, excluding the amounts collected on behalf of third parties. Revenue is shown net of value-added tax and discounts. Revenue from sale of energy is recognised over the period.

Consolidated revenue of the Group is mainly attributed to sale and transmission of electric and heating power, and hot water production. The Group recognizes revenue from contracts with customers over the period.

According to the contracts for sale and transmission of electric and heating power of the Group, obligations to be performed are identified when concluding the relevant contract. Contracts for sale and transmission of electric and heating power do not include related and/or additional services.

The Group does not assume concluding contracts which provide for a period between transfer of the promised goods or services to the customer and payment by the customer to be more than one year. Accordingly, the Group does not adjust transaction prices for time value for money.

According to the contracts for sale and transmission of electric and heating power, the contract amount is the price for sold or transmitted amount of electric or heating power, which is a separate performance obligation.

Electric and heating power generation and sale

Revenues are recognised based on the actual amount of electric and heating power sold by the Group’s power plants.

Revenue is determined based on tariffs approved by the authorised agency.

Sales of electric and heating power are recognised based on readings of metering devices on a monthly basis. These devices installed at connection point of the Group’s power plant to the transmission networks.

A receivable is recognised when electric and heating power is delivered at the connection point of the Group’s power plant to the transmission networks, as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. Actual volume of electric and heating power transmitted for the accounting period is supported by the act of electric power supply/reconciliation report on heating power. Invoices are issued to customers on a monthly basis.

Electric power transmission and distribution

The Group provides services under fixed-price contracts per 1 kWh of transmitted and distributed power based on the tariffs approved by the authorised agency.

Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is recognised based on the actual volume of electric power transmitted over the reporting period because the customer receives and uses the benefits simultaneously.

The actual volume of electric power transmitted and distributed for the reporting period is supported by relevant reconciliation reports to be monthly executed and signed with customers based on readings of metering devices. Customers are billed on a monthly basis on the last day of each month, and consideration is payable within 5 working days after billing.

A receivable is recognised when an invoice is issued, as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Revenue from services to maintain the electric power capacity

Also, the Group provides a service to maintain the electric power capacity. Revenues from the provision of services to maintain the electric power capacity are recognized in the reporting period when these services were provided. Revenue is determined on the basis of the actual electric power capacity, on the basis of monthly reports on the available electric power capacity from a unified purchaser in accordance with the Rules of the power capacity market.

The contract provides for payment for 1 kW of available power per month, and revenue is recognized in the amount to which the Group has the right to invoice.

Pursuant to the certificate signed for the reporting month, the Group issues invoices to the Unified Purchaser on a monthly basis.

Sale of electric power

The Group sells electric power under agreements with individuals and legal entities based on the tariffs approved by the authorised agency.

Sales to legal entities are recognised monthly in the reporting period in which electric power is consumed, according to readings of the metering devices. A legal entity agreement requires payment within 5 working days after billing. An agreement of publicly-funded legal entities provides for payment until 15th day of the month following the billing month.

Sales to individuals are recognised monthly in the reporting period in which electric power is consumed. Revenues from agreements with individuals include revenues for the last few days of the month after reading of the metering devices, which are recognised as a proportion of the total electric power sold for the billing month. An agreement with individuals provides for payment until the 25th day of the month following the billing month, based on the payment document to be issued by the Company. The billing period is one calendar month.

Income taxes

Income taxes have been provided for in these consolidated financial statements in accordance with legislation of the Republic of Kazakhstan enacted or substantively enacted by the end of the reporting period.

Current tax is the amount expected to be paid to or recovered from the state budget in respect of taxable profits or losses for the current and prior periods.

Deferred tax assets and liabilities are netted only within the individual companies of the Group.

The Group controls the reversal of temporary differences relating to taxes chargeable on dividends from subsidiaries or on gains upon their disposal. The Group does not recognise deferred tax liabilities on such temporary differences except to the extent that management expects the temporary differences to reverse in the foreseeable future.

Deferred tax liability is recognised in respect of the taxable temporary difference on the restoration and closure costs added to the cost of property plant and equipment and, subject to recognition criteria mentioned above, a deferred tax asset is recognised in respect of the deductible temporary difference on the provision for asset retirement obligation.

Uncertain tax positions

Management at the end of each reporting period evaluates the Group’s uncertain tax positions. Liabilities reported in respect of income tax positions are taken into account when management believes that the likelihood of emergence of additional tax liabilities, in case the tax authorities challenge the tax position of the Group, is higher than the probability of their absence.

Such an assessment is conducted based on the interpretation of tax laws that are in force or in effect at the end of the reporting period, as well as any known court decisions or other decisions on such matters. Liabilities for fines, penalties and taxes, other than income tax, are presented on the basis of management's best estimate of the costs required to settle the obligations at the end of the reporting period. Adjustments to uncertain income tax positions are reported within income tax expense.

3. New Accounting Pronouncements

The following amended standards and interpretations became effective from 1 January 2024, but didn’t have material impact on the Group:

• Classification of Liabilities as Current or Non-Current – Amendments to IAS 1 (initially issued on 23 January 2020, and subsequently amended on 15 July 2020, and 31 October 2022, with final adoption for annual periods beginning on or after 1 January 2024). According to these amendments, liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Liabilities are considered non-current if the organization has a substantial right to defer settlement for at least twelve months from the end of the reporting period. Management is no longer required to ensure that this right is unconditional. The amendment made in October 2022 clarified that contractual conditions, i.e., covenants that must be adhered to after the reporting date, do not affect the classification of debt as current or non-current at the reporting date. Management’s expectations regarding whether it will later exercise its right to defer settlement do not impact the classification of liabilities. A liability is classified as current if the condition was breached on or before the reporting date, even if, after the reporting period, the creditor grants a waiver of the breach. Conversely, debt is classified as non-current if the breach of the loan agreement condition occurs only after the reporting date. Additionally, the amendments clarify the requirements for classifying debt that can be settled by converting it into equity. The term "settlement" is defined as the termination of a liability through payment in cash, other resources containing economic benefits, or the organization’s own instruments. There is an exception for convertible instruments that may be converted into equity, but only for instruments where the conversion option is classified as equity instruments as a separate component of the combined financial instrument.
• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022 and effective for annual periods beginning on or after 1 January 2024).
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (issued on 25 May 2023).

New standards and interpretations

Certain new standards and interpretations have been issued that are mandatory for the annual periods beginning on or after 1 January 2025 or later, and which the Group has not early adopted.

• Amendments to IAS 21 Lack of Exchangeability (Issued on 15 August 2023 and effective for annual periods beginning on or after 1 January 2025).
• Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 (issued on 30 May 2024 and effective for annual periods beginning on or after 1 January 2026).
• IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024 and effective for annual periods beginning on or after 1 January 2027).
• IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024 and effective for annual periods beginning on or after 1 January 2027).
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB).
• Annual Improvements to IFRS Accounting Standards (issued in July 2024 and effective from 1 January 2026).
• IFRS 14, Regulatory Deferral Accounts (issued on 30 January 2014).
• Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and IFRS 7 (issued on 18 December 2024 and effective from 1 January 2026). The Group is currently assessing the impact of the amendments on its financial statements.

Unless otherwise described above, the new standards and interpretations are not expected to affect significantly the Group’s consolidated financial statements.

4. Critical Accounting Estimates, and Judgements in Applying Accounting Policies

The Group makes estimates and assumptions that affect the amounts recognised in the consolidated financial statements and the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management also makes certain judgements, apart from those involving estimations, in the process of applying the accounting policies. Judgements that have the most significant effect on the amounts recognised in the consolidated financial statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:

Impairment of non-financial assets

At each reporting date management assesses whether there is any indication of impairment of separate assets or groups of assets, and whether there is any indication that an impairment loss recognised in prior periods for separate assets or groups of assets other than goodwill may no longer exist or may have decreased.

If such indications exist, management estimates the recoverable amount of an asset, which is determined as the higher of an asset’s fair value less costs to sell and its value in use. The calculation of value in use requires the application of the management’s estimates and judgments, which are deemed appropriate under the current circumstances.

Assessment of impairment indicators also requires the use of judgments and estimates in determining possible technological obsolescence of fixed assets, discontinuing operations, residual useful lives, and other changes in operating conditions.

Under IAS 36, one of the possible impairment indicators is the presence of significant changes that had negative consequences for the Group that occurred during the period or are expected in the near future in the technological, market, economic or legal environment in which the Group operates or in the market for which the asset is used.

In assessing the recoverable amount of assets, the Group makes estimates and judgments. Estimates and judgments are repeatedly evaluated and based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management also makes certain judgments, apart from those involving estimations, in the process of applying the accounting policies.

Analysis of the impairment indicators of property, plant and equipment – production of electricity and heat based on coal, transmission and distribution of electricity

The Group’s management performed the analysis of the impairment indicators of property, plant and equipment of subsidiaries JSC "Almaty Electric Stations" ("AlES"), Ekibastuz GRES-1 named after Bulat Nurzhanov LLP (“EGRES-1”), Alatau Zharyk Company JSC (“AZhK”) as well as investments in the joint venture JSC "Station Ekibastuzskaya GRES-2" (hereinafter "SEGRES-2") in accordance with IAS 36 “Impairment of Assets”.

The principal facts and assumptions used in the analysis of the impairment indicators are:

• Lack of negative changes in the economic efficiency of subsidiaries for the reporting period;
• Increase in marginal tariffs for electricity for power plants from 1 January 2024 for 10-27% from current tar-iffs and from 1 November 2024 tariff of EGRES-1 for 3% from current tariff in accordance with Order of the Minister of Energy of the RoK with the possibility of adjusting tariffs when major costs increase in accord-ance with the Rules for approving the marginal tariff for electrical energy;
• A change in interest rates on loans will not have a significant impact on the recoverable amount of assets, since an increase in the debt financing rate will be similarly reflected in the WACC rate when calculating the rate of return, in the next validity period of the cap tariffs, according to the methodology for determining the rate of return taken into account when approving the cap tariffs for electricity, as well as a fixed profit for balancing, taken into account when approving cap tariffs for balancing electricity approved by Order of the Minister of Energy of the RoK dated 22 May 2020 No. 205, the cost part of the tariff also includes interest expenses for the previous period;
• A change in inflation rates will not have a significant impact, since the cost part of the tariff includes costs taking into account actual inflation for the previous year, as well as amendments to the Law “On Natural Monopolies” dated 30 December 2022 No. 177-VII ZRK stipulate additional conditions for adjusting tariffs approved for 5 years for the transmission of electricity before its expiration (change in the approved invest-ment program in connection with the implementation of national projects, receipt on the balance sheet or in trust management of networks, change in the average monthly nominal wage);
• The introduction of a new target model of the electricity sales market from 1 July 2023 (Note 19) did not have a significant impact on the financial results of the Group’s power plants. The volume of purchases and sales of imbalances on the balancing electricity market amounted to less than 1% of the total sales volume, which is a minor deviation. The price of purchase and sale of electricity at centralized trading in the event of imbalances also did not have a significant impact on the Group’s results. The Group's stations primarily op-erate in accordance with the declared volumes and accordingly, the plan usually corresponds to the fact, which allows minimizing the volume of transactions on the balancing electricity market.
• Lack of significant changes having adverse consequences for subsidiaries, which occurred during the period or may presumably occur in the nearest future;
• Projected growth in the medium term in demand for electricity in the northern and southern zones of the Republic of Kazakhstan.

Additional facts and assumptions used in the analysis of impairment indicators for AlES:

• Increase in the tariff for heat energy from 1 January and 1 September 2024. In accordance with the Law of RoK “On natural monopolies” there is a possibility to adjust tariffs in case of changes in the type and cost of strategic goods;
• It is planned to modernize the two main power plants of AlES - Almaty CHP-2 and CHP-3 (Note 26). The residual value of the existing assets of the coal-fired power units of these plants, subject to conservation or dismantling, by the time the new combined cycle power units are put into operation will be equal to zero;
• No significant changes that have occurred during the period or are expected to occur in the near future and can have a material effect on the asset's recoverable amount.

Additional facts and assumptions used in the analysis of impairment indicators for AZhK:

• Overfulfillment of the plan in terms of key operational and financial performance indicators at 31 December 2024;
• Projected growth in the medium term in demand for electricity in the Almaty city and the Almaty region;
• Increase in the tariff for electricity transmission from 1 January 2024 for 6.7% and from 1 August 2024 for 28.5% per joint order of the DCRNM of the Ministry of National Economy of the Republic of Kazakhstan for Almaty and Almaty Region;
• Costs of purchased electricity from the Unified Purchaser and on the balancing electricity market (Note 20) are included in the tariff estimate;
• Law of the Republic of Kazakhstan dated 30 December 2022 No. 177-VII amended Law of RoK “On Natural Monopolies” dated 27 December 2018 No. 204-VІ ZRK allowing to adjust the tariffs for electricity transmission approved for 5 years before expiration. By the Order of the Republic of Kazakhstan of the Minister of National Economy of the Republic of Kazakhstan dated 8 December 2023, changes were made to the Rules for the formation of tariffs of natural monopoly entities, approved by Order of the Minister of National Economy of the Republic of Kazakhstan dated 19 November 2019 No. 90, which updated the incentive method for regulating the spheres of natural monopoly, allowing the use of 50% the permissible level of profit at the discretion of the natural monopoly entity, upon achieving the performance indicators determined by the specified Rules.

Results of analysis of the impairment indicators of property, plant and equipment – production of electricity and heat based on coal, transmission and distribution of electricity

As a result of the analysis of external and internal impairment indicators, the Group’s management concluded that there were no impairment indicators at the date of the analysis. Accordingly, the Group’s management has elected not to test for impairment of property, plant and equipment and intangible assets of these subsidiaries and investments in the joint venture at 31 December 2024.

In 2023 the Group has identified an individual impairment indicator of impairment for Ereymentau Wind Power LLP due to the delay in the implementation of the 50 MW wind power plant construction project in Ereymentau and the litigation of Ereymentau Wind Power LLP with the Settlement and Financial Center for Support of Renewable Energy Sources LLP in relation to prolongation of contract on provision of tariff for electricity sales.

The Group recognized a full impairment of construction in progress objects in the amount of Tenge 4,912,900 thousand and prepayments on long-term assets in the amount of Tenge 9,155,825 thousand.

In 2023 Alatau Zharyk Company JSC sent pre-trial claims against Electroremont LLP and ABM-Building 2007 LLP for a compensation of material damage caused due to failure to fulfill its contractual obligations. Due to the low probability of recoverability of the construction in progress project, in 2023 the Group recognised an impairment loss of construction in progress objects of Alatau Zharyk Company JSC in the amount of Tenge 3,659,788 thousand.

Also in 2023, the Group recognized gain from the reversal of impairment of non-financial assets of Shulbinskaya HPS and UK HPS in the amount of Tenge 8,057,283 thousand.

Cost of equipment purchased for the construction of power unit No. 3 at SEGRES-2

In 2008, SEGRES-2 began preparations for the construction of power unit No. 3 with a capacity of 500 MW. Subsequently, the construction plan was revised and until 2016 the Company was at the stage of development of feasibility study, preliminary construction and purchasing the necessary equipment for the new power unit No. 3 with a capacity of 630 MW. On 29 August 2016, SEGRES-2 terminated the general contract for the construction of power unit No. 3, concluded between SEGRES-2 and KVARTZ KZ LLP, due to the postponement of the construction of power unit No. 3.

SEGRES-2 carried out several activities related to the construction of power unit No. 3, including:

• On 14 March 2022, the Market Council Commission for the consideration of investment programs made a unanimous decision to recommend for consideration by the authorized body the investment program of SEGRES-2 JSC “Expansion and reconstruction of SEGRES-2 with the installation of a power unit No.3.
• Measures have been taken to prepare the station for the reception and proper storage of equipment from the People's Republic of China, heated hangar-type buildings have been built and secured storage facilities have been allocated. A significant part of the technological equipment for the power unit has been accepted. At the same time, in order to complete the construction of the power unit, it is necessary to make additional orders for the manufacture of the missing part of the equipment.

Due to the planned increase in the share of renewable energy sources by 2031, according to the forecast balances of the Ministry of Energy of Kazakhstan for the years 2025–2031, there is a need for the construction of additional maneuvreable power capacities to ensure the regulation of the energy system. These forecasts include the construction of new generation facilities, including the expansion of SEGRES-2 and the construction of a new GRES-3 station, aimed at reducing the deficit of electricity and maneuverable capacities.

The management of the Group, taking into account the above facts, is considering the possibility of using existing Chinese equipment a) for the further construction of a maneuverable power unit at SEGRES-2, and also b) transfer of equipment to EGRES-3 for the construction of a new station GRES-3.

For the project “Construction of GRES-3 based on clean coal technology”

On 18 April 2024, according to the Minutes of the meeting of the Ministry of Energy regarding the development of the electric power industry it was recommended to make changes to the terms of reference for the pre-feasibility study of the construction project of GRES-3 including an increase in the installed capacity of the plant up to four power units, as well as to consider the possibility of using equipment purchased in the PRC, which was originally intended for power unit No.3 of SEGRES-2.

On 8 July 2024, amendments were made to the Law of RK “On Electric Power Industry” under the draft law “On Thermal Power Industry” in terms of improving the current tender mechanism for the construction of newly commissioned generating units (in terms of return on investment) for the project “Construction of GRES-3 based on clean coal technology”.

According to this law, if in the approved forecast balance of electricity and capacity for the forthcoming seven-year period the forecasted deficit of electricity capacity in the United Energy System of Kazakhstan or in any of its zones during the first five years of the forecast exceeds 100 MW, the authorized body is obliged to hold a tender for the construction of new generating plants producing electricity using solid fuel.

The Group is currently developing a pre-feasibility study for the project “Construction of GRES-3 based on clean coal technology”.

In accordance with the current plans of the Government, management considers the most probable scenario to be the implementation of the GRES-3 construction project and transfer of technological equipment purchased in the PRC to a new organization at its carrying value. In this regard, an additional provision of Tenge 18,524,342 thousand as at 31 December 2024 was accrued for other incurred costs, including construction and assembly works, foundation preparation and other construction-related expenses for Ppower unit No. 3 of SEGRES-2, recorded as construction in progress (31 December 2023: Tenge 13,215,512 thousand) (Note 8).

Modernisation of the Almaty CHP-2 and CHP-3 with the minimization of the environmental impact

The projects are being implemented as part of the execution of the President's directive.

The CHP-2 modernization project, which minimizes environmental impact, includes the construction of a new gas-fired power station with a capacity of up to 600 MW at the Almaty CHP-2 site. On 31 December 2024, Investment Agreement No. 52 was signed for the modernization, reconstruction, and/or expansion with the construction of generating units using gas as an alternative fuel for AlES JSC for the 2024-2038 period. This agreement allows for the return of all invested capital through the capacity market mechanism.

The reconstruction of Almaty CHP-3 with the construction of a gas-steam unit (GSU) with a capacity of at least 450 MW involves replacing the existing coal-fired equipment with modern environmentally friendly gas-steam power units, as well as building a new, more powerful СHP on the existing site with a maneuverable mode of operation to partially address the shortage of maneuverable capacity in the southern region of Kazakhstan. On 17 March 2023, a contract was signed for the purchase of a service to maintain the readiness of electrical capacity during the construction of new generating units with a maneuverable generation mode with Settlement and Financial Center for Renewable Energy Support LLP.

According to the management's estimates, the residual value of the existing assets of CHP-3 and CHP-2 that will be replaced will be zero by the time the new gas-steam power units are put into operation.

To finance the projects, the Group entered into loan agreements with various financial institutions (Note 16).

As a result of the competitive bidding, EPC contracts were signed with suppliers for the implementation of the projects.

Status of Completed Works:

Modernisation of the Almaty CHP-2

As of 31 December 2024, the Group decided to capitalise the cost of equipment delivered for CHP-2 under the EPC contract in the amount of Tenge 18,574,198 thousand. Additionally, as of 31 December 2024, the cost of work-in-progress equipment for CHP-2 was capitalised in the amount of Tenge 23,412,629 thousand. Construction and installation work under the EPC contract amounting to Tenge 7,345,497 thousand, completed in 2024, was also capitalized. The estimated of the work-in-progress equipment was based on the percentage of completion indicated in the weekly equipment status reports provided by the EPC contractor. Prices were determined according to the price schedule attached to the EPC contract.

Modernisation of the Almaty CHP-3

Construction and installation works for CHP-3 under the EPC contract amounting to Tenge 2,212,400 thousand, completed in 2024, were capitalised. The estimate of obligations was carried out based on the design and estimate documentation. Additionally, as of 31 December 2024, the cost of work-in-progress equipment for CHP-3 was capitalised in the amount of Tenge 22,135,105 thousand. The cost of the work-in-progress equipment was recognised according to the percentage of completion indicated in the progress table provided by the EPC contractor. Prices were determined based on approved price lists and commercial offers related to the project.

Capitalisation was carried out in accordance with the requirements of IAS 16 Property, Plant and Equipment, as the costs are associated with preparing the asset for its intended use, and there is a high probability of obtaining future economic benefits, with costs that can be reliably measured.

In cases where an asset is created under a long-term EPC contract and the asset has no alternative use for the contractor, and the terms of the EPC contract provide the contractor with the right to receive payment for the work actually performed even if the contract is terminated, the costs may be capitalised.

Insurance

Under the voluntary insurance agreement for construction and installation risks and project cargo, including delays in commissioning and civil liability to third parties for harm caused, in 2024 the insurance premium was paid in the total amount of Tenge 10,388,767 thousand. These insurance expenses are mandatory as they are required by the investor banks and are considered an integral part of the project costs that cannot be avoided. In accordance with IFRS, specifically IAS 23 Borrowing Costs and IAS 16 Property, Plant, and Equipment, the total insurance premium of Tenge 10,388,767 thousand was capitalized and included in the cost of the Almaty CHP-2 modernization project. The capitalization of the insurance premium is due to its direct link to bringing the asset to a state of readiness and protecting against financial losses that may impact the future economic benefits of the project.

Accounting for property, plant and equipment of Renewble Energy Sources

Property, plant and equipment with a carrying value of Tenge 14,026,839 thousand represent the assets of the First Wind Power Plant (PVES) of Tenge 12,918,858 thousand and Samruk-Green Energy LLP of Tenge 1,107,981 thousand (2023: Tenge 14,653,228 thousand, Tenge 13,554,452 thousand and Tenge 1,098,776 thousand).

Settlement and Financial Center for Support of Renewable Energy Sources LLP (“RFC”), a governmental organization, acts as an agent that buys the entire volume of electricity generated by RES companies and resells it to stations powered by coal and hydrocarbons. The total volume of electricity is purchased from the power plants at a specified tariff above the market one, which is annually adjusted to the inflation rate.

According to IFRS 16, arrangements of this nature may contain a lease. Upon review of IFRS 16 criteria, management concluded that this arrangement is an operating lease, whereby PVES and Samruk-Green Energy LLP act as lessors. Accordingly, revenue from electricity of these stations was included in lease income from these power plants. Lease income is disclosed in Note 19. Future lease payments are disclosed in Note 26.

Useful lives of property, plant and equipment

The estimation of the useful lives of items of property, plant and equipment is a matter of judgment based on the experience with similar assets. The future economic benefits embodied in the assets are consumed principally through use. However, other factors, such as technical or commercial obsolescence and wear and tear, often result in the diminution of the economic benefits embodied in the assets. Management assesses the remaining useful lives in accordance with the current technical conditions of the assets and estimated period during which the assets are expected to earn benefits for the Group.

The following primary factors are considered: (a) expected usage of the assets; (b) expected physical wear and tear, which depends on operational factors and maintenance programme; and (c) technical or commercial obsolescence arising from changes in market conditions. If the estimated useful lives were different by 10% from management’s estimates, the depreciation for the year ended 31 December 2024 would have been higher/lower by Tenge 6,037,439 thousand (31 December 2023: higher/lower by Tenge 6,523,910 thousand).

Balkhash Thermal Power Plant (hereinafter – “BTTP”)

On 29 October 2019, the Group acquired 50% + 1 share of BTPP from Samsung C&T and became the owner of 100% interest in BTPP. As of the acquisition date, BTPP was on the brink of bankruptcy and did not actually perform any significant activities. Since 2017, creditors and suppliers have repeatedly sued due to the insolvency of BTPP, which in turn led to the seizure of property, and also significantly limited the activities of BTPP. On 6 December 2019, a temporary administrator was appointed by the court to control and conduct the bankruptcy process.

On 20 April 2022, following the petition of Bank CenterCredit JSC, the Specialized Interdistrict Court of Almaty Region (“SIEC”) initiated a civil case to declare BTPP bankrupt. By the decision of SIEC of the Almaty region dated 27 June 2022, the BTPP was refused to be declared bankrupt. By the decision of the Judicial Chamber for Civil Cases of the Almaty Regional Court, the decision of SIEC was upheld, the appeal of Bank CenterCredit JSC was not satisfied. According to the courts, the recognition of BTPP as a bankrupt is premature due to the absence of a decision on the part of the state on the future fate of the Project and is based on arguments about the presence of assets and property, plant and equipment in BTPP, the cost of which may be the subject of fulfilment of obligations if the Government of the RoK makes a negative conclusion regarding the project, as well as a prospect for resuming the Project and restoring the financial position of the debtor with the possibility of repaying debts to creditors.

In turn, the operations of the BTPP were completely suspended as of 31 December 2024. BTPP’s property was fully distrained and arrested by bailiffs on the applications of creditors and tax authorities for subsequent sale through an auction to pay off the debt to creditors. Therefore, management believes that the Group has no control and the investments in BTPP are fully impaired.

Asset retirement obligations

In accordance with the requirements of the Environmental Code of the Republic of Kazakhstan after the cessation of operation of facilities that have a negative impact on the environment, facility operators are required to ensure the elimination of the consequences of the operation of such facilities per the requirements of the legislation of the Republic of Kazakhstan. In accordance with the provisions of the Environmental Code, liquidation measures depend on the nature of facilities and the degree of their impact on the environment, in particular, the code regulates the classification of facilities into categories that reflect the degree of impact on the environment.

The provisions were determined based on the interpretation of the group of the current environmental legislation of the Republic of Kazakhstan, supported by a feasibility study and/or engineering studies per the current standards and methods of liquidation (dismantling), reclamation work, the level of technology and prices.

The following judgments were applied by the Group in determining the amount of the obligation to eliminate the consequences of the operation of the facilities as at 31 December 2024 and 31 December 2023:

• calculation of obligations to eliminate the consequences of the operation of the facilities was performed by the Group based on the results of assessments carried out by independent and internal specialists. The scope of work provided for by law and included in the calculation included the dismantling and disposal of the main equipment and mechanisms directly involved in the production of electrical and thermal energy (steam boilers, turbines, generators, fuel supply, etc.), engineering systems and structures intended for removal of combustion products, as well as equipment of fuel oil facilities and chemical reagents warehouse, which have a negative impact on the environment and the safety of life and/or health of people;
• there are assets (administrative buildings and other structures) on the balance sheet of facility operators in the Group, which in the future are very likely to be converted, and also have a minimal adverse impact on the environment, for which there is no need to recognize obligations to eliminate the consequences of their operation;
• for thermal power plants, referred to the I category, the amount of reserves is determined based on the expected costs that will be incurred by the facilities during the liquidation of the main equipment and mechanisms directly involved in the production of electrical and thermal energy (steam boilers, turbines, generators, fuel supply, etc.), engineering systems and structures designed to remove combustion products, as well as equipment for fuel oil facilities and a chemical reagents warehouse, as well as facilities and equipment of the fuel oil economy, which really have an adverse impact on the environment;
• the Group’s management applied the judgment that the deadline for the liquidation of category I facilities of Ekibastuzskaya GRES-1 and Ekibastuzskaya GRES-2, which have a negative impact on the environment, is in 2055 and 2053, respectively, based on the useful lives of the assets. These useful lives are justified by the fact that the residual fleet life of the main and auxiliary equipment and engineering structures of the main equipment will be extended through major repairs or reconstruction until the end of filling the existing ash dumps. Deadlines for closing ash dumps are applied in accordance with the approved working projects for closing ash dumps per the “Rules for the formation of liquidation funds for waste disposal sites” approved by Decree of the Government of the RoK dated 10 July 2007 No.591. Coal reserves are sufficient to continue the work on these stations. These periods were determined based on the need to ensure the country’s energy security in response to a predicted shortage of electricity in the RoK.
• for Almaty Electric Stations JSC, the deadlines for the liquidation of CHPP-2 and CHPP-3 facilities were applied taking into account the timing of implementation, commissioning and technical parameters of the projects "Modernization of Almaty CHPP-2 with minimization of environmental impact" and "Reconstruction of Almaty CHPP-3".
• hydroelectric power plants of the Group belong to category II facilities.the Shardara hydroelectric power station, as a strategic complex structure, which is an integral part of the hydrotechnical complex of the Shardara hydroelectric complex on the Syrdarya River, which has a direct purpose for flood control and irrigation, due to the specifics of its activity, does not eliminate embankments / dams and adjacent hydraulic structures; at the same time, in the opinion of the station’s management, the liquidation work of the Company may be limited to the dismantling of the equipment of hydroelectric units and some surface utility facilities, and the provision to cover them is not significant at the reporting date;
• for the Moinak hydroelectric power plant, in accordance with the legislation, the Group’s management applied the judgment that the useful lives of the main hydraulic structures, as structures of I and II classes, in the conditions of timely overhauls amount to 60 years. After the expiration of useful lives of the main building of the hydroelectric power plant, the diversion tunnel and the halfway, in accordance with the norms of the “Methodological recommendations on the procedure for extending the life of the safe operation of technical devices, equipment and structures at hazardous production facilities,” further use of these structures as a hydrological post and mudflow holders during the flood period is expected on the Sharyn River. At the same time, in the opinion of the plant’s management, the liquidation work of the Company may be limited to the dismantling of the equipment of hydroelectric units and some surface utility facilities, and the provision for their coverage is not material at the reporting date;
• AZhK facilities in III and IV categories. Due to the fact that AZhK's production facilities have an insignificant minimum negative impact on the environment, the Group has not accrued obligations for liquidation of the consequences of activities in these consolidated financial statements, as there is currently no reasonable calculation method for these types of assets, and the Group has received confirmation from government authorities on the absence of obligations to eliminate the consequences for the environment;
• wind and solar power plants recognize provisions for dismantling and removal of generating and technological equipment, further, the liquidation terms are determined by the technical specifications of equipment and structures.

Key assumptions in making such estimates include estimates of the discount rate, amount and timing of future cash flows. The discount rate is based on the risk-free rate defined as the yield on government bonds with maturities that coincide with the liquidation of the facilities.

As of 31 December 2024, provision on obligations for liquidation of the consequences of operating the facilities were recalculated taking into account the updating of the costs for the liquidation of facilities based on the revision of inflation rates and the discount rate as of the reporting date.

The table below presents carrying amount of provision on obligations for liquidation of the consequences of operating the facilities by the Group’s subsidiaries and joint ventures as at 31 December:

Changes in provision on obligations for liquidation of the consequences of operating the facilities were recorded in the cost of property plant and equipment (Note 7).

Since the actual costs of eliminating the consequences of operating the facilities may differ from their estimates due to changes in relevant legislation, interpretation of regulations, technologies, prices and other conditions, and these costs will be incurred in the distant future, the carrying amount of the provisions is subject to regular review and adjustment to take into account such changes.

Accounting for repurchase agreements with the Single Power Purchaser from 1 July 2023

From 1 July 2023, a new model of power market was introduced with the implementation of a Single Power Purchaser, Settlement and Financial Center for Support of Renewable Energy Sources LLP (“RFC”) and a real time balancing electricity market (“BEM”) (Note 19). The Group conducted an analysis to assess the impact of changes on the revenue recognition process in accordance with IFRS 15 Revenue from Contracts with Customers.

As a result, the Group determined that for Group consolidated financial statements, the electricity sales contracts of power plants and purchase contracts of distribution and trade entities of the Group are considered as repurchase agreements in accordance with IFRS15. Accordingly, the Group eliminated the cost of purchasing electricity and revenue from sales of electricity by power plants at the consolidation level of the Group.

To calculate the amount of elimination, the Group used the actual electricity volume purchased by Alatau Zharyk Company JSC and AlmatyEnergoSbyt LLP from the RFC and weighted average selling price of electricity in accordance with the approved cap tariffs of the Group’s power plants. The calculation was carried out monthly.

The elimination amount for 2024 amounted to 93,778,408 thousand tenge (2023: 35,516,055 thousand tenge). This adjustment is reflected for the purpose of presenting the revenue and costs of sales of the Group from a single economic unit perspective and does not affect the financial results of the Group.

Apart from the above, the new model of power market, which came into force on 1 July 2023, did not have a significant impact on the revenue recognition.

If the estimated weighted average selling price had differed by 10% from management's estimates, the elimination amount for the year ended 31 December 2023, revenue and cost of sales would have increased/decreased by Tenge 9,377,841 thousand (2023: Tenge 3,551,606 thousand).

Payable to the Akimat

In 2009 AZhK was involved in litigation with the Akimat of Almaty city (“Akimat”) related to the settlement of AZhK payables to Akimat. On 14 February 2014 AZhK and Akimat signed an amicable agreement for the settlement of AZhK liabilities. To settle the liabilities, among other procedures, AZhK shall accept power lines, being in the communal ownership and under trust management of the Akimat, and Akimat assumes to write-off the liabilities of AZhK. The amount of liabilities of the AZhK to Akimat, after deduction of all payments made during the previous years as part of the amicable agreement, as of 31 December 2024 is Tenge 5,841,514 thousand (31 December 2023: Tenge 5,841,514 thousand). As of 31 December 2024 the transfer of ownership over power lines has not been completed. The Group will derecognise this liability when it is exempted from payments, i.e., at the time of implementation of all actions by the parties to the amicable agreement, particularly at the time of the assuming the ownership over power lines from the Akimat. At the same time, the Group recognises a gain from write-off of the liability in the amount of Tenge 5,841,514 thousand.

ECL measurement

Measurement of ECLs is a significant estimate that involves determination methodology, models and data inputs. Details of ECL measurement methodology are disclosed in Note 29. The following components have a major impact on the credit loss allowance: definition of default, SICR, probability of default (“PD”), exposure at default (“EAD”), and loss given default (“LGD”), as well as models of macro-economic scenarios. The Company regularly reviews and validates the models and inputs for the models to reduce any differences between expected credit loss estimates and actual losses in respect of receivables.

Other Distributions to the Shareholder

The Group accounts for the obligations related to the capital repair of the Ekibastuzteploenergo LLP, as instructed by the ultimate shareholder of the Group, in equity as other distributions to the shareholder (Note 14).

5. Segment Information

Operating segments are components that engage in business activities that may earn revenues or incur expenses, segment operating results are regularly reviewed by the chief operating decision maker (CODM) and for which discrete financial information is available. The CODM is the person or group of persons who allocates resources and assesses the performance for the entity. The functions of the CODM are performed by the management board of the Group.

CODM monitors the revenue and operating profit. CODM also monitors the EBITDA, which is calculated as profit/(loss) for the period before accounting for finance income and finance expense, income tax expenses, depreciation of property, plant and equipment and amortisation of intangible assets, impairment of property plant and equipment and investment property, impairment of goodwill, share of profit/(loss) of associates and joint ventures and effects, related to acquisition and other similar effects. Sequence for identification of adjusted EBITDA by Group might be different from sequence used by other companies.

(a) Description of products and services from which each reportable segment derives its revenue

The Group is organised on the basis of three main business segments:

• Production of electric and heating energy.
• Transmission and distribution of electricity.
• Sale of electricity.

(b) Performance of operating segments

The CODM evaluates performance of each segment based on a measure of revenue and pre-tax profit.

(c) Major customers

The Group’s revenues are analysed by products and services in Note 19 (revenue from principal activities). Majority of sales of the Group are within Kazakhstan.

In 2024 and 2023, more than 10% of the total revenues were derived from sales to the companies under control of Samruk-Kazyna (Note 6).

The Group’s revenues are recorded during the period when obligations are performed, in accordance with IFRS 15.

6. Balances and Transactions with Related Parties

Related parties are defined in IAS 24, Related Party Disclosures. Parties are generally considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence or joint control over the other party in making financial and operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. The Company’s parent entity and ultimate controlling party are disclosed in Note 1.

The related parties include the companies under control of Samruk-Kazyna. Transactions with government-run companies are not disclosed if they are carried out in the ordinary course of business in accordance with conditions consistent with all public and private companies i) when they are not individually significant; ii) if the Group’s services are provided on standard terms available to all consumers, or iii) provided there is no choice of providers of services such as electricity transmission services, telecommunications services, etc.

The Group purchases from and sells goods to a large number of government related entities. Such purchases and sales are individually insignificant and are generally entered into on an arm’s length basis. Transactions with the state also include taxes which are detailed in Note 25.

As part of “Operations under government control”, balances and transactions with the state utility company Almaty SU Holding, Almaty Heat Networks LLP, Settlement and Financial Center for Support of Renewable Energy Sources LLP (hereinafter referred to as “SFC for RES” LLP) and KOREM JSC were disclosed.

For the purposes of the Group’s consolidated financial statements, agreements for the sale of electrical energy of energyproducing organizations and agreements for the purchase of electrical energy of the Group’s distribution and sales companies with the SFC for RES are repurchase agreements in accordance with from IFRS 15 (Note 4).

At 31 December 2024, the outstanding balances with related parties were as follows:

At 31 December 2023, the outstanding balances with related parties were as follows:

Share of emissions is disclosed in Note 14.

The income and expense items with related parties for the year ended 31 December 2024 were as follows:

The income and expense items with related parties for the year ended 31 December 2023 were as follows:

At 31 December 2024, the Group has following outstanding guarantees from related parties:

• Corporate guarantee from Samruk-Kazyna in the amount of Tenge 12,285,000 thousand for outstanding loan to Development Bank of Kazakhstan JSC (2023: Tenge 12,285,000 thousand);
• Corporate guarantee of Samruk-Kazyna in the amount of Tenge 130,000,000 thousand under the loan agreement of AlES JSC with the EBRD (European Bank for Reconstruction and Development), purpose is to finance the project on transfer of Almaty CHP-2 to gas. The Group also signed a guarantee agreement with Samruk-Kazyna in the amount of Tenge 130,000,000 thousand within the guarantee provided by Samruk-Kazyna to EBRD as a collateral on loan agreement between AlES and EBRD.
• Corporate guarantee of Samruk-Kazyna in the amount of Tenge 98,000,000 thousand under the loan agreement of AlES JSC with the ADB (Asian Development Bank), purpose is to finance the project on transfer of Almaty CHP-2 to gas. The Group also signed a guarantee agreement with Samruk-Kazyna in the amount of Tenge 98,000,000 thousand within the guarantee provided by Samruk-Kazyna to ADB as a collateral on loan agreement between AlES and ADB.
• Corporate guarantee from Samruk-Energy to Samruk-Kazyna in the amount of Tenge 117,000,000 thousand within the guarantee provided by Samruk-Kazyna to Development Bank of Kazakhstan as a collateral. This loan has not yet been drawdown.

Key management compensation is presented below:

Company’s key management personnel compensation represents the salaries, bonuses and other short-term employee benefits. Key management personnel as at 31 December 2024 include 7 persons (31 December 2023: 5 persons). Independent directors - members of the Board of Directors at 31 December 2024 – 4 persons (31 December 2023 - 4 persons).

Transactions with related parties are made on terms agreed between the parties that do not necessarily correspond to market rates, with the exception of regulated services that are provided on the basis of the tariffs approved by the Order of the Minister of Energy On Approval of Cap rates for Electricity for a Group of Energy-Producing Companies.

7. Property, Plant and Equipment

Movements in the carrying amount of property, plant and equipment were as follows:

Additions include capitalised borrowing costs of Tenge 12,767,766 thousand (2023: Tenge 11,169,836 thousand). The average capitalization rate on interest expenses was 17.13% (2023: 15.77%).

In 2023 the Group reclassified the assets of hydro power plant Shardara HPS JSC in the amount of Tenge 29,407,848 thousand from buildings and construction to machinery and equipment in accordance with clarifications received from State Revenue Committee of the Ministry of Finance of the RoK and the Ministry of Energy of the RoK.

As at 31 December 2024 buildings and constructions include carrying value of windmills, solar panels and other related infrastructure in the amount of Tenge 13,218,676 thousand (31 December 2023: Tenge 13,680,639 thousand) that earn rental income from renewable energy power plants on a monthly basis (Note 4, 19).

As at 31 December 2024 and 31 December 2023 property, plant and equipment have not been pledged as collateral for borrowings (Note 16).

Depreciation charge is allocated to the following items of profit and loss for the year:

8. Investments in Joint Ventures and Associates

The table below summarises the movements in the carrying amount of the Group’s investment in joint ventures and associates.

At 31 December 2024, the Group has interests in the following jointly controlled entities:

• SEGRES-2 – 50%. The remaining 50% interest is owned by National Welfare Fund Samruk-Kazyna JSC (Note 4).
• Forum Muider – 50%. The remaining 50% is owned by UC RUSAL.
• Kokshetau CHPP - 50%. The remaining 50% interest is owned by National Welfare Fund Samruk-Kazyna JSC.

On 24 June 2024 based on Decision of the Board of the Fund dated 6 June 2024 and Decisions of the Board of Directors of the Fund dated 20 May 2024 as part of the implementation of projects of construction of coal-fired thermal power plants in the cities of Semey, Ust-Kamenogorsk, the Group and Samruk-Kazyna established jointly controlled enterprises Semey Energy LLP, Uskemen Energy LLP.

As of 31 December 2024, the Group has ownership interests in the following associates:

• Energy Semirechya LLP - 25%. Energy Semirechya plans to build a renewable energy station. The shareholders of Energy Semirechya LLP are Hydrochina Corporation (50% share), Samruk-Energy JSC (25% share through Qazaq Green Power PLC), Powerchina Chegdu Engineering Corporation (15% share), and Powerchina Resourses Ltd (10% share).
• Private company “Altyn Dala Energy Ltd.” - 25%. The remaining 75% ownership share belongs to TUMAR COMMERCE LLP.

The only difference at reconciliation of the amounts below and carrying values of investments in associates and joint ventures is the excluded share of other investors in these associates and joint ventures.

The Group’s management believes that the Group’s share in net assets in associates and joint ventures is limited to the investment in the associate.

Impairment loss of SEGRES-2 includes the amount of recognised provision on construction in progress (Note 4).

Contingencies related to the Group’s share in joint ventures are disclosed in Note 26. Related party balances and transactions are presented in Note 6.

Presented below is summarised financial information of joint ventures and associates as at 31 December 2024 and 31 December 2023 and for the years then ended:

9. Other Non-Current Assets

As at 31 December 2024 prepayments for Construction of a 50 MW wind farm in Ereymentau in the amount of Tenge 15,376,102 thousand was fully impaired (Note 4). In 2023 the Group recognised impairment loss on this prepayment in the amount of Tenge 9,155,825 thousand and in 2022 in the amount of Tenge 6,220,277 thousand.

Gross amount of other non-current assets includes advances and prepayments for the following types of construction and property, plant and equipment:

10. Inventories

As at 31 December 2024 and 31 December 2023 inventories have not been pledged as collateral for borrowings.

Presented below are movements in the Group’s inventory provision:

11. Trade and Other Receivables

Carrying amount of financial receivables approximates fair value due to its short-term nature.

Financial receivables are denominated in Tenge. Movement in the impairment provision for trade and other receivables are as follows:

The levels of default and calculation of loss allowance are disclosed in Note 29.

12. Other Current Assets

Bonds and debt securities as at 31 December 2024 include bonds of Samruk-Kazyna in the amount of Tenge 17,807,278 thousand and Notes of the National Bank of Kazakhstan in the amount of Tenge 259,950 thousand. The nominal value of one Samruk-Kazyna bond is Tenge 1,000 and the term is up to 1 year. The coupon interest rate is calculated as the average of the prime rates set by the NBRK during the coupon period less a fixed margin of 0.75%. As at 31 December 2023, bonds and securities included Notes of the National Bank of Kazakhstan in the amount of Tenge 4,100,000 thousand.

13. Cash and Cash Equivalents

As at the reporting date for portfolio diversification purposes the Group has used purchase and repurchase agreements (“reverse repo”) which are presented by transactions on placement of cash for a short period of time (1-7 days) at stock exchange and collateralised by securities.

Term deposits and current deposits have contractual maturity terms less than three months or are available on demand.

Cash and cash equivalents balances are denominated in the following currencies:

14. Equity

Authorised capital

As at 31 December 2024, 6,952,267 of issued ordinary shares were fully paid in the amount of Tenge 507,435,225 thousand (31 December 2023: 6,311,967 shares in the amount of Tenge 443,567,998). Each ordinary share equals to one vote. The Company has no preferred shares. There are 8,602,187 authorised shares (31 December 2023: 8,602,187 authorised shares). As at 31 December 2024 Samruk-Kazyna NWF JSC is a 100% shareholder of the Company (2023: 100%).

On 2 May 2024 Samruk-Kazyna transferred to the Group 100% stake in NPS Shulbinskaya HPS LLP and NPS Ust- Kamenogorskaya HPS LLP in payment for the issue of shares of the Company worth Tenge 36,224,485 thousand and Tenge 23,505,742 thousand in the amount of 375,500 and 260,000 shares. The fair value of the participation interests was determined as of 30 April 2024 by engaging independent appraisers by the Company in accordance with the Law on joint stock companies. The difference between the fair value of the acquisition and the value of the shares issued in the amount of Tenge 8,957,051 thousand was recorded as an increase in Other reserves (Note 2).

On 25 April 2024 the Group declared dividends payment to the Sole Shareholder in the amount of Tenge 20,565,904 thousand – Tenge 3,258.24 per share. On 11 April 2024 Shulbinskaya HPS and UK HPS declared dividends to Samruk- Kazyna in the amount of Tenge 3,249,965 and Tenge 1,000,000 thousand.

On 4 September 2024 Samruk-Kazyna purchased 4,800 of the Company shares at price of 861,875 Tenge per share and were fully paid in cash in the amount Tenge 4,137,000 thousand in accordance with the preferred right to purchase shares in order to replenish the authorized capital of Kokshetau CHPP LLP.

On 1 July 2023 Samruk Kazyna purchased 253,500 of the Group shares at price of 95,468 Tenge per share and were fully paid in cash in the amount Tenge 24,201,138 thousand in accordance with the preferred right to purchase shares, for the purposes of contribution to equity capital of AlES JSC as part of implementation of the project of Modernisation of Almaty CHP-2 with the minimization of the environmental impact (Note 9, 26).

On 11 August 2023 Samruk Kazyna purchased 22,180 of the Group shares at price of 103,250 Tenge per share in the total amount Tenge 2,290,085 thousand by transferring on 14 November 2023 electrical grid facilities located in Almaty region.

On 19 October 2023 Samruk Kazyna purchased 403,750 of the Group shares at price of 95,468 Tenge per share and were fully paid in cash in the amount Tenge 38,545,205 thousand in accordance with the preferred right to purchase shares, for the purposes of contribution to equity capital of AlES JSC as part of implementation of the project of Reconstruction of Almaty CHP-3 (Note 9, 26).

In 2024, Samruk-Energy fully paid the declared dividends to the Sole Shareholder in the amount of Tenge 24,815,869 thousand.

The reconciliation of issued and declared common shares is presented below:

Other operations with Shareholder

In accordance with the order of the Government of the Republic of Kazakhstan, following the emergency failure of heat supply in the city of Ekibastuz, the issue of the capital modernization Ekibastuz CHPP was considered. At the same time, given the lack of financial and technical capabilities of local executive bodies to maintain and develop the plant, which is owned by the Akimat of Ekibastuz city, the Government instructed Samruk-Energy to enter into a trust management agreement with the Akimat of Ekibastuz for a period until June 2027, transferring the assets of Ekibastuz CHPP to the Group. In turn, the Group is obligated to carry out capital repairs of the assets at its own expense. Upon expiration of the agreement, the Group must return the transferred assets in a condition that ensures their normal operation and uninterrupted heat supply to the population. Since the decision to enter into the trust management agreement, including the obligation to carry out capital repairs of the assets of modernization Ekibastuz CHPP, was made by the ultimate shareholder of the Group and is directive in nature, such operations are considered as "other transactions with shareholders" according to the Group's accounting policy. The Group does not derive any economic benefits from this agreement, and therefore, it is considered onerous. Accordingly, the Group assessed the cost of capital repairs for the modernization Ekibastuz CHPP and created a provision for capital repair obligations, as well as reflected them in the consolidated statement of changes in equity as other transactions with the shareholder. As of December 31, 2024, the Group transferred the capital works performed on the assets of the Akimat of Ekibastuz in the amount of Tenge 3,723,198 thousand. In the consolidated statement of financial position as of December 31, 2024, the Group recognized other long-term provisions in the amount of Tenge 4,030,672 thousand and other short-term provisions in the amount of Tenge 4,843,000 thousand.

Other reserves

15. Provision for asset restoration

The movement in the provision on obligations for liquidation of the consequences of operating the facilities is presented below: