JSC Commodity Exchange ‘‘Caspian’’ Emissions Trading at JSC Commodity Exchange “Caspian”

JSC Commodity Exchange “Caspian” (further JSC “TBC”) is registered as the legal entity on November 18, 2011 On December 30, 2011 JSC “TBC” obtained the state license No for the implementation of commodity exchange The first biddings on an exchange platform took place on December 30, 2011 at once after receipt of the license on agricultural products section. In January 2012, we launched an online electronic trading system and began regular trading on the section of industrial and consumer goods, agricultural products, oil and petroleum products, metals and metal products. Presently the organized commodity market becomes more and more demanded attribute in system of the market relations of domestic enterprises. Main objective of the exchange is forming of the organized commodity market providing concentration in one place of the demand and supply, and also establishment of the clear and transparent mechanism of forming of fair prices for basic commodities. The correctly organized commodity exchange building a system of guarantees of execution of transactions and helps to improve the liquidity of the commodity market, and hence the popularity of organized trade through the exchange infrastructure. From the moment of the basis of JSC “TBC” cooperates with commodity exchanges of CIS countries and foreign countries, the Kazakhstan and foreign banks, the Ministry of economic development and trade of the Republic of Kazakhstan, and also is official member of the Interexchange electronic union of the countries of EurAsEC. Our brokerage companies have the certified accreditation, and the personnel of the Exchange was trained concerning the organization of commodity exchange trading on leading exchange platforms of the world Today JSC “TBC” conducts the biddings on the principles of publicity and equality. The agreements signed at the exchange are not subject to notarial certification, and are obligatory for accomplishment by their parties in case of internal and external economic relations. Clients of the Exchange use various services of JSC “TBC”: informational, advisory and etc. JSC “TBC” takes active part in reforming of national economy, development of international economic relations, and also formation of the market relations. Computer support of the bidding process, skilled specialists, standardization of conditions and exact accomplishment of rules erects to a minimum of loss of time for the conclusion of agreements. JSC Commodity Exchange “Caspian” About JSC “TBC”

JSC Commodity Exchange “Caspian” The system of trading and clearing Clearing Client Member of Clearing House Clearing Exchange Head of exchange Client The clearing exchange center

JSC Commodity Exchange “Caspian” Structure of elements and control Supervisory council Market research Council of the exchange Shareholders The exchange Arbitration Exchange management Reporting Management Current work Private law Public law represents members of trade Permanent control The Commission on sanctions The current work at the exchange

JSC Commodity Exchange “Caspian” State control and cooperation. Council of the exchange Council of the exchange The International Arbitration Court "IUS" JSC “Zhasyl Damu” JSC “Zhasyl Damu” The ecological code of Republic of Kazakhstan (Head – 9-1); The Order of the Government Republic of Kazakhstan of December 13, 2012 No "About approval of the National plan of distribution of quotas of emissions of greenhouse gases for 2013"; The Order of the Minister of May 11, 2012 No. 151-p "Rules of trade in quotas of emissions of greenhouse gases and carbon units"; Exchange trading rules from , the Terms of trade quotas on greenhouse gas emissions and carbon credits from Law of Republic of Kazakhstan of N 22-3 "On arbitration courts" Rules of the International Arbitration Court «IUS» Committee of trade of Department of Economic Affairs and budgetary planning of the Republic of Kazakhstan The Law of the Republic of Kazakhstan "On Commodity Exchanges" from Resolution of the Government of the Republic of Kazakhstan on December 28, 2012 № 1707 Resolution of the Government of the Republic of Kazakhstan on December 20, 2012 № 1644 Resolution of the Government of the Republic of Kazakhstan on December 21, 2012 № 1653 Resolution of the Government of the Republic of Kazakhstan on December 6, 2012 № 1552

JSC Commodity Exchange “Caspian” The contractual framework of control Terms and Conditions Clearing member Terms of non- clearing members Clearing agreement Exchange trading rules Terms of trading Code of Conduct conditions of a contract tariffs clearing conditions ExchangeThe clearing exchange center Terms of clearing members of non- clearing participant = trader Agreement on the exchange Transport System Operator trade agreement Registration

JSC Commodity Exchange “Caspian” Activization of all groups of participants  Hedged bidders  Hedging with futures(for example, with respect to volatile spot prices of quota)  Hedging with provision of possibility of participation in favorable development of the prices on condition of an award.  Arbitrage trading participants  Strategy of trade in case of which in proportion incorrectly estimated tools for receipt of risk-free profitability are used.  Time arbitrage: In case of time arbitrage the line item which is liquidated again by means of simultaneous transactions with derivative financial instruments, opens in certain time.  Third bidder  The contract is bought / sold in anticipation of changes in market prices in order to elimina te later with the benefit of the final position. Third bidders take a risk and provide liquidity support to other bidders with different views on the market..

JSC Commodity Exchange “Caspian” Offers urgent and trade spot Spot market Derivatives market Market structure Today: = 2 days Biddings delivery payment Biddings delivery payment The market of deliveries according to transactions for term Annual market of deliveries

JSC Commodity Exchange “Caspian” Standardization of all processes Standardized terms of the Contract: The set quantity and quality, Place of delivery period / delivery date, If necessary, the type of product, Terms of payment Speed ​​ of / size and scope of the contract, The asking price, the type of the option and the exercise price Standardized bidding procedures : Trading hours Pricing Reconciliation A standardized clearing and settlement: Providing liabilities, daily calculations, final settlements, consecutive arrangement of co ntracts (if necessary), delivery, payment of option premiums, option implementation, concessi on, mutual settlement of requirements and contract obligations  Participants shall agree only about the price and number of contracts

JSC Commodity Exchange “Caspian” Portfolio of products for the bidder Primary implementation Derivatives market Secondary implementation Spot market Rights to CO2 emission The contract on a basis national plan. Spot auction based on KZQ Derivatives market Rights to CO2 emission Auctions KZQ Auctions of derivatives KZQ Futures KZQ Rights to CO2 emission Auctions KZQ Auctions of derivatives KZQ Completely integrated clearing and cross-margining through commodity exchange “Caspian”

EEX Trade participant buyer Trade participant seller Clearing member Report of JSC “Zhasyl Damu” list of quotas Report of JSC “Zhasyl Damu” list of quotas Clearing centre of Exchange CO2 certificate CO2 certificate 4 CO2 certificate CO2 certificate 1 Money 3 3 CO2 certificates 3 Buyer report Internal report Buyer Internal report Seller Seller report Order 2 2 Clearing member JSC Commodity Exchange “Caspian” Clearing member JSC Commodity Exchange “Caspian” Cooperation with departments on registration

JSC Commodity Exchange “Caspian” Effective risk management system The Clearing House (KCB) assumes counter-party risk according to all transactions. For the purpose of ensuring accomplishment of all transactions in case of insolvency of KCB requires pro viding liabilities, a so-called margin. Calculations are conducted on the basis of world-wide acknowledged methods. KCB accepts securities or cash in quality providing liabilities. Providing liabilities of KCB is encumbered with pledge with parties of the member of clearing. Providing liabilities of the member of clearing are encumbered with pledge at least the same size from ou tside member of the transaction. Members of the biddings can make recalculation KCB Participant of margin trading Member of a clearing margin Clearing fund Trade participant Clearing member Clearing center of exchange

JSC Commodity Exchange “Caspian” Effective trading and back office systems System settlement Spothandels- systeme Trader Spothandels- systeme Clearing member Exchange System of Derivative trading Reports / Interfaces Clearing system Real delivery Internal back office / Cost accounting / Risk management system Internal system of conducting financial accounting Reports / Interfaces System of spot trading

JSC Commodity Exchange “Caspian” Flexible technical connections MISS = System server of members of integration Internet Access Internet connection Joint access Connection through the allocated line and Internet Premium Access Connection through 2 allocated lines Exchange database Web Access The 2nd connection with other provider (in case of opportunity) Access point Reserve *MISS Internet * MISS-group * MISS / LAN terminal Router Internet * MISS-group *MISS / LAN terminal Router * MISS-group Reserve *MISS Trader Exchange Internet Terminals with connection the Internet and a token Reserve *MISS

JSC Commodity Exchange “Caspian” , Аstana, Kazakhstan, Business Centre “Caspian” Taha Hussein street, 9 fax : tel.: