In 2010 the Republic of Kazakhstan entered on a new stage of development. One of the most relevant events of 2009 that effects the republic’s further economic development is signing of package of documents by the heads of states which would determine principles and terms of participation in the consolidated custom union and by 2012 – common economic space of the Republic of Kazakhstan, Russian Federation and the Republic of Belarus with one currency introduction.

These changes would affect economic relations and financial state of domestic business and working population of the country – contributors of pension funds and owners of pension assets. Successful performance of this project suggests GDP growth. In the same time the integration process would be followed by high risks of political and financial character.

At the corporate strategy development specific attention should be paid to the tasks set in the Message of the President to the people of Kazakhstan:- “New decade – new economic growth – new opportunities of Kazakhstan”, including the most relevant for pension funds – increase of living standards and social protection.

In this connection the pension system’s main task is effective investment management of pension assets to secure their value and cost in order to provide future pension benefits payment to today’s contributors.

On 01.01.2010., i.e. in 12 years of the pension system of Kazakhstan, the number of pension funds came up to 14. Pension funds manage pension accumulations in amount exceeding 1.8 trn KZT. Annual growth of pension accumulations varies from 18% to 40% in different years which stands for average 30% per annum. Number of contributors exceeds 7.7 mln people. About 72% of these people are contributors of 4 funds. These funds accumulate 71% share of the whole amount.

“GNPF” APF” JSC (hereinafter – GNPF or the Fund) is the first pension fund of Kazakhstan. Working at the ground zero of the pension system, GNPF is one of its infrastructural founders that sustained all peculiarities of this sphere of economic relations. After stop being a “by default fund” GNPF along with newly established funds continues its activities on pension contributions acquisition and pension benefits payment.

Approved strategy and moderate conservative investment policy help to keep leading osition on the market of contributors and pension accumulations as well as form mild investment income which allows securing contributors’ pension accumulations. GNPF sets mid-term perspective task to develop new approaches to clients relations management. It means using advanced know-how of planning and forming of pension accumulations providing expansion of clients database, growth of pension assets investing and investment income and increase of capitalization.

The Mission:

GNPF is a pension fund that creates financial freedom after retirement together with its contributors.

The Vision:

GNPF is financially successful and dynamically developing pension fund.

1. Strategic targets

Basic strategic target of “GNPF” APF” JSC designed to make it attractive for clients and investors

is: Financial achievements through high-quality service commitment.

Tasks of financial and quality character are taken as components of the basic strategic target.

1.1 Financial landmark is increase of the Fund’s capitalization and pension assets yield.

1.2 High-quality service commitment shall be expressed by means of flawless up-to-date

service of the Fund’s clients by highly qualified specialists who apply modern communication

gadgets and automated systems of information processing and storage in their work.

Tasks securing successful performance of strategic targets:

1. Strengthening of status of the reliable pension fund.

2. Maximal possible level of pension assets nominal yield – task designed to secure pension

accumulations growth exceeding inflation level.

3. Introduction of transparent management systems – includes risk management, business

processes control and analysis of activities results in order to safeguard the interests of parties

concerned.

4. Establishment of financial advisers (consultants) institution – suggests forming of new level and

quality of contributors relations.

5. Establishment of well-equipped service centers – includes application of modern technologies on

each step of work to create ergonomic environment to the staff and comfort client service.

2. Strategic analysis

2.1 Characteristics of GNPF.

First of all, the Fund’s activities is aimed on satisfaction of contributors’ requirements i.e. provision

of high level of pension income. Thus at this stage the Fund’s mission is formed. The Fund’s has

defined own position to perform its mission which is to continue previously approved course.

Values GNPF adheres to.

Availability: Wide network of branch offices and agent offices makes pension services available in

all regions of Kazakhstan. Contributors can ask their questions concerning pension provision matters

on “hot line” which purpose is increase of people awareness.

Transparency: GNPF is organization acting within corporate governance standards. The Fund’s

accounting complies to international accounting standards. It regularly publishes in media

information on its financial state, informs the audience about its activities results and gives

comments on pension market events.

Progressiveness: The first pension fund of Kazakhstan. GNPF was one of the first Kazakhstan

organizations that were confirmed on their compliance to ISO 9001:2000. The Fund plans to

develop and perform a training program for managers – financial advisors of pension accumulations

planning.

The interests of the Fund’s shareholders and contributors were taken into account as a guideline at

choosing of strategic target. That identifies the necessity of development and improvement of the

values approved, namely corporate governance system; expansion of presence making the Fund

available on the whole territory of Kazakhstan; improvement of work effectiveness on every step of

business processes starting from advisory and client service till the pension benefits payment or

accounting.

2.2 Current state of GNPF.

On January 01, 2010 own equity of GNPF amounted to 14 473 mln KZT. The Fund’s market share

on own equity is 16,2%. Within last five years own equity value grew up by 6.4 times. Average

annual growth of own equity is 61%.

Decrease in capital yield in 2007 and 2008 is caused by increase of charter capital and decrease in

value and yield of financial instruments which changed in 2009 and gave growth by 12.2 per cent

points in comparing to 2008. Average annual ROE is 14%.

On January 01, 2010 the Fund’s pension accumulations value amounted to 293,4 mlrd KZT. Pension

accumulations value increased by 19.5% in 2009.

The Fund’s market share decrease in pension accumulations from 19% in 2005 to 15.8% in 2009

was a tendency of the last five years.

In the same period number of GNPF’s contributors became less by 23.6%, i.e. from 2.3 mln to 1.7

mln people. Average amount of pension accumulations on an individual pension account increased

from 55 thd KZT to 158 thd KZT.

3. Disclosure of strategic targets.

Targets and tasks approved within the long-term corporate strategy of “GNPF” APF” JSC to 2015

for the planning period are aimed on the Fund’s improvement and quality development.

Taking into account the current state of GNPF as well as existing threats it is planned for the period

2010 – 2012 to hit the set targets using available capabilities and opportunities. Achievement of

financial and qualitative indices is expected in result of the planned actions performance within

given mid-term period. Detailed Action Plan for the Fund’s Strategy 2010-2012 performance is

attached as Appendix 1.

3.1. Increase of capitalization and investment prospects.

The Fund’s capitalization and investment prospects are affected by pension assets investment income as well as pension assets amount being in management which indices are basic at the Fund’s profit calculation.

In this connection it is planned to increase pension accumulation amount within forthcoming period

by means of retaining of existing contributors and acquisition of new ones. In the same time increase of pension assets value would be result of investment strategy targeted on maximal level of pension assets nominal yield.

3.2. Service quality commitment.

Development of qualitative indices is one of the most relevant factors directly affecting contributors

retaining and acquisition. They are interested in additional services along with the basic ones relating

to pension provision. It improves the format of client service. Qualitative development is characterized in following indices:

1) operative adaptation of business processes and IT systems to changing environment of financial

market and legislation;

2) client service rendered by highly qualified staff;

3) Informational and explanatory work on pension reform and pension provision matters;

4) service available through any possible and safe channels of interaction, including Internet;

5) commitment to principles of objectiveness and transparency in cooperation with financial

market participants, contributors and employees of the Fund.

Thus performance of set tasks along with the Fund’s financial state development shall aid to the idea

of population social protection by means of long-term relations establishment designed to save,

multiply and subsequent payment of pension accumulations as well as development of pension

provision system of Kazakhstan.

Chairman of the Board of “GNPF” APF” JSC

D.T. Medeusheyeva

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