The present Investment Declaration of OJSC APF «GNPF» (hereinafter — the Fund) is developed in accordance with requirements of the current legislation of the Republic of Kazakhstan and establishes the order for investment activities to be carried out in order to ensure stable increasing in the value of its pension assets.Chapter

1. Investment Objectives and Principles

1. The main objective of investment activities consists in deriving of maximum possible profits /profitability of investments at the preset investment risk parameters

2. The main principles are ensuring a stable growth of pension assets and conservative investment policy.

3. In the course of management of its pension assets, the Fund strives for preservation of capitals invested, ensures and maintains liquidity, profitability, duration, diversification and pension asset managers’ qualification.

1) the financial assets portfolio shall be diversified in order to exclude risks of losses resulting from the concentration of financial assets of a fixed maturity, or of a certain issuer, or of a certain type of investments in the Fund’s investment portfolio. The low or negative correlation with other types of assets serves as a criterion for the Fund in selection of securities for its investment portfolio;

2) the Fund’s investment portfolio is formed and structured in such a manner that it could ensure the maintenance of the liquidity level required for covering the Fund’s obligations on pension payments and transfers and the rate of profitability established by the Fund’s investment strategy;

3) to ensure high quality of investment solutions, the asset managers undertake to ensure the efficient management of investment assets with due diligence.Chapter

2. Investment Strategy

4. The Fund’s investment strategy is focused on the growth of investments at the preset risk rate, to be achieved by means of an optimal combination of different types of assets, such as equity securities, debt securities, deposits in the second level banks, alternative investments and money. At that the Fund assumes only a risk allowing to preserve the real value of the pension assets.

5. To achieve its purpose the Fund elects the conservative strategy that supposes a small segment of shares in the Fund’s investment portfolio with a view to reduce the influence of unlimited fluctuations in prices for shares (volatility) on the Fund’s investment efficiency on the whole.

6. Within such a strategy, investments are made in liquid securities of sound issuers rated by an international rating agency and/or included in the KASE’s official list as per the top listing category.

7. Portfolios are formed and structured on the basis of analytical researches in part of ascertainment of historical interrelations between the profitability and risks among different types of assets, integrating the gap analysis of the Fund’s assets and liabilities in order to make it quite probable that the Fund achieves the average weighted intended profitability of the assets at minimum investment risks.

8. In the course of its investment activities the Fund adheres to the abovementioned standards (strategic shares) applied in the form of flexible reference points in the allocation of assets assessed at market value.

9. Deviations from standards are allowed within the limits established for each class of assets in view of dynamic financial/equity markets causing prices and risks volatility within a certain economic cycle.

10. Due to a considerable influence of economic and financial conditions currently prevailing or that may become prevailing at the market in the future, portfolios may be reviewed on the basis of perspective evaluation of a wide range of economic factors, such as GDP growth, interest rates forecast, current liquidity assessment, monetary policies, inflation forecast, level and growth rate of the corporate external and state’s foreign debts, consumers’ expenses and savings level, exchange rates, companies’ efficiency etc.

Chapter 3. Investment Portfolio Structure

11. The Fund’s investment portfolio structure consists of two portfolios – liquid and investment portfolios.

12. The purpose of the investment portfolio is to maintain the liquidity required for covering the Fund’s obligations on pension payments and transfers. The liquid portfolio consists of marketable securities of the Republic of Kazakhstan and/or foreign countries, including bonds of agencies of the Republic of Kazakhstan and federal agencies of foreign countries.

13. In case the strategic share of the liquid portfolio decreases lower than the minimum limit, the strategic volume of this portfolio shall be restored by the transfer of assets of the long-term sub-portfolio of the Fund’s investment portfolio.

14. The purpose of the investment portfolio is to derive short-term and long-term investment income.

15. To achieve the desirable profitability, the investment portfolio is formed of three sub-portfolios – the short-term, the medium term and the long-term as well as the sub-portfolio of deposits.

1) the actively managed short-term sub-portfolio is intended for deriving investment incomes from capital appreciation in addition to coupon yields and/or dividends. The short-term sub-portfolio consists of the state securities of the Republic of Kazakhstan and foreign countries, including bonds of agencies of the Republic of Kazakhstan and federal agencies of foreign countries; shares and bonds of resident issuers of Kazakhstan and foreign issuers; shares in investment funds; derivative/hedging instruments and affined precious metals.

2) the medium- and long-term portfolios include state securities of the Republic of Kazakhstan and foreign countries, debt securities of Kazakhstan and foreign issuers with the maturity of more than 3 years, shares in investment funds and other alternative instruments allowed by the authorized body for acquisition using pension assets.

3) the sub-portfolio of deposits consists of deposits with the National Bank of the Republic of Kazakhstan, the second-level banks of Kazakhstan and with foreign banks.

16. The segment of the liquid portfolio shall be within an interval between 5% and 15% of the total pension assets, investment portfolio — not more than 95% of the total pension assets.

17. Financial assets in foreign currencies shall be not more than 40% of the total pension assets.

Fund’s Investment Portfolio Structure

Table 1

Type of Portfolio	Type of Asset / Portfolio Percentage
Liquid	— from 5% to 15% of PA
	— state securities of Kazakhstan and other countries,
	— bonds of Kazakhstan and foreign agencies, — reverse repo
Investment	— not more than 95% of PA
Short-term sub-portfolio	— state securities of Kazakhstan and other countries, — bonds of Kazakhstan and foreign agencies, — shares/GDR/ADR of Kazakhstan and foreign issuers, — debt securities Kazakhstan and foreign issuers, — shares in investment funds, — derivative and/or hedging instruments, — affined precious metals
Medium- and long-term sub-portfolio	— Kazakhstan and foreign state securities with a maturity exceeding 3 years, — debt securities of Kazakhstan and foreign issuers with a maturity exceeding 3 years, — shares in investment funds — other alternative instruments allowed by the authorized body for acquisition using pension assets
Sub-portfolio of deposits	— deposits with the National Bank of the Republic of Kazakhstan, the second-level banks of Kazakhstan and with foreign banks

Allocation of Assets

Table 2	Lower	Strategic share	Upper
State Securities	5%	10%-60%	60%
Shares	0%	5%-35%	35%
Debt Securities	30%	35%	80%
Deposits	10%	20%	30%
Shares in investment funds	0%	5%-35%	35%
Derivatives	0%	5%-40%	40%
Structured Notes, PPN	0%	5%-35%	35%
Affined precious metals	0%	5%-10%	10%

Chapter 4. Diversification

18.In order to reduce risks caused by negative cyclic changes in economic and financial conditions, the Fund diversifies its investment portfolio in accordance with the requirements of the authorized body and assets allocation as per table 2.

Chapter 5. Investment Risks Management

19. Investment (market, interest, liquid, currency, credit, and country) risks are reduced by the investment portfolio diversification and risk hedging on the basis of derivative and hedging instruments allowed by the authorized body within the procedure established by the Policy of Hedging of Instruments acquired using pension assets.

20. When investing the pension assets, the Fund shall collect information concerning potential or purchased financial assets, trace the financial and economic situation at macro- and microeconomic levels, establish limits, analyze the investment portfolio structure in terms of periods, currencies, sectors, geography and other factors, assessing risks in each category.

Chapter 6. Investment Objects

21. Investees:

1) state securities of the Republic of Kazakhstan, including securities issued against the state’s guarantee;

2) foreign state securities;

3) shares of resident and foreign issuers:
- ordinary shares;
- preferred shares;
- Global/American Depositary Receipts with the base asset in the form of ordinary shares;

4) debt securities of resident and foreign issuers:
- debt securities with a fixed interest ;
- indexed debt securities;
- agent bonds;
- mortgage bonds;
- infrastructure bonds;

5) objects of alternative investments permitted by the authorized body;

6) derivative and hedging instruments allowed by the authorized body:
- option;
- forward;
- swop;
- futures;

7) deposits with the National Bank second-level banks of Kazakhstan and with foreign banks;

8) reverse repo;

9) instruments allowed by the authorized body for acquisition using pension assets.

Chapter 7. Investment Restrictions

22. Securities must be allowed to circulation within the KASE’s trading systems, including the special trading site of the Regional Financial Centre of Almaty and permitted by the authorized body for acquisition using the pension assets;

23. State securities must be issued by central governments of foreign countries with a sovereign credit rating not lower than «ВВВ-» of the Standard&Poor’s agency or another rating of a similar level;

24. Private foreign securities must have a credit rating not lower than «ВВВ-» of the Standard&Poor’s agency or another rating of a similar level;

25. Non-state securities of Kazakhstan issuers must have a credit rating not lower than «BB-» of the «Standard&Poor’s» agency or another rating of a similar level, or a rating not lower than «kzВВВ» as per the national scale «Standard & Poor’s»;

26. In case the debt securities issued by residents of Kazakhstan have no appropriate rating, the issuer’s rating shall be taken into account;

27. The pension assets may be deposited with the second-level banks of Kazakhstan if such a bank:

1) has a long-term international rating not lower than «ВВ-» from the Standard&Poor’s agency or a rating not lower than «kzВВВ» as per the national scale «Standard & Poor’s», or another rating of a similar level;

2) or is an affiliate resident of a non-resident parent bank having a rating not lower than «ВВВ-» of the Standard&Poor’s agency or another rating of a similar level;

3) is one whose shares are included in the KASE’s official list as per the top listing category;
28. Investment funds must be rated by «Standard & Poor’s principal stability fund ratings» as not lower than «BBBm», or «Standard & Poor’s Fund credit quality ratings» not lower than «BBBf-»;

29. Shares in interval mutual investment funds whose managing company is a resident of Kazakhstan must be included in the KASE’s official list except for the official list of the special trading site of the Regional Financial Center of Almaty city;

30. Affined precious metals must be in compliance with international quality standards of the London Bullion Market Association and mentioned in documents of this association as the London Good Delivery standard and metal deposits, including ones in non-resident banks rated as not lower than «АА» by the «Standard&Poor’s» agency or having another rating of a similar level, with a maturity not longer than 12 months;

31. Principal Protected Notes must be from the issuers having a rating not lower than «ВВВ-» of the Standard&Poor’s agency or another rating of a similar level;

32. The actual amount invested in debt securities of Kazakhstani legal entities having an international rating lower than «BB-» of the «Standard&Poor’s» agency or another rating of a similar level, or a rating lower than «kzВВВ» as per the national scale «Standard & Poor’s», or having no appropriate rating, provided that the said securities are included in the KASE’s official on the category following the top one, shall not exceed 5% of the Fund’s pension assets;

33. The actual amount invested in shares of interval investment funds whose managing company is a resident of Kazakhstan and which are included in the KASE’s official on the category following the top one, shall not exceed 5% of the Fund’s pension assets;

34. The actual amount invested in debt securities listed at the special trading site of the Regional Financial Centre of Almaty and having an international rating lower than «BB-» of the «Standard&Poor’s» agency or another rating of a similar level, or a rating lower than «kzВВВ» as per the national scale «Standard & Poor’s», or having no appropriate rating, shall not exceed 5% of the Fund’s pension assets;

35. The actual amount invested in futures, options, swops, forwards with base assets specified in clauses 32 — 34 of the present section shall not exceed 5% of the Fund’s pension assets;

36. An amount invested by the Fund in non-state securities of one and the same issuer, or deposits with one and same second-level bank shall meet the restrictions established by the prudential standards;

37. The “reverse repo” transactions may be concluded for not more than thirty calendar years;

38. The Fund may deposit its pension assets with second-level banks for not longer than thirty six months;

39. The pension assets received on the Fund’s investment accounts opened with the custodian bank or the custodian bank’s correspondent accounts in foreign custodian banks or the custodian bank’s accounts in foreign organizations participating in international depositary and settlement systems must be invested in full less current deductions within ten calendar days in the national currency and within thirty calendar days in a foreign currency.

40. For the investment purposes the Fund places the balance on the accumulative pension fund’s investment account of a non-resident bank rated as not lower than «АА» as per the international scale of the «Standard&Poor’s» agency or having another rating of a similar level, with a maturity not longer than thirty calendar days.

41. Any other restrictions established by the authorized body.

Chairman of the Board Sekenov А.S.

APPROVED

By the Board of Directors

of JSC “GNPF” Accumulation Pension Fund”

Minutes №_ 4 _

As of «_ 09 _» ___June___ 2008

CHANGES AND AMENDMENTS

To the Investment Declaration в of JSC “GNPF” Accumulation Pension Fund”

It is hereby resolved to introduce into the Investment Declaration of JSC “GNPF” Accumulation Pension Fund” as approved by the Board of Directors (Minutes №1 as of 18 February, 200 ) (hereinafter referred to as the Investment Declaration) the following changes and amendments:

1) the Preamble and Article 2 of the Investment Declaration shall be added after the word “pension” with the word “and owned”.

2) Chapter 2 of the Investment Declaration:

after the Chapter Title shall be added with the Paragraph title to read as follows:

“§ 1 Owned Assets Investment Strategy ”;

after Article 10 shall be added with Paragraph 2 of the following wording:

“§ 2 Owned Assets Investment Strategy

10-1. The Fund’s Owned Assets Investment Strategy shall be aimed at protection of the investments and maintenance of the investment portfolio liquidity. At the same time the Fund shall pursue the investment policy which can allow it to preserve the real value of the owned assets and, respectively, a high level of their liquidity.

10-2. In order to achieve the above goals and objectives, the Fund shall select the strategy of investing the owned assets in the financial assets and instruments of the Republic of Kazakhstan and/or foreign states.

10-3. All the transactions in the government securities of the Republic of Kazakhstan to be performed by the Fund at the expense of its owned assets in the primary market and to be recognized in accordance with the Joint-Stock Companies Legislation as the major transactions shall be considered as the transactions performed upon authorization of the Fund’s Board of Directors on the basis of this Investment Declaration without any further authorization or approval by the Board of Directors with respect to each particular transaction.”;

3) Chapter 3 of the Investment Declaration:

after the Chapter Title shall be added with the Paragraph Title to read as follows:

“§ 1 Structure of the Portfolio of Investments Made at the Expense of Pension Assets”;

Article 11 shall be added after the word “Fund” with the words “, made at the expense of the pension assets”;

After Article 17 shall be added with Paragraph 2 of the following wording:

“§ 2 Structure of the Portfolio of Investments Made at the Expense of Owned Assets

17-1. The structure of the portfolio of investments made at the expense of the owned assets shall be based upon deposits with the second-level banks, government securities of the Republic of Kazakhstan and REPO operations.

17-2. Purpose of the portfolio consisting of the government securities of the Republic of Kazakhstan and REPO instruments shall be the maintenance of the assets liquidity as required for fulfillment of the Fund’s current obligations.

17-3. Purpose of the deposits portfolio shall be the acquisition of short- and mid-term investment income.

17-4. The owned assets may be invested by the Fund at its own discretion in other financial instruments according to the current legislation and the Fund ’ s internal regulatory documents ”;

4) Title of Chapter 4 of the Investment Declaration shall read as follows:

“ Chapter 4. Diversification of the Portfolio of Investments Made at the Expense of Pension Funds ”;

5) Title of Chapter 7 of the Investment Declaration shall read as follows:

“Chapter 7. Investment Restrictions on Pension Assets”.

A.S. Sekenov

Chairman of the Board

Amendments to the Investment Declaration of "GNPF" Accumulativу pension fund" joint stock company