/IRBIS, Galina Tsalyuk, November 9, 04/ - Kazakhmys Corporation JSC (Zheskazgan), whose simple shares are circulating in Kazakhstan stock exchange's (KASE) "А" official listing category, presented KASE auditor's report of the company for 2003 prepared according to Kazakhstan standards of accounting (KSA).

Result of the company's financial and economic activity as of December 31, 2003 is presented by the following indexes, in accordance with the auditor's data (in th. KZT, unless otherwise specified):

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Indicator                                                 2002         2003
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Authorized capital (paid minus omitted)              2,946,920   14,734,512
Shareholders' equity                               119,182,704  129,487,870
Total assets                                       153,459,502  179,019,316
Net working capital                                 48,788,722   57,790,694
Accounts receivable (net)                           19,781,790   30,797,239
Liabilities, total                                  34,211,075   49,453,051
Accounts payable                                    13,592,703   17,495,424
Borrowed loans (including eurobonds)                 3,703,280   24,315,068
Negative goodwil                                     7,551,935    5,892,794
Volume sale                                        125,860,326  125,076,946
Cost price of goods sold                            57,368,960   55,788,054
Net income                                          27,791,354   28,743,254
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It's been calculated according to auditor's data:
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Return on sales (ROS), %                                 54.42        55.40
Return on equity (ROE), %                                23.32        22.20
Return on assets (ROA), %                                18.11        16.06
Balance cost of 1 share, tenge                       24,265.89     5,272.84
Net income per 1 simple share (EPS), tenge            5,658.39     1,170.45
Book value of a share, KZT                                1.77         3.59
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Audit was conducted by KPMG Janat company according to international standards of audit.

Consolidated financial statements include financial statement of Kazakhmys Corporation JSC, and also three of its subsidiary organizations (hereinafter - Group) - Corporate insurance company JSC (100 shares in ownership of Kazakhmys Corporation JSC), Kazakhmys pension fund JSC (99.0%), Zheskazgangeology JSC (60.0%).

In the report auditor pays attention to the following:

In previous years Group acquired property complexes of a number of state enterprises. Assets and liabilities of the enterprise, acquired by the Group are reflected in consolidated financial statements on current cost in the amount of KZT15,225.704 th. Group did not give original or official documents for confirmation of above current cost. Difference between premium, paid by the Group, and rest assets and liabilities value of the acquired enterprise are reflected as goodwill (licensed agreement) or negative goodwill (licensed agreement) accordingly. Any corrections of current assets and liabilities value acquired in the result of merging the business, also could affect amortization of goodwill (licensed agreement), amortization expenses, expenses on income tax and accordingly net profit, and also assets and liabilities on deferred tax and undistributed profit.

The Group did not acknowledge potential tax liabilities, evaluated in the amount of KZT2.775 m., occurring in connection with negative goodwill (licensed agreement) as it determined by tax legislation of the Republic of Kazakhstan, when acquiring net assets of some property complexes. Probably that Group will have such liability, which should be reflected in financial statement in accordance with requirements of KSA 27 "Unforeseen circumstances and events, happening after date of statement period". Thus, in the opinion of auditors as on December 31, 2003 accounts payable should be increased to KZT2.775 m., and undistributed profit should be decreased to the same amount.

In the opinion of KPMG Janat Company with the exception of influence of above mentioned consolidated financial statements in all essential aspects precisely reflect financial position of the Group as on December 31, 2003, and also results of its activity, changes in capital and money flow for the mentioned statement period in accordance with KSA.

Company's primary activities - extraction and manufacturing of treasures of the soil, production of cathode copper; production, transfer and distribution of electrical and heat energy; scientific-research, development, design works;
industrial and civil building; transportation of cargo and passengers.

[2004-11-09]