Auditing report on "NOC KAZAKHOIL" CJSC financial statements

/KASE, Galina Tsalyuk, Oct 06, 00/ - According to the listing requirements, NOC KAZAKHOIL CJSC (Astana, Kazakhstan) presented to KASE its auditing report made by "Ernst & Young" (Almaty, Kazakhstan). The report assess financial statements of the company for 1999. Based on data of the auditor, that finished its report on Aug 15, 2000, results of financial and economic activity as of Dec 31, 1998, 1999 are presented by following figures: Ratio 1998 1999 -------------------------------------------------------- Authorized capital (paid-up) 54,425 145,484 Shareholders' equity 1,853,579 1,766,155 Total assets 3,603,744 3,277,886 Net working capital -109,949 61,586 Accounts receivable (net) 903,835 914,130 Long term accounts receivable 713,028 691,054 Short term accounts receivable (net) 190,807 223,076 Total liabilities 1,750,165 1,511,731 Loans received 974,640 945,176 Accounts payable 664,488 440,905 Sales (services offered) 664,878 927,645 Cost of sales (services offered) 475,705 484,327 Net income (loss) 373,729 93,889 -------------------------------------------------------- Following ratios were estimated based on the data of auditing report -------------------------------------------------------- Return on sales (ROS), % 28.45 47.79 Return on equity (ROE), % 20.16 5.32 Return on assets (ROA), % 10.37 2.86 -------------------------------------------------------- NOC "KAZAKHOIL CJSC presented auditing reports, made by "Ernst & Young" (Almaty, Kazakhstan) in accordance with International accounting standards, based on consolidated financial statements of the company for the years 1998-1999. Statements were corrected to comply with International Accounting Standards. Corrections are mostly related to depreciation, cost of sites liquidation and reconstruction, decrease in value of tangible assets, deferred income tax payments and re-estimation of the exchange rate impact. Some entries of 1998 were reclassified to be in the frame of 1999 statements. These changes did not affect net income and net assets figures. The presented statements for 1999 include the reports of head company and its branch establishments. Report of daughter companies with control stake are consolidated completely. Joint ventures are considered by the method of proportional consolidation. Investments in companies with substantial KAZAKHOIL influence are accounted under the method of share holding. The Appendix 7 includes auditor notes on long-term accounts receivable. It states that $648,113 th out of total sum of the long-term receivables as of the end of 1999 - sum of Tengizchevroil JV (TCHO) debt is to be repaid fully or partially at discretion of TCHO at any time. The Appendix 16 (long term debt) includes information on long-term credits and other liabilities of the company. As of Dec 31, 1999 total sum of long- term credits ($898,512 th) consists of partner loans - $861,864 th, of which $684 mln is the Kazakhoil share to other TCHO partners. This sum is subject to the repayment at discretion of TCHO. Auditors also notes that existing total debt of Uzenmunaigas OJSC of $6,051 th.(to the Oman Sultanate, due on Jan 01, 1997) in the form of principal and interest payments is classified as current part of the long-term debt. There are no any other overdue debts (both over principal and interest rate) in the form of long-term debt obligations (World Bank, partner credits, the Kazakhstan government). Long-term liabilities (the cost reflection) on liquidation and reconstruction of oil sites totaled (as of Dec 1999) $122,050 th (99,247 in 1998). Decrease in net income in the presence of sales growth in comparison ещ 1998 has its own basis. The sum of OKIOC stake sale of $481.5 mln in 1998 was fully reported. Out of this number, $345.5 mln were retained by the government and reported in the form of "dividends distributed". This was also reflected in 1998 figures of shareholder equity flows. The earning totaled $55.0 mln. By the opinion of the Auditor consolidated financial statements is reliable in all aspects and truly reflects conditions of the Group (KAZAKHOIL and daughter companies) as of Dec 31, 1999. At the same time, The Auditor avoids any judgements over comparative data for 1998 financial statements as those data contain some stipulations. These stipulations are produced from limitation of auditing procedures over opening balances, inadequate account entries for fixed assets, absence of renewed estimation of oil and gas reserves made by independent experts. On May 19, 2000 coupon bonds of NOC KAZAKHOIL CJSC (KZ72LAG56A20, trade code KZOLb) were admitted into official list of KASE securities, category "A". Main activities: oil operations including exploration, mining, production, refining, transportation, sales and marketing, import export operations.