Auditor's report on financial statement of Kazneftehim JSC (Kazakhstan) for 2003

/IRBIS, Galina Tsalyuk, July 27, 04/ - Kazneftehim JSC (Almaty), whose bonds are circulating in the official "B" listing category of Kazakhstan stock exchange Inc. (KASE), has presented to KASE auditor's report made by BDO Kazakhstanaudit LLP(Almaty), which was made on the Company's financial statement for 2003 prepared in compliance with Kazakhstan accounting standards (KAS). Result of the Company's financial and economic activity in 2003 is as follows, in accordance with audited statement's data (th. KZT, unless otherwise specified): ------------------------------------------------------ As of As of Indicator Jan 1, 03 Jan 1, 04 -------------------------------- --------- --------- Authorized capital (paid) 200,000 300,000 Shareholders' equity 347,323 3,188,836 Total assets 739,689 4,195,752 Net working capital -184,183 -132,992 Accounts receivable 140,451 85,433 Total liabilities 368,322 827,152 Borrowed loans (excluding bonds) 232,688 303,181 Accounts payable 135,635 137,422 Issued bonds - 305,800 Sales volume 610,778 1,972,870 Cost of goods sold 463,553 1,554,616 Income from primary activity (73,965) (147,977) Income from secondary activity 275,584 2,953,182 Net income (loss) for the period 201,569 2,801,711 -------------------------------- --------- --------- Calculated by issuer's data: -------------------------------- --------- --------- Return on sales (ROS), % 24.10 21.20 Return on equity (ROE), % 58.04 87.86 Return on assets (ROA), % 27.25 66.77 ------------------------------------------------------ * - not audited ** - includes income from revaluation of stake participation in Kazneftehim Kopa LLP for KZT 2,824,643 thousands. Audit was conducted by BDO Kazakhstanaudit LLP in compliance with international auditing standards. Consolidated statements for 2003 include reports of Kazneftehim JSC and three 100% controlled companies: Zhem Oil Bez LLP, KazTransGroup CJSC and Kazneftehim Kopa LLP The auditor noted that it did not observe stocktaking procedure as of December 31, 2003 as it had become an auditor after mentioned date. Because of specific maintenance of records the auditor has had no possibility to assess number of inventories using other audit procedures. With the exception of corrections that could have been made considering stocktaking procedure the Company's financial statements in all essential aspects present clear and accurate picture of financial positions of the Company as of December 31, 2003. Company's primary activities - trade in oil products at domestic and foreign markets, reloading, transportation of oil, production and refining of oil products and other. [2004-07-27]