/KASE, September 13, 04/ - NAC Kazatomprom (Almaty), whose bonds are circulating in Kazakhstan stock exchange's (KASE) official list under "А" category, has presented KASE auditor's report, which was made by KMPG Janat (Аlmaty) on the company's consolidated financial statement for 2003.

Following are audited results of the Company's financial activity as of December 31, 2003 (in th. KZT, unless otherwise indicated):

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Indicator                                      2002        2003
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Authorized capital (paid-up)              3,373,136   3,423,284
Shareholders' equity                     39,579,313  50,013,378
Total assets                             50,684,356  62,361,733
Net working capital                      28,265,049  25,739,704
Accounts receivable (net)                 9,723,313  10,617,803
Total liabilities                         6,867,693   8,702,943
Funds borrowed (excluding bonds)          1,662,256   3,070,693
Floated bonds                               511,285     662,384
Accounts payable                          3,590,812   4,089,259
Sales (services offered)                 23,822,816  28,330,135
Cost of goods sold                       17,094,520  19,374,094
Net income                                4,481,326   1,285,587
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It's been calculated by auditor's data:
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Return on sales (ROS), %                       28.2        31.6
Return on equity (ROE), %                      11.3         2.6
Return on assets (ROA), %                       8.8         2.1
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Audit of the company's financial statement (the Group) is prepared by KPMG Janat using Kazakhstan accounting standards and compiles with international auditing standards.

The Group's consolidated financial statement comprises of financial statements NAC Kazatomprom and 10 daughter companies, including Kazakhstan entities: UMZ OJSC (producing of uranium, tantalum and beryllium production, participation stake - 90.0%), Volgovgeologiya OJSC (exploration works, 90.0%). Mashzavod LLP (mechanical engineering, 90.0%), Ulba-geologiya LLP (exploration works, 100.0%), IVT LLP (cultivating the concept of developing of the uranium-minning industry in Kazakhstan, finding solutions to scientific, technical, technological and environmental problems, 99.91%), MCS-2 LLP (medical services, 52.08%), and foreign entities - GeoTekhnologiya J.V. (Kyrgyzstan, professional personnel training for the enterprises engaged in mining and processing of mineral resources, training on radio-active and nuclear safety, providing MAGATE guarantees, creation and modernization of contemporary methodologies, information technologies and programs applicable to geotechnology of pore underground leaching and geological - geophysical servicing of enterprises, 50%), UKR-TVS CJSC (the Ukraine, joint producing of competitive nuclear fuel for reactor facility of VVER-1000 type for Ukrainian atomic stations, 33.3%), BerylliUm LLP (Russia, production and sale of rolled metal and other non-ferrous metal produces, 50%).

The auditor notes following aspects:

If the Group considered inventories of uranium acquired before January 1, 1992 (and revaluated at market price as of January 1, 2000) using lowest value of revalued cost and net sale price, than cost of named inventories and revaluation reserve must have been lowered by KZT 2.9 bn (as of December 31, 2003).

As of May 1, 2003, the Group re-estimated value of fixed assets by KZT 9.1 bn using assessor's reports, that has not disclosed sufficiently the revaluation methodology. The Auditor had no possibility to apply extended audit procedures in order to receive true cost of fixed assets, which were reflected in the balance sheet as: depreciated cost - 8.7 bn; revaluation reserve - 8.6 bn;
depreciation cost - 512.7 m, in the consolidated income and loss statement and to calculate corresponding figures of deferred taxes and income tax payments. These figures define financial position of the Group and affect results of its activity and cash flow.

In auditor's opinion, except for the influence of the question cited above, the consolidated financial statement exactly in all significant aspects reflects the Group's financial situation by December 31, 2002, and the results of its financial and economic activity and cash flow for the year ended December 31, 2003; fhe financial statements are prepared according to Kazakhstan accounting standards and other regulating legislative norms.

Without recording reservations in his opinion, auditor also notes that according to the letter of the Minister of Finance of the Republic of Kazakhstan, the Group disclosed the treatment of the revaluation capital as a part of sold production in the report about financial and economic activity, whereas, as a general rule, this reserve is treated as a movement in capital accounts. If the Group had treated revaluation capital as movement in capital accounts, then net income would have been unchanged (in 2002 it was lowered by 3.3 bn tenge).

Principal activity of the company - national operator on export and import of uranium its compounds, nuclear fuel for atomic power stations, special equipment and technologies.

[2004-09-13]