Auditor's report on financial statement of KOSTANAY MINERALS JSC (Kazakhstan) for year 2004

/IRBIS, Galina Tsalyuk, June 10, 05/ - KOSTANAY MINERALS JSC (Zhetikara, Kostanay oblast, hereinafter - company), whose bonds are circulating in the official "A" listing category of Kazakhstan stock exchange (KASE), has presented to KASE auditor's report made by KPMG Janat company (Almaty) on the company's consolidated financial statement for year 2004 prepared in compliance with international accounting standards (IAS). Result of the bank's financial and economic activity as on December 31, 2004 is as follows, according to the audited data (th. KZT, unless otherwise specified): -------------------------------------------------------- as of as of Indicator Dec 31, 03 Dec 31, 04 -------------------------------- ---------- ---------- Authorized capital (paid) 460,000 460,000 Shareholders' equity 1,965,360 1,979,452 Total assets 5,297,553 5,067,848 Net working capital -100,178 -179,106 Accounts receivable 1,192,944 648,234 Total liabilities 3,332,193 3,088,396 Borrowed loans (excluding bonds) 521,501 391,696 Placed bonds 865,076 1,109,673 Accounts payable 1,656,622 1,558,819 Volume of sales 3,828,473 3,473,010 Prime cost of sales 2,835,685 2,670,984 Net income for the year 230,305 21,182 -------------------------------- ---------- ---------- Calculated by audited statement: -------------------------------- ---------- ---------- Return on sales (ROS), % 25.93 23.09 Return on equity (ROE), % 11.72 1.07 Return on assets (ROA), % 4.35 0.42 -------------------------------------------------------- Audit of the bank's financial statement for year 2004 was made by KPMG Janat in compliance with international auditing standards. Consolidated financial statement for 2004 includes financial statement of the company and its subsidiary organization - Bas Kuduk LLP (Almaty, trade- intermediary activity), where the company is the only participant. In KPMG Janat company's opinion consolidated financial statement in all essential aspects for sure reflects the company's and its subsidiary organization's financial condition as of December 31, 2004, and also results of its activity and cash flow for the years, which ended by the mentioned dates, in compliance with IAS. KPMG Janat company draws attention on note 2 of the auditor's report according to which in 2004 the company revealed essential error of previous year, concerning penalties on undercharged taxes for the period from 1994 to 1997, and recalculated balance of undistributed profit as on January 1, 2003. Primary activities of the company - production and enrichment of chrysotile- asbestos and production of commodity asbestos and accompanying construction materials. [2005-06-10]