Auditor's report on financial statement of NAC Kazatomprom (Kazakhstan) for 2004

/KASE, October 11, 05/ - NAC Kazatomprom JSC (Almaty, hereinafter - company), whose bonds are circulating in Kazakhstan stock exchange's (KASE) official "A" listing category, has presented KASE auditor's report, which was made by Deloitte & Touche (Almaty) on the company's consolidated financial statement for 2004, prepared by Kazakhstani accounting standards (KAS). Following are audited results of the company's financial and economic activity as of December 31, 2004 (in th. KZT, unless otherwise indicated): ----------------------------------------------------------------- Indicator As of As of Dec. 31, 03 Dec. 31, 04 --------------------------------------- ----------- ----------- Authorized capital (paid-up) 3,373,136 3,423,284 Shareholders' equity 50,013,378 51,840,955 Total assets 62,361,733 69,003,165 Net working capital 26,124,820 26,334,093 Accounts receivable (net) 6,572,743 7,782,221 Total liabilities 8,702,943 13,522,667 Funds borrowed (excluding bonds) 3,042,034 6,141,752 Issued bonds 662,384 597,074 Accounts payable 4,115,540 6,123,214 Sales (services offered) 28,330,135 36,849,268 Cost of goods sold 19,374,094 23,738,196 Net income 1,285,587 1,829,469 --------------------------------------- ----------- ----------- It's been calculated by auditor's data: --------------------------------------- ----------- ----------- Return on sales (ROS), % 31.61 35.58 Return on equity (ROE), % 2.57 3.53 Return on assets (ROA), % 2.06 2.65 ----------------------------------------------------------------- Audit of the company's financial statement and its subsidiary organizations (hereinafter - Group) was prepared by Deloitte & Touche in compliance with Kazakhstan and international auditing standards. The Group's consolidated financial statement for 2004 includes the company's financial statement and its 20 subsidiary organizations, main of them - Ulbinsk metallurgy plant JSC (producing of uranium, tantalum and beryllium production, participation stake - 90.2% from floated shares), Volgovgeologiya JSC (exploration works, 90.0%). MAEK-Kazatomprom LLP (production of electric and heat energy, participation stake - 100.0% in paid authorized capital), Mining company LLP (production and processing of uranium raw, 100%), Institute of high technologies LLP (research of technological and technical problems, 100%, Corporate fund Demeu-Kazakhstan (social servicing of the Group's enterprises, 100%). In its report the auditor draws attention to the following. As it is reveled in 10 comment to consolidated financial statement, as of January 1, 2000 the Group revaluated uranium reserves to the net cost of realization according to decree of the Government of the Republic of Kazakhstan. During the year, ended December 31, 2003, the Group has not acknowledged writing off uranium reserves at less from revaluated cost or net cost of realization for the amount KZT2.9 bn. Correspondingly, in 2004 the Group did not acknowledge as a result of increase of net cost of realization restoration of uranium reserves cost, offered to be written off, and additional unpaid capital from revaluation of uranium reserves for the amount KZT2.9 bn. According to the 4 comment to consolidated financial statement the Group as of May 1, 2003 revaluated fixed assets to KZT9.0 bn. through attraction of independent evaluator, whose report does not reveal adequately method to assess fixed assets. Auditor did not has opportunity to expand volume of his auditors procedures with a view to confirm revaluated cost of fixed assets, which are reflected in consolidated accounting balance as of December 31, 2004 at balance cost KZT7.6 bn., additional unpaid capital from revaluation of fixed assets for the amount KZT7.5 bn., expenses on depreciation for the amount KZT871.9 m. and corresponding effect on obligation on deferred corporate income tax, and also expenses on corporate income tax, reflected in consolidated incomes and expenses report for the year, ended December 31, 2004. In the opinion of Deloitte & Touche, except for the influence of correction, necessity in which might occur in connection with questions, described above, consolidated financial statement exactly in all significant aspects reflects the Group's financial situation by December 31, 2004, and also consolidated results of its financial and economic activity and cash flow for the year ended the above date, in compliance with KAS. Company's primary activities - execution of functions of national operator on export and import of uranium and its compounds, nuclear fuel for atomic power stations, special equipment and technologies, materials of double application. [2005-10-11]