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КОIНА-АКНМЕТ
Од.
ВУ7ОУ
СНIЕЕ
‘у
ЕiАКСГАЕ
СОЫТКОЕЁЕК
JSC National Atomic Company Kazatomprom
Consolidated Financial Statements
for the year ended 31 December 2021 and
Independent Auditor’s Report
Content
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................................... 1
Consolidated Statement of Financial Position ............................................................................................................. 2-3
Consolidated Statement of Cash Flows ......................................................................................................................... 4
Consolidated Statement of Changes in Equity ............................................................................................................... 5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 JSC NAC Kazatomprom Group and its Operations ............................................................................................ 6
2 Environment of the Group................................................................................................................................... 9
3 Significant Accounting Policies ........................................................................................................................... 9
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies ............................................. 26
5 Adoption of New or Revised Standards and Interpretations ............................................................................. 28
6 New Accounting Pronouncements .................................................................................................................... 28
7 Segment Information ........................................................................................................................................ 29
8 Balances and Transactions with Related Parties .............................................................................................. 32
9 Revenue ........................................................................................................................................................... 34
10 Cost of Sales .................................................................................................................................................... 34
11 Distribution Expenses ....................................................................................................................................... 35
12 General and Administrative Expenses .............................................................................................................. 35
13 Impairment Losses and Reversal of Impairment Losses .................................................................................. 35
14 Other Income .................................................................................................................................................... 36
15 Other Expenses and Net Foreign Exchange Gain ............................................................................................ 36
16 Personnel Costs ............................................................................................................................................... 37
17 Finance Income and Costs ............................................................................................................................... 37
18 Income Tax Expense ........................................................................................................................................ 37
19 Earnings per Share ........................................................................................................................................... 40
20 Intangible Assets .............................................................................................................................................. 41
21 Property, Plant and Equipment ......................................................................................................................... 42
22 Mine Development Assets ................................................................................................................................ 44
23 Mineral Rights ................................................................................................................................................... 45
24 Exploration and Evaluation Assets ................................................................................................................... 45
25 Investments in Associates ................................................................................................................................ 46
26 Investments in Joint Ventures ........................................................................................................................... 49
27 Accounts Receivable ........................................................................................................................................ 51
28 Other Assets ..................................................................................................................................................... 52
29 Inventories ........................................................................................................................................................ 52
30 Loans to Related Parties .................................................................................................................................. 53
31 Cash and Cash Equivalents ............................................................................................................................. 53
32 Share Capital .................................................................................................................................................... 54
33 Loans and Borrowings ...................................................................................................................................... 54
34 Provisions ......................................................................................................................................................... 56
35 Accounts Payable ............................................................................................................................................. 57
36 Other Liabilities ................................................................................................................................................. 57
37 Contingencies and Commitments ..................................................................................................................... 58
38 Non-controlling Interest..................................................................................................................................... 61
39 Principal Subsidiaries ....................................................................................................................................... 63
40 Financial Risk Management ............................................................................................................................. 64
41 Fair Value Disclosures ...................................................................................................................................... 72
42 Presentation of Financial Instruments by Measurement Category ................................................................... 72
43 Events after the Reporting Period ..................................................................................................................... 72
PricewaterhouseCoopers LLP
34 Al-Farabi Ave., A25D5F6 Almaty, Kazakhstan
T: +7 (727) 330 3200, F: +7 (727) 244 6868, www.pwc.com/kz
Independent Auditor’s Report
To the Shareholders and the Board of Directors of National Atomic Company Kazatomprom JSC:
Our opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of National Atomic Company Kazatomprom JSC (the “Company”) and its
subsidiaries (together – the “Group”) as at 31 December 2021, and the Group’s consolidated financial
performance and consolidated cash flows for the year then ended in accordance with International
Financial Reporting Standards.
What we have audited
The Group’s consolidated financial statements comprise:
• the consolidated statement of profit or loss and other comprehensive income for the year ended
31 December 2021;
• the consolidated statement of financial position as at 31 December 2021;
• the consolidated statement of cash flows for the year then ended;
• the consolidated statement of changes in equity for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code) and the ethical requirements that are relevant to our
audit of the consolidated financial statements in the Republic of Kazakhstan. We have fulfilled our
other ethical responsibilities in accordance with the IESBA Code and the ethical requirements of the
Republic of Kazakhstan that are relevant to our audit of the consolidated financial statements.
Independent auditor’s report (Continued)
Page 2
Our audit approach
Overview
O
verall Group materiality: Kazakhstani Tenge (“Tenge”) 14,000
million, which represents approximately 5% of profit before tax.
• We conducted audit work at the Company, ten subsidiaries, three
joint arrangements, two associates in Kazakhstan and one
subsidiary in Switzerland.
• Our audit scope addressed 99% of the Group’s revenues and 99%
of the Group’s absolute value of underlying profit before tax.
• Disposal of a 49% ownership interest in DP Ortalyk LLP
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls including, among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
in the table below. These, together with qualitative considerations, helped us to determine the scope
of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the consolidated financial statements as a
whole.
Overall Group materiality Tenge 14,000 million
How we determined it approximately 5% of profit before tax
Rationale for the materiality
benchmark applied
We chose profit before tax as the benchmark because, in our
view, it is the benchmark against which the performance of the
Group is most commonly measured by users and is a generally
accepted benchmark. We chose 5% which is consistent with
quantitative materiality thresholds used for profit-oriented
companies.
Materiality
Group
scoping
Key audit
matters
Independent auditor’s report (Continued)
Page 3
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Disposal of 49% ownership interest in DP
Ortalyk LLP
Notes 1 and 4 to the consolidated financial
statements
In July 2021 the Group completed a
transaction to dispose 49% ownership interest
in its wholly owned mining subsidiary DP
Ortalyk LLP to a subsidiary of China General
Nuclear Power Corporation (“CGNPC”) for the
consideration in an amount of Tenge 186,437
million.
Following the completion of the transaction the
Group retained a 51% ownership interest and
concluded that it continued to have control of
DP Ortalyk LLP given that it held the majority
voting rights in the subsidiary’s Supervisory
Board and the rights to control its production
process which was assessed as the most
relevant activity impacting DP Ortalyk LLP’s
economic performance (as disclosed in Note
4).
Accordingly, in the consolidated financial
statements for the year ended 31 December
2021 the Group recognised an increase in the
non-controlling interest in amount of Tenge
27,076 million, an increase in equity
attributable to the Group’s shareholders in
amount of Tenge 159,361 million with
corresponding decrease in equity attributable
to the Group’s shareholders in amount of
Tenge 33,466 million for the tax impact of this
disposal.
In connection with the disposal the Group
entered into complex put and call
arrangements that under certain circumstances
might cause that the 49% interest disposed to
be purchased back by the Group. In
connection with that the Group recognised a
liability of Tenge 186,437 million and
subsequenlty derecognised it as a result of
change in circumstances (as disclosed in
Note 1).
O
ur audit procedures included:
• We analysed the sales and purchas
e
agr
eement between the Group and CGNPC in
relation to the sale of 49% interest in D
P
O
rtalyk LLP and the related documents
supporting the completion of this transacti
on
i
n 2021.
• We analysed the Framework and Marketi
ng
agr
eements between the Group and CGNPC
governing DP Ortalyk LLP’s key busine
ss
oper
ations including sales and marketing,
financing and production following t
he
c
ompletion of the sale of DP Ortalyk LLP’
s
49%
interest to CGNPC.
• We analysed the revised charter of DP
Ortalyk LLP and the related documents
describing the subsidiary’s corporat
e
gov
ernance and key business decisions
making process at the level of th
e
s
hareholders, its Supervisory Board and t
he
G
eneral Director.
• Based on the analysed documents mentioned
above, we obtained an understanding of the
most relevant activities in assessment of
control over DP Ortalyk LLP and discuss
ed
our
assessment with the management of th
e
G
roup.
• We involved our accounting technical
specialists to assist in the review of th
e
ac
counting treatment of the disposal of 49%
interest in DP Ortalyk LLP and associated put
and call arrangements. In addition, we
analysed the Group’s related disclosures in
the Notes 1 and 4 to the consolidated financial
statements against the requirements of th
e
rel
evant accounting standards.
Independent auditor’s report (Continued)
Page 4
Key audit matter How our audit addressed the key audit matter
We focused on this area because assessment
of control over DP Ortalyk LLP involved
significant judgement.
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
The Group’s major production facilities and uranium sites are located in the Republic of Kazakhstan.
The Group’s trading activities are carried out primarily out of Kazakhstan, as well as through
operations of a trading subsidiary set up in Switzerland. Group operates seven mining subsidiaries
(under twelve subsurface contracts), four mining joint arrangements (under six subsurface use
contracts) and four mining associates (under four subsurface use contracts). PwC audited all seven
subsidiaries, two joint arrangements and one associate. Auditors of two joint arrangements and one
associate reported to us on their audits. The audit scope also included three non-mining subsidiaries,
audited by PwC network firms.
Based on our continuous assessment, we included in our group audit scope the Company and sixteen
entities (components), including four components audited by other auditors.
In order to achieve appropriate audit coverage of the audit risks and of each individually significant
component of the Group, including each segment and group function:
• Significant components were subject to either a full scope audit, specified risk-focused audit
procedures of specific account balances, or Group level procedures. Our selection was based
on the relative significance of the entities within the Group or specific risks identified. The
components within the scope of our work accounted for the following percentages of the
Group’s measures (1):
Audit instructions set out the significant audit areas, materiality thresholds (which ranged from Tenge
617 million to Tenge 6,824 million) and specific reporting requirements. The Group audit team directed
the work undertaken by component auditors, through a combination of related network and non-
network firm reporting, regular interaction on audit and accounting matters, periodic site visits and
review of specific audit work papers.
By performing the procedures above at the components in combination with additional procedures
performed at Group level, we have obtained sufficient and appropriate audit evidence regarding the
consolidated financial statements as a whole that provides basis for our opinion.
Independent auditor’s report (Continued)
Page 5
Other information
Management is responsible for the other information. The other information comprises the Annual
report (but does not include the consolidated financial statements and our auditor’s report thereon),
which is expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we will
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
When we read the Annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
JSC National Atomic Company Kazatomprom
Consolidated Statement of Profit or Loss and Other Comprehensive Income
The accompanying notes are an integral part of these consolidated financial statements.
1
These consolidated financial statements were approved by management on 15 March 2022:
Syzdykova K.B.
Chief Financial Officer
Kozha-Akhmet D.A.
Financial Controller
Jakypbekova S.J.
Chief Accountant
In millions of Kazakhstani Tenge
Note
For the year ended
31 December 2021
For the year ended
31 December 2020
Revenue
9
Cost of sales
10
(402,967 )
(319,624 )
Gross profit
Distribution expenses
11
(15,706 )
(14,352 )
General and administrative expenses
12
(34,105 )
(29,582 )
Reversal of impairment losses on non-financial assets
13
Impairment losses on non-financial assets
13
(5,003 )
(3,132 )
Reversal of impairment/(impairment loss) on financial assets
13
(208 )
Gain from disposal of joint venture
1
Net foreign exchange gain
15
Other income
14
Other expenses
15
(15,394 )
(7,605 )
Finance income
17
Finance costs
17
(6,712 )
(7,680 )
Share of results of associates
25
Share of results of joint ventures
26
Profit before tax
Income tax expense
18
(61,618 )
(63,776 )
PROFIT FOR THE YEAR
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange differences arising on translation of entities with foreign
functional currency
Items that will not be reclassified to profit or loss:
Net loss from investments in equity securities at fair value through
other comprehensive income
(3 )
Remeasurements of post-employment benefit obligations
Share in other comprehensive loss of equity method investments
Other comprehensive income for the year
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Profit for the year attributable to:
- Owners of the Company
- Non-controlling interest
38
Profit for the year
Total comprehensive income attributable to:
- Owners of the Company
- Non-controlling interest
Total comprehensive income for the year
Earnings per share attributable to the owners of the Company,
basic and diluted (rounded to Tenge)
19
JSC National Atomic Company Kazatomprom
Consolidated Statement of Financial Position
The accompanying notes are an integral part of these consolidated financial statements.
2
In millions of Kazakhstani Tenge
Note
31 December 2021
31 December 2020
ASSETS
Non-current assets
Property, plant and equipment
21
Mine development assets
22
Mineral rights
23
Exploration and evaluation assets
24
Investment property
Intangible assets
20
Right-of-use assets
Investments in associates
25
Investments in joint ventures
26
Deferred tax assets
18
Loans to related parties
30
Other non-current assets
28
Current assets
Accounts receivable
27
Prepaid income tax
VAT recoverable
Inventories
29
Loans to related parties
30
Short-term securities
Term deposits
Cash and cash equivalents
31
Other current assets
28
Assets of disposal groups classified as held for sale
1
TOTAL ASSETS
JSC National Atomic Company Kazatomprom
Consolidated Statement of Financial Position
The accompanying notes are an integral part of these consolidated financial statements.
3
In millions of Kazakhstani Tenge
Note
31 December 2021
31 December 2020
EQUITY
Share capital
32
Additional paid-in capital
Reserves
Retained earnings
Equity attributable to shareholders of the Company
Non-controlling interest
38
TOTAL EQUITY
LIABILITIES
Non-current liabilities
Loans and borrowings
33
Provisions
34
Deferred tax liabilities
18
Employee benefits
Other non-current liabilities
36
Current liabilities
Loans and borrowings
33
Provisions
34
Accounts payable
35
Other tax and compulsory payments liabilities
Employee benefits
Income tax liabilities
Other current liabilities
36
Liabilities of disposal groups classified as held for sale
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Carrying value of one share (Tenge)
19
These consolidated financial statements were approved by management on 15 March 2022:
Syzdykova K.B.
Chief Financial Officer
Kozha-Akhmet D.A.
Financial Controller
Jakypbekova S.J.
Chief Accountant
JSC National Atomic Company Kazatomprom
Consolidated Statement of Cash Flows
The accompanying notes are an integral part of these consolidated financial statements.
4
In millions of Kazakhstani Tenge
Note
For the year ended
31 December 2021
For the year ended
31 December 2020
OPERATING ACTIVITIES
Cash receipts from customers
VAT refund
Interest received
Payments to suppliers
(503,301 )
(380,576 )
Payments to employees
(51,856 )
(48,125 )
Income tax paid
(97,747 )
(59,155 )
Other taxes paid
(55,227 )
(57,356 )
Interest paid
33
(3,265 )
(4,277 )
Other payments
(1,499 )
Cash flow from operating activities
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
(16,252 )
(15,613 )
Proceeds from disposal of property, plant and equipment
Advance paid for property, plant and equipment
(373 )
(206 )
Acquisition of intangible assets
(754 )
(395 )
Acquisition of mine development assets
(28,233 )
(18,102 )
Acquisition of exploration and evaluation assets
(1,682 )
(1,156 )
Proceeds from disposal of subsidiary net of cash and cash
equivalents of disposed subsidiary
1
Acquisition of short-term securities
(126,331 )
(11,040 )
Proceeds from redemption of short-term securities
Placement of term deposits and restricted cash
(51,158 )
(9,395 )
Redemption of term deposits and restricted cash
Issuance of loans
(190 )
Loan repayments received from related parties
Acquisition of interest in associates and joint ventures
26
(2,499 )
Proceeds from sale of investment in joint venture
1
Dividends received from associates, joint ventures and other
investments
25,26
Other
(1,648 )
(2,171 )
Cash flow (used in)/from investing activities
(71,241 )
FINANCING ACTIVITIES
Proceeds from loans and borrowings
33
Proceeds from sale of non-controlling interest in subsidiary
1
Repayment of loans and borrowings
33
(76,108 )
(191,991 )
Dividends paid to the shareholders
32
(150,082 )
(99,002 )
Dividends paid to non-controlling interest
(26,584 )
(29,050 )
Payments under lease
33
(452 )
(465 )
Cash flow used in financing activities
(1,843 )
(201,415 )
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash and cash
equivalents
Change in impairment provision for cash and cash equivalents
(3 )
Cash and cash equivalents at the end of the year
31
These consolidated financial statements were approved by management on 15 March 2022:
Syzdykova K.B.
Chief Financial Officer
Kozha-Akhmet D.A.
Financial Controller
Jakypbekova S.J.
Chief Accountant
JSC National Atomic Company Kazatomprom
Consolidated Statement of Changes in Equity
The accompanying notes are an integral part of these consolidated financial statements.
5
In millions of Kazakhstani Tenge
Attributable to the shareholders of the Company
Share capital
Reserves
Retained earnings
Additional paid-in
capital
Total
Non-controlling
interest
Total equity
Balance at 1 January 2020
Profit for the year
Foreign currency translation difference
Remeasurements of post-employment benefit
obligations
(3 )
Total comprehensive income for the year
Dividends declared (Note 32)
(99,002 )
(99,002 )
(24,811 )
(123,813 )
Other operations
Balance at 31 December 2020
Profit for the year
Foreign currency translation difference
Remeasurements of post-employment benefit
obligations
(4 )
Other comprehensive income/(loss)
(3 )
(3 )
(3 )
Total comprehensive income for the year
Dividends declared (Note 32)
(150,082 )
(150,082 )
(26,583 )
(176,665 )
Other operations (Note 1)
(1,922 )
Change in ownership interest in a subsidiary
without loss of control (Note 1)
Balance at 31 December 2021
These consolidated financial statements were approved by management on 15 March 2022:
Syzdykova K.B.
Chief Financial Officer
Kozha-Akhmet D.A.
Financial Controller
Jakypbekova S.J.
Chief Accountant
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
6
1 JSC NAC Kazatomprom Group and its Operations
These consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) for the year ended 31 December 2021 for JSC National Ato mic Company Kazatomprom (the
“Company”) and its subsidiaries (here in after collectively referred to as “the Group” or “ JSC NAC Kazatomprom ” ).
The Company is a joint stock company set up in accordance with regulations of th e Republic of Kazakhstan . The
Company was established pursuant to the Decree of the President of the Rep ublic of Kaz akhstan on the establishment
of National Atomic Company Kazatomprom No. 3593, dated 14 July 1997, and the Decree of the Government of the
Republic of Kazakhstan on National Atomic Company Kazatomprom Issues No. 1148 dated 22 July 1997, as a closed
joint stock company with a 100% government shareholding.
As of 31 December 2021, 75% of the Company’s shares are held by Samruk-Kazyna JSC and 25% are on free float.
The Company’s registered address is Syganak street, house 1 7/12 , Nur-Sultan city, the Republic of Kazakhstan. The
principal place of business is the Republic of Kazakhstan .
leading uranium producing companies of the world. The Group is also involved in processing of rare metals,
manufacture and sale of beryllium and tantalum products and scientific support of operational activities.
JSC NAC Kazatomprom is an entity representing interests of the Republic of Kazakhstan at the initial stages of the
nuclear fuel cycle and production of fuel assemblies and their components. The Group is a participant in a number of
associates and joint ventures which make a significant contribution to its profit (Notes 25 and 26). The Group’s
Development Strategy focuses on the core business activities of mining and processing of uranium and related natural
resources. The Development Strategy is designed to ensure long term value growth for all stakeholders of the Group
in accordance with the principles of Sustainable Development through aligning production volumes to market conditions
and adopting a market centric focus to sales capabilities, applying best practices in business activities, and developing
a corporate culture consistent with the Group’s position as an industry leader.
As at 31 December 2021, the Group was a party to the following contracts for production and exploration of uranium:
Mine/area
Stage
Contract date
Contract term
Subsurface user
Kanzhugan
Production
27 November 1996*
26 years
Kazatomprom-
SaUran LLP
Uvanas
Production
27 November 1996**
26 years
Kazatomprom-
SaUran LLP
Mynkuduk, East lot
Production
27 November 1996*
26 years
Kazatomprom-
SaUran LLP
Moinkum, lot 1 (South) (south
part)
Production
26 September 2000**
20 years
Kazatomprom-
SaUran LLP
Mynkuduk, Central lot
Production
08 July 2005
28 years
DP Ortalyk LLP
Mynkuduk, West lot
Production
08 July 2005
30 years
Appak LLP
North and South Karamurun
Production
15 November 1996*
26 years
RU-6 LLP
Moinkum, lot 3 (Central) (north
part)
Production
31 May 2010
31 years
Kazatomprom-
SaUran LLP
Inkai, block 1
Production
13 July 2000
45 years
JV Inkai LLP
Inkai, block 2
Exploration
25 June 2018*
4 years
Company
Inkai, block 3
Exploration
25 June 2018*
4 years
Company
Zhalpak
Production
14 December 2021
21 years
DP Ortalyk LLP
North Khorasan, block 2
Production
01 March 2006
49 years
Baiken-U LLP
North Khorasan, block 1
Exploration and
Production
08 May 2005
53 years
JV Khorassan-U LLP
Budenovskoe, block 2
Production
08 July 2005
35 years
Karatau LLP
Budenovskoe, block 1
Production
20 November 2007
30 years
JV Akbastau JSC
Budenovskoe, blocks 3, 4
Production
20 November 2007
31 years
JV Akbastau JSC
* The Group plans to extend the subsoil use contract in 2022.
** The contracts have expired and mines are depleted and the Group is in the process of mine liquidation.
At 31 December 2021 the Group comprises 33 entities (2020: 37), including associates and joint ventures, located in
six regions of the Republic of Kazakhstan: Turkestan region, East Kazakhstan region, Kyzylorda region, Akmola region,
Pavlodar region and Almaty region. At 31 December 2021 the aggregate number of employees of the Group is
21 thousand (2020: 21 thousand) people.
Presented below are significant changes in the Group structure during 2021.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
7
1 JSC NAC Kazatomprom Group and Its Operations (Continued)
Sale of a 49% non-controlling share in DP Ortalyk LLP
The Group and China General Nuclear Power Group, CGNPC, agreed to build a plant for the production of fuel
assemblies, Ulba-FA LLP (Note 26) located on the territory of Ulba Metallurgical Plant JSC (Note 39). CGNPC
guaranteed the purchase of Ulba-FA LLP products, and in return the Group agreed to sell a 49% interest in DP Ortalyk
LLP (Note 39) to CGNPC or its affiliate.
In April 2021 the parties signed a sale and purchase agreement, where the selling price of a 49% stake in DP Ortalyk
LLP was determined in the amount of 435 million US Dollars (equivalent to Tenge 186,437 million) based on a fair
value assessment determined by an independent appraiser.
On 22 July 2021 the sale of the interest in DP Ortalyk LLP was completed after obtaining all state permits and fulfilling
all the preliminary conditions of the sale and purchase agreement. The re-registration has been completed and CGNM
UK Limited (a subsidiary of CGNPC) became the owner of a 49% interest in DP Ortalyk LLP. The Group retains a 51%
ownership interest. The management of the Group has determined that the Group retains control over DP Ortalyk LLP,
because the Group has significant rights to manage the enterprise's production activities and influence the profits from
them (Note 4).
In millions of Kazakhstani Tenge
Selling price at the exchange rate as of 22 April 2021
186,437
Less foreign exchange loss
(579)
Consideration received
185,858
Net assets of the subsidiary at the date of disposal of the interest
55,258
Non-controlling interest, 49%
27,076
Selling price at the exchange rate as of 22 April 2021
186,437
Less Non-controlling interest
(27,076)
Less Corporate income tax
(33,466)
Increase in equity attributable to the owners of the Company
125,895
Mutual cooperation between the Group and CGNM and its related entities involved (CGNM Group) is governed by
commercial agreement that contains put and call options.
Call option grants the Group the right to demand CGNM Group to sell their interest in DP Ortalyk LLP and Ulba-FA LLP
after occurrence of any of the following events: (1) there is a deadlock situation for a decision made by the Group and
CGNM Group as participants of DP Ortalyk LLP and Ulba-FA LLP, (2) CGNM Group ceases to own its interest in Ulba-
FA LLP, (3) CGNM Group submits a notice of liquidation, (4) CGNM Group causes a material breach of commercial
terms of Ulba-FA LLP that has not been addressed, (5) Ulba-FA LLP does not complete any of its planned activities on
the specified date because of unfulfilled liabilities by the CGNM Group, including shipment of fuel tablets within 24
months after the first order placed. CGNM Group has 60 days to eliminate an event occurred before the option is
exercised. Call option is exercised at fair value of shares as of the date the notice of option exercise.
Put option grants the CGNM Group the right to demand the Group to buy their interest in DP Ortalyk LLP and Ulba-FA
LLP after occurrence of any of the following events: (1) there is a deadlock situation for a decision made by the Group
and CGNM Group as participants of DP Ortalyk LLP and Ulba-FA LLP, (2) CGNM Group ceases to own its interest in
DP Ortalyk LLP, (3) the Group submits a notice of liquidation, (4) the Group causes a material breach of commercial
terms of Ulba-FA LLP that has not been addressed, (5) Ulba-FA LLP does not complete any of its planned activities on
the specified date because of unfulfilled liabilities by the Group, including shipment of fuel tablets within 24 months after
the first order placed. The Group has 60 days to eliminate an event occurred before the option is exercised. Put option
is exercised at fair value of shares as of the date the notice of option exercise. With respect of valuation of derivative
instruments relating to above mentioned put and calls options the Group determined that such value is immaterial as
the exercise price is set at the fair value of the shares.
The Group considered the impact of above mentioned call and put options on the financial statements, in particular the
Group considered whether the existence of put option requires recognition of financial liabilities at the amount equal to
net present value of the redemption amount pursuant to requirement of IAS 32. Consequently, as at the date of
transaction and as at 30 September 2021 the Group has recognised a liability in the amount of Tenge 185,210 million
in accordance with the terms of the sale and purchase agreement of a 49% stake in DP Ortalyk LLP, which provides
the right to CGNM to request the Group to buy back that entity’s ownership interest in DP Ortalyk LLP at fair value on
the date of purchase if DP Ortalyk LLP does not receive a new subsoil use contract on Zhalpak field by 31 December
2021, the Group assessed that obtaining that subsoil use contract was outside of control of the Group. The subsoil use
contract was received on 14 December 2021 and then the liability was derecognised in correspondence with equity
amount. There was no material change to its fair value between initial recognition date and extinguishment date.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
8
1 JSC NAC Kazatomprom Group and Its Operations (Continued)
As of 31 December 2021 the Group has not recognised financial liability to purchase shares in DP Ortalyk LLP as
required by IAS 32 because management believes that other conditions requiring purchase of shares listed above are
under the Group’s control, i.e. the Group does not have unavoidable obligation to pay cash.
Production contract of JV Budenovskoye LLP
Established in 2016, JV Budenovskoye LLP is owned 51% by the Group and 49% by Stepnogorsk Mining and Chemical
Plant LLP. On 21 December 2021 the Ministry of Energy approved the right of JV Budenovskoye LLP (Note 26) to
commence commercial uranium production under a subsoil use agreement for Budenovskoye mine blocks 6 and 7.
After the completion of its ongoing pilot production program, the agreement provides for a commercial ramp-up of up
to 2,500 tonnes beginning no earlier than 2024, and the potential for maximum annual production capacity of up to
6,000 tonnes no earlier than 2026. The timing of commissioning plans and future production rates remain subject to
annual review and may be adjusted based upon Kazatomprom’s strategy and an ongoing assessment of market
conditions.
Under an agreement signed by the JV Budenovskoye LLP partners, the JV Budenovskoye LLP anticipated ramp-up
production from 2024 – 2026 is fully committed for supplying the Russian civil nuclear energy industry, under an offtake
contract at market-related terms.
Sales of share in Caustic JSC
On 30 December 2021 the Group concluded an agreement for the sale of its 40% stake in Caustic JSC to Trade House
"United Chemical Technologies" LLP, one of the major shareholders of Caustic JSC. The selling price is Tenge 1,214
million based upon an independent appraisal of fair market value. According to the terms of the sales contract, payment
is made in instalments. The first tranche in the amount of Tenge 364 million was received in January 2022. The act of
transfer of ordinary shares equivalent to 12% of the Group’s holding in Caustic JSC was signed on February 2022. The
remaining consideration must be paid by the buyer within 24 months from the date of signing the contract. As of 31
December 2021 the investment in Caustic JSC is presented as an asset held for sale, net of impairment loss of Tenge
1,084 million (Note 13).
Sales of 100% interests in subsidiaries - KazPV project
On 10 June 2021 the Group signed an agreement for the sale of the Group’s entire interest in Kazakhstan Solar Silicon
LLP. The sale was completed on 12 July 2021 upon receipt of full payment of Tenge 323 million.
On 16 July 2021 the Group signed an agreement for the sale of the Group's entire interest in Astana Solar LLP and on
23 August 2021 signed the act of acceptance after receiving full payment under the contract. The payment received
amounted to Tenge 380 million.
On 26 October 2021, an agreement for the sale of the Group's entire interest in MK Kazsilicon LLP was signed. On 19
November 2021 after receiving full payment under the contract the Group signed an act of acceptance certificate. The
payment received amounted to Tenge 652 million.
Total proceeds from sales of KazPV entities was Tenge 1,355 million less Tenge 16 million cash and cash equivalents
of disposed entities at the disposal date.
Liquidation of Kazatomprom-Damu LLP
In April 2021, the Group liquidated Kazatomprom-Damu LLP. As a result of the liquidation, the Group wrote off
additional paid-in capital of Tenge 2,254 million and the accumulated loss attributable to non-controlling interest of
Tenge 377 million.
Sale of JSC Uranium Enrichment Center (TsOU)
In 2019 the Group entered into a conditional contract to sell its 50% interest minus 1 (one) share in JSC Uranium
Enrichment Center (TsOU) to its partner in this joint venture - TVEL JSC (TVEL). The Group maintained 1 share of
TsOU, which will retain the Group’s right to access uranium enrichment services in accordance with the conditions
previously agreed with TVEL. On 17 March 2020, the Group completed this sale. The contract price was Russian rubles
6,253 million or Euro 90 million fixed at an exchange rate as at 31 December 2019. Actual cash consideration received
was Euro 90 million (Tenge 43,858 million equivalent).
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
9
1 JSC NAC Kazatomprom Group and Its Operations (Continued)
In millions of Kazakhstani Tenge
Contract price in accordance with exchange rate as at 31 December 2019
40,485
Less: carrying value of the investment in joint venture
(18,670)
Transfer of foreign currency translation reserve
248
Gain from disposal of joint venture
22,063
2 Environment of the Group
In general, the economy of the Republic of Kazakhstan continues to display characteristics of an emerging market. Its
economy is particularly sensitive to prices on oil and gas and other commodities, which constitute a major part of the
country’s exports. These characteristics include, but are not limited to, the existence of national currency that is not
freely convertible outside of the country and little presence of Kazakhstani debt and equity securities on foreign stock
exchanges. Ongoing political tension in the region including significant developments since 1 January 2022 (refer Note
43), has caused and may continue to have a negative impact on the economy of the Republic of Kazakhstan, including
decrease in liquidity, difficulties in attracting international financing and volatility of exchange rates.
On 20 August 2015 the National Bank and the Government of the Republic of Kazakhstan made a resolution about
discontinuation of supporting the exchange rate of Tenge and implemented a new monetary policy, which is based on
an inflation targeting regime, cancellation of exchange rate trading band and start of a free-floating exchange rate.
However, the National Bank's exchange rate policy allows it to intervene to prevent dramatic fluctuations of the Tenge
exchange rate and to ensure financial stability.
As at the date of this report the official exchange rate of the National Bank of the Republic Kazakhstan was Tenge
511.71 per 1 US Dollar compared to Tenge 431.67 per 1 US Dollar as at 31 December 2021 (31 December 2020:
Tenge 420.71 per 1 US Dollar)
In response to the COVID-19 pandemic that arose in 2019, Kazakhstani authorities implemented numerous measures
attempting to contain the spreading and impact of the virus, including travel bans and restrictions, quarantines, shelter-
in-place orders and limitations on business activity, including closures. Some of the above measures have been
relaxed. During 2021, the Group’s activities were not suspended, although administrative staff largely continued to work
remotely.
In September 2021 S&P Global Ratings, the international rating agency, affirmed the sovereign credit rating of
Kazakhstan of “ВВВ-”. This credit rating reflects the government's strong balance sheet, built on past budgetary
surpluses accumulated in the National Fund of the Republic of Kazakhstan, low government debt, total volume of which
will not exceed the external liquid assets of the state within two years, as well as measures implemented by the
Government of the Republic of Kazakhstan aimed at controlling the negative consequences of the COVID-19 pandemic
on the economy.
The economic environment has a significant impact on the Group’s operations and financial position. Management is
taking necessary measures to ensure sustainability of the Group’s operations. However, the future effects of the current
economic situation are difficult to predict, and management’s current expectations and estimates could differ from
actual results. Additionally, the energy sector in the Republic of Kazakhstan is still impacted by political, legislative,
fiscal and regulatory developments. The prospects for future economic stability in the Republic of Kazakhstan are
largely dependent upon the effectiveness of any economic and public policy measures undertaken by the Government
which are beyond the Group’s control.
3 Significant Accounting Policies
Basis of preparation
These consolidated financial statements have been prepared in accordance with IFRS under the historical cost
convention, as modified by financial instruments categorised at fair value through profit or loss (“FVTPL”) and at fair
value through other comprehensive income (“FVOCI”). The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These policies have been consistently applied to all the
periods presented.
The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are disclosed in Note 4.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
10
3 Significant Accounting Policies (Continued)
Presentation currency
These consolidated financial statements are presented in millions of Kazakhstani Tenge (“Tenge”), unless otherwise
stated.
Consolidation
(i) Consolidated financial statements
Subsidiaries are those investees, including structured entities, that the Group controls because the Group
(i) has power to direct the relevant activities of the investees that significantly affect their returns, (ii) has exposure, or
rights, to variable returns from its involvement with the investees, and (iii) has the ability to use its power over the
investees to affect the amount of the investor’s returns. The existence and effect of substantive rights, including
substantive potential voting rights, are considered when assessing whether the Group has power over another entity.
For a right to be substantive, the holder must have a practical ability to exercise that right when decisions about the
direction of the relevant activities of the investee need to be made. The Group may have power over an investee even
when it holds less than the majority of the voting power in an investee. In such a case, the Group assesses the size of
its voting rights relative to the size and dispersion of holdings of the other vote holders to determine if it has de-facto
power over the investee. Protective rights of other investors, such as those that relate to fundamental changes of the
investee’s activities or applied only in exceptional circumstances, do not prevent the Group from controlling an investee.
Subsidiaries are consolidated from the date on which control is transferred to the Group (acquisition date) and are
deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account acquisition of subsidiaries other than those acquired from
parties under common control. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured at their fair values at the acquisition date, irrespective of the extent of any non-
controlling interest.
The Group measures non-controlling interest that represents present ownership interest and entitles the holder to a
proportionate share of net assets in the event of liquidation non-controlling interest’s proportionate share of net assets
of the acquiree.
Goodwill is measured by deducting the net assets of the acquiree from the aggregate of the consideration transferred
for the acquiree, the amount of non-controlling interest in the acquiree and the fair value of an interest in the acquiree
held immediately before the acquisition date. Any negative amount (“negative goodwill” or a “bargain purchase”) is
recognised in profit or loss, after management reassesses whether it identified all the assets acquired and all the
liabilities and contingent liabilities assumed and reviews the appropriateness of their measurement.
The consideration transferred for the acquiree is measured at the fair value of the assets given up, equity instruments
issued and liabilities incurred or assumed, including the fair value of assets or liabilities from contingent consideration
arrangements, but excludes acquisition related costs such as advisory, legal, valuation and similar professional
services. Transaction costs related to the acquisition of and incurred for issuing equity instruments are deducted from
equity; transaction costs incurred for issuing debt as part of the business combination are deducted from the carrying
amount of the debt and all other transaction costs associated with the acquisition are expensed.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated;
unrealised losses are also eliminated unless the cost cannot be recovered. The Company and all of its subsidiaries use
uniform accounting policies consistent with the Group’s policies. When necessary amounts reported by subsidiaries
have been adjusted to conform with the Group’s accounting policies.
Non-controlling interest is that part of the net results and of the equity of a subsidiary attributable to interests which are
not owned, directly or indirectly, by the Group. Non-controlling interest forms a separate component of the Group’s
equity.
(ii) Purchases and sales of non-controlling interests
(iii) The Group applies the economic entity model to account for transactions with owners of non-controlling interest in
transactions that do not result in a loss of control. Any difference between the purchase consideration and the
carrying amount of non-controlling interest acquired is recorded as a capital transaction directly in equity. The
Group recognises the difference between sales consideration and the carrying amount of non-controlling interest
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
11
3 Significant Accounting Policies (Continued)
sold as a capital transaction in the consolidated statements of changes in equity. Purchases of subsidiaries from
parties under common control
Purchases of subsidiaries from parties under common control are accounted for using the predecessor values method.
Under this method the consolidated financial statements of the combined entity are presented as if the businesses had
been combined from the beginning of the earliest period presented or, if later, the date when the combining entities
were first brought under common control. The assets and liabilities of the subsidiary transferred under common control
are at the predecessor entity’s carrying amounts.
The predecessor entity is considered to be the highest reporting entity in which the subsidiary’s IFRS financial
information was consolidated. Related goodwill inherent in the predecessor entity’s original acquisitions is also
recorded in these consolidated financial statements. Any difference between the carrying amount of net assets,
including the predecessor entity’s goodwill, and the consideration for the acquisition is accounted for in these
consolidated financial statements as an adjustment to retained earnings within equity.
(iv) Associates
Associates are entities over which the Group has significant influence (directly or indirectly), but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted
for using the equity method of accounting and are initially recognised at cost. Dividends received from associates
reduce the carrying value of the investment in associates. Other post-acquisition changes in the Group’s share of net
assets of an associate are recognised as follows: (i) the Group’s share of profits or losses of associates is recorded in
the consolidated profit or loss for the year as the share of results of associates, (ii) the Group’s share of other
comprehensive income is recognised in other comprehensive income and presented separately, (iii) other changes in
the Group’s share of the carrying value of net assets of associates are recognised in profit or loss within the share of
results of associates.
However, when the Group’s share of losses in an associate equals or exceeds its interest in the associate, including
any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group’s interest in the associates; unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
(v) Joint arrangements
The Group is a party of joint arrangement when it exercises joint control over arrangement by acting collectively with
other parties and decisions about the relevant activities require unanimous consent of the parties sharing control. The
joint arrangement is either a joint operation or a joint venture depending on the contractual rights and obligations of the
parties to the arrangement.
The Group’s interests in joint ventures are accounted for using the equity method and are initially recognised at cost.
Dividends received from joint ventures reduce the carrying value of the investment in joint ventures. Other
post-acquisition changes in the Group’s share of net assets of joint ventures are recognised as follows:
(i) the Group’s share of profits or losses of joint ventures is recorded in the consolidated profit or loss for the year as
share of result of joint ventures, (ii) the Group’s share of other comprehensive income is recognised in other
comprehensive income and presented separately, (iii) other changes in the Group’s share of the carrying value of net
assets of joint ventures are recognised in profit or loss within the share of result of joint ventures. When the Group’s
share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term
interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to
ensure consistency with the policies adopted by the Group.
If participants of joint arrangements have rights to assets and bear responsibility for obligations under joint
arrangements, then the joint arrangement is classified as a joint operation. In relation to interest in joint operations the
Group recognises: (i) its share of any assets held jointly, (ii) its share of any liabilities incurred jointly, (iii) revenue from
the sale of its share of the output arising from the joint operation, (iv) its share of any expenses incurred jointly. In
accordance with requirements of the relevant agreements, participants buy output of joint operations equally in
accordance with their 50% ownership interest. If participants of the joint operations do not comply with this requirement
during a period, a liability or receivable under joint operations is recognised for an amount equivalent to the
corresponding gross margin. The liability/receivable is settled either when participants satisfy the parity requirements
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
12
3 Significant Accounting Policies (Continued)
or participants mutually agree to discharge the liabilities/receivables, and a corresponding loss/gain is recognised in
profit and loss. Receivables and payables between participants of the joint operations are presented on a gross basis
in the financial statements. No revenue from joint operations is recognised in the financial statements until the Group
sells the output to third parties.
(vi) Disposals of subsidiaries, associates or joint ventures
When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its
fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value
is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect
of that entity, are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean
that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
Foreign currency translation
The functional currency of each of the Group’s consolidated entities is the currency of the primary economic
environment in which the entity operates. The functional currency of the Company and its Kazakhstan subsidiaries,
and the Group’s presentation currency, is the national currency of Kazakhstan, Kazakhstani Tenge. Exchange
restrictions and currency controls exist in relation of converting Tenge into other currencies. Currently, Tenge is not
freely convertible outside of the Republic of Kazakhstan.
Monetary assets and liabilities are translated into each entity’s functional currency at the official exchange rate at the
respective end of the reporting period. Foreign exchange gains and losses resulting from the settlement of the
transactions and from the translation of monetary assets and liabilities into each entity’s functional currency at year-
end official exchange rates are recognised in profit or loss. Translation at year-end does not apply to non-monetary
items that are carried at historic costs.
Loans between Group entities and related foreign exchange gains or losses are eliminated upon consolidation.
However, where the loan is between Group entities that have different functional currencies, the foreign exchange gain
or loss cannot be eliminated in full and is recognised in the consolidated profit or loss, unless the loan is not expected
to be settled in the foreseeable future and thus forms part of the net investment in foreign operation. In such a case,
the foreign exchange gain or loss is recognised in other comprehensive income.
The results and financial position of Group entities, which have financial statements with different functional currencies,
are translated into the presentation currency as follows:
assets and liabilities for each statements of financial position are translated at the closing rate at the end of the
respective reporting period;
income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions);
components of equity are translated at the historic rate;
all resulting exchange differences are recognised in other comprehensive income
When control over a foreign operation is lost, the exchange differences recognised previously in other
comprehensive income are reclassified to profit or loss for the year as part of the gain or loss on disposal.
On partial disposal of a subsidiary without loss of control, the related portion of accumulated currency
translation differences is reclassified to non-controlling interest within equity. At 31 December 2021 the
principal rate of exchange used for translating foreign currency balances was US Dollar 1 per Tenge 431.80 (31
December 2020: US Dollar 1 per Tenge 420.91).
Revenue recognition
Revenue is income arising in the course of the Group’s ordinary activities. Revenue is recognised in the amount of
transaction price. Transaction price is the amount of consideration to which the Group expects to be entitled in
exchange for transferring control over promised goods or services to a customer, excluding the amounts collected on
behalf of third parties. Revenue is recognised net of discounts, returns and value added taxes, export duties, other
similar mandatory payments.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
13
3 Significant Accounting Policies (Continued)
(i) Revenue from sales of goods (uranium, tantalum, beryllium, niobium and other products)
Sales are recognised when control of the good has transferred, being when the goods are delivered to the customer,
the customer has full discretion over the goods, and there is no unfulfilled obligation that could affect the customer’s
acceptance of the goods. Delivery occurs when the goods have been delivered to the specific location, the risks of
obsolescence and loss have been transferred to the customer, and either the customer has accepted the goods in
accordance with the contract, the acceptance provisions have lapsed, or the Group has objective evidence that all
criteria for acceptance have been satisfied.
Revenue from the sales with discounts is recognised based on the price specified in the contract, net of the estimated
volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected value
method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.
No element of financing is deemed present as the sales are made with an average credit term of 30-90 days, which is
consistent with market practice.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
Delivery of uranium, tantalum and beryllium products vary depending on the individual terms of a sale contract usually
in accordance with the Incoterms classification. Delivery of uranium products occurs: at the date of physical delivery
in accordance with Incoterms or at the date of book-transfer to account with convertor specified by customer. Book-
transfer operation represents a transaction whereby uranium account balance of the transferor is decreased with
simultaneous allocation of uranium to the transferee’s uranium account with the same specialised conversion /
reconversion entity.
(ii) Sales of services (transportation, drilling and other)
The Group may provide services under fixed-price and variable price contracts. Revenue from providing services is
recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised
based on the actual service provided to the end of the reporting period as a proportion of the total services to be
provided because the customer receives and uses the benefits simultaneously.
Where the contracts include multiple performance obligations, the transaction price is allocated to each separate
performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are
estimated based on expected cost plus margin.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any
resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the
circumstances that give rise to the revision become known by management.
In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services
rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services
rendered, a contract liability is recognised.
If the contract includes variable consideration, revenue is recognised only to the extent that it is highly probable that
there will be no significant reversal of such consideration.
(iii) Financing components
(iv) The Group does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not
adjust any of the transaction prices for the time value of money. Barter transactions and mutual cancellations
A portion of sales and purchases are settled by mutual cancellations, barter or non-cash settlements. These
transactions are generally in the form of direct settlements by dissimilar goods and services from the final customer
(barter), cancellation of mutual balances or through a chain of non-cash transactions involving several companies.
Sales and purchases that are expected to be settled by mutual settlements, barter or other non-cash settlements are
recognised based on the management’s estimate of the fair value to be received or given up in non-cash settlements.
The fair value is determined with reference to observable market information.
Non-cash transactions have been excluded from the cash flow statement. Investing and financing activities and the
total of operating activities represent actual cash flows.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
14
3 Significant Accounting Policies (Continued)
Interest income
Interest income is recorded for all debt instruments, other than those at FVTPL, on an accrual basis using the effective
interest method. This method defers, as part of interest income, all fee received between the parties to the contract
that are an integral part of the effective interest rate, all other premiums or discounts. Interest income on debt
instruments at FVTPL calculated at nominal interest rate is presented within ‘finance income’ line in profit or loss.
Fees integral to the effective interest rate include origination fees received or paid by the Group relating to the creation
or acquisition of a financial asset (for example, fees for evaluating creditworthiness, evaluating and recording
guarantees or collateral, negotiating the terms of the instrument and for processing transaction documents).
For financial assets that are originated or purchased credit-impaired, the effective interest rate is the rate that discounts
the expected cash flows (including the initial expected credit losses) to the fair value on initial recognition (normally
represented by the purchase price). As a result, the effective interest is credit-adjusted.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets,
except for (i) financial assets that have become credit impaired (Stage 3), for which interest revenue is calculated by
applying the effective interest rate to their AC, net of the ECL provision, and (ii) financial assets that are purchased or
originated credit impaired, for which the original credit-adjusted effective interest rate is applied to the AC.
Income taxes
Income taxes have been provided for in the consolidated financial statements in accordance with legislation enacted
by the end of the reporting period. The income tax charge/(credit) comprises current tax and deferred tax and is
recognised in profit or loss for the year, except if it is recognised in other comprehensive income or directly in equity
because it relates to transactions that are also recognised, in the same or a different period, in other comprehensive
income or directly in equity.
Current tax is the amount expected to be paid to, or recovered from, the taxation authorities in respect of taxable profits
or losses for the current and prior periods. Taxable profits or losses are based on estimates if consolidated financial
statements are authorised prior to filing relevant tax returns. Taxes other than on income are recorded within operating
expenses.
Deferred income tax is provided using the balance sheet liability method for tax loss carry forwards and temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes. In accordance with the initial recognition exemption, deferred taxes are not recorded for temporary
differences on initial recognition of an asset or a liability in a transaction other than a business combination if the
transaction, when initially recorded, affects neither accounting nor taxable profit. Deferred tax liabilities are not recorded
for temporary differences on initial recognition of goodwill, and subsequently for goodwill which is not deductible for tax
purposes. Deferred tax balances are measured at tax rates enacted at the end of the reporting period, which are
expected to apply to the period when the temporary differences will reverse or the tax loss carry forwards will be utilised.
Deferred tax assets and liabilities are netted only within the individual companies of the Group. Deferred tax assets for
deductible temporary differences and tax loss carry forwards are recorded only to the extent that it is probable that the
temporary difference will reverse in the future and there is sufficient future taxable profit available against which the
deductions can be utilised. The Group controls the reversal of temporary differences relating to taxes chargeable on
dividends from subsidiaries or on gains upon their disposal. The Group does not recognise deferred tax liabilities on
such temporary differences except to the extent that management expects the temporary differences to reverse in the
foreseeable future.
The Group’s uncertain tax positions are reassessed by management at the end of each reporting period. Liabilities are
recorded for income tax positions that are determined by management as more likely than not to result in additional
taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the
interpretation of tax laws that have been enacted by the end of the reporting period, and any known court or other
rulings on such issues.
Liabilities for penalties, interest and taxes other than on income are recognised based on management’s best estimate
of the expenditure required to settle the obligations at the end of the reporting period.
Property, plant and equipment
(i) Recognition and measurement of property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and provision for impairment, where
required.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
15
3 Significant Accounting Policies (Continued)
Cost comprises purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates, and any costs directly attributable to bringing the asset to the location and condition necessary
for its intended use. The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate
proportion of production overheads. The individual significant parts of an item of property, plant and equipment
(components), whose useful lives are different from the useful life of the given asset as a whole are depreciated
individually, applying depreciation rates reflecting their anticipated useful lives.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. Specialised spare parts and servicing equipment with a significant initial value and a useful
life of more than one year are recognised as an item of property, plant and equipment. Other spare parts and auxiliary
equipment are recognised as inventories and accounted for in profit and loss for the year as retired.
Costs of minor repairs and day-to-day maintenance are expensed when incurred. Cost of replacing major parts or
components of property, plant and equipment items are capitalised and the replaced part is disposed. Gains and losses
on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss
for the year.
(ii) Depreciation
Land is not depreciated. Depreciation of items within buildings category that are used in extraction of uranium and its
preliminary processing is charged on a unit-of-production (UoP) method in respect of items for which this basis best
reflects the pattern of consumption. Depreciation on other items of property, plant and equipment is calculated using
the straight-line method to allocate their cost to their residual values over their estimated useful lives:
Useful lives in years
Buildings
10 to 50
Machinery and equipment
3 to 50
Vehicles
3 to 10
Other
3 to 20
Each item’s estimated useful life depends on its own useful life limitations and/or term of a subsurface use contract and
the present assessment of economically recoverable reserves of the mine property at which the item is located.
The residual value of an asset is the estimated amount that the Group would currently obtain from the disposal of the
asset less the estimated costs of disposal, if the asset was already of the age and in the condition expected at the end
of its useful life. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
Mine development assets
Mine development assets are stated at cost, less accumulated depreciation and provision for impairment, where
required. Mine development assets comprise the capitalised costs of pump-in and pump-out well drilling, main external
tying of the well with surface piping, equipment, measuring instruments, ion-exchange resin, estimated site restoration,
acid costs and other development costs. Mine development assets are amortised at the mine or block level using the
unit-of-production method. Unit-of-production rates are based on proved reserves estimated to be recovered from
mines (blocks) using existing facilities and operating methods. The estimate of proved reserves is based on reserve
reports which are integral part of each subsoil use contract. These reserve reports are incorporated into feasibility
models which are approved by the government and detail the total proven reserves and estimated scheduled extraction
by year. Since 2017, the Group uses reserve reports prepared by an independent consultant (Note 4).
Intangible assets
(i) Recognition and measurement of intangible assets
The Group’s intangible assets other than goodwill have definite useful lives and primarily include capitalised production
technology development costs, computer software, patents, and licences. Acquired computer software licences and
patents are initially measured at costs incurred to acquire and bring them to use.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
16
3 Significant Accounting Policies (Continued)
(ii) Amortisation of intangible assets
Intangible assets are amortised using the straight-line method over their useful lives:
Useful lives in years
Licences and patents
3 to 20
Software
1 to 14
Other
2 to 15
If impaired, the carrying amount of intangible assets is written down to the higher of value in use and fair value less
costs to sell.
(iii) Goodwill
Goodwill is carried at cost less accumulated impairment losses, if any. The Group tests goodwill for impairment at least
annually and whenever there are indications that goodwill may be impaired. Goodwill is allocated to the cash-generating
units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination.
Such units or groups of units represent the lowest level at which the Group monitors goodwill and are not larger than
an operating segment.
Gains or losses on disposal of an operation within a cash-generating unit to which goodwill has been allocated include
the carrying amount of goodwill associated with the disposed operation, generally measured on the basis of the relative
values of the disposed operation and the portion of the cash-generating unit which is retained.
(iv) Research and development costs
Research expenditure is recognised as an expense when incurred. Costs incurred on development projects (relating
to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the
project will be a success considering its commercial and technological feasibility, and costs can be measured reliably.
Other development expenditures are recognised as an expense as incurred. Development costs previously recognised
as an expense are not recognised as an asset in a subsequent period.
Development costs with a finite useful life that have been capitalised are amortised from the commencement of the
commercial production of the product on a straight-line basis over the period of its expected benefit.
Mineral rights
Mineral rights are stated at cost, less accumulated depreciation and provision for impairment, where required. Mineral
rights acquired as part of business combinations are recognised at fair value. The capitalised cost of acquisition of
mineral rights comprises subscription bonus, commercial discovery bonus, the cost of subsurface use rights and
capitalised historical costs. The Group is obliged to reimburse historical costs incurred by the State in respect of mining
rights prior to licence or subsoil use contracts being issued. These historical costs are recognised as part of the
acquisition cost with a corresponding liability equal to the present value of payments made during the licence period or
subsoil use contract.
Mineral rights are amortised using unit-of-production method based upon proved reserves commencing when uranium
first starts to be extracted.
The estimate of proved reserves is based on reserve reports, which are integral part of each subsoil use contract.
These reserve reports are incorporated into feasibility models, which are approved by the government and detail the
total proven reserves and estimated scheduled extraction by year. Since 2017, the Group uses reserve reports
prepared by an independent consultant (Note 4).
Exploration and evaluation assets
Exploration and evaluation assets are measured at cost less provision for impairment, where required. The Group
classifies exploration and evaluation assets as tangible or intangible according to the nature of the assets acquired.
Exploration and evaluation assets comprise the capitalised costs incurred by the Group prior to proving that viable
production is possible and include geological and geophysical costs, the costs of exploratory wells and directly
attributable overheads associated with exploration activities.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
17
3 Significant Accounting Policies (Continued)
The decision to enter into or renew a subsoil use contract after the expiration of the exploration and appraisal period is
subject to the success of the exploration and appraisal of mineral resources and the Group's decision to proceed to the
production (development) stage.
Tangible exploration and evaluation assets are transferred to mine development assets upon demonstration of
commercial viability of uranium production and amortised using unit-of-production method based upon proved reserves.
Once commercial reserves (proved or commercial reserves) are found, intangible exploration and evaluation assets
are transferred to mineral rights. Accordingly, the Group does not amortise exploration and evaluation assets before
commercial reserves (proved or commercial reserves) are found. If no commercial reserves are found, exploration and
evaluation assets are expensed.
Exploration and evaluation assets are tested by the Group for impairment whenever facts and circumstances indicate
assets’ impairment. An impairment loss is recognised for the amount by which exploration and evaluation assets’
carrying amount exceeds their recoverable amount. The recoverable amount is higher of the exploration and evaluation
assets’ fair value less costs to sell and their value in use.
One or more of the following facts and circumstances indicate that the Group should test its exploration and evaluation
assets for impairment (the list is not exhaustive):
the period for which the Group has the right to explore in the specific area has expired during the period or will
expire in the near future, and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral reserves in the specific area is neither
budgeted nor planned;
exploration for and evaluation of mineral reserves in the specific area have not led to the discovery of commercially
viable quantities of mineral reserves and the Group has decided to discontinue such operations in the specific
area;
sufficient data exist to indicate that, although development works in the specific area are likely to proceed, the
carrying amount of the exploration and evaluation assets is unlikely to be recovered in full resulting from efficient
development or by sale.
Costs associated with activities undertaken prior to exploration such as design, technical and economical assessments
are expensed as incurred.
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication exists,
management estimates the recoverable amount, which is determined as the higher of an asset’s fair value less costs
to sell (the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date) and its value in use (being the net present value of expected future cash
flows of the relevant cash-generating unit). In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset for which the future cash flow estimates have not been adjusted.
If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable
amount of the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group
of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of
assets. Basis for determination of cash-generating units is presented in Note 4.
The estimates used for impairment reviews are based on detailed life of mine plans and operating budgets, modified
as appropriate to meet the requirements of IAS 36 “Impairment of Assets”. Future cash flows are based on:
estimates of the volumes of the reserves for which there is a high degree of confidence of economic extraction;
future production and sales quantities;
future commodity prices (assuming the current market prices will revert to the Group’s assessment of the long term
average price, generally over a period of three to five years); and
future costs of production and other operating and capital expenditures.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
18
3 Significant Accounting Policies (Continued)
If the carrying amount of the asset exceeds its recoverable amount, the asset is impaired and an impairment loss is
charged to profit and loss for the year so as to reduce the carrying amount in the consolidated statements of financial
position to its recoverable amount. An impairment loss recognised for an asset in prior years is reversed where
appropriate if there has been a change in the estimates used to determine the asset’s value in use or fair value less
costs to sell. This reversal is recognised in profit and loss for the year, and is limited to the carrying amount that would
have been determined, net of depreciation, if no impairment loss had been recognised in prior years.
Investment property
Investment property is property held by the Group to earn rental income or for capital appreciation, or both and which
is not occupied by the Group.
Investment properties are stated at cost less accumulated depreciation and provision for impairment, where required.
If any indication exists that investment properties may be impaired, the Group estimates the recoverable amount as
the higher of value in use and fair value less costs of disposal. The carrying amount of an investment property is written
down to its recoverable amount through a charge to profit or loss for the year. An impairment loss recognised in prior
years is reversed if there has been a subsequent change in the estimates used to determine the asset’s recoverable
amount.
Subsequent expenditure is capitalised only when it is probable that future economic benefits associated with the item
will flow to the Group, and the cost can be measured reliably. All other repairs and maintenance costs are expensed
when incurred. If an investment property becomes owner-occupied, it is reclassified to property, plant and equipment.
Earned rental income is recorded in profit or loss for the year within other income. Gains or losses on disposal of
investment property are calculated as proceeds less the carrying amount.
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its carrying
amount at the date of reclassification becomes its deemed cost for accounting purposes.
Assets classified as held for sale
Assets and disposal groups (which may include both non-current and current assets) are classified in the consolidated
statements of financial position as ‘Assets of disposal groups classified as held for sale’ if their carrying amount will be
recovered principally through a sale transaction (including loss of control of a subsidiary holding the assets) within
twelve months after the reporting period. Assets are reclassified when all of the following conditions are met: (a) the
assets are available for immediate sale in their present condition; (b) the Group management approved and initiated
an active programme to locate a buyer; (c) the assets are actively marketed for sale at a reasonable price; (d) the sale
is expected within one year; and (e) it is unlikely that significant changes to the plan to sell will be made or that the plan
will be withdrawn.
Non-current assets or disposal groups classified as held for sale in the current period’s consolidated statements of
financial position are not reclassified or re-presented in the comparative statements of financial position to reflect the
classification at the end of the current period.
A disposal group is a group of assets (current or non-current) to be disposed of, by sale or otherwise, together as a
group in a single transaction, and liabilities directly associated with those assets that will be transferred in the
transaction. Goodwill is included if the disposal group includes an operation within a cash-generating unit to which
goodwill has been allocated on acquisition. Non-current assets are assets that include amounts expected to be
recovered or collected more than twelve months after the reporting period. If reclassification is required, both the
current and non-current portions of an asset are reclassified.
Held for sale disposal groups as a whole are measured at the lower of their carrying amount and fair value less costs
to sell. Held for sale property, plant and equipment are not depreciated. Reclassified non-current financial instruments
are not subject to write down to the lower of their carrying amount and fair value less costs to sell.
Liabilities directly associated with the disposal group that will be transferred in the disposal transaction are reclassified
and presented separately in the consolidated statements of financial position.
Financial instruments
Key measurement terms
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The best evidence of fair value is the price in an active market.
An active market is one in which transactions for the asset or liability take place with sufficient frequency and volume
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
19
3 Significant Accounting Policies (Continued)
to provide pricing information on an ongoing basis.
Fair value of financial instruments traded in an active market is measured as the product of the quoted price for the
individual asset or liability and the number of instruments held by the entity. This is the case even if a market’s normal
daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single
transaction might affect the quoted price.
Valuation techniques such as discounted cash flow models or models based on recent arm’s length transactions or
consideration of financial data of the investees are used to measure fair value of certain financial instruments for which
external market pricing information is not available. Fair value measurements are analysed by level in the fair value
hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets
or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements
are valuations not based on solely observable market data (that is, the measurement requires significant unobservable
inputs). Transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting
period.
(i) Transaction costs
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial
instrument. An incremental cost is one that would not have been incurred if the transaction had not taken place.
Transaction costs include fees and commissions paid to agents (including employees acting as selling agents),
advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties.
Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding costs.
(ii) Amortised cost
Amortised cost (“AC”) is the amount at which the financial instrument was recognised at initial recognition less any
principal repayments, plus accrued interest, and for financial assets less any allowance for expected credit losses
(“ECL”). Accrued interest includes amortisation of transaction costs deferred at initial recognition and of any premium
or discount to the maturity amount using the effective interest method. Accrued interest income and accrued interest
expense, including both accrued coupon and amortised discount or premium (including fees deferred at origination, if
any), are not presented separately and are included in the carrying values of the related items in the consolidated
statement of financial position.
(iii) The effective interest method
The effective interest method is a method of allocating interest income or interest expense over the relevant period, so
as to achieve a constant periodic rate of interest (effective interest rate) on the carrying amount. The effective interest
rate is the rate that exactly discounts estimated future cash payments or receipts (excluding future credit losses) through
the expected life of the financial instrument or a shorter period, if appropriate, to the gross carrying amount of the
financial instrument. The effective interest rate discounts cash flows of variable interest instruments to the next interest
repricing date, except for the premium or discount which reflects the credit spread over the floating rate specified in the
instrument, or other variables that are not reset to market rates.
Such premiums or discounts are amortised over the whole expected life of the instrument. The present value
calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate. For assets that are purchased or originated credit impaired (“POCI”) at initial recognition, the effective
interest rate is adjusted for credit risk, i.e. it is calculated based on the expected cash flows on initial recognition instead
of contractual payments.
Financial instruments – initial recognition
Financial instruments at FVTPL are initially recorded at fair value. All other financial instruments are initially recorded
at fair value adjusted for transaction costs. Fair value at initial recognition is best evidenced by the transaction price. A
gain or loss on initial recognition is only recorded if there is a difference between fair value and transaction price which
can be evidenced by other observable current market transactions in the same instrument or by a valuation technique
whose inputs include only data from observable markets. After the initial recognition, an ECL allowance is recognised
for financial assets measured at AC and investments in debt instruments measured at FVOCI, resulting in an immediate
accounting loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or
market convention (“regular way” purchases and sales) are recorded at trade date, which is the date on which the
Group commits to deliver a financial asset. All other purchases are recognised when the entity becomes a party to the
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
20
3 Significant Accounting Policies (Continued)
contractual provisions of the instrument.
Financial assets – classification and subsequent measurement
(i) Measurement categories
The Group classifies financial assets in the following measurement categories: FVTPL, FVOCI and AC. The
classification and subsequent measurement of debt financial assets depends on: (i) the Group’s business model for
managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
(ii) Business model
The business model reflects how the Group manages the assets in order to generate cash flows – whether the Group’s
objective is: (i) solely to collect the contractual cash flows from the assets (“hold to collect contractual cash flows”,) or (ii) to
collect both the contractual cash flows and the cash flows arising from the sale of assets (“hold to collect contractual cash
flows and sell”) or, if neither of (i) and (ii) is applicable, the financial assets are classified as part of “other” business model and
measured at FVTPL.
Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the activities
that the Group undertakes to achieve the objective set out for the portfolio available at the date of the assessment. Factors
considered by the Group in determining the business model include the purpose and composition of a portfolio, past
experience on how the cash flows for the respective assets were collected, how risks are assessed and managed, how the
assets’ performance is assessed and how managers are compensated.
(iii) Cash flow characteristics
Where the business model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the
Group assesses whether the cash flows represent solely payments of principal and interest (“SPPI”). Financial assets with
embedded derivatives are considered in their entirety when determining whether their cash flows are consistent with the SPPI
feature.
In making this assessment, the Group considers whether the contractual cash flows are consistent with a basic lending
arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic lending risks and profit
margin.
Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending arrangement, the
financial asset is classified and measured at FVTPL. The SPPI assessment is performed on initial recognition of an asset
and it is not subsequently reassessed.
Financial assets – reclassification
Financial instruments are reclassified only when the business model for managing the portfolio as a whole changes. The
reclassification has a prospective effect and takes place from the beginning of the first reporting period that follows after the
change in the business model. The entity did not change its business model during the current and comparative period and
did not make any reclassifications.
Financial assets impairment – credit loss allowance for ECL
The Group assesses, on a forward-looking basis, the ECL for debt instruments measured at AC and FVOCI and for the
exposures arising from loan commitments and financial guarantee contracts, for contract assets. The Group measures ECL
and recognises Net impairment losses on financial and contract assets at each reporting date. The measurement of ECL
reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii)
time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the
end of each reporting period about past events, current conditions and forecasts of future conditions.
Debt instruments measured at AC and contract assets are presented in the consolidated statement of financial position net
of the allowance for ECL. For loan commitments and financial guarantees, a separate provision for ECL is recognised as a
liability in the consolidated statement of financial position. For debt instruments at FVOCI, changes in amortised cost, net of
allowance for ECL, are recognised in profit or loss and other changes in carrying value are recognised in OCI as gains less
losses on debt instruments at FVOCI.
The Group applies a three stage model for impairment, based on changes in credit quality since initial recognition. A financial
instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL
measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
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3 Significant Accounting Policies (Continued)
or until contractual maturity, if shorter (“12 Months ECL”). If the Group identifies a significant increase in credit risk (“SICR”)
since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is,
up until contractual maturity but considering expected prepayments, if any (“Lifetime ECL”). Refer to Note 40 for a description
of how the Group determines when a SICR has occurred.
If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured
as a Lifetime ECL. The Group’s definition of credit impaired assets and definition of default is explained in Note 40. For
financial assets that are purchased or originated credit-impaired (“POCI Assets”), the ECL is always measured as a Lifetime
ECL.
Note 40 provides information about inputs, assumptions and estimation techniques used in measuring ECL, including an
explanation of how the Group incorporates forward-looking information in the ECL models.
Financial assets – write-off
Financial assets are written-off, in whole or in part, when the Group exhausted all practical recovery efforts and has
concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event.
Indicators that there is no reasonable expectation of recovery include (i) court decision, (ii) liquidation of entity from
which financial asset was acquired, (iii) overdue period of 3 years and more.
Derivative financial instruments
Derivative financial instruments are carried at their fair value. All derivative instruments are carried as assets when fair
value is positive and as liabilities when fair value is negative. Changes in the fair value of derivative instruments are
included in profit or loss for the year. The Group does not apply hedge accounting.
Certain derivative instruments embedded in financial liabilities and other non-financial contracts are treated as separate
derivative instruments when their risks and characteristics are not closely related to those of the host contract.
Financial assets – derecognition
The Group derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets
otherwise expire or (b) the Group has transferred the rights to the cash flows from the financial assets or entered into
a qualifying pass-through arrangement whilst (i) also transferring substantially all the risks and rewards of ownership
of the assets or (ii) neither transferring nor retaining substantially all the risks and rewards of ownership but not retaining
control.
Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated
third party without needing to impose additional restrictions on the sale.
Financial assets – modification
The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group
assesses whether the modification of contractual cash flows is substantial considering, among other, the following
factors: any new contractual terms that substantially affect the risk profile of the asset, significant change in interest
rate, change in the currency denomination, new collateral or credit enhancement that significantly affects the credit risk
associated with the asset or a significant extension of a loan when the borrower is not in financial difficulties.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group
derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is
considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining
whether a SICR has occurred. The Group also assesses whether the new loan or debt instrument meets the SPPI
criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new
substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a
capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the
originally agreed payments, the Group compares the original and revised expected cash flows to assets whether the
risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and
rewards do not change, the modified asset is not substantially different from the original asset and the modification
does not result in derecognition. The Group recalculates the gross carrying amount by discounting the modified
contractual cash flows by the original effective interest rate (or credit-adjusted effective interest rate for POCI financial
assets), and recognises a modification gain or loss in profit or loss.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
22
3 Significant Accounting Policies (Continued)
Financial liabilities – measurement categories
Financial liabilities are classified as subsequently measured at AC, except for (i) financial liabilities at
FVTPL(derivatives, financial liabilities held for trading, e.g. short positions in securities), contingent consideration
recognised by an acquirer in a business combination and other financial liabilities designated as such at initial
recognition and (ii) financial guarantee contracts and loan commitments.
Financial liabilities – derecognition
Financial liabilities are derecognised when they are extinguished, i.e. when the obligation specified in the contract is
discharged, cancelled or expires.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well
as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially
different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees
received and discounted using the original effective interest rate, is at least 10% different from the discounted present
value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the
currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached
to the instrument and change in loan covenants are also considered. If an exchange of debt instruments or modification
of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss
on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees
incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a
cumulative catch up method, with any gain or loss recognised in profit or loss, unless the economic substance of the
difference in carrying values is attributed to a capital transaction with owners.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when
there is a legally enforceable right to offset the recognised amounts, and there is an intention to either settle on a net
basis, or to realise the asset and settle the liability simultaneously. Such a right of set off (a) must not be contingent on
a future event and (b) must be legally enforceable in all of the following circumstances: (i) in the normal course of
business, (ii) in the event of default and (iii) in the event of insolvency or bankruptcy.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term highly liquid
investments with original maturities of three months or less. Cash and cash equivalents are carried at AC because:
(i) they are held for collection of contractual cash flows and those cash flows represent SPPI, and (ii) they are not
designated at FVTPL. Restricted balances are excluded from cash and cash equivalents for the purposes of the cash
flow statement. Balances restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period are included in other non-current assets.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently carried at amortised cost using
the effective interest method.
Inventories
Inventories are recorded at the lower of cost and net realisable value. The cost of inventory is determined on the
weighted average basis. The cost of finished goods and work in progress comprises raw material, direct labour, other
direct costs and related production overheads (based on the normal operating capacity) but excludes borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of
completion and selling expenses.
Inventory loans
The Group enters into inventory loan agreements, according to which one party (the lender) undertakes to provide the
other party (the borrower) with uranium products, and the borrower obliges to return to the lender an identical amount
of uranium products. The Group obtains inventory loans to facilitate the performance of its uranium supply obligations.
The Group classifies inventory loans as a non-financial liability.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
23
3 Significant Accounting Policies (Continued)
Upon receipt of the inventory loan, the Group accounts for the inventory at the contracted cost. Liability arising from
inventory loan are recognised as part of other liabilities at the fair value of the uranium products at the reporting date.
Subsequent revaluation of the inventory loan is carried out through profit or loss as part of other income/expenses in
accordance with changes in the fair value of uranium products.
Prepayments
Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-current when the
goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment
relates to an asset which will itself be classified as non-current upon initial recognition. Prepayments for assets are
transferred to the carrying amount of the asset once the Group has obtained control of the asset and it is probable that
future economic benefits associated with the asset will flow to the Group.
Other prepayments are written off to profit or loss when the goods or services relating to the prepayments are received.
If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying
value of the prepayment is written down accordingly and a corresponding impairment loss is recognised in profit or loss
for the year. Non-current prepayments are not discounted.
Value added tax
Value added tax (VAT) related to sales is payable to the tax authorities when goods are shipped or services are
rendered. Purchase VAT can be offset against sales VAT upon the receipt of a tax invoice from a supplier. Tax
legislation allows the settlement of VAT on a net basis.
Accordingly, VAT related to sales and purchases unsettled at the reporting date is stated in the consolidated statements
of financial position on a net basis separately for each consolidated entity. Recoverable VAT is classified as non-
current if its settlement is not expected within one year after the reporting period. Non-current VAT is not discounted.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds. Any excess of the fair value of consideration received over the
par value of shares issued is recorded as share premium in equity. Additional paid-in capital primarily represents capital
contributions made by non-controlling interests in excess of their ownership.
Dividends
Dividends are recorded as a liability and deducted from equity in the period in which they are declared and approved.
Any dividends declared after the reporting period and before the financial statements are authorised for issue are
disclosed in the subsequent events note.
Leases
Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the fixed payments (including in-substance fixed payments) less any lease incentives receivable. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases of the Group, the Group’s incremental borrowing rate is used, being the rate that the
Group would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in
a similar economic environment with similar terms, collateral and conditions.
Lease payments are allocated between principal and finance costs. The finance costs are charged to profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment and small items of office furniture with value of Tenge
500 thousand or less.
Operating leases
Where the Group is a lessor in a lease which does not transfers substantially all the risks and rewards incidental to
ownership to the lessee (i.e. operating lease), lease payments from operating leases are recognised as other income
on a straight-line basis.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
24
3 Significant Accounting Policies (Continued)
Loans and borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at AC
using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial time to get ready for intended use or sale (qualifying assets) are capitalised as part of the costs of those
assets. The commencement date for capitalisation is when (a) the Group incurs expenditures for the qualifying asset;
(b) it incurs borrowing costs; and (c) it undertakes activities that are necessary to prepare the asset for its intended use
or sale. Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use
or sale.
The Group capitalises borrowing costs that could have been avoided if it had not made capital expenditure on qualifying
assets. Borrowing costs capitalised are calculated at the Group’s average funding cost (the weighted average interest
cost is applied to the expenditures on the qualifying assets), except to the extent that funds are borrowed specifically
for the purpose of obtaining a qualifying asset.
Where this occurs, actual borrowing costs incurred on the specific borrowings less any investment income on the
temporary investment of these borrowings are capitalised.
Preference shares
Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on
these preference shares are recognised in the statement of profit or loss and other comprehensive income as interest
expense.
Provisions for liabilities and charges
Provisions for liabilities and charges are non-financial liabilities of uncertain timing or amount. They are accrued when
the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount
of the obligation can be made. The Group’s provisions include site restoration, environment protection and other
provisions (Note 34).
Provisions for assets retirement obligations
Assets retirement obligations are recognised when it is probable that the costs would be incurred and those costs can
be measured reliably. Asset retirement obligations include the costs of rehabilitation and costs of liquidation (demolition
of buildings, constructions and infrastructure, dismantling of machinery and equipment, transportation of the residual
materials, environmental clean-up, monitoring of wastes and land restoration). Provision for the estimated costs of
liquidation, rehabilitation and restoration are established and charged to the cost of property, plant and equipment or
mine development assets in the reporting period when an obligation arises from the respective land disturbance in the
course of mine development or environment pollution, based on the discounted value of estimated future costs.
Movements in the provisions for assets retirement obligations, resulting from updated cost estimates, changes to the
estimated term of operations and revisions to discount rates are capitalised within property, plant and equipment or
mine development assets. These amounts are then depreciated over the lives of the assets to which they relate using
the depreciation methods applied to those assets.
Provisions for asset retirement obligations do not include any additional obligations which are expected to arise from
future disturbances. The costs are estimated on the basis of a closure and restoration plan. The cost estimates are
calculated annually during the course of the operations to reflect known developments, including updated cost
estimates revised subsoil use terms and estimated lives of operations, and are subject to formal reviews on a regular
basis.
Although the final cost to be incurred is uncertain, the Group estimates its costs based on feasibility and engineering
studies using current restoration standards and techniques for conducting restoration and retirement works (Note 4).
The amortisation or “unwinding” of the discount applied in establishing the net present value of provisions is charged
to profit and loss in each reporting period. The amortisation of the discount is disclosed as finance costs.
Financial guarantees
Financial guarantees require the Group to make specified payments to reimburse the holder of the guarantee for a loss
it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms
of a debt instrument. Financial guarantees are initially recognised at their fair value, which is normally evidenced by
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
25
3 Significant Accounting Policies (Continued)
the amount of fees received. This amount is amortised on a straight line basis over the life of the guarantee. At the
end of each reporting period, the guarantees are measured at the higher of (i) the amount of the loss allowance for the
guaranteed exposure determined based on the expected loss model and (ii) the remaining unamortised balance of the
amount at initial recognition. In addition, an ECL loss allowance is recognised for fees receivable that are recognised
in the consolidated statement of financial position as an asset.
Trade and other payables
Trade payables are accrued when the counterparty performs its obligations under the contract and are recognised
initially at fair value and subsequently carried at amortised cost using the effective interest method.
Employee benefits
(i) Long-term employee benefits
The Group entities provide long-term employee benefits to employees in accordance with the provisions of the collective
agreement. The agreements provide for financial aid for employees’ disability, retirement, funeral aid and other
payments to the Group’s employees. The entitlement to some benefits is usually conditional on the employee remaining
employed until the retirement age and the completion of a minimum service period.
The Group does not have any funded post-employment plans. Liability recognised at each reporting date represents
the present value of the plan liabilities.
Actuarial gains and losses on post-employment obligations such as experience adjustments and the effects of changes
in actuarial assumptions recognised in other comprehensive income in the period occurred. Other movements in the
present value of the plan liabilities are also recognised in the profit or loss for the year, including current service cost.
The most significant assumptions used in accounting for defined benefit obligations are the discount rate, staff turnover
and the mortality assumptions. The discount rate is used to determine the net present value of future liabilities and
each year the unwinding of the discount on those liabilities is charged to profit or loss for the year. The mortality
assumption is used to project the future stream of benefit payments, which is then discounted to arrive at a net present
value of liabilities.
Employee benefits, including financial aid for employees’ disability and funeral aid to the Group’s employees and other
payments, are considered as other long-term employee benefits. The expected cost of these benefits is accrued over
the period of employment using the same accounting methodology as used for the defined benefit plan. The Group
recognises changes in actuarial assumptions for other long-term employee benefits in profit or loss for the year. The
Group receives services from an independent qualified actuary to evaluate long-term employee benefits on an annual
basis.
(ii) Payroll expense and related contributions
Wages, salaries, contributions to pension and social insurance funds, paid annual leave and sick leave, bonuses, and
non-monetary benefits are accrued in the year in which the associated services are rendered by the employees of the
Group. In this case, the Group applies the Defined Contribution Plans scheme. In accordance with the legal
requirements of the Republic of Kazakhstan, the Group withholds pension contributions from employees’ salary and
transfers them into the united pension fund.
Upon retirement of employees, all pension payments are administered by the united pension fund. The Group does not
have any legal or constructive obligation to pay additional contributions other than pension contributions withheld from
the salaries of the Group's employees.
Earnings per share
Earnings per share are determined by dividing the profit or loss attributable to owners of the Company by the weighted
average number of participating shares outstanding during the reporting year adjusted for share split.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief
operating decision maker. The chief operating decision-maker is responsible for allocating resources and assessing
performance of the operating segments. Reportable segments whose revenue, result or assets are ten percent or
more of all the segments are reported separately.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
26
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies
The Group makes estimates and assumptions that affect the amounts recognised in the financial statements including
the carrying amounts of assets and liabilities. Estimates and judgements are continually evaluated and are based upon
management’s experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. Management also makes certain judgements, apart from those involving estimations, in the
process of applying the accounting policies. Judgements that have the most significant effect on the amounts
recognised in the financial statements and estimates that can cause a significant adjustment to the carrying amount of
assets and liabilities include:
Ore reserves (estimates)
Uranium reserves are a critical component of the Group’s projected cash flow estimates that are used to assess the
recoverable values of relevant assets as well as depreciation and amortisation expense. Estimates of uranium reserves
also determine the life of mines, which in turn affect asset retirement obligation calculations.
In 2021 and 2020, the Group engaged an independent consultant to assess the Group’s ore reserves and mineral
resources in accordance with the Australasian Code for reporting on geological exploration works, mineral resources
and ore reserves (hereinafter JORC Code). Independent assessments of reserves and resources was carried out as
of 31 December 2021 and 31 December 2020. The consultant reviewed all key information upon which the reported
mineral resource and ore reserve statements for the mining assets of NAC Kazatomprom JSC are based.
The consultant’s reports contain an assessment of the tons of uranium contained in ore which has the potential to be
extracted by the existing and planned mining operations (the mineral resource), and also the tons of uranium contained
in ore currently planned to be extracted as envisaged by the respective life-of-mine plans (the ore reserve). The Group
used the ore reserves data for calculation of impairment of long-term assets, unit of production depreciation for each
of the Group’s mines as well as asset retirement obligation calculations.
Impairment of non-financial assets (estimates)
At the end of each reporting period, management assesses whether there is any indication of impairment of individual
assets (or cash-generating units). If any such indication exists, management estimates the recoverable amount, which
is determined as the higher of an asset’s fair value less costs to sell and its value in use. An impairment loss is
recognised for the amount by which carrying amount exceeds recoverable amount. The Group tests goodwill for
impairment at least annually.
The calculation of value in use requires management to make estimates regarding the Group’s future cash flows. The
estimation of future cash flows involves significant estimates and assumptions regarding commodity prices (uranium
and other products), the level of production and sales, discount rates, growth rates, operating costs and other factors.
The impairment review and calculations are based upon assumptions that are consistent with the Group’s business
plans. Due to its subjective nature, these estimates could differ from future actual results of operations and cash flows;
any such difference may result in impairment in future periods which would decrease the carrying value of the respective
asset.
Goodwill
Refer to Note 20 for details of the Group’s impairment testing for goodwill at 31 December 2021.
Assets related to uranium production
Assets related to uranium mines include property, plant and equipment, mine development assets, mineral rights,
exploration and evaluation assets, investments in associates, investments in joint ventures, and other investments.
For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows that are largely independent of the cash inflows from other assets or groups of assets (termed as ‘cash-
generating units’). The Group has identified each mine (contract territory) as a separate cash-generating unit unless
several mines are technologically connected with single processing plant in which case the Group considers such
mines as one cash-generating unit.
As at 31 December 2021, management conducted an analysis and did not find any impairment indicators of assets
(generating units) associated with the production of uranium products.
Provision for asset retirement obligations (estimates)
Mining assets
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
27
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
In accordance with environmental legislation and the subsurface use contracts, the Group has a legal obligation to
remediate damage caused to the environment from its operations and to decommission its mining assets and landfills
and restore landfill sites after closure of mining activities. Provision is made based upon the net present values of
estimated site restoration and retirement costs as soon as the obligation arises from past mining activities.
The provision for asset retirement obligations is estimated based upon the Group’s interpretation of current
environmental legislation in the Republic of Kazakhstan and the Group’s related programme for liquidation of
subsurface use consequences on the contracted territory and other operations supported by the feasibility study and
engineering research in accordance with the applicable restoration and retirement standards and techniques.
Provisions for asset retirement obligations are subject to potential changes in environmental regulatory requirements
and the interpretation of the legislation. Provisions for mining assets and landfills retirement obligations are recognised
when there is a certainty of incurring of such liabilities and when it is possible to measure the amounts reliably.
The calculation of the provision for production assets retirement as at 31 December 2021 was performed by the Group
based upon assessments performed by independent and internal consultants. The scope of work stipulated by the
legislation and included in the calculations included the dismantling of facilities and infrastructure (pumping, injection
and observation wells, technological units for acidification and distribution of solutions, pipelines, access roads,
technological sites, landfills, buildings and other facilities) and subsequent restoration of land.
Principal assumptions used in such estimations include the estimate of discount rate and the amount and timing of
future cash flows. The discount rate is applied to the nominal costs that management expects to spend on mining site
restoration in the future. Management’s estimates based on current prices are inflated using the expected long-term
inflation rate of 5.12% in 2021 (2020: 5.17%), and subsequently discounted using a rate that reflects the current market
estimates of the time value of money and those risks specific to the liability not reflected in the best estimate of the
costs. The discount rate is based on a risk-free rate determined as interest rates on government bonds with the maturity
as the average of Group subsoil use contracts. The discount rate used by the Group’s companies for calculation of the
provision as at 31 December 2021 is 9.85% (2020: 9.87%).
At 31 December 2021, the carrying value of the site restoration provision was Tenge 31,431 million (2020:
Tenge 23,841 million) (Note 34). The increase is mainly attributable to the estimated cost of reclamation at RU-6 LLP
(a wholly owned entity) as its mining allotment includes arable lands, pastures and the Kargaly state nature reserve.
Decommissioning of the Ulba plant facility
Management has assessed whether the Group has an obligation for decommissioning and dismantling of the
production facility of Ulba Metallurgical Plant JSC and concluded that the Group has no legal obligation to
decommission this facility at the end of its useful life as of 31 December 2021 and 2020.
In addition, management considered the extent to which the Group’s policies and statements may have created a
constructive obligation to decommission this production facility and concluded that no liability should be recorded as:
Radiation contamination of the facility is limited and the costs involved in remediation are not significant.
In the event of discontinuance of production activities, the Group will not have an obligation to liquidate buildings
and other infrastructure. In addition, the possibility exists of redeployment of the production facilities to alternative
uses.
Timely inspections, surveys, repair work to reduce physical damage and maintain the normal level of performance
of structures and engineering equipment can extend the useful life of the facility for an indefinite period. These
factors together with the extended periods over which the Group’s uranium reserves are available to be mined
mean that it is not practical to estimate a reliable closure date for the UMP production facility.
In the event of future changes in environmental legislation and in the field of the use of atomic energy or its
interpretation, as well as the Group’s policy, obligations may arise which could require recognition as liabilities in the
financial statements.
Tax and transfer pricing legislation (judgements)
Kazakhstan tax and transfer pricing legislation is subject to varying interpretations (Note 37).
Swap transactions (judgements)
The Group sells part of its uranium products under swap transactions with separate agreements with the same
counterparty, being for sales and purchase of the same volume of uranium for the same price at different delivery points
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
28
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
or different timeframes. Effectively, this results in the exchange of own uranium (produced or purchased from the
Group’s entities) with purchased uranium.
Normally, under a swap transaction, the Group delivers physical uranium to one destination point, and purchases the
same volume of uranium at a third party converter for sale to end customers. Swap transactions are entered into
primarily to reduce transportation costs for uranium delivery from Kazakhstan to end customers.
Despite the fact that swap agreements are not formally related to each other, management concluded that these
transactions are in substance linked and would not have occurred on an isolated basis, driven by the existing market
demand and supply forces. In management’s view, supply of the same volume of homogeneous product (uranium) for
the same price represents an exchange of products, which should be presented on a net basis in the consolidated
financial statements, reflecting the economic substance of the transaction. Interpretation of terms and approach to the
accounting for swap transactions requires judgement.
In 2021, the Group did not recognise sales revenue from swap transactions of Tenge 146,910 million and cost of sales
of Tenge 135,158 million. In 2020, the Group did not recognise sales revenue from swap transactions of
Tenge 71,331 million, cost of sales of Tenge 65,713 million.
Control over DP Ortalyk LLP (judgement)
On 22 July 2021 the Group completed the sale of a 49% interest in DP Ortalyk LLP (Note 1). The Group retains a 51%
ownership interest and majority voting rights in the Supervisory Board. Sales activities of DP Ortalyk LLP are governed
by the Marketing agreement, any amendments to which would require consent by both owners. The Group governs
production activity within the 20% limit permitted by law through its power to approve the entity’s budget by simple
majority vote. Decisions about financing of DP Ortalyk LLP are made by unanimous consent of both owners. Сurrently,
DP Ortalyk LLP does not rely on shareholders’ or external financing. Given that all production volumes are committed
to be purchased by the Group and CGNPC based upon market prices, production volumes and costs have the most
significant impact on financial results and therefore are considered to be relevant activities for the purpose of the control
assessment. Based on these facts, the Group management has concluded that the Group retains control over DP
Ortalyk LLP.
5 Adoption of New or Revised Standards and Interpretations
The following amended accounting standards became effective from 1 January 2021, but did not have any material
impact on the Group:
COVID-19-Related Rent Concessions Amendment to IFRS 16 issued on 28 May 2020 and effective for annual
periods beginning on or after 1 June 2020.
Interest rate benchmark (IBOR) reform – phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
(issued on 27 August 2020 and effective for annual periods beginning on or after 1 January 2021).
6 New Accounting Pronouncements
Certain new standards and interpretations have been issued that are mandatory for annual periods beginning on or
after 1 January 2022 or later, and which the Group has not early adopted. These are:
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10
and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be
determined by the IASB).
IFRS 17 “Insurance Contracts” (issued on 18 May 2017 and effective for annual periods beginning on or after
1 January 2021, the effective date subsequently modified to 1 January 2023 by the Amendments to IFRS 17 as
discussed below).
Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual periods
beginning on or after 1 January 2023).
Classification of liabilities as current or non-current – Amendments to IAS 1 (issued on 23 January 2020 and
effective for annual periods beginning on or after 1 January 2022).
Classification of liabilities as current or non-current, deferral of effective date – Amendments to IAS 1 (issued on
15 July 2020 and effective for annual periods beginning on or after 1 January 2023).
Proceeds before intended use, Onerous contracts – cost of fulfilling a contract, Reference to the Conceptual
Framework – narrow scope amendments to IAS 16, IAS 37 and I FRS 3, and Annual Improvements to
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
29
6 New Accounting Pronouncements (Continued)
IFRSs 2018-2020 – amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (issued on 14 May 2020 and effective
for annual periods beginning on or after 1 January 2022).
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on
12 February 2021 and effective for annual periods beginning on or after 1 January 2023).
Amendments to IAS 8: Definition of Accounting Estimates (issued on 12 February 2021 and effective for annual
periods beginning on or after 1 January 2023).
Covid-19-Related Rent Concessions – Amendments to IFRS 16 (issued on 31 March 2021 and effective for annual
periods beginning on or after 1 April 2021).
Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 (issued on
7 May 2021 and effective for annual periods beginning on or after 1 January 2023).
The Group is currently assessing the impact of the amendments on its financial statements. The new standards and
interpretations are not expected to affect significantly the Group’s consolidated financial statements.
7 Segment Information
Operating segments are components that engage in business activities that may earn revenues or incur expenses,
whose operating results are regularly reviewed by the chief operating decision maker (CODM) and for which discrete
financial information is available. The CODM is the person or group of persons who allocates resources and assesses
the performance for the entity. The CODM has been identified as the Management Board of the Group headed by the
CEO.
(a) Description of products and services from which each reportable segment derives its revenue
The Group is a vertically integrated business involved in the production chain of end products – from geological
exploration, mining of uranium and nuclear fuel production, to marketing and auxiliary services (transportation and
logistics, procurement, research and other). The Group is organised on the basis of two main business segments:
Uranium – uranium mining and processing from the Group’s mines, purchases of uranium from joint ventures and
associates, external sales and marketing of produced and purchased uranium. This segment includes the Group’s
share in the net results of joint ventures and associates engaged in uranium production, as well as the Group’s
head office (JSC NAC Kazatomprom);
UMP (Ulba Metallurgical Plant JSC) – production and sales of products containing beryllium, tantalum and niobium,
hydrofluoric acid and by-products, processing of uranium on tolling basis for the Group’s uranium entities and
production and marketing of uranium powders and tablets to external markets and production of fuel assemblies
and their components
The revenues and expenses of some of the Group’s subsidiaries, which primarily provide services to the uranium
segment (such as drilling, transportation, security and geological), are not allocated to the results of this operating
segment. These Group’s businesses are not included within reportable operating segments as their financial results do
not meet the quantitative threshold. The results of these and other minor operations are included in the “Other” caption.
(b) Factors that management used to identify the reportable segments
The Group’s segments are strategic business units that focus on different customers. They are managed separately
because of the differences in the production processes, the nature of products produced and required marketing and
investment strategies. Segment financial information reviewed by the CODM includes:
information about income and expenses by business units (segments) based on IFRS figures on a quarterly basis;
assets and liabilities as well as capital expenditures by segment on a quarterly basis;
operating data (such as production and inventory volumes) and revenue data (such as sales volumes per type of
product, average sales price) are also reviewed by the CODM on a monthly and quarterly basis.
(c) Measurement of operating segment profit or loss, assets and liabilities
The CODM evaluates performance of each segment based on gross and net profit. Segment financial information is
prepared on the basis of IFRS financial information and measured in a manner consistent with that in these consolidated
financial statements. Revenues from other segments include transfers of raw materials, goods and services from one
segment to another, amount is determined based on market prices for similar goods.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
30
7 Segment Information (Continued)
(d) Information about reportable segment profit or loss, assets and liabilities
Segment information for the reportable segments for the years ended 31 December 2021 and 2020 is set out below:
In millions of Kazakhstani Tenge
Uranium
UMP
Other
Eliminations
Total
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
External revenue
616,860
525,532
55,323
42,625
18,828
19,300
-
-
691,011
587,457
Revenues from other segments
4,846
2,404
4,908
3,712
54,083
53,209
(63,837)
(59,325)
-
-
Cost of sales
(350,052)
(274,968)
(42,534)
(30,066)
(65,175)
(69,868)
54,794
55,278
(402,967)
(319,624)
-
Gross profit
271,654
252,968
17,697
16,271
7,736
2,641
(9,043)
(4,047)
288,044
267,833
Impairment losses, net of impairment
reversals
(4,790)
52
(200)
(114)
1,978
(1,666)
-
(3)
(3,012)
(1,731)
Gain from disposal of joint venture
-
22,063
-
-
-
-
-
-
-
22,063
Share of results of associates and
joint ventures
52,341
43,982
(1,932)
(1,745)
1,174
(2,151)
-
-
51,583
40,086
Net foreign exchange gain
2,845
2,339
488
1,379
12
41
-
-
3,345
3,759
Finance income
6,390
4,416
246
170
441
397
-
-
7,077
4,983
Finance expense
(6,237)
(7,010)
(464)
(632)
(195)
(167)
184
129
(6,712)
(7,680)
Income tax expense
(58,759)
(60,029)
(2,606)
(3,315)
(253)
(432)
-
-
(61,618)
(63,776)
Profit/(loss) for the year
212,963
222,889
7,085
6,284
4,222
(5,662)
(4,244)
(2,143)
220,026
221,368
Depreciation and amortisation
charge
(63,348)
(56,141)
(1,924)
(1,666)
(4,718)
(4,434)
728
257
(69,262)
(61,984)
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
31
7 Segment Information (Continued)
Segment information for the reportable segments for the years ended 31 December 2021 and 2020 is set out below (Continued):
In millions of Kazakhstani Tenge
Uranium
UMP
Other
Eliminations
Total
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Investments in associates and joint
ventures
142,920
107,354
2,705
4,636
9,070
7,897
-
-
154,695
119,887
Total reportable segment assets
2,061,161
1,690,120
111,224
83,820
77,142
77,413
(299,236)
(165,318)
1,950,291
1,686,035
Assets of disposal groups classified as
held for sale
-
-
-
-
1,213
3,244
-
-
1,213
3,244
Total assets
2,061,161
1,690,120
111,224
83,820
78,355
80,657
(299,236)
(165,318)
1,951,504
1,689,279
Total reportable segment
liabilities
657,916
479,272
36,630
14,161
19,057
20,615
(299,200)
(164,977)
414,403
349,071
Liabilities of disposal groups classified
as held for sale
-
-
-
-
-
416
-
-
-
416
Total liabilities
657,916
479,272
36,630
14,161
19,057
21,031
(299,200)
(164,977)
414,403
349,487
Capital expenditure
45,096
33,462
3,631
4,146
4,791
3,160
-
-
53,518
40,768
Capital expenditure represents additions to non-current assets other than financial instruments, deferred tax assets, post-employment benefits assets and rights arising under
insurance contracts.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
32
7 Segment Information (Continued)
(e) Analysis of revenues by products and services
The Group’s revenues are analysed by products and services in Note 9. Information about finance income and costs
is disclosed in Note 17.
(f) Geographical information
The Group’s main assets are located in the Republic of Kazakhstan. Distribution of the Group’s sales between
countries on the basis of the customer’s country of domicile was as follows:
In millions of Kazakhstani Tenge
2021
2020
China
191,212
195,860
United Kingdom (including Jersey and Cayman Islands)
156,928
33,856
Canada
115,163
65,501
USA
94,114
56,764
France
50,134
65,443
Kazakhstan
25,113
21,758
Russia
10,952
78,548
Brazil
9,914
3,332
Germany
8,283
3,776
Japan
3,167
4,830
India
44
32,695
Belgium
-
5,336
Other countries
25,987
19,758
Total consolidated revenues
691,011
587,457
Major customers
The Group has a group of customers under common control that accounts for more than 10% of the Group’s
consolidated revenue. This revenue in the amount of Tenge 236,204 million (2020: Tenge 181,695 million) is reported
under the Uranium segment.
8 Balances and Transactions with Related Parties
Parties are generally considered to be related if the parties are under common control or if one party has the ability to
control the other party or can exercise significant influence or joint control over the other party in making financial and
operational decisions. In considering each possible related party relationship, management has regard to the substance
of the relationship, not merely the legal form.
Entities under common control include companies under control of Samruk-Kazyna JSC. Transactions with other
government owned entities are not disclosed when they are entered into in the ordinary course of business with terms
consistently applied to all public and private entities, when they are not individually significant, if the Group’s services
are provided on standard terms available for all customers, or where there is no choice of supplier of services such as
electricity transmission services and telecommunications.
At 31 December 2021, the outstanding balances with related parties were as follows:
In millions of Kazakhstani Tenge
Accounts
receivable
and other
assets
Loans given
Accounts
payable and
other
liabilities
Borrowings
Associates
1,458
8,663
29,961
10,514
Joint ventures
4,270
187
18,508
-
Entities under common control
238
-
606
-
Controlling shareholder
-
-
127
-
Associates of the controlling
shareholder
11
-
1,013
-
Total
5,977
8,850
50,215
10,514
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
33
8 Balances and Transactions with Related Parties (Continued)
Transactions with related parties for the year ended 31 December 2021 were as follows:
In millions of
Kazakhstani Tenge
Sale of
goods and
services
Dividends
received
Purchase of
goods and
services
Dividends to
the
Shareholder
Finance and
other
income
Finance and
other costs
Associates
7,833
15,028
90,966
-
912
-
Joint ventures
12,291
2,080
29,051
-
-
-
Entities under common
control
79
-
5,867
-
-
-
Controlling shareholder
-
-
-
112,561
-
90
Associates of the
controlling shareholder
130
-
5,599
-
-
-
Total
20,333
17,108
131,483
112,561
912
90
In February 2019, following the acquisition of JV Khorasan-U LLP, the Group became a co-borrower and is jointly and
severally liable with Kyzylkum LLP for a loan provided by the Company to Kyzylkum LLP in 2010 in the amount of
Tenge 8,716 million (2020: Tenge 11,584 million).
In June 2021, the Group provided to Uranenergo LLP the repayable financial aid secured by entity’s property in the
form of a revolving credit line with a term until 30 June 2023 in the amount of Tenge 187 million (Note 30).
The Group is a guarantor for loans obtained by SKZ-U LLP in the amount of Tenge 5,220 million (2020: Tenge 8,481
million), as well as a loan to Ulba-FA LLP in the amount of Tenge 15,934 million (2020: Tenge 10,909 million) (Note
37).
At 31 December 2020, the outstanding balances with related parties were as follows:
In millions of Kazakhstani Tenge
Accounts
receivable
and other
assets
Dividends
receivable
Loans given
Accounts
payable and
other
liabilities
Loans and
borrowings
Associates
1,393
310
11,512
15,076
14,004
Joint ventures
1,347
-
-
2,929
-
Entities under common control
73
-
-
933
-
Controlling shareholder
-
-
-
507
-
Associates of the controlling
shareholder
10
-
-
18
-
Total
2,823
310
11,512
19,463
14,004
Transactions with related parties for the year ended 31 December 2020 were as follows:
In millions of Kazakhstani Tenge
Sale of
goods and
services
Dividends
received
Purchase of
goods and
services
Dividends to
the
Shareholder
Finance
and other
income
Finance and
other costs
Associates
7,585
42,265
89,684
-
1,183
15
Joint ventures
8,767
1,005
13,976
-
5
-
Entities under common control
189
-
5,474
-
-
-
Controlling shareholder
1
-
-
80,466
-
70
Associates of the controlling
shareholder
113
-
205
-
-
-
Total
16,655
43,270
109,339
80,466
1,188
85
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
34
8 Balances and Transactions with Related Parties (Continued)
Key management personnel is represented by personnel with authority and responsibility in planning, management
and control of the Group's activities, directly or indirectly. Key management personnel includes all members of the
Management Board and the members of the Board of Directors. The table below represents remuneration of the key
management personnel, paid by the Group in exchange for services provided. This remuneration includes salaries,
bonuses, as well as associated taxes and payments. No remuneration is paid or payable to representatives of the
Controlling shareholder in the Board of Directors.
In millions of Kazakhstani Tenge
2021
2020
Expense
Accrued
liability
Expense
Accrued
liability
Short-term benefits
Salaries and bonuses
1,088
60
1,205
98
Total
1,088
60
1,205
98
9 Revenue
The Group’s revenue arises from contracts with customers where performance obligations are satisfied mostly at a
point in time.
In millions of Kazakhstani Tenge
2021
2020
Sales of uranium products
625,048
529,196
Sales of beryllium products
26,119
21,866
Sales of tantalum products
15,777
12,205
Sales of other services
6,459
6,911
Sales of purchased goods
5,860
5,321
Drilling services
4,357
5,972
Sales of materials and other goods
3,713
3,030
Transportation services
3,413
2,798
Research and development
265
153
Sales of photovoltaic cells
-
5
Total revenue
691,011
587,457
10 Cost of Sales
In millions of Kazakhstani Tenge
2021
2020
Materials and supplies
241,695
167,546
Depreciation and amortisation
66,429
60,002
Wages and salaries
33,294
31,874
Taxes other than income tax
25,474
23,775
Processing and other services
17,404
19,738
Transportation expenses
4,982
2,913
Maintenance and repair
4,918
4,751
Utilities
1,703
1,669
Rent expenses
210
422
Research and development
49
115
Other
6,809
6,819
Total cost of sales
402,967
319,624
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
35
11 Distribution Expenses
In millions of Kazakhstani Tenge
2021
2020
Shipping, transportation and storage
11,110
10,351
Wages and salaries
1,456
1,139
Commissions
502
456
Materials and supplies
306
212
Rent
105
113
Depreciation and amortisation
65
66
Other
2,162
2,015
Total distribution expenses
15,706
14,352
12 General and Administrative Expenses
In millions of Kazakhstani Tenge
2021
2020
Wages and salaries
18,303
17,709
Consulting and information services
4,697
4,467
Depreciation and amortisation
2,493
1,744
Provision for tax fines and penalties
1,266
-
Insurance
788
519
Taxes other than income tax
661
950
Communication
495
257
Training expenses
401
258
Maintenance and repair
390
441
Rent
352
75
Corporate events
302
161
Tax fines and penalties
261
441
Business trip expenses
251
170
Utilities
187
160
Security
184
178
Materials and supplies
179
197
Bank charges
58
86
Stationery
57
70
Representative expenses
41
45
Other
2,739
1,654
Total general and administrative expenses
34,105
29,582
13 Impairment Losses and Reversal of Impairment Losses
In millions of Kazakhstani Tenge
2021
2020
Reversal of impairment losses of financial assets
239
425
Impairment losses of financial assets
(447)
(68)
(Impairment losses)/reversal of impairment on financial assets
(208)
357
The Group recognised the reversal of previously recognised impairments for the following non-financial assets:
In millions of Kazakhstani Tenge
Note
2021
2020
Inventories
29
623
963
Property, plant and equipment
21
365
42
Mine development assets
22
199
-
Intangible assets
20
-
5
Other assets
11
34
Total reversal of impairment losses
1,198
1,044
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
36
13 Impairment Losses and Reversal of Impairment Losses (Continued)
The Group recognised impairment losses for the following non-financial assets :
In millions of Kazakhstani Tenge
Note
2021
2020
Intangible assets
20
2,169
-
Inventories
29
1,238
654
Impairment of assets held for sale
1
1,084
-
Investments in associates
25
-
1,364
Other assets
512
1,114
Total impairment losses
5,003
3,132
An impairment loss of Tenge 2,169 million was recognised during the year for the Digital Mine software developed by
the Group following an assessment of its suitability for use within the Group.
14 Other Income
In millions of Kazakhstani Tenge
2021
2020
Gain from joint operations
3,513
4,874
Gain on disposal of subsidiary
915
-
Gain from fines and penalties
138
340
Other
2,959
2,156
Total other income
7,525
7,370
Gain from joint operations represents the effect of exchange rate volatility and spot price quotations on contractual
obligations for the purchase of uranium from joint operations.
15 Other Expenses and Net Foreign Exchange Gain
In millions of Kazakhstani Tenge
2021
2020
Social expenses
4,537
1,006
Remeasurement of non-financial liabilities
2,872
1,156
Non-recoverable VAT
2,235
624
Loss on suspension of production
1,626
842
Research expenses
725
505
Loss on disposal of non-current assets
411
19
Depreciation and amortisation
275
172
Loss on disposal of intangible assets
-
347
Other
2,713
2,934
Total other expenses
15,394
7,605
Net foreign exchange gain
In millions of Kazakhstani Tenge
2021
2020
Foreign exchange loss on financing activities, net
(1,696)
(4,396)
Foreign exchange gain on operating activities, net
5,041
8,155
Total foreign exchange gain, net
3,345
3,759
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
37
16 Personnel Costs
In millions of Kazakhstani Tenge
2021
2020
Wages and salaries, including 10% mandatory pension contributions
64,580
59,270
Social tax and social payments
6,904
6,437
Total personnel costs
71,484
65,707
17 Finance Income and Costs
In millions of Kazakhstani Tenge
2021
2020
Interest income calculated using the effective interest rate
Cash and cash equivalents
3,087
2,679
Short-term securities
959
94
Loans at amortised cost
912
1,182
Term deposits
129
-
Other
114
402
Other financial income
Financial derivative asset
1,732
435
Other
144
191
Total finance income
7,077
4,983
Finance costs
Interest expense on loans and borrowings
3,546
4,284
Unwinding of discount on provisions
2,259
2,629
Other
907
767
Total finance costs
6,712
7,680
18 Income Tax Expense
(a) Components of income tax expense
Income tax expense recorded in profit or loss comprises the following:
In millions of Kazakhstani Tenge
2021
2020
Current income tax
85,345
65,492
Deferred income tax
(23,727)
(1,716)
Total income tax expense
61,618
63,776
(b) Reconciliation between the tax expense and profit or loss multiplied by applicable tax rate
The income tax rate applicable to the majority of the Group’s profits in 2021 and 2020 is 20%. Income tax in the amount
of Tenge 33,466 that relates to the sales of interest in subsidiary (Note 1) was recognised in equity directly.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
38
18 Income Tax Expense (Continued)
A reconciliation between the expected and the actual taxation charge is provided below:
In millions of Kazakhstani Tenge
2021
2020
Profit before tax
281,644
285,144
Theoretical tax charge at statutory tax rate of 20%
56,329
57,029
Prior periods adjustments of income tax
5,401
3,966
Transfer pricing adjustment
5,371
2,561
Profit on income from controlled foreign company
1,383
-
Withholding tax on dividend payments
1,240
2,310
Share of results of joint ventures and associates
(10,317)
(8,017)
Other items
2,211
5,927
Income tax expense
61,618
63,776
(c) Deferred taxes analysed by type of temporary difference
Differences between IFRS and statutory taxation regulations in Kazakhstan give rise to temporary differences between
the carrying amount of assets and liabilities for financial reporting purposes and their tax bases. The tax effect of the
movements in these temporary differences is detailed below at 20%.
In millions of Kazakhstani Tenge
1 January
2021
Credited/
(charged) to
profit or loss
Exchange
differences
arising on
translation of
entities with
foreign
functional
currency
Disposal of
companies
31 December
2021
Tax effect of deductible/(taxable)
temporary differences
Property, plant and equipment, intangible
assets and mineral rights
(129,120)
5,483
6
136
(123,495)
Accounts receivable
(374)
166
-
-
(208)
Loans and borrowings
-
3
-
-
3
Provisions
438
1,134
-
-
1,572
Accrued liabilities on vacation payments
and bonuses
1,155
508
-
-
1,663
Taxes
916
593
-
-
1,509
Inventories
12,513
15,563
-
-
28,076
Other assets
(111)
269
-
-
158
Other liabilities
306
8
(4)
-
310
(114,277)
23,727
2
136
(90,412)
Recognised deferred tax asset
13,206
17,483
-
-
30,689
Recognised deferred tax liabilities
(127,483)
6,244
2
136
(121,101)
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
39
18 Income Tax Expense (Continued)
Management estimates that deferred tax assets of Tenge 1,572 million in 2021 (2020: Tenge 438 million) are
recoverable after more than twelve months after the end of the reporting period. Investments in subsidiaries, associates
and joint ventures will be recovered primarily through dividends. Dividends from subsidiaries, associates and joint
ventures are not taxable, accordingly the Group did not recognise deferred tax on undistributed earnings from
investments.
The tax effect of the movements in the temporary differences for the year ended 31 December 2020 is:
In millions of Kazakhstani Tenge
1 January
2020
Credited/
(charged) to
profit or loss
Business
combinations
and other
31 December
2020
Tax effect of deductible/(taxable) temporary
differences
Property, plant and equipment, intangible assets
and mineral rights
(131,377)
2,225
32
(129,120)
Accounts receivable
83
(457)
-
(374)
Loans and borrowings
(16)
16
-
-
Accounts payable
(1,301)
1,301
-
-
Provisions
1,414
(976)
-
438
Accrued liabilities
1,104
51
-
1,155
Tax losses carried forward
198
(198)
-
-
Taxes
1,262
(346)
-
916
Inventories
11,837
676
-
12,513
Other assets
609
(720)
-
(111)
Other liabilities
163
144
(1)
306
(116,024)
1,716
31
(114,277)
Recognised deferred tax asset
13,558
(352)
-
13,206
Recognised deferred tax liabilities
(129,582)
2,068
31
(127,483)
In the context of the Group’s structure, tax losses of different Group companies may not be offset against current tax
liabilities and taxable profits of other Group companies and, accordingly, taxes may accrue even where there is a
consolidated tax loss. Therefore, deferred tax assets and liabilities are offset only when they relate to the same taxable
entity.
The Group has unrecognised deferred tax assets in respect of unused tax loss carry forwards of Tenge 602 million in
2021 (2020: Tenge 5,435 million) and excluded from the calculation the tax losses for the enterprises sold in 2021 with
unrecognized tax losses. The tax loss carry forwards expire as follows:
In millions of Kazakhstani Tenge
2021
2020
2025
-
2,719
2026
-
676
2027
-
188
2028
-
1,120
2029
-
172
2030
368
560
2031
234
-
Total unrecognised deferred tax asset on tax losses
602
5,435
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
40
19 Earnings per Share
Basic earnings per share is calculated by dividing the profit or loss attributable to owners of the Company by the number
of ordinary shares in issue during the year (Note 32). The Company has no dilutive potential ordinary shares; therefore,
the diluted earnings per share equals the basic earnings per share. Earnings per share from continuing operations is
calculated as follows:
In millions of Kazakhstani Tenge
2021
2020
Profit for the year for the year attributable to owners of the Company
(in millions of Kazakhstani Tenge)
140,773
183,541
Number of ordinary shares (in thousands)
259,357
259,357
Earnings per share attributable to the owners of the Company, basic
and diluted (rounded to Tenge)
543
708
On 27 September 2019, the Company issued 70 million indexed to US Dollar bonds which were included in the official
list of Kazakhstan Stock Exchange JSC (hereinafter - the “KASE”). The Company is required to present information on
the book value of one share calculated in accordance with the KASE Listing Rules.
Book value per share is calculated as follows:
In millions of Kazakhstani Tenge
2021
2020
Total assets of the Group (in millions Tenge)
1,951,504
1,689,279
Intangible assets (in millions Tenge)
(58,940)
(59,906)
Total liabilities of the Group (in millions Tenge)
(414,403)
(349,487)
1,478,161
1,279,886
Number of ordinary shares (in thousands)
259,357
259,357
Book value of one share (Tenge per share)
5,699
4,935
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
41
20 Intangible Assets
In millions of Kazakhstani Tenge
Licences and
patents
Software
Goodwill
Other
Total
At 1 January 2020
Cost
1,897
6,634
54,953
1,329
64,813
Accumulated amortisation and
impairment
(844)
(2,257)
(6,459)
(556)
(10,116)
Carrying value
1,053
4,377
48,494
773
54,697
Additions
425
373
-
14
812
Disposals
(22)
(207)
-
(127)
(356)
Amortisation charge
(243)
(551)
-
(95)
(889)
Amortisation charge on disposals
22
47
-
127
196
Reversal of impairment
-
5
-
-
5
Transfers from property, plant and
equipment (Note 21)
22
5,419
-
-
5,441
At 31 December 2020
Cost
2,322
12,219
54,953
1,216
70,710
Accumulated amortisation and
impairment
(1,065)
(2,756)
(6,459)
(524)
(10,804)
Carrying value
1,257
9,463
48,494
692
59,906
Additions
204
631
-
19
854
Disposals
(4)
(218)
-
(13)
(235)
Depreciation charge and impairment
losses on disposals/transfers
4
218
13
235
Amortisation charge
(284)
(1,163)
-
(96)
(1,543)
Impairment (Note 13)
-
(2,169)
-
-
(2,169)
Transfers from property, plant and
equipment (Note 21)
2
834
-
1,833
2,669
Impairment in construction in progress
(transfers from property, plant and
equipment)
-
-
-
(777)
(777)
At 31 December 2021
Cost
2,524
13,466
54,953
3,055
73,998
Accumulated amortisation and
impairment
(1,345)
(5,870)
(6,459)
(1,384)
(15,058)
Carrying value
1,179
7,596
48,494
1,671
58,940
Goodwill impairment test
DP Ortalyk LLP, JV Akbastau JSC and Karatau LLP
Goodwill relates to business combinations in prior periods being: Tenge 5,166 million relates to subsurface use
operations of DP Ortalyk LLP at the area Central on Mynkuduk mine, Tenge 24,808 million relates to Karatau LLP and
Tenge 18,520 million relates to JV Akbastau JSC, which independently perform subsurface use operations at the
Budenovskoye mine. At least annually, goodwill is tested for impairment. The carrying value of goodwill applicable to
each of these entities is allocated to their respective cash generating units and the recoverable amount was determined
on a value in use basis from forecast cash flows over the term of subsurface use contracts. Forecast cash flows are
based on the approved volume of proven reserves, estimated volumes of production and sales over a life of mine plan
approved by management, using a discount rate of 12.97% for 2021 year (2020: 12.35%). Production volumes are
consistent with those agreed with the competent authority and independent consultant’s report and are based on the
production capacity of the cash-generating units. Key assumptions used in calculations include forecast sales prices,
production costs and capital expenditures. Sales prices used in developing forecast cash flows were determined using
an independent official source Ux Consulting LLC published in the fourth quarter of 2021. Production costs and capital
expenditures are based on approved budgets for 2022-2026 and growth of 5.12% which approximates long-term
average inflation rates. The estimated values in use significantly exceed the carrying amounts of the non-current assets
of the three cash-generating units, including goodwill, and therefore even reasonably possible changes in key
assumptions would not lead to impairment losses being recognised.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
42
21 Property, Plant and Equipment
Movements in the carrying amount of property, plant and equipment were as follows:
In millions of Kazakhstani Tenge
Land
Railway
infra-
structure
Buildings
Machinery
and
equipment
Vehicles
Other
Const-
ruction in
progress
Total
At 1 January 2020
Cost
406
2,007
135,023
83,240
20,133
6,011
19,372
266,192
Accumulated depreciation and
impairment
-
(860)
(32,800)
(36,984)
(11,406)
(2,938)
(1,751)
(86,739)
Carrying amount
406
1,147
102,223
46,256
8,727
3,073
17,621
179,453
Additions
11
-
414
3,190
1,981
703
10,483
16,782
Transfers
2
28
6,638
5,406
335
119
(12,528)
-
Depreciation charge
-
(86)
(5,228)
(6,470)
(1,534)
(768)
-
(14,086)
Impairment loss (Note 13)
-
-
(28)
(1)
-
-
(223)
(252)
Reversal of impairment losses
recognised in prior periods
-
-
8
33
-
-
1
42
Disposals
-
-
(121)
(640)
(444)
(77)
(292)
(1,574)
Transfer from inventories
-
-
13
56
-
18
201
288
Transfers from/(to) intangible
assets (Note 20)
-
-
-
19
-
-
(5,460)
(5,441)
Transfers to non-current
assets held for sale
-
-
(13)
-
(1)
-
-
(14)
Transfers to investment
property
-
-
(2,135)
(68)
-
-
-
(2,203)
Depreciation charge and
impairment losses on
disposals
-
-
110
566
412
67
214
1,369
Changes in estimates
(6)
-
(503)
(548)
-
-
-
(1,057)
Transfer to mine development
assets
(Note 22)
-
-
-
-
-
-
(593)
(593)
Translation to presentation
currency
-
-
19
-
11
3
-
33
At 31 December 2020
Cost
413
2,035
139,335
90,655
22,015
6,777
11,183
272,413
Accumulated depreciation and
impairment
-
(946)
(37,938)
(42,856)
(12,528)
(3,639)
(1,759)
(99,666)
Carrying amount
413
1,089
101,397
47,799
9,487
3,138
9,424
172,747
Additions
-
-
47
3,997
2,987
414
11,450
18,895
Transfers
-
-
2,004
1,772
94
96
(3,966)
-
Depreciation charge
-
(89)
(5,563)
(6,802)
(1,612)
(799)
-
(14,865)
Impairment loss
-
-
-
-
-
-
(9)
(9)
Reversal of impairment losses
recognised in prior periods
-
-
10
41
-
-
314
365
Disposals
(6)
-
(284)
(1,486)
(540)
(220)
(442)
(2,978)
Impairment disposals
-
-
-
-
-
-
2
2
Transfer from inventories
-
-
-
271
-
9
659
939
Transfers to intangible assets
(Note 20)
-
-
-
-
-
-
(2,669)
(2,669)
Impairment in construction in
progress (transfers to
intangible assets)
-
-
-
-
-
-
777
777
Transfer from/(to) investment
property
-
-
3
89
-
(29)
-
63
Depreciation charge and
impairment losses on
disposals/transfers
-
-
191
1,385
521
212
7
2,316
Changes in estimates
-
-
(1,859)
13
-
-
-
(1,846)
Transfer to mine development
assets
(Note 22)
-
-
-
-
-
-
(2,255)
(2,255)
Translation to presentation
currency
-
-
-
-
4
1
-
5
At 31 December 2021
Cost
407
2,035
139,246
95,311
24,560
7,148
13,960
282,567
Accumulated depreciation and
impairment
-
(1,035)
(43,300)
(48,232)
(13,619)
(4,226)
(668)
(111,080)
Carrying amount
407
1,000
95,946
47,079
10,941
2,822
13,292
171,487
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
43
21 Property, Plant and Equipment (Continued)
Depreciation expense of Tenge 12,773 million (2020: Tenge 11,773 million) was charged to cost of sales,
Tenge 65 million (2020: Tenge 67 million) to distribution expenses, Tenge 1,243 million (2020: Tenge 1,318 million) to
general and administrative expenses, Tenge 170 million (2020: 158 million tenge) to other expenses. The remaining
depreciation expense is included in finished goods, work-in-process and other inventory.
At 31 December 2021, construction in progress included mainly technical re-equipment of the production of
Ulba Metallurgical Plant JSC in the amount of Tenge 1,311 million (2020: Tenge 1,307 million) and construction of a
refinery in the amount of Tenge 3,127 million of JV Inkai LLP .
At 31 December 2021, the Group had contractual capital expenditure commitments in respect of property, plant and
equipment of Tenge 5,615 million (2020: Tenge 8,304 million).
There are no capitalized borrowing costs in 2021 (2020: nil).
At 31 December 2021, the gross carrying value of fully depreciated property, plant and equipment still in use was
Tenge 25,943 million (2020: Tenge 21,093 million).
Depreciation and amortisation charged on long-term assets for the years ended 31 December are as follows:
In millions of Kazakhstani Tenge
2021
2020
Mine development assets
34,185
27,308
Mineral rights
27,917
25,531
Property, plant and equipment
14,865
14,086
Intangible assets
1,543
889
Right-of-use assets
148
267
Total accrued depreciation and amortisation
78,658
68,081
Depreciation and amortisation charged to profit or loss for the years ended 31 December are as follows:
In millions of Kazakhstani Tenge
2021
2020
Cost of sales
66,764
60,002
General and administrative expenses
2,493
1,744
Distribution expenses
65
66
Other expenses
275
172
Total depreciation and amortisation charged to profit or loss
69,597
61,984
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
44
22 Mine Development Assets
In millions of Kazakhstani Tenge
Field
preparation
Site
restoration
costs
Ion exchange
resin
Total
At 1 January 2020
Cost
262,393
18,255
15,931
296,579
Accumulated depreciation and impairment
(147,164)
(3,609)
(5,066)
(155,839)
Carrying amount
115,229
14,646
10,865
140,740
Additions
22,236
-
-
22,236
Transfers from inventory
3,651
-
1,933
5,584
Transfer from property, plant and equipment
(Note 21)
593
-
-
593
Transfer from exploration and evaluation assets
(Note 24)
-
-
26
26
Depreciation charge
(25,815)
(701)
(792)
(27,308)
Changes in accounting estimates
(3,431)
(10,121)
-
(13,552)
At 31 December 2020
Cost
285,442
8,134
17,890
311,466
Accumulated depreciation and impairment
(172,979)
(4,310)
(5,858)
(183,147)
Carrying amount
112,463
3,824
12,032
128,319
Additions
27,870
-
-
27,870
Transfers from inventory
6,823
-
867
7,690
Transfer from property, plant and equipment
(Note 21)
2,255
-
-
2,255
Transfer from exploration and evaluation assets
(Note 24)
649
384
-
1,033
Depreciation charge
(33,260)
(193)
(732)
(34,185)
Reversal of impairment
-
199
-
199
Changes in accounting estimates
631
4,861
-
5,492
At 31 December 2021
Cost
323,670
13,379
18,757
355,806
Accumulated depreciation and impairment
(206,239)
(4,304)
(6,590)
(217,133)
Carrying amount
117,431
9,075
12,167
138,673
Estimated site restoration costs are capitalised when the Group recognises a provision for site restoration. The carrying
value of the provision and site restoration assets is reassessed at each reporting period end (Notes 4 and 34).
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
45
23 Mineral Rights
In millions of Kazakhstani Tenge
At 1 January 2020
Cost
646,153
Accumulated amortisation and impairment
(43,111)
Carrying amount
603,042
Amortisation charge
(25,531)
At 31 December 2020
Cost
646,153
Accumulated amortisation and impairment
(68,642)
Carrying amount
577,511
Additions
2,466
Transfer from exploration and evaluation assets (Note 24)
897
Amortisation for the period
(27,917)
At 31 December 2021
Cost
649,516
Accumulated amortisation and impairment
(96,559)
Carrying amount
552,957
24 Exploration and Evaluation Assets
In millions of Kazakhstani Tenge
Tangible assets
Intangible assets
Total
At 1 January 2020
19,504
3,423
22,927
Additions
938
-
938
Transfer to mine development assets (Note 22)
(26)
-
(26)
Transfer to inventory
(25)
(1)
(26)
Impairment
(23)
-
(23)
Changes in accounting estimates
(845)
-
(845)
At 31 December 2020
19,523
3,422
22,945
Additions
3,425
-
3,425
Transfer to mine development assets (Note 22)
(1,033)
-
(1,033)
Transfer to subsoil use rights (Note 23)
-
(897)
(897)
Changes in accounting estimates
(62)
-
(62)
At 31 December 2021
21,853
2,525
24,378
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
46
25 Investments in Associates
The table below summarises the movements in the carrying amount of the Group’s investment in associates:
In millions of Kazakhstani Tenge
2021
2020
Carrying value at 1 January
84,626
90,943
Share of results of associates
47,294
39,482
Contribution to charter capital
-
163
Transfer to assets held for sale
-
(2,297)
Dividends received from associates
(15,028)
(42,265)
Impairment of investment (Note 1, 13)
-
(1,364)
Other
-
(36)
Carrying value at 31 December
116,892
84,626
The Group’s interests in its principal associates were as follows:
2021
2020
Country of
incorpora-
tion
Principal activities
% ownership
interest held / % of
voting rights
Carrying
value in
millions of
Tenge
%
ownership
interest
held / % of
voting
rights
Carrying
value in
millions of
Tenge
JV KATCO LLP
Kazakhstan
Extraction, processing
and export of uranium
products
49%
85,123
49%
55,845
JV Zarechnoye JSC
Kazakhstan
Extraction, processing
and export of uranium
products
49.98%
10,968
49.98%
10,983
JV South Mining
Chemical Company
LLP
Kazakhstan
Extraction, processing
and export of uranium
products
30%
13,196
30%
11,321
Kyzylkum LLP
Kazakhstan
Extraction, processing
and export of uranium
products
50%
6,616
50%
5,424
Сaustiс JSC
Kazakhstan
Supply of caustic soda
40%
-
40%
-
SSAP LLP (former JV
SKZ Kazatomprom
LLP)
Kazakhstan
Production of sulphuric
acid
9.89%
693
9.89%
668
JV Rusburmash
Kazakhstan LLP
Kazakhstan
Geological exploration,
drilling services
49%
183
49%
240
Zhanakorgan-Transit
LLP
Kazakhstan
Transportation
40%
113
40%
145
Total investments in associates
116,892
84,626
On 22 January 2018 JV KATCO LLP (“the Partnership”) received a new mining allotment for site #2 (Tortkuduk) where
additional uranium reserves were found. Development of the South Tortkuduk project was approved by the participants
during 2017/2018. However, no formal addendum to the Subsoil Use Contract was signed for the extension of the
exploration period in 2015-2018. In November 2020 the Ministry of Energy refused application of the Partnership to
conclude an addendum to the Subsoil use contract for commercial development of the South Tortkuduk field. In
December 2020, the Partnership applied to the Supreme Court to appeal against the actions of the Ministry of Energy.
On May 24, 2021, the Supreme Court issued a decision on leaving the Partnership’s claim without consideration. On
November 19, 2021, the Partnership filed an appeal against this decision. On January 17, 2022, the Supreme Court of
the Republic of Kazakhstan rejected the appeal. In 2021, the Partnership and the Government of the Republic of
Kazakhstan represented by the Ministry of Energy and Ministry of Justice commenced negotiations to settle the dispute.
The Group’s management believes that the Partnership will continue as a going concern in the foreseeable future and
therefore has not recognised any impairment loss.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
47
25 Investments in Associates (Continued)
Summarised financial information for 2021 in respect of each of the Group’s material associates is set out below. The summarised financial information below represents amounts
shown in the associates’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.
In millions of Kazakhstani Tenge
Kyzylkum LLP
JV KATCO LLP
JV South Mining
Chemical Company LLP
JV Zarechnoye JSC
Other
Total
Current assets
3,897
125,413
57,210
15,224
2,742
204,486
Including cash
2,243
88,359
31,079
5,610
461
127,752
Non-current assets
22,383
85,480
35,287
15,777
11,510
170,437
Total assets
26,280
210,893
92,497
31,001
14,252
374,923
Current liabilities
(4,318)
(10,192)
(29,373)
(4,671)
(5,283)
(53,837)
Including financial liabilities net of trade and other accounts payable and provisions
(3,171)
(329)
(22,143)
(1,595)
(3,266)
(30,504)
Incl. loan from the Company
(3,169)
-
-
-
-
(3,169)
Non-current liabilities
(7,192)
(9,874)
(11,099)
(1,676)
(408)
(30,249)
Including financial liabilities net of trade and other accounts payable and provisions
(6,152)
(64)
(7,645)
(27)
-
(13,888)
Incl. loan from the Company
(6,152)
-
-
-
-
(6,152)
Total liabilities
(11,510)
(20,066)
(40,472)
(6,347)
(5,691)
(84,086)
Net assets
14,770
190,827
52,025
24,654
8,561
290,837
Group’s share of net assets of associates
7,384
93,506
15,608
12,321
1,052
129,871
Unrealised profit in the Group
-
(8,451)
(2,412)
(1,396)
-
(12,259)
Other
(768)
-
-
43
(145)
(870)
Goodwill
-
68
-
-
82
150
Carrying value of investments in associates
6,616
85,123
13,196
10,968
989
116,892
Total revenue
12,486
116,791
91,587
23,727
10,166
254,757
Depreciation and amortisation
(672)
(9,571)
(5,904)
(5,781)
(612)
(22,540)
Finance income
66
18
381
-
31
496
Finance costs
(510)
(857)
(1,263)
(166)
(430)
(3,226)
Foreign exchange gain/(loss)
(270)
2,032
(125)
126
-
1,763
(Impairment losses)/reversal of impairment losses
(2)
(1,542)
(16)
(11)
1
(1,570)
Income tax
(536)
(16,130)
(13,410)
(1,818)
(24)
(31,718)
Profit for the year
2,385
61,016
52,477
6,853
101
122,832
Total comprehensive income
2,385
61,016
52,477
6,853
101
122,832
Unrealised profit
-
(620)
(1,408)
(872)
-
(2,900)
Other
-
-
-
-
-
-
Share of result of associates
1,193
29,278
14,334
2,553
(64)
47,294
Dividends received
-
-
12,459
2,569
-
15,028
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
48
25 Investments in Associates (сontinued)
Summarised financial information for 2020 in respect of each of the Group’s material associates is set out below. The summarised financial information below represents amounts
shown in the associates’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.
In millions of Kazakhstani Tenge
Kyzylkum LLP
JV KATCO LLP
JV South Mining
Chemical Company LLP
JV Zarechnoye JSC
Other
Total
Current assets
1,336
73,445
40,574
10,414
3,426
129,195
Including cash
248
54,080
24,619
3,444
224
82,615
Non-current assets
25,811
73,426
34,984
16,311
11,656
162,188
Total assets
27,147
146,871
75,558
26,725
15,082
291,383
Current liabilities
(4,299)
(8,291)
(24,674)
(2,583)
(6,225)
(46,072)
Including financial liabilities net of trade and other accounts payable and
provisions
(3,144)
(265)
(19,999)
(32)
(3,642)
(27,082)
Incl. loan from the Company
(3,089)
-
-
-
-
(3,089)
Non-current liabilities
(10,463)
(8,768)
(9,804)
(1,201)
(398)
(30,634)
Including financial liabilities net of trade and other accounts payable and
provisions
(9,526)
(201)
(6,719)
-
-
(16,446)
Incl. loan from the Company
(9,509)
-
-
-
-
(9,509)
Total liabilities
(14,762)
(17,059)
(34,478)
(3,784)
(6,623)
(76,706)
Net assets
12,385
129,812
41,080
22,941
8,459
214,677
Group’s share of net assets of associates
6,192
63,608
12,324
11,465
1,097
94,686
Unrealised profit in the Group
-
(7,831)
(1,003)
(524)
-
(9,358)
Other movements
(768)
-
-
42
(126)
(852)
Goodwill
-
68
-
-
82
150
Carrying value of investments in associates
5,424
55,845
11,321
10,983
1,053
84,626
Total revenue
11,119
93,923
76,439
20,253
15,505
217,239
Depreciation and amortisation
(628)
(11,830)
(5,252)
(3,431)
(2,050)
(23,191)
Finance income
33
16
192
5
89
335
Finance costs
(2,351)
(824)
(1,384)
(116)
(1,271)
(5,946)
Net foreign exchange gain/(loss)
(11)
6,038
261
(177)
(322)
5,789
(Impairment losses)/reversal of impairment losses
38
(56)
(36)
(7)
3
(58)
Income tax
(201)
(13,178)
(10,775)
(1,750)
(142)
(26,046)
Profit/(loss) for the year
682
52,267
41,531
6,426
(1,194)
99,712
Other comprehensive loss
(47)
-
(41)
-
-
(88)
Total comprehensive income/(loss)
635
52,267
41,490
6,426
(1,194)
99,624
Unrealised profit
-
(538)
(926)
(192)
-
(1,656)
Share of result of associates
341
25,073
11,553
3,020
(485)
39,482
Dividends received
1,568
30,870
7,780
2,047
-
42,265
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
49
26 Investments in Joint Ventures
The table below summarises the movements in the carrying amount of the Group’s investment in joint ventures:
In millions of Kazakhstani Tenge
2021
2020
Carrying value at 1 January
35,261
33,122
Contributions to charter capital
-
2,499
Share of results of joint ventures
4,289
604
Dividends received from joint ventures
(2,080)
(1,005)
Other
333
41
Carrying value at 31 December
37,803
35,261
The Group’s interests in its principal joint ventures were as follows:
2021
2020
Country of
incorpora-
tion
Principal activity
% ownership
interest held
Carrying value
in millions of
Tenge
% ownership
interest held
Carrying value
in millions of
Tenge
Semizbay-U LLP
Kazakhstan
Extraction, processing and
export of uranium products
51.00%
20,945
51.00%
17,900
Ulba-FA LLP
Kazakhstan
Production of fuel assemblies
and their components
51.00%
2,705
51.00%
4,636
JV Budenovskoe LLP
Kazakhstan
Extraction, processing and
export of uranium products
51.00%
6,071
51.00%
5,881
Uranenergo LLP
Kazakhstan
Transfer and distribution of
electricity, grid operations
79.23%
3,095
79.23%
3,068
SKZ-U LLP
Kazakhstan
Production of sulphuric acid
49.00%
4,987
49.00%
3,776
JV UKR TVS CJSC
Ukraine
Production of nuclear fuel
33.33%
-
33.33%
-
Total investments in joint ventures
37,803
35,261
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
50
26 Investments in Joint Ventures (Continued)
Summarised financial information on respect of the Group’s material joint ventures is set out below. The summarised financial information below represents amounts shown in the
joint ventures’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.
Semizbay-U LLP
JV Budenovskoe LLP
Ulba-FA LLP
Other
Total
In millions of Kazakhstani Tenge
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Current assets
30,089
14,186
29
194
51,164
6,464
3,974
5,278
85,256
26,122
Including cash
13,132
2,946
22
193
5,747
39
219
1,012
19,120
4,190
Non-current assets
20,687
20,572
25,791
23,840
21,939
26,980
24,846
25,680
93,263
97,072
Total assets
50,776
34,758
25,820
24,034
73,103
33,444
28,820
30,958
178,519
123,194
Current liabilities
(7,090)
(2,647)
(296)
(495)
(35,769)
(2,231)
(9,735)
(9,424)
(52,890)
(14,797)
Including financial liabilities net of trade and
other accounts payable and provisions
(3,183)
(72)
(15)
(13)
(1,680)
(370)
(6,007)
(5,693)
(10,885)
(6,148)
Non-current liabilities
(4,412)
(4,077)
(1,933)
(320)
(32,031)
(22,122)
(4,239)
(9,194)
(42,615)
(35,713)
Including financial liabilities net of trade and
other accounts payable and provisions
(66)
-
(1,933)
(320)
(31,241)
(21,729)
(2,877)
(8,463)
(36,117)
(30,512)
Total liabilities
(11,502)
(6,724)
(2,229)
(815)
(67,800)
(24,353)
(13,974)
(18,618)
(95,505)
(50,510)
Net assets
39,274
28,034
23,591
23,219
5,303
9,091
14,846
12,340
83,014
72,684
Group’s share of net assets of joint ventures
20,030
14,297
12,031
11,841
2,705
4,636
8,724
7,484
43,490
38,258
Share in accumulated unrecognised losses
-
-
-
-
-
-
-
-
-
-
Goodwill
4,105
4,105
-
-
-
-
(1,374)
(1,374)
2,731
2,731
Impairment losses
-
-
-
-
-
-
(21)
(21)
(21)
(21)
Other
120
(7)
-
-
-
-
753
755
873
748
Unrealised gain
-
-
(5,960)
(5,960)
-
-
-
-
(5,960)
(5,960)
Unrealised profit in the Group
(3,310)
(495)
-
-
-
-
-
-
(3,310)
(495)
Carrying value of investments in joint
ventures
20,945
17,900
6,071
5,881
2,705
4,636
8,082
6,844
37,803
35,261
Total revenue
40,913
26,068
-
-
-
2
12,769
12,357
53,682
38,427
Depreciation and amortisation
(4,836)
(3,177)
-
-
(559)
(7)
(1,337)
(1,275)
(6,732)
(4,459)
Finance income
62
85
-
-
4
2
33
34
99
121
Finance costs
(501)
(531)
(1)
(20)
(1,466)
(615)
(107)
(277)
(2,075)
(1,443)
Foreign exchange gain/(loss)
(146)
30
5
486
(592)
(1,273)
(236)
(1,498)
(969)
(2,255)
Impairment losses
-
(255)
(14)
(49)
(11)
-
-
(2,623)
(25)
(2,927)
Income tax
(3,978)
(2,015)
(61)
(9)
(397)
(396)
(642)
(852)
(5,078)
(3,272)
Profit/(loss) for the year
15,569
8,082
(280)
408
(3,788)
(3,422)
2,505
(1,464)
14,006
3,604
Other comprehensive income/(loss)
34
14
-
-
-
-
2
-
36
14
Total comprehensive income/(loss)
15,603
8,096
(280)
408
(3,788)
(3,422)
2,507
(1,464)
14,042
3,618
Other
(2,815)
(314)
-
-
-
-
-
-
(2,815)
(314)
Share of results of joint ventures
5,125
3,807
(142)
208
(1,932)
(1,745)
1,238
(1,666)
4,289
604
Dividends received
2,080
1,005
-
-
-
-
-
-
2,080
1,005
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
51
26 Investments in Joint Ventures (Continued)
Together with China General Nuclear Power Corporation (CGNPC), the Group is involved in the construction of a fuel
assembly plant in Kazakhstan with a capacity to supply Chinese nuclear power plants with up to 200 tons of enriched
uranium per annum. In December 2015, subsidiaries of the Company and CGNPC established a joint venture Ulba-FA
LLP with 51% and 49% respective interests, which is responsible for construction and operation of the plant. The fuel
assembly plant was commissioned in December 2020. During 2021 the plant was certified by the owner of the
technology for the production of fuel assemblies and was also recognised as a certified supplier of nuclear fuel to
nuclear power plants in China from the end user of the plant's products (CGNPC Uranium Resources Company Limited
(CGNPC-URC).
A long-term contract for the supply of fuel assemblies between Ulba-FA LLP and CGNPC-URC was entered into in
May 2021.
Management regularly evaluates whether the Group exercises control, joint control or significant influence over
investees including subsidiaries, associates and joint ventures. Management applies judgement in this evaluation,
including: (a) determination of availability of power that gives to the Group ability to direct the relevant activities of the
investees that significantly affect their returns, and (b) determination of ability to use its power over the investees to
affect the amount of the investor’s returns. Management concluded that the Group does not have the ability to use its
power to exercise control over Uranenergo LLP. Accordingly, this investment is classified as an investment in a joint
venture.
27 Accounts Receivable
In millions of Kazakhstani Tenge
2021
2020
Trade accounts receivable
215,483
115,026
Trade accounts receivable from related parties
4,713
2,398
Total gross trade accounts receivable
220,196
117,424
Provision for impairment of trade receivables
(148)
(90)
Provision for impairment of trade receivables from related parties
(24)
(20)
Total current net trade accounts receivable
220,024
117,314
Other accounts receivable
175
160
Other accounts receivable from related parties
44
22
Total gross other accounts receivable
219
182
Provision for impairment of other receivables
(105)
(78)
Total net other accounts receivable
114
104
Total current accounts receivable
220,138
117,418
Information on the Group’s exposure to credit and currency risks and provision for impairment for accounts receivable
is disclosed in Note 40.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
52
28 Other Assets
In millions of Kazakhstani Tenge
2021
2020
Non-current
Restricted cash
17,654
14,846
VAT recoverable
11,315
14,544
Long-term inventories
7,247
7,790
Advances for non-current assets
1,857
972
Prepaid expenses
926
809
Loans to employees
271
454
Other assets
263
1,450
Total other non-current assets
39,533
40,865
Current
Advances for goods and services
3,026
3,402
Prepaid expenses
1,465
1,758
Advances to related parties for goods and services
1,244
423
Prepaid insurance
1,025
871
Restricted cash
427
354
Prepaid taxes other than income tax
371
767
Due from employees
259
274
Dividends receivable from related parties
-
310
Other assets
6
-
Total other current assets
7,823
8,159
Financial assets within other current and non-current assets include restricted cash, loans to employees and dividends
receivable. Other current and non-current assets are non-financial assets.
Non-current inventories include stock of enriched uranium which has been held since Group’s inception for future use
after commissioning of new facilities for production of uranium pellets. Management does not plan to use these
inventories in operational activity during the year after the reporting date.
In accordance with the terms of its subsurface use contracts, the Group transfers cash to long-term bank deposits to
finance site restoration activities. As at 31 December 2021 the balance of restricted cash held in long-term bank
deposits related to financing of future site restoration activities of Tenge 17,654 million (2020: Tenge 14,751 million).
29 Inventories
In millions of Kazakhstani Tenge
2021
2020
Finished goods and goods for resale
223,750
185,397
Including uranium products
222,195
183,633
Work-in-process
30,409
22,923
Raw materials
14,879
20,179
Other materials
5,709
5,104
Materials in processing
3,091
1,204
Spare parts
789
682
Fuel
479
655
Provision for obsolescence and write-down to net realisable value
(3,250)
(2,755)
Total inventories
275,856
233,389
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
53
29 Inventories (Continued)
Movements in the provision for obsolescence are as follows:
In millions of Kazakhstani Tenge
2021
2020
Balance at 1 January
(2,755)
(3,152)
Reversal of provision during the year
623
963
Inventory write off during the year
130
108
Accrual of provision during the year
(1,238)
(654)
Translation of foreign currency
(10)
(20)
Balance at 31 December
(3,250)
(2,755)
30 Loans to Related Parties
In millions of Kazakhstani Tenge
2021
2020
Non-current
Kyzylkum LLP
5,547
8,495
Provision for impairment
(54)
(72)
Total non-current loans
5,493
8,423
Current
Kyzylkum LLP
3,170
3,089
Uranenergo LLP
189
-
Provision for impairment
(2)
-
Total current loans
3,357
3,089
In 2010, the Group provided an interest-bearing long-term loan to Kyzylkum LLP with maturity to 2024. The loan is
collateralised by the property of Kyzylkum LLP. From December 2015, JV Khorasan-U LLP is a co-borrower of the
loan to Kyzylkum LLP and is a guarantor of the loan.
In June 2021, the Group provided repayable financial assistance to Uranenergo LLP secured by property in the form
of a revolving credit line with a term until June 30, 2023 to replenish working capital. As part of this line, cash tranches
for up to 12 months can be provided.
The weighted average annual interest rate on loans to related parties in 2021 was 8.5% (2020: 8.5%). According to
internal estimates, the level of credit risk for these loans is at an acceptable level.
31 Cash and Cash Equivalents
In millions of Kazakhstani Tenge
2021
2020
Current bank accounts
138,867
95,257
Demand deposits
22,338
14,987
Cash in hand
8
5
Reverse repo transaction
-
3,118
Provision for impairment
(23)
(20)
Total cash and cash equivalents
161,190
113,347
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
54
32 Share Capital
At 31 December 2021 the total number of authorised and paid ordinary shares is 259,356,608 (2020: 259,356,608) of
which 75% is owned by Samruk-Kazyna JSC and 25% of the shares/GDRs are freely floated with listing on the Astana
International Exchange (AIX) and the London Stock Exchange (LSE). One GDR represents a share in one share. Each
ordinary share carries the right to one vote. The nominal value of share is Tenge 142.9.
Dividends declared and paid during the year were as follows:
In millions of Kazakhstani Tenge
2021
2020
Dividends payable at 1 January
-
-
Dividends declared during the year
150,082
99,002
Dividends paid during the year
(150,082)
(99,002)
Dividends payable at 31 December
-
-
Dividends declared per share, in Tenge
579
382
33 Loans and Borrowings
In millions of Kazakhstani Tenge
2021
2020
Non-current
Bonds
77,700
76,300
Total non-current loans and borrowings
77,700
76,300
Current
Promissory notes issued
10,514
14,004
Bonds
803
788
Bank loans
-
6,734
Total current loans and borrowings
11,317
21,526
Total loans and borrowings
89,017
97,826
Financial liabilities of the Group as of December 31, 2021 are represented by bonds placed on the organized securities
market of Kazakhstan Stock Exchange JSC (“KASE”) and promissory notes.
The company placed 70 million US Dollar-indexed bonds on 27 September 2019 with a maturity of 27 October 2024
and a coupon of 4% per annum. The nominal value of one bond is Tenge 1,000.
Promissory notes were issued by a subsidiary of the Group JV Khorasan-U LLP in December 2014 to repay amounts
owing for mine development assets. According to the terms, the promissory notes are payable on demand at an interest
rate of 0.1%. As of 31 December 2021, the right of claim under these promissory notes belongs to Kyzylkum LLP, an
associate of the Group.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
55
33 Loans and Borrowings (Continued)
Information about the Group’s loans and borrowings is presented as follows:
In millions of Kazakhstani Tenge
Currency
Maturity
2021
2020
Bank loans
Sumitomo Mitsui Bankinq Corporation
US Dollar
2021
-
6,734
Total bank loans
-
6,734
Bonds
Bonds
US Dollar
2024
78,503
77,088
Total bonds
78,503
77,088
Promissory note issued
Kyzylkum LLP
Tenge
on demand
10,514
14,004
Total promissory note issued
10,514
14,004
In 2021, the Group’s weighted average interest rate on fixed interest rate loans was 3.52% (2020: 3.31%) and floating
interest rate loans was 0.97% (2020: 1.99%).
Reconciliation of debt
The table below shows an analysis of the debt amount and changes in the Group’s liabilities arising from financing
activities for each of the periods presented:
In millions Kazakhstani Tenge
Loans and
borrowings
Lease liabilities
Liability of
ownership
interest in a
subsidiary
Total
Debt at 31 December 2019
159,964
1,394
-
161,358
Proceeds from loans and
borrowings
119,093
-
-
119,093
Foreign currency translation
11,391
17
-
11,408
Interest accrued
4,174
110
-
4,284
Repayment of loans and
borrowings
(191,991)
(465)
-
(192,456)
Interest paid
(4,149)
(128)
-
(4,277)
Other non-cash changes
(656)
(182)
-
(838)
Debt at 31 December 2020
97,826
746
-
98,572
Proceeds from loans and
borrowings
65,525
-
-
65,525
Foreign currency translation
1,749
7
-
1,756
Interest accrued
3,168
60
-
3,228
Repayment of loans and
borrowings
(76,108)
(452)
-
(76,560)
Interest paid
(3,143)
(122)
-
(3,265)
Recognition of liability related to
put option (Note 1)
-
-
185,210
185,210
De-recognition of liability related
to put option (Note 1)
-
-
(185,210)
(185,210)
Other non-cash changes
-
52
-
52
Debt at 31 December 2021
89,017
291
-
89,308
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
56
34 Provisions
In millions of Kazakhstani Tenge
Compensation
for
occupational
deceases
Environmental
protection
Site restoration
Other
Total
At 1 January 2020
Non-current
228
3,420
35,799
40
39,487
Current
85
96
706
-
887
Total
313
3,516
36,505
40
40,374
Provision for the year
(27)
(1)
(27)
2
(53)
Unwinding of discount
22
244
2,362
1
2,629
Disposals
-
-
(24)
-
(24)
Reversal of provision
-
(43)
-
-
(43)
Provision used
(77)
(100)
-
-
(177)
Change in estimates
-
(459)
(14,975)
-
(15,434)
At 31 December 2020
Non-current
154
3,061
23,135
43
26,393
Current
77
96
706
-
879
Total
231
3,157
23,841
43
27,272
Provision for the year
14
(1)
-
32
45
Unwinding of discount
23
241
1,993
2
2,259
Disposals
-
-
(78)
-
(78)
Provision used
(72)
-
272
-
200
Change in estimates
-
(2,040)
5,403
-
3,363
At 31 December 2021
Non-current
129
1,261
30,725
77
32,192
Current
67
96
706
-
869
Total
196
1,357
31,431
77
33,061
Provision for environmental protection
The Group has a legal obligation to dispose of radioactive waste, eliminate and decommission contaminated items of
property, plant and equipment after the closure of the facility. The amount of the provision for landfill restoration and
asset remediation is determined using the nominal prices effective at the reporting dates, using the projected rate of
long-term average inflation for the expected period of operation of landfills and the discount rate at the end of the
reporting period.
Provision for restoration of mine sites
The Group estimates the site restoration costs for each mine operated by the Group. The undiscounted estimated cost
of restoration of mine sites in 2021 is Tenge 148,683 million (2020: Tenge 116,533 million). The amount of provision
for restoration of mine sites was calculated using current prices (the prices effective at the reporting date) for
expenditures to be incurred and then inflated using the forecast inflation rate effective for the period until the settlement
of restoration (5.12% for the period 2021-2045). The present value at 31 December 2021 has been estimated using a
discount rate of 9.85% (2020: 9.87%), which is a risk free nominal rate as the future cash outflows reflect risk specific
to the liability.
In view of the long-term nature of restoration of mine sites, there is uncertainty concerning the actual amount of
expenses that will be incurred in performing site restoration activities for each mine (Note 4). Changes in estimates
occur due to annual revision of costs for site liquidation including newly drilled wells, sand traps and other facilities
subject to subsequent liquidation.
In accordance with the terms of the subsurface use agreements the Group places cash in long-term bank deposits to
finance future site restoration activities. As at 31 December 2021, the accumulated transfers to restricted deposits
amounted to Tenge 21,963 million (2020: Tenge 19,246 million).
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
57
34 Provisions (Continued)
Key assumptions which serve as the basis for determining the carrying value of the provision for restoration of mine
sites provision are as follows:
there is a high probability that the Group will proceed to development and production stages for its fields which are
currently under exploration. This creates a constructive obligation for the Group to recognise a site restoration
provision for all mining and exploration licenses;
the expected term for future cash outflows for the mine sites is based on the life of the mines. A substantial part of
the expenditures is expected to occur starting from 2045, at the end of the expected life of the mines.
35 Accounts Payable
In millions of Kazakhstani Tenge
2021
2020
Trade accounts payable to related parties
33,620
18,880
Trade accounts payable
29,302
23,227
Total current trade accounts payable
62,922
42,107
Other accounts payable
3,092
1,841
Total current other accounts payable
3,092
1,841
Total current accounts payable
66,014
43,948
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 40.
36 Other Liabilities
In millions of Kazakhstani Tenge
2021
2020
Non-current
Liabilities under inventory loan agreements
13,461
-
Advances received
3,740
3,632
Liabilities under contracts with customers
2,564
-
Deferred income from subsidies received
1,356
1,309
Preferred shares
265
265
Issued financial guarantees
133
250
Historical costs liabilities
76
396
Advances received from related parties
2
7
Other
1,823
622
Total non-current other liabilities
23,420
6,481
Current
Liabilities under contracts with customers
16,598
85
Amounts due under uranium swap contracts
15,355
11,588
Accrued unused vacation payments and bonuses
8,425
5,775
Joint operations liabilities
4,569
-
Liability for social sphere contributions
3,600
-
Wages and salaries payable
1,561
1,509
Social contributions payable
1,301
1,078
Advances received
1,280
1,460
Historical costs liabilities
361
620
Dividends payable to other participants
263
265
Deferred income
166
203
Liabilities under inventory loan agreements
99
10,522
Issued financial guarantees
90
7
Advances received from related parties
46
69
Other
3,624
1,813
Total current other liabilities
57,338
34,994
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
58
36 Other Liabilities (Continued)
In 2020 the Group obtained finished goods under commodity loans totalling 21.9 million US Dollar. A liability was initially
recognised to return inventory at a cost of Tenge 8,597 million. This liability is subsequently remeasured in accordance
with changes in market prices for these goods. In the current period, additional agreements were concluded to extend
the maturity of these commodity loans until May-June 2023, as a result of which the commodity loans were reclassified
to noncurrent liabilities at 31 December 2021.
Joint operations liabilities represent obligations of the Group under the terms of the joint operations contractual
agreements that require equal volumes of uranium to be purchased during the period by the participants. In 2021 the
Group did not purchase the required volume.
The liability for social sphere contributions mainly relates to JV Akbastau JSC. As part of measures taken to amend the
subsoil use contract of JV Akbastau JSC, an agreement was reached during the year with the competent authority for
JV Akbastau JSC to make expenditures amounting to Tenge 6 billion to the region in which it carries out mining
operations.
In accordance with the terms of the subsurface use contracts the Group is required to reimburse the historical costs
related to the geological research and other costs incurred by the Republic of Kazakhstan for exploration of the
contractual territories before the transfer of subsurface use rights to the Group. In accordance with tax legislation, the
historical costs are to be reimbursed to the Government via quarterly payments over a 10 year period, beginning from
the date of commercial extraction of uranium. The liability represents the discounted cash flow of estimated future
payments. The discount rate applied for historical costs denominated in US Dollar was 3.3% and 7% for historical costs
denominated in Tenge.
The Group reports the following liabilities related to contracts with customers:
In millions of Kazakhstani Tenge
2021
2020
Non-current contract liability – material right
2,564
-
Current advances received under contract with customer for uranium
tablets
16,598
85
19,162
85
Non-current contract liabilities are options granted to the customers to acquire additional goods. The Group expects
that the allocated material right will be recognized as revenue in the 2026 once the associated right is executed or
expires.
Current advances mainly include advances for Tenge 16,420 million were received under the contract with Ulba-FA
LLP. During 2021 the Group has not recognized revenue, which is planned for 2022 when production at the plant starts
(Note 1).
37 Contingencies and Commitments
Compliance with Kazakhstan Tax legislation
The tax environment in the Republic of Kazakhstan is subject to change and inconsistent application and
interpretations. In particular, existing subsurface use contracts do not have tax stability from 1 January 2009 and tax
liabilities are computed under common regime. This could result in unfavourable changes to subsurface users’ tax
positions, including those of the Group. Non-compliance with Kazakhstani law and regulations as interpreted by the
Kazakhstani authorities may lead to the assessment of additional taxes, penalties and interest. Kazakhstani tax
legislation and practice is in a state of continuous development, and therefore is subject to varying interpretations and
frequent changes, which may be retroactive. Tax periods remain open to retroactive review by the Kazakhstan tax
authorities for five years.
The Group’s management believes that its interpretation of the relevant legislation is appropriate and the Group’s tax
positions will be sustained. In the opinion of the Group’s management, no material losses will be incurred in respect of
existing and potential tax claims in excess of provision or disclosures that have been made in these consolidated
financial statements.
(a) Transfer pricing legislation
In 2021 transfer pricing tax audits were started by the relevant Kazakhstan authorities across all subsoil use entities of
the Group, but were not completed at balance date due to the suspension of the audits by the tax authorities. During
these audits, the tax authorities enquired into the documentary support for certain transport arrangements included in
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
59
37 Contingencies and Commitments (Continued)
sales contracts of subsidiaries and affiliates. The legislation requires, in part, that Kazakhstani companies maintain
and, if required, provide supporting evidence for the determination of prices used in international transactions.
To date, other than as described below, no additional transfer pricing tax assessments have been issued. The
management of the Group believes that it will be able to sustain its position if the transfer pricing practices of the Group
are challenged by the tax authorities.
In JV Khorasan-U LLP (a subsidiary), transfer pricing was included in the results of a comprehensive tax audit
conducted by the authorities which resulted in 2021 in an additional assessment of KZT 910 million. The entity has
appealed against the results of the audit report and no liability has been recorded by the Group at 31 December 2021
in relation to this matter.
From 1 January 2009 the Group self-assesses additional income tax to reflect market prices. The amount of recognised
additional income tax in 2021 was Tenge 5,371 million (2020: Tenge 2,561 million).
As a result of audit conducted by tax authorities, the Company was presented additional corporate income tax in the
amount of Tenge 6,282 million on various transfer pricing issues. The most significant issue in the amount of Tenge
4,320 million was announced for short-term concluded under the Framework Agreements. The Group is preparing to
discuss controversial issues with the tax authorities and intends to make every effort to resolve the issue positively.
During the audits, the tax authorities raised a general issue of transfer pricing for the Group regarding the documentary
confirmation of the transport differential in China for subsidiaries and affiliates, thas was previously confirmed in practice
by a letter from CNEIC, the maximum estimated amount of risk of which is Tenge 9,135 million. This procedure was
included in the Rules (Methodology) for pricing natural uranium concentrate in 2021 to consolidate the existing practice.
(b) Complex tax inspections of Group entities
During 2021, most of the Group’s entities, underwent comprehensive tax audits for the years 2016-2019/2020, which
resulted in additional tax assessments including penalties and fines for the total amount of Tenge 5,377 million. The
results of the tax audits include:
- JV Inkai LLP Tenge 552 million, Kazatomprom-SaUran LLP Tenge 175 million, Ortalyk LLP Tenge 341 million and
JV Khorasan-U LLP Tenge 1,070 million. These additional assessments have been paid or recognised as liabilities by
these entities at 31 December 2021.
- JV KATCO LLP underwent a comprehensive tax audit during 2021, resulting in additional tax assessments for CIT of
Tenge 843 million, mineral extraction tax of amount of Tenge 297 million and penalties of Tenge 251 million. JV KATCO
LLP recognized these amounts as liabilities at 31 December 2021 but has appealed the assessments. The result of
the appeal is outstanding at the date of these financial statements. In addition, this entity received additional tax
assessments relating to withholding tax for the period 2014-2018 on payments of dividends and royalties amounting to
Tenge 10,482 million and penalties of Tenge 19,923 million. The entity appealed against these assessments which
resulted in a reduction of the amount of penalties to Tenge 5,358 million. JV KATCO LLP has commenced a court
action to have these assessments withdrawn and this is unresolved at the date of these financial statements. No liability
was recorded by this entity or the Group at 31 December 2021 in relation to these disputed withholding tax
assessments.
- several group entities received preliminary tax audit results indicating potential additional accruals of CIT: Appak LLP
- Tenge 198 million, JV Inkai LLP - Tenge 654 million, JV South Mining Chemical Company LLP - Tenge 1,270 million.
The entities disagree with the tax authorities on the possible additional taxes payable and did not recognize liabilities
at 31 December 2021. Appeals will be lodged against any additional tax assessments that may be issued.
Compliance with subsoil use contractual obligations
In accordance with the terms of the subsoil use contracts, the Group mining entities are required to comply with the
obligations specified therein. Failure to comply with the conditions stipulated by subsoil use contracts may lead to
negative consequences, including termination of contracts, fines and penalties. Under current subsoil use legislation,
the payment of penalty does not relieve subsurface user from fulfillment of stated obligations in full.
As of 31 December 2021 some entities underproduced uranium for more than 20% threshold allowed by the legislation.
Moreover, mining entities did not fulfill their financial obligations under subsoil use contracts, which could lead to
penalties of 1% from the amount of unfulfilled liability, or Tenge 270 million – Tenge 420 million for 2021. The Group
did not recognize any liabilities in the financial statements as at 31 December 2021 as it plans to settle financial liabilities
in future periods in accordance with the revised minimum work programs.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
60
37 Contingencies and Commitments (Continued)
In 2020 in order to prevent the spread of coronavirus infection, the Company undertook a number of measures during
the year including suspension of mining preparation and repair and restoration. In this regard, production plans for 2020
were adjusted. As a result, deviations from the contractual obligations or production of subsidiaries, associates and
JV’s exceeded the levels acceptable under relevant regulations of the Republic of Kazakhstan. All subsidiaries,
associates and joint ventures received certificates of the occurrence of force majeure from appropriate government
authorities and sent notifications to the Competent authority about the reduction in production volumes due to the
occurrence of force majeure. The Group initiated actions to sign amendments to subsoil use contracts during 2021 and
update the minimum working programs to take into account reduced production volumes and financial obligations; as
of 31 December 2021 the amendments were not signed by government authorities. Certain Group mining entities
received fine notifications from the government authorities and these amounts were expensed as incurred.
Insurance
The Kazakhstani insurance industry is in development stage, and many forms of insurance protection common in other
countries are not yet available. In 2021, the implementation of the Corporate Property Insurance Program for the
Company against “all risks” of death, loss or damage as a result of accidental and unforeseen direct physical impact
(excluding equipment breakdown/failure and interruption in production) was launched.
The Company does not have full insurance coverage for risks related to mining activities and production facilities,
including for damages caused by the stoppage of production or obligations incurred to third parties in connection with
damages caused to the property or the environment resulting from accidents or operations.
The Сompany provides Directors’ & Officers’ Liability insurance (D&O). D&O insurance policies offer liability cover for
the Company’s managers to protect them from claims which may arise from decisions and actions taken (“alleged
wrongful acts”) within the scope of their regular duties. The terms of the policy prohibit disclosure of the amount of the
insurance coverage.
Environmental obligations
Changes in the Environmental Code
In 2021, a new Environmental Code came into force in the Republic of Kazakhstan. One of the provisions in this Code
requires the obtaining of integrated environmental permits associated with the use of the best available techniques
(BAT) to be issued by Committee for Environmental Regulation and Control of the Ministry of Ecology, Geology and
Natural Resources of the Republic of Kazakhstan . At the first stage of implementation of the Code, the fifty largest
enterprises from the oil and gas, mining and metallurgical, chemical and electric power industries will be required to
obtain BAT permits. The uranium mining enterprises of the Group were not included in the list of the fifty largest
enterprises, however, the Group owns certain “category I” facilities that are considered to have a significant impact on
the environment. The operation of these facilities will require an integrated environmental permit from 2025. According
to the new Code, currently uranium mining and processing activities do not require the introduction of BAT. However,
this situation may change. Other provisions of this Code relevant to certain Group entities include installation of
automated emissions monitoring systems and waste management practices.
Until a full assessment is completed, it is not possible to assess the financial implications of the new requirements of
the new Kazakhstani Ecological Code, but the cost of complying with environmental requirements is expected to
increase, either in the form of additional investment required for waste management and the development of appropriate
monitoring processes, or in the form of higher fees for waste production.
Dismantlement and restoration Ulba facilities
As at the reporting date management concluded that the Group has no legal or constructive obligation to finance
dismantlement and restoration of Ulba plant facilities (Note 4).
Guarantees
Guarantees are irrevocable assurances that the Group will make payments in the event that another party cannot meet
its obligations. The maximum exposure to credit risk under financial guarantees provided to secure financing of certain
related parties at 31 December 2021 is Tenge 21,154 million (2020: Tenge 19,390 million) (Note 8).
Compliance with covenants
The Group is subject to certain covenants related primarily to its liabilities under credit lines and guarantee agreements.
The Group complied with all applicable covenants as of 31 December 2021 and 31 December 2020 and during the
periods then ended.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
61
37 Contingencies and Commitments (Continued)
Legal proceedings
From time to time and in the normal course of business, claims against the Group may be received. During 2021 and
as of 31 December 2021 there were no material claims or litigations against the Group. Management concluded that
no material losses are expected to be incurred in respect of any such claims.
38 Non-controlling Interest
The following table provides information about each significant subsidiary that has a non-controlling interest that is
material to the Group at 31 December 2021:
In millions of Kazakhstani Tenge
Country of
incorporation
and principal
place of business
Ownership rights
held by non-
controlling interest
Profit or loss
attributable to
non-controlling
interest
Accumulated
non-controlling
interest
Name
Ulba Metallurgical Plant JSC
Kazakhstan
5.67%
568
7,491
Appak LLP
Kazakhstan
35%
4,614
11,113
JV Inkai LLP
Kazakhstan
40%
45,556
123,120
JV Khorasan-U LLP
Kazakhstan
50%
11,839
110,290
Baiken-U LLP
Kazakhstan
47.5%
9,034
60,106
DP Ortalyk LLP
Kazakhstan
49%
7,780
34,857
Volkovgeologiya JSC
Kazakhstan
3.38%
(138)
281
Total
79,253
347,258
The following table provides information about each significant subsidiary that has non-controlling interest that is
material to the Group at 31 December 2020:
In millions of Kazakhstani Tenge
Country of
incorporation
and principal
place of business
Ownership rights
held by non-
controlling interest
Profit or loss
attributable to
non-controlling
interest
Accumulated
non-controlling
interest
Name
Ulba Metallurgical Plant JSC
Kazakhstan
9.82%
788
7,284
Appak LLP
Kazakhstan
35%
2,879
9,378
JV Inkai LLP
Kazakhstan
40%
19,292
94,682
JV Khorasan-U LLP
Kazakhstan
50%
8,888
98,450
Baiken-U LLP
Kazakhstan
47.5%
6,236
57,301
Volkovgeologiya JSC
Kazakhstan
10%
(303)
420
Kazatomprom-Damu LLP
Kazakhstan
10%
47
(378)
Total
37,827
267,137
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
62
38 Non-controlling Interest (Continued)
The summarised financial information of these subsidiaries is as follows:
Ulba Metallurgical Plant
JSC
Appak LLP
JV Inkai LLP
Baiken-U LLP
JV Khorasan-U LLP
DP Ortalyk LLP
Volkovgeologiya JSC
Kazatomprom-Damu LLP
In millions of Kazakhstani Tenge
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Current assets
74,957
46,052
17,164
17,428
108,441
54,033
44,227
29,913
89,727
63,461
54,052
-
8,042
9,086
-
-
Non-current assets
37,032
40,019
20,538
15,578
216,565
221,077
106,269
113,575
182,054
185,335
29,228
-
8,054
7,409
-
-
Current liabilities
(31,240)
(7,046)
(2,880)
(3,000)
(11,199)
(8,731)
(5,060)
(3,604)
(16,990)
(16,441)
(8,569)
-
(7,820)
(6,878)
-
-
Non-current liabilities
(5,390)
(7,116)
(2,910)
(3,052)
(35,022)
(35,470)
(18,733)
(19,086)
(34,049)
(35,291)
(3,573)
-
(91)
(163)
-
-
Equity, incl.
75,359
71,909
31,912
26,954
278,785
230,909
126,703
129,798
220,742
197,064
71,138
-
8,185
9,454
-
-
Equity attributable to the
Group
67,868
64,625
20,799
17,576
155,665
136,227
66,597
63,497
110,452
98,614
36,281
-
7,904
9,034
-
378
Non-controlling interest
7,491
7,284
11,113
9,378
123,120
94,682
60,106
57,301
110,290
98,450
34,857
-
281
420
-
(378)
Revenue
60,254
46,338
30,902
21,970
131,866
78,973
49,981
38,060
63,117
49,290
59,195
-
23,513
21,453
-
-
Depreciation and
amortisation
(1,924)
(1,666)
(3,184)
(1,073)
(10,913)
(10,985)
(12,694)
(10,028)
(13,842)
(11,394)
(4,971)
-
(1,424)
(1,489)
-
-
Including depreciation and
amortisation at fair value
-
-
-
-
(2,205)
(3,356)
(6,985)
(3,992)
(8,868)
(6,366)
-
-
-
-
-
-
Finance income
360
171
278
244
127
111
340
358
116
187
8,045
-
22
-
-
-
Finance costs
(467)
(636)
(218)
(180)
(359)
(339)
(69)
(123)
(72)
(105)
(8,186)
-
(319)
(9)
-
-
Income tax expense
(2,606)
(3,314)
(3,932)
(2,918)
(20,547)
(13,597)
(6,219)
(4,395)
(8,584)
(5,699)
(7,218)
-
61
117
-
-
Including tax effect of
depreciation and amortisation
of adjustments to fair value
-
-
-
-
441
658
1,404
800
1,774
1,273
-
-
-
-
-
-
Net foreign exchange gain
488
1,379
12
388
404
285
91
399
613
1,826
56
-
-
1
-
-
(Impairment
losses)/reversal of
impairment losses
(198)
(112)
9
(78)
(478)
-
(164)
-
-
-
22
-
60
(233)
-
-
Profit for the year
5,606
5,463
13,183
8,227
76,693
33,315
19,019
13,148
23,679
17,775
27,016
-
(1,511)
(3,233)
-
472
Profit attributable to the
owners of the Company
5,038
4,675
8,569
5,348
31,137
14,023
9,985
6,912
11,840
8,887
19,236
-
(1,373)
(2,930)
-
425
Profit attributable to non-
controlling interest
568
788
4,614
2,879
45,556
19,292
9,034
6,236
11,839
8,888
7,780
-
(138)
(303)
-
47
-
Profit/(loss) for the year
5,606
5,463
13,183
8,227
76,693
33,315
19,019
13,148
23,679
17,775
27,016
-
(1,511)
(3,233)
-
472
Other comprehensive
income/(loss)
16
50
1
1
-
(32)
(8)
(20)
-
-
2
-
(9)
(2)
-
-
Total comprehensive
income/(loss) for the
year
5,622
5,513
13,184
8,228
76,693
33,283
19,011
13,128
23,679
17,775
27,018
-
(1,520)
(3,235)
-
472
Dividends declared to non-
controlling interest
360
268
2,879
1,902
17,117
12,189
6,225
10,450
-
-
-
-
1
(2)
-
-
Net cash inflow/(outflow)
from:
- operating activities
7,561
6,935
13,376
5,807
26,366
46,968
13,777
19,324
12,606
19,052
17,440
-
109
(639)
-
(86)
- investing activities
(2,838)
(3,329)
(6,160)
(2,346)
(8,894)
(6,016)
(3,585)
(5,124)
(8,557)
(3,032)
(2,527)
-
(1,057)
(736)
-
49
- financing activities
(3,812)
(2,958)
(8,278)
(5,481)
(28,832)
(30,749)
(11,869)
(22,038)
(3,504)
(3,367)
(3)
-
750
1,478
-
(24)
Net cash inflow/(outflow)
911
648
(1,062)
(2,020)
(11,360)
10,203
(1,677)
(7,838)
545
12,653
14,910
-
(198)
103
-
(61)
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
63
38 Non-controlling Interest (Continued)
Allocation of profit between the non-controlling interest of JV Inkai LLP and the Group is impacted by the
allocation of JV Inkai LLP dividends. During 2020 and 2021 dividends declared/to be declared by JV Inkai
LLP were allocated according to an amendment to the agreement between Cameco and the Company to be
59.4% and 40.6% respectively, and not by reference to the ownership interests. This amendment was agreed
between the parties to compensate losses to Cameco due to a reduction in production by 20% in 2020-2021.
Accordingly, Tenge 20,857 mln (2020: Tenge 5,978 mln) was reclassified from profit attributable to the Group
to profit attributable to non-controlling interests.
39 Principal Subsidiaries
These consolidated financial statements include the following subsidiaries:
Ownership
Principal activity
2021
2020
Kazatomprom-Damu LLP
Consulting services on the Group’s investment activity
-
90%
KAP Technology JSC
Communication services
100%
100%
Qorgan-Security LLP
Security services
100%
100%
Appak LLP
Exploration, production, processing and sale of uranium
products
65%
65%
Ulba Metallurgical Plant JSC
Production and processing of uranium materials,
production of rare metals and semiconductor materials
94.33%
90.18%
Volkovgeologiya JSC
Exploration and research of uranium reserves, drilling
services, monitoring of radiation level and environment
conditions
96.62%
90%
High Technology Institute LLP
Research, project, development and engineering
consulting services
100%
100%
МК KazSilicon LLP
Production and sale of metallurgical and polycrystalline
silicon, recycling of silicon production waste
-
100%
Kazakhstan Solar Silicon LLP
Production of silicon of solar quality, silicon slices and
photovoltaic slices
-
100%
Astana Solar LLP
Production of photovoltaic modules
-
100%
DP Ortalyk LLP
Exploration, production, processing and sale of uranium
products
51%
100%
RU-6 LLP
Exploration, production, processing and sale of uranium
products
100%
100%
Kazatomprom-SaUran LLP
Exploration, production, processing and sale of uranium
products
100%
100%
Trade and Transportation
Company LLP
Procurement and transportation services
99.9999%
99.9999%
Kazakatom TH AG
Marketing function for sale of uranium, investment and
administration of finances, goods and rights
100%
100%
JV Inkai LLP
Exploration, production, processing and sale of uranium
products
60%
60%
Baiken-U LLP
Exploration, production, processing and sale of uranium
products
52.5%
52.5%
JV Khorasan-U LLP
Exploration, production, processing and sale of uranium
products
50%
50%
These consolidated financial statements include the following joint operations:
Ownership
Principal activity
2021
2020
Karatau LLP
Exploration, production, processing and sale of uranium
products
50%
50%
JV Akbastau JSC
Exploration, production, processing and sale of uranium
products
50%
50%
Energy Asia (BVI) Limited (EAL)
Commercial and investment activities
50%
50%
All entities are incorporated and operate on the territory of the Republic of Kazakhstan, except for Kazakatom TH AG,
which is incorporated in Switzerland and EAL that is registered in the British Virgin Islands.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
64
40 Financial Risk Management
Accounting policies and disclosures in respect of financial instruments are applied to the following classes of financial
instruments:
In millions of Kazakhstani Tenge
Note
2021
2020
Financial assets
Trade accounts receivable
27
220,024
117,314
Current bank accounts
31
138,844
95,237
Restricted cash
28
18,081
15,200
Demand deposits
31
22,338
14,987
Loans to related parties
30
8,850
11,512
Other investments
5,224
5,423
Reverse repo transaction
31
-
3,118
Financial derivative asset
-
1,048
Loans to employees
28
271
454
Dividends receivable from related parties
28
-
310
Other accounts receivable
27
114
104
Term deposits
28
43,235
15
Cash in hand
31
8
5
Total financial assets
456,989
264,727
Financial liabilities
Bonds
33
78,503
77,088
Trade accounts payable
35
62,922
42,107
Promissory note issued
33
10,514
14,004
Liability for social sphere contributions
36
3,600
-
Bank loans
33
-
6,734
Other accounts payable
35
3,092
1,841
Historical costs liabilities
36
437
1,016
Lease liabilities
291
746
Issued financial guarantees
36
133
250
Preferred shares
36
265
265
Dividends payable on non-controlling interest
36
263
265
Total financial liabilities
160,020
144,316
Financial risks are monitored by the Group’s risk management function and comprise market risk (including currency risk,
interest rate risk and price risk), credit risk and liquidity risk. The objectives of the Group’s financial risk management
policy are to establish risk limits, and then ensure that exposure to risks stays within these limits. Risk management
policies and systems are regularly analysed for the need of revision due to changes in market conditions and the Group
operations. The Group’s risk management function monitors compliance with approved policies and procedures.
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies
and processes for measuring and managing risk, and the Group’s policy for management of capital. Further quantitative
disclosures are included throughout these consolidated financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Management Board has established a Risk Management Committee, which is responsible for developing
and monitoring the Group’s risk management policies. The committee reports regularly to the Management Board and
the Board of Directors on its activities.
Credit risk
The Group has exposure to credit risk, which is the risk that one party to a financial instrument will cause a financial loss
for the other party by failing to discharge an obligation. Exposure to credit risk arises as a result of the Group’s sales of
products on credit terms and other transactions with counterparties giving rise to financial assets. Financial assets, which
potentially expose the Group to credit risk, consist mainly of trade and other receivables, cash and cash equivalents, term
deposits and loans to related parties.
The Group’s maximum exposure to credit risk by class of assets is reflected in the carrying amounts of financial assets in
the statements of financial position and the nominal amount of financial guarantees (Note 37).
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
65
40 Financial Risk Management (Continued)
The credit risk on cash and cash equivalents and term deposits is limited, because the counterparties are banks with
highest available credit ratings assigned by international credit rating agencies.
The table below shows credit ratings of banks where the Group had accounts as at 31 December 2021:
In millions of Kazakhstani Tenge
Rated
Standard &
Poor’s AAA
to A-
Rated
Standard &
Poor’s
BBB+ to
BBB-
Rated
Standard &
Poor’s BB+
to B-
Other
Total
Restricted cash
7,449
1,206
8,997
429
18,081
Term deposits
-
-
43,235
-
43,235
Current bank accounts
49,430
27,613
61,801
-
138,844
Demand deposits
3,024
337
18,977
-
22,338
Total
59,903
29,156
133,010
429
222,498
The table below shows credit ratings of banks where the Group had accounts as at 31 December 2020:
In millions of Kazakhstani Tenge
Rated
Standard &
Poor’s AAA
to A-
Rated
Standard &
Poor’s
BBB+ to
BBB-
Rated
Standard &
Poor’s BB+
to B-
Other
Total
Restricted cash
924
1,035
12,812
429
15,200
Term deposits
-
-
15
-
15
Current bank accounts
7,476
33,758
54,001
2
95,237
Demand deposits
651
-
14,336
-
14,987
Total
9,051
34,793
81,164
431
125,439
The Group applies the simplified approach permitted in IFRS 9 to measure expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been
grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 24 month before
31 December 2021 or 31 December 2020 respectively and the corresponding historical credit losses experienced within
this period. The historical loss rates are not adjusted to reflect forward-looking information on macroeconomic factors
because those factors do not significantly affect the risk profile. The expected environment in the near future (12 months)
is identical to the environment reflected in the time series used to estimate the parameters of expected credit losses.
The credit loss allowance for trade receivables is determined according to provision matrix presented in the table below.
The provision matrix is based the number of days that an asset is past due.
In millions of Kazakhstani Tenge
Loss rate
Gross carrying
amount
Lifetime
ECL
2021
Trade receivables
- current
0.06%
220,084
(132)
- 30 to 90 days overdue
32.04%
104
(32)
- over 360 days overdue
100%
8
(8)
Total trade receivables (gross carrying amount)
220,196
Credit loss allowance
(172)
Total trade receivables from contracts with customers
(carrying amount)
220,024
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
66
40 Financial Risk Management (Continued)
In millions of Kazakhstani Tenge
Loss rate
Gross carrying
amount
Lifetime
ECL
2020
Trade receivables
- current
0.07%
114,072
(81)
- less than 30 days overdue
0.15%
3,328
(5)
- over 360 days overdue
100%
23
(23)
Total trade receivables (gross carrying amount)
117,423
Credit loss allowance
(109)
Total trade receivables from contracts with customers
(carrying amount)
117,314
The following table explains the changes in the credit loss allowance for trade and other receivables between the
beginning and the end of 2021 as well as impairment provision for trade and other receivables during 2020:
In millions of Kazakhstani Tenge
Trade accounts
receivable
Other accounts
receivable
Provision at 1 January 2020
483
764
Provision for the year
47
2
Reversal
(398)
(11)
Amounts written-off
(23)
(681)
Provision at 31 December 2020
109
74
Provision for the year
184
34
Recalculation of foreign currency
1
-
Reversal
(121)
(2)
Amounts written-off
(1)
-
Provision at 31 December 2021
172
106
The Group’s exposure to credit risk in respect of trade accounts receivable is influenced mainly by the individual
characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the
industry and country, in which customers operate, has no significant influence on credit risk. The Group is exposed to
concentrations of credit risk. Approximately 65% of the Group’s revenue for 2020 (53% of trade receivables as of
31 December 2021) is attributable to sales transactions with seven main customers (2020: 66% of Group’s revenues;
52% of trade receivables). The Group defines counterparties as having similar characteristics if they are related entities.
The Group applies a credit policy under which each new customer is analysed individually for creditworthiness before the
Group’s standard payment and delivery terms and conditions are offered.
The Group does not require collateral in respect of trade and other receivables.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
67
40 Financial Risk Management (Continued)
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
In millions of Kazakhstani Tenge
2021
2020
China
68,397
35,639
Canada
60,276
9,089
USA
46,564
6,767
Russia
20,134
18,570
United Kingdom
11,929
13,265
Kazakhstan
5,792
6,932
European Union
5,645
22,709
Japan
1,287
3,063
Argentina
-
1,221
Brazil
-
59
Total
220,024
117,314
The average credit period on sales of goods is 30 days. No interest is charged on receivables for the first 30 days from
the date of the invoice.
Credit risk exposure in respect of loans to related parties (Note 30) arises from possibility of non-repayment of loans. For
loans to joint ventures and associates, the Group manages the credit risk by requirement to provide collateral in lieu of
borrowers’ property. Borrowers do not have a credit rating.
Expected Credit Loss (ECL) measurement
Measurement of ECLs is an estimate that involves determination methodology, models and data inputs. The following
components have a major impact on credit loss allowance: definition of default, SICR, probability of default (“PD”),
exposure at default (“EAD”), and loss given default (“LGD”), as well as models of macro-economic scenarios. The Group
regularly reviews and validates the models and inputs to the models to reduce any differences between expected credit
loss estimates and actual credit loss experience of issued loans and guarantees.
The Group used supportable forward looking information for measurement of ECL, primarily an outcome of its own macro-
economic forecasting model. Several assumptions that are easily interpretable can be selected for analysis: GDP growth
rate, inflation rate, exchange rate, crude oil price and current economic indicator. Final macroeconomic scenario includes
only historically observed values of the inflation rate and the share of overdue loans. Forward-looking information is
included in parameters of PD within the horizon of the next year after the reporting date. In addition, to calculate credit
losses, the corporate average cumulative default probabilities are updated annually according to S&P's Annual Global
Corporate Default Study and Rating.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The
Group is exposed to daily calls on its available cash resources. Liquidity risk is managed by the treasury department of
the Group. Management monitors monthly rolling forecasts of the Group’s cash flows.
The Group seeks to maintain a stable funding base primarily consisting of borrowings, trade and other payables and debt
securities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities as they fall due, under both normal and stressful conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation. The Group invests available cash funds in diversified portfolios of
liquid assets, in order to be able to respond quickly to unforeseen liquidity requirements.
The Group ensures that it has sufficient cash on demand to meet expected operational expense or financial obligations
which excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural
disasters.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
68
40 Financial Risk Management (Continued)
Below is a summary of the Group’s undrawn borrowing facilities and available cash and cash equivalents, including current
term deposits, which are the important instruments in managing the liquidity risk:
In millions of Kazakhstani Tenge
2021
2020
Current term deposits
65,558
14,987
Current bank accounts
138,867
95,257
Undrawn borrowing facilities
177,902
241,602
Total
382,327
351,846
The table below shows liabilities at the reporting date by their remaining contractual maturity. The amounts disclosed in
the maturity table are the contractual undiscounted cash flows. Such undiscounted cash flows differ from the amount
included in the statements of financial position because the statement of financial position amount is based on discounted
cash flows.
When the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the
end of the reporting period. Foreign currency payments are translated using the spot exchange rate at the end of the
reporting period.
The following are the contractual maturities of financial liabilities at 31 December 2021:
In millions of
Kazakhstani Tenge
Carrying
value
Contractual
cash flows
On demand
and less
than
1 month
From 1 to 3
months
From 3
months to 1
year
From 1 to 5
years
Over
5 years
Bonds
78,503
88,550
-
-
3,080
85,470
-
Trade accounts payable
62,922
62,922
-
62,922
-
-
-
Promissory note issued
10,514
10,514
10,514
-
-
-
-
Liability for social sphere
contributions
3,600
3,600
-
-
3,600
-
-
Other accounts payable
3,092
3,092
-
3,092
-
-
-
Historical costs liabilities
437
437
-
90
271
76
-
Lease liabilities
291
350
-
52
156
102
40
Issued financial guarantees
133
21,154
21,154
-
-
-
-
Preferred shares
265
265
-
-
-
265
-
Dividends payable to other
participants
263
263
-
263
-
-
-
Total
160,020
191,147
31,668
66,419
7,107
85,913
40
The above table does not include a potential cash outflow that might be required if put option relating to DP Ortalyk LLP
and Ulba-FA LLP are exercised pursuant to put option mechanism. This is because the Group assessed it controls the
exercise of such put options and therefore has no unavoidable obligation to pay cash (see more in Note 1).
The following are the contractual maturities of financial liabilities at 31 December 2020:
In millions of
Kazakhstani Tenge
Carrying
value
Contractual
cash flows
On demand
and less
than
1 month
From 1 to 3
months
From 3
months to 1
year
From 1 to 5
years
Over
5 years
Bank loans
6,734
6,763
-
-
6,763
-
-
Non-bank loans
-
-
-
-
-
-
-
Bonds
77,088
88,589
-
-
788
87,801
-
Trade accounts payable
42,107
42,107
-
42,107
-
-
-
Promissory note issued
14,004
14,004
14,004
-
-
-
-
Other accounts payable
1,841
1,841
-
1,841
-
-
-
Historical costs liabilities
1,016
1,055
-
155
465
435
-
Lease liabilities
746
898
-
133
400
262
103
Issued financial guarantees
257
19,390
19,390
-
-
-
-
Preferred shares
265
265
-
-
-
265
-
Dividends payable to other
participants
265
265
-
265
-
-
-
Total
144,323
175,177
33,394
44,501
8,416
88,763
103
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
69
40 Financial Risk Management (Continued)
Market risk
The Group has exposure to market risks. Market risk is the risk that changes in market prices will have a negative impact
on the Group’s income or the value of its financial instrument holdings. Market risks arise from open positions in (a) foreign
currencies, (b) interest bearing assets and liabilities and (c) equity products, all of which are exposed to general and
specific market movements. The objective of market risk management is to monitor and control market risk exposures
within acceptable limits, while optimising the return on investments. Management sets limits on the value of risk that may
be accepted, which is monitored on a daily basis. However, the use of this approach does not prevent losses outside of
these limits in the event of more significant market movements.
Sensitivities to market risks included below are based on a change in a factor while holding all other factors constant. In
practice this is unlikely to occur and changes in some of the factors may be correlated – for example, changes in interest
rate and changes in foreign currency rates.
Currency risk
The Group is exposed to currency risk on sales, purchases and borrowings which are denominated in currencies other
than the functional currency. Borrowings are denominated in currencies that match the cash flows generated by operating
entities in the Group. Therefore, in most cases, economic hedging is achieved without derivatives. In respect of other
monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an
acceptable level by planning future expenses taking into consideration the currency of payment. The Group is mainly
exposed to the risk of US Dollars currency fluctuations.
The Group’s exposure to currency risk was as follows:
In millions of Kazakhstani Tenge
2021
2020
Denominated in US Dollars
Trade accounts receivable
207,325
105,945
Current bank accounts
95,630
60,125
Loans to related parties*
8,663
11,512
Demand deposits
-
-
Other accounts receivable
1
-
Term deposits
43,212
-
Other assets
17,252
13,300
Total assets
372,083
190,882
Bonds*
(78,503)
(77,088)
Bank and non-bank loans
-
(6,734)
Trade and other accounts payable
(13,110)
(1,079)
Other financial liabilities
(34,048)
(10,593)
Total liabilities
(125,661)
(95,494)
Net exposure to currency risk
246,422
95,388
* - loan given to Kyzylkum LLP and bonds are nominated in Tenge, but are subject to indexation for changes in US
Dollar/Tenge exchange rate.
A 13% weakening and 10% strengthening of Tenge against US Dollar as at 31 December 2021 (2020: 14% weakening
and 11% strengthening) would increase/(decrease) equity and profit or loss by the amounts shown below.
In millions of Kazakhstani Tenge
2021
2020
US Dollar strengthening by 13% (2020: 14%)
25,628
10,688
US Dollar weakening by 10% (2020:11%)
(19,714)
(8,394)
Movements of Tenge against US Dollar above represent reasonably possible changes in market risk estimated by
analysing annual standard deviations based on the historical market data for 2021.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
70
40 Financial Risk Management (Continued)
Price risk on uranium products
The Group is exposed to the effect of fluctuations in the price of uranium, which is quoted in US Dollar on the international
markets. The Group prepares an annual budget based on future uranium prices.
Uranium prices historically fluctuate and are affected by numerous factors outside of the Group’s control, including, but
not limited to:
demand for uranium used as fuel by nuclear power stations;
depleting levels of secondary sources such as recycling and blended down highly enriched stocks available to close
the gap of the excess demand over supply;
impact of regulations by the International Agency on Nuclear Energy;
other factors related specifically to uranium industry.
At the end of the reporting period there was no significant impact of commodity price risk on the Group’s financial assets
and financial liabilities.
Interest rate risk
Changes in interest rates impact loans and borrowings by changing either their fair value (fixed rate debt) or their future
cash flows (floating rate debt). At the time of raising new loans or borrowings, management uses its judgement to decide
whether it believes that a fixed or a floating rate would be more favourable to the Group over the expected period until
maturity. As at 31 December 2021 approximately 100% (2020: 93%) of the Groups borrowings have a fixed interest rate.
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
In millions of Kazakhstani Tenge
2021
2020
Fixed rate instruments
Term deposits
43,235
15
Restricted cash
18,081
15,200
Demand deposits
22,338
14,987
Loans to related parties
8,850
11,512
Reverse repo transaction
-
3,118
Bonds
(78,503)
(77,088)
Promissory note issued
(10,514)
(14,004)
Net position
3,487
(46,260)
Floating rate instruments
Bank loans
-
(6,734)
Net position
-
(52,994)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and financial liabilities at fair value through profit or loss.
Therefore a change in interest rates at the reporting date would not affect profit or loss. However, fixed rate financial
assets and financial liabilities are exposed to fair value risk from change in interest rates. Reasonably possible changes
in interest rates do not significantly affect fair values of those financial assets and financial liabilities.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
71
40 Financial Risk Management (Continued)
Future cash flows sensitivity analysis for floating rate instruments
An increase (decrease) in interest rates of 125 (25) basis points in 2021 (2020: increase of 100 and
decrease of 25 basis points) at the reporting date would have decreased (increased) equity and profit or loss by the
amounts shown below. These amounts represent management’s assessment of reasonably possible changes in the
interest rates based upon current interest rates and the current economic environment. This analysis assumes that all
other variables, in particular foreign currency rates, remain constant and that balances due were outstanding for the year.
In millions of Kazakhstani Tenge
2021
2020
Increase of 125 basis points (2021), 100 basis points (2020)
-
(54)
Decrease of 25 basis points (2021), 25 basis points (2020)
-
13
Fair values versus carrying amounts
With the exception of instruments specified in the following table, the Group believes that the carrying value of financial
assets and financial liabilities are recognised in the consolidated financial statements approximate their fair value:
2021
2020
In millions of Kazakhstani Tenge
Carrying value
Fair value
Carrying value
Fair value
Financial liabilities
Historical costs liabilities
437
326
1,016
759
Total
437
326
1,016
759
In assessing fair values, management uses the following major methods and assumptions: (a) for interest free financial
liabilities and financial liabilities with fixed interest rate, financial liabilities were discounted at effective interest rate which
approximates the market rate; (b) for financial liabilities with floating interest rate, the fair value is not materially different
from the carrying amount because the effect of the time value of money is immaterial.
Capital management
The Group’s policy is to maintain a strong capital base so as to safeguard the Group’s ability to continue as a going
concern, to maintain investor, creditor and market confidence, to provide returns for shareholders, to maintain an optimal
capital structure to reduce the cost of capital, and to sustain future development of the business. Capital includes all
capital and reserves of the Group as recorded in the consolidated statements of financial position.
The Group’s loan agreements with banks include covenants, pursuant to which the Group must comply with applicable
laws and regulations, cannot create or permit any security over its assets or dispose assets, unless allowed by the loan
agreements, and must obtain the lenders’ approval for any acquisitions, mergers and disposals. The Group may also sell
uranium for non-military purposes and only to customers residing in countries which signed the Nuclear Non-Proliferation
Treaty and are members of the International Agency on Nuclear Energy. In addition, the Group must maintain certain key
financial covenants based on the Group’s consolidated financial information, such as: .
the debt to equity ratio;
the debt ratio to earnings before interest, taxes, depreciation and amortisation (Debt/EBITDA).
The Group’s internal quantitative capital management targets are similar to externally imposed requirements.
The Group applies the Policy on borrowings and financial sustainability management, which is aimed to manage financial
risks by adopting common principles and rules of debt management and financial sustainability for non-financial
organisations.
The Group has complied with all externally and internally imposed capital requirements during 2021 and 2020,
requirements associated with borrowing facilities.
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
72
41 Fair Value Disclosures
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at
quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations
techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that
is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is,
unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy.
If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3
measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
Assets and liabilities not measured at fair value but for which fair value is disclosed
Estimates of all assets and liabilities not measured at fair value but for which fair value is disclosed are level 3 of the fair
value hierarchy.
The fair values in level 3 of the fair value hierarchy were estimated using the discounted cash flows valuation technique.
The fair value of floating rate instruments that are not quoted in an active market was estimated to be equal to their
carrying amount. The fair value of unquoted fixed interest rate instruments was estimated based on estimated future cash
flows expected to be received discounted at current interest rates for new instruments with similar credit risks and
remaining maturities.
Financial assets carried at amortised cost
The fair value of floating rate instruments is normally their carrying amount. Estimate of all financial assets carried at
amortised cost is level 3 measurement. The estimated fair value of fixed interest rate instruments is based on estimated
future cash flows expected to be received discounted at current interest rates for new instruments with similar credit risks
and remaining maturities. Discount rates used depend on the credit risk of the counterparty.
Liabilities carried at amortised cost
Fair values of other liabilities were determined using valuation techniques. The estimated fair value of fixed interest rate
instruments with stated maturities were estimated based on expected cash flows discounted at current interest rates for
new instruments with similar credit risks and remaining maturities. The fair value of liabilities repayable on demand or
after a notice period (“demandable liabilities”) is estimated as the amount payable on demand, discounted from the first
date on which the amount could be required to be paid. The discount rates used ranged from 4.5% p.a. to 11,8% p.a.
depending on the length and currency of the liability.
42 Presentation of Financial Instruments by Measurement Category
For the purposes of measurement, IFRS 9 Financial Instruments classifies financial assets into the following categories:
(a) financial assets at FVTPL; (b) debt instruments at FVOCI, (c) financial assets at AC. Financial assets at FVTPL have
two sub-categories: (i) assets mandatorily measured at FVTPL, and (ii) assets designated as such upon initial recognition
or subsequently. All of the Group’s financial assets as of the end of reporting period fell into the category AC, except for
the financial derivative asset, classified as FVTPL. All of the Group’s financial liabilities were carried at AC. Fair value is
approximate to carrying amount.
43 Events after the Reporting Period
Subsequent to balance date, significant geopolitical events have occurred in Kazakhstan and Russia/Ukraine. These
events have not had a material impact to date on the Group’s operations although the resulting market uncertainty has
caused a significant decline in the traded price of the Company’s securities. Management is unable to predict the
consequences or future impacts of these events , if any, on the Group's financial position or operating performance.
Management will continue to monitor the potential impact of the above events and will take all necessary steps to prevent
adverse business impacts.
(a) January events in Kazakhstan
On 2 January 2022 protests triggered by a rise in fuel prices began in the Mangistau region of Kazakhstan which spread
to other regions in the country. The protestors demanded a number of social and economic reforms. Although the
Government took measures to respond to these demands, including a decrease in fuel prices, the protests escalated into
significant civil unrest in Almaty and southern regions of the country.
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1]МР.
73
JSC National Atomic Company Kazatomprom
Notes to the Consolidated Financial Statements – 31 December 2021
74
43 Events after the Reporting Period (Continued)
On 10 February 2022 UMP received calculations from the Department of Ecology of EKR, according to which
administrative fine amounted to Tenge 18,516 million.
The Group management does not agree with the calculation and considers the probability of confirming the calculations
as unlikely. UMP began to challenge this administrative fine in court.