National Atomic Company Kazatomprom JSC
Consolidated Financial Statements
for the year ended 31 December 2022 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
NAC Kazatomprom JSC Group and its Operations ............................................................................................ 7
2 Environment of the Group .................................................................................................................................. 8
3 Significant Accounting Policies ......................................................................................................................... 10
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies ............................................. 27
5 Adoption of New or Revised Standards and Interpretations ............................................................................. 31
6 New Accounting Pronouncements .................................................................................................................... 32
7 Segment Information ........................................................................................................................................ 32
8 Balances and Transactions with Related Parties .............................................................................................. 36
9 Revenue ........................................................................................................................................................... 38
10 Cost of Sales .................................................................................................................................................... 38
11 Distribution Expenses ....................................................................................................................................... 39
12 General and Administrative Expenses .............................................................................................................. 39
13 Net Reversal / (Impairment Loss) on non-financial assets ............................................................................... 39
14 Other Income .................................................................................................................................................... 40
15 Other Expenses and Net Foreign Exchange Gain ............................................................................................ 40
16 Payroll Costs .................................................................................................................................................... 41
17 Finance Income and Costs ............................................................................................................................... 41
18 Income Tax Expense ........................................................................................................................................ 41
19 Earnings per Share ........................................................................................................................................... 44
20 Intangible Assets .............................................................................................................................................. 45
21 Property, Plant and Equipment ......................................................................................................................... 46
22 Mine Development Assets ................................................................................................................................ 48
23 Mineral Rights ................................................................................................................................................... 49
24 Exploration and Evaluation Assets ................................................................................................................... 49
25 Investments in Associates ................................................................................................................................ 50
26 Investments in Joint Ventures ........................................................................................................................... 55
27 Accounts Receivable ........................................................................................................................................ 57
28 Other Financial Assets ..................................................................................................................................... 57
29 Other Non-Financial Assets .............................................................................................................................. 59
30 Inventories ........................................................................................................................................................ 59
31 Cash and Cash Equivalents ............................................................................................................................. 60
32 Share Capital .................................................................................................................................................... 60
33 Loans and Borrowings ...................................................................................................................................... 60
34 Provisions ......................................................................................................................................................... 62
35 Accounts Payable ............................................................................................................................................. 63
36 Other Liabilities ................................................................................................................................................. 64
37 Contingencies and Commitments ..................................................................................................................... 65
38 Non-controlling Interest .................................................................................................................................... 67
39 Principal Subsidiaries ....................................................................................................................................... 70
40 Financial Risk Management ............................................................................................................................. 72
41 Fair Value Disclosures ...................................................................................................................................... 79
42 Presentation of Financial Instruments by Measurement Category ................................................................... 80
43 Events after the Reporting Period ..................................................................................................................... 80
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ргсiзiсп
сг
Ше
аззеi
геiiгегтепi
сЫдаiсп
сг
из
п,iпiпд
епьиез.
\Л/е
геуiе’месi
сспзн1ап1з
герсгi
апсi
гесспсiIес
А1О
агтiсiiпз
п
Ше
герсг[
с
аiнiез
iiзеЛ
Ьу
Ше
Сгсiiр
iп
А1О
ргсiзiсп
езiпiа1ез.
Лiе
геуiе’мес
Ше
СЭгсiiр’з
са1сii1аiспз,
гесспсi1е
ргiпсiраi
аззiлтiрiспз
1с
ехiегпаI
зснгсез
апсi
ез1есI
сп
а
заiтiрiе
Ьазiз
iпрн1
сIаа
нзес
iп
псгпiпаI
ссзi
са1сн1аiспз,
iпсIнсiiпд
риузiсаi
сiште
Ы’мсгiз,
ссзi
рег
iiпi
апс
сспзгнсiсп
езiгпа1е
псггтiз.
А/е
епдадес
снг
iедаi
ехрегiз
с
сЫаiп
ап
нIпсIегзапiiпд
Ы
геянiiгеп,епз
Ы
Ше
ЕссiсдiсаI
Сссе
Ша
сагяе
iпс
еi’1ес
п
)н1у
2021
‘мiШ
гедагсiз
с
сiессгягрiззiспiпд
ргссезз
сг
псп-гтiiпiпд
епiез
апс
аззеззес
пiападегяепi’з
iпегрге1аiсп
апсi
н11I1гпеп
Ы
знiсii
геснiгегпепз
Ша
гезi,Iесi
п
Ше
ассгнiаi
Ы
асЛiспа1
ргсiзiспз
аз
Ы
31
ОесегтiЬег
2022.
Л/е
iп”с1уес
снг
ассснпiЛпд
Iесипiсаi
зресiаIiзз
Iс
аззiз
п
Ше
геуiе’м
Ы
Ше
ассснiпiпд
геагяеп
Ы
асiiiiспаI
ргсiзiспз
сг
псп-гпiпiпд
епьиез
ШаI
агсзе
аз
а
гезн1
Ы
iпгонiс1iсп
Ы
Ше
пе’м
Ессiсдiсаi
Сссе.
Л(е
епдадесi
снг
аIнаiсп
ехрегiз
п
Ше
анкi1
ргссеснгез
п
геiаiЛсп
Iс
Ше
аззеззгтiеп
Ы
Ше
геазспаЫепезз
Ы
Ше
iзсснп
апс
iпЛаiiспз
гаез
нзес
Ьу
Ше
гснр
iп
са1сЫаiсп
Ы
Ше
ргсiзiсп
сг
Ше
аззеi
геiгегтеп
сЬ1iдаiспз
сг
iз
ггiiпiпд
апс
псп
пiiпiпд
епiез.
.
Лiе
геуiе’мес
Огснр’з
сiзсIсзнiгез
iп
Ше
сспзсIiЛа1е
iпапсiа1
з1а1егтепз
сг
ссгпрiiапсе
‘мiШ
iРЗ
генiгеп,епз.
Ii
р14’С
Iпаереiiаепi
аш1i1ог’
геротI
(Сотiiiлпеi)
Раде
4
за1егяеп1з.
Тiе
Сгоiiр’з
ез1лтiа1оп
Ы
зiс1i
а
рго’Iiзiоп
iпсогрогаiез
Ше
еi1есз
Ы
Ше
ехресес
арргоасii
о
сесогягтiiззiопiпд
агiс
сiiзсоiiпi:
гаiез,
еесз
Ы
сiiапдез
iп
Iосаi
гедЫаiопз
аiопд
мiШ
Ше
е11есз
Ы
сiiапдез
п
iп1аiоп.
Но’л,
е
аi1огесI
оiг
Сгоiр
аiкIi
эсоре
\/Уе
Iаiiогесi
Ше
эсоре
Ы
оiг
аiкi
iп
огсег
1о
регiоггя
зЫиiсiепI
‚мог1
ю
епаЫе
из
ю
ргоiе
ап
орiпiоп
оп
Ше
сопзо1iс1ае1
iпапсiаi
заепiепз
аз
а
лФо1е,
Iаiiпд
iпо
ассоiiп
Ше
згiсiге
Ы
iiе
Сгоiiр,
Ше
ассоiiпiпд
ргосеззез
апс
сопiтоIз,
апсi
Ше
iпсiiзгу
п
м1iiсi
Ше
Сгоiiр
орегаез.
Тие
Огоiiр’з
пiа)ог
ргосiiс1оп
асi1Ше$
апсi
iгапiiятi
зiез
аге
iосаес
iп
Ше
ерiiЫiс
Ы
КагаiФзап.
Тие
Сгоiiр’з
Iгасiiпд
асii1ез
аге
саггiе
оii
ргiгяагiiу
оiii
Ы
КагаiФзiап,
аз
лiе11
аа
ШгоiiдIi
орегаiiопз
Ы
а
гасIiпд
зiiЬзiсiагу
зе
нр
п
Злiiгег1ап.
Тие
Згоiiр
орегаiеа
зееп
гпiпiпд
зiiЬзiiагiез
(iiпсег
1л’е1че
зiЬзiiг1асе
сопiгасiз),
оiiг
п,iпiпд
]оiпi
аггапдегтiепз
(iiпсIег
зiх
зiiЬзшiасе
iзе
соп1тасз)
апс
оiiг
гяiпiпд
аззосiаез
(iпсег
оiiг
зiiЬзiiгасе
iiзе
соп1тасз).
Л/е
аiкiес
зiх
гпiпiпд
зiiЬзiсiiагiез
апс
опе
гтiiпiпд
оiп
аггапдегпепi
АiиЛiогз
Ы
1мо
гтiiпiпд
)оiп
аггапдегяепз,
опе
гтiiпiпд
зiiЬзiсiагу
апс
1мо
пiiпiпд
аззосiаез
герог[ес
о
из
оп
Шеiг
аiiсiз.
Тие
аiiсi
эсоре
аIзо
iпсIiк1ес
оiг
поп-гяiпiпд
зiiЬзiсЯагiез,
аiiсЯ1ес
Ьу
iз
апс
опе
Ы
РмС
пе1мог1
iгпiз.
Вазес
оп
оiг
сопiпiоiiз
аззеззiтiеп1
‘лiе
iпсIiiсiесi
п
оiг
дгоiiр
аiкй
эсоре
Ше
Согтiрапу
апсi
зiхееп
епьиез
(согтiропепiз),
iпс1iiсiпд
iе
согяропепз
аiiсi1е
Ьу
оШег
аiкiiiогз.
Iп
огсiег
о
асЫее
арргоргiае
аiкIi
соегаде
Ы
Ше
аiкii
гiзIз
ап
Ы
еасii
iпсIiiа1Iу
зiдпiiсап1
согтiропепi
Ы
Ше
агоiiр,
iпсIiкiiпд
еасii
зедгтiепi
апсi
дгоiр
iiпсiоп:
.
$iдпiiсап1
согтiропепз
меге
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ю
еiШег
а
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аiiсIi,
зресiiес
гiзi4осiiзес
аiкii
ргосесiiiгез
Ы
зресс
ассоiiп
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ог
Сгоiiр
IееI
ргосегез.
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аеIесiоп
ыаз
Ьааес
оп
Ше
ге1аiуе
зiдпiiсапсе
Ы
Ше
епi1iез
лЛШiп
Ше
Огоiiр
ог
зресiiс
гiзз
i1епiес1.
Тие
согРропепз
мiШiп
Ше
эсоре
Ы
оiiг
могi
ассоiпе
ог
Ше
оI1омiпд
регсепiадез
Ы
Ше
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(1):
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Ьеiоге
ах
%
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оiа1
9’
.
ГпII
соре
апаi
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о!
соре
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iпз1гiсiопз
зе
оii
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аiдпiiсап
аiiсi1
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гапдесi
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Тепде
958
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о
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9131
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зресiiс
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гесiiiгепiеп1з.
Тие
Сгоiр
аiкЫ
Iеапi
сiгесес
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л’ог
пег1аеп
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согяропеп
аiкi1огз,
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а
соггЫпаiЛоп
Ы
геiаес1
пе1ногI
апс
поп-
пе1ыогI
iггя
герогiiпд,
гедiiiаг
пiегасiiоп
оп
аiкi1
апс
ассоiп1Лпд
та1егз,
регiоЛiс
зiе
iiзi1з
апс
геiем
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зресiiс
аiкiii
мог1
рарегз.
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регiоггтiiпд
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ргосесiiiгез
аЬое
а
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п
согтЫпаiЛоп
мiШ
ассIШопаI
ргосесiiгез
рег1оггтiес
а
а
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‘ме
иае
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зЫиiсiепI
апсi
арргоргiае
аiiсi1
еiсепсе
гедагiпд
Ше
сопзо1iсiаеI
iпапсiа1
з1а1епiепз
аз
а
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%
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в
ы
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еетийет
2022
р14’С
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5
ОШег
iпоггтiа1iоп
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з
гезроп5iЫе
ог
Ше
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Тiе
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iпоггпаiоп
согтргiзез
Ше
Аппiiаi
герог
(ЫII
соез
по
iпсiiкiе
Ше
сопзо1iсIаесi
iпапсiа1
заегтiепз
апс
оiг
аiсIi1ог’з
герог
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iз
ехресеЛ
о
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гтiасе
ааiiаЬ1е
о
i
а1ег
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сIае
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оп
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1iпапсiаi
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соез
по
соiег
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апi
ые
мi11
поI
ехргезз
апу
огпi
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аззiiгапсе
сопсiiзiоп
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‘п
соппесiiоп
мiШ
оiiг
аiкШ
Ы
Ше
сопзоIiiаес
iпапсiаI
заегпеп1в,
оiiг
геаропаiьиiiу
з
о
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iпоггтiаiоп
iсiепШiесi
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ап,
iп
оiпд
зо,
сопзiсiег
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iз
гтiаiегiаIiу
iпсопзiзеп1
мiШ
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сопзоiiс1аесi
iпапсiаi
заеп,епз
ог
оiiг
Iпом1есде
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п
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аiкi,
ог
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арреага
о
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гйаiегiаIiу
пiiззаеi
\Мiеп
ме
геа
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i
‘ме
сопс1iiсе
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iз
а
гпаегiаi
пiiза1аепiеп
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л’е
аге
геЫге
ю
согтюiiiпiсаiе
Ше
iтiаiiег
о
Шозе
с1iагде
‘мiШ
доУегпапсе.
езропзiЫ1i1iез
Ы
iтiапа9егяепi
апсi
Шове
сiагде
лiiШ
оiегпапсе
ог
Ше
сопзо1iсiаесi
iпапсiа1
зiаiеiтепiз
Мападегтiепi
iз
гезропзiЫе
ог
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ргерагаiЛоп
ап
аiг ргезепаiоп
Ы
Ше
сопзо1iса1е
1iпапсiаI
з1а1егяепз
iп
ассогiапсе
мiШ
Iпегпаiопа1
йпапсiаi
1ерог1iпд
8апсiагсiз,
апс
ог
зiiсii
iпегпаI
сопгоI
аз
гтiападеп,епi
сееггпiпез
iз
песевзагу
о
епаЫе
Ше
ргерагаiоп
Ы
сопзо1iсаес
iiпапсiаi
з1а1егтiепз
Ша
аге
гее
гогя
гяаегiа1
п,iзз1аеiтеп1,
‘мiiеШег
iiе
о
гаiкi
ог
еггог.
Iп
ргерагiпд
Ше
сопзоIiсаеI
iпапсiа1
з1аепiепз,
гпападепiеп
з
гезропзiЫе
ог
аззеззiпд
Ше
Огоiiр’з
аЫ1iу
о
сопiЛпiiе
аз
а
доiпд
сопсегп,
сiiзсiозiпд,
аз
аррiiсаЫе,
гтiайегз
геiае
о
доiпд
сопсегп
апс
1зiпд
Ше
доiпд
сопсегп
Ьазiа
Ы
ассоiiпiЛпд
iiпIезз
гтiападегт’епi
еiШег
iпiепсiз
ю
Iiсiiiсiаюе
Ше
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ог
юо
сеаве
орегаюiопз,
ог
iаз
по
геаiiзiiс
а1юегпаюiе
ью
юо
о
зо.
Тiiозе
сI,агдес
л’iШ
до’б’егпапсе
аге
гезропзiЫе
ог
оегзееiпд
Ше
Сгоiiр’з Iiпапсiаi
герогЁiпд
ргосезз.
Аiiсiiiог’з
гезропзiЫIiiiез
ог
Ше
аiiсi
Ы
Ше
сопзоiiсiаiесi
iпапсiа1
за1еiтiеп1з
Оiг
оьесюiез
аге
юо
оьюаiп
геазопаЫе
аззiгапсе
аЬоЫ
лФеШег
Ше
сопзо1iсаюес
1Ёпапсiаi
зюаюегяепюз
аз
а
лФоIе
аге
гее
гогтi
гтiаюегiаi
пiiззюаюегпепю,
мiiеШег
сiiе
ю
гаiiс1
ог
еггог,
апсi
ю
iззiiе
ап
аiкiiюог’з
герог
Шаю
iпс1iкез
оiiг
орiпiоп.
IеазопаЬ1е аззiiгапсе
iз
а
Iiiдi’
iее1
Ы
аззыгапсе
ЬЫ
iз
поi а
дiагапюее
Шаю
ап
аiсi1
сопсiiсюес
п
ассогапсе
мiШ
‘ЗАз
‘ми’
аКмауз
сеюесю
а
гтiаюегiаi
гпiззюаюегтiепю
‘мiiеп
ю
ехiзюз.
Мiззюаюегяепюз
сап
агiзе
гогя
гаiсI
ог
еггог
апсi
аге
сопзiЛеге
пiаюегiаI
i,
iпсiiсй.аI1у
ог
п
Ше
аддгедаюе,
Шеу
соii1с
геазопаЫу
Ье
ехресюесi
юо
iп1iепсе
Ше
есопогяiс
сесiзiопз
Ы
iiзегз
юаеп
оп
Ше
Ьазiз
Ы
Шезе
сопзоiiса1ес
1iпапсiаi
зюаюепiепюз.
Аз
рагю
Ы
ап
аiкi1
п
ассогсапсе
лЛШ
‘ЗАз,
ме
ехегсiзе
ргЫеззiопаI
iiсIдгтепю
ап
гяаiпiаiп
(
ргЫеззiопаi
зсерюiсiзгя
шгодою
ше
аiiсЖ.
Лiе
аiзо:
.
Iсеп1iу
апс
аззезз
Ше
гiзiз
Ы
гпаюегiаI
гтiiззюаюегпепю
Ы
Ше
сопзо1iсаюес
Iiпапсiаi
зюаюегтiепюз,
лФеШег
сию
юо
гаiiс1
ог
еггог,
сiезiдп
апсi
регiогпi
аiiсiiю
ргосесыгез
гезропзiе
юо
Шозе
гiзIз,
апсi
оьюаiп
аiкЯю
еiЛепсе
ШаI
iз
зьиiсiепю
апсi
арргоргiаюе
ю
ргоiс1е
а
Ьазiз
ог
оiг
орiпiоп.
Тие
гiзi
Ы
пою
еюесюiпд
а
гяаюегiаi
гтiззюаюегтiепю
гезiiIюiпд
гоггi
гаiк
з
Ыдi,ег
Шап
ог
опе
гезiiiюiпд
гогтi
еггог,
аз
гаiк
гтiау
iпо1уе
соiiiiзiоп,
огдегу,
iпюепюiопаi
огяiззiопз,
гтiiзгергезепюаюiопз,
ог
Ше
оеггiе
Ы
iпюегпаi сопюгоi.
.
ОЫаiп
ап
пегзюапiпд
Ы
iпюегпаI
сопюгоi
ге1еапю
юо
Ше
аiкiю
п
огсiег
юо
сезiдп
аiiсiю
ргосегез
Шаю
аге
арргоргiаюе
п
Ше
сiгсштiзюапсез,
ью
пою
ог
Ше
рiiгрозе
Ы
ехргеззЁпд
ап
орiпiоп
оп
Ше
еесюiепезз
Ы
Ше
Огоiр’з
iпюегпаI
сопюгоi.
.
Еа1iiа1е
Ше
арргоргiаюепезз
Ы
ассоiiпюiпд
роiiсiез
iiзес
ап
Ше
геазопаЫепезз
Ы
ассоiпюiпд
езюiпiаюез
ап
геIаюес
iiзсIозiiгез
гтiасе
Ьу
гпападеггiепю.
-iii
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National Atomic Company Kazatomprom JSC
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 16 March 2023:
Beketayev R.B.
Chief Financial Officer
Jakypbekova S.J.
Chief Accountant
In millions of Kazakhstani Tenge
Note
For the year ended
31 December 2022
Revenue
9
1,001,171
Cost of sales
10
(475,097)
Gross profit
526,074
Distribution expenses
11
(25,605)
General and administrative expenses
12
(44,507)
Net reversal/(impairment losses) on non-financial assets
13
176
Net reversal/(impairment losses) on financial assets
132
Net foreign exchange gain
15
17,304
Other income
14
21,717
Other expenses
15
(9,564)
Finance income
17
17,327
Finance costs
17
(8,425)
Share of results of associates
25
75,736
Share of results of joint ventures
26
13,340
Profit before tax
583,705
Income tax expense
18
(110,742)
PROFIT FOR THE YEAR
472,963
Other comprehensive income
Items that may be subsequently reclassified to profit or
loss:
Exchange differences arising on translation of entities
with foreign functional currency
(46)
Items that will not be reclassified to profit or loss:
Net gain/(losses) from investments in equity securities at
fair value through other comprehensive income
14
Remeasurements of post-employment benefit obligations
(478)
Other comprehensive (loss)/income for the year
(510)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
472,453
Profit for the year attributable to:
- Owners of the Company
348,048
- Non-controlling interest
38
124,915
Profit for the year
472,963
Total comprehensive income attributable to:
- Owners of the Company
347,589
- Non-controlling interest
124,864
Total comprehensive income for the year
472,453
Earnings per share attributable to the owners of the
Company, basic and diluted (rounded to Tenge)
19
1,342
National Atomic Company Kazatomprom JSC
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 2022
31 December 2021*
ASSETS
Non-current assets
Property, plant and equipment
21
188,300
171,487
Mine development assets
22
162,174
138,673
Mineral rights
23
525,140
552,957
Intangible assets
20
59,159
58,940
Exploration and evaluation assets
24
26,543
24,378
Investments in associates
25
154,124
116,892
Investments in joint ventures
26
44,208
37,803
Deferred tax assets
18
34,515
30,689
Other financial assets
28
59,371
23,671
Other non-financial assets
29
21,279
24,258
1,274,813
1,179,748
Current assets
Accounts receivable
27
270,921
220,138
Prepaid income tax
11,451
7,526
VAT recoverable
62,389
46,447
Inventories
30
392,621
275,856
Cash and cash equivalents
31
169,536
161,190
Other financial assets
28
20,678
52,249
Other non-financial assets
29
19,274
7,137
946,870
770,543
Assets of disposal groups classified as held for sale
25
850
1,213
947,720
771,756
TOTAL ASSETS
2,222,533
1,951,504
* Certain amounts in this column do not correspond to the consolidated financial statements for the year ended 31 December 2021,
since they comprise reclassifications that are described in Note 3.
National Atomic Company Kazatomprom JSC
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 2022
31 December 2021
EQUITY
Share capital
32
37,051
37,051
Additional paid-in capital
2,539
2,539
Reserves
1,874
1,866
Retained earnings
1,268,580
1,148,387
Equity attributable to shareholders of the
Company
1,310,044
1,189,843
Non-controlling interest
38
386,459
347,258
TOTAL EQUITY
1,696,503
1,537,101
LIABILITIES
Non-current liabilities
Loans and borrowings
33
83,300
77,700
Provisions
34
43,475
32,192
Deferred tax liabilities
18
116,808
121,101
Employee benefits
1,731
1,168
Other liabilities
36
9,313
23,420
254,627
255,581
Current liabilities
Loans and borrowings
33
54,971
11,317
Provisions
34
4,506
869
Accounts payable
35
98,809
66,014
Other tax and compulsory payments liabilities
24,688
17,973
Employee benefits
325
215
Income tax liabilities
4,221
5,096
Other liabilities
36
83,883
57,338
271,403
158,822
TOTAL LIABILITIES
526,030
414,403
TOTAL EQUITY AND LIABILITIES
2,222,533
1,951,504
Carrying value of one share (rounded to
Tenge)
19
6,313
5,699
These consolidated financial statements were approved by management on 16 March 2023:
Beketayev R.B.
Chief Financial Officer
Jakypbekova S.J.
Chief Accountant
National Atomic Company Kazatomprom JSC
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 2022
For the year ended
31 December 2021*
OPERATING ACTIVITIES
Cash receipts from customers
1,213,489
779,981
VAT refund
74,910
45,204
Interest received
11,701
4,104
Payments to suppliers
(677,658)
(488,883)
Payments of wages and salaries
(87,317)
(63,236)
Income tax paid
(125,914)
(97,747)
Other taxes paid
(89,259)
(50,882)
Interest paid
33
(3,570)
(3,319)
Payment held as restricted funds
28
(14,812)
-
Compensation paid under subsoil use agreement
12
(7,310)
-
Social payments
(5,226)
(3,166)
Other payments, net
(5,175)
(3,327)
Cash flow from operating activities
283,859
118,729
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
(21,571)
(16,625)
Proceeds from disposal of property, plant and equipment
1,211
104
Acquisition of intangible assets
(1,013)
(754)
Acquisition of mine development assets
(48,670)
(28,233)
Acquisition of exploration and evaluation assets
(3,223)
(1,682)
Proceeds from disposal of subsidiary net of cash and cash
equivalents of disposed subsidiary
39
-
1,339
Acquisition of short-term debt securities
28
(80,219)
(126,331)
Acquisition of long-term debt securities
28
(8,804)
-
Proceeds from redemption of short-term debt securities
28
86,006
127,341
Placement of term deposits and restricted cash
28
(12,486)
(51,158)
Redemption of term deposits and restricted cash
28
44,688
6,350
Loan repayments received from related parties
3,514
3,138
Acquisition of equity investments
28
(12,368)
-
Dividends received from associates, joint ventures
25,26
45,346
17,108
Other payments, net
(3,304)
(1,838)
Cash flow used in investing activities
(10,893)
(71,241)
FINANCING ACTIVITIES
Proceeds from loans and borrowings
33
70,905
65,525
Proceeds from sale of non-controlling interest in subsidiary
39
-
185,858
Repayment of loans and borrowings
33
(26,555)
(76,108)
Dividends paid to shareholders
32
(227,388)
(150,082)
Dividends paid to non-controlling interest
(85,667)
(26,584)
Payments under lease
33
(162)
(452)
Other payments, net
(10)
-
Cash flow used in financing activities
(268,877)
(1,843)
Net increase in cash and cash equivalents
4,089
45,645
Cash and cash equivalents at the beginning of the year
161,190
113,347
Effect of exchange rate fluctuations on cash and cash equivalents
4,245
2,201
Change in impairment provision for cash and cash equivalents
12
(3)
Cash and cash equivalents at the end of the year
31
169,536
161,190
* Certain amounts in this column do not correspond to the consolidated financial statements for the year ended 31 December 2021,
since they comprise reclassifications that are described in Note 3.
These consolidated financial statements were approved by management on 16 March 2023:
Beketayev R.B.
Chief Financial Officer
Jakypbekova S.J.
Chief Accountant
National Atomic Company Kazatomprom JSC
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 2021
37,051
1,666
1,029,477
4,461
1,072,655
267,137
1,339,792
Profit for the year
-
-
140,773
-
140,773
79,253
220,026
Foreign currency
translation
difference
-
203
-
-
203
2
205
Remeasurements of
post-employment
benefit obligations
-
-
70
-
70
(4)
66
Other
comprehensive
loss
-
(3)
-
-
(3)
-
(3)
Total
comprehensive
income for the
year
-
200
140,843
-
141,043
79,251
220,294
Dividends
declared
(Note 32)
-
-
(150,082)
-
(150,082)
(150,082)
Dividends
declared
by
subsidiarie
s to other
participants
-
-
-
-
-
(26,583)
(26,583)
Other
operations
(Note 39)
-
-
2,254
(1,922)
332
377
709
Change in
ownership
interest in a
subsidiary
without loss of
control (Note
39)
-
-
125,895
-
125,895
27,076
152,971
Balance at 31
December 2021
37,051
1,866
1,148,387
2,539
1,189,843
347,258
1,537,101
National Atomic Company Kazatomprom JSC
Consolidated Statement of Changes in Equity
The accompanying notes are an integral part of these consolidated financial statements.
6
Profit for the year
-
-
348,048
-
348,048
124,915
472,963
Foreign currency
translation
difference
-
(6)
-
-
(6)
(40)
(46)
Remeasurements of
post-employment
benefit obligations
-
-
(467)
-
(467)
(11)
(478)
Other
comprehensive
income
-
14
-
-
14
-
14
Total
comprehensive
income for the
year
-
8
347,581
-
347,589
124,864
472,453
Dividends
declared
(Note 32)
-
-
(227,388)
-
(227,388)
-
(227,388)
Dividends
declared
by
subsidiarie
s to other
participants
-
-
-
-
-
(85,663)
(85,663)
Balance at 31
December 2022
37,051
1,874
1,268,580
2,539
1,310,044
386,459
1,696,503
These consolidated financial statements were approved by management on 16 March 2023:
Beketayev R.B.
Chief Financial Officer
Jakypbekova S.J.
Chief Accountant
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
7
1 NAC Kazatomprom JSC 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 2022 for National Atomic Company Kazatomprom JSC (the
“Company”) and its subsidiaries (hereinafter collectively referred to as “the Group” or “NAC Kazatomprom JSC”).
The Company is a joint stock company set up in accordance with regulations of the Republic of Kazakhstan. The
Company was established pursuant to the Decree of the President of the Republic of Kazakhstan 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 2022, 75% of the Company’s shares are held by Samruk-Kazyna JSC and 25% are on free float.
Government is an ultimate controlling party of the Group. This is unchanged from the prior year end.
The Company’s registered address is Syganak street, building 17/12, Astana city, the Republic of Kazakhstan. The
principal place of business is the Republic of Kazakhstan.
The Group’s principal activities include production of uranium and sale of uranium products. The Group is one of the
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.
NAC Kazatomprom JSC 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 2022, the Group and its associates and joint ventures were a party to the following contracts for
production and exploration of uranium:
Mine/area
Stage
Contract date
Contract term
Group
Kazatomprom-SaUran LLP
Kanzhugan
Production
27 November 1996
51 years
Uvanas
Liquidation
27 November 1996
26 years
Mynkuduk, East lot
Production
27 November 1996
31 years
Moinkum, lot 1 (South) (south part)
Liquidation
26 September 2000
20 years
Moinkum, lot 3 (Central) (north part)
Production
31 May 2010
29 years
DP Ortalyk LLP
Mynkuduk, Central lot
Production
8 July 2005
28 years
Zhalpak
Production
14 December 2021
21 years
Appak LLP
Mynkuduk, West lot
Production
8 July 2005
30 years
RU-6 LLP
North and South Karamurun
Production
15 November 1996
44 years
JV Inkai LLP
Inkai, block 1
Production
13 July 2000
45 years
Company
Inkai, block 2
Exploration
25 June 2018
6 years
Inkai, block 3
Exploration
25 June 2018
4 years*
Baiken-U LLP
North Khorasan, block 2
Production
1 March 2006
49 years
JV Khorassan-U LLP
North Khorasan, block 1
Exploration and
Production
8 May 2005
53 years
Karatau LLP
Budenovskoe, block 2
Production
8 July 2005
35 years
JV Akbastau JSC
Budenovskoe, block 1
Production
20 November 2007
30 years
Budenovskoe, blocks 3, 4
Production
20 November 2007
31 years
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
8
1 NAC Kazatomprom JSC Group and its Operations (Continued)
Mine/area
Stage
Contract date
Contract term
Associates
JV KATCO LLP
Southern Moinkum (Northern part and Tortkuduk)
Production
3 March 2000
39 years
JV Zarechnoye JSC
Zarechnoye
Production
23 September 2002
23 years
JV South Mining Chemical Company LLP
Akdala
Production
28 March 2001
25 years
Inkai, block 4
Production
8 July 2005
24 years
Joint Ventures
Semizbay-U LLP
Semizbai
Production
2 June 2006
25 years
Irkol
Production
14 July 2005
25 years
JV Budenovskoe LLP
Block 6&7 Budenovskoye
Production
16 October 2020
25 years
* Exploration completed, the Group is in the process of developing the pilot production project.
At 31 December 2022 the Group comprises 33 entities (2021: 33), 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 2022 the aggregate number of employees of the Group is
21 thousand (2021: 21 thousand) people.
2 Environment of the Group
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 a national currency that is not freely
convertible outside of the country and little presence of Kazakhstani debt and equity securities on foreign stock
exchanges. Higher inflation, challenges posted by the domestic unrest in January 2022, ongoing political tension in the
region and volatility of exchange rates have had and may continue to have a negative impact on the economy of the
Republic of Kazakhstan, including decrease in liquidity, and creation of difficulties in attracting international financing.
On 20 August 2015 the National Bank and the Government of the Republic of Kazakhstan resolved to discontinue
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 464.79 per 1 US Dollar compared to Tenge 462.65 per 1 US Dollar as at 31 December 2022
(31 December 2021: Tenge 431.67 per 1 US Dollar). The average exchange rate for 2022 was Tenge 460.85 per
1 US Dollar (2021: Tenge 426.03 per US Dollar 1). Uncertainty remains in relation to the exchange rate of Tenge and
future actions of the National Bank and the Government of the Republic of Kazakhstan and the impact of these factors
on the economy of the Republic of Kazakhstan.
COVID-19
In March 2020, the World Health Organisation declared the outbreak of COVID-19 a global pandemic. In response to
the pandemic, the Kazakhstani authorities implemented numerous measures attempting to contain the spreading and
impact of COVID-19, such as travel bans and restrictions, quarantines, shelter-in-place orders and limitations on
business activity, including closures. Most of those measures were subsequently relaxed, however, as of
31 December 2022, there remains a risk that the authorities may impose additional restrictions in 2023 as a response
to possible new variants of the virus.
Conflict between Russia and Ukraine
On 21 February 2022 the Russian President announced that the Russian government would recognise the Luhansk
and Donetsk People’s Republics. On 24 February the Russian president directed its military to mobilize troops to the
territory of Ukraine. As a response to the Russian actions, the United States, the European Union and a number of
other states imposed sanctions against Russia including the disconnection of a number of Russian financial institutions
from SWIFT. Russia is Kazakhstan's largest trading partner and is a key country of transit for trade, notably via the
Caspian Pipeline Consortium (CPC) pipeline, through which up to 80% of Kazakh crude is exported.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
9
2 Environment of the Group (Continued)
CPC operations were temporarily interrupted in March 2022 officially due to storm damage, which did not have a
significant budgetary economic impact because of rising oil prices. However, a prolonged closure by Russia of the CPC
route for Kazakh crude oil would have serious consequences for Kazakh exports and the economy as a whole. The
Kazakh authorities consider alternative routes to the Caspian Sea, including through Azerbaijan, Georgia and Turkey,
but these will require significant additional infrastructure and it will take many years to replace the CPC route.
In connection with the Russian/Ukraine conflict and its consequences, the Tenge exchange rate began to be more
volatile and the annual inflation rate was 20.3% in 2022. To date, the National Bank of the Republic of Kazakhstan has
taken a number of measures to maintain the stability of the Kazakhstan financial system.
The Group’s exported products are transported through Russia which creates risks associated with both transit through
the territory of Russia and the delivery of cargo by sea vessels, logistical constraints could also increase import costs.
The Group constantly monitors the potential impact of sanctions on the transportation of finished products. At the date
of these financial statements, there are no restrictions on the Group's activities related to the supply of the Group's
products to end customers. The Group also has permission to transit uranium through the Trans-Caspian International
Transport Route (hereinafter referred to as the TITR), which the Group has successfully used as an alternative route
since 2018 to help mitigate the risk of the primary route being unavailable, for any reason. There are also risks
associated with Russian partners in Group’s subsidiaries, associates and joint ventures, including reputational and
corporate governance risks.
The Group has a Uranium Processing Agreement with the Uranium Enrichment Center (TsOU) (a resident of the
Russia). At the date of these financial statements, the Group anticipates that provision of services under this agreement
will continue as the situation should not affect the activities of the TsOU and its ability to enrich uranium for the Group.
As part of its ongoing risk assessment program, management is reviewing the impact of anti-Russian sanctions on the
Group's operations. To date, the sanctions have not had a significant impact on the Group's operations, although the
resulting market uncertainty caused by the conflict between Russia and Ukraine has led to significant volatility in the
spot uranium price, the exchange rate of the national currency and the quotations of the Company's securities. During
the reporting period, the Company experienced some difficulties with certain bank payments, as described in Note 28.
As of December 31, 2022, all funds placed with financial institutions included in the sanctions list were withdrawn and
transferred to other financial institutions.
The most significant factors that affected the Group’s results of operations during the year included:
• A 31% increase in the average realized price of uranium during 2022 compared to 2021 due to a higher spot price
for uranium (US Dollar 43.44 vs. US Dollar 33.11). Some long-term contract pricing mechanisms incorporated a
portion of base (fixed) price components that were established prior to the increase in spot price during the current
period. As a result, the increase in the Group’s average realized prices during the reporting period were lower than
the increase in the spot market price for uranium;
• US Dollar appreciation of approximately 8% during 2022 (8% increase in comparison with the prior period).
The above factors had a positive effect on revenue from sales of uranium in the current period that increased by
approximately Tenge 245,318 million (Note 9).
Most of the Group’s borrowings are denominated in US Dollars, including Tenge bonds with indexation to the US Dollar.
As a result of depreciation of the Tenge against the US Dollar, loans and borrowings have increased by
Tenge 4,758 million at 31 December 2022 (Note 15).
The net foreign exchange gain was larger in 2022 than in 2021 by approximately Tenge 13,959 million (Note 15) in line
with the US Dollar appreciation because most of the Group’s consolidated accounts receivable and cash are
denominated in US Dollars.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
10
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
11
3 Significant Accounting Policies (Continued)
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
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. 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 recognizes the difference
between sales consideration and the carrying amount of non-controlling interest sold as a capital transaction in the
consolidated statements of changes in equity.
(iii) 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 results 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
12
3 Significant Accounting Policies (Continued)
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
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. The official exchange rate of Kazakhstan Stock Exchange (KASE) as of 31
December 2022 was Tenge 462.65 per 1 US Dollar (2021: Tenge 431.80 per 1 US Dollar). 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 statement 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
13
3 Significant Accounting Policies (Continued)
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.
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.
(i) 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 30-270 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 an account with a convertor specified by the customer.
A book-transfer operation represents a transaction whereby the uranium account balance of the transferor is decreased
with a 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
14
3 Significant Accounting Policies (Continued)
(iii) Financing components
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.
(iv) 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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
15
3 Significant Accounting Policies (Continued)
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
16
3 Significant Accounting Policies (Continued)
Mine development assets
Mine development assets are stated at cost, less accumulated depreciation and provision for impairment, where
required. Mine development assets comprise reclassified exploration and evaluation costs, 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. Under existing
production method the wellfields are progressively established over the orebody as uranium is depleted by blocks.
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 and probable reserves, except for capitalised development costs that are
amortised based on ready for extraction volumes. Ready for extraction volumes represent a portion of proved and
probable reserves that management estimates to extract from a block/mine as a result of available capitalised costs.
The estimate of proved and probable reserves is based on reserve reports which are an 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.
(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. Intangible assets not ready for use is not amortised being part of intangible assets under development.
(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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
17
3 Significant Accounting Policies (Continued)
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 and probable reserves commencing
when uranium first starts to be extracted.
The estimate of proved and probable reserves is based on reserve reports, which are an 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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
18
3 Significant Accounting Policies (Continued)
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
19
3 Significant Accounting Policies (Continued)
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
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
20
3 Significant Accounting Policies (Continued)
(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
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
21
3 Significant Accounting Policies (Continued)
(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
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
22
3 Significant Accounting Policies (Continued)
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
23
3 Significant Accounting Policies (Continued)
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 bank deposits 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. 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.
Cash and cash equivalents also include reverse repurchase transaction (reverse repo), an investment in highly liquid
government securities with the agreement to sell them at a higher price within 1 to 30 days. Repo transactions are
readily convertible to cash and cash equivalents and are subject to insignificant risk of changes in value as they are
backed by the government of the Republic of Kazakhstan.
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 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 received as a non-financial liability.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
24
3 Significant Accounting Policies (Continued)
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
25
3 Significant Accounting Policies (Continued)
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 asset retirement obligations
Provisions for assets retirement obligations include site restoration and environment protection provisions. Asset
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 corresponding asset 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. Site restoration provisions are charged
fully to the cost of mine development assets despite some of the costs might include decommissioning of property,
plant and equipment in accordance with site liquidation plans and materiality grounds.
Movements in the provisions for asset retirement obligations, resulting from updated cost estimates, changes to the
estimated term of operations and revisions to discount rates are capitalised within mine development assets. These
amounts are then depreciated under unit of production method based on the produced volumes during the period,
including losses, to the total number of proved reserves for each deposit.
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
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
26
3 Significant Accounting Policies (Continued)
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 costs 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
27
3 Significant Accounting Policies (Continued)
Change in presentation
Certain amounts in the consolidated statement of cash flows for 2021 have been reclassified in accordance with the
presentation applied in 2022. The effect on comparative information for the year ended 31 December 2021 is as follows:
In millions Tenge
As originally
presented
Reclassification
As reclassified for
2021
Cash receipts from customers
782,316
(2,335)
779,981
Payments to suppliers
(503,301)
14,418
(488,883)
Payments to employees
(51,856)
(11,380)
(63,236)
Interest paid
(3,265)
(54)
(3,319)
Other taxes paid
(55,227)
4,345
(50,882)
Social payments
-
(3,166)
(3,166)
Net other (payments)/receipts
(1,499)
(1,828)
(3,327)
Certain amounts in the consolidated statement of financial position as at 31 December 2021 have been reclassified in
accordance with the presentation applied as at 31 December 2022 as follows:
In millions Tenge
As originally
presented
Reclassification
As reclassified as at
31 December 2021
Non-current assets
Investment property
2,065
(2,065)
-
Right-of-use assets
838
(838)
-
Loans to related parties
5,493
(5,493)
-
Other financial assets
-
23,671
23,671
Other non-financial assets
-
24,258
24,258
Other non-current assets
39,533
(39,533)
-
Current assets
Loans to related parties
3,357
(3,357)
-
Short-term securities
4,986
(4,986)
-
Term deposits
43,220
(43,220)
-
Other current assets
7,823
(7,823)
-
Other financial assets
-
52,249
52,249
Other non-financial assets
-
7,137
7,137
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.
On an annual basis the Group engages 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 assessment of reserves and resources was carried out as of
31 December 2022 and 2021. The consultant reviewed all key information upon which the reported mineral resource
and ore reserve statements for the mining assets of the Group are based.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
28
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
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 2022.
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 2022, management conducted an analysis and did not find any impairment indicators of assets
(cash generating units) associated with the production of uranium products.
Provision for asset retirement obligations (estimates)
Site restoration provisions for mining assets
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 are recognised when there is a certainty of incurring of such liabilities
and when it is possible to measure the amounts reliably. The scope of work stipulated by the legislation and included
in the calculations of the asset retirement obligations contains 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.
The calculation of the provision for production assets retirement as at 31 December 2022 was performed by the Group’s
internal specialists and reviewed by an independent consultant.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
29
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
At 31 December 2022, site restoration provision for mining assets was Tenge 38,116 million (2021:
Tenge 31,431 million) (Note 34). The increase is mainly attributable to the update of prices for liquidation works that
reflect the current economic environment, as well as the impact of introducing a unified calculation methodology across
the Group mining entities that resulted in re-estimates of required liquidation works, including low radioactive waste
management, dismantlement of process units and handling of construction debris.
Principal assumptions used in the estimations include:
• a discount 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 by
reference to the interest rate on government bonds with maturity matching the average period of the Group’s
subsoil use contracts, 11.55% (2021: 9.85%);
• average long-term inflation rate applied to the nominal costs calculated at current prices of 5.99% in 2022 (2021:
5.12%);
• discounting period in accordance with the estimated life of mines and reserves depletion period.
• low radioactive waste management program assumes removal and disposal at special landfills owned by the
Group.
Sensitivity analysis of the principal assumptions as of 31 December 2022 is as follows:
In millions of Kazakhstani Tenge
(Decrease)/Increase of
assumptions
(Decrease)/Increase of
decommissioning provisions
Inflation rate
-1%
(4,469)
+1%
5,288
Discount rate
-1%
5,052
+1%
(4,229)
Sensitivity analysis of the principal assumptions as of 31 December 2021 is as follows:
In millions of Kazakhstani Tenge
(Decrease)/Increase of
assumptions
(Decrease)/Increase of
decommissioning provisions
Inflation rate
-1%
(4,360)
+1%
5,139
Discount rate
-1%
4,948
+1%
(4,152)
Provision for environment protection - decommissioning of Ulba metallurgical plant
The Group has previously recognised an obligation only for the disposal of radioactive waste, landfill restoration and
asset remediation for Ulba Metallurgical Plant JSC (Note 34). In 2021 the Ecological Code of the Republic of
Kazakhstan (the Code) came into effect. The Code stipulates that operators of assets that are considered to have a
negative impact on the environment have an obligation to decommission such assets in accordance with the
requirements of the legislation. Liquidation measures will depend on the assets’ nature and the degree of their impact
on the environment.
The Group has recognised for the first time a decommissioning provision as of December 31, 2022 of
Tenge 7,624 million based on its current interpretation of the relevant legislation and technical analysis performed. The
liability recognised includes dismantlement of facilities and infrastructure located at production facility sites
(technological sites, landfills, buildings and other facilities), radioactive waste disposal and subsequent land restoration.
Principal assumptions used in the estimations include:
• current prices are inflated using the expected long-term inflation rate (of 7.7% for assets with liquidation term until
2027, 4.6% for assets with liquidation term until 2042, 3.93% for assets with liquidation term after 2044), and
subsequently discounted;
• the discount rate for calculation of the provision as at 31 December 2022 is 14.4% for assets with liquidation term
until 2027, 11.3% for assets with liquidation term until 2042, 10% for assets with liquidation term after 2044.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
30
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
• the discounting period equates to the remaining useful life of buildings and constructions, of not less than 50 years.
All buildings and constructions are subject to annual technical reviews to determine required capital and operating
expenditure requirements.
Total provision for the Ulba Metallurgical Plant JSC as of 31 December 2022 amounted to Tenge 9,243 million (2021:
Tenge 1,339 million). Sensitivity analysis of the principal assumptions as of 31 December 2022 is as follows:
In millions of Kazakhstani Tenge
(Decrease)/Increase of
assumptions
(Decrease)/Increase of
decommissioning provisions
Inflation rate
-1%
(3,148)
+1%
4,950
Discount rate
-1%
4,665
+1%
(2,986)
Discount period
-10%
2,682
+10%
(2,044)
Based on the Group’s analysis of current regulation, management concluded that certain other Ulba metallurgical
plant’s assets should be excluded from asset retirement obligations as of 31 December 2022 since there is no
reasonable calculation method for these types of assets and/or the potential amount of such liabilities is not significant.
This judgement is based on the following:
• such assets do not have a significant negative impact on the environment and ecological legislation does not
require financial provision for the assets,
• production processes involving these assets do not lead to consequences that would require dismantlement and
recultivation works to mitigate the negative environmental impact.
As the requirements of the Environmental Code are relatively new, there is no practice of applying these requirements
and there are ambiguities in the legislation, management has applied significant judgment in terms of assessing
liabilities and their amounts. In case of changes in environmental legislation, its interpretation and practice of its
application, as well as in the judgments and in the Group's estimates, such liabilities may be revised in the future.
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
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 2022, the Group did not recognise sales revenue from swap transactions of Tenge 195,958 million and related cost
of sales of Tenge 207,789 million. 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. The Group has recognised liabilities under swap
transactions in the amount of Tenge 4,709 million as of 31 December 2022 (2021: Tenge 15,355 million) for the volume
of uranium that would be returned under swap transactions (Note 36) post balance date.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
31
4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)
Control over DP Ortalyk LLP (judgement)
On 22 July 2021 the Group completed the sale of a 49% interest in DP Ortalyk LLP (Note 39). The Group retains a
51% ownership interest and majority voting rights in the Supervisory Board of that entity. 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. All production volumes are committed
to be purchased by the Group and the minority shareholder based upon market prices. Production volumes and costs
have a significant impact on financial results and are considered to be the most 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 amendments became effective from 1 January 2022, but did not have any material impact on the Group:
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 IFRS 3, and Annual Improvements to 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).
• The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PPE any proceeds received
from selling items produced while the entity is preparing the asset for its intended use. The proceeds from selling
such items, together with the costs of producing them, are now recognised in profit or loss. An entity will use IAS
2 to measure the cost of those items. Cost will not include depreciation of the asset being tested because it is not
ready for its intended use. The amendment to IAS 16 also clarifies that an entity is ‘testing whether the asset is
functioning properly’ when it assesses the technical and physical performance of the asset. The financial
performance of the asset is not relevant to this assessment. An asset might therefore be capable of operating as
intended by management and subject to depreciation before it has achieved the level of operating performance
expected by management.
• The amendment to IAS 37 clarifies the meaning of ‘costs to fulfil a contract’. The amendment explains that the
direct cost of fulfilling a contract comprises the incremental costs of fulfilling that contract; and an allocation of other
costs that relate directly to fulfilling. The amendment also clarifies that, before a separate provision for an onerous
contract is established, an entity recognises any impairment loss that has occurred on assets used in fulfilling the
contract, rather than on assets dedicated to that contract.
• IFRS 3 was amended to refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine
what constitutes an asset or a liability in a business combination. Prior to the amendment, IFRS 3 referred to the
2001 Conceptual Framework for Financial Reporting. In addition, a new exception in IFRS 3 was added for
liabilities and contingent liabilities. The exception specifies that, for some types of liabilities and contingent
liabilities, an entity applying IFRS 3 should instead refer to IAS 37 or IFRIC 21, rather than the 2018 Conceptual
Framework. Without this new exception, an entity would have recognised some liabilities in a business
combination that it would not recognise under IAS 37. Therefore, immediately after the acquisition, the entity would
have had to derecognise such liabilities and recognise a gain that did not depict an economic gain. It was also
clarified that the acquirer should not recognise contingent assets, as defined in IAS 37, at the acquisition date.
• The amendment to IFRS 9 addresses which fees should be included in the 10% test for derecognition of financial
liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid
to third parties will not be included in the 10% test.
• Illustrative Example 13 that accompanies IFRS 16 was amended to remove the illustration of payments from the
lessor relating to leasehold improvements. The reason for the amendment is to remove any potential confusion
about the treatment of lease incentives.
• IFRS 1 allows an exemption if a subsidiary adopts IFRS at a later date than its parent. The subsidiary can measure
its assets and liabilities at the carrying amounts that would be included in its parent’s consolidated financial
statements, based on the parent’s date of transition to IFRS, if no adjustments were made for consolidation
procedures and for the effects of the business combination in which the parent acquired the subsidiary. IFRS 1
was amended to allow entities that have taken this IFRS 1 exemption to also measure cumulative translation
differences using the amounts reported by the parent, based on the parent’s date of transition to IFRS. The
amendment to IFRS 1 extends the above exemption to cumulative translation differences, in order to reduce costs
for first-time adopters. This amendment will also apply to associates and joint ventures that have taken the same
IFRS 1 exemption.
• The requirement for entities to exclude cash flows for taxation when measuring fair value under IAS 41 was
removed. This amendment is intended to align with the requirement in the standard to discount cash flows on a
post-tax basis.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
32
6 New Accounting Pronouncements
Certain new standards and interpretations have been issued that are mandatory for annual periods beginning on or
after 1 January 2023 or later, and which the Group has not early adopted. These are:
• 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).
• Classification of liabilities as current or non-current, deferral of effective date – Amendments to IAS 1 (originally
issued on 23 January 2020 and subsequently amended on 15 July 2020 and 31 October 2022, ultimately effective
for annual periods beginning on or after 1 January 2024).
• 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).
• 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).
The Group is currently assessing the impact of the amendments on its financial statements.
• Amendment to IFRS 16 – Leases on sale and leaseback (issued on 20 September 2022 and effective for annual
periods beginning or after 1 January 2023).
• IFRS 17 “Insurance Contracts” (issued on 18 May 2017 and effective for annual periods beginning on or after 1
January 2023). 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).
• Transition option for insurers applying IFRS 17 – Amendments to IFRS 17 (issued on 9 December 2021 and
effective for annual periods beginning on or after 1 January 2023).
Unless otherwise described above, 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 (NAC Kazatomprom JSC);
• 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 of uranium powders and pellets to external markets and its joint venture, Ulba-FA LLP.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
33
7 Segment Information (Continued)
(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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
34
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 2022 and 2021 is set out below:
In millions of
Kazakhstani Tenge
Uranium
UMP
Other
Eliminations
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
External revenue
856,952
616,860
114,555
55,323
29,664
18,828
-
-
1,001,171
691,011
Revenues from
other segments
63,141
4,846
6,855
4,908
70,008
54,083
(140,004)
(63,837)
-
-
Cost of sales
(409,158)
(350,052)
(94,672)
(42,534)
(97,190)
(65,175)
125,923
54,794
(475,097)
(402,967)
Gross profit
510,935
271,654
26,738
17,697
2,482
7,736
(14,081)
(9,043)
526,074
288,044
Net
reversal/(impair
ment losses)
(22)
(5,791)
(297)
(200)
421
1,978
206
-
308
(4,013)
Share of results
of associates
and joint
ventures
89,442
52,341
(1,748)
(1,932)
1,382
1,174
-
-
89,076
51,583
Net foreign
exchange gain
16,625
2,845
672
488
7
12
-
-
17,304
3,345
Finance income
15,626
6,390
743
246
958
441
-
-
17,327
7,077
Finance expense
(6,754)
(6,237)
(1,447)
(464)
(332)
(195)
108
184
(8,425)
(6,712)
Income tax
expense
(105,947)
(58,759)
(4,165)
(2,606)
(630)
(253)
-
-
(110,742)
(61,618)
Profit/(loss) for
the year
467,382
212,963
12,803
7,085
(2,920)
4,222
(4,302)
(4,244)
472,963
220,026
Depreciation
and
amortisation
charge
(77,951)
(63,348)
(2,066)
(1,924)
(4,914)
(4,718)
3,553
728
(81,378)
(69,262)
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
35
7 Segment Information (Continued)
Segment information for the reportable segments for the years ended 31 December 2022 and 2021 is set out below (Continued):
In millions of Kazakhstani Tenge
Uranium
UMP
Other
Eliminations
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Investments in associates and joint
ventures
186,961
142,920
957
2,705
10,414
9,070
-
-
198,332
154,695
Total reportable segment assets
2,361,914
2,061,161
155,011
111,224
89,774
77,142
(385,016)
(299,236)
2,221,683
1,950,291
Assets of disposal groups classified as
held for sale
-
-
-
-
850
1,213
-
-
850
1,213
Total assets
2,361,914
2,061,161
155,011
111,224
90,624
78,355
(385,016)
(299,236)
2,222,533
1,951,504
Total liabilities
813,577
657,916
71,798
36,630
25,957
19,057
(385,302)
(299,200)
526,030
414,403
Capital expenditure
59,059
45,096
4,794
3,631
8,123
4,783
-
-
71,976
53,510
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
36
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
2022
2021
China
272,291
191,212
Canada
160,278
115,163
United Kingdom (including Jersey and Cayman Islands)
150,427
156,928
USA
112,590
94,114
Kazakhstan
109,595
25,113
Russia
87,877
10,952
France
68,054
50,134
Other countries
40,059
47,395
Total consolidated revenues
1,001,171
691,011
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 324,509 million (2021: Tenge 236,204 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 2022, the outstanding balances with related parties were as follows:
In millions of Kazakhstani Tenge
Accounts
receivable
and other
assets
Other
financial
assets
Accounts
payable and
other
liabilities
Loans and
borrowings
Associates
4,447
5,933
43,703
7,002
Joint ventures
6,559
94
48,428
-
Entities under common control
362
9,274
1,119
-
Controlling shareholder
-
-
17
-
Associates of the controlling shareholder
12
-
1,236
-
Total
11,380
15,301
94,503
7,002
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
37
8 Balances and Transactions with Related Parties (Continued)
Transactions with related parties for the year ended 31 December 2022 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
12,321
38,503
152,580
-
699
9
Joint ventures
53,111
6,934
39,490
-
28
-
Entities under common
control
41
-
11,582
-
1,090
7,543
Controlling shareholder
-
-
-
170,541
-
1
Associates of the
controlling shareholder
150
-
13,041
-
-
-
Total
65,623
45,437
216,693
170,541
1,817
7,553
From December 2015, JV Khorasan-U LLP (over which the Group obtained control in 2019) is a co-borrower and
guarantor of a loan to Kyzylkum LLP given by the Company in 2010 in the amount of Tenge 5,945 million (2021:
Tenge 8,716 million).
In June 2021, the Group provided to Uranenergo LLP repayable financial aid secured by that 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. As of
December 31, 2022, the remaining amount repayable is Tenge 94 million (Note 28).
The Group is a guarantor for loans obtained by SKZ-U LLP in the amount of Tenge 1,864 million (2021:
Tenge 5,220 million) and Ulba-FA LLP in the amount of Tenge 17,072 million (2021: Tenge 15,934 million) (Note 36).
In 2022 the Group transfers obligatory pension payments for its employees to the state-owned Unified Accumulative
Pension Fund JSC in the amount of Tenge 7,543 million (2021: Tenge 5,329 million) (Note 16).
At 31 December 2021, the outstanding balances with related parties were as follows:
In millions of Kazakhstani Tenge
Accounts
receivable
and other
assets
Other
financial
assets
Accounts
payable and
other
liabilities
Loans and
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
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
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
38
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
2022
2021
Expense
Accrued
liability
Expense
Accrued
liability
Short-term benefits
Salaries and bonuses
983
55
1,088
60
Total
983
55
1,088
60
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
2022
2021
Sales of uranium
851,427
606,109
Sales of uranium products
57,806
18,939
Sales of beryllium products
31,986
26,119
Sales of tantalum products
23,171
15,777
Sales of purchased goods
15,164
5,860
Sales of other services
11,147
6,459
Drilling services
3,730
4,357
Transportation services
3,586
3,413
Sales of materials and other goods
2,815
3,713
Research and development
339
265
Total revenue
1,001,171
691,011
10 Cost of Sales
In millions of Kazakhstani Tenge
2022
2021
Materials and supplies
261,825
241,695
Depreciation and amortisation
79,037
66,429
Payroll costs
49,348
33,294
Taxes other than income tax
32,216
25,474
Processing and other services
31,361
17,404
Transportation expenses
5,787
4,982
Maintenance and repair
5,082
4,918
Utilities
1,678
1,703
Rent expenses
234
210
(Reversal of inventory provision)/write off to net realizable value
(190)
615
Other
8,719
6,243
Total cost of sales
475,097
402,967
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
39
11 Distribution Expenses
In millions of Kazakhstani Tenge
2022
2021
Shipping, transportation and storage
20,331
11,110
Payroll costs
1,744
1,456
Commissions
952
502
Rent
214
105
Materials and supplies
199
306
Depreciation and amortisation
56
65
Other
2,109
2,162
Total distribution expenses
25,605
15,706
12 General and Administrative Expenses
In millions of Kazakhstani Tenge
2022
2021
Payroll costs
20,594
18,303
Consulting and information services
5,196
4,697
Compensation for overproduction
7,310
-
Depreciation and amortisation
2,110
2,493
Fines and penalties
2,068
1,527
Insurance
822
788
Communication
509
495
Business trip expenses
497
251
Rent
460
352
Maintenance and repairs
451
390
Training expenses
416
401
Taxes other than income tax
355
661
Security
186
184
Materials and supplies
173
179
Utilities
159
187
Representative expenses
114
41
Other
3,087
3,156
Total general and administrative expenses
44,507
34,105
Compensation for overproduction relates to JV Akbastau JSC (Note 39) as a result of an assessed breach of the terms
of subsoil use contract #2488 dated 20 November 2007. Although the entity had been involved in negotiations with the
regulator over an extended period as it finalized its reserves assessment, the production volume exceeded the
contracted level. In 2021 the entity had reached a draft agreement with the regulator which was to provide social support
to the Turkistan region in the amount of Tenge 3,000 million as a compensation for the breach of license terms. An
expense for this social support was recognised as other expense in 2021 (Note 15). However, in 2022 the regulator
rejected the draft agreement and reassessed the amount payable to be compensation for the overproduction of uranium
in the amount of Tenge 7,310 million. The compensation was determined as the fair value of 249 tones of overproduced
uranium based on current uranium spot prices. As a result, during 2022 the Group reversed social expenses in the
amount of Tenge 3,000 million (Note 14) and recognized an expense of Tenge 7,310 million. On 30 December 2022
JV Akbastau JSC signed addendum #4 to the subsoil use contract #2488 and paid the compensation.
13 Net Reversal / (Impairment Loss) on non-financial assets
The Group recognised impairment losses for the following non-financial assets:
In millions of Kazakhstani Tenge
2022
2021
Property, plant and equipment (Note 21)
(1)
356
Intangible assets (Note 20)
-
(2,169)
Mine development assets
-
199
Impairment of assets held for sale
-
(1,084)
Other assets
177
(1,107)
Net reversal / (impairment loss) on non-financial assets
176
(3,805)
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
40
14 Other Income
In millions of Kazakhstani Tenge
2022
2021
Income from an associate development agreement (Note 25)
7,671
-
Gain from joint operations
4,217
3,513
Reversal of social expenses (Note 12)
3,000
-
Insurance receipt
1,981
-
Income from disposal of property, plant and equipment
1,384
160
Income from a joint venture development agreement
985
-
Gain from fines and penalties
306
138
Gain on disposal of subsidiary
-
915
Other
2,173
2,799
Total other income
21,717
7,525
The Group has fulfilled its obligations under one of its joint operation agreements for the purchase of equal volume of
uranium in 2022 and 2021; however, volatility of exchange rates and spot prices resulted in disproportionate Tenge
amounts contributed by each participant and a gain in the amount of Tenge 4,217 million was recognised by the Group.
The Group received an insurance payment for losses incurred in 2016 as a result of an accident in the Indian sea.
15 Other Expenses and Net Foreign Exchange Gain
In millions of Kazakhstani Tenge
2022
2021
Remeasurement of non-financial liabilities, net of gain
on disposal (Note 36)
1,906
2,872
Social expenses
1,130
4,537
Loss on suspension of production
1,126
1,626
Research expenses
887
725
Non-recoverable VAT
620
2,235
Depreciation and amortisation
175
275
Loss on disposal of property, plant and equipment
175
-
Loss on disposal of intangible assets
93
-
Loss on disposal of non-current assets
-
411
Other
3,452
2,713
Total other expenses
9,564
15,394
Social expenses in 2021 include social sphere contributions to Turkistan region in the amount of Tenge 3,000 million
(Note 12).
Net foreign exchange gain
In millions of Kazakhstani Tenge
2022
2021
Foreign exchange loss on financing activities, net
(4,758)
(1,696)
Foreign exchange gain on operating activities, net
22,062
5,041
Total foreign exchange gain, net
17,304
3,345
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
41
16 Payroll Costs
In millions of Kazakhstani Tenge
2022
2021
Wages and salaries
89,208
64,580
Including Pension contributions
7,543
5,329
Social tax and social payments
10,427
6,904
Total payroll costs
99,635
71,484
17 Finance Income and Costs
In millions of Kazakhstani Tenge
2022
2021
Interest income calculated using the effective interest
rate
Cash and cash equivalents
10,433
3,087
Government securities
1,262
959
Loans at amortised cost
699
912
Term deposits
111
129
Other
-
114
Other financial income
Revaluation of other investments (Note 28)
4,699
-
Financial derivative asset
-
1,732
Other
123
144
Total finance income
17,327
7,077
Finance costs
Interest expense on loans and borrowings
3,689
3,546
Unwinding of discount on provisions
2,892
2,259
Other
1,844
907
Total finance costs
8,425
6,712
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
2022
2021
Current income tax
118,853
85,345
Deferred income tax
(8,111)
(23,727)
Total income tax expense
110,742
61,618
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
42
18 Income Tax Expense (Continued)
The income tax rate applicable to the majority of the Group’s profits in 2022 and 2021 is 20%. Income tax in the amount
of Tenge 33,466 million that relates to the sales of interest in subsidiary (Note 39) was recognised in equity directly in
2021.
A reconciliation between the expected and the actual taxation charge is provided below:
In millions of Kazakhstani Tenge
2022
2021
Profit before tax
583,705
281,644
Theoretical tax charge at statutory tax rate of 20%
116,741
56,329
Prior periods adjustments of income tax
2,065
5,401
Transfer pricing adjustment
7,298
5,371
Profit on income from controlled foreign company
294
1,383
Withholding tax on dividend payments
677
1,240
Share of results of joint ventures and associates
(17,815)
(10,317)
Other items
1,482
2,211
Income tax expense
110,742
61,618
(b) 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
2022
Credited/
(charged) to
profit or loss
Exchange
differences
arising on
translation of
entities with
foreign
functional
currency
31 December
2022
Tax effect of deductible/(taxable) temporary
differences
Property, plant and equipment, intangible assets
and mineral rights
(123,495)
4,442
11
(119,042)
Accounts receivable
(208)
(164)
-
(372)
Loans and borrowings
3
9
-
12
Provisions
1,572
(1,548)
-
24
Accrued liabilities on vacation payments and
bonuses
1,663
604
-
2,267
Taxes
1,509
318
-
1,827
Inventories
28,076
4,347
(4)
32,419
Other assets
158
88
1
247
Other liabilities
310
15
-
325
(90,412)
8,111
8
(82,293)
Recognised deferred tax asset
30,689
3,818
8
34,515
Recognised deferred tax liabilities
(121,101)
4,293
-
(116,808)
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
43
18 Income Tax Expense (Continued)
Management estimates that 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 2021 is:
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)
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 1,274 million
in 2022 (2021: Tenge 602 million) and excluded from the calculation the tax losses for the enterprises sold in 2022 with
unrecognized tax losses. The tax loss carry forwards expire as follows:
In millions of Kazakhstani Tenge
2022
2021
2030
-
368
2031
470
234
2032
804
-
Total unrecognised deferred tax asset on tax losses
1,274
602
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
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
2022
2021
Profit for the year for the year attributable to owners of the
Company (in millions of Kazakhstani Tenge)
348,048
140,773
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)
1,342
543
The Company issued 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
2022
2021
Total assets of the Group (in millions Tenge)
2,222,533
1,951,504
Intangible assets (in millions Tenge)
(59,159)
(58,940)
Total liabilities of the Group (in millions Tenge)
(526,030)
(414,403)
1,637,344
1,478,161
Number of ordinary shares (in thousands)
259,357
259,357
Book value of one share (Tenge per share)
6,313
5,699
44
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
45
20 Intangible Assets
In millions of Kazakhstani Tenge
Licences and
patents
Software
Goodwill
Other
Total
At 1 January 2021
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
-
(2,169)
-
(777)
(2,946)
Transfers from property, plant and
equipment (Note 21)
2
834
-
1,833
2,669
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
Additions
136
345
-
908
1,389
Disposals
(328)
(784)
-
(259)
(1,371)
Depreciation charge and impairment
losses on disposals/transfers
289
188
-
35
512
Amortisation charge
(284)
(875)
-
(110)
(1,269)
Impairment reversal
-
590
-
222
812
Transfers from right of use assets
737
-
-
-
737
Transfers to property, plant and
equipment (Note 21)
-
-
-
(591)
(591)
Transfers
-
(1,706)
-
1,706
-
At 31 December 2022
Cost
3,069
11,321
54,953
4,819
74,162
Accumulated amortisation and
impairment
(1,340)
(5,967)
(6,459)
(1,237)
(15,003)
Carrying value
1,729
5,354
48,494
3,582
59,159
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 18.49% for 2022 year (2021: 12.97%). 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 2022. Production costs and capital
expenditures are based on approved budgets for 2023-2027 and growth of 6.16% 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.
At 31 December 2022, the Group had contractual commitments to acquire intangible assets for Tenge 544 million
(2021: 425 million).
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
46
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 2021
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 (Note 34)
-
-
(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
7,048
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
Additions
17
-
107
7,334
5,225
431
11,011
24,125
Transfers
-
38
1,941
1,150
43
104
(3,276)
-
Depreciation charge
-
(89)
(5,633)
(6,742)
(1,934)
(732)
-
(15,130)
Impairment loss
-
-
-
-
-
-
(409)
(409)
Reversal of impairment losses
recognised in prior periods
-
-
245
156
-
-
7
408
Disposals
-
-
(211)
(1,765)
(288)
(143)
(7)
(2,414)
Impairment disposals
-
-
-
-
-
-
2
2
Transfer from inventories
-
-
38
506
-
6
445
995
Transfers to intangible assets
(Note 20)
-
-
-
102
-
-
489
591
Transfer from/(to) investment
property
-
-
(17)
-
-
-
-
(17)
Depreciation charge and
impairment losses on
disposals/transfers
-
-
207
1,525
369
136
-
2,237
Changes in estimates (Note
34)
-
-
8,630
585
-
-
-
9,215
Transfer to mine development
assets
(Note 22)
-
-
-
-
-
-
(2,789)
(2,789)
Translation to presentation
currency
-
-
-
-
(1)
-
-
(1)
At 31 December 2022
Cost
424
2,073
150,996
101,960
28,082
7,446
19,833
310,814
Accumulated depreciation and
impairment
-
(1,124)
(49,743)
(52,030)
(13,727)
(4,822)
(1,068)
(122,514)
Carrying amount
424
949
101,253
49,930
14,355
2,624
18,765
188,300
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
47
21 Property, Plant and Equipment (Continued)
Depreciation expense of Tenge 12,774 million (2021: Tenge 12,773 million) was charged to cost of sales,
Tenge 56 million (2021: Tenge 65 million) to distribution expenses, Tenge 1,257 million (2021: Tenge 1,243 million) to
general and administrative expenses, Tenge 137 million (2021: 170 million tenge) to other expenses. The remaining
depreciation expense is included in finished goods, work-in-process and other inventory.
At 31 December 2022 construction in progress included technical re-equipment of
Ulba Metallurgical Plant JSC in the amount of Tenge 1,087 million (2021: Tenge 1,311 million),construction of a refinery
in the amount of Tenge 3,267 million at JV Inkai LLP, construction of facilities for the development of a mine at Appak
LLP in the amount of Tenge 681 million.
At 31 December 2022, the Group had contractual capital expenditure commitments in respect of property, plant and
equipment of Tenge 5,310 million (2021: Tenge 5,615 million).
There are no capitalized borrowing costs in 2022 (2021: nil).
At 31 December 2022, the gross carrying value of fully depreciated property, plant and equipment still in use was
Tenge 34,870 million (2021: Tenge 25,943 million).
Depreciation and amortisation charged on long-term assets for the years ended 31 December are as follows:
In millions of Kazakhstani Tenge
2022
2021
Mine development assets
42,045
34,185
Mineral rights
28,237
27,917
Property, plant and equipment
15,130
14,865
Intangible assets
1,269
1,543
Right-of-use assets
19
148
Total accrued depreciation and amortisation
86,700
78,658
Depreciation and amortisation charged to profit or loss for the years ended 31 December are as follows:
In millions of Kazakhstani Tenge
2022
2021
Cost of sales
79,037
66,429
General and administrative expenses
2,110
2,493
Distribution expenses
56
65
Other expenses
175
275
Total depreciation and amortisation charged to profit or
loss
81,378
69,262
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
48
22 Mine Development Assets
In millions of Kazakhstani Tenge
Field preparation
Site restoration
costs
Ion exchange
resin
Total
At 1 January 2021
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
Third-party services
27,870
-
-
27,870
Material used
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 (Note 34)
631
4,861
-
5,492
At 31 December 2021
Cost
317,560
13,532
18,757
349,849
Accumulated depreciation
and impairment
(200,129)
(4,457)
(6,590)
(211,176)
Carrying amount
117,431
9,075
12,167
138,673
Third-party services
43,649
-
-
43,649
Material used
16,238
-
966
17,204
Transfer from property, plant
and equipment (Note 21)
2,789
-
-
2,789
Depreciation charge
(40,940)
(590)
(515)
(42,045)
Changes in accounting
estimates (Note 34)
693
1,211
-
1,904
At 31 December 2022
Cost
380,929
14,743
19,723
415,395
Accumulated depreciation
and impairment
(241,069)
(5,047)
(7,105)
(253,221)
Carrying amount
139,860
9,696
12,618
162,174
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).
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
49
23 Mineral Rights
In millions of Kazakhstani Tenge
At 1 January 2021
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
649,452
Accumulated amortisation and impairment
(96,495)
Carrying amount
552,957
Additions
420
Amortisation for the period
(28,237)
At 31 December 2022
Cost
649,872
Accumulated amortisation and impairment
(124,732)
Carrying amount
525,140
24 Exploration and Evaluation Assets
In millions of Kazakhstani Tenge
Tangible assets
Intangible assets
Total
At 1 January 2021
19,523
3,422
22,945
Additions
3,425
-
3,425
Transfer to mine development assets (Note 22)
(1,033)
-
(1,033)
Transfer to mineral rights (Note 23)
-
(897)
(897)
Changes in accounting estimates
(62)
-
(62)
At 31 December 2021
21,853
2,525
24,378
Additions
2,393
-
2,393
Changes in accounting estimates
(228)
-
(228)
At 31 December 2022
24,018
2,525
26,543
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
50
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
2022
2021
Carrying value at 1 January
116,892
84,626
Share of results of associates
75,736
47,294
Dividends received from associates
(38,504)
(15,028)
Carrying value at 31 December
154,124
116,892
The Group’s interests in its principal associates were as follows:
2022
2021
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%
113,920
49%
85,123
JV Zarechnoye
JSC
Kazakhstan
Extraction, processing
and export of uranium
products
49.98%
18,197
49.98%
10,968
JV South Mining
Chemical
Company LLP
Kazakhstan
Extraction, processing
and export of uranium
products
30%
16,147
30%
13,196
Kyzylkum LLP
Kazakhstan
Extraction, processing
and export of uranium
products
50%
5,017
50%
6,616
Сaustiс JSC
Kazakhstan
Supply of caustic soda
28%
-
40%
-
SSAP LLP
Kazakhstan
Production of sulphuric
acid
9.89%
742
9.89%
693
JV Rusburmash
Kazakhstan LLP
Kazakhstan
Geological exploration,
drilling services
49%
-
49%
183
Zhanakorgan-
Transit LLP
Kazakhstan
Transportation
40%
101
40%
113
Total investments in associates
154,124
116,892
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 17 January 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. As a result of the negotiations, on 16 August 2022, Addendum No. 10
to the Subsoil use contract was signed to extend the exploration period, a mining allotment was received and the work
program was approved. Also on 31 December 2022, Addendum No. 11 to the Subsoil use contract was signed with an
update of the work program.
On 11 August 2022, the Partnership participants made amendments to the Partnership Agreement on further
development of JV KATCO LLP dated 10 April 2017, under which the Group became entitled to compensation in the
amount of Tenge 7,671 million from the second participant, which was recognized as income in 2022 (Note 14) and
other receivables (Note 27).
According to the Partnership Agreement, the Group also became entitled to an additional 11% of the Partnership's
annual profit allocation starting from 2022 and until the end of JV KATCO LLP operations, with the ownership interest
being unchanged.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
51
25 Investments in Associates (Continued)
This additional 11% impacts the allocation of JV KATCO LLP dividends, therefore, in these consolidated financial
statements the Group recognized a share in the results of the Partnership for 2022 in the amount of 60%. Net assets
are still recognized as 49% in accordance with the participants initial agreement.
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 and corresponding transfer of the ownership shares is to be made in instalments. The first tranche
of Tenge 363 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 2022 the remaining 28% investment in
Caustic JSC is presented as an asset held for sale in the amount of Tenge 850 million.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
52
25 Investments in Associates (Continued)
Summarised financial information for 2022 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
6,757
132,298
77,223
26,011
2,515
244,804
Including cash
5
97,300
13,855
7,147
338
118,645
Non-current assets
15,619
132,022
42,114
19,593
11,493
220,841
Total assets
22,376
264,320
119,337
45,604
14,008
465,645
Current liabilities
(6,766)
(8,822)
(33,059)
(4,068)
(5,099)
(57,814)
Including financial liabilities net of trade and other accounts payable and
provisions
(3,397)
(82)
(21,920)
(32)
(894)
(26,325)
Incl. loan from the Company
(3,397)
-
-
(3,397)
Non-current liabilities
(4,038)
(20,139)
(10,060)
(3,973)
(1,308)
(39,518)
Including financial liabilities net of trade and other accounts payable and
provisions
(2,852)
-
(3,286)
-
(835)
(6,973)
Incl. loan from the Company
(2,852)
-
-
-
-
(2,852)
Total liabilities
(10,804)
(28,961)
(43,119)
(8,041)
(6,407)
(97,332)
Net assets
11,572
235,359
76,218
37,563
7,601
368,313
Group’s share of net assets of associates
5,786
115,326
22,865
18,774
390
163,141
Unrealised profit in the Group
-
(10,592)
(6,719)
(619)
-
(17,930)
Additional allocation of profits
-
9,118
-
-
-
9,118
Other
(768)
-
-
42
371
(355)
Goodwill
-
68
-
-
82
150
Carrying value of investments in associates
5,018
113,920
16,146
18,197
843
154,124
Total revenue
10,572
146,304
131,039
44,538
13,757
346,210
Depreciation and amortisation
(682)
(12,262)
(6,328)
(6,218)
(643)
(26,133)
Finance income
162
127
655
109
87
1,140
Finance costs
(435)
(1,282)
(1,393)
(347)
(314)
(3,771)
Foreign exchange gain/(loss)
(642)
4,931
(1,331)
(1,288)
-
1,670
(Impairment losses)/reversal of impairment losses
(2)
180
26
1
(1)
204
Income tax
(368)
(24,035)
(21,706)
(5,073)
(338)
(51,520)
Profit for the year
(1,039)
82,891
76,114
18,939
(567)
176,338
Total comprehensive income
(1,039)
82,891
76,114
18,939
(567)
176,338
Unrealised profit
-
(2,141)
(4,307)
777
-
(5,671)
Share in accumulated unrecognized losses
-
-
-
-
519
519
Share of result of associates
(520)
47,593
18,528
10,242
(107)
75,736
Dividends received
1,080
18,796
15,576
3,013
39
38,504
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
53
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 movements
(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)
Net 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)
(13,210)
(1,818)
(24)
(31,718)
Profit/(loss) 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)
Share of result of associates
1,193
29,278
14,334
2,553
(64)
47,294
Dividends received
-
-
12,459
2,569
-
15,028
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
54
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
55
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
2022
2021
Carrying value at 1 January
37,803
35,261
Share of results of joint ventures
13,340
4,289
Dividends received from joint ventures
(6,935)
(2,080)
Other
-
333
Carrying value at 31 December
44,208
37,803
The Group’s interests in its principal joint ventures were as follows:
2022
2021
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%
28,252
51.00%
20,945
Ulba-FA LLP
Kazakhstan
Production of fuel
assemblies and their
components
51.00%
957
51.00%
2,705
JV Budenovskoe LLP
Kazakhstan
Extraction, processing and
export of uranium
products
51.00%
5,428
51.00%
6,071
Uranenergo LLP
Kazakhstan
Transfer and distribution of
electricity, grid operations
79.23%
3,078
79.23%
3,095
SKZ-U LLP
Kazakhstan
Production of sulphuric acid
49.00%
6,493
49.00%
4,987
JV UKR TVS CJSC
Ukraine
Production of nuclear fuel
33.33%
-
33.33%
-
Total investments in joint ventures
44,208
37,803
Ulba-FA LLP
In December 2020 the Group together with China General Nuclear Power Corporation (CGNPC) finished 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. The plant is owned by Ulba-Fa LLP, a joint-venture between subsidiaries of the Company
and CGNPC with 51% and 49% respective interests.
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 and in 2022 the entity started its
sales activities.
Uranenergo LLP
Management concluded that the Group does not have the ability to exercise control over Uranenergo LLP. Accordingly,
this investment is classified as an investment in a joint venture.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
56
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
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Current assets
37,976
30,089
153
29
121,989
51,164
5,121
3,974
165,239
85,256
Including cash
18,725
13,132
114
22
19,791
5,747
1,164
219
39,794
19,120
Non-current assets
25,111
20,687
28,801
25,791
26,142
21,939
24,808
24,846
104,862
93,263
Total assets
63,087
50,776
28,954
25,820
148,131
73,103
29,929
28,820
270,101
178,519
Current liabilities
(6,153)
(7,090)
(1,079)
(296)
(92,883)
(35,769)
(9,675)
(9,735)
(109,790)
(52,890)
Including financial liabilities net of trade and other
accounts payable and provisions
(66)
(3,183)
(31)
(15)
(4,147)
(1,680)
(3,219)
(6,007)
(7,463)
(10,885)
Non-current liabilities
(6,100)
(4,412)
(5,320)
(1,933)
(53,373)
(32,031)
(2,354)
(4,239)
(67,147)
(42,615)
Including financial liabilities net of trade and other
accounts payable and provisions
-
(66)
(5,123)
(1,933)
(30,818)
(31,241)
-
(2,877)
(35,941)
(36,117)
Total liabilities
(12,253)
(11,502)
(6,399)
(2,229)
(146,256)
(67,800)
(12,029)
(13,974)
(176,937)
(95,505)
Net assets
50,834
39,274
22,555
23,591
1,875
5,303
17,900
14,846
93,164
83,014
Group’s share of net assets of joint ventures
25,925
20,030
11,503
12,031
957
2,705
10,213
8,724
48,598
43,490
Goodwill
4,105
4,105
-
-
-
-
(1,374)
(1,374)
2,731
2,731
Impairment losses
-
-
-
-
-
-
(21)
(21)
(21)
(21)
Other
149
120
(115)
-
-
-
753
753
787
873
Unrealised gain
-
-
(5,960)
(5,960)
-
-
-
-
(5,960)
(5,960)
Unrealised profit in the Group
(1,927)
(3,310)
-
-
-
-
-
-
(1,927)
(3,310)
Carrying value of investments in joint ventures
28,252
20,945
5,428
6,071
957
2,705
9,571
8,082
44,208
37,803
Total revenue
55,660
40,913
-
-
22,929
-
15,708
12,769
94,297
53,682
Depreciation and amortisation
(5,758)
(4,836)
(13)
-
(292)
(559)
(1,342)
(1,337)
(7,405)
(6,732)
Finance income
498
62
4
-
35
4
11
33
548
99
Finance costs
(501)
(501)
(252)
(1)
(1,489)
(1,466)
(119)
(107)
(2,361)
(2,075)
Foreign exchange gain/(loss)
807
(146)
(98)
5
(2,374)
(592)
(455)
(236)
(2,120)
(969)
Impairment losses
(387)
-
(40)
(14)
(1)
(11)
(5)
-
(433)
(25)
Income tax
(6,243)
(3,978)
(149)
(61)
(425)
(397)
(792)
(642)
(7,609)
(5,078)
Profit/(loss) for the year
25,215
15,569
(1,261)
(280)
(3,428)
(3,788)
3,098
2,505
23,624
14,006
Other comprehensive income/(loss)
-
34
-
-
-
-
-
2
-
36
Total comprehensive income/(loss)
25,215
15,603
(1,261)
(280)
(3,428)
(3,788)
3,098
2,507
23,624
14,042
Other
1,382
(2,815)
-
-
-
-
-
-
1,382
(2,815)
Share of results of joint ventures
14,242
5,125
(643)
(142)
(1,749)
(1,932)
1,490
1,238
13,340
4,289
Dividends received
6,935
2,080
-
-
-
-
-
-
6,935
2,080
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
57
27 Accounts Receivable
In millions of Kazakhstani Tenge
2022
2021
Trade accounts receivable
251,697
215,483
Trade accounts receivable from related parties
7,024
4,713
Total gross trade accounts receivable
258,721
220,196
Provision for impairment of trade receivables
(87)
(148)
Provision for impairment of trade receivables from related
parties
(3)
(24)
Total current net trade accounts receivable
258,631
220,024
Other accounts receivable
12,389
175
Other accounts receivable from related parties
81
44
Total gross other accounts receivable
12,470
219
Provision for impairment of other receivables
(180)
(105)
Total net other accounts receivable
12,290
114
Total current accounts receivable
270,921
220,138
Other accounts receivable include:
• joint operations receivable of Tenge 4,568 million that represent receivable of the Group from the second
participant 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 2022 the second participant of joint operation did not
purchase the required volume; and
• compensation from the second participant of JV KATCO LLP of Tenge 7,374 million, adjusted for foreign exchange
loss from initial amount of Tenge 7,671 million (Note 25).
Information on the Group’s exposure to credit and currency risks and provision for impairment for accounts receivable
is disclosed in Note 40.
28 Other Financial Assets
In millions of Kazakhstani Tenge
2022
2021
Non-current assets
Restricted cash
29,044
17,654
Investment in ANU Energy
17,066
-
Long-term debt securities
9,202
-
Loans to related parties
2,536
5,493
Other
1,523
524
Total other non-current assets
59,371
23,671
Current assets
Restricted cash
15,923
427
Loans to related parties
3,491
3,357
Short-term debt securities
72
4,986
Term deposit
930
43,220
Other
262
259
Total other current assets
20,678
52,249
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
58
28 Other Financial Assets (Continued)
Restricted cash
In accordance with the terms of its subsoil use contracts, the Group transfers cash to long-term bank deposits to finance
future site restoration activities. As at 31 December 2022 the balance of restricted cash held in long-term bank deposits
related to financing of future site restoration activities was Tenge 29,044 million (2021: Tenge 17,654 million).
Short-term restricted cash includes payments of 32.3 million US Dollar, or Tenge 14,812 adjusted for foreign exchange
gains and amounting to Tenge 14,956 million as at 31 December 2022, made by the Group in March 2022 to a uranium
enrichment service provider whose Russian bank was subsequently included in the list of legal entities that fell under
the sanctions of the Office of Foreign Assets Control of the US Department of the Treasury (OFAC).The correspondent
bank which initially blocked the payment funds returned the amount to the Group (including interest) after the reporting
period (Note 43).
Investments in ANU Energy
In accordance with the Framework Agreement signed on November 22, 2021, the Group and Genchi Global Limited,
agreed to establish ANU Energy OEIC Ltd. The purpose of ANU Energy OEIC Ltd. is to store physical uranium as a
long-term investment. The Group made an investment of 24.25 million US dollars in March 2022 (equivalent to Tenge
12,368 million), which is 32.7% of the entity's shares. The Group does not have representation in the governing body
of the entity and does not take part in making decision key strategic issues of the entity. Accordingly, the Group does
not have a significant impact on the management of the Fund, and therefore the Group recognizes this investment at
fair value through profit or loss. As of December 31, 2022, the Group’s investment in ANU Energy OEIC Ltd. amounts
to Tenge 17,066 and the Group recognized the fair value adjustment of Tenge 4,699 million as finance income
(Note 17).
In accordance with the Framework Agreement, the Group and ANU Energy OEIC Ltd. signed a short-term contract for
the sale and purchase of natural uranium concentrates, under which the Group delivered natural uranium concentrates
on May 12, 2022. Under the terms of the same Framework Agreement the Group has received a uranium loan from
ANU Energy OEIC Ltd. in May 2022 (Note 36).
Debt securities
On May 12, 2022, in order to diversify its treasury portfolio, the Group invested in Eurobonds issued by Development
Bank of Kazakhstan JSC, in the amount of 19.9 million US dollars, or Tenge 8,804 million with a maturity of 3 years
and a coupon rate of 5.75%. The bonds are measured at amortized cost. As of 31 December 2022 the amount of the
long-term investment is Tenge 9,274 million.
The Group also purchases short-term debt securities. During the year the Group purchased Tenge 80,219 million and
redeemed Tenge 86,006 million (2021: Tenge 126,331 and Tenge 127,341) of such securities, mainly issued by the
National Bank of the Republic of Kazakhstan. As of 31 December 2021 short-term securities were represented by
investment in corporate bonds of Eurasian Bank of Development JSC, denominated in Tenge with a maturity of 3
months expiring on 12 January 2022 with a discount rate of 9.6%.
Loans to related parties
In millions of Kazakhstani Tenge
2022
2021
Non-current
Kyzylkum LLP
2,548
5,547
Provision for impairment
(12)
(54)
Total non-current loans
2,536
5,493
Current
Kyzylkum LLP
3,397
3,170
Uranenergo LLP
95
189
Provision for impairment
(1)
(2)
Total current loans
3,491
3,357
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
59
28 Other Financial Assets (Continued)
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 and
guarantor of a loan to Kyzylkum LLP.
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 2022 was
8.5% (2021: 8.5%). According to internal estimates, the level of credit risk for these loans is at an acceptable level.
29 Other Non-Financial Assets
In millions of Kazakhstani Tenge
2022
2021
Non-current
VAT recoverable
8,725
11,315
Long-term inventories
7,299
7,247
Investment property
2,046
2,065
Advances for non-current assets
1,782
1,857
Prepaid expenses
789
926
Other assets
638
848
Total other non-current assets
21,279
24,258
Current
Advances for goods and services
11,085
3,026
Advances to related parties for goods and services
3,834
1,244
Prepaid expenses
2,059
1,465
Prepaid insurance
1,309
1,025
Prepaid taxes other than income tax
443
371
Other assets
544
6
Total other current assets
19,274
7,137
30 Inventories
In millions of Kazakhstani Tenge
2022
2021
Finished goods and goods for resale
309,950
223,750
Including uranium products
308,168
222,195
Work-in-process
40,899
30,409
Raw materials
19,633
14,879
Materials in processing
15,198
3,091
Other materials
7,486
5,709
Fuel
1,488
479
Spare parts
989
789
Provision for obsolescence and write-down to net realisable
value
(3,022)
(3,250)
Total inventories
392,621
275,856
Movements in the provision for obsolescence are as follows:
In millions of Kazakhstani Tenge
2022
2021
Balance at 1 January
(3,250)
(2,755)
Reversal of provision during the year
1,011
623
Inventory write off during the year
77
130
Accrual of provision during the year
(821)
(1,238)
Translation of foreign currency
(39)
(10)
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
60
Balance at 31 December
(3,022)
(3,250)
31 Cash and Cash Equivalents
In millions of Kazakhstani Tenge
2022
2021
Current bank accounts
131,260
138,867
Demand deposits
38,274
22,338
Cash in hand
14
8
Provision for impairment
(12)
(23)
Total cash and cash equivalents
169,536
161,190
32 Share Capital
At 31 December 2022 the total number of authorised and paid ordinary shares is 259,356,608 (2021: 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. Registered share capital is Tenge 37,051 million.
Dividends declared and paid during the year were as follows:
In millions of Kazakhstani Tenge
2022
2021
Dividends payable at 1 January
-
-
Dividends declared during the year
227,388
150,082
Dividends paid during the year
(227,388)
(150,082)
Dividends payable at 31 December
-
-
Dividends declared during the year per share, in Tenge
877
579
33 Loans and Borrowings
In millions of Kazakhstani Tenge
2022
2021
Non-current
Bonds
83,300
77,700
Total non-current loans and borrowings
83,300
77,700
Current
Promissory notes issued
7,002
10,514
Bonds
24,016
803
Bank loans
23,953
-
Total current loans and borrowings
54,971
11,317
Total loans and borrowings
138,271
89,017
The company placed 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, total volume is 70 million.
In December 2022, the Company placed short-term commercial bonds in the amount of US Dollar 50 million on the
trading floor of Kazakhstan Stock Exchange JSC (“KASE”) with a maturity in January 2023 and a coupon of 4.32%
(Note 43).
Current bank borrowings primarily include short-term loan from ForteBank JSC in amount 50 million US dollars with a
maturity in January 2023. Bank loans were obtained for liquidity needs.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
61
33 Loans and Borrowings (Continued)
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 2022, the right of claim under these promissory notes belongs to Kyzylkum LLP, an
associate of the Group (Note 8).
Information about the Group’s loans and borrowings is presented as follows:
In millions of Kazakhstani Tenge
Currency
Maturity
2022
2021
Bank loans
Fortebank JSC
US Dollar
2023
23,202
-
Halyk Bank JSC
Tenge
2023
751
-
Total bank loans
23,953
-
Bonds
Bonds
US Dollar
2024, 2023
107,316
78,503
Total bonds
107,316
78,503
Promissory notes issued
Kyzylkum LLP
Tenge
on demand
7,002
10,514
Total promissory notes issued
7,002
10,514
The Group’s loans and borrowings were unsecured. In 2022, the Group’s weighted average interest rate on fixed
interest rate loans was 3.62% (2021: 3.52%).
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 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
(76,108)
(452)
-
(76,560)
Interest paid
(3,143)
(122)
-
(3,265)
Recognition of liability related to put
option
-
-
185,210
185,210
De-recognition of liability related to put
option (Note 39)
-
-
(185,210)
(185,210)
Other non-cash changes
-
52
-
52
Debt at 31 December 2021
89,017
291
-
89,308
Proceeds from loans and borrowings
70,905
-
-
70,905
Foreign currency translation
4,760
(2)
-
4,758
Interest accrued
3,689
20
-
3,709
Repayment
(26,555)
(162)
-
(26,717)
Interest paid
(3,545)
(25)
-
(3,570)
Other non-cash changes
-
51
-
51
Debt at 31 December 2022
138,271
173
-
138,444
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
62
34 Provisions
In millions of Kazakhstani Tenge
Compensation
for occupational
diseases
Environment
protection
Site restoration
Other
Total
At 1 January 2021
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 the year
45
28
-
197
270
Transfers
-
77
-
(44)
33
Unwinding of discount
19
128
2,745
-
2,892
Provision used
(61)
(10)
-
-
(71)
Change in estimates
-
7,811
3,940
45
11,796
At 31 December 2022
Non-current
133
9,268
34,074
-
43,475
Current
66
123
4,042
275
4,506
Total
199
9,391
38,116
275
47,981
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 (liquidation of the consequences of the operation of
facilities). 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. The change in estimate in 2022 mainly
relates to inclusion of provision of Ulba Metallurgical Plant JSC as described in Note 4.
The nominal cost of restoration of liquidation facilities as of 31 December 2022 is Tenge 134,438 million (2021:
Tenge 5,710 million). Key assumptions used in estimations are described in Note 4.
Provision for restoration of mine sites
The Group estimates the site restoration costs for each mine operated by the Group. The nominal cost of restoration
of mine sites as of 31 December 2022 is Tenge 84,209 million (2021: Tenge 63,989 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.
In view of the long-term nature of provisions, 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 2022, the accumulated transfers to restricted deposits
amounted to Tenge 33,371 million (2021: Tenge 21,963 million) (Note 28).
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
63
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
2022
2021
Trade accounts payable to related parties
58,668
33,620
Trade accounts payable
39,794
29,302
Total current trade accounts payable
98,462
62,922
Other accounts payable
346
3,092
Other accounts payable to related parties
1
-
Total current other accounts payable
347
3,092
Total current accounts payable
98,809
66,014
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 40.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
64
36 Other Liabilities
In millions of Kazakhstani Tenge
2022
2021
Non-current
Liabilities under contracts with customers
2,746
2,564
Advances received
2,276
3,740
Deferred income from subsidies received
1,820
1,356
Preferred shares
265
265
Issued financial guarantees
633
133
Liabilities under inventory loan agreements
-
13,461
Other
1,573
1,901
Total non-current other liabilities
9,313
23,420
Current
Liabilities under contracts with customers
35,139
16,598
Liabilities under inventory loan agreements
19,147
99
Accrued unused vacation payments and bonuses
11,453
8,425
Amounts due under uranium swap contracts (Note 4)
4,709
15,355
Joint operations liabilities
4,569
4,569
Wages and salaries payable
2,420
1,561
Social contributions payable
1,795
1,301
Advances received
1,795
1,280
Advances received from related parties
735
46
Issued financial guarantees
653
90
Dividends payable to other participants
259
263
Deferred income
161
166
Liability for social sphere contributions
-
3,600
Other
1,048
3,985
Total current other liabilities
83,883
57,338
Liabilities under uranium loan agreements
In 2020 the Group obtained uranium under commodity loans totalling US Dollar 21.9 million. A liability was initially
recognised to return inventory at a cost of Tenge 8,597 million. This liability is subsequently measured at fair value in
accordance with changes in market prices for uranium and foreign exchange rates. Accrued revaluation loss for the
year ended 31 December 2022 amounted to Tenge 5,445 million (2021: Tenge 2,872 million). As of 31 December
2022, the Group reclassified inventory loans from long-term to short-term, as the repayment period is up to May and
June 2023. The Group intends to extend the repayment period.
On 19 May 2022 the Group obtained a uranium loan totalling US Dollar 113.5 million from ANU Energy OEIC Ltd. that
was concluded under the Framework Agreement between the Group and Genchi Global Limited (Note 28). A liability
was initially recognised to return inventory at a cost of Tenge 49,089 million and subsequently measured at fair value
in accordance with changes in market prices for these goods and foreign exchange rates – the revaluation loss for the
year ended 31 December 2022 amounted to Tenge 4,712 million. On 20 December the Group returned the inventory,
the fair value of which amounted to Tenge 53,802 million on the date of return, which was greater than the cost of
inventory returned for Tenge 8,251 million.
Losses from revaluation of uranium loans to fair value as well as net gain from disposal of the loan returned to ANU
Energy OEIC Ltd. are recognised in profit and loss and presented as other loss (Note 15).
Uranium loans are part of the Group’s normal inventory management policy, required to mitigate logistical risks that
could affect the timely delivery of Kazakhstani uranium to Western conversion enterprises due to the current unstable
geopolitical situation.
Joint operations liabilities
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
65
36 Other Liabilities (Continued)
The Group reports the following liabilities related to contracts with customers:
In millions of Kazakhstani Tenge
2022
2021
Non-current contract liability
2,746
2,564
Current contract liability - advances received under contracts
with customer for uranium pellets
35,139
16,598
37,885
19,162
Non-current contract liabilities are rights granted to the customers to acquire additional volumes of uranium. The Group
expects that revenue will be recognized in future period(s) once the associated right is executed or expires.
Current contract liabilities include advances for uranium pellets for Tenge 35,082 million under contracts with
Ulba-FA LLP (2021: Tenge 16,420 million). During 2022, the Group has recognized revenue, which was included in
the balance of advances received as at 31 December 2021 in the amount of Tenge 16,420 million (2021: none).
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. 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 31 December 2022 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 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.
The Company received preliminary assessments for additional income tax in the amount of Tenge 5,754 million related
to transfer pricing for the period 2016-2020. In addition, the tax authorities raised a transfer pricing matter common to
the Group relating to documenting the transport differential in China for subsidiaries and affiliates, the maximum
estimated amount of which is Tenge 10,764 million for 2016-2022 (2021: Tenge 9,135 million). The Group introduced
amendments to transfer pricing methodology in 2021 to include supporting documentation for transportation differential
on sales made to China but still uncertainty exists about tax authorities interpretations.
To date, these tax audits were not finalised. Uncertainty exists as to the validity of the positions taken by the tax
authorities regarding the preliminary assessments issued by and interpretations of the documentation requirements
discussed above. 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. Accordingly, no liability has been recognised.
The Group recognized additional income tax related to transfer pricing of Tenge 7,298 million in 2022 (2021: Tenge
5,371 million), which does not relate to 2016-2020, following a review by management of compliance with Group
transfer pricing methodology.
(b) Complex tax inspections of Group entities
In 2021, most of the Group's entities underwent comprehensive tax audits, the results of which are reflected in the
financial statements prepared as at 31 December 2021. Pending comprehensive tax audits at certain Group entities as
of December 31, 2022 have been completed, the results of the audits are reflected in the financial statements as of
December 31, 2022.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
66
37 Contingencies and Commitments (Continued)
According to the results of the thematic audit of income tax at the source of payment from the income of non-residents
for 2014-2018, completed in 2021, additional charges of JV KATCO LLP amounted to CIT on payments of dividends
and loyalties in the amount of Tenge 10,482 million and penalties of Tenge 9,441 million. By decision of the Appellate
Commission of the Ministry of Finance, the amount of the fine was reduced to Tenge 5,358 million. In 2022, JV KATCO
LLP continued to appeal to the judiciary, and by the decisions of the court of first instance and the court of appeal, the
amount of additional charges was reduced by Tenge 15,761 million. In November 2022, the State Revenue Department
filed a complaint with the Supreme Court to overturn the decision of the Court of Appeal, and the issue is currently
being considered. As at 31 December 2022, the entity or the Group did not record any liability in respect of these
contested assessments.
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 December 31, 2022, at some enterprises, the underproduction of uranium exceeds the legally allowed threshold
of 20%, which is associated with a shortage of strategic materials. In addition, mining enterprises failed to meet their
financial obligations under subsoil use contracts, which could result in penalties of 1% of the defaulted obligation or
Tenge 150-200 million for 2022. The Group has not recognized additional liabilities in the financial statements as at 31
December 2022 as it plans to settle financial liabilities in future periods in accordance with revised work programs.
Insurance
The Kazakhstani insurance industry is in development stage, and many forms of insurance protection common in other
countries are not yet available. Since 2021, the Corporate Property Insurance Program of the Company’s enterprises
has been implemented against the “risks” of death, loss or damage as a result of accidental and unforeseen direct
physical impact (excluding equipment breakdown/failure and interruption in production).
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 (hereinafter referred to as the “Code”) came into force. The Code provides for the
division of objects that have a negative impact on the environment into four categories, depending on their level of
impact, which implies the differentiation of environmental requirements for each of the categories. Operators of facilities
that have a negative impact on the environment have obligations to eliminate the consequences of the operation of
facilities in accordance with the requirements of the legislation of the Republic of Kazakhstan.
The changes in the Code mainly affected non-mining companies of the first category, which include: Ulba Metallurgical
Plant JSC (Note 4), JV SSAP LLP, SKZ-U LLP and Kyzylkum LLP. Following detailed technical and commercial
assessments during the current year, the Group recognized in 2022 obligations to remediate the consequences of the
operation of facilities (Note 34).
According to the Code, category I companies, such as Ulba Metallurgical Plant JSC also have an obligation to provide
financial security to the state until July 2024 for the full amount of provision (Note 34). The Management of the Group
is currently in discussions with the competent authorities regarding the method and timing of funding the liability.
As a result of the assessment of liabilities, non-mining enterprises of categories II-IV did not have significant obligations
as of the reporting date.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
67
37 Contingencies and Commitments (Continued)
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 2022 is Tenge 18,937 million (2021: Tenge 21,154 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 2022 and 31 December 2021 and during the
periods then ended.
Legal proceedings
Administrative offense of JV Inkai LLP in terms of environmental requirements
The Department of Ecology imposed a fine in the amount of Tenge 1,639 million for the entity exceeding the permitted
wastewater rate. JV Inkai LLP believes that there were errors in the calculation of the fine. JV Inkai LLP paid the fine,
however, JV Inkai LLP is taking measures to dispute the fine through legal proceedings.
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 2022:
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%
819
8,088
Appak LLP
Kazakhstan
35%
8,029
15,449
JV Inkai LLP
Kazakhstan
40%
48,497
129,891
JV Khorasan-U LLP
Kazakhstan
50%
24,044
112,584
Baiken-U LLP
Kazakhstan
47.5%
17,452
77,558
DP Ortalyk LLP
Kazakhstan
49%
26,195
42,730
Volkovgeologiya JSC
Kazakhstan
1.04%
(121)
159
Total
124,915
386,459
The following table provides information about each significant subsidiary that has 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
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
68
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
In millions of Kazakhstani
Tenge
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Current assets
112,643
74,957
24,853
17,164
133,314
108,441
86,830
44,227
90,905
89,727
59,750
54,052
9,097
8,042
Non-current assets
42,479
37,032
27,752
20,538
215,967
216,565
102,771
106,269
181,990
182,054
36,564
29,228
11,208
8,054
Current liabilities
(57,444)
(31,240)
(4,088)
(2,880)
(11,812)
(11,199)
(6,629)
(5,060)
(14,560)
(16,990)
(4,781)
(8,569)
(15,954)
(7,820)
Non-current liabilities
(14,355)
(5,390)
(4,218)
(2,910)
(34,053)
(35,022)
(19,529)
(18,733)
(33,004)
(34,049)
(4,329)
(3,573)
(162)
(91)
Equity, incl.
83,323
75,359
44,299
31,912
303,416
278,785
163,443
126,703
225,331
220,742
87,204
71,138
4,189
8,185
Equity attributable to
the Group
75,235
67,868
28,850
20,799
173,525
155,665
85,885
66,597
112,747
110,452
44,474
36,281
4,030
7,904
Non-controlling
interest
8,088
7,491
15,449
11,113
129,891
123,120
77,558
60,106
112,584
110,290
42,730
34,857
159
281
Revenue
121,435
60,254
45,050
30,902
165,966
131,866
74,579
49,981
90,156
63,117
95,240
59,195
29,742
23,513
Depreciation and
amortisation
(2,066)
(1,924)
(4,084)
(3,184)
(11,812)
(10,913)
(11,921)
(12,694)
(14,823)
(13,842)
(6,490)
(4,971)
(1,503)
(1,424)
Including depreciation
and amortisation at
fair value
-
-
-
-
(3,088)
(2,205)
(5,996)
(6,985)
(8,588)
(8,868)
-
-
-
-
Finance income
855
360
576
278
633
127
619
340
217
116
26,375
8,045
61
22
Finance costs
(1,864)
(467)
(428)
(218)
(1,114)
(359)
(244)
(69)
(203)
(72)
(26,469)
(8,186)
(85)
(319)
Income tax expense
(4,165)
(2,606)
(5,688)
(3,932)
(26,047)
(20,547)
(11,082)
(6,219)
(14,162)
(8,584)
(13,982)
(7,218)
69
61
Including tax effect of
depreciation and
amortisation of
adjustments to fair val
-
-
-
-
616
441
1,202
1,404
1,718
1,774
-
-
-
-
Net foreign exchange
gain
953
488
229
12
1,542
404
529
91
3,729
613
1,686
56
(4)
-
(Impairment
losses)/reversal of
impairment losses
1,054
(198)
(20)
9
-
(478)
57
(164)
-
-
(41)
22
(18)
60
Profit for the year
12,699
5,606
22,940
13,183
96,995
76,693
36,740
19,019
48,089
23,679
53,458
27,016
(4,844)
(1,511)
Profit attributable to
the owners of the
Company
11,880
5,038
14,911
8,569
48,498
31,137
19,288
9,985
24,045
11,840
27,263
19,236
(4,723)
(1,373)
Profit attributable to
non-controlling
interest
819
568
8,029
4,614
48,497
45,556
17,452
9,034
24,044
11,839
26,195
7,780
(121)
(138)
Profit/(loss) for the
year
12,699
5,606
22,940
13,183
96,995
76,693
36,740
19,019
48,089
23,679
53,458
27,016
(4,844)
(1,511)
Other comprehensive
income/(loss)
(726)
16
(7)
1
-
-
-
(8)
-
-
(11)
2
(16)
(9)
Total
comprehensive
income/(loss) for
the year
11,973
5,622
22,933
13,184
96,995
76,693
36,740
19,011
48,089
23,679
53,447
27,018
(4,860)
(1,520)
Dividends declared to
non-controlling
interest
177
360
3,691
2,879
41,727
17,117
-
6,225
21,750
-
18,316
-
1
1
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
69
Net cash
inflow/(outflow)
from:
- operating activities
9,777
7,561
18,166
13,376
87,391
26,366
27,041
13,777
48,124
12,606
40,252
17,440
1,719
109
- investing activities
(2,383)
(2,838)
(10,287)
(6,160)
(10,649)
(8,894)
(7,433)
(3,585)
(13,525)
(8,557)
(12,488)
(2,527)
(3,837)
(1,057)
- financing activities
(4,023)
(3,812)
(10,547)
(8,278)
(75,305)
(28,832)
-
(11,869)
(47,000)
(3,504)
(37,382)
(3)
2,791
750
Net cash
inflow/(outflow)
3,371
911
(2,668)
(1,062)
1,437
(11,360)
19,608
(1,677)
(12,401)
545
(9,618)
14,910
673
(198)
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
70
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. The distribution of dividends is made in accordance with the amendment
to the agreement between the parties, and is not based on ownership interests. For 2021, dividends were
distributed between the non-controlling interest and the Company in the amount of 59.4% and 40.6%,
respectively, for 2022 - in the amount of 50% and 50%, respectively. This amendment was agreed by the
parties to compensate the non-controlling interest for losses due to a 20% reduction in production in
2021-2022. Accordingly, the amount reclassified from profit attributable to the Group to profit attributable to
non-controlling interests during 2022-2020 amounted to Tenge 30,556 million (2021-2020:
Tenge 20,857 million).
39 Principal Subsidiaries
These consolidated financial statements include the following subsidiaries:
Ownership
Principal activity
2022
2021
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%
94.33%
Volkovgeologiya JSC
Exploration and research of uranium reserves, drilling
services, monitoring of radiation level and environment
conditions
98.96%
96.62%
High Technology Institute LLP
Research, project, development and engineering
consulting services
100%
100%
DP Ortalyk LLP
Exploration, production, processing and sale of uranium
products
51%
51%
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%
KAP Logistics LLP (former
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
2022
2021
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.
Disposal of a 49% non-controlling share in DP Ortalyk LLP
In April 2021, a sale and purchase agreement was signed between the Company and CGNM UK Limited, where the value
of a 49% stake in DP Ortalyk LLP was determined in the amount of 435 million US Dollar (equivalent to
Tenge 186,437 million) based on fair value assessment by an independent appraiser.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
71
39 Principal Subsidiaries (Continued)
On July 22, 2021, the sale of the share in DP Ortalyk LLP was completed after obtaining all state permits and fulfilling all
the preconditions of the sale and purchase agreement.
The management of the Company has concluded that the Company retains control over DP Ortalyk LLP, as the Group
has significant rights to manage the enterprise's production activities and influence the profits earned.
In millions of Kazakhstani tenge
Selling price at the exchange rate as of April 22, 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 April 22, 2021
186,437
Less Non-controlling interest
(27,076)
Minus 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 agreements that contain 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 a 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 the 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 accordingly the liability was derecognised. There was no material change to its fair
value between initial recognition date and extinguishment date.
As of 31 December 2022 and 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
72
39 Principal Subsidiaries (Continued)
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.
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
2022
2021
Financial assets
Trade accounts receivable
27
258,631
220,024
Current bank accounts
31
131,248
138,844
Restricted cash
28
44,967
18,081
Demand deposits
28
38,274
22,338
Investments in debt securities
28
9,274
4,986
Investment in ANU Energy
28
17,066
-
Other accounts receivable
27
12,290
114
Loans to related parties
28
6,027
8,850
Term deposits
28
946
43,220
Cash in hand
31
14
8
Other
28
1,785
783
Total financial assets
520,506
457,248
Financial liabilities
Bonds
33
107,316
78,503
Trade and other accounts payable
35
98,809
66,014
Bank loans
33
23,953
-
Promissory note issued
33
7,002
10,514
Issued financial guarantees
36
1,286
133
Preferred shares
36
265
265
Dividends payable to other participants
36
259
263
Lease liabilities
33
173
291
Historical costs liabilities
36
-
437
Liability for social sphere contributions
36
-
3,600
Total financial liabilities
239,063
160,020
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
73
40 Financial Risk Management (Continued)
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, investments in securities 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).
The table below shows credit ratings of banks where the Group had financial assets as at 31 December 2022:
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-
Total
Current bank accounts
33,291
17,183
80,774
131,248
Restricted cash
9,908
2,842
32,217
44,967
Demand deposits
2,968
3,216
32,090
38,274
Term deposits
-
-
946
946
Investment in debt securities
-
9,274
-
9,274
Total
46,167
32,515
146,027
224,709
The table below shows credit ratings of banks where the Group had financial assets 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-
Total
Restricted cash
7,449
1,206
9,426
18,081
Term deposits
-
-
43,220
43,220
Current bank accounts
49,430
27,613
61,801
138,844
Demand deposits
3,024
337
18,977
22,338
Investment in debt securities
-
-
4,986
4,986
Total
59,903
29,156
138,410
227,469
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 2022 or 31 December 2021 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
74
40 Financial Risk Management (Continued)
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
2022
Trade receivables
- current
0.03%
258,607
(70)
- less than 30 days overdue
10.53%
38
(4)
- 30 to 90 days overdue
20%
30
(6)
- 90 to 180 days overdue
20%
46
(10)
Total trade receivables (gross carrying amount)
258,721
Credit loss allowance
(90)
Total trade receivables from contracts with customers
(carrying amount)
258,631
In millions of Kazakhstani Tenge
Loss rate
Gross carrying
amount
Lifetime
ECL
2021
Trade receivables
- current
0.06%
220,084
(132)
- less than 30 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
The following table explains the changes in the credit loss allowance for trade and other receivables between the
beginning and the end of 2022 as well as impairment provision for trade and other receivables during 2021:
In millions of Kazakhstani Tenge
Trade accounts
receivable
Other accounts
receivable
Provision at 1 January 2021
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
Provision for the year
90
76
Reversal
(172)
-
Amounts written-off
-
(2)
Provision at 31 December 2022
90
180
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
75
40 Financial Risk Management (Continued)
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 75% of the Group’s revenue for 2022 (84% of trade receivables as of
31 December 2022) is attributable to sales transactions with eleven main customers (2021: 65% of Group’s revenues and
53% of trade receivables attributable to seven customers). 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.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
In millions of Kazakhstani Tenge
2022
2021
China
143,154
68,397
Canada
54,239
60,276
United Kingdom
30,712
11,929
Russia
12,989
20,134
USA
8,338
46,564
Kazakhstan
8,100
5,792
Japan
696
1,287
European Union
403
5,645
Total
258,631
220,024
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 28) 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
76
40 Financial Risk Management (Continued)
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.
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
2022
2021
Current bank accounts
131,248
138,844
Undrawn borrowing facilities
84,665
177,902
Current term deposits
39,204
65,558
Total
255,117
382,304
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 2022:
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
107,316
114,706
-
23,216
861
90,629
-
Trade and other accounts
payable
98,809
98,809
-
98,809
-
-
-
Bank loans
23,953
24,161
-
24,161
-
-
-
Promissory note issued
7,002
7,002
7,002
-
-
-
-
Issued financial guarantees
1,286
18,937
18,937
-
-
-
-
Preferred shares
265
265
-
-
-
265
-
Dividends payable to other
participants
259
259
-
-
259
-
-
Lease liabilities
173
259
-
12
38
154
55
Total
239,063
264,398
25,939
146,198
1,158
91,048
55
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 and other accounts
payable
66,014
66,014
-
66,014
-
-
-
Promissory note issued
10,514
10,514
10,514
-
-
-
-
Liability for social sphere
contributions
3,600
3,600
-
-
3,600
-
-
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
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
77
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
2022
2021
Denominated in US Dollars
Trade accounts receivable
248,201
207,325
Current bank accounts
97,471
95,630
Other investments
26,487
-
Other accounts receivable
7,508
1
Loans to related parties*
5,933
8,663
Term deposits
922
43,212
Demand deposits
385
-
Other assets
1,646
17,252
Total assets
388,553
372,083
Bonds*
(107,316)
(78,503)
Bank and non-bank loans
(23,202)
-
Trade and other accounts payable
(6,350)
(13,110)
Other financial liabilities
(21,740)
(34,048)
Total liabilities
(158,608)
(125,661)
Net exposure to currency risk
229,945
246,422
* - 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 21% weakening and 21% strengthening of Tenge against US Dollar as at 31 December 2022 (2021: 13% weakening
and 10% strengthening) would increase/(decrease) equity and profit or loss by the amounts shown below.
In millions of Kazakhstani Tenge
2022
2021
US Dollar strengthening by 21% (2021: 13%)
38,631
25,628
US Dollar weakening by 21% (2021:10%)
(38,631)
(19,714)
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 2022 and 2021.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
78
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 except for investments in ANU Energy OEIC Ltd. (Note 28).
A 40% weakening and 40% strengthening of Tenge against spot price as at 31 December 2022 would increase/(decrease)
equity and profit or loss by the amounts shown below.
In millions of Kazakhstani Tenge
2022
Spot price increase by 40%
5,324
Spot price increase by 40%
(5,324)
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 2022 approximately 100% (2021: 100%) 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
2022
2021
Fixed rate instruments
Restricted cash
44,967
18,081
Demand deposits
38,274
22,338
Securities
9,274
-
Loans to related parties
6,027
8,850
Term deposits
946
43,235
Bonds
(107,316)
(78,503)
Bank loans
(23,953)
-
Promissory note issued
(7,002)
(10,514)
Net position
(38,783)
3,487
Fair value sensitivity analysis for fixed rate instruments
The Group has only 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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
79
40 Financial Risk Management (Continued)
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 2022 and 2021,
requirements associated with borrowing facilities.
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.
Financial assets carried at amortised cost
Estimate of all financial assets carried at amortised cost is level 3 measurement, except for cash and cash equivalents,
which is in Level 2. 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.
All financial assets of the Group as of the end of the reporting period are carried at amortised cost except as disclosed
below.
Financial assets carried at FVTPL
Financial assets carried at FVTPL include derivative asset and investment in ANU Energy OEIC Ltd. (Note 28) that are
recognised at fair value through profit and loss. Fair value measurements for both assets fall in Level 2. The Group
estimates fair value of investment in ANU Energy OEIC Ltd. as a percentage of Group’s owned share multiplied by the
fair value of uranium held by the entity as of the date. The main inputs used in fair value estimation are spot prices of
uranium as of the reporting date. Fair value of a derivative asset are determined based on binominal model with uranium
spot price forecasts.
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 weighted average discount rate is 4.94% p.a (2021: 4.5%).
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
80
41 Fair Value Disclosures (Continued)
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:
2022
2021
In millions of Kazakhstani Tenge
Carrying value
Fair value
Carrying value
Fair value
Financial liabilities
Bonds
83,300
82,288
77,700
76,305
Historical costs liabilities
-
-
437
326
Total
83,300
82,288
78,137
76,631
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.
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 and investment in ANU Energy OEIC Ltd. (Note 28), classified as FVTPL upon initial
recognition. All of the Group’s financial liabilities were carried at AC. Fair value is approximate to carrying amount and
there were no reclassifications during the period.
43 Events after the Reporting Period
Restricted cash
On 13 January 2023 the Office of Foreign Assets Control of the US Department of the Treasury (OFAC) issued a license
to return blocked funds. On 30 January 2023 the correspondent bank returned the funds in the amount of
32.7 million US Dollars, including 0.4 million US Dollars of accrued interest.
Commercial bonds issue
Short-term commercial bonds issued in 2022 were redeemed on 23 January 2023. The payment made was
50.18 million US Dollars, including a coupon amount of 0.18 million US Dollars.
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