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 ............................................................................................ 6
2 Environment of the Group................................................................................................................................... 7
3 Significant Accounting Policies ........................................................................................................................... 9
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 ........................................................................................................................................ 33
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................................................................................ 40
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 ........................................................................................................................... 54
27 Accounts Receivable ........................................................................................................................................ 56
28 Other Financial Assets ..................................................................................................................................... 57
29 Other Non-Financial Assets .............................................................................................................................. 58
30 Inventories ........................................................................................................................................................ 59
31 Cash and Cash Equivalents ............................................................................................................................. 59
32 Share Capital .................................................................................................................................................... 59
33 Loans and Borrowings ...................................................................................................................................... 60
34 Provisions ......................................................................................................................................................... 62
35 Accounts Payable ............................................................................................................................................. 63
36 Other Liabilities ................................................................................................................................................. 64
37 Contingencies and Commitments ..................................................................................................................... 66
38 Non-controlling Interest..................................................................................................................................... 68
39 Principal Subsidiaries ....................................................................................................................................... 71
40 Financial Risk Management ............................................................................................................................. 74
41 Fair Value Disclosures ...................................................................................................................................... 81
42 Presentation of Financial Instruments by Measurement Category ................................................................... 82
43 Events after the Reporting Period ..................................................................................................................... 82
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
Note
For the year ended
31 December 2022
For the year ended
31 December 2021
9
1,001,171
691,011
10
(475,097)
(402,967)
526,074
288,044
11
(25,605)
(15,706)
12
(44,507)
(34,105)
13
176
(3,805)
132
(208)
15
17,304
3,345
14
21,717
7,525
15
(9,564)
(15,394)
17
17,327
7,077
17
(8,425)
(6,712)
25
75,736
47,294
26
13,340
4,289
583,705
281,644
18
(110,742)
(61,618)
472,963
220,026
(46)
205
14
(3)
(478)
66
(510)
268
472,453
220,294
348,048
140,773
38
124,915
79,253
472,963
220,026
347,589
141,043
124,864
79,251
472,453
220,294
19
1,342
543
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
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
* 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 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
(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
(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
(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 subsidiaries 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
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 subsidiaries 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
6
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
08 July 2005
28 years
Zhalpak
Production
14 December 2021
21 years
Appak LLP
Mynkuduk, West lot
Production
08 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
01 March 2006
49 years
JV Khorassan-U LLP
North Khorasan, block 1
Exploration and
Production
08 May 2005
53 years
Karatau LLP
Budenovskoe, block 2
Production
08 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
7
1 NAC Kazatomprom JSC Group and its Operations (Continued)
Mine/area
Stage
Contract date
Contract term
Associates
JV KATCO LLP
Southern Moinkum
Production
03 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
08 July 2005
24 years
Joint Ventures
Semizbay-U LLP
Semizbai
Production
02 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
20 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 XXX. 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.
War 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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
8
2 Environment of the Group (Continued)
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
9
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
10
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
11
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.
(iv) 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
12
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
13
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
14
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
15
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
16
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
17
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
18
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
19
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
20
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
21
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
22
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
23
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
24
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
25
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
26
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
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)
-
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
27
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.
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.
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)
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.
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)
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)
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.
- 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.
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)
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.
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
31
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.
National Atomic Company Kazatomprom JSC
Notes to the Consolidated Financial Statements – 31 December 2022
33
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.
(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/(impairment 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: <