About the Report

GENERAL INFORMATION

This Kazatomprom Integrated Annual Report 2023 (the Report) is the eleventh report, which discloses information on financial, economic and operational performance, as well as data about the sustainable development achievements of the Company. The Report is intended for a wide range of stakeholders. This report has been prepared in accordance with the GRI Standards 2021 and SASB Metals&Mining version 2021-12.

The Report discloses Kazatomprom’s financial and non-financial operations connected with projects both in the Company’s country of residence, the Republic of Kazakhstan, and abroad. Non-financial disclosures relate mainly to the subsidiaries, associates and joint ventures in which the Company holds 50%+. i.e. to the Group.

Compared to Integrated Annual Report 2022, changes have been made to the Report in individual indicators and the disclosure of additional indicators. In particular, the Report includes information on tailings and tailings storage facilities. Detailed explanations are given in the text of the Report. In 2023, there were no significant changes in the scope and boundaries of the Report compared to the previous year.

The Report comprehensively discloses:

• Implementation of Kazatomprom’s Development Strategy.
• Business administration approach of the Company’s management.
• Significant financial, economic, and production plans and performance in core operations.
• Performance in occupational health and safety and environmental protection.
• Contribution to the regional development, implementation of the social policy, and other sustainable development aspects.

To designate Kazatomprom and its subsidiaries, the Report uses the names: “Kazatomprom”, “Company”, “Group”, “We”.

Standards and Statutory Requirements

The Report discloses basic data in accordance with the requirements of the laws of the Republic of Kazakhstan, the internal regulations and practices of the Company, and international corporate governance practices. When drawing up the Report, the Company considered the following documents:

• Law No.415-II of the Republic of Kazakhstan dated 13 May 2003 On Joint Stock Companies.
• The rules for information disclosure by the issuer, Requirements for the content of information to be disclosed by the issuer, and the terms for information disclosure by the issuer on the Internet resource of the Depository of financial statements as approved by the Resolution No.189 adopted by the Board of the National Bank of the Republic of Kazakhstan on 27 August 2018.
• Information Disclosure Rules of NAC Kazatomprom JSC (2022).
• Kazatomprom’s Corporate Governance Code approved by the Resolution of the Sole Shareholder dated 27 May 2015 (Decision No.22/15 of the Management Board of Samruk-Kazyna JSC).
• Regulatory requirements of the London Stock Exchange (LSE), Kazakhstan Stock Exchange (KASE), and Astana International Exchange (AIX).
• International integrated reporting standard ( International Framework).
• International standard for sustainable development reporting, Global Reporting Initiative.
• Sustainability Accounting Standards Board (SASB) standards.
• Recommendations of the TCFD (The Task Force on Climate-related Financial Disclosures) Working Group of the Financial Stability Board (partial disclosure).
• АА1000SES Stakeholder Engagement Standard.
• Ten principles of UN Global Compact.
• Sustainable Development Goals adopted by the UN General Assembly for the period till 2030.
• ISO 26000:2010 Social Responsibility Guidance Standard.

Since 2019, Kazatomprom has included the information on its contribution to the achievement of the United Nations Sustainable Development Goals in the Report. This approach is also followed in this document. The Company strives to ensure that the development strategy of the Group correlates with the objectives of achieving the UN SDGs in addressing environmental, social and economic issues, as reflected in the Report. In 2019, the Company identified a list of priority SDGs where the Group can make a tangible contribution: SDGs 3, 7, 8, 9, 12 and 13. By prioritising the Sustainable Development Goals, the Company focused on beacons relevant to the sectoral identity and strategy of Kazatomprom, as well as to the interests of its stakeholders.

INFORMATION PERIMETER

The scope of the Report corresponds to the annual reporting cycle of the Company. The previous Report was published in April 2022. Electronic copies of the reports for the previous years are available on the official websitе of the Company. The current Report discloses the operations and performance of Kazatomprom for the period from 1 January 2023 to 31 December 2023.

The Report includes important facts that fall beyond the reporting period but are directly related to it, as well as the medium-term plans of the Group. The Report discloses information on the most significant results of the operations of Kazatomprom, its subsidiaries, associates and joint ventures. During data collection, all data of quantitative and qualitative nature across the entire Group, which can have a significant impact on making an informed decision on a significant issue, event or decision, is taken into account and disclosed. Kazatomprom is systematically developing a system of work with sustainable development indicators and aims to align the disclosure perimeter with the financial data disclosure to the full amount in the near future.

PRINCIPLES FOR DEFINING REPORT QUALITY

The key principles of the GRI Standards ensure the quality of the Report.

MATERIAL TOPICS

INDEPENDENT ASSURANCE

The external audit of the financial statements of the Company was performed by PricewaterhouseCoopers LLP. The auditor’s report is presented as an Annex to the Report.

The proper disclosure of non-financial information prepared in accordance with the GRI Standards has been assured in accordance with ISAE 3000 (Revised), the International Standard for Assurance Engagements Other than Audits and Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. PricewaterhouseCoopers LLP was an independent auditor. The auditor's report is in the Annexes to the Report.

FORWARD-LOOKING STATEMENTS

The statements in the Report are considered to be forward-looking. To describe the future, the terminology is used that includes words such as “believes”, “evaluates”, “expects”, “forecasts”, “intends”, “plans”, “assesses”, “will” or “may”, or in each case, comparable words and terms of similar or comparable terminology, or references to discussions, plans, goals, objectives, future events or intentions are designed to identify statements regarding the future. All the statements in the Report, other than statements on historical facts, are considered to be forward-looking statements. These forward-looking statements include, without limitation, statements regarding the intentions, opinions and expectations of the Company concerning, among other things, the results of operations, financial state, liquidity, prospects, growth, potential acquisitions, strategies and sectors in which the Company operates.

By their very nature, forward-looking statements involve risks and uncertainties because they relate to future events and circumstances that may or may not occur. Forward-looking statements do not guarantee future or actual performance. The actual results of the activity, the financial situation and liquidity of the Company and the development of the country and industries in which the Company operates can differ significantly from those options that are described in this document or are assumed in accordance with the statements contained in this document.

The Company does not plan and does not assume the obligation to update any information regarding the industry or any forward-looking statements contained herein, whether as a result of the obtaining new information or the occurrence of future events or any other circumstances. The Company makes no representations, provides no assurances and publishes no forecasts as to whether the outcomes described in such forward-looking statements will be achieved.

Key ESG Indicators, 2021-2023

CORPORATE SOCIAL RESPONSIBILITY

Kazatomprom headcount and staff composition, employees

Kazatomprom headcount broken down by gender and region, 2023

Regular employees broken down by gender and region, 2023

Temporary employees broken down by gender and region, 2023

Full-time employees broken down by gender and region, 2023

Part-time employees broken down by gender and region, 2023

Structure of Kazatomprom's governing bodies and employees, %

Structure of Kazatomprom's employees broken down by gender and age group, %

Number of hired employees, employees

Employees hired by Kazatomprom, broken down by gender, age groups and region, persons

Kazatomprom's dismissed employees and staff turnover

Staff turnover across the Group, %

Number of employees who returned to work after parental leave and childcare leave⁹²

Kazatomprom payroll fund, KZT

Benchmarking Kazatomprom's minimum salary against Kazakhstan's minimum salary, KZT

Kazatomprom staff training, man-workshops⁹⁶

Average number of training hours per employee

ENVIRONMENTAL PROTECTION

Direct (Scope 1) and Indirect (Scope 2) GHG emissions, t СО2-eq

Breakdown and source of air emissions, '000 tonnes

Total water withdrawal by source, '000 m³

Total wastewater discharge by categories, ’000 m³

Total wastewater discharge by type, ’000 m³

Total waste by type, '000 tonnes

Electricity produced by PV plants, MWh

Inventory table of tailings dumps

OCCUPATIONAL HEALTH AND SAFETY

Kazatomprom's H&S expenses, KZT billion⁹⁸

Occupational injuries at Kazatomprom⁹⁹

Radiation safety indicators at Kazatomprom, mSv a year

SOCIO-ECONOMIC CONTRIBUTION

Direct economic value generated and distributed, KZT billion

Taxes paid in other jurisdictions in 2023

Contributions to the local budget for socio-economic and infrastructure development of regions of operations, KZT million

Association and International Initiative Membership and Partnership

Reports by Chairmen of the Board of Directors Committees in 2023

PRODUCTION SAFETY (HSE) COMMITTEE REPORT

AUDIT COMMITTEE REPORT

STRATEGIC PLANNING AND INVESTMENT COMMITTEE REPORT

NOMINATION AND REMUNERATION COMMITTEE REPORT

Statement of Responsibility from Members of the Board of Directors and Management Board

Under the Company’s Corporate Governance Code, the Board of Directors and Management Board are responsible for the correctness of the annual report, as well as the Company’s financial statements.

In accordance with the Disclosure and Transparency Rules of the Handbook of the Financial Conduct Authority, each member of the Board of Directors confirms, based on the information they have, that:

• the financial statements have been prepared in accordance with IFRS, and give a true and reliable reflection of: assets, liabilities, and financial position; the results of the financial and economic activities of the Company; and the consolidated balance sheet of the Company and its subsidiaries;
• the management report contains accurate data on the development and indicators related to financial and economic activities and the financial position of the Company and its subsidiaries, as well as a description of the most significant risks and uncertainties that they face.

As of the date of this Report, no member of the Board of Directors or Management Board has in the past five years:

• had a criminal record for offences related to fraud;
• been a member of the administrative, managerial, or supervisory bodies of any company or partner in any partnership at the time or in anticipation of a bankruptcy, or been engaged in property management due to insolvency or liquidation;
• been subject to official public charges or sanctions by a government organisation or regulatory body (including a professional body); have never been deprived of the right, upon a court order, to act as a member of the administrative, managerial, or supervisory bodies of a company, or been prohibited from participating in managing a company or in doing business.

Group’s Subsidiaries, Joint Ventures, Joint Operations, and Associates

In all cases, the share percentage shown is equal to the Group’s voting rights, with the exception of Ulba Metallurgical Plant JSC and Volkovgeologia JSC, where the Group has 100% voting rights in each entity. In ANU Energy OEIC Ltd (ANU Energy) the Group does not have representation in the Board of Directors, has no voting rights and does not take part in decision-making on key strategic issues of the ANU.

Subsidiaries, joint ventures, joint operations, and associates of the Holding, 31 December 2023

The following asset is currently subject to liquidation

Contributing to the Achievement of the UN Sustainable Development Goals

Kazatomprom fully shares the values of the UN Sustainable Development Agenda. The Company recognises the importance of all 17 UN SDGs and, as part of its operations, strives to make a feasible contribution to their achievement. Due to the specifics of our operations, we have identified six priority UN SDGs to which the Company makes the most significant contribution.

Kazatomprom’s Priority UN Sustainable Development Goals

Company's Contribution to UN Sustainable Development Goals

Contribution to the Second Priority UN Sustainable Development Goals

GRI Index

TCFD Index

SASB Index

UNCTAD Index

Independent Assurance Report

Consolidated financial statements

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Notes to the Consolidated Financial Statements

1. NAC KAZATOMPROM JSC AND ITS OPERATIONS

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards for the year ended 31 December 2023 for National Atomic Company Kazatomprom JSC (the “Company”) and its subsidiaries (hereinafter collectively referred to as “the Group”).

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 at 31 December 2023, 75% of the Company’s shares are held by SWF Samruk-Kazyna JSC and 25% are on free float. Government is the 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 world leading uranium producing companies. 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 23 and 24). 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 2023, the Group and its associates and joint ventures were a party to the following contracts for production and exploration of uranium:

At 31 December 2023 the Group comprises 33 entities (2022: 33), mainly 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 2023 and 2022 the aggregate number of employees of the Group is about 21 thousand people.

2. ECONOMIC ENVIRONMENT OF THE GROUP

In November 2023 Fitch Ratings, an international rating agency, affirmed Kazakhstan's Long-Term Foreign- Currency Issuer Default Rating (IDR) at 'BBB' with a stable outlook. According to Fitch, Kazakhstan's 'BBB' IDRs reflect strong fiscal and external balance sheets that have proven resilient to external shocks, and financing flexibility underpinned by accumulated oil revenue savings. Set against these strengths are its very high dependence on commodities, high inflation that partly reflects a less developed macroeconomic policy framework relative to 'BBB' peers, and weak governance indicators. Crude oil and oil condensates continue to be the major contributors to fiscal revenues and exports, and the sector accounts for 17% of GDP, exposing the economy to external shocks arising from changing prices in those commodities. Economic diversification efforts are underway but it will take time, given challenges associated with the business environment and skills shortages.

The economy of the Republic of Kazakhstan continues to develop. Its economy is particularly sensitive to prices on oil, gas and other commodities, which constitute a major part of the country’s exports. These characteristics include, but are not limited to, having a national currency that is not freely traded on the global foreign-exchange markets not freely convertible outside of the country and little presence of Kazakhstani debt and equity securities on foreign stock exchanges. Additionally, the energy sector in the Republic of Kazakhstan is still impacted by political, legislative, fiscal and regulatory developments. Uncertainty remains in relation to the exchange rate of Tenge and commodity prices.

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.

IMPACT OF ANTI-RUSSIAN SANCTIONS

On 24 February 2022 Russia launched a military invasion of Ukraine. In response, the United States, the European Union and a number of other states imposed widespread sanctions on Russia, including banning Russian banks from the SWIFT system. Russia is Kazakhstan's largest trade partner. Kazakhstan is also heavily reliant on the Caspian Pipeline Consortium (CPC), which carries up to 80% of its oil exports and passes through Russian territory.

The conflict in Ukraine and sanctions imposed on Russia have affected commodity prices and Tenge exchange rate. Inflation moderated to 9.8% in December 2023 after peaking at 21.3% in February 2023. During 2023 the economy grew 4.8%. As at the date of issuing these consolidated financial statements the official exchange rate of the National Bank of the Republic of Kazakhstan was Tenge 449.89 per US Dollar 1 compared to Tenge 454.56 per US Dollar 1 as at 31 December 2023 (31 December 2022: Tenge 462.65 per 1 US Dollar).

As part of its ongoing risk assessment program the Group management monitors the potential impact of anti-Russian sanctions on the Group’s operations. To date, the sanctions have had no significant impact on the Group's operations although the market uncertainty caused by the conflict between Russia and Ukraine has resulted in significant volatility of uranium spot price and the Company's share price.

As part of the Group’s exported products are transported through Russia, there are risks associated with transit through the territory of Russia, insurance and the delivery of cargo by sea vessels. 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. Since 2018, the Group has also successfully used the Trans-Caspian International Transport Route.

There are also risks associated with Russian partners in the Group’s subsidiaries, associates and joint ventures, including reputational and corporate governance risks. On 24 February 2023, the UK included a number of key employees of the Rosatom State corporation in the sanctions list. At the same time, as at the date of approval of these financial statements, the entities of Rosatom State corporation, which are the partners of the Group in six uranium mining entities in Kazakhstan, are not included in the sanctions list. The Group monitors the risk of sanctions. the Group drew up an action plan to minimise possible negative consequences. This action plan is updated as new risks are identified or sanctions programs and lists are updated.

The Group’s management is unable to predict the impact of future events on the Group’s financial position and its results of this matter. Management will continue to monitor the potential impact of anti-Russian sanctions on the Group and will take all necessary steps to mitigate risks.

3. OTHER MATERIAL ACCOUNTING POLICIES

BASIS OF PREPARATION

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards 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 unless specified.

The preparation of consolidated financial statements in conformity with IFRS Accounting Standards 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 are disclosed in the corresponding notes of these consolidated financial statements.

PRESENTATION CURRENCY

These consolidated financial statements are presented in millions of Kazakhstani Tenge (“Tenge”), unless otherwise stated.

CONSOLIDATION

(i) Consolidated financial statements

The Group has several subsidiaries disclosed in Note 37. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation or registration is also their principal place of business.

(ii) Associates and joint ventures

The Group’s associates and joint ventures are disclosed in Notes 23 and 24. The entities have share capital, which is held directly by the group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. 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. Entities where the Group holds joint control by means of unanimous decision making with the second participant over relevant activities, are classified as joint ventures.

(iii) Joint operations

The Group is a party to joint operations as disclosed in Note 37. In accordance with requirements of the relevant agreements, participants buy output of joint operations equally in accordance with their 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 or loss statement. 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.

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 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 at 31 December 2023 was Tenge 454.56 per 1 US Dollar (2022: Tenge 462.65 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 yearend official exchange rates are recognised in profit or loss statement as a separate line item. Note 13 provides additional information about foreign exchange gains and losses from financing activities (attributable to borrowings) and operating activities (all other foreign exchange gains and losses).

The results and financial position of the Group’s foreign operation, which has financial statements with different functional currency, 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.

Translation at year-end does not apply to non-monetary items that are carried at historic costs.

CHANGE IN PRESENTATION

The management has decided to improve presentation of operating cash flows by disclosing cash flows from swap transactions separately from cash receipts from customers and cash payments to suppliers. Additionally, operations on acquisition and redemption of shortterm highly liquid instruments were presented on the net basis. The following amounts in the consolidated statement of cash flows for the year ended 31 December 2022 have been reclassified in accordance with the presentation applied in 2023 as follows:

4. ADOPTION OF NEW OR REVISED STANDARDS AND INTERPRETATIONS

The following amendments became effective from 1 January 2023, but did not have any material impact on the Group:

• Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 (issued on 7 May 2021).
• Amendment to IFRS 16 – Leases on sale and leaseback (issued on 20 September 2022).
• IFRS 17 – Insurance Contracts (issued at 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).
• 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).
• Amendments to IAS 8 – Definition of Accounting Estimates (issued at 12 February 2021 and effective for annual periods beginning on or after 1 January 2023).

The Group has adopted Amendments to IAS 1 – Presentation of financial statements and IFRS Practice Statement 2 – Disclosure of Accounting policies (issued at 12 February 2021) and made corresponding changes in these financial statements.

Certain new standards and interpretations have been issued that are mandatory for annual periods beginning on or after 1 January 2024 or later, and which the Group has not early adopted. These are:

• Amendment to IFRS 16 – Leases on sale and leaseback (issued on 20 September 2022 and effective for annual periods beginning on or after 1 January 2024). The amendments relate to the sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale. The amendments require the seller-lessee to subsequently measure liabilities arising from the transaction and in a way that it does not recognise any gain or loss related to the right of use that it retained.
• 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 At 15 July 2020 and 31 October 2022, ultimately effective for annual periods beginning on or after 1 January 2024). These amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities are non-current if the entity has a substantive right, at the end of the reporting period, to defer settlement for at least twelve months. The guidance no longer requires such a right to be unconditional. The October 2022 amendment established that loan covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date.
• Amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments, Disclosures: Supplier Finance Arrangements (Issued on 25 May 2023). In response to concerns of the users of financial statements about inadequate or misleading disclosure of financing arrangements, in May 2023, the IASB issued amendments to IAS 7 and IFRS 7 to require disclosure about entity’s supplier finance arrangements. These amendments require the disclosures of the entity’s supplier finance arrangements that would enable the users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.
• Amendments to IAS 21 – Lack of Exchangeability (Issued on 15 August 2023). In August 2023, the IASB issued amendments to IAS 21 to help entities assess exchangeability between two currencies and determine the spot exchange rate, when exchangeability is lacking. An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose.

The Group is currently assessing the impact of the amendments on its financial statements.

5. 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 natural uranium, sales of enriched 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.

(d) Information about reportable segment profit or loss, assets and liabilities

Segment information for the reportable segments for the years ended 31 December 2023 and 2022 is set out below:

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.

(e) Analysis of revenues by products and services

The Group’s revenues are analysed by products and services in Note 7. Information about finance income and costs is disclosed in Note 15.

(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:

MAJOR CUSTOMERS

The Group has a group of customers under common control that accounts for more than 10% of the Group’s consolidated revenue. This revenue in the amount of Tenge 526,684 million (2022: Tenge 345,696 million) is reported under the Uranium segment mainly.

6. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

Parties are generally considered to be related if the parties are under common control or if one party has the ability to control the other party or can exercise significant influence or joint control over the other party in making financial and operational decisions. In considering each possible related party relationship, management has regard to the substance of the relationship, not merely the legal form.

Entities under common control include companies under control of SWF Samruk-Kazyna JSC. Transactions with other government owned entities are not disclosed when they are entered into in the ordinary course of business with terms consistently applied to all public and private entities, when they are not individually significant, if the Group’s services are provided on standard terms available for all customers, or where there is no choice of supplier of services such as electricity transmission services and telecommunications. In accordance with IAS 24.26 the Group discloses only individually significant transactions and qualitative and quantitative indication of other collectively, but not individually significant transactions with government and state owned entities. Detailed description of such significant transactions is presented in Note 26, 34.

At 31 December 2023, the outstanding balances with related parties were as follows:

Transactions with related parties for the year ended 31 December 2023 were as follows:

From December 2015, JV Khorasan-U LLP (over which the Group obtained control in 2019) is a co-borrower and guarantor of a loan to Kyzylkum LLP given by the Company in 2010 in the amount of Tenge 2,502 million (2022: Tenge 5,933 million).

The Group is a guarantor for loan obtained by Ulba- FA LLP in the amount of Tenge 16,096 million (2022: Tenge 17,072 million) (Note 35).

In 2023 the Group transfers obligatory pension payments for its employees to the state-owned Unified Accumulative Pension Fund JSC in the amount of Tenge 9,328 million (2022: Tenge 7,543 million) (Note 14). Corporate income tax (Note 16) as well as other taxes, penalties and fines are also transferred to the state (Note 8-10).

At 31 December 2022, the outstanding balances with related parties were as follows:

Transactions with related parties for the year ended 31 December 2022 were as follows:

Key management personnel are represented by personnel with authority and responsibility in planning, management and control of the Group's activities, directly or indirectly. Key management personnel include all members of the Management Board and the members of the Board of Directors. The table below represents remuneration of the key management personnel, paid by the Group in exchange for services provided. This remuneration includes salaries, bonuses, as well as associated taxes and payments. No remuneration is paid or payable to representatives of the Controlling shareholder in the Board of Directors.

7. REVENUE

The Group’s revenue arises from contracts with customers where performance obligations are satisfied mostly at a point in time.

The most significant factors that affected the Group’s results of operations during the year included:

• Since 2022 the Group sells uranium tablets to Ulba- FA LLP that are produced at Group premises from produced uranium enriched at third parties, the amount of such sales was Tenge 50,633 million (2022: Tenge 43,566 million). In the middle of 2023 the Group and Ulba-FA LLP changed the sales agreement terms, now the Group sells enriched uranium and uranium tablets production services to Ulba-FA LLP. In 2023 the Group sold Tenge 91,218 million of enriched uranium.
• An 10% increase of natural uranium sales volumes compared to 2022 due to additional customer supply requests under new and existing contracts. Sales volumes may vary from year to year due to differences in customer delivery schedules and requests throughout the year and actual physical deliveries.
• A 27% increase in the average selling price compared to 2022 (USD 55.09 versus USD 43.44) due to an increase in spot price for natural uranium. The Group's current portfolio of natural uranium sale contracts is linked to uranium spot price; however, some contracts that the Group executed several years ago contained price ceilings and other arrangments that limit effective price. As a result increase in the Group’s average selling price was lower than increase in the market natural uranium spot price.

Liabilities under contracts with customers

As at 31 December 2022 current liabilities under contracts with related party customers included advances for uranium products in the amount of Tenge 35,082 million under contracts with Ulba-FA LLP, which the Group recognised as revenue during 2023 (Note 34).

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Revenue is defined as 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 and 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 booktransfer 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 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.

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 2023, the Group did not recognise sales revenue from swap transactions of Tenge 139,322 million (2022: Tenge 195,958 million) and related cost of sales of Tenge 149,209 million (2022: Tenge 207,789 million). The Group has also increased other accounts receivable for Tenge 72,978 million (Note 25), accounts payable for Tenge 31,215 million (Note 33) with net effect impacting inventories. Given that swap agreements require cash payments, accounts receivable represent cash receipts expected for purchased and paid uranium under swap agreement, accounts payable represent expected cash payments for sold uranium under swap agreement, where accounts receivable was repaid by the counterparty.

In 2022 the Group has recognised liabilities under swap agreement for Tenge 4,709 million (Note 34) and inventory for Tenge 5,627 million with net effect impacting retained earnings. Liability under swap agreement is a non-financial obligation to return uranium that was already sold to third party.

Purchase and sales agreements assume cash transfers on a regular payment terms, similar to contracts with customers. The Group presents cash receipts as “receipts under swap transactions” and cash payments as “payments under swap transactions”.

ENRICHMENT OF NATURAL URANIUM (JUDGEMENTS)

The Group purchases uranium enrichment services from Uranium Enrichment Center JSC (UEC) in Russia. The transaction is structured as two separate agreements. Group sells natural uranium and purchases enriched uranium from UEC. Despite agreements with UEC are not formally related, the management concluded that these transactions are in substance linked and would not have occurred on an isoldated basis. Effectively, this results in the sales of uranium with an obligation to repurchase it in the form of enriched uranium, in accordance with IFRS 15 requirements no revenue from sales of uranium to UEC should be recognised, reflecting the economic substance of the transaction. Interpretation of terms and approach to the accounting for transactions with UEC requires judgement. The cost of enrichment services included in cost of sales in the amount of Tenge 40,643 million (2022: Tenge 13,363 million) in process and other services line item (Note 8).

Purchase and sales agreements with UEC assumed cash transfers, starting from 2023 the Group changed the contract terms to settle cash transfers on a net basis.

8. COST OF SALES

An increase in the cost of materials and supplies resulted from an increase in spot price of natural uranium and sulfuric acid as well as increase in sales volumes.

9. DISTRIBUTION EXPENSES

10. GENERAL AND ADMINISTRATIVE EXPENSES

The PwC network of companies provided the Group with the following audit and non-audit services (net of VAT):

Compensation payment for uranium mined without license

Compensation payment relates to uranium mined at Zhalpak field of MC Ortalyk LLP and block of Budenovskoye field of JV Akbastau JSC (Note 37).

In October 2017, the Group obtained a contract for uranium exploration at Zhalpak field for a period up to 31 ay 2018. In May 2018, the Ministry of Energy of the Republic of Kazakhstan agreed to extend the exploration period under the contract until 31 December 2022 for performing evaluation works. However, the approval process by the Ministry of Energy of the Republic of Kazakhstan was delayed. In April 2020 MC Ortalyk LLP stopped all work and test production at the mine. In December 2021 the Group received subsoil use rights. The volume of uranium mined at Zhalpak field during the period from June 2018 to April 2020 amounted to 162 tons. On 15 August 2023 the Group paid a compensation of Tenge 11,404 million to the Government for this volume of uranium based on the decision of the Energy Council of the President of the Republic of Kazakhstan.

JV Akbastau JSC has been involved in negotiations with the regulator over an extended period to update the contract terms of the subsoil use contract No.2488 dated 20 November 2007, and during such discussions the regulator has determined that JV Akbastau JSC exceeded the allowed production volume indicated in the subsoil use contract. In 2021 the Group reached a draft agreement with the regulator which was to provide social support to the Turkistan region in the amount of Tenge 3,000 million as a compensation for the breach of license terms. However, in 2022 the regulator rejected the draft agreement and reassessed the amount payable to be compensation for the overproduction of uranium in the amount of Tenge 7,310 million. The compensation was determined as the fair value of 249 tons of overproduced uranium based on current uranium spot prices. On 30 December 2022 JV Akbastau JSC signed addendum No.4 to the subsoil use contract No.2488 and paid the compensation.

11. NET (IMPAIRMENT LOSSES)/REVERSAL OF IMPAIRMENT LOSSES ON FINANCIAL ASSETS

Impairment losses for the following financial assets:

In December 2023 the Group delivered uranium concentrates to Dioxitek S.A., Argentina. The government of Argentina introduced new requirements to import operations, incurred prior to 12 December 2023, which may only be settled by means of government bonds sales that will provide sufficient amount of US dollars for Dioxitek S.A. to pay its labilities. The Group expects difficulties with the payment from Dioxitek S. A, thus, 100% provision on the overdue amount of Tenge 15,692 million was accrued. The management of the Group will resume negotiations with Dioxitek S.A. on debt repayment.

12. OTHER INCOME

On 11 August 2022 participants of JV KATCO LLP (Note 23) made amendments to the partnership agreement on further development of JV KATCO LLP dated 10 April 2017, under which the Group became entitled to compensation in the amount of Tenge 7,671 million from the second participant, which was recognised as income in 2022 and other receivables (Note 25).

13. OTHER EXPENSES AND NET FOREIGN EXCHANGE (LOSS)/GAIN

Expenses from joint operations

During the current period he Group fulfilled its obligations under joint operations agreements to purchase equal amounts of uranium for 2023 and 2022, however, volatility in exchange rates and spot prices resulted in disproportionate Tenge contributions by each participant and recognition of expense of Tenge 3,426 million by the Group. In 2022 the Group has recognised income from joint operations for Tenge 4,217 million (Note 12).

NET FOREIGN EXCHANGE (LOSS)/GAIN

14. PAYROLL COSTS

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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.

15. FINANCE INCOME AND COSTS

MATERIAL ACCOUNTING POLICIES

Interest income on financial assets at amortised cost, other than those at FVTPL, is recorded on an accrual basis using the effective interest method and recognised in the profit or loss as part of finance income. 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.

16. INCOME TAX EXPENSE

(a) Components of income tax expense

Income tax expense recorded in profit or loss comprises the following:

The income tax rate applicable to the majority of the Group’s profits in 2023 and 2022 is 20%.

(b) A reconciliation between the expected and the actual taxation charge

A reconciliation between the expected and the actual taxation charge is provided below:

The Group assesses compliance of sales transactions with transfer pricing requirements and makes additional corporate income tax accruals on an annual basis, if necessary.

(с) Deferred taxes analysed by type of temporary difference

Differences between IFRS and statutory taxation regulations in Kazakhstan give rise to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their tax bases. The tax effect of the movements in these temporary differences is detailed below at 20%.

Management estimates that investments in subsidiaries, associates and joint ventures will be recovered primarily through dividends. Dividends from subsidiaries, associates and joint ventures are not taxable, accordingly the Group did not recognise deferred tax on undistributed earnings from investments.

The tax effect of the movements in the temporary differences for the year ended 31 December 2022 is:

In the context of the Group’s structure, tax losses of different Group companies may not be offset against current tax liabilities and taxable profits of other Group companies and, accordingly, taxes may accrue even where there is a consolidated tax loss. Therefore, deferred tax assets and liabilities are offset only when they relate to the same taxable entity.

The Group has not recognised deferred tax assets in respect of unused tax loss carry forwards of Tenge 1,596 million in 2023 (2022: Tenge 1,274 million) and excluded from the calculation the tax losses for the enterprises sold in 2023 with unrecognized tax losses. The tax loss carryforwards expire as follows:

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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 using tax rates enacted or substantively enacted at the reporting date, and any adjustment in respect of previous years.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to the same tax authority on the same taxable entity, if there is an intention to settle current tax liabilities and assets on a net basis or tax assets and liabilities will be realised simultaneously.

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.

17. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit or loss attributable to owners of the Company by the number of ordinary shares in issue during the year (Note 30). The Company has no dilutive potential ordinary shares, therefore, the diluted earnings per share equals the basic earnings per share. Earnings per share from continuing operations is calculated as follows:

The Group issued bonds which are included in the official list of Kazakhstan Stock Exchange JSC (hereinafter – the “KASE”). The Company is required to present information on the book value of one share calculated in accordance with the KASE Listing Rules.

Book value per share is calculated as follows:

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Earnings per share are determined by dividing profit or loss attributable to the Company's shareholders by the weighted average number of participating shares outstanding during the reporting year, adjusted for stock splits.

18. INTANGIBLE ASSETS

MC Ortalyk LLP, JV Akbastau JSC and Karatau LLP

Goodwill relates to prior period business combinations of MC Ortalyk LLP in the amount of Tenge 5,166 million, Karatau LLP of Tenge 24,808 million and JV Akbastau JSC of Tenge 18,520 million. At least annually, goodwill is tested for impairment at the level of a corresponding cash generating unit (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).

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. The carrying value of goodwill applicable to each of the entities was allocated to their respective cash generating units, Central Mynkuduk mine (Central block) and separate blocks of Budenovskoye mine (Note 1) for MC Ortalyk LLP and Karatau LLP, JV Akbastau JSC, respectively.

The recoverable amount was determined on a value in use basis, cash flows forecasts were based on approved reserves, estimated production volumes, subsurface use contracts periods and a pre-tax discount rate of 18.59% for 2023 year (2022: 19.03%).

Production volumes are consistent with those agreed with the competent authority and independent consultant’s report and are based on the production capacity of the cash-generating units. Key assumptions used in calculations include forecast sales prices, production volumes. Sales prices used in developing forecasted cash flows were based on annual spot and long-term base price projections (denominated in US Dollar per pound of uranium) published by UxC LLC in the fourth quarter of 2023.

Production costs and capital expenditures are based on approved business plans for 2024-2028 and growth of 6.39% which approximates long-term average inflation rates. The estimated values in use significantly exceed the carrying amounts of the non-current assets of the three cash-generating units, including goodwill, and therefore even reasonably possible changes in key assumptions would not lead to impairment losses being recognised.

19. PROPERTY, PLANT AND EQUIPMENT

Movements in the carrying amount of property, plant and equipment were as follows:

At 31 December 2023, the Group had contractual capital expenditure commitments in respect of property, plant and equipment of Tenge 3,966 million (2022: Tenge 5,310 million).

At 31 December 2023, the gross carrying value of fully depreciated property, plant and equipment still in use was Tenge 38,006 million (2022: Tenge 34,870 million).

Depreciation and amortisation charged on long-term assets for the years ended 31 December are as follows:

Depreciation and amortisation charged to profit or loss for the years ended 31 December are as follows:

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Property, plant and equipment are stated at cost, less accumulated depreciation and provision for impairment, where required. The individual significant parts of an item of property, plant and equipment (components) with useful lives different from the useful lives of the given asset as a whole are depreciated individually, applying depreciation rates reflecting their anticipated useful lives.

(i) 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:

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. Since 2017, the Group uses reserve reports prepared by an independent consultant (Note 21).

20. MINE DEVELOPMENT ASSETS

Estimated site restoration costs are capitalised when the Group recognises a provision for site restoration. The carrying value of the provision and site restoration assets is reassessed at each reporting period end (Notes 32).

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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 level using the unit-of-production method based on carrying value of the asset. Unit-of-production rates are based on proved and probable reserves for reclassified exploration and evaluation assets, while 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 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 21).

In 2023 the Group unified depreciation method for capitalised developments costs across all mining entities because technological blocks into which mines are conventionally divided (and based on which depreciation was calculated by some entities) represent in fact one geological block and uranium production solution creates flows inside deposit as a result of which production at some technological blocks results in over or underproduction, and the cost of asset is not depreciated correctly.

IMPAIRMENT OF NON-FINANCIAL ASSETS (ESTIMATES)

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.

At the end of each reporting period, management assesses whether there are any impairment indicators of individual assets (or cash-generating units). If any such indicators exist, 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 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 test and calculations are based on 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.

As of 31 December 2023 management did not find any impairment indicators of assets (cash generating units) associated with the production of uranium products.

21. MINERAL RIGHTS

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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.

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 at 31 December 2023 and 31 December 2022. 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-ofmine 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.

22. EXPLORATION AND EVALUATION ASSETS

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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 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.

Costs associated with activities undertaken prior to exploration such as design, technical and economical assessments are expensed as incurred.

23. INVESTMENTS IN ASSOCIATES

The table below summarises the movements in the carrying amount of the Group’s investment in associates:

The Group’s interests in its principal associates were as follows:

According to amendments to the Partnership Agreement, the Group also became entitled to an additional 11% of JV KATCO LLP annual profit allocation starting from 2022 and until the end of JV KATCO LLP operations, with the ownership interest being unchanged.

Summarised financial information for 2023 in respect of each of the Group’s material associates is set out below. The summarised financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.

Summarised financial information for 2022 in respect of each of the Group’s material associates is set out below. The summarised financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.

24. INVESTMENTS IN JOINT VENTURES

The table below summarises the movements in the carrying amount of the Group’s investment in joint ventures:

The Group’s interests in its principal joint ventures were as follows:

Uranenergo LLP

Management concluded that the Group does not have the ability to exercise control over Uranenergo LLP. Accordingly, this investment is classified as an investment in a joint venture.

Summarised financial information on respect of the Group’s material joint ventures is set out below. The summarised financial information below represents amounts shown in the joint ventures’ financial statements prepared in accordance with IFRS, adjusted by the Group for equity accounting purposes.

25. ACCOUNTS RECEIVABLE

Increase in accounts receivable balance is explained by:

• Increase of trade accounts receivable in line with revenue increase;
• Increase in sales volumes to Ulba-FA LLP;
• Other receivables expected under swap transactions (Note 7).

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due within 12 months period and are therefore all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. Details about the Group’s impairment policies and the calculation of the loss allowance are provided in Note 38.

Other receivables are recognised initially at fair value and are subsequently carried at amortised cost using the effective interest method. Those are mainly current receivables other than those for goods sold or services performed. As of 31 December 2023 other receivables include amounts from swap operations (Note 7).

Information on the Group’s exposure to credit and currency risks and provision for impairment for accounts receivable is disclosed in Note 38.

26. OTHER FINANCIAL ASSETS

Restricted cash

In accordance with the terms of its subsoil use contracts, the Group transfers cash to long-term bank deposits to finance future site restoration activities. As at 31 December 2023 the balance of restricted cash held in long-term bank deposits related to financing of future site restoration activities was Tenge 30,588 million (2022: Tenge 29,044 million).

At December 31, 2022, current restricted cash balance includes blocked payments of US Dollars 32.3 million (equivalent to Tenge 14,956 million), which were returned to the Group on January 30, 2023 in the amount of Tenge 14,884 million (including foreign exchange differences).

Investments in ANU Energy

On 22 November 2021 the Group invested US Dollar 24.25 million (equivalent to Tenge 12,368 million) in shares of ANU Energy OEIC Ltd together with other state-owned entities and entities under common control of SWF Samruk-Kazyna JSC in equal ownership shares of 32.7%. The purpose of ANU Energy OEIC Ltd. is to store physical uranium as a long-term investment. Management of ANU Energy OEIC Ltd. is performed by a third party in accordance with trust management agreement. The Group recognises investment at fair value through profit or loss. The fair value is determined based on the fair value of uranium spot prices (Note 39).

The Group has recognised gain from revaluation of other investments of Tenge 13,658 million (2022: Tenge 4,699 million) (Note 15). As of 31 December 2023 the fair value of investment in ANU Energy OEIC Ltd. was Tenge 30,667 million (2022: Tenge 17,066 million).

Debt securities

On May 12, 2022, in order to diversify its treasury portfolio, the Group invested in Eurobonds issued by Development Bank of Kazakhstan JSC, in the amount of 19.9 million US Dollars, or Tenge 8,804 million with a maturity of 3 years and a coupon rate of 5.75%. The bonds are measured at amortised cost. On December 8, 2023 the Group invested in bonds issued by the Eurasian Development Bank in the amount of US Dollars 7.1 million or Tenge 3,259 million with a maturity of 3 years and a coupon rate of 5.72%. Bonds are valued at amortised cost. As at December 31, 2023, the amount of long-term investments is equal to Tenge 12,257 million including foreign exchange differences.

As at December 31 2023 current debt securities include Tenge 46,276 million of investment in US Treasury bills with 84 days duration.

27. OTHER NON-FINANCIAL ASSETS

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.

As at 31 December 2023, VAT recoverable by the Group amounted to Tenge 146,450 million (2022: Tenge 62,389 million). The Group expects that this amount will be confirmed for return by tax authorities in the first half of 2024. VAT confirmed by tax audits is subject to refund from the budget by transfer to a current account or by offset.

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.

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Advances are carried at cost less provision for impairment. Advances are classified as non-current when the goods or services relating to the prepayment are expected to be obtained after one year, or when the advances relate to an asset which will itself be classified as non-current upon initial recognition. Advances for assets are transferred to the carrying amount of the asset once the Group has obtained control of the asset and it is probable that future economic benefits associated with the asset will flow to the Group.

Other advances 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 an advance will not be received, the carrying value of the advance is written down accordingly and a corresponding impairment loss is recognised in profit or loss for the year. Non-current advances are not discounted.

28. INVENTORIES

Movements in the provision for obsolescence are as follows:

Inventories are recorded at the lower of cost and net realisable value. The cost of inventory is determined on the weighted average basis.

29. CASH AND CASH EQUIVALENTS

Significant non-cash transactions include settlement of cash transfers with Uranium Enrichment Center JSC for Tenge 47,862 million (Note 7).

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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 amortised cost 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 transactions under reverse repurchase transaction with highly liquid government securities received as a pledge with the agreement to sell them within 1 to 30 days. Reverse repo transactions are readily convertible to cash and cash equivalents and are subject to insignificant risk of changes in value.

30. SHARE CAPITAL

At 31 December 2023 the total number of authorised and paid ordinary shares is 259,356,608 (2022: 259,356,608) of which 75% is owned by SWF Samruk-Kazyna JSC and 25% of the shares/GDRs are freely floated with listing on the Astana International Exchange (AIX) and the London Stock Exchange (LSE). One GDR represents a share in one share. Each ordinary share carries the right to one vote. Registered share capital is Tenge 37,051 million.

Dividends declared and paid during the year were as follows:

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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 noncontrolling interests in excess of their ownership.

31. LOANS AND BORROWINGS

Information about the Group’s loans and borrowings is presented as follows:

The company placed US Dollar-indexed bonds on 27 September 2019 with a maturity of 27 October 2024 and a coupon of 4% per annum. The nominal value of one bond is Tenge 1,000, total volume is 70 million.

Promissory notes were issued by a subsidiary of the Group JV Khorasan-U LLP in December 2014 to repay amounts owing for mine development assets. According to the terms, the promissory notes are payable on demand at an interest rate of 0.1%. As at 31 December 2023, the right of claim under these promissory notes belongs to Kyzylkum LLP, an associate of the Group (Note 6).

As at 31 December 2022, current bank loans included loans from Forte Bank JSC in the amount of Tenge 23,202 million and Halyk Bank of Kazakhstan JSC in the amount of Tenge 751 million. Also, during the reporting period, the Group received a loan from Forte bank JSC in the amount of Tenge 22,358 million.

Bank loans that were received to cover short-term liquidity shortages, were repaid as at the reporting date and the repayment amount was Tenge 46,808 million. Additionally, the Group made a partial repayment of promissory notes in the amount of Tenge 3,500 million and bonds in the amount of Tenge 23,217 million.

The Group’s loans and borrowings were unsecured. In 2023, the Group’s weighted average interest rate on fixed interest rate loans was 3.81% (2022: 3.62%).

Reconciliation of debt

The table below shows an analysis of the debt amount and changes in the Group’s liabilities arising from financing activities for each of the periods presented:

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

Borrowings are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at amortized cost using the effective interest method.

32. PROVISIONS

Site restoration provision

The nominal cost of site restoration provision as at 31 December 2023 is Tenge 100,955 million (2022: Tenge 84,209 million). The amount of provision for restoration of mine sites was calculated using current prices (the prices effective at the reporting date) for expenditures to be incurred and then inflated using the forecast inflation rate effective for the period until the settlement of restoration.

The change in provision is explained by the updated estimate of radioactive waste disposal amount based on tests performed across all Group mines on pumping and production wells, which resulted in the decrease of the nominal amount. Management believes that such approach gives a more precise information. The natural increase of provision due to inflation and additional operating activities during the year was partially offset by the increase in discount rates. The amount of the provision for environment protection is mainly associated with Ulba Metallurgical Plant JSC. The nominal cost of restoration of liquidation facilities as at 31 December 2023 is Tenge 138,724 million (2022: Tenge 134,438 million).

Other provisions

Taking into account that in 2023 the Group fulfilled its obligation to pay compensation to the state budget for the uranium mined without license in the amount of Tenge 11,404 million (Note 10), the Group accrued a provision to compensate the second participant of MC Ortalyk LLP in the amount of Tenge 4,679 million, or 49% of Tenge 11,404. Depending on the applicability of certain conditions in the Sale and Purchase with a second participant, the Group may have an obligation to compensate the second participant for unexpected payments to the state budget with regards to prior periods.

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

In accordance with environmental legislation and the subsoil 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 Group estimates the site restoration costs for each mine operated. Estimate provision is charged to the cost of corresponding asset (mine development assets or property, plant and equipment) in the reporting period when an obligation arises from past operating activity performed.

Provisions for asset retirement obligations do not include any additional obligations which are expected to arise from future disturbances. 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. 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. In view of the long-term nature of provisions, there is uncertainty concerning the actual amount of expenses that will be incurred in performing site restoration activities for each mine. Changes in estimates occur due to annual revision of costs for site liquidation including newly drilled wells, sand traps and other facilities subject to subsequent liquidation.

PROVISION FOR ASSET RETIREMENT OBLIGATIONS (ESTIMATES)

Site restoration

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 of 31 December 2023 was performed by the Group’s internal specialists and reviewed by an independent consultant.

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 period of the Group’s each subsoil use contract, range of 11.7% - 13.3% (2022: average 11.55%);
• long-term inflation rate applied to the nominal costs calculated at current prices of 4.01% - 6.39% in 2023 (2022: average 5.99%);
• 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 at 31 December 2023 is as follows:

Sensitivity analysis of the principal assumptions as at 31 December 2022 is as follows:

Provision for environment protection

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.

Based on the analysis carried out by the Group’s specialists, as well as based on the interpretation of current environmental legislation and IFRS requirements, in 2022 the Group recognised an obligation to decommission, dismantle and reclaim the Group’s facilities.

The liability for decommissioning, dismantling and reclamation was assessed and recognised in relation to the following facilities: facilities classified as category I (facilities that have a significant negative impact on the environment): JSC Ulba Metallurgical Plant site in Ust- Kamenogorsk, as well as assets technologically related to them and located on the territory of the industrial site. The Group assessed liquidation obligations based on the methodology approved by the Environmental Code.

Principal assumptions used in the estimations include:

• current prices are inflated using the expected longterm inflation rate of 6.39% for assets with liquidation term until 2027, 4.49% for assets with liquidation term until 2042, 3.76% for assets with liquidation term after 2044 (2022: 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 of 31 December 2023 is 13.3% for assets with liquidation term until 2027, 12.15% for assets with liquidation term until 2042, 10.36% for assets with liquidation term after 2044. (31 December 2022: 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.

Sensitivity analysis of the principal assumptions as at 31 December 2023 is as follows:

Sensitivity analysis of the principal assumptions as at 31 December 2022 is as follows:

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 at 31 December 2023 since there is no reasonable calculation method for these types of assets and/or the potential amount of such liabilities is not significant. This judgement is based on the following:

• such assets do not have a significant negative impact on the environment and ecological legislation does not require financial provision for the assets;
• production processes involving these assets do not lead to consequences that would require dismantlement and recultivation works to mitigate the negative environmental impact.

As the requirements of the Environmental Code are relatively new, there is no practice of applying these requirements and there are ambiguities in the legislation, management has applied significant judgment in terms of assessing liabilities and their amounts. In case of changes in environmental legislation, its interpretation and practice of its application, as well as in the judgments and in the Group's estimates, such liabilities may be revised in the future.

Refer to Note 35 for details of the Group’s provisions on Environmental Code at 31 December 2023.

Key assumptions which serve as the basis for determining the carrying value of the provision for restoration of mine sites provision are as follows:

• there is a high probability that the Group will proceed to development and production stages for its fields which are currently under exploration. This creates a constructive obligation for the Group to recognise a site restoration provision for all mining and exploration licenses;
• the expected term for future cash outflows for the mine sites is based on the life of the mines. A substantial part of the expenditures is expected to occur starting from 2045, at the end of the expected life of the mines.

33. ACCOUNTS PAYABLE

The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 38.

MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS

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.

34. OTHER LIABILITIES

Liabiitites under inventory loan agreements

In 2020, the Group received uranium hexofluoride under inventory loan agreements for the total amount of US Dollars 21.9 million (Tenge 8,597 million) to fulfill the obligations under one of the sales agreement. Liabilities were subsequently measured at fair value in accordance with changes in uranium spot prices and exchange rates. In 2023 the Group returned uranium under inventory loan agreements by purchasing it from third party.

The Group borrowed 886 tones of natural uranium from ANU Energy OEIC Ltd. due for return at 31 December 2023. In December 2023 the Group has returned 38 tones and extended the due date of agreement until the end of March 2024. As at December 31, 2023 the fair value of liability under inventory loan agreement was Tenge 91,151 million, revaluation loss for the year amounted to Tenge 37,977 million (Note 13).

Uranium loans are part of the Group’s normal inventory management policy, required to mitigate logistical risks that could affect the timely delivery of Kazakhstani uranium to Western conversion enterprises due to heightened geopolitical instability. 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 nonfinancial 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.

Joint operations liabilities

As at 31 December 2023, joint operations liabilities represent obligations of the Group under the terms of the joint operations contractual agreements that require equal volumes of uranium to be purchased during the period by the participants. In 2023, the Group repurchased the 2023 volume in full, as well as the corresponding volume of the previous period.

35. CONTINGENCIES AND COMMITMENTS

Compliance with Kazakhstan Tax legislation

The tax environment in the Republic of Kazakhstan is subject to change and inconsistent application and interpretations.

Kazakhstani tax legislation and practice is in a state of continuous development, and therefore is subject to varying interpretations and frequent changes, which may be retroactive. Tax periods remain open to retroactive review by the Kazakhstan tax authorities for five years.

The Group’s management believes that its interpretation of the relevant legislation is appropriate and the Group’s tax positions will be sustained. In the opinion of the Group’s management, no material losses will be incurred in respect of existing and potential tax claims in excess of provision or disclosures that have been made in these consolidated financial statements.

Compliance with subsoil use contractual obligations

In accordance with the terms of the subsoil use contracts, the Group mining entities are required to comply with the obligations specified therein. Failure to comply with the conditions stipulated by subsoil use contracts may lead to negative consequences, including termination of contracts, fines and penalties. Under current subsoil use legislation, the payment of penalty does not relieve subsurface user from fulfillment of obligations under subsoil use contracts.

As at December 31, 2023, at some enterprises, the underproduction of uranium exceeds the legally allowed threshold of 20%, which is associated with a shortage of strategic materials. In addition, mining enterprises failed to meet their financial obligations under subsoil use contracts, which could result in penalties of 1% of the defaulted obligation in the amount of Tenge 40- 50 million for 2023. The Group has not recognised additional liabilities in the financial statements as at 31 December 2023 as it plans to settle financial liabilities in future periods in accordance with revised work programs.

Insurance

The Kazakhstani insurance industry is in development stage, and many forms of insurance protection common in other countries are not yet available. Since 2021, the Corporate Property Insurance Program of the Company’s enterprises has been implemented against the “risks” of death, loss or damage as a result of accidental and unforeseen direct physical impact (excluding equipment breakdown/failure and interruption in production).

The Group does not have full insurance coverage for risks related to mining activities and production facilities, including for damages caused by the stoppage of production or obligations incurred to third parties in connection with damages caused to the property or the environment resulting from accidents or operations.

The Group provides directors and officers liability insurance, which cover for the Company’s managers to protect them from claims which may arise from decisions and actions taken (“alleged wrongful acts”) within the scope of their regular duties. The terms of the policy prohibit disclosure of the amount of the insurance coverage.

Environmental obligations

In 2021, a new Environmental Code (hereinafter referred to as the “Code”) came into force. The Code provides for the division of objects that have a negative impact on the environment into four categories, depending on their level of impact, which implies the differentiation of environmental requirements for each of the categories. Operators of facilities that have a negative impact on the environment have obligations to eliminate the consequences of the operation of facilities in accordance with the requirements of the legislation of the Republic of Kazakhstan.

The changes in the Code mainly affected non-mining companies of the first category, which include: Ulba Metallurgical Plant JSC, SSAP LLP, SKZ-U LLP and Kyzylkum LLP. Following detailed technical and commercial assessments during the current year, the Group recognized in 2022 obligations to remediate the consequences of the operation of facilities (Note 32).

Under the current version of the Code, the Group has an obligation to provide financial security to eliminate the consequences of Category I facilities by July 1, 2024. Financial support is provided in the form of: guarantee; pledge of a bank deposit; pledge of property; insurance. Financial security is provided in one of several types of financial security listed above, or in a combination of them at the choice of the operator of a category I facility, provided that the share of financial security in the form of a bank deposit pledge must be:

1) after ten years from the date of commissioning of the facility (for existing facilities as at July 1, 2021 until 2031) – at least fifty percent of the total amount of financial support;

2) after twenty years from the date of commissioning of the facility for existing facilities as at July 1, 2021 until 2041 – one hundred percent of the total amount of financial support. The operator of category I facility is obliged to ensure the availability of financial security continuously until all its obligations to eliminate the consequences of the operation of such a facility are fully fulfilled.

The amount of financial support is determined in accordance with the methodology approved by the authorized body in the field of environmental protection, based on the estimated cost of work to eliminate the consequences of operating a category I facility, and is subject to recalculation every seven years. According to the Group’s calculations, the future cost (undiscounted) of measures to eliminate the consequences of the operation of facilities at Ulba Metallurgical Plant JSC amounted to Tenge 138,724 million.

As at December 31, 2023, the estimated amount of financial support is Tenge 179,623 million. As part of discussions with representatives of the Ministry of Environment, the Group's management understands that changes will be made to the legislation, in accordance with which the conditions and terms for providing financial support will be revised.

The Management of the Group is currently in discussions with the competent authorities regarding the method and timing of funding the liability.

As a result of the assessment of liabilities, non-mining enterprises of categories II-IV did not have significant obligations as at the reporting date.

Guarantees

Guarantees are irrevocable assurances that the Group will make payments in the event that another party cannot meet its obligations. The maximum exposure to credit risk under financial guarantees provided to secure financing of certain related parties at 31 December 2023 is Tenge 16,096 million (2022: Tenge 18,937 million) (Note 6).

Compliance with covenants

The Group is subject to certain covenants related primarily to its liabilities under credit lines and guarantee agreements. The Group complied with all applicable covenants as at 31 December 2023 and 31 December 2023 and during the periods then ended.

Legal proceedings

On 23 July 2021, the Fund for the Protection of the Rights of Investors in Foreign Countries (hereinafter referred to as the Fund), to which the rights of claim were assigned by Quorum Debt Management Group, filed a lawsuit with the Arbitration Court of the Irkutsk Region, Russia, demanding the recovery of funds from the Company in the amount of US Dollars 50,000,000 under a Framework Agreement (support for asset recovery activities) dated 25 December 2013, which was expired on 26 December 2016. By the ruling of the Arbitration Court of the Irkutsk Region dated 31 August 2021, the civil case on the above claim was terminated due to lack of jurisdiction, with which the Company fully agrees, since the agreement provides for jurisdiction under Kazakh procedural legislation. By the decision of the Fourth Arbitration Court of Appeal dated 24 January 2022 and the decision of the Arbitration Court of the East Siberian District dated 24 May 2022, the ruling of the Arbitration Court of the Irkutsk Region dated 31 August 2021 in the above case was left unchanged. However, on 7 December 2022, the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation cancelled the rulings of the Arbitration Court of the Irkutsk Region of 31 August 2021, the rulings of the Fourth Arbitration Court of Appeal of 24 January 2022, and the rulings of the Arbitration Court of the East Siberian District of 24 May 2022 with sending the case for a new trial to the Arbitration Court of the Irkutsk Region in connection with the jurisdiction of this case by the courts of the Russian Federation.

On 3 May 2023, the Arbitration Court of the Irkutsk Region ruled to satisfy the claims and recover from the Company in favour of Quorum Debt Management Group LLC (previously the Fund was the claimant in the case) US dollars 50,000,000 of losses, as well as Russian roubles 200,000 for the payment of state duty. The Company believes that the decision of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation of 7 December 2022 was made with violations and intends to appeal the judicial acts to all higher instances.

The Company filed a supervisory appeal against the decision of the Supreme Court of the Russian Federation dated 7 December 2022. However, by the decision of the Supreme Court of the Russian Federation from 18 April 2023, it was refused to transfer the supervisory appeal for consideration by the Presidium of the Supreme Court of the Russian Federation. Also, at 11 May 2023, the Company filed a complaint addressed to the Chairman of the Supreme Court of the Russian Federation against the rulings of the Supreme Court of the Russian Federation and the refusal to transfer the complaint for consideration by the Presidium of the Supreme Court of the Russian Federation. On 7 July 2023, by letter of the Chairman of the Supreme Court of the Russian Federation, the Company's complaint was denied.

Also, the Company filed an appeal against the decision of the Arbitration Court of the Irkutsk Region dated 3 May 2023, as part of the consideration of the appeal, at 19 October 2023, the Court rejected the Company’s appeal and upheld the decision of the Arbitration Court of the Irkutsk Region dated 3 May 2023.

On 1 November 2023, the Company filed a cassation appeal against the Resolution of the Fourth Arbitration Court of Appeal dated 19 October 2023, and the Decision of the Arbitration Court of the Irkutsk Region dated 3 May 2023. On 17 January 2024, the Arbitration Court of the East Siberian District satisfied the Company’s cassation appeal, judicial acts of 3 May 2023 and 19 October 2023 were canceled and the case was sent back to the court of the first instance for a new trial. The consideration of the civil case in the Arbitration Court of the Irkutsk Region is scheduled for 26 March 2024. As at 31 December 2023, the Company had not recognised a liability in this litigation.

36. NON-CONTROLLING INTEREST

The following table provides information about subsidiaries that have a non-controlling interest as at 31 December 2023:

The following table provides information about subsidiaries that have a non-controlling interest as at 31 December 2022:

The summarised financial information of these subsidiaries is as follows:

Allocation of profit between the non-controlling interest of JV Inkai LLP and the Group is impacted by the allocation of JV Inkai LLP dividends. The distribution of dividends is made in accordance with the amendment to the agreement between the parties, and is not based on ownership interests. For 2021, dividends were distributed between the non-controlling interest and the Company in the amount of 59.4% and 40.6%, respectively, for 2022 – in the amount of 50% and 50%, respectively, for 2023 – in the amount of 50% and 50%, respectively. This amendment was agreed by the parties to compensate the non-controlling interest for losses due to a 20% reduction in production in 2021-2022. Accordingly, the amount reclassified from profit attributable to the Group to profit attributable to non-controlling interests in 2023 amounted to Tenge 14,155 million (2022: Tenge 9,700 million).

37. PRINCIPAL SUBSIDIARIES

These consolidated financial statements include the following subsidiaries:

Taiqonyr Qyshqyl Zauyty LLP

In March 2023 the Group established a new subsidiary Taiqonyr Qyshqyl Zauyty LLP (hereinafter – the “TQZ LLP”) as part of the project for the construction of a sulfuric acid production plant. Considering that sulphuric acid production is not Group’s core business, the Group expects to decrease its ownership in TQZ LLP by attracting external investors.

These consolidated financial statements include the following joint operations:

All entities are incorporated and operate on the territory of the Republic of Kazakhstan, except for Kazakatom TH AG, which is incorporated in Switzerland and EAL that is registered in the British Virgin Islands.

38. FINANCIAL RISK MANAGEMENT

Accounting policies and disclosures in respect of financial instruments are applied to the following classes of financial instruments:

Financial risks are monitored by the Group’s risk management function and comprise market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The objectives of the Group’s financial risk management policy are to establish risk limits, and then ensure that exposure to risks stays within these limits. Risk management policies and systems risk management function are regularly analysed for the need of revision due to changes in market conditions and the Group operations. The Group’s monitors compliance with approved policies and procedures.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s policy for management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Management Board has established a Risk Management Committee, which is responsible for developing and monitoring the Group’s risk management policies. The committee reports regularly to the Management Board and the Board of Directors on its activities.

CREDIT RISK

The Group has exposure to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Exposure to credit risk arises as a result of the Group’s sales of products on credit terms and other transactions with counterparties giving rise to financial assets. Financial assets, which potentially expose the Group to credit risk, consist mainly of trade and other receivables, cash and cash equivalents, term deposits, investments in securities and loans to related parties.

The Group’s maximum exposure to credit risk by class of assets is reflected in the carrying amounts of financial assets in the statements of financial position and the nominal amount of financial guarantees (Note 34).

The table below shows quality of Group’s financial instruments (credit ratings of banks and other counterparties, where available) as at 31 December 2023:

The table below shows quality of Group’s financial instruments (credit ratings of banks and other counterparties, where available) as at 31 December 2022:

The Group applies the simplified approach permitted in IFRS 9 to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

The expected loss rates are based on the payment profiles of sales over a period of 24 month before 31 December 2023 or 31 December 2022 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are not adjusted to reflect forward-looking information on macroeconomic factors because those factors do not significantly affect the risk profile.

The credit loss allowance for trade receivables is determined according to provision matrix presented in the table below. The provision matrix is based the number of days that an asset is past due. The information as of 31 December 2023 is presented below:

The information as of 31 December 2022 is presented below:

The following table explains the changes in the credit loss allowance for trade and other receivables between the beginning and the end of 2023 as well as impairment provision for trade and other receivables during 2022:

The Group’s exposure to credit risk in respect of trade accounts receivable is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country, in which customers operate, has no significant influence on credit risk. The Group is exposed to concentrations of credit risk. Approximately 75% of the Group’s revenue for 2023 (84% of trade receivables as at 31 December 2023) is attributable to sales transactions with eleven main customers (2022: 75% of Group’s revenues and 84% of trade receivables attributable to seven customers). The Group defines counterparties as having similar characteristics if they are related entities.

The Group applies a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered.

The Group does not require collateral in respect of trade and other receivables.

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

Credit risk exposure in respect of loans to related parties (Note 26) arises from possibility of non-repayment of loans. For loans to joint ventures and associates, the Group manages the credit risk by requirement to provide collateral in lieu of borrowers’ property. Borrowers do not have a credit rating.

EXPECTED CREDIT LOSS (ECL) MEASUREMENT

Measurement of ECLs is an estimate that involves determination methodology, models and data inputs. The following components have a major impact on credit loss allowance: definition of default, SICR, probability of default (“PD”), exposure at default (“EAD”), and loss given default (“LGD”), as well as models of macro-economic scenarios. The Group regularly reviews and validates the models and inputs to the models to reduce any differences between expected credit loss estimates and actual credit loss experience of issued loans and guarantees.

The Group used supportable forward-looking information for measurement of ECL, primarily an outcome of its own macro-economic forecasting model. Several assumptions that are easily interpretable can be selected for analysis: GDP growth rate, inflation rate, exchange rate, crude oil price and current economic indicator. Final macroeconomic scenario includes only historically observed values of the inflation rate and the share of overdue loans. Forward-looking information is included in parameters of PD within the horizon of the next year after the reporting date. In addition, to calculate credit losses, the corporate average cumulative default probabilities are updated annually according to S&P's Annual Global Corporate Default Study and Rating.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group is exposed to daily calls on its available cash resources. Liquidity risk is managed by the treasury department of the Group. Management monitors monthly rolling forecasts of the Group’s cash flows.

The Group seeks to maintain a stable funding base primarily consisting of borrowings, trade and other payables and debt securities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities as they fall due, under both normal and stressful conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group invests available cash funds in diversified portfolios of liquid assets, in order to be able to respond quickly to unforeseen liquidity requirements.

The Group ensures that it has sufficient cash on demand to meet expected operational expense or financial obligations which excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Below is a summary of the Group’s undrawn borrowing facilities and available cash and cash equivalents, including current term deposits, which are the important instruments in managing the liquidity risk:

The table below shows liabilities at the reporting date by their remaining contractual maturity. The amounts disclosed in the maturity table are the contractual undiscounted cash flows. Such undiscounted cash flows differ from the amount included in the statements of financial position because the statement of financial position amount is based on discounted cash flows.

When the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the end of the reporting period. Foreign currency payments are translated using the spot exchange rate at the end of the reporting period.

The following are the contractual maturities of financial liabilities at 31 December 2023:

The following are the contractual maturities of financial liabilities at 31 December 2022:

MARKET RISK

The Group has exposure to market risks. Market risk is the risk that changes in market prices will have a negative impact on the Group’s income or the value of its financial instrument holdings. Market risks arise from open positions in (a) foreign currencies, (b) interest bearing assets and liabilities and (c) equity products, all of which are exposed to general and specific market movements. The objective of market risk management is to monitor and control market risk exposures within acceptable limits, while optimising the return on investments. Management sets limits on the value of risk that may be accepted, which is monitored on a daily basis. However, the use of this approach does not prevent losses outside of these limits in the event of more significant market movements.

Sensitivities to market risks included below are based on a change in a factor while holding all other factors constant. In practice this is unlikely to occur and changes in some of the factors may be correlated – for example, changes in interest rate and changes in foreign currency rates.

CURRENCY RISK

The Group is exposed to currency risk on sales, purchases and borrowings which are denominated in currencies other than the functional currency. Borrowings are denominated in currencies that match the cash flows generated by operating entities in the Group. Therefore, in most cases, economic hedging is achieved without derivatives. In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by planning future expenses taking into consideration the currency of payment. The Group is mainly exposed to the risk of US Dollars currency fluctuations.

The Group’s exposure to currency risk was as follows:

A 14% weakening and 14% strengthening of Tenge against US Dollar as at 31 December 2023 (2022: 21% weakening and 21% strengthening) would increase/(decrease) equity and profit or loss by the amounts shown below.

Movements of Tenge against US Dollar above represent reasonably possible changes in market risk estimated by analysing annual standard deviations based on the historical market data for 2023 and 2022.

Price risk on uranium products

The Group is exposed to the effect of fluctuations in the price of uranium, which is quoted in US Dollar on the international markets. The Group prepares an annual budget based on future uranium prices.

Uranium prices historically fluctuate and are affected by numerous factors outside of the Group’s control, including, but not limited to:

• demand for uranium used as fuel by nuclear power stations;
• depleting levels of secondary sources such as recycling and blended down highly enriched stocks available to close the gap of the excess demand over supply;
• impact of regulations by the International Agency on Nuclear Energy;
• other factors related specifically to uranium industry.

At the end of the reporting period there was no significant impact of commodity price risk on the Group’s financial assets and financial liabilities except for investments in ANU Energy OEIC Ltd. (Note 26).

A 20% weakening and 20% strengthening of Tenge against spot price as at 31 December 2023 would increase/(decrease) equity and profit or loss by the amounts shown below.

Interest rate risk

Changes in interest rates impact loans and borrowings by changing either their fair value (fixed rate debt) or their future cash flows (floating rate debt). At the time of raising new loans or borrowings, management uses its judgement to decide whether it believes that a fixed or a floating rate would be more favourable to the Group over the expected period until maturity. As at 31 December 2023 100% (2022: 100%) of the Groups borrowings have a fixed interest rate. At the reporting date, the interest rate profile of the Group’s interestbearing financial instruments was:

FAIR VALUE SENSITIVITY ANALYSIS FOR FIXED RATE INSTRUMENTS

The Group has only fixed rate instruments. The Group does not account for any fixed rate financial assets and financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss. However, fixed rate financial assets and financial liabilities are exposed to fair value risk from change in interest rates. Reasonably possible changes in interest rates do not significantly affect fair values of those financial assets and financial liabilities.

CAPITAL MANAGEMENT

The Group’s policy is to maintain a strong capital base so as to safeguard the Group’s ability to continue as a going concern, to maintain investor, creditor and market confidence, to provide returns for shareholders, to maintain an optimal capital structure to reduce the cost of capital, and to sustain future development of the business. Capital includes all capital and reserves of the Group as recorded in the consolidated statements of financial position.

The Group may sell uranium for non-military purposes and only to customers residing in countries which signed the Nuclear Non-Proliferation Treaty and are members of the International Agency on Nuclear Energy. In addition, the Group must maintain certain internal qualitative capital management targets based on the Group’s consolidated financial information, such as total shareholder return, free cash flow, EBITDA margin.

The Group applies the Policy on borrowings and financial sustainability management, which is aimed to manage financial risks by adopting common principles and rules of debt management and financial sustainability for non-financial organisations. The Group has complied with all externally and internally imposed capital requirements during 2023 and 2022, requirements associated with borrowing facilities.

39. FAIR VALUE DISCLOSURES

Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.

Financial assets carried at amortised cost

Estimate of all financial assets carried at amortised cost is Level 3 measurement, except for cash and cash equivalents, which is in Level 2. The estimated fair value of fixed interest rate instruments is based on estimated future cash flows expected to be received discounted at current interest rates for new instruments with similar credit risks and remaining maturities. Discount rates used depend on the credit risk of the counterparty.

All financial assets of the Group as at the end of the reporting period are carried at amortised cost except as disclosed below.

Financial assets carried at FVTPL

Financial assets carried at FVTPL include derivative asset and investment in ANU Energy OEIC Ltd. (Note 26) that are recognised at fair value through profit and loss. The Group estimates fair value of investment in ANU Energy OEIC Ltd. as a percentage of Group’s owned share multiplied by the fair value of uranium held by the entity as at the date. Fair value measurement falls in Level 2 category. The main inputs used in fair value estimation are spot prices for uranium pulished by UxConsulting LLP and TradeTech LLP independent nuclear industry’s market research and analysis companies. Fair value of a derivative asset is determined based on binominal model with uranium spot price forecasts. This is a Level 3 category.

Liabilities carried at amortised cost

Fair values of other liabilities were determined using valuation techniques. The estimated fair value of fixed interest rate instruments with stated maturities were estimated based on expected cash flows discounted at current interest rates for new instruments with similar credit risks and remaining maturities. The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) is estimated as the amount payable on demand, discounted from the first date on which the amount could be required to be paid. The weighted average discount rate is 6.83% p.a (2022: 4.94%).

Fair values versus carrying amounts

With the exception of instruments specified in the following table, the Group believes that the carrying value of financial assets and financial liabilities are recognised in the consolidated financial statements approximate their fair value:

In assessing fair values, management uses the following major methods and assumptions: (a) for interest free financial liabilities and financial liabilities with fixed interest rate, financial liabilities were discounted at effective interest rate which approximates the market rate; (b) for financial liabilities with floating interest rate, the fair value is not materially different from the carrying amount because the effect of the time value of money is immaterial.

40. PRESENTATION OF FINANCIAL INSTRUMENTS BY MEASUREMENT CATEGORY

For the purposes of measurement, IFRS 9 Financial Instruments classifies financial assets into the following categories: (a) financial assets at FVTPL; (b) debt instruments at FVOCI; (c) financial assets at AC. Financial assets at FVTPL have two sub-categories: (i) assets mandatorily measured at FVTPL, and (ii) assets designated as such upon initial recognition or subsequently. All of the Group’s financial assets as at the end of reporting period fell into the category AC, except for the financial derivative asset and investment in ANU Energy OEIC Ltd. (Note 26), classified as FVTPL upon initial recognition. All of the Group’s financial liabilities were carried at amortised cost.

41. EVENTS AFTER THE REPORTING PERIOD

Control over JV Budenovskoe LLP

The Group obtained control over JV Budenovskoe LLP from 1 January 2024 as a result of significant changes in Charter and Foundation agreement that became effective from 1 January 2024. The Group’s ownership interest remained the same, 51%. The Group plans to complete the assessment of fair value for the business combination until the end of 2024. The carrying value of JV Budenovskoy LLP’s assets and liabilities as of 31 December 2023 are disclosed in Note 24. Also on 11 March 2024, JV Budenovskoye LLP received a loan from the second participant in the amount of Tenge 4,500 million with a repayment period until March 2025.

Addendum to the subsoil use contract of Semizbay-U LLP

Addendum to subsoil use contract for Irkol field that had an expiration date on 4 March 2024, was signed on 28 February 2024 with the new contract date of 2030.

Glossary

UK tax information

This review is based on UK law and UK government tax and customs duties at the date of this document each of which is subject to change, possibly retroactively. Unless otherwise indicated this review only addresses some of the effects of UK taxation on individuals who are the absolute beneficial owners of shares or GDRs and who (1) are UK residents for tax purposes; (2) are not residents for tax purposes in any other jurisdiction and (3) do not have a permanent establishment in the Republic of Kazakhstan which is associated with the ownership of shares or GDRs (hereinafter – Holders from the UK).

In addition this review (1) considers only the tax consequences for UK Holders who hold shares and GDRs as equity, and does not consider tax consequences that may be relevant to some other categories of UK Holders such as dealers; (2) it is assumed that the UK Holder does not directly or indirectly control 10 or more percent of the voting shares of the Company; (3) it is assumed that the holder of the GDR has a beneficial ownership of the underlying shares and dividends on such shares; and (4) tax consequences for UK Holders which are insurance companies, investment companies, charities, or pension funds, are not considered.

This review is a general guide and is not intended and should not be construed by specific Holders from the UK as legal or tax advice. Accordingly, investors should consult their tax advisers regarding general tax consequences including the consequences of acquiring, holding and disposing of shares or GDRs in accordance with UK law and UK tax and customs administration practices in their particular case.

Withholding tax

Assuming that income derived from the GDR does not have a source in the UK, such income should not be taxed at the source of payment in the UK. Dividends on shares will not be taxed at the UK source.

Dividends taxation

A UK holder receiving a dividend on shares or GDRs may be required to pay UK income or corporate tax (as the case may be) on the gross amount of the dividend paid before deduction of Kazakhstan taxes at the source of payment, taking into account the presence of any amount set off against Kazakhstan tax at the source of payment. UK holder – an individual who is a resident and resides in the UK will pay UK income tax on dividends paid on shares or GDRs that are subject to the actual tax exemption on the first £5,000 of all dividends (zero dividend rate) received for the relevant tax year, including dividends received from any other equity investments for the same tax year. UK holder – an individual who is a resident but does not reside in the UK and entitled to select UK taxation based on the transfer of funds (and where necessary, paying a transfer fee), will pay UK income tax on dividends paid on shares or GDR, to the extent that the dividend is transferred or considered to be transferred to the UK. A UK holder who is a UK resident company for tax purposes should not be subject to corporate tax on dividends paid on shares or GDRs, unless it is subject to certain rules against tax evasion.

Taxation at exclusion or conditional exclusion

The alienation of the Holder's shares from the UK in stocks or GDRs may result in taxable income or an allowable deduction for tax purposes for UK taxable income depending on the position of the Holder from the UK and subject to tax exemption. A holder from the UK who is a resident individual and resides in the UK will be required to pay UK capital gains tax on taxable income upon alienation of a share in shares or GDRs. A UK holder who is a resident individual who does not reside in the UK and has the right to choose taxation in the UK based on the transfer of funds (and, where necessary, paying a transfer fee), will pay the UK capital gains tax to the extent that in which taxable income derived from the disposal of a share in shares or GDRs is transferred or deemed to be transferred to the UK. In particular, transactions with GDRs on the London Stock Exchange may result in the transfer of profits, which, accordingly, will be subject to UK capital gains tax. In particular transactions with GDRs on the London Stock Exchange may result in the transfer of profits which, accordingly, will be subject to UK capital gains tax. An individual – a holder of shares or GDRs who ceases to be a resident or has not resided in the UK for tax purposes for less than five full years and alienates such shares or GDRs for such a period, may be required to pay UK capital gains tax upon returning to the UK, despite the fact that during the alienation he was not a resident and did not live in the UK. A UK holder who is a legal entity will pay UK corporate tax on any taxable income from the sale of shares or GDRs.

Action of taxes of Kazakhstan at the source of payment

Dividends on shares and GDRs are subject to Kazakhstan tax at the source of payment. A holder from the UK – an individual – resident must have the right to offset the Kazakhstan tax at the source of payment withheld from such payments against UK income tax on such payments in accordance with the procedure for calculating such a set-off amount in the UK. A UK holder, a UK resident company, usually does not pay corporate tax on dividends paid and, therefore, will usually not be able to claim a deduction from any Kazakhstan taxes at the source of payment.

Stamp and equivalent of stamp tax (SEST)

Assuming that a document executing a transaction or containing an agreement to transfer one or more shares or GDRs, (i) is not signed in the UK or (ii) does not relate to any property located in the UK, or an act committed or performed in UK (which may include participation in payments to bank accounts in the UK) such a document should not be subject to stamp duty on declared value. Even if the document completing the transaction or containing an agreement to transfer one or more shares or GDRs, (i) is signed in the UK and/or (ii) concerns any property located in the UK, or an act committed or performed in the UK, in practice, there should be no need to pay stamp duty on declared value for such a document in the UK, if such a document is not required for any purpose in the UK. If there is a need to pay stamp duty on declared value in the UK, then it may be necessary to pay interest and fines. Since GDRs are securities whose value is not expressed in pounds sterling, the stamp duty on a “bearer document” should not be paid either for the issue of GDRs or for the transfer of securities that are transferred through the GDRs. Assuming that shares (i) are not registered in a registry located in the UK, or (ii) are not combined with shares issued by a UK-registered company, the transfer of shares or GDRs should not be subject to SEST.

Contacts

National Atomic Company Kazatomprom Joint Stock Company

17/12, Syganak Street, Z05T1X3 Astana, Republic of Kazakhstan

Tel: +7 7172 55 13 98

Fax: +7 7172 55 13 99

E-mail: nac@kazatomprom.kz

Website: www.kazatomprom.kz

Should you have any questions, comments or proposals concerning this Report, or if you would like to receive a printed version, please contact the following employees of Kazatomprom:

Investor Relations

Botagoz Muldagaliyeva, Director of IR

Tel.: +7 7172 45 81 80

E-mail: ir@kazatomprom.kz

Public Relations and Internal Communications

Askar Atagulin, Director of PR

Tel.: +7 7172 45 80 63

E-mail: pr@kazatomprom.kz

Acting Corporate Secretary

Kazbek Shaimerdinov, Managing Director of Legal Affairs and Risk

Tel.: +7 7172 45 80 70

E-mail: kshaimerdinov@kazatomprom.kz

Auditors

PricewaterhouseCoopers LLP 34,

Al Farabi Avenue, Building А, 4th floor

о25D5F6 Almaty, Kazakhstan

Tel.: +7 727 330 3200

www.pwc.com/kz

Depository Bank

Citibank, N.A.

388 Greenwich Street, New York

New York 10013, USA

Tel: +1-212-816-6622/+1-917-533-7887