Identification of errors


 

TIDMKZG 
 
RNS Number : 7600I 
KazakhGold Group Ltd 
17 March 2010 
 

17 March 2010 
KazakhGold Group Limited (LSE: KZG): Identification of material errors in 
financial statements for the year ended 31 December 2008 
As previously announced on 16 November 2009, following the acquisition in August 
2009 of a 50.1% stake in KazakhGold Group Limited ("KazakhGold") by Jenington 
International, an indirect wholly owned subsidiary of OJSC Polyus Gold (the 
"Partial Offer"), the new management of KazakhGold has been carrying out an 
extensive series of measures to improve the operations and internal systems and 
controls of KazakhGold, including trying to recover and restore primary 
accounting and production documentation, in order to confirm the historical 
accounting records. 
As a result of these measures, and in the course of preparing the consolidated 
financial statements for the year ended 31 December 2009, certain material 
errors have been identified in respect of the previously published consolidated 
financial statements of KazakhGold for the year ended 31 December 2008.  These 
financial statements relate to a financial period prior to the completion of the 
Partial Offer. 
On the basis of information currently available, these errors comprise the 
following: 
·          Errors identified in the inappropriate recognition of fixed assets 
and exploration and evaluation expenditures, in an estimated amount of $157 
million; 
·          Errors in revenue recognition, and related debtor balances, giving 
rise to an estimated overstatement in the amount of $36 million; 
·          Errors in capitalisation of borrowing costs on qualifying assets, in 
an estimated amount of $7 million; and 
·          Errors in recognition of negotiation rights in relation to the Jerooy 
project in the Kyrgyz Republic. 
All estimates above are given without regard to the tax effect of the 
adjustments. 
KazakhGold expects to publish its audited consolidated financial statements for 
the year ended 31 December 2009 by the end of April 2010. 
The new management of KazakhGold is continuing to review and analyse the 
information it has received and the circumstances giving rise to these errors. 
A further announcement will be made in due course. 
 
For further information please contact: 
Alexey V. Chernushkin, Director, capital markets and IR 
 Evguenia V.Buydina, 
IR manager 
 +7 (495) 641-3377 
 +7 (495) 785-4031 
ir@polyusgold.com 
Anton A. Arens, PR Director 
 +7 (495) 641-3365 
 +7 (495) 
544-5496 
pr@polyusgold.com 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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