The FBRK editorial team continues its series of publications devoted to the analysis of the financial statements of social-entrepreneurial corporations of Kazakhstan (SEC). Today we will review the consolidated financial statements of SEC «Saryarka» for 2023 — the regional development institute of the Karaganda region, which demonstrated contradictory indicators: despite a gross loss of 34 million tenge, the corporation managed to finish the year with a net profit of 38.7 million tenge, actively fulfilling socially significant functions through microcredit and price stabilisation programmes.
FINANCIAL RESULTS: FROM GROSS LOSS TO NET PROFIT
The financial results for 2023 of SEC «Saryarka» reflect the specific nature of the activities of social-entrepreneurial corporations. With revenue of 321.9 million tenge, the corporation faced the cost of goods sold and services rendered exceeding 355.8 million tenge, which led to a gross loss of 33.96 million tenge.
However, thanks to effective management of financial assets and the receipt of remuneration on deposits totalling 221.1 million tenge, the corporation managed not only to compensate for operational losses but also to finish the year with a net profit of 38.7 million tenge. This demonstrates a prudent policy of liquidity management and diversification of income sources.
ASSET STRUCTURE: A CONSERVATIVE APPROACH TO LIQUIDITY
The consolidated balance sheet of SEC «Saryarka» showed total assets of 48.2 billion tenge, with the structure reflecting a predominance of long-term assets (42.1 billion tenge) over short-term (4 billion tenge). This ratio is typical for development institutions focused on long-term lending and investment activities.
Particular attention is drawn to the conservative approach to managing cash and cash equivalents. The corporation held 1.07 billion tenge in bank accounts and a further 994.6 million tenge in savings accounts. This significant volume of liquid funds (over 2 billion tenge) provided SEC «Saryarka» with the necessary safety margin for implementing regional development programmes.
CAPITAL STRUCTURE: A STABLE FINANCIAL BASE
The corporation's share capital amounted to 70.9 billion tenge with issued shares worth 55.5 billion tenge out of 80 billion tenge authorised. The price per share is set at a symbolic level of 0.0007 tenge, which is typical for state development institutions.
An important element of the capital structure was other capital totalling 21.3 billion tenge — assets withdrawn and transferred free of charge by a company under common control. This capital strengthens the corporation's financial base and expands opportunities for regional development programmes.
LONG-TERM LIABILITIES: PARTNERSHIP WITH REGIONAL STRUCTURES
Within the structure of long-term liabilities, a special place is held by other long-term liabilities totalling 2.26 billion tenge. The largest portion consisted of indebtedness to JSC «KazTransGas» amounting to 2.21 billion tenge, as well as a liquidation fund for the Sherubainurinsky coal-bearing district (45.9 million tenge).
These liabilities reflect the participation of SEC «Saryarka» in major infrastructure projects and confirm the corporation's system-forming role in the regional economy.
PROGRAMME «AUL AMANATY»: LARGE-SCALE SUPPORT FOR RURAL AREAS
A key area of the corporation's activity was participation in the state microcredit programme «Aul Amanaty». The total loan portfolio issued under this programme amounted to an impressive 3.4 billion tenge, including a long-term portion of 2.94 billion tenge and a short-term portion of 474 million tenge.
Financing for the programme is provided through a long-term loan from the Agriculture Department of the Karaganda Region totalling 3.43 billion tenge at an interest rate of 2.5% per annum until 2033. SEC «Saryarka» acts as a trustee agent for servicing this budget loan, providing loans to individual entrepreneurs on concessional terms for up to 7 years, subject to collateral, in the areas of livestock, crop production, and other non-agricultural sectors.
STABILISATION FUND: BALANCING SOCIAL IMPACT AND PROFITABILITY
Activities related to managing the Stabilisation Fund showed mixed results. With income from the sale of stabilisation fund goods of 102.6 million tenge, expenses amounted to 192.1 million tenge, leading to a loss of 89.5 million tenge in this area.
In addition to direct sales through the stabilisation fund, SEC «Saryarka» employs an additional price regulation mechanism — short-term concessional lending to market participants. As part of measures to ensure food security for the city of Karaganda, the corporation issues loans at a symbolic rate of 0.01% per annum for a term of 1 year to stabilise prices for regulated goods.
Despite the financial losses from the stabilisation fund, the integrated approach to price regulation fulfils an important social function, ensuring the affordability of socially significant goods for the region's population.
ADMINISTRATIVE EXPENSES AND HR POLICY
Administrative expenses amounted to 308.9 million tenge, which includes 207.6 million tenge in personnel costs, inclusive of taxes. Among other significant items of administrative expenses are social tax and social contributions (21.2 million tenge), as well as audit fees and other professional services (6.3 million tenge).
INVESTMENT POLICY AND DEVELOPMENT PROSPECTS
SEC «Saryarka» demonstrates an active investment policy, holding stakes in various organisations totalling 36.4 billion tenge. Notable holdings include a 20% stake in LLP «QazTechna» (manufacturer of Kazakhstani buses) and 31.2 billion tenge in JSC «KamaTuresKZ». This diversification allows the corporation not only to generate investment income but also to contribute to the development of various sectors of the regional economy.
An important signal for future development was the attraction, at the beginning of 2024, of substantial long-term loans totalling 10.67 billion tenge from the State Institution «Agriculture Department of the Karaganda Region» (800 million tenge) and JSC «Industrial Development Fund» (9.87 billion tenge). This indicates the trust of state institutions in SEC «Saryarka» and plans for a significant expansion of its activities.
AUDITOR'S REPORT AND REPORTING TRANSPARENCY
The consolidated financial statements of SEC «Saryarka» for 2023 were audited by an independent auditor, LLP «Elit Audit». The auditors expressed an unqualified opinion, confirming that the statements, in all material respects, were prepared in accordance with International Financial Reporting Standards. This attests to the high quality of accounting and the transparency of the corporation's financial operations.
CONCLUSION
The consolidated financial results of SEC «Saryarka» for 2023 demonstrated the classic model of a social-entrepreneurial corporation, where commercial indicators are closely intertwined with the implementation of state development programmes. Despite gross losses from core operations, effective management of financial assets allowed the corporation to finish the year with a positive result.
The key success factors were a conservative liquidity management policy, active participation in the «Aul Amanaty» programme, and a diversified investment portfolio. The loss-making nature of the stabilisation fund underscores the social orientation of the SEC's activities, where financial efficiency may give way to social impact.
The corporation's further development will depend on its ability to balance commercial sustainability with the fulfilment of socially significant tasks to support entrepreneurship and stabilise prices in the Karaganda region. The attraction of additional financing totalling 10.67 billion tenge has likely opened new opportunities for scaling regional development programmes and strengthening the SEC's role as a key institution supporting the region's economy.
We remind you that we previously analysed the financial statements of SEC «Kokshe» for 2023. In subsequent publications, the FBRK editorial team plans to continue the analysis, which will allow us to build a comprehensive picture of the effectiveness of these development institutions and their contribution to the economy of Kazakhstan.
To be continued...