Kaspi KZ JSC

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Financial Statement

Kaspi.kz Joint St

ock Company

Consolidated Financial Statements

For the years ended

31 December 2021 and 2020

able of Contents

Page

TEMENT

OF MANAGEMENT

’S RESPONSIBILI

TIES

FOR

THE PREP

ARA

TION AND

APPROVAL

THE CONSOLIDA

TED FINANCIAL ST

TEMENTS

FOR

THE YEARS ENDED

31 DECEMBER

2021

AND 2020

INDEPENDENT

AUDIT

ORS’

REPOR

CONSOLIDA

TED

FINANCIAL ST

TEMENTS

FOR

THE YEARS ENDED

31 DECEMBER

2021

AND 2020

Consolidated statements of prot or loss

Consolidated statements of other comprehensive income

100

Consolidated statements of nancial position

101

Consolidated statements of changes in equity

102

Consolidated statements of cash ows

104

Notes to the Consolidated nancial statements

105-165

Management of Kaspi.kz JSC is responsible for the prepar

ation of the consolidated nancial statements that

presents fairly the nancial position of Kaspi.kz Joint Stock Company and its subsidiaries (“the Group

”) as

at 31 December 2021 and the related consolidated statements of prot or loss, comprehensiv

e income for

the year then ended, changes in equity and cash ows for the year then ended, and of signicant accounting

policies and notes to the consolidated nancial statements (the “

consolidated nancial statements”) in

compliance with International Financial Repor

ting Standards (“IFRS”).

In preparing the consolidated nancial statements, management is responsible for:

•

Properly selecting and applying accounting policies;

•

Presenting information, including accounting policies, in a manner that provides r

elevant, reliable,

comparable and understandable information;

•

Providing additional disclosures when compliance with the specic r

equirements in IFRS are

insucient to enable users to understand the impact of particular transactions, other events and

conditions on the Group’

s consolidated nancial position and nancial performance; and

•

Making an assessment of the Group’

s ability to continue as a going concern.

Management is also responsible for:

•

Designing, implementing and maintaining an effective and sound system of internal controls,

throughout the Group;

•

Maintaining adequate accounting records that ar

e sucient to show and explain the Group

’

transactions and disclose with r

easonable accuracy at any time the consolidated nancial position of

the Group, and which enable them to ensur

e that the consolidated nancial statements of the Group

comply with IFRS;

•

Maintaining accounting records in compliance with the legislation of the Republic of Kazakhstan;

•

aking such steps as are reasonably av

ailable to them to saf

eguard the assets of the Group; and

•

Preventing and detecting fr

aud and other irregularities.

These consolidated nancial statements for the year ended 31 December 2021 were appro

ved by the

Chairman of the Management Board, the Chief Financial Ocer and the Chief Accountant on 25 February

2022 and will be provided t

o the shareholders for approv

al in accordance with the requir

ements of the

legislation of the Republic of Kazakhstan.

On behalf of the Management

Mikheil Lomtadze

Chairman of

the Management

Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

Kaspi.kz Joint Stock Company

Statement of Management’

s Responsibilities

For the Prepar

ation and Approval of the Consolidated Financial Statements

For the Y

ears Ended 31 December 2021 and 2020

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

INDEPENDENT

AUDITORS’ REPOR

o the Shareholders of Kaspi.kz Joint Stock Company

Opinion

We hav

e audited the consolidated nancial statements of Kaspi.kz Joint Stock Company and its subsidiaries

(“the Group”), which comprise the consolidated statement of nancial position as at 31 December 2021

and the consolidated statement of prot or loss, consolidated statement of other comprehensive income,

consolidated statement of changes in equity and consolidated statement of cash ows for the year then

ended, and notes to the consolidated nancial statements, including a summary of signicant accounting

policies.

In our opinion, the accompanying consolidated nancial statements present fairly

, in all material respects,

the consolidated nancial position of the Group as at 31 December 2021 and its consolidated nancial

performance and its consolidated cash ows for the year then ended in accordance with International

Financial Reporting Standards (“IFRSs”).

Basis for Opinion

We conducted our audit in accordance with International Standar

ds on Auditing (“ISAs”). Our responsibilities

under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated

Fin

anc

l St

ate

men

sec

on o

f ou

r re

por

t. We are independent

of the

Group in

accordance with

the

International Ethics Standar

ds Board

for Accountants’ Code

of Ethics for

Prof

essional Accountants (the

“IESBA Code”)

together with

the ethical r

equirements that

are r

elevant

to our

audit of the

consolidated nancial

statements in the

Republic of Kazakhstan,

and we ha

ve fullled

our other ethical

responsibilities in

accordance

wit

h t

hes

qui

men

d t

IES

de.

We belie

ve that the audit evidence we hav

e obtained is sucient

and appropriate to pr

ovide a basis for our opinion.

Key A

udit Matter

Key audit matter is the matter that, in our prof

essional judgment, was of most signicance in our audit of

the consolidated nancial statements of the current period.

This matter was addressed in the context of our

audit of the consolidated nancial statements as a whole, and in forming our opinion thereon, and we do not

provide a separ

ate opinion on this matter

Deloitte refers to one or mor

e of Deloitte T

ouche T

ohmatsu Limited (“DTTL

”), its global network of member rms, and their related entities

(collectively

, the “Deloitte organization

”). DTTL (also ref

erred to as “Deloitte Global”) and each of its member rms and related entities

are legally separate and independent entities, which cannot obligate or bind each other in r

espect of third parties. DTTL and each DTTL

member rm and related entity is liable only for its own acts and omissions, and not those of each other

. DTTL does not provide services

to clients. Please see www

.deloitte.com/about to learn more.

Why the matter was determined to be a

key audit matter

How the matter was addressed

in the audit

Impairment of loans to customers under IFRS

9 Financial instruments (“IFRS 9”)

As disclosed in Note 12

as at 31 December 2021, loans to customers

amounted to KZT

2,430,737 million, net of the

related allowance for impairment losses of KZT

142,416 million.

The assessment of the measurement of

expected credit losses requir

e considerable

judgment in analyzing all reasonable and

suppor

table information at the reporting date.

Key ar

ea of judgement included measuring the

amount of expected credit losses by assessing

the probability of a loan falling into default

and the amount of recoveries expected fr

defaulted loans.

Due to the signicance of the loans’ balances,

magnitude of estimation uncer

tainties, and

the complexity of judgements applied by

management in measuring expected credit

losses, we identied impairment of loans as a

key audit matter

The

audit

procedures

performed

this

area,

included:

•

Obtaining an understanding of the loan

loss

provisioning

process,

particularly

over

measurement and

recognition of

allowances

for

expected

credit

losses.

included

assessment of the design and implementation

of relev

ant controls ov

er the expected cr

edit

loss model,

including model

governance

and

mathematical accuracy;

•

Assessment of the provisioning methodology

developed for calculation of impairment losses

accordance

with

the

requirements

outlined in

IFRS 9;

•

Assessment of the reasonableness of

management’

s assumptions and input data

used

the

model,

the

probability

loan

falling

into

default,

assessment

any

reco

veries

expected

from

defaulted

loans

and

forecasted

macroeconomic v

ariables with

the involvement

of our internal specialists against requirements

of the accounting standards. We tested the

underlying

statistical

data,

represented

the principle balances,

including the overdue

principle and interest and allocation of loans by

days in arrears, on a sample basis;

•

esting of operating effectiveness of certain

controls

over

data

transfer

information

capture and processing in the gener

ation of

the statistical data, repr

esented by the principle

balances,

including

overdue

principal

and

allocation of loans by days in arrears.

Consideration of the adequacy and completeness

of the Group’

s disclosures in respect of credit

risk,

structure

and

quality

loan

portfolio

and

impairment

allowance

accordance

with

IFRS

on expected credit loss.

We found no material exceptions in these tests.

Deloitte LLP

36 Al Far

abi Av

enue

Almaty

, 050059

Republic of Kazakhstan

el.: +7 (727) 258 13 40

Fax: +7 (727) 258 13 41

deloitte.kz

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Other Information – Annual Report

Management is responsible for the other information. The other information comprises the information

included in the Annual Repor

t, but does not include the consolidated nancial statements and our auditors’

report thereon. The Annual Report is expected to be made available to us after the date of this audit

ors’

report.

Our opinion on the consolidated nancial statements does not cover the other information and we will not

express any form of assur

ance conclusion thereon.

In connection with our audit of the consolidated nancial statements, our responsibility is to read the

other information identied above when it becomes av

ailable and, in doing so, consider whether the other

information is materially inconsistent with the consolidated nancial statements or our knowledge obtained

in the audit, or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are

required t

o communicate the matter to those charged with gov

ernance.

Responsibilities of Management and

Those Charged with Governance for the Consolidated Financial

Statements

Management is responsible for the prepar

ation and fair presentation of the consolidated nancial statements

in accordance with IFRSs, and for such internal control as management determines is necessary to enable

the prepar

ation of consolidated nancial statements that are free fr

om material misstatement, whether due

to fr

aud or error

In preparing the consolidated nancial statements, management is responsible for assessing the Group

’

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using

the going concern basis of accounting unless management either intends to liquidate the Group or to cease

operations, or has no r

ealistic alternative but to do so.

Those charged with governance ar

e responsible for ov

erseeing the Group’

s nancial repor

ting process.

Auditors’ Responsibilities for the A

udit of the Consolidated Financial Statements

Our objectives are to obtain r

easonable assurance about whether the consolidated nancial statements

as a whole are free fr

om material misstatement, whether due to fr

aud or error

, and to issue an auditors’

report that includes our opinion. Reasonable assurance is a high level of assur

ance, but is not a guarantee

that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fr

aud or error and are considered material if, individually or in the aggr

egate,

they could reasonably be expected to inuence the economic decisions of users tak

en on the basis of these

consolidated nancial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain pr

ofessional

skepticism throughout the audit. W

e also:

•

Identify and assess the risks of material misstatement of the consolidated nancial statements,

whether due to fr

aud or error

, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sucient and appropriate to pr

ovide a basis for our opinion.

The risk of

not detecting a material misstatement resulting from fr

aud is higher than for one resulting from err

as fraud ma

y involve collusion, forgery

, intentional omissions, misrepresentations, or the override of

internal control.

•

Obtain an understanding of internal control relev

ant to the audit in order t

o design audit procedures

that are appropriate in the cir

cumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Gr

oup’

s internal control.

•

Evaluate the appr

opriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’

s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or

conditions that may cast signicant doubt on the Group

’

s ability to continue as a going concern. If we

conclude that a material uncer

tainty exists, we are requir

ed to dr

aw attention in our auditors’ report to

the related disclosures in the consolidated nancial statements or

, if such disclosures are inadequate,

to modify our opinion. Our conclusions are based on the audit evidence obtained up t

o the date of our

auditors’ report. However

, future events or conditions may cause the Group to cease t

o continue as a

going concern.

•

Evaluate the o

ver

all presentation, structure and content of the consolidated nancial statements,

including the disclosures, and whether the consolidated nancial statements represent the underlying

transactions and ev

ents in a manner that achieves fair presentation.

•

Obtain sucient appropriate audit evidence regar

ding the nancial information of the entities or

business activities within the Group to express an opinion on the consolidated nancial statements.

We are r

esponsible for the direction, supervision and performance of the group audit. We r

emain solely

responsible for our audit opinion.

We communicate with those charged with go

vernance regar

ding, among other matters, the planned scope

and timing of the audit and signicant audit ndings, including any signicant deciencies in internal control

that we identify during our audit.

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

We also pro

vide those charged with gov

ernance with a statement that we have complied with rele

vant ethical

requirements r

egarding independence, and to communicate with them all r

elationships and other matters

that may reasonably be thought to bear on our independence, and wher

e applicable, related saf

eguards.

From thematters communicated t

o those charged with gov

ernance, we determine those matters that were

of most signicance in theaudit of theconsolidated nancial statements of thecurrent period and are

therefore the k

ey audit matters. We describe these matters in our audit

or’

s repor

t unless law or regulation

precludes public disclosure about the matter or when, in extremely r

are circumstances, we determine that

a matter should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public inter

est benets of such communication.

Deloitte LLP

State license on auditing in the

Republic of Kazakhstan

No. 0000015, type MFU-2, issued by the

Ministry of Finance of the

Republic of Kazakhstan

dated 13 September 2006

Zhangir Zhilysbayev

Engagement Partner

Qualied Auditor

of the Republic of Kazakhstan

Qualication cer

ticate

No.MF-0000116

dated 22 November 2012

General Dir

ector

Deloitte LLP

25 February 2022

Almaty

, Kazakhstan

Notes

ear ended

31 December

2021

ear ended

31 December

2020*

REVENUE

4,5

884,822

602,869

Interest rev

enue

422,075

322,913

Fees & commissions

191,831

165,450

Seller fees

149,070

63,196

ransaction & membership r

evenue

175,901

94,921

Rewards

(51,981)

(38,568)

Other gains

(

losses

)

(2,074)

(5,043)

COST

OF REVENUE

(244,862)

(199,313)

Interest expenses

(171,491)

(139,002)

ransaction expenses

(16,542)

(14,074)

Operating expenses

(56,829)

(46,237)

AL NET

REVENUE

639,960

403,556

echnology & product development

(44,388)

(30,818)

Sales & marketing

(8,702)

(7,191)

General & administr

ative e

xpenses

(23,685)

(20,101)

Provision e

xpense

(34,383)

(27,622)

OPERA

TING INCOME

528,802

317,824

Income

tax

(93,588

)

(54,476)

NET INCOME

435,214

263,348

Attributable to:

Shareholders of the Company

431,914

260,964

Non-controlling Interests

3,300

2,384

NET INCOME

435,214

263,348

Earnings per share

Basic (KZT)

2,247

1,361

Diluted (KZT)

2,222

1,347

* As reclassied, see Note 3

On behalf of the Management:

Mikheil Lomtadze

Chairman of

the Management

Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

Kaspi.kz Joint Stock Company

Consolidated Statements of Prot and Loss

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT

, except for earnings per share which are in KZT)

The notes on pages 105-165 form an integral part of these consolidated nancial statements.

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

ear ended

31 December

2021

ear ended

31 December

2020

NET INCOME

435,214

263,348

THER COMPREHENSIVE INCOME

Items that will not be reclassied subsequently to pr

ot or loss:

Movement in investment re

valuation reserve for equity instruments atFVTOCI

(5)

Items that may be reclassied subsequently t

o prot or loss:

Movement in investment re

valuation reserve for debt instruments at FVTOCI:

(Losses)/gains arising during the period, net of tax KZT Nil

(2,201)

3,609

Foreign ex

change differences on tr

anslation of foreign oper

ations

(18)

Expected credit recov

eries

recognised

in prot or loss

1,846

Reclassication of gains included in prot or loss, net of tax KZT Nil

(511)

(701)

Other comprehensive (loss)/gain for the year

(2,601)

4,749

AL COMPREHENSIVE INCOME

432,613

268,097

Attributable to:

Shareholders of the Company

429,340

265,663

Non-controlling Interests

3,273

2,434

AL COMPREHENSIVE INCOME

432,613

268,097

On behalf of the Management:

Mikheil Lomtadze

Chairman of

the Management

Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

Notes

31 December

2021

31 December

2020

ASSETS:

Cash and cash equivalents

342,101

330,409

Mandatory cash balances with National Bank of the Republic of

Kazakhstan

32,734

27,659

Due from banks

50,903

44,259

Investment securities and derivatives

607,417

869,572

Loans to customers

,23

2,430,737

1,404,554

Property

, equipment and intangible assets

85,101

70,016

Other assets

58,931

51,645

Assets classied as held for sale

8,628

AL ASSE

3,607,924

2,806,742

LIABILITIES AND

EQUITY

LIABILITIES:

Due to banks

76,492

Customer accounts

16,23

2,763,043

2,150,581

Debt securities issued

139,711

139,111

Other liabilities

56,318

41,343

Subordinated debt

67,665

78,009

Liabilities directly associated with the assets classied as held for

sale

3,038

AL LI

ABILITIES

3,103,229

2,412,082

EQUITY:

Share capital

97,530

95,825

Additional paid-in-capital

506

Revaluation reserve of nancial assets

2,597

5,171

Share-Based Compensation reserve

21,242

8,788

Retained earnings

377,852

280,828

otal equity attributable to Shar

eholders of the Company

499,727

391,118

Non-controlling interests

4,968

3,542

AL EQUITY

504,695

394,660

AL LI

ABILITIES AND EQUITY

3,607,924

2,806,742

On behalf of the Management:

Mikheil Lomtadze

Chairman of the

Management Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

Kaspi.kz Joint Stock Company

Consolidated Statements of Other Comprehensive Income

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Consolidated Statements of Financial Position

As at 31 December 2021 and 2020

(in millions of KZT)

The notes on pages 105-165 form an integral part of these consolidated nancial statements.

100

101

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Issued capital

Treasury shares

Additional paid-in-

capital

Revaluation reserve of

nancial assets and

other reserves

Share-Based

Compensation reserve

Retained earnings

otal equity attributable

to equity

holders of the parent

Non-controlling interest

otal equity

Balance at 31 December 2019

130,144

(34,319)

506

472

195,232

292,035

3,587

295,622

Net income

260,964

2,384

263,348

Other comprehensive income

4,699

4,749

otal comprehensive income

4,699

260,964

265,663

2,434

268,097

Dividends declared

(175,368)

Dividends declared by subsidiary to non-controlling interest

(2,479)

Share-based compensation reserve

8,788

Balance at 31 December 2020

130,144

(34,319)

506

5,171

8,788

280,828

391,118

3,542

394,660

Net income

431,914

3,300

435,214

Other comprehensive loss

(2,574)

(27)

(2,601)

otal comprehensive income



(2,574)



431,914

429,340



3,273



432,613

Dividends declared

(340,362)

Dividends declared by subsidiary to non-controlling interest

(1,847)

Share options accrued

19,631

-

19,631

-

19,631

Share options exercised

1,705

(7,177)

5,472

Balance at 31 December 2021

130,144

(32,614)

506

2,597



21,242



377,852



499,727



4,968



504,695

On behalf of the Management:

Mikheil Lomtadze

Chairman of

the Management

Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

The notes on pages 12-69 form an integral part of these consolidated nancial statements.

Kaspi.kz Joint Stock Company

Consolidated Statements Of Changes in Equity

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

The notes on pages 105-165 form an integral part of these consolidated nancial statements.

102

103

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Year ended

31 December

2021

Year ended

31 December

2020

CASH FLOWS FROM OPERA

TING ACTIVITIES:

Interest received from loans t

o customers

334,300

256,824

Other interest received

30,747

16,608

Interest paid

(161,369)

(129,255)

Expenses paid on obligatory insurance of individual deposits

(6,688)

(5,721)

Fees & commissions received

191,831

165,450

Seller fees received

149,070

63,188

ransaction & membership revenue r

eceived

178,400

99,268

Fees & commissions paid

(21,726)

(53,309)

Other income received

10,585

7,778

Operating expenses paid

(153,421)

(87,200)

Cash ows from operating activities befor

e changes in operating assets and liabilities

551,729

333,631

Changes in operating assets and liabilities

(Increase)/decrease in operating assets:

Mandatory cash balances with NBRK

(5,075)

(2,416)

Financial assets at FVTPL

(4,296)

3,844

Due from banks

(5,520)

2,869

Loans to customers

(1,057,590)

(143,528)

Other assets

(11,663)

896

Increase/(decrease) in operating liabilities:

Due to banks

76,430

(3,000)

Customer accounts

597,542

489,343

Financial liabilities at FVTPL

(585)

(5,846)

Other liabilities

14,500

(2,289)

Net cash inow from operating activities befor

e income tax

155,472

673,504

Income tax paid

(85,121)

(55,775)

Net cash inow from operating activities

70,351

617,729

CASH FLOWS FROM INVESTING A

CTIVITIES:

Purchase of property

, equipment and intangible assets

(24,901)

(18,189)

Proceeds on sale of property and equipment

383

694

Proceeds on sale of nancial assets at FVTOCI

1,362,302

396,615

Purchase of nancial assets at FVTOCI

(1,047,426)

(743,169)

Acquisition of subsidiary

, net of cash acquired

(5,110)

(662)

Proceeds on sale of subsidiary

4,500

Net cash inow/(outow) from investing activities

289,748

(364,711)

CASH FLOWS FROM FINANCING AC

TIVITIES:

Dividends paid

(340,362)

(175,368)

Dividends paid by subsidiary to non-controlling interest

(1,847)

(2,125)

Repayment of subordinated debt

(10,371)

Net cash outow from nancing activities

(352,580)

(177,493)

Effect of changes in foreign ex

change rate on cash and cash equivalents

4,174

15,744

NET INCREASE IN CASH AND CASH EQUIV

ALENTS

11,693

91,269

CASH AND CASH EQUIV

ALENTS, beginning of period

330,409

239,140

CASH AND CASH EQUIV

ALENTS, end of period

342,101

330,409

On behalf of the Management:

Mikheil Lomtadze

Chairman of

the Management

Board

engiz Mosidze

Chief Financial Ocer

Nailya Ualibekova

Chief Accountant

1. Corporate information

Overview

Kaspi.kz operates the Kaspi.kz Super App, the leading mobile app in Kazakhstan and the gatewa

y to all Kaspi.

kz products and services.

Through the Super App users can access Kaspi.kz’

s Payments, Marketplace and Fintech Platforms.

The app

is designed so that the growth and development of one service contributes to the gr

owth and development of

other services, creating powerful network effects. The popularity of the Super App has helped each platform

achieve market leadership.

Highly relevant digital pr

oducts and services make Kaspi.kz integral t

o the daily lives of both consumers

and merchants in Kazakhstan.

The combination of scale with both consumers and merchants, joined by a

proprietary payments network makes our business model unique.

Our mission is to improv

e people

’

s lives by dev

eloping innovative pr

oducts and services. Going forward we

will maintain a singular focus on development of innovativ

e digital products around r

egular needs of our

consumers and merchants. Our technologically advanced products tr

ansform the way consumers pay

shop and manage their personal nances, help merchants acceler

ate their growth and allow us to mak

e a

signicant contribution to digital transformation in our daily liv

es.

Kaspi.kz Segments

Kaspi.kz is comprised of the following three market leading platforms centered ar

ound our customers’

everyday needs:

•

Payments Platform connects our customers, which consist of both consumers and merchants,

to facilitate cashless, digital tr

ansactions. We offer our cust

omers a proprietary technology

platform to both pay and receiv

e payments for goods and services, as well as to tr

ansfer and

withdraw mone

. Consumers can transact with merchants and amongst themselves using

services including the Kaspi.kz Super App, Kaspi QR Scan to Pay

, Kaspi Gold debit and vir

tual

card, or any bank card. Mer

chants can accept payments from consumers using Kaspi Pay POS

Solutions, Kaspi QR Checkout and Kaspi Bill Payments, amongst a wide suite of other products.

Following our recent acquisition of Portmone Group, we have enter

ed the Ukrainian mark

et and

plan to launch payments services for merchants and consumers.

•

Marketplace Platform connects merchants and consumers enabling merchants t

o increase their

sales and consumers to buy a broad selection of products and services off

ered by a variety of

merchants. We help mer

chants increase their sales by linking them t

o our technology

, Payments

Platform, Buy Now Pay Later consumer nance products, mark

eting and Kaspi Smar

t Logistics.

Fullment options include in-stor

e pick up, delivery by merchants, Kaspi Postomate and deliv

ery

Kaspi.kz Joint Stock Company

Consolidated Statements of Cash Flows

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statements

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

The notes on pages 105-165 form an integral part of these consolidated nancial statements.

104

105

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

•

In 2020 we launched Kaspi T

rav

el, initially offering domestic and international ight tickets

through our Super App and in 2021 added domestic r

ail bookings in line with our plan to buildout

a full online tra

vel proposition.

In Azerbaijan, we operate a mark

etplace platform encompassing the country’

s leading real

estate, new and used cars, new and used goods mobile classied apps.

•

Fintech Platform enables customers to manage their personal nances online and access

consumer nance and deposit products primarily through the Kaspi.kz Super App. Our Buy Now

Pay Later consumer nance products ar

e also strategically integr

ated around the product and

merchant selection on our Marketplace Platform.

This allows customers to

shop and access

nancing seamlessly and then pay over time in affor

dable monthly installments. In 2020 we

broadened our Fintech proposition t

o include working capital and micro nance products for

merchants and these new products ar

e scaled rapidly in 2021.

Information about the group of companies

Kaspi.kz Joint Stock Company (“the Company”) was incorporated in the Republic of Kazakhstan in 2008.

The

Company is regulated by the National Bank of the Republic of Kazakhstan (“NBRK”) and the Agency of the

Republic of Kazakhstan for Regulation and Development of Financial Market (“the FMRD

”). The registered

address of the Company is 154A, Nauryzbai Batyr street, Almaty

, 050013, the Republic of Kazakhstan. During

2020 and 2021 changes in the Group structure were as follows:

In August 2020, Kaspi Pay LL

C, a separate legal entity fully owned by Kaspi.kz, was established. Kaspi Pay

incorporates

our Pa

yments Platform technology and benets from greater exibility t

o offer innovativ

payment products to cust

omers including Kaspi.kz, third-party online and oine merchants and nancial

institutions, as well as pursuing M&A, joint ventures and str

ategic par

tnerships in Kazakhstan and across the

CIS region.

In June 2020, the Bank entered into a pr

eliminary agreement to sell its subsidiary IC“Basel”JSC to an

unrelated third party

. As at 31 December 2020, assets of the subsidiar

y IC“Basel” JSC include nancial

assets measured at fair value through other compr

ehensive income, were KZT

7,407 million, proper

equipment and intangible assets, were KZT

743 million and other assets of KZT 478 million. Liabilities

included insurance r

eserves of KZT 2,944 million and other liabilities of KZT

94 million.

As at 31 December 2020, assets and liabilities of IC “Basel” JSC were classied as assets held for sale and

liabilities associated with assets classied as held for sale in accordance with IFRS5 in these consolidated

nancial statements. On 26 January 2021, the sale was completed. As a result, no gain/loss was recognised

by the Bank as net assets approximated the fair v

alue of consideration r

eceived. IC “Basel” JSC was part of

the Group’

s Fintech segment.

On 8 October 2021, the Company acquired 100% of Portmone Group. This tr

ansaction was accounted as an

asset acquisition as the Group didn

’t acquire any substantive processes or activities that would constitute

a “business”. Substantially all of the consideration paid has been allocated to the cost of intangible assets

acquired, which is mainly repr

esented by its customer base and software.

In October 2021, the Group enter

ed into an agreement t

o acquire 100% of JSC BT

A Bank Ukraine fr

om an

unrelated third party

. As at the date of approval of these consolidated nancial statements, completion of the

acquisition is expected in the 1

half 2022 and is subject to receipt of the requir

ed regulat

ory approvals.

Kaspi.kz Joint Stock Company is the parent of the following dir

ectly and indirectly held subsidiaries:

Subsidiary

ype of operation

Country of operation

Ownership

as at

31 December 2021

Ownership

as at

31 December 2020

Kaspi Pay LL

Payment processing

services

Kazakhstan

Directly (100%)

Dir

ectly (100%)

Kaspi Magazin LL

E-commerce

Kazakhstan

Directly (100%)

Kaspi T

rav

el LLC

Online tr

avel

Kazakhstan

Directly (100%)

Kaspi Bank JSC

Banking

Kazakhstan

Indirectly (98

95%)

Indirectly (98

95%)

ARK Balance LL

Distressed asset

management

Kazakhstan

Indirectly

(100%)

Indirectly (98.95%)

Kaspi Oce LL

Real estate

Kazakhstan

Directly (100%)

Kaspi Group JSC

Holding Company

Kazakhstan

Directly (100%)

IC Basel JSC

Insur

ance

Kazakhstan

Indirectly (98.95%)

OOO Digital Classieds

E-commer

Azerbaijan

Indirectly (100%)

Directly (100%)

Portmone Group

Payment processing

services

Ukraine

Indirectly (100%)

The shareholders’ structure was as follows:

31 December

2021

31 December

2020

Ultimate shareholders:

Baring Vost

ok Funds

28.71

31.

Kim Vyacheslav

24.13

24.

Mikheil Lomtadze

23.30

22.92

Public Investors

21.01

Management

2.85

2.66

otal

100.00

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statements (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statements (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

106

107

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Operating envir

onment

Emerging mark

ets such as

Kazakhstan are

subject to

differ

ent risks than

more de

veloped mark

ets,

including economic, political

and social, legal

and legislative

risks. Laws and

regulations aff

ecting

businesses in Kazakhstan

continue to

change r

apidly

, tax and

regulatory fr

ameworks are subject to

varying interpretations.

The future economic dir

ection of

Kazakhstan is hea

vily inuenced by

the scal

and monetary policies adopted

by the

government, t

ogether with

developments in

the legal, r

egulatory

and political envir

onment. Because Kazakhstan

produces and

exports large volumes

of oil and

gas, its

economy is particularly sensitive t

o the price

of oil

and gas on

the world mark

et.

o address spikes in COVID-19 cases in Kazakhstan, the Gov

ernment continues to vary restrictions

on oine activity

. As the business of the Group is concentrated on online services, there has been

no material impact from the COVID-19 pandemic on oper

ating activities of the Group and its

nancial statements in 2021.

The Management’

s analysis of the Group’

s liquidity and capital position as at 31 December 2021,

demonstrates that the Gr

oup has sucient liquidity buffer and will continue to comply with

regulatory requir

ements, including liquidity risk and capital adequacy ratios, for the foreseeable

future.

The Group has reected the most r

ecent macroeconomic outlooks, as well as actual

customers’ loan repayment statistics in its ECL estimates.

These consolidated nancial statements were approv

ed by the Chairman of the Management Board,

the Chief Financial Ocer and the Chief Accountant on 25 February 2022 and will be provided to

the shareholders for appro

val at the annual general meeting of shar

eholders in accordance with the

requirements of the legislation of the Republic of Kazakhstan.

2. Basis of presentation

Foreign curr

ency translation

For the purpose of the consolidated nancial statements, the results and nancial position of each

group company are expr

essed in Kazakhstani tenge which is the functional currency of the Group,

and the presentation currency for the consolidated nancial statements.

The individual nancial statements of each group company are presented in the curr

ency of the

primary economic environment in which it operates (its functional currency). In

eparing the

nancial statements of each individual entity

, monetary assets and liabilities denominated in

currencies other than the entity’

s functional currency (foreign currencies) are tr

anslated at the

appropriate spot r

ates or exchange r

ates prevailing at the r

eporting date. T

ansactions in foreign

currencies are initially recor

ded at their spot rates at the date of the tr

ansaction.

Non-monetary items that are measured in terms of historical cost in a foreign curr

ency are

translated using the ex

change rates at the dates of the initial tr

ansactions. Non-monetar

y items

measured at fair value in a foreign curr

ency are tr

anslated using the exchange r

ates at the date

when the fair value is determined.

Rates of exchange

The exchange r

ates at the period-end used by the Group in the prepar

ation of the consolidated

nancial statements are as follows:

31 December 2021

31 December 2020

KZT/USD

431.8

420.91

KZT/EUR

489.1

516.79

Going concern

These consolidated nancial statements have been prepar

ed on the assumption that the Group is a

going concern, as the Group has the resources t

o continue in operation for the for

eseeable future. In

making this assessment, the management have considered a wide r

ange of information in relation

to present and futur

e economic conditions, including projections of cash ows, prot and capital

resources.

3. Signicant accounting policies

Basis of accounting

These consolidated nancial statements have been prepar

ed in accordance with International

Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

The Group and its subsidiaries maintain their accounting records in accor

dance with IFRS. The

consolidated nancial statements have been prepar

ed on the historical cost basis, except for the

revaluation of certain properties and nancial instruments that are measured at revalued amounts

or fair values at the end of each reporting period, as explained in the accounting policies below

. The

Group presents its statement of nancial position in order of liquidity

Offsetting

Financial assets and nancial liabilities are offset and the net amount reported in the consolidated

statement of nancial position only when there is a legally enforceable right to offset the r

ecognised

amounts and there is an intention to settle on a net basis, or to r

ealise the assets and settle the

liability simultaneously

. Income and expense is not offset in the consolidated statement of prot or

loss unless required or permitted by any accounting standar

d or interpretation, and as specically

disclosed in the accounting policies of the Group.

The principal accounting policies adopted are set out below

108

109

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Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Basis of consolidation

The consolidated nancial statements incorporate the nancial statements of the Kaspi.kz Joint Stock

Company (“the Company”) and entities controlled by the Company (its subsidiaries). Control is achieved

when the Company has power over the investee; is exposed, or has rights, t

o variable returns from its

involvement with the investee; and has the ability t

o use its power to affect its r

eturns.

The Company reassesses whether or not it controls an investee if facts and cir

cumstances indicate that

there are changes t

o one or more of the three elements of contr

ol listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the

investee when the voting rights are sucient t

o give it the pr

actical ability to direct the r

elevant activities

of the investee unilaterally

. The Company considers all relev

ant facts and circumstances in assessing

whether or not the Company’

s voting rights in an investee are sucient to give it power

. Consolidation of a

subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company

loses control of the subsidiary

Non-controlling interests

Non-controlling interests repr

esent the portion of prot or loss and net assets of subsidiaries not

owned, directly or indirectly

, by the Company

. Non-controlling interests are presented separ

ately in the

consolidated statement of prot or loss and within equity in the consolidated statement of nancial

position, separately fr

om parent shareholders’ equity

Leases

The Group as lessee

The Group as lessee recognises a right-of-use asset and a corresponding liability t

o pay future r

entals on

the consolidated statement of nancial position. The asset will be amortised over the shorter of the length

of the lease and the useful economic life, subject to r

eview for impairment, and the liability is measured at

the present value of future lease pa

yments discounted at the applicable incremental borrowing r

ate.

The Group recognises lease pa

yments for shor

t-term leases or leases in which the base asset has a low

value as an expense during the lease period. In a long-term lease, assets are recognised at the lease start

date as right-of-use and a lease liability

A right-of-use asset is recognised in accounting at initial value – the initial measurement of lease liabilities

and lease payments as at the lease start date or before that date less lease facilitating payments received

and any initial direct lease costs.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash balances with NBRK, rev

erse repurchase

agreements and unrestricted balances on correspondent accounts and deposits with other banks with

original maturities within three months and are free fr

om contractual encumbr

ances. Cash and cash

equivalents are measur

ed at amor

tised cost.

Mandatory cash balances with NBRK

Mandatory cash balances with NBRK represent funds in correspondent accounts with the NBRK and

cash which are not available t

o nance the Group

’

s day to day oper

ations and, hence, are not considered

as part of cash and cash equivalents for the purpose of the consolidated statement of cash ows.

Due from banks

In the normal course of business, the Group maintains advances and deposits for various periods of time

with other banks. Due from banks initially are recognised at fair v

alue. Due from banks are subsequently

measured at amortised cost using the effective interest method, and are carried net of allowance for

impairment losses.

Property

, equipment and intangible assets

Property

, equipment and intangible assets, except land and buildings, are carried at historical cost

less accumulated depreciation and recognised impairment loss, if any

. Depreciation on assets under

construction and those not placed in service commences from the date the assets are ready for their

intended use.

Depreciation of property

, equipment and amor

tisation of intangible assets is charged on the carrying

value of property

, equipment and intangible assets and is designed to write off assets over their useful

economic lives. Depreciation has been calculated on a str

aight-line basis at 2% per annum for buildings

and construction and 10%-33.3% for furniture and computers and intangible assets.

Leasehold improvements ar

e amortised over the shor

ter of the life of the related leased asset or

the lease term. Expenses related to r

epairs and renewals are char

ged when incurred and included in

operating expenses in the consolidated statement of pr

ot or loss, unless they qualify for capitalization.

Buildings and constructions held for use in the supply of services, or for administrative purposes, are

stated in the consolidated statement of nancial position at their revalued amounts, being the fair value

at the date of revaluation dened on the basis of mark

et data by qualied independent appr

aisers,

less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Revaluations are performed with sucient regularity such that the carrying amounts do not differ

materially from those that would be determined using fair values at the end of the reporting period.

110

111

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Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Any revaluation incr

ease arising on the revaluation of pr

operty is recognised and accumulated in equity

except to the extent that it r

everses a re

valuation decrease for the same asset pre

viously recognised in prot

or loss, in which case the increase is credited to the consolidated pr

ot or loss to the extent of the decrease

previously expensed. A decrease in the carrying amount arising on the re

valuation of such land and buildings is

recognised in the consolidated prot or loss to the extent that it ex

ceeds the balance, if any

, held in the property

revaluation r

eserve relating to a pr

evious rev

aluation of that asset.

Depreciation on rev

alued buildings is recognised in prot or loss. Depr

eciation of property revaluation reserve is

transf

erred from pr

operty revaluation reserve to retained earnings on an annual basis. On the subsequent sale

or retirement of a r

evalued property

, the attributable revaluation surplus remaining in the property revaluation

reserve is transf

erred directly to retained earnings.

An item of property

, plant and equipment is derecognised upon disposal or when no future economic benets

are expected to arise fr

om the continued use of the asset. The gain or loss arising on the disposal or retir

ement

of an asset is determined as the difference between the sales pr

oceeds and the carrying amount of the asset

and is recognised in prot or loss.

Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property

under construction for such purposes). Investment properties are measured initially at cost, including

transaction costs. Subsequent t

o initial recognition, investment property is carried at historical cost net of

accumulated depreciation and recognised impairment loss. Depr

eciation is calculated on a straight-line basis

over the useful life of the assets.

The expenses associated with the registr

ation of ownership, maintenance and valuation of investment property

are included in the cost of sales.

The depreciation expense and payment of tax

es associated with ownership of investment property are

included in general and administr

ative expenses. Investment proper

ty is disclosed within other

non-nancial assets in the consolidated nancial statements

(Note 14).

Non-current assets held for sale

Non-current assets and disposal groups are classied asheld for sale if their carrying amount will be reco

vered

principally through asale tr

ansaction rather than thr

ough continuing use. This condition is regar

ded asmet

only when theasset (or disposal group) is available for immediate sale in its pr

esent condition subject only

to terms that are usual and cust

omary for sales of such asset (or disposal group) and its sale is highly

probable. Management must be committed to thesale, which should be expected t

o qualify for recognition

asacompleted sale within one year from thedate of classication.

When theGroup is committed to asale plan involving loss of contr

ol of asubsidiary

, all oftheassets

and liabilities of that subsidiary are classied asheld for sale when thecriteria described above are met,

regardless of whether theGr

oup will retain anon-controlling interest in its former subsidiary after thesale.

Impairment of non-nancial assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible

assets to determine whether there is any indication that those assets hav

e suffered an impairment loss.

If any such indication exists, the recover

able amount of the asset is estimated in order to determine the

extent of the impairment loss (if any). Where it is not possible to estimate the reco

ver

able amount of an

individual asset, the Group estimates the recov

erable amount of the cash-gener

ating unit to which the asset

belongs. Where a reasonable and consistent basis of allocation can be identied, corpor

ate assets are also

allocated to individual cash-gener

ating units, or otherwise they are allocated to the smallest group of cash-

generating units for which a r

easonable and consistent allocation basis can be identied.

axation

Income tax expense represents the sum of the tax currently pa

yable and deferr

ed tax.

Current tax

The tax currently payable is based on taxable pr

ot for the year

. T

axable prot differs from net pr

ot as

reported in the consolidated statement of prot or loss because it excludes items of income or expense

that are taxable or deductible in other years and it further excludes items that are never taxable or

deductible. The Gr

oup’

s liability for current tax is calculated using tax rates that have been enacted or

substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is r

ecognised on temporary differ

ences between the carrying amounts of assets and

liabilities in the consolidated statements of nancial position and the corresponding tax bases used in the

computation of taxable prot. Deferr

ed tax liabilities are gener

ally recognised for all taxable tempor

ary

differences and def

erred tax assets are gener

ally recognised for all deductible temporary differences t

the extent that it is probable that taxable prots will be av

ailable against which those deductible temporary

differences can be utiliz

ed. Such deferred tax assets and liabilities ar

e not recognised if the tempor

ary

difference arises fr

om the initial recognition of other assets and liabilities in a tr

ansaction that affects

neither the taxable prot nor the accounting prot.

Deferred tax liabilities ar

e recognised for taxable tempor

ary differences associated with investments in

subsidiaries, except where the Gr

oup is able to control the re

versal of the tempor

ary difference and it is

probable that the tempor

ary difference will not re

verse in the foreseeable future. Def

erred tax assets arising

from deductible tempor

ary differences associated with such investments and interests ar

e only recognised

to the extent that it is probable that ther

e will be sucient taxable prots against which to utilize the

benets of the temporary differ

ences and they are expected t

o reverse in the for

eseeable future.

112

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Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

The carrying amount of deferred tax assets is reviewed at each r

eporting date and reduced to the extent

that it is no longer probable that sucient taxable prots will be av

ailable to allow all or part of the asset to

be recover

ed.

Deferred tax assets and liabilities ar

e measured at the tax r

ates that are expected to apply in the period

in which the liability is settled or the asset is realized, based on tax r

ates (and tax laws) that have been

enacted or substantively enacted by the end of the reporting period. The measurement of def

erred tax

liabilities and assets reects the tax consequences that would follow from the manner in which the Group

expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and

liabilities.

Deferred income tax assets and def

erred income tax liabilities are offset and r

eported net on the

consolidated statement of nancial position if:

•

The Group has a legally enforceable right t

o set off current income tax assets against current income

tax liabilities; and

•

Deferred income tax assets and the def

erred income tax liabilities relate t

o income taxes levied by

the same taxation authority on the same taxable entity

Current and deferr

ed tax are recognised in pr

ot or loss, except when they relate t

o items that are

recognised in other comprehensive income or dir

ectly in equity

, in which case, the current and deferred tax

are also recognised in other compr

ehensive income or directly in equity respectiv

ely

The Group recor

ds a provision for uncertain tax positions if it is probable that the Group will have t

o make

a payment to tax authorities upon their examination of a tax position.

This provision is measured at the

Group’

s best estimate of the amount expected to be paid. Provisions are r

eversed t

o income in provision for

(recovery of) income taxes in the period in which management determines they ar

e no longer required or as

determined by statute.

Operating tax

The Republic of Kazakhstan also has various other taxes, which are assessed on the Gr

oup’

s activities.

These taxes are included as a component of oper

ating expenses in the consolidated statement of prot or

loss.

Provisions

Provisions are r

ecognised when the Group has a present legal or constructiv

e obligation as a result of past

events, it is probable that the Gr

oup will be required t

o settle the obligation and a reliable estimate can be

made of the obligation.

The amount recognised as a provision is the best estimate of the consider

ation required to settle the

present obligation at the end of the reporting period, taking into account the risks and uncer

tainties

surrounding the obligation. When a provision is measur

ed using the cash ows estimated to settle the

present obligation, its carrying amount is the present value of those cash ows (where the eff

ect of the

time value of money is material).

When some or all of the economic benets required t

o settle a provision are expected t

o be

recover

ed from a third party

, a receivable is recognised as an asset if it is virtually cer

tain that

reimbursement will be received and the amount of the r

eceivable can be measured r

eliably

. The

expense relating to a pr

ovision is presented in the consolidated statement of prot or loss net of any

reimbursement.

Share-based compensation

Equity-settled share-based pa

yments (“

share options”) are measured at the fair value of the equity

instruments at the grant date.

The fair value excludes the effect of non-market-based vesting

conditions.

The fair value determined at the gr

ant date of the equity-settled share-based payments is expensed

on a straightline basis ov

er the vesting period, based on the Group

’

s estimate of the number of

equity instruments that will eventually vest. At each r

eporting date, the Group revises its estimate

of the number of equity instruments expected to vest as a result of the eff

ect of non-market-based

vesting conditions. The impact of the r

evision of the original estimates, if any

, is recognised in

prot or loss such that the cumulative expense reects the r

evised estimate, with a corresponding

adjustment to reserves.

For cash-settled share-based pa

yments (“phantom shar

es”), a liability is recognised for services

acquired, measured initially at the fair value of the liability

. At each reporting date until the liability is

settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in

fair value recognised in prot or loss for the y

ear

Contingencies

Contingent liabilities are not recognised in the consolidated statement of the nancial position but

are disclosed unless the possibility of any outow in settlement is remote. A contingent asset is

not recognised in the consolidated statement of nancial position but disclosed when an inow of

economic benets is probable.

Financial instruments

The Group recognises nancial assets and liabilities on its consolidated statement of nancial

position when it becomes a par

ty to the contr

actual obligation of the instrument. Regular way

purchases and sales of nancial assets and liabilities are recognised using settlement date

accounting.

Financial assets and nancial liabilities are initially measured at fair value.

ansaction costs that are

directly attributable to the acquisition or issue of nancial assets and nancial liabilities (other than

nancial assets and nancial liabilities at fair value through prot or loss) ar

e added to or deducted

from the fair value of the nancial assets or nancial liabilities, as appropriate, on initial r

ecognition.

ransaction costs directly attributable to the acquisition of nancial assets or nancial liabilities at

fair value through pr

ot or loss are recognised immediately in prot or loss.

114

115

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Financial assets

All recognised nancial assets that are within the scope of IFRS 9 are r

equired t

o be measured

subsequently at amor

tised cost or fair value on the basis of the entity’

s business model for managing the

nancial assets and the contractual cash ow char

acteristics of the nancial assets.

Under IFRS 9, all debt nancial assets that do not meet a “

solely payment of principal and interest” (“SPPI”)

criterion, are classied at initial recognition as fair value thr

ough prot or loss (“FVTPL

”). Under this criterion,

debt instruments that do not correspond to a “basic lending arr

angement”, are measured at FVTPL. F

debt nancial assets that meet the SPPI criterion, classication at initial recognition is determined based on

the business model under which these instruments are managed:

•

Financial assets, other than equity investments, that are managed on a “hold to collect” basis ar

measured at amortised cost;

•

Financial assets, other than equity investments, that are managed on a “hold to collect and for sale

”

basis are measured at fair value thr

ough other comprehensive income (“FVT

OCI”);

•

Financial assets, including equity investments, that are managed on another basis, including tr

ading

nancial assets, will be measured at FVTPL.

Equity nancial assets are r

equired to be classied at initial recognition as FVTPL unless an irr

evocable

designation is made to classify an instrument as FVTOCI. F

or equity investments classied as FVTOCI,

all realised and unrealised gains and losses, ex

cept for dividend income, are recognised in other

comprehensive income with no subsequent reclassication t

o prot or loss.

Financial assets, other than equity investments, that are measured subsequently at amortised cost or at

FVTOCI are subject t

o impairment.

After initial measurement, amortised cost nancial assets are measured using the effective interest r

ate

method, less any impairment losses. The fair value of FVTPL and FVT

OCI nancial assets is determined

under IFRS 13,

Fair V

alue Measurement

(“IFRS 13”). The fair value gains or losses for FVTPL are r

ecognised

in the statement of prot or loss and for FVTOCI ar

e recognised in the other comprehensive income, until

these instruments are disposed.

Equity investments that do not hav

e a quoted market price in an active market and whose fair v

alue

cannot be reliably measured ar

e measured at cost less any identied impairment losses at the end of each

reporting period. These instruments are accounted for at fair value under IFRS 9.

TheGroup has designated

these investments as equity instruments atFVTOCI astheGr

oup plans to hold them in thelong term for

strategic r

easons.

The Group enters into a variety of deriv

ative nancial instruments to manage its exposure t

o interest r

ate

and foreign exchange r

ate risk, including foreign exchange forward contracts, interest r

ate swaps and cross

currency swaps. All derivative nancial instruments ar

e classied as held for trading and measur

ed at fair

value through pr

ot or loss and not designated for hedge accounting.

Expected credit loss (“ECL

”) measur

ement – denitions

ECL is a probability-weighted measurement of the pr

esent value of future cash shortfalls

(i.e., the weighted aver

age of credit losses, with the respectiv

e risks of default occurring in a given

time period used as weights). An ECL measurement is unbiased and should be determined by

evaluating a r

ange of possible outcomes.

An ECL measurement is based on four components used by the Group:

•

Exposure at Default (“EAD”) – an estimate of exposure at a future default date, taking int

account expected changes in exposure after the reporting date, including repayments of

principal and interest, and expected dr

awdowns on committed facilities.

•

Probability of Default (“PD”) – an estimate of the likelihood of default t

o occur over a given

time period.

•

Loss Given Default (“L

GD”) – an estimate of a loss arising on default. It is based on the

difference between contr

actual cash ows due and those that the lender would expect to

receive, including from any collater

al. It usually expressed as a percentage of EAD

•

Discount Rate – a tool to discount an expected loss from the pr

esent value at the reporting

date. The discount r

ate represents the effective interest r

ate (“EIR”) for the nancial

instrument or an approximation thereof.

Default and credit-impaired assets

The nancial asset is considered to be in default, or credit impair

ed, when it meets one or more of

the following criteria:

For individually signicant loans (except interbank exposures):

•

The borrower is more than 60 days past due on its contr

actual payments (regulatory

denition of default for individually signicant loans);

•

Signicant deterioration of the borr

ower’

s operating results;

•

The bank has sold the borrower’

s debt with losses;

•

The loan had experienced a forced restructuring due t

o deterioration in the borr

ower’

creditworthiness;

•

The misuse of borrowed funds;

•

The borrower is deceased (retail loans);

•

The borrower is insolvent (bankruptcy) for corpor

ate customers;

•

The borrower’

s debt was par

tially or fully written off due to a signicant increase in credit risk.

For homogeneous loans:

•

The borrower is more than 90 days past due on its contr

actual payments;

•

The bank has sold the borrower’

s debt with losses;

•

The loan had experienced a forced restructuring due t

o a deterioration in borr

ower

creditworthiness;

•

The borrower is deceased (retail loans);

•

The borrower’

s debt was par

tially or fully written off due to a signicant increase in credit risk.

116

117

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

For other nancial assets, debt securities and due from banks:

•

The counterpar

ty or issuer rated at C or less;

•

The counterpar

ty or issuer is more than 30 days past due;

•

The counterpar

ty or issuer has signicant deterioration of oper

ating results.

Signicant increase in credit risk (“SICR”)

The SICR assessment is performed on an individual basis and on a por

tfolio basis. SICR for individually

signicant loans is assessed on an individual basis by monitoring the triggers stated below

. The criteria

used to identify a SICR are monit

ored and reviewed periodically for appr

opriateness by the Group

’

s risk

department.

The Group considers a nancial instrument to hav

e experienced a SICR when one or more of the following

quantitative, qualitative or subsidiary criteria have been met:

For individually signicant loans:

•

Increase in lifetime pr

obability of default over dened thresholds;

•

The number of days past due is higher than 30 days but lower than 60;

•

The increase in credit risk, expressed in the r

elative threshold based on internal r

atings is signicant.

SICR is determined based on the comparison date and credit risk r

ating as of the reporting date for

each nancial asset individually

For homogeneous loans:

•

Increase in lifetime pr

obability of default over dened thresholds;

•

The number of days past due is more than 30 but less than 90;

•

External factors affect the solv

ency of individual groups of individuals (such as natural disasters,

closure of the city-forming enterprise in the region, etc.).

For other nancial assets, debt securities and due from banks:

•

Deterioration of the counterparty’

s or issuer

’

s rating by 4 notches;

•

Deterioration of the counterparty’

s or issuer

’

s rating up to CCC+;

•

Deterioration of oper

ating results of the counterpar

ty or issuer

ECL measurement – description of estimation techniques

General principle

For nancial assets that are not pur

chased or originated credit impaired (“POCI”) assets ECLs are gener

ally

measured based on the risk of default over one of two diff

erent time periods, depending on whether the

borrower’

s credit risk has increased signicantly in a three-stage model for ECL measur

ement:

Stage 1: a group of nancial instruments for which no signicant increase in the credit risk le

vel has been

recorded since initial r

ecognition and provisions for this group ar

e created as 12-month ECL, and interest

income is calculated based on the gross carrying amount of the nancial asset.

Stage 2: a group of nancial instruments for which a signicant increase in the credit risk le

vel has

been recorded since the initial r

ecognition and provisions for which equal ECL for the instrument’

lifetime, and interest income is calculated based on the gr

oss carrying amount of the nancial asset.

Stage 3: a group of credit-impair

ed nancial instruments, for which provisions equal the ECL amount

for the instrument’

s lifetime, and interest income is accrued based on the carrying amount of the

asset, net of the loss allowance.

ECL for POCI nancial assets is always measured on a lifetime basis (Stage 3), and at the r

eporting

date, the Group only recognises the cumulative changes in lif

etime expected credit losses since

initial recognition.

The Group performs individual assessments for credit-impaired loans.

The Group performs assessments on a por

tfolio basis for retail loans and loans issued to small and

medium entities (“SMEs”). This appr

oach incorporates aggr

egating the por

tfolio into homogeneous

segments based on borrower-specic information, such as delinquency

, historical data on losses

and forward-looking macroeconomic information.

Macroeconomic overla

y and macroeconomic scenarios

The Group incorpor

ates forward looking information in its impairment calculations via

macroeconomic models, which leads to a dir

ect adjustment of default probabilities. Since the Group

cannot predict the future realisation of these macr

oeconomic parameters, it uses thr

ee scenarios - a

base scenario, an optimistic scenario and a pessimistic scenario. The latter two scenarios are link

to a weight of 12% and 23%.

The base scenario has an attached weight of 65% in the calculation.

For each scenario a set of values for the rele

vant macroeconomic v

ariables is used as an input for

the macroeconomic model, which subsequently is applied to adjust the rele

vant input par

ameter

The List of Macro-Economic Indicat

ors

•

Real GDP growth;

•

Unemployment.

ECL measurement – description of estimation techniques

Principles of individual assessment – ECL assessments on an individual basis are done by

weighting the estimates of credit losses for differ

ent possible outcomes against the probabilities of

each outcome. The Gr

oup denes three possible outcomes for each loan.

Principles of por

tfolio assessments – to assess the staging of exposure and to measur

e a loss

allowance on a collective basis, the Group combines its exposures int

o segments on the basis of

shared credit risk char

acteristics, so that exposure to risk within a group are homogeneous.

Examples of shared char

acteristics include product type and the amount of debt.

118

119

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

wo types of PDs are used to calculate ECLs: 12- month and lif

etime PD:

•

12-month PDs – the estimated probability of a default occurring within the next 12 months (or

over the remaining lif

e of a nancial instrument if less than 12 months). This par

ameter is used to

calculate 12-month ECLs. An assessment of a 12-month PD is based on the latest available historical

default data and adjusted for forward-looking information;

•

Lifetime PDs – the estimated probability of a default occurring ov

er the remaining life of a nancial

instrument. This par

ameter is used to calculate lif

etime ECLs. An assessment of a lifetime PD is

based on the latest available historic default data and adjusted for forward looking information.

o calculate Lifetime PD

, the Group uses different statistical approaches depending on the segment and

product type, such as the extr

apolation of 12-month PDs based on migration matrixes, de

veloping lifetime

PD curves based on the historical default data, hazard r

ate approach or other

GD represents the Gr

oup’

s expectation of the extent of loss on a defaulted exposure and assessed on a

collective basis based on the latest available r

ecovery statistics.

For unsecured loans Gr

oup calculates L

GD based on historical NPL collection statistics. For loans secur

by cars, real estate, cash and liquid securities, the Group calculates L

GD based on specic collateral

characteristics, such as pr

ojected collateral values, hist

orical sales discounts and other factors.

Modication of loans to customers

The Group modies loans to cust

omers in temporary nancial diculty in order to allow a borr

ower to

recover solv

ency

. Modication of loans is provided in the form of short-term revision of loan terms and may

include the reduction of interest r

ate, reduction of monthly payment amount, extension of the loan term, or

a combination of these measures that do not lead to der

ecognition of the nancial asset. After the recovery

period, ordinary contractual terms ar

e to be applied.

The recovery period is agreed in the modication

terms, but in most cases is set for 6 months.

Modication of loan is provided only once and to the borr

owers with over

due less than

90 days on a modication date, where sucient grounds exist t

o support its recoverability

During the recovery period, such modied loans are classied t

o Stage 3, with corresponding increase in

loss allowance. After the recovery period, such modied loans are allocated t

o the relev

ant impairment

category

, based on its days past due and impairment methodology

.

Write off of loans to cust

omers

Loans are written off against the allowance for impairment losses. Decision to write off is taken b

the Credit Committee and for loans at over

due more than one year

. However write off of loans does

not indicate that no other actions will be under

taken to collect the loans. Subsequent reco

veries of

amounts previously written off are r

eected as an offset to the charge for impairment of nancial

assets in the consolidated statement of prot or loss in the period of recov

ery

Derecognition of nancial assets

The Group derecognises a nancial asset only when the contr

actual rights to the cash ows from

the asset expire, or when it tr

ansfers the nancial asset and substantially all the risks and rewards

of ownership of the asset to another entity

. If the Group neither transf

ers nor retains substantially

all the risks and rewards of ownership and continues to contr

ol the transf

erred asset, the Gr

oup

recognises its retained inter

est in the asset and an associated liability for amounts it may have

to pay

. If the Group retains substantially all the risks and rewards of ownership of a tr

ansferred

nancial asset, the Group continues to recognise the nancial asset and also r

ecognise a

collateraliz

ed borrowing for the proceeds r

eceived.

On derecognition of a nancial asset in its entirety

, the difference between the asset’

s carrying

amount and the sum of the consideration r

eceived and the cumulative gain or loss that had been

recognised in other comprehensive income and accumulated in equity is r

ecognised in prot or loss.

On derecognition of a nancial asset other than in its entirety (e.g. when the Group r

etains an option

to repur

chase par

t of the transf

erred asset or retains a r

esidual interest that does not result in the

retention of substantially all the risks and rewards of ownership and the Gr

oup retains control), the

Group allocates the previous carrying amount of the nancial asset between the part it continues

to recognise under continuing involv

ement, and the part it no longer recognises on the basis of the

relative fair values of those parts on the date of the transf

The difference between the carrying amount allocated to the part that is no longer recognised and

the sum of the consideration r

eceived for the part no longer recognised and any cumulative gain

or loss allocated to it that had been recognised in other comprehensiv

e income is recognised in

prot or loss. A cumulative gain or loss that had been recognised in other compr

ehensive income is

allocated between the part that continues to be recognised and the par

t that is no longer recognised

on the basis of the relative fair values of those parts.

Financial liabilities

Financial liabilities, such as due to banks, customer accounts, debt securities issued, subordinated

debt and other nancial liabilities are initially recognised at fair value. Subsequently amounts due ar

stated at amortised cost and any difference between carrying and redemption value is recognised

in the consolidated statement of prot or loss over the period of the borr

owings using the effective

interest method as a component of interest expense.

120

121

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Derecognition of nancial liabilities

The Group derecognises nancial liabilities when, and only when, the Gr

oup’

s obligations are discharged,

cancelled, or expired. Where an existing nancial liability is replaced b

y another from the same lender

on substantially different terms, or the terms of an existing liability are substantially modied, such an

exchange or modication is treated as a de-r

ecognition of the original liability and the recognition of a

new liability

, and the difference between the carrying amount of the nancial liability derecognised and the

consideration paid and pa

yable is recognised in the consolidated statement of prot or loss.

Recognition of income and expense

Interest income from a nancial asset is recognised when it is pr

obable that the economic benets will

ow to the Group and the amount of income can be measured r

eliably

. Interest income and expense are

recognised on an accrual basis using the effective inter

est method.

The effective interest method is a

method of calculating the amor

tised cost of a nancial asset or a nancial liability (or group of nancial

assets or nancial liabilities) and of allocating the interest income or interest expense ov

er the relevant

period.

The effective inter

est rate is the r

ate that exactly discounts estimated future cash payments or receipts

(including all fees paid or receiv

ed that form an integral part of the effective interest r

ate, transaction

costs and other premiums or discounts) through the expected lif

e of the nancial instrument or

, (where

appropriate) a shorter period to the gross carrying amount.

Interest earned on assets at fair value is classied within interest income.

Fees and commissions that are included in the eff

ective interest r

ate are r

ecognised in accordance with

IFRS 9, all other fees and commissions are accounted for in accor

dance with IFRS 15.

Revenue recognition

The Group recognised r

evenue from the following major sour

ces:

Fees & commissions rev

enue mainly includes banking service fees and commissions. Banking service fees

and commissions are recognised ov

er a period in which the related service is provided, typically monthly

and include the following services of Kaspi.kz, such as access

to wide network of Kaspi A

TMs with free

cash withdrawals up t

o certain limits, 24-hour ser

vice line suppor

t, charge-free tr

ansfers between Kaspi

clients’ accounts and bill payments for services via kaspi.kz website and mobile application, SMS and

mobile push notication services.

Seller fees includes fees paid b

y merchants from shopping tr

ansaction originated during both online and in

store shopping.

The Group earns seller fees when transactions are completed on the Mark

etplace Platform

and are gener

ally determined as a percentage based on the value of mer

chandise and services being sold

by merchants. Seller fees ar

e recognised when the services are render

ed, which gener

ally occurs upon

delivery of the related products and services to the customer

The Group earns tr

ansaction and membership revenues when pr

ocessing payments/tr

ansactions

and engaging customers in Kaspi.kz Super App.

This includes transaction f

ees paid by merchants

when the Group enables various payment and pur

chase transactions.

ansaction fees char

ged

to customers for pr

ocessing services such as cash withdrawals over certain limits and P2P (peer

to peer) money tr

ansfers t

o other banks’ cards and worldwide. Such fees ar

e recognised when the

associated service is satised, which normally occurs at the point in time the service is requested by

client and provided by the Gr

oup.

Membership fee re

venue is deferr

ed and recognised over the terms of the applicable memberships,

typically for one year

, on a straight-line basis. Membership fees are paid on a monthly/quarterly

basis or paid up front at the beginning of the applicable membership period by customers and

merchants for accessing various Kaspi.kz services. Generally

memberships are cancellable and

non-refundable.

Rewards are designed t

o change customer behavior and pr

omote daily use of our Super App and

ensure growth in cust

omer engagement across all our platforms. Retail customers of the Group

accumulate bonuses for purchases/transactions made with mer

chants that are also customers of

the Group. Retail customers can then use bonuses earned for future pur

chases/transactions. F

uture

nancial costs due to the bonuses gr

anted are considered paid t

o customers, and according to IFRS

15 “Revenue from contr

acts with customers” these expenses are presented as an adjustment to

revenue.

Change in Revenue Recognition

In the consolidated nancial statements for the year ended 31 December 2021, the Group has

changed the presentation of its engagement-based rewar

ds progr

am Kaspi Bonus.

The management believes that the presentation of r

ewards earned by r

etail customers of the Group

on purchases/tr

ansactions from merchants, as an adjustment to r

evenue mor

e appropriately

reects the requir

ements of IFRS 15 on revenue accounting.

This change in accounting policy has no net income or cash ow impact for the Group.

The following changes have been made to the consolidated nancial statements for the y

ear ended

31 December 2020 to conform to the amended accounting policies in 2021:

For the year

ended

31 December

2020

As previously

reported

Reclassication

amount

For the year

ended

31 December

2020

As reclassied

REVENUE

641,437

(38,568)

602,869

Rewards

(38,568)

NET REVENUE

442,124

(38,568)

403,556

Sales and marketing

(45,759)

38,568

(7,191)

122

123

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Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Share capital and share pr

emium

Contributions to share capital are r

ecognised at cost. Non-cash contributions are not included into the

share capital until realized in cash.

Costs directly attributable to the issue of new shares, other than on a business combination, ar

e deducted

from equity net of any related income tax

es.

reasury shares repurchased from shareholders ar

e recognised at cost of acquisition. When such

repurchased tr

easury shares are further sold, any difference between their selling price and the cost of

acquisition is charged to shar

e capital (if positive) or to retained earnings (if negativ

e). Where repur

chased

treasury shares are r

etired, the carrying value thereof is reduced b

y the amount paid by the Group at

repurchase ther

eof, with the share capital respectively r

educed by the par value of such retir

ed shares

restated, where applicable, for ination, and the resulting diff

erence is char

ged to retained earnings.

Dividends on ordinary shares are r

ecognised in equity as a reduction in the period in which they are

declared. Dividends that are declar

ed after the reporting date are treated as a subsequent event under IAS

10, Events after the Reporting Period (“IAS 10”) and disclosed accordingly

Equity reserves

The reserves recorded in equity (other compr

ehensive income) on the Group

’

s consolidated statement of

nancial position include revaluation r

eserve of nancial assets and other reserves comprise changes in

fair value of nancial assets at fair value through other compr

ehensive income investments and allowance

for impairment losses for debt instruments measured at fair value through other compr

ehensive income,

and foreign currency tr

anslation reserve, which is used to r

ecord exchange diff

erences arising from the

translation of the net investment in for

eign operation.

Retirement and other benet obligations

In accordance with the requir

ements of the Republic of Kazakhstan in which the Group oper

ates, cer

tain

percentages of pension payments are withheld fr

om total disbursements to staff t

o be transf

erred to

pension fund, such that a por

tion of salary expense is withheld from the employee and instead paid to a

pension fund on behalf of the employee.

This expense is charged to the consolidated statement of pr

ot or

loss in the period in which the related salaries are earned. Upon r

etirement, all retirement benet pa

yments

are made by the pension fund.

The Group does not hav

e any pension arrangements separ

ate from the

pension system of the Republic of Kazakhstan. In addition, the Group has no post-retirement benets or

other signicant compensated benets requiring accrual.

Areas of signicant management judgment and sour

ces of estimation uncer

tainty

The prepar

ation of the Group’

s consolidated nancial statements requires management to mak

estimates, judgments and assumptions about the carrying amounts of assets and liabilities that are

not readily apparent fr

om other sources.

The estimates and associated assumptions are based on

historical experience and other factors that ar

e considered to be r

elevant. Actual results ma

y differ

from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Re

visions to

accounting estimates are recognised in the period in which the estimate is re

vised if the revision

affects only that period, or in the period of the revision and futur

e periods if the revision aff

ects both

current and future periods.

Critical judgments in applying accounting policies

The critical judgments, apar

t from those involving estimations (see below), that the Group

management has made in the process of applying the Group

’

s accounting policies and that have

the most signicant effect on the amounts recognised in the consolidated nancial statements.

Signicant judgments have been made in the business model assessment, signicant increase in

credit risk, models and assumptions used which are discussed in Note 3 below

Key sour

ces of estimation uncertainty

The following are the ke

y assumptions concerning the future, and other key sour

ces of estimation

uncer

tainty at the end of the reporting period, that have a signicant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next nancial year

Assessment of signicant increase of cr

edit risk

As explained in Note 3, ECL are measured as an allowance equal t

o 12-month ECL for stage 1

assets, or lifetime ECL assets for stage 2 or stage 3 assets. An asset moves t

o stage 2 when

its credit risk has increased signicantly since initial recognition. IFRS 9 does not dene what

constitutes a signicant increase in credit risk. In assessing whether the credit risk of an asset has

signicantly increased the Group tak

es into account qualitative and quantitative r

easonable and

suppor

table forward looking information.

Incorporation of forward looking information

When measuring ECL the Group uses reasonable and supportable forward looking information,

which is based on assumptions for the future movement of diff

erent economic drivers and how

these drivers will affect each other

. Refer to Note 26 for more details, including analysis of the

sensitivity of the reported ECL to changes in estimated forward looking information.

124

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Governance

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Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Models and assumptions used

The Group uses various models and assumptions in measuring fair value of nancial assets as well as in

estimating ECL. Judgement is applied in identifying the most appropriate model for each type of asset,

as well as for determining the assumptions used in these models, including assumptions that relate to

key drivers of cr

edit risk. See Note 26 for more details onECL and Note 24 for more details on fair value

measurement.

Fair v

alue measurement and valuation pr

ocess

In estimating the fair value of a nancial asset or a liability

, the Group uses market-observable data to

the extent it is available. Where such Le

vel 1 inputs are not av

ailable, the Group uses valuation models

to determine the fair value of its nancial instruments. Refer t

o Note 24 for more details on fair value

measurement.

The Group considers that the accounting estimate related t

o valuation of nancial instruments where

quoted markets prices are not av

ailable is a key sour

ce of estimation uncer

tainty because: (i) it is highly

susceptible to change from period t

o period because it requires management t

o make assumptions about

interest r

ates, volatility

, exchange r

ates, the credit r

ating of the counterpar

, valuation adjustments and

specic feature of the tr

ansactions and (ii) the impact that recognising a change in the valuations would

have on the assets reported on its consolidated statement of nancial position as well as its prot or loss

could be material.

Had the management used different assumptions r

egarding the interest r

ates, volatility

, exchange r

ates,

the credit r

ating of the counterpar

ty and valuation adjustments, a larger or smaller change in the valuation

of nancial instruments where quoted market prices are not a

vailable, would have r

esulted that could have

had a material impact on the Group’

s repor

ted net income.

Adoption of new and revised Standar

New and revised IFRS Standar

ds that are eff

ective for thecurrent y

ear

The following amendments and interpretations are eff

ective for the Group eff

ective

1 January 2021:

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

Interest Rate Benchmark Reform (Phase 2)

Amendments to IFRS 16

Covid-19-Related Rent Concessions

The above standards and interpr

etations were re

viewed by the Group

’

s management, but did not have a

signicant effect on the consolidated nancial statements of the Group.

New and revised IFRS Standar

ds in issue but not yet eff

ective

At the date of authorisation of these nancial statements, the Group has not applied the following

new and revised IFRS Standar

ds that have been issued but are not yet eff

ective:

New or revised standard or interpr

etation

Applicable

annualreporting

periods beginning on or after

Amendments to IAS 1 “Classication of Liabilities as Current or Non-current”

(as part of the project to formulate Annual Improvements to IFRS 2010-2012 cycles).

1 January 2023

Amendments to IAS 8 – “Denition of Accounting Estimates”

1 January 2023

Amendments to IAS 1 and IFRS Practice Statement 2 – “Disclosure of Accounting

Policies”

1January 2023

Annual Improvements t

o IFRS Standards 2018-2020:

Amendments to IFRS 3 – “Refer

ence to the Conceptual Fr

amework”

1 January 2022

Amendments to IAS 16 Property

, Plant and Equipment – Revenue Befor

e Intended Use

1 Januar

y 2022

Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent

Assets” – “Onerous Contracts – Cost of F

ullling a Contract”

1 January 2022

Amendments to IAS 12 Deferred

ax Relating to Assets and Liabilities Arising from a

Single T

ransaction

1 January 2023

Amendment to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor

and its Associate or Joint Venture

Date to be determined

by the IASB

The management does not expect that the adoption of the Standards listed above t

o have a material

impact on the consolidated nancial statements of the Group in future periods.

4. Revenue

Revenue includes interest r

evenue, f

ees, commissions, seller fees, tr

ansaction & membership

revenue, r

ewards and other losses. Rewards earned b

y retail customers of the Gr

oup are deducted

from rev

enue.

ear ended

31 December 2021

ear ended

31 December 2020

REVENUE

884,822

602,869

Interest rev

enue

422,075

322,913

Fees & commissions

191,831

165,450

Seller fees

149,070

63,196

ransaction & membership r

evenue

175,901

94,921

Rewards

(51,981)

(38,568)

Other gains (losses)

(

,074)

(5,043)

126

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Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Revenue by segments for the years ended 31 December 2021 and 2020 is pr

esented below:

ear ended

31 December 2021

ear ended

31 December 2020

Marketplace

153,604

65,977

Seller fees

149,070

63,196

Other gains (losses)

4,534

2,781

Payments

217,085

120,923

ransaction & membership r

evenue

166,449

88,347

Interest rev

enue

50,636

32,576

Fintech

566,114

454,537

Interest rev

enue

371,439

290,337

Fees & commissions

191,831

165,450

ransaction & membership r

evenue

9,452

6,574

Other gains (losses)

(6,608)

(7,824)

Segment Revenue

936,803

641,437

Rewards

(51,981)

(38,568)

REVENUE

884,822

602,869

Interest rev

enue includes interest originated from nancing t

o customers through the Kaspi.kz Super App

or from nancing purchases on the Marketplace Platform, thir

d party merchant sites and third-par

ty mobile

apps. It also includes interest rev

enue from securities and deposits placed with banks.

Fees & commissions rev

enue mainly includes banking service fees and commissions, which are paid by

customers on a monthly basis.

Seller fees includes fees paid b

y merchants from shopping tr

ansactions originated on the Marketplace

Platform. The Gr

oup earns seller fees when tr

ansactions are completed and are gener

ally determined as

a percentage based on the value of mer

chandise and services being sold by merchants. Seller fees also

include revenue fr

om delivery and marketing services paid by Marketplace merchants.

The Group earns

ransaction revenue at point in time when processing pa

yments for regular household

needs, payments for purchases both online and in-stor

e, other debit card tr

ansactions, online money

wire tr

ansfers both inside the country domestically and globally

, and transactions by SME and corpor

ate

customers. Since the 4th quarter of 2021 Payment Platform also includes transaction re

venue from our

payments business in Ukraine. F

or the years ended 31 December 2021 and 2020, the

ransaction revenue

was KZT 156,738 million and KZT

83,716 million, respectively

Membership revenue is earned o

ver time and includes annual fees of KZT

19,163 million (2020:

KZT 11,205 million) paid by individual cust

omers, SME and corporate cust

omers for engagement in Kaspi.kz.

Other gains (losses) are mainly due to net gains (losses) on foreign ex

change oper

ations and

nancial assets and liabilities at fair value through prot or loss. F

or the years ended 31 December

2021 and 2020, the net loss on foreign exchange oper

ations were KZT

(656) million and KZT

(6,087) million, respectively

. For the years ended 31 December 2021 and 2020, the net (loss) gain on

nancial assets and liabilities at fair value through prot or loss wer

e KZT (7,066) million and KZT

6,124 million, respectively

. It also includes revenue from Kaspi

avel and re

venue from OOO Digital

Classieds in the Republic of Azerbaijan.

5. Segment Repor

ting

The Group reports its business in three operating segments as described in Note 1 t

o the

consolidated nancial statements of the Group.

The following tables present the summary of each segments’ revenue, net r

evenue and net income:

ear ended

31 December 2021

ear ended

31 December 2020

SEGMENT

REVENUE

936,803

641,437

Marketplace

153,604

65,977

Payments

217,085

120,923

Fintech

566,114

454,537

SEGMENT

T REVENUE

691,941

442,124

Marketplace

142,354

60,730

Payments

195,205

102,943

Fintech

354,382

278,45

NET INCOME

435,214

263,348

Marketplace

99,716

38,587

Payments

126,653

60,554

Fintech

208,845

164,207

Segment revenue r

eporting policies are the same as the Group’

s revenue accounting policies

described in Note 3, with the exception of accounting for Kaspi Bonus rewards. W

e have designed

Kaspi Bonus as a tool to incr

ease cross-platform customer engagement and promote daily use

of our Super App. As a result, for management reporting and for segment repor

ting purposes we

continue to account for rewards as selling and mark

eting expenses and allocate accordingly

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Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Expenses associated with share-based compensation are r

ecognised across the segments.

The following

table presents the summary of share-based compensation expense by segments:

ear ended

31 December 2021

ear ended

31 December 2020

SHARE-BASED COMPENSA

TION

(20,057)

(11,515)

Marketplace

(1,934)

(1,065)

Payments

(4,620)

(2,598)

Fintech

(13,503)

(7,852)

Operating segments ar

e reported in a manner consistent with internal repor

ts, which are reviewed and used

by management and board of direct

ors (who are identied as Chief Oper

ating Decision Makers, “CODM”).

6. Cost of rev

enue

Cost of revenue includes inter

est expense, transaction expenses and oper

ating expenses which are directly

attributable to the Group

’

s everyday oper

ating activities.

ear ended

31 December 2021

ear ended

31 December 2020

COST

OF REVENUE

(244,862)

(199,313)

Interest expense

(171,491)

(139,002)

ransaction expenses

(16,542)

(14,074)

Operating expenses

(56,829)

(46,237)

Interest expenses include interest expenses on customer accounts, mandat

ory insurance of retail deposits

and interest expenses on debt securities, including subordinated debt.

ransaction expenses are mainly composed of the costs associated with accepting, processing and

otherwise enabling payment transactions.

Those costs include fees paid t

o payment processors, payment

networks and various service providers.

Operating expenses include costs incurred t

o oper

ate retail network, 24-hour call support and

communication with customers, product packaging and delivery

, loan origination and risk assessment,

customer deposit acquisition and other expenses which can be attributed to the Group

’

s operating activities

related to the pr

ovision of the products and services.

Employee benets, depreciation and amortisation expenses and operating lease expenses are

presented as follows:

ear ended

31 December 2021

ear ended

31 December 2020

Employee

benets

Deprecia-

tion &

amotisa-

tion

Operating

lease

Employee

benets

Deprecia-

tion &

amortisa-

tion

Operating

lease

Cost of revenue

(17,361)

(831)

(1,084)

(17,596)

(625)

(1,302)

echnology & product

development

(24,478)

(9,359)

(1,641)

(13,136)

(6,688)

(1,635)

Sales & marketing

(403)

(340)

(2)

General & administr

ative

expenses

(16,043)

(1,876)

(2,097)

(15,074)

(2,035)

(1,959)

otal

(58,285)

(12,066)

(4,822)

(46,146)

(9,348)

(4,898)

Expenses associated with share-based compensation are r

ecognised across the functions in which

the compensation recipients are employ

ed. The following table sets forth an analysis of share-based

compensation expense by function for the periods indicated:

ear ended

31 December 2021

ear ended

31 December 2020

SHARE-BASED COMPENSA

TION

(20,057)

(11,515)

Cost of revenue

(1,148)

(397)

echnology & product development

(9,020)

(4,818)

Sales & marketing

(27)

General & administr

ative expenses

(9,862)

(6,300)

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Kaspi.kz 2021 Annual Report

7. Provision expense

The movements in loss allowance were as follows:

Loans to customers

Due from

banks

Financial assets at FVTOCI

Cash and cash

equivalents

Other

assets

Contin-

gencies

otal

Stage 1

Stage 2

Stage

Stage 1

Stage 2

Stage 3

Stage 1

Stage 3

Stage 1

Loss allowance for ECL

as at 31 December 2020

40,062

7,674

74,153

374

2,564

2,058

126,942

Changes in provisions

-T

ransf

er to Stage 1

5,556

(1,145)

(4,411)

-T

ransf

er to Stage 2

(335)

832

(497)

-T

ransf

er to Stage 3

(2,033)

(4,723)

6,756

Net changes, resulting from changes in credit risk par

ameters

(8,490)

9,608

16,509

(8)

(54)

278

(2)

2,392

(14)

20,219

New assets issued or acquired

54,379

54,387

Repaid assets (except for write off)

(25,096)

(1,664)

(13,265)

(198)

(40,223)

Write-off, net of recoveries

(11,458)

(180)

(605)

(12,239)

Foreign exchange diff

erence

As at 31 December 2021

64,043

10,582

67,791

130

2,662

3,846

149,092

Net changes, resulting from changes in credit risk par

ameters include decrease of provisions due to partial repayment of loans.

As at 31 December 2021, the allowance for expected credit losses on nancial assets at fair value through other compr

ehensive income of KZT

2,792 million (31 December 2020: KZT 2,938 million) is included in the ‘Revaluation r

eserve of nancial

assets’ within equity

Kaspi.kz Joint Stock Company

Consolidated Statements of Cash Flows

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

132

133

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Kaspi.kz 2021 Annual Report

Loans to customers

Due from

banks

Financial assets at FVTOCI

Cash and cash

equivalents

Other

assets

Contin-

gencies

otal

Stage 1

Stage 2

Stage

Stage 1

Stage 2

Stage 3

Stage 1

Stage 3

Stage 1

Loss allowance for ECL

as at 31 December 2019

31,983

5,235

70,195

304

789

2,378

110,966

Changes in provisions

-T

ransf

er to Stage 1

3,445

(635)

(2,810)

-T

ransf

er to Stage 2

(443)

892

(449)

-T

ransf

er to Stage 3

(2,475)

(3,576)

6,051

(789)

789

Net changes, resulting from changes in credit risk par

ameters

(4,921)

6,541

16,356

(220)

1,775

(6)

298

(23)

19,800

New assets issued or acquired

27,343

296

27,643

Repaid assets (except for write off)

(14,870)

(783)

(4,162)

(6)

(19,821)

Write-off, net of recoveries

(11,136)

(36)

(11,172)

Foreign exchange diff

erence

108

114

Loss allowance for assets, reclassied as Assets held for sale

(588)

As at 31 December 2020

40,062

7,674

74,153

374

2,564

2,058

126,942

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

134

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Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

8. Income tax

The Group pro

vides for taxes for the current period based on the tax accounts maintained and prepar

ed in

accordance with the tax regulations of the Republic of Kazakhstan, the Republic of

Azerbaijan and Ukr

aine,

where the

Company and its subsidiaries oper

ate and which may differ fr

om IFRS.

The Group is subject to certain permanent tax differences due to non-tax deductibility of certain expenses

and a tax-free regime for certain income.

Deferred tax

es reect the net tax effects of tempor

y differences between the carrying amounts of assets

and liabilities for nancial reporting purposes and the amounts used for tax purposes. T

emporary differences

relate mostly to diff

erent methods of income and expense recognition as well as t

o recorded values of certain

assets.

Deferred income tax liabilities comprise:

31 December 2021

31 December 2020

Vacation r

eserve, accrued bonuses and share-based compensation

779

1,155

Property

, equipment and intangible assets

(3,263)

(3,485)

Other

Net deferred tax liability

(2,467)

(2,319)

Relationships between tax expenses and accounting prot are explained as follows:

ear ended

31 December 2021

ear ended

31 December 2020

Net income before income tax

528,802

317,824

ax at the statutory tax rate of 20%

(105,760)

(63,565)

Non-taxable income

12,303

9,793

Adjustment recognised in the period for current tax of prior periods

1,626

Non-deductible expense

(1,757)

(704)

Income tax expense

(93,588)

(54,476)

Current income tax expense

(95,066)

(54,465)

Adjustment recognised in the period for current tax of prior periods

1,626

Deferred income tax expense

(148)

(11)

Income tax expense

(93,588)

(54,476)

Non-taxable income was represented by inter

est income on governmental and other qualied securities in

accordance with the tax legislation. Corpor

ate income tax rate is 20% in Kazakhstan and

Azerbaijan, and 18%

in Ukraine.

31 December 2021

31 December 2020

Net deferred tax liability:

At the beginning of the period

(2,319)

(2,373)

Change in deferred income tax balances r

ecognised in prot or loss

(148)

(11)

Reclassied as liabilities directly associated with the assets classied as

held for sale

At the end of the period

(2,467)

(2,319)

9. Earnings per share

Earnings per share are determined by dividing the pr

ot or loss attributable to owners of the Company by the

weighted aver

age number of participating shares outstanding during the repor

ting year

, excluding treasury

shares. For the purpose of diluted earnings per shar

e calculation the Group considers dilutive effects of

shares gr

anted under share-based compensation plan.

31 December 2021

31 December 2020

Net income attributable to the shareholders of the Company

431,914

260,964

Weighted av

erage number of ordinary shares for basic earnings per shar

192,187,223

191,805,000

Weighted av

erage number of ordinary shares for diluted earnings per

194,341,305

193,716,115

Earnings per share – basic (KZT)

2,247

1,361

Earnings per share – diluted (KZT)

2,222

1,347

Reconciliation of the number of shares used for basic and diluted EPS:

31 December 2021

31 December 2020

Weighted aver

age number of ordinary shares for basic earnings per share

192,187,223

191,805,000

Number of potential ordinary shares attributable to Share-based

Compensation

2,154,082

1,911,115

Weighted av

erage number of ordinary shares for diluted earnings per

194,341,305

193,716,115

10. Cash and cash equivalents

31 December 2021

31 December 2020

Cash on hand

151,668

149,366

Current accounts with other banks

161,524

38,725

Short-term deposits with other banks

28,909

117,907

Reverse repur

chase agreements

24,411

otal cash and cash equivalents

342,101

330,409

136

137

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Cash on hand includes cash balances with A

TMs and cash in transit. As at 31 December 2021 and 2020, the

fair value of collater

al of reverse r

epurchase agreements classied as cash and cash equiv

alents are KZT

Nil

million and KZT 29,931 million, respectiv

ely

11. Investment securities and derivativ

Investment securities and derivatives comprise:

31 December 2021

31 December 2020

otal nancial assets at fair value through OCI

606,462

865,847

otal nancial assets at fair value through prot or loss

955

3,725

otal investment securities and derivatives

607,417

869,572

Financial assets at fair value through OCI comprise:

31 December 2021

31 December 2020

Debt securities

606,107

865,577

Equity investments

355

otal nancial assets at fair value thr

ough OCI

606,462

865,847

As at 31 December 2021 and 2020, sovereign debt securities of KZT

347,166 million and KZT 659,132 million,

respectively

, were included in debt securities.

Financial assets at fair value through prot or loss comprise:

31 December 2021

31 December 2020

Financial assets at fair value through prot or loss:

Derivative nancial instruments

955

3,725

otal nancial assets at fair value thr

ough prot or loss

955

3,725

As at 31 December 2021, nancial assets at fair value through prot or loss included swap and spot

instruments of KZT 98 million (2020: KZT

19 million) with a notional amount of KZT 60,914 million (2020:

KZT 10,514 million) and forwards of KZT

857 million (2020: KZT 3,706 million) with a notional amount of KZT

126,348 million (2020: KZT 139,193 million).

As at 31 December 2021, nancial liabilities at fair value through prot or loss included swap and spot

instruments of KZT 67 million (2020: KZT

3 million) with a notional amount of KZT 60,986 million (2020: KZT

10,488 million) and forwards of KZT 2,341 million (2020: KZT

2,990 million) with a notional amount of KZT

134,704 million (2020: KZT 142,428 million) and are disclosed in Note 18.

12. Loans to customers

31 December 2021

31 December 2020

Gross loans to customers

,573,153

1,526,443

Less: allowance for impairment losses (Note 7)

(142,416)

(121,889)

otal loans to cust

omers

2,430,737

1,404,554

All loans to customers issued by the Gr

oup were allocated to the Fintech segment for internal segment

reporting purposes.

Movements in allowances for impairment losses on loans to cust

omers for the periods ended 31 December

2021 and 2020 are disclosed in Note 7.

Accrued interest of KZT

27,648 million and KZT 19,331 million, respectiv

ely

, was included in loans to

customers.

Loans with principal or accrued interest in arrears for more than 90 da

ys are classied as “Non-performing

loans” (“NPL

”). Allowance for impairment to gross NPLs reects the Group

’

s ability to absorb potential

losses from non-performing loans. Considering the ratio repr

esents impairment loan loss allowances as

a percentage of NPLs, the r

atio can be more than 100%. With the adoption of IFRS 9, these loans were

classied in stage 3.

The following table sets for

th the Group’

s outstanding NPLs as compared to the total allowance for

impairment losses on total loans to customers:

Gross NPLs

otal allowance

for impairment

otal allowance

for impairment

to gr

oss NPLs

otal non-performing loans to customers

as at 31 December 2021

120,652

142,416

118%

otal non-performing loans to customers

as at 31 December 2020

120,894

121,889

101%

Provision expense on loans to cust

omers:

ear ended

31 December 2021

ear ended

31 December 2020

Provision expense on loans t

o customers:

Loans to customers

(31,981)

(25,504)

otal pro

vision expenses on loans to customers

(31,981)

(25,504)

The Group did not pro

vide loans which individually exceeded 10% of the Group

’

s equity

138

139

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

The gross carrying amount and related loss allowance on loans to customers b

y stage were as follows

Stage 1

Stage 2

Stage 3

Loans to customers

12-month ECL

Lifetime ECL

otal

Gross carrying amount

2,407,687

29,831

135,635

2,573,153

Loss allowance

(64,043)

(10,582)

(67,791)

(142,416)

Carrying amount as at 31 December 2021

2,343,644

19,249

67,844

2,430,737

Stage 1

Stage 2

Stage 3

Loans to customers

12-month ECL

Lifetime

ECL

Lifetime ECL

otal

Gross carrying amount

1,351,855

20,500

154,088

1,526,443

Loss allowance

(40,062)

(7,674)

(74,153)

(121,889)

Carrying amount as at 31 December 2020

1,311,793

12,826

79,935

1,404,554

13. Property

, equipment and intangible assets

Buildings and

construction

Furniture and

equipment

Intangible

assets

Construction

in progress

otal

At initial/rev

alued cost

31 December 2019

37,297

41,674

15,446

1,087

95,504

Additions

851

11,948

4,206

1,915

18,920

Disposals

(

432

)

(600)

(280)

(1,312)

Reclassied as held for sale

(830)

(78)

(104)

(1,012)

31 December 2020

36,886

52,944

19,268

3,002

112,100

Additions

1,158

16,270

8,578

1,528

27,534

Disposals

(282)

(3,947)

(694)

(4,923)

ransf

ers

4,504

(4,504)

31 December 2021

42,266

65,267

27,152

134,711

Accumulated depreciation and

impairment

31 December 2019

7,500

19,778

7,241

34,519

Charge for the year

783

5,527

2,574

8,884

Eliminated on disposals

(306)

(465)

(279)

(1,050)

Reclassied as held for sale

(124)

(48)

(97)

(269)

31 December 2020

7,853

24,792

9,439

42,084

Charge for the year

785

7,286

4,265

12,336

Disposals

(281)

(3,835)

(694)

(4,810)

31 December 2021

8,357

28,243

13,010

49,610

Net book value

31 December 2021

33,909

37,024

14,142

85,101

31 December 2020

29,033

28,152

9,829

3,002

70,016

As at 31 December 2021 and 2020, property and equipment included fully depreciated proper

ty and

equipment of KZT 9,922 million and KZT

10,614 million, respectively

The Group’

s revaluation policy requir

es the entire class of buildings and construction to be r

evalued every

ve years. In 2021, the Group had its buildings and pr

operties revalued by independent appraisers, and the

valuation amounts approximate their carrying value.

The fair value of buildings and construction was determined based on the market compar

able approach that

reects recent tr

ansaction prices for similar properties and was carried out by independent appraisers not

related to the Gr

oup. In measuring fair value of the Group

’

s buildings and construction, the measurements

were categorized int

o Level 3. During the years 2021 and 2020, there wer

e no movements between Le

vel 3

and other levels.

14. Other assets

31 December 2021

31 December 2020

Other nancial assets:

Receivables from VISA and Master Card

9,594

1,348

Settlement with brokers

8,733

6,617

Prepayments for customers online tr

ansactions

5,014

7,820

Other

2,031

2,323

otal other nancial assets

25,372

18,108

Less: allowance for impairment losses

(3,433)

(1,939)

otal net other nancial assets

21,93

16,16

Other non-nancial assets:

Investment property

18,574

23,788

Other

18,831

11,807

otal other non-nancial assets

37,405

35,595

Less: allowance for impairment losses

(413)

(119

)

otal net other non-nancial assets

36,992

35,47

otal other assets

58,931

51,645

Movements in allowances for impairment of other assets are disclosed in Note 7.

Investment property movement is presented as follows:

2021

2020

Cost

As at 1 January

24,643

30,178

Additions

1,440

4,320

Disposals

(6,527)

(9,855)

As at 31 December

19,556

24,643

Accumulated depreciation

As at 1 January

(855)

(374)

Depreciation charge

(342)

(704)

Disposals

215

223

As at 31 December

(982)

(855)

Net book value

18,574

23,788

During the years ended 31 December 2021 and 2020, the Group foreclosed collater

al it held as security

for loans. As a result, the Group receiv

ed investment property of KZT 1,440 million and KZT

4,320 million,

respectively

140

141

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

As at 31 December 2021 and 2020, the fair value of investment property was KZT 22,718 million and KZT

27,430 million, respectively

. In measuring fair value of the Group’

s investment property

, the measurements

were categorized int

o Level 3.

15. Due to banks

31 December 2021

31 December 2020

Recorded at amortised cost:

Repurchase agreements

75,524

Time deposits of banks and other nancial institutions

968

otal due to banks

76,492

Accrued interest of KZT

62 million and KZT Nil million, respectiv

ely

, was included in due to banks.

Fair value of collater

al of repurchase agreements, which were classied as due t

o banks as at 31 December

2021 and 2020, amounted to KZT

75,295 million and KZT Nil, respectiv

ely

16. Customer accounts

31 December 2021

31 December 2020

Individuals

erm deposits

2,070,822

1,634,409

Current accounts

534,190

403,851

otal due to individuals

2,605,012

2,038,260

Corporate cust

omers

erm deposits

43,131

41,032

Current accounts

114,900

71,289

otal due to corpor

ate customers

158,031

112,321

otal customer accounts

2,763,04

2,150,581

As at 31 December 2021 and 2020, accrued interest of KZT 15,423 million and KZT

12,265 million,

respectively

, was included in customer accounts.

As at 31 December 2021 and 2020, customer accounts of KZT 26,679 million and KZT

16,080 million,

respectively

, were held as security against loans.

As at 31 December 2021 and 2020, customer accounts of KZT 41,490 million (1.50%) and KZT

76,576 million

(3.56%), respectively

, were due to the top twenty customers.

17. Debt securities issued

Currency

Maturity

date

month/

year

Nominal

interest

rate

31 December

2021

31 December

2020

Third bond progr

am – rst issue

KZT

January 2025

9.90

51,045

51,043

Third bond progr

am – second issue

KZT

January 2024

9.80

48,414

48,412

Third bond progr

am – third issue

KZT

January 2023

9.70

40,252

39,656

otal debt securities issued

139,711

139,111

As at 31 December 2021 and 2020, accrued interest of KZT 5,620 million and KZT

5,620 million, respectively

was included in debt securities issued. All debt securities issued are recorded at amortised cost as at 31

December 2021 and 2020. The Gr

oup did not have any defaults or other breaches with r

espect to its debt

securities during the years ended 31 December 2021 and 2020.

18. Other liabilities

31 December 2021

31 December 2020

the

r 

nan

cia

l lia

bil

ies:

Payables for cust

omers’ online transactions

12,080

8,980

Derivative nancial liabilities

2,408

2,993

Accrued expenses

2,281

1,614

Accrued dividends payable to non-contr

olling interest

1,003

1,38

Payables for Visa and Master Car

d transactions

808

527

Other

369

otal nancial liabilities

18,949

15,592

Other non-nancial liabilities:

Prepayments

10,653

11,172

Current income tax payable

8,609

854

Other taxes payable

6,936

3,265

Accumulated employee benets, vacation r

eserves

3,938

3,049

Deferred tax liabilities

2,512

2,319

Accumulated share-based compensation

2,727

Other

4,721

2,365

otal non-nancial liabilities

37,369

25,751

otal other liabilities

56,318

41,343

142

143

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

19. Subordinated debt

Currency

Maturity date

month/

year

Nominal

interest

rate, %

31 December

2021

31 December

2020

Second bond progr

am - rst issue

KZT

July 2021

1% plus

ination rate

10,230

Second bond progr

am – third issue

KZT

February

2023

2% plus

ination rate

5,317

5,401

Third bond progr

am – fourth issue

KZT

June 2025

10.7%

62,266

62,263

Debt component of prefer

ence

KZT

n/a

115

otal subordinated debt

67,665

78,009

The debt component of prefer

ence shares relates t

o subsidiary Kaspi Bank JSC, and is held by the non-con-

trolling interest. As at 31 December 2021 and 2020, accrued interest of KZT

3,457 million and KZT 3,816 mil-

lion, respectively

, was included in subordinated debt.

All subordinated debt are r

ecorded at amortised cost as at 31 December 2021 and 2020. The above liabilities

are subordinated t

o the claims of depositors and other credit

ors of the issuer in the event of liquidation.

The

Group did not have any defaults or other br

eaches with respect to its subor

dinated debt during the years end-

ed 31 December 2021 and 2020.

Reconciliation of liabilities arising from nancing activities

The table below details changes in the Group’

s liabilities arising from nancing activities, including both cash

and non-cash changes. Liabilities arising from nancing activities are those for which cash ows were, or

future cash ows will be, classied in the Group

’

s consolidated statement of cash ows as cash ows from

nancing activities.

1 January

2021

Non-cash changes

Financing

cash ows

Foreign

exchange

movement

Changes in

amortised

cost

31 December

2021

Debt securities issued

139,111

600

139,711

Subordinated debt

78,009

(10,371)

67,665

1 January

2020

Non-cash changes

Financing

cash ows

Foreign

exchange

movement

Changes in

amortised

cost

31 December

2020

Debt securities issued

138,574

537

139,111

Subordinated debt

77,786

223

78,009

20. Share capital

The table below provides a r

econciliation of the change in the number of authorised shares, shares issued

and fully paid, treasury shares and shares outstanding:

Authorised

Issued and fully

paid shares

reasury shares

outstanding

Ordinary shares

1 January 2020

216,742,000

199,500,000

7,695,000

191,805,000

Movement

31 December 2020

216,742,000

199,500,000

7,695,000

191,805,000

Movement

(382,223)

382,223

31 December 2021

216,742,000

199,500,000

7,312,777

192,187,223

In March 2021, share options in the quantity of 382,223 shares wer

e exercised fr

om treasury shares under

the share-based compensation plan.

The table below provides a r

econciliation of the change in outstanding share capital fully paid:

Ordinary shares

otal

Balance at 1 January 2020

95,825

Movements

31 December 2020

95,825

Movements

1,705

31 December 2021

97,530

All shares are KZT

denominated. The Group has one class of ordinary shares which carry no right to xed

income. Share premium r

epresents an excess of contributions receiv

ed over the nominal value of shar

issued and amounts received as a result of the r

esale of shares ov

er their purchase price.

On 15 October 2020, the Company completed its IPO on the London Stock Exchange (LSE) and the Astana

International Exchange (AIX). The Company did not r

aise any primar

y funds in the IPO

, with all shares sold

being those held by the existing shareholders of the Company

144

145

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

The following tables represent dividends declar

ed:

Dividends

declared

Dividend

per share

March 2021

170,662

KZT 888

September 2021

79,758

KZT 415

December 2021

89,942

KZT 4

otal for 2021

340,362

Dividends

declared

Dividend

per share

June 2020

76,563

KZT 399

September 2020

98,805

KZT 515

otal for 2020

175,368

21. Share-based compensation reserve

In the four

th quarter of 2020, the Group introduced share-based compensation, according to which senior

executives and other core Gr

oup personnel receive shar

e options or phantom shares of the Gr

oup. Awards

are payable in annual installments o

ver a ve year v

esting schedule for share options and a two year vesting

schedule for phantom shares.

In the third quarter of 2021, the Group replaced its phantom shares pr

ogram with shar

e options to better

align the interest of the participants with the long-term interests of the Company and its Shareholders. As a

result of such modication, a liability for phantom shares as at the date of r

eplacement was derecognised

and share options measured at their fair value at the date of the r

eplacement were recognised. A

wards are

payable in annual installments ov

er a ve-year vesting schedule.

The previous phantom share progr

am had

a two-year vesting schedule. Now all Share-based pr

ograms of the gr

oup are equity settled with no phantom

shares involved.

In addition, the progr

am was expanded to include more senior ex

ecutives and other core Group personnel,

who will all receive share options of the Gr

oup. Share options were measur

ed at fair value of the shares at the

date of grant. A

wards are payable in annual installments over a v

e-year vesting schedule.

The management of the Group believes that shar

e-based awards are vital t

o attract, incentiviz

e and retain

employees ov

er the long-term.

Share-based compensation expenses

The Group applies the gr

aded vesting method, under which gr

anted equity instruments are vested in

instalments over the vesting period. Each installment is separ

ately measured and attributed t

o expense over

the vesting period. According to IFRS 2, this acceler

ates the recognition of compensation expenses resulting

in a higher proportion of expenses being recognised in the early years of over

all plan.

ear ended

31 December

2021

ear ended

31 December

2020

Share-based compensation expense

(20,057)

(11,515)

Share options

(19,631)

(8,788)

Phantom shares

(426)

(2,727)

Phantom share expenses in the amount of KZT

426 million ref

er to rev

aluation of the 1

year of the previous

Phantom share pr

ogram v

ested in the 1

quarter of 2021.

Share Options

Share options are measur

ed at fair value of the shares at the date of gr

ant using the Black Scholes model.

The fair value determined at the gr

ant date is expensed over the ve-y

ear vesting period, based on the group

’

estimate of the number of shares that will eventually v

est. Recipients of Share Options are entitled to the

dividends once shares vested and ex

ercised.

The following table summarizes the details of the share options outstanding:

ear ended

31 December

2021 (shares)

ear ended

31 December

2020 (shares)

Outstanding at the beginning of the year

1,911,115

Granted

625,190

1,911,115

Forfeited

Exercised

(382,223)

Expired

Outstanding at the end of the year

2,154,082

1,911,115

Share options in the quantity of 501,335 shares are expected t

o be exercised in Mar

ch 2022. All shares that

will eventually vest will be deliver

ed from treasury shares.

146

147

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

The following table represents Shar

e-Based Compensation reserve outstanding:

Share-Based

Compensation

reserve

1 January 2020

Share options accrued

8,788

31 December 2020

8,788

Share options accrued

19,631

Share options exercised

(7,177)

31 December 2021

21,242

22. Commitments and contingencies

In the normal course of business the Group is a party to nancial instruments with off-balance sheet risk in

order to meet the needs of its cust

omers. Guarantees issued included below r

epresent nancial guar

antees,

where payment is not probable as at the r

espective reporting date, and therefore hav

e not been recorded in

the consolidated statement of nancial position.

The Group’

s maximum exposure to credit loss under contingent liabilities and commitments to extend cr

edit,

in the event of non-performance by the other party where all counterclaims, collateral or security pr

ove

valueless, is represented b

y the contractual amounts of those instruments.

The Group uses the same credit policy in undertaking contingent commitments as it does for on-balance

operations.

As at 31 December 2021 and 2020, provision for losses on contingent liabilities were KZT

18 million and KZT

28 million, respectively

The Group’

s contingent liabilities and credit commitments comprised the following:

31 December 2021

31 December 2020

Nominal amount

Commitments on loans and unused credit lines: Revocable loans

131,804

91,920

Guarantees issued and similar commitments

1,904

1,460

otal contingent liabilities and credit commitments

133,708

93,380

Commitments on loans and unused credit lines represent the Gr

oup’

s revocable and irrev

ocable

commitments to extend loans within unused credit line limits.

Those commitments where the borrower has

to apply each time it wants to dr

aw the credit facility from unused credit lines and the Group may appr

ove or

deny the extension of the credit facility based on the borrower’

s nancial per

formance, debt service and other

credit risk char

acteristics are considered r

evocable.

Those commitments where the Group is contr

actually

obliged with no conditions to extend the loan are consider

ed as irrevocable.

Legal proceedings

From time t

o time and in the normal course of business, claims against the Group are receiv

ed from

customers and counterparties. Management is of the opinion that no material losses will be incurred and

respectively no pro

vision has been made in these consolidated nancial statements.

Pensions and retir

ement plans

Employees of the Group r

eceive pension benets from pension funds in accordance with the laws and

regulations of the Republic of Kazakhstan. As at 31 December 2021 and 2020, the Group was not liable for

any supplementary pensions, post-retirement health care, insur

ance benets, or retirement indemnities t

o its

current or former employees.

axes

Due to the presence in Kazakhstani commer

cial legislation and tax legislation in par

ticular

, of provisions

allowing more than one interpretation, and also due to the pr

actice developed in a generally unstable

environment by the tax authorities of making arbitr

ary judgment of business activities, if a par

ticular

treatment based on Management’

s judgment of the Group’

s business activities was to be challenged by the

tax authorities, the Group may by assessed additional tax

es, penalties and interest. Such uncertainty may

relate to the v

aluation of nancial instruments, loss and impairment provisions and market lev

el for deals’

pricing. The Gr

oup believes that it has already made all tax pa

yments, and therefore no pr

ovision has been

made in the consolidated nancial statements. T

ax years remain open to re

view by the tax authorities for ve

years.

23. T

ransactions with related parties

In considering each possible related party relationship, attention is directed to the substance of the

relationship, and not merely the legal form.

The Group had the following tr

ansactions outstanding with

related parties:

ear ended

31 December 2021

ear ended

31 December 2020

ransactions

with related

parties

otal category as per

nancial statements

captions

ransactions

with related

parties

otal category

as per nancial

statements

captions

Consolidated statement of

nancial position

Loans to customers

3,568

2,573,153

4,098

1,526,443

- other related parties

3,568

4,098

Allowance for losses on loans to

customers

(13)

(142,416)

(1)

(121,889)

- other related parties

(13)

(1)

Customer accounts

17,077

2,763,043

8,349

2,150,581

- key management personnel

of the Group

2,421

1,235

- other related parties

14,656

7,114

148

149

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Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Compensation to direct

ors and other members of key management is presented as follows:

ear ended

31 December 2021

ear ended

31 December 2020

ransactions with

related parties

otal category

as per nancial

statements

caption

ransactions with

related parties

otal category

as per nancial

statements

caption

Compensation to ke

y management

personnel:

Employee benets

(782)

(58,285)

(783)

(46,146)

Share-based compensation

(11,381)

(20,057)

(8,446)

(11,515)

During the years ended 31 December 2021 and 2020, interest income from other r

elated parties were KZT

362 million and KZT 133 million, respectiv

ely

During the years ended 31 December 2021 and 2020, interest expense from tr

ansactions with key

management personnel were KZT

22 million and KZT 16 million, respectiv

ely

, and other related parties were

KZT 144 million and KZT

148 million, respectively

During the years ended 31 December 2021 and 2020, transaction costs attributable t

o loans to customers

and paid to other related parties, were KZT 10,981 million and KZT

12,527 million, respectively

24. Fair v

alue of nancial instruments

a. Fair v

alue of nancial instruments

IFRS denes fair value as the price that would be received t

o sell an asset or paid to tr

ansfer a liability in an

orderly tr

ansaction between market participants at the measurement date.

b. Fair v

alue of the Group’

s nancial assets and nancial liabilities measured at fair value on a r

ecurring

basis

Some of the Group’

s nancial assets and nancial liabilities are measured at fair value at the end of each

reporting period. The following table gives information about how the fair values of these nancial assets

and nancial liabilities are determined (in particular

, the valuation technique(s) and inputs used).

150

151

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Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Management Report

Governance

Financial Statements

Kaspi.kz 2021 Annual Report

Financial assets/ nancial liabilities

Fair value as at 31 December 2021

Fair value as at 31 December 2020

Fair value hier

archy

Valuation technique(s) and k

ey input(s)

Non-derivative nancial assets at fair value thr

ough other

comprehensive income (Note 11)

230,847

406,772

Level 1

Quoted prices in an active market

Non-derivative nancial assets at fair value thr

ough other

comprehensive income (Note 11)

375,581

459,041

Level 2

Quoted prices in markets that are not active.

Unlisted Equity investments classied as nancial assets at fair value

through other comprehensive income

Level 3

Adjusted net assets based on most recent published nancial statements of

unlisted companies with discount for marketability and liquidity

. Discount ratios

varies from 10% to 30%.

Derivative nancial assets (Note 11)

955

3,725

Level 2

DCF method. Future cash ows ar

e estimated based on forward exchange rates

(from observable forward exchange r

ates at the end of the reporting period) and

contract forward r

ates, discounted at a rate that r

eects the credit risk of various

counterparties.

Derivative nancial liabilities (Note 18)

2,408

2,993

Level 2

DCF method. Future cash ows ar

e estimated based on forward exchange rates

(from observable forward exchange r

ates at the end of the reporting period) and

contract forward r

ates, discounted at a rate that r

eects the credit risk of various

counterparties.

As at 31 December 2021, the fair value of the investment securities in Level 2 includes short-term and long-term sovereign debt securities of KZT

81,672 million and KZT 160,527 million, r

espectively

. As at 31 December 2020, the fair value of the

investment securities in Level 2 includes short-term and long-term sovereign debt securities of KZT

303,024 million and KZT 67,347 million, respectiv

ely

. Those investment securities are b

y nature and for regulat

ory purposes treated as high quality

liquid assets, but are classied as Level 2 due t

o insucient trading on active mark

et.

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

152

153

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Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

There were no tr

ansfers between Level 1 and Level 2 in the period.

Fair value of nancial assets and nancial liabilities that ar

e not measured at fair value on a recurring

basis (but fair value disclosures ar

e required).

Except as detailed in the following table, management of the Group considers that the carrying amount of

nancial assets and nancial liabilities recognised in the consolidated nancial statements approximate their

fair values.

31 December 2021

Carrying amount

Fair value

Fair v

alue hierarchy

Due from banks

50,903

50,783

Level 2

Loans to customers

2,43

,737

2,465,700

Level 3

Due to banks

76,492

75,870

Level 2

Customer accounts

2,763,043

2,751,213

Level 2

Debt securities issued

139,711

137,649

Level 2

Subordinated debt

67,665

67,272

Level 2

31 December 2020

Carrying Amount

Fair v

alue

Fair value hierar

chy

Due from banks

44,259

44,203

Level 2

Loans to customers

1,404,554

1,482,035

Level 3

Customer accounts

2,150,581

2,109,827

Level 2

Debt securities issued

139,111

138,924

Level 2

Subordinated debt

78,009

77,506

Level 2

Loans to customers

Loans to individual customers ar

e made at xed r

ates. Fair value of x

ed r

ate loans has been estimated by

refer

ence to the market r

ates available at the reporting date for loans with similar maturity prole.

Debt securities issued, subordinated debt

Debt securities issued and subordinated debt are valued using quoted prices.

Customer accounts

The estimated fair value of term deposits is determined by discounting contr

actual cash ows using interest

rates curr

ently offered for deposits with similar terms. F

or current accounts, the Group considers fair value t

equal carrying value, which is equivalent to the amount pay

able on the balance sheet date.

Information about measurement hier

archy of property

, equipment and intangible assets is disclosed in Note

13.

Due from banks

The estimated fair value of term due from banks is determined by discounting the contr

actual cash ows

using interest r

ates currently offer

ed for due from banks with similar terms.

Due to banks

The estimated fair value of term due to banks is determined by discounting the contr

actual cash ows using

interest r

ates currently offer

ed for due to banks with similar terms.

Assets and liabilities for which fair value appro

ximates carrying value

For nancial assets and liabilities that have a short-term maturity (less than 3 months), it is assumed that the

carrying amounts approximate to their fair value.

This assumption is also applied to demand deposits and

savings accounts without a maturity

25. Regulatory matters

The management of JSC Kaspi Bank (subsidiary of the Company) monitor capital adequacy ratio based

on requirements of standar

dized approach of Basel Committee of Banking Supervision “Basel III: A global

regulatory fr

amework for more resilient banks and banking systems” (December 2010, updated in June

2011

). In 2021, the management of JSC Kaspi Bank implemented updated requirements stated in Basel III:

Finalising post-crisis reforms (December 2017). The new methodology intr

oduces a unied standardized

approach for estimation of risk weighted assets for the oper

ational risk, replacing previously in for

standardized and adv

anced measurement approaches.

The capital adequacy ratios calculated on the basis of JSC Kaspi Bank’

s consolidated nancial statements

under Basel III with updated RWA methodology ar

e presented in the following table:

31 December

2021

31 December 2020

(

as per updated

approach)

31 December 2020

(

as per previous

approach)

Capital adequacy ratios:

Tier 1 capital

15.9%

14.7%

otal capital

18.0%

20.4%

18.8%

Kaspi Bank JSC complies with NBRK’

s capital requirements.

The following table presents Kaspi Bank’

s JSC

capital adequacy ratios in accor

dance with the NBRK requirements:

31 December 2021

31 December 2020

Capital adequacy ratios:

Tier 1 capital (k1.2)

11.5%

11.3

otal capital (k.2)

12.9%

14.3

154

155

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Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

26. Risk management policy

The Group permanently advances it’

s risk management environment, to t up-to-date challenges and risks the

Group is exposed to.

The Group is exposed to the following types of risks: credit risk, liquidity risk, market risk.

Credit risk

The Group is exposed to cr

edit risk, which is the risk that a customer will be unable to pay amounts in full

when due. The Gr

oup’

s credit risk exposure arises primarily from our consumer nance business through the

Fintech Platform. T

o manage credit risk during loan origination the Group centralized all pr

ocesses related

to decision making, verication and accounting through it’

s headquar

ters. The Group has de

veloped an

automated, centr

alised and big data-driven proprietary loan approv

al process that enables it to mak

e instant

credit decisions.

The risk management block is responsible for maintaining scoring models and decision-

making process.

The quality of approved loans ar

e monitored b

y risk management block on day-to-day basis

with periodical validation of the models.

During the credit decision process, the Gr

oup uses proprietary risk algorithms and predictive scoring models

for the evaluation of the risks of potential borrowers using statistical modelling based on (i) a wealth of

proprietary internal data such as application, transactional, behaviour

al, shopping and payment history

information, which is supplemented by (ii)external data such as data received fr

om credit bureaus (LL

C First

Credit Bureau and LL

C State Credit Bureau) and pension centre (the State Pension P

ayment Centre) with

regard t

o each customer

The additional proprietary data constantly accumulated around the Group

’

s customers’ activity that enables it

to continuously deepen its credit decision process.

The risk management block, in terms of credit risk, consists of independent modelling, anti-fraud, monit

oring

and provisioning division.

Maximum Exposure

The Group’

s maximum exposure to credit risk varies signicantly and is dependent on both individual risks

and general mark

et economy risks. For nancial assets recor

ded on statement of nancial position, the

maximum exposure equals to a carrying value of those assets prior to any offset or collater

al. For nancial

guarantees and other contingent liabilities the maximum exposure t

o credit risk is the maximum amount the

Group would have t

o pay if the guar

antee was called on or in the case of commitments, if the loan amount

was called on.

As at 31 December 2021 and 2020, the maximum exposure to credit risk after offset and collater

al was equal

to its carrying value of all nancial assets except for loans to cust

omers.

As at 31 December 2021 and 2020, the maximum exposure to credit risk after offset and collater

al of loans to

customers were KZT

1,875,603 million and KZT 1,067,047 million, respectively

Collateral held as security and other cr

edit enhancements

The Group holds collater

al or other credit enhancements to mitigate cr

edit risk associated with nancial

assets. The main types of collater

al obtained are as follows:

•

For re

verse repurchase tr

ansactions – securities;

•

For commercial lending – char

ges over real estate pr

operties and vehicles.

Although, the Group uses collater

al as credit enhancement to mitigate its exposure t

o credit risk, major part

of its loan por

tfolio is represented by unsecur

ed loans. Thus, as at 31 December 2021 and 2020, unsecur

gross carrying amount of loans to customers were KZT

1,989,342 million and KZT 1,162,426 million,

respectively

As at 31 December 2021 and 2020, credit impaired loans with a net carrying value of KZT

16,084 million

and KZT 19,330 million, respectiv

ely were either fully or partially collateralized, reecting the extent t

o which

collateral and other cr

edit enhancements mitigate credit risk.

Credit quality of nancial assets

The tables below present information about the signicant changes in the gross carrying amount of loans

during the period that contributed to changes in the loss allowance during the year ended 31 December 2021

and 31 December 2020:

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Loans at amortised cost

Gross carrying amount as at 1January 2021

1,351,855

20,500

154,088

1,526,443

Changes in the gross carrying amount

- T

ransfer to Stage 1

13,221

(3,124)

(10,097)

- T

ransfer to Stage 2

(30,543)

31,690

(1,147)

- T

ransfer to Stage 3

(58,892)

(12,232)

71,124

New nancial assets originated or purchased

2,113,372

Financial assets that have been repaid

(981,326)

(7,003)

(32,014)

(1,020,343)

Write-offs

(46,324)

Other changes

Gross carrying amount as at 31December 2021

2,407,687

29,831

135,635

2,573,153

156

157

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Loans at amortised cost

Gross carrying amount as at 1January 2020

1,228,093

15,383

156,041

1,399,5

Changes in the gross carrying amount

- T

ransfer to Stage 1

10,198

(2,180)

(8,018)

- T

ransfer to Stage 2

(19,835)

21,026

(1,191)

- T

ransfer to Stage 3

(63,280)

(10,207)

73,487

New nancial assets originated or purchased

938,746

Financial assets that have been repaid

(742,067)

(3,522)

(27,601)

(773,190)

Write-offs

(38,739)

Other changes

109

Gross carrying amount as at 31December 2020

1,351,855

20,500

154,088

1,526,443

The Group uses an internal r

ating model to classify individually signicant loans to customers in diff

erent risk

categories:

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Loans to customers that individually assessed for

impairment

Grades: Low t

o fair risk

22,526

Grade: Impair

6,391

Loans to customers that collectively assessed for

impairment

2,385,161

29,831

129,244

2,544,236

otal gross carrying amount

2,407,687

29,831

135,635

2,573,153

Loss allowance

(64,043)

(10,582)

(67,791)

(142,416)

Carrying amount as at

31 December 2021

2,343,644

19,249

67,844

2,430,737

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Loans to customers that individually assessed for

impairment

Grades: Low t

o fair risk

23,260

Grade: Impair

14,094

Loans to customers that collectively assessed for

impairment

1,328,595

20,500

139,994

1,489,089

otal gross carrying amount

1,351,855

20,500

154,088

1,526,443

Loss allowance

(40,062)

(7,674)

(74,153)

(121,889)

Carrying amount as at

31 December 2020

1,311,793

12,826

79,935

1,404,554

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Due from banks

High grade (A- and higher)

20,504

Investment grade (BBB+ - BBB-)

29,710

Non-Investment grade (BB+ - B-)

708

Low grade (CCC+ and lower)

otal gross carrying amount

50,922

Loss allowance

(19)

Carrying amount as at

31 December 2021

50,903

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Due from banks

High grade (A- and higher)

14,017

Investment grade (BBB+ - BBB-)

29,046

Non-Investment grade (BB+ - B-)

1,222

Low grade (CCC+ and lower)

otal gross carrying amount

44,285

Loss allowance

(26)

Carrying amount as at

31 December 2020

44,259

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Investment debt securities

High grade (A- and higher)

840

Investment grade (BBB+ - BBB-)

595,969

Non-Investment grade (BB+ - B-)

7,460

Low grade (CCC+ and lower)

1,838

arrying amount as at

31 December 2021

604,269

1,838

606,107

Stage 1

Stage 2

Stage 3

12-month ECL

Lifetime ECL

otal

Investment debt securities

High grade (A- and higher)

883

Investment grade (BBB+ - BBB-)

848,887

Non-Investment grade (BB+ - B-)

14,497

Low grade (CCC+ and lower)

1,310

arrying amount as at

31 December 2020

864,267

1,310

865,577

158

159

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Financial assets, other than loans to customers and other nancial assets, are gr

aded according to their

external credit r

atings issued by an international rating agencies, such as Standar

d and Poor’

s, Fitch and

Moody’

s Investors Services. The highest possible r

ating is AAA.

A- and

higher

BBB+ to

BBB-

BB+ to B-

CCC+ and

lower

Not

rated

otal

Gross carrying value:

31 December 2021

Cash and cash equivalents, net of cash

on hand

102,514

86,884

994

190,43

Mandatory cash balances with NBRK

32,734

Due from banks

20,504

29,71

708

50,922

Investment securities and derivatives

1,217

596,643

7,848

4,501

610,20

31 December 2020

Cash and cash equivalents, net of cash

on hand

36,837

143,76

273

173

181,0

Mandatory cash balances with NBRK

27,659

Due from banks

14,017

29,046

1,222

44,285

Investment securities and derivatives

3,368

850,434

,817

3,891

872,5

As at 1 January 2021 and 31 December 2021, all loan commitments and nancial guarantee contracts of the

Group are classied in Stage 1 (12-month ECL) and hav

e “low to fair” risk grade.

Modied nancial assets

As aresult of the Group

’

s forbearance activities nancial assets might be modied. Modication doesn

’t lead

to a material change in the net present value (“NPV”), ther

efore the Gr

oup doesn

’t recognise a modication

gain/loss. The following tables r

efer to modied nancial assets wher

e modication does not result

inderecognition. Financial assets (with loss allowance based on lifetime ECL) modied during the years

ended 31 December 2021 and 2020:

2021

2020

Gross carrying amount of nancial assets that are impaired after modication

but not in NPL as at 1 January

17,923

14,126

Gross carrying amount of modied loans within period

20,222

21,173

Loans transf

erred to Non impaired category (Cured loans)

(16,425)

(11,600)

Loans transf

erred to NPL

(6,875)

(5,516)

Repaid loans

(2,824)

(260)

Gross carrying amount of nancial assets that are impaired after modication

but not in NPL as at 31 December

12,021

17,923

The net carrying amount of loans at time of modication, that are modied during the years ended 31

December 2021 and 2020 were KZT

13,079 million and KZT 12,931 million, respectiv

ely

. The gross carrying

amount of modied loans for which the loss allowance changed from lifetime t

o 12-month ECL in the years

ended 31 December 2021 and 2020 were KZT

9,020 million and KZT 8,018 million, respectiv

ely

Macro sensitivity

The Group has performed asensitivity analysis on how ECL on the main por

tfolios will change if the key

assumptions used to calculate ECL change by 1 percentage point. F

or the purpose of ECL estimation, the

Group takes a gr

owth rate of r

eal GDP at 3.90% and 3.76% for years 2022 and 2023, respectively as the

baseline scenario, 5.89% and 5.75% for years 2022 and 2023, respectively as an upside scenario and 1.91%

and 1.77% for the years 2022 and 2023 respectively as a downside scenario. A change in the baseline gr

owth

rate of r

eal GDP by +/- 1 percentage point with respectiv

e correction of the upside and downside scenarios

lead to a change in the loss allowance amount by KZT

-8,134/+8,181 million as at 31 December 2021,

respectively

Liquidity risk

The liquidity management framework of the Gr

oup mainly consists of following instruments:

•

Assessment of sucient level of high quality liquid assets

•

Cash ow forecasting

•

Diversication of funding

•

Social media marketing

•

Up-to-date contingent funding plan

The liquidity risk is managed considering specic aspects of Kazakhstan economy

, in par

ticular limited

funding instruments and possible dollarization due to currency dev

aluation expectations.

The Group devote gr

eat signicance to social media marketing, t

o support the brand of the Group and

mitigate various risks such as liquidity and reputational risks.

The division of social media marketing covers

mass media, social networks, blogs and other sources of information, available t

o current or potential

customers.

A major part of the Group’

s obligations consists of customer accounts of individuals, with nominal maturity

under 2 years. However 96% of deposits in 2021 wer

e rolled over

, which ensures the Group maintains a

reliable and long-term funding base.

The aver

age amount of individuals’ customer accounts balance is

KZT 828 thousand as at 31 December 2021, which is another indicator of div

ersication and stability of the

funding base.

The Group retains a signicant amount of high quality liquid assets, which consists mainly of cash, deposits

within NBRK, shor

t-term and mid-term notes of NBRK and bonds of Ministry of Finance of the Republic of

Kazakhstan.

160

161

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

Market risk

Price Risk

The Group’

s market risk arises from uctuations in the value of nancial instruments because of changes in

market prices whether those changes are caused by fact

ors specic to the individual instrument or factors

affecting all instruments tr

aded in the market.The Group has established v

arious limits on operations

with securities, including instrument specic limits, in order to balance prot and risk in the securities

por

tfolio.The Group’

s por

tfolio is predominantly comprised of Kazakhstan government debt securities.

Currency risk

The Group manages its currency risk by k

eeping modest open currency position.

The Group only issues loans

to customers in tenge, which pr

otects the Group from hidden currency risk in case of a curr

ency devaluation.

Interest r

ate risk

The contractual maturities of assets and liabilities of the Group has modest gaps, which pr

ovides possibilities

of instant reactions on changes of market interest r

ates. The Group has signicant amounts of high quality

liquid assets with a shor

t maturity which helps to minimize the sensitivity to a sharp incr

ease of interest r

ates

in case of a liquidity shor

tfall on the market.

An analysis of the liquidity and interest r

ate risks is presented in the following table.

Up to

1month

1 month to

3months

3 months

to 1year

1 year to

5years

Over

5 years

31 December

2021

otal

otal interest bearing

nancial assets

429,046

466,439

1,34

,621

818,762

106,545

3,163,413

otal interest bearing

nancial liabilities

255,838

454,882

1,387,054

299,036

5,526

2,402,336

Interest sensitivity gap

173,208

11,557

(44,433)

519,726

101,019

Cumulative interest

sensitivity gap

173,208

184,765

140,332

660,058

761,077

Up to

1month

1 month

3months

3 months

to 1year

1 year to

5years

Over

5 years

31 December

2021

otal

otal nancial assets

1,308,515

428,337

1,155,87

498,702

94,398

3,485,831

otal nancial liabilities

920,656

455,573

1,387,477

299,036

5,526

3,068,268

Guarantees issued and

similar commitments

317

110

4,500

4,927

otal nancial liabilities

and commitments

920,973

455,683

1,387,477

303,536

5,526

3,073,195

Liquidity gap

387,542

(27,346)

(231,598)

195,166

88,872

Cumulative liquidity gap

387,542

360,196

128,598

323,764

412,636

Up to

1month

1 month to

3

months

3 months

1

year

1 year to

5

years

Over

5 years

31 December

2020 T

otal

otal interest bearing

nancial assets

657,658

402,890

780,943

505,353

121,978

2,468,822

otal interest bearing

nancial liabilities

119,086

322,098

1,002,664

447,357

5,159

1,896,364

Interest sensitivity gap

538,572

80,792

(221,721)

57,996

116,819

Cumulative interest

sensitivity gap

538,572

619,364

397,643

455,639

572,458

Up to

1month

1 month to

3

months

3 months

1

year

1 year to

5

years

Over

5 years

31 December

2020 T

otal

otal nancial

assets

1,475,461

259,040

629,677

228,341

100,103

2,692,622

otal nancial

liabilities

606,119

323,393

1,004,259

447,357

5,159

2,386,287

Guarantees

issued and similar

commitments

2,177

2,196

otal nancial

liabilities and

commitments

606,137

323,394

1,004,259

449,534

5,159

2,388,483

Liquidity gap

869,324

(64,354)

(374,582)

(221,193)

94,944

Cumulative

liquidity gap

869,324

804,970

430,388

209,195

304,139

For more r

elevant repr

esentation of the liquidity risk, in 2021 the Group has introduced in these consolidated

nancial statements an additional table, where investment securities are pr

esented in the category up to one

month, as they can be traded in open mark

et if needed.

The liquidity disclosure as at 31 December 2020 is

presented with the effect of these changes.

As at 31 December 2021 and 2020, guarantee deposits in fav

our of international payments systems included

in due from banks were KZT

50,214 million and KZT 43,062 million, respectively

Based on prior experience, the Group considers it highly unlikely that all customer accounts seek r

epayment

on maturity

. Historically the majority of such deposits are rolled ov

Interest r

ate sensitivity analysis

The Group manages fair value inter

est rate risk through periodic estimation of potential losses that could

arise from adverse changes in market conditions.

The Risk Management Depar

tment conducts monitoring of

the Group’

s current nancial performance, estimates the Group’

s sensitivity to changes in fair value interest

rates and its inuence on the Gr

oup’

s protability

The sensitivity analysis includes interest rate risk, which has been determined based on “r

easonably possible

changes in the risk variable”.

The level of these changes is determined by management and is contained

within the risk reports provided to ke

y management personnel.

162

163

Management Report

Governance

Financial Statements

Management Report

Governance

Financial Statements

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz Joint Stock Company

Notes to Consolidated Financial Statement (Continued)

For the Y

ears Ended 31 December 2021 and 2020

(in millions of KZT)

Kaspi.kz 2021 Annual Report

As at 31 December 2021, the impact on prot before income tax due to a +/-3 p.p. change in inter

est rate

amounted -/+ KZT 150 million (2020: -/+ KZT

469 million).

As at 31 December 2021, the impact on equity due to a +/-3 p.p. change in interest r

ate amounted KZT

-24,236 million KZT/+25,684 million (2020: KZT -17,261 million/KZT

+18,474 million).

Currency risk

The Group’

s exposure to foreign curr

ency exchange r

ate risk is presented in the table below:

enge

USD

1 USD =

KZT

431.80

EUR

EUR 1 =

KZT

489.10

Other

currency

31 December

2021

otal

Non-derivative nancial assets

otal non-derivative nancial assets

3,140,201

334,006

6,748

3,922

3,484,877

Non-derivative nancial liabilities

otal non-derivative nancial liabilities

2,550,500

506,102

5,574

1,272

3,063,448

NET POSI

TION ON NON-DERIV

TIVE

FINANCIAL INSTRUMENTS

589,701

(172,096)

1,174

2,650

Derivative nancial instruments

Accounts payable on spot and

derivativecontr

acts

(184,863)

(5,035)

(3,913)

(4,287)

(198,098)

Accounts receivable on spot and

derivativecontr

acts

857

182,328

2,446

2,587

188,218

NET POSI

TION ON DERIV

TIVE

FINANCIAL INSTRUMENTS

(184,006)

177,293

(1,467)

(1,700)

(9,880)

NET POSI

TION

405,695

5,197

(293)

950

enge

USD

1 USD =

KZT

420.91

EUR

EUR 1 =

KZT

516.79

Other

currency

31 December

2020 T

otal

Non-derivative nancial assets

otal non-derivative nancial assets

2,398,772

278,917

7,362

3,846

2,688,897

Non-derivative nancial liabilities

otal non-derivative nancial liabilities

1,953,837

420,094

5,560

808

2,380,299

NET POSI

TION ON NON-DERIV

TIVE

FINANCIAL INSTRUMENTS

444,935

(141,177)

1,802

3,038

Derivative nancial instruments

Accounts payable on spot and

derivativecontr

acts

(137,184)

(1,297)

(14,729)

(2,700)

(155,910)

Accounts receivable on spot and

derivativecontr

acts

3,706

136,788

12,920

153,433

NET POSI

TION ON DERIV

TIVE

FINANCIAL INSTRUMENTS

(133,478)

135,491

(1,809)

(2,681)

(2,477)

NET POSI

TION

311,457

(5,686)

(7)

357

Currency risk sensitivity

The Group analysed sensitivity to an incr

ease and decrease in the USD and EUR against the KZT

. 25%

is the sensitivity rate used when r

epor

ting foreign currency risk internally to k

ey management personnel

and represents management’

s assessment of the possible change in foreign currency exchange r

ates.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and

adjusts their translation as at 31 December 2021 and 2020 for a 25% change in foreign curr

ency rates.

The

sensitivity analysis includes external loans as well as loans to foreign oper

ations within the Group where the

denomination of the loan is in a currency other than the currency of the lender or the borrower

As at 31 December 2021, the impact on prot or loss and on equity due to +/-25% change in USD r

ate were

KZT +/-1,299 million (2020: KZT

+/-1,422 million).

As at 31 December 2021, the impact on prot or loss and on equity due to +/-25% change in EUR r

ate were

KZT +/-73 million (2020: KZT

+/-2 million).

27. Subsequent events

In January 2022, Kaspi Cloud LLC, a separ

ate legal entity fully owned by Kaspi Oce LLC, has been

established. Kaspi Cloud LL

C is providing data center services, that support the storage, maintenance and

processing of information using server software and equipment.

In the rst half of January 2022, a series of large protests took place in Kazakhstan, which grew int

o violent

unrest. A number of facilities were looted and damaged, including facilities of the Gr

oup. T

o respond to these

riots, the Government imposed a two-week state of emergency thr

oughout the territory of Kazakhstan and

introduced certain restrictions of movement of the population and activities of entities depending on their

location. As a result of anti-terror oper

ations, there were signicant limitations on internet access thr

oughout

Kazakhstan, which led to disruption of online tr

ansactions. Financial organizations limited their operations

for the period of the state of emergency

. Management has analysed the impact of these events on the

Group’

s business and the analysis has demonstrated that losses are appr

oximately KZT

1.5 billion. However

Management continues to monitor the current economic situation.

In response to the political situation and its economic implications, the Government has pr

epared initiatives

designed to address the curr

ent crisis. A special charitable fund “For the People of Kazakhstan

”, which

is funded from private and public sources, is established t

o support citizens of Kazakhstan in the eld of

healthcare, education and pro

vide other social suppor

t. The Gr

oup has contributed KZT 10 billion to the fund.

On 24 February 2022, due to external geopolitical situation, the NBRK has set the base r

ate at 13.5% p.a.

with a corridor of +/- 1.0 p.p. In response to the dev

aluation of national currency

, the NBRK has performed

interventions on the currency market to support tenge exchange r

ate against foreign currencies. Howev

there is uncertainty exists related to the future development of the external risk and its impact on the

economy of countries where the Group oper

ates.

The Management of the Group believes it is taking all

necessary measures to support the sustainability of the Group under these conditions.

In order to maintain the stability of the nancial market and support the attractiveness of tenge deposits, the

Government has announced the realization of the pr

otection progr

am for tenge deposits, under which tenge

deposits of individuals will be provided with compensation out of Gov

ernment budget resources equal to

around 10% of savings as at 23 F

ebruary 2022.

164

165