With independent auditor’s report

JSC “Uzbekneftegaz”
Consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
44
20. 
Provisions
Employee benefit
In billions of Uzbek soums
Asset
retirement
obligations
Post-
employment
benefits
Other long-
term
payments
Legal
claims
Total
As at 1 January 2018
826
894
47
81
1,848
Provision for the year / current service
cost
3
−
−
−
3
Change in estimate
(167)
(116)
−
−
(283)
Unwinding of discount
(Note 28)
106
139
10
−
255
Use of provision/payment
−
(56)
(1)
−
(57)
Discontinued operations
−
(242)
(48)
(81)
(371)
As at 31 December 2018
768
619
8
−
1,395
Provision for the year / current service
cost
51
−
−
−
51
Change in estimate
5
6
−
−
11
Unwinding of discount
(Note 28)
131
−
−
−
131
Interest cost
(Note 28)
70
57
−
127
Use of provision/payment
−
(17)
(1)
−
(18)
Disposal of service companies
−
−
(8)
−
(8)
As at 31 December 2019
955
678
56
−
1,689
Provision for the year / current service
cost
30
53
7
−
90
Change in estimate
(115)
68
−
−
(47)
Experience-based adjustments
−
9
−
−
9
Unwinding of discount
(Note 28)
103
−
−
−
103
Interest cost
(Note 28)
−
97
8
−
105
Use of provision/payment
(2)
(14)
(4)
−
(20)
As at 31 December 2020
971
891
67
−
1,929
As at 31 December 2018
Current portion
−
15
−
−
15
Long-term portion
768
604
8
−
1,380
As at 31 December 2018
768
619
8
−
1,395
As at 31 December 2019
Current portion
−
20
15
−
35
Long-term portion
955
658
41
−
1,654
As at 31 December 2019
955
678
56
−
1,689
As at 31 December 2020
Current portion
−
2
6
−
8
Long-term portion
971
889
61
−
1,921
As at 31 December 2020
971
891
67
−
1,929
Key actuarial assumptions
The principal assumptions used in determining defined benefit obligations for the Group’s defined benefit
plan are shown below:
2020
2019
2018
Discount rate
13.03%
14.31%
13.83%
Future salary increases
10.72%
10.4%
9.8%
Growth of the minimum wage
14.7%
15.86%
16.9%
Increase in surcharges
12.1%
12.05%
11.8%

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JSC “Uzbekneftegaz”
Consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
45
20. 
Provisions (continued)
Key actuarial assumptions (continued)
A quantitative sensitivity analysis for significant assumption as at 31 December 2020 is as shown below:
Assumptions
Discount rate
Future salary
increases
Staff turnover
Mortality
Sensitivity level
1%
increase
1%
decrease
1%
increase
1%
decrease
1%
increase
1%
decrease
10%
increase
10%
decrease
Impact on post-
employment benefits
(139)
181
178
(139)
(72)
87
(40)
45
Impact on other long-term
payments
(4)
6
6
(4)
(4)
6
−
−
A quantitative sensitivity analysis for significant assumption as at 31 December 2019 is as shown below:
Assumptions
Discount rate
Future salary
increases
Staff turnover
Mortality
Sensitivity level
1%
increase
1%
decrease
1%
increase
1%
decrease
1%
increase
1%
decrease
10%
increase
10%
decrease
Impact on post-
employment benefits
(94)
119
119
(96)
(53)
62
(25)
28
Impact on other long-term
payments
(4)
4
5
(4)
(4)
5
−
−
The sensitivity analysis above were made based on a method that extrapolates the impact on net defined
benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting
period.
21. 
Shareholders’ equity
As of 31 December 2020, the share capital of the Company consisted of 43,048,493,329 common shares
(2019: 14,628,597,094 common shares, 2018: 14,415,056,795 common shares) issued at UZS 500 par value
(2019: UZS 1,000 par value, 2018: UZS 1,000 par value) as well as preferred non-voting shares of 24,312,673
(31 December 2019: 519,856 preferred shares, 31 December 2018: 519,856 preferred shares) issued at UZS
500 par value (2019: UZS 1,000 par value, 2018: UZS 1,000 par value).
Contributions to share capital
i)
Contribution of non-controlling interest (2019 and 2020)
In 2019 according to the Decree of President of Republic of Uzbekistan No. 4388 from 9 July 2019, a number
of 
subsidiary 
entities 
(JSC “Uzburneftegaz”, 
JSC “Uzneftegazdobicha”, 
JSC “Uznefteproduct”,
JSC “Mubarekneftegaz”, “Mubarek Gas Refinery Plant” LLC, “Ustyurtgaz” LLC, “Gazlineftegazdobicha” LLC,
“Shurtanneftegaz” LLC) were merged with JSC “Uzbekneftegaz”
(Note 1)
. For the purpose of merging the
Centre for the State Asset Management transferred its non-controlling interest in the above-mentioned entities
to the Group. The formal registration of the share capital contribution in respect of this transfer partially took
place in 2019 (nominal value of shares issued: UZS 213 billion) and 2020 (nominal value of shares issued:
UZS 1,561 billion 
−
1,544,755,227 common shares and 11,478,425 preferred shares with par value
UZS 1,000). As an actual transfer of the non-controlling interest in all above-mentioned entities and the merger
was fully completed in 2019, the difference in the amount of UZS 981 billion, between nominal value of issued
shares in 2019 (UZS 213 billion) and the book value of the received non-controlling interest (UZS 1,194 billion)
was recognized in retained earnings in 2019.
In 2020, when the formal registration of the remaining part of the share capital contribution was completed, the
Group recognized the increase in share capital by the amount of UZS 1,561 billion (nominal value of shares
issued) with an adjustment of the retained earnings for the same amount.

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