With independent auditor’s report

Legal proceedings
From time to time and in the normal course of business, claims against the Group are received. On the basis
of its own estimates and both internal and external professional advice management is of the opinion that no
material losses will be incurred in respect of claims in excess of provisions that have been made in these
consolidated financial statements.
Taxation
Uzbekistan currently has a number of laws related to various taxes imposed by both state and regional
governmental authorities. Implementing regulations are often unclear or non-existent and few precedents have
been established. Often, differing opinions regarding legal interpretation exist both among and within
government ministries and organizations (like the State Tax Committee and its various inspectorates) thus
creating uncertainties and areas of conflict. Tax declarations, together with other legal compliance areas
(as examples, customs and currency controls matters) are subject to review and investigation by a number of
authorities that are empowered by law to impose extremely severe fines, penalties and interest charges.
These facts create tax risks in Uzbekistan substantially more significant than typically found in countries with
more developed tax systems. Management believes that the Group is in substantial compliance with the tax
laws affecting its operations. However, the risk remains that the relevant authorities could take differing
positions with regard interpretive issues.
As at 31 December 2020 management believes that its interpretation of the relevant legislation is appropriate
and that the Group’s tax, currency and customs position will be sustained.

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JSC “Uzbekneftegaz”
Consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
56