With independent auditor’s report

JSC “Uzbekneftegaz”
Consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
8
2. 
Basis of preparation (continued)
Foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities included in these consolidated
financial statements are measured using the currency of the primary economic environment in which the
entities operate (“the functional currency”). The consolidated financial statements are presented in Uzbek
soums, which is the Company’s and the majority of subsidiaries’ functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the consolidated statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value is determined.
Differences arising on settlement or translation of monetary items are recognized in profit or loss with the
exception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreign
operation. These are recognized in other comprehensive income until the net investment is disposed of, at
which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to
exchange differences on those monetary items are also recorded in other comprehensive income.
Group Companies
The results and financial position of all the Group’s subsidiaries, joint ventures and associates (none of which
operate in a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:

Assets and liabilities for each statement of financial position presented are translated at the closing rate
at that reporting date;

Income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the rate on
the dates of the transactions); and

All resulting exchange differences are recognized as a separate component of other comprehensive
income.
Exchange rates
The exchange rates established by the Central Bank of Uzbekistan (“CBU”) are used as official currency
exchange rates in the Republic of Uzbekistan.
The currency exchange rate of CBU as of 31 December 2020 was 10,476 UZS to 1 US dollar. This rate was
used to translate monetary assets and liabilities denominated in United States dollars (“US dollar”, or “USD”)
as of 31 December 2020 (31 December 2019: 9,508 UZS to 1 US dollar, 31 December 2018: 8,340 UZS to
1 US dollar). The currency exchange rate of CBU as of 30 September 2021 was 10,692 UZS to 1 US dollar.

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