Tatneft Group
IFRS CON SOLIDATED FI N A N CIAL STATEME N TS
AN D I N DEPE N DE N T AUDITOR’S REPORT
31 DECEMBER 2022
IFRS CON SOLIDATED FI N A N CIAL STATEME N TS
AN D I N DEPE N DE N T AUDITOR’S REPORT
31 DECEMBER 2022
Contents
INDEPENDENT AUDITOR’ S REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position ........................................................................................... 1
Consolidated Statement of Profit or Loss and Other Comprehensive Income .......................................... 2
Consolidated Statement of Changes in Equity .......................................................................................... 4
Consolidated Statement of Cash Flows ..................................................................................................... 5
Notes to the Consolidated Financial Statements
Note 1: Organisation ................................................................................................................................. 7
Note 2: Basis of preparation ...................................................................................................................... 7
Note 3: Summary of significant accounting policies ................................................................................. 7
Note 4: Critical accounting estimates and judgements in applying accounting policies ......................... 21
Note 5: Adoption of new or revised standards and interpretations .......................................................... 24
Note 6: Cash and cash equivalents .......................................................................................................... 25
Note 7: Accounts receivable .................................................................................................................... 25
Note 8: Financial services: Loans to customers ...................................................................................... 27
Note 9: Other financial assets .................................................................................................................. 28
Note 10: Inventories ................................................................................................................................ 29
Note 11: Prepaid expenses and other current assets ................................................................................ 29
Note 12: Property, plant and equipment .................................................................................................. 30
Note 13: Taxes......................................................................................................................................... 33
Note 14: Debt .......................................................................................................................................... 34
Note 15: Accounts payable and accrued liabilities .................................................................................. 35
Note 16: Financial services: Due to banks and CB RF............................................................................ 35
Note 17: Financial services: Customer accounts ..................................................................................... 36
Note 18: Other long-term liabilities......................................................................................................... 36
Note 19: Shareholders’ equity ................................................................................................................. 37
Note 20: Employee benefit expenses....................................................................................................... 39
Note 21: Interest and commission income and expense from financial services:................................... 39
Note 22: Segment information ................................................................................................................ 39
Note 23: Related party transactions ......................................................................................................... 42
Note 24: Contingencies and commitments .............................................................................................. 44
Note 25: Business combinations.............................................................................................................. 46
Note 26: Discontinued operation ............................................................................................................. 46
Note 27: Financial risk management ....................................................................................................... 47
Note 28: Subsequent events..................................................................................................................... 63
INDEPENDENT AUDITOR’ S REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position ........................................................................................... 1
Consolidated Statement of Profit or Loss and Other Comprehensive Income .......................................... 2
Consolidated Statement of Changes in Equity .......................................................................................... 4
Consolidated Statement of Cash Flows ..................................................................................................... 5
Notes to the Consolidated Financial Statements
Note 1: Organisation ................................................................................................................................. 7
Note 2: Basis of preparation ...................................................................................................................... 7
Note 3: Summary of significant accounting policies ................................................................................. 7
Note 4: Critical accounting estimates and judgements in applying accounting policies ......................... 21
Note 5: Adoption of new or revised standards and interpretations .......................................................... 24
Note 6: Cash and cash equivalents .......................................................................................................... 25
Note 7: Accounts receivable .................................................................................................................... 25
Note 8: Financial services: Loans to customers ...................................................................................... 27
Note 9: Other financial assets .................................................................................................................. 28
Note 10: Inventories ................................................................................................................................ 29
Note 11: Prepaid expenses and other current assets ................................................................................ 29
Note 12: Property, plant and equipment .................................................................................................. 30
Note 13: Taxes......................................................................................................................................... 33
Note 14: Debt .......................................................................................................................................... 34
Note 15: Accounts payable and accrued liabilities .................................................................................. 35
Note 16: Financial services: Due to banks and CB RF............................................................................ 35
Note 17: Financial services: Customer accounts ..................................................................................... 36
Note 18: Other long-term liabilities......................................................................................................... 36
Note 19: Shareholders’ equity ................................................................................................................. 37
Note 20: Employee benefit expenses....................................................................................................... 39
Note 21: Interest and commission income and expense from financial services:................................... 39
Note 22: Segment information ................................................................................................................ 39
Note 23: Related party transactions ......................................................................................................... 42
Note 24: Contingencies and commitments .............................................................................................. 44
Note 25: Business combinations.............................................................................................................. 46
Note 26: Discontinued operation ............................................................................................................. 46
Note 27: Financial risk management ....................................................................................................... 47
Note 28: Subsequent events..................................................................................................................... 63
Joint-Stock Company
“Technologies of Trust – Audit”
(“Technologies of Trust – Audit” JSC)
White Square Office Center,
10 Butyrsky Val, Moscow,
Russian Federation, 125047
T: +7 (495) 967 6000,
F: +7 (495) 967 6001 www.tedo.ru
Independent Auditor’s Report
To the Shareholders and Board of Directors of Public Joint Stock Company TATNEFT named after V.D. Shashin:
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
financial position of Public Joint Stock Company TATNEFT named after V.D. Shashin and its subsidiaries (together
– the “Group”) as at 31 December 2022, and the Group’s consolidated financial performance and consolidated
cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).
What we have audited
The Group’s consolidated financial statements comprise:
• the consolidated statement of financial position as at 31 December 2022;
• the consolidated statement of profit or loss and other comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for
Accountants (IESBA Code) and the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s
Independence Rules that are relevant to our audit of the consolidated financial statements in the Russian
Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
“Technologies of Trust – Audit”
(“Technologies of Trust – Audit” JSC)
White Square Office Center,
10 Butyrsky Val, Moscow,
Russian Federation, 125047
T: +7 (495) 967 6000,
F: +7 (495) 967 6001 www.tedo.ru
Independent Auditor’s Report
To the Shareholders and Board of Directors of Public Joint Stock Company TATNEFT named after V.D. Shashin:
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
financial position of Public Joint Stock Company TATNEFT named after V.D. Shashin and its subsidiaries (together
– the “Group”) as at 31 December 2022, and the Group’s consolidated financial performance and consolidated
cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).
What we have audited
The Group’s consolidated financial statements comprise:
• the consolidated statement of financial position as at 31 December 2022;
• the consolidated statement of profit or loss and other comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for
Accountants (IESBA Code) and the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s
Independence Rules that are relevant to our audit of the consolidated financial statements in the Russian
Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
www.tedo.ru
2
Key audit matter How our audit addressed the key audit matter
Impairment of property, plant and equipment
We focused on this matter due to significance of
carrying amount of property, plant and equipment,
significance of judgements and estimates applied
in analysis of impairment of these assets, and the
effect of the current geopolitical environment and
economic situation on the recoverable amount of
these assets and predictability of such recoverable
amount.
Information on property, plant and equipment,
analysis of impairment of these assets and results
of such analysis are disclosed in Note 12 “Property,
Plant and Equipment” to the consolidated financial
statements.
Regarding recoverable amounts calculated by the Group
based on expected discounted cash flows, we (on a sample
basis, where applicable):
• assessed appropriateness of the methodology applied;
• assessed acceptability of the key assumptions applied
(with involvement of our valuation specialists);
• tested underlying data, including comparing the used
information about hydrocarbon reserves to the
assessment made by independent engineering firm;
• tested the mathematical accuracy of the calculations; and
• performed a sensitivity analysis of the results of the
calculations to changes in key assumptions.
We tested (on a sample basis) that recorded impairment is
sufficient by comparing carrying amounts of assets to
corresponding recoverable amounts.
We assessed information on impairment of property, plant
and equipment in the consolidated financial statements for
compliance with requirements of IFRS.
Disposal of the tire business
We focused on this matter due to complexity of the
transaction, significance of judgements and
estimates applied in accounting for the transaction,
and due to complexity of presentation of
discontinued operations.
Information on disposal of the tire business is
disclosed in Note 4 “ Critical accounting estimates
and judgements in applying accounting policies”
and Note 26 “Discontinued Operations” to the
consolidated financial statements.
We performed the following procedures:
• analysis of sale and purchase agreements and other
documents to obtain understanding of terms of individual
deals and of the transaction on disposal of the tire
business as a whole;
• analysis of the Group’s conclusions on transfer of control
over the tire business;
• testing of the fair value of the consideration received,
including assessment of appropriateness of the discount
rate used;
• testing of accounting (on a sample basis) for the disposal
of the tire business and related disclosures, and
presentation of the tire business as discontinued
operations.
Other information
Management is responsible for the other information. The other information comprises the Integrated Annual
Report 2022, Securities Issuer’s Report for the 12 months of 2022 and “Management’s discussion and analysis of
financial condition and results of operations for the years ended 31 December 2022 and 2021” (but does not
include the consolidated financial statements and our auditor’s report thereon) , which are expected to be made
available to us after the date of this auditor’s report .
Our opinion on the consolidated financial statements does not cover the other information and we will not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above when it is made available to us and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
2
Key audit matter How our audit addressed the key audit matter
Impairment of property, plant and equipment
We focused on this matter due to significance of
carrying amount of property, plant and equipment,
significance of judgements and estimates applied
in analysis of impairment of these assets, and the
effect of the current geopolitical environment and
economic situation on the recoverable amount of
these assets and predictability of such recoverable
amount.
Information on property, plant and equipment,
analysis of impairment of these assets and results
of such analysis are disclosed in Note 12 “Property,
Plant and Equipment” to the consolidated financial
statements.
Regarding recoverable amounts calculated by the Group
based on expected discounted cash flows, we (on a sample
basis, where applicable):
• assessed appropriateness of the methodology applied;
• assessed acceptability of the key assumptions applied
(with involvement of our valuation specialists);
• tested underlying data, including comparing the used
information about hydrocarbon reserves to the
assessment made by independent engineering firm;
• tested the mathematical accuracy of the calculations; and
• performed a sensitivity analysis of the results of the
calculations to changes in key assumptions.
We tested (on a sample basis) that recorded impairment is
sufficient by comparing carrying amounts of assets to
corresponding recoverable amounts.
We assessed information on impairment of property, plant
and equipment in the consolidated financial statements for
compliance with requirements of IFRS.
Disposal of the tire business
We focused on this matter due to complexity of the
transaction, significance of judgements and
estimates applied in accounting for the transaction,
and due to complexity of presentation of
discontinued operations.
Information on disposal of the tire business is
disclosed in Note 4 “ Critical accounting estimates
and judgements in applying accounting policies”
and Note 26 “Discontinued Operations” to the
consolidated financial statements.
We performed the following procedures:
• analysis of sale and purchase agreements and other
documents to obtain understanding of terms of individual
deals and of the transaction on disposal of the tire
business as a whole;
• analysis of the Group’s conclusions on transfer of control
over the tire business;
• testing of the fair value of the consideration received,
including assessment of appropriateness of the discount
rate used;
• testing of accounting (on a sample basis) for the disposal
of the tire business and related disclosures, and
presentation of the tire business as discontinued
operations.
Other information
Management is responsible for the other information. The other information comprises the Integrated Annual
Report 2022, Securities Issuer’s Report for the 12 months of 2022 and “Management’s discussion and analysis of
financial condition and results of operations for the years ended 31 December 2022 and 2021” (but does not
include the consolidated financial statements and our auditor’s report thereon) , which are expected to be made
available to us after the date of this auditor’s report .
Our opinion on the consolidated financial statements does not cover the other information and we will not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above when it is made available to us and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
www.tedo.ru
3
When we read the Integrated Annual Report 2022, Securities Issuer’s Report for the 12 months of 2022 and
“Management’s disc ussion and analysis of financial condition and results of operations for the years ended 31
December 2022 and 2021”, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s 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 realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, 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 fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness 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 significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
3
When we read the Integrated Annual Report 2022, Securities Issuer’s Report for the 12 months of 2022 and
“Management’s disc ussion and analysis of financial condition and results of operations for the years ended 31
December 2022 and 2021”, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s 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 realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, 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 fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness 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 significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
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4
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare 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 interest benefits of such communication.
The certified auditor responsible for the audit resulting in this independent auditor’s report is E. N. Kriventsev.
15 March 2023
Moscow, Russian Federation
E. N. Kriventsev is authorised to sign on behalf of the general director of Joint-Stock Company “Technologies of
Trust – Audit” (Principal Registration Number of the Record in the Register of Auditors and Audit Organizations
(PRNR) – 12006020338), certified auditor (PRNR – 21906099944)
4
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare 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 interest benefits of such communication.
The certified auditor responsible for the audit resulting in this independent auditor’s report is E. N. Kriventsev.
15 March 2023
Moscow, Russian Federation
E. N. Kriventsev is authorised to sign on behalf of the general director of Joint-Stock Company “Technologies of
Trust – Audit” (Principal Registration Number of the Record in the Register of Auditors and Audit Organizations
(PRNR) – 12006020338), certified auditor (PRNR – 21906099944)
T A T N E F T
Consolidated S t a t e m e n t o f Financial Position
(In m i l l i o nof Russian Rubles)
Assets
Cash and cash equivalents
Financial services: Mandatory reserve deposits with the Bank of
R u s s i a
Short-term accounts receivable, net
Financial services: Loans to customers
Other short-term financial assets
Inventories
Prepaid expenses and o t h e rcurrent assets
Prepaid income tax
Non-current assets held for sale
To t a l c u r r e n t assets
Long-term accounts receivable, net
Financial services: Loans to customers
Other long-term financial assets
Investments i n associates and joint ventures
Property, plant and equipment, net
Right-of-use assets
Deferred income tax assets
Other long-term assets
Total non-current assets
Total assets
Liabilities and equity
Short-term debt and current portion of long-term debt
Accounts payable and accrued liabilities
Dividends payable
Financial services: Due to banks and the Bank o f Russia
Financial services: Customer accounts
Financial services: Other financial liabilities at fair value through
profit or loss
Taxes payable, other than income tax
Income tax payable
Other short-term liabilities
Total c u r r e n t liabilities
Long-term debt, netof current portion
Financial services: Due to banks and the Bank of Russia
Financial services: Customer accounts
Decommissioning provision, netof current portion
Lease liabilities, net ofcurrent portion
Deferred income tax liability
Other long-term liabilities
Total non-current liabilities
T o t a l l i a b i l i t i e s
Equity
Preferred shares (authorised. issued and paid as at 3 1 December 2022 and at
3 1 December 2021 - 147,508.500 shares: nominal value - RR 1.00
Ordinary shares (authorised, issued and paid a s a t 3 1 December 2022 and a t
3 1 December 2021 - 2,178,690,700 shares; nominal value - RR 1.00)
Additional paid-in capital
Accumulated o t h e r comprehensive (loss)/income
Retained earnings
Less: Ordinary shares held i n treasury, a t cost
(75.636.735 shares a t 3 1 December 2022 and 3 1 December 2021)
Total equityownedb yshareholderso fPJSC Tatneft
Non-controlling interest
Total equity
Total liabilities and equity
Approvedfor issue and signed o n 75 M a r c h 2023.
N o t e 31 D e c e m b e r 2022
6
7
8
9
10
11
7
9
1 2
13
1 4
15
19
16
17
13
14
16
17
1 2
13
19
19
27
167,864
378
107,869
44,881
23,764
77,382
32,198
1,180
910
456,426
12,823
112,525
90,241
2,535
975,172
3,237
5,504
17,374
1,219,411
1,675,837
2,665
92,936
26,025
3,290
211,919
1,433
72,218
4,428
140
415,054
11,836
2,883
713
53,994
2,641
50,912
33,360
156,339
571,393
746
11,021
84,437
(249 )
1,010,027
(10,359 )
1,095,623
8,821
1,104,444
1,675,837
31 D e c e m b e r 2021
66,487
1,429
89,004
32,342
108,162
81,062
32,278
763
715
412,242
918
102,360
81,084
2,125
879,782
11,897
3,333
8,548
1,090,047
1,502,289
22,541
101,270
22,984
23,553
150,141
7,063
89,705
4,443
414
422,114
9,631
4,026
1,288
38,653
10,324
43,073
29,805
136,800
558,914
746
11,021
84,437
2,345
850,198
(10,359 )
938,388
4,987
943,375
1,502,289
CEO Maganov N Chief AccotintantMatveev O.M.
T h e accompanying notes a r e a n integralpart o f these consolidated financial statements.
Consolidated S t a t e m e n t o f Financial Position
(In m i l l i o nof Russian Rubles)
Assets
Cash and cash equivalents
Financial services: Mandatory reserve deposits with the Bank of
R u s s i a
Short-term accounts receivable, net
Financial services: Loans to customers
Other short-term financial assets
Inventories
Prepaid expenses and o t h e rcurrent assets
Prepaid income tax
Non-current assets held for sale
To t a l c u r r e n t assets
Long-term accounts receivable, net
Financial services: Loans to customers
Other long-term financial assets
Investments i n associates and joint ventures
Property, plant and equipment, net
Right-of-use assets
Deferred income tax assets
Other long-term assets
Total non-current assets
Total assets
Liabilities and equity
Short-term debt and current portion of long-term debt
Accounts payable and accrued liabilities
Dividends payable
Financial services: Due to banks and the Bank o f Russia
Financial services: Customer accounts
Financial services: Other financial liabilities at fair value through
profit or loss
Taxes payable, other than income tax
Income tax payable
Other short-term liabilities
Total c u r r e n t liabilities
Long-term debt, netof current portion
Financial services: Due to banks and the Bank of Russia
Financial services: Customer accounts
Decommissioning provision, netof current portion
Lease liabilities, net ofcurrent portion
Deferred income tax liability
Other long-term liabilities
Total non-current liabilities
T o t a l l i a b i l i t i e s
Equity
Preferred shares (authorised. issued and paid as at 3 1 December 2022 and at
3 1 December 2021 - 147,508.500 shares: nominal value - RR 1.00
Ordinary shares (authorised, issued and paid a s a t 3 1 December 2022 and a t
3 1 December 2021 - 2,178,690,700 shares; nominal value - RR 1.00)
Additional paid-in capital
Accumulated o t h e r comprehensive (loss)/income
Retained earnings
Less: Ordinary shares held i n treasury, a t cost
(75.636.735 shares a t 3 1 December 2022 and 3 1 December 2021)
Total equityownedb yshareholderso fPJSC Tatneft
Non-controlling interest
Total equity
Total liabilities and equity
Approvedfor issue and signed o n 75 M a r c h 2023.
N o t e 31 D e c e m b e r 2022
6
7
8
9
10
11
7
9
1 2
13
1 4
15
19
16
17
13
14
16
17
1 2
13
19
19
27
(
(
31 D e c e m b e r 2021
CEO Maganov N Chief AccotintantMatveev O.M.
T h e accompanying notes a r e a n integralpart o f these consolidated financial statements.
TAT
N
EFT
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
2
N ote
Year ended
31 December 2022
Year ended
31 December 2021
(restated, Note 26)
Continuing operations
Revenue (excluding financial services) 221,427,147
1,205,267
Costs and other expenses (excluding financial services)
Operating expenses (176,629 )
(136,300 )
Purchased crude oil and refined products (135,203 )
(125,834 )
Exploration (1,946 )
(2,799 )
Transportation (52,892 )
(35,854 )
Selling, general and administrative (68,584 )
(68,246 )
Depreciation, depletion and amortization 12,22 (48,042 )
(41,723 )
Expected credit losses on financial assets net of reversal 7,92,165
(39 )
Impairment losses on property, plant and equipment and other non-
financial assets net of reversals 12 (30,230 )
(3,297 )
Taxes other than income taxes 13 (464,819 )
(497,948 )
Export duties (44,527 )
(39,033 )
Maintenance of social infrastructure and transfer of social assets (9,496 )
(12,826 )
Total costs and expenses (excluding financial services) (1,030,203 )
(963,899 )
Loss on disposals of interests in subsidiaries and associates, net (96 )
(14 )
Fair value gain from financial assets at fair value through profit or
loss, net897
3,382
Other operating income, net2,645
2,617
Operating profit (excluding financial services)400,390
247,353
Net interest, fee and commission and other operating
income/(expenses) and gains/(losses) from financial services
Interest, fee and commission income 21,2225,804
16,448
Interest, fee and commission expense 21 (14,522 )
(8,229 )
Net (expense)/income on creating/reversal provision for credit losses
associated with debt financial assets 8 (1,501 )
543
Operating expenses (8,930 )
(8,335 )
Gain arising from dealing in foreign currencies, net3,301
8
Other operating expense, net (1,922 )
(75 )
Total net interest, fee, commission and other operating income
and gains from financial services2,230
360
Other (expenses)/ income
Foreign exchange (loss)/gain, net 27 (24,999 )
2,440
Interest income (excluding financial services)7,756
3,909
Interest expense, net of amounts capitalised (excluding financial
services) (5,697 )
(6,174 )
Share of results of associates and joint ventures, net288
11
Total other (expenses)/income, net (22,652 )
186
Profit before income tax379,968
247,899
Income tax
Current income tax expense (76,908 )
(48,753 )
Deferred income tax expense (3,822 )
(7,658 )
Total income tax expense 13 (80,730 )
(56,411 )
Profit from continuing operations299,238
191,488
(Loss)/profit from discontinued operation 26 (14,335 )
7,398
Profit for the year284,903
198,886
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
2
N ote
Year ended
31 December 2022
Year ended
31 December 2021
(restated, Note 26)
Continuing operations
Revenue (excluding financial services) 22
Costs and other expenses (excluding financial services)
Operating expenses (
Purchased crude oil and refined products (
Exploration (
Transportation (
Selling, general and administrative (
Depreciation, depletion and amortization 12,22 (
Expected credit losses on financial assets net of reversal 7,9
Impairment losses on property, plant and equipment and other non-
financial assets net of reversals 12 (
Taxes other than income taxes 13 (
Export duties (
Maintenance of social infrastructure and transfer of social assets (
Total costs and expenses (excluding financial services) (
Loss on disposals of interests in subsidiaries and associates, net (
Fair value gain from financial assets at fair value through profit or
loss, net
Other operating income, net
Operating profit (excluding financial services)
Net interest, fee and commission and other operating
income/(expenses) and gains/(losses) from financial services
Interest, fee and commission income 21,22
Interest, fee and commission expense 21 (
Net (expense)/income on creating/reversal provision for credit losses
associated with debt financial assets 8 (
Operating expenses (
Gain arising from dealing in foreign currencies, net
Other operating expense, net (
Total net interest, fee, commission and other operating income
and gains from financial services
Other (expenses)/ income
Foreign exchange (loss)/gain, net 27 (
Interest income (excluding financial services)
Interest expense, net of amounts capitalised (excluding financial
services) (
Share of results of associates and joint ventures, net
Total other (expenses)/income, net (
Profit before income tax
Income tax
Current income tax expense (
Deferred income tax expense (
Total income tax expense 13 (
Profit from continuing operations
(Loss)/profit from discontinued operation 26 (
Profit for the year
TAT
N
EFT
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
3
N ote
Year ended
31 December 2022
Year ended
31 December 2021
(restated, Note 26)
Other comprehensive (loss)/ income net of income tax:
Continuing operations
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments (1,296 )
(847 )
Loss on debt financial assets at fair value through other comprehensive
income, net (424 )
(957 )
Items that will not be reclassified to profit or loss:
(Loss)/gain on equity financial assets at fair value through other
comprehensive income, net (524 )
255
Actuarial (loss)/gain on employee benefit plans (175 )
1,536
Other comprehensive loss from continuing operations (2,419 )
(13 )
Other comprehensive income from discontinued operation 2642
-
Total comprehensive income for the period282,526
198,873
Profit attributable to:
- Shareholders of PJSC Tatneft284,572
198,412
- Non-controlling interest331
474
284,903
198,886
Total comprehensive income attributable to:
- Shareholders of PJSC Tatneft282,319
198,571
- Non-controlling interest207
302
282,526
198,873
Total comprehensive income/(loss) attributable to shareholders of
PJSC Tatneft from:
- continuing operations296,373
191,312
- discontinued operation (14,054 )
7,259
282,319
198,571
Basic and diluted earnings per share (RR)
Ordinary 19126,44
88,16
Preferred126,44
88,16
Basic and diluted earnings per share from continuing
operations (RR)
Ordinary 19132,70
84,93
Preferred132,70
84,93
Weighted average shares outstanding (millions of shares)
Ordinary 192,103
2,103
Preferred148
148
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
3
N ote
Year ended
31 December 2022
Year ended
31 December 2021
(restated, Note 26)
Other comprehensive (loss)/ income net of income tax:
Continuing operations
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments (
Loss on debt financial assets at fair value through other comprehensive
income, net (
Items that will not be reclassified to profit or loss:
(Loss)/gain on equity financial assets at fair value through other
comprehensive income, net (
Actuarial (loss)/gain on employee benefit plans (
Other comprehensive loss from continuing operations (
Other comprehensive income from discontinued operation 26
Total comprehensive income for the period
Profit attributable to:
- Shareholders of PJSC Tatneft
- Non-controlling interest
Total comprehensive income attributable to:
- Shareholders of PJSC Tatneft
- Non-controlling interest
Total comprehensive income/(loss) attributable to shareholders of
PJSC Tatneft from:
- continuing operations
- discontinued operation (
Basic and diluted earnings per share (RR)
Ordinary 19
Preferred
Basic and diluted earnings per share from continuing
operations (RR)
Ordinary 19
Preferred
Weighted average shares outstanding (millions of shares)
Ordinary 19
Preferred
TAT
N
EFT
Consolidated Statement of Changes in Equity
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
4
Total equity owned by shareholders of PJSC Tatneft
N on-con-
trolling
interest
Total
equity
Number of
shares
( thousands )
Share
capital
Additional
paid-in
capital
Treasury
shares
Actuarial
(loss)/profit
on employee
benefit
plans
Foreign
currency
translation
adjustments
Gain/(loss) on
financial
assets at fair
value through
other compre-
hensive
income, net
Retained
earnings
Total
Balance at 1 January 20212,250,562
11,767
84,437
(10,359 )
(2,511 )
3,191
1,506
739,641
827,672
3,918
831,590
Profit for the year-
-
-
-
-
-
-
198,412
198,412
474
198,886
Other comprehensive income/(loss) for
the year-
-
-
-
1,536
(847 )
(530 )
-
159
(172 )
(13 )
Total comprehensive income/(loss) for
the year-
-
-
-
1,536
(847 )
(530 )
198,412
198,571
302
198,873
Acquisition of non-controlling interest in
subsidiaries-
-
-
-
-
-
-
-
-
321
321
Disposal of non-controlling interest in
subsidiaries-
-
-
-
-
-
-
-
-
(40 )
(40 )
Dividends declared (Note 19)-
-
-
-
-
-
-
(87,322 )
(87,322 )
(47 )
(87,369 )
Intercompany transactions on the
purchase and sale of loans-
-
-
-
-
-
-
(533 )
(533 )
533
-
Balance at 31 December 20212,250,562
11,767
84,437
(10,359 )
(975 )
2,344
976
850,198
938,388
4,987
943,375
Balance at 1 January 20222,250,562
11,767
84,437
(10,359 )
(975 )
2,344
976
850,198
938,388
4,987
943,375
Profit for the year-
-
-
-
-
-
-
284,572
284,572
331
284,903
Other comprehensive loss for the year-
-
-
-
(175 )
(1,254 )
(824 )
-
(2,253 )
(124 )
(2,377 )
Total comprehensive (loss)/income for
the year-
-
-
-
(175 )
(1,254 )
(824 )
284,572
282,319
207
282,526
Acquisition of non-controlling interest in
subsidiaries-
-
-
-
-
-
-
-
-
2,021
2,021
Dividends declared (Note 19)-
-
-
-
-
-
-
(125,379 )
(125,379 )
(30 )
(125,409 )
Disposal of equity financial assets at fair
value through other comprehensive
income-
-
-
-
-
-
(341 )
341
-
-
-
Disposal of subsidiaries (Note 26)-
-
-
-
-
-
-
-
-
356
356
Other movements-
-
-
-
-
-
-
295
295
1,280
1,575
Balance at 31 December 20222,250,562
11,767
84,437
(10,359 )
(1,150 )
1,090
(189 )
1,010,027
1,095,623
8,821
1,104,444
Consolidated Statement of Changes in Equity
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
4
Total equity owned by shareholders of PJSC Tatneft
N on-con-
trolling
interest
Total
equity
Number of
shares
( thousands )
Share
capital
Additional
paid-in
capital
Treasury
shares
Actuarial
(loss)/profit
on employee
benefit
plans
Foreign
currency
translation
adjustments
Gain/(loss) on
financial
assets at fair
value through
other compre-
hensive
income, net
Retained
earnings
Total
Balance at 1 January 2021
Profit for the year
Other comprehensive income/(loss) for
the year
Total comprehensive income/(loss) for
the year
Acquisition of non-controlling interest in
subsidiaries
Disposal of non-controlling interest in
subsidiaries
Dividends declared (Note 19)
Intercompany transactions on the
purchase and sale of loans
Balance at 31 December 2021
Balance at 1 January 2022
Profit for the year
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
Acquisition of non-controlling interest in
subsidiaries
Dividends declared (Note 19)
Disposal of equity financial assets at fair
value through other comprehensive
income
Disposal of subsidiaries (Note 26)
Other movements
Balance at 31 December 2022
TAT
N
EFT
Consolidated Statement of Cash Flows
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
5
N ote
Year ended
31 December 2022
Year ended
31 December 2021
Operating activities
Profit for the year284,903
198,886
Adjustments:
Net interest, fee and commission and other operating income
and gains from financial services activities (2,230 )
(360 )
Depreciation, depletion and amortization 12,2248,547
42,663
Income tax expense 1382,274
58,420
Expected credit losses on financial assets net of reversal 7,9 (2,200 )
78
Impairment losses on property, plant and equipment and
other non-financial assets net of reversal 1230,408
3,576
Loss on disposals of interests in subsidiaries and associates,
net 2619,110
14
Income from changes in the fair value of financial assets
measured at fair value through profit or loss, net (897 )
(3,382 )
Effects of foreign exchange (1,269 )
(268 )
Share of results of associates and joint ventures, net (288 )
(11 )
Interest income (excluding financial services) (7,771 )
(3,962 )
Interest expense, net of amounts capitalised (excluding
financial services)5,952
6,304
Other (6,199 )
1,529
Changes in operational working capital related to operating
activities, excluding cash:
Accounts receivable (24,694 )
(4,559 )
Inventories (11,482 )
(32,467 )
Prepaid expenses and other current assets (2,708 )
(10,748 )
Securities at fair value through profit or loss200
(49 )
Accounts payable and accrued liabilities2,265
15,114
Taxes payable, other than income tax (16,511 )
58,441
Net cash provided by operating activities before income tax
and interest (excluding financial services)397,410
329,219
Net interest, fee and commission and other operating income
and gains from financial services2,230
360
Adjustments:
Net expense/(income) on creating/(reversal) of provision for
credit losses associated with debt financial assets 81,501
(543 )
Provision/(reversal of provision) for losses on credit related
commitments170
(186 )
Change in fair value of debt financial assets through profit or
loss-
234
Other (938 )
1,006
Changes in operational working capital related to financial
services, excluding cash:
Mandatory reserve deposits with the Bank of Russia1,051
99
Due from banks6,285
(1,334 )
Loans to customers (23,915 )
(36,841 )
Due to banks and the Bank of Russia (22,215 )
12,007
Customer accounts80,205
3,391
Promissory notes issued (250 )
(43 )
Securities at fair value through profit or loss (3,054 )
2,316
Other financial liabilities at fair value through profit or loss (6,377 )
5,299
Net cash provided by/(used in) operating activities from
financial services before income tax34,693
(14,235 )
Income taxes paid (79,243 )
(48,900 )
Interest paid (excluding financial services) (2,324 )
(2,434 )
Interest received (excluding financial services)7,162
3,844
Net cash provided by operating activities357,698
267,494
Consolidated Statement of Cash Flows
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
5
N ote
Year ended
31 December 2022
Year ended
31 December 2021
Operating activities
Profit for the year
Adjustments:
Net interest, fee and commission and other operating income
and gains from financial services activities (
Depreciation, depletion and amortization 12,22
Income tax expense 13
Expected credit losses on financial assets net of reversal 7,9 (
Impairment losses on property, plant and equipment and
other non-financial assets net of reversal 12
Loss on disposals of interests in subsidiaries and associates,
net 26
Income from changes in the fair value of financial assets
measured at fair value through profit or loss, net (
Effects of foreign exchange (
Share of results of associates and joint ventures, net (
Interest income (excluding financial services) (
Interest expense, net of amounts capitalised (excluding
financial services)
Other (
Changes in operational working capital related to operating
activities, excluding cash:
Accounts receivable (
Inventories (
Prepaid expenses and other current assets (
Securities at fair value through profit or loss
Accounts payable and accrued liabilities
Taxes payable, other than income tax (
Net cash provided by operating activities before income tax
and interest (excluding financial services)
Net interest, fee and commission and other operating income
and gains from financial services
Adjustments:
Net expense/(income) on creating/(reversal) of provision for
credit losses associated with debt financial assets 8
Provision/(reversal of provision) for losses on credit related
commitments
Change in fair value of debt financial assets through profit or
loss
Other (
Changes in operational working capital related to financial
services, excluding cash:
Mandatory reserve deposits with the Bank of Russia
Due from banks
Loans to customers (
Due to banks and the Bank of Russia (
Customer accounts
Promissory notes issued (
Securities at fair value through profit or loss (
Other financial liabilities at fair value through profit or loss (
Net cash provided by/(used in) operating activities from
financial services before income tax
Income taxes paid (
Interest paid (excluding financial services) (
Interest received (excluding financial services)
Net cash provided by operating activities
TAT
N
EFT
Consolidated Statement of Cash Flows
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
6
Note
Year ended
31 December 2022
Year ended
31 December 2021
Investing activities
Additions to property, plant and equipment (160,895 )
(119,106 )
Proceeds from disposal of property, plant and equipment456
1,593
Acquisition and increase of interest in associate (119 )
(12 )
Net cash flow from acquisitions of subsidiaries 25 (24,455 )
(6,589 )
Net cash flow from disposal of subsidiaries 26 (2,991 )
-
Purchase of securities at fair value through other comprehensive
income (12,446 )
(35,424 )
Purchase of securities at amortised cost (15,825 )
(5,018 )
Proceeds from disposal of securities at fair value through other
comprehensive income7,323
25,830
Proceeds from redemption of securities at amortised cost8,990
12,368
Proceeds from sale of non-current assets held for sale297
316
Proceeds from investments in associates and joint ventures-
7
Proceeds from redemption of bank deposits measured at amortised
cost69,266
40,364
Placement of bank deposits measured at amortised cost (12,750 )
(86,083 )
Proceeds from redemption of bank deposits measured at fair value
through profit or loss40,567
30,480
Placement of bank deposits measured at fair value through profit
or loss (6,105 )
(62,295 )
Proceeds from redemption of loans and notes receivable 92,593
9,164
Issuance of loans and notes receivable 9 (5,527 )
(598 )
Net cash flow from currency swaps550
1,904
Advance payment for acquisition of other non-current assets (14,730 )
-
(Acquisition)/proceeds from sale of other non-current assets (1,020 )
4,658
Proceeds from government grants 189,767
15,803
Net cash used in investing activities (117,054 )
(172,638 )
Financing activities
Proceeds from issuance of debt (excluding financial services) 271,488
9,338
Repayment of debt (excluding financial services) 27 (3,091 )
(9,689 )
Repayment of principal portion of lease liabilities (1,125 )
(1,440 )
Issuance of bonds 27-
50
Redemption of bonds 27 (18,318 )
(1,713 )
Promissory notes issued 2711,400
-
Dividends paid to shareholders 19 (122,338 )
(64,804 )
Dividends paid to non-controlling shareholders (30 )
(47 )
Net cash used in financing activities (132,014 )
(68,305 )
Net change in cash and cash equivalents108,630
26,551
Effect of foreign exchange on cash and cash equivalents (7,253 )
(169 )
Cash and cash equivalents at the beginning of the year 666,487
40,105
Cash and cash equivalents at the end of the period 6167,864
66,487
Consolidated Statement of Cash Flows
(In million of Russian Rubles)
The accompanying notes are an integral part of these consolidated financial statements.
6
Note
Year ended
31 December 2022
Year ended
31 December 2021
Investing activities
Additions to property, plant and equipment (
Proceeds from disposal of property, plant and equipment
Acquisition and increase of interest in associate (
Net cash flow from acquisitions of subsidiaries 25 (
Net cash flow from disposal of subsidiaries 26 (
Purchase of securities at fair value through other comprehensive
income (
Purchase of securities at amortised cost (
Proceeds from disposal of securities at fair value through other
comprehensive income
Proceeds from redemption of securities at amortised cost
Proceeds from sale of non-current assets held for sale
Proceeds from investments in associates and joint ventures
Proceeds from redemption of bank deposits measured at amortised
cost
Placement of bank deposits measured at amortised cost (
Proceeds from redemption of bank deposits measured at fair value
through profit or loss
Placement of bank deposits measured at fair value through profit
or loss (
Proceeds from redemption of loans and notes receivable 9
Issuance of loans and notes receivable 9 (
Net cash flow from currency swaps
Advance payment for acquisition of other non-current assets (
(Acquisition)/proceeds from sale of other non-current assets (
Proceeds from government grants 18
Net cash used in investing activities (
Financing activities
Proceeds from issuance of debt (excluding financial services) 27
Repayment of debt (excluding financial services) 27 (
Repayment of principal portion of lease liabilities (
Issuance of bonds 27
Redemption of bonds 27 (
Promissory notes issued 27
Dividends paid to shareholders 19 (
Dividends paid to non-controlling shareholders (
Net cash used in financing activities (
Net change in cash and cash equivalents
Effect of foreign exchange on cash and cash equivalents (
Cash and cash equivalents at the beginning of the year 6
Cash and cash equivalents at the end of the period 6
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
7
N
ote 1:
Organisation
PJSC TATNEFT n.a. V.D. Shashin (the “Company”) and its controlled subsidiaries (jointly referred to as the
“Group”) are engaged in crude oil exploration, development and production principally in the Republic of Tatarstan
(“Tatarstan”), a republic within the
Russian Federation . The Group also engages in refining of crude oil and associated petroleum gas processing, marketing of crude oil and refined products and financial services
(Note 22).
The Company was incorporated as an open joint stock company (now referred to as a
public joint stock company )
in January 1994 pursuant to the approval of the State Property Management Committee of the Republic of Tatarstan
in accordance with Decree of the President of the
Russian Federation No. 1403 on Privatization and Restructuring
of Enterprises and Corporations into Joint-Stock Companies.
The Company does not have an ultimate controlling party.
As at 31 December 2022 and 31 December 2021 the government
of Tatarstan controls about 36% of the Company’s
voting stock. Tatarstan also holds a “Golden Share”, a special governmental right, in the Company (Note 19).
The Company is domiciled in the
Russian Federation . The address of its registered office is Lenina St., 75, Almetyevsk, Republic of Tatarstan, Russian Federation.
N
ote 2: Basis of preparation
The accompanying consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”).
These consolidated financial statements have been prepared on a historical cost basis, except for initial recognition
of financial instruments and revaluation of financial instruments at fair value.
The entities of the Group maintain their accounting records and prepare their statutory financial statements
principally in accordance with the Regulations and Federal standards on Accounting and Reporting of the Russian
Federation (“RAR”), and applicable accounting and
reporting standards of countries outside the Russian Federation.
A number of entities of the Group prepare their financial statements in accordance with IFRS. The accompanying
consolidated financial statements have been prepared from these accounting records and adjusted as necessary to
comply with IFRS.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are disclosed in Note 4.
N
ote 3: Summary of significant accounting policies
The key accounting policies used in preparing these consolidated financial statements are presented below. These
principles have been applied consistently to all periods presented in the statements.
Functional and presentation currency. The presentation currency of the Group is the Russian Ruble.
Management has determined the functional currency for the Company and each consolidated subsidiary of the
Group, except for subsidiaries located outside of the Russian Federation, is the Russian Ruble because the majority
of Group revenues, costs, property and equipment purchased, debt and trade liabilities are either priced, incurred,
payable or otherwise measured in Russian Rubles. Accordingly, transactions and balances not measured in Russian
Rubles (primarily US Dollars) have been re-measured into Russian Rubles in accordance with the relevant
provisions of IAS 21 “The Effects of Changes in Foreign Exchange Rates” .
For operations of major subsidiaries located outside of the Russian Federation, that primarily use US Dollar as the
functional currency, adjustments resulting from translating foreign functional currency assets and liabilities into
Russian Rubles are recorded in other comprehensive income. Revenues, expenses and cash flows are translated at
average exchange rates of the relevant period (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).
The official rates of exchange, as published by the Central Bank of the Russian Federation (“the Bank of Russia”),
of the Russian Ruble (“RR”) to the US Dollar (“US $”) at 31 December 2022 and 31 December 2021 were RR 70.34
and RR 74.29 to US $, respectively. Average rates of exchange for the years ended 31 December 2022 and 31
December 2021 were RR 68.55 and RR 73.65 per US $, respectively.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
7
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
8
N
ote 3: Summary of significant accounting policies (continued)
Consolidation. Subsidiaries are all entities over which the Group has control. The Group controls an entity when
the Group has the power to direct relevant activities of the investee that significantly affect their returns, exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and
the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred.
Identifiable acquired assets and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date.
T he Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis at the non- controlling interest’s proportionate share of the acquiree’s net a ssets
or at fair value.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net
assets acquired is recorded within other non-current assets as goodwill. If the total of consideration transferred, non-
controlling interest recognised and previously held interest measured is less than the fair value of the net assets of
the subsidiary, the difference is recognised directly in the profit or loss for the year.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the cost cannot be recovered.
Associates and joint ventures. Associates and joint ventures are entities over which the Group has significant
influence (directly or indirectly), but not control, generally accompanying a shareholding of between 20 and 50
percent of the voting rights. Investments in associates and joint ventures are accounted for using the equity method
of accounting and are initially recognised at cost. Dividends received from associates and joint ventures reduce the
carrying value of the investment in associates and joint ventures. Other post- acquisition changes in Group’s share
of net assets of an associate and joint ventures are recognised as follows: (i) the Group’s share of profits or losses of
associates or joint ventures is recorded in the consolidated profit or loss for the year as share of result of associates
or joint ventures, (ii) the Group’s share of other comprehensive income is recognised in other comprehensive income
and presented separately, ( iii) all other changes in the Group’s share of the carrying value of net assets of associates
or joint ventures are recognised in profit or loss within the share of result of associates or joint ventures.
However, when the Group’s share of losses in an ass ociate or joint venture equals or exceeds its interest in the
associate or joint venture, including any other unsecured receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate or joint venture.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent
of the Group’s interest in the associates and joint ventures; unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
The Group reviews equity method investments for impairment on an annual basis, and records impairment when
circumstances indicate that the carrying value exceeds the recoverable amount.
Financial instruments – key measurement terms. Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. The best
evidence of fair value is the price in an active market. An active market is one in which transactions for the asset or
liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Fair
value of financial instruments traded in an active market is measured as the product of the quoted price for the
individual asset or liability and the number of instruments held by the Group. This is the case even if a market’s
normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a
single transaction might affect the quoted price.
Valuation techniques such as discounted cash flow models or models based on recent arm’s length transactions or
consideration of financial data of the investees are used to measure fair value of certain financial instruments for
which external market pricing information is not available.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
8
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
9
N
ote 3: Summary of significant accounting policies (continued)
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements
at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are
valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on solely
observable market data (that is, the measurement requires significant unobservable inputs). Transfers between levels
of the fair value hierarchy are deemed to have occurred at the end of the reporting period. Refer to Note 27.
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial
instrument. An incremental cost is one that would not have been incurred if the transaction had not taken place.
Transaction costs include fees and commissions paid to agents (including employees acting as selling agents),
advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties.
Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding
costs.
Amortised cost (“AC”) is th e amount at which the financial instrument was recognised at initial recognition less any
principal repayments, plus accrued interest, and for financial assets less any allowance for expected credit losses
(“ECL”). Accrued interest includes amortisation of transaction costs deferred at initial recognition and of any
premium or discount to the maturity amount using the effective interest method. Accrued interest income and
accrued interest expense, including both accrued coupon and amortised discount or premium (including fees deferred
at origination, if any), are not presented separately and are included in the carrying values of the related items in the
consolidated statement of financial position.
The effective interest method is a method of allocating interest income or interest expense over the relevant period,
so as to achieve a constant periodic rate of interest (effective interest rate) on the carrying amount. The effective
interest rate is the rate that exactly discounts estimated future cash payments or receipts (excluding future credit
losses) through the expected life of the financial instrument or a shorter period, if appropriate, to the gross carrying
amount of the financial instrument.
The effective interest rate discounts cash flows of variable interest instruments to the next interest repricing date,
except for the premium or discount which reflects the credit spread over the floating rate specified in the instrument,
or other variables that are not reset to market rates. Such premiums or discounts are amortised over the whole
expected life of the instrument. The present value calculation includes all fees paid or received between parties to
the contract that are an integral part of the effective interest rate. For assets that are purchased or originated credit
impaired (“POCI”) at initial recognition, the effective interest rate is adjusted for credit risk, i.e. it is calculated base d
on the expected cash flows on initial recognition instead of contractual payments.
Financial instruments – initial recognition. Financial instruments at FVTPL are initially recorded at fair value.
All other financial instruments are initially recorded at fair value adjusted for transaction costs. Fair value at initial
recognition is best evidenced by the transaction price. A gain or loss on initial recognition is only recorded if there
is a difference between fair value and transaction price which can be evidenced by other observable current market
transactions in the same instrument or by a valuation technique whose inputs include only data from observable
markets. After the initial recognition, an ECL allowance is recognised for financial assets measured at AC and
investments in debt instruments measured at FVOCI, resulting in an immediate accounting loss
. All purchases and sales of financial assets that require delivery within the time frame established by regulation or
market convention (“regular way” purchases and sales) are recorded at trade date, which is the date on which the
Group commits to deliver a financial asset. All other purchases are recognised when the entity becomes a party to
the contractual provisions of the instrument.
Financial assets – classification and subsequent measurement – measurement categories. The Group classifies
financial assets in the following measurement categories: FVTPL, FVOCI and AC. The classification and
subsequent measurement of debt financial assets depends on: (i) the Group’s business model for managing the
related assets portfolio and (ii) the cash flow characteristics of the asset.
Financial assets – classification and subsequent measurement – business model. The business model reflects
how the Group manages the assets in order to generate cash flows – whether the Group’s objective is: (i) solely to
collect the contractual cash flows from the assets (“hold to collect contractual cash flows”) or (ii) to collect both the
contractual cash flows and the cash flows arising from the sale of assets (“hold to collect contractual cash flows and
sell”) or, if neither of (i) and (ii) is applicable, the financial assets are classified as part of “other” business model
and measured at FVTPL.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
9
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
10
N
ote 3: Summary of significant accounting policies (continued)
Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the
activities that the Group undertakes to achieve the objective set out for the portfolio available at the date of the
assessment. Factors considered by the Group in determining the business model include the purpose and composition
of a portfolio, past experience on how the cash flows for the respective assets were collected, how risks are assessed
and managed, how the assets’ performance is assessed and how managers are compensated. Refer to Note 4 for
critical judgements applied by the Group in determining the business models for its financial assets.
Financial assets – classification and subsequent measurement – cash flow characteristics. Where the business
model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the Group assesses
whether the cash flows represent solely payments of principal and interest (“SPPI”). Financial assets with embedded
derivatives are considered in their entirety when determining whether their cash flows are consistent with the SPPI
feature. In making this assessment, the Group considers whether the contractual cash flows are consistent with a
basic lending arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic
lending risks and profit margin.
Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending
arrangement, the financial asset is classified and measured at FVTPL. The SPPI assessment is performed on initial
recognition of an asset and it is not subsequently reassessed. Refer to Note 4 for critical judgements applied by the
Group in performing the SPPI test for its financial assets.
Financial assets – reclassification. Financial instruments are reclassified only when the business model for
managing the portfolio as a whole changes. The reclassification has a prospective effect and takes place from the
beginning of the first reporting period that follows after the change in the business model. The Group did not change
its business model during the current and comparative period and did not make any reclassifications.
Financial assets impairment – credit loss allowance for ECL. The Group assesses, on a forward-looking basis,
the ECL for debt instruments measured at AC and FVOCI and for the exposures arising from loan commitments
and financial guarantee contracts, for contract assets. The Group measures ECL and recognises Net impairment
losses on financial and contract assets at each reporting date. The measurement of ECL reflects: (i) an unbiased and
probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money
and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each
reporting period about past events, current conditions and forecasts of future conditions.
Debt instruments measured at AC and contract assets are presented in the consolidated statement of financial position
net of the allowance for ECL. For loan commitments and financial guarantees, a separate provision for ECL is
recognised as a liability in the consolidated statement of financial position. For debt instruments at FVOCI, changes
in amortised cost, net of allowance for ECL, are recognised in profit or loss and other changes in carrying value are
recognised in OCI as gains less losses on debt instruments at FVOCI.
The Group applies a three stage model for impairment, based on changes in credit quality since initial recognition.
A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in
Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events
possible within the next 12 months or until contractual maturity, if shorter (“12 Months ECL”). If the Group
identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2
and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but considering
expected prepayments, if any (“Lifetime ECL”). Refer to Note 27 for a description of how the Group determines
when a SICR has occurred. If the Group determines that a financial asset is credit-impaired, the asset is transferred
to Stage 3 and its ECL is measured as a Lifetime ECL. The Group’s definition of credit impaired assets and definition
of default is explained in Note 27. For financial assets that are purchased or originated credit-impair ed (“POCI
Assets”), the ECL is always measured as a Lifetime ECL. Note 27 provides information about inputs, assumptions
and estimation techniques used in measuring ECL.
The Group applies the IFRS 9 simplified approach for measuring expected credit losses which uses a lifetime
expected loss allowance for all trade and other receivables. To measure the expected credit losses, trade and other
receivables have been grouped based on shared credit risk characteristics and the days past due. The Group calculates
expected credit losses on trade receivables based on historical data assuming reasonable approximation of current
losses rates adjusted on forward-looking information.
Financial assets – write-off. Financial assets are written-off, in whole or in part, when the Group exhausted all
practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off
represents a derecognition event. The Group may write-off financial assets that are still subject to enforcement
activity when the Group seeks to recover amounts that are contractually due, however, there is no reasonable
expectation of recovery.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
10
TAT
N
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
11
N
ote 3: Summary of significant accounting policies (continued)
Financial assets – derecognition. The Group derecognises financial assets when (a) the assets are redeemed or the
rights to cash flows from the assets otherwise expire or (b) the Group has transferred the rights to the cash flows
from the financial assets or entered into a qualifying pass-through arrangement whilst (i) also transferring
substantially all the risks and rewards of ownership of the assets or (ii) neither transferring nor retaining substantially
all the risks and rewards of ownership but not retaining control.
Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated
third party without needing to impose additional restrictions on the sale.
Financial assets – modification. The Group sometimes renegotiates or otherwise modifies the contractual terms of
the financial assets. The Group assesses whether the modification of contractual cash flows is substantial
considering, among other, the following factors: any new contractual terms that substantially affect the risk profile
of the asset (e.g. profit share or equity-based return), significant change in interest rate, change in the currency
denomination, new collateral or credit enhancement that significantly affects the credit risk associated with the asset
or a significant extension of a loan when the borrower is not in financial difficulties.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group
derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is
considered to be the date of initial recognition for subsequent impairment calculation purposes, including
determining whether a SICR has occurred. The Group also assesses whether the new loan or debt instrument meets
the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of
the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed
to a capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make
the originally agreed payments, the Group compares the original and revised expected cash flows to assets whether
the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks
and rewards do not change, the modified asset is not substantially different from the original asset and the
modification does not result in derecognition. The Group recalculates the gross carrying amount by discounting the
modified contractual cash flows by the original effective interest rate (or credit-adjusted effective interest rate for
POCI financial assets), and recognises a modification gain or loss in profit or loss.
Presentation of cash flows on deposits at fair value through profit or loss in the consolidated statement of cash
flows. Placements and proceeds from redemption of bank deposits at fair value through profit or loss mature less
than three months are presented in the consolidated statement of cash flows on a net basis. Placements and proceeds
from redemption of bank deposits at fair value through profit or loss mature more than three months are presented
in the consolidated statement of cash flows separately in gross amounts.
Presentation of cash flows from currency swap in the consolidated statement of cash flows. Cash flows from
currency swap transactions are presented in the consolidated statement of cash flows on a net basis
Financial liabilities – measurement categories. Financial liabilities are classified as subsequently measured at AC,
except for (i) financial liabilities at FVTPL: this classification is applied to derivatives, financial liabilities held for
trading (e.g. short positions in securities), contingent consideration recognised by an acquirer in a business
combination and other financial liabilities designated as such at initial recognition and (ii) financial guarantee
contracts and loan commitments.
Financial liabilities – derecognition. Financial liabilities are derecognised when they are extinguished (i.e. when
the obligation specified in the contract is discharged, cancelled or expires).
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as
well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. The terms are
substantially different if the discounted present value of the cash flows under the new terms, including any fees paid
net of any fees received and discounted using the original effective interest rate, is at least 10% different from the
discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative
factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new
conversion features attached to the instrument and change in loan covenants are also considered. If an exchange of
debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are
recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as
an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the
remaining term of the modified liability.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
11
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N
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
12
N ote 3: Summary of significant accounting policies (continued)
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a
cumulative catch up method, with any gain or loss recognised in profit or loss, unless the economic substance of the
difference in carrying values is attributed to a capital transaction with owners.
Financial liabilities designated at FVTPL. The Group may designate certain liabilities at FVTPL at initial
recognition. Gains and losses on such liabilities are presented in profit or loss except for the amount of change in
the fair value that is attributable to changes in the credit risk of that liability (determined as the amount that is not
attributable to changes in market conditions that give rise to market risk), which is recorded in OCI and is not
subsequently reclassified to profit or loss. This is unless such a presentation would create, or enlarge, an accounting
mismatch, in which case the gains and losses attributable to changes in credit risk of the liability are also presented
in profit or loss.
Offsetting financial instruments. Financial assets and liabilities are offset and the net amount reported in the
statement of financial position only when there is a legally enforceable right to offset the recognised amounts, and
there is an intention to either settle on a net basis, or to realise the asset and settle the liability simultaneously. Such
a right of set off (a) must not be contingent on a future event and (b) must be legally enforceable in all of the
following circumstances: (i) in the normal course of business, (ii) in the event of default and (iii) in the event of
insolvency or bankruptcy.
Cash and cash equivalents. Cash represents cash on hand and in bank accounts and the Bank of Russia, other than
mandatory reserves deposits with the Bank of Russia, which can be effectively withdrawn at any time without prior
notice. Cash equivalents include highly liquid short-term investments that can be converted to a certain cash amount
and mature within three months or less from the date of purchase. Cash and cash equivalents are carried at AC
because: (i) they are held for collection of contractual cash flows and those cash flows represent SPPI, and (ii) they
are not designated at FVTPL. Features mandated solely by legislation, such as the bail-in legislation in certain
countries, do not have an impact on the SPPI test, unless they are included in contractual terms such that the feature
would apply even if the legislation is subsequently changed.
Mandatory reserve deposits with the Bank of Russia. Mandatory cash balances with the Bank of Russia are
carried at AC and represent non-interest bearing mandatory reserve deposits, which are not available to finance the
Group’s day to day operations, and hence are not considered as part of cash and cash equivalents for the purposes
of the consolidated statement of cash flows.
Due from banks. Amounts due from banks are recorded when the Group advances money to counterparty banks
due on fixed or determinable dates. Amounts due from banks are carried at AC when: (i) they are held for the
purposes of collecting contractual cash flows and those cash flows represent SPPI, and (ii) they are not designated
at FVTPL. Due from banks that mature within three months or less from the date of placement are included in cash
and cash equivalents.
Investments in debt securities. Based on the business model and the cash flow characteristics, the Group classifies
investments in debt securities as carried at AC, FVOCI or FVTPL. Debt securities are carried at AC if they are held
for collection of contractual cash flows and where those cash flows represent SPPI, and if they are not voluntarily
designated at FVTPL in order to significantly reduce an accounting mismatch. Debt securities are carried at FVOCI
if they are held for collection of contractual cash flows and for selling, where those cash flows represent SPPI, and
if they are not designated at FVTPL.
Interest income from these assets is calculated using the effective interest method and recognised in profit or loss.
An impairment allowance estimated using the expected credit loss model is recognised in profit or loss for the year.
All other changes in the carrying value are recognised in OCI. When the debt security is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from OCI to profit or loss.
Investments in debt securities are carried at FVTPL if they do not meet the criteria for AC or FVOCI. The Group
may also irrevocably designate investments in debt securities at FVTPL on initial recognition if applying this option
significantly reduces an accounting mismatch between financial assets and liabilities being recognised or measured
on different accounting bases.
Investments in equity securities. Financial assets that meet the definition of equity from the issuer’s perspective,
i.e. instruments that do not contain a contractual obligation to pay cash and that evidence a residual interest in the
issuer’s net assets, are considered as investments in equity securities by the Group. Investments in equity securities
are measured at FVTPL, except where the Group elects at initial recognition to irrevocably designate an equity
investments at FVOCI.
The Group’s policy is to designate equity investments as FVOCI when those investments are held for strategic purposes other than solely to generate investment returns. When the FVOCI election is used,
fair value gains and losses are recognised in OCI and are not subsequently reclassified to profit or loss, including on
disposal. Impairment losses and their reversals, if any, are not measured separately from other changes in fair value.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
12
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
13
N ote 3: Summary of significant accounting policies (continued)
Dividends continue to be recognised in profit or loss when the Group’s right to receive payments is established
except when they represent a recovery of an investment rather than a return on such investment.
Loans to customers. Loans to customers are recorded when the Group advances money to purchase or originate a
loan due from a customer. Based on the business model and the cash flow characteristics, the Group classifies loans
to customers into one of the following measurement categories: (i) AC: loans that are held for collection of
contractual cash flows and those cash flows represent SPPI and loans that are not voluntarily designated at FVTPL,
and (ii) FVTPL: lo
ans that do not meet the SPPI test or other criteria for AC are measured at FVTPL. Note 27 provides information about inputs, assumptions and estimation techniques used in measuring ECL.
Loan commitments. The Group issues commitments to provide loans in the course of its financial services. These
commitments are irrevocable or revocable only in response to a material adverse change. Such commitments are
initially recognised at their fair value, which is normally evidenced by the amount of fees received. This amount is
amortised on a straight line basis over the life of the commitment, except for commitments to originate loans if it is
probable that the Group will enter into a specific lending arrangement and does not expect to sell the resulting loan
shortly after origination; such loan commitment fees are deferred and included in the carrying value of the loan on
initial recognition. At the end of each reporting period, the commitments are measured at (i) the remaining
unamortised balance of the amount at initial recognition, plus (ii) the amount of the loss allowance determined based
on the expected credit loss model, unless the commitment is to provide a loan at a below market interest rate, in
which case the measurement is at the higher of these two amounts.
The carrying amount of the loan commitments represents a liability. For contracts that include both a loan and an
undrawn commitment and where the Group cannot separately distinguish the ECL on the undrawn loan component
from the loan component, the ECL on the undrawn commitment is recognised together with the loss allowance for
the loan. To the extent that the combined ECLs exceed the gross carrying amount of the loan, they are recognised
as a liability.
Financial guarantees. Financial guarantees require the Group in the course of its financial services to make
specified payments to reimburse the holder of the guarantee for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantees
are initially recognised at their fair value, which is normally evidenced by the amount of fees received. This amount
is amortised on a straight line basis over the life of the guarantee. At the end of each reporting period, the guarantees
are measured at the higher of (i) the amount of the loss allowance for the guaranteed exposure determined based on
the expected loss model and (ii) the remaining unamortised balance of the amount at initial recognition. In addition,
an ECL loss allowance is recognised for fees receivable that are recognised in the statement of financial position as
an asset.
Sale and repurchase agreements and lending of securities. Sale and repurchase agreements (“repo agreements”),
which effectively provide a lender’s return to the counterparty, are treated as secured financial transactions.
Securities sold under such sale and repurchase agreements are not derecognised. Securities sold under repo
agreements are presented as other financial assets carried at FVTPL, FVOCI, AC. The corresponding liability is
presented within amounts “Due to banks and the Bank of Russia” or “Customer accounts”.
Securities purchased under agreements to resell (“reverse repo agreements”), which effectively provide a lender’s
return to the Group, are recorded as “Due from other banks” or “L oans to customers”, as appropriate. The difference
between the sale and repurchase price, adjusted by interest and dividend income collected by the counterparty, is
treated as interest income and accrued over the life of repo agreements using the effective interest method.
N otes receivable. Notes receivable are included in “Other financial assets” and are carried at AC if: (i) they are held
for collection of contractual cash flows and those cash flows represent SPPI, and (ii) they are not designated at
FVTPL.
Trade and other receivables. Trade and other receivables are recognised initially at fair value and are subsequently
carried at AC using the effective interest method.
Trade and other payables. Trade payables are accrued when the counterparty performs its obligations under the
contract and are recognised initially at fair value and subsequently carried at AC using the effective interest method.
Due to banks and the Bank of Russia. Amounts due to banks and the Bank of Russia are recorded when money or
other assets are advanced to the Group by counterparty banks. The non-derivative liability is carried at AC. If the
Group purchases its own debt, the liability is removed from the consolidated statement of financial position and the
difference between the carrying amount of the liability and the consideration paid is included in gains or losses
arising from retirement of debt.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
13
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
14
N
ote 3: Summary of significant accounting policies (continued)
Customer accounts. Customer accounts are non-derivative liabilities to individuals, state or corporate customers
and are carried at AC.
Subordinated debt. Subordinated debt can only be paid in the event of a liquidation after the claims of other higher
priority creditors have been met. Subordinated debt is carried at AC.
Debt securities and bonds issued . Debt securities issued include promissory notes and certificates of deposit issued
by the Group to its customers in the course of its financial services. Bonds issued represent securities issued by the
Bank that are traded and quoted in the open market. Promissory notes carry a fixed date of repayment. These may
be issued against cash deposits or as a payment instrument, which the customer can sell at a discount in the over-
the-counter market. Debt securities and bonds issued are carried at AC. If the Group purchases its own debt, it is
removed from the consolidated statement of financial position and the difference between the carrying amount and
the amount paid is recognised as a gain or loss on redemption of debt.
N on-current assets classified as held for sale. Non-current assets are classified in the consolidated statement of
financial position as “Long term assets held for sale” if their carrying amount will be recovered principally through
a sale transaction within twelve months after the end of the reporting period. Assets are reclassified when all of the
following conditions are met: (a) the assets are available for immediate sale in their present condition; (b) the
Group’s management approved and initiated an active programme to locate a buyer; (c) the assets are actively
marketed for sale at a reasonable price; (d) the sale is expected within one year and (e) it is unlikely that significant
changes to the plan to sell will be made or that the plan will be withdrawn. Non-current assets classified as held for
sale in the current period’s consolidated statement of financial position are not reclassified or re -presented in the
comparative consolidated statement of financial position to reflect the classification at the end of the current period.
Non-current assets held for sale are measured at the lower of its carrying amount and fair value less costs of disposal.
If the fair value less costs of disposal of an asset held for sale is lower than its carrying amount, an impairment loss
is recognised in the consolidated statement of profit or loss and other comprehensive income as other operating
expense. Any subsequent increase in an asset’s fair value less costs of disposal is recognised to the extent of the
cumulative impairment loss that was previously recognised in relation to that specific asset.
Precious metals.
The Group has a practice of taking delivery of precious metals and selling them within a short
period after delivery, for the purpose of generating a profit from short- term fluctuations in price or dealer’s margin.
Precious metals are carried at purchase price from the Bank of Russia and are subsequently measured at fair value
based on London precious metals exchange. Precious metals are recognized as part of prepayments and other current
assets in the consolidated statement of financial position.
Inventories . Inventories of crude oil, refined oil products, materials and supplies, finished goods and other
inventories are valued at the lower of cost or net realizable value. Net realisable value is the estimated selling price
in the ordinary course of business, less the estimated cost of completion and selling expenses. The Group uses the
weighted-average-cost method. Costs include both direct and indirect expenditures incurred in bringing an item or
product to its existing condition and location.
Prepaid expenses.
Prepaid expenses include advances for purchases of products and services, insurance fees,
prepayments for export duties, VAT and other taxes. Prepayments are carried at cost less provision for impairment.
Prepayments to acquire assets are transferred to the carrying amount of the asset once the Group has obtained control
of the asset and it is probable that future economic benefits associated with the asset will flow to the Group.
Prepayments for services such as insurance, transportation and others are written off to profit or loss when the goods
or services relating to the prepayments are received.
If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying
value of the prepayment is written down accordingly and a corresponding impairment loss is recognised in the profit
or loss for the year.
Mineral extraction tax.
The base rate of mineral extraction tax (MET) relating to oil production, established for
2022 and 2021 at RR 919 per tonne, adjusted depending on the average world market prices of the Urals blend and
the RR/US $ average exchange rate.
Since 2019, additional coefficients have been added to the MET calculation in connection with the introduction of
a "reverse excise" on crude oil and with a reduction in export customs duties as part of the completion of the tax
maneuvere.
MET is recorded within taxes other than income tax in the consolidated statements of profit or loss and other
comprehensive income.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
14
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N
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
15
N
ote 3: Summary of significant accounting policies (continued)
Tax on additional income from hydrocarbon extraction. AIT is levied at the rate of 50% on additional income
from oil production, calculated as the difference between the estimated revenue from the sale of hydrocarbons and
the actual and estimated costs of its production, including capital costs. This tax regime includes MET, but with a
reduced rate. This regime covers depleted oil fields in Republic of Tatarstan, as well as the Group's license areas in
the Nenets Autonomous District. AIT is included in taxes other than income tax in the consolidated statements of
profit or loss and other comprehensive income.
Reverse excise on crude oil refined and negative excise on gasoline and diesel fuel. In the consolidated statement
of profit or loss and other comprehensive income reverse (“negative”) excise on crude oi l refined and negative excise
on gasoline and diesel fuel is recognised as a reduction (additional expense, if reverse excise payable) in excise tax
expense included in taxes other than income tax (Note 4) and is presented in prepaid expenses and other current
assets line in the statement of consolidated financial position. The investment premium for refineries Kinv is also
included in reverse (negative) excise of the period.
Value added tax. Value added tax (VAT) at a standard rate of 20% is payable on the difference between output
VAT on sales of goods and services and recoverable input VAT charged by suppliers. Output VAT is charged on
the earliest of the dates: either the date of the shipment of goods (works, services) or the date of advance payment
by the buyer. Input VAT can be recovered when purchased goods (works, services) are accounted for and other
necessary requirements provided by the tax legislation are met. Where provision has been made for the ECL of
receivables, the impairment loss is recorded for the gross amount of the debtor, including VAT.
Export of goods and rendering certain services related to exported goods are subject to 0% VAT rate upon the
submission of confirmation documents to the tax authorities.
VAT related to sales and purchases is recognised in the Consolidated Statement of Financial Position on a gross
basis and disclosed separately within Prepaid expenses and other current assets and Taxes payable.
Oil and gas exploration and development cost. Oil and gas exploration and development activities are accounted
for using the successful efforts method whereby costs of acquiring unproved and proved oil and gas property as well
as costs of drilling and equipping productive wells and related production facilities are capitalised.
Other exploration expenses, including geological and geophysical expenses and the costs of carrying and retaining
undeveloped properties, are expensed as incurred. The costs of exploratory wells that find oil and gas reserves are
capitalised as exploration and evaluation assets on a “field by field” basis pending determination of whether proved
reserves have been found.
Ex
ploration and evaluation assets are subject to technical, commercial and management review as well as review for impairment at least once a year to confirm the continued intent to develop or otherwise extract value from the
discovery. When indicators of impairment are present, resulting impairment loss is measured.
If subsequently commercial reserves are discovered, the carrying value, less losses from impairment of respective
exploration and evaluation assets, is classified as development assets. However, if no commercial reserves are
discovered, such costs are expensed after exploration and evaluation activities have been completed.
Property, plant and equipment.
Property, plant and equipment are carried at historical cost of acquisition or
construction less accumulated depreciation, depletion, amortization and impairment.
Proved oil and gas properties include the initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located.
T he cost of maintenance, repairs and replacement of minor items of property are expensed when incurred within operating expenses; renewals and improvements of assets are capitalised and
depreciated during the remaining useful life. Cost of replacing major parts or components of property, plant and
equipment items are capitalised and the replaced part is retired.
Advances made on construction of property, plant and equipment are accounted for within Construction in progress.
Non-current assets, including proved oil and gas properties at a field level, are assessed for possible impairment in
accordance with IAS 36 Impairment of assets, which requires non-current assets with recorded values that are not
expected to be recovered through future cash flows to be written down to their recoverable amount which is the
higher of fair value less costs of disposal and value-in-use.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
15
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
16
N
ote 3: Summary of significant accounting policies (continued)
I
ndividual assets are grouped for impairment purposes at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets - generally on a field-by-field basis for
exploration and production assets, at an entire complex level for refining assets or at a site level for petrol stations.
Impairment losses are recognised in the profit or loss for the year.
Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original
impairment have changed. The reversal of impairment would be limited to the original carrying value less
depreciation which would have been otherwise charged had the impairment not been recorded.
Non-current assets committed by management for disposal within one year, and meet the other criteria for held for
sale assets, are accounted for at the lower of amortised cost or fair value, less cost of disposal
. Costs of unproved oil and gas properties are evaluated periodically and any impairment assessed is charged to expense.
The Group calculates depreciation expense for oil and gas proved properties using the units-of-production method
for each field based upon proved developed oil and gas reserves, except in the case of significant asset components
whose useful life differs from the lifetime of the field, in which case the straight-line method is applied.
Oil and gas licenses for exploration of unproved reserves are capitalised within property, plant and equipment; they
are depreciated on the straight-line basis over the period of each license validity.
Depreciation of all other property, plant and equipment is determined on the straight-line method based on estimated
useful lives which are as follows:
Years
Buildings and constructions
20-50
Machinery and equipment
5-30
Gains and losses on disposals of property, plant and equipment are determined by comparing proceeds, if any, with
the carrying amount. Gains and losses are recorded in impairment losses on property, plant and equipment and other
non-financial assets net of reversal in the consolidated statement of profit or loss and other comprehensive income.
Leases. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. An asset is identified by being explicitly specified in a contract, or implicitly specified
at the time that the asset is made available for use by the customer. The Group does not have the right to use an
identified asset if the supplier has the substantive right to substitute the asset throughout the period of use.
To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group
assessed whether both of the following met:
• The Group has the right to obtain substantially all of the economic benefits from use of the identified asset,
and
• The Group has the right to direct the use of the identified asset.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated ov er the shorter of the asset’s
useful life and the lease term on a straight-line basis. The estimated useful lives of right-of-use assets are determined
on the same basis as those of property, plant and equipment.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the lease payments that are not paid at the commencement date, discounted using the interest
rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used. Generally,
the Group determines its incremental borrowing rate as possible borrowing rate offered by banks for the funds,
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The right-of-use asset is initially measured at cost, which comprises the amount of the initial measurement of lease
liability adjusted for any lease payments made at or before the commencement date less any lease incentives
received, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
16
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
17
N
ote 3: Summary of significant accounting policies (continued)
The term used to measure a liability and an asset in the form of a right of use is defined as the period during which
the Group has sufficient confidence that it will lease the asset. Any option for renewal or termination is taken into
account when estimating the term. Extension options are included in a number of equipment leases across the Group.
The majority of extension options held are exercisable only by the Group and not by the respective lessor. The Group
considers monetary and non-monetary aspects to determine the lease term of the contract, such as business plans,
past practices and economic incentives to extend or terminate the contract (the presence of inseparable
improvements, integration to the production process, potentially high consequential termination costs, etc.) and other
factors that may affect management’s judgment on the lease term. Extension options and termination options are
only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Potential future cash outflows that have not been included in the lease liability because it is not reasonably certain
that the leases will be extended (or not terminated) are not significant.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as
an expense in profit or loss.
Short-term leases are leases with a lease term of 12 months or less. The Group presents right-of-use assets and lease liabilities in the separate lines in the Consolidated Statement of
Financial Position.
Debt.
Debt is recognised initially at fair value, net of transaction costs incurred and is subsequently carried at AC
using the effective interest method.
I nterest income (excluding financial services). Interest income (excluding financial services) is recognised on a
time-proportion basis using the effective interest method. This method defers, as part of interest income, all fee
received between the parties to the contract that are an integral part of the effective interest rate, all other premiums.
Fees integral to the effective interest rate include origination fees received by the Group relating to the creation or
acquisition of a financial asset or the issuance of a financial liability.
For financial assets that are originated or purchased credit-impaired, the effective interest rate is the rate that
discounts the expected cash flows (including the initial expected credit losses) to the fair value on initial recognition
(normally represented by the purchase price). As a result, the effective interest is credit-adjusted.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets,
except for (i) financial assets that have become credit impaired (Stage 3), for which interest revenue is calculated by
applying the effective interest rate to their AC, net of the ECL provision, and (ii) financial assets that are purchased
or originated credit impaired, for which the original credit-adjusted effective interest rate is applied to the AC.
Employee benefits, post-employment and other long-term benefits. Wages, salaries, contributions to the social
insurance funds, paid annual leave and sick leave, bonuses, and non-monetary benefits (such as health services and
kindergarten services) are accrued in the year in which the associated services are rendered by the employees of the
Group. The Group has various pension plans covering substantially all eligible employees and members of
management. The pension liabilities are measured at the present value of the estimated future cash outflows using
interest rates of government securities, which have the same currency and terms to maturity approximating the terms
of the related liability. Pension costs are recognised using the projected unit credit method.
The cost of providing pensions is accrued and charged to staff expense within operating expenses in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income reflecting the cost of benefits as they are earned over
the service lives of employees.
Remeasurements of the net defined benefit liability arising as the actuarial gains or losses from changes in
assumptions and from experience adjustments with regard to post employment benefit plans are recognised
immediately in other comprehensive income. Actuarial gains and losses related to other long-term benefits are
recognised immediately in the profit or loss for the year.
Past service costs are recognised as an expense for the year immediately.
Plan assets are measured at fair value and are subject to certain limitations. Fair value of plan assets is based on
market prices. When no market price is available the fair value of plan assets is estimated by different valuation
techniques, including discounted expected future cash flow using a discount rate that reflects both the risk associated
with the plan assets and maturity or expected disposal date of these assets.
In the normal course of business the Group contributes to the Russian Federation State Pension Fund on behalf of
its employees. Mandatory contributions to the Fund are expensed when incurred and are included within staff costs
in operating expenses .
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
17
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
18
N
ote 3: Summary of significant accounting policies (continued)
Long-term employee incentives program. The Group operates a cash-settled share-based compensation plan.
Services from employees received in exchange for cash-settled share-based payments, are recognised at the fair
value of the liability incurred and are expensed when consumed. Until the liability is settled, the Group remeasures
the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in
fair value recognised in profit or loss for the period. Market conditions, such as increase of share prices, on the
achievement of which the receipt of remuneration depends, are taken into account when estimating the fair value of
the cash-settled share-based payment granted and when remeasuring the fair value at the end of each reporting period
and at the date of settlement. Program conditions, other than market conditions, are not taken into account when
estimating the fair value of the cash-settled share-based payment at the measurement date, however are taken into
account by adjusting the number of awards included in the measurement of the liability arising from the transaction.
The amount recognised for the services received during the period of program is based on the best available estimate
of the number of awards. The cumulative amount ultimately recognised for services received as consideration for
the cash-settled share-based payment is equal to the cash that is paid. The terms of share-based compensation plan,
initial data, assumptions and models used in measurement of cash-settled share-based compensation plan are
presented in Note 18.
Decommissioning provisions. The Group recognises a liability for the present value of legally required or
constructive decommissioning provisions associated with non-current assets in the period in which the retirement
obligations are incurred. The Group has numerous asset removal obligations that it is required to perform under law
or contract once an asset is permanently taken out of service. The Group’s field exploration, development, and
production activities include assets related to: well bores and related equipment and operating sites, gathering and
oil processing systems, oil storage facilities and gathering pipelines. Generally, the Group’s licenses and other
operating permits require certain actions to be taken by the Group in the abandonment of these operations. Such
actions include well abandonment activities, equipment dismantlement and other reclamation activities. The Group’s
estimates of future abandonment costs consider present regulatory or license requirements, as well as actual
dismantling and other related costs. These liabilities are measured by the Group using the present value of the
estimated future costs of decommissioning of these assets. The discount rate is reviewed at each reporting date and
reflects current market assessments of the time value of money and the risks specific to the liability. Most of these
costs are not expected to be incurred until several years, or decades, in the future and will be funded from general
Group resources at the time of removal.
The Group capitalises the associated decommissioning costs as part of the carrying amount of the non-current assets.
Changes in obligation, reassessed regularly, related to new circumstances or changes in law or technology, or in the
estimated amount of the obligation, or in the pre-tax discount rates, are recognised as an increase or decrease of the
cost of the relevant asset. If a decrease in the liability exceeds the carrying amount of the asset, the excess shall be
recognised immediately in profit or loss.
The Group’s petrochemical, refining and marketing and distribution operations are carried out at large
manufacturing facilities and fuel outlets. The nature of these operations is such that the ultimate date of
decommissioning of any sites or facilities is unclear. Current regulatory and licensing rules do not provide for
liabilities related to the liquidation of such manufacturing facilities or of retail fuel outlets. Management therefore
believes that there are no legal or contractual obligations related to decommissioning or other disposal of these
assets.
Income Taxes. Effective 1 January 2012, the Company has established the Consolidated Taxpayer Group, which
included four, and since 2016, five enterprises of the Group. From 1 January 2023, the institution of a consolidated
group of taxpayers ceased to operate. Income taxes have been provided for in the consolidated financial statements
in accordance with legislation enacted or substantively enacted by the end of the reporting period. The income tax
charge comprises current tax and deferred tax and is recognised in profit or loss for the year, except if it is recognised
in other comprehensive income or directly in equity because it relates to transactions that are also recognised, in the
same or a different period, in other comprehensive income or directly in equity.
Current tax is the amount expected to be paid to, or recovered from, the taxation authorities in respect of taxable
profits or losses for the current and prior periods.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
18
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
19
N
ote 3: Summary of significant accounting policies (continued)
Deferred income tax is provided using the balance sheet liability method for tax loss carry forwards and temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes. In accordance with the initial recognition exemption, deferred taxes are not recorded for temporary
differences on initial recognition of an asset or a liability in a transaction other than a business combination if the
transaction, when initially recorded, affects neither accounting nor taxable profit. Deferred tax balances are
measured at tax rates enacted or substantively enacted at the end of the reporting period, which are expected to apply
to the period when the temporary differences will reverse or the tax loss carry forwards will be utilised.
Deferred tax assets for deductible temporary differences and tax loss carry forwards are recorded only to the extent
that it is probable that the temporary difference will reverse in the future and there is sufficient future taxable profit
available against which the deductions can be utilised.
Deferred tax balances are measured at tax rates enacted or substantively enacted at the end of the reporting period,
which are expected to apply to the period when the temporary differences will reverse or the tax loss carry forwards
will be utilised. Deferred tax assets and liabilities are netted only within the Consolidated Taxpayer Group or
individual companies of the Group outside the Consolidated Taxpayer Group.
Income tax penalties expense and income tax penalties payable are included in Taxes other than income tax in the
consolidated statement of profit or loss and other comprehensive income and taxes payable in the consolidated
statement of financial position, respectively. Income tax interest expense and payable are included in interest
expense in the consolidated statements of profit or loss and other comprehensive income and other accounts payable
and accrued expenses in the consolidated statement of financial position, respectively.
Share capital.
Ordinary shares and non-redeemable preferred shares with discretionary dividends are both classified
as equity.
Dividends paid to shareholders are determined by the Board of directors and approved at the annual or extraordinary
shareholders’ meeting. Dividends are recorded as a liability and deducted from equity in the period in which they
are declared and approved.
Treasury shares .
Common shares of the Company owned by the Group at the reporting date are designated as
treasury shares and are recorded at cost using the weighted-average method. Gains on resale of treasury shares are
credited to additional paid-in capital whereas losses are charged to additional paid-in capital to the extent that
previous net gains from resale are included therein or otherwise to retained earnings.
Earnings per share. Preferred shares are not redeemable and are considered to be participating shares.
Basic and diluted earnings per share are calculated by dividing profit or loss attributable to ordinary and preferred
shareholders by the weighted average number of ordinary and preferred shares outstanding during the period. Profit
or loss attributed to equity holders is reduced by the amount of dividends declared in the current period for each
class of shares. The remaining profit or loss is allocated to ordinary and preferred shares to the extent that each class
may share in earnings if all the earnings for the period had been distributed. Treasury shares are excluded from
calculations. The total earnings allocated to each class of shares are determined by adding together the amount
allocated for dividends and the amount allocated for a participation feature.
Revenue from Contracts with Customers. Revenue is income arising in the course of the Group’s ordinary
activities. Revenue is recognised in the amount of transaction price. Transaction price is the amount of consideration
to which the Group expects to be entitled in exchange for transferring control over promised goods or services to a
customer, excluding the amounts collected on behalf of third parties.
Revenue is recognised net of discounts, value added taxes.
The Group’s business ac tivities include sales of crude oil and refined products, petrochemical raw materials.
Revenues are recognised at a point in time when control over such products has transferred to a customer, which
refers to ability to direct the use of, and obtain substantially all of the remaining benefits from the products. Transfer
occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been
transferred to the customer, and either the customer has accepted the products in accordance with the sales contract,
the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been
satisfied.
The Group considers indicators that customer has obtained control of an asset, which include, but are not limited to
the following: the Group has a present right to payment for the products; the Group has transferred physical
possession of the products; the customer has legal title to the products; the customer has the significant risks and
rewards of ownership of the products; the customer has accepted the products. Not all of the indicators need to be
met for management to conclude that control has transferred and revenue could be recognised. Management uses
judgement to determine whether factors collectively indicate that the customer has obtained control.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
19
TAT
N
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
20
N
ote 3: Summary of significant accounting policies (continued)
If the contract includes variable consideration, revenue is recognised only to the extent that it is highly probable that
there will be no significant reversal of such revenue.
The Group operates a chain of own petrol (gas) stations selling refined products. Revenue from the sale of products
is recognised when a group entity sells a product to the customer. Payment of the transaction price is due immediately
when the customer purchases the fuel. Since no right of return, no refund liability is recognised.
Revenues from providing services are recognised in the period in which the services are rendered.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due. No significant element of
financing is deemed present as the sales are made with short-term credit terms consistent with market practice. As a
consequence, the Group does not adjust any of the transaction prices for the time value of money.
Recognition of interest, fee and commission income and expense from financial services . Interest income and
expense are recognised on an accrual basis calculated using the effective interest method. This method defers, as
part of interest income or expense, all fees paid or received between the parties to the contract that are an integral
part of the effective interest rate, transaction costs and all other premiums or discounts.
Fees integral to the effective interest rate include origination fees received or paid by the entity relating to the creation or acquisition of a financial
asset or issuance of a financial liability, for example fees for evaluating creditworthiness, evaluating and recording
guarantees or collateral, negotiating the terms of the instrument and for processing transaction documents.
Commitment fees received by the Group to originate loans at market interest rates are integral to the effective interest
rate if it is probable that the Group will enter into a specific lending arrangement and does not expect to sell the
resulting loan shortly after origination. The Group does not designate loan commitments as financial liabilities at
FVTPL.
For financial assets that are originated or purchased credit-impaired, the effective interest rate is the rate that
discounts the expected cash flows (including the initial expected credit losses) to the fair value on initial recognition
(normally represented by the purchase price). As a result, the effective interest is credit risk adjusted.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets,
except for (i) financial assets that have become credit impaired (Stage 3), for which interest revenue is calculated by
applying the effective interest rate to their AC, net of the ECL provision, and (ii) financial assets that are purchased
or originated credit impaired, for which the original credit-adjusted effective interest rate is applied to the AC.
Fee and commission income is recognised over time on a straight line basis as the services are rendered, when the
customer simultaneously receives and consumes the benefits provided by the Group’s performance. Such income
includes recurring fees for account maintenance, account servicing fees, account subscription fees, premium service
package fees, portfolio and other asset management advisory and service fees, wealth management and financial
planning services, or fees for servicing loans on behalf of third parties, etc. Variable fees are recognised only to the
extent that management determines that it is highly probable that a significant reversal will not occur.
Other fee and commission income is recognised at a point in time when the Group satisfies its performance
obligation, usually upon execution of the underlying transaction. The amount of fee or commission received or
receivable represents the transaction price for the services identified as distinct performance obligations. Such
income includes fees for arranging a sale or purchase of foreign currencies on behalf of a customer, fees for
processing payment transactions, fees for cash settlements, collection or cash disbursements, as well as, commissions
and fees arising from negotiating, or participating in the negotiation of a transaction for a third party, such as the
acquisition of loans, shares or other securities or the purchase or sale of businesses.
Transportation expenses. Transportation expenses recognised in the consolidated statements of profit or loss and
other comprehensive income represent all expenses incurred by the Group to transport crude oil and refined products
to end customers (they may include pipeline tariffs and any additional railroad costs, handling costs, port fees, sea
freight and other costs). Compounding fees are included in selling, general and administrative expenses.
Government grants. Grants from the government are recognised at their fair value where there is reasonable
assurance that the grant will be received and the Group will comply with all attached conditions. Government grants
relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income
and are credited to profit or loss on a straight line basis over the expected lives of the related assets.
Discontinued operation.
A discontinued operation is a component of the Group that has been disposed of and
represents a separate major line of business; is part of a single co-ordinated plan to dispose of a separate major line
of business or geographical area of operations. Earnings of discontinued operation are disclosed separately from
continuing operations with comparatives being re-presented.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
20
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N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
21
N
ote 3: Summary of significant accounting policies (continued)
Changes in the presentation of financial statements.
In the second quarter of 2022, the Group disposed of its share and interests in subsidiaries that comprised the tire
business segment (Note 26). The impact of the presentation changes for the year ended 31 December 2021 due to
classification of the tire business as a discontinued operation, the following:
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Value before
change Changes Value after change
Revenue (excluding financial services) 1,265,380 (60,113) 1,205,267
Operating expenses (180,897) 44,597 (136,300)
Selling, general and administrative (73,203) 4,957 (68,246)
Depreciation, depletion and amortization (42,663) 940 (41,723)
Expected credit losses on financial assets net of
reversal (78) 39 (39)
Impairment losses on property, plant and
equipment and other non-financial assets net of
reversal (3,576) 279 (3,297)
Taxes other than income taxes (498,143) 195 (497,948)
Maintenance of social infrastructure and transfer
of social assets (13,130) 304 (12,826)
Total costs and expenses (excluding financial
services) (1,015,210) 51,311 (963,899)
Other operating income, net 3,264 (647) 2,617
Operating income (excluding financial
services) 256,802 (9,449) 247,353
Foreign exchange gain, net 2,475 (35) 2,440
Interest income (excluding financial services) 3,962 (53) 3,909
Interest expense, net of amounts capitalised
(excluding financial services) (6,304) 130 (6,174)
Total other income, net 144 42 186
Profit before income tax 257,306 (9,407) 247,899
Income tax
Current income tax expense (50,670) 1,917 (48,753)
Deferred income tax expense (7,750) 92 (7,658)
Total income tax expense (58,420) 2,009 (56,411)
Profit from continuing operations - 191,488 191,488
Profit from discontinued operation - 7,398 7,398
N
ote 4: Critical accounting estimates and judgements in applying accounting policies
The Group makes estimates and assumptions that affect the amounts recognised in the consolidated financial
statements and the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements
are continually evaluated and are based on management’s experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
Management of the Group also makes certain judgements, apart from those involving estimations, in the process of
applying the accounting policies. Judgements that have the most significant effect on the amounts recognised in the
consolidated financial statements and estimates that can cause a significant adjustment to the carrying amount of
assets and liabilities within the next financial year include:
•
Estimation of oil and gas reserves;
•
Useful life of property, plant and equipment;
•
Decommissioning provisions;
•
Impairment of property, plant and equipment;
•
Accounting of investments in JSC “National Non
-St
ate Pension Fund”;
•
Sale and purchase of oil under contracts for counter oil deliveries;
•
Financial assets impairment;
•
Financial assets classification;
•
Financial instruments fair value estimation;
•
Presentation of excise tax, including reverse excise and export duties.
•
Determining the absence of control as a result of transactions for the sale of shares and interests in
enterprises
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
21
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
22
N ote 4: Critical accounting estimates and judgements in applying accounting policies (continued)
Estimation of oil and gas reserves. Oil and gas development and production assets are depreciated on a unit-of-
production (UOP) basis for each field or group of fields with similar characteristics at a rate calculated by reference
of proved developed reserves. Estimates of proved reserves are also used in the determination of whether
impairments have arisen or should be reversed. Also, exploration drilling costs are capitalised pending the results of
further exploration or appraisal activity, which may take several years to complete and before any related proved
reserves can be booked.
Proved reserves are estimated by reference to available geological and engineering data and only include volumes
for which access to market is assured with reasonable certainty. Estimates of oil and gas reserves are inherently
imprecise, require the application of judgment and are subject to regular revision, either upward or downward, based
on new information such as from the drilling of additional wells, observation of long-term reservoir performance
under producing conditions and changes in economic factors, including product prices, contract terms or
development plans. The Group estimates its oil and gas reserves in accordance with rules approved by the Oil and
Gas Reserves Committee of the Society of Petroleum Engineers (SPE) for proved reserves.
Changes to the Group’s estimates of proved developed reserves affect prospectively the amounts of depreciation,
depletion and amortization charged and, consequently, the carrying amounts of oil and gas properties. It is expected,
however, that in the normal course of business the diversity of the Group’s portfolio will limit the effect of such
revisions. The outcome of, or assessment of plans for, exploration or appraisal activity may result in the related
capitalised exploration drilling costs being written off in the profit or loss for the year.
Useful life of property, plant and equipment. Based on the terms included in the licenses and past experience,
management believes hydrocarbon production licenses will be extended past their current expiration dates at
insignificant additional costs. As a result of the anticipated license extensions, the assets are depreciated over their
useful lives beyond the end of the current license term.
Management assesses the useful life of an asset by considering the expected usage, estimated technical obsolescence,
residual value, physical wear and tear and the operating environment in which the asset is located. Differences
between such estimates and actual results may have a material impact on the amount of the carrying values of the
property, plant and equipment and may result in adjustments to future depreciation expenses for the period.
Management reviews the appropriateness of the assets’ useful economic lives and resid ual values at the end of each
reporting period. The review is based on the current condition of the assets, the estimated period during which they
will continue to bring economic benefit to the Group and the estimated residual value.
Decommissioning provisions. Management makes provision for the future costs of decommissioning oil and gas
production facilities, wells, pipelines, and related support equipment and for site restoration based on the best
estimates of future costs and economic lives of the oil and gas assets. Estimating future decommissioning provisions
is complex and requires management to make estimates and judgments with respect to removal obligations that will
occur many years in the future.
Changes in the measurement of existing obligations can result from changes in estimated timing, future costs or
discount rates used in valuation.
The amount recognised as a provision is the best estimate of the expenditures required to settle the present obligation
at the reporting date based on current legislation in each jurisdiction where the Group‘s operating assets are located,
and is also subject to change because of revisions and changes in laws and regulations and their interpretation. As a
result of the subjectivity of these provisions there is uncertainty regarding both the amount and estimated timing of
such costs.
Sensitivity analysis for changes in discount rate:
Impact on decommissioning provision
Change in
At 31 December
2022
At 31 December
2021
Discount rate 100 bp increase (8,869) (7,419)
100 bp decrease 10,830 9,579
Information about decommissioning provision is presented in Note 12.
Impairment of property, plant and equipment. Information is presented in Note 12.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
22
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
23
N ote 4: Critical accounting estimates and judgements in applying accounting policies (continued)
Accounting of investments in JSC “National Non - State Pension Fund”
As at 31 December 2022 and 2021 the Group has 74.46% of shares of JSC “National Non -Governmental Pension
Fund”. The Group does not exercise either control or significant influence over JSC “National Non -Governmental
Pension Fund” based on corporate governance and pension legislation. These investments are presented within
financial assets carried at FVOCI as at 31 December 2022 and 2021 (Note 9).
Operations for the sale and purchase of oil under contracts for counter oil deliveries. During the years ended
31 December 2022 and 2021 sales of crude oil under counter-delivery contracts in the amount of RR 283,886 million
and RR 221,526 million respectively are presented net in the consolidated statement of profit or loss and other
comprehensive income of the Group in accordance with the IFRS 15 requirements for exchange of products of
similar quality.
Financial assets impairment
Detailed information is presented in Note 27.
Financial assets classification
Business model assessment. The business model drives classification of financial assets. Management applied
judgement in determining the level of aggregation and portfolios of financial instruments when performing the
business model assessment. When assessing sales transactions, the Group considers their historical frequency, timing
and value, reasons for the sales and expectations about future sales activity. Sales transactions aimed at minimising
potential losses due to credit deterioration are considered consistent with the “hold to collect” business model. Other
sales before maturity, not related to credit risk management activities, are also consis tent with the “hold to collect”
business model, provided that they are infrequent or insignificant in value, both individually and in aggregate. The
Group assesses significance of sales transactions by comparing the value of the sales to the value of the portfolio
subject to the business model assessment over the average life of the portfolio. In addition, sales of financial asset
expected only in stress case scenario, or in response to an isolated event that is beyond the Group’s control, is not
recurring and could not have been anticipated by the Group, are regarded as incidental to the business model
objective and do not impact the classification of the respective financial assets.
The “hold to collect and sell” business model means that assets are held to collect the cash flows, but selling is also
integral to achieving the business model’s objective, such as, managing liquidity needs, achieving a particular yield,
or matching the duration of the financial assets to the duration of the liabilities that fund those assets.
The residual category includes those portfolios of financial assets, which are managed with the objective of realising
cash flows primarily through sale, such as where a pattern of trading exists.
Assessment whether cash flows are solely payments of principal and interest (“SPPI”). Determining whether a
financial asset’s cash flows are solely payments of principal and interest required judgement.
The time value of money element may be modified, for example, if a contractual interest rate is periodically reset
but the frequency of that reset does not match the tenor of the debt instrument’s underlying base interest rate, for
example a loan pays three months interbank rate but the rate is reset every month. The effect of the modified time
value of money assessed by comparing relevant instrument’s cash flows against a benchmark debt instrument with
SPPI cash flows, in each period and cumulatively over the life of the instrument. The assessment done for all
reasonably possible scenarios, including reasonably possible financial stress situation that can occur in financial
markets.
The Group identified and considered contractual terms that change the timing or amount of contractual cash flows.
The SPPI criterion is met if a loan allows early settlement and the prepayment amount substantially represents
principal and accrued interest, plus a reasonable additional compensation for the early termination of the contract.
The asset’s principal is the fair value at initial recognition less subsequent principal repayments, i.e. instalments net
of interest determined using the effective interest method. As an exception to this principle, the standard also allows
instruments with prepayment features that meet the following condition to meet SPPI: (i) the asset is originated at a
premium or discount, (ii) the prepayment amount represents contractual amount and accrued interest and a
reasonable additional compensation for the early termination of the contract, and (iii) the fair value of the prepayment
feature is immaterial at initial recognition.
The instruments that failed the SPPI test are measured at FVTPL are described in Note 8 and 9.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
23
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
24
N ote 4: Critical accounting estimates and judgements in applying accounting policies (continued)
Financial instruments fair value estimation. Financial instruments carried at FVTPL or FVOCI and all derivatives
are stated at fair value. If a quoted market price is available for an instrument, the fair value is calculated based on
the quoted market price. When valuation parameters are not observable in the market or cannot be derived from
quoted market prices, the fair value is derived through analysis of other observable market data appropriate for each
product and pricing models which use a mathematical methodology based on accepted financial theories. Pricing
models take into account the contract terms of the financial instruments as well as market-based valuation
parameters, such as interest rates, volatility, exchange rates and the credit rating of the counterparty. Where market-
based valuation parameters are missed, management makes a judgment as to its best estimate of that parameter in
order to determine a reasonable reflection of how the market would be expected to price the instrument, in exercising
this judgment, a variety of tools are used including proxy observable data, historical data, and extrapolation
techniques. The best evidence of fair value of a financial instrument at initial recognition is the transaction price
unless the instrument is evidenced by comparison with data from observable markets.
Any difference between the transaction price and the value based on a valuation technique is not recognised in the
consolidated statement of profit or loss and other comprehensive income on initial recognition unless the value is
based on valuation technique that uses only data from observable markets. Subsequent gains or losses are only
recognised to the extent that they arise from a change in a factor that market participants would consider in setting
a price.
Information on fair value of financial instruments where estimate is based on assumptions that do not utilize
observable market prices is presented in Note 27.
Presentation of excise tax, including reverse excise and export duties Excise taxes, including reverse (negative)
excise tax on crude oil, motor gasoline and diesel fuel, are presented in the Group's consolidated statement of profit
or loss and other comprehensive income as part of the line “Taxes other than income tax” (Note 13). Export duties
are presented in the Group's consolidated statement of profit or loss and other comprehensive income as a separate
line in the section “Costs and expenses (excluding financial services)”. Recognition in this section provides more
comprehensive presentation of overall tax maneuver effect for the financial results of the Group in comparison with
presentation in Revenue (excluding financial services).
Determining the absence of control as a result of transactions for the sale of shares and interests in enterprises.
In the 2nd quarter of 2022, the Group disposed of shares and interests in entities that constituted a separate segment.
The Company analysed the terms of the agreements and existing relationships. Given the absence of ownership
interests and other factors, the Group does not have any mechanisms to manage the significant activities of the
disposed entities, and, therefore, the Group does not control them as at 31 December 2022 (Note 26).
Note 5: Adoption of new or revised standards and interpretations
The following amended standards became mandatory for the consolidated financial statements of 2022, but did not
have any material impact on the Group:
• COVID-19-Related Rent Concessions Amendment to IFRS 16 (issued on 31 March 2021 and effective for
annual periods beginning on or after 1 April 2021).
• Revenue received prior to the commencement of the intended use of the asset, Onerous Contracts – contract
performance cost, Reference to the Conceptual Framework – Limited Scope Amendments to IAS 16, IAS
37 and IFRS 3, and Annual Improvements to IFRS 2018-2020 relating to IFRS 1, IFRS 9, IFRS 16 and IAS
41 (issued on 14 May 2020 and effective for annual periods beginning on 1 January 2022 or after that date).
The following published new standards and interpretations mandatory for annual periods beginning on 1 January
2023 or after, are not expected to have any material impact on the Group’s consolidated financial statements when
adopted:
• Classification of liabilities as current or non-current, deferral of effective date – Amendments to IAS 1
(issued on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023, deferred to
1 January 2024).
• Classification of liabilities as current or non-current – Amendments to IAS 1 (issued on 23 January 2020
and effective for annual periods beginning on or after 1 January 2022, deferred to 1 January 2024).
• Non-current Liabilities with Covenants – Amendments to IAS 1 (issued on 31 October 2022 and effective
for annual periods beginning on or after 1 January 2024).
• IFRS 17 "Insurance Contracts"(issued on 18 May 2017 and effective for annual periods beginning on or
after 1 January 2021, deferred to 1 January 2023).
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
24
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
25
N ote 5: Adoption of new or revised standards and interpretations (continued)
• Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual
periods beginning on or after 1 January 2023).
• Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12
February 2021 and effective for annual periods beginning on or after 1 January 2023).
• Amendments to IAS 8: Definition of Accounting Estimates (issued on 12 February 2021 and effective for
annual periods beginning on or after 1 January 2023).
• Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12
(issued on 7 May 2021 and effective for annual periods beginning on or after 1 January 2023).
• Transition option to insurers applying IFRS 17 – Amendments to IFRS 17 (issued on 9 December 2021 and
effective for annual periods beginning on or after 1 January 2023).
• Lease Liability in a Sale and Leaseback Amendments to IFRS 16 – Amendments to IFRS 16 (issued on 22
September 2022 and effective for annual periods beginning on or after 1 January 2024).
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to
IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after
a date to be determined by the IASB).
Note 6: Cash and cash equivalents
At 31 December
2022
At 31 December
2021
Cash on hand and in banks 86,582 48,937
Term deposits with original maturity of less than three months 81,282 17,550
Total cash and cash equivalents 167,864 66,487
The fair value and credit quality analysis of cash and cash equivalents is presented in Note 27.
Note 7: Accounts receivable
Short-term and long-term accounts receivable comprise the following:
At 31 December
2022
At 31 December
2021
Short-term accounts receivable:
Trade receivables 102,642 90,348
Other financial receivables (Note 26) 16,250 9,138
Other non-financial receivables 131 153
Less credit loss allowance (11,154) (10,635)
Total short-term accounts receivable 107,869 89,004
Long-term accounts receivable:
Trade receivables 431 579
Other financial receivables (Note 26) 12,848 808
Less credit loss allowance (456) (469)
Total long-term accounts receivable 12,823 918
Total trade and other receivables 120,692 89,922
The estimated fair value of short-term and long-term accounts receivable is presented in Note 27.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables.
The credit loss allowance for trade receivables is determined according to provision matrix, which is based on the
number of days that an asset is past due, with a distribution to portfolios of receivables, homogeneous in terms of
credit risk. In addition to the number of days that an asset is past due, types of products sold, geographical specificity
of distributional channels and other factors were taken into account.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
25
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
26
N ote 7: Accounts receivable (continued)
Analysis by credit quality of trade and other receivables is as follows:
At 31 December 2022 At 31 December 2021
Trade
receivables
Other
receivables
Trade
receivables
Other
receivables
Not past due
- International traders of crude oil, oil
products and petrochemicals 26,235 - 23,946 -
- Russian crude oil and oil products
traders 617 - 487 -
- Russian oil and petrochemicals
refineries 23,700 - 36,617 -
- Foreign refineries 30,056 - 6,877 -
- Russian tire dealers and automotive
manufacturers - - 3,331 -
- Natural monopoly entity 1,142 - 127 -
- Russian construction companies 601 - 263 -
- other (Note 26) 14,681 23,034 12,611 4,583
including related parties 3,864 14,656 2,452 228
Not past due 97,032 23,034 84,259 4,583
Expected credit loss allowance (305) (82) (409) (7)
Past due but not individually assessed
for credit loss allowance
- less than 90 days overdue 464 2 1,007 9
- 91 to 180 days overdue 164 29 289 -
- over 180 days overdue - 1 - 1
Total past due but not individually
assessed for credit loss allowance 628 32 1,296 10
Expected credit loss allowance (15) (18) (25) (9)
Individually assessed for credit loss
allowance (gross)
- less than 90 days overdue - - - -
- 91 to 180 days overdue - - - -
- over 180 days overdue 5,413 6,032 5,372 5,353
Total individually assessed for
credit loss allowance 5,413 6,032 5,372 5,353
Expected credit loss allowance (5,397) (5,793) (5,358) (5,296)
Total 97,356 23,205 85,135 4,634
The following table explains the changes in the credit loss allowance for trade and other receivables between the
beginning and the end of the annual period, ended 31 December 2022 and 2021:
2022 2021
Trade
receivables
Other
receivables
Trade
receivables
Other
receivables
Expected credit loss allowance at 1
January (5,792) (5,312) (5,462) (4,919)
New originated or purchased (168) (731) (7) (392)
Total credit loss allowance charge
in profit or loss for the period (168) (731) (7) (392)
Write-offs - 2 1 (1)
Exchange differences 95 1 - -
Disposal of provision for
discontinued operation 148 61 - -
Other changes - 86 (324) -
Expected credit loss allowance at
31 December (5,717) (5,893) (5,792) (5,312)
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
26
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
27
N ote 8: Financial services: Loans to customers
At 31 December
2022
At 31 December
2021
Loans to legal entities 49,335 37,622
Loans to individuals 2,552 1,977
Short term loans to customers measured at amortised cost
before credit loss allowance 51,887 39,599
Credit loss allowance (7,043) (7,257)
Total short term loans to customers measured at amortised
cost 44,844 32,342
Short term loans to legal entities measured at fair value through
profit or loss 37 -
Total short term loans to customers 44,881 32,342
At 31 December
2022
At 31 December
2021
Loans to legal entities 57,509 51,653
Loans to individuals 59,769 54,939
Long term loans to customers measured at amortised cost
before credit loss allowance 117,278 106,592
Credit loss allowance (4,753) (4,232)
Total long term loans to customers measured at amortised cost 112,525 102,360
Total long term loans to customers 112,525 102,360
There is a certain concentration of loans issued to customers in the financial services segment of the Group. As at
31 December 2022 and 2021 the Group granted loans to 21 and 17 customers totalling RR 62,151 million and
RR 54,852 million respectively, which individually exceeded 5% of segment equity.
The fair value of loans to customers, including a breakdown by fair value hierarchy level, is disclosed in Note 27.
Information on related party balances is disclosed in Note 23.
Movements in the credit loss allowance during the year ended at 31 December 2022 are as follows:
Loans to legal
entities
Loans to
individuals
Total
Credit loss allowance as at 1 January 2022 (7,859) (3,630) (11,489)
Net provision for credit loss allowance during the
period 87 (1,588) (1,501)
Other changes 804 390 1,194
Credit loss allowance as at 31 December 2022 (6,968) (4,828) (11,796)
Movements in the credit loss allowance during the year ended at 31 December 2021 are as follows:
Loans to legal
entities
Loans to
individuals
Total
Credit loss allowance as at 1 January 2021 (9,427) (3,798) (13,225)
Net reversal of provision/(provision) for credit
loss allowance during the period 592 (49) 543
Reclassification to the credit loss allowance for
other long-term loans 298 - 298
Other changes 678 217 895
Credit loss allowance as at 31 December 2021 (7,859) (3,630) (11,489)
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
27
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
28
N
ote 8: Financial services: Loans to customers (continued)
Risk concentrations by customer industry within the customer loan portfolio are as follows:
At 31 December 2022
At 31 December 2021
Gross book
value
Share in
customer loan
portfolio, %
Gross book
value
Share in
customer loan
portfolio, %
Trade
21,678
12.81%
15,314
10.48%
Manufacturing
41,020
24.24%
41,788
28.58%
Construction
1,497
0.88%
1,537
1.05%
Services
21,531
12.73%
12,925
8.84%
Food
350
0.21%
572
0.39%
Finance
14,964
8.84%
8,311
5.69%
Agriculture
1,442
0.85%
2,310
1.58%
Oil and gas
3,105
1.84%
4,463
3.05%
Individuals, including:
62,321
36.84%
56,916
38.93%
mortgage loans
31,605
18.68%
27,660
18.92%
consumer loans
16,476
9.74%
15,920
10.89%
car loans
13,799
8.16%
12,844
8.79%
plastic cards overdrafts
423
0.25%
452
0.31%
other
18
0.01%
40
0.02%
Other
1,294
0.76%
2,055
1.41%
Total loans to customers before credit loss
allowance
169,202
100%
146,191
100%
N ote 9: Other financial assets
Other short-term financial assets comprise the following:
At 31 December
2022
At 31 December
2021
Financial assets measured at amortised cost
Bank deposits (net of credit loss allowance of RR 2,972
million and RR 5,547 million as 31 December 2022 and
31 December 2021 respectively) - 56,492
Securities held by the Group (net of credit loss allowance of
RR 29 million and of RR 8 million as at 31 December 2022
and 31 December 2021 respectively): 12,034 3,993
Russian government and municipal debt securities 20 12
Corporate debt securities 12,014 3,981
Other (net of credit loss allowance of RR 327 million and of
RR 3,524 million as at 31 December 2022 and 31 December
2021 respectively) 4,025 7,852
Total 16,059 68,337
Financial assets measured at fair value through profit or loss
Bank deposits - 33,465
Other 5,998 4,409
Total 5,998 37,874
Financial assets measured at fair value through other
comprehensive income 1,707 1,951
Total short-term financial assets 23,764 108,162
Bank deposits measured at fair value through profit or loss represent prepayments under foreign exchange forward
contracts with a Russian commercial bank. The terms of the contracts include exposure to cash flows and volatility that
are not consistent with the terms of the underlying loan agreement.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
28
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
29
N ote 9: Other financial assets (continued)
Other long-term financial assets comprise the following:
At 31 December
2022
At 31 December
2021
Financial assets measured at amortised cost
Loans (net of credit loss allowance of RR 17,647 million and of RR
19,938 million as at 31 December 2022 and 31 December 2021
respectively) 8,138 1,463
Securities held by the Group (net of credit loss allowance of RR 39
million and of RR 16 million as at 31 December 2022 and 31
December 2021 respectively): 15,323 8,917
Russian government and municipal debt securities 2,434 1,252
Corporate debt securities 12,889 7,665
Other (net of credit loss allowance of RR 4,659 million and of RR
2,120 million as at 31 December 2022 and 31 December 2021
respectively) 6,605 12,701
Total 30,066 23,081
Financial assets measured at fair value through profit or loss 2,331 4,410
Financial assets measured at fair value through other
comprehensive income
Securities held by the Group: 57,844 49,196
Russian government and municipal debt securities 14,208 11,013
Corporate shares 12,834 13,329
Corporate debt securities 19,503 12,113
Foreign country’s debt securities 636 673
Investment fund units 10,663 12,068
Other - 4,397
Total 57,844 53,593
Total long-term financial assets 90,241 81,084
The fair value of financial assets and valuation techniques used are disclosed in Note 27.
Investment fund units are solely presented with investment in closed mutual investment rental fund AK BARS –
Gorizont (45.45% of the total amount a shares). The main assets of this fund are the land plots located in Tatarstan
Republic. The Group does not exercise significant influence over this investment and therefore accounts for it as a
financial asset measured at fair value through other comprehensive income.
N
ote 10: Inventories
At 31 December
2022
At 31 December
2021
Materials and supplies
32,725
22,384
Crude oil
15,799
20,748
Refined oil products
21,657
21,973
Petrochemical supplies and finished products of
tires business (Note 26)
-
9,942
Other finished products and goods
7,201
6,015
Total inventories
77,382
81,062
N
ote 11: Prepaid expenses and other current assets
At 31 December
2022
At 31 December
2021
Prepaid export duties
1,569
1,754
VAT recoverable
6,130
7,277
Advances
7,983
8,807
Prepaid transportation expenses
2,923
2,495
Excise
12,323
10,891
Other
1,270
1,054
Prepaid expenses and other current assets
32,198
32,278
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
29
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
30
N ote 12: Property, plant and equipment
Oil and
gas
properties
Buildings
and
constructions
Machinery
and
equipment
Construc-
tion in
progress
Total
Cost
As at 31 December 2020 474,112 294,356 220,109 229,416 1,217,993
Additions - - - 120,151 120,151
Disposals (662) (2,448) (3,646) (2,696) (9,452)
Changes in Group structure - 2,016 1,788 169 3,973
Transfers 6,087 45,695 30,568 (82,350) -
Changes in decommissioning
provision (20,198) - - - (20,198)
As at 31 December 2021 459,339 339,619 248,819 264,690 1,312,467
Depreciation, depletion,
amortisation and impairment
As at 31 December 2020 210,248 63,962 90,213 27,001 391,424
Depreciation, depletion and
amortisation 21,038 8,593 12,158 - 41,789
Impairment 327 - - 2,466 2,793
Disposals (328) (382) (2,611) - (3,321)
Transfers (2,837) 3,051 (214) - -
As at 31 December 2021 228,448 75,224 99,546 29,467 432,685
Net book value
As at 31 December 2020 263,864 230,394 129,896 202,415 826,569
As at 31 December 2021 230,891 264,395 149,273 235,223 879,782
Cost
As at 31 December 2021 459,339 339,619 248,819 264,690 1,312,467
Additions - - - 163,043 163,043
Disposals (3,453) (1,073) (4,186) (914) (9,626)
Changes in Group structure
(Note 25) 16,190 1,986 9,590 109 27,875
Changes in Group structure
(Note 26) - (8,843) (29,933) (23,917) (62,693)
Transfers 35,381 53,841 34,552 (123,774) -
Changes in decommissioning
provision 12,370 - - - 12,370
Currency translation effect - (230) (174) (783) (1,187)
As at 31 December 2022 519,827 385,300 258,668 278,454 1,442,249
Depreciation, depletion,
amortisation and impairment
As at 31 December 2021 228,448 75,224 99,546 29,467 432,685
Depreciation, depletion and
amortisation 25,259 12,361 12,527 - 50,147
Impairment 14,541 463 459 5,717 21,180
Disposals (3,369) (342) (3,068) - (6,779)
Changes in Group structure
(Note 26) - (4,527) (23,446) (2,021) (29,994)
Transfers 554 143 (697) - -
Currency translation effect - (81) (81) - (162)
As at 31 December 2022 265,433 83,241 85,240 33,163 467,077
Net book value
As at 31 December 2021 230,891 264,395 149,273 235,223 879,782
As at 31 December 2022 254,394 302,059 173,428 245,291 975,172
Additions for 2022 and 2021 years include construction of TANECO refinery complex,
wells, oil fields facilities.
Within construction in progress there are advances for construction of RR 26,166 million and RR 21,794 million at
31 December 2022 and 2021, respectively.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
30
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
31
N
ote 12: Property, plant and equipment (continued)
As stated in Note 3, the Group calculates depreciation, depletion and amortization for oil and gas properties using
the units-of-production method over proved developed oil and gas reserves. The proved developed reserves used in
the units-of-
production method assume the extension of the Group’s production license beyond their current
expiration dates until the end of the economic lives of the fields as discussed below in further detail.
The Group’s oil and gas field
s are located principally on the territory of Tatarstan. The Group obtains licenses from
the governmental authorities to explore and produce oil and gas from these fields. The Group’s existing production
licenses for its major fields expire, after their recent extension, between 2038 and 2090, with other production
licenses expiring between 2023 and 2109
. The economic lives of several of the Group’s licensed fields extend
beyond the dates of licenses expiration. Under Russian law, the Group is entitled to renew the licenses to the end of
the economic lives of the fields, provided certain conditions are met.
Management is reasonably certain that the Group will be allowed to produce oil from the Group’s reserves after the
expiration of existing production licenses and until the end of the economic lives of the fields.
Changes in the net book value of exploration and evaluation assets are presented below:
At 1 January 2021 3,787
Additions 1,679
Reclassification to development assets (1)
Charged to expense (2,291)
At 31 December 2021 3,174
Additions 3,386
Reclassification to development assets (1)
Charged to expense (3,401)
At 31 December 2022 3,158
Due to indications of possible impairment the Group conducted impairment testing for the main groups of assets as
at 30 June 2022. As at 31 December 2022 due to changes in the legislation on mineral extraction tax the impairment
estimates for assets related to exploration and production of superviscous oil were updated. Assets are grouped for
impairment purposes to the cash generating units (CGU) at the lowest level for which there are identifiable cash
flows that are largely independent of the cash flows of other groups of assets:
• field-by-field basis for exploration and production assets;
• entire complex level for refining assets;
• other assets were grouped depending on the nature of the generated cash flows.
The macroeconomic factors, including but not limited to the changes in oil production and crude oil and oil products
prices, the volatility of the Russian Ruble to the US dollar and a changes in the level of business activity were taken
into account when preparing models, which are the main source of information for measuring the value in use of
non-current assets, including forecasts of oil production and refining volumes, oil and oil products price dynamics,
petrochemical production forecast, as well as when determining the discount rate.
In assessing impairment, the recorded value of assets was compared with the estimated value in use of the CGUs.
The value in use is determined as the discounted net cash flows based on the forecasts of revenue, production costs
and changes in working capital based on confirmed long-term strategic plans of the Group, taking into account the
uncertainty in the period of recovery in demand.The forecasting period for determining the value in use is in line
with the management assumptions used for long-term strategy and does not exceed the useful life of assets included
in the CGUs.
Key assumptions applied to the calculation of value in use are follows:
• oil prices and forecast US dollar/Russian ruble exchange rates are based on available forecasts from
globally recognized research institutions;
• estimated production and refining volumes were based on detailed information for the production and
refining plans approved by management as part of the long-term strategy, considering the estimates of proved
oil reserves and the current geopolitical situation.
The discount rate was calculated based on the Company’s weighted average cost of capital adjusted for asset specific
risks. The Group applied the following nominal pre-tax discount rates for impairment testing purposes:
• from 21.33 % to 23.1% for oil and gas fields;
• from 16.88 % to 17.36% for petrochemical and oil and gas processing complexes.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
31
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
32
N
ote 12: Property, plant and equipment (continued)
For the purposes of impairment testing, the following Brent price assumptions have been used: $ 104.96 per barrel
in 2023, $ 107.27 per barrel in 2024, $ 109.52 per barrel in 2025, $ 111.76 per barrel in 2026 and $ 113.93 per
barrel in 2027 with further growth in subsequent years according to forecasts. A forecast discount was applied to
Brent crude prices to bring them to Urals crude prices.
For the purposes of updating estimates as at 31 December 2022 the following Brent price assumptions have been
used: $ 93.43 per barrel in 2023, $ 87.15 per barrel in 2024, $ 81.48 per barrel in 2025 and $ 79.36 per barrel in
2026, $ 79.72 per barrel in 2027 with further growth in subsequent years according to forecasts. A forecast discount
was applied to Brent crude prices to bring them to Urals crude prices.
A reasonably justified change in key assumptions, taken into account by management for the purpose of preparing
models as at the reporting date, does not necessitate the recognition of an additional impairment other than the below.
In 2022 the Group recognised an impairment losses on property, plant and equipment and other non-financial assets
in the amount of RR 30,230 million (in 2021 impairment losses on property, plant and equipment and other non-
financial assets net of reversal in the amount of RR 3,297 million). These losses consist of impairment losses on
property, plant and equipment net of reversal in the amount of RR 21,005 million (in 2021 in the amount of RR
2,514 million) excluding loss on discontinued operations, loss from impairment on other long-term assets in the
amount of RR 8,161 million (in 2021 income from reversal of impairment in the amount of RR 111 million),
expenses from write-down of inventories to the net realizable value in the amount of RR 814 million (in 2021,
income from reversal in the amount of RR 74 million) and losses on disposal of property, plant and equipment in
the amount of RR 250 million (in 2021 in the amount of RR 968 million).
In 2022 the Group recognised an impairment on property, plant and equipment in relation to the following assets::
• assets related to discontinued operation (Note 26) in the amount of RR 175 million (loss recognised prior
to disposal date);
• exploration assets related to the superviscous oil fields, in the amounts of RR 13,638 million;
• oil development related to the oilfields located outside the Republic of Tatarstan in the amount of RR 4,680
million;
• other assets in the total amount of RR 2,687 million.
The recoverable amount of superviscous oil fields, which were impaired, was determined in the amount of RR
35,016 million.
At 31 December 2022 and 2021 the Group held social assets with a net book value of RR 4,552 million and RR
4,075 million, respectively.
Decommissioning provisions
The following table summarizes changes in the Group’s decommissioning provision for the year :
2022 2021
Balance at the beginning of period 38,710 55,373
Unwinding of discount 3,103 3,582
New obligations 802 222
Expenses on current obligations (6) (8)
Changes in estimates 11,568 (20,459)
Balance at the end of period 54,177 38,710
Less: current portion of decommissioning provisions (Note 15) (183) (57)
Long-term balance at the end of period 53,994 38,653
In 2022 the Group recorded the change in estimate for oil and gas properties decommissioning due to the growth in
estimated future costs of decommissioning and changes in discount rate (in 2021 due to changes in discount rate).
Key assumptions used for evaluation of decommissioning provision were as follows:
At 31 December
2022
At 31 December
2021
Discount rate 10.06% 8.47%
Discount rate for superviscous oil 9.88% 8.39%
Long-term inflation rate 4.20% 4.00%
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
32
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
33
N ote 13: Taxes
Presented below is reconciliation between the provision for income taxes and taxes determined by applying the
statutory tax rate 20% to income before income taxes:
Year ended
31 December 2022
Year ended
31 December 2021
Profit before income tax 379,968 247,899
Theoretical income tax expense at statutory rate (75,994) (49,580)
(Increase)/decrease due to:
Non-deductible expenses, net (4,110) (6,392)
Income tax withheld at source on dividends for treasury shares (632) (440)
Other 6 1
Income tax expense (80,730) (56,411)
At 31 December 2022 no deferred tax liabilities have been recognised for taxable temporary differences of
RR 31,366 million (2021: RR 45,537 million) on undistributed earnings of certain subsidiaries. These earnings have
been and will continue to be reinvested. These earnings, except for undistributed earnings of subsidiaries operating
in a tax free jurisdictions, could become subject to additional tax of approximately RR 2,058 million (2021: RR
2,839 million) if they were remitted as dividends.
Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities
recognised for financial reporting purposes and such amounts recognised for statutory tax purposes. Deferred tax
assets (liabilities) are comprised of the following:
At 31 December
2022
At 31 December
2021
Tax loss carry forward 5,026 3,899
Decommissioning provision 9,321 8,469
Prepaid expenses and other current assets 235 175
Long-term loans and certificates of deposits 1,748 1,411
Long-term investments 266 444
Other 2,704 249
Deferred income tax assets 19,300 14,647
Property, plant and equipment (55,388) (46,612)
Inventories (3,153) (3,688)
Prepaid expenses and other current assets (4,513) (2,007)
Long-term debt (1,429) (1,429)
Other liabilities (225) (651)
Deferred income tax liabilities (64,708) (54,387)
N et deferred tax liability (45,408) (39,740)
Deferred income taxes are reflected in the consolidated statement of financial position as follows:
At 31 December
2022
At 31 December
2021
Deferred income tax asset 5,504 3,333
Deferred income tax liability (50,912) (43,073)
Net deferred tax liability (45,408) (39,740)
Tax losses carry forward. At 31 December 2022, the Group had recognised deferred income tax assets of RR 5,026
million (RR 3,899 million at 31 December 2021) in respect of unused tax loss carry forwards of RR 25,130 million
(RR 19,495 million at 31 December 2021). Starting from 1 January 2017 the amendments to the Russian tax
legislation became effective in respect of tax loss carry forwards. The amendments affect tax losses incurred and
accumulated since 2007 that have not been utilised. The ten year expiry period for tax loss carry-forwards no longer
applies. The amendments also set limitation on utilisation of tax loss carry forwards that will apply during the period
from 2017 to 2024. The amount of losses that can be utilised each year during that period is limited to 50% of annual
taxable profit. In determining future taxable profits and the amount of tax benefits that are probable in the future
management makes judgments including expectations regarding the Group’s ability to generate sufficient future
taxable income and the projected time period over which deferred tax benefits will be realised.
The Group does not have any unrecognised potential deferred tax assets in respect of deductible temporary
differences.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
33
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
34
N
ote 13: Taxes (continued)
The Group is subject to a number of taxes other than income taxes, which are detailed as follows:
Year ended
31 December 2022
Year ended
31 December 2021
Mineral extraction tax
511,993
516,598
Tax on additional income from hydrocarbon extraction
128,491
2,299
Excise
(190,382)
(30,492)
incl. reverse excise
(278,583)
(81,547)
Property tax
12,499
7,281
Other
2,218
2,262
Total taxes, other than income taxes
464,819
497,948
Taxes payable, other than income taxes were as follows:
At 31 December
2022
At 31 December
2021
Mineral extraction tax
21,650
52,298
Tax on additional income from hydrocarbon extraction
18,395
1,174
Value Added Tax
15,216
24,723
Excise
8,319
5,493
Export duties
672
647
Property tax
3,547
2,131
Other
4,419
3,239
Total taxes payable, other than income taxes
72,218
89,705
N ote 14: Debt
At 31 December
2022
At 31 December
2021
Short-term debt 298 1,518
Сurrent portion of long-term debt 2,367 21,023
Total short-term debt, including current portion of
long-term debt 2,665 22,541
Long-term debt
Bonds issued 2,057 20,412
Promissory notes issued 11,621 6
Discontinued operations credit tranches (Note 26) - 5,908
Other debt 525 4,328
Total long-term debt 14,203 30,654
Less: current portion (2,367) (21,023)
Total long-term debt, net of current portion 11,836 9,631
Fair value of debt is presented in Note 27. Maturity and currency analysis of debt is presented in Note 27. Debt
issued to related parties is presented in Note 23.
In December 2019 the Company issued Russian Ruble denominated bonds in the amount of RR 15,000 million with
the maturity in 3 years at a rate of 6.45% per annum. In December 2022 the bonds were redeemed in accordance
with the schedule.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
34
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
35
N ote 15: Accounts payable and accrued liabilities
At 31 December
2022
At 31 December
2021
Trade payables 49,609 54,113
Current portion of lease liabilities 974 2,838
Other payables 481 2,528
Total financial liabilities within trade and other
payables 51,064 59,479
Salaries and wages payable 13,051 10,393
Current portion of long-term employee incentives program
(Note 18) 80 -
Advances received from customers 21,118 25,340
Current portion of decommissioning provisions (Note 12) 183 57
Other accounts payable and accrued liabilities 7,440 6,001
Total non-financial liabilities 41,872 41,791
Accounts payable and accrued liabilities 92,936 101,270
For the current reporting period revenue of RR 25,340 million was recognised in respect of contract obligations as
of 1 January 2022 related to advances received.
For the previous reporting period revenue of RR 11,175 million was recognised in respect of contract obligations as
of 1 January 2021 related to advances received.
As at 31 December 2021 advances received include an advance payment under the oil supply agreement in the
amount RR 12,850 million. The prepayment was repaid by delivery of oil.
The fair value of each class of financial liabilities included in short-term trade and other payables is presented in
Note 27.
N ote 16: Financial services: Due to banks and the Bank of Russia
At 31 December
2022
At 31 December
2021
Term deposits from banks 1 2,077
Term deposits from the Bank of Russia 5,239 4,486
REPO - 20,743
Correspondent accounts and banks’ overnight deposits 933 273
Total due to banks and the Bank of Russia 6,173 27,579
Less: long term due to banks and the Bank of Russia (2,883) (4,026)
Total short term of due to banks and the Bank of Russia 3,290 23,553
There is a certain concentration of sources of financing in the Group's financial services segment. As at 31 December
2022 within due to banks and the Bank of Russia there are RR 5,239 million of correspondent accounts and term
deposits borrowed from the Bank of Russia which individually exceeded 5% of the segment equity. As at 31
December 2021 within due to banks and the Bank of Russia there are RR 27,087 million of correspondent accounts
and term deposits, borrowed from the Bank of Russia and from 4 Russian banks, which individually exceeded 5%
of the segment equity.
As at 31 December 2021 financial liabilities which are subject to offsetting include RR 20,743 million of due to
banks collateralised by securities, fair value of which is RR 23,428 million. As at 31 December 2022 there are no
such financial liabilities.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
35
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
36
N ote 17: Financial services: Customer accounts
At 31 December
2022
At 31 December
2021
State and public organizations
Current / settlement accounts 1,333 1,196
Term deposits 327 156
Other legal entities
Current / settlement accounts 40,352 20,141
Term deposits 60,933 33,322
Individuals
Current / settlement accounts 35,676 25,500
Term deposits 74,011 71,114
Total customer accounts 212,632 151,429
Less: long-term customer accounts (713) (1,288)
Total short-term customer accounts 211,919 150,141
There is a certain concentration of sources of financing in the Group's financial services segment. Within customer
accounts at 31 December 2022 and 2021 there are RR 77,301 million and RR 48,864 million of current/settlement
accounts and term deposits from 22 and 19 customers respectively, which individually exceeded 5% of the segment
equity.
Risk concentrations by customer industry within customer accounts are as follows:
At 31 December
2022
At 31 December
2021
Carrying value
Share in customer
loan portfolio, %
Carrying
value
Share in customer
loan portfolio, %
Individuals 109,687 51.59% 96,614 63.80%
Finance 30,501 14.34% 17,336 11.45%
Oil and gas 4,740 2.23% 9,859 6.51%
Trade 28,487 13.40% 6,273 4.14%
Services 16,074 7.56% 10,325 6.82%
Manufacturing 13,368 6.29% 3,408 2.25%
Construction 3,295 1.55% 4,434 2.93%
Other 6,480 3.04% 3,180 2.10%
Total customer accounts 212,632 100% 151,429 100%
N ote 18: Other long-term liabilities
Other long-term liabilities are as follows:
At 31 December
2022
At 31 December
2021
Pension and other long-term liabilities to employees and retirees 3,745 4,140
Government grants 28,948 24,124
Long-term employee incentives program, net of current portion
(Note 15, 20) - 1,186
Other long-term liabilities 667 355
Total other long-term liabilities 33,360 29,805
Pension liabilities. The Group has various pension plans offered to all employees. Starting from 1 March 2021 the
amount of contributions, frequency of benefit payments and other conditions of these plans are regulated by the new
“Statement of Organization of Corporate Non-Governmental Pension Benefits for P JSC Tatneft Employees” , similar
provisions of controlled subsidiaries and agreements arranged between the Company and the JSC “National Non -
Governmental Pension Fund”. In accordance with the terms of the agreements the Group is committed to make
certain contributions on favor of its employees, the aggregated amount of savings guarantees the payment of a non-
state pension in an amount not lower than the minimum amount provided by pension agreements. The amount of
contributions and non-state pensions depends on the amount of contributions chosen by the employee and the
achievement of the target indicators of the companies.
In accordance with the provisions of collective agreements concluded on an annual basis between the Company or
its subsidiaries and their employees, the Group is obliged to pay other certain post-employment benefits to
employees upon completion of their employment with the Company or its controlled subsidiaries.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
36
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
37
N ote 18: Other long-term liabilities (continued)
Government grants. The Group received grants from the Republic of Tatarstan for the creation, modernization and
reconstruction of energy facilities, processing capacity and infrastructure.
Long-term employee incentives program. According to the Tatneft Group long-term employee incentives program
for key employees the benefits are based on the change in the Company share price during a five-year cycle. In
accordance with the terms of the program, 13 million shares are “conditionally” assigned to the management and
directors of the Company, based on which, at the end of the cycle, remuneration is paid on the amount of the positive
difference in the average annual price of an ordinary share of PJSC Tatneft for the fifth year of the five-year cycle
and the year adopted as a base. Payments are made in cash. Receipt of payouts is contingent upon meeting the
required service period, certain performance metrics and an increase in the value of shares.
The fair value of the Program at the reporting date was determined as RR 5.41 per share as the difference between
the actual average annual price of an ordinary share of the Company for the fifth year of a five-year cycle (2022) in
the amount of RR 405.68 and the price for the year taken as the base year (2017) in amount of RR 400.27. The
amount of the liability under the Program as at 31 December 2022 is included in accounts payable and accrued
liabilities (Note 15). The difference with the amount of the liability as at 31 December 2021 is taken to the reversal
of the provision within employee benefits expense (Note 18).
In 2021 the fair value of the Program was determined as RR 103 per share in accordance with the Black-Scholes
option pricing model. The fair value was calculated using the spot price of the Company's shares at the end of 2021
in the amount of RR 498.6 the exercise price of the option in the amount of RR 400.27, an expected dividend yield
of 7.63% per annum, the risk-free interest rate equal to 7.86 % per annum, the term until the maturity of the program,
and the volatility of the return on the underlying asset equal to 25%. The expected volatility was determined based
on the historical volatility of the Company's shares.
Note 19:
Shareholders’ equity
Authorised share capital.
At 31 December 2022 and 2021 the authorised, issued and paid share capital of PJSC
Tatneft consists of 2,178,690,700 voting common shares and 147,508,500 non-voting preferred shares; both classes
of shares have a nominal value of RR 1.00 per share. The nominal value of authorised share capital differs from its
carrying value due to effect of the hyperinflation on capital contributions made before 2003.
Golden share.
Tatarstan holds a “Golden Share” –
a special governmental right
–
in the PJSC Tatneft company.
The exercise of its powers under the Golden Share enables the Tatarstan government to appoint one representative
to the Board of Directors and Revision Commission of the Company and to veto certain major decisions, including
those relating to changes in the share capital, amendments to the Charter, liquidation or reorganization and “major”
and “interested party” transactions as defined under Russian law. The Golden Share currently has an indefinite term.
Rights attributable to preferred shares. Unless a different amount is approved at the annual shareholders meeting,
preferred shares earn dividends equal to their nominal value. The amount of a dividend for a preferred share may
not be less than the amount of a dividend for a common share. Preferred shareholders may vote at meetings only on
the following decisions:
• the amendment of the dividends payable per preferred share;
• the issuance of additional shares with rights greater than the current rights of preferred shareholders; and
• the liquidation or reorganization of the Company.
The decisions listed above can be made only if approved by 75% of preferred shareholders.
Holders of preferred shares acquire the same voting rights as holders of common shares in the event that preferred
dividends are either not declared, or declared but not paid. On liquidation, the shareholders are entitled to receive a
distribution of net assets. Under Russian Joint Stock Companies Law and the Company’s charter in case of
liquidation, preferred shareholders have priority over shareholders holding common shares to be paid declared but
unpaid dividends on preferred shares and the liquidation value of preferred shares, if any.
Amounts available for distribution to shareholders. The source of payment of dividends is the Company's net
profit for the reporting period, determined based on the Company’s non -consolidated statutory accounts prepared in
accordance with RAR, which differ significantly from IFRS.
When determining the dividend amount (per share) recommended to the General Meeting of Shareholders, the
decision of PJSC TATNEFT’s Board of Directors is based on the amount of net profit under RA R or IFRS,
depending on the availability of published accounting and consolidated financial statements for the relevant period,
and assuming that the target level the total funds allocated for dividends payment accounts for least 50% of the net
profit amount determined by RAR or IFRS, whichever is greater.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
37
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
38
N
ote 19
: Shareholders’ equity (continued)
I
n December 2022, the shareholders of the Company approved the payment of interim dividends for the nine months ended 30 September 2022, in the amount of RR
39.57 per preferred and ordinary share, including previously paid interim dividends for the six months ended 30 June 2022, in the amount of RR 32.71 per preferred and ordinary
share.
In September 2022, the shareholders of the Company approved interim dividends for the six month ended 30 June
2022 in the amount of RR 32.71 per each preferred and ordinary share.
In June 2022, the shareholders of the Company approved dividends for the year ended 31 December 2021 in the
amount of RR 42.64 per each preferred and ordinary share, including the previously approved interim dividends for
the six and nine months of 2021 in the amount of RR
26.5 per each preferred and ordinary share. In December 2021, the shareholders of the Company approved the payment of interim dividends for the nine months
ended 30 September 2021, in the amount of RR
26.5 per preferred and ordinary share, including previously paid interim dividends for the six months ended 30 June 2021, in the amount of RR 16.52 per preferred and ordinary
share.
In September 2021, the shareholders of the Company approved interim dividends for the six month ended 30 June
2021 in the amount of RR 16.52 per each preferred and ordinary share.
In June 2021, the shareholders of the Company approved dividends for the year ended 31 December 2020 in the
amount of RR
22.24 per each preferred and ordinary share, including the previously approved interim dividends for the six months ended 30 June 2020 the amount of RR 9.94 per each preferred and ordinary share.
Earnings per share. Preferred shares are not redeemable and are considered to be participating shares. Basic and
diluted earnings per share are calculated by dividing profit or loss attributable to ordinary and preferred shareholders
by the weighted average number of ordinary and preferred shares outstanding during the period. Profit or loss
attributed to equity holders is reduced by the amount of dividends declared in the current period for each class of
shares.
The remaining profit or loss is allocated ordinary and preferred shares to the extent that each class may have share
in earnings if all the earnings for the period had been distributed. Treasury shares are excluded from calculations.
The total earnings allocated to each class of shares are determined by adding together the amount allocated for
dividends and the amount unallocated for now.
Year ended
31 December 2022
Year ended
31 December 2021
Profit attributable to shareholders of PJSC Tatneft 284,572 198,412
Profit attributable to shareholders of PJSC Tatneft from continuing
operations 298,668 191,153
Ordinary share dividends (117,161) (81,599)
Preferred share dividends (8,218) (5,723)
Income available to shareholders of PJSC Tatneft , net of
dividends 159,193 111,090
Basic and diluted:
Weighted average number of shares outstanding (millions of
shares):
Ordinary 2,103 2,103
Preferred 148 148
Combined weighted average number of ordinary and preferred
shares outstanding 2,251 2,251
Basic and diluted earnings per share (RR)
Ordinary 126.44 88.16
Preferred 126.44 88.16
Basic and diluted earnings per share from continuing
operations (RR)
Ordinary 132.70 84.93
Preferred 132.70 84.93
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
38
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
39
N
ote 20: Employee benefit expenses
Year ended
31 December 2022
Year ended
31 December 2021
Wages and salaries
62,994
52,272
Statutory insurance contributions
17,861
14,782
(Reversal of provision)/provision for long term employee
incentives program compensations (Note 18)
(1,106)
210
Pension costs –
defined benefit plans
(364)
1,627
Other employee benefits
2,566
1,571
Total employee benefit expense
81,951
70,462
Employee benefit expenses are included in operating expenses, selling, general and administrative expenses and
maintenance of social infrastructure and transfer of social assets, other expenses and operating expenses from
financial services, as well as financial result from discontinued operations in the consolidated statement of profit or
loss and other comprehensive income.
N ote 21: Interest and commission income and expense from financial services
Year ended
31 December:
2022 2021
Interest income 21,795 13,501
Loans to customers 15,072 9,956
Other 6,723 3,545
Fee and commission income 4,009 2,947
Settlement transactions 1,790 1,737
Other 2,219 1,210
Total interest and commission income from financial services 25,804 16,448
Interest expense (13,324) (6,869)
Term deposits (11,330) (4,839)
Other (1,994) (2,030)
Fee and commission expense (1,198) (1,360)
Settlement transactions (1,094) (1,265)
Other (104) (95)
Total interest and commission expense from financial services (14,522) (8,229)
N
ote 22: Segment information
Operating segments are components that engage in business activities that may earn revenues or incur expenses,
whose operating results are regularly reviewed by the Board of Directors and the Management Committee and for
which discrete financial information is available.
Segments whose revenue, result or assets are 10% or more of all the segments are reported separately.
The Group’s business activities are conducted predominantly through
three main operating segments:
•
Exploration and production consists of exploration, development, extraction and sale of own crude oil.
Intersegment sales consist of transfer of crude oil to refinery and other goods and services provided to other
operating segments;
•
Refining and marketing comprises purchases and sales of crude oil and refined products from third parties,
own refining activities and retailing operations;
•
Financial services.
The tire business segment is withdrawn from the main operating segments due to disposal of assets in 2nd quarter
of 2022.
Information on the segment sales and segment result presented in Note 3 and Note 26.
Other sales include revenues from ancillary services provided by the specialised subdivisions and subsidiaries of the
Group, such as sales of oilfield equipment, revenues from the sale of auxiliary petrochemical related services and
materials as well as other business activities, which do not constitute reportable business segments.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
39
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
40
N
ote 22: Segment information (continued)
The Group evaluates performance of its reportable operating segments and allocates resources based on segment
earnings, defined as profit before income tax not including interest income and expense (excluding financial
services), gains from equity investments, other income (expenses). Intersegment sales are at prices that approximate
market. The Group uses an export netback calculated based on average Urals quotes less export duty, freight and
transportation costs to calculate the cost of its own oil for refining. The Group financing including interest expense
and interest income (excluding financial services) and income taxes are managed on a Group basis and are not
allocated to operating segments.
For the year ended 31 December 2022, revenues of RR 163,802 million or 11 % of the Group’s total sales and
operating revenues are derived from one external customer.
For the year ended 31 December 2021, revenues of RR 187,901 million or 15 % of the Group’s total sales and
operating revenues are derived from one external customer.
These revenues represent sales of crude oil and are attributable to the exploration and production segment.
Management does not believe the Group is dependent on any particular customer.
Segment sales
Year ended
31 December 2022
Year ended
31 December 2021
Exploration and production
Domestic sales of own crude oil 195,422 287,656
Near abroad countries sales of own crude oil - 9,379
Own crude oil sales to far abroad countries 335,794 250,196
Other 8,750 4,366
Intersegment sales 410,013 322,534
Total exploration and production 949,979 874,131
Refining and marketing
Domestic sales
Refined products 473,162 338,820
Total Domestic sales 473,162 338,820
Near abroad countries sales
Refined products 16,762 13,514
Total near abroad countries sales 16,762 13,514
Far abroad countries sales
Crude oil purchased for resale 1,833 9,262
Refined products 302,298 215,320
Total far abroad countries sales 304,131 224,582
Other 24,443 19,231
Intersegment sales 4,485 1,895
Total refining and marketing 822,983 598,042
Financial services
Interest income 21,795 13,501
Fee and commission income 4,009 2,947
Total financial services 25,804 16,448
Total segment sales 1,798,766 1,488,621
Corporate and other sales 68,683 57,523
Elimination of intersegment sales (414,498) (324,429)
Total sales 1,452,951 1,221,715
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
40
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
41
N
ote 22: Segment information (continued)
Segment earnings
Year ended
31 December 2022
Year ended
31 December 2021
Segment earnings
Exploration and production 101,774 213,498
Refining and marketing 307,410 73,349
Financial services 1,083 1,488
Total segment result 410,267 288,335
Corporate and other (32,646) (38,182)
Other income/(expenses), net (w/o foreign exchange
differences) 2,347 (2,254)
Profit before income tax 379,968 247,899
Segment result includes foreign exchange loss, net. "Corporate and other" line includes Head Office administrative
expenses, impairment losses on property, plant and equipment and other non-financial assets net of reversal, charity
expenses, maintenance of social infrastructure and transfer of social assets, fair value gain from financial assets at
fair value through profit or loss.
Segment assets
At 31 December
2022
At 31 December
2021
Assets
Exploration and production 446,794 383,873
Refining and marketing 630,216 583,611
Financial services 319,444 245,188
Corporate and other 279,383 238,773
Discontinued operations (Note 26) - 50,844
Total assets 1,675,837 1,502,289
As at 31 December 2022 corporate and other assets includes RR 100,371 million of property, plant and equipment,
RR 22,079 million of securities measured at fair value through other comprehensive income, RR 12,551 million
loans receivable, RR 75,080 million of bank deposits measured at amortised cost, RR 3,451 million of cash, 18,070
million of inventories, RR 4,806 million of advances issued.
As at 31 December 2021 corporate and other assets includes RR 77,113 million of property, plant and equipment,
RR 24,317 million of securities measured at fair value through other comprehensive income, RR 5,307 million loans
receivable, RR 65,508 million of bank deposits measured at amortised cost, RR 33,465 million of bank deposits
measured at fair value through profit or loss, RR 1,347 million of cash, RR 13,701 million of inventories, RR 1,678
million of advances issued.
The Group’s assets and operations are primarily located and conducted in the Russian Federation.
Segment depreciation, depletion and amortisation and additions to property, plant and equipment
Year ended
31 December 2022
Year ended
31 December 2021
Depreciation, depletion and amortization
Exploration and production 26,527 23,027
Refining and marketing 17,332 14,472
Financial services 500 366
Corporate and other 3,683 3,858
Total depreciation, depletion and amortization 48,042 41,723
Additions to property, plant and equipment
Exploration and production 93,277 29,089
Refining and marketing 62,027 64,544
Financial services 57 268
Corporate and other 30,471 16,082
Total additions to property, plant and equipment 185,832 109,983
Additions to property, plant and equipment of exploration and production segment are presented net of changes in
estimated decommissioning provisions (Note 12). Total additions from property, plant and equipment is presented
net of additions from discontinued operation (Note 26).
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
41
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
42
N
ote 23: Related party transactions
Parties are generally considered to be related if the parties are under common control or if one party has the ability
to control the other party or can exercise significant influence or joint control over the other party in making financial
and operational decisions. In considering each possible related party relationship, attention is directed to the
substance of the relationship, not merely the legal form.
Transactions are entered into in the normal course of business with associates, joint ventures, government related
companies, key management personnel and other related parties. These transactions include sales and purchases of
refined products, purchases of electricity, transportation services and financial services. The Group enters into
transactions with related parties based on market or regulated prices.
Associates, joint ventures and other related parties
The amounts of transactions for each period with associates, joint ventures and other
related parties are as follows:
Year ended
31 December 2022
Year ended
31 December 2021
Revenues and income
708
138
Costs and expenses
980
607
The outstanding balances with associates, joint ventures and other related parties were as follows:
At 31 December
2022
At 31 December
2021
Short-term assets
2,279
649
Long-term assets
12,157
5,230
Short-term liabilities
(2,076)
(1,297)
Long-term liabilities
-
(70)
Long-term assets mainly include securities at fair value through other comprehensive income and other loans.
Government related companies
The amounts of transactions for each period with Government related companies are as follows:
Year ended 31
December 2022
Year ended 31
December 2021
Sales of crude oil
14,734
49,676
Sales of refined products
32,886
19,602
Other sales
14,915
-
Other proceeds
8,441
9,165
Interest income
7,470
2,917
Income from changes in the fair value of financial assets
1,407
3,702
Interest expense
596
209
Purchases of crude oil
1,346
631
Purchases of refined products and natural gas
16,465
24,367
Purchases of electricity
24,232
20,783
Purchases of transportation and compounding services
47,379
26,800
Other services
7,866
6,779
Other purchases
527
489
Other services and other purchases from organizations related to the state include contributions to the State Housing
Fund under the President of the Republic of Tatarstan under the program of housing construction on social mortgages
in the Republic of Tatarstan, the purchase of petrochemical products, as well as some other services. Other sales
includes income from the assignment of rights of claim and the sale of interests in companies and shares.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
42
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
43
N
ote 23: Related party transactions (continued)
The outstanding balances with Government related companies were as follows
At 31 December
2022
At 31 December
2021
Assets
Cash and cash equivalents
79,214
28,794
Financial services: Mandatory reserve deposits with the
Bank of Russia
378
1,429
Accounts receivable
5,733
2,591
Financial services: Loans to customers
251
230
Other financial assets
Bank deposits measured at amortised cost
-
8,399
Bank deposits measured at fair value through profit or
loss
-
33,465
Securities measured at amortised cost
5,966
5,616
Other
2,069
3,839
Prepaid expenses and other current assets
3,290
4,712
Total short-term assets
96,901
89,075
Financial services: Loans to customers
7,436
3,355
Accounts receivable
12,060
-
Other financial assets
Securities measured at fair value through other
comprehensive income
39,478
38,809
Securities measured at amortised cost
13,826
11,116
Other loans
16
60
Advances for the acquisition of non-current assets
6,629
1
Total long-term assets
79,445
53,341
Liabilities
Accounts payable and accrued liabilities
(4,536)
(14,581)
Financial services: Due to banks and the Bank of Russia
(2,356)
(3,436)
Financial services: Customer accounts
(1,097)
(3,809)
Financial services: Other financial liabilities at fair value
through profit or loss
(819)
-
Debt
Promissory notes issued
(199)
(253)
Other debt
-
(494)
Total short-term liabilities
(9,007)
(22,573)
Financial services: Due to banks and the Bank of Russia
(2,883)
(4,026)
Other debt
-
(80)
Government grants (Note 18)
(28,948)
(21,312)
Other long-term liabilities
(365)
-
Total long-term liabilities
(32,196)
(25,418)
As at 31 December 2022 guarantees issued to government related parties amounted to RR 5,575 million (as at 31
December 2021: not applicable).
Key management personnel
The key management personnel of the Group includes members of the Board of Directors and the Management
Board of PJSC Tatneft.
For the years ended 31 December 2022 and 2021 total remuneration, including pension cost, for key management
personnel was RR 1,605 million and RR 1,072 million, respectively.
At 31 December 2022 and 2021 the Group’s key management personnel accounts in the customer accounts
amounted to RR 33,079 million and RR 25,433 million, respectively.
As at 31 December 2022 and 2021 the liability for the services provided by the key management personnel of the
Group in accordance with the long-term incentive program for executive employees amounted to RR 30 million and
RR 462 million respectively. Information about the program is presented in Note 18. In addition, in 2022, a provision
for short-term remuneration under the incentive program for executive employees in the amount of RR 153 million
was accrued for key management personnel (in 2021: RR 242 million).
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
43
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
44
N ote 24: Contingencies and commitments
Operating Environment of the Group
The economy of the Russian Federation displays certain characteristics of an emerging market. It is particularly
sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue to develop and are subject to
frequent changes and varying interpretations. The Russian economy continues to be negatively impacted by ongoing
political tension in the region and sanctions imposed by a number of countries against certain sectors of the Russian
economy, Russian companies and individuals.
In 2022 ongoing geopolitical tension in the region significantly escalated and situation remains highly unstable. The
escalation of the geopolitical situation led to a significant foreign exchange rates volatility (a sharp increase in
foreign exchange rates compared to 2021 year-end exchange rates with further decrease), an increase in the key rate
of the Bank of Russia, which subsequently reduced, an increase in oil and gas prices and to a decline in the Russian
equity market. There is increased volatility in the financial and commodity markets. A number of multinational
groups suspended or terminated their business activity in the Russian Federation. The Russian authorities imposed
restrictions on payments to a number of foreign creditors and shareholders.
In addition, in 2022, a number of countries introduced a ban on new investments by citizens and legal entities of
such countries in the energy industry of Russia, as well as on the supply of certain nomenclatures of goods,
equipment and a number of technologies. Since December 2022, some countries, including EU countries, have
banned their citizens and legal entities from importing Russian oil, as well as from providing brokerage, transport,
insurance and other services in relation to Russian oil transported by tankers and sold at a price above the price
threshold set by these countries. In February 2023, similar restrictive measures came into force for Russian oil
products.
Further limitations on business activity affecting companies operating in the Russian Federation, as well as further
negative consequences for the Russian economy in general cannot be ruled out, but it is not possible to determine
the duration, full extent and scale of possible effects.
The Group is characterized by a low level of debt and, although the current uncertainty may affect the Group's future
profitability and cash flows in the near future, management believes this will not affect the Group's ability to continue
as a going concern and meet its obligations for the foreseeable future.
The Group's management takes the necessary measures to ensure its sustainable operation. However, the future
impact of the current economic and geopolitical situation is difficult to predict and the Group's management's current
expectations and estimates may differ from actual results.
Capital commitments. As at 31 December 2022 and 2021 the Group has approximate outstanding capital
commitments of RR 72,681 million and RR 88,016 million, respectively, mainly for the construction of the
TANECO refinery complex, construction of wells and oil fields facilities construction. These commitments are
expected to be paid between 2023 and 2028.
Management believes the Group’s current and long-term capital expenditures program can be funded through cash
flows generated from existing operations as well as lines of credit available to the Company or issuance of debt
instruments.
Management believes the Company has the ability to obtain financings as needed to continue funding the own
projects, refinance any maturing debts as well as finance business acquisitions and other transactions that may arise
in the future.
Credit related commitments. The credit related commitments comprise loan commitments, letters of credit and
guarantees. The contractual commitments represent the value at risk should the contract be fully drawn upon, the
client defaults, and the value of any existing collateral becomes worthless. In general, certain part of Group's letters
of credit are collateralised with cash deposits or collateral pledged to the Group and accordingly the Group normally
assumes minimal risk.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
44
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
45
N
ote 24: Contingencies and commitments (continued)
Outstanding credit related commitments are as follows:
At 31 December 2022 At 31 December 2021
Undrawn credit lines that are irrevocable or are
revocable only in response to a material adverse change 39,781 26,373
Unused limits on the issuance of guarantees 21,461 13,581
Guarantees issued 35,062 14,111
Letters of credit 557 424
Less: allowance for credit related commitment (409) (236)
Less: commitments collateralised by cash deposits
under guarantees issued (70) (20)
Less: commitments collateralised by cash deposits
under Letters of credit (557) (424)
Total credit related commitments 95,825 53,809
Taxation. The Russian tax legislation is subject to varying interpretations and changes which can occur frequently.
Management’s interpretation of the legislation, as applied to the transactions and activities, may be challenged by
the tax authorities.
The tax authorities may take a different position in their interpretation of the legislation, and it is possible that
transactions and activities that have not been challenged in the past may be challenged.
The Russian transfer pricing legislation is generally aligned with the international transfer pricing principles
developed by the Organisation for Economic Cooperation and Development (OECD), with certain specific features.
This legislation allows tax authorities to assess additional taxes for controllable transactions (transactions between
related parties and certain transactions between unrelated parties) if such transactions are not on an arm's length
basis.
Tax liabilities arising from intercompany transactions are determined using actual transaction prices. It is possible,
with the evolution of the interpretation of the transfer pricing rules, that such prices could be challenged.
Management believes that its pricing policy is arm’s length and it has implemented internal processes to be in
compliance with the new transfer pricing legislation. The Group believes that its interpretation of the new legislation
is appropriate and the Group’s tax position will be sustained.
Environmental contingencies. The Group, through its predecessor entities, has operated in Tatarstan for many
years without developed environmental laws, regulations and the Group’s policies. Environmental regulations and
their enforcement are currently being considered in the Russian Federation and the Group is monitoring its potential
obligations related thereto. The outcome of environmental liabilities under proposed or any future environmental
legislation cannot reasonably be estimated at present, but could be material. The Group has analysed its exposure to
climatic and other emerging business risks, but has not identified any risks that could affect the financial results or
the position of the Group at the reporting date. Under existing legislation, however, management believes that there
are no probable liabilities, which would have a material adverse effect on the operating results or financial position
of the Group. In addition, the Group is introducing and applying best health, safety and environmental protection
practices and standards which might go beyond any existing and potential legal requirements in the Russian
Federation.
Legal contingencies.
The Group is subject to various lawsuits and claims arising in the ordinary course of business.
The outcomes of such contingencies, lawsuits or other proceedings cannot be determined at present. In the case of
all known contingencies the Group accrues a liability when the loss is probable and the amount is reasonably
estimable. Based on currently available information, management believes that it is remote that future costs related
to known contingent liability exposures would have a material adverse impact on the Group’s consolidated financial
statements.
Social commitments. The Group contributes significantly to the maintenance of local infrastructure and the welfare
of its employees within Tatarstan, which includes contributions towards the construction, development and
maintenance of housing, hospitals and transport services, recreation and other social needs. Such funding is
periodically determined by the Board of Directors after consultation with governmental authorities and recorded as
expenditures when incurred.
Transportation of crude oil. The Group transports substantially all of the crude oil that it sells in export and local
markets through trunk pipelines in Russia that are controlled by PJSC Transneft, the state-owned monopoly owner
and operator of Russia’s trunk crude oil pipelines. The Group’s crude oil is blended in the Transneft pipeline system
with other crude oil of varying qualities to produce an export blend commonly referred to as Urals. There is currently
no equalization scheme for differences in crude oil quality within the Transneft pipeline system and the
implementation of any such scheme or the impact of it on the Group’s business is not currently determinable.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
45
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
46
N
ote 25: Business combinations
In 2-3 quarter of 2022 as part of the development of the own oilfield service function the Group acquired shares in
charter capital of LLC UK Tatburneft, LLC Tatintek, LLC UK Tatspectransport, LLC Tagras-KhimService, LLC
KRS-Service, LLC NKT-Service, LLC MekhService-NPO, LLC TMS-Logistica and the movable and immovable
property and obtained control becoming the sole participant of these entities.
The purchase price amounted RR 25,633 million and the cash consideration was fully paid in 2-3 quarter 2022. The
consideration paid by the Group was based on the results of the evaluation of the business value of the acquired
entities as a whole.
At the 31 December 2022 the assessment of the fair value of the assets and liabilities of the acquired subsidiaries
has not been completed.
The allocation of the purchase price to the fair value of the assets and liabilities acquired
will be completed within 12 months from the acquisition date.
Details of assessment of the fair value of acquired assets and liabilities performed by the Group are as follows:
Preliminary
fair value
Cash and cash equivalents 1,178
Property, plant and equipment 24,920
Inventories 1,950
Accounts receivable and advances issued 4,212
Deferred tax assets 777
Other assets 202
Debt (1,427)
Trade and other payables (3,344)
Deferred tax liabilities (1,364)
Other liabilities (1,471)
Fair value of identifiable net assets of subsidiaries 25,633
Total purchase consideration 25,633
Сash and cash equivalents of subsidiaries acquired (1,178)
N et cash flow from acquisition of subsidiaries 24,455
For the period from the acquisition date to 31 December 2022 the acquired business accounted for RR 4,689 million
in the Group's revenue, share of the profits is insignificant.
Note 26: Discontinued operation
In the 2nd quarter of 2022, the Group sold its interests in subsidiaries of the tire business segment to a state-controlled
company for RR 37,476 million payable by instalment. Fair value of consideration determined based on discounted
cash flows amounted to RR 12,115 million.
С
arrying amount of the disposed assets and liabilities at the date of disposal are as follows:
Carrying amount
at the date of
disposal
Cash and cash equivalents
3,747
Property, plant and equipment
32,245
Right-of-use assets
986
Inventories
15,483
Accounts receivable and advances issued
12,525
Other assets
2,741
Debt (including loans received from the Group)
(17,211)
Trade and other payables
(10,678)
Other liabilities
(9,163)
N
et assets of subsidiaries
30,675
Less non-controlling interest
356
Carrying amount of disposed net assets
31,031
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
46
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
47
N
ote 26: Discontinued operation (continued)
The impact of disposal of the tire business on the Group's financial results for the year ended 31 December 2022
was the following:
Carrying amount of disposed net assets
(31,031)
Reclassification to loss of accumulated other comprehensive loss
(98)
Discounted value of the consideration
12,115
Loss on disposal of tire business
(19,014)
The result of the tire business before the date of disposal
Revenue
28,683
Cost
(23,843)
Other income, net
1,383
Income tax expense
(1,544)
Profit before the date of disposal
4,679
Loss from discontinued operation
(14,335)
The cash flow analysis of discontinued operation is as follows:
Year ended
31 December 2022
Year ended
31 December 2021
Cash flows from operating activities (5,983) 8,665
Cash flows from investing activities (3,296) (11,136)
Cash flows from financing activities 1,037 2,528
Total cash flow from discontinued operation (8,242) 57
Changes in the presentation of the consolidated statement of profit or loss and other comprehensive income for the
year ended 31 December 2021 due to the classification of the tire business as a discontinued operation are disclosed
in Note 3.
Note 27: Financial risk management
Financial risk management objectives and policies.
The Group‘s activities expose it to a variety
of financial risks: market risk (including foreign currency risk, interest
rate
risk),
credit
risk
and
liquidity
risk.
The
Group‘s
overall
risk
management
program
focuses
on
the
unpredictability of financial markets and seeks to minimize potential adverse
effects on the Group‘s financial
performance. The Group has introduced a risk management system and developed a number of procedures to
measure, assess and monitor risks and select the relevant risk management techniques.
Market risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future
performance of a business.
The Group takes on exposure to market risks. Market risks arise from open positions in (a) foreign currencies,
(b) interest rate risk and (c) financial instruments price risk.
a) Currency risk
The Group operates internationally and is exposed to currency risk arising from various currencies exposures.
Foreign exchange risk arises from assets, liabilities, commercial transactions and financing denominated in foreign
currencies.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
47
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
48
N
ote 27: Financial risk management (continued)
The table below summarises the Group’s exposure to foreign currency exchange rate risk as at 31 December 202 2.
Russian Ruble US Dollar Chinese yuan
Other
currencies
Financial assets
Cash and cash equivalents 84,027 10,067 56,065 17,705
Financial services: Mandatory
reserves with the Bank of Russia 378 - - -
Accounts receivable 57,964 59,620 - 2,977
Financial services: Loans to
customers 128,531 19,173 6,293 3,409
Other financial assets 80,311 18,999 13,383 1,312
Total financial assets 351,211 107,859 75,741 25,403
Financial liabilities
Trade and other financial payables 50,397 449 10 208
Dividends payable 26,025 - - -
Lease obligations, net of current
portion 2,641 - - -
Financial services: Other
financial liabilities at FVTPL 1,433 - - -
Debt 14,185 316 - -
Financial services: Due to banks
and the Bank of Russia 5,728 3 348 94
Financial services: Customer
accounts 171,852 11,938 17,322 11,520
Total financial liabilities 272,261 12,706 17,680 11,822
Net balance sheet position 78,950 95,153 58,061 13,581
The table below summarises the Group’s exposure to foreign currency exchange rate risk as at 31 December 20 21.
Russian Ruble US Dollar Chinese yuan
Other
currencies
Financial assets
Cash and cash equivalents 33,125 28,126 - 5,236
Financial services: Mandatory
reserves with the Bank of Russia 1,429 - - -
Accounts receivable 53,614 35,078 - 1,077
Financial services: Loans to
customers 98,129 31,399 - 5,174
Other financial assets 130,165 56,916 - 2,165
Total financial assets 316,462 151,519 - 13,652
Financial liabilities
Trade and other financial payables 58,463 234 - 782
Dividends payable 22,984 - - -
Lease obligations, net of current
portion 10,324 - - -
Financial services: Other financial
liabilities at FVTPL 6,092 960 - 11
Debt 25,271 2,499 - 4,402
Financial services: Due to banks
and the Bank of Russia 14,735 12,753 - 91
Financial services: Customer
accounts 126,036 20,263 - 5,130
Total financial liabilities 263,905 36,709 - 10,416
Net balance sheet position 52,557 114,810 - 3,236
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
48
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
49
N
ote 27: Financial risk management (continued)
For the year ended 31 December 2022 the Group recognised foreign exchange gain of RR 133,692 million and a
foreign exchange loss of RR 158,691 million in the consolidated interim condensed statement of profit or loss and
other comprehensive income on a net basis (for the year ended 31 December 2021: RR 13,817 million and RR
11,377, respectively). Gain and loss on foreign exchange differences were received mainly on receivables from
operating activities from the sale of crude oil and refining products for export, as well as from the revaluation of
cash in foreign currencies.
The following table presents sensitivities of profit or loss and equity to changes in US Dollar and Chinese yuan
exchange rates applied at the end of the reporting period relative to Russian Ruble:
Year ended
31 December 2022
Year ended
31 December 2021
Impact on
profit before
tax
Impact on
equity
Impact on
profit before
tax
Impact on
equity
US Dollar strengthening by 20% 19,031 15,224 15,515 12,412
US Dollar weakening by 20% (19,031) (15,224) (15,515) (12,412)
Chinese yuan strengthening by
20% 11,612 9,290 - -
Chinese yuan weakening by 20% (11,612) (9,290) - -
b) Interest rate risk.
The Group takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on its
financial position and cash flows. Interest margins may increase as a result of such changes, but may reduce or create
losses in the event that unexpected movements arise. Management monitors on a daily basis and sets limits on the
level of mismatch of interest rate repricing that may be undertaken.
Operations interest rate risk management (excluding financial services)
The majority of the Group’s borrowings is at variable interest rates (linked to the LIBOR rate). The Group’s treasury
function performs periodic analysis of the interest rate environment. The Group does not have a formal policy of
determining how much of the Group’s exposure should be to fixed or variable rates. However, the Group performs
periodic analysis of the current interest rate environment and depending on that analysis at the time of raising new
debts management makes decisions whether to obtain financing on fixed-rate or variable-rate basis would be more
beneficial to the Group over the expected period until maturity.
Operations interest rate risk management from financial services
The majority of the Group’s interest rate sensitive financial assets and liabilities are at fixed rates. Therefore, the
Group’s interest rate risk arises primarily from unmatched positions on maturities of assets and liabilities carried at
fixed rates.
Management of interest rate risk is performed through analysis of the structure of assets and liabilities by repricing
dates. Interest rates that are contractually fixed on both assets and liabilities may be renegotiated before any new
credit tranche is issued to reflect current market conditions. All new credit products and transactions are assessed in
respect of interest rate risk upfront, prior to starting these transactions.
Additionally, as disclosed in the maturity analysis below, the maturity dates applicable to the majority assets and
liabilities are relatively short-term and that provides with a certain level of flexibility to react to changing market
conditions.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
49
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
50
N
ote 27: Financial risk management (continued)
Interest rate risk analysis on assets and liabilities of the Group
The table below summarises the Group’s exposure to interest rate risks. The table presents the aggregated amounts
of the Group’s financial assets and liabilities at carrying amounts, categorised by the earlier of contractual interest
repricing or maturity dates:
Demand and
less than
1 month
From 1 to
6 months
From 6 to
12 months
From 1 to 5
years
More than
5 years
Non-
sensitive
Total
31 December
2022
Total financial
assets 153,214 32,979 29,628 102,088 67,861 174,444 560,214
Total financial
liabilities 59,600 77,327 38,605 61,167 695 77,075 314,469
Net interest
sensitivity
gap 93,614 (44,348) (8,977) 40,921 67,166 97,369 245,745
31 December
2021
Total financial
assets 55,583 67,899 54,568 96,232 59,022 148,329 481,633
Total financial
liabilities 55,542 36,144 61,448 71,231 6,696 79,969 311,030
Net interest
sensitivity
gap 41 31,755 (6,880) 25,001 52,326 68,360 170,603
The following table presents a sensitivity analysis of interest rate risk on financial assets and liabilities:
Year ended
31 December 2022
Year ended
31 December 2021
Impact on
profit before
tax
Impact on
equity
Impact on
profit before
tax
Impact on
equity
Increase by 200 basis points 2,968 2,374 2,045 1,636
Decrease by 200 basis points (2,968) (2,374) (2,045) (1,636)
c) Financial instruments price risk
Financial instruments price risk is the risk that movements in market prices resulting from factors associated with
an issuer of financial instruments (specific risk) and general changes in the market prices of financial instruments
(general risk) will affect the fair value or future cash flows of a financial instrument and, as a result, the Group’s
profitability.
Financial instruments price risk for financial instruments held within the Group’s financial assets at fair value
through profit or loss is managed: (a) through maintaining a diversified structure of portfolios; and (b) by setting
position limits (i.e. limits restricting the total amount of an investment or maximum mismatch between respective
assets and liabilities) as well as stop-loss and call-level limits, in addition to these, the Group sets limits on a
maximum duration of debt financial instruments. When necessary the Group establishes margin and collateral
requirements.
Financial instruments price risk is managed primarily through daily mark-to-market procedures, sensitivity analysis
and control of limits established for various types of financial instruments.
Sensitivity to changes in other prices is estimated using the Value at Risk (VaR) methodology. This is a way to
assess potential losses that may occur at a risk position as a result of changes in market rates and prices in a certain
period of time with a given level of confidence.
According to the results of the VaR assessment for financial assets at fair value through profit or loss and available-
for-sale financial assets the price risk does not exceed RR 1 billion.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
50
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
51
N
ote 27: Financial risk management (continued)
Credit risk
The Group exposes itself to credit risk, which is the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to meet an obligation.
Exposure to credit risk arises as a result of the Group’s lending and other transactions with counterparties, giving
rise to financial assets and off-balance sheet credit-related commitments.
The Group’s maximum exposure to credit risk is reflected in the carrying amounts of financial assets in the
consolidated statement of financial position. For financial guarantees issued, commitments to extend credit, undrawn
credit lines and export/import letters of credit, the maximum exposure to credit risk is the amount of the commitment.
The estimation of credit risk for risk management purposes is complex and involves the use of models, as the risk
varies depending on market conditions, expected cash flows and the passage of time. The assessment of credit risk
for a portfolio of assets entails further estimations of the likelihood of defaults occurring, the associated loss ratios
and default correlations between counterparties.
Expected credit loss (ECL) measurement. ECL is a probability-weighted estimate of the present value of future cash
shortfalls (i.e., the weighted average of credit losses, with the respective risks of default occurring in a given time
period used as weights). An ECL measurement is unbiased and is determined by evaluating a range of possible
outcomes. ECL measurement is based on four components used by the Group: Probability of Default (“PD”),
Exposure at Default (“EAD”), Loss Given Default (“LGD”) and Discount Rate.
EAD is an estimate of exposure at a future default date, taking into account expected changes in the exposure after
the reporting period, including repayments of principal and interest, and expected drawdowns on committed
facilities. The EAD on credit related commitments is estimated using Credit Conversion Factor (“CCF”). CCF is a
coefficient that shows the probability of conversion of the committed amounts to an on-balance sheet exposure
within a defined period.
PD an estimate of the likelihood of default to occur over a given time period. LGD is an estimate of the loss arising
on default. It is based on the difference between the contractual cash flows due and those that the lender would
expect to receive, including from any collateral. It is usually expressed as a percentage of the EAD. The expected
losses are discounted to present value at the end of the reporting period. The discount rate represents the effective
interest rate (“EIR”) for the financial instrument or an approximation thereof.
Expected credit losses are modelled over instrument’s lifetime period. The lifetime period is equal to the remaining
contractual period to maturity of debt instruments, adjusted for expected prepayments, if any. For loan commitments
and financial guarantee contracts, it is the contractual period over which an entity has a present contractual obligation
to extend credit.
Management models Lifetime ECL, that is, losses that result from all possible default events over the remaining
lifetime period of the financial instrument. The 12-month ECL, represents a portion of lifetime ECLs that result
from default events on a financial instrument that are possible within 12 months after the reporting period, or
remaining lifetime period of the financial instrument if it is less than a year.
The ECLs that are estimated by management for the purposes of these financial statements are point-in-time
estimates. That is, ECLs reflect probability weighted development of key macroeconomic variables that have an
impact on credit risk.
The ECL modelling does not differ for Purchased or Originated Credit Impaired (“POCI”) financial assets, except
that (a) gross carrying value and discount rate are based on cash flows that were recoverable at initial recognition of
the asset, rather than based on contractual cash flows, and (b) the ECL is always a lifetime ECL. POCI assets are
financial assets that are credit-impaired upon initial recognition, such as impaired loans acquired in a past business
combination.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
51
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
52
N
ote 27: Financial risk management (continued)
Credit risk management. Management carefully manages its exposure to credit risk.
An assessment is performed at each reporting date to identify a significant increase in credit risk since initial recognition
of a financial instrument. Such assessment is performed on the basis of qualitative and quantitative information:
• Quantitative assessment is performed on the basis of a change in risk of default arising over the expected
lifetime of a financial asset.
• Qualitative assessment implies that a number of factors are important for assessing significant increase in
credit risk (restructuring indicative of problems, establishing favourable schedule for repaying loan interest
and principal, significant changes in expected results of operations and behaviour of a borrower and other
material changes).
Financial assets move from Stage 1 to Stage 2 if there is one or a combination of the following factors:
• financial assets are over 30 days overdue;
• credit rating deteriorates;
• there are early warning indicators of an increase in credit risk; a need to change previously agreed on terms
of the agreement to create more favourable environment for a customer due to his inability to meet current
liabilities because of the customer’s financial position; full or partial refinancing of the current debt which
would not be required if the client did not experience financial difficulties;
• information on future changes in assets that may result in credit losses not considered in the rating systems
is identified (e.g. military conflicts in the region that may have a significant impact on future credit quality).
A default is recognised if one or a combination of the following events occur:
• financial assets are over 90 days overdue (a rebuttable presumption);
• a default rating is assigned;
• restructuring indicative of problems is undertaken;
• a favourable schedule for repaying interest and principal with payments to be made at the end of the term
is granted.
Credit risk management (excluding financial services)
Credit risk (excluding financial services) arises from cash and cash equivalents, bank deposits, loans and notes
receivables, as well as credit exposures to customers including outstanding trade and other receivables.
Credit risks related to accounts receivable are systematically monitored taking into account the customer’s financial
position, past experience and other factors. Management systematically reviews ageing analysis of receivables and
uses this information for calculation of expected credit losses. A significant portion of the Group’s accounts
receivable is due from domestic and export trading companies. The Group does not always require collateral to limit
the exposure to loss. The Group operates with various customers but a substantial part of its sales relate to major
customers.
Although collection of accounts receivable could be influenced by economic factors affecting these customers,
management believes there is no significant risk of loss to the Group beyond the provisions already recorded. Credit
risk analysis for accounts receivable is presented in Note 7.
The Group performs an ongoing assessment and monitoring of the risk of default. In addition, as part of its cash
management and credit risk function, the Group regularly evaluates the creditworthiness of financial and banking
institutions where it deposits cash.
The Group deposits available cash mostly with financial institutions in the Russian Federation. To manage this credit
risk, the Group allocates its available cash to a variety of Russian banks.
For measuring credit risk and grading financial instruments by the amount of credit risk, the Group applies an
approach based on risk grades estimated by internal ratings. Internal ratings are mapped to external credit rating
provided by agencies (Expert RA JSC, ACRA JSC) on an internally defined master scale with a specified range of
probabilities of default.
Credit risk management in financial services
The Group’s credit risk policies prescribe its a cceptance only through formalized procedures and only based on
decisions of the authorized collegial body. The Group has a system of credit committees responsible for making
credit decisions, the main objective of which is to create a high-quality loan portfolio that ensures the implementation
of the strategy, credit policies and risk management policies. Collegial authorities, authorized to make credit
decisions, have a clear segmentation according to business lines, lending segments and the amount of authority.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
52
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
53
N
ote 27: Financial risk management (continued)
The Group structures the level of credit risk it undertakes by placing the appropriate limits. Limits are set by the
Group on an individual (for example, for specific customers and counterparties), group and portfolio basis (for
example, industry and regional limits, limits on types of operations, etc.).
Internal regulations on financial analysis and risk assessment are created and applied to each segment of the lending
activity, including lending to legal entities, individuals, small and medium-sized businesses and other categories of
borrowers.
To reduce the level of risk, the Group accepts collateral in the form of pledges, sureties and guarantees. In case of
acceptance of a surety, the Group performs a financial analysis of the guarantor. The assessment of collateral is
performed internally by special division responsible for collateral assessment and control. They use several
methodologies developed for each type of collateral.
Valuations performed by third parties, including independent appraisal firms authorized by the Group, may serve as
additional data for such assessment. The Group usually requires collateral to be insured by insurance companies
authorized by the Group.
Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a loss as the result
of another party to a financial instrument failing to perform in accordance with the terms of the contract. The Group
uses the same credit policies in assuming conditional obligations as it does for on balance sheet financial instruments,
through established credit approvals, risk control limits and monitoring procedures.
Risk management departments monitor compliance with the requirements of external and internal polices of risk
assessment, credit decision making, authority to make credit decisions, and work with collaterals.
To quantify the credit risk, the Group uses internal models (rating systems). In the absence of a model, the assessment
can be carried out in one of the alternative ways:
• based on the average values obtained on the internal statistics;
• using external ratings of national rating agencies.
The system of internal ratings has been continuously updated and developed. The information accumulated over this
period provides a sound ground for assessment of ratings migration and allows the Group to calibrate corresponding
parameters of default probability.
The Group updates and validates internal models and approaches on a periodic basis, but at least once a year.
Credit risk monitoring has an important role in maintaining the quality of loans at least as good as at the moment of
credit limits approval, in preventing losses on the formed portfolio in excess of planned norms and consists in:
• structured and continuous monitoring of the implementation of financial and non-financial covenants;
• carrying out, with an established frequency, regular inspections of the volume, type and conditions of
maintenance of the pledged items, its validity and insurance;
• conducting a quarterly analysis of the financial and economic activities of the borrower and monitoring its
financial position;
• carrying out a full annual risk review according to the established limits with a full-scale, comprehensive
reassessment of the key risks of the counterparty / issuer / company / group of companies (holding) that
includes the borrower, its financial stability and solvency, taking into account the market situation;
• monitoring of problematic signals in order to promptly respond and minimize risks at an early stage;
• monitoring of proper loan maintenance and repayment (tranches);
• analysis of actual exposures versus established limits;
• control over compliance with internal policies, procedures, instructions and orders issued by respective
management bodies;
• monitoring of macroeconomic parameters in order to check the adequacy of risk assessment and forecast.
In order to ensure financial stability, forecast expected losses, plan capital requirements, calculate risk-appetite
limits, the Group performs periodic stress-testing of credit risk. The stress-testing tool includes regression models
based on macroeconomic factors. A mandatory condition for the application of regression models is their high
quality, confirmed by the results of validation.
The Group’s divisions carry out loan maturity analysis and follow -up control over overdue balances.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
53
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
54
N
ote 27: Financial risk management (continued)
Credit risk analysis of the Group
To quantify the credit risk, the Group uses internal models (rating systems). The Group uses the following rating
categories for the analysis of credit quality of assets other than loans to customers and accounts receivable:
• investment grade ratings referred to classification in the range from AAA (RU) to BBB- (RU) of the
agencies of Expert RA JSC, ACRA JSC ( in 2021 Aaa to Baa3 for Moody’s Investment Services, as AAA
to BBB- for Fitch Rating and as AAA to BBB- for Standard and Poor’s Rating, respectively) . The
probability of default for assets of this category ranges from 0% to 1.51%;
• non-investment grade ratings referred to classification referred from BB+ (RU) to D (RU) of the agencies
of Expert RA JSC, ACRA JSC (in 2021 Ba1 to C for Moody’s Investment Services, as BB+ to D for Fitch
Rating and as BB+ to D for Standard and Poor’s Rating, respectively) . The probability of default for assets
of this category ranges from 1.51% to 100%.
The following table contains an analysis of the credit risk exposure of cash and cash equivalents including mandatory
reserve deposits with the Bank of Russia. Cash and cash equivalents are classified as Stage 1. As at 31 December
2022 and 31 December 2021 there is no cash classified as Stage 2, Stage 3, or acquired or originated impaired. The
carrying amount also represents the Group's maximum exposure to credit risk on these financial assets.
At 31 December
2022
At 31 December
2021
Stage 1
(12-months ECL)
Stage 1
(12-months ECL)
Cash on hand and cash in banks
- Investment grade rating 70,321 46 ,750
- Non-investment grade rating 16,261 859
- No ratings - 1,328
Gross carrying amount 86,582 48,937
Credit loss allowance - -
Carrying amount 86,582 48,937
Term deposits
- Investment grade rating 79,637 8,097
- Non-investment grade rating 1,645 9,150
- No ratings - 303
Gross carrying amount 81,282 17,550
Credit loss allowance - -
Carrying amount 81,282 17,550
Financial services: Mandatory reserve deposits with the Bank of
Russia
- Investment grade rating 378 1,429
- Non-investment grade rating - -
- No ratings - -
Gross carrying amount 378 1,429
Credit loss allowance - -
Carrying amount 378 1,429
The following table contains an analysis of the credit risk exposure of other financial assets measured at amortised
cost and measured at fair value through other comprehensive income for which ECL allowance is recognised other
than cash and cash equivalents including mandatory reserve deposits with the Bank of Russia, loans to customers
and accounts receivable. The carrying amount also represents the Group’s maximum exposure to credit risk on these
financial assets.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
54
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
55
N
ote 27: Financial risk management (continued)
At 31 December 2022
Stage 1
(12-months
ECL)
Stage 2
(lifetime
ECL for
SICR)
Stage 3
(lifetime
ECL for
credit im-
paired)
POCI Total
Loans
- Investment grade rating - 601 - - 601
- Non-investment grade rating - 10,581 2,511 - 13,092
- No ratings - - 15,902 - 15,902
Gross carrying amount - 11,182 18,413 - 29,595
Credit loss allowance - (93) (17,880) - (17,973)
Carrying amount - 11,089 533 - 11,622
Bank deposits
- Investment grade rating - - - - -
- Non-investment grade rating - - 2,972 - 2,972
- No ratings - - - - -
Gross carrying amount - - 2,972 - 2,972
Credit loss allowance - - (2,972) - (2,972)
Carrying amount - - - - -
Other
- Investment grade rating 1 - - - 1
- Non-investment grade rating 540 - 8,270 - 8,810
- No ratings - - 2,995 - 2,995
Gross carrying amount 541 - 11,265 - 11,806
Credit loss allowance (1) - (4,659) - (4,660)
Carrying amount 540 - 6,606 - 7,146
Debt securities measured at amortised cost
- Investment grade rating 25,893 - - - 25,893
- Non-investment grade rating 1,532 - - - 1,532
- No ratings - - - - -
Gross carrying amount 27,425 - - - 27,425
Credit loss allowance (68) - - - (68)
Carrying amount 27,357 - - - 27,357
Debt securities measured at fair value
through other comprehensive income
- Investment grade rating 32,378 - - - 32,378
- Non-investment grade rating 3,640 - - - 3,640
- No ratings - - - - -
Gross carrying amount 36,018 - - - 36,018
Credit loss allowance (116) - - - (116)
Carrying amount 35,902 - - - 35,902
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
55
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
56
N
ote 27: Financial risk management (continued)
At 31 December 2021
Stage 1
(12-months
ECL)
Stage 2
(lifetime
ECL for
SICR)
Stage 3
(lifetime
ECL for
credit im-
paired)
POCI Total
Loans
- Investment grade rating - - - - -
- Non-investment grade rating - - - - -
- No ratings - 1,474 24,262 - 25,736
Gross carrying amount - 1,474 24,262 - 25,736
Credit loss allowance - (92) (23,361) - (23,453)
Carrying amount - 1,382 901 - 2,283
Bank deposits
- Investment grade rating 3,777 - - - 3,777
- Non-investment grade rating 52,715 - - - 52,715
- No ratings - - 5,547 - 5,547
Gross carrying amount 56,492 - 5,547 - 62,039
Credit loss allowance - - (5,547) - (5,547)
Carrying amount 56,492 - - - 56,492
Other
- Investment grade rating 653 - - - 653
- Non-investment grade rating 4,762 - - - 4,762
- No ratings - - 3,073 - 3,073
Gross carrying amount 5,415 - 3,073 - 8,488
Credit loss allowance - - (2,133) - (2,133)
Carrying amount 5,415 - 940 - 6,355
Debt securities measured at amortised cost
- Investment grade rating 9,292 - - - 9,292
- Non-investment grade rating 17,055 - - - 17,055
- No ratings - - - - -
Gross carrying amount 26,347 - - - 26,347
Credit loss allowance (59) - - - (59)
Carrying amount 26,288 - - - 26,288
Debt securities measured at fair value
through other comprehensive income
- Investment grade rating 1,866 - - - 1,866
- Non-investment grade rating 27,734 - - - 27,734
- No ratings 359 - - - 359
Gross carrying amount 29,959 - - - 29,959
Credit loss allowance (90) - - - (90)
Carrying amount 29,869 - - - 29,869
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
56
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
57
N
ote 27: Financial risk management (continued)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Liquidity risk management (excluding financial services)
The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group‘s reputation. In managing its liquidity risk, the Group maintains adequate cash reserves and
debt facilities, continuously monitors forecast and actual cash flows and matches the maturity profiles of financial
assets and liabilities.
The Group prepares various financial plans (monthly, quarterly and annually) which ensures that the Group has
sufficient cash on demand to meet expected operational expenses, financial obligations and investing activities for
a period of 30 days or more. To fund cash requirements of a more permanent nature, the Group will normally raise
long-term debt in available international and domestic markets.
Liquidity risk management in financial services
The objective of liquidity risk management is to ensure the stable operations of the Group, the possibility of
uninterrupted operations in accordance with the Group's business plans, including the timely fulfilment of all
obligations to customers and counterparties related to making payments, as well as minimising the negative impact
on financial results, own funds (capital), the Group's reputation for a possible liquidity deficit. Also, the priority
objective of liquidity risk management is to ensure that the Group comply with the mandatory liquidity ratios
established by the Central Bank of Russia.
The Group’s approach to financial services liquidity management is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when due under both ordinary and stressed conditions, without incurring
unacceptable losses or damaging the Group’s reputation.
In respect to the financial services segment The Group endeavors to maintain a stable and diversified funding base
including core corporate and individual customer accounts; short-, medium- and long-term loans from other banks;
promissory notes and bonds issued. On the other hand, the Group tends to keep diversified portfolios of liquid and
highly liquid assets in order to be able to settle unforeseen liquidity requirements in an efficient and timely manner.
Key parameters in liquidity risk management such as the structure of assets and liabilities, composition of liquid
assets and acceptable liquidity risks are established by Assets and Liabilities Management Committee (ALCO).
ALCO sets and reviews limits on liquidity gaps which are assessed on the basis of liquidity stress-tests in regard to
medium- and long-term liquidity. These tests are performed using the following information:
• current structure of assets and liabilities including any known renewal arrangements as at the date of the
respective test;
• amounts, maturity and liquidity profiles of transactions projected by business units;
• current and projected characteristics of liquid assets which include, apart from cash and cash equivalents,
amounts due from other banks and certain financial assets held-for-trading; and
• relevant external factors.
The resulting models allow for the assessment of future expected cash flows due to projected future business and
different crisis scenarios. While managing liquidity risk distinguish liquidity required within a current business day
and term liquidity.
For managing current liquidity (with a 1-day horizon) the following methods are used:
• reallocation of cash between accounts with banks;
• collection of information from business and other supporting units on large transactions (both proprietary
and customer based);
• purchase and sale of certain financial assets in liquid portfolios;
• accelerating closure of trade positions;
• estimation of minimum expected cash inflow during a business day; and
• daily control over the balance of cash and estimated liabilities to be settled on demand.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
57
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
58
N
ote 27: Financial risk management (continued)
The monitoring of the current and forecasted state of urgent liquidity is carried out daily on the basis of calculating
the sufficiency of highly liquid assets to cover planned and unplanned outflows and meeting resource requirements
for a period of up to 30 days.
The share of liquid assets is maintained at a level sufficient to meet obligations to customers and counterparties of
the Group, which can significantly reduce liquidity risks and non-market funding rates.
To maintain instant liquidity, limits are opened by a significant number of Russian banks. In addition, the liquidity
risk is minimized by the Group ’s ability to raise funds from the Bank of Russia within the framework of the
refinancing system and state support for the financial sector, as well as established liquidity management policies
and technologies that provide for stress approaches in estimating future cash flows.
In accordance with the Group's Liquidity Management Policy, the basic principle of liquidity management is risk
limiting, in particular, using the required liquid assets limit. If necessary (changing the financial situation in the
markets or at Group), other limits (for counterparties, financial instruments, etc.) can be used to manage liquidity.
Liquidity risk analysis of the Group
The following tables summarise the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments, including interest payments:
At 31 December 2022
Less than 1 year Between 1
and 5 years
Over
5 years
Total
Financial liabilities
Trade and other financial payables 50,981 204 2 51,187
Dividend payable 26,025 - - 26,025
Lease obligations, net of current portion - 2,553 1,394 3,947
Financial services: Other financial
liabilities at fair value through profit or
loss 1,433 - - 1,433
Debt 2,711 15,057 19 17,787
Financial services: Due to banks and the
Bank of Russia 3,590 2,903 - 6,493
Financial services: Customer accounts 212,919 2,791 12 215,722
Credit related commitments (Note 24) 54,031 42,453 377 96,861
Total 351,690 65,961 1,804 419,455
At 31 December 2021
Less than 1 year Between 1
and 5 years
Over
5 years
Total
Financial liabilities
Trade and other financial payables 59,439 190 4 59,633
Dividend payable 22,984 - - 22,984
Lease obligations, net of current portion - 8,916 8,621 17,537
Financial services: Other financial
liabilities at fair value through profit or
loss 7,063 - - 7,063
Debt 23,800 5,864 3,837 33,501
Financial services: Due to banks and the
Bank of Russia 24,063 3,975 - 28,038
Financial services: Customer accounts 138,915 15,958 6 154,879
Credit related commitments (Note 24) 28,864 22,808 2,817 54,489
Total 305,128 57,711 15,285 378,124
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
58
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
59
N
ote 27: Financial risk management (continued)
Fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction
between market participants at the measurement date. The estimated fair values of financial instruments are
determined with reference to various market information and other valuation techniques as considered appropriate.
The different levels of fair value hierarchy have been defined as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities that Group has the ability to assess at the
measurement date.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3 – Unobservable inputs for the asset or liability. Th ese inputs reflect the Group‘s own assumptions about the
assumptions a market participant would use in pricing the asset or liability.
Recurring fair value measurements
The levels in the fair value hierarchy into which the recurring fair value measurements are categorised are as follows:
At 31 December 2022
Fair value
Level 1 Level 2 Level 3 Carrying value
Financial services: Loans to
customers measured at fair value
through profit or loss - - 37 37
Securities measured at fair value
through profit or loss 4,438 479 690 5,607
Derivatives measured at fair value
through profit or loss - 562 - 562
Loans measured at fair value
through profit or loss - - 2,160 2,160
Securities measured through other
comprehensive income 31,570 7,334 20,647 59,551
Investment property - - 786 786
Financial services: Other financial
liabilities measured at fair value
through profit or loss (526) (907) - (1,433)
Total 35,482 7,468 24,320 67,270
At 31 December 2021
Fair value
Level 1 Level 2 Level 3 Carrying value
Financial services: Loans to
customers measured at fair value
through profit or loss 3,731 453 - 4,184
Derivatives measured at fair value
through profit or loss - 384 - 384
Loans measured at fair value
through profit or loss - - 4,251 4,251
Financial services: Due from
banks - 33,465 - 33,465
Securities measured at fair value
through other comprehensive
income 20,789 14,245 20,510 55,544
Investment property - - 691 691
Financial services: Other financial
liabilities measured at fair value
through profit or loss (7,013) (50) - (7,063)
Total 17,507 48,497 25,452 91,456
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
59
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
60
N
ote 27: Financial risk management (continued)
The description of valuation technique and description of inputs used in the fair value measurement for Level 2 and
Level 3 measurements at 31 December 2022 и 2021:
Fair value hierarchy Valuation technique and key input data
Financial services: Loans to customers at
FVTPL
Level 3 D iscounted cash flow models adjusted at
credit risk
Securities at FVTPL Level 2, Level 3 Quoted prices for similar investments in
active markets, net assets valuation,
comparative (market) approach /
Publicly available information,
comparable market prices/ discounted
cash flow models adjusted at credit risk
Loans measured at FVTPL Level 3 Discounted cash flow models adjusted at
credit risk
Deposits measured at FVTPL Level 2 D iscounted cash flow models adjusted at
market risk at floating rates
Securities at FVOCI Level 2, Level 3 Quoted prices for similar investments in
active markets, net assets valuation,
comparative (market) approach /
Publicly available information,
comparable market prices / discounted
cash flow models adjusted at credit risk
Investment property Level 3 Market data on comparable objects
adjusted in case of differences from
similar objects
Financial services: Other financial
liabilities at FVTPL
Level 2 D iscounted cash flow models adjusted at
credit risk
There were no changes in valuation technique for Level 2 and Level 3 recurring fair value measurements during the
years ended 31 December 2022 and 2021.There have been no transfers between Level 1, Level 2 and Level 3 during
2022 and 2021 year.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
60
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
61
N
ote 27: Financial risk management (continued)
Assets and liabilities not measured at fair value but for which fair value is disclosed
Fair values analysed by level in the fair value hierarchy and carrying value of assets and liabilities not measured at
fair value are as follows:
At 31 December 2022 At 31 December 2021
Fair value
Carrying
value
Fair value
Carrying
value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash and cash equivalents
Cash on hand and in
banks 3,599 82,983 - 86,582 4,595 44,342 - 48,937
Term deposits - 81,282 - 81,282 - 17,550 - 17,550
Financial services:
Mandatory reserve
deposits with the Bank of
Russia 378 - - 378 1,429 - - 1,429
Accounts receivable
Trade receivables - - 97,356 97,356 - - 85,135 85,135
Other financial
receivables - 1,229 21,976 23,205 - 1,202 3,432 4,634
Financial services: Loans
to customers measured at
amortised cost - - 161,065 157,369 - - 133,384 134,702
Other financial assets
Bank deposits - - - - - 56,492 - 56,492
Due from banks - 543 6,048 6,588 - 5,486 - 5,415
Loans to employees - - 558 558 - - 940 940
Loans measured at
amortised cost - - 11,622 11,622 - - 2,283 2,283
Securities measured at
amortised cost 15,761 4,952 6,240 27,357 20,266 5,791 - 26,288
Total 19,738 170,989 304,865 492,297 26,290 130,863 225,174 383,805
Liabilities
Trade and other financial
payables
Trade payables - - 49,609 49,609 - - 54,113 54,113
Dividend payable - - 26,025 26,025 - - 22,984 22,984
Current portion of lease
liabilities - - 974 974 - - 2,838 2,838
Other payables - - 481 481 - - 2,528 2,528
Non-current lease
liabilities - - 2,641 2,641 - - 10,324 10,324
Debt
Bonds issued - 2,052 - 2,057 15,000 5,333 - 20,412
Subordinated debt - 22 - 22 - 21 - 21
Promissory notes issued - 11,666 - 11,897 - 557 - 568
Credit facilities - - - - - - 8,078 8,078
Other debt - - 525 525 - - 3,093 3,093
Financial services: Due to
banks and the Bank of
Russia 921 5,240 - 6,173 270 27,055 - 27,579
Financial services:
Customer accounts - 76,333 133,868 212,632 - 46,373 104,447 151,429
Total 921 95,313 214,123 313,036 15,270 79,339 208,405 303,967
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
61
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
62
N
ote 27: Financial risk management (continued)
The fair values in Level 2 fair value hierarchy were estimated using the discounted contractual cash flows and
observable interest rates for identical instruments. The fair values in Level 3 fair value hierarchy were estimated
using the discounted cash flows and observable interest rates for similar instruments with adjustment to credit risk
and maturity.
Reconciliation of liabilities arising from financing activities
The table below sets out an analysis of the movements in the Group’s liabilities from financing activities for each
of the periods presented. The items of these liabilities are those that are reported as financing in the statement of
cash flows:
Liabilities arising as a result of financing activities
Credits
and loans
Bonds
issued
Subordinat
ed debt
Lease
liabilities
Promissory
notes Total
At 31 December 2020 11,901 22,079 21 13,219 - 47,220
Cash flow movement,
including:
Proceeds from
issuance of debt 9,338 - - - - 9,338
Repayment of debt (9,689) - - - - (9,689)
Issuance of bonds - 50 - - - 50
Redemption of
bonds - (1,713) - - - (1,713)
Repayment of
principal portion
of lease liabilities - - - (1,440) - (1,440)
Interest paid (235) (1,478) (99) (1,228) - (3,040)
Foreign exchange
adjustments (268) - - - - (268)
Interest accrual 219 1,471 99 1,228 - 3,017
Other non-cash flows (95) 3 - 1,383 - 1,291
At 31 December 2021 11,171 20,412 21 13,162 - 44,766
Cash flow movement,
including:
Proceeds from
issuance of debt 1,488 - - - - 1,488
Repayment of debt (3,091) - - - - (3,091)
Promissory notes
issued - - - - 11,400 11,400
Redemption of
bonds,
subordinated debts - (18,318) - - - (18,318)
Repayment of
principal portion
of lease liabilities - - - (1,125) - (1,125)
Interest paid (542) (1,341) (99) (817) - (2,799)
Foreign exchange
adjustments (1,269) - - - - (1,269)
Interest accrual 428 1,277 100 817 - 2,622
Disposal of liabilities
as result of
discontinued
operations (7,110) - - (1,078) - (8,188)
Disposal of liabilities
as a result of the
termination of lease
agreements - - - (7,220) - (7,220)
Other non-cash flows (550) 27 - (124) - (647)
At 31 December 2022 525 2,057 22 3,615 11,400 17,619
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
62
TAT
N
EFT
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
63
N
ote 27: Financial risk management (continued)
Management of Capital
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and increase shareholder value. The Group manages its capital
structure and makes adjustments to it, in light of changes in economic conditions.
The Group defines capital under management as the “Total equity owned by shareholders of PJSC Tatneft” as shown
in the consolidated statement of financial position. The amount of capital that the Group managed as at 31 December
2022 was RR 1,095,623 million (2021: RR 938,388 million).
The Group considers equity and debt to be the principal elements of capital management. In order to maintain or
adjust the capital structure, the Group may adjust the dividend payment to shareholders, revise its investment
program, attract new or settle existing debt or sell certain non-core assets.
The Group monitors capital on the basis of its gearing ratio.
Note 28: Subsequent events
In the 4th quarter of 2022, the Group entered into an agreement to acquire a 100% share in the authorized capital of
Nokian Tires LLC, Nokian Shina LLC, Hakka Invest LLC. To complete the transaction, certain conditions must be
met. At the date these consolidated financial statements are signed, the transaction has not been completed.
N otes to the Consolidated Financial Statements
(In million of Russian Rubles)
63
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2022
MAN AGEME N T'S DISCUSSIO N A N D A N ALYSIS
OF FIN A N CIAL CO N DITIO N A N D RESULTS OF OPERATIO N S
FOR THE YEARS EN DED 31 DECEMBER 2022 A N D 2021
MAN AGEME N T'S DISCUSSIO N A N D A N ALYSIS
OF FIN A N CIAL CO N DITIO N A N D RESULTS OF OPERATIO N S
FOR THE YEARS EN DED 31 DECEMBER 2022 A N D 2021
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
2
Content
Background ............................................................................................................................................................................... 3
Key financial and operational results ........................................................................................................................................ 4
Segment information ................................................................................................................................................................ 4
Exceptional items...................................................................................................................................................................... 5
Results of the Group operations for the year ended 31 December 2022 compared to the year ended 31 December 2021....... 6
Revenues (excluding financial services) ............................................................................................................................. 7
Revenues breakdown (excluding financial services) .......................................................................................................... 7
Costs and other expenses (excluding financial services)..................................................................................................... 8
Other (expenses)/income...................................................................................................................................................... 8
Income taxes ........................................................................................................................................................................ 9
EBITDA reconciliation ............................................................................................................................................................. 9
Financial Condition Summary Information .............................................................................................................................. 9
Liquidity and Capital Resources ............................................................................................................................................. 10
Contractual obligations, other contingencies and off-balance sheet arrangements ................................................................. 10
Critical accounting policies .................................................................................................................................................... 11
Forward-looking statements ................................................................................................................................................... 11
Corporate Governance Statement (as of 31 December 2022) ................................................................................................. 12
Corporate Governance Code ............................................................................................................................................. 12
Main Features of Internal Control and Risk Management Systems in Relation to the Financial Reporting Process ........ 12
Information About Share Capital ...................................................................................................................................... 12
Description of the Composition and Operation of the Administrative, Management and Supervisory Bodies and Their
Committees ....................................................................................................................................................................... 14
Statement regarding TCFD disclosures .................................................................................................................................. 20
MD&A for the year ended 31 December 2022
2
Content
Background ............................................................................................................................................................................... 3
Key financial and operational results ........................................................................................................................................ 4
Segment information ................................................................................................................................................................ 4
Exceptional items...................................................................................................................................................................... 5
Results of the Group operations for the year ended 31 December 2022 compared to the year ended 31 December 2021....... 6
Revenues (excluding financial services) ............................................................................................................................. 7
Revenues breakdown (excluding financial services) .......................................................................................................... 7
Costs and other expenses (excluding financial services)..................................................................................................... 8
Other (expenses)/income...................................................................................................................................................... 8
Income taxes ........................................................................................................................................................................ 9
EBITDA reconciliation ............................................................................................................................................................. 9
Financial Condition Summary Information .............................................................................................................................. 9
Liquidity and Capital Resources ............................................................................................................................................. 10
Contractual obligations, other contingencies and off-balance sheet arrangements ................................................................. 10
Critical accounting policies .................................................................................................................................................... 11
Forward-looking statements ................................................................................................................................................... 11
Corporate Governance Statement (as of 31 December 2022) ................................................................................................. 12
Corporate Governance Code ............................................................................................................................................. 12
Main Features of Internal Control and Risk Management Systems in Relation to the Financial Reporting Process ........ 12
Information About Share Capital ...................................................................................................................................... 12
Description of the Composition and Operation of the Administrative, Management and Supervisory Bodies and Their
Committees ....................................................................................................................................................................... 14
Statement regarding TCFD disclosures .................................................................................................................................. 20
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
3
The following discussion should be read in conjunction with the audited consolidated financial statements in accordance
with IFRS and the related notes, approved for issue and signed prior to publishing of this Management’s Discussion and
Analysis of financial condition and results of operations (MD&A). This report includes forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from those anticipated in the forward-looking statements
as a result of numerous factors, including those discussed later in this MD&A. Words such as “believes,” “anticipates,”
“expects,” “estimates,” “intends,” “plans,” etc. – that reflect management’s current estimates and beliefs, but are not
guarantees of future results. Please see “Forward- looking statements” for a discussion of some factors that could cause
actual results to differ materially.
For financial reporting purposes, Tatneft converts metric tonnes of crude oil to barrels using a conversion factor of 7.123.
This factor represents a blend of varying conversion factors specific to each of Tatneft’s fields. Because the proportion of
actual production by field varies from period to period, total reserves and production volumes for the Group in barrels
converted from tonnes using the blended rate may differ from total reserves and production calculated on a field-by-field
basis. Translations of cubic meters to cubic feet were made at the rate of 35.31 cubic feet per cubic meter. Translations of
barrels of crude oil into barrels of oil equivalent (“BOE”) were made at the rate of 1 barrel per BOE and of cubic feet into
BOE at the rate of 6 thousand cubic feet per BOE.
Background
PJSC Tatneft n.a. V.D. Shashin (the “Company”) and its subsidiaries (jointly referred to as the “Group” or “Tatneft”) is one
of the largest vertically integrated oil companies in Russia in terms of crude oil production, proved oil reserves, and refining
capacity. The Company is a public joint-stock company organized under the laws of the Russian Federation with the
headquarters located in City of Almetyevsk, Tatarstan. The principal business of the Group is to explore for, develop, produce,
process, and market crude oil and refined products. The Group is also involved in gas treatment and refining, petrochemicals’
production and marketing, manufacturing of equipment, engineering, procurement, and construction services for oil, gas and
petrochemical projects, and in financial services.
As of 31 December 2022 and 31 December 2021, the Tatarstan Government controls approximately 36% of the Company’s
voting stock. Tatarstan also holds a “Golden Share”, a special governmental right, in the Company. The exercise of its powers
under the Golden Share enables the Tatarstan Government to appoint one representative to the Board of Directors and one
representative to the Revision Committee of the Company as well as to veto certain major decisions, including those relating
to changes in the share capital, amendments to the Charter, liquidation or reorganization of the Company and “major” and
“interested party” transactions as defined under Russian law. The Golden Share currently has an indefinite term.
The majority of the Group’s crude oil and gas production, refining capacity, and other operations are located in Tatarstan, a
republic of the Russian Federation, situated between the Volga River and the Ural Mountains, with its capital city Kazan 797
kilometers southeast of Moscow.
The Group currently holds most of the exploration and production licenses and produces substantially all its crude oil in
Tatarstan.
MD&A for the year ended 31 December 2022
3
The following discussion should be read in conjunction with the audited consolidated financial statements in accordance
with IFRS and the related notes, approved for issue and signed prior to publishing of this Management’s Discussion and
Analysis of financial condition and results of operations (MD&A). This report includes forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from those anticipated in the forward-looking statements
as a result of numerous factors, including those discussed later in this MD&A. Words such as “believes,” “anticipates,”
“expects,” “estimates,” “intends,” “plans,” etc. – that reflect management’s current estimates and beliefs, but are not
guarantees of future results. Please see “Forward- looking statements” for a discussion of some factors that could cause
actual results to differ materially.
For financial reporting purposes, Tatneft converts metric tonnes of crude oil to barrels using a conversion factor of 7.123.
This factor represents a blend of varying conversion factors specific to each of Tatneft’s fields. Because the proportion of
actual production by field varies from period to period, total reserves and production volumes for the Group in barrels
converted from tonnes using the blended rate may differ from total reserves and production calculated on a field-by-field
basis. Translations of cubic meters to cubic feet were made at the rate of 35.31 cubic feet per cubic meter. Translations of
barrels of crude oil into barrels of oil equivalent (“BOE”) were made at the rate of 1 barrel per BOE and of cubic feet into
BOE at the rate of 6 thousand cubic feet per BOE.
Background
PJSC Tatneft n.a. V.D. Shashin (the “Company”) and its subsidiaries (jointly referred to as the “Group” or “Tatneft”) is one
of the largest vertically integrated oil companies in Russia in terms of crude oil production, proved oil reserves, and refining
capacity. The Company is a public joint-stock company organized under the laws of the Russian Federation with the
headquarters located in City of Almetyevsk, Tatarstan. The principal business of the Group is to explore for, develop, produce,
process, and market crude oil and refined products. The Group is also involved in gas treatment and refining, petrochemicals’
production and marketing, manufacturing of equipment, engineering, procurement, and construction services for oil, gas and
petrochemical projects, and in financial services.
As of 31 December 2022 and 31 December 2021, the Tatarstan Government controls approximately 36% of the Company’s
voting stock. Tatarstan also holds a “Golden Share”, a special governmental right, in the Company. The exercise of its powers
under the Golden Share enables the Tatarstan Government to appoint one representative to the Board of Directors and one
representative to the Revision Committee of the Company as well as to veto certain major decisions, including those relating
to changes in the share capital, amendments to the Charter, liquidation or reorganization of the Company and “major” and
“interested party” transactions as defined under Russian law. The Golden Share currently has an indefinite term.
The majority of the Group’s crude oil and gas production, refining capacity, and other operations are located in Tatarstan, a
republic of the Russian Federation, situated between the Volga River and the Ural Mountains, with its capital city Kazan 797
kilometers southeast of Moscow.
The Group currently holds most of the exploration and production licenses and produces substantially all its crude oil in
Tatarstan.
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
4
Key financial and operational results
12 months ended Chg.,
31 December
2022
31 December
2021
%
Financial results
Revenues (excluding financial services), net (RR million) 1,427,147 1,205,267 18.4
Profit attributable to shareholders of PJSC Tatneft
(RR million) 284,572 198,412 43.4
EBITDA (1) (RR million) 447,120 283,437 57.7
Adjusted EBITDA (1) (RR million) 475,185 286,773 65.7
Additions to property, plant and equipment (2) (RR million) 160,895 119,106 35.1
Free Cash Flow (3) (RR million) 196,803 148,388 32.6
Net debt (4) (RR million) (153,363) (34,315) >100
Basic and Diluted profit per share (RR)
Common 126.44 88.16 43.4
Preferred 126.44 88.16 43.4
Operational results
Crude oil production by the Group (th. tonnes) 29,114 27,830 4.6
Crude oil production by the Group (th. barrels) 207,379 198,233 4.6
Crude oil daily production (th. barrels per day) 568 543 4.6
Gas production by the Group (million cubic meters) 935 885 5.6
Gas daily production (th. boe per day) 15 14 7.1
Refined products produced (th. tonnes) 15,988 12,413 28.8
Gas products produced (5) (th. tonnes) 1,042 1,057 (1.4)
Refining throughput (th. barrels per day) 324 247 31.2
(1) As calculated on page 9
(2) As in consolidated statement of cash flows
(3) As calculated on page 10
(4) At the end of the period
(5) Including natural stable gasoline, produced by gas refining division Tatneftegaspererabotka
The net profit of the Group (profit attributable to the Company shareholders) in the twelve months of 2022 compared to the
same period of 2021 increased by 43.4%. The main factors affecting the increase in net profit were substantially higher
volumes and prices for refined products, as well as the strengthening of the ruble.
Segment information
Our operations are currently divided into the following main segments:
• Exploration and Production – consists of the Company’s Oil and Gas Extraction and Production Division, as well
as production subsidiaries. Most oil and gas exploration and production activities are concentrated within the Company
and centrally managed by Tatneft-Upstream ( Tatneft-Dobycha ) Division.
• Refining and Marketing – consists of a refining and petrochemical complex in Nizhnekamsk, Tatarstan, operated
by TANECO, Gas Collection, Transportation and Refining Division Tatneftegaspererabotka, which also operates a
small refinery in Kichui, Tatarstan; the Company’s Sales and Marketing Division ( URNiN ), Tatneft-AZS Center,
Tatneft-AZS-Zapad, Tatneft-AZS-Severo-Zapad and other subsidiaries which manage the Tatneft branded gas stations
network in Russia and abroad, and carry out refined products wholesale sales; as well as various ancillary companies.
• Financial Services .
The tire business segment was excluded from the main operating segments due to disposal of assets.
These segments are determined by the way management recognizes the segments within the Group for making operating
decisions and how they are evident from the Group structure.
MD&A for the year ended 31 December 2022
4
Key financial and operational results
12 months ended Chg.,
31 December
2022
31 December
2021
%
Financial results
Revenues (excluding financial services), net (RR million) 1,427,147 1,205,267 18.4
Profit attributable to shareholders of PJSC Tatneft
(RR million) 284,572 198,412 43.4
EBITDA (1) (RR million) 447,120 283,437 57.7
Adjusted EBITDA (1) (RR million) 475,185 286,773 65.7
Additions to property, plant and equipment (2) (RR million) 160,895 119,106 35.1
Free Cash Flow (3) (RR million) 196,803 148,388 32.6
Net debt (4) (RR million) (153,363) (34,315) >100
Basic and Diluted profit per share (RR)
Common 126.44 88.16 43.4
Preferred 126.44 88.16 43.4
Operational results
Crude oil production by the Group (th. tonnes) 29,114 27,830 4.6
Crude oil production by the Group (th. barrels) 207,379 198,233 4.6
Crude oil daily production (th. barrels per day) 568 543 4.6
Gas production by the Group (million cubic meters) 935 885 5.6
Gas daily production (th. boe per day) 15 14 7.1
Refined products produced (th. tonnes) 15,988 12,413 28.8
Gas products produced (5) (th. tonnes) 1,042 1,057 (1.4)
Refining throughput (th. barrels per day) 324 247 31.2
(1) As calculated on page 9
(2) As in consolidated statement of cash flows
(3) As calculated on page 10
(4) At the end of the period
(5) Including natural stable gasoline, produced by gas refining division Tatneftegaspererabotka
The net profit of the Group (profit attributable to the Company shareholders) in the twelve months of 2022 compared to the
same period of 2021 increased by 43.4%. The main factors affecting the increase in net profit were substantially higher
volumes and prices for refined products, as well as the strengthening of the ruble.
Segment information
Our operations are currently divided into the following main segments:
• Exploration and Production – consists of the Company’s Oil and Gas Extraction and Production Division, as well
as production subsidiaries. Most oil and gas exploration and production activities are concentrated within the Company
and centrally managed by Tatneft-Upstream ( Tatneft-Dobycha ) Division.
• Refining and Marketing – consists of a refining and petrochemical complex in Nizhnekamsk, Tatarstan, operated
by TANECO, Gas Collection, Transportation and Refining Division Tatneftegaspererabotka, which also operates a
small refinery in Kichui, Tatarstan; the Company’s Sales and Marketing Division ( URNiN ), Tatneft-AZS Center,
Tatneft-AZS-Zapad, Tatneft-AZS-Severo-Zapad and other subsidiaries which manage the Tatneft branded gas stations
network in Russia and abroad, and carry out refined products wholesale sales; as well as various ancillary companies.
• Financial Services .
The tire business segment was excluded from the main operating segments due to disposal of assets.
These segments are determined by the way management recognizes the segments within the Group for making operating
decisions and how they are evident from the Group structure.
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
5
Togliattikauchuk, which was acquired in the fourth quarter of 2019, and Ecopet Group of Companies, which was acquired in
the second quarter of 2021, are included in “Corporate and other” category.
Intersegment sales
Tatneft’s two main business segments are interconnected and dependent on each other, and hence a portion of the revenues
of one main segment are related to the expenses of the other. In particular, exploration and production Group companies
supply part of crude oil for the processing at our own refineries, mainly TANECO, and the refined products are then sold by
the Company in domestic or international markets, as well as to the Company’s consumer marketing subsidiaries for
subsequent distribution.
As a result of certain factors, benchmark crude oil market prices in Russia cannot be determined with certainty. Therefore,
the prices set for inter-segment purchases of crude oil and other goods and services reflect a combination of market factors,
primarily international crude oil market prices, transportation costs, regional market conditions, the cost of crude oil refining,
and other factors. Accordingly, an analysis of either of these segments on a stand-alone basis could give a misleading
perception of those segments’ underlying financial position and results of operations. For this reason, we do not analyze
either of our main segments separately in the discussion that follows. However, we present the financial data for each
respective segment in Note 22 “Segment information” to our consolidated financial statements. All intercompany operations
are eliminated on the consolidation level.
Exceptional items
The Group's results for the respective reporting periods of 2022 and 2021 were impacted by certain exceptional items,
including impairment loss on assets related to exploration and production of superviscous oil, exploration and appraisal assets,
related mainly to the oilfields located outside the Republic of Tatarstan, and an impairment provision loss on certain social
assets not providing direct future economic benefits, as well as the loss from impairment of other assets due to the current
macroeconomic situation. These losses were reflected in the lines “Impairment losses on property, plant and equipment and
other non- financial assets net of reversal” and “ Expected credit losses on financial assets net of reversal ” in the Consolidated
Statement of Profit or Loss and other Comprehensive Income of the Group (see page 9):
12 months ended
(RR million)
31 December
2022
31 December
2021
Expected credit losses on financial assets net of reversal (2 165) 39
Impairment losses on property, plant and equipment and other non-financial assets
net of reversal 30 230 3 297
Total exceptional items 28 065 3 336
MD&A for the year ended 31 December 2022
5
Togliattikauchuk, which was acquired in the fourth quarter of 2019, and Ecopet Group of Companies, which was acquired in
the second quarter of 2021, are included in “Corporate and other” category.
Intersegment sales
Tatneft’s two main business segments are interconnected and dependent on each other, and hence a portion of the revenues
of one main segment are related to the expenses of the other. In particular, exploration and production Group companies
supply part of crude oil for the processing at our own refineries, mainly TANECO, and the refined products are then sold by
the Company in domestic or international markets, as well as to the Company’s consumer marketing subsidiaries for
subsequent distribution.
As a result of certain factors, benchmark crude oil market prices in Russia cannot be determined with certainty. Therefore,
the prices set for inter-segment purchases of crude oil and other goods and services reflect a combination of market factors,
primarily international crude oil market prices, transportation costs, regional market conditions, the cost of crude oil refining,
and other factors. Accordingly, an analysis of either of these segments on a stand-alone basis could give a misleading
perception of those segments’ underlying financial position and results of operations. For this reason, we do not analyze
either of our main segments separately in the discussion that follows. However, we present the financial data for each
respective segment in Note 22 “Segment information” to our consolidated financial statements. All intercompany operations
are eliminated on the consolidation level.
Exceptional items
The Group's results for the respective reporting periods of 2022 and 2021 were impacted by certain exceptional items,
including impairment loss on assets related to exploration and production of superviscous oil, exploration and appraisal assets,
related mainly to the oilfields located outside the Republic of Tatarstan, and an impairment provision loss on certain social
assets not providing direct future economic benefits, as well as the loss from impairment of other assets due to the current
macroeconomic situation. These losses were reflected in the lines “Impairment losses on property, plant and equipment and
other non- financial assets net of reversal” and “ Expected credit losses on financial assets net of reversal ” in the Consolidated
Statement of Profit or Loss and other Comprehensive Income of the Group (see page 9):
12 months ended
(RR million)
31 December
2022
31 December
2021
Expected credit losses on financial assets net of reversal (2 165) 39
Impairment losses on property, plant and equipment and other non-financial assets
net of reversal 30 230 3 297
Total exceptional items 28 065 3 336
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
6
Results of the Group operations for the year ended 31 December 2022 compared to the year ended
31 December 2021
The following table sets forth the consolidated statement of profit or loss both in absolute values and respective changes
(where relevant) over the analyzed periods:
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Revenue (excluding financial services), net 1,427,147 1,205,267 18.4
Costs and other expenses (excluding financial services)
Operating expenses (176,629) (136,300) 29.6
Purchased oil and refined products (135,203) (125,834) 7.4
Exploration (1,946) (2,799) (30.5)
Transportation (52,892) (35,854) 47.5
Selling, general and administrative (68,584) (68,246) 0.5
Depreciation, depletion and amortization (48,042) (41,723) 15.1
Expected credit losses on financial assets net of reversal 2,165 (39) n/a
Impairments loss on property, plant and equipment and other non-financial assets, net of
reversal (30,230) (3,297) >100
Taxes other than income taxes (464,819) (497,948) (6.7)
Export duties (44,527) (39,033) 14.1
Maintenance of social infrastructure and transfer of social assets (9,496) (12,826) (26.0)
Total costs and expenses (excluding financial services) (1,030,203) (963,899) 6.9
Loss on disposals of interests in subsidiaries and associates, net (96) (14) >100
Fair value gains from financial assets at fair value through profit or loss, net 897 3,382 (73.5)
Other operating income, net 2,645 2,617 1.1
Operating profit (excluding financial services) 400,390 247,353 61.9
Net interest, fee and commission and other operating income/(expenses) and
gains/(losses) from financial services
Interest, fee and commission income 25,804 16,448 56.9
Interest, fee and commission expense (14,522) (8,229) 76.5
Net (expense)/income on creating provision for credit losses associated with debt financial
assets (1,501) 543 n/a
Operating expenses (8,930) (8,335) 7.1
Gain arising from dealing in foreign currencies, net 3,301 8 >100
Other operating income, net (1,922) (75) >100
Total net interest, fee and commission and other operating income and gains from
financial services 2,230 360 >100
Other (expenses)/income
Foreign exchange (loss)/gain, net (24,999) 2,440 n/a
Interest income (excluding financial services) 7,756 3,909 98.4
Interest expense, net of amounts capitalized (excluding financial services) (5,697) (6,174) (7.7)
Share of results of associates and joint ventures, net 288 11 >100
Total other (expenses)/income, net (22,652) 186 n/a
Profit before income tax 379,968 247,899 53.3
Current income tax expense (76,908) (48,753) 57.8
Deferred income tax expense (3,822) (7,658) (50.1)
Total income tax expense (80,730) (56,411) 43.1
Profit from continuing operations 299,238 191,488 56.3
(Loss)/profit from discontinued activity (14,335) 7,398 n/a
Profit for the period 284,903 198,886 43.2
Less: profit attributable to non-controlling interest (331) (474) (30.2)
Profit attributable to shareholders of PJSC Tatneft n.a. V.D. Shashin 284,572 198,412 43.4
MD&A for the year ended 31 December 2022
6
Results of the Group operations for the year ended 31 December 2022 compared to the year ended
31 December 2021
The following table sets forth the consolidated statement of profit or loss both in absolute values and respective changes
(where relevant) over the analyzed periods:
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Revenue (excluding financial services), net 1,427,147 1,205,267 18.4
Costs and other expenses (excluding financial services)
Operating expenses (176,629) (136,300) 29.6
Purchased oil and refined products (135,203) (125,834) 7.4
Exploration (1,946) (2,799) (30.5)
Transportation (52,892) (35,854) 47.5
Selling, general and administrative (68,584) (68,246) 0.5
Depreciation, depletion and amortization (48,042) (41,723) 15.1
Expected credit losses on financial assets net of reversal 2,165 (39) n/a
Impairments loss on property, plant and equipment and other non-financial assets, net of
reversal (30,230) (3,297) >100
Taxes other than income taxes (464,819) (497,948) (6.7)
Export duties (44,527) (39,033) 14.1
Maintenance of social infrastructure and transfer of social assets (9,496) (12,826) (26.0)
Total costs and expenses (excluding financial services) (1,030,203) (963,899) 6.9
Loss on disposals of interests in subsidiaries and associates, net (96) (14) >100
Fair value gains from financial assets at fair value through profit or loss, net 897 3,382 (73.5)
Other operating income, net 2,645 2,617 1.1
Operating profit (excluding financial services) 400,390 247,353 61.9
Net interest, fee and commission and other operating income/(expenses) and
gains/(losses) from financial services
Interest, fee and commission income 25,804 16,448 56.9
Interest, fee and commission expense (14,522) (8,229) 76.5
Net (expense)/income on creating provision for credit losses associated with debt financial
assets (1,501) 543 n/a
Operating expenses (8,930) (8,335) 7.1
Gain arising from dealing in foreign currencies, net 3,301 8 >100
Other operating income, net (1,922) (75) >100
Total net interest, fee and commission and other operating income and gains from
financial services 2,230 360 >100
Other (expenses)/income
Foreign exchange (loss)/gain, net (24,999) 2,440 n/a
Interest income (excluding financial services) 7,756 3,909 98.4
Interest expense, net of amounts capitalized (excluding financial services) (5,697) (6,174) (7.7)
Share of results of associates and joint ventures, net 288 11 >100
Total other (expenses)/income, net (22,652) 186 n/a
Profit before income tax 379,968 247,899 53.3
Current income tax expense (76,908) (48,753) 57.8
Deferred income tax expense (3,822) (7,658) (50.1)
Total income tax expense (80,730) (56,411) 43.1
Profit from continuing operations 299,238 191,488 56.3
(Loss)/profit from discontinued activity (14,335) 7,398 n/a
Profit for the period 284,903 198,886 43.2
Less: profit attributable to non-controlling interest (331) (474) (30.2)
Profit attributable to shareholders of PJSC Tatneft n.a. V.D. Shashin 284,572 198,412 43.4
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
7
Revenues (excluding financial services)
A breakdown of Revenues (excluding financial services) by product type is provided in the following table:
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Crude oil 533,049 556,493 (4.2)
Refined products 792,222 567,654 39.6
Corporate and other sales 101,876 81,120 25.6
Total Revenue (excluding financial services) 1,427,147 1,205,267 18.4
Increase in revenues (excluding financial services) in the twelve months of 2022 in comparison to the same period of 2021
was due to increase in refined products volumes and sales prices.
Export duties and excise taxes
12 months ended Chg .,
(RR million)
31 December
2022
31 December
2021
%
Export duties on crude oil 33,977 29,568 14.9
Export duties on refined products 10,550 9,465 11.5
Excise taxes on refined products (190,382) (30,492) >100
incl. “reverse excise tax” (278,583) (81,547) >100
Total export duties and excise taxes (145,855) 8,541 n/a
The negative amount of excise tax on refined products is associated with the effect of the “reverse excise” mechanism based
on differences between domestic refined products prices and respective export netbacks, as well as an increase in the
correction factor (Kadj) from 0.5 to 0.667 in 2022. In addition, since 2021 an investment premium K INV has been introduced
for certain refineries, including the Company’s TANECO refinery, which increases the amount of reverse excise tax.
Revenues breakdown (excluding financial services)
Revenues (including purchased oil and refined products)
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Crude oil
Far abroad countries sales 337,627 259,458 30.1
Near abroad countries sales - 9,379 (100.0)
Domestic sales 195,422 287,656 (32.1)
533,049 556,493 (4.2)
Refined products
Far abroad countries sales 302,298 215,320 40.4
Near abroad countries sales 16,762 13,514 24.0
Domestic sales 473,162 338,820 39.6
792,222 567,654 39.6
Other sales 101,876 81,120 25.6
Sales of crude oil
In the twelve months of 2022, revenue from oil sales amounted to RR 533,049 million, which is lower by 4.2% compared to
the same period of 2021 and is associated with a decrease in crude oil sales volumes in the reporting period.
Sales of refined products
Revenue from the sale of refined products in the twelve months of 2022 increased by 39.6% compared to the same period of
2021 and amounted to RR 792,222 million, which is associated with an increase in the sales volumes, as well as prices of
refined products.
MD&A for the year ended 31 December 2022
7
Revenues (excluding financial services)
A breakdown of Revenues (excluding financial services) by product type is provided in the following table:
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Crude oil 533,049 556,493 (4.2)
Refined products 792,222 567,654 39.6
Corporate and other sales 101,876 81,120 25.6
Total Revenue (excluding financial services) 1,427,147 1,205,267 18.4
Increase in revenues (excluding financial services) in the twelve months of 2022 in comparison to the same period of 2021
was due to increase in refined products volumes and sales prices.
Export duties and excise taxes
12 months ended Chg .,
(RR million)
31 December
2022
31 December
2021
%
Export duties on crude oil 33,977 29,568 14.9
Export duties on refined products 10,550 9,465 11.5
Excise taxes on refined products (190,382) (30,492) >100
incl. “reverse excise tax” (278,583) (81,547) >100
Total export duties and excise taxes (145,855) 8,541 n/a
The negative amount of excise tax on refined products is associated with the effect of the “reverse excise” mechanism based
on differences between domestic refined products prices and respective export netbacks, as well as an increase in the
correction factor (Kadj) from 0.5 to 0.667 in 2022. In addition, since 2021 an investment premium K INV has been introduced
for certain refineries, including the Company’s TANECO refinery, which increases the amount of reverse excise tax.
Revenues breakdown (excluding financial services)
Revenues (including purchased oil and refined products)
12 months ended Chg.,
(RR million)
31 December
2022
31 December
2021
%
Crude oil
Far abroad countries sales 337,627 259,458 30.1
Near abroad countries sales - 9,379 (100.0)
Domestic sales 195,422 287,656 (32.1)
533,049 556,493 (4.2)
Refined products
Far abroad countries sales 302,298 215,320 40.4
Near abroad countries sales 16,762 13,514 24.0
Domestic sales 473,162 338,820 39.6
792,222 567,654 39.6
Other sales 101,876 81,120 25.6
Sales of crude oil
In the twelve months of 2022, revenue from oil sales amounted to RR 533,049 million, which is lower by 4.2% compared to
the same period of 2021 and is associated with a decrease in crude oil sales volumes in the reporting period.
Sales of refined products
Revenue from the sale of refined products in the twelve months of 2022 increased by 39.6% compared to the same period of
2021 and amounted to RR 792,222 million, which is associated with an increase in the sales volumes, as well as prices of
refined products.
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
8
Other sales
Other sales primarily represent sales of materials and equipment, some types of petrochemical products, various oilfield
services and sales of energy, water, and steam by the Group entities to third parties.
In the twelve months of 2022, other sales amounted to RR 101,876 million, increasing by 25.6% in comparison to the twelve
months of 2021. The changes occurred mainly due to an increase in sales of other goods produced by the Group, including
polyethylene terephthalate produced and sold at the Group's petrochemical businesses acquired in the second quarter of 2021.
Costs and other expenses (excluding financial services)
Operating expenses. Operating expenses in 2022 amounted to RR176,629 million, increasing by 29.6% in comparison to
2021. Operating expenses include crude oil extraction expenses, refining expenses, as well as Cost of other sales.
Cost of purchased crude oil and refined products in 2022 and 2021 amounted to RR135,203 million and RR 125,834
million, respectively.
Exploration expenses. Exploration expenses consist primarily of geological and geophysical costs, and the costs of carrying
and retaining undeveloped properties.
Transportation expenses . Transportation of the Group’s crude oil and refined products , including purchased crude oil and
refined products, are mostly carried out using the Transneft trunk pipeline system and the railway.
In the twelve months of 2022, transportation costs amounted to RR 52,892 million, which is 47.5% higher than in the twelve
months of 2021. The increase was mainly due to higher volumes of refined products deliveries to customers in non-CIS
countries.
Selling, general and administrative expenses. These expenses are not directly related to production and include salary
expenses, general business costs, insurance, advertising, legal fees, consulting and audit services, charity and sponsorship
expenses and other expenses.
Information about other expenses is presented on page 6.
Taxes. Effective tax burden (taxes other than income tax as well as export duties to the gross revenue (excluding financial
services)) of the Group in the twelve months of 2022 and 2021 was 36% and 45%, respectively.
Taxes other than income taxes include the following:
12 months ended
(RR million)
31 December
2022
31 December
2021
Mineral extraction tax 511,993 516,598
Tax on additional income from the extraction of hydrocarbons 128,491 2,299
Excise (190,382) (30,492)
Property tax 12,499 7,281
Other 2,218 2,262
Total taxes other than income taxes 464,819 497,948
Changes in taxes other than income taxes in the twelve months of 2022 compared to the same period of 2021 were mainly
due to higher oil prices taken into account in the mineral extraction tax rate, the introduction of the EPT regime in a number
of fields in the Republic of Tatarstan, and were partially offset by the impact of the “reverse excise tax” mechanism.
Maintenance of social infrastructure and transfer of social assets. In the twelve months of 2022, maintenance of social
infrastructure expenses and transfer of social assets amounted to RR 9,496 million compared to RR 12,826 million in the
same period of 2021. These social infrastructure expenses relate primarily to housing, educational facilities, and cultural
buildings in Tatarstan.
Other (expenses)/income
Foreign exchange gain/(loss), net. In the twelve months of 2022, the Group recorded a RR 24,999 million loss compared to
RR 2,440 million gain in the twelve months of 2021, which were due to volatility of Ruble to US Dollar exchange rate in the
reporting periods, resulting in the corresponding revaluation of US Dollar-denominated monetary assets and liabilities of the
Group.
Interest income (excluding financial services). In the twelve months of 2022 amounted to RR 7,756 million and increased
by 98.4% compared to the same period of 2021, mainly due to an increase in average balances on bank deposits.
MD&A for the year ended 31 December 2022
8
Other sales
Other sales primarily represent sales of materials and equipment, some types of petrochemical products, various oilfield
services and sales of energy, water, and steam by the Group entities to third parties.
In the twelve months of 2022, other sales amounted to RR 101,876 million, increasing by 25.6% in comparison to the twelve
months of 2021. The changes occurred mainly due to an increase in sales of other goods produced by the Group, including
polyethylene terephthalate produced and sold at the Group's petrochemical businesses acquired in the second quarter of 2021.
Costs and other expenses (excluding financial services)
Operating expenses. Operating expenses in 2022 amounted to RR176,629 million, increasing by 29.6% in comparison to
2021. Operating expenses include crude oil extraction expenses, refining expenses, as well as Cost of other sales.
Cost of purchased crude oil and refined products in 2022 and 2021 amounted to RR135,203 million and RR 125,834
million, respectively.
Exploration expenses. Exploration expenses consist primarily of geological and geophysical costs, and the costs of carrying
and retaining undeveloped properties.
Transportation expenses . Transportation of the Group’s crude oil and refined products , including purchased crude oil and
refined products, are mostly carried out using the Transneft trunk pipeline system and the railway.
In the twelve months of 2022, transportation costs amounted to RR 52,892 million, which is 47.5% higher than in the twelve
months of 2021. The increase was mainly due to higher volumes of refined products deliveries to customers in non-CIS
countries.
Selling, general and administrative expenses. These expenses are not directly related to production and include salary
expenses, general business costs, insurance, advertising, legal fees, consulting and audit services, charity and sponsorship
expenses and other expenses.
Information about other expenses is presented on page 6.
Taxes. Effective tax burden (taxes other than income tax as well as export duties to the gross revenue (excluding financial
services)) of the Group in the twelve months of 2022 and 2021 was 36% and 45%, respectively.
Taxes other than income taxes include the following:
12 months ended
(RR million)
31 December
2022
31 December
2021
Mineral extraction tax 511,993 516,598
Tax on additional income from the extraction of hydrocarbons 128,491 2,299
Excise (190,382) (30,492)
Property tax 12,499 7,281
Other 2,218 2,262
Total taxes other than income taxes 464,819 497,948
Changes in taxes other than income taxes in the twelve months of 2022 compared to the same period of 2021 were mainly
due to higher oil prices taken into account in the mineral extraction tax rate, the introduction of the EPT regime in a number
of fields in the Republic of Tatarstan, and were partially offset by the impact of the “reverse excise tax” mechanism.
Maintenance of social infrastructure and transfer of social assets. In the twelve months of 2022, maintenance of social
infrastructure expenses and transfer of social assets amounted to RR 9,496 million compared to RR 12,826 million in the
same period of 2021. These social infrastructure expenses relate primarily to housing, educational facilities, and cultural
buildings in Tatarstan.
Other (expenses)/income
Foreign exchange gain/(loss), net. In the twelve months of 2022, the Group recorded a RR 24,999 million loss compared to
RR 2,440 million gain in the twelve months of 2021, which were due to volatility of Ruble to US Dollar exchange rate in the
reporting periods, resulting in the corresponding revaluation of US Dollar-denominated monetary assets and liabilities of the
Group.
Interest income (excluding financial services). In the twelve months of 2022 amounted to RR 7,756 million and increased
by 98.4% compared to the same period of 2021, mainly due to an increase in average balances on bank deposits.
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
9
Interest expense, net of amounts capitalized (excluding financial services) , includes, among other things, an unwinding
of the present value discount of decommissioning provision on oil and gas assets as well as an interest expense on lease
obligations was included into this line item in accordance with IFRS 16 “Leases” .
In the twelve months of 2022, interest expenses, net of capitalized, amounted to RR 5,697 million, a decrease of 7.7%
compared to the twelve months of 2021.
Income taxes
The Group’s effective income tax rate in the twelve months of 2022 was 21.2% compared to the statutory tax rate of 20% in
the Russian Federation.
EBITDA reconciliation
12 months ended
(RR million)
31 December
2022
31 December
2021
Revenues (excluding financial services) 1,427,147 1,205,267
Costs and other deductions (excluding financial services) (1,030,203) (963,899)
Loss on disposal of interest in subsidiaries and associates, net (96) (14)
Operating results from financial services, net 2,230 360
Depreciation, depletion and amortization 48,042 41,723
EBITDA 447,120 283,437
Add back Exceptional items* 28,065 3,336
EBITDA adjusted for Exceptional items* 475,185 286,773
*See section Exceptional items (p.5)
EBITDA (earnings before interest taxes depreciation and amortization) is non-IFRS financial measure. Herewith, its
calculation methodology is not standardized, therefore above presented calculations of this indicator do not reflect unified
approaches. EBITDA provides useful information to investors being the indicator of the strength and performance of our
business operations. EBITDA also shows our ability to finance capital expenditures, acquisitions, and other investments and
our ability to incur and service debt. While depreciation and amortization are considered operating costs under IFRS, these
expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or
constructed in prior periods.
EBITDA is commonly used as a basis by some investors, analysts, and credit rating agencies to evaluate and compare the
periodic and future operating performance and value of companies in the oil and gas industry. This indicator should not be
considered in isolation as an alternative to net profit, operating income, or any other measure of performance under IFRS.
EBITDA does not consider our need to replace our capital equipment over time.
Financial Condition Summary Information
The following table shows certain key financial indicators based on the Consolidated Statement of Financial Position :
(RR million)
At 31 December
2022
At 31 December
2021
Current assets 456,426 412,242
Long-term assets 1,219,411 1,090,047
Total assets 1,675,837 1,502,289
Current liabilities 415,054 422,114
Long-term liabilities 156,339 136,800
Total liabilities 571,393 558,914
Total equity 1,104,444 943,375
Working capital (current assets, incl. cash and cash equivalents,
less current liabilities) 41,372 (9,872)
MD&A for the year ended 31 December 2022
9
Interest expense, net of amounts capitalized (excluding financial services) , includes, among other things, an unwinding
of the present value discount of decommissioning provision on oil and gas assets as well as an interest expense on lease
obligations was included into this line item in accordance with IFRS 16 “Leases” .
In the twelve months of 2022, interest expenses, net of capitalized, amounted to RR 5,697 million, a decrease of 7.7%
compared to the twelve months of 2021.
Income taxes
The Group’s effective income tax rate in the twelve months of 2022 was 21.2% compared to the statutory tax rate of 20% in
the Russian Federation.
EBITDA reconciliation
12 months ended
(RR million)
31 December
2022
31 December
2021
Revenues (excluding financial services) 1,427,147 1,205,267
Costs and other deductions (excluding financial services) (1,030,203) (963,899)
Loss on disposal of interest in subsidiaries and associates, net (96) (14)
Operating results from financial services, net 2,230 360
Depreciation, depletion and amortization 48,042 41,723
EBITDA 447,120 283,437
Add back Exceptional items* 28,065 3,336
EBITDA adjusted for Exceptional items* 475,185 286,773
*See section Exceptional items (p.5)
EBITDA (earnings before interest taxes depreciation and amortization) is non-IFRS financial measure. Herewith, its
calculation methodology is not standardized, therefore above presented calculations of this indicator do not reflect unified
approaches. EBITDA provides useful information to investors being the indicator of the strength and performance of our
business operations. EBITDA also shows our ability to finance capital expenditures, acquisitions, and other investments and
our ability to incur and service debt. While depreciation and amortization are considered operating costs under IFRS, these
expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or
constructed in prior periods.
EBITDA is commonly used as a basis by some investors, analysts, and credit rating agencies to evaluate and compare the
periodic and future operating performance and value of companies in the oil and gas industry. This indicator should not be
considered in isolation as an alternative to net profit, operating income, or any other measure of performance under IFRS.
EBITDA does not consider our need to replace our capital equipment over time.
Financial Condition Summary Information
The following table shows certain key financial indicators based on the Consolidated Statement of Financial Position :
(RR million)
At 31 December
2022
At 31 December
2021
Current assets 456,426 412,242
Long-term assets 1,219,411 1,090,047
Total assets 1,675,837 1,502,289
Current liabilities 415,054 422,114
Long-term liabilities 156,339 136,800
Total liabilities 571,393 558,914
Total equity 1,104,444 943,375
Working capital (current assets, incl. cash and cash equivalents,
less current liabilities) 41,372 (9,872)
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
10
Working capital position
The change in working capital in the twelve months of 2022 is associated with an increase in current assets and decrease in
current liabilities. At the same time, the assets increased mainly in cash and cash equivalents and accounts receivable, and
liabilities decreased in accounts payable.
Liquidity and Capital Resources
The following table shows a summary from the Consolidated Statement of Cash Flows:
12 months ended
(RR million) 31 December 2022 31 December 2021
Net cash provided by operating activities 357,698 267,494
including:
Net cash provided by operating activities before income tax and interest
(excluding financial services) 397,410 329,219
Net cash provided/(used) by operating activities from financial services
before income tax 34,693 (14,235)
Net cash used in investing activities (117,054) (172,638)
Net cash used in financing activities (132,014) (68,305)
Net change in cash and cash equivalents 108,630 26,551
Additions to property, plant and equipment
The following additions to property, plant and equipment (by segment, excluding non-cash additions) were made in the
respective periods of 2022 and 2021:
12 months ended
(RR million) 31 December 2022 31 December 2021
Exploration and production 64,318 26,847
Refining and marketing 60,489 64,524
Financial services 57 268
Corporate and other 30,945 13,326
Total additions to property, plant and equipment 155,809 104,965
Total additions from property, plant and equipment is presented net of additions from discontinued operation
Calculation of Free Cash Flow
12 months ended
(RR million) 31 December 2022 31 December 2021
Net cash provided by operating activities 357,698 267,494
Additions to property, plant and equipment (160,895) (119,106)
Free Cash Flow 196,803 148,388
Calculation of Net Debt
(RR million)
At 31 December
2022
At 31 December
2021
Short term debt 2,665 22,541
Long term debt 11,836 9,631
Total debt 14,501 32,172
Cash and cash equivalents 167,864 66,487
Net Debt (153,363) (34,315)
Contractual obligations, other contingencies and off-balance sheet arrangements
Guarantees
The Group has guarantees issued related mainly to financial services at 31 December 2022 and at 31 December 2021.
MD&A for the year ended 31 December 2022
10
Working capital position
The change in working capital in the twelve months of 2022 is associated with an increase in current assets and decrease in
current liabilities. At the same time, the assets increased mainly in cash and cash equivalents and accounts receivable, and
liabilities decreased in accounts payable.
Liquidity and Capital Resources
The following table shows a summary from the Consolidated Statement of Cash Flows:
12 months ended
(RR million) 31 December 2022 31 December 2021
Net cash provided by operating activities 357,698 267,494
including:
Net cash provided by operating activities before income tax and interest
(excluding financial services) 397,410 329,219
Net cash provided/(used) by operating activities from financial services
before income tax 34,693 (14,235)
Net cash used in investing activities (117,054) (172,638)
Net cash used in financing activities (132,014) (68,305)
Net change in cash and cash equivalents 108,630 26,551
Additions to property, plant and equipment
The following additions to property, plant and equipment (by segment, excluding non-cash additions) were made in the
respective periods of 2022 and 2021:
12 months ended
(RR million) 31 December 2022 31 December 2021
Exploration and production 64,318 26,847
Refining and marketing 60,489 64,524
Financial services 57 268
Corporate and other 30,945 13,326
Total additions to property, plant and equipment 155,809 104,965
Total additions from property, plant and equipment is presented net of additions from discontinued operation
Calculation of Free Cash Flow
12 months ended
(RR million) 31 December 2022 31 December 2021
Net cash provided by operating activities 357,698 267,494
Additions to property, plant and equipment (160,895) (119,106)
Free Cash Flow 196,803 148,388
Calculation of Net Debt
(RR million)
At 31 December
2022
At 31 December
2021
Short term debt 2,665 22,541
Long term debt 11,836 9,631
Total debt 14,501 32,172
Cash and cash equivalents 167,864 66,487
Net Debt (153,363) (34,315)
Contractual obligations, other contingencies and off-balance sheet arrangements
Guarantees
The Group has guarantees issued related mainly to financial services at 31 December 2022 and at 31 December 2021.
PJSC TAT
N
EFT n.a. V.D. Shashin
MD&A for the year ended 31 December 2022
11
Legal contingencies
The Group is subject to various lawsuits and claims arising in the ordinary course of business. The outcomes of such
contingencies, lawsuits, or other proceedings cannot be determined at present. In the case of all known contingencies the
Group accrues a liability when the loss is probable, and the amount is reasonably estimable. Based on currently available
information, management believes that it is remote that future costs related to known contingent liability exposures would
have a material adverse impact on the Group’s consolidated financial statements.
Social commitments
The Group contributes significantly to the maintenance of local infrastructure and the welfare of its employees in Tatarstan,
which includes contributions towards the construction, development, and maintenance of housing, hospitals and transport
services, recreation and other social needs. Such funding is periodically determined by the Board of Directors after
consultation with governmental authorities and recorded as expenditures when incurred or capitalized to the extent that the
Group will receive economic benefits from their use in the future.
Critical accounting policies
The preparation of consolidated financial statements in conformity with IFRS requires management to select appropriate
accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and the disclosure of contingent assets and liabilities. For a full description of our significant accounting
policies, please refer to Note 3 of consolidated financial statements of the Group.
Forward-looking statements
Certain statements in this document are not historical facts and are ‘‘forward - looking’’ (as such term is defined in the US
Private Securities Litigation Reform Act of 1995). We may from time to time make written or oral forward-looking statements
in reports to shareholders and in other communications. Examples of such forward-looking statements include, but are not
limited to:
• projections of revenues , income (or loss), earnings (or loss) per share, dividends, capital structure, or other financial
items or ratios;
• statements of our plans , objectives or goals, including those related to products or services;
• statements of future economic performance; and
• statements of assumptions underlying such statements.
Words such as "believes", "anticipates", "expects", "intends" and "plans" and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks
exist that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. We caution
readers that a number of important factors could cause actual results to differ materially from the plans, objectives,
expectations, estimates, and intentions expressed in such forward-looking statements.
These factors include:
• inflation , interest rate and exchange rate fluctuations;
• the price of oil;
• the effect of, and changes in, Russian or Tatarstan government policy;
• the effect of terrorist attack or other geopolitical instability, either within Russia or elsewhere;
• the effects of competition in the geographic and business areas in which we conduct operations;
• the effects of changes in laws, regulations, taxation or accounting standards or practices;
• our ability to increase market share and control expenses;
• acquisitions or divestitures;
• technological changes.
This list of important factors is not exhaustive; when relying on forward-looking statements to make decisions with respect
to our shares, American Depositary Shares (ADSs), or other securities, investors and others should carefully consider the
foregoing factors and other uncertainties and events, especially in light of the difficult political, economic, social and legal
environment in which we operate. Such forward-looking statements speak only at the date on which they are made, and we
do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or
otherwise. We do not make any representation, warranty or prediction that the results anticipated by such forward-looking
statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios
and should not be viewed as the most likely or standard scenario.
MD&A for the year ended 31 December 2022
11
Legal contingencies
The Group is subject to various lawsuits and claims arising in the ordinary course of business. The outcomes of such
contingencies, lawsuits, or other proceedings cannot be determined at present. In the case of all known contingencies the
Group accrues a liability when the loss is probable, and the amount is reasonably estimable. Based on currently available
information, management believes that it is remote that future costs related to known contingent liability exposures would
have a material adverse impact on the Group’s consolidated financial statements.
Social commitments
The Group contributes significantly to the maintenance of local infrastructure and the welfare of its employees in Tatarstan,
which includes contributions towards the construction, development, and maintenance of housing, hospitals and transport
services, recreation and other social needs. Such funding is periodically determined by the Board of Directors after
consultation with governmental authorities and recorded as expenditures when incurred or capitalized to the extent that the
Group will receive economic benefits from their use in the future.
Critical accounting policies
The preparation of consolidated financial statements in conformity with IFRS requires management to select appropriate
accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and the disclosure of contingent assets and liabilities. For a full description of our significant accounting
policies, please refer to Note 3 of consolidated financial statements of the Group.
Forward-looking statements
Certain statements in this document are not historical facts and are ‘‘forward - looking’’ (as such term is defined in the US
Private Securities Litigation Reform Act of 1995). We may from time to time make written or oral forward-looking statements
in reports to shareholders and in other communications. Examples of such forward-looking statements include, but are not
limited to:
• projections of revenues , income (or loss), earnings (or loss) per share, dividends, capital structure, or other financial
items or ratios;
• statements of our plans , objectives or goals, including those related to products or services;
• statements of future economic performance; and
• statements of assumptions underlying such statements.
Words such as "believes", "anticipates", "expects", "intends" and "plans" and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks
exist that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. We caution
readers that a number of important factors could cause actual results to differ materially from the plans, objectives,
expectations, estimates, and intentions expressed in such forward-looking statements.
These factors include:
• inflation , interest rate and exchange rate fluctuations;
• the price of oil;
• the effect of, and changes in, Russian or Tatarstan government policy;
• the effect of terrorist attack or other geopolitical instability, either within Russia or elsewhere;
• the effects of competition in the geographic and business areas in which we conduct operations;
• the effects of changes in laws, regulations, taxation or accounting standards or practices;
• our ability to increase market share and control expenses;
• acquisitions or divestitures;
• technological changes.
This list of important factors is not exhaustive; when relying on forward-looking statements to make decisions with respect
to our shares, American Depositary Shares (ADSs), or other securities, investors and others should carefully consider the
foregoing factors and other uncertainties and events, especially in light of the difficult political, economic, social and legal
environment in which we operate. Such forward-looking statements speak only at the date on which they are made, and we
do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or
otherwise. We do not make any representation, warranty or prediction that the results anticipated by such forward-looking
statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios
and should not be viewed as the most likely or standard scenario.
PJSC TAT
N
EFT
Corporate Governance Statement
12
Corporate Governance Statement (as of 31 December 2022)
Corporate Governance Code
The Company’s corporate governance standards are set out in the Corporate Governance Code of PJSC Tatneft n.a. V.D.
Shashin, approved by our Board of Directors in March 2022 (the “Code”).
The Code sets out principles of corporate governance within Tatneft, including, inter alia , procedures for protecting the
interests of shareholders, requirements to members of corporate management bodies, their functions and main
responsibilities, disclosure standards, internal controls and auditing principles.
The Code complies with the requirements of the Russian Federation laws and listing standards applicable to Tatneft and
follows some best practices of corporate governance.
A copy of the Code as well as information about the Company’s corporate governance principles and practices is publicly
available at the Company’s web -site: http://www.tatneft.ru.
Main Features of Internal Control and Risk Management Systems in Relation to the Financial Reporting Process
The entities of the Group maintain their accounting records and prepare their statutory financial statements principally in
accordance with the Regulations and Federal standards on Accounting and Reporting of the Russian Federation (“RAR”),
and applicable accounting and reporting standards of countries outside the Russian Federation. A number of entities of the
Group prepare their financial statements in accordance with IFRS. The accompanying consolidated financial statements have
been prepared based on the financial statements of the Group companies, taking into account the necessary adjustments to
comply with IFRS requirements.
Internal control and risk management systems include special software products designed to minimize human influence on
the flow of data for the preparation of the IFRS financial statements. These systems also involve respective controls at the
Group’s entities level.
Tatneft’s Internal Audit Department assists the Board of Directors and the Management Board of the Company in maintaining
and increasing its value, achieving its goals, ensuring continuous operation, and improving financial and economic activities.
To do this, a systematic and consistent approach is used to assess and improve the effectiveness of risk management, internal
control, and corporate governance. The Internal Audit Department is functionally subordinate to the Board of Directors of
the Company.
Financial statements of major entities of the Group are audited by reputable independent auditing firms, and the IFRS
financial statements of the Group are audited by Technologies of Trust – Audit JSC, an independent auditor.
Information About Share Capital
Significant Holding of Ordinary Shares
At 31 December 2022, JSC Svyazinvestneftekhim (“Svyazinvestneftekhim”), a joint stock c ompany fully owned by the
Republic of Tatarstan, held approximately 29.1% of the Company’s voting stock. Based on the shareholding records the
Company estimates the holding by Svyazinvestneftekhim, its subsidiaries as well as other entities controlled by the Republic
of Tatarstan, in the share capital of PJSC Tatneft at approximately 36% of voting stock as of 31 December 2022.
Our major shareholders have the same voting rights per share as other shareholders.
Special Rights (Golden Share)
In addition to Svyazinvestneftekhim's ownership of our ordinary shares, the Tatarstan Government holds a Golden Share.
Under federal law, a holder of a Golden Share has the veto rights in respect of the major decisions at meetings of shareholders,
including:
• decisions relating to changes to the share capital;
• amendments to the charter;
• liquidation or reorganization of the company; and
• entering into “major” or “interested party” transactions as defined in the Law on Joint Stock Companies.
Under the Federal Law of the Russian Federation No. 178- FZ “On Privatization of State and Municipal Property” of
21 December 2001 (as amended), the Golden Share also allows the government to appoint one representative of the
government to each of our Board of Directors and Revision Committee.
Due to Svyazinvestneftekhim's current ownership of ordinary shares and its rights under the Golden Share, Tatarstan may
elect members of the Board and influence our current and future operations, including decisions regarding acquisitions and
Corporate Governance Statement
12
Corporate Governance Statement (as of 31 December 2022)
Corporate Governance Code
The Company’s corporate governance standards are set out in the Corporate Governance Code of PJSC Tatneft n.a. V.D.
Shashin, approved by our Board of Directors in March 2022 (the “Code”).
The Code sets out principles of corporate governance within Tatneft, including, inter alia , procedures for protecting the
interests of shareholders, requirements to members of corporate management bodies, their functions and main
responsibilities, disclosure standards, internal controls and auditing principles.
The Code complies with the requirements of the Russian Federation laws and listing standards applicable to Tatneft and
follows some best practices of corporate governance.
A copy of the Code as well as information about the Company’s corporate governance principles and practices is publicly
available at the Company’s web -site: http://www.tatneft.ru.
Main Features of Internal Control and Risk Management Systems in Relation to the Financial Reporting Process
The entities of the Group maintain their accounting records and prepare their statutory financial statements principally in
accordance with the Regulations and Federal standards on Accounting and Reporting of the Russian Federation (“RAR”),
and applicable accounting and reporting standards of countries outside the Russian Federation. A number of entities of the
Group prepare their financial statements in accordance with IFRS. The accompanying consolidated financial statements have
been prepared based on the financial statements of the Group companies, taking into account the necessary adjustments to
comply with IFRS requirements.
Internal control and risk management systems include special software products designed to minimize human influence on
the flow of data for the preparation of the IFRS financial statements. These systems also involve respective controls at the
Group’s entities level.
Tatneft’s Internal Audit Department assists the Board of Directors and the Management Board of the Company in maintaining
and increasing its value, achieving its goals, ensuring continuous operation, and improving financial and economic activities.
To do this, a systematic and consistent approach is used to assess and improve the effectiveness of risk management, internal
control, and corporate governance. The Internal Audit Department is functionally subordinate to the Board of Directors of
the Company.
Financial statements of major entities of the Group are audited by reputable independent auditing firms, and the IFRS
financial statements of the Group are audited by Technologies of Trust – Audit JSC, an independent auditor.
Information About Share Capital
Significant Holding of Ordinary Shares
At 31 December 2022, JSC Svyazinvestneftekhim (“Svyazinvestneftekhim”), a joint stock c ompany fully owned by the
Republic of Tatarstan, held approximately 29.1% of the Company’s voting stock. Based on the shareholding records the
Company estimates the holding by Svyazinvestneftekhim, its subsidiaries as well as other entities controlled by the Republic
of Tatarstan, in the share capital of PJSC Tatneft at approximately 36% of voting stock as of 31 December 2022.
Our major shareholders have the same voting rights per share as other shareholders.
Special Rights (Golden Share)
In addition to Svyazinvestneftekhim's ownership of our ordinary shares, the Tatarstan Government holds a Golden Share.
Under federal law, a holder of a Golden Share has the veto rights in respect of the major decisions at meetings of shareholders,
including:
• decisions relating to changes to the share capital;
• amendments to the charter;
• liquidation or reorganization of the company; and
• entering into “major” or “interested party” transactions as defined in the Law on Joint Stock Companies.
Under the Federal Law of the Russian Federation No. 178- FZ “On Privatization of State and Municipal Property” of
21 December 2001 (as amended), the Golden Share also allows the government to appoint one representative of the
government to each of our Board of Directors and Revision Committee.
Due to Svyazinvestneftekhim's current ownership of ordinary shares and its rights under the Golden Share, Tatarstan may
elect members of the Board and influence our current and future operations, including decisions regarding acquisitions and
PJSC TAT
N
EFT
Corporate Governance Statement
13
other business opportunities, declaration of dividends and issuance of additional shares and other securities even without
recourse to the Golden Share.
Voting Rights
Each fully paid ordinary share of the Company, except for treasury shares held by Tatneft directly (i.e. not through
subsidiaries), gives its holder the right to participate in shareholders’ meetings and vote on matters to be decided thereby.
Holders of preferred shares are generally not entitled to vote at the shareholders’ meetings. However, both the Charter and
the Law on Joint Stock Companies entitle preferred stockholders to vote on changes and additions to the Charter where such
changes provide for reorganization or liquidation of the Company, limitation of their rights, including the issuance of
preferred shares with broader rights than those of the existing preferred shares, or change the amount of dividends on the
preferred shares. Holders of preferred shares are also entitled to vote at the shareholders’ meeting on any items that may
appear on the agenda in the event that we fail to declare a dividend on preferred shares in full.
Under the Law on Joint Stock Companies, a general shareholders’ meeting is held at least once a year between 1 March and
30 June of each year, and the agenda must include the following items:
• election of members of the Board of Directors;
• election of members of the Revision Committee;
• approval of the annual report, annual accounting (financial) statements;
• approval of any distribution of profits, except net profit that has been distributed as quarterly dividends or losses;
and
• approval of an independent auditor.
A shareholder or a group of shareholders owning in the aggregate at least two percent of our issued voting shares may submit
proposals to the agenda of the annual shareholders’ meeting and may nominate candidates to serve as members of our Board
or Revision Committee. The shareholders must provide their agenda proposals or nominations to us within 60 calendar days
of the end of the fiscal year preceding the annual shareholders’ meeting.
Extraordinary shareholders’ meeting may be called by the Board at its own initiative to consider matters within the
competence of the general shareholders’ meeting, as well as upon written request by the Revision Committee, our independent
auditor or shareholders owning no less than 10% of our ordinary shares in the aggregate as of the date of such request. An
extraordinary shareholders’ meeting convened at the request of the Revision Committee of the Company, the auditor of the
Company or shareholders (shareholder) owning no less than 10% of the voting shares of the Company must be held within
40 days from the date of the request to hold an extraordinary shareholders’ meeting. If the proposed agenda of an
extraordinary general meeting contains an issue on the election of members of the Board of Directors of the Company, then
such shareholders’ meeting must be held within 75 days from the date of the request for its holding.
The quorum for a shareholders’ meeting constitutes presence in person or through authorized representatives of holders of
more than 50% of our voting shares. Shareholders are entitled to participate in the shareholders’ meeting by forwarding a
ballot to us, provided such duly completed ballot is received at least two days before the meeting. If the quorum requirement
is not met, the date of the adjourned general meeting with the same agenda is announced. Changing the agenda when
convening a repeated general meeting is not allowed. A repeated shareholders’ meeting convened to replace the failed one
has a quorum if it was attended by shareholders holding in aggregate at least 30% of the issued voting shares have registered
at that meeting.
All our shareholders entitled to participate in a shareholders’ meeting must be notified of a meeting and its agenda no less
than 30 days prior to the date of the meeting. However, if it is an extraordinary shareholders’ meeting to elect our Board by
cumulative voting or contains an item on reorganization, the shareholders must be notified at least 50 days prior to the date
of the meeting. The record date of the shareholders’ meeting is set by the Board and may not be (i) earlier than 10 days from
the date of adoption of the resolution to hold a shareholders’ meeting and (ii) more than 25 days before the date of the meeting
or, in the case of an extraordinary shareholders’ meeting to elect our Board or contains an item on reorganization, more than
55 days prior to the meeting.
Right to Dividends
The shareholders’ meeti ng, which considers a proposal by the Board of Directors to pay a dividend (interim or annual), upon
approval of such dividend shall set the date on which holders of our shares entitled to the dividend are identified (“ex -dividend
date”); this date for our shares (as of an issuer whose shares are traded on a stock exchange) cannot be earlier than 10 days
and later than 20 days after the date of respective shareholders’ resolution, while the payment of dividends shall be effecte d
to nominees and professional securities managers within 10 days, and to all other registered holders within 25 days, from
such ex-dividend date.
Corporate Governance Statement
13
other business opportunities, declaration of dividends and issuance of additional shares and other securities even without
recourse to the Golden Share.
Voting Rights
Each fully paid ordinary share of the Company, except for treasury shares held by Tatneft directly (i.e. not through
subsidiaries), gives its holder the right to participate in shareholders’ meetings and vote on matters to be decided thereby.
Holders of preferred shares are generally not entitled to vote at the shareholders’ meetings. However, both the Charter and
the Law on Joint Stock Companies entitle preferred stockholders to vote on changes and additions to the Charter where such
changes provide for reorganization or liquidation of the Company, limitation of their rights, including the issuance of
preferred shares with broader rights than those of the existing preferred shares, or change the amount of dividends on the
preferred shares. Holders of preferred shares are also entitled to vote at the shareholders’ meeting on any items that may
appear on the agenda in the event that we fail to declare a dividend on preferred shares in full.
Under the Law on Joint Stock Companies, a general shareholders’ meeting is held at least once a year between 1 March and
30 June of each year, and the agenda must include the following items:
• election of members of the Board of Directors;
• election of members of the Revision Committee;
• approval of the annual report, annual accounting (financial) statements;
• approval of any distribution of profits, except net profit that has been distributed as quarterly dividends or losses;
and
• approval of an independent auditor.
A shareholder or a group of shareholders owning in the aggregate at least two percent of our issued voting shares may submit
proposals to the agenda of the annual shareholders’ meeting and may nominate candidates to serve as members of our Board
or Revision Committee. The shareholders must provide their agenda proposals or nominations to us within 60 calendar days
of the end of the fiscal year preceding the annual shareholders’ meeting.
Extraordinary shareholders’ meeting may be called by the Board at its own initiative to consider matters within the
competence of the general shareholders’ meeting, as well as upon written request by the Revision Committee, our independent
auditor or shareholders owning no less than 10% of our ordinary shares in the aggregate as of the date of such request. An
extraordinary shareholders’ meeting convened at the request of the Revision Committee of the Company, the auditor of the
Company or shareholders (shareholder) owning no less than 10% of the voting shares of the Company must be held within
40 days from the date of the request to hold an extraordinary shareholders’ meeting. If the proposed agenda of an
extraordinary general meeting contains an issue on the election of members of the Board of Directors of the Company, then
such shareholders’ meeting must be held within 75 days from the date of the request for its holding.
The quorum for a shareholders’ meeting constitutes presence in person or through authorized representatives of holders of
more than 50% of our voting shares. Shareholders are entitled to participate in the shareholders’ meeting by forwarding a
ballot to us, provided such duly completed ballot is received at least two days before the meeting. If the quorum requirement
is not met, the date of the adjourned general meeting with the same agenda is announced. Changing the agenda when
convening a repeated general meeting is not allowed. A repeated shareholders’ meeting convened to replace the failed one
has a quorum if it was attended by shareholders holding in aggregate at least 30% of the issued voting shares have registered
at that meeting.
All our shareholders entitled to participate in a shareholders’ meeting must be notified of a meeting and its agenda no less
than 30 days prior to the date of the meeting. However, if it is an extraordinary shareholders’ meeting to elect our Board by
cumulative voting or contains an item on reorganization, the shareholders must be notified at least 50 days prior to the date
of the meeting. The record date of the shareholders’ meeting is set by the Board and may not be (i) earlier than 10 days from
the date of adoption of the resolution to hold a shareholders’ meeting and (ii) more than 25 days before the date of the meeting
or, in the case of an extraordinary shareholders’ meeting to elect our Board or contains an item on reorganization, more than
55 days prior to the meeting.
Right to Dividends
The shareholders’ meeti ng, which considers a proposal by the Board of Directors to pay a dividend (interim or annual), upon
approval of such dividend shall set the date on which holders of our shares entitled to the dividend are identified (“ex -dividend
date”); this date for our shares (as of an issuer whose shares are traded on a stock exchange) cannot be earlier than 10 days
and later than 20 days after the date of respective shareholders’ resolution, while the payment of dividends shall be effecte d
to nominees and professional securities managers within 10 days, and to all other registered holders within 25 days, from
such ex-dividend date.
PJSC TAT
N
EFT
Corporate Governance Statement
14
Rules About Appointment of Directors and Amendment of the Charter
The Company complies with the requirements of Russian law as to appointment and replacement of Directors as well as
amendment of the Charter (please see sections relating to voting rights above and the Board of Directors below).
Description of the Composition and Operation of the Administrative, Management and Supervisory Bodies and Their
Committees
Board of Directors
In accordance with the Charter Tatneft’s Board of Directors currently consists of 15 members (14 representatives elected, 1
appointed). Directors are elected by a resolution of shareholders passed at a shareholders' meeting by cumulative voting.
They serve until the next ordinary shareholders' meeting (or an extraordinary shareholders’ meeting replacing the Board of
Directors) and can be re-elected for an unlimited number of terms. Apart from those members appointed by the Tatarstan
Government, through Svyazinvestneftekhim in its capacity as a shareholder of Tatneft, the Tatarstan Government possesses
a Golden Share special right in our company that gives it the power to appoint one representative to our Board.
The members of our Board of Directors are:
Name Titles Born
Rustam Nurgalievich Minnikhanov* Chairman of the Board, Rais (Head) of the Republic of Tatarstan 1957
Nail Ulfatovich Maganov Director, General Director of Tatneft 1958
Fanil Anvarovich Agliullin Director, Minister of Land and Property Relations of the
Republic of Tatarstan
1975
Radik Raufovich Gaizatullin Director, Finance Minister of the Republic of Tatarstan 1964
Renat Maratovich Galiev Director, Assistant to the Rais (Head) of the Republic of
Tatarstan
1989
Laszlo Gerecs Independent Director, Managing Director of G Petroconsulting
Ltd.
1953
Larisa Yurievna Glukhova Director, Head of the State Legal Department of the Office of the
Rais (Head) of the Republic of Tatarstan
1976
Valery Anatolievich Krukov Independent Director, Director of the Institute of Economics and
Industrial Engineering within the Siberian Branch of the Russian
Academy of Sciences
1954
Yuri Lvovich Levin** Independent Director, Chairman of Audit Committee, Managing
Director of BVM Capital Partners Ltd.
1953
Rafael Saitovich Nurmukhametov Director, Retiree, former Head of the Leninogorsk NGDU of
Tatneft
1949
Valery Yurievich Sorokin Director, General Director of Svyazinvestneftekhim 1964
Nurislam Zinatulovich Syubaev Director, Deputy General Director for Strategic Development 1960
Shafagat Fakhrazovich Takhautdinov Director, Advisor to the Chairman of the Board, Assistant to Rais
(Head) of the Republic of Tatarstan on Oil Production
1946
Rustam Khamisovich Khalimov Director, First Deputy General Director for Exploration and
Production of Oil and Gas – Head of Tatneft-Upstream
1965
Rais Salikhovich Khisamov Member of the Board of Directors of Tatneft 1950
* Appointed to the Board of Directors pursuant to the exercise of the Golden Share special right of the Tatarstan Government.
** Considered a retired member of the Board of Directors from 21 February 2023 based on his own application.
Biographies of the Directors are set out below:
Rustam Nurgalievich Minnikhanov . Mr. Minnikhanov was born in 1957. In 1978, he graduated from the Kazan Agricultural
Institute with a specialization in mechanical engineering, and from the Institute of Soviet Trade in 1986 with a degree in
merchandizing of foodstuffs. He has a Ph.D. in Economics. He started work in 1978 as an engineer and was responsible for
diagnostics at the Sabinsky district in union of “ Agricultural Equipment ” . He further worked as senior and chief power
engineer at the Sabinsky Forestry Engineering Co. From 1983 to 1985, he was Deputy Director of Trade of the Sabinsky
district, and from 1985 to 1990, he was Chairman of the Arsky Consumer Supplies Board. He was then elected Chairman of
the Executive Committee of the Arsky Council of Peoples' Deputies. In 1992, he was First Deputy Head of the Administration
of the Arsky district of the Republic of Tatarstan. From 1993 to 1996, he was Chairman of the Visokogorsky district Council
of People's Deputies and then Head of Administration of the Visokogorsky district of the Republic of Tatarstan. From 1996
to 1998, he was Minister of Finance of the Republic of Tatarstan. From 1998 to 2010, he was Prime Minister of the Republic
of Tatarstan. Since March 2010, he has been Head of the Republic of Tatarstan. He has been a member of the Board of
Directors since 1997 and has served as Chairman of the Board of Directors since June 1998.
Corporate Governance Statement
14
Rules About Appointment of Directors and Amendment of the Charter
The Company complies with the requirements of Russian law as to appointment and replacement of Directors as well as
amendment of the Charter (please see sections relating to voting rights above and the Board of Directors below).
Description of the Composition and Operation of the Administrative, Management and Supervisory Bodies and Their
Committees
Board of Directors
In accordance with the Charter Tatneft’s Board of Directors currently consists of 15 members (14 representatives elected, 1
appointed). Directors are elected by a resolution of shareholders passed at a shareholders' meeting by cumulative voting.
They serve until the next ordinary shareholders' meeting (or an extraordinary shareholders’ meeting replacing the Board of
Directors) and can be re-elected for an unlimited number of terms. Apart from those members appointed by the Tatarstan
Government, through Svyazinvestneftekhim in its capacity as a shareholder of Tatneft, the Tatarstan Government possesses
a Golden Share special right in our company that gives it the power to appoint one representative to our Board.
The members of our Board of Directors are:
Name Titles Born
Rustam Nurgalievich Minnikhanov* Chairman of the Board, Rais (Head) of the Republic of Tatarstan 1957
Nail Ulfatovich Maganov Director, General Director of Tatneft 1958
Fanil Anvarovich Agliullin Director, Minister of Land and Property Relations of the
Republic of Tatarstan
1975
Radik Raufovich Gaizatullin Director, Finance Minister of the Republic of Tatarstan 1964
Renat Maratovich Galiev Director, Assistant to the Rais (Head) of the Republic of
Tatarstan
1989
Laszlo Gerecs Independent Director, Managing Director of G Petroconsulting
Ltd.
1953
Larisa Yurievna Glukhova Director, Head of the State Legal Department of the Office of the
Rais (Head) of the Republic of Tatarstan
1976
Valery Anatolievich Krukov Independent Director, Director of the Institute of Economics and
Industrial Engineering within the Siberian Branch of the Russian
Academy of Sciences
1954
Yuri Lvovich Levin** Independent Director, Chairman of Audit Committee, Managing
Director of BVM Capital Partners Ltd.
1953
Rafael Saitovich Nurmukhametov Director, Retiree, former Head of the Leninogorsk NGDU of
Tatneft
1949
Valery Yurievich Sorokin Director, General Director of Svyazinvestneftekhim 1964
Nurislam Zinatulovich Syubaev Director, Deputy General Director for Strategic Development 1960
Shafagat Fakhrazovich Takhautdinov Director, Advisor to the Chairman of the Board, Assistant to Rais
(Head) of the Republic of Tatarstan on Oil Production
1946
Rustam Khamisovich Khalimov Director, First Deputy General Director for Exploration and
Production of Oil and Gas – Head of Tatneft-Upstream
1965
Rais Salikhovich Khisamov Member of the Board of Directors of Tatneft 1950
* Appointed to the Board of Directors pursuant to the exercise of the Golden Share special right of the Tatarstan Government.
** Considered a retired member of the Board of Directors from 21 February 2023 based on his own application.
Biographies of the Directors are set out below:
Rustam Nurgalievich Minnikhanov . Mr. Minnikhanov was born in 1957. In 1978, he graduated from the Kazan Agricultural
Institute with a specialization in mechanical engineering, and from the Institute of Soviet Trade in 1986 with a degree in
merchandizing of foodstuffs. He has a Ph.D. in Economics. He started work in 1978 as an engineer and was responsible for
diagnostics at the Sabinsky district in union of “ Agricultural Equipment ” . He further worked as senior and chief power
engineer at the Sabinsky Forestry Engineering Co. From 1983 to 1985, he was Deputy Director of Trade of the Sabinsky
district, and from 1985 to 1990, he was Chairman of the Arsky Consumer Supplies Board. He was then elected Chairman of
the Executive Committee of the Arsky Council of Peoples' Deputies. In 1992, he was First Deputy Head of the Administration
of the Arsky district of the Republic of Tatarstan. From 1993 to 1996, he was Chairman of the Visokogorsky district Council
of People's Deputies and then Head of Administration of the Visokogorsky district of the Republic of Tatarstan. From 1996
to 1998, he was Minister of Finance of the Republic of Tatarstan. From 1998 to 2010, he was Prime Minister of the Republic
of Tatarstan. Since March 2010, he has been Head of the Republic of Tatarstan. He has been a member of the Board of
Directors since 1997 and has served as Chairman of the Board of Directors since June 1998.
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Corporate Governance Statement
15
Nail Ulfatovich Maganov . Mr. Maganov was born in 1958. In 1983, he graduated from the evening department of the
Tatarstan branch of the Gubkin Petrochemical and Gas Industry Institute of Moscow. He started work in 1977 at the
Elkhovneft NGDU, where he was gradually promoted from the position of transportation helper to that of Head of the Oil
and Gas Production Division. Between 1991 and 1993, he was Deputy Head of the Zainskneft NGDU for capital construction.
In 1993, he was transferred to the position of Head of Tatneft Oil and Refined Products Sales Department. In 1994, he was
appointed Deputy General Director of Production of Tatneft. From July 2000 to November 2013, he was First Deputy General
Director for the Sales of Oil and Refined Products and Refining and Head of Crude Oil and Refined Products Sales
Department. In November 2013 he was appointed the General Director of the Company. He has been a member of the Board
of Directors since 2000.
Fanil Anvarovich Agliullin was born in 1975. Mr Agliullin graduated from the Kazan Law Institute of the Ministry of Internal
Affairs of the Russian Federation in 2004. From 1995 to 2014, he served in internal affairs agencies of the Russian Federation.
From 2014 to 2016, Mr Agliullin worked as a deputy head of the department of special training at the centre for security of
top officials of the Internal Protection Directorate of the Ministry of Internal Affairs for the Republic of Tatarstan. From 2016
to 2019, Mr Agliullin headed the security service and served as an aide to the Head of the Republic of Tatarstan. Starting
September 2019, he has held the position of the Minister of Land and Property Relations of the Republic of Tatarstan. Mr.
Agliullin has been a member of the Board of Directors since 2020.
Radik Raufovich Gaizatullin . Mr. Gaizatullin was born in 1964. In 1985, he graduated from the Kazan Agricultural Institute
with a specialization in accounting and economic analysis of agriculture. He started work as the chief accountant at the
collective farm Mayak, Laishevsky district. He then worked as the leading economist for control and supervision of the
Laishevsky district Cooperative Society, and then as the chief accountant of the agricultural firm Biryuli, Visokogorsky
district. In 1999, he was transferred to the Ministry of Finance of the Republic of Tatarstan as Head of the Section for
Financing Agriculture and Food Industry. In June 2000, he was appointed Deputy Minister of Finance of the Republic of
Tatarstan and, in 2001, he was appointed First Deputy Minister of Finance of the Republic of Tatarstan. Since 27 June 2002,
he has served as Finance Minister of the Republic of Tatarstan. He has been a member of the Board of Directors since 2000.
Renat Maratovich Galiev was born in 1989. In 2012, he graduated from the Russian State University of Oil and Gas named
after I.M. Gubkin with a degree in "Geology and exploration of minerals." In 2016, he completed his postgraduate studies at
the Russian State University of Oil and Gas named after I.M. Gubkin. Since 2014, he worked in the Ministry of Energy of
Russia as a chief specialist, expert, leading adviser. Since 2021, he has been appointed Assistant to the Head of the Republic
of Tatarstan. He has been a member of the Board of Directors since 2022.
Laszlo Gerecs. Mr. Gerecs was born in 1953. He graduated from the Moscow Institute of Petrochemical and Gas Industry
named after academician I.M. Gubkin in 1977 specializing in Development and Complex Mechanization of oil fields. He
graduated with a Master’s Degree in Business Administration from the Oxford Business University in 1995. Since 2012 -
Head of Project Management for oilfield production and infrastructure development, MOL Group, Budapest. From 2015 to
2016 - Managing Director of MOL Oman, Oman Branch in Muscat. Since January 2017- Managing Director of G
Petroconsulting Ltd. He has been a member of the Board of Directors since 2015.
Larisa Yurievna Glukhova was born in 1976. Ms Glukhova graduated from Kazan State University in 1998. From 2005 to
2012, she managed the sector of public law and statutory economic regulation and was the Deputy Head of the Legal
Department of the Administration of the Cabinet of Ministers of the Republic of Tatarstan. From 2012 to 2013, she headed
the legal department of OAO Tatavtodor. In 2013 to 2017, Ms Glukhova was Minister of Justice of the Republic of Tatarstan.
In 2017, she was appointed as the head of the State Legal Administration under the Head of the Republic of Tatarstan. Ms
Glukhova has been a member of the Board of Directors since 2020.
Valery Anatolievich Krukov was born in 1954. In 1977, he graduated from Novosibirsk State University with a degree in
Economic Cybernetics. In 1982 he completed his postgraduate studies at the Institute of Economics and Organization of
Industrial Production of the Siberian Branch of the USSR Academy of Sciences (Novosibirsk). In 2007 he was awarded the
academic title of professor in the specialty "Economics and Management of the National Economy", in 2011 – a
corresponding member of the Russian Academy of Sciences, in 2019 – an academician of the Russian Academy of Sciences.
The main direction of scientific research is the economic problems of the resource sector of the Russian economy with a
special emphasis on studying the problems of the oil and gas industry. Academic degree: candidate of economic sciences,
doctor of economic sciences. Since 2017, he has been appointed director of the Federal State Budgetary Institution of Science
"Institute for Economics and Organization of Industrial Production" of the Siberian Branch of the Russian Academy of
Sciences. He has been a member of the Board of Directors since 2022.
Yuri Lvovich Levin . Mr. Levin was born in 1953. He graduated from the Moscow Finance Institute in 1975, in 1979 he
completed post-graduate studies at the Institute of World Economy and International Relations. He has a Ph.D. in Economics.
Since 2001, Mr. Levin is the Managing Partner in BVM Capital Partners Ltd. He has been a member of the Board of Directors
since 2015.
Corporate Governance Statement
15
Nail Ulfatovich Maganov . Mr. Maganov was born in 1958. In 1983, he graduated from the evening department of the
Tatarstan branch of the Gubkin Petrochemical and Gas Industry Institute of Moscow. He started work in 1977 at the
Elkhovneft NGDU, where he was gradually promoted from the position of transportation helper to that of Head of the Oil
and Gas Production Division. Between 1991 and 1993, he was Deputy Head of the Zainskneft NGDU for capital construction.
In 1993, he was transferred to the position of Head of Tatneft Oil and Refined Products Sales Department. In 1994, he was
appointed Deputy General Director of Production of Tatneft. From July 2000 to November 2013, he was First Deputy General
Director for the Sales of Oil and Refined Products and Refining and Head of Crude Oil and Refined Products Sales
Department. In November 2013 he was appointed the General Director of the Company. He has been a member of the Board
of Directors since 2000.
Fanil Anvarovich Agliullin was born in 1975. Mr Agliullin graduated from the Kazan Law Institute of the Ministry of Internal
Affairs of the Russian Federation in 2004. From 1995 to 2014, he served in internal affairs agencies of the Russian Federation.
From 2014 to 2016, Mr Agliullin worked as a deputy head of the department of special training at the centre for security of
top officials of the Internal Protection Directorate of the Ministry of Internal Affairs for the Republic of Tatarstan. From 2016
to 2019, Mr Agliullin headed the security service and served as an aide to the Head of the Republic of Tatarstan. Starting
September 2019, he has held the position of the Minister of Land and Property Relations of the Republic of Tatarstan. Mr.
Agliullin has been a member of the Board of Directors since 2020.
Radik Raufovich Gaizatullin . Mr. Gaizatullin was born in 1964. In 1985, he graduated from the Kazan Agricultural Institute
with a specialization in accounting and economic analysis of agriculture. He started work as the chief accountant at the
collective farm Mayak, Laishevsky district. He then worked as the leading economist for control and supervision of the
Laishevsky district Cooperative Society, and then as the chief accountant of the agricultural firm Biryuli, Visokogorsky
district. In 1999, he was transferred to the Ministry of Finance of the Republic of Tatarstan as Head of the Section for
Financing Agriculture and Food Industry. In June 2000, he was appointed Deputy Minister of Finance of the Republic of
Tatarstan and, in 2001, he was appointed First Deputy Minister of Finance of the Republic of Tatarstan. Since 27 June 2002,
he has served as Finance Minister of the Republic of Tatarstan. He has been a member of the Board of Directors since 2000.
Renat Maratovich Galiev was born in 1989. In 2012, he graduated from the Russian State University of Oil and Gas named
after I.M. Gubkin with a degree in "Geology and exploration of minerals." In 2016, he completed his postgraduate studies at
the Russian State University of Oil and Gas named after I.M. Gubkin. Since 2014, he worked in the Ministry of Energy of
Russia as a chief specialist, expert, leading adviser. Since 2021, he has been appointed Assistant to the Head of the Republic
of Tatarstan. He has been a member of the Board of Directors since 2022.
Laszlo Gerecs. Mr. Gerecs was born in 1953. He graduated from the Moscow Institute of Petrochemical and Gas Industry
named after academician I.M. Gubkin in 1977 specializing in Development and Complex Mechanization of oil fields. He
graduated with a Master’s Degree in Business Administration from the Oxford Business University in 1995. Since 2012 -
Head of Project Management for oilfield production and infrastructure development, MOL Group, Budapest. From 2015 to
2016 - Managing Director of MOL Oman, Oman Branch in Muscat. Since January 2017- Managing Director of G
Petroconsulting Ltd. He has been a member of the Board of Directors since 2015.
Larisa Yurievna Glukhova was born in 1976. Ms Glukhova graduated from Kazan State University in 1998. From 2005 to
2012, she managed the sector of public law and statutory economic regulation and was the Deputy Head of the Legal
Department of the Administration of the Cabinet of Ministers of the Republic of Tatarstan. From 2012 to 2013, she headed
the legal department of OAO Tatavtodor. In 2013 to 2017, Ms Glukhova was Minister of Justice of the Republic of Tatarstan.
In 2017, she was appointed as the head of the State Legal Administration under the Head of the Republic of Tatarstan. Ms
Glukhova has been a member of the Board of Directors since 2020.
Valery Anatolievich Krukov was born in 1954. In 1977, he graduated from Novosibirsk State University with a degree in
Economic Cybernetics. In 1982 he completed his postgraduate studies at the Institute of Economics and Organization of
Industrial Production of the Siberian Branch of the USSR Academy of Sciences (Novosibirsk). In 2007 he was awarded the
academic title of professor in the specialty "Economics and Management of the National Economy", in 2011 – a
corresponding member of the Russian Academy of Sciences, in 2019 – an academician of the Russian Academy of Sciences.
The main direction of scientific research is the economic problems of the resource sector of the Russian economy with a
special emphasis on studying the problems of the oil and gas industry. Academic degree: candidate of economic sciences,
doctor of economic sciences. Since 2017, he has been appointed director of the Federal State Budgetary Institution of Science
"Institute for Economics and Organization of Industrial Production" of the Siberian Branch of the Russian Academy of
Sciences. He has been a member of the Board of Directors since 2022.
Yuri Lvovich Levin . Mr. Levin was born in 1953. He graduated from the Moscow Finance Institute in 1975, in 1979 he
completed post-graduate studies at the Institute of World Economy and International Relations. He has a Ph.D. in Economics.
Since 2001, Mr. Levin is the Managing Partner in BVM Capital Partners Ltd. He has been a member of the Board of Directors
since 2015.
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Corporate Governance Statement
16
Rafael Saitovich Nurmukhametov . Mr. Nurmukhametov was born in 1949. He began working in 1966 as an electrician. In
1974, he graduated from the Ufa Oil Institute with a specialization in technology and complex mechanization of the
development of oil and gas fields. After graduation, he worked at the Suleevneft NGDU as an oil production operator,
technology engineer, foreman for oil production, Head of the Oil and Gas Production Shop, and Head of Subterranean and
Capital Oil Well Workover. Mr. Nurmukhametov has also served at the Communist Party Committee of the Tatar region and
as an instructor and Head of the Oil and Gas Production Departments of the Djalilneft NGDU (1983-1986), the Laseganneft
NGDU (1986-1989) and the Pokachivneft NGDU (1987-1989). From 1989 to January 2020, he had been Head of the
Leninogorskneft NGDU of Tatneft and from 2016 a member of the Board of Directors.
Valery Yurievich Sorokin . Mr. Sorokin was born in 1964. He graduated from the Kazan State University in 1986 with a
degree in mechanics. From 1996 to 2002, he was the Director of the Agency for State Debt Management of the Republic of
Tatarstan under the Ministry of Finance of the Republic of Tatarstan. Since 2003, he has been the General Director of
Svyazinvestneftekhim. He has been a member of the Board of Directors since 2005.
Nurislam Zinatulovich Syubaev. Mr. Syubaev was born in 1960. In 1982 he graduated from the Plekhanov Economy Institute
with a diploma of an economist and in 1985 he completed the program "Financial accounting and audit" of the Requalification
Institute for Banking and Finance under the Financial Academy of the Russian Government; in 1999 he qualified as
"Economist in Banking" from the Banking Department of the Plekhanov Economy Institute. In 1992-1994 he served as the
deputy CEO of Alfa-Bank and from 1994-1995 he headed the Financial Services Center of Higher School of International
Business. From 1995 to 2001 Mr. Syubaev was the First Deputy CEO of Bank Zenit, and from 2001 he has been serving as
the Head of the Strategic Planning Department of Tatneft and Advisor to General Director of Tatneft for Foreign Economic
Affairs and Financial/Banking Issues and from 2014 - a member of the Management Board of Tatneft. In 2016 he was
appointed as Deputy General Director for Strategic Development of Tatneft. He has been a member of the Board of Directors
since 2019.
Shafagat Fakhrazovich Takhautdinov . Mr. Takhautdinov was born in 1946. In 1971, he graduated from the Gubkin
Petrochemical and Gas Industry Institute of Moscow. He has a Ph.D. in Economics. He started work in 1964 as a driller's
assistant at the Almetyevsk Drilling Operations Department and then worked as an oil production operator, underground well
repair foreman and manager of a reservoir pressure maintenance section. He also served as Head of the Djalilneft NGDU
(1978-1983), Head of the Almetyevneft NGDU (1983-1985) and First Secretary of the Communist Party Committee of
Leninogorsk (1985-1990). From 1990 to 1999, he was Chief Engineer and First Deputy General Director of Tatneft. From
1999 to November 2013, he was the General Director. In November 2013 he was appointed an Advisor to the Chairman of
the Board of Directors of Tatneft. He has been a member of the Board of Directors since 1994.
Rustam Khamisovich Khalimov . He was born in 1965. He graduated from the Moscow Institute of Petrochemical and Gas
Industry in 1987 specializing in Technology and complex mechanization of oil and gas fields development. Later he
graduated from the National Economy Academy under the Government of the Russian Federation and the Tyumen State Oil
and Gas University. From 2010 to 2011 he worked as the Head of Tatneft Branch in Libya. He was appointed as the Head of
NGDU Elkhovneft from 2011 to 2015. In 2015 he was appointed as Deputy General Director for Exploration and Production
of Oil and Gas, in 2018 promoted to the position of First Deputy General Director for Exploration and Production of Oil and
Gas, and 2019 Mr. Khalimov assumed the leadership over newly established division Tatneft-Upstream. He is a Candidate
of Science in Engineering. Mr. Khalimov has been a member of the Board of Directors since 2015.
Rais Salikhovich Khisamov . Mr. Khisamov was born in 1950. In 1978, he graduated from the evening department of the
Gubkin Petrochemical and Gas Industry Institute of Moscow with a specialization in mining engineering. He has a Ph.D. in
Geology and Mineralogy. He started work as an oil production operator at the Elkhovneft NGDU, then worked as a collector
at the Birsk Geological Prospecting Unit and as an operator at the Irkenneft NGDU. In 1972, after serving in the Russian
army, he returned to the Irkenneft NGDU, where he worked until 1997 and was gradually promoted from the position of well
exploration operator to that of Chief Geologist of the Irkenneft NGDU. From October 1997 to April 2021, he had been
working as Chief Geologist and Deputy General Director of Tatneft. He has been a member of the Board of Directors since
1998.
Authority of the Board of Directors
Under the Law on Joint Stock Companies, the Charter and the Regulation on the Board of Directors, the Board of Directors
has general authority to take all decisions regarding or related to our business activities, operations and internal affairs, except
to the extent any specific matter or decision falls within the exclusive competence of the shareholders in a shareholders'
meeting, the General Director or the Management Board. The following matters fall within the scope of authority of the
Board of Directors:
• determining our strategic priorities;
• convening annual and extraordinary shareholders' meetings;
• approving agendas for, and other ancillary matters related to, shareholders' meetings;
• increasing our charter capital through public issuance of additional shares within the amount of authorized shares,
Corporate Governance Statement
16
Rafael Saitovich Nurmukhametov . Mr. Nurmukhametov was born in 1949. He began working in 1966 as an electrician. In
1974, he graduated from the Ufa Oil Institute with a specialization in technology and complex mechanization of the
development of oil and gas fields. After graduation, he worked at the Suleevneft NGDU as an oil production operator,
technology engineer, foreman for oil production, Head of the Oil and Gas Production Shop, and Head of Subterranean and
Capital Oil Well Workover. Mr. Nurmukhametov has also served at the Communist Party Committee of the Tatar region and
as an instructor and Head of the Oil and Gas Production Departments of the Djalilneft NGDU (1983-1986), the Laseganneft
NGDU (1986-1989) and the Pokachivneft NGDU (1987-1989). From 1989 to January 2020, he had been Head of the
Leninogorskneft NGDU of Tatneft and from 2016 a member of the Board of Directors.
Valery Yurievich Sorokin . Mr. Sorokin was born in 1964. He graduated from the Kazan State University in 1986 with a
degree in mechanics. From 1996 to 2002, he was the Director of the Agency for State Debt Management of the Republic of
Tatarstan under the Ministry of Finance of the Republic of Tatarstan. Since 2003, he has been the General Director of
Svyazinvestneftekhim. He has been a member of the Board of Directors since 2005.
Nurislam Zinatulovich Syubaev. Mr. Syubaev was born in 1960. In 1982 he graduated from the Plekhanov Economy Institute
with a diploma of an economist and in 1985 he completed the program "Financial accounting and audit" of the Requalification
Institute for Banking and Finance under the Financial Academy of the Russian Government; in 1999 he qualified as
"Economist in Banking" from the Banking Department of the Plekhanov Economy Institute. In 1992-1994 he served as the
deputy CEO of Alfa-Bank and from 1994-1995 he headed the Financial Services Center of Higher School of International
Business. From 1995 to 2001 Mr. Syubaev was the First Deputy CEO of Bank Zenit, and from 2001 he has been serving as
the Head of the Strategic Planning Department of Tatneft and Advisor to General Director of Tatneft for Foreign Economic
Affairs and Financial/Banking Issues and from 2014 - a member of the Management Board of Tatneft. In 2016 he was
appointed as Deputy General Director for Strategic Development of Tatneft. He has been a member of the Board of Directors
since 2019.
Shafagat Fakhrazovich Takhautdinov . Mr. Takhautdinov was born in 1946. In 1971, he graduated from the Gubkin
Petrochemical and Gas Industry Institute of Moscow. He has a Ph.D. in Economics. He started work in 1964 as a driller's
assistant at the Almetyevsk Drilling Operations Department and then worked as an oil production operator, underground well
repair foreman and manager of a reservoir pressure maintenance section. He also served as Head of the Djalilneft NGDU
(1978-1983), Head of the Almetyevneft NGDU (1983-1985) and First Secretary of the Communist Party Committee of
Leninogorsk (1985-1990). From 1990 to 1999, he was Chief Engineer and First Deputy General Director of Tatneft. From
1999 to November 2013, he was the General Director. In November 2013 he was appointed an Advisor to the Chairman of
the Board of Directors of Tatneft. He has been a member of the Board of Directors since 1994.
Rustam Khamisovich Khalimov . He was born in 1965. He graduated from the Moscow Institute of Petrochemical and Gas
Industry in 1987 specializing in Technology and complex mechanization of oil and gas fields development. Later he
graduated from the National Economy Academy under the Government of the Russian Federation and the Tyumen State Oil
and Gas University. From 2010 to 2011 he worked as the Head of Tatneft Branch in Libya. He was appointed as the Head of
NGDU Elkhovneft from 2011 to 2015. In 2015 he was appointed as Deputy General Director for Exploration and Production
of Oil and Gas, in 2018 promoted to the position of First Deputy General Director for Exploration and Production of Oil and
Gas, and 2019 Mr. Khalimov assumed the leadership over newly established division Tatneft-Upstream. He is a Candidate
of Science in Engineering. Mr. Khalimov has been a member of the Board of Directors since 2015.
Rais Salikhovich Khisamov . Mr. Khisamov was born in 1950. In 1978, he graduated from the evening department of the
Gubkin Petrochemical and Gas Industry Institute of Moscow with a specialization in mining engineering. He has a Ph.D. in
Geology and Mineralogy. He started work as an oil production operator at the Elkhovneft NGDU, then worked as a collector
at the Birsk Geological Prospecting Unit and as an operator at the Irkenneft NGDU. In 1972, after serving in the Russian
army, he returned to the Irkenneft NGDU, where he worked until 1997 and was gradually promoted from the position of well
exploration operator to that of Chief Geologist of the Irkenneft NGDU. From October 1997 to April 2021, he had been
working as Chief Geologist and Deputy General Director of Tatneft. He has been a member of the Board of Directors since
1998.
Authority of the Board of Directors
Under the Law on Joint Stock Companies, the Charter and the Regulation on the Board of Directors, the Board of Directors
has general authority to take all decisions regarding or related to our business activities, operations and internal affairs, except
to the extent any specific matter or decision falls within the exclusive competence of the shareholders in a shareholders'
meeting, the General Director or the Management Board. The following matters fall within the scope of authority of the
Board of Directors:
• determining our strategic priorities;
• convening annual and extraordinary shareholders' meetings;
• approving agendas for, and other ancillary matters related to, shareholders' meetings;
• increasing our charter capital through public issuance of additional shares within the amount of authorized shares,
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Corporate Governance Statement
17
but (in case of ordinary shares) in a total amount not exceeding 25% of the total amount of ordinary shares then
outstanding;
• issuing bonds and other securities, as provided by law;
• amending our Charter following the placement of additional shares, including amendments relating to the increase
in our charter capital, as provided by law;
• determining the market value of our property and the price for placing and repurchasing our securities, where
provided for by law;
• acquiring stocks, bonds, and other securities placed by us, where provided for by law;
• appointing and dismissing the General Director and other members of the Management Board;
• appointing and dismissing the Secretary of the Board and determining her/his duties;
• appointing the First Deputy General Directors;
• making recommendations relating to the amount of remuneration and compensation to be paid to members of the
Revision Committee and determining payments for the services of the independent auditors;
• approving the criteria for performance evaluation and the amount of compensation for the members of the Board of
Directors and the Management Board, approving the Board of Directors’ budget;
• recommending the amount to be declared and paid as dividends on our shares and facilitating payment of the same;
• using our reserves and other funds;
• establishing branches and opening representative offices;
• concluding certain major transactions and certain interested party transactions, (where provided for by law), and
concluding certain other transactions (where provided for by internal documents);
• approving the appointment of a registrar and the terms and conditions under which such appointment is made;
• determining the procedures for presentation of all bills, reports and applications, and determining the system for
calculation of profits and losses, including the rules relating to the depreciation of property;
• adopting the Corporate Governance Code and introducing amendments thereto;
• forming committees of the Board of Directors and approving related regulations;
• approving other internal documents of the Company on the regulation of the matters related to the competence of
the Board of Directors, excluding internal documents that are within the competence of the shareholders' meeting,
the General Director and the Management Board as provided for in the Charter; and
• making other decisions that are not within the competence of the shareholders' meeting, the General Director and
the Management Board.
Meetings of the Board of Directors
Meetings of the Board of Directors are convened either by the Chairman of the Board of Directors, or upon request of the
General Director, any member of the Board of Directors, the Management Board, the Revision Committee, or the independent
auditor. Although the Board of Directors only needs to meet once a year, at least one month prior to an annual shareholders'
meeting, in order to review our annual report and resolve other issues relating to holding the annual shareholders’ meeting
(unless the interests of the company require more frequent meetings), they are typically held once a month. The agenda for
meetings of the Board of Directors must include any items proposed by shareholders who own in the aggregate at least 5%
of our shares and the auditor, the General Director, members of the Board of Directors, the Revision Committee, or the
Management Board.
Under the Law on Joint Stock Companies and the Charter, the affirmative vote of a majority of the Directors present at a
quorate meeting of the Board of Directors is usually required to pass a resolution and the Chairman of the Board of Directors
shall cast the deciding vote in the event of a tie. However, certain resolutions, such as the approval of major transactions, and
the issuance of additional shares, require the unanimous approval of all Directors present at a meeting of the Board of
Directors. A quorum for the purpose of a meeting of the Board of Directors exists if more than 50% of the Directors are
present. The minutes of meetings of the Board of Directors must be made available for review to any shareholder upon
request.
The Law on Joint Stock Companies prohibits a person from holding the posts of Chairman of the Board of Directors and
General Director at the same time.
Committees of the Board of Directors
Audit Committee. The Audit Committee of the Board of Directors is comprised of the following directors: Mr. Yuri L. Levin
(Chairman), Mr. Radik R. Gaizatullin, Mr. Laszlo Gerecs and Mr. Valery A. Krukov. Under the terms of reference of the
Audit Committee, its membership shall consist of at least three directors, including one director who is an audit committee
financial expert. We have determined that three members of the Audit Committee are independent. Responsibilities of the
Audit Committee are separate from the responsibilities of the Revision Committee, which might be maintained as a matter
of Russian law. The Audit Committee is responsible for submitting recommendations to the Board of Directors on an annual
basis regarding the independent auditor, negotiating the terms of engagement of the independent auditor, and evaluating its
Corporate Governance Statement
17
but (in case of ordinary shares) in a total amount not exceeding 25% of the total amount of ordinary shares then
outstanding;
• issuing bonds and other securities, as provided by law;
• amending our Charter following the placement of additional shares, including amendments relating to the increase
in our charter capital, as provided by law;
• determining the market value of our property and the price for placing and repurchasing our securities, where
provided for by law;
• acquiring stocks, bonds, and other securities placed by us, where provided for by law;
• appointing and dismissing the General Director and other members of the Management Board;
• appointing and dismissing the Secretary of the Board and determining her/his duties;
• appointing the First Deputy General Directors;
• making recommendations relating to the amount of remuneration and compensation to be paid to members of the
Revision Committee and determining payments for the services of the independent auditors;
• approving the criteria for performance evaluation and the amount of compensation for the members of the Board of
Directors and the Management Board, approving the Board of Directors’ budget;
• recommending the amount to be declared and paid as dividends on our shares and facilitating payment of the same;
• using our reserves and other funds;
• establishing branches and opening representative offices;
• concluding certain major transactions and certain interested party transactions, (where provided for by law), and
concluding certain other transactions (where provided for by internal documents);
• approving the appointment of a registrar and the terms and conditions under which such appointment is made;
• determining the procedures for presentation of all bills, reports and applications, and determining the system for
calculation of profits and losses, including the rules relating to the depreciation of property;
• adopting the Corporate Governance Code and introducing amendments thereto;
• forming committees of the Board of Directors and approving related regulations;
• approving other internal documents of the Company on the regulation of the matters related to the competence of
the Board of Directors, excluding internal documents that are within the competence of the shareholders' meeting,
the General Director and the Management Board as provided for in the Charter; and
• making other decisions that are not within the competence of the shareholders' meeting, the General Director and
the Management Board.
Meetings of the Board of Directors
Meetings of the Board of Directors are convened either by the Chairman of the Board of Directors, or upon request of the
General Director, any member of the Board of Directors, the Management Board, the Revision Committee, or the independent
auditor. Although the Board of Directors only needs to meet once a year, at least one month prior to an annual shareholders'
meeting, in order to review our annual report and resolve other issues relating to holding the annual shareholders’ meeting
(unless the interests of the company require more frequent meetings), they are typically held once a month. The agenda for
meetings of the Board of Directors must include any items proposed by shareholders who own in the aggregate at least 5%
of our shares and the auditor, the General Director, members of the Board of Directors, the Revision Committee, or the
Management Board.
Under the Law on Joint Stock Companies and the Charter, the affirmative vote of a majority of the Directors present at a
quorate meeting of the Board of Directors is usually required to pass a resolution and the Chairman of the Board of Directors
shall cast the deciding vote in the event of a tie. However, certain resolutions, such as the approval of major transactions, and
the issuance of additional shares, require the unanimous approval of all Directors present at a meeting of the Board of
Directors. A quorum for the purpose of a meeting of the Board of Directors exists if more than 50% of the Directors are
present. The minutes of meetings of the Board of Directors must be made available for review to any shareholder upon
request.
The Law on Joint Stock Companies prohibits a person from holding the posts of Chairman of the Board of Directors and
General Director at the same time.
Committees of the Board of Directors
Audit Committee. The Audit Committee of the Board of Directors is comprised of the following directors: Mr. Yuri L. Levin
(Chairman), Mr. Radik R. Gaizatullin, Mr. Laszlo Gerecs and Mr. Valery A. Krukov. Under the terms of reference of the
Audit Committee, its membership shall consist of at least three directors, including one director who is an audit committee
financial expert. We have determined that three members of the Audit Committee are independent. Responsibilities of the
Audit Committee are separate from the responsibilities of the Revision Committee, which might be maintained as a matter
of Russian law. The Audit Committee is responsible for submitting recommendations to the Board of Directors on an annual
basis regarding the independent auditor, negotiating the terms of engagement of the independent auditor, and evaluating its
PJSC TAT
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Corporate Governance Statement
18
performance, overseeing completeness and correctness of our financial statements and evaluating reliability, effectiveness of
internal control, pre-approving permissible non-auditing services provided by the auditors, and dealing with
“whistleblowing” reports.
Human Resources and Compensation Committee . The Human Resources is comprised of the following directors and
members of the Management Board: Mr. Laszlo Gerecs (Chairman), Mr. Valery A. Krukov, and Mr. Yuri L. Levin. The
Human Resources and Compensation Committee is responsible for appraising the work of the Board of Directors and the
Management Board, developing recommendations with respect to remuneration of top managers, the terms of their
employment contracts and personnel policies more generally, establishing criteria for selecting candidates for the
Management Board and to head our structural divisions, and preparing proposals on the main terms of agreements with
members of the Board of Directors, the General Director and members of the Management Board.
Sustainable Development and Corporate Governance Committee . The Committee is comprised of the following directors
and members of senior management: Mr. Nail U. Maganov (Chairman), Ms. Larisa Y. Glukhova, Mr. Laszlo Gerecs, Mr.
Valery A. Krukov, Mr. Nurislam Z. Syubaev, Mr. Azat G. Khabibrahmanov, Ms Aigul M. Alparova, Mr. Damir M. Gamirov,
and Mr. Vasily A. Mozgovoi. The Committee assists the Board of Directors in implementing the requirements of legislation
and best practices in sustainable development in order to achieve strategic goals, in developing and improving the system
and practice of corporate governance, regulates relations between shareholders, the Board of Directors and the executive
bodies of the Company, makes recommendations to the Board of Directors to improve corporate governance practices
management.
Management Board
Our Management Board currently consists of 4 members*. The Management Board is appointed by the Board of Directors.
The Management Board coordinates and oversees the effective operation of the Company and its various divisions. The
Management Board’s authority extends across a broad remit and includes our long and short-term business development
program, our participation in commercial and non-profit organizations, and our economic, financial and investment activities.
The members of our Management Board* are:
Name Titles Born
Nail Ulfatovich Maganov Chairman of the Board, General Director 1958
Nikolay Mikhailovich Glazkov Deputy General Director for Capital
Construction
1960
Rustam Nabiullovich Mukhamadeev Deputy General Director for General Affairs 1952
Nurislam Zinatulovich Syubaev Deputy General Director for Strategic
Development
1960
Information as of 31 December 2022
Biographies of the members of the Management Board are set out below:
Nail Ulfatovich Maganov . See “Board of Directors” above.
Nikolay Mikhailovich Glazkov . Mr. Glazkov was born in 1960. In 1988, he graduated from Kazan Engineering and
Construction Institute specializing in industrial and civil construction. He began his career at SMU 51 (a construction
company), where he became the CEO of the company. From 1999 to 2005, he worked as Deputy Head of the Administration
of the Almetyevsk District and the city of Almetyevsk on construction and communications, then the First Deputy Head of
the Administration of the city of Almetyevsk. Since 2005, he has been serving as Head of the Capital Construction
Department of PJSC Tatneft, subsequently promoted to the position of Deputy General Director for Capital Construction,
and from 2012 a member of the Management Board.
Rustam Nabiullovich Mukhamadeev . Mr. Mukhamadeev was born in 1952. In 1977, he graduated from the Gubkin
Petrochemical and Gas Industry Institute of Moscow, with a specialization in technological and complex mechanization for
the development of oil and gas fields. From 1970 to 1971, Mr. Mukhamadeev worked as a student operator at the Elkhovneft
NGDU. Following service in the army, he joined the evening department of the Tatarstan branch of the Gubkin Petrochemical
and Gas Industry Institute of Moscow as a senior laboratory technician. In 1975, Mr. Mukhamadeev returned to the
Elkhovneft NGDU as an oil-pump research engineer, subsequently becoming a senior geologist at Tatneftegasrazvedka in
1978. His subsequent work includes serving as an instructor in the industrial-transport section of the Communist Party
Committee of Almetyevsk (1981-1985); Secretary of the Communist Party Committee, Assistant Director for Personnel,
extra-curricular and social development, Assistant Director for Social Development and Assistant Director for General
Operations of the Elkhovneft NGDU (1985-1998); and head of the Almetyevsk repair and construction division of Tatneft
(1998-2001). Mr. Mukhamadeev served as Tatneft's Deputy General Director for Personnel and Social Development from
2001 to 2017. Since December 2017 - Deputy General Director for General Affairs with the title subsequently changed to
Deputy General Director for General Affairs.
Corporate Governance Statement
18
performance, overseeing completeness and correctness of our financial statements and evaluating reliability, effectiveness of
internal control, pre-approving permissible non-auditing services provided by the auditors, and dealing with
“whistleblowing” reports.
Human Resources and Compensation Committee . The Human Resources is comprised of the following directors and
members of the Management Board: Mr. Laszlo Gerecs (Chairman), Mr. Valery A. Krukov, and Mr. Yuri L. Levin. The
Human Resources and Compensation Committee is responsible for appraising the work of the Board of Directors and the
Management Board, developing recommendations with respect to remuneration of top managers, the terms of their
employment contracts and personnel policies more generally, establishing criteria for selecting candidates for the
Management Board and to head our structural divisions, and preparing proposals on the main terms of agreements with
members of the Board of Directors, the General Director and members of the Management Board.
Sustainable Development and Corporate Governance Committee . The Committee is comprised of the following directors
and members of senior management: Mr. Nail U. Maganov (Chairman), Ms. Larisa Y. Glukhova, Mr. Laszlo Gerecs, Mr.
Valery A. Krukov, Mr. Nurislam Z. Syubaev, Mr. Azat G. Khabibrahmanov, Ms Aigul M. Alparova, Mr. Damir M. Gamirov,
and Mr. Vasily A. Mozgovoi. The Committee assists the Board of Directors in implementing the requirements of legislation
and best practices in sustainable development in order to achieve strategic goals, in developing and improving the system
and practice of corporate governance, regulates relations between shareholders, the Board of Directors and the executive
bodies of the Company, makes recommendations to the Board of Directors to improve corporate governance practices
management.
Management Board
Our Management Board currently consists of 4 members*. The Management Board is appointed by the Board of Directors.
The Management Board coordinates and oversees the effective operation of the Company and its various divisions. The
Management Board’s authority extends across a broad remit and includes our long and short-term business development
program, our participation in commercial and non-profit organizations, and our economic, financial and investment activities.
The members of our Management Board* are:
Name Titles Born
Nail Ulfatovich Maganov Chairman of the Board, General Director 1958
Nikolay Mikhailovich Glazkov Deputy General Director for Capital
Construction
1960
Rustam Nabiullovich Mukhamadeev Deputy General Director for General Affairs 1952
Nurislam Zinatulovich Syubaev Deputy General Director for Strategic
Development
1960
Information as of 31 December 2022
Biographies of the members of the Management Board are set out below:
Nail Ulfatovich Maganov . See “Board of Directors” above.
Nikolay Mikhailovich Glazkov . Mr. Glazkov was born in 1960. In 1988, he graduated from Kazan Engineering and
Construction Institute specializing in industrial and civil construction. He began his career at SMU 51 (a construction
company), where he became the CEO of the company. From 1999 to 2005, he worked as Deputy Head of the Administration
of the Almetyevsk District and the city of Almetyevsk on construction and communications, then the First Deputy Head of
the Administration of the city of Almetyevsk. Since 2005, he has been serving as Head of the Capital Construction
Department of PJSC Tatneft, subsequently promoted to the position of Deputy General Director for Capital Construction,
and from 2012 a member of the Management Board.
Rustam Nabiullovich Mukhamadeev . Mr. Mukhamadeev was born in 1952. In 1977, he graduated from the Gubkin
Petrochemical and Gas Industry Institute of Moscow, with a specialization in technological and complex mechanization for
the development of oil and gas fields. From 1970 to 1971, Mr. Mukhamadeev worked as a student operator at the Elkhovneft
NGDU. Following service in the army, he joined the evening department of the Tatarstan branch of the Gubkin Petrochemical
and Gas Industry Institute of Moscow as a senior laboratory technician. In 1975, Mr. Mukhamadeev returned to the
Elkhovneft NGDU as an oil-pump research engineer, subsequently becoming a senior geologist at Tatneftegasrazvedka in
1978. His subsequent work includes serving as an instructor in the industrial-transport section of the Communist Party
Committee of Almetyevsk (1981-1985); Secretary of the Communist Party Committee, Assistant Director for Personnel,
extra-curricular and social development, Assistant Director for Social Development and Assistant Director for General
Operations of the Elkhovneft NGDU (1985-1998); and head of the Almetyevsk repair and construction division of Tatneft
(1998-2001). Mr. Mukhamadeev served as Tatneft's Deputy General Director for Personnel and Social Development from
2001 to 2017. Since December 2017 - Deputy General Director for General Affairs with the title subsequently changed to
Deputy General Director for General Affairs.
PJSC TAT
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Corporate Governance Statement
19
Nurislam Zinatulovich Syubaev. See “Board of Directors” above.
Authority of the Management Board
The Management Board is our executive body and exercises day-to-day management and control over our business activities
and operations. Under the Charter, the Management Board is, inter alia, explicitly responsible for:
• developing our programs of activities;
• participating in commercial and non-commercial organizations;
• performing our financial and investment programs;
• selling our shares and other securities to investors;
• determining procedures for granting access to the register of shareholders;
• submitting proposals on profit and loss distribution to the Board of Directors;
• determining internal and external pricing policies; and
• approving certain of our internal documents governing matters related to the competence of the Management Board
and other documents provided by the General Director.
Under the Regulation on the Management Board approved by the shareholders (last amended on 21 June 2019), the
Management Board does not have a fixed number of members, appointed by the Board of Directors and is chaired by the
General Director.
The Management Board is convened by the General Director. Meetings of the Management Board are deemed quorate if at
least 50% of the members of the Management Board are present. All decisions of the Management Board must be approved
by a simple majority of the votes cast, provided that the Chairman of the Management Board has a deciding vote in the event
of a tie.
The General Director
The General Director is elected by the Board of Directors for a five-year term and can be removed by a vote of two thirds of
the members of the Board of Directors. The current General Director, Mr. Nail U. Maganov, was appointed by the Board of
Directors in November 2018.
The General Director exercises day-to-day control over our activities and chairs meetings of the Management Board. The
General Director is accountable to the Board of Directors and our shareholders. Pursuant to the Charter, the Regulation on
the General Director approved by the shareholders (last amended on 23 June 2022), and Russian law, the General Director is
authorized to, inter alia:
− procure performance of the decisions of the shareholders' meeting and the Board of Directors;
− manage our property in the manner prescribed by the Charter and the law;
− nominate candidates for the positions of First Deputy General Directors and members of the Management Board;
− organize and delegate duties within the Management Board, determine the amount of compensation of the members
of the Management Board;
− hire and dismiss employees, including his deputies, the chief accountant, heads of departments, branches and
representative offices;
− ensure the development, conclusion, and execution of the collective bargaining agreement;
− open settlement, currency, and other accounts of the Company in banks, conclude contracts, and make other
transactions on behalf of the Company;
− approve our internal documents, excluding those internal documents the approval of which is within the exclusive
competence of the shareholders' meeting, the Board of Directors, or the Management Board;
− exercise the rights of the Company as shareholder/participant in its subsidiaries; and
− make any other decisions pertaining to the conduct of the Company's business in the ordinary course.
The General Director also chairs meetings of our Management Board.
Revision Committee
The Revision Committee is our financial control body, which can be formed pursuant to the Law on Joint Stock Companies
and is charged with supervising our financial and economic activity. It is elected by, and accountable to, the shareholders and
consists of nine members, none of whom can be members of the Board of Directors or serve in any of our other management
bodies. Each member of the Revision Committee serves until the next annual shareholders' meeting. Pursuant to the Charter,
the Revision Committee must submit annual reports to the Board of Directors at least 40 days prior to the date of each annual
shareholders' meeting. Further, it can be instructed to conduct a special audit by holders of 10% or more of our voting shares,
by the shareholders' resolution passed at a shareholders' meeting, by the Board of Directors, and at its own initiative. In such
case, a report of the Revision Committee must be submitted to the Board of Directors no later than one month after the date
of such instruction. Any decision of the Revision Committee must be approved by a majority of its members.
Corporate Governance Statement
19
Nurislam Zinatulovich Syubaev. See “Board of Directors” above.
Authority of the Management Board
The Management Board is our executive body and exercises day-to-day management and control over our business activities
and operations. Under the Charter, the Management Board is, inter alia, explicitly responsible for:
• developing our programs of activities;
• participating in commercial and non-commercial organizations;
• performing our financial and investment programs;
• selling our shares and other securities to investors;
• determining procedures for granting access to the register of shareholders;
• submitting proposals on profit and loss distribution to the Board of Directors;
• determining internal and external pricing policies; and
• approving certain of our internal documents governing matters related to the competence of the Management Board
and other documents provided by the General Director.
Under the Regulation on the Management Board approved by the shareholders (last amended on 21 June 2019), the
Management Board does not have a fixed number of members, appointed by the Board of Directors and is chaired by the
General Director.
The Management Board is convened by the General Director. Meetings of the Management Board are deemed quorate if at
least 50% of the members of the Management Board are present. All decisions of the Management Board must be approved
by a simple majority of the votes cast, provided that the Chairman of the Management Board has a deciding vote in the event
of a tie.
The General Director
The General Director is elected by the Board of Directors for a five-year term and can be removed by a vote of two thirds of
the members of the Board of Directors. The current General Director, Mr. Nail U. Maganov, was appointed by the Board of
Directors in November 2018.
The General Director exercises day-to-day control over our activities and chairs meetings of the Management Board. The
General Director is accountable to the Board of Directors and our shareholders. Pursuant to the Charter, the Regulation on
the General Director approved by the shareholders (last amended on 23 June 2022), and Russian law, the General Director is
authorized to, inter alia:
− procure performance of the decisions of the shareholders' meeting and the Board of Directors;
− manage our property in the manner prescribed by the Charter and the law;
− nominate candidates for the positions of First Deputy General Directors and members of the Management Board;
− organize and delegate duties within the Management Board, determine the amount of compensation of the members
of the Management Board;
− hire and dismiss employees, including his deputies, the chief accountant, heads of departments, branches and
representative offices;
− ensure the development, conclusion, and execution of the collective bargaining agreement;
− open settlement, currency, and other accounts of the Company in banks, conclude contracts, and make other
transactions on behalf of the Company;
− approve our internal documents, excluding those internal documents the approval of which is within the exclusive
competence of the shareholders' meeting, the Board of Directors, or the Management Board;
− exercise the rights of the Company as shareholder/participant in its subsidiaries; and
− make any other decisions pertaining to the conduct of the Company's business in the ordinary course.
The General Director also chairs meetings of our Management Board.
Revision Committee
The Revision Committee is our financial control body, which can be formed pursuant to the Law on Joint Stock Companies
and is charged with supervising our financial and economic activity. It is elected by, and accountable to, the shareholders and
consists of nine members, none of whom can be members of the Board of Directors or serve in any of our other management
bodies. Each member of the Revision Committee serves until the next annual shareholders' meeting. Pursuant to the Charter,
the Revision Committee must submit annual reports to the Board of Directors at least 40 days prior to the date of each annual
shareholders' meeting. Further, it can be instructed to conduct a special audit by holders of 10% or more of our voting shares,
by the shareholders' resolution passed at a shareholders' meeting, by the Board of Directors, and at its own initiative. In such
case, a report of the Revision Committee must be submitted to the Board of Directors no later than one month after the date
of such instruction. Any decision of the Revision Committee must be approved by a majority of its members.
PJSC TAT
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Corporate Governance Statement
20
The current members of the Revision Committee are:
− Marcel Fagimovich Abdullin, Head of the Workplace Infrastructure Management Center of the General Service
Center of the Business Service Center of Tatneft;
− Ilnur Imamzufarovich Gabidullin, Deputy Director of Tatneft-Ak Bars;
− Liliya Rafaelevna Gaizetdinova, Head of the Economics Department of the Ministry of Land and Property Relations
of the Republic of Tatarstan;
− Guzel Rafisovna Gilfanova, Deputy Head of Control and Revision Department of Tatneft;
− Tatyana Gennadievna Malakhova, Deputy Chief of Corporate Secretary of Tatneft;
− Lilya Rafaelovna Rakhimzyanova, Head of Department of the Ministry of Industry and Trade of the Republic of
Tatarstan;
− Ramil Shavkatovich Khairullin, Deputy Chief Accountant-Head of the Accounting and Reporting Department of
Tatneft;
− Ravil Anasovich Sharifullin, Head of Control and Revision Department of Tatneft;
− Saria Kashibulkhakovna Yusupova*, Deputy Head of Economic Analysis Department of Ministry of Finance of the
Republic of Tatarstan;
*Appointed to the Revision Committee pursuant to the exercise of the Golden Share rights of the Tatarstan Government
Statement regarding TCFD disclosures
This report does not contain climate-related financial disclosures consistent with the TCFD recommendations and
recommended disclosures (the TCFD disclosures). The Company intends to include respective TCFD disclosures in its
integrated annual report for 2022 (the Annual report) to be released for the approval by the Company’s annual shareholders
meeting in the second quarter of 2023. As of the date of this report the information required for the TCFD disclosures is still
being collected and analysed for the purposes of being included in the Annual report.
Corporate Governance Statement
20
The current members of the Revision Committee are:
− Marcel Fagimovich Abdullin, Head of the Workplace Infrastructure Management Center of the General Service
Center of the Business Service Center of Tatneft;
− Ilnur Imamzufarovich Gabidullin, Deputy Director of Tatneft-Ak Bars;
− Liliya Rafaelevna Gaizetdinova, Head of the Economics Department of the Ministry of Land and Property Relations
of the Republic of Tatarstan;
− Guzel Rafisovna Gilfanova, Deputy Head of Control and Revision Department of Tatneft;
− Tatyana Gennadievna Malakhova, Deputy Chief of Corporate Secretary of Tatneft;
− Lilya Rafaelovna Rakhimzyanova, Head of Department of the Ministry of Industry and Trade of the Republic of
Tatarstan;
− Ramil Shavkatovich Khairullin, Deputy Chief Accountant-Head of the Accounting and Reporting Department of
Tatneft;
− Ravil Anasovich Sharifullin, Head of Control and Revision Department of Tatneft;
− Saria Kashibulkhakovna Yusupova*, Deputy Head of Economic Analysis Department of Ministry of Finance of the
Republic of Tatarstan;
*Appointed to the Revision Committee pursuant to the exercise of the Golden Share rights of the Tatarstan Government
Statement regarding TCFD disclosures
This report does not contain climate-related financial disclosures consistent with the TCFD recommendations and
recommended disclosures (the TCFD disclosures). The Company intends to include respective TCFD disclosures in its
integrated annual report for 2022 (the Annual report) to be released for the approval by the Company’s annual shareholders
meeting in the second quarter of 2023. As of the date of this report the information required for the TCFD disclosures is still
being collected and analysed for the purposes of being included in the Annual report.