PJSC Tatneft. Annual report 2017
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PJSC Tatneft. Annual report 2017

SCOPE OF THE REPORTING

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The Report of Public Joint Stock Company Tatneft (PJSC Tatneft, the Company) for 2017 includes the results of activities of the Company and its subsidiaries, collectively referred to as Tatneft Group (the Group). The terms "PJSC Tatneft", "Tatneft Group", "the Group", "Tatneft", "the Company," "we" and "our" used in the text of this Report, are considered to be equivalent and belong to Tatneft Group, PJSC Tatneft and/or its subsidiaries depending on the context.

PJSC Tatneft is the parent company of the Group and for this Report provides consolidated information on operating and financial activities in key business units and areas.

The Report is formed on a single integrated basis, combining the requirements applied to  annual reports of public companies, as well as standards and recommendations for the preparation of public corporate reports on sustainable development.

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The Company commenced the reporting on sustainable development in 2005 and published the Corporate Social Responsibility Report for 2004. At the end of 2005, the Report on the Company's Social, Economic, Environmental and Innovation Activities was published. From 2006 to 2013, the Company prepared the Reports on Sustainable Development and Social Responsibility. Since 2014, the Company has been preparing integrated annual reports.

The Company considers an integrated approach to the preparation of the Report as an opportunity to reflect the production, financial, economic, environmental and social results and achievements inter-relatedly, and that only the balance between these aspects can ensure harmonious and effective business development.

Key communication objective of the Report is to form the most complete understanding of the Company's activities as a whole, the reporting results, strategic plans and their implementation potential, and sustainable development factors.

Theme of the Report – "Growth Strategy" –reflects the long-term course chosen by the Company, aimed at increasing the shareholder value and confirmed by the high effectiveness of actions taken to implement the Strategy in the reporting year.

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Communication concept of the Report

  • The content of the Report focuses on the expectations of stakeholders in obtaining information identified in the process of its preparation (identification of significant themes of the Report, as well as opportunities for its improvement).
  • The Report is logically structured with highlighted key messages confirmed by relevant cases. Interactive internal navigation with contextual links and the ability to quickly move through the text increases the efficiency, immediacy and integrity in obtaining and analyzing information.
  • The Company purposefully maintains the continuity of the structure and style of the Report for several reporting cycles for the convenience of stakeholders.
  • The design is based on the uniqueness of stylistic solutions corresponding to the corporate style, it contains adapted info graphics, photo illustrations of the Company's bank.
  • The content reflects the integration of corporate values, business ethics and culture in the Company's activities.

The Report is prepared in two formats:

  • Annual report (PDF version);
  • Integrated report (interactive version) - combines the disclosure requirements of public companies (annual report) and essential elements of ESG, significantly expands the scope of provided information on aspects of sustainable development.

The Report is adapted for mobile devices.

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In comparison with the previous reports, the list and content of aspects and indicators in all areas of activity were significantly expanded due to the elaboration of corporate governance in the field of sustainable development and the increased level of interaction with stakeholders.

The Report presents the results of the Company's activities in a broad context of sustainable development.

The Report is prepared on the basis of the analysis of operating data on the consolidated indicators according to IFRS, including financial position and results of production activities.

The Report takes into account the recommendations of the Corporate Governance Code approved by the Government of the Russian Federation and recommended by the Bank of Russia by letter No. 06-52/2463 dated 10.04.2014.

The Report complies with:

  • Federal Law No. 208-FZ dated 26.12.1995 "On Joint-Stock Companies";
  • Federal Law No. 39-FZ dated 22.04.1996 "On Securities Market";
  • Regulation of the Central Bank of the Russian Federation No. 454-P "On Information Disclosure by Issuers of Issue-Grade Securities", approved on 30.12.2014, registered by the Ministry of Justice of the Russian Federation on 12.02.2015;
  • Information Letter of the Bank of Russia No. IN-06-52/8 dated 17.02.2016 "On Disclosure of the Report on Compliance with Principles and Recommendations of the Corporate Governance Code in the Annual Report of Public Joint-Stock Companies".

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With regard to sustainability development aspects, the Report is prepared in accordance with the GRI (Global Reporting Initiative) Guidelines on Sustainable Development Reporting, version G4 (standard reporting with elements of the extended version of the standard).

PRINCIPLES OF REPORT PREPARATION
Principle Our actions
Interaction with stakeholders The Company makes significant efforts to involve stakeholders in the discussion of issues related to the preparation of the Report, such as the determination of its content, the choice of performance indicators, etc. For this purpose, the Company arranges consultations with representatives of stakeholders, organizes conferences and seminars, conducts surveys. The Company makes significant efforts to involve stakeholders in the discussion of issues related to the preparation of the Report, such as the determination of its content, the choice of performance indicators, etc. For this purpose, the Company arranges consultations with representatives of stakeholders, organizes conferences and seminars, conducts surveys.
Context of sustainable development Information on the Company's performance is presented in the Report in close connection with its contribution to sustainable development. The Report reflects all the significant issues, indicators and initiatives in the field of preservation of economic sustainability, increase of environmental security and strengthening of social stability in the society.
Significance We aim to include in the Report only those aspects, issues and indicators that are relevant to stakeholders and can influence their decisions. When determining the significance of the issues, the Company takes into account such factors as goals and objectives, risks and opportunities, industry problems, and other factors.
Completeness The Company is committed to the most complete disclosure of information in the economic, environmental and social spheres. The set of issues reflected in the Report is sufficient for users of the Report to assess the performance of the Company as a whole and its contribution to the sustainable development of the society.
Balance According to the principle of balance, the Report reflects both the Company's positive performance and the challenges. The degree of attention given to different issues is proportional to their relative importance.
Comparability The Report ensures comparability of performance from year to year. An explanation is provided for each significant change in the scope or reporting period. To ensure comparison of the Company's performance with the performance of other companies, indicators included in the GRI guidelines and technical protocols are used in the Report.
Accuracy We strive to ensure that the information provided in the Report is accurate and sufficiently detailed and stakeholders can use it to make decisions with a high degree of confidence. Extent of error of quantitative data is minimized. Ratios and specific values used in the Report are supplemented by corresponding absolute values. The data are presented using common international units and calculated using standard coefficients.
Timeliness The Company understands the need to provide timely information in the Report, so the Report is published with the same frequency once a year in advance of the Annual General Meeting of Shareholders.
Clarity We make efforts to ensure that the information presented in the Report is clear, understandable and useful to various stakeholders. The Report contains a list of abbreviations explaining scientific and technical terms and abbreviations.
Reliability The data in the Report are based on internal documentation that can be evaluated by independent parties. Information that cannot be documented is not included in the Report.
Response The Company aims to provide the most efficient interaction with stakeholders through coherent responding and taking appropriate measures in response to queries and comments from stakeholders. For this purpose, the Company forms appropriate quantitative and qualitative indicators for assessing interaction with stakeholders on the basis of the principles of such interaction, the Company's policy in this area and made commitments, with the allocation of adequate resources and timely informing stakeholders in an intelligible form.

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In order to ensure a balanced approach to identifying significant themes and defining the scope of the Report, balanced approaches to the preparation of the Report as a whole, as well as to the improvement of the Report, the Company interacts with stakeholders and forms a Public Council of representatives of stakeholders, which are competent and independent of the Company and use systematic, documented and evidence-based approaches, in order to assess the overall approach of the Company to the preparation of reports on sustainable development.

The Report reflects the principles and approaches of the Company, the Corporate Social Responsibility Policy, main areas and effectiveness of economic activity, industrial safety, rational use of natural resources, balanced support and development of personnel, and promotion of socio-economic development of the regions of activity.

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When preparing the Report and the corresponding indicators, the Company took into account:

  • Provisions of the UN Global Compact;
  • OECD guidelines;
  • Provisions of the Social Charter of Russian Business;
  • International Integrated Reporting Framework  (www.theiirc.org/international-ir-framework/);
  • AA 1000 Stakeholder Engagement Standard (SES);
  • AA 1000 Accountability Principles Standard (APS);
  • ISO 26000 Standard: 2010 "Guidelines on Social Responsibility";
  • Research of industry practice of sustainable development management and reporting in this area;
  • Analysis of aspects of interaction with Company's stakeholders and possible improvements.

In order to ensure the reliability of the information, the Annual Report was agreed with the responsible services and verified by an independent auditor of PWС. The Annual Report of Public Joint-Stock Company Tatneft for 2017 was previously approved by the Board of Directors of PJSC Tatneft, Minutes No. 5-z dated May 21, 2018. The reliability of the data presented in the Annual Report was confirmed by the Audit Commission. The Annual Report was approved by the Annual General Meeting of Shareholders of PJSC Tatneft, held on June 22, 2018, Minutes No. 26.

IDENTIFICATION OF SIGNIFICANT THEMES OF THE REPORT

The Company considers it essential to regularly provide stakeholders with comprehensive information on all significant aspects of the Company's activities, including financial, production, social, environmental aspects, labor relations, personnel and innovation potential, and to receive feedback on the Company's activities and the Report.

When defining the themes of the Report, the Company analyzes their relevance on the basis of constant monitoring of scale and nature of the impact of Company's activities on the economy, industry, social and natural environment, as well as requests from stakeholders, and determines the significance of the Report from the point of view of business obligations, including fixed in the Russian and international documents, as well as social significance.

MATRIX OF SIGNIFICANCE OF ASPECTS REFLECTED IN THE REPORT

STRATEGY AND ANALYSIS
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ORGANIZATIONAL PROFILE
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G4-14G4-15G4-16        
MATERIAL ASPECTS AND BOUNDARIES
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STAKEHOLDER ENGAGEMENT
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GENERAL INFORMATION ON THE REPORT
G4-28G4-29G4-30G4-31G4-32G4-33     
GOVERNANCE
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ETHICS AND INTEGRITY
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DISCLOSURES ON MANAGEMENT APPROACH
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INDICATORS BY ASPECTS

CATEGORY "ECONOMICS"
Economic performanceOECD
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Market presence
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Indirect economic impacts
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Procurement practices
G4-EC9          
CATEGORY: ENVIRONMENTAL OECD/UNGC
Materials
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Energy
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Water
G4-EN8G4-EN9G4-EN10        
Biodiversity
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Emissions
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Effluents and Waste
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Products and Services
G4-EN27G4-EN28         
Compliance
G4-EN29          
Transport
G4-EN30          
General information
G4-EN31          
Supplier Environmental Assessment
G4-EN32G4-EN33         
Environmental Grievance Mechanisms
G4-EN34          
CATEGORY "SOCIAL"
LABOR PRACTICES AND DECENT WORKOECD/UNGC
Employment
G4-LA1G4-LA2G4-LA3        
Labor/Management Relations UNGC
G4-LA4          
Occupational Health and Safety OECD
G4-LA5G4-LA6G4-LA7G4-LA8       
Training and Education OECD
G4-LA9G4-LA10G4-LA11        
Diversity and Equal Opportunity
G4-LA12          
Equal Remuneration for Women and Men
G4-LA13          
Supplier Assessment for Labor Practices
G4-LA14G4-LA15         
Labor Practices Grievance Mechanisms OECD
G4-LA16          
HUMAN RIGHTS OECD/UNGC
Investment
G4-HR1G4-HR2         
Non-discrimination OECD/UNGC
G4-HR3          
Freedom of association and collective bargaining OECD/UNGC
G4-HR4          
Child Labor OECD/UNGC
G4-HR5          
Forced or Compulsory Labor OECD/UNGC
G4-HR6          
Security Practices
G4-HR7          
Indigenous Rights
G4-HR8          
Assessment
G4-HR9          
Supplier Human Rights Assessment
G4-HR10G4-HR11         
Human Rights Grievance Mechanisms
G4-HR12          
SOCIETY
Local CommunitiesOECD/UNGC
G4-SO1G4-SO2         
Anti-corruption OECD/UNGC
G4-SO3G4-SO4G4-SO5        
Public Policy OECD/UNGC
G4-SO6          
Anti-competitive Behavior OECD
G4-SO7          
Compliance OECD
G4-SO8          
Supplier Assessment for Impacts on Society OECD
G4-SO9G4-SO10         
Grievance Mechanisms for Impacts on Society OECD
G4-SO11          
LIABILITY FOR PRODUCTS OECD
Customer Health and Safety OECD
G4-PR1G4-PR2         
Product and Service Labeling
G4-PR3G4-PR4G4-PR5        
Marketing Communications
G4-PR6G4-PR7         
Customer Privacy
G4-PR8          
Compliance
G4-PR9          
    General Standard Disclosures
    Required General Standard Disclosures for both “in accordance” criteria options
    Specific Standard Disclosures
OECD Linkage to OECD Guidelines for Multinational Enterprises
UNGC Linkage to UN Global Compact “Ten Principles”

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The preparation of the integrated Report includes the creation of a special Working Group (it consists of responsible managers and specialists of the Company), the formation of internal administrative documents on the preparation and analysis of information for the Report, and the interaction with stakeholders. The Office of the Corporate Secretary of PJSC Tatneft is involved in coordinating the preparation of the Report and providing feedback on the Report from shareholders, investors and other stakeholders.

When determining significant themes for this Report, the Company used the following basic methods:

  • analysis of the Company's interaction with shareholders, investors, federal and regional authorities, business partners, non-profit and public organizations, experts, local communities (including meetings, round tables, public hearings, etc.);
  • interview of managers and specialists of the Company on the significant themes for stakeholders, including managers of main structural units and subsidiaries of the Company;
  • analysis of topical themes and problems arising in the Company's activities, including the supply;
  • analysis of the interaction with stakeholders in the regions of the Company's presence in Russia;
  • analysis of the results of feedback from employees, including materials of meetings of labor collectives, meetings of managers with employees, including subsidiaries;
  • analysis of issues raised during public speeches and presentations of the Company's managers and specialists in Russia and abroad;
  • analysis of the interaction with the mass media, analysis of publications about the Company in reputable Russian and foreign industry and socio-political periodicals (including online media) and issues received from the media;
  • analysis of annual reports and reports on sustainable development of Russian and foreign industrial companies, comparable in their scope of activity with Tatneft, as well as the best practices of corporate reporting;
  • analysis of events of the reporting period that are significant for the industry;
  • analysis of the Company's hotline.

The identified themes are relevant for all subsidiaries of the Company.

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Reformulations of indicators and/or their adjustments previously disclosed by the Company are not used in this Report.

FORWARD-LOOKING STATEMENTS

In addition to the actual data for the past period, the Report contains medium- and long-term plans and/or forward-looking statements regarding future economic and financial performance, the Company's goals and objectives regarding development plans, including those related to products and services. Forward-looking statements may include information on predicted or expected income, profit (loss), net profit (loss) in respect of shares, dividends, capital structure and other financial matters. Such statements are forward-looking and accompanied by the words "expected", "supposed", "planned", "intended", etc. The forward-looking statements involve risks and uncertainties, both general and specific. The feasibility of the stated intentions depends, among other things, on (economic, social, legal) factors outside the Company's influence. There is a risk that future actual results may differ materially from the plans, objectives, expectations, estimates and intentions expressed in such statements or may not be realized due to a number of different factors.

Note

The text of the Report may contain errors in the calculation of shares, percentages, amounts when rounding the calculated figures. The data presented in this Report may differ slightly from the previously published data due to the difference in rounded figures.