Tatneft : Integrated (GRI/TCFD) Report 2023

ENERGY OF LIFE

Integrated annual report 2023

CONTENT

About the report

Material topics

ABOUT THE COMPANY

Mission & Vision Cultural Code Company's Values TATNEFT - main

Sustainable development ratings & rankings Key Indicators

Our global reach Business model

STRATEGIC REPORT

Address of the Board of Directors' Chairman Address of the General Director Sustainable Development Strategy Integration of the Sustainable Development Goals Navigator of the Sustainable Development Goals Investment Policy

Innovations Activity Supply Chain Product Quality

Interaction with the Government Macroeconomy

CORPORATE GOVERNANCE

Corporate governance system

Structure of governance and overseeing bodies General meeting of shareholders

Board of directors

Committees of the board of directors Executive bodies

Motivation system for the members of the governance bodies

Shareholders' capital Dividend policy Shareholders' rights protection

Risks and control

Management System

Risk management culture

Internal control

Internal Audit

External Audit

Revision commission

Business ethics

Management system

Insider Information Protection

Information Policy

Conflict of interests

4	Anti-Corruption Policy	142
8	Antimonopoly Policy	144
	Cybersecurity Policy	144
	Information system	146

16

18 SUSTAINABLE DEVELOPMENT

20	Sustainable Development Management	151
21
Human rights	154
22
24	Personnel	156
26	Production safety	176
28	Environment	188
	The Company's Position on Climate Change	190
	Environmental Management System	192
32	Contribution to the environment protection	199
32	Air emissions	204
33	Water consumption	214
38	Waste management	222
40
Biodiversity conservation	226
54
Resource efficiency	232
58
66

76 PROMOTION OF SOCIAL DEVELOPMENT

81	Management Approach	242
84
Social Infrastructure Development	245
	Charitable Foundation	250
94	Educational Ecosystem	254
Preservation of Cultural and Historical Heritage	264
97
Interaction with Local Indigenous People
98
Living a Traditional Lifestyle	267
99
Healthy Lifestyle	268
106
112	Support for development initiatives	272
113	Public assurance of the report	274
118	Independent auditor's limited assurance report	275
121
122	Forward-looking statements	279
126

126 Attachments

129	Annex 1. Report on compliance with the Corporate Governance
131	Code principles and recommendations	282
132	Annex 2. Key risks	306
132	Internal documents of the company	316
133
Index GRI	317
134
Index SASB	329
134
Index TCFD	337
136
138	List of Abbreviations	338
140	Contact information	340

designed by VisualMethod studio

4

ABOUT THE REPORT

Integrated annual report 2023	5

GRI 2-2,2-3,2-5,2-14

Integrated annual report of PJSC TATNEFT n.a. V.D. Shashin for 2023 (hereinafter referred

The Company believes that independent verification of the disclosed information, as well as the public

STANDARDS

In preparing this Report, we apply the following standards and guidelines:

to as the Report) contains the main priorities, goals, objectives, key indicators and significant events, actions and plans of the Company in the field

of sustainable development, corporate, social and environmental responsibility.

The report, which includes indicators characterizing sustainable development and responsible behavior, has been issued by the Company annually since 2005. This Report was generated for the period from January 1 to December 31, 2023, and includes information

on the TATNEFT Group as a whole. The Report also includes data on significant events after the reporting period. The financial reporting period is an annual period that coincides with the Report period. The previous Report was disclosed on June 30, 2023. The 2023 Integrated Annual Report of PJSC TATNEFT n.a. V.D. Shashin was preliminarily reviewed by the Board of Directors (Minutes 4-z dated 15.05.2024).

The Report is addressed to a wide range

of stakeholders: shareholders and investors, representatives of state authorities, local self- government authorities, workers, partners and clients, public and environmental organizations, scientific and educational institutions, and the local population.

The key communication objective of the Report is the formation among stakeholders of the most complete understanding of the Company's activities, strategic plans, and the potential for their implementation, the results achieved, as well as the measures to improve the business efficiency, taking into account the aspects of sustainable development.

The Company has various channels for providing feedback. Suggestions on the Report are accepted via telephone and e-mail specified in the Contacts section. All messages are considered and taken into account when preparing the Report for the next period of activity. To avoid duplication of information, this Report provides links to other publicly available documents. Abbreviations and definitions of the concepts used are presented in the List

of Abbreviations.

assurance of the Report, are the important conditions for the Report preparation. The selected quantitative and qualitative information of the Report has

been verified by the independent auditor and the corresponding report of the auditing firm is presented on page 275-278. The conclusion on passing the Report public assurance with the RUIE Nonfinancial Reporting Council is published on p. 274 of this Report.

SCOPE

The Report contains the results of the activities of PJSC TATNEFT n.a. V.D. Shashin and the organizations included in the TATNEFT Group. The TATNEFT Group is formed in accordance with International Financial Reporting Standards (IFRS). The financial indicators are disclosed based on the consolidated financial statements of the TATNEFT Group under IFRS for 2023, which were audited by JSC Technologies of Trust - Audit

in accordance with international auditing standards.

According to the Report text, the names and words "TATNEFT," "TATNEFT Group," "Company," "Group," and the pronoun "we" shall mean the aggregate of legal entities, including Public Joint Stock Company TATNEFT named after V.D. Shashin and the organizations controlled by it with direct and indirect participation

in their authorized capital, forming the TATNEFT Group.

The name and words "PJSC TATNEFT n.a. V.D. Shashin," "PJSC TATNEFT," "Company" in the Report text shall mean PJSC TATNEFT n.a. V.D. Shashin as a separate legal entity.

• UN Global Compact Principles
• UN General Assembly Resolution "Transforming our world: 2030 Agenda for Sustainable Development No. 70/1 dated 25.09.2015
• GRI 2021 standards, industry standard GRI 11: Oil and Gas Sector 2021
• SASB Industry Standards (version 2023-06) for the mining and processing sector (Oil & Gas - Exploration & Production, Oil & Gas - Refining & Marketing)
• Recommendations of the Task Force on Climate- Related Financial Disclosures, TCFD
• Code of Corporate Governance recommended by Bank of Russia Letter No. 06-52/2463 dated
  10.04.2014

• Regulation on Disclosing Information by Issuers of Issue-Grade Securities approved by Bank of Russia Order No. 714-P dated 27.03.2020
• Bank of Russia Letter No. IN-06-28/102
  "On Disclosure of Information on Compliance with Corporate Governance Code Principles and Recommendations in Annual Reports of Public Joint Stock Companies" dated 27.12.2021

6

In preparing this Report, we are also guided by the following:

Integrated annual report 2023	7

PRINCIPLE

↗ Greenhouse Gas Protocol

↗ IPIECA Guidelines for Voluntary Reporting

on Sustainable Development in Oil and Gas Sector

↗ International Integrated Reporting Framework

↗ ISO 26000 Guidance on Social Responsibility

↗ AA 1000 standards developed by the International

Institute for Social and Ethical Reporting (Account

Ability)

↗ Bank of Russia Information Letter No. IN-06-28/49

"On Recommendations for Disclosure by Public

Joint Stock Companies of Nonfinancial Information

Related Their Activities" dated 12.07.2021

The Report contains forward-looking statements regarding indicators characterizing the further development of the Company. The implementation

of plans and intentions is connected with the changing political, economic, social, and legal situation in the Russian Federation and the world. Due to this, the actual results of operations may differ from those forecasted. For more information on forward-looking statements, please refer to the Important Statements section.

Sustainable Development Context

When preparing the Report, the Company considers the results of its activities in the context of sustainable development. The Report outlines all significant issues, indicators, and initiatives in the field of preserving economic sustainability, improving environmental safety, and strengthening social stability in society.

It also examines and analyzes aspects of human rights observance, ensuring cybersecurity and the level

of combating and preventing corruption.

↗ Order on Approval of Methodological

Recommendations for the Preparation of Reporting

on Sustainable Development No. 764 of the

Ministry of Economic Development of Russia dated

01.11.2023

↗ Recommendations of the Russian Union

of Industrialists and Entrepreneurs (RUIE)

on maintaining and promoting the sustainable

development agenda in modern Russian practice

↗ Baseline performance indicators. Recommendations

for use in the RUIE management practice and

in corporate non-financial reporting

Accuracy

The Company is committed to ensuring that the information provided in the Report is accurate and detailed enough so that stakeholders can use

it to make decisions with a high degree of confidence. The acceptable level of error in the data is minimized. Data are presented using the generally accepted international units and calculated using standard coefficients.

Balance

As part of observing the principle of balance, the Report reflects both favorable operating results and the problems the Company faces. The degree of attention to various issues is proportional to their relative materiality.

Clarity

The Company makes every effort to ensure that the information presented in the Report is clear, understandable, and useful for various stakeholders. The Report contains a list of abbreviations explaining the industry, scientific, and technical special terms and abbreviations.

Comparability

The Report ensures the comparability of the results of the Company's activities over the past periods.

To ensure a comparison of the Company's performance with the results of other companies, when preparing the Report, the indicators included in the GRI and SASB guidelines and technical protocols were used.

Completeness

The Company is strongly committed to providing the fullest possible disclosure on the economic, environmental and social aspects of its operations. The set of issues reflected in the Report is sufficient for the users of the Report to assess the performance of the Company as a whole and its contribution to the sustainable development of society.

Timeliness

The Company understands the need for timely submission of information, therefore, the publication of the Report is carried out annually, within the time limits established by current legislation for the publication of annual reports.

Verifiability

The reliability of the data in the Report is confirmed by the Revision Commission. The Audit Committee evaluates approaches to disclosing information regarding the Company. The Board of Directors preliminarily reviews the Report and submits it for approval to the General Meeting of Shareholders. An important requirement is the independent verification of the selected information and the public assurance of the Report.

8

MATERIAL TOPICS

Integrated annual report 2023	9

GRI 2-14,2-29,3-1,3-2

We strive to present information in a balanced manner in accordance with the interests of each group.

The Company uses various forms and mechanisms

of interaction with stakeholders to achieve sustainable development goals effectively. The procedure for interaction with key stakeholders is defined in the corporate standards.

To determine the material topics of the report, the Company analyzes and takes into account the aspects that affect the interests of the Company itself and its stakeholders as well as the aspects that affect the industry, social, environmental, and corporate factors in the reporting period.

The Company uses a reasonable approach to select the topics of the Report content. This approach is based on interaction with various stakeholder groups and their representatives, which allows for identifying the relevance of the topics concerning the Company's activities and taking into account their opinions and recommendations for analyzing opportunities to improve the effectiveness of socially oriented programs and investments in sustainable development. In the course of preparing the Report, the recommendations of GRI and SASB standards were analyzed, interviews were conducted with managers and specialists of the Company, group and individual meetings.

and social impact on the environment beyond its own financial prospects. Taking into consideration that the financial materiality of individual business areas of the Company may be insignificant within the entire TATNEFT Group, and the materiality criterion for the Group

may exceed the cost of an individual business area,

to ensure the principle of comparability we proceed from the position that the material topics of both standards have priority assessed by the degree of influence

on stakeholders.

34 potentially material topics were identified, which were considered by the Company's Management Board for Sustainable Development, stakeholders were identified in accordance with the GRI recommendations followed by the assessment of each topic's impact

on stakeholders according to four criteria. A survey of eight groups of stakeholders and experts was conducted. The scores for all criteria were summed up. Based on the obtained data array, a frequency diagram (histogram) was made in accordance with the Gaussian normal distribution function. Topics with a score

of 742 or more points became the threshold for inclusion in the list of material ones.

Stakeholders:
↗ shareholders and investors	↗ counterparties
↗ workers and trade unions	↗ clients
↗ population and local communities	↗ educational institutions
↗ new generations (preschoolers and students)	↗ external organizations (NPOs, sports organizations)

Material Topics

742

SASB standards focus on issues that affect how

a business creates and maintains enterprise value, i.e. focused on "financial materiality". At the same time, the GRI standard goes beyond SASB's focus on issues that may affect the value of an enterprise by assessing "impact materiality" or the economic, environmental

The assessment of material topics identified 21 topics that met the materiality criteria. Industry standards SASB and GRI provide lists of potentially material topics. It was revealed during the analysis that stakeholders did not recognize some of the topics of the standard as material note: highlighted in grey in the table). The Company believes that these topics are regulated

in detail by national legislation and do not need additional regulation by internal standards. Therewith, approaches to these topics are partially disclosed in this Report.

Compared to the list of material topics in the report of the previous period, there were the following changes:

not considered to be material:

• Anti-corruption

recognized as significant:

↗ Infrastructural transformations

↗ Resource efficiency

Ethics and good faith

PROCEDURE FOR

DETERMINING MATERIAL Identification and approval of stakeholders

TOPICS

Survey of stakeholders and experts

Analysis and assessment of materiality

Identification of material topics required to be disclosed in the Report

↗

ognized as material by expert decision:

• Estimation of reserves and capital expenditures

10

Material topics	GRI O&G 11 SASB E&P SASB R&M add. topics

GHG Emissions

Adaptation to climate changes, resilience and transition

Air emissions. Ambient air protection

Biodiversity and land conservation

Waste management

Water and wastewater. Water protection

Closure and rehabilitation of production facilities

Critical incident management

Industrial Safety and Labor Protection

Employment practice

Non-discrimination and equal opportunity

Forced labor and modern slavery

Freedom of association and collective bargaining agreements

Economic consequences

Local communities

Land and resource rights

Rights of indigenous peoples

Conflicts and security

Anticompetitive behavior

Anti-corruption

Payments to governments

State policy

Estimation of reserves and capital expenditures

Education, professional development

Infrastructural transformations

Integrated annual report 2023	11

Material topics	GRI O&G 11 SASB E&P SASB R&M add. topics

Cultural and social projects

Medical and healthcare services

Charity

Innovations

Youth policy

Resource efficiency

Digitalization and cybersecurity

Ethics and good faith

Security in foreign assets

- topic is provided for by the standard and selected as essential

- topic is provided for by the standard and is not selected as essential

- the topic is not provided for by the standard

ABOUT

THE COMPANY

Mission & Vision	16
Cultural Code	18
Company's Values	20
TATNEFT - main	21
Sustainable Development Raitings & Rangings	22
Key Indicators	24
Our Geography	26
Business Model	28

14

ABOUT THE COMPANY

Integrated annual report 2023	15

DISCOVERIES'

ENERGY

GRI 2-1,2-6

TATNEFT Group is one of the largest vertically integrated oil companies in Russia in terms of oil production, proved oil reserves and refining capacity with 80 years of experience. The core operations are the exploration, development, production, refining and marketing of crude oil and petroleum products. The Company is also engaged in the following activities:

• gas production and refining
• manufacture and sale of tire products and petrochemicals
• manufacture of industrial equipment
• providing of engineering design services
• supply of electric and thermal energy
• production of composite materials
• development of biological technologies
• industrial waste treatment

The Company's key production assets are located

in the Russian Federation with the main concentration in the Republic of Tatarstan. Business projects are implemented in both domestic and foreign markets. The business infrastructure is formed by the geographical proximity of production facilities and efficient logistics.

The Company has been operating in the status of a public joint stock company listed on the international stock market for almost 30 years. The global reach of shareholders spans more than 30 countries.

PJSC TATNEFT named after V.D. Shashin was established in accordance with the President of the Republic of Tatarstan Decree No. UP-466

"On Measures for Transformation of State Enterprises, Organizations, and Associations into Joint Stock Companies" dated 26.09.1992, and the Republic

of Tatarstan Law No. 1403-XII "On Transformation of State and Communal Property in the Republic

of Tatarstan (on Denationalization and Privatization)" dated 05.02.1992. The Company is headquartered in Almetyevsk, the Republic of Tatarstan, the Russian Federation. The Company has representation offices in Moscow, Kazan, the Republic of Iraq, the Republic of Kazakhstan, the Republic of Uzbekistan, as well as branches in Libya and Turkmenistan.

The Company does not have a major controlling shareholder. The Government of the Republic

of Tatarstan controls 34% of the authorized capital. The Company has a special right - a "golden share" - that allows the Government of the Republic

of Tatarstan to appoint one representative to the Board of Directors and one representative to the Revision Commission of the Company as well as to veto resolutions of the General Meeting of Shareholders as specified by legislation.

The main industry peers are all Russian oil majors, including Rosneft, PJSC LUKOIL, PJSC Surgutneftegas, PJSC Gazprom Neft, and PJSC ANK Bashneft as well as international oil companies. The Company competes with oil companies for the right to supply crude oil and petroleum products, as well as technologies, equipment, and engineering services.

THE FUTURE WE CREATE TODAY BASED ON COMMON VALUE ORIENTATIONS AND OUR CULTURAL CODE

EXPERIENCE

OF THE PAST

It is a foundation, basis, and formations.

ENERGY

OF THE PRESENT

It is a life and energy.

SUSTAINABILITY

OF THE FUTURE

It is a symbol of our energy's infinity.

16

MISSION

Integrated annual report 2023	17

VISION

TATNEFT Group meets the energy needs of people, actively develops and improves the quality of life in the regions of its presence, introduces innovative ideas, improves its energy efficiency and is committed to achieving carbon neutrality.

Changes in the external environment and the desire to continuously increase efficiency and improve the business caused TATNEFT Group to revise its Mission and Vision. In September 2023, the Board of Directors of PJSC TATNEFT approved the new wording. The updated meanings embedded in the Mission and Vision reflect the Company's desire for a sustainable future and effective solutions.

The Vision is a connecting element between the Mission and the Strategy of the Company, which conveys the essence of strategic plans, as well as the values and meanings of the mission. The 2030 Strategy of TATNEFT Group seeks to increase the Company's flexibility in relation to external changes and transformation of business processes.

To be a sustainable, high-yielding company, responsibly and efficiently produce energy and promising products, by developing the existing and creating

new businesses based on innovation and low-carbon solutions, with care for people, nature and the common future

Together we create the energy of life and new solutions for the sustainable future

TOGETHER		The mission can be realized only together. Together with like-minded people: employees, clients, partners,
		and shareholders. Together with those who are ready to work hard with us, create a sustainable future for next
		generations, be a leader and part of our culture.

WHAT DO WE WANT TO BE?

TO BE A SUSTAINABLE HIGH-YIELDING COMPANY

WHAT WILL WE DO FOR THIS?

We are building a sustainable company of the future. A constantly developing company, successful in the energy-of-the-future and other markets. "Sustainable" means a thriving, growing business on an endless horizon, giving due regard for the interests of society, the native land and nature. We see the Group's income as a source for sustainable development, creating new benefits for employees, regions of operation and society as a whole.

We believe that energy is a basic element of life, well-being and progress of society.

WE CREATE THE ENERGY OF LIFE

AND NEW

SOLUTIONS

FOR A SUSTAINABLE

FUTURE

We want people's lives to be active, filled with energy, conscious, healthy and constantly improving. We create energy, solutions, a wide range of products and social benefits for life, for movement (activity), for creativeness and happiness.

The Company possesses and increases its innovative potential, does its best to be a leader in creating the best, progressive, technological and breakthrough solutions and products, continuously improves and develops R&D, encouraging the initiative and bold ideas of its employees.

The sustainable Company creates the sustainable future. We create conditions in which a person gets a feeling of happiness, understands their value, consumes resources consciously, has room

for self-realization and development. The Company creates a future in which there are no threats to descendants and the prospects of the planet.

RESPONSIBLY AND EFFICIENTLY PRODUCE ENERGY AND ADVANCED PRODUCTS

HOW WILL WE ACHIEVE THIS?

BY DEVELOPING THE EXISTING AND CREATING NEW BUSINESSES

ON THE BASIS OF INNOVATION

AND LOW-CARBON SOLUTIONS

WITH CARE FOR PEOPLE, NATURE AND THE COMMON FUTURE

Traditional energy will be in demand in the world for a long while. However, we are aware of and support the worldwide transformation of the energy market and the movement towards a low-carbon future. Our task is to do our job responsibly and efficiently by offering the best products, services and solution.

We not only develop and improve the current business lines, but also launch new points of growth, including non-fuel businesses based on synergies, market potential,

and exploring the trends of the future.

We pay great attention to the adaptability to streamlined manufacture and innovation, develop low-carbon technology and solutions. We create a culture of innovative thinking, ambition and creativeness.

People are the backbone of the Company and society. We trust the bold ideas and professionalism of our employees. Nature is the basis of this world. We develop the Company by maintaining a balance of public interests and a responsible attitude to nature.

ENERGY AND SOLUTIONS	RATIONALITY, AWARENESS
↗ energy in different forms	↗ conscious production and consumption
↗ set of products, services and social benefits	without harm to the future
for life and development

Focusing on the achievement of the strategic goals, TATNEFT Group transforms approaches to energy production and consumption and its products and solutions:

BEST PRODUCTS

• high quality
• best consumer properties

CREATION OF NOVELTY AND INNOVATION

GROWTH OF QUALITY OF LIFE

• habitat improvement
• creation of opportunities
  for comprehensive personal development

CLEAN FUTURE

↗ preservation of environment,

• produces and converts hydrocarbons into energy and value-added products in the most efficient way with a minimum carbon footprint
• develops non-fuel and low-carbon businesses and solutions that create synergies with the current portfolio and open up new opportunities
• consumes energy, resources and products consciously and rationally

• makes efforts to be the leader in terms of costs along the entire production chain, in innovative ideas and timely efforts to implement these, in the creation of quality products and new solutions for clients and society, in the application of technology to achieve carbon neutrality
• values the professionalism, creativity and efforts of employees and partners, creates conditions for the human capital development

Culture of creativeness:

• innovations, progressive ideas, adaptability to streamlined manufacture, new solutions
• hard work and perseverance

nature and climate

↗ no threats to the future

The Company puts these ideas in each unit of energy produced, in each product and solution, in each action, in order to become better itself and to lead others by its example.

18

CULTURE

CODE

People tend to unite to effectively resist external	The Culture Code of the Company, as the core of the
conditions. The most stable and successful	corporate culture, includes:
associations of people are formed around their values,	↗ basic values, ideas, ideals, ethical meanings shared
which are proclaimed by the leader and shared by all
participants.	by all Company employees, regardless of their
nationality, culture, age and gender

Integrated annual report 2023	19

Functions of the Corporate Culture Code
Group	Orientation	Behavior

Each company goes through the formation of values, mission and vision, defining its uniqueness. The Republic of Tatarstan, where the Company primarily operates, is represented by numerous peoples who live peacefully respecting each other. The industrial history of the region includes dozens of construction and far-reaching projects of a country scale, where TATNEFT marked every decade of the 20th century with significant events, records and victories. All this has left a mark on the character of our people -

we show leadership and are a tight-knit team focused on new victories. The Company has expressed the basis of its identity and uniqueness in the corporate Culture Code.

The Culture Code is something that unites and brings together people of different gender, age, education and experience, directs their joint activities to achieve a common goal, promotes their productive communication and mutual understanding.

• corporate values developed in the course of the Company operations, embedded in its Mission and Vision, in the personnel communication system, in the standards and rules of corporate conduct
• national values and spiritual traditions, respect for roots, moral guidelines formed under the influence of cultural heritage

The Mission and Vision are based on the principles

of sustainable development of the Company with the minimization of damage caused by its activities to the environment and improving the well-being of people. Focus on sustainable development is indicative of the Company maturity, its conscientious attitude to business.

The symbiosis of mission, vision, corporate values and national traditional values is embedded in the formula of the Culture Code of the Company:

and organizational									and adaptation	coordination
identification

Integration	Communication	Building
of brand awareness

The Corporate Culture Code integration

Mission

Vision

Culture Code

Values

Strategy

THE COMPANY	The Company	Sustainable	National
Mission	Development	Traditional
CULTURE CODE	and Vision	Goals	Values

The Culture Code is the key to understanding, filling of our Mission, Vision and Values with meanings and interpretations, which ensures the interconnection, binds them into a single DNA and enhances the motivation to achieve strategic goals.

Strategic directions for the implementation of the Culture Code

Marketing strategy	HR strategy	PR strategy	Brand management
Recognition	Hiring	Slogan	Positive perception
Emotional connection	Training	Promotion	Uniqueness
Trust	Briefing	Advertising	Recognition
Loyalty	Involvement	Identity	Attractiveness
	Support
	Motivation

Business plan

KPIs

Motivation

By identifying and disclosing the Culture Code of TATNEFT Group, we help our employees to feel

the significance and value of their work, as well as preserve and pass on the unique history, culture and values of the Company to future generations.