Annual Report of the Tatneft Company
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LOOKING INTO THE FUTURE ANNUAL REPORT OF THE TATNEFT COMPANY ABOUT OPERATIONS CORPORATE FINANCIAL SOCIAL INDUSTRIAL SAFETY & PJSC TATNEFT, ANNUAL REPORT 2015 THE COMPANY MANAGEMENT RESULTS RESPONSIBILITY ENVIRONMENTAL POLICY CONTENTS ABOUT THE COMPANY 01 Joint Address to Shareholders, Investors and Partners .......................................................................................................... 02 The Company’s Mission ....................................................................................................................................................... 04 Equity Holding Structure of PJSC TATNEFT ........................................................................................................................... 06 Development and Continuity of the Company’s Strategic Initiatives.......................................................................................... 09 Business Model ................................................................................................................................................................... 10 Finanical Position and Strengthening the Assets Structure ...................................................................................................... 12 Major Industrial Factors Affecting the Company’s Activity in 2015 ............................................................................................ 18 Model of Sustainable Development of the Company ............................................................................................................... 20 OPERATIONS 22 Upstream ............................................................................................................................................................................ 24 Downstream........................................................................................................................................................................ 30 PJSC TATNEFT 2015 year-end Annual Report has been prepared on a uniform integrated Petrochemicals ................................................................................................................................................................... 36 Heat & Power Energy ........................................................................................................................................................... 38 basis incorporating the requirements applicable to annual reports of public companies and the corporate accounting standards applicable to sustainable development. The Integrated Annual Report considers the principles of the Corporate Governance Code recommended CORPORATE MANAGEMENT 40 for use by the Letter of Bank of Russia No. 06-52/2463 dated 10 April 2014. Management of the Company ............................................................................................................................................... 42 PJSC TATNEFT’s General Shareholders’ Meeting .................................................................................................................. 44 The Annual Report of the Company on the information disclosure corresponds to the Board of Directors of PJSC TATNEFT .................................................................................................................................... 46 requirements of the following documents: Composition of the PJSC TATNEFT’s Board of Directors ......................................................................................................... 48 Committees of the Board of Directors ................................................................................................................................... 54 − Federal Law No. 208-FZ «On Joint Stock Companies» dated 26 December 1995. Executive Bodies ................................................................................................................................................................. 58 − Federal Law No. 39-FZ «On the Securities Market» dated 22 April 1996. Composition of the PJSC TATNEFT’s Management Board ...................................................................................................... 60 − Regulations of the Central Bank of the Russian Federation No. 454-P «On the Disclosure Corporate Practice .............................................................................................................................................................. 64 of Information by Issuers of Securities» approved 30 December 2014, registered by the Corporate Management Practices Report .............................................................................................................................. 66 Personnel Management ....................................................................................................................................................... 72 Ministry of Justice of the Russian Federation on 12 February 2015. Control Bodies .................................................................................................................................................................... 76 - Letter of Information of Bank of Russia No. IN-06-52/8 «On Disclosure of Report on Integrated Risk Management System .................................................................................................................................... 78 Observance of the Principles and Recommendations of the Corporate Governance Code in Information Disclosure ......................................................................................................................................................... 82 the Annual Report of Public Joint Stock Company» dated 17 February 2016 Awards and Nominations ...................................................................................................................................................... 88 As related to the sustainable development aspects the integrated Company is focused on FINANCIAL RESULTS 90 compliance with the following standards: − Global Reporting Initiative (G4) Guidelines for annual reports on sustainable development; Accounting Statements Prepared in Accordance with Russian Accounting Standards. Auditor’s Opinion ................................................................................................................................................................. 92 − AA 1000 Stakeholder Engagement Standard; Accounting Reports of PJSC TATNEFT, FY 2015 ..................................................................................................................... 94 − ISO 26000 Guidance on Social Responsibility Standard; Essential Aspects of the Accounting Policy and Presentation of − Social Charter of Russian business; the Accounting Statements for 2015 FY ................................................................................................................................. 97 − International Standard of Integrated Reporting (www.theiirc.org/international-ir- Consolidated Financial Statements in Accordance with International Financial Reporting Standards as of and for the Year Ended December 31, 2015. framework/). Independent Auditor’s Report ............................................................................................................................................. 106 Consolidated Statements of Financial Position ..................................................................................................................... 108 The Annual Report of Public Joint Stock Company «TATNEFT» for 2015 has been Consolidated Statements of Profit or Loss and Other Comprehensive Income ........................................................................ 109 preliminarily approved by the Board of Directors of PJSC TATNEFT. Minutes No.13 Consolidated Statements of Changes in Equity .................................................................................................................... 111 dated 25 May 2016. Consolidaed Statements of Cash Flows ............................................................................................................................... 112 Notes to the Consolidated Financial Statements ................................................................................................................... 114 SOCIAL RESPONSIBILITY 164 Social Investment .............................................................................................................................................................. 166 Inofrming on the Activity Related to Sustainable Development and Corporate Social Responsibility .................................................................................................................................... 167 Social Reponsibility of the Company Towards Its Employees ................................................................................................. 168 Social Infrastructure Development ...................................................................................................................................... 174 Charitable Activities ........................................................................................................................................................... 175 Registry of Corporate Social Projects .................................................................................................................................. 176 FORWARD-LOOKING STATEMENTS Interaction with the Stakeholders .......................................................................................................................................