Tatneft Group

IFRS CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT 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

Joint-Stock Company

White Square Office Center,

"Technologies of Trust - Audit"

10 Butyrsky Val, Moscow,

("Technologies of Trust - Audit" JSC)

Russian Federation, 125047

T: +7 (495)

967

6000,

www.tedo.ru

F: +7 (495)

967

6001

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

Key audit matter

How our audit addressed the key audit matter

Impairment of property, plant and equipment

Regarding recoverable amounts calculated by the Group

We focused on this matter due to significance of

based on expected discounted cash flows, we (on a sample

basis, where applicable):

carrying amount of property, plant and equipment,

significance of judgements and estimates applied

• assessed appropriateness of the methodology applied;

in analysis of impairment of these assets, and the

• assessed acceptability of the key assumptions applied

effect of the current geopolitical environment and

(with involvement of our valuation specialists);

economic situation on the recoverable amount of

these assets and predictability of such recoverable

• tested underlying data, including comparing the used

amount.

information about hydrocarbon reserves to the

Information on property, plant and equipment,

assessment made by independent engineering firm;

analysis of impairment of these assets and results

• tested the mathematical accuracy of the calculations; and

of such analysis are disclosed in Note 12 "Property,

Plant and Equipment" to the consolidated financial

• performed a sensitivity analysis of the results of the

statements.

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 performed the following procedures:

We focused on this matter due to complexity of the

• analysis of sale and purchase agreements and other

transaction, significance of judgements and

documents to obtain understanding of terms of individual

estimates applied in accounting for the transaction,

deals and of the transaction on disposal of the tire

and due to complexity of presentation of

business as a whole;

discontinued operations.

• analysis of the Group's conclusions on transfer of control

Information on disposal of the tire business is

over the tire business;

disclosed in Note 4 "Critical accounting estimates

• testing of the fair value of the consideration received,

and judgements in applying accounting policies"

including assessment of appropriateness of the discount

and Note 26 "Discontinued Operations" to the

rate used;

consolidated financial statements.

• 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

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When we read 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", 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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OAO Tatneft published this content on 21 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2023 08:40:03 UTC.