GENERATING RECORDS 2014 ANNUAL REPORT

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3 GENERATING RECORDS 2014 ANNUAL REPORT

4 2 Strategy and Outlook page 26 ALEXANDER LOKSHIN Chairman of the Board of Directors, Rosenergoatom Concern OJSC, First Deputy General Director for Operations Management, Rosatom State Corporation «The priority development objectives of the Concern are safe, efficient, and reliable operation of the operating NPPs, increase of the nuclear generation share in the power balance of Russia, implementation of innovative projects, entry into the international market, and increase of efficiency» NPP power units under construction floating power unit under construction bln KWh production plan for the year 2015 Key Performance Results page years bln KWh additional power generation due to VVER-type power units capacity increase with no events above Level 1 according to the INES scale 11 NPP installed capacity share in total capacity of Russia s UES NPP electricity production share in total production of Russia s UES Power generation compared to the FTS balance VVER-type power units operate at increased capacity 10.9% 17.6% 107.3%

5 3 Corporate Governance page bln rubles economic impact of the competitive procurement procedures MAIN PRINCIPLES OF CORPORATE MANAGEMENT safeguard of funds provided all stockholders when they exercise their right to take part in management. 4 general meetings of shareholders held in meetings of the Board o f Directors 546 mln rubles remuneration of the key managerial personnel of stakeholders. associated with Concern's activity. Interaction with Stakeholders page 150 Sosnovy Bor 6regions taking part in the Atom-Class project town of Kurchatov Novovoronezh Zarechny settlement of Novy Eroglyk Volgodonsk 16 8,000 5, Public discussions held in the Concern presence regions public discussions participants Persons visit the Community Information Centers of NPPs yearly project recognized the winner of the socially competition

6 4 Contents Key Performance Results Business Model Calendar of Key Events Business Geography Address by Board of Directors Chairman Address by General Director Concern s Awards Public Reporting Awards OVERVIEW 1.1. General Information History Corporate Structure STRATEGY AND OUTLOOK 2.1. Mission Business Model Strategic Goals and Initiatives Material Aspects of Performance

7 5 345 KEY PERFORMANCE RESULTS 3.1. Situation in Electric Power Industry Production Capital. Generating Capacities Ensuring Safety of Russian NPPs. Radiation Impact on Personnel and Citizens Natural Capital. Environmental Impact Developing Generating Potential Financial Capital. Performance Results Human Capital. Labor Protection Intellectual Capital. Knowledge Preservation and Transfer. Innovations Management Social Capital and Goodwill. Developing Areas of Presence. Charity Investments in Development International Activities CORPORATE GOVERNANCE 4.0. Corporate Governance Concern s Corporate Governance Structure Governance and Control Bodies KPI. Employee Evaluation and Remuneration Internal Control and Auditing Risk Management Quality Management Purchase Management Property Management Information Technology INTERACTION WITH STAKEHOLDERS 5.1. Interaction with Stakeholders in Reporting Period Interaction as this Annual Report Was Prepared Stakeholders Commission Public Reporting System APPENDICES TO THE ANNUAL REPORT

8 6 Key Performance Results N 0 1 N 0 2 The first place among Russian electric power generation companies The second place among the world s leading companies in terms of NPP installed capacity and operating units quantity Asset value, mln rubles Registered capital, mln rubles Net asset value, mln rubles Power generation, bln KWh Investments in equity, mln rubles 1,355,827 1,240,961 1,087, , , , ,154 1,181,245 1,059, , , , Labor efficiency, thousand rubles/pers. Average headcount, pers. Charitable contributions, mln rubles Installed capacity use factor (ICUF), % EBITDA margin, % 5, , , ,933 36,269 37, bln rubles labor safety expenditures ln rubles social policy expenditures % net profit increase in 2014 bln rubles international orders portfolio

9 % years with no events above Level 1 according to the INES scale NPP share in Russia s energy balance Revenue, mln rubles 200, , ,215 Net profit, mln rubles 9,238 Taxes paid, mln rubles, including: 1 21,094 3,609 18, In 2014, 8,632 mln rubles were transferred to Atomenergoprom JSC a responsible participant in the consolidated group of taxpayers (CGT) for the purpose of profit tax payment (5,601 mln rubles in 2013). 2, ,043 4, , ,572 3, ,867 Gross profit, mln rubles 105,607 96,309 76,115 Total volume of profit tax payments accrued, mln rubles 9,325 6, ,967 6, ,801 5, , Personal income tax local budgets Budgets of constituent entities of the Russian Federation Federal budget bln KWh power generation in % FTS balance fulfillment % total value of the KPI fulfillment in bln KWh power generation plan for 2015

10 8 Business Model * 1 2 Resources PRODUCTION AND INNOVATIVE CAPITAL Key business processes 33 Units 11.9 Procurement procedures totaling 10 NPPs FINANCIAL CAPITAL (BLN RUBLES) Revenue in bln rubles incl. VAT Net profit in GW Installed capacity Investments in equity for 3 years KEY PROCESSES Operation of existing NPPs Construction management of new NPP units Sale of electrical and thermal power Service of NPPs designed in Russia abroad HUMAN CAPITAL 37,492 Persons headcount DEVELOPMENT PROCESSES Organization/performance of R&D work SOCIAL AND NATURAL CAPITAL Modernization of existing NPPs 11 Geographical regions of operations 200 Ha Area of NPPs with VVER-type high capacity units Development of international activity

11 9 * For the detailed business model description see Page 25 3 Value Creation. Results of 2014 PRODUCTION AND INNOVATIVE CAPITAL Bln KWh generation 17.2% Share in Russia s energy balance 81.6% ICUF FINANCIAL CAPITAL (BLN RUBLES) Revenue 9.2 Net profit 18.3 Taxes paid HUMAN CAPITAL 4.9 Mln hours employees training 6.7 Mln rubles/pers labor efficiency SOCIAL AND NATURAL CAPITAL -5.9% Atmospheric emissions reduction 0.4 Bln rubles Investments in communities

12 Calendar of Key Events MAY JUNE AUGUST OCTOBER The Ninth Interna- tional Scientific and Technical Conference Safety, Efficiency, and Economics of Nucle- ar Power Industry (MNTK-2014) orga- nized by the Concern took place in Moscow Commencement of work on bringing the BN-800 reactor of the new power unit No. 4 of the Beloyarsk NPP to the lowest capacity level Rosenergoatom Con- cern was recognized as the best technical supervisor service of Rosatom State Corpo- ration in The contract extending the operation term for the 5th power unit to 60 years was executed between the consortium of Rosenergoatom Concern OJSC Rusatom Service CJSC EDF, and the Kozloduy NPP. Rostekhnadzor granted the license for an additional operating period of 25 years for power unit No. 4 of the Kola NPP

13 11 More detailed information on the key events may be found in the interactive version of the Report DECEMBER Memorandum of Cooperation was signed between the AAP NP Fund and the Hungarian Association of Social Inspection and Information (TEIT). The annual task of the FTS of Russia on power generation (168.3 bln KWh) was completed ahead of schedule In the night between the 21 and 22 of De- cember Russian NPPs followed through with the target indicator of Rosatom State Corpo- ration having gener- ated 175 5bl bln KWh of electrical power Power unit No. 3 of the Rostov NPP was included in the Russian unified energy system For the first time ever in the nuclear power industry Russian NPPs achieved a record aggregate capacity of over 26.4 GW (with the NPP installed capacity of 25.2 GW).

14 12 Business Geography KOLA NPP LENINGRAD NPP KALININ NPP SMOLENSK NPP KURSK NPP NOVOVORONEZH NPP ROSTOV NPP BALAKOVO NPP BELOYARSK NPP installed capacity 25.2GW

15 13 Active NPP Active units BILIBINO NPP 5.7% Kola NPP 7.3% Novovoronezh NPP 2.5% Beloyarsk NPP 0.12% Bilibino NPP 16.5% Balakovo NPP 8.7% Rostov NPP 13.1% Smolensk NPP Generated in 2014 vs all electric power of the Concern 14.1% Leningrad NPP 15.7% Kalinin NPP 16.2% Kursk NPP 180.5of electric power generated in 2014 BLN kwh

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17 15 Address by Board of Directors Chairman clearly demonstrated the need for strengthening of the responsible function of the Concern as the NPP power units construction customer and for strict control over compliance with the established timeline for start-up of new power units. AMONG THE CONCERN S ACHIEVEMENTS THE RE- CORD INDICATOR OF ELECTRIC POWER GENERATION, WHICH IN 2014 EXCEEDED THE BALANCE VALUE APPROVED BY THE FEDERAL TARIFF SERVICE, AND THE TARGET LEVEL OF ROSATOM STATE CORPORA- TION. WE EXPECT THE CONCERN TO ACHIEVE YET ANOTHER RECORD IN TERMS OF POWER GENERA- TION IN Dear colleagues, The year 2014 was not easy for the Concern. Power start-up of the 3rd power unit of the Rostov NPP completed ahead of schedule became one of the most important events for the entire nuclear industry. This achievement was recognized at the annual competition Rosatom s Person of the Year where a joint team of the Concern and NIAEP-ASE received the first award in the nomination Victory of the Year for early power start-up of the 3rd power unit of the Rostov NPP. At the same time postponement of start-up of the 4th power unit of the Beloyarsk NPP and the 6th power unit of the Novovoronezh NPP for 2015 The strategy of the Concern as an electric power branch of Rosatom State Corporation is traditionally based on the strategic goals and objectives of the Corporation. Pursuant to this strategy, the priority development objectives of the Concern are safe, efficient, and reliable operation of the functioning NPPs, increase of the nuclear generation share in the power balance of Russia, implementation of innovative projects, entry into the international market, and general increase of efficiency. Every year the Concern performs increasingly ambitious tasks set by the state and Rosatom State Corporation thus confirming its leading position in the market in the era of fierce competition. I hope that despite all the hardships Rosenergoatom will successfully continue to perform a demanding task of ensuring Russia s energy security. Alexander Lokshin, Chairman of the Board of Directors, Rosenergoatom Concern OJ SC, First Deputy General Director for Operations Management, Rosatom State Corporation

18 16 Address by General Director of electricity production. In 2014 the Concern achieved the record output of bln kwh which amounts to 104.8% of the production in the previous year. The balance of the Federal Tariff Service was fulfilled by 107.3%. Dear Sirs and Madams, I am pleased to present you the seventh integrated Rosenergoatom Concern Annual Report describing the main results of operations in the year The report covers financial, production, social, and environmental aspects of the Concern s activity and has been put together by a big team of technical specialists and managers in accordance with the best practices and best Russian and international reporting standards. For several years in a row the Concern has been holding a leading position among the largest Russian energy companies in terms of volumes Optimization of the repair campaign, reduction of timelines for scheduled repairs, work on recovery of graphite stack resource characteristics in RBMK reactors, and operation of generating power units of the VVER type at increased capacity (104% of the nominal) made the most important contribution to exceeding the FTS balance. In general terms the 2014 repair campaign was carried out on a higher level as compared to The aggregate reduction of repair timelines of generating power units in 2014 amounted to days (in 2013 the planned duration of repairs was exceeded by 25.8 days). The program for resource characteristics recovery of generating power units of RBMK reactors was implemented successfully. In 2014 the operations on generating power units No. 2 of the Kursk NPP and No. 2 of the Leningrad NPP were completed. Both repairs were performed in accordance with duration target values within 180 days. THE LAUNCH OF THE GENERATING POWER UNIT NO. 3 OF THE ROSTOV NPP BECAME ONE OF THE PRINCIPAL ACHIEVEMENTS OF THE YEAR FOR THE ENTIRE RUSSIAN NUCLEAR INDUSTRY. THE EVENT TOOK PLACE ON DECEMBER 27, 2014 AND BECAME TWICE AS VALUABLE FOR THE CONCERN WHICH IS AN ORDERING CUSTOMER OF NEW GENERATING POWER UNITS BECAUSE THE LAUNCH WAS INITIAL- LY SCHEDULED FOR

19 One of the challenges of our construction sites days total reduction of power units scheduled repair time in 2014 lies in increasing efforts in order to ensure a safe work environment and reduce the injury rate. Although the overall injury rate at the Concern is the lowest in the nuclear industry, construction sites of our subcontractors leave room for improvement. We are well aware of it and are implementing integrated system of labor protection which brings along actual results. The Concern confirms its reputation as a socially responsible company. In 2014 the Concern spent 2.6 bln rubles on its social policy. Yet another record was achieved in construction of housing for our employees 870 apartments were put into service. The Neptun swimming pool was put into service in the city of Zarechny (Sverdlovsk Oblast), a stadium and a sports complex became operational in the city of Novovoronezh where the first All-Russian Rural Sports Games were held. Striving to diversify the business, the Concern continues mastering new lines of development, including the global market. We have become an active player in the sales market: in the reporting period AtomEnergoSbyt has won competitive tenders and received the status of a guaranteed supplier in four regions Kursk, Smolensk, Tver, and Murmansk Oblast. We keep on working to make sure our subsidiary Rusatom Service can efficiently enter the global markets. I am sure that the Concern will make every effort to complete the ambitious goals set by Rosatom State Corporation and the state, and this work will contribute to the further development of our competitive advantages both in domestic and international markets. We are confident that our work on increasing labor efficiency to the level of the best international practices will help us achieve the goals. Guided by the principles of responsibility, professionalism, and mutual trustin general and in our interaction with the stakeholders, we will be able to ensure sustainable development of the Concern in the long-term perspective. Yevgeny Romanov, General Director of THE SUCCESSFUL RESULTS OF THE YEAR 2014 WOULD BE IMPOSSIBLE WITHOUT A HIGHLY PRO- FESSIONAL TEAM OF THE CONCERN. WE AIM TO MAINTAIN AND INCREASE THE ACHIEVED RATE OF DEVELOPMENT. WE HAVE SET OURSELVES A CHAL- LENGING TASK TO PRODUCE MORE THAN 189 BLN KWH OF ELECTRICITY IN 2015.

20 18 Concern s Awards 1st place in the Generating The winner of the Best Technical Superket Companies: Mar- 11th Anniversary visor Service of Rosa- Efficiency rating, V.I. Vernadsky National tom State Corporation compiled by Market Environmental Council Non-Commercial Award Contest in the Partnership basing nomination Energy on the results of Industry of the Future: Developing New Energy Sources and Increasing Efficiency of eco Renewable Sources of Energy for the project Implementation System of Environmental Policy of Rosenergoatom Concern OJSC and Its Branches The Russian Federation Government science and technology prize for 2014 to the team of the Concern s specialists who have resolved an unprecedented task of resource characteristics recovery of the graphite stack of RBMK reactors.

21 19 Public Reporting Awards Diploma for active participation in the 1st All-Russia Exhibition of Sustainable Development Reports. Five-time winner of the international MarCom Awards 2014: Platinum Award winner in the nominations Annual Report on Corporate Social Responsibility and Electronic Communications/ Electronic Annual Report, Gold Award winner in the nominations Annual Report and Annual Report of the Corporation. Honorable Mention in the nomination Text/ Annual Report. Nominee of the Annual Reports Competition organized by Expert-RA rating agency in the nomination Best Interactive Annual Report. 1st place in the nomination Best Electronic/Interactive Annual Report, 2nd place in the nominations Best Level of Information Disclosure in Annual Report and Best System of Public Reporting, 3rd place in the nomination Best Public Annual Report of the 6th Public Reporting Competition among organizations of Rosatom State Corporation rd place in the corporate transparency rating among the largest Russian companies basing on the results of the year 2013 prepared by the Russian Regional Network for Integrated Reporting. awards won at MarComAwards 2014 awards won at the 6th Public Reporting Competition among organizations of Rosatom State Corporation

22 1. OVERVIEW The Concern holds a leading position among the largest Russian generating companies in terms of volumes of electricity production. In 2014 the Concern achieved the record output of BLN KWH

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24 General Information is one of the largest electric power generation companies in Russia, and Russia s only nuclear plant operator The Concern has integrated, as branch companies, active nuclear plants, directorates of nuclear plants under construction and the Facilities Construction Directorate, Science-Research Center for Emergency Response at NPPs, Science and Engineering Center, Pilot and Demonstration Engineering Center for Decommissioning, Engineering Design Branch Office, Technology Branch Office, Resource-Bulgaria Historical Perspective Fund, and Directorate for Construction and Operation of Floating Thermal Nuclear Power Plants (see Section 1.3). The Concern also maintains its representative office in the People s Republic of China. The Concern s main occupation is generation of electrical and thermal energy at its nuclear plants, as well as management of nuclear plants, sources of radiation, nuclear material and radioactive substance storage sites pursuant to the procedure set forth by the legislation of the Russian Federation. THE CONCERN HAS JOINED THE FOLLOWING CHARTERS AND INITIATIVES AND IS A MEMBER OF THE FOLLOWING ASSOCIATIONS Pursuant to the resolution of the general meeting of the Concern on July 17, 2014 (Minutes No. 8), the Concern jointly with TVEL JSC, Science and Innovations CJSC, Russian Nuclear Society Non-Governmental Organization, and the Association of Institutions of Higher Education Consortium of Supportive Institutions of Higher Education of Rosatom State Corporation took part in setting up the association National Nuclear Innovation Consortium. The association is aimed at promoting expert community of the organizations which form Rosatom State Corporation and specialized institutions of higher education, accrediting educational programs, setting up a final proficiency examination of educated young professionals prior to their employment in the industry (qualification approval), and monitoring by industry organizations of young specialists education quality. The stockholders of Rosenergoatom Concern OJSC are Atomenergoprom JSC ( %) and Rosatom State Corporation (3.0093%).

25 History 1992 State-owned enterprise Russian State Concern for Production of Electric and Thermal Energy at Nuclear Power Plants Open Joint-Stock Company ( State-Owned Enterprise) was established by Presidential Decree No of September 7, 1992 On Operating Entity of Nuclear Plants of the Russian Federation. The Decree ruled that Rosenergoatom Concern State-Owned Enterprise (SOE) was a stateowned enterprise that independently and through outsourcing was engaged in all stages of the life cycle of nuclear plants, regarding the selection of construction sites, project design, construction, commissioning, operation, decommissioning, and other operating functions. The same Decree ruled that the assets of nuclear plants which at that moment were in operation, under construction, in project design phase, or abandoned, were owned by the Federal Government and assigned to Rosenergoatom Concern SOE, who was fully in charge and in control of them. The idea was to use Rosenergoatom Concern SOE as a platform to integrate all nuclear plants, which under the Decree had received the exclusive rights of self-governed business units. During the 1990s one of the main tasks facing Rosenergoatom Concern SOE was to overcome the transition difficulties and, first and foremost, to resolve the problem of non-payments for the energy supplied by NPPs In accordance with the Federal Government Directive No r of September 8, 2001, starting on April 1, 2002, with the intention to improve operating efficiency of nuclear plants, Rosenergoatom Concern SOE was reorganized into a generating company (Rosenergoatom Concern FSUE) by merging with all nuclear plants, both in operation and under construction. Apart from its functions as an operator, this entity was able to act independently in the power market and sell power generated by the nuclear plants to solvent users To assist further development of the nuclear power industry and to restructure the nuclear power complex in Russia, as instructed by Presidential Decree No. 556 of April 27, 2007, the Federal Government issued Resolution No. 319 of May 26, 2007, under which Atomenergoprom JSC was incorporated in July 2007, of which Rosatom State Corporation is the sole stockholder By Directive No r of the Federal Agency for State Property Management of August 11, 2008, Rosenergoatom Concern FSUE was reorganized into Energoatom Concern OJSC, which surrendered 100% of its stocks to Atomenergoprom JSC. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

26 By Federal Government Resolution No r of September 14, 2009, the Concern became entitled to use the word Russian in its corporate name. In November 2009 the sole stockholder of Energoatom Concern OJSC decided to add modifications into the Concern s Articles of Incorporation related to its new name: Russian Concern for Production of Electric and Thermal Energy at Nuclear Power Plants (Rosenergoatom Concern OJSC) In 2011 Rosatom State Corporation became another stockholder of Rosenergoatom Concern OJSC, together with Atomenergoprom JSC Corporate Structure CENTRAL ADMINISTRATION OF ROSENERGOATOM CONCERN OJSC AFFILIATES NPPS IN OPERATION AFFILIATES AFFILIATES DIRECTORATES OF NUCLEAR PLANTS UNDER CONSTRUCTION REPRESENTATIVE OFFICE * Under liquidation Balakovo NPP Bilibino NPP Beloyarsk NPP Kalinin NPP Kola NPP Kursk NPP Leningrad NPP Novovoronezh NPP Rostov NPP Smolensk NPP Science-Research Center for Emergency Response at NPPs Directorate for Construction and Operation of Floating Thermal Nuclear Power Plants Engineering Design Branch Office Technology Branch Office Resource-Bulgaria HPF Science and Engineering Center Pilot and Demonstration Engineering Center for Decommissioning Facilities Construction Directorate Directorate of Leningrad NPP-2 (under construction) Directorate of Baltic NPP (under construction) Directorate of Kursk NPP-2 (under construction) Directorate of Nizhny Novgorod NPP (under construction) Directorate of Voronezh NPP (under construction) Directorate of Kostroma NPP (under construction) Directorate of Bashkiria NPP (under construction)* Russian Representative Office in Lianyungang (People s Republic of China)

27 25 ^ Balakovo NPP 1. The list of subsidiaries and affiliates is provided in Appendix 2 Banking Details and Contact Information. CONCERN CONSOLIDATION PERIMETER 1 ROSENERGOATOM CONCERN OJSC The main activity of the Concern is production of electricity and heat by nuclear plants and management of nuclear plants, radioactive sources, nuclear material, and radioactive substance storage sites pursuant to the procedure set forth by the legislation of the Russian Federation. ATOMENERGOREMONT JSC Maintenance, repair, and modernization of equipment of nuclear plants, including design and technology, repair, and assembly operations. ATOMENERGOSBYT JSC Supply of electricity to consumers in Kursk, Tver, Smolensk, and Murmansk Oblast as a guaranteed supplier. Sale of additional goods and services as part of AtomEnergoSbyt JSC product line development. A sole executive body of the subsidiaries and affiliates of Atomenergopromsbyt JSC, Atom- TeploSbyt LLC. An independent power supply company, including power supply to companies of Rosatom State Corporation from the wholesale market of electrical power and capacity (Order of Rosatom State Corporation No. 701 of October 8, 2009). ATOMTEKHENERGO JSC Organization, management, and actual commissioning of NPPs, including all types of start-up and adjustment operations for all NPP equipment and systems, engineering operations on technical support of active power units of Russian and foreign NPPs, and training of NPP personnel. VNIIAES JSC Research and technology support, operations support of Concern s NPPs: dealing with issues of NPPs operations, increase of efficiency, extension of the operation term, safety and cost effectiveness of NPPs, development of technical requirements and concepts of new NPPs with VVER reactors. Design, system integration, and supply of automated process control system complexes for the NPPs that are operating or under construction, as well as development and supply of simulators. VPO ZAES JSC Organization and provision of services on manufacture quality control and acceptance of equipment and nuclear fuel for companies of Rosatom State Corporation,, and foreign customers; expert appraisal of design and process control documentation of nuclear installations and storage sites of nuclear materials and radioactive substances. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

28 2. STRATEGY AND OUTLOOK Nuclear power generation efficiency improvement in the Russian Federation, nuclear fuel cycle closure, international expansion are the Concern s strategic development objectives. An ambitious goal for electric power production in 2015 is BLN KWH

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30 Mission sees its mission as supplying consumers with electrical and thermal power produced by the Concern NPPs, with guaranteed safety as its top business priority. The Concern s core values are energy security and economic development of Russia, protection and safety of people, and environmental protection. The Concern implements the following principles during its main activity of NPPs operation: federal standards and security rules, compliance with institutional standards; economic efficiency of electrical and thermal energy production at NPPs; safety culture improvement. As a corporate operator, the Concern is fully responsible for ensuring nuclear and radiation safety at all stages of the NPPs life cycle: location, design, construction, operation, and decommissioning of NPPs. ensuring nuclear, radiation, technical fire, and environmental safety, as well as labor protection; unconditional compliance with the legislation of the Russian Federation, compliance with the 2.2. Business Model The business model contains the general description of the Concern s internal and external processes and is provided as a transformation of input resources to tangible and marketable results (cost for stockholders, products, and services). The Concern s business processes include two main areas: The business model reflects processes and resources participating in the value chain. The Concern s value chain forms part of Rosatom State Corporation common industry processes organized in accordance with fuel and equipment life cycles. 1. Main processes. 2. Development processes.

31 29 KEY PARTNERS AND RESOURCES PROCESSES AND ASSETS PRODUCTS, SALES CHANNELS, AND CONSUMERS KEY PARTNERS Construction, assembly, and repair organizations and enterprises; Supplier of nuclear fuel, and plants involved in spent nuclear fuel; Suppliers of systems and equipment; Design organizations; Engineering departments; Research and development centers. RESOURCES Financial; Human; Natural. KEY PROCESSES Operation of existing NPPs; Construction management of new NPP units; Sale of electrical and thermal power; Service of NPPs designed in Russia abroad. DEVELOPMENT PROCESSES Organization/performance of R&D work; Modernization of existing NPPs; Development of international activity. MAIN ASSETS 33 units with total installed capacity of 25.2 GW; Intellectual Property. PRODUCTS Electrical and thermal power; Services. SALES CHANNELS Wholesale market for electricity and power; AtomEnergoSbyt OJSC; Regional market for thermal power; Rusatom Service CJSC. CONSUMERS Major industrial enterprises; Guaranteed suppliers; Energy supply companies; End consumers. KEY PARTNERS AND RESOURCES CONSTRUCTION, ASSEMBLY, AND REPAIR ORGANIZATIONS AND ENTERPRISES Organizations and enterprises providing services for the Concern during construction and operation of the NPPs. SUPPLIERS OF NUCLEAR FUEL AND PLANTS THAT SPECIALIZE IN SPENT NUCLEAR FUEL REGENERATION Companies supplying reactor fuel assemblies (FAs) to the NPPs and accepting spent nuclear fuel for storage and reprocessing. SUPPLIERS OF SYSTEMS AND EQUIPMENT First of all these are the companies manufacturing equipment and management and control systems for the NPPs, as well as third party suppliers of materials and services which help the Concern to obtain materials and services from the open market. DESIGN ORGANIZATIONS Design institutions involved in the development of preliminary and detailed design documentation for the NPPs scheduled for construction. 1. Overview 2. Strategy 3. Key Performance and Outlook Results 4. Corporate Governance 5. Interaction with Stakeholders

32 30 ENGINEERING DEPARTMENTS Industry companies that deal with engineering reactor plants for new NPP power units, auxiliary equipment, and its components. RESEARCH AND DEVELOPMENT CENTERS Research, development, design, and engineering organizations of nuclear power industry providing research and technical support to nuclear power plants and striving to increase reliability, safety, and economic efficiency of NPP power units. This work also includes developing intelligent systems, software and hardware complexes, simulators, automated process control system complexes, NPP technical diagnostics, and virtual modeling systems for new projects. FINANCIAL Revenues from the federal budget, incomes from the wholesale market for electricity and power, credit resources from banks and financial institutions necessary for carrying out financial and economic activity. HUMAN The Concern uses the open labor market to select labor resources with required competence. However, specialized skillsets absent in the open market are formed by the Concern in-house. NATURAL Mainly water resources required for electrical power and heat production process at NPPs, as well as land plots for new NPP power units construction. The Concern strives to further reduce the environmental impact of its activity. KEY PROCESSES OPERATION OF EXISTING NPPS Management of equipment, nuclear fuel, and the operating process to produce electrical power and heat for sale. NEW NPP POWER UNITS CONSTRUCTION MANAGEMENT Formation of the Concern s fixed productive assets and infrastructure from the investment plan to delivery of a finished asset for operation. ELECTRICAL AND THERMAL POWER SALE Electrical power sale in the Electrical Power (Capacity) Wholesale Market (ECWM) and directly to end consumers of electricity and heat. DEVELOPMENT PROCESSES Organization/performance of R&D work by the Concern aimed at resolving long-term tasks of the Concern s production and technical research activity to the extent of modernization of NPP power unit design and construction processes, increase of service life of main equipment, implementation of new materials and processes, and development of new reactor units. MODERNIZATION OF EXISTING NPPS Activity aimed at increasing operating performance of NPPs, subject to unconditional safety at all stages of their life cycle. DEVELOPMENT OF INTERNATIONAL ACTIVITY CONSISTS OF FIVE MAIN BLOCKS: Marketing collection and analysis of information to determine parameters of effective demand, desired commodity (consumer) properties, target markets and consumers, and promotional channels.

33 31 Service development the Concern s activity on forming a line of services with required consumer properties, approaches to pricing and interaction with target clients. Sales and contracting corresponds to activity on service promotion, consumer search, and interaction with consumers up to signing a contract. Production (provision) of services performance of contractual obligations up to accepting the provided services and receiving the payment. After-sale service includes reclamation processing and provision of paid and free additional services to ensure competitive performance as part of long-term interactions with consumers. PRODUCTS, SALES CHANNELS, AND CONSUMERS. VALUE CREATION FOR STAKEHOLDERS The Concern uses sales channels for sale of products (electrical power and heat) and services to consumers. CONCERN S KEY PARTNERS NIAEP JSC ATOMPROEKT JSC Atomenergoproekt JSC TVEL JSC GHK FSUE PO Mayak FSUE The focus of the NIAEP OJSC Atomstroyexport CJSC (ASE CJSC) united company is facility design and construction project management. The portfolio of implemented projects comprises of more than 20 power units under construction or simultaneously designed power units in Russia and abroad. The only company in Russia designing NPPs with various types of nuclear reactors: VVER, BN, and RBMK, as well as thermal power facilities. Engineering company, general designer and general contractor of the Novovoronezh NPP-2, general contractor of the Leningrad NPP-2, and general contractor of the Smolensk NPP-2. TVEL fuel company supplies nuclear fuel to the entire Russian market for power and research reactors, as well as for power units of nuclear icebreaker fleet. Areas of interaction: Site preparation and design support during creation of the facilities producing mixed uranium plutonium oxide fuel (MOX) for fast breeder reactors; VVER-1000 and RBMK-1000 spent nuclear fuel management; Industrial production of MOX fuel; Creation of an experimental test center for reprocessing of spent nuclear fuel and a process complex for nuclear fuel cycle closure; Research and development work. Reprocessing of spent nuclear fuel of nuclear reactors. 1. Overview 2. Strategy 3. Key Performance and Outlook Results 4. Corporate Governance 5. Interaction with Stakeholders

34 Strategic Goals and Initiatives The Concern s strategy is part and parcel of the business strategy of Rosatom State Corporation and is based on provisions of Russian Energy Strategy up to Efficiency improvement of nuclear generation in the Russian Federation, closure of the nuclear fuel cycle, and international expansion, servicing of VVER power units abroad, comprise the main areas of the Concern s strategic development. CONCERN S STRATEGIC GOALS AND OBJECTIVES AND THEIR CONNECTION WITH STRATEGIC GOALS OF ROSATOM STATE CORPORATION Strategic goals of Rosatom State Corporation Strategic goals of the Concern Strategic objectives of the Concern Contribution in 2014 Ensuring nuclear radiation safety, legacy issues solving Ensuring safe, efficient, and reliable operation of existing NPPs, nuclear and radiation safety of facilities which use nuclear power, protection of personnel, population, and environment A set of measures on safe and sustainable work of operating NPP power units (OBURDE) (modernization of NPP systems and equipment aimed at safe, reliable, and sustainable work of NPPs, Program for Recovery of Resource Characteristics of RBMK power units). See Section 3.3 Providing electricity to the national economy Increasing electrical power generation while ensuring a necessary safety level Generating electrical power while ensuring a necessary safety level Generation (+4.8% vs 2013) Technology leadership Closure of nuclear fuel cycle at the power units with BN-800, BN-1200, and VVER-TOI with mixed uranium plutonium fuel Implementation of the R&D Program Construction of NPP power units with fast breeder reactors operating in the nuclear energy system with a closed nuclear fuel cycle Construction of NPPs based on the VVER-TOI project See Section 3.8 Implementation of projects on construction of NPP power units with low and medium capacity Project development for medium capacity power units Project development for low capacity power units See Section 3.8 Scale Increasing the share of nuclear generation due to NPP installed capacity growth, and generation of nuclear power while ensuring a necessary safety level Implementation of projects on NPP construction (9 NPP power units and 1 floating power unit are currently under construction) Location and design of new NPPs Power unit No. 3 of the Rostov NPP start-up in December 2014 Global operation Development of international activity Construction of NPPs abroad according to the BOO rule (Build Own Operate) Servicing Russian-designed NPPs abroad, including maintenance, repair, modernization, preparing of documentation, and personnel training Improving energy sales abroad See Section

35 33 Strategic goals of Rosatom State Corporation Strategic goals of the Concern Strategic objectives of the Concern Contribution in 2014 Product competitiveness Increasing NPPs operating efficiency Increasing the capacity of operating VVER-1000 power units Switching VVER-1000 power units to 18-month fuel cycle Extending the service life of currently operating NPP power units which have exhausted their design service life Increasing the efficiency of repair campaigns Increasing the efficiency of fuel use Reducing the expenditures on operating activity and cost management Preparation of the NPPs based on the VVER-TOI project for construction See Section 3.2 Increasing efficiency of design and capital construction of NPPs Increasing the capacity of operating VVER-1000 power units Switching VVER-1000 power units to 18-month fuel cycle Extending the service life of currently operating NPP power units which have exhausted their design service life Increasing the efficiency of repair campaigns Increasing the efficiency of fuel use Reducing the expenditures on operating activity and cost management Preparation of the NPPs based on the VVER-TOI project for construction Increasing the efficiency of the capital construction management system Increasing the procurement efficiency through consolidation of procurement volumes, efficient resource management, and logistics optimization Preparation for serial and continuous construction under VVER-TOI project (Kursk NPP-2 and other sites) See Section Overview 2. Strategy 3. Key Performance and Outlook Results 4. Corporate Governance 5. Interaction with Stakeholders

36 Material Aspects of Performance G4-18, G4-19, G4-20, G4-21, G4-22, G4-23 When preparing the Annual Report concept under the GRI G4 Public Reporting Guidelines, representatives of stakeholders and top management of the Concern took part in a 2013 survey to identify material aspects of the Concern s performance and the subsequent disclosure of these aspects in the Annual Report. Based on the survey and with due regard to the reporting principles used to determine the content of the report and in accordance with the public reporting standard, as well as with the Rules of Preparing the Public Annual Report of the Concern, the concept of the Concern s Annual Report was developed and approved determining the content and material aspects of activity subject to disclosure in the report. 32blue areas of the diagram). The aspects included significant aspects are provided in the Report Ranking map was updated following the discussion of the concept as part of the first dialog with stakeholders. The ratio of importance for each aspect was determined as a ratio of the number of voters in favor of such aspect to the total amount of persons surveyed. Thus the ratio threshold was 0.5. We decided to consider material all aspects included in the blue and yellow areas of the ranking map. The aspects recognized as material are specified in the ranking map below (yellow and in the white area of the diagram were recognized as immaterial at this point. The boundaries of the aspects importance were determined basing on the ranking map and taking into account the opinion of the Concern s top management. The description of impact boundaries for the aspects are provided in the Concern s annual report for 2013 (pages 36-37). All material aspects are important for the organization within the report perimeter. There are no specific limits regarding aspect boundaries within the organization. All aspect boundaries outside the organization are immaterial, except for the matters of suppliers occupational injury rate. There is no redefinition of the indicators provided in the previous reports. All provided data correlates with the previous reports. The Emissions aspect has been deemed immaterial because NPP emission values are situated close to the low limit of indicator measurement. The ranking map of importance of various aspects of activity is provided in the Concern s annual report for 2013 (Page 35).

37 35 G4-18, G4-19, G4-20, G4-21, G4-22, G4-23 Influence on evaluation and decisions of stakeholders Ranking Map of Significant Aspects of Activity Significant economic, environmental, and social influences Material aspects 35 Immaterial aspects * specific aspects of the Concern s activity, ** the aspect is disclosed by the Concern. 1. Safe operation of NPPs* 2. Economic performance 3. Occupational health problems and safety 4. Training and drilling of Employees 5. Approaches to safety 6. Reliability of electrical power supplies to consumers* 7. Emissions 8. Conformance to requirements (ecology) 9. Anti-corruption 10. Public acceptance* 11. Presence in the market 12. Energy 13. Industrial waste and waste waters 14. Procurement practice 15. Occupation 16. Relations between employees and management 17. Social policy 18. Conformance to requirements (society) 19. Consumer health and safety 20. Conformance to requirements (products) 21. Rights of local population 22. Water** 23. Countering unfair competition 24. Marketing communications 25. Indirect economic impacts 26. Materials 27. Products and services 28. General impacts (ecology) 29. Procedures for submitting complaints on environmental problems 30. Evaluation of suppliers labor relation practices 31. Procedures for submitting complaints on labor relation practices 32. Investments 33. Non-discrimination 34. Freedom of associations and collective bargaining 35. Evaluation of suppliers respect for human rights 36. Procedures for submitting complaints on violation of human rights 37. Local communities 38. Procedures for submitting complaints on social impacts 39. Protection of consumers personal information 40. Environmental evaluation of suppliers 41. Diversification and equal opportunities 42. Equal wages for men and women 43. Evaluation of suppliers impact on society 44. Interaction with state supervision agencies and non-governmental organizations* 45. Product selling prices* 46. Company openness* 47. Social responsibility* 48. Biodiversity 49. Transport 50. Child labor 51. Compulsory labor 52. Product marking 53. Evaluation (human rights) 1. Overview 2. Strategy 3. Key Performance and Outlook Results 4. Corporate Governance 5. Interaction with Stakeholders

38 3. KEY PERFORMANCE RESULTS is one of the world s largest electric power industry companies and Russia s only organization primarily focused on operation of nuclear power plants. There are no events above Level 1 according to the INES scale YEARS

39

40 Situation in Electric Power Industry is one of the largest companies of the electric power industry in the world and the only organization in Russia mainly acting as an operator of nuclear power plants GW NPP installed capacity ELECTRIC POWER AND CAPACITY MARKET After 2014 the installed capacity of electric power plants of the Unified Energy System (UES) of Russia has increased by 2.6% and amounted to GW as of January 1, The total installed capacity of the Concern s nuclear power plants is 25.2 GW which made 10.86% of the total capacity of the UES of Russia in New capacity introduced at electric power plants of the UES of Russia in 2014 taking into account electric power plants of industrial facilities, totaled 7, MW. 1,762.6 MW of inefficient and obsolete generating equipment was decommissioned in Russia in 2014 (NPP capacities were not decommissioned in 2014). On December 27, 2014 the turbo generator of 3rd power unit of the Rostov NPP with the installed capacity of 1,000 MW was synchronized with the energy system. On February 2, 2014 the BN-800 reactor at the power unit No. 4 (under construction) of the Beloyarsk NPP was physically launched. This is a non-serial type of fast breeder reactor with sodium cooling. In terms of installed capacity of the NPPs and the amount of operating power units the Concern holds the 2nd place in the world among leading global companies operating NPPs (1st place EDF, France). In 2014 electricity generation in Russia totaled 1,024.9 bln KWh which is 0.1% more than in Furthermore has been the Concern s NPPs generated bln KWh which is 4.8% more than the amount of electrical power generated in Over many years the Concern has been consistently keeping the leading position among Russian generating companies in terms of installed capacity and power generation. The Concern s Position Among the Largest Companies of the Russian Federation in Terms of Installed Capacity, GW Gazprom Energoholding LLC RusHydro OJSC INTER RAO Electric Power Plants OJSC EuroSibEnergo OJSC Integrated Energy Systems CJSC

41 39 Top 6 Companies: Number of Reactors, Installed Capacity as of End of 2014, and Electric Power Generation in No. Operator company Int l abbreviation Country Number of power units Number of sites Installed capacity, net MW (e) Installed capacity, gross MW (e) Generation in 2013 GWh (generation) Generation in 2012 GWh (generation) Generation in 2011 GWh (generation) (as of December 31, 2014) 1. Électricité de France EDF France ,130 65, , , , Rosenergoatom REA Russia 34,(33) ,643 25, , (supply) 172,217.4 (generation) 166, (supply) 177,290.4 (generation) 162,018 (supply) 172,681.3 (generation) 3. Korea Hydro and Nuclear Power KHNP South Korea ,739 21, , , , Exelon Corporation Exelon USA 22,(17) 2 13,(10) 17,373 18, , , , NNEGC Energoatom NNEGC Ukraine ,107 13,835 78, , , Tokyo Electric TEPCO Japan ,233 12, , , The share of NPPs in power generation in the total generation of the UES of Russia (excluding isolated energy systems) in 2014 was distributed as follows: Unified Energy System (UES) Total power generation, mln KWh* Power generation by NPP, mln KWh Share of NPP generation, % Russia 1,024, , Central UES 239, , Volga UES 105, , Northwest UES 102, , South UES 84, , Urals UES 259, , Source: Report of the System Operator on Operating UES in 2014 ( ^ 1. On December 27, 2014 power unit No. 3 of the Rostov NPP was introduced. The data on generation in includes 33 power units. 2. In March 2012 following the acquisition of Constellation Energy the amount of Exelon s units increased up to 22 at 13 sites. The data on generation in includes 17 power units. 3. In May power units (Nos. 1-4) of the NPP Fukushima Dai-Ichi which were unfit for use were shut down. In December 2013 power units Nos. 5 and 6 of the NPP Fukushima Dai-Ichi were also shut down. The Concern s Position Among the Largest Companies of the Russian Federation in Terms of Power Generation over , bln KWh ,5 152,2 113,6 102,7 79,0 60, Gazprom Energoholding LLC RusHydro OJSC INTER RAO Electric Power Plants OJSC EuroSibEnergo OJSC Integrated Energy Systems CJSC 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

42 40 1, rubles per MWh weighted average year-average sales price of NPP electric power in the day-ahead market SALES MARKET AND PRODUCT CONSUMERS The Concern s products (electricity and capacity) is sold in the Electrical Power (Capacity) Wholesale Market (ECWM) which is a sphere of circulation of special goods of electric power and capacity within the UES of Russia. The buyers are sales companies which for the major part have a status of guaranteed suppliers and a number of major consumers (for details see clause 2 of the Register of Entities of Wholesale Market for Electricity (Power)). The composition and amount of buyers of electricity and power capacity of the Concern are not constant and do not depend on the Concern s preferences. The amount, composition, and structure of consumers are determined by a commercial operator of the ECWM (Trading System Administrator OJSC) each year during centralized contractual campaign of the ECWM (and in case of introduction of significant amendments to regulations determining the procedure for the ECWM functioning within a calendar year and requiring changes in contractual relations more than once per year). In order to ensure compliance with the principles of proportionality and fair distribution of contracting agents under the contracts supporting sale of electricity and capacity at regulated prices, the projects pending distribution undergo approval procedure by market participants during preparation for the contractual campaign. During this approval procedure the projects are optimized taking into account the interests of market participants. Demand for electricity and power capacity supplied by the Concern in the ECWM is generally steady with some deviations due to seasonal changes in electricity consumption and water content conditions with the appropriate change in hydrogeneration in the volume of electricity production on a scale of the Unified Energy System of Russia. In geographical terms the market covers the area of the unified energy system of Russia and is divided into two pricing zones: the first (the area of Europe and the Ural which includes a number of regions of geographical Siberia, such as Tyumen Oblast and a part of Tomsk Oblast) and the second pricing zone (the most part of Siberia and Trans-Baikal). All NPPs, except for Bilibino, are located in the European part of Russia and belong to the first pricing zone of the wholesale electricity market. In addition to special regions electricity is bought at regulated prices by guaranteed suppliers throughout Russia in the amount intended for the population. Contracts with other buyers are free, and their prices and scopes are established by participants themselves. In 2014 the Concern supplied electricity under regulated contracts, to the day-ahead market, to the balancing market, and under free contracts. Power Concern s Electricity Supply Structure in ECWM between 2010 and 2014, Bln KWh Balancing market Regulated contracts Day-ahead market Free bilateral contracts

43 41 Electricity sales in 2014 Power capacity sales in 2014 Day-ahead market supply Supply under regulated contracts Supply of power generated by new facilities under sales contracts (power supply contracts) Supply under regulated contracts Supply under sales contracts subject to competitive process 1, rubles/mwh weighted average year sales price of NPP electric power in the day-ahead market. In 2014 the sales of electric power totaled bln KWh. For regulated activity the sales of electric power totaled bln KWh For all other markets the sales of power totaled bln KWh, including: bln KWh to the wholesale market; bln KWh to the retail market. In ,915 contracts were concluded with consumers of the wholesale market to obtain funds totaling 4.4 tln rubles (excl. VAT) from sales of capacity generated by 8 new NPP units from 2011 to In 2014 the capacity corresponding with the volume which had passed competitive selection in 2013 was sold. As of 2015 all the NPP units have passed the competitive selection (taking into account the increased number of unselected capacity following competitive selection in 2014 (15 GW). Payments for electricity and capacity supplied under regulated contracts as well as payments for capacity under contracts on sales of capacity generated by NPP new facilities were effected at the rates (prices) established by the FTS of Russia for the Concern for capacity was supplied under regulated contracts, capacity sale contracts executed following competitive selection of price quotes for capacity sale, and capacity sale contracts of new NPP facilities. In 2014 the actual volume of electricity generated by the NPPs amounted to bln KWh, with the planned value of bln KWh recorded by the FTS of Russia, among which: bln KWh (or 99.88%) were supplied to ECWM; 0.22 bln KWh (or 0.12%) were supplied to the retail market (generated by the Bilibino NPP). DEVELOPMENT OF POWER SALES IN 2014 As a part of comprehensive measures of the Concern s heat sales concept a pilot project was implemented in 2014 resulting in Beloyarsk nuclear power plant obtaining the status of a unified heat supply organization in the urban district of Zarechny of Sverdlovsk Oblast. The awarding of unified heat supply organization status to the nuclear power plant will make it possible to increase reliability of heat supply to end consumers of thermal energy. As part of implementation of the strategy of entry into retail markets of electric power, in 2014 AtomEnergoSbyt JSC won the competitive process and was awarded the status of the guaranteed supplier in Kursk, Smolensk, Tver, and Murmansk Oblast. Moreover, in order to divide regulated and non-regulated types of activity Atomenergopromsbyt JSC was created. Nuclear industry enterprises and other consumers which had previously received power supply from AtomEnergoSbyt JSC were transferred to the new company for service. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

44 Production Capital. Generating Capacities bln kwh in 2014 the highest ever indicator of power generation was achieved by Rosenergoatom Concern OJSC (104.8% of power generated in 2013.) bln KWh the balance of the FTS for 2014 (minimum amount of power to be generated by the Concern in a year (the plan was fulfilled 107.3%) The record indicator of power generation in 2014 was achieved due to the following factors Non-fulfillment of FTS balance by other NPPs was caused by the following: 123 Reduced timelines for scheduled repairs of power units Rostov, Balakovo, Kalinin, and Smolensk NPPs, Leningrad NPP, power unit No. 1 On recovery of resource characteristics: Kursk NPP p.u. No. 2, Leningrad NPP p.u. No. 2 Kola NPP Power units were operating in a limited dispatching mode due to consumption decrease and power transit restrictions. Cancel/postponement of current repairs of power units for 2015 Balakovo NPP power units Nos. 2, 3, and 4 On recovery of resource characteristics: Kursk NPP, p.u.no. 1 Novovoronezh NPP Two unscheduled stops due to manufacturing defects in turbogenerator at the manufacturing plant. Operation of power units at a nominal capacity Leningrad NPP power unit No. 1 (from to ) Kursk NPP power unit No. 2 (from to ) Beloyarsk NPP FAs of BN-800 reactor of power unit No. 4 required remedial actions. Power Generation at the Concern s NPPs, Bln KWh BAL was put into operation RST was put into operation KLN was put into operation RST was put into operation ,2 4KLN was put into operation 3RST was put into operation

45 43 Installed Capacity Use Factor, Availability Factor 81.6 % installed capacity utilization factor (ICUF) in 2014 (3.7% higher vs 2013) 83.7 % availability factor (AF) in 2014 (4.2% higher vs 2013) Changes in ICUF and AF, % ICUF AF Deviation from TsU 1.87 Fulfillment of Balance Target Set Forth by FTS and Generation of Power by Concern s NPPs, % and Mln KWh 29,224.0 >4.5 bln kwh 180, , , , , , , , ,523.6 Deviation from the balace set forth by FTS % 125.5% 111.0% 108.4% 108.2% 106.6% 104.4% 102.5% 98.4% 98.2% 97.7% 2.34 >11 bln kwh Chart of Actual Load and FTS Plan in 2014, MW Concern Kursk Bilibino Leningrad Rostov Balakovo Kalinin Smolensk Kola* Novovoronezh** Beloyarsk*** 7.30 Change of repair conditions with recovery of resource characteristics and operation of units after repairs Reduction of scheduled repair timelines, including according to ESL, cancelation of minor repairs Operation of VVER-1000 units at 104% of capacity during pilot operation De facto FTS balance target 20,903 20,540 20,043 18,468 16,956 17,232 18,121 17,118 18,702 20,240 20,364 21,879 January February March April May June July August September October November December 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

46 % Generation vs 2013 Concern s Generating Capacities Balakovo NPP The largest electricity producer in Russia Best NPP of Russia: 1995, 1999, 2000, 2003, , , and % 85.1 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Saratov Oblast 12.5 km To Balakovo satellite town 145 km To the regional center (city of Saratov) ACHIEVEMENTS OF 2014 First place in All-Russia Contest Leader of Environmental Protection Activity in Russia. It is for the seventh time that the plant has received this award for active participation in environmental protection and rational use of natural resources. The plant has for the ninth time been recognized as the Best NPP of Russia in the area of safety culture. Generated in 2014 vs all electric power of the Concern Share of power production in the Volga Federal Okrug 16.5% 25% NPP power units: No Type of reactor Installed capacity, MW Age 1 VVER , years 2 VVER , years 3 VVER , years 4 VVER , years bln kwh Generated from power start up of power unit No. 1

47 % Generation vs 2013 Beloyarsk NPP The only nuclear power plant in Russia with a commercial fast breeder reactor BN-800 Best NPP of Russia: 1994, 1995, 1997, and % 86.1 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Sverdlovsk Oblast 3,5 km To Zarechny satellite town 45 km To the regional center (city of Yekaterinburg) ACHIEVEMENTS OF 2014 Power unit No. 4 with a 880 MW BN-800 reactor was completed and physically launched in February Due to remedial actions required for the reactor fuel assemblies, the power start up has been postponed for Due to remedial actions required for the reactor fuel assemblies, the power start-up is postponed for Generated in 2014 vs all electric power of the Concern Electricity production share in the Sverdlovsk energy system 2.5% 10% NPP power units: No Type of reactor Installed capacity, MW Age 3 BN years 4 BN Physical launch bln kwh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

48 46 102% Generation vs 2013 Bilibino NPP The most remote of Russian nuclear power plants Best NPP in Terms of Safety Culture: % 52.4 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Chukotka Autonomous Okrug 4,5 km To Bilibino satellite town 610 km To the administrative center (city of Anadyr) ACHIEVEMENTS OF 2014 Bilibino NPP will be shut down in and substituted by a floating NPP (currently under construction). The Bilibino NPP backbones vital activity of the Bilibino city, and ore and gold mining companies of the Bilibino district. Generated in 2014 vs all electric power of the Concern 0.12% Share of power production of the Chaun-Bilibino isolated energy system; the only heat source in the city of Bilibino 80% NPP power units: No Type of reactor Installed capacity, MW Age 1 EGP years EGP years 3 EGP years 4 EGP years bln kwh Generated from power start up of power unit No. 1

49 % Generation vs 2013 Kalinin NPP On June 27, 2014 the Rostekhnadzor license was obtained for power unit No.1 operating term extension for another 30 years Best NPP of Russia: Best nuclear plants of the year: % 80.9 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Tver Oblast 4 km To Udomlya satellite town 125 km To the regional center (city of Tver) ACHIEVEMENTS OF 2014 Pursuant to the industry-specific Program for Increasing Power Generation at operating NPP power units in power units Nos. 1, 2, and 3 of Kalinin NPPhas been operating at 104% of the rated capacity. Generated in 2014 vs all electric power of the Concern Share of electric power produced in the Tver Oblast 15.7% 70% NPP power units: No Type of reactor Installed capacity, MW Age 1 VVER , years 2 VVER , years 3 VVER , years 4 VVER ,000 2 years bln KWh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

50 48 100% Generation vs 2013 Kola NPP First nuclear power plant of Russia built beyond the Arctic circle % 67.2 % mln KWh power generation Fulfillment of the FTS balance ICUF Located at the Kola Peninsula 11 km To Polyarnye Zori satellite town 170 km To the administrative center (city of Murmansk) ACHIEVEMENTS OF 2014 Power units of Kola NPP are currently operating in a limited dispatching mode due to consumption decrease and power transit restrictions. On October 8, 2014 the Rostekhnadzor license was obtained for power unit No.4 operation period of 25 years. Generated in 2014 vs all electric power of the Concern Share of power production in the Murmansk Oblast 5.7% 60% NPP power units: No Type of reactor Installed capacity, MW Age 1 VVER years 2 VVER years 3 VVER years 4 VVER years bln kwh Generated from power start up of power unit No. 1

51 49 124% Generation vs 2013 Kursk NPP It is among the first four nuclear power plants in Russia with equal power capacity Best NPP of Russia: % 83.4 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Kursk Oblast 4 km To the Kurchatov satellite town ACHIEVEMENTS OF 2014 The Kursk NPP is a major element of Russia s Unified Energy System. The main consumer is the Central UES which covers 19 Oblasts of Russia s Central Federal Okrug. Generated in 2014 vs all electric power of the Concern Share of the installed capacity of all power plants of the Black Earth area 40 km To the regional center (city of Kursk) 16.2% 50% ДейNPP power units: No Type of reactor Installed capacity, MW Age 1 RBMK , years 2 RBMK , years 3 RBMK , years 4 RBMK , years bln kwh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

52 Generation vs 2013 Leningrad NPP The largest electricity producer in Northwest Russia.The first plant in Russia with reactors of RBMK-1000 type Best nuclear plants of the year: 2012 and % 72.4 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Leningrad Oblast 5 km To Sosnovy Bor satellite town 70 km To the regional center (city of Saint Petersburg) ACHIEVEMENTS OF 2014 Ensures more than 50% of power consumption of Saint Petersburg and Leningrad Oblast. Between 2012 and 2014 a unique program was implemented to recover the reactor performance characteristics at power unit No.1 NPP power units: No Type of reactor Installed capacity, MW Age 1 RBMK , years 2 RBMK , years 3 RBMK , years 4 RBMK , years Generated in 2014 vs all electric power of the Concern Share of electric power production of the Northwest geographic region 14.1% 28% bln kwh Generated from power start up of power unit No. 1

53 % Generation vs 2013 Novovoronezh NPP The first NPP in Russia with VVER reactors Best nuclear plants of the year: % 82.4 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Voronezh Oblast 3.5 km To Novovoronezh satellite town ACHIEVEMENTS OF 2014 For the first time ever in Europe a unique set of work aimed at service life extension for 15 years was performed at power units Nos. 3 and 4; appropriate licenses of Rostekhnadzor were obtained. Generated in 2014 vs all electric power of the Concern Share of electric power production of the Voronezh Oblast 70 km To the regional center (city of Voronezh) Power unit No. 5 of Novovoronezh NPP initially pertained to the second generation now pertains to the third generation as a result of work performed. It completely complies with modern Russian requirements and recommendations of IAEA, and its additional operating term was extended for another years. NPP power units: No Type of reactor Installed capacity, MW Age 3 VVER years 4 VVER years 5 VVER , years 7.3% 100% bln kwh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

54 % Generation vs 2013 Novovoronezh NPP The first NPP in Russia with VVER reactors Best nuclear plants of the year: % 82.4 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Voronezh Oblast 3.5 km To Novovoronezh satellite town ACHIEVEMENTS OF 2014 For the first time ever in Europe a unique set of work aimed at service life extension for 15 years was performed at power units Nos. 3 and 4; appropriate licenses of Rostekhnadzor were obtained. Generated in 2014 vs all electric power of the Concern Share of electric power production of the Voronezh Oblast 70 km To the regional center (city of Voronezh) Power unit No. 5 of Novovoronezh NPP initially pertained to the second generation now pertains to the third generation as a result of work performed. It completely complies with modern Russian requirements and recommendations of IAEA, and its additional operating term was extended for another years. NPP power units: No Type of reactor Installed capacity, MW Age 3 VVER years 4 VVER years 5 VVER , years 7.3% 100% bln kwh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

55 52 Our global image is determined by our capacity to build complex facilities in the nuclear industry right on time and strictly within the established estimate. This was demonstrated by the joined team of Rostov NPP and NIAEP-ASE who launched the facility ahead of schedule in 2014 (Rostov-3 was scheduled to start only in 2015), and also with cost saving. 91.7% Generation vs 2013 Sergey Kirienko, Chief Executive Officer, Rosatom State Corporation Rostov NPP The largest power industry enterprise in southern Russia. The southernmost Russian NPP Best NPP of Russia: 2004, 2011, and Winner of the industry competition in the area of safety culture: 2005, 2008, 2010, and % 89.5 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Rostov Oblast 16 km To Volgodonsk satellite town ACHIEVEMENTS OF 2014 On December 27, 2014 power start up of power unit No. 3 took place, now it is in pilot operation. Delivery of the unit for industrial operation is scheduled for Generated in 2014 vs all electric power of the Concern Share of power production in the Rostov Oblast 205 km To the regional center (city of Rostov-on-Don) Power unit No. 4 is currently under construction. 8.7% 40% NPP power units: No Type of reactor Installed capacity, MW Age 1 VVER , years 2 VVER ,000 4 years 3 VVER ,070 In pilot operation bln kwh Generated from power start up of power unit No. 1

56 % Generation vs 2013 Smolensk NPP City-forming leading enterprise of the region, the largest in the fuel and energy balance plan of the geographic region Best NPP of Russia: 1992, 1993, 2006, and Best NPP in the area of safety culture in Best nuclear plants of the year: Russian Organization of High Social Efficiency: % 90.1 % mln KWh power generation Fulfillment of the FTS balance ICUF Located in the Smolensk Oblast 4.5 km To Desnogorsk satellite town 105 km To the regional center (city of Smolensk) ACHIEVEMENTS OF 2014 It was the first among Russian NPPs to obtain the international certificate of conformance of quality management system to ISO 9001:2000 standard and was recognized as the best NPP of Russia in providing social safety and work with personnel: Generated in 2014 vs all electric power of the Concern Share of power production in the Smolensk Oblast 13.1% 80% NPP power units: No Type of reactor Installed capacity, MW Age 1 RBMK , years 2 RBMK , years 3 RBMK , years bln kwh Generated from power start up of power unit No Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

57 54 VVER Power Units Capacity Increase One of the options to increase power generation at NPP power units with VVER reactors consists in increasing heat capacity of reactor plants using engineering reserves of equipment taking into account the actual characteristics obtained upon its manufacturing and recorded during operation. Increase of power capacity by 1 KW is approximately 10 times cheaper than the construction cost of 1 KW of new power capacity. The program on operation of VVER power units at an increased capacity forms part of a big program aimed at increasing power generation at operating NPP power units of Rosenergoatom Concern. Pursuant to the Concern s plan, power unit No. 1 of Balakovo NPP, No. 1 of Rostov NPP, and No. 4 of Kola NPP were switched to an industrial operation (IO) at an increased capacity in In 2014, the permit of Rostekhnadzor for pilot operation (PO) of power unit No. 3 of Kola NPP was issued. Capacity increase and start of the pilot operation is scheduled for AFTER START OF THE PILOT OPERATION OF VVER POWER UNITS AT AN INCREASED CAPACITY, NO SIGNIFICANT ENVIRONMENTAL CHANGES WERE REVEALED AT ANY OF NPPS. During operation of power units at an increased capacity we conducted and continue conducting an analysis of the main parameters of reactor unit to ensure compliance with permissible operating limits. According to this analysis, the values of neutronic and thermohydraulic characteristics of the active zone are compliant with design parameters and meet the requirements and design limitations set forth in the process rules for safe operation of power units. Results of tests and operating experience confirmed the possibility of stable and safe operation of NPP power units with VVER-type reactors at an increased capacity level. Program results VVER-1000 reactors operate at an increased capacity of 104% VVER-440 reactors operate at an increased capacity of 107% bln KWh additional energy generation in reactor years is the additional operation time from the program start

58 55 Source: Atomny Expert Journal content/vygodnoe-povyshenie Schedule of Switching VVER-1000 Units to Operation at an Increased Capacity of 104% Nnom PO Pilot Оperation IO Industrial Operation 1st unit of Balakovo NPP 2nd unit of Balakovo NPP 3rd unit of Balakovo NPP 4th unit of Balakovo NPP 1st unit of Kalinin NPP 2nd unit of Kalinin NPP 3rd unit of Kalinin NPP 4th unit of Kalinin NPP 1st unit of Rostov NPP 2nd unit of Rostov NPP Performance results while operating at an increased capacity Parameter name Capacity level 104% Nnom Operating limit Thermohydraulics Reactor thermal capacity (taking into account the temperature accuracy provided by regulating system), MW 3,115-3,120 3,120 Heating heat transfer agent in reactor, о C Maximum heating of heat transfer agent in reactor loop/maximum capacity of reactor loop, o C/MW / /800 Maximum heating of heat transfer agent in FA per ICIS readings, o C Temperature of heat transfer agent at the reactor inlet in any operating loop, o C Reactor neutronics FA maximum capacity as per ICIS readings, MW FA energy release variance ratio as per ICIS readings Minimum reserve on energy release variance by volume of active area as per ICIS readings 1.05 No less than 1 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

59 56 How to Get 104% in 4 Steps Increase in heat capacity is implemented due to intensification of fuel fission. In this case, the temperature in the reactor has increased by 1.5 o C from 320 to in average in the active zone С Temperature inside the fuel INCREASE OF URANIUM 1FISSION RATE 2 INCREASE OF GENERATED STEAM VOLUME When the reactor unit is switched to 104% capacity versus nominal capacity, operating safety limits are not breached. They are not even reached! In case of capacity increase the pressure inside the reactor remains the same and is equal to 160 atm. However, the vessel is capable to support by far higher loads: pressure of hydro-testing of about 250 atm. By increasing the temperature of water at the output of the reactor it is possible to submit more heat to the steam generator. In this case the parameters inside the steam generator (pressure and temperature) remain the same. The volume of generated steam increases t/h steam generator productivity URANIUM FISSION PROCESS U 235 Descendants Moderator 3х10 20 Free neutron released secondary neutron Uranium nucleons are split inside the reactor every second

60 57 Initially the B-320 reactor project was designed for heat capacity of 3,250 MW. However, Elektrosila PO supplied already developed structure of electric generator with electrical capacity of 1,000 MW. That is why based on power efficiency of the entire turbo-generator unit the heat capacity of VVER-1000 reactor is 3,000 MW. 3 TURBINE MODERNIZATION GENERATOR CAPACITY 4INCREASE In order to ensure that more volume of steam is produced, the turbine wheel space and last buckets were also modernized. Also, deeper dehydration of resulting steam from steam generators is provided for. The increased capacity of generator, while the terminal voltage remains the same, is a consequence of heavy currents. In order to cool down the ironed generator due to heat released under higher current load, the density of the cooling gas (hydrogen) was increased V terminal voltage of electricity generator > turbine modernization: treatment of last stage blades >> Balakovo NPP generator 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

61 58 Vladimir Pereguda, Leningrad NPP, Director Our team faces ambitious tasks. We created unique technologies on the first power unit and proved their feasibility while maintaining RBMK which accounts for 40% of electricity generated by Russian NPPs. We made this technology a benchmark and passed the baton to Kursk NPP. Now this work has to be fine-tuned we have to optimize repair times, labor and financial costs. Of course, with due regard to safety at all times. MODERNIZATION AND SERVICE LIFE EXTENSION OF POWER UNITS One of the main areas of the Concern s activity is modernization of operating NPP power units which permits maintaining power capacity of NPPs as well as increasing their safety level and improve operating characteristics of power units. In 2014 modernization of NPPs was performed in a planned scope in the following main areas: Support of NPP power unit safety in accordance with the requirements of standards and rules in the area of nuclear power use; Compliance with the terms and conditions of licenses for power unit operation; Performance of post-fukushima activities; Implementation of industry-specific programs aimed at improving NPP safety, among other things, by way of modernization of main equipment, etc.; Recovery of resource characteristics of the graphite stack of RBMK power units; Substitution of NPP equipment with an exhausted lifespan; Improving safety and reliability of operation of systems and equipment involved in handling spent nuclear fuel and radioactive waste; Implementation of systems for diagnostics and monitoring of operating condition of heating, mechanical and electrical equipment; Modernization aimed at increasing installed capacity and electric power generation; Implementation of modern energy efficient processes and equipment; Optimization of processes in order to improve energy efficiency of NPP operation; Implementation of energy efficiency automated management systems; Renovation and modernization of worn out and obsolete equipment of auxiliary facilities that ensure proper operation of NPPs. 435 bln KWh generation by NPP power units with an extended resource In NPP reactor hall

62 GW is an aggregate installed capacity of NPP power units with an extended resource. SERVICE LIFE EXTENSION FOR EXISTING NPP POWER UNITS Service life extension for existing NPPs power units once they exhaust the determined service life is one of the vital tasks at the current development stage of Russian nuclear industry and an efficient financial investment which permit to maintain generating capacities and increasing NPP safety. Economically feasible duration of an extended operation timelines for NPP power units is years and depends on both technical and economic factors on a case by case basis. We have been working on service life extension for operating power units of Russian NPPs since By the end of 2014, the operations on extending operation timelines of 21 NPP power units with an aggregate installed capacity of 13,242 MW were completed. The licenses permitting operation of these power units outside the determined service life were issued by Rostekhnadzor. NPP power units with an extended resource generated 435 bln KWh of power and the aggregate capacity amounts to 52.5% of the installed capacity of operating NPPs of the Russian Federation. Currently investment projects on SLE are implemented at 8 power units: power units Nos. 1, 2, 3, and 4 of Balakovo NPP, power unit No. 2 of Kalinin NPP, power unit No. 4 of Kursk NPP; power units Nos. 2 and 3 of Smolensk NPP. RESULTS OF WORK ON SERVICE LIFE EXTENSION FOR NPP POWER UNITS IN 2014: Completion of work and approval of resolution on continuing operation of power unit No. 4 of Kola NPP for an additional term of 25 years; operation license for the extended time was obtained; Completion of work and formalization of the resolution by Rosatom State Corporation about continuing operation of power unit No. 1 of Kalinin NPP for an additional term of 30 years; Rostekhnadzor license was obtained; Rosatom State Corporation approved the investment project on service life extension for power unit No. 4 of Balakovo NPP; Design documentation Measures on Modernization of Smolensk NPP in order to extend service life of power unit No. 3 was prepared. Maintaining NPP Generating Power Capacities after Extension of the Operating Term, MW +4 КОL +1 КLN +4 КUR +2 SМО +1 BAL 16, КLN 17, BAL 18, BAL 19, SMО 20, NVO NVO LEN +1 KOL 2, KOL +1.2 BIL 2, LEN +3 BIL 3, KUR +4 BIL 4, KUR +3 LEN 6, BEL +4 LEN 8, КОL +5 NVО 9, SМО 10, KUR 11,802 13, Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

63 60 Main Results of the Repair Campaign in repairs of 33 NPP power units were completed in 2014 bln rubles financial effect days general optimization of repair terms According to the approved annual repair schedule of nuclear station power units, the following operations were planned for 2014: Repairs of 33 power units. 2,051 repair days. The 2014 repair campaign is fulfilled in full scope and with due quality in terms of power generation and reduction of expenses for repairs. Optimization of repair duration of 26 power units amounted to days. Increase in repair duration of 5 power units 23 days. 40 repairs of 33 NPP power units with a total actual duration of 1,892.5 days were completed in General optimization of repair terms days. Financial effect: 1.6 bln rubles. Additional generation: 1,745 mln KWh. 1,745 mln kwh additional power generation due to repair schedule optimization MAIN RESULTS OF THE REPAIR CAMPAIGN IN 2014 General optimization of repair times became possible due to the following: Targeted search and removal of downtimes during scheduled repairs as a part of Rosatom production system development; Conservative approach to preparation of power unit repair schedules, allowing for time margin to remove possible defects; Absence of defects that may affect the duration of the critical path of repairs; Justification of canceling minor repairs of the power units switched to 18-month fuel cycle; 12 unscheduled stops of power units due to equipment failure with a total duration of 53 days occurred in ENERGY SAVING PROGRAM IMPLEMENTATION G4-EN3, G4-EN6 The target indicator of cost saving due to reduction of energy consumption in the similar conditions versus 2009 set forth for 2014 by the Order of Rosatom State Corporation is complied with mainly thanks to increasing energy production. The target indicator amounted to 23.11%. In 2014, thermal and electric energy savings totaled 29.9% (4,753.6 GJ) and 17.0% (487,257.2 GJ), accordingly. Consolidated program for energy saving is implemented in the scope scheduled for NPPs currently undergo implementation of energy resource accounting systems and modernization of lighting systems using LED lights. Also, we pursue reduction of heat loss in heat supply systems

64 61 and replace obsolete thermal insulation. Some work is currently at the design stage. We continued working on replacement of turbine condensers at Balakovo, Kalinin, and Novovoronezh NPPs, modernization of separator superheaters at Kursk NPP aimed first of all at increasing safety and reliability of work of main equipment at the same time improving energy efficiency of power unit operation. The contract on manufacturing components and modernization of turbine wheel space of power unit No. 5 of Novovoronezh NPP was concluded. The volume of financing totaled 3.7 bln rubles in Inspection audit confirmed the compliance of the Concern s energy management system with the requirements of the international standard ISO 50001:2011. Automated Energy Performance Management System was put into operation. The system permits collecting, generalizing, and analyzing information about changes in energy resource consumption and provides access to information on all levels of management in the Concern and Rosatom State Corporation. 29.9% in 2014 thermal and electric energy savings Energy Consumption Name Unit in kind thou rubles in kind thou rubles in kind thou rubles Nuclear power (used as a fuel) Fuel assemblies, pcs 4,425 * 3,557 * 4,683 * Automotive gasoline t (GJ) 287 (12,599) 10, (8,824) 8, (18,833) 16,229 Diesel fuel t (GJ) 2,432 (103,846) 84,415 4,436 (189,417) 162,793 2,848 (121,610) 94,574 Residual oil t (GJ) 11,460 (446,940) 137,490 16,790 (654,810) 186,955 13,096 (510,744) 141,083 Gas (natural) m 3 (GJ) No purchase 24,125 (811) 98,021 Oil, carbon, shale oil, and peat No purchase * The information constitutes commercial secret. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

65 Ensuring Safety of Russian NPPs. Radiation Impact on Personnel and Citizens Ensuring safety of Russian NPPs throughout their entire life cycle is the top priority of the Concern as an operator. The Concern sets forth new global safety standards. Vladimir Potsyapun, Member of State Duma Committee on Energy Now we can say that we actually set new global safety standards, since everything was greatly improved in terms of safety. We have visited Russian NPPs as well as nuclear power plants in Europe, and we can compare many parameters. The safety of our plants not only matches that of foreign plants, but currently ranks first. The portfolio of foreign orders for Russian nuclear power units confirms that. SAFETY OF RUSSIAN NPPS: RESULTS OF INSPECTIONS CONDUCTED BY THE COUNCIL OF THE FEDERATION OF THE RUSSIAN FEDERATION In early 2014 ad hoc work group was created by the Council of the Federation Committee on Economic Policy following orders by Valentina Matvienko, Chairwoman of the Council of the Federation of the Federal Assembly of the Russian Federation, to review matters of safety at operating nuclear plants of Russia. Members of work group reviewed the materials submitted by nuclear enterprises and visited the Concern s NPPs with reactors of various types: Novovoronezh NPP (VVER-1000), Leningrad NPP ENSURING SAFETY OF NPPS Strict compliance with all international and internal safety regulations. Rostekhnadzor (RBMK-1000), and Beloyarsk NPP (BN-600). The inspection conducted by the Council of Federation brought the following results: The Concern s NPPs comply with applicable Russian requirements and current international recommendations on nuclear and radiation safety. The Concern has developed and takes measures seeking to increase stability of operating NPPs against extreme external impacts. Modern Russian NPP designs comply with post-fukushima requirements. The measures stipulated during construction of power units permit us to additionally improve reliability of NPP operation and responsiveness to emergency situations. ALL NPPS OPERATING IN RUSSIA CURRENTLY COMPLY WITH RUSSIAN AND INTERNATIONAL STANDARDS. ALL RUSSIAN PROJECTS IN THE AREA OF NPPS COMPLY WITH POST-FUKUSHIMA STANDARDS. The Concern obtained licenses for the right of operation of all NPP power units. All power units are operated in accordance with the terms and condition of licenses. In 2014 there were no cases of suspension of licenses for operation of power units due to non-compliance with the terms and condition of licenses. Insurance companies State regulatory agencies on safety The Concern provided for 100% of insurance of all types of civil liability according to the requirements of the licenses obtained. The Concern s employees involved in safety use of nuclear power duly undergone assessment of their knowledge of safety requirements and proper operating skills and received authorization to conduct relevant operations.

66 63 Incidents with radioactive consequences (Regulation NP ), loss of nuclear materials and radioactive substances: NONE IN 2014 NPPS OF RUSSIA OPERATED SAFELY AND RELIABLY, UNCONDITIONALLY COMPLYING WITH THE REQUIRED SAFETY LEVEL. In 2014, the Concern registered the following events: 37 deviations in operation of NPP at the level 0 / below scale at the INES scale. 2 events with the level 1 at the INES scale: On and power unit No. 4 of Beloyarsk NPP (physical launch stage). 10 instances of unscheduled automatic stop of reactors due to critical condition (of them 1 at power unit No. 4 of Beloyarsk NPP). 2 fires (power unit No. 3 of Kursk NPP, ; power unit No. 4 (under construction) of Beloyarsk NPP, ). 2 fire outbreaks (power unit No. 3 of Beloyarsk NPP, ; Leningrad NPP-2 (under construction), ). 2 Concern employees were severely injured (at Beloyarsk and Kalinin NPPs). In all instances which required stop and unload of reactors, the availability of safety systems was complete and provided safe switching of reactors to sub-critical mode or to a required level of capacity. Accidents and incidents occurred at the Concern s registered hazardous facilities: NONE Failures of safety system items which could lead to loss of safety: NOT REGISTERED Deviations at Operating Power Units of NPPs, Injuries, Unscheduled Automated Stops of Reactors, Fires (Fire Outbreaks) NPP Deviations Unscheduled automatic stops of reactor due to critical state Injuries (amount) Fires/fire outbreaks (amount) / /2013 Bal Bel /1 0 Bil Kln Kol Kur /0 0 Len Nvo Ros Smo Total /1 0 Deviations in operation of the Russian NPPs according to the INES scale between 2008 and * * 25+13* * 20+2* 23 * Events associated with low power testing at the stage of putting NPPs into operation. In 2014 events of the level 1 on the INES scale at power unit No. 4 of Beloyarsk NPP during physical launch ( and ) * Beyond scale Level 0 Level 1 Level 2 and higher * 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

67 64 Dynamic Development of Automatic Stops of Reactor from Critical Condition for Period from 2009 to 2014, Cumulative Numbers by Months 16+(3*) * events associated with low power testing at the stage of putting into operation of power unit No. 2 of Rostov NPP. ** events associated with low power testing at the stage of putting into operation of power unit No. 4 of Kalinin NPP. *** events at the stage of physical launch of power unit No. 4 of Beloyarsk NPP (1**) (1***) (2**) safety inspections of operating NPPs and NPPs under construction were conducted 8 material breaches were revealed NPP SAFETY ASSURANCE CONTROL Organization of NPP Safety Assurance Control First Deputy General Director Deputy General Director Director for Production and Operation of Nuclear Power Plants General Director of Deputy General Director General Inspector Deputy General Director Director of the Facilities Construction Management Branch Activity plans to remove the revealed concerns were developed and are currently being implemented Chief engineers of operating NPPs Production Control Subdivisions Chief Inspectors of operating NPPs and NPPs under construction NPP Inspection Control Subdivisions Chief Engineers of the Directorate of NPPs under construction Subdivisions for Technical Supervision of NPP Construction

68 65 Short-time (immediate) activities, COMPLETED Mid-term activities, COMPLETED Long-term activities, CURRENTLY ARE BEING IMPLEMENTED INCREASING SAFETY AND STABILITY OF NPPS AGAINST EXTREME EXTERNAL IMPACTS In connection with the events in Japan which caused the accident at NPP Fukushima, the Concern has developed and implemented an analysis of possible accident development scenarios at Russian NPPs, determining activities aimed at mitigating consequences and reducing impact on population and environment in case of a severe off-design accident (Plan of Activities Intended to Improve Safety of Operating NPPs and Activities Intended to Reduce Consequences of Severe Off-Design Accidents at NPPs). Activities intended to improve stability of nuclear power plants against natural and man-made impacts are performed in three phases: 1. Short-time (immediate) activities, Aimed at reducing man-made risks. All NPPs were supplied with additional mobile accident-prevention machines. Completed. 2. Mid-term activities, Aimed at improving durability of NPPs. Preparation of design specifications and estimates, calculations, analyses, and feasibility studies, supply of additional equipment and materials according to design specifications. Completed. 3. Long-term activities, Implementation of additional design solutions at NPPs, adjustment of accident-prevention documentation. Currently are being inplemented. Each year the Concern updates its activities according to the results achieved in the previous time period. The activities aimed at enhancing stability against extreme external impacts for NPPs under construction, design, and at the stage of putting into operation are similar to the activities applied to operating NPPs. These activities include the following: Analysis of degree of facility protection against extreme external impacts according to the guidelines suggested by Rostekhnadzor; A program for implementation of additional design solutions intended to mitigate consequences of off-design accidents at NPPs; Installment of additional equipment: self-contained mobile diesel generator and mobile pumping power units. Activities at operating NPPs and NPPs under construction permits enhancing stability of NPPs against natural and man-made impacts, including: Prevention of severe accidents; Use of technical means to prevent building up of explosive hydrogen concentrations during zirconium-steam reaction; Zero tolerance to radioactive emissions and effluents to environment in excess of the prescribed standards. Each year one of the Concern s NPPs hosts Comprehensive Emergency Response Drills (CERD). In the course of the drill NPP personnel and subdivisions of the Ministry of Emergency Situations of Russia jointly practice using all emergency response mobile machines available at NPPs. In 2014 comprehensive emergency response drill were held at Kola NPP. CERD 2014 showed that the number and capacity of the available mobile machinery are sufficient to support a power unit in a stable and steady condition for the required amount of time in case of any natural or manmade anomalies. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

69 66 ^ Integrated emergency response exercises at NPP FIRE SAFETY In 2014, the Concern performed a number of activities to ensure fire safety, in particular: Participating in inspection of fire safety conditions at Baltic NPP, Leningrad NPP-2, Novovoronezh NPP-2, power units Nos. 3 and 4 of Rostov NPP, power unit No. 4 of Beloyarsk NPP, FTNPP, and Voronezh NHP (all currently under construction). Performing organizational and technical activities at all NPPs to ensure preparation for spring-summer fire hazard period. Reviewing materials and preparation of opinions for the expert committee for capital construction. Preparing and implementing the Plan for Enhancing Fire Safety for NPPs under construction of and Improving Efficiency of Control over Fire Safety approved by the Chief Executive Officer of Rosatom State Corporation. Holding training meetings with heads of facility-based subdivisions of the Federal Fire Fighting Service involved in NPP protection and heads of fire safety departments of operating NPPs (Beloyarsk NPP, November 4-6, 2014). Developing and introducing into effect by an order of the General Director of regulations regarding NPP fire safety. THE LEVEL OF PERFORMANCE OF FIRE FIGHTING ACTIVITIES ASSOCIATED WITH RECTIFICATION OF POINTS OF CRITICISMS INDICATED BY THE STATE FIRE SUPERVISION AUTHORITY IS 100%.

70 67 100% In order to increase fire safety at NPPs, in 2014 the Concern s third-party liability is 100% insured the Ministry of Emergency Situations of Russia allocated additional facility-based subdivisions of the Federal Fire Fighting Service involved in NPP protection intended to enhance fire protection and supplied fire-fighting machinery, including 19 fire fighting vehicles and 2 training facilities. INDUSTRIAL SAFETY The Concern pays great attention to industrial safety of NPP Hazardous Production Facilities (HPFs). Pursuant to Federal Law No. 116-FZ dated July 21, 1997 On Industrial Safety of Hazardous Production Facilities, HPFs are registered with the departmental (industry-specific) section of state register of hazardous production facilities. As of December 31, 2014, 89 HPFs were registered with the departmental (industry-specific) section of state register of hazardous production facilities. All these HPFs are insured pursuant to the Federal Law On Compulsory Civil Liability Insurance for Owners of a Hazardous Facility for Causing Harm as a Result of an Accident at the Hazardous Facility. Industrial Safety Declarations were prepared pursuant to regulatory requirements for hazardous production facilities of hazard classes 1 and 2. The Concern employees involved in operation of HPFs undergo training and certification on the matters of industrial safety in the appropriate committees of Rostekhnadzor and NPPs. Concern has the industrial safety management system in place in order to prevent industrial accidents and incidents as well as in order to plan and implement priority and long-term measures aimed at increasing industrial safety of hazardous production facilities and at providing due training for the Concern s personnel making them ready to containment and elimination of consequences of accidents and incidents at HPFs. In 2014, no industrial accidents at hazardous production facilities operated by Rosenergoatom Concern OJSC were registered. PHYSICAL PROTECTION The most important objectives of the operating organization consist in providing for physical protection, including anti-terrorist stability of nuclear power plants which operate on all stages of their life cycles as nuclear hazardous facilities; protecting state, proprietary, and trade secrets; ensuring economic security of the enterprise while maintaining the Concern s legitimacy and corporate interests. Among the important elements of the physical protection system are organizational activities, actions of security teams, and sets of engineering and technical means of physical protection. Access control and management system (ACMS) is one of the nine sub-systems. It is an automatic analytical system capable to identify individuals and vehicles at the entrance to (and exit from) the protected areas using various physical identification characteristics; restriction on the number of people with the right to access the premises, buildings, and protected areas; automated activation and deactivation of security alarm for premises: control of time and place of entry, as well as the time periods during which controlled users stayed at the facility. One of the ACMS objectives consists in making it impossible for anyone to bring weapons, explosive, narcotic, and radioactive substances (materials), and other prohibited items to NPP. For this purpose modern inspection and search equipment is implemented at NPPs (including by way of modernization). This equipment permits automating and speeding up the access of system users to the facility after their thorough search and identification. ACMS technical characteristics make it possible for subdivisions in charge of NPP security to timely detect, block, and apprehend violators and provide reliable access control for personnel, visitors, and vehicles to the facility and its protected areas. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

71 68 14 TSCs are currently in operation EMERGENCY PLANNING AND EMERGENCY PREPAREDNESS The Concern has created and currently operates the emergency prevention and response system (SChSK). The system is used to plan, ensure preparedness, and conduct activities aimed at protecting personnel and areas of NPPs against emergency situations, both natural and man-made. In structural terms, the Concern s SChSK is a sub-system of the Industry-Specific Emergency Prevention and Response System of Rosatom State Corporation (OSChS) and is operated in liaison with regional and municipal subsystems of the Unified State System for Emergency Prevention and Response (RSChS) according to the location of nuclear power plants. The particularity of the Concern s emergency response system operation consists in a very efficient mechanism of cooperation in case of emergency. Appropriate resources and centralized reserves of finances and materials have been created at each NPP for containment and elimination of accidents and emergencies. Following the accident at Fukushima NPP all nuclear power plants were additionally equipped with mobile emergency units, newest systems were created for communication, public announcement, and information support. The availability of communication and public announcement systems is provided (24/7) by duty shift of the Crisis Center and operations control duty services (duty operators) of operating NPPs. The important place in the emergency response system belongs to the group for emergency assistance to nuclear power plants (EANPP) and coordinating bodies (committees on emergency prevention and elimination and fire safety) at operating NPPs. In the face of an emergency the group (EANPP) closely cooperates with technical support centers (TSC) created on the basis of the organizations which are general design contractors, chief designers, research advisors, as well as leading Russian institutions involved in matters of nuclear power industry. 14 TSCs are currently in operation. Each TSC has a 24/7 duty in place, and interaction with the Concern s Crisis Center is also organized. In 2014, the Crisis Center, nuclear power plants, and TSCs held emergency prevention drills at a regular basis to enhance coordination and interaction in the conditions of simulated severe accidents. Readiness checks were conducted at Kola and Leningrad NPPs to make sure they are prepared to contain and eliminate emergency situations, both natural and man-made. These NPPs confirmed their readiness to perform their tasks in the area of civil defense and emergency situations. The Regional Crisis Center (RCC) was created and operated in It was established on the basis of the Concern s Crisis Center (CC) following recommendation of the Post-Fukushima Committee and resolutions of the WANO workshop (Moscow Center) regarding meeting the requirements of the Rules for Information Exchange between Participants of RCC and NPPs with RU VVER of the WANO Moscow Center. Emergency centers of Russian NPPs interact with RCC within the same scope as with CC, and there is also an option to request support from other foreign RCC member countries. The Concern s emergency prevention and elimination system is a well-coordinated and interconnected system operating 24/7 and receiving information from NPPs in real time. The Crisis Center monitors main technology, radiation, environmental, and fire protection parameters 24 hours a day 7 days a week; the parameters are also submitted to Technical Support Centers thus creating unified information space for all participants of emergency response. The Concern s current emergency prevention and elimination system meets all requirements set for the participants of the Unified State System for Emergency Prevention and Response, is one of its most sophisticated links, and corresponds to the best global practice.

72 69 SAFETY CULTURE Safety culture is a basic principle of NPP safety management. The Concern s activity in the area of safety culture is aimed at forming a high level of commitment to safety among the Concern s and NPP s personnel. High level of commitment to safety is shown in continuous improvement of activity that affects safety, self-consciousness of employees who understand their responsibility in the area of safety and their self-control during performance of all operations. All this together guarantees a steadily high level of NPP safety. The Concern has developed and put into practice by an administrative order the Procedure for Organization of Work on Developing and Maintaining Safety Culture in Rosenergoatom Concern OJSC which sets forth distribution of functions on development and maintenance of safety culture within the company. Management s policy in the area of safe and reliable operation of NPPs is communicated to personnel using mass media, posters, and title screens on PCs. Also, Internet consulting portals are set up by management of operator companies, and awareness day campaigns are regularly held. The safety matters are discussed with NPP personnel during visits of the Concern s management to NPPs and in the course of conference calls and visiting meetings of the Concern s management. The achieved level of safety culture and commitment of personnel to the principles of safety culture are evaluated systematically at all NPPs. Training materials on safety culture have been developed. The programs for preparation to a position and programs for maintaining personnel qualification include the Safety Culture section. Training on the subject Psychological Aspects of Safety Culture is organized on-site at NPPs. Levels of Commitment to Safety Culture Commitment at the political level Declaration about policy in the area of safety Management structure Resources Self-regulation Commitment at the management level Determination of responsibility Work practice determination and control Personnel qualification and training Incentives and penalties Revisions, analytical reviews, and comparisons Individual commitment Critical position Strictly regulated and weighted approach Communicative approach 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

73 70 х3 collective radiation exposure decreased by 3 times during 9 previous years Safety Culture and Human Factor booklets were prepared in order to use them in daily operations of NPP personnel. Safety Culture handbooks intended for better understanding of bases and principles of safety culture as well as for understanding the importance of human factor in safety matters were prepared and are currently in use. Instructional film on the subject Self-Control as a Method to Prevent Errors of Personnel was prepared and made available to NPPs in order to enhance training efficiency and prevent erroneous actions of personnel. RADIATION EFFECT ON PERSONNEL AND POPULATION. RADIATION CONTROL At the current stage of extended construction of nuclear power plants the important task consists in ensuring radiation safety of NPP personnel and local communities along with preventing radioactive contamination of the environment in excess of permissible levels regulated by radiation safety standards. Information about radiation level at NPP, in the environment, and people exposure levels is obtained through radiation control. NPP design provides for radiation control system (RCS) intended to ensure efficient systematic and uninterrupted control of protective barrier integrity. NPP radiation control system includes automated data measurement units and equipment that ensures their operation. The system obtains and processes data about controlled radiation parameters in the area of controlled access to NPP, at the industrial site, in the sanitary protective area, and in the supervised area in all operational modes of NPP, including designbased and off-design accidents, as well as about condition of NPP during decommissioning of power units. Radiation control at NPP is exercised by NPP radiation control services certified in accordance with the requirements of the Federal Agency on Technical Regulating and Metrology. NPP radiation control organization (scope, frequency, control points, performers, and result record-keeping) is determined by relevant rules approved by regional directorate of the Federal Medical-Biological Agency (FMBA) of Russia. Also, regional directorates of FMBA of Russia perform independent selective radiation control of environmental facilities and foodstuff produced locally. Based on the radiation safety principles adopted by global community, Rosenergoatom Concern OJSC consistently conducts policy on implementation and further development of methodology on radiation protection optimization at NPPs. The methodology consists in maintaining individual exposure doses and number of exposed persons on the lowest possible levels taking into account economic and social factors. The following measures are taken pursuant to requirements of standard documents at the Concern s NPPs: Keeping records of individual exposure dose for each employee throughout the year; Keeping records of individual exposure dose for each employee throughout 5 consecutive years; Keeping records of individual exposure dose for each employee throughout their labor activity. Information about exposure doses is recorded in personnel s record cards for individual exposure doses and in the electronic databases of the automated system of individual dosimetry control (ASIDC) created in Rosenergoatom Concern OJSC. Radiation control of the environment at the location of NPPs is exercised according to rules for radiation control taking into account the type of reactor units and particulars of their locations. The results are submitted in radiation hygienic data sheets of relevant organizations and annual reports about radiation environment at NPP locations. Radiation control is intended to confirm the absence of radiation impact of NPPs on population and environment by controlling and analyzing changes in radiation situation in the sanitary protection zone and supervised area at NPPs.

74 71 Kola NPP ^ In order to ensure uninterrupted control over dosage intensity at the location of NPPs, automated radiation control system (ARCS) operates around each NPP. The system is a functional sub-system of the Unified State Automated System for Monitoring Radiation Situation on the territory of the Russian Federation. Its main purpose consists in controlling radiation in the sanitary protection zone and supervised area at NPPs and providing information and analytical support of emergency structures, NPP management, governing agencies and state authorities of various levels in case of an accident at NPP. ARCSs of all NPPs of Russia are connected through data transmission channels in an industry-wide sub-system whose central control panel is located in the Concern s Crisis Center. From here, data are submitted to the industry-specific system of Rosatom State Corporation. ARCS stands located in populated areas within the NPP supervised zone are equipped with information panel displaying data about dose intensity at the location. Radiation data is also available on the Concern s website at both in real-time mode and as archived data for previous periods. Pursuant to Resolution of the Government of the Russian Federation No. 639 dated July 10, 2014 On State Monitoring of Radiation in the Russian Federation, organization and maintenance of a unified state automated system for radiation 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

75 72 Sliding (over Three Years) Collective Radiation Exposure at NPPs by Types of Reactor Units (Person-Sv/Unit) RBMK All NPPs VVER Custom-built reactors (EGP, AMB, BN) Collective Radiation Exposure at NPPs in , Person-Sv/Unit All NPPS KUR SML LEN BAL KOL BIL KLN NVO BEL RST monitoring is stipulated, taking into account the efforts on creating ARCS of NPPs of Russia. Thanks to focused organizational and technical efforts at NPPs, personnel s radiation exposure is steadily decreasing. From 1995 to 2014, the value of collective radiation exposures decreased by more than 3 times. The main limits of NPP personnel s radiation exposures were not exceeded in In 2014, a set of work was performed on evaluating personnel s individual radiation risk and preparing techniques for radiation risk management. We worked on evaluating ratios of individual radiation risk for NPP personnel. The evaluation served as a basis for development of a software module for automated workstation which calculates individual radiation risk (ARMIR AES, version 6.1). The module permits making decisions on radiation risk management based on source data of personnel working at Russian NPPs. In 2014 we also worked on improving control over personnel s internal radiation doses. In 2014, the Concern established standards on emission limits and allowable discharges of

76 73 Emissions of Inert Radioactive Gases, in Percentage of Allowable Emissions EGP RBMK VVER BN radioactive substances into environment pursuant to Resolution of the Government of the Russian Federation No. 717 dated September 13, 2010 On Amendments to Certain Resolutions of the Government of the Russian Federation on the Matters of Authorities of the Ministry of Natural Resources and Ecology of the Russian Federation, Federal Service for Supervision of Natural Resources, and Federal Service for the Supervision of Environment, Technology and Nuclear Management. No unauthorized discharge of radioactive nuclides took place in Like in the previous years, the actual gas-aerosol emissions and liquid discharges were significantly lower than the standards established by Rostekhnadzor. The picture shows IRG emissions in percentage to the standards for allowable emissions. New (for some NPPs) and more strict standards for allowable emissions were introduced at NPPs in Furthermore, in 2014 the procedure for accounting of emissions changed. After such change radioactive substances are assumed to be present in emissions (even if they are not detected by current devices and methods) at the level of 0.5 of the minimum detectable amount, i.e. the emission evaluation became more conservative. The analysis of data on NPP emissions and discharges confirms the stable and reliable operating level of NPP power units and the efficiency of protective barriers created to prevent dissipation of radioactive substances. Systematic measurement of concentration of radioactive substances in the atmosphere and heat sinks, measurement of soil and plant activity and food stuff at the control points located at a distance of 50 km from NPP confirm the absence of detectable impact of NPP operation on the condition of objects of outside environment. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

77 74 ^ Kalinin NPP NONPROLIFERATION OF NUCLEAR MATERIALS Nonproliferation of nuclear materials is ensured through the Concern s system of state accounting and control of nuclear materials. This system functions in full compliance with the requirements of international and Russian regulations and is under control of Rosatom State Corporation and Rostekhnadzor. The system comprises a set of organizational activities, regulatory and procedural documents, and technical means which provide for accounting and control, detection and registration of losses, and prevention of unauthorized operations with nuclear fuel at all stages of its handling at NPPs, from receiving fresh nuclear fuel to sending spent nuclear fuel outside of NPPs. The system is based on timely registration of each reception, moving, or sending of nuclear fuel as well as changes in the amount of nuclear materials in nuclear fuel after its use in the reactor. All these operations are registered in operating and accounting documents of NPPs and serve as a basis for preparation of reports to be submitted to the system of state accounting and control of nuclear materials and Rosatom State Corporation.

78 75 Kursk NPP 2,530 3,262 1,728 Each year a physical inventory count of nuclear materials takes place in order to comply with the procedure for accounting and control of nuclear fuel at the places of storage and use of fuel assemblies (FAs). For the entire term of operation of the Concern s NPPs there were no losses or theft of nuclear materials. January 15, 2011 was completed (Kalinin, Kursk, Leningrad, and Rostov NPPs). First line of RAW treatment facility of Leningrad NPP was put into industrial operation. DECOMMISSIONING OF NPP POWER UNITS Leningrad NPP 2,387 5,847 2,125 Amount of spent FAs, segmented in 2014 Total spent FAs segmented from start of operation Spent FAs removed to FSUE GKhK HANDLING RADIOACTIVE WASTE AND SPENT NUCLEAR FUEL The main area of efforts in handling radioactive waste (RAW) is further reduction in generation of initial RAW and their transformation to a conditioned state which is safe for temporary storage at NPPs. The Concern equips NPPs with RAW treatment facilities, reconstructs the existing and creates new storages for RAW at NPPs which provide for environmental safety of NPPs throughout the entire term of their operation. All work on extraction, treatment, and conditioning of collected and incoming RAW is performed at NPP in accordance with federal legislation. The following techniques are used at NPPs for RAW treatment and conditioning: evaporation to the maximum salt, cementing, ion-selective cleansing, burning, flattening, melting, and fragmentation. In 2014 at the expense of the Concern, the container storage and segmenting facility for spent FAs was put into industrial operation at the spent nuclear fuel storage facility of Leningrad NPP, and proper work criteria were achieved at the container storage and segmenting facility for spent FAs at the spent nuclear fuel storage facility of Kursk NPP in the industrial operation mode t of metal waste contaminated with radioactive substances were removed from NPP sites (Balakovo, Beloyarsk, Kalinin, Kola, Novovoronezh, Kursk, Leningrad, and Smolensk NPPs). Initial registration of RAW generated before Decommissioning of NPP power units after the end of designed service life is a natural and necessary stage of their life cycle. This work was performed in 2014 in accordance with the activity programs for NPP decommissioning approved by Rosatom State Corporation as well as as a within the scope of the Federal Special Purpose Program Ensuring Nuclear and Radiation Safety for 2008 and Until Amendments to the terms and conditions of the license of Rostekhnadzor authorizing operation of power units Nos. 1 and 2 of Beloyarsk NPP were received in order to perform the following operations: removal of the building of gas storage tank for accident containment, deconstruction of south-west structure of KhSO-1, disassembly of equipment, pipelines, and fittings of machine hall, etc. Programs for comprehensive inspection of power units Nos. 1 and 2 of Leningrad NPP, No. 3 of Novovoronezh NPP were prepared. Programs for decommissioning of power units Nos. 1 and 2 of Kursk NPP were updated. Equipment was disassembled and 250 t of metallic low-level RAW was removed from power units Nos. 1 and 2 of Beloyarsk NPP. Operational testing of plasma treatment of RAW at power units Nos. 1 and 2 of Novovoronezh NPP started. Required routine operations intended to ensure safe condition of power units Nos. 1 and 2 of Beloyarsk and Novovoronezh NPPs were performed. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

79 Natural Capital. Environmental Impact Ecological safety, environmental protection, and rational use of natural resources in the areas of industrial activities constitute strategically important objectives for the Concern. The purpose of the Concern s environmental policy is to provide the level of NPP safety when the impact on the environment, personnel, and population would be minimal, thus conserving natural systems and supporting their integrity and life-supporting functions. The Concern pursues a comprehensive approach to managing environmental impact which includes complete accountability to Rosatom State Corporation and transparency of all indicators of environmental activity. The Concern s environmental activity principles and obligations regarding ecological safety and environmental protection are specified in the Environmental Policy available at: environment_safety/environment/ In 2014 NPPs were operated subject to unconditional compliance with statutory environmental standards and rules. NPPs operated in a reliable and safe manner, with a minimum possible impact on the environment. THE MAIN SIGNIFICANT WORK PERFORMED BY CONCERN AS A PART OF ITS ENVIRONMENTAL POLICY IN 2014 Rostov NPP: capital repairs of filtration field No. 1 of waste treatment facilities in the radiation free area; waste treatment facilities for storm water drainage of power units Nos. 3 and 4 were put into operation; algol treatment of heat sink and dam area of the Tsimliansk water basis in order to suppress biological interference (preventing water bloom) Balakovo NPP: certain measures were taken to maintain (recover) design characteristics of the Kristall oily water treatment facility and biological treatment station in order to reduce adverse impact on the environment by treating and reducing pollutants in discharging water ATMOSPHERIC EMISSIONS Priority areas in environmental protection activity Discharges into waters Production waste recovery

80 77 NPP Ecological Services Ecological control and Safety Evaluation Making Efficient Decisions Minimization of environmental impact of NP IN 2014, 1,514 T OF POLLUTANTS WERE EMITTED INTO ATMOSPHERE, WHICH IS 35.5% OF THE AMOUNT PERMITTED IN THE REPORTING YEAR (4,290 T). THE VOLUME OF POLLUTANT EMISSIONS RESULTED FROM FUEL COMBUSTION IN BOILERS AND EMERGENCY DIESEL GENERATORS ON THE BOOKS OF NPPS TOTALED 948 T WHICH IS 62.6% OF GROSS EMISSION OF POLLUTANTS. THE VOLUME OF SOLID POLLUTANTS EMITTED IN 2014 TOTALED 63 T, GASEOUS AND LIQUID POLLUTANTS 1,451 T. GAS CLEANING AND DUST-CAPTURING UNITS RECEIVED 190 T OF POLLUTANTS, OUT OF WHICH 182 T WERE CAPTURED AND DECONTAMINATED (CAPTURE EFFICIENCY IS APPROXIMATELY 96%). OVER MANY YEARS THE SHARE OF NPPS IN THE VOLUME OF POLLUTANTS EMITTED INTO ATMOSPHERE BY ALL ENTERPRISES OF THE RUSSIAN FEDERATION IS BELOW 0.01%. MAIN INDICATORS OF ENVIRONMENTAL IMPACT ATMOSPHERIC EMISSIONS OF POLLUTANTS Notwithstanding the minimum values of indicators for pollutant emissions, nuclear power plants strive to reduce harmful impact on atmosphere: we improve technology used for increasing efficiency of fuel consumption, use fuel oil of a better quality (with less sulfur content), improve technologies used in painting, put into operation efficient gas cleaning and dust-capturing units. Emissions of NO X, SO X and Other Significant Pollutants into Atmosphere, Indicating their Type and Mass, t * Sulfur dioxide Carbon oxides Nitrogen oxides (in NO 2 equivalent) Hydrocarbons (excl. volatile organic compounds) Volatile organic compounds Other gaseous and liquid 1, , , Volume of Pollutant Emissions into Atmosphere by Nuclear Power Plants in , tons 3,769 3,913 1,587 1,602 1,514 4, ** 238.0*** Actual emissions Standard * * Excluding solid pollutants. ** Incl of methane. *** Incl of methane. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

81 78 * (among them 7.5 ground water) ** (among them 7.8 ground water) *** (among them 7.6 ground water) Emission of Ozone-Destroying Substances (ODS) in Name of ODS ODS emitted, t Use of Water by Sources, mln m 3 6, * 6, , , ** *** 7.5 1,818.9 CFC Total, incl. ODP (metric, t) х 1 = х 1 = х 1 = , , , ,654.1 HCFC Total, incl. ODP (metric, t) 1.832х0.055= х0.055= х0.055= CFC-12 dichlorodifluoromethane (ozone depletion potential (ODP) = 1.0) HCFC-22 difluorochloromethane (ODP = 0.055) Potable water from natural water sources Potable water from water supply utility systems Fresh process water from natural bodies of water Sea water 34,130 t of waste generated at NPPs in 2014 (1,835 t less than in 2013) DISCHARGE OF POLLUTANTS INTO WATERS Water sources used by nuclear power plants do not belong to protected areas. It is worth noting that the Concern s NPPs have no effect on wetlands included in the Ramsar List ( In 2014, NPP wastewater disposal was within the limits of water balance and the amount of generated power and totaled 93.6% of the volume of water used. It is a good indicator of water use and complies with the limits established by environmental authorities. At all NPPs waste waters of household sewage and storm water drainage were treated before their discharge into surface waters. Control over content of pollutants entering surface water with waste waters from NPPs was effected in accordance with duly agreed and approved rules. Waste waters discharged in 2014 totaled 6,076 mln m 3, and the share of polluted waste waters totaled approximately 0.09%. It is a good indicator compared to other enterprises of the Russian Federation. 6,063 mln m 3 of partially clean waste waters and 6.3 mln m 3 of waste waters treated to standard quality were discharged in water bodies in 2014, including: 5.9 mln m 3 at the mechanical water treatment facilities; 0.4 mln m 3 at the biological water treatment facilities. The discharge volumes of polluted waste waters are steadily reduced thanks to consistent modernization and reconstruction of waste water treatment facilities at NPPs.

82 79 HANDLING PRODUCTION AND CONSUMPTION WASTE Total Volume of Multiusable and Reusable Water, mln m 3 As far as handling production and consumption waste (hereinafter, waste) is concerned, NPPs effect their environmental protection activities in accordance with legislation of the Russian Federation in the area of environmental protection and based on the license and approved draft standards for waste generation and limits on waste emplacement. 28, , ,777.8 The main volume (95.1%) of waste generated in 2014 consists of class 4 waste (low hazardous waste) and class 5 waste (virtually non-hazardous waste) 15,406 t and 17,043 t, accordingly. The increase in generation of class 2 waste is due to scheduled replacement of lead accumulators at Balakovo, Kola, and Novovoronezh NPPs In recycled water systems In reused water systems Consumption in recycled water systems/total water extraction Consumption in reused watersystems/total water extraction Production and Consumption Waste by Classes, t Indicators Class Class Class 3 1,586 2,311 1,369 Class 4 11,900 13,544 15,406 Class 5 26,503 19,994 17,043 Waste hazard class Existed at the beginning of 2014 Generated in 2014 Used Decontaminated Handed over to other enterprises Emplaced at own facilities in 2014 Total Among them Total Among them on sites: Existed at the end of 2014 for use for decontamination for storage for dumping storage dumping = = I II III , , IV 14, , , , , , , , ,009.7 V 1, , , , , , Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

83 80 Environmental Costs Incurred, mln rubles 2,458 3,196 3, Current (Operating) Environmental Costs, mln rubles ,058 Payment for Environmental Services, mln rubles For ensuring environmental radiation safety Collection and treatment of waste waters Waste handling Protection of atmospheric air and prevention of climate change Protection and rehabilitation of lands, surface and ground waters Other areas of activity in the environmental protection sphere For preservation of biodiversity and protection of natural areas Research activities aimed at reducing adverse human-induced impact on the environment Protection of environment against noise, vibration, and other types of physical impact 3,141 mln rubles environmental costs in 2014 The volume of waste generated at NPPs at the beginning of 2014 was 16,185 t, at the end of the year 17,155 t. Following waste handling activities at NPPs, in t of class 1 waste (extremely hazardous) was decontaminated, 884 t of classes 3, 4, and 5 waste (moderately hazardous, low hazardous, and virtually non-hazardous) was reused; 30,529 t of waste was handed over to other enterprises; and 1,744 t of waste of classes 3, 4, and 5 was dumped at own facilities. All production and consumption waste is emplaced at specially equipped sites, in special storages, and their disposal is controlled by NPP ecological services. ENVIRONMENTAL COSTS Environmental costs incurred by NPP include expenses for protection and rational use of water resources (including payments to other enterprises for acceptance and treatment of waste waters), atmospheric air, environmental protection from adverse impact of production and consumption waste (including payment under contracts on transfer of waste to specialized organizations) and remediation of violated and contaminated lands. In 2014, fines for breach of statutory requirements in the area of production and consumption waste handling were levied on Leningrad NPP and totaled 140,000 rubles. Applicable legislation provides for a fee for adverse environmental impact as a form of partial compensation for damage caused to the environment by a natural resource user. ENVIRONMENTAL RISK MANAGEMENT In 2014, comprehensive research in evaluation of radiation and chemical risks for human health in local communities situated close to NPP locations were carried out in the Sverdlovsk and Voronezh Oblast where Beloyarsk and Novovoronezh NPPs, accordingly, are located and where it was decided to construct new units. The results of these risk evaluations were taken into account in preparation of the Concern s environmental policy and development of the Concern s environmental management system (EMS). NPP radiation impact on environment through its actual emissions and discharges of radioactive substances into atmospheric air and bodies of water is significantly below allowable values and

84 81 Standards developed and introduced by Concern pursuant to requirements of Russian legislation and regulations Fee for Adverse Impact on the Environment, thousand rubles Name Fee for allowable and excessive emissions (discharges) of pollutants (emplacement of production and consumption waste) Actually paid during the year ,691 11,064 15,705* Fundamental Rules for Environmental Protection at Nuclear Power Plants Funds (charges) and fines recovered in compensation for damage caused by breach of environmental legislation * The growth is generally caused by increase in fee for emplacement of production and consumption waste Guidelines for Organization of Production and Environmental Monitoring at Nuclear Power Plants Manual on Organization of Work Connected with Handling Production and Consumption Waste Procedure for Production Control in Waste Handling Activities in Rosenergoatom Concern OJSC does not exceed the minimum significant dose equal to 10 msv per year. With such volume of emission of radionuclides to environment the radiation risk for population is guaranteed to be unconditionally acceptable (less than 10-6 ). It permits us to consider the actual level of emissions and discharges of NPPs as optimized. ECOLOGICAL ACCEPTABILITY The Concern has developed program activities in key areas, including environmental, along with corporate standards which reflect short-term goals and comply with the Concern s strategic concept on EMS improvement. ENVIRONMENTAL AUDIT AND EMS CERTIFICATION Improvement of EMS and its certification on conformance with international standard ISO is an efficient way for the Concern to confirm its commitment to ideas of environmental protection and an opportunity to increase its competitiveness and to enhance interaction with stakeholders and general public. In 2014, inspection and/or recertification audits of certified EMS were conducted at the Concern s headquarters and operating NPPs. Guidelines. Technologies for Reducing Volumes and Ways of Reusing Hazardous Waste Generated during Operation of NPPs Key Results of The following Concern s standards were updated and put into operation: Water Use at Nuclear Power Plants. Classification of Cooling Water Supply Systems, Manual for Environmental Management System, Procedure for Internal Audit of the Environmental Management System. Inspection and/or recertification audits of certified environmental management systems of Concern s headquarters and operating NPPs were organized and conducted to ensure conformance with international standard ISO 14001:2004. Validity of environmental certificates was confirmed. Favorable opinions of the state environmental expertise were obtained based on justification materials to the licenses for operation of the following power units at 104% capacity vs nominal: No. 1 of Balakovo NPP, No. 2 and 3 of Kalinin NPP. The activities stipulated in the Comprehensive Plan for Implementation of the Environmental Policy of Rosatom State Corporation for 2012 and until 2015 and scheduled for 2014 were performed to the extent referring to Rosenergoatom Concern OJSC and its branches operating NPPs. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

85 Developing Generating Potential Novovoronezh NPP-2 and Leningrad NPP-2 are the first plants to be built in Russia from scratch for the last thirty years. 9/1 9 (and 1 floating) new NPP blocks were under construction in 201 BUILDING NEW NPP POWER UNITS Pursuant to Energy Strategy of Russia until 2030, General Allocation Pattern for Energy Facilities of Russia until 2020, and taking into account the long-term development until 2030, the Concern provides for increase in the share of nuclear power in energy balance of Russia at the same time ensuring necessary safety level, including by way of building new power units of NPPs. In 2014, construction work on erection of 9 new power units and 1 floating power unit was in progress at the Concern s nuclear power plants. Six of them were constructed according to the NPP-2006 design which became an evolutionary step in development of the Russian nuclear power industry. In 2014, construction of new power units was effected under general contractor agreements with engineering companies NIAEP JSC, Atomenergoproekt JSC, and UK Uralenergostroy LLC. General contractors and contractors were selected according to the requirements of the Unified Industry Procurement Standard of Rosatom State Corporation bln rubles was spent on construction of NPP-2006 NPP Power Units under Construction: Volume of Construction Work Performed (% of Plan Fulfilled) No. Name of NPP Power unit availability 1 Beloyarsk NPP, power unit No. 4, BN Novovoronezh NPP-2, power unit No. 1, VVER % 3 Novovoronezh NPP-2, power unit No. 2, VVER % Physical launch (start) 4 Leningrad NPP-2, power unit No. 1, VVER % 6/7 6 years 7 months period of the NPP power unit construction 5 Leningrad NPP-2, power unit No. 2, VVER % 6 Rostov NPP, power unit No. 3, VVER Rostov NPP, power unit No. 4, VVER % 8 Baltic NPP, power unit No. 1, VVER % 9 Baltic NPP, power unit No. 2, VVER % Physical launch, power start up

86 83 Building New NPP Power Units in 2014 NPP Power unit No. Power unit type Основные результаты Beloyarsk NPP No. 4 BN-800 Work on 500 kv switchgear (cells 1, 2, 4, and 5) were completed. Construction and assembly operations at 3rd loop of the 2nd contour were completed and ready for filling with sodium. Turbine assembly and setting of turbine at hydraulic ratchet pump were completed. The test consisting in filling condenser with a vacuum was conducted. Novovoronezh NPP-2 No. 1 VVER-1200 Voltage was supplied to gas-insulated switchgear of 220 kv from overhead line. ITVS were supplied. No. 2 VVER-1200 (NPP-2006 project) The dome was covered with internal containment (20UJAreactor building). The ring of the base RU was assembled. Leningrad NPP-2 No. 1 VVER-1200 (NPP-2006 project) Reactor vessel was installed on its proper location (reactor building (10UJA)). Polar crane was put into operation, Start of welding work at main circulation piping in the reactor building (10UJA). No. 2 VVER-1200 (NPP-2006 project) De-aerator is installed on its proper location. Turbine-generator pedestal is assembled. Supporting truss in the reactor building is assembled. Rostov NPP No. 3 VVER-1000 The systems are prepared for spillage to open reactor. The systems and equipment are prepared to civil defense test. Stage B (Physical launch) is performed. Turbo-generator is synchronized and connected to network. No. 4 VVER-1000 The crane with lifting capacity of 200 t is registered in the turbine room. Supporting truss is installed on its proper location. Baltic NPP No. 1 VVER-1200 (NPP-2006 project) No. 2 VVER-1200 (NPP-2006 project) Operations performed as a part of activities following decision on additional placement of power units of low and medium capacity. Kursk NPP-2 No. 1 VVER-1200 (VVER-TOI project) Preparatory operations were performed. No. 2 VVER-1200 (VVER-TOI project) ОсвProgress of Main Physical Volumes of Construction and Assembly Operations in Work types Unit Reinforcement t 45,011 27,186 Concreting m 3 377, ,044 Process pipelines t 19,131 18,367 Metal structures t 32,714 16,351 Equipment assembly t 30,176 23, Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

87 COST OF NPP CONSTRUCTION bln rubles invested in construction of new NPP power units in 2014 Due to the current economical situation and tough competition in the NPP design market the Concern faces the task of significant reduction of cost and timelines for construction of new NPP power units. NPP-2006 is currently the basic design for organized serial construction of NPPs of the Russian design both in Russia and abroad. The construction cost of a standard two-unit NPP according to this design totals 43.4 bln rubles in the basis prices of the year 2000, or bln rubles in prices of the 1Q The power start of the first power unit of an NPP constructed under the NPP-2006 design is accomplished in 6 years and 7 months, and of the second power unit in 7 years and 7 months after project launch. Maximum expenses on financing of a two-unit NPP are incurred on the fifth year of construction. New techniques based on the Rosatom Production System are implemented in order to reduce construction timelines of new power units: Preassembly of main circulation pipelines in the pre-installation preparation workshop directly on-site; Simultaneous welding at four loops of main circulation pipelines, simultaneous welding of more than two welded seams; Supply of turbo-generator К /300 in the form of five preassembled blocks; Manufacture and assembly of preassembled blocks of the internal containment of the reactor building. For the first time in Russia, at Leningrad NPP-2 the 328 t reactor vessel of the first power unit was installed using the open top technique using heavy-duty caterpillar crane Liebherr LR The operation was performed in compliance with all industrial safety requirements. The quality management system which complies with international standard ISO 9001:2008 Quality Management Systems. Requirements was developed and implemented in 2014 by the Concern s Facility Construction Management Branch in order to regulate operations, make them compliant with international standards, as well as to meet the requirements for participation in international tenders on NPP construction. Certification audit in TÜF Thüringen certification authority was successfully passed, and we received the certificate on conformance of the management system with standard 9001:2008 in the area of design and construction management of facilities intended for peaceful use of nuclear energy as well as production and supply of electric power (reg. No. TIC ). Unified requirements were introduced for the organization, collection, and analysis of data on production (work, services) quality in the civil nuclear power industry of the Russian Federation, formation and evaluation of successful management solutions, implementation of quality policy of Rosatom State Corporation. Requirements were introduced for organization of the monitoring system of construction and assembly work providing for unified (for all construction sites) collection and analysis of data and information about quality of construction and assembly work.

88 85 Financial and Economic Indicators of NPP Construction in 2014 Indicator Unit Plan Actual Financing* bln rubles Compliance with annual plan % Increments of non-financial assets bln rubles Compliance with annual plan % Assimilation of capital expenses bln rubles * Investments in fixed capital. Compliance with annual plan % Number of Organizations and Employees Involved in Construction of NPPs in 2014 NPP Number of main organizations involved Total employees engaged engineers and technical employees including: blue collar workers Baltic NPP, power units Nos. 1 and Beloyarsk NPP, power unit No , ,198 Novovoronezh NPP-2, power units Nos. 1 and ,021 1,668 6,353 Leningrad NPP-2, power units Nos. 1 and , ,666 Rostov NPP, power units No. 3 and , ,597 Total: ,176 3,282 20, Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

89 Financial Capital. Performance Results The main factor in growth of net profit by 7,027 mln rubles is achievement of the record power generation for the entire history of the Russian nuclear industry. 253, % vs revenue in 2013 mln rubles revenue from sales of Concern s products in ,256 mln rubles actual revenue from selling Concern s power and capacity at ECWM in 2014 (incl. Bilibino NPP) 9, ,489 mln rubles from sales of own products 2,767.2 mln rubles from sales of purchased products % vs net profit in 2013 mln rubles net profit from sales of Concern s products in

90 87 In 12 months of 2014, power and capacity sold by Rosenergoatom Concern OJSC totaled 295,506,639 mln rubles. (including Bilibino NPP, AtomEnergoSbyt JSC, Voronezhatomenergosbyt OJSC, VAT included). THE GROWTH OF REVENUE FROM SALES IS CAUSED BY THE FOLLOWING: PRICING FACTORS by rubles/mwh actual prices in the free market of electric power VOLUME FACTORS by 7, mln KWh actual volumes of power supply in the free market by 22, rubles/mwh actual price of capacity according to RD by 81, rubles/mwh actual price of capacity under power supply agreements of power unit No. 2 of Rostov NPP by 556 MW actual volume of capacity supply under competitive capacity auction by 96 MW actual volume of capacity supply under power supply agreements Main Financial and Economic Indicators (Mln Rubles) Indicator Δ2014/2013 Revenue 200, , ,215 9% Gross profit 76,116 96, ,607 10% Percent of gross profit to revenue 38% 41% 42% Business expenses % Management expenses* 10,157 10,637 11,325 7% Net profit -1,849 2,211 9, % Net cash flow -3,661 8,802-4, % Net assets 936,154 1,059,013 1,181,245 12% Return on sales (by net profit) -0.92% 0.95% 3.65% Return on assets 19.5% 20.0% 19.5% Return on equity -0.21% 0.22% 0.83% Debt/equity ratio Current liquidity ratio * Management expenses are shown excl. accrued industry-specific reserves (allocated to prime cost). Equity 943,788 1,057,723 1,180,017 12% Borrowed funds 82, ,326 94,450-9% 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

91 88 Value Created and Distributed by according to Russian Accounting Standards, Bln Rubles Indicator Created economic value Incomes (sales revenue, gains from financial investments, and sold assets) Distributed economic value Operating costs (payments to suppliers and contractors, cost of purchased materials) Salaries and other payments and benefits for employees Payments to capital providers Gross tax payment (before individual profit tax and VAT) Investments in communities, including donations Retained economic value Contribution to GDP NET ASSETS THE GROWTH IN NET ASSETS VALUE IN 2014 WAS DUE TO THE GROWTH IN THE ASSETS CONSIDERED BY 114,865 MLN RUBLES WITH SIMULTANEOUS REDUCTION OF LIABILITIES CONSIDERED BY 7,367 MLN RUBLES As of December 31, 2014, net assets of Rosenergoatom Concern OJSC exceed registered capital by 43%. Taking into account that net assets both exceeded registered capital and increased during the reporting period, we may say that, based on this indicator, financial state of Rosenergoatom Concern OJSC is quite healthy. BALANCE SHEET STRUCTURE The amount of assets of Rosenergoatom Concern OJSC increased by 9% (114,865 mln rubles). The increase in the amount of assets is due to increase in value of both non-current assets by 9% (106,946 mln rubles) and current assets by 9% (7,920 mln rubles). Increase in value of non-current assets is caused by growth in capital investments in-progress in fixed assets by 26% (141,544 mln rubles) which shows significant amount of investments in fixed assets made by the Concern. by 122,232 mln rubles 1,181,245 1,355,827 mln rubles the Concern s net asset value as of December 31, 2014 (as per balance sheet) by 114,865 mln rubles mln rubles the Concern s asset value as of December 31, 2014 (as per balance sheet)

92 89 Evaluation of Net Assets of Indicator Actual value of the indicator Changes over the time period As of December 31, 2013 As of December 31, 2014 mln rubles % to balance sheet total mln rubles % to balance sheet total thousand rubles = (col - col 2) Net assets 1,059, ,181, ,232 Registered capital 671, , Net assets over registered capital 387, , ,232 Dynamic Changes in Non-Current Assets of, mln rubles Dynamic Changes in Non-Current Assets of, mln rubles 1,003,778 1,152,338 1,259,284 79,776 73, , ,143 83, ,723 91,712 84,097 1,180,017 84,048 88,623 96, Current assets Non-current assets Long-term liabilities Short-term liabilities Equity As of December 31, 2014, non-current assets total 1,259,284 mln rubles, which is 93% of the total asset value. The cost of property of Rosenergoatom Concern OJSC as of the end of the reporting period totaled 1,355,827 mln rubles. The Concern s structure of sources of funds is dominated by equity ratio 87%. The Concern approved regulatory documents and guidelines on financial statements internal control system (FS ICS). The main purpose of FS ICS is to provide reasonable assurance of the reliability of financial statements for external and internal users. The Plan on improvement the FS ICS in, comprising measures aimed at enhancing the quality of accounting and ensuring the reliability of financial statements, is prepared each year. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

93 90 BUDGETING In order to achieve key performance indicators, the Concern applies a systematic approach to planning and accounting of incomes, costs, and cash flows. On an annual basis, to ensure the Concern s production program fulfillment and guaranteed funding for priority areas of industrial and economic activities and development, budgets (including the cash flow budget) and income and expense estimates by activity are prepared in the context of structural units of the Concern and the Concern as a whole; these are the basic documents for expenditures of the Concern and its branches for the planning period. The budgeting process is implemented within the approved standards of Rosatom State Corporation put into effect by orders of the Concern and represents a short term planning process (planning horizon of 1 year with a breakdown by quarters). The Company is also engaged in operational financial planning (planning horizon of 1 month). Funds are spent strictly within the limits communicated to structural subdivisions in accordance with the approved consolidated income and expense estimates for the production and sale of products subject to adjustments made pursuant to the approved procedure. Spending is funded according to the cash flow budget. Budgeting process products are approved key performance indicators which are decomposed down to the level of NPPs and the Concern s headquarters. COST MANAGEMENT Pursuant to the action plan aimed at limitation of the final cost of goods and services provided by infrastructure companies while maintaining their financial stability and investment appeal which was approved by Chairman of the Government of the Russian Federation D.A. Medvedev in Resolution No. 6732p-P9 dated November 11, 2013, operating expenses in 2014 were agreed at the same level as the budget of 2013, without indexation. Also, when preparing the Concern s budget for 2014, we took into account the task of reducing the costs associated with administration and maintenance activity by 10% (in comparable prices of 2013). Thus, strict control over compliance by the Concern s branches and structural subdivisions with assigned limits formed with due regard to the task of reducing the costs contributed to EBITDA increase comparing with the indicator in Expenses of structural subdivisions of the headquarters and branches of the Concern are monitored on a monthly basis; the fulfillment of consolidated estimate is analyzed quarterly, while identifying reasons for variations of actual costs from target costs in order to optimize costs and to achieve the established target parameters for the Concern in general. Dynamic Changes in EBITDA and EBITDA Margin Indicator /2013, % EBITDA, mln rubles 81, , , EBITDA margin, %

94 Human Capital. Labor Protection Distribution of Training Hours per Employee of Operating NPPs by Years Pursuant to the Concern s development strategy, safety, increase in economic efficiency in the domestic and external markets, stability, and technology leadership remained the main objectives in The strategy implementation determines priorities in work with personnel, because such important objectives cannot be achieved without qualified and committed employees. HR POLICY TRAINING, MAINTAINING QUALIFICATION, AND ADVANCED TRAINING OF PERSONNEL THE GOAL OF THE CONCERN S HR POLICY CONSISTS IN PROVIDING THE COMPANY WITH COMPETENT AND QUALIFIED EMPLOYEES WHICH IS POSSIBLE ONLY IF THERE IS A PERSONNEL MANAGEMENT SYSTEM CAPABLE OF RESPONDING TO CHANGING MARKET REQUIREMENTS QUICKLY AND PROPERLY. The Concern resolves current tasks in the HR area also through successfully functioning system for training, maintaining qualification, and advanced training of personnel. Key components of the efficient functioning of the Concern s HR system are personnel training and psychological assessment. The Concern s employees undergo training in accordance with the requirements of legislative instruments and regulations issued by federal executive agencies and local regulations of Rosatom State Corporation and the Concern. The Concern s employees undergo training according to training programs prepared by the Concern s training and apprenticeship units and educational institutions. Routine Performance Evaluation and Career Development Employees subject to routine performance evaluation and career development, pers. 11,288 Men 54% Women 46% Managers 30.86% Specialists 69.14% Training for Employees 130 hours of training on average, each Concern s employee received in Indicator Hours of training, total Hours of training, per 1 employee Total hours of in-house training (in TAU NPP and subdivisions) 3,651, Total hours of training with third-party providers 1,217, Total hours of training, including: 4,869, Managers 1,015, Specialists and white collar workers 1,821, Blue collar workers 2,032, Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

95 92 Distribution of Costs for Training of Concern s Employees, thousand rubles 324, , , ,500 the total number of persons who participated in the development programs In order to make perfect practical skills in production process management, training and apprenticeship units of nuclear power plants (TAU NPP) were equipped with technical training aids, including comprehensive simulators (CSs). In 2014, in accordance with the Concern s regulations TAU of Balakovo and Kola NPPs were certified, CS of FTNPP was admitted for training, analytical simulator for training operating personnel of power unit No. 4 of Beloyarsk NPP obtained permission for use. 42 sample items of NPP equipment, 15 stands for performance of various operations on NPP equipment, 8 dummy systems and items of equipment of NPP, and 10 stands modeling various operation mode of NPP equipment were put into operation in TAU NPP. In order to ensure standardized approaches to professional training of personnel the Concern operates the Instructor School. 345 NPP instructors attended advanced training courses in In 2014 in-house training of employees of operating NPPs in TAU NPP and NPP subdivisions totaled 3,646,183 hours. On average, each employee of operating NPPs received hours of in-house training. In order to enhance safety and economic efficiency of maintenance and repair of NPP equipment and systems the Concern has prepared and implements the Program for Manning, Training, and Retaining Electrotechnical Personnel of NPP, Program on Upgrading the Status of Foremen at NP Repair Services, and Program for Development of Training System for Maintenance and Repair Personnel. The Concern has also introduced standard programs for preparation to a position. In 2014, 67 training programs were updated. The Concern s employees attend annual training in external educational institutions for additional vocational education (hereinafter, external education). The main providers of external education for the Concern are such institutions as Non-State Educational Institution CPE Rosatom Central Institute for Continuing Education and Training, National Research Nuclear University MEPhI, Rosatom Corporate Academy, and Federal State Educational Autonomous Institution of Additional Professional Training Petersburg Power Institute of Professional Upgrading. Each year managers and specialists of nuclear power plants holders of permits issued by Rostekhnadzor authorizing work in the field of nuclear energy use attend a qualification maintaining course provided at National Research Nuclear University MEPhI. In 2014, 296 employees of NPPs attended a qualification maintaining course. In the reporting period the Concern successfully carried out activities in personnel evaluation and development, including the corporate program on teaching the English language, trainings on commitment and mentoring, and managerial skills development programs. As a part of managerial skill development, training was provided on the programs Work Planning and Organization, 7 Skills of Highly Efficient People, and Change Management. As required by regulations, NPP employees undergo routine assessment of knowledge they need to perform their job functions. Assessment cover rules and standards of nuclear energy use, industrial safety, labor safety, radiation safety, fire safety, basic rules of nuclear plant operation, job descriptions, and operating procedures. NPP personnel training also includes psychological and psycho-physiological training provided by specialists from psycho-physiological support laboratories (NPP PPSL). In 2014, 10,020 NPP employees attended psychological training, and 8,144 NPP employees underwent psycho-physiological examination.

96 93 399,207 thousand rubles cost of external training for the Concern s employees in 2014 which is 10.6 thousand rubles per person per year In 2014, NPP PPSL specialists participated in committees investigating 38 violations and 89 deviations in operation of nuclear power plants. Based on the investigations, PPSL specialists developed corrective actions aimed at prevention of the same breaches in the future. The achieved level of safety culture and commitment of personnel to the principles of safety culture are evaluated systematically at all NPPs. Pursuant to the Concern s regulations in 2014 Bilibino, Novovoronezh, and Leningrad NPP-2 were certified by PPSL. The main personnel characteristics are provided in Appendix Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

97 94 Due to specifics of nuclear power industry, the issue of highly qualified personnel availability is one of the most important for the Concern to achieve its strategic goals and ensure its economic stability. The Concern has a multi-level human resource development system in place: starting from professional orientation work with secondary school and university students and completing with preparation of personnel for critically important top management positions. HUMAN RESOURCE DEVELOPMENT SCHOOL INSTITUTION OF HIGHER EDUCATION DIVISION The Concern is directly interested in attracting best students and graduates for work at NPPs and other organizations forming part of the management circuit. Professional orientation starts at school. In the cities where NPPs are located nuclear classes are created to serve as a basis for holding specialized academic competitions in physics and mathematics for secondary school students. IN LATE 2014, MULTI-PROFILE ENGINEERING ACADEMIC COMPETITION FUTURE OF RUS- SIA STARTED WITH THE CONCERN S SUPPORT. OVER 800 SECONDARY SCHOOL STUDENTS TOOK PART IN THIS ACADEMIC COMPETITION. THIS FEDERAL-LEVEL ACADEMIC COMPETITION WAS ORGANIZED FOLLOWING THE ASSIGNMENT GIVEN BY PRESIDENT OF THE RUSSIAN FEDER- ATION V.V. PUTIN AND WAS HELD FOR THE FIRST TIME. THE CONCERN WAS CO-ORGANIZER OF THE ACADEMIC COMPETITION ON THE SUBJECT OF NUCLEAR ENERGY INDUSTRY AND TECHNO- LOGIES: NOW SATELLITE TOWNS OF NPPS COULD ALSO TAKE PART IN THE COMPETITION. WINING THE ACADEMIC COMPETITION GIVES HIGH SCHOOL GRADUATES ADVANTAGES AND BENEFITS WHEN ENTERING LEADING RUSSIAN INSTITUTIONS OF HIGHER EDUCATION IN THE TECHNICAL FIELD AS WELL AS ADDITIONAL POINTS WHEN ENTERING THE PROGRAM OF EMPLOYER-SPONSORED EDUCA- TION ON THE SUBJECT OF NPPS FOR PROFESSION ORIENTED SPECIALIZATIONS IN Among the leaders in training of personnel for the Concern are such institutions of higher education as National Research Nuclear University MEPhI with branches (Volgodonsk, Obninsk, and Seversk), Ivanovo Power Engineering Institute (IPEI) (Ivanovo), Tomsk Polytechnic University (TPU) (Tomsk), Voronezh State Technical University (VSTU) (Voronezh), and Ural Federal University (UFU) (Yekaterinburg). Employer-sponsored education has become a tradition for the Concern. Since 2014 each prospective student must conclude an agreement on employer-sponsored education with the Concern as a prerequisite for entering the employer-sponsored selection. If such employer-sponsored students are successful in their studies, they receive additional financial support in addition to their study allowance, attend practical training at NPPs, and obtain an employment offer upon completion of the educational institution. In 2014, 121 students were accepted to the first academic term as part of the Concern-sponsored education program. Each year the Concern participates in professional orientation activities for students of leading technical institutions of higher education. In 2014, the Concern organized business games for students as a part of the Rosatom s Career Days which took place in Tomsk, Yekaterinburg, and Moscow. The winners were awarded with a study allowance of Rosatom State Corporation

98 Indicators of Efficiency of Personnel Reserve, % of Appointments from the Personnel Reserve in 2014 Appointments from the personnel reserve to critically important positions Participants of the personnel reserve who received the appointment minimum diploma average grade point prerequisite for graduates applying for a job at NPPs and received advantages applicable to practical training and employment in the Concern s organization. Also, in 2014, the Concern took part in industry-specific contest of young professionals TeMP which is a large-scale event organized in order to select the best students studying engineering specializations in Russian institutions of higher education. Students and graduate students had to solve real production tasks business cases prepared specifically for the contest, with support of experts, employees of the Concern and other organizations involved in the industry. TeMP is a unique site: students solve real tasks suggested by companies, and it permits employers to select the employment candidates who are most suitable for the real production environment. On the other hand, during the contest students interact with representative of their future employer, because company experts provide direct advice to participants, and it permits graduate students to make conscious choice of their future place of work. The graduate students who aspire to work at nuclear power plants have to meet demanding requirements: the mandatory prerequisite is the average grade point of at least 4.2 and successful attendance of practical training at NPP. CAREER AND SUCCESSION MANAGEMENT. DEVELOPMENT OF PERSONNEL RESERVE Career and Succession Management is a process intended to provide the availability of prepared successors for company s management positions as well as to manage career expectations of employees increasing their level of involvement. Development of personnel reserve is one of the links of career and succession management. The Concern successfully implements the unified industry-specific system for development of personnel reserve for various position levels: Rosatom s Talents for initial management level, Rosatom s Capital for medium management level, and Rosatom s Legacy for top management level. Employees who have potential to management activities, are motivated to achieve high results, professional growth and development become selected to the personnel reserve. Each year employees are selected to the personnel reserve. As of late 2014, 318 employees of the Concern who completed training on the development program were included into the reserve. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

99 96 PERSONNEL INVOLVEMENT A survey held in late 2014 among personnel showed that the Concern in terms of its working environment and team spirit is close to the level of the best employers in Russia: 79% of employees consider the Concern the best place for work, make every effort to achieve goals, and take pride in their work (at the companies considered the best employers in Russia the level of personnel involvement is 84%). Following common corporate values makes it possible for the Concern to achieve strategic goals. 79% of employees consider the Concern the best place for work Kola NPP 92% Balakovo NPP Kursk NPP 91% 88% Novovoronezh NPP 88% Bilibino NPP Rostov NPP Leningrad NPP Smolensk NPP 82% 80% 79% 78% Atomenergoremont Headquarters (Moscow) Beloyarsk NPP Kalinin NPP 72% 71% 68% 62% SPEAKING Involved employees always speak positively about the organization. STAYING Involved employees really want to stay in the organization. STRIVING Involved employees make extra effort to contribute to the success of the organization.

100 97 ETHICAL PRACTICE Following common corporate values makes it possible for the Concern to achieve strategic goals The Concern has prepared and approved the following: Corporate Ethics Code, Ethics Regulation Panel, and Regulations on the Authorized Ethics Officer. G4-41, The Ethics Code defines the ethical basis of activity of the Concern, its branches, and employees. It covers ethical principles, basic mechanisms of their execution, and the Concern s commitments in specific areas of activity, including its relationship with Rosatom State Corporation, society, and business partners. Ethic Councils are created and Authorized Ethics Officers are selected at all NPPs. More details about the Ethics Code are available at: In 2014 an updated version of the Ethics Code was prepared; its adoption is scheduled for In 2015, Committee on Settling the Conflict of Interests was established. The objective of the Committee is to make sure the Concern s employees comply with their duties on prevention and settlement of conflict of interests and to perform anti-corruption activities. The Concern s activity is based on corporate values which are common for the entire nuclear power industry: One step ahead Accountability Efficiency One team Respect Safety 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

101 98 Rosatom s Person of the Year Rosatom s Person of the Year is an industry-wide competition of professional achievements of employees who work for companies of Rosatom State Corporation. SPECIAL NOMINATIONS OF THE GENERAL DIRECTOR OF ROSATOM STATE CORPORATION: The joint team of Rosenergoatom Concern OJSC, including Rostov NPP, VNIIAES JSC, Ros- and NIAEP ASE JSC took 1tovatomtekhenergo, the 1st place in the nomination Victory of the Year for starting power unit No. 3 of Rostov NPP ahead of schedule; The team of comprising Balakovo NPP and Balakovoatomenergoremont, took the 1st place in the nomination Efficiency for the project on reducing the timeline of replacing turbine condenser in power unit No. 4 of Balakovo NPP in 56 days. CORPORATION-WIDE NOMINATIONS NOMINATIONS FOR ALL EMPLOYEES OF ENERGY INDUSTRY COMPANIES: Sergey Vladimirovich Zakharkov, Head of the Information and Public Relations Department of Leningrad NPP took the 1st place in the nomination Mass Media and Internal Communications Management; Anatoly Yevgenyevich Muraviev, Chief Specialist of Information and Communication Technologies of Balakovo NPP took the 1st place in the nomination Information Technologies Management; Marina Mikhailovna Shindina, Leading Specialist for Staff Development of Smolensk NPP took the 1st place in the nomination Human Resource Management. DIVISIONAL NOMINATIONS NOMINATIONS FOR EMPLOYEES OF THE ELECTRIC ENERGY DIVISION: Vyacheslav Yuryevich Klimov, Dosimeter Specialist at the Radiation Safety Department of Balakovo NPP became the winner in the nomination Dosimeter Specialist; Tatyana Mikhailovna Sadovnikova, Laboratory Chemical Analysis Specialist of the 7th discharge of Balakovo NPP became the winner in the nomination Laboratory Chemical Analysis Specialist; Sergey Alexeyevich Tsymlyakov, Senior Operator of the Reactor Compartment of Kola NPP became the winner in the nomination Operator of the Reactor Compartment; Alexey Ilyich Pecherkin, Driver Lineman of Turbine Equipment of the 7th discharge became the winner in the nomination Driver Lineman of Turbine Equipment; Oleg Alexandrovich Shamarov, Electrician Repair Specialist of Relay Protection and Automation of Smolensk NPP became the winner in the nomination Electrician.

102 99 Labor Protection Evgeny Romanov about Labor Safety Ensuring safe working conditions for nuclear plant employees and contractor personnel is the Concern s key objective in labor protection, and one of the key operating principles. In 2014, the Concern continued systematic work to improve safety level, including reduction of industrial injuries and reduction of the impact of harmful factors on personnel. Matters of health and safety are included in the Corporate Agreement in the Area of Labor and Social Relations concluded between employer and the trade union for 3 years. G4-LA8 In the reporting period, 2 the Concern s employees suffered injuries (Beloyarsk and Kalinin NPPs), both cases are classified as severe. Today we hear a lot of suggestions on how to avoid injuries at construction sites. In my opinion, the proven and efficient solution consists in further development of our proven industrial Labor Safety Management System and its introduction to the daily practice of the entire chain of our external contractors followed by a strict and rigorous monitoring of compliance. I think that we must part with the companies and managers who are not capable to comply with our requirements, notwithstanding their operating performance, because it is better to lose a job in the nuclear industry than one s life or health. Number of Injuries at Operating NPPs in Balakovo Beloyarsk s 1f 0 0 1s Bilibino Kalinin s 0 0 1s Kola s Kursk f Leningrad Novovoronezh 0 1 1s Rostov s Smolensk s 0 0 Total: 1 1 1s 2 (1s) 6 (2f, 3s) 2 (1s) 0 2s Dynamic Change in Injuries at Concern s Operating NPPs in * * All injuries happened to men Minor injuries Severe injuries Fatalities Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

103 100 Standard Regulations on the Labor Protection Committee (Commission) were approved by Order of the Ministry of Labor of Russia No. 412n dated June 24, The Order was registered with the Ministry of Justice of Russia under No dated July 28, 2014 and entered into force from August 29, 2014 (published in the Rossiyskaya Gazeta, issue No. 185 of August 18, 2014). G4-LA5 Based on the Standard Regulations, labor protection committees (commissions) were established at each NPP by orders of Deputy General Directors Concern s NPP Branch Directors with due regard to opinion of the trade union organization. There are no such committees in the headquarters. Committees are an integral part of the labor protection management system as well as one of the form of employees participation in labor protection management. Committees operate pursuant to the principles of social partnership. WORK WITH CONTRACTORS Contractors employees working at the operating NPPs suffered five accidents involving injuries in 2014 (among them two fatalities), in 2013 six accidents involving injuries occurred (three of them were severe injuries). Out of five accidents involving injuries in 2014 three happened to employees of Atomenergoremont JSC. In order to analyze the causes of increase in injury rate, extraordinary inspection was carried out resulting in implementation of a specific program for remedial actions at Atomenergoremont JSC. Among six accidents involving injuries suffered by contractors employees at NPPs under construction, five accidents were caused by falling from height (including four fatalities and one case of severe injury due to falling into an unfenced opening). Dynamic Changes in Injury Rate among Contractor s Personnel NPP Injuries, total: At construction facilities of the Concern s operating NPPs Balakovo - 3 (1f) Kalinin 1 (1s) 1 Kursk 2 1f Leningrad 1 - Smolensk 2 (2s) - Total 6 (3s) 5 (2f) At construction facilities of the Concern s NPPs under construction Baltic 1 (1f) - Beloyarsk, power unit No. 4 5 (1f, 2s) 2 (1f, 1s) Leningrad NPP-2 6 (1f, 5s) 1f Novovoronezh NPP-2 2 (1f, 1s) 3 (2f, 1s) Rostov, power units Nos. 3 and 4 2 (2s) - Total 16 (4f, 10s) 6 (4f, 2s)

104 101 General decrease in the amount of accidents involving injuries among contractors over the last years was achieved thanks to the implementation of standard approaches to the organization of the labor protection management system at NPP construction sites, including the following: Implementation of the Standard Regulations on the Labor Protection Management System at NPP Construction Sites (SR LPMS); Implementation of the Plan of Additional Activities on Safety and Injury Prevention during Construction, Repair, Reconstruction, and Modernization of Facilities where Nuclear Power is Used according to Order of Rosatom State Corporation No. 1-1/15-PP dated February 11, 2014; Implementation of activities according to Concern s order No. 9/846-P dated August 5, 2014 On Injury Prevention during Construction of NPP Facilities. NPP >9.2 ECONOMIC INDICATORS OF LABOR PROTECTION EXPENSES These funds were spent on the following: Labor protection activities according to collective agreement; Ensuring normal working environment; Improvement of labor conditions and protection; Acquisition of personal protection equipment; Therapeutic and preventive nutrition. Expenses (thousand rubles) Balakovo 471,121 Beloyarsk 141,014 Bilibino 156,966 Kalinin 1,022,303 Kola 4,806,241 Kursk 510,826 Leningrad 1,093,694 Novovoronezh 498,313 Rostov 529,306 Smolensk 813,042 TOTAL 9,273,725 bln rubles was spent on labor protection in 2014 (in bln rubles) Key Results in Labor Protection in 2014 Planned activities aimed at enhancing labor protection at operating NPPs and NPPs under construction were put into practice. The condition of labor protection at NPPs was checked according to safety inspection schedule for Labor protection workshops were held for deputy general directors of general contractors involved in NPP construction. A set of actions on implementation of the Federal Law On Special Evaluation of Labor Conditions No. 426-FZ was performed Priority tasks for 2015 Implementation of a set of actions on providing proper labor conditions for employees during construction and startup of NPP facilities. Exclusion of conditions that may lead to injuries. Not to exceed the Lost Time Injury Frequency Rate (LTIFR) value of 0.15 which is the most ambicious indicator in the industry. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

105 Intellectual Capital 1. Knowledge Preservation and Transfer. Innovations Management 1. The term intellectual capital is described in the glossary (Appendix 16). Results of Employing Graduates with Higher Education in 2014, % WORKING WITH GRADUATES In 2014, 415 graduates with higher education were hired by branches and organizations of the Concern s management circuit. The share of supportive institutions of higher education of Rosatom State Corporation in the total amount of new hires has increased in 2014 comparing with 2013 by 3% and totaled 68% 283 persons. Among them the share of MIFI National Nuclear Science Research Institute and branches in the total amount of new hires totaled 18% (74 persons) which is 6% more than in The following main areas of preparation were especially important in 2014: heat power engineering and heat technology; electric power engineering and electric technology; nuclear power plants: design, operation, engineering, and nuclear reactors and materials. Comparing with 2013, in 2014 the need in specialists majored in the area of nuclear reactors and materials Other institutions of higher education (132 pers), 34 institutions of higher education MIFI NNSRI (23 pers) 11 supportive institutions of higher education (209 pers) 3 branches: INPE, VETI, and STI (51 pers) Number of Graduates Employed in 2013 and 2014 by Institutions of Higher Education Hired in 2013 Hired in 2014 IPEI Branches TPU VSTU MIFI NNSRI UFU n.a. MPEI of MIFI NNSRI B.N.Yeltsin (INPE, VETI) Yu.Gagarin STUS Number of Employed Graduates in 2013 and 2014 by Areas of Preparation Heat power engineering and heat technology Electric power engineering and electric technology Nuclear power plants: design, operation, engineering Nuclear reactors and materials Process and production automation 17 Power engineering Physics 16 Construction Nuclear physicsand technology Economics 28 6 Nuclear power engineering and thermal physics Electronics and automatics of physical installations Heat and power supply to specialized technical systems and facilities Chemical technology of materials in modern power industry Hired in 2013 Hired in

106 103 Recruitment Plan for Graduates of Institutions of Higher Education in Institutions of Higher Education where More than 50 Graduates are Planned for Recruitment by (22%) Branches of MIFI NNSRI 533 (17%) IPEI 510 (16%) Other institutions of higher education 437 (14%) TPU 286 (9%) MIFI NNSRI 178 (5%) VSTU 178 (5%) UFU n.a. B.N.Yeltsin 132 (4%) MPEI 101 (3%) SPbPU 94 (3%) Yu.Gagarin STUS 50 (2%) Bauman MSTU has increased, and the need in specialists majored in the area of nuclear physics and technologies has decreased. The need in specialists majored in all other areas remained at the same level. By 2021 more than 3,000 graduates with higher education are to be employed by branches and organizations forming part of the Concern s management circuit, and the share of Rosatom s supportive institutions of higher education will comprise approximately 70% of this amount, which is the highest indicator in the entire industry. KNOWLEDGE TRANSFERRING SYSTEM AND MENTORING A mentoring system has been introduced at all NPPs. A mentor chosen from among highly skilled employees is assigned to every newly employed young specialist and trainee. Mentor helps the young specialist during their on-boarding period, transfers knowledge necessary for the specialist to carry out their work, and monitors performance of assigned tasks. Veteran employees play an important role in knowledge transfer. Rosenergoatom Concern OJSC has an agreement with the interregional non-governmental organization of Concern s veteran employees on veterans (pensioners ) social protection which provides, among other things, for transfer of expertise and knowledge to the young generation of employees and education of youth in the spirit of patriotism and continuation of the Concern s glorious labor traditions. INTELLECTUAL PROPERTY MANAGEMENT In the Concern intellectual property (IP) management is aimed at creation, efficient use (including matters of commercialization), and protection of company s IP. The main objectives of IP management are as follows: Creating environment for efficient use of IP Providing efficient protection of rights to IP Providing efficient mechanisms and procedures for IP commercialization Developing labor-saving and innovative culture among employees. The main part of IP is created during performance of research and development work under contracts financed by the Concern itself. All research and development work initiated by the Concern has applied nature and aimed at resolving real current needs at NPPs and detecting long-term objectives of Concern s production and research activity. The main areas of the Concern s research activities include modernization of NPP power unit design and construction processes, extension of service life of the main equipment through development and use of new materials and processes as well as development of new reactor units subject to unconditional safety at all stages of life cycle of NPPs. The Concern s intellectual property portfolio comprises exclusive rights to 319 items of intellectual property, including 162 invention patents and 60 utility model patents, 95 items of software for PC and databases, among them two items of software for PC have certificate issued by the Federal Service for Intellectual Property (Rospatent), and two trademarks. There was no activity on legal protection of intellectual property abroad. In the Concern was not involved in legal protection of know how Invention patents obtained 8 6 Utility model patents obtained 7 1 Certificates on trademark registration obtained Applications for invention patents filed Applications for utility models filed Applications for trademark registration filed 3 (two patents for utility models obtained) Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

107 104 INNOVATION MANAGEMENT 3.5 bln rubles invested in R&D financing in 2014 as part of the Concern s Integrated Investment Program Innovation development of Rosenergoatom Concern OJSC is an integral part of maintaining positions of technology leader of Rosatom State Corporation and one of the main areas of strategic development of the company. The main areas of innovative development of are the following: Improving competitiveness in the nuclear power market by: enhancing processes of design and construction of nuclear power units; extending service life of principal equipment, including during development and implementation of new materials and processes; Creating new processes and products for energy markets through development of new reactor units; Gradual process and product diversification through transfer of own achievements to new (for and Rosatom State Corporation) markets. Solving high-priority tasks of innovative development is aimed at achieving the following strategic goals: 1. Closure of nuclear fuel cycle at the power units with BN-1200 and VVER-TOI with mixed uranium plutonium fuel: Implementation of the R&D program; Construction of NPP power units with fast breeder reactors operating in nuclear energy system with closed nuclear fuel cycle. The work on achieving this goal is performed as a part of the program New Technology Platform: Closed Nuclear Fuel Cycle and Fast Breeder Reactors. 2. Increasing competitiveness of nuclear power industry through construction of VVER power units using new designs with enhanced performance indicators. In 2014 the Concern acted as the owner of work to develop new nuclear energy technologies, while simultaneously solving the following tasks: Developing proposals and supporting the Concern s uniform science and technology policy; Systematic implementation of results of scientific research in production; conducting the full innovative cycle of R & D; Coordinating scientific research and engineering to support the NPP operation; Providing for an integrated system to control research in science and technology in order to maintain high efficiency and competitiveness; Working out a patent and license policy regarding intellectual activities. Based on Rosatom State Corporation Long-Term Action Plan ( ) approved by Resolution of the Government of the Russian Federation No. 705 dated September 20, 2008, and local corporate regulations, the Concern prepares annual R&D action plans on an annual basis. The approved spending target is stated in the respective section of the Investment Program for the planning year. In 2014, R & D financing totaled 3.5 bln rubles under the Concern s Integrated Investment Program, including over 1 bln rubles for innovative designs with fast breeder reactors. FAST BREEDER REACTORS To date, the Russian nuclear industry has accumulated unique practical experience on creation of fast breeder reactors and their successful operation over a long term. They are expected to enable the transition of the nuclear power industry to a closed fuel cycle that will ensure more efficient use of uranium resources and a solution to environmental problems associated with handling spent nuclear fuel and radioactive waste.

108 105 BN-800 reactor of power unit No. 4 at Beloyarsk NPP The technologies used in fast breeder reactors and the closed fuel cycle have great innovative potential, while the start and operation of power unit No. 4 at Beloyarsk NPP with a BN-800 reactor unit in 2015 is of special importance. Currently there are no similar foreign facilities (operating power units with fast breeder reactors with industrial capacity). In 2014 R & D on substantiating the design of a power unit with the BN-1200 fast breeder reactor continued as a part of the Rosatom State Corporation Long-Term Activity Program ( ). In 2014 the detailed design of the BN-1200 reactor core with MOX fuel and main developments on construction and process components of BN-1200 power unit were completed. Power unit process parameters, including in case of breaches in normal operation were reviewed. For 2015 expert review of the prepared documents is scheduled, with subsequent adjustments to be made and preparation of technical assignments for design of BN-1200 power unit as a power unit No. 5 of Beloyarsk NPP. FLOATING THERMAL NUCLEAR POWER PLANT (FTNPP) In 2014 the Concern continued construction of the first (head) 70 MW floating thermal nuclear power plant (FTNPP) based on the floating power unit (FPU) equipped with two KLT-40S reactors. The FTNPP shall be stationed in Pevek, Chukotka Autonomous Okrug. The FTNPP is to be put into operation in Under the FPU Further Construction Contract entered into between the Concern and Baltiysky Zavod Sudostroenie LLC in 2012, the FPU hull, with a part of the superstructure with installed systems and equipment, was constructed as of December 31, The volume of constructed hull structures totaled 100%, with 78% completion of general onboard systems. Component manufacturing for systems supporting the nuclear power plant is in progress. The general engineering contractor Atomenergo CJSC completed design and survey work and finalized the preparation of design documents for the FTNPP onshore and hydraulic facilities. In 2014 the documents were submitted to Federal Autonomous Institution State Expert Evaluation Department (Glavgosekspertiza) to obtain their opinion. In , it is planned to complete the installation and piping of steam-generating units on the floating power unit, approve design documentation with the Concern, and obtain a permission with Rosatom State Corporation for the construction of FTNPP onshore and hydraulic facilities, finalizing the assembly of FPU superstructure sections, storage facility equipment for SFA and solid RAW, and nuclear fuel loading facilities. 70 MWh the capacity of the first (pilot) floating thermal nuclear power plant (FTNPP) 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

109 Social Capital and Goodwill. Developing Areas of Presence. Charity Development of social capital and areas of presence forms an integral part of the Concern s development strategy. The social policy implemented by the Concern in its areas of presence enjoys active support of communities and reflects the needs and goals of social development in these communities. SOCIAL POLICY Under the collective agreement employees of are entitled to voluntary health insurance (VHI), private pension insurance (PPI), and health-improving programs. Great attention is paid to support long serving employees of the industry and develop the potential of the youth. G4-11, including footnote 2 VOLUNTARY INSURANCE FOR EMPLOYEES In accordance with current legislation, the Concern employees are entitled to medical care in Russian Federal Medical-Biological Agencies (FMBA) institutions. In addition to local Compulsory Health Insurance (CHI) programs and state guarantee programs, the Concern provides to its employees voluntary medical insurance and insurance against accidents and disease. Employees can insure their family members at their own expense using the corporate discount. Under the VHI program employees and their family members can receive special information, consulting, and medical assistance both in the medical institutions of their region and in institutions located in Moscow and St. Petersburg. bln rubles In 2014 the funds channeled to implementation of the social policy 1. The main provisions of the social policy and liaison with trade union are disclosed in the Concern s Annual Report for 2013 (pages ). 2. Concern s order No dated December 23, 2010 on co-financing canceled order No. 891 dated September 22, 2006 on private pensions starting from January 1, The Concern s Social Expenditures in , thousand rubles Plan for 2015 Costs per employee Total costs for implementation of social policy 2,399,639 2,750,786 2,653,527 2,813,457 Including by main programs 1 Health programs (VHI, accident insurance) 274, , , ,470 2 NGO 547,584 1,126, , ,535 3 Health resort treatment 204, , , ,502 4 Support of retirees 324, , , ,200 5 Assistance in housing acquisition 21, , , ,445 6 Organization of culture and sports events 458, , , ,190

110 mln rubles the Concern s expenses on health rehabilitation and improvement in mln rubles the costs of insurance against accidents and disease in 2014 PERSONNEL REHABILITATION Each year the Concern conducts activities for personnel rehabilitation in departmental clinics and health resort institutions. In the year of 2014, for example, 11,298 persons received health rehabilitation and treatment in 10 clinics at the nuclear plants, under rehabilitation programs to treat cardiovascular, musculoskeletal, nervous system, gastrointestinal, and other conditions. Another 7,660 employees enjoyed health rehabilitation treatment away from home, in rehabilitation institutions and resorts in 20 health centers on the Black Sea, the Mineral Waters area of the Caucasus, and midland Russia. PRIVATE PENSION INSURANCE G4-EC32 The Concern provides for private pension insurance of employees through industry-based Atomgarant Non-Government Pension Fund under the executed pension agreement. Pension obligations are covered from the general resources of which assessed value was mln rubles in The obligations are covered in their entirety according to the pension benefit arrangement. The obligations with respect to the pension plan for 2014 were evaluated as of December 31, 2013 and obtained on the basis of the actuarial expectation with due regard to the number of employees who participate in the Concern s pension plan and an average contribution per pension plan participant employee. Upon retirement of an employee of Rosenergoatom Concern OJSC, the degree of participation in the pension plan is determined based on the length of service in nuclear power industry at least 15 years at the time of achieving retirement age according to pension legislation of the Russian Federation. The Concern s expenses on private pension arrangement in 2014 totaled mln rubles. The total number of the Concern s retirees receiving non-government pension in Atomgarant Non-Government Pension Fund is 15,308 persons. The average private pension amounts to 2,137 rubles. The pension funds paid by NGPF Atomgarant as a non-government pensions to retirees for 2014 total mln rubles. 6,339 employees participate in the Concern s program on co-financing of pension. Information on Share of Salary Contributed by Employee/Employer Age of the participant Ratio of pension contributions (in % of employee s monthly salary) Employee and older 2 4 Employer 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

111 108 YOUTH POLICY, MASS SPORTS AND PHYSICAL CULTURE As a part of its youth policy the Concern traditionally pays special attention to working with young people increasing their educational level and literacy, promoting academic and research activities among young people. IN 2014 OVER 2,500 PERSONS FROM THE CONCERN S TEAMS AND CREATIVE TEAMS OF NPPS TOOK PART IN CORPORATE SPORTS AND CULTURAL EVENTS. THE FUNDS SPENT TO SUPPORT SPORTS AND PHYSICAL CULTURE TOTALED 522,541 THOUSAND RUBLES. Activities aimed at implementation of the youth policy in 2014 The most important cultural and sports activities held in 2014 In May the 10 th International Tournament in Brain Games ( What? Where? When? and Brain Ring ) was held among young employees of the nuclear power industry in the city of Zarechny (Beloyarsk NPP). In September a team from the Union of Exploration Troops of participated in the inter-regional Memory Watch in the Kaluga Oblast. In October Smolensk NPP hosted the 12 th International Youth Festival Automn Maximum for Teams of the Club of the Cheerful and Quick-Witted from various companies operating in nuclear power industry. In October Smolensk NPP hosted the Coordination Board of Authorized Representatives of Youth Organizations of Rosenergoatom Concern OJSC. The 8 th Summer Spartakiada Games for employees of Sport NPP (Rostov NPP, 300 persons). Nuclear Regata-2014 water sports open tournament for prizes of (Kola NPP, 150 persons). Energy of Life-2014 competition among creative teams of retirees of (Novovoronezh NPP, 160 persons). Ceremonial events dedicated to the 60 th anniversary of Russian power energy industry (city of Obninsk, 400 persons). 6 th Spartakiada Games for employees of the Headquarters of (Moscow, 250 persons). In November Novovoronezh NPP hosted the International Research Conference of Young NPP Employees Youth of NPPs: Safety, Science, and Production.

112 apartments were built in 2014 under the program IMPROVING HOUSING CONDITIONS The Concern annually provides significant support to hundreds of employees families to improve their housing conditions. In 2014, housing construction and assistance to employees in obtaining permanent housing was carried out in accordance with the Concern housing program approved in The Concern helps its employees with purchasing permanent housing and, depending on their needs, employees can request interest-free loans to pay their first mortgage installment, and/or partial reimbursement of interest on the mortgage loan. VETERANS MOVEMENT Taking care of its veteran employees is an important directive of the Concern s social policy. The main objective for the veterans movement is to maintain the achieved level of cooperation with veterans, getting them involved in activities of their choice, allowing them to share their experiences with younger specialists, providing skilled medical assistance, and helping them with daily chores. IN 2014 THE ACTUAL NUMBER OF RETIRED EMPLOYEES IN THE INTER-REGIONAL ORGANIZATION OF CONCERN S VETERANS (MOOVK) TOTALED 16,100 PERSONS, INCLUDING: 1,072 PARTICIPANTS IN EMERGENCY RESPONSE CAMPAIGN OF THE CHER- NOBYL NPP AND PO MAYAK, 546 GREAT PATRIOTIC WAR, WARTIME HOMEFRONT VETERANS, AND CON- CENTRATION CAMP PRISONERS, AND 7,102 VETER- AN EMPLOYEES OF THE NUCLEAR POWER INDUSTRY. FROM THE FUNDS ALLOCATED BY THE CONCERN UNDER CHARITY CONTRACTS, MOOVK PROVIDED 47.3 MLN RUBLES AS FINANCIAL AID TO RETIREES IN DIFFICULT SITUATIONS; 10.4 MLN RUBLES FOR HEALTH RESORTS AND MEDICAL REHABILITATION OF RETIREES. THE EXPENDITURES ON EXECUTION OF DIRECT CONTRACTS WITH NFM TO PROVIDE MEDICAL SERVICE TO VETERANS TOTALED 13.4 MLN RUBLES, ON ORGANIZATION OF HEALTH IMPROVING REST AND CULTURAL ACTIVITIES TOTALED 3.9 MLN RUBLES. VETERANS RECEIVED NURSING SERVICES AND PRESENTS ON HOLIDAYS AND ANNIVERSARIES. COUNTING ALL EXPENSE ITEMS, FINANCIAL AID WAS PROVIDED TO RETIREES IN 23,891 CASES. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

113 110 Social and Economic Influence on Areas of Presence Investments in infrastructure Creation and support of housing stock Improving housing conditions for employees DEVELOPING AREAS OF PRESENCE In 2014 the spending on activities under contracts with regional governors in the regions where Russian NPPs are located totaled 1.22 bln rubles. The indicator of implementation of the contracts, based on the activity program in 2014, totaled 103.4%. In 2014 the Concern transferred 8,632 mln rubles to the settlement account of the responsible participant of the consolidated taxpayers group (Atomenergoprom JSC) for payment of corporate income tax (in ,601 mln rubles). Investments in infrastructure form an important aspect of the Concern s social responsibility. The Concern s investment programs typically include construction of social facilities and infrastructure. Key infrastructure components in the hometowns of nuclear plants were built simultaneously with construction of NPPs. The table below contains data about past investments into the development of infrastructure in Information about the Concern s contribution to infrastructure of geographical regions in the previous time periods is provided in the Concern s annual report for 2013 (pages ). PURSUANT TO A COMPREHENSIVE PROGRAM ON PROVISION OF THE CONCERN S EMPLOYEES WITH HOUSING, OVER 625,000 M 2 OF HOUSING IS PLANNED TO BE BUILT, WHICH MEANS ABOUT 10,500 APARTMENTS UNTIL THE YEAR CONSTRUCTION OF HOUSING IS ONE OF THE MOST IMPORTANT CONDITIONS IN ATTRACTING QUALIFIED PERSONNEL. IT IS ESPECIALLY IMPORTANT GIVEN THE SCALE OF CONSTRUCTION OF NEW POWER UNITS. Programs on liason with educational institutions, veteran and youth organizations Infrastructure Facilities Created in Areas of Presence with Concern s Support in 2014 Areas Beloyarsk NPP, Town of Zarechny, Sverdlovsk Oblast Infrastructure facilities put into operation and work completed Neptun swimming pool (the largest social facility of all put into operation in 2014); Youth theater; New kindergarten for 219 children (the construction is completed); Construction of kindergarten with a swimming pool (delivery is scheduled for 2015); Gas supply program to villages of the Zarechny town circuit; Construction of new residential micro-district in Zarechny is currently at the final stage, the first set of residential houses is delivered and people already live there; Several projects on modernization of housing maintenance and utilities is currently in progress; The Concern s grants were used to built the urban sports complex «Belka Ropes Park» and acquire sports motorcycles for the youth motorsports club. Kola NPP, town of Polyarnye Zori, Murmansk Oblast Kursk NPP, town of Kurchatov, Kursk Oblast New sports and fitness center in the integrated center for social services; Reconstruction of the open ice court; Improvement of the urban park of health and recreation; Construction of Spiritual and Outreach Center under the St. Trinity Cathedral and the Avenue of Construction Workers. 14 storey apartment building is put into operation in the town of Kurchatov; Major repairs of motor roads; Repairs in schools and kindergartens; Efforts on setting up a network of basic educational institutions; Teaching programs for the disabled as a part of the program «Accessible Environment»; Sports and recreation complex, boiler, and fire station were built in the town of Lgov and the Lgov Oblast; An office building was reconstructed to create a sports complex and a kindergarten.

114 111 Areas Leningrad NPP, town of Sosnovy Bor, Leningrad Oblast Novovoronezh NPP, town of Novovoronezh, Voronezh Oblast Smolensk NPP, town of Desnogorsk, Smolensk Oblast Infrastructure facilities put into operation and work completed Funds were allocated to the Malakhit sports and culture complex for the acquisition of equipment for biathlon center; to secondary schools of general education: No. 7 to build and reconstruct the sports area of the school, No. 3 to perform major repairs of the sports hall, No. 6 as a construction cofinancing, No. 2 to repair sports ground. Construction of bell-tower in the Cathedral of the Christ the Savior and construction of the John the Baptist Cathedral were continued; Children s playground in hospital No. 33 was improved; A stele was installed at the entrance to the city of Novovoronezh to commemorate the 50th anniversary of putting into operation of the first in Russia VVER nuclear power unit; Construction of the urban stadium was completed; Construction of the martial arts center was continued; Improvement of the Knowledge Square at the Novovoronezh Polytechnic College; Improvement and repair of streets of the urban circuit. An apartment building with 135 apartments was put into operation; Assembly of the stele dedicated to the first construction workers of the city and NPP; Assembly of the monument «Good Angel the Peace Keeper»; Improvement of the Avenue of Glory and the Square of Labor Glory, «Health Path», and the city in general; Assembly of the monument dedicated to the saints Pyotr and Fevronia of Murom. Work with educational institutions in the areas of NPP presence includes career consulting for high-school students, and support of target-oriented education of students, organization of academic competitions and contests. For example, the Concern is involved in annual vacancy fairs for students of specialized institutions of higher education, offering internships and apprenticeships at nuclear plants. Among the unique projects are educational projects for schoolchildren, such as the Children s Nuclear Academy at Kola NPP, Atom Classes, a lecture cycle My Profession for high school students at Leningrad NPP, and others. Programs for young employees of the Concern seek to create conditions for efficient work and to help developing creative potential. Key directions to support young specialists are as follows: A system of adaptation, training, and mentoring for young specialists; Youth organizations in science and technology, occupational training, social activities and sports; Additional higher education and advanced training programs; Housing for Youth project; Plans for career growth and development of management skills. More details about work with youth is provided in Section 3.8. Intellectual Capital. Knowledge Preservation and Transfer Innovation Management. CHARITY The Concern implements charitable programs since its incorporation, and considers this activity one of its best corporate traditions. After years of cooperation, main principles and terms of interaction have evolved between the Concern and charity recipients. Co-financing is one of such principles: the Concern partners up with other businesses and organizations in virtually every project. In addition, the Concern s charity projects have input from private individuals, including employees of nuclear plants and headquarters. Traditional areas for charity and sponsorship include: assistance to socially disadvantaged citizens orphaned children or persons in dire straights, the disabled, Chernobyl disaster liquidators, war and homefront veterans, large families, etc.; restoring and renovating places related to Saint Sergius of Radonezh and Seraphim of Sarov; church building in the towns of NPP presence; support and promotion of sports and a healthy lifestyle, and patriotism; events aimed to improve social and sport infrastructure 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

115 mln rubles are to be destined to charity and sponsorship in 2015 in communities around NPP, landscaping; support for cultural projects that promote moral values and responsibility. Completed construction of the Seraphim of Sarov Cathedral in the town of Kurchatov in 2013 became one of the important projects funded by the Concern s charitable contributions. In 2014 work on interior finishing and decoration and external improvement of the Cathedral was in progress. In 2014 the Concern participated in celebration of the 700 th anniversary of Sergius of Radonezh in the Holy Trinity St. Sergius Lavra (financing of hotel construction for pilgrims) which also represented an important contribution. Also, in 2014 the Concern provided sponsor assistance to 8 organizations for approximately 117 mln rubles, including Baltika Football Club OJSC and Dynamo Volleyball Club NCP Leningrad Oblast. Charity and Sponsorship Costs, mln rubles Charity and sponsorship category Traditional events under the charity and sponsorship policy Charitable activities and sponsorship in nuclear plant locations (including aid to retirees, persons in need, institutions for children, sports infrastructure, etc.) Industry-level programs Total > Seraphim of Sarov Cathedral in Kurchatov City

116 Investments in Development The Concern s investment activities through capital investments seek to implement the Long-Term ( ) Program of Rosatom State Nuclear Energy Corporation approved by Resolution of the Government of the Russian Federation No. 705 of September 20, 2008 (as amended in October 4, 2013) to the extent of development of the nuclear power industry in Russia. With a view to continuous and efficient implementation of this objective as well as in order to achieve strategic goals, the Concern has prepared investment programs for the long term, medium term (three years), and short term (one year). The Concern s investment programs are prepared in full conformity with strategic goals of the Electric Energy Division aimed at providing consumers with electrical and heat power produced at Russian NPPs with guaranteed safety as a top priority of its activities. Investment Activities (100%) Distribution of functions among the parties involved in the investment process is regulated in the Investment Agreement between Rosatom State Corporation, Atomenergoprom OJSC, and. Investment activities of Rosenergoatom Concern OJSC are financed from the Concern s own funds, from assets contributed by Rosatom State Corporation, and, when necessary, using borrowed funds. Pursuant to the resolution of the General Meeting of Stockholders of (Minutes No. 7 of June 24, 2014), the Concern s profit of mln rubles were used for investments in development. 74 Investment projects on construction of NPP power units, including the Floating Thermal Nuclear Power Plant construction project and financing of research work for new NPP power unit construction sites Projects and activities at operating NPPs: investment projects on service life extension at power units of 1 st and 2 nd generations, Ensuring safe and stable operation of operating power units Investment projects at the facilities with spent nuclear fuel and radioactive waste Other investment projects and activities: facility conservation, research and development work, technical regulations and other pre-design work 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

117 114 The Investment Program of Rosenergoatom Concern OJSC for 2014 was duly submitted to the Ministry of Energy of the Russian Federation, with the planned investments of 185, mln rubles (210, mln rubles VAT included). The actual level of fulfillment of the Investment Program of in 2014 totaled 190, mln rubles (216, mln rubles VAT included). Furthermore, the funds of the Rosatom State Corporation s asset contribution totaling 55,297.2 mln rubles were channeled to investment projects related to construction of NPP power units. The following projects were implemented in 2014 in subsidiaries of (financing totaled 3, mln rubles, VAT included): Projects of guaranteed suppliers of AtomEnergoSbyt JSC in Kursk, Tver, and Smolensk Oblast 2, mln rubles, VAT included; Construction, reconstruction, and equipment of production bases of Atomenergoremont JSC mln rubles, VAT included; Activities of Atomtekhenergo JSC (acquisition of equipment for start-up work etc.) mln rubles, VAT included; Activities of VNIIAES JSC (construction of laboratory and storage complex etc.) mln rubles, VAT included. In 2014, following competitive processes, AtomEnergoSbyt JSC was awarded the status of guaranteed supplier in Kursk, Tver, Smolensk, and Murmansk Oblasts (orders of Ministry of Energy of Russia Nos. 116 and 117 dated March 19, 2014 and No. 311 dated May 23, 2014, and No. 843 dated November 18, 2014). The goals of these projects include extending competencies of Rosatom State Corporation, ensuring stability of its positions in the energy market, increasing consolidated profit and revenues of Rosatom State Corporation from sales of electric power, guaranteed sales market for energy produced by organizations of Rosatom State Corporation, and increasing significance and influence of the State Corporation throughout Russia. Dynamic Changes in Investments in , mln rubles The Estimated Demand for investments to Fixed Capital in 2015 and in is as follows: 178, , , , , , , , , , , , , , , ,297.2 According to the Investment Program of for submitted to the Ministry of Energy of Russia with letter of No. 9/01/335 dated March 31, Changes in contributions to fixed capital Changes in asset contribution

118 The following standalone subdivisions of Atom- mln rubles net profit of AtomEnergoSbyt EnergoSbyt JSC were created in order to perform the function of the guaranteed supplier: KurskAtomEnergoSbyt SS, TverAtomEnergoSbyt SS, branches SmolenskAtomEnergoSbyt, and KolAtomEnergoSbyt with a ramified network of departments and stations which ensure maximum available and comfortable service to all consumers of electric power in the regions. These projects permitted AtomEnergoSbyt JSC to implement the strategy of entry into the sales of electric power. The revenues of AtomEnergoSbyt JSC in 2014 totaled 29,809.8 mln rubles, net profit totaled 13.6 mln rubles. Key Results of the Project Creation of Electric Power Commercial Accounting Systems in 2014: A subsidiary of AtomEnergoSbyt JSC was created Atomenergopromsbyt JSC. Unregulated type of activity was separated to become an independent energy sales company; Negotiations with companies were held; at the first stage, 10 nuclear industry companies will be introduced in the wholesale market of electric power and capacity; Design and exploration work started with a view to create automated information and measuring system for commercial accounting of energy (AIMS CAE). Key Results of Project Implementation Creation of Support Center for Processing and Storage of Data of Rosenergoatom Concern OJSC in 2014: Design and exploration work performed in full scope, including expertize of design documentation under the title of Data Processing Center (DPC); Design documentation of the TP stage was prepared under the title DPC Energy Supply System; The algorithm for substantiation of changes in electric energy consumption norms for own needs was developed; The Plan for Organizational Arrangements was prepared and implemented in order to start DPC construction; A set of actions in order to conclude the General Contractor Agreement for construction of DPC were carried out (Investment Committee s resolution is obtained, Operating Committee s resolution is obtained, Expert Commission on Capital Construction s resolution was obtained, and competitive procedures were complied with). Key Results of Project Implementation Information System for Project Portfolio Management (ISPPM) in and Its Subsidiaries in 2014: The ISPPM system was introduced into commercial operation in the Concern; the implementation of the project REA-B-KSP-1 Transformation of IT Architecture of the Information System of Project Portfolio Management and Updating KSP Methodology commenced. As a part of the project, in 2014 the requirements for NPP construction schedules were updated and specific modules were developed in order to automate control processes over preparation of management reports during implementation of capital construction projects. The information system is about to be introduced into pilot operation. For 2015 we additionally plan work on extending the list of projects to be planned and monitored using the Concern s ISPPM; Starting from 2014, the reporting of investment projects and activities of the Concern s subsidiaries shall be submitted to Rosatom State Corporation in the ISPPM system as a part of the second rollout stage in order to facilitate monitoring of the investment activity. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

119 International Activities In accordance with the general strategy of the Concern its international activity is mainly aimed at safety and reliability of operation of NPPs built abroad under Russian designs as well as at extension of service life of equipment. In collaboration with leading international organizations and companies we work on a bilateral basis seeking to share our experiences. We also hold conferences, subject-oriented workshops, and mutual on-the-job trainings. is one of the main participants of the integrated offer of Rosatom State Corporation in the international markets of NPP construction. One of the strategic initiatives of the Electric Energy Division is development of the line NPP Service which goals consist in increase in volume of services during life cycle of NPPs and increase in presence in the foreign market of nuclear industry services. The line NPP Service is coordinated by the Concern and organizations of the Division which have necessary competences and reference experience in implementation of projects abroad at all stages of NPP life cycle. The main increase in revenues is caused by successful implementation of the following projects: Kozloduy NPP comprehensive examination and evaluation of the remaining life of equipment and structures of power units Nos. 5 and 6; Bushehr NPP provision of technical support during operation and preventive repairs; Tyanvan NPP provision of services on modernization, maintenance, and repairs. We continued working on the contract on radiation treatment of cobalt. The revenue from sales of Co-60 to a foreign customer in 2014 totaled mln rubles. In the reporting year the Concern was actively involved in increasing foreign order portfolio on new products for ten years which totaled 34, mln rubles thus exceeding the target indicator by 3,5 times. OBJECTIVES FOR 2015 AND MEDIUM TERM In the mid-term the Concern will continue working on developing new markets and increasing its portfolio as a part of fulfillment of the program of Rosatom State Corporation on construction and putting into operation of NPP abroad in while implementing projects in Turkey, Jordan, Belarus, Bangladesh, Vietnam, Iran and China, as well as on business development of electricity sales in the foreign markets. In we plan to increase our share in the market of operating NPPs from 2 to 17% by developing the following areas: Supply of equipment and spare parts; Modernization of systems and equipment; Technical support of NPP operation and service; Service life extension of Kozloduy NPP and Armenia NPP.

120 117 The product portfolio of the Electric Energy Division for Foreign Market in 2014 Nuclear infrastructure Provision of Technical Supervisor s services Personnel preparation Putting into operation Operation Service (modernization, SLE, maintenance and repairs, and supply of spare parts, tools and accessories) ASUTP simulators and elements Decommissioning OBJECTIVES FOR 2015 IN AREA OF REACTOR ISOTOPES PRODUCTION: Preparation of an integrated offer on organization of production of Mo-99 using production capacities of Kursk, Leningrad, and Smolensk NPPs. The availability of such potential for Mo-99 production will permit us to enter into the global market and become the key player in production of Molybden-99; Provision of services on radiation treatment of cobalt (production of Co-60) under new contract conditions. Taking into account the available experience on chemical cleanup of equipment of NPPs with VVER reactors the Concern plans to prepare an integrated offer for chemical cleanup of steam generators at foreign NPPs. In the long-term the Concern will extend its presence in the area of services to external customers using new products, such as decommissioning and engineering services in traditional power industry. DEVELOPMENT OF ELECTRICITY SALES IN FOREIGN MARKETS Following resolution of Rosatom State Corporation, the Concern jointly with AtomEnergoSbyt JSC were determined as the sole responsible entities within Rosatom State Corporation for development of electricity sales abroad to end consumers. As a part of development of the international business a relevant competency is being created in AtomEnergoSbyt JSC, and this area of business will be among priority areas in Strategic goal of this area consists in entering into priority sales markets of the countries in the Central and Eastern Europe and Turkey pursuing the following goals: building up an integrated portfolio for hedging pricing risks of NPPs abroad under management of Rosatom, seeking a possibility to obtain additional margin in more profitable markets, and opening new markets for the corporation in general. Mid-term objectives: Development of export-oriented Baltic NPP, conclusion of long-term contracts on power supply with foreign 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

121 118 ^ A visit of foreign experts to Novovoronezh NPP as part of Atomexpo International Forum consumers, entering into transactions, partnerships, mergers, and acquisitions with foreign energy companies. SCIENTIFIC AND TECHNICAL COOPERATION INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA) In 2014, as supported by Rosatom State Corporation, the Concern continued its active involvement in international activities under the aegis of the IAEA. OSART MISSION PROGRAM (OPERATIONAL SAFETY REVIEW TEAM) THE OSART MISSION IS AN INDEPENDENT EXAM- INATION OF NPP OPERATION SAFETY CONDUCT- ED BY THE IAEA UPON REQUEST OF INDIVIDUAL STATES. UPON COMPLETION OF THE EXAMINATION THE RECEIVING PARTY OBTAINS THE EVALUATION OF OPERATING SAFETY OF THE STATION IN TERMS OF IAEA SAFETY STANDARDS AND WRITTEN RECOMMENDATIONS AND SUGGESTIONS AS TO THE AREAS OF IMPROVEMENT WITH A VIEW TO ACHIEVE THE CONFORMANCE WITH THESE SAFETY STANDARDS. In 2014 the Concern participated in preparation and presentation of the National Report of the Russian Federation at the 6 th Meeting on Reviewing the Convention on Nuclear Safety. As a part of the long-term program of OSART missions the OSART mission was conducted at Kola NPP (November 10-27, 2014). The results were one of the best OSART ever seen. An extra-budgetary project of IAEA on consulting support of Kola and Novovoronezh NPPs on operation safety was completed. In 2014 under the aegis of IAEA two international reviews of Russian NPP projects were completed:

122 119 6 peer audits were conducted by World Association of Nuclear Operators at Russian NPPs 1. WANO is the World Association of Nuclear Plant Operators. 1. The project VVER-TOI was reviewed to check the consistency with the IAEA standards on safety (results: 99% IAEA requirements were evaluated as satisfied or partially satisfied in the project). 2. The materials of the Environmental Impact Statement (EIS) of Baltic NPP (project NPP- 2006) were reviewed to check their consistency with the requirements of IAEA and the Expo Convention in terms of ensuring radiation safety of people and environment (general conclusion: the EIS materials are consistent with these requirements). In 2014 the Project Office on Nuclear Infrastructure (PONI) was created in the Concern s structure. Its main area of activity is implementation of the project Assistance in Creation or Enhancement of National Infrastructures of Nuclear Power Industry in the Countries Building or Planning to Build Nuclear Facilities under Russian Designs, including training of foreign specialists on all elements of nuclear infrastructure according to IAEA classification, organization of work of joint working groups with partner countries, such as Bangladesh, Belarus, Vietnam, and others, preparation and carrying out international events, participation in IAEA activity in nuclear infrastructure. Competitive process among candidate contractors for preparation of teaching materials on all elements of nuclear infrastructure for training representatives of partner countries was held. Currently the matter of creation of basic permanent training courses aimed at preparation of representative of newly joined countries in all elements of nuclear infrastructure and practical aspects of self-evaluation of national infrastructure using the IAEA methodology is being reviewed together with IAEA Secretariat. The work start is scheduled for March-April WANO 1 The Concern is the largest WANO member organization in the Moscow Center (MC). In 2014 the Concern pursued the following design objectives: pilot operation of the Regional Crisis Center for NPPs with VVER Reactors based on the Crisis Center of, activity of WANO s representatives at Russian NPPs. In 2014 the Concern s top management participated in the Global Board of Governors in the Tokyo Regional Center, two Boards of Governors of WANO MC, the International Conference of Technical Managers of Operators and Chief Engineers of NPPs, and International Conference of Repairs Personnel. Six peer audits were conducted by WANO at Russian NPPs. The Concern s headquarters hosted the event on transfer of best practices to the management of Armenia NPP on the subject Mid- and Long-Term Planning of Operator s Activity. The Concern s headquarters held two technical support missions on the following subjects: Goals and Methods for Self-Evaluation of NPP Safety Assurance System and Self-Evaluation Efficiency and Creation and Development of Commitment to Safety Culture at the Operator s Level. We continue working on post-fukushima projects and initiatives. ÉLECTRICITÉ DE FRANCE (FRANCE) In 2014 cooperation of the Concern and the French energy company Électricité de France (EDF) celebrated the 20th anniversary. On September 16, 1994 the Concern and EDF signed the Memorandum on Cooperation in the Area of Enhancement of Safety and Reliability of Russian NPPs. Today the cooperation is based on the agreement between the Concern and EDF dated April 4, 2011 and provides for cooperation in a number of areas, including the following: operation, engineering, and operation support, designs of new NPPs, fast breeding reactors (since 2014), personnel training, inspections and control, procurement activity, nuclear risks and insurance (since 2013), and general organization and development. The cooperation program provides for workshops and work meetings, participation of company experts in crisis emergency drills, inspections of NPPs in Russia and France, and scientific and 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

123 120 ^ Signing of the contract with EDF for Kozloduy NPP operation period extension technical conferences and symposiums. The cooperation is focused on the following areas: operation, engineering, and operation support, designs of new NPPs, fast breeding reactors, personnel training, inspections and control, procurement activity, civil responsibility for nuclear damage and insurance, and general organization and development. It was decided to separate the areas of decommissioning, waste treatment, and research and development from the other areas starting from Following review of EDF practices the Concern adjusts work plans, amends regulating and governing documents, and compares and adjusts approaches to task solving. In 2012 the agreement on the Concern s admission to the International Materials Aging Institute (MAI) operating under EDF. Participation in work of MAI will assist the Concern in its tasks on service life extension of Russian NPPs. In 2014 the Concern and MAI started joint work on the project Evaluation of Integrity of Reactor s Vessel with participation of Kurchatov Institute Research Center. We plan to start working on the following new projects in 2015: Deformation of Elements of Reactor In-Vessels Components with participation of Gidropress Development Design Bureau JSC and Water and Chemical Mode of the Primary System with participation of VNIIAES JSC. IBERDROLA (SPAIN) Cooperation between the Concern and Iberdrola is implemented according to annually approved programs. As a part of Program for 2014, workshops and working meetings on the matters of technology and best practice in repair of FAs with leaking fuel pins at the inspectorate s stands, on

124 121 Key activities in 2014 International Scientific and Technical Conference Safety, Efficiency, and Economics of Nuclear Power Industry (MNTK-2014) (attended by 51 foreign representatives). The 6th meeting of contracting parties on review of the Convention on Nuclear Safety (participation in preparation and presentation of the National Report of the Russian Federation and in work of a group of countries). OSART mission at Kola NPP. Coordination Committee with Électricité de France in commemoration of the 20th anniversary of cooperation. Workshop with Électricité de France on measures to improve safety in connection with the accident and Fukushima Daiichi. Participation in the 40th annual conference of the Spanish Nuclear Society (ENS-2014) with a report Innovative Development Projects of Nuclear Industry in Russia. Comprehensive emergency drills at Kola NPPs (attended by 24 foreign observers). Peer audits of WANO s Moscow Center at Leningrad and Kalinin NPPs. Follow-up peer audits of WANO s Moscow Center at Kola and Beloyarsk NPPs. Pre-start peer audits of WANO s Moscow Center at Beloyarsk and Rostov NPPs. the matters of quality assurance during operation of NPP power units, and on the matters of decommissioning and construction of new power units. Specialists of the Spanish company took part in the international conference on heating machinery equipment, integrated emergency drills at Kola NPP, in the international scientific and technical conference MNTK-2014, and in the Atomexpo-2014 forum. The Concern s representatives took part in the 40 th annual conference of the Spanish Nuclear Society (ENS-2014) with a report Innovative Development Projects of Nuclear Industry in Russia. The Iberdrola s best practices on the use of modules during construction was recognized one of the promising areas for cooperation in 2015 at the meeting of the Coordination Committee on Cooperation held in the town of Sosnovy Bor: organization of module design using the information model can be applied to designs of VVER-TOI; as well as the best practice in the area of preparation to decommissioning. COOPERATION WITH NORDIC COUNTRIES In 2014 Leningrad and Kola NPPs continued their cooperation with Nordic countries Norway, Finland, and Sweden. The agreements among REA and SSM (Sweden), STUK (Finland), and IPE/NRPA (Norway) regulate mutually beneficial international cooperation in different areas: emergency preparedness, decommissioning, and RAW handling and disposal. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

125 122 Map of International Activity 1 1. CANADA 3. BELARUS 4. CZECH REPUBLIC 6. HUNGARY 8. BULGARIA Export of isotope materials (cobalt-60) 2. FINLAND Control over NPP nuclear fuel manufacturing quality Evaluation of conformance of equipment of Belarus NPP, technical supervision, and start-up operations. Control over NPP nuclear fuel manufacturing quality Nuclear fuel manufacturing quality control, supply of spare parts, tools and accessories to Paks NPP. 5. SLOVAKIA 7. UKRAINE Technical and consulting work during completion of construction of power units Nos. 3 and 4 of Mochovce NPP Contract on supply of equipment and spare parts, tools and accessories Nuclear fuel manufacturing quality control, substantiation of service life extension of power unit No. 5 of Kozloduy NPP up to 60 years. Revenues from international operations in bln rubles

126 mln rubles (21.5%) mln rubles (32.5%) bln rubles Net exports revenue since 2012 to mln rubles (46%) TURKEY 10. ARMENIA 11. IRAN 12. CHINA Preparation of section of the "Report on Akkuyu NPP Site Parameters" and support during approval of the reporting documents by the Turkish Agency on Nuclear Power, completion of work on the terms of reference for development of design documentation for Akkuyu NPP (power units Nos. 1, 2, 3, and 4). Performance of work and provision of supplies and services for extension of service life of power unit No. 2 of Armenia NPP. Engineering services and technical support of operation, preventive repairs, modernization of CSs of power unit No. 1 of Bushehr and NPP power units under construction. Engineering and consulting services on support of the operation of the Chinese Experimental Fast Reactor (CEFR), engineering services and technical support of operation of power units of Tyanvan NPP, supply of equipment and spare parts, tools and accessories for power units Nos. 1 and 2 of Tyanvan NPP. Portfolio of foreign orders for new products for 10 years 34.2bln rubles 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

127 4. CORPORATE GOVERNANCE Rosenergoatom Concern places high emphasis on the issues of corporate governance and its improvement.the total value of key performance indicators fulfillment is %

128

129 Corporate Governance The Concern applies certain norms of the Corporate Conduct Code recommended by letter No /2463 dated April 10, 2014 of the Bank of Russia to its daily practice taking into account the specifics of the legal status of Rosatom State Corporation set forth in regulations of the Russian Federation which provides for unified management of organizations operating in the nuclear power industry; these norms of the Corporate Conduct Code are reflected in a number of local regulations. 2times a year the Board of Directors considers a report on execution of decisions made GOALS OF CORPORATE MANAGEMENT Strategic priorities in the corporate management Improving perception of Concern s activity through timely and quality disclosure of information. Introducing best Russian and international practice into the corporate management system in the area of corporate management, business ethics, and principles of openness and transparency. MAIN PRINCIPLES OF CORPORATE MANAGEMENT Creation of an efficient system for safeguard of funds provided by stockholders and their efficient use. Equal and fair treatment to all stockholders when they exercise their right to take part in management. Recognition of staturory rights of stakeholders. Timely and accurate disclosure of information on all significant events associated with Concern s activity. MAIN POLICIES IN CORPORATE MANAGEMENT Disclosure of the information subject to mandatory disclosure according to legislation on Concern s website. Implementation of control over fulfillment of resolutions of the Board of Directors in order to increase efficiency of corporate management (the Board of Directors will review a report on fulfillment of the adopted resolutions twice a year).

130 Concern s Corporate Governance Structure AUDITING COMMITTEE AUDITOR GENERAL MEETING OF STOCKHOLDERS as of December 31, 2014 Atomenergoprom JSC %; Rosatom State Corporation % Collegiate bodies CENTRAL COMMITTEE DIRECTORATE BOARD OF DIRECTORS GENERAL DIRECTOR THE SOLE EXECUTIVE BODY Yevgeny Vladimirovich Romanov The current system of management of the organizations of the nuclear power industry: CORPORATE MANAGEMENT Board of Directors Beneral meeting of Shareholders OPERATIONS MANAGEMENT Industry-specific rules Interaction procedure Pursuant to Order No. 1/218-P dated March 4, 2013 of Rosatom State Corporation On Approval of the Regulations on the Management Model of the Civil Part of the Industry, the Concern is the management company of the Electric Energy Division. Division means an organizational unit which activity is aimed at the implementation of the strategic business goals of Rosatom State Corporation. Division includes organizations from the management circuit of the management company. One of the main tasks of the current management model is the optimization of the horizontal management of interaction of subdivisions of Rosatom State Corporation and vertical interaction of Rosatom State Corporation and its organizations in process groups. Division is an organizational unit and comprises Corporation s organizations by specific types of activities and areas of business. Characteristics of the Division: Implements development strategy of the Division; Provides for Operation Management of Organizations which form part of its management circuit; Manager of the Division is included in the decision-making system of the Corporation. Main Competences of the Division: Organization of efficient performance of operating processes; Formation of liaison system between organizations included in its management circuit. Liaison rules is a joint document that determines the procedure for liaison of the Corporation and the Concern when the Concern and organizations operate within the limits of the Concern s management circuit and sets forth bases and conditions for participation of the Corporation in decision-making associated with industry-specific processes. The new version of the liaison rules for the Concern and Rosatom State Corporation was approved in September Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

131 Governance and Control Bodies The General Meeting of Stockholders is the supreme management body. In its activity the General Meeting of Stockholders is guided by legislation of the Russian Federation, Charter and Regulation on the Concern s General Meeting of Stockholders. The General Meeting of Stockholders is the supreme management body. In its activity the General Meeting of Stockholders is guided by legislation of the Russian Federation, Charter, and Regulation on the Concern s General Meeting of Stockholders. In 2014 four general meetings of stockholders were held at the decision of the Board of Directors. The Board of Directors was elected at the Concern s Annual General Meeting of Stockholders on June 24, 2014 (minutes No. 7) with the following members: Alexander Markovich Lokshin (Board Chairman, non-executive director); Sergey Anatolyevich Adamchik (Non-executive director); Kirill Borisovich Komarov (Non-executive director); Yevgeny Vladimirovich Romanov (Executive director); Boris Georgievich Silin (Non-executive director). G4-39 The Board of Directors operates in this composition from January 1, 2014 to December 31, There were no changes in the composition of the Board of Directors during the year. 4 general meeting of shareholders were held in 2014 The Board of Directors is a collegiate governing body in charge of overall management of the Concern. It is responsible for development of the strategy and controls activity of executive bodies ensuring observance of rights and legitimate interests of the Concern s stockholders. Members of the Board of Directors are elected through a transparent procedure that permits stockholders to obtain information about candidates sufficient to get an idea about their personal and professional qualities. The activity of the Board of Directors is regulated by applicable legislation, norms of the Concern s Charter, and Regulations on the Board of Directors approved in its new version by resolution of the general meeting of stockholders on July 29, 2014 (Minutes No. 9). The Concern s Board of Directors has no committees. Members of the Board of Directors do not participate in the Concern s registered capital, do not hold the Concern s common stock, and have not entered into transactions on acquisition or alienation of the Concern s stock. Performance of the Board of Directors was not evaluated in Sole Executive Body is represented by the General Director who is in charge of the Concern s operations management. The General Director does not participate in the Concern s registered capital, does not hold the Concern s common stock, and has not entered

132 129 The Concern s internal documents are available at: shareholdersandinvestors/ inner-documents/ into transactions on acquisition or alienation of the Concern s stock. Information about the General Director is provided in the section «Information about Members of the Board of Directors» as of December 31, Auditing Committee is a body elected by the Concern s General Meeting of Stockholders to exercise control over financial and economic activity of the company. The Auditing Committee was elected at the Concern s Annual General Meeting of Stockholders on June 24, 2014 (minutes No. 7) with the following members: Pyotr Anatolyevich Stepayev; Liudmila Nikolayevna Demidova; Marina Igorevna Kiseleva. This composition of the Auditing Committee was in place in the Company from January 1, 2014 to December 31, The advisory collegiate bodies include the Concern s Directorate and Central Committee headed by the General Director. The list of main local regulations in the area of corporate management is provided in the Concern s Annual Report for REPORT ON ACTIVITIES OF BOARD OF DIRECTORS One of the most important functions of the Board of Directors is general governance of the Concern. The area of competence of the Concern s Board of Directors includes determination of priority lines of business (according to Federal Law No FZ dated December 26, 1995 On Joint Stock Companies and the Charter of the Concern). In 2014, as a part of its current activity, the Board of Directors determined the main parameters of business in the approved budget, planned indicators of financial and economic activity, and target performance indicators of the Concern s activity for 2014, main reference points for activity in the long-term, and approved key performance indicators. In 2014 the Board of Directors held 22 meetings and reviewed 49 issues. Meetings of the Board of Directors were held with all members present. The most important resolutions adopted in the reporting year: The Board of Directors made a resolution to amend the resolution on additional issue of securities in terms of extension of the period of distribution of the securities for 1 year (until September 15, 2015) in order to ensure budget financing and reduce costs of supporting additional issue. At the initiative of the Board of Directors in 2014 amendments were made to the Concern s Charter extending the area of competence of the Board of Directors in order to arrange for control over specific transactions with immovable property. The Board of Directors made a resolution to terminate Concern s participation in certain companies due to inexpediency of further participation in line with optimization of the Concern s management circuit. In 2014 the Board of Directors approved recommendations to the general meeting of stockholders to approve the Regulations on the Board of Directors and the Regulations on the Concern s General Meeting of Stockholders in order to establish control over fulfillment of resolutions made by the Concern s management bodies. In 2014 four general meetings of stockholders were held at the decision of the Board of Directors. As a part of preparation to the Concern s annual general meeting of stockholders the Board of Directors tentatively approved the annual report and annual financial statements of 2013, and gave recommendations on distribution of profits and payment of dividends. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

133 130 Board of Directors ALEXANDER MARKOVICH LOKSHIN Board Chairman, ; First Deputy General Director for Operations Management, Rosatom Nuclear Energy State Corporation. Born in Education: M.I. Kalinin Leningrad Polytechnical Institute. Professional Experience: Acting Director, Director, Deputy General Director of Rosenergoatom Concern; Director of Smolensk Nuclear Plant (Branch of Rosenergoatom Concern) First Deputy General Director, Acting General Director in FSUE Rosenergoatom Concern Deputy General Director, Rosatom Nuclear Energy State Corporation Deputy General Director, Director of the Directorate for Nuclear Energy Complex, Rosatom Nuclear Energy State Corporation First Deputy General Director, Director of the Directorate for Nuclear Energy Complex, Rosatom Nuclear Energy State Corporation. Since 2012 First Deputy General Director for Operations Management, Rosatom Nuclear Energy State Corporation. SERGEY ANATOLYEVICH ADAMCHIK Board Member of (since 2010), Inspector General of Rosatom Nuclear Energy State Corporation. Born in Education: Tomsk Polytechnic Institute. Professional Experience: Deputy Head of the Federal Service for Environment, Technological, and Nuclear Supervision of the Russian Federation. November 2008 to June 2010 Deputy Inspector General, Rosatom Nuclear Energy State Corporation. Since July 2010 Inspector General, Rosatom Nuclear Energy State Corporation.

134 131 KIRILL BORISOVICH KOMAROV Board Member of (since 2010); Director of Atomenergoprom JSC; Deputy General Director for Development and International Business of Rosatom State Corporation. Born in Education: Urals State Law Academy. Candidate of Law. Professional Experience: Deputy Head of the Federal Agency for Water Resources, Russian Federation Vice President, TVEL OJSC; General Director, Atomenergomash OJSC Deputy Director, Executive Director, Atomenergoprom JSC. Since April 2010 Director, Atomenergoprom OJSC, simultaneously holds the office of Executive Director of Nuclear Energy Complex Directorate, Rosatom Nuclear Energy State Corporation. Since April 2011 Deputy General Director for Development and International Business, Rosatom Nuclear Energy State Corporation. Simultaneously holds the office of Director in Atomenergoprom OJSC. Director, Board Member, Atomenergoprom JSC; Board Chairman, Atomenergomash JSC; Board Member, TVEL JSC, Atomstroyexport CJSC, Techsnabexport International Business Company (OJSC), Atomredmetzoloto JSC, Power Machines Group OJSC, INTER RAO UES Energy Efficiency Center LLC, NIAEP JSC, New Composite Materials LLC; Management Board Member, Rosatom State Corporation; Board Chairman, AKKUYU NGS ELEKTRİK ÜRETİM ANONİM ŞİRKETİ. YEVGENY VLADIMIROVICH ROMANOV Board Member, (since 2012); General Director, Rosenergoatom Concern OJSC Born in Education: Urals Polytechnic Institute. Professional Experience: Head of Economic Analysis Group; Deputy Head of Economic Planning Section; Chief Accountant, Urals Electrochemical Plant Advisor to Deputy Chairman of the Management Board, Deputy Head of Corporate Client Base Management, Vice President of United Export- Import Bank OJSC ONEXIM Bank Vice President, ROSBANK JSCB Advisor to First Deputy General Director, RAO Norilsk Nickel First Deputy General Director, acting General Director, General Director, Kola GMK OJSC First Deputy Director, First Deputy Chairman of the Management Board, Deputy Director, Head of Mining and Metallurgy Directorate, Deputy Chairman of the Management Board, Zapolyarye Branch of Norilsk Nickel GMK OJSC General Director, VSMPO-AVISMA OJSC Engaged in comprehensive audits of financing and business activities of RusSpetsStal OJSC General Director, Rostekhnologii Metallurgy OJSC. Since August of 2011 General Director, Rosenergoatom Concern OJSC. In 2011 was elected to the World Association of Nuclear Operators (WANO). Board Chairman, Baltic NPP OJSC. BORIS GEORGIEVICH SILIN Board Member, (since 2010); Advisor to First Deputy General Director for Operations Management, Rosatom Nuclear Energy State Corporation. Born in Education: Moscow Institute of Chemical Machine Building Professional Experience: Head of Department, Deputy Head of Management for Nuclear Power Industry and Nuclear Fuel Cycle of the Federal Agency for Nuclear Energy (Rosatom) Head of Department, Deputy Director of the Department for Nuclear Power Complex of Rosatom Nuclear Energy State Corporation Advisor, Nuclear Energy Complex Directorate, Rosatom Nuclear Energy State Corporation. Since 2012 Advisor to First Deputy General Director for Operations Management, Rosatom Nuclear Energy State Corporation. Board Member, OKB GIDROPRESS JSC. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

135 132 Directorate YEVGENY VLADIMIROVICH ROMANOV STANISLAV IVANOVICH ANTIPOV BORIS ALEXANDROVICH BOKAREV PAVEL LEONIDOVICH IPATOV OLEG MAKAROVICH SARAYEV General Director VLADIMIR GRIGORYEVICH ASMOLOV Deputy General Director Director of Science and Engineering Center (Branch of Rosenergoatom Concern OJSC). Rewarded with Order of Honor (2002) and with honorary title Honored Power Engineer of the Russian Federation (1995). Deputy General Director, Director for Energy Policy and Sales in Retail and Foreign Markets. Deputy General Director, Director for Strategy and Corporate Development. Rewarded with Order of Red Banner of Labor (1988), Order of Peoples Friendship (1994), and Order of Honor (2000). Winner of the Prize of the USSR Council of Ministers (1991) and Prize of the Government of the Russian Federation in Science and Engineering (2001). Deputy General Director Project Manager Awarded with medal «Distinguished Work» (1973), Order of Red Banner of Labor (1981), and Order of Honor (1995). Winner of USSR State Prize (1988). First Deputy General Director Rewarded with Order of Fortitude (1997) and Order of Honor (2009). Since March 2015 works for Rosatom State Corporation as Advisor to the General Director. ALLA IGOREVNA ARKHANGELSKAYA Deputy General Director, Director for Economics. SERGEY NIKOLAYEVICH ZAVYALOV Deputy General Director, Director of Directorate for Construction of Floating Thermal Nuclear Power Plants (Branch of Rosenergoatom Concern OJSC Awarded with the honorary title «Honored Shipbuilder» (2011). ALEXANDER VASILYEVICH PALAMARCHUK Deputy General Director, Director of Facilities Construction Management (Branch of ) NIKOLAY NIKOLAYEVICH SAFRONOV Deputy General Director, Director for Special Security VLADIMIR YURYEVICH MYASNIKOV First Deputy General Director BESLAN ANDREYEVICH BARGANJIYA Deputy General Director, Director for Energy Policy and Sales in Retail and Foreign Markets ALEXANDER ALEXEYEVICH KHVALKO Deputy General Director Sales Director Rewarded with Order Medal «For Merits to the Homeland» II degree (2003) and Order Medal «For Merits to the Homeland» I degree (2007). VLADIMIR ALEXEYEVICH SERVETNIK Deputy General Director, Director for Purchases and Logistics of

136 133 NIKOLAY MIKHAYLOVICH SOROKIN ALEXEY VITALYEVICH SHALIMOV MIKHAIL VASILYEVICH BAKANOV VASILY VASILYEVICH OMELCHUK VLADIMIR PETROVICH POVAROV Deputy General Director Inspector General Awarded with the honorary title «Honored Power Engineer of the Russian Federation» (2010). Chief Accountant Deputy General Director, Director of Beloyarsk Nuclear Plant (Branch of ) Deputy General Director, Director of Kola Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Rewarded with Order Medal «For Merits to the Homeland» II degree (2000) and Order Medal «For Merits to the Homeland» I degree (2006). Deputy General Director, Director of Novovoronezh Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Rewarded with Order Medal «For Merits to the Homeland» II degree (2003). ALEXANDER VIKTOROVICH SHUTIKOV JUMBERI LEONTOVICH TKEBUCHAVA First Deputy General Director of Rosenergoatom Concern OJSC Deputy General Director, Director for Production and Operation of Nuclear Plants Awarded with honorary title «Distinguished Contributor to Power Industry of the CIS» (2013) MIKHAIL YURYEVICH KANISHEV Deputy General Director, Director of Kalinin Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Awarded with the honorary title «Honored Power Engineer of the Russian Federation» (2011). VLADIMIR IVANOVICH PEREGUDA Deputy General Director, Director of Leningrad Nuclear Plant (Branch of Rosenergoatom Concern OJSC) ANDREY ALEXANDROVICH SALNIKOV Deputy General Director, Director of Rostov Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Rewarded with Order Medal «For Merits to the Homeland» II degree (2010). ANDREY YUVENALYEVICH PETROV VIKTOR IGOREVICH IGNATOV Deputy General Director, Director of Smolensk Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Awarded with the honorary title «Honored Power Engineer of the Russian Federation» (2009) Deputy General Director, Director of Balakovo Nuclear Plant (Branch of Rosenergoatom Concern OJSC) Awarded with Order «Friendship of Peoples» (1994) and Order Medal «For Merits to the Homeland» II degree (2001) VYACHESLAV ALEXANDROVICH FEDYUKIN Deputy General Director, Director of Kursk Nuclear Plant (Branch of Rosenergoatom Concern OJSC) KONSTANTIN GENNADYEVICH KHOLOPOV Deputy General Director, Director of Bilibino Nuclear Plant (Branch of ) 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

137 134 Structure of Concern s Managerial Bodies, by Gender and Age Indicator Board of Directors Directors Men Women Total Men Women Total Under 30 years old (inclusive) From 31 to 50 years old (inclusive) Over 51 years old Total REPORT ON DIVIDENDS PAID mln rubles is the total remuneration paid in 2014 to key management personnel The Concern s Annual General Meeting of Stockholders (Minutes No. 7 of June 24, 2014) made the following resolution: no dividends on common stock of the Concern shall be declared or paid with respect to results of INFORMATION ABOUT MAJOR TRANSACTIONS AND INTERESTED PARTY TRANSACTIONS No major transactions or interested party transactions subject to approval by the Concern s management bodies were conducted in CRITERIA FOR DETERMINING REMUNERATION OF GENERAL DIRECTOR, DIRECTORATE, AND BOARD MEMBERS part of remuneration depends on achieved key performance indicators (KPI). Key performance indicators are established for the Concern as a whole and included in the indicator matrix of the General Director. KPIs for Rosenergoatom Concern OJSC are decomposed and translated to executives of all levels mln rubles is the total remuneration paid in 2014 to key management personnel: executives (General Director and his Deputies) and other officers vested with authority and responsibility for planning, directing, and controlling activities of the company 1. G4-52 Total performance ratio in 2014 adjusted by weight factors was % (with % in 2013). 1. No remuneration consultants took part in the determination of the remuneration. As regulated in clause of the Concern s Charter, if so decided by the General Meeting of Stockholders, members of the Concern s Board of Directors, while in office, may be entitled to remuneration and reimbursement of costs related to their functions as Board Members. The sums of such remunerations shall be established by resolution of the General Meeting of Stockholders. In 2014 no remuneration was paid to the Concern s Board Members. The General Director s remuneration is regulated by the employment contract and payable after its approval by the Board of Directors. The variable For more information on KPIs, see Section 4.3. KPI. Personnel Evaluation and Remuneration. INFORMATION ABOUT REGISTERED CAPITAL As of December 31, 2014, the Concern s registered capital totaled 671,516,563,474 rubles. The amount of the registered capital did not change comparing with The registered capital is divided into 671,516,563,474 common stocks with a nominal value of one (1) ruble.

138 135 KPIs of General Director of for 2014 KPI % of fulfillment in 2014 Adjusted free cash flow of State Corporation, bln rubles EBITDA, bln rubles Growth of labor efficiency vs 2013, % Index of fulfillment of the Investment program of, % 96.3 NPP generation, bln KWh Integral performance on new products, % Specific semi-fixed cost, rubles/mwh Reduction of process flow time Growth of labor efficiency vs 2013, % LTIFR, % Fulfilled No incidents above Level 2 on the INES scale in the industry and no personnel exposure incidents over 50 msv per year Fulfilled No incidents above Level 2 on the INES scale in the industry Fulfilled Specific forecast cost of NPP construction, taking into account the time limits, rubles/kw As a part of distribution of securities of the Concern s additional issue 55,297,167,000 common stocks totaling 55,297,167,000 rubles were distributed to Atomenergoprom JSC in order to attract funds channeled from the federal budget to development of nuclear power industry complex. The time period for distribution of additional stock of the Concern was extended until September 15, MATERIAL CHANGES IN SIZE, STRUCTURE OR OWNERSHIP IN REPORTING PERIOD The Concern s General Meeting of Stockholders made a resolution to increase the Concern s registered capital (Minutes No. 6 dated November 29, 2013). The resolution on additional issue of securities was approved by the Board of Directors (Minutes No. 170 dated December 4, 2013) and registered with the Bank of Russia on December 24, 2013 under state registration number Е-006D. The number of additionally issued stocks is 250,000,000,000 with a nominal value of 1 ruble, totaling 250,000,000,000 rubles. From January 1, 2014 to December 31, 2014 as a part of the resolution on increase of the Concern s registered capital, 55,297,167,000 common stocks totaling 55,297,167,000 rubles were distributed to Atomenergoprom JSC. In September 2014 the Concern s Board of Directors made a resolution to extend the time period of distribution of the securities until September 15, In this connection necessary amendments with respect to increase of the Concern s registered capital will be done to the Concern s Charter when the time period of distribution of the securities ends. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

139 KPI. Employee Evaluation and Remuneration The personnel performance management and motivation system was introduced in Rosenergoatom Concern OJSC in It is based on the use of key performance indicators (KPIs) that permits measuring the efficiency and define performance criteria of each individual employee. The remuneration process and its relation to personnel performance and development have become open and transparent. KPI target values for the current and subsequent years are set up based on the out-performance on the main indicators that characterize the target status implementation of the Concern s strategic goals. The SAP-based automated performance management system is currently implemented in order to enhance convenience and increase performance and control over fulfillment of KPI. The procedure to remunerate the Concern s employees is set forth in the following regulations: The Standard Procedure for Remuneration of Labor of Branch Employees; Procedure for Remuneration of Labor of Employees of the Headquarters. The amount of remuneration depends on the position level (with differentiation factors), type of job functions, and the level of fulfillment of assigned key performance indicators (KPI). KPI DEVELOPMENT PRINCIPLES SMART CRITERIA COMPLIANCE PRINCIPLE Each set goal should be realistic and achievable. The result should be measured in figures or defined with quality indicators. DECOMPOSITION PRINCIPLE KPIs of subordinates derive from KPIs of managers. PRINCIPLE OF BALANCE KPIs match each other: they are consistent and non-contradictory. FREQUENCY PRINCIPLE Performance assessment is conducted on annual basis. KPIs are communicated to the employee at the beginning of the period and are valid throughout the year.

140 137 Amount of Remuneration by Employee Category, thousand rubles per year Employee category Base salary KPI achievement bonus 2012 Managers up up Specialists up 41.5 up Shop floor 86.0 up 8.6 up 2013 Managers up up Specialists up 42.9 up Shop floor 93.5 up 9.4 up 2014 Managers up up Specialists up 44.3 up Shop floor 98.8 up 9.9 up The ratio of the total annual remuneration of the highest paying official vs average annual remuneration of all employees (excluded this official) 3.3 The ratio of the total annual remuneration of the highest paying official vs percent of growth of average annual remuneration of all employees (excluded this official) Minimum Salary of an Employee in Concern s Branch, rubles 8,600 8,050 7,540 6,800 Before July 1, 2012 Before July 1, 2013 After July 1, 2013 with a minimum monthly wage of 5,205 rubles After September 1, 2014 with a minimum monthly wage of 5,554 rubles In 2014 the minimum salary of a Branch employee totaled 8,050.0 rubles before September 1, 2014 and 8,600.0 rubles from September 1, 2014 (with the federally regulated minimum wage of 5,554.0 rubles). The evaluation system used to assess managers performance is based on the annual evaluation system (which, among other things, is based on key performance indicators achievement). weighted value assigned against the total sum of bonuses. The total amount of bonuses is based on the annual total of base salaries for each position, adjusted by a specific coefficient; the top limit depends on the position level and can be as high as 248% if the target KPI level is achieved. Bonuses are only paid upon achievement of KPI threshold values that are also specified in the individual KPI matrix. If achievements significantly excel the target, the bonus can be increased. The system of incentives is based on bonuses for achieved KPIs, where each indicator has a 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

141 Internal Control and Auditing Seeking higher business efficiency, the Concern continues to improve its internal control and auditing system, and takes anti-corruption measures. 19 checkup activities using a risk-oriented approach were conducted in 2014 The Concern provides for independent and unbiased operation of the Dedicated Internal Control Body (DICB), professional competence of its employees, and unrestricted and efficient performance of the entrusted functions. In 2014 the DICB conducted 19 control activities using risk-oriented approach. They were performed by way of synchronizing audit elements with control and revision methods ( two-inone ). Audits are aimed at improving the reliability of internal control systems and risk management, providing comprehensive assessment of existing business processes, and are combined with verification of the legality and validity of specific business operations that are intrinsic to control and auditing activities. The application of disciplinary actions and fines to persons in breach contributes to increasing the level of responsibility. The combination of various methodologies permits us to perform tasks of the DICB in an extensive, comprehensive, and efficient way and achieve strategic goals of the Concern. As a result of control activities in the sphere of international technical assistance, research and development work, labor remuneration, patent use, financing of investment projects, insurance, IT services, financial and economic activities of subsidiaries, etc. in 2014 recommendations were prepared in order to eliminate the deficiencies revealed and minimization of risk down to the acceptable level. Business process owners perform 379 organizational and technical activities (73% higher versus 2013). Fulfillment of such organizational and technical activities is under constant control of the DICB. The Concern s Arbitration Committee (hereinafter the Committee) met its targets of pre-trial disputes settlement and ensuring procurement procedures legitimacy. Committee s priorities are: transparency, openness, and information availability. They are implemented by participation in the largest all-russia forums (Atomex and Goszakaz), routine publication of reviews of the arbitration practice, and posting of each opinion of the Committee on the Concern s portal. The methodology on fulfillment of Committee s opinions was developed and put into practice, permitting us to significantly increase quality, timeliness, and completeness of implementation of resolution of the Committee. The methodology is the first of its kind in the industry. As a result, the share of justified complaints versus reviewed complaints has decreased by one third, and versus the total amount of purchases of the division almost by half. A set of measures on adjustment of activity of senior auditors internal controllers of the Concern s branches, operating NPPs. The following are the key areas of development for internal control and audit: thorough control actions, increase in quality of reporting materials, review of organization processes and integration of appropriate, reliable, and efficient control procedures with allocation of responsibility of business process participants for their proper performance, and improvement of competencies and potential of employees of DICB.

142 139 ^ General Director Evgeny Romanov and First Deputy General Director Vladimir Asmolov at WANO meeting ANTI-CORRUPTION ACTIVITY In 2014 the main efforts of the Concern were aimed at formation of local regulatory base on anti-corruption, improvement of prevention measures focused on organization of good faith operation of the Concern, as well as performance of recommendations issued by Rosatom State Corporation. In order to implement specific provisions of the National Anti-Corruption Plan for the Concern approved and put into effect the Anti-Corruption Plan for The Concern s administrative orders determined officials and subdivisions responsible for work on prevention of corruption and other offenses, and appropriate duties are allocated to such officials and subdivisions. The Concern s Ethics Code and the Unified Industry-Specific Procedure for Verification of Communications on Corruption and Other Offenses Received through Hot Line Channels were updated. The Guidelines on Analysis of Applications and Planned Transactions for Interest in Their Settlement were put into effect. Local regulations were adopted with a view to ensure anti-corruption practice of the external economic activities, as well as a number of local regulations increasing responsibility for preparation of unofficial financial and other reporting were introduced. The Action Plan on Organization of Training and Legal Education of Concern s Employees in the Matters of prevention and countering corruption was approved. The Action Plan provides for development of a training program for employees, and preparation of schedule and organization of training in educational institutions. In the reporting period 27 employees of the Concern attended training on the subject Formation and Verification of the Initial (Maximum) Price during Procedure for Order Placement and Structural Analysis of the Pricing Mechanism of the Contracts Concluded in the Organizations of Rosatom State Corporation. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

143 140 ^ Ecological expedition at Leningrad NPP-2 With a view to create conditions impeding corruptive behavior and thus reducing corruption level in the Concern, the development of standards and procedures ensuring good faith operation of the Concern is introduced in daily practice. First of all, this activity is aimed at ensuring transparency of transactions, openness of procurement procedures, prevention of bad faith competition, and exclusion (minimization) of corruptive risks during competitive processes for supply of equipment, and performance of work and services. A number of collegiate bodies involved in review of main issues of financial and economic activity is created and currently functions in the Concern. Their meetings are held and accompanied by audio and video recording. In the reporting period Concern s economic security subdivisions verified over 21,000 participants of procurement procedures for their compliance with the requirements of UIPS, including in terms of corruptive practices. As a result, over 2,600 breaches of the procurement procedures were revealed. With respect to 180 reported cases involving possible risks and threats, the Concern s and NPPs management took preventive measures which permitted to avoid potential corruption risks and possible property damage totaling over 248 mln rubles. In communications to the Hot Line and queries of people reporting corruption and other offenses were verified, and 33 of them were confirmed. As a result of the appropriate measures the breaches revealed were eliminated, and 42 employees of the Concern were subjected to disciplinary action. In 2014 economic security subdivisions jointly with NPP subdivisions revealed and prevented 66 attempts to supply and use of equipment with signs of illegal origin at NPPs, including by way of substitution of such equipment with the legitimate equipment. The information on 13 revealed cases of supply of falsified products was supplied to law enforcement agencies for further legal evaluation. In 2014 no cases of breach of anti-corruption legislation of the Russian Federation and requirements of industry-specific local regulations regulating anti-corruption activity resulting in imposing of any sanctions and fines or property damage for the Concern were revealed in the Concern.

144 Risk Management The key principle of the Corporate Risk Management System of Rosatom State Corporation is the integration of current management processes, primarily, in strategic and medium-term planning, budgeting, and investment planning processes. What Do We Strive for? The Concern s activity in risk management area is aimed at achievement of strategic goals using integration of risk management process with the managerial decision-making processes. In 2014 the Concern continued improving the risk management system seeking further integration with all main processes and first of all with the strategic planning. As a part of the indicated activity the list of risks was updated, the evaluation of aggregate impact of risks (including macroeconomic and geopolitical) on the main indicators of activity was carried out; owners of newly detected risks were determined, and the scheduled monitoring of risk management activities was conducted. The most important risks from the point of view of achieving the Concern s goals: Production risk (risk of reducing generation volumes). The main risk factors are upsets and failures in equipment operation leading to unscheduled load reliefs, stops, and unscheduled repairs due to technical conditions of a power unit. In 2014 such risk did not affected the results of activities of the Concern. All cases of upsets and failures in equipment operation were investigated pursuant to the established procedure. Corrective and preventive measures were developed. They are aimed at removal of the root causes of upsets and prevention of their repetition. In particular, a set of activities on recovery of resource characteristics of the graphite stack of reactors with RBMK-type power units which is currently implemented permitted us to minimize the risk as well as to obtain additional generation in We do not foresee significant changes in the risk level in We intend to continue scheduled work on recovery of resource characteristics of the graphite stack of reactors with RBMK power units. Furthermore, in 2015 special attention will be paid to electrical equipment. An entire program system was developed in order to increase its reliability and prevent damages and defects. Commodity risks (adverse change in prices for electrical power and capacity). Commodity risk depends exclusively on external factors. The adverse impact of the risk increased in 2014 versus The main factors were increase in total volume of offer using new (more efficient) heating stations and increase in generation of NPPs on the background of slower economic growth and, as a result, less energy consumption. In these conditions the Concern s efforts were directed at reducing possible adverse consequences for commodity risk. According to the Ministry of Economic Development, in 2015 the growth rate of prices for natural gas will continue decreasing, and this, in its turn, will probably slow down the growth of electricity prices. The decrease in growth rate of electricity consumption may also have an adverse impact on the prices. Credit risk (increase in accounts receivable, including overdue). The main risk factors are the following: imperfection of ECWM rules to the extent of ensuring timely payment for supplied electricity and capacity; current financial and economic situation in Russia reflected in increase of short-term indebtedness of electricity buyers due to decrease in capacity to attract credits channeled to elimination of the cash gap. We managed to reduce the impact of the risk in 2014 comparing with 2013 thanks to participation in 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

145 142 ^ Smolensk NPP the entire complex of measures, such as implementation of financial guarantee system and work on improvement of payment discipline at ECWM. In 2015 the tools and mechanism of influence on non-payers will remain largely the same. Risk of non-achievement of investment projects of NPP construction in the Russian Federation (increase in expenses and construction timelines). The risk impact is assessed as insignificant in the one year term. In order to minimize the risk in midand long-term, the Concern implements activities (mostly organizational) aimed at increasing efficiency of the current construction management system. The most detailed information on electricity generation, sales markets, and prospects for construction of new NPPs is provided in Section 3 of the Annual Report Main Performance Results. Due to specifics of activity the Concern pays main attention to the risks of nuclear, radiation, technical, and fire safety, and physical protection of NPPs. The detailed information on NPP safety is provided in subsection 3.3 Ensuring Safety of Russian NPPs. Radiation Effect on Personnel and Population. In 2015 the Concern plans to continue its work aimed at further enhancement of the risk management system.

146 Quality Management At all life cycle stages of its nuclear facilities the Concern determines its quality policy based on its main operation goals: economically efficient generation and reliable supply of electrical and thermal power to consumers, with safety as an unconditional priority. ISO 9000 Standards that the integrated quality system meets QUALITY POLICY By its administrative order the Concern has enacted the Quality Policy Statement prepared in furtherance of the Quality Policy of Rosatom State Corporation when Using Nuclear Power for Peaceful Purposes. In order to achieve its main goals the Concern pursues a policy in the area of quality in the following areas: Provision of nuclear, radiation, technical, fire, and environmental safety and labor protection; Provision of physical protection of nuclear units, radiation sources, storage points, nuclear materials, and radioactive waste; Achievement of best economic indicators and ensuring competitiveness of NPPs in the electricity, heat, and capacity production market; Improving the management system through formation, implementation, development, and efficient functioning of integrated quality system which meets the requirements of ISO 9000 standards, federal norms and rules in the area of use of nuclear power, GS-R-3 «IAEA Safety Manual. Management System for Units and Activity»; Development of the Concern s qualification potential which provides the growth in labor efficiency and improvement of safety culture. The Concern pursues the quality policy based on the following methods and measures: Implementation of resolutions and instructions of the agency on state management of nuclear power use of Rosatom State Corporation, requirements of the agency on state regulation of safety during the use of nuclear power of the Federal Service for Environment, Technological, and Nuclear Supervision; orientation on demands of Russian and foreign consumers and customers, and IAEA documents; Development, implementation, and updating organizational structure of quality assurance as a part of general organizational and functional structure of the corporate management; Assistance in achievement of necessary level of safety of nuclear facility by ensuring quality of products (work, services) and processes; Performance of all work in strict compliance with statutory and regulatory requirements, requirements of quality assurance programs at all stages of life cycle of nuclear facility; Distribution of power and responsibility, functions and duties in the area of quality among subdivisions and employees, up to direct performers; Efficient management and development of regulatory and methodological base of the Concern in the area of quality; Control of operators activity in the area of quality, including regular inspections (audits) of compliance with general and local quality assurance programs of nuclear plants and quality assurance programs of organizations 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

147 144 ^ Quality Management System and TÜV certificates which provide work and services to operators, evaluation of their results; Regular analysis of indicators of the Concern s activity on the part of the management, organization of development and implementation of necessary measures on their improvement; Determination of causes of deficiencies and violations in quality, development and fulfillment of measures on their elimination and prevention at all stages of work; Involvement of all the Concern s employees in quality system improvement process Review and application of positive Russian and foreign practices. The Concern s integrated quality system is based on the ISO standards of 9000 series, federal standards and rules NP «Requirements for Quality Assurance Programs for Nuclear Facilities», IAEA manuals on safety of nuclear units of GS-R series (General Safety Requirements). In accordance with the objectives set, the following results were obtained in the area of quality assurance in 2014: Recertification of the Concern s quality system for compliance with the standard ISO 9001:2008 «Quality Management Systems. Requirements» by the certification agency TÜV Thuringen e.v. (Germany) obtaining new conformance certificate No. TIC with an extended area of application: «Management of Design and Construction of Facilities of Peaceful Use of Nuclear Power, Electricity Production and Supply» (previously the certificate with the area of application «Management of Electricity Production and Supply» was in place). The validity term of the conformance certificate: from May 23, 2015 to May 22, 2018; Confirmation of validity of the conformance 7 certificate of the Concern s quality system power plants passed issued by the certification agency ANO inspections of compliance with NPQAP (O) and standard GOST ISO , NP-090- Atomsertifika on conformance with the NPQAP (E) and GOST ISO 11, IAEA manuals on safety of nuclear units of GS-R-3 series, extension of its area of application to the Concern s Branches Facilities Construction Management, Beloyarsk Nuclear Plant, and Directorate for Construction of Floating Thermal Nuclear Power Plants, with obtaining a new conformance certificate No. ROSS RU АЭ ; Development of the Concern s quality system in terms of introduction to organizational and functional structure and personnel chart of the Concern of the structural subdivision the Management on Liaison with Equipment Manufacturers subordinate to the Concern s Quality Director; Creation of Certification System for Production Sites of Manufacturers of Equipment for the Concern s NPPs; Determination of the procedure for conformance evaluation of equipment of the 4th safety class; Inspections of equipment manufacturing plants and inspections of organization of equipment on-receipt checks at the Concern s NPPs; inspections of compliance with NPQAP (O) and NPQAP (E) and GOST ISO at Balakovo, Leningrad, Kalinin, Smolensk, Kola, and Novovoronezh (units under construction) NPPs by the Directorate of Leningrad NPP-2 (under construction); Internal audits in divisions of the Headquarters and branches of the Concern regarding their compliance with GOST ISO , NP , and GS-R-3; Implementation of PSR projects to the extent of ensuring product quality, on-receipt check, evaluation of conformance of the products delivered to operating NPPs and NPPs under construction, and monitoring of progress towards goals in the area of quality; Developing and enacting guidelines of the operator aimed at ensuring the quality of products supplied to NPPs (in operation and under construction), organizing and carrying out audits for compliance of NPPs and organizations performing work and services to the operator with quality assurance programs and GOST ISO , assessing the efficiency of NPP quality assurance programs; Organization of development, mutual agreement, and approval, and put into effect

148 145 ^ NPP satellite city of the quality assurance programs in the area of responsibility of operators according to the requirements NP «Requirements to Quality Assurance Programs for Nuclear Facilities». All activities regarding the Concern s quality system development scheduled for 2014 by the administrative order on target benchmarks for the Concern s core activities were performed in full. MAIN PLANS FOR 2015 AND NEAR FUTURE: Development of the integrated quality system towards forming and implementing a single technical policy in the area of quality, updating of statutory base of the Concern s quality system, including quality assurance of the products supplied to operating NPPs and NPPs under construction; Confirmation of validity of the Concern s conformance certificate in the certification agency TÜV Thuringen e.v.; Creation in the organizational and functional structure of the Concern s branches of operating NPPs and NPPs under construction of a structural subdivision «Department for Organization of On-Receipt Control and Evaluation of Conformance»; Inspections of compliance with quality assurance programs and GOST ISO by the Concern s branches and organizations performing work and services, including: quality assurance programs for development and manufacturing of equipment by manufacturers of equipment important for NPP safety; Implementation of the Certification System for Production Sites of Manufacturers of Equipment for the Concern s NPPs; Performance and scaling of results of PSR projects in the area of quality assurance of the products supplied to operating NPPs and NPPs under construction. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

149 Purchase Management The Concern s purchasing activities are regulated by Uniform Industry-Level Purchasing Standard (Regulations on Purchasing Activities) of Rosatom State Corporation, as approved by the resolution of Rosatom State Corporation Supervisory Council (the UIPS ). 5,811 mln rubles incl. VAT (or 9.1%) savings from competitive purchasing procedures The UIPS regulates relations connected with purchases for the needs of Rosatom State Corporation and entities thereof so as to ensure efficient use of funds, open and transparent placement of orders, and the required level of safe operation of the nuclear energy sector and industry facilities. Pursuant to Federal Law No FZ of July 18, 2011, «Purchasing of Products, Work, and Services by Specific Corporate Entities» and the UIPS, information on goods, work, or services to be purchased is published on the Internet on the official website of the government gov.ru, and on the official website on purchasing in the nuclear sector ru; thus a wide range of bidders may join the procedure. In order to reduce times of the processes and increase efficiency of purchases in 2014 the Concern regulated purchase processes, including those determining the procedure for interaction of structural subdivisions of the organization during competitive purchases, and areas of responsibility at all stages of purchase are additionally distributed and allocated. In 2014 structural subdivisions of Rosenergoatom Concern OJSC and its branches conducted 11,913 purchase procedures totaling 118,319 mln rubles, VAT included. Savings from competitive purchasing procedures totaled 5,811 mln rubles, VAT included (9.1%). The share of the contracting agents from the «local suppliers» as a result of purchasing procedures totaled 18%, where «local suppliers» means suppliers on supply of goods, work, and services located at the are of location of Rosenergoatom Concern OJSC and its branches. In 2014 the Concern s purchase performance indicators were fulfilled in full. The Concern s purchasing objectives for 2015 are as follows: Share of public purchasing procedures 94%; Economic effect from implementation of category strategies 5%.

150 Property Management Leningrad NPP As of December 31, 2014 Rosenergoatom Concern OJSC (hereinafter, the «Concern») de-facto uses 790 land plots with the total area of 21,839 ha, among them: 430 land plots with the total area of 6,266 ha are owned by the Concern, 11 of them are formed in 2014 as a result of the optimization of the area of previously accounted land plots, 1 land plot is currently pending state registration of title; 360 plots with a total area of 15,574 ha are leased by the Concern, including 149 plots under a short-term lease in land plots are registered with cadaster, including, by way of declaration, the lands of the forest fund. 47 land plots are currently subject to survey work with subsequent registration with cadaster. As of December 31, 2014, the Concern owns 6,926 items of immovable properties (buildings and structures), among them: 6,810 items are own by the Concern; 116 items are pending state registration of title. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

151 Information Technology In 2014 we worked in three main areas: IT infrastructure, information security, and applicable information systems. Great attention was paid to issue of organizational and administrative documents formalizing interactions of the Information Technology Department (ITD) and the Concern s subdivisions interested in automation of business processes. IT INFRASTRUCTURE In 2014 the IT infrastructure of the Data Processing Center (DPC) of the Concern s Crisis Center located at 25 Ferganskaya Street is used for the projects coordinated by ITD. The standard DPCs were supplied, assembled, and put into operation at Beloyarsk and Kalinin NPPs. Work on putting DPCs into pilot operation at Kursk NPP is about to complete. A distributed redundant computer system ( Metrocluster ) of the Concern s Headquarters is created. Equipment for the auxiliary data transfer hardware and software complex project (Stage 1) was supplied to branches. The system of multiflow online broadcasting and recording of meetings and conferences of the Concern is created and put into operation. Design and exploration work was completed at Kalinin NPP with respect to the project of supportive DPCs; design and estimate documents are prepared; currently the project is under expert review. The competitive process is on the way to determine the construction contractor. The construction of the supportive DPCs is scheduled for 2Q Before November 2015 the auxiliary data transfer hardware and software complexes (Stages 2 and 3) will be supplied and deployed at nine NPPs. INFORMATION SECURITY In 2014, in addition to development and updating organizational, administrative, and regulatory documents on information security of the Concern, the automated audible warning system certification was completed, and certificates on conformance with the information security requirements were obtained for the relevant facilities: Headquarters, Balakovo, Beloyarsk, Kalinin, Kola, Kursk, Leningrad, Novovoronezh, Rostov, and Smolensk NPPs. Firewalling complexes are implemented at the Concern s Headquarters and 9 operating NPPs. They protect the corporate network from cyber-threats. The information protection subsystem against unauthorized access based on SecretNet software was introduced at the operating NPPs and the Concern s Headquarters. As planned, jointly with the DES inspections on information protection of IT systems were conducted at Kursk NPP, Leningrad NPP, Leningrad NPP-2, and Rostov NPP. All work listed above is aimed at improvement of the unified integrated system of the Concern s information security. APPLIED INFORMATION SYSTEMS As a part of the Information and Communication Technologies ( ICT ) Development Program, the automated system of technical documentation management is prepared and introduced in commercial operation at the Concern s Headquarters and at

152 149 75,000 production and technical documents and notifications of the Balakovo NPP are available via the automated system of technical documentation management Balakovo NPP to the extend of managing regulatory documents of the Headquarters and production and technical documents of Balakovo NPP. The System ensures storage and quick access to over 15,000 technical documents of the Headquarters and over 75,000 production and technical documents and notifications of Balakovo NPP. The development of the system functionality to the extent of storage and management of design and detailed design documentation of NPPs under construction and other operating documents of NPPs, replication of the system for all NPPs are scheduled for The information subsystem for supporting qualification on labor protection, rules for operation repairs and safety (hereinafter, ISSQ) was developed and put into commercial operation at Balakovo NPP. The subsystem is a part of the Concern s personnel management system in addition to its basic part industry-level system for personnel management ISPPM. ISSQ is replicated and prepared for putting into pilot operation at Leningrad NPP. Here, ISPPM has been commercially operated since ISSQ functionality development is planned for The development will include storage and processing of historical personnel data of NPPs, replication of the Concern s personnel management system (ISPPM integrated with ISSQ) to all remaining NPPs, except for Bilibino NPP. As a part of implementation of the Program for Development of Information Systems of NPP Production and Operation Block, in 2014 the basic functionality of the Information System for NPP Operation Support (IS OS) was developed and implemented at the 3rd power unit of Smolensk NPP. The system is currently being implemented at the 1st and 2nd power units. The following objects are subject to automation within the IS OS of NPPs: NPP current operation processes (maintenance of equipment database; management of rounds; keeping the shift operation logs; keeping the logs of administrative and technical orders; management of normal operation mode and management of shift assignments for operating personnel; selection of personnel for shifts and management of shifts of operating personnel; preparation of operation reporting following rounds and data recorded in the operating logs). In 2014 the Integrated System for Centralized Operation Planning and Production Management is put into commercial operation at Balakovo, Smolensk, and Kalinin NPPs and at the Headquarters. Its implementation at Rostov and Kursk NPP is currently in process. The implementation of the integrated system is scheduled for at four NPPs of the Concern. The implemented functionality provides for data collection, storage, transmission, calculation; analytical functions, and display of information about the current status of NPP. It facilitates operation with 2,000-2,500 process parameters with their collection and storage at NPP level as well as transmission of all these parameters to the Concern s Crisis Center which is the main data consumer. Also, it constitutes the basis platform for the tasks of reservation of collection and storage of parameters in the protected emergency response control post. In addition to the option of data transmission from NPP level to the level of the Headquarters the platform permits organizing data transmission from the Headquarters to NPPs. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

153 5. INTERACTION WITH STAKEHOLDERS The Concern strives for ensuring the highest level of openness and transparency of its businesses by supporting active communications with all stakeholders. The nuclear power industry development 86 support by regional population amounted to %

154

155 Interaction with Stakeholders in Reporting Period G4-24, G4-25, G4-26, G4-27 The Concern strives for ensuring the highest level of openness and transparency of its activity by implementing the principle of active dialog with stakeholders. The Concern supports active communications with all interested stakeholders, timely providing significant information on all aspects of its activity and responding to requests and suggestions of stakeholders. The approach to interaction is based on the following principles: Regular and meaningful dialog; Partnership; Mutually beneficial cooperation; Confidence and sincerity; Publicity and transparency; Fulfilment of assumed obligations. The map of stakeholders and the nature of interaction are provided in the Concern s annual report for 2012 (page 196). PUBLIC DISCUSSIONS In strict compliance with legislation of the Russian Federation, when planning its activities that can have considerable impact on the environment and the local communities, the Concern initiates public discussions. Among the participants are experts representing R&D organizations and designers, supervisory agencies, federal, regional, and local government agencies, NGOs, environmentalists, the press, and the broader public. Public discussions are a set of activities forming part of evaluation of environmental impact of prospective economic and other activity held with a view to inform the public about planned activities and its possible impact on the environment, to identify public preferences and consider them Main Forms of Communications and Information Sharing ROSENERGOATOM CONCERN OJSC Public discussions Environmental reports Presentations Mass media Special Projects Blogosphere Interaction as a part of preparation of public annual report POPULATION AND COMMUNITY

156 project were recognized as winners, and all projects were successfully implemented for impact assessment, and to protect the rights, liberty, and legitimate interests of citizens within areas targeted for specific business operations of significance. Overall, in 2014, 16 public discussions were held in the Concern s areas of presence. More than 8,000 persons took part in them. The «case» of each public discussions includes 100 or more activities involving communities, regulatory agencies, and mass media and involves explaining of planned activity and its safety principles for human and environment. AAP NP FUND The Fund for Promotion of Development of Municipalities «Association of Areas of Presence of Nuclear Plants» (AAP NP Fund) was created in Their founders are Rosenergoatom Concern OJSC and municipal entities where nuclear plants are located. The fund is yet another efficient mechanism of interaction between the Concern s management with municipal governments in the area of implementation of projects and programs facilitating social, economic, and infrastructural development of satellite towns of nuclear plants, increasing their attraction as a place to live. In 2014, 4 meetings of the Management Board of the AAP NP Fund were held. Members of the Management Board of the Fund took part in the 9th International Dialog Forum «Nuclear Power, Society, and Safety» in Moscow, in the 7th Regional Dialog Forum in Krasnoyarsk, in the conference and ceremonial events in the city of Obninsk dedicated to the 60th anniversary of the nuclear industry, and in industry-level workshop on monitoring of the social and political situation in the regions of presence of Rosatom State Corporation. In 2014 the great attention was paid to the international cooperation of the Fund with the Concern s partner countries in the nuclear power industry. In April the Memorandum on Cooperation was signed between the Fund and the district execution committees of the Minsk and Grodno Oblasts of the Republic of Belarus. In November the Agreement on Establishing Twin-Cities Relations between the Towns of Harkany (Hungary) and Kurchatov (Russia). In September the delegation of the Fund visited Finland to exchange best practices in the areas of municipal construction and work with communities in the area of safe use of nuclear power. In December the Memorandum on Cooperation was signed between the Fund and Non-Governmental Organization on Control, Information, and Regional Development of Hungary (TEIT). Being 2014 the Year of Culture in the Russian Federation, the Fund organized visiting exhibitions and master classes of the Hungarian photo artist Bálint Vincze at all locations of NPPs and became one of the sponsors of the 7th Festival of Accordionists and Bayanists in Paks (Hungary). Children from the Russian towns located around NPPs took part in the competitive program of the festival. In 2014 AAP NP Fund carried out another contest of the socially important projects among non-commercial organizations of the areas of NPP location. 41 project were recognized as winners, and all projects were successfully implemented. LIAISON WITH NON-GOVERNMENTAL AND ENVIRONMENTAL ORGANIZATIONS Non-Governmental Environmental Organizations have a real possibility to obtain unbiased information about the state of ecological, radiation, and energy safety of NPPs. Representatives of various environmental organizations and movements form part of the Stakeholders Commission. In particular, the Inter-Regional Non-Governmental Environmental Movement «Oka» routinely conducts ecological expeditions to operating NPPs and construction sites of new nuclear power units as a part of the long-term program 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

157 154 «Civic Watch in Nuclear Power Industry». In 2014 ecological expeditions were conducted at Rostov and Smolensk NPP. The movement carried out research using their own specialists and professional certification equipment, with participation and under supervision of independent mass media, and announced the obtained unbiased and reliable results to wide public and government authorities. The results of this work attracted great attention of the largest industry-level, Russian, and international mass media. notification involving press editions of towns and areas of location of NPPs, urban and regional television and radio channels, information agencies, press services of the governor and regional government, press services of regional departments of the Ministry of Emergency Situations and the Ministry of Internal Affairs of Russia. The notification mechanism is used not just in case of emergency situations but also against attempts of information attacks, in case knowingly false information is distributed. At the meeting of the Public Council of the State Corporation S.V. Kirienko, the General Director of Rosatom, awarded Novovoronezh NPP for activity in the development of environmental culture. Kalinin and Beloyarsk NPPs were also awarded at the Concluding Conference on Environmental Culture at the end of the year. MASS MEDIA The information on operation of nuclear plants and radiation environment in the towns of NPP location is available on the Concern s official 5,000 website and websites of nuclear power plants. Press releases and information communications are posted there without delays. The Concern s website The website contains real-time information about radiation monitoring of Russian nuclear power plants. Furthermore, all nuclear power plants have 24/7 automatic responding machines providing information about current operation of NPP and radiation environment on a daily basis. every year, up to 5,000 visitors attend the exhibitions located in Community Information Centers of NPPs The information support of the operation of nuclear power plants is coordinated by the Departments of Information and Public Relations of each NPP. Reports on production and social materials are posted on the Concern s website, in corporate and regional print editions, in broadcast programs of local and federal television channels, in blogs, etc. In case of emergency situations in NPP operation there is a mechanism in place ensuring quick Press tours and visits to nuclear power plants involving representatives of Russian mass media and foreign journalists became a tradition. SPECIAL PROJECTS One of the most important areas of informational interaction is educational work among population and communities. Exhibitions located in Community Information Centers of NPPs receive from 3 to 5 thousand visitors each year. Special education projects are implemented, such as the «Nuclear Academy for Children» (Kola NPP), «Kurchatov Public Readings for Children» (Beloyarsk NPP), and «Today s Fiction is Tomorrow s Reality» (Kalinin NPP) addressed to schoolchildren and students. This includes a unique project called «Atom Classes» implemented in areas of presence of the Concern as a part of the civic educational initiative «Rosatom s School». The project provides for complete re-equipment of physics classrooms in schools with advanced equipment and devices, including interactive multimedia and special tool kits for laboratory and science experiments. In 2014 new Atom Classes opened in the Physics and Mathematical School No. 3 of the town of Kurchatov and Ye.I. Ignatenko Secondary School No. 62 in the settlement of Novy Eroglyk (Rostov Oblast). Currently Atom Classes function in the following towns: Angarsk, Volgodonsk, Glazov, Zarechny (Sverdlovsk Oblast), Zelenogorsk, Kovrov, Nizhny Novgorod, Novovoronezh, Novouralsk, Rostovon-Don, Seversk, Sosnovy Bor, Elektrostal, and Orlenok All-Russia Children s Center.

158 155 Public Awareness Centers at nuclear plants have a chain of Clean Energy clubs as a meeting place for local reporters who regularly write on the issues of the nuclear sector. The clubs organize interviews, press conferences, and subject-oriented press tours. On November 18-19, 2014 the Concern and nuclear plants hosted a videoconference workshop for teachers which connected all locations of Russian NPPs. Approximately 245 teachers of physics, biology, and basics of personal and social safety took part in the event organized by the Concern jointly with the V.I.Vernadsky Non-Government Environmental Fund for Employees of Educational Institutions of NPP Towns. On November the similar educational workshop was held for medical doctors of the municipal entities where NPPs are located. The workshop was simultaneously attended by 220 employees of medical institutions. PUBLIC OPINION SURVEYS The Concern s management attaches great importance to survey of public opinion on the issues of development of the nuclear power industry. In September 2014 NTTs Perspektiva (www. ntcpa.ru) conducted a survey in Voronezh, Kursk, Leningrad, Murmansk, Rostov, Saratov, Sverdlovsk, Smolensk, and Tver Oblasts (regions where NPPs are located). The survey showed that in one year the opinion of local residents about nuclear plants in the areas of presence improved. 86% of residents of Russian regions where nuclear plants (branches of Rosenergoatom Concern) are located were in favor of the active development of nuclear power industry or its maintenance on the current level. In 2013 they constituted 73%: 56% of respondents considered their opinion to NPPs as positive, and 74% told so in Furthermore, if in 2013 the use of nuclear power as one of the means to provide the country with electricity was supported by 67% of respondents, in 2014 the number increased to 79%. Attitude to Nuclear Power Use in 2014, % 3 3 Polling results The nuclear power industry should be developed or maintained 40 8 BLOGOSPHERE 11 Deescalated or abandoned Actively develop Maintain at the current level Deescalate Abandon completely Not sure In 2014 the blog of Yevgeny Romanov, the Concern s General Director ( romanov/), and blogs of nuclear plants ( publicatom.ru/blogs/) continued their operation at the blog platform of Rosatom State Corporation. The blogs are used to post answers of the General Director to questions asked by the readers as well as to post current information about NPP operations. The readership audience of the blog totals 20,000 users per month. From start of the blog, approximately 500 questions and more than 1,000 comments were submitted to Yevgeny Romanov, the General Director in one year. In 2014 the project «The General Director s Blog» took the 2nd place in the annual industry-wide contest of the best personnel management practices «Simple Stories of Success» of Rosatom State Corporation. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

159 Interaction as this Annual Report Was Prepared Mikhail Kanyshev, Director, Kalinin NPP The community evaluates the business of a company based on the official reporting information. Such a wide representation of dialog participants guarantees that the report will be discussed from the points of view of all parties interested in the meaningful dialog and faithful reflection of the specifics of our operating organization. In view of the nature of the Concern s activity the following subjects were selected as the priority issues of the Report: «Safety of the Russian Nuclear Industry» and «Increasing Capacity of NPP Power Units with VVER-Type Reactors». Key stakeholder representatives were involved in dialogs discussing the overall concept, priority issues, and the draft of the Annual Report, as well as participated in selection of the significant aspects and public affirmation of the Report. Dialog No. 1 on Discussing the Concept of the of Rosenergoatom Concern OJSC with stakeholders took place on December 2014 in absentia (by survey). During the dialog all participants received the draft concept of the Concern s Annual Report. Representatives of stakeholders could express their comments and suggestions. Following the dialog, a number of significant changes were introduced to the Annual Report (see the table on consideration of suggestions made by Stakeholders Appendix 15 in the interactive version). Dialog No. 2 on the subjects «Safety of the Russian Nuclear Industry» and «Increasing Capacity of NPP Power Units with VVER-Type Reactors» took place on March 5, 2014 in the format of a visiting meeting at Kalinin NPP. During the dialog the participants visited operating power units of Kalinin NPP, saw the operations on increasing capacity of VVER power units, and could ask questions regarding disclosure of information in the annual report regarding the Concern s activity in 2014 and measures on safety assurance at Russian NPPs. Stakeholders expressed certain comments and suggestions regarding reflection of information on this priority subject in the annual report. These comments and suggestions were taken into account during preparation of the report. PUBLIC CONSULTATIONS Public consultations on the draft Annual Report took place in the Concern s Headquarters on May 6, A wide range of interested parties took part in the consultations. They expressed suggestions and comments to the draft report. In general, a high level of information disclosure and reflection of opinions and suggestions of interested parties expressed during the reporting campaign was recognized

160 Stakeholders Commission ^ Dialog at Kalinin NPP. March, In order to improve Concern s public reporting system and to ensure acceptance of the Concern s activity by communities through involving stakeholders in the dialog, in 2013 the Stakeholders Commission was created at the Concern s initiative which included representatives of key groups of stakeholders: local communities, non-government and environmental organizations and associations, scientists and experts, public persons, and representatives of mass media, suppliers, and contractors. The Commission s goals consist in ensuring acceptance by communities of development of nuclear power industry in Russia, joint preparation of recommendations for decision-making in the area of sustainable development of the Concern and nuclear power industry in general, and communications with people and non-government organizations on the issues connected with the use of nuclear energy. Members of the Stakeholders Commission take an active part in dialogs and community consultations, discussing annual reports of the Concern as well as in the procedure of public affirmation of the annual reports. 1. Overview 2. Strategy and Outlook 3. Key Performance Results 4. Corporate Governance 5. Interaction with Stakeholders

161 Public Reporting System The Concern has in place a public reporting system which is a set of interrelated and connected elements forming a certain integrated activity on public reporting and its development. The main elements of the Concern s public reporting system stipulated by the Policy and Standard of Rosatom State Corporation in the area of public reporting are the functional center of responsibility (managers and the working group), regulatory framework, representatives of stakeholders participating in preparation of reporting during dialogs and operation of the Stakeholders Commission, as well as infrastructural support (consulting, internal and external independent audit, etc.). The Concern s Standard of Public Annual Reporting; Procedure for Preparation of the Concern s Annual Report; List of Standard Elements of Public Annual Reporting of the Concern; Regulations on the Concern s Stakeholders Commission. The functioning of the Concern s public reporting system is based on the work of a number of structural subdivisions which representatives form part of the working group on report preparation. The main functions are divided between the First Deputy General Director Head of the Working Group on Report Preparation, Deputy General Directors, and the Department for Information and Public Relations. The Concern s report is prepared on the basis of regulating documents approved by administrative orders of the General Director: Concern s Public Reporting System General Director First Deputy General Director - Head of the Work Group on Report Preparation Director of the Department of Information and Public Relations - Deputy Head of the Work Group Work Group, Department of Information and Public Relations Structural subdivisions CONTROL Internal control and audit Non-financial audit Stakeholders Commission Regulatory documents on reporting

162 Appendices to the Annual Report 1. About the Annual Report Corporate and Contact Details GRI Content Index for Comprehensive Report Variant Prepared According to Sustainability Reporting Guidelines for Global Reporting Initiative (GRI), RSPP System of Public Reporting Indicators at Opinion about Public Affirmation Statement on the Results of Independent Assurance of Public Annual Report of Open Joint-Stock Company «Concern for Production of Electric and Thermal Energy at Nuclear Power Plants» Statement of the Internal Control Department of Rosenergoatom Concern OJSC on the Results of the Internal Audit of Conformance of Preparation of Concern s 2014 Annual Report with the Requirements of the Policy of Rosatom State Corporation in the Area of Public Reporting and Standard of Public Annual Reporting of Business/Financial Accounting Statements Statement on the Results of Independent Assurance of Public Annual Report of Open Joint-Stock Company «Concern for Production of Electric and Thermal Energy at Nuclear Power Plants» Opinion of the Internal Auditing Committee on the Results of Review of Financial and Business Activities of for Report on the Concern s Compliance with the Corporate Management Code Recommended by the Bank of Russia Active Nuclear Power Units Installed Capacity, Electricity Generation, and ICUF at NPPs of in 2014 by Geographical Regions Main Personnel Characteristics* 15. Table on Consideration of Suggestions Made by Stakeholders* 16. Glossary Abbreviations Feedback Form * Appendices 14 and 15 may be found in the interactive version of the Report report2014.rosenergoatom.ru

163 About the Annual Report DESCRIPTION OF THE REPORT This Annual Report of for 2014, and for six previous years, is an integrated report that combines the usual Annual Report and the sustained development report filed by the company. The Report is subject to approval by the General Meeting of Stockholders. G4-48 The Concern Annual Report was prepared to meet the requirements of the following regulatory documents: Corporations Federal Act of December 26, 1995, No. 208-FZ; Corporate Accounting Federal Act of December 6, 2012, No. 402-FZ; Regulation on Information Disclosure by Issuers of Securities (approved by Order of the Central Bank of the Russian Federation No. 454-P dated December 30, 2014); Letter of the Central Bank of the Russian Federation dated April 10, 2014, No /2463, On Recommendations for Applying the Corporate Governance Code ; G4 Sustainability Reporting Guidelines issued by the Global Reporting Initiative (GRI); АА1000 series of standards published by the International Institute of Social and Ethical Accountability (AccountAbility); Integrated reporting standard of the International Integrated Reporting Council (IIRC); Key Performance Indicators. Recommendations of the Russian Union of Industrialists and Entrepreneurs (RSPP) on their use within managerial practices and corporate non-financial reports; Rosatom State Nuclear Energy Corporation s Public Accountability Policy; Public Annual Reporting Standard of ; Ethics Code. This Annual Report discloses key performance indicators of business activities for the period between January 1 and December 31, 2014, and describes the Concern s outlooks for growth, aimed at efficient achievement of strategic goals and building a basis for long-term sustainable growth. The structure of this Annual Report includes information on performance of the Concern and branch companies thereof (NPPs). This Annual Report comprehensively discloses financial, economic, and production-related information on the Concern s key activities, as well as their economic, environmental, and social impact. G4-17, G4-18 REPORT-BUILDING PROCESS Before this report was prepared, the context of the Concern s operations in 2014 was subject to examination. Just as before, the safety of NPP operation remained one of the Concern s key issues. Therefore, Safety of the Russian Nuclear Power Industry was selected to be the priority topic of this Report. Taking into account the fact that performance improvement constituted the priority topic for the entire nuclear industry in 2014, the Concern identified Increasing Capacity of NPP Power Units with VVER-Type Reactors as the second priority topic reflecting its impact on various aspects of the Concern s activities during the reporting year and over the medium term. To ensure that these topic was relevant, during the preparation of the Annual Report under the Sustainability Reporting Guidelines issued by the Global Reporting Initiative (GRI, version G4), the principle of highlighting the material aspects and interacting with stakeholders was implemented. Stakeholder representatives were invited to discuss the report through dialogue, public consultations, and public affirmation. Interaction with stakeholders was arranged as recommended in the Stakeholder Interaction Standard АА1000SES. LEVEL OF COMPLIANCE OF THIS ANNUAL REPORT WITH THE GRI MANUAL (G4): СOMPREHENSIVE Disclosure of information in the Annual Report: the Comprehensive option under the GRI G4 Public Reporting Guidelines as proven by an independent third-party audit. To conduct an independent third-party audit, the Concern annually hires an independent auditor as determined during the relevant tender. Appendix 1 About the Annual Report

164 161 DIFFERENCES FROM THE 2013 ANNUAL REPORT There is no significant differences. In preparing the Annual Report, closer attention was paid to the materiality principle that allowed specification of relevant areas of the Concern s activities and focus on the disclosure of information that is the most relevant for stakeholders. DISCLAIMER Information included in this Annual Report contains, among other things, estimates and other forecast figures as an attempt to describe future events or future financial activities of the Concern. Such statements are speculative by their nature, and may ultimately differ from real-life events or results. Forecast information is disclosed before the respective reporting period begins. Many existing factors may cause actual results to significantly depart from those stated in our assumptions or estimates. This includes general economic conditions, competitive environment, risks related to the operations inside and outside Russia, changes in technologies and the market situation in the nuclear power industry, and other factors relevant to the Concern s business. For additional updates on the Concern s activities, please visit 2. Corporate and Contact Details Full business name and abbreviation Open joint-stock company Russian Concern for Production of Electric and Thermal Energy at Nuclear Power Plants (Rosenergoatom Concern OJSC). Location , Moscow, ul. Ferganskaya, d. 25 Contact phone +7 (495) Fax +7 (495) info@rosenergoatom.ru Website Auditor details According to decision of General Meeting of Stockholders dated June 24, 2014 (Minutes No. 7), the Accountants & Business Advisers Limited Liability Company (FBK LLC) was approved as the Concern s Auditor. Registrar details The registrar for the Concern s inscribed security holders registry is the Registrar R.O.S.T. OJSC. Details of the Concern s registrar: Full business name: open jointstock company Registrar R.O.S.T. Location: Moscow, ul. Stromynka, d. 18, korp. 13. License details: No , issued by FCSM of Russia on December 3, Stockholders details 1. Atomenergoprom JSC % 2. Rosatom State Corporation % Subsidiaries and affiliated companies details List of Subsidiaries: 1. Atomenergoremont OJSC 100% 2. Energoatominvest LLC 100% 3. EREC JSC 100% 4. Baltic NPP OJSC 100% 5. IKAO CJSC 100% 6. Atomtrans JSC 100% 7. All-Russian Production Association Zarubezhatomenergostroy JSC 100% 8. Nuclear Power Plant Equipment Research and Testing Center OJSC 100% 9. Atomtehenergo JSC 100% 10. Rusatom Service CJSC 96.21% 11. Beloyarsk NPP-2 OJSC 80.6% 12. VNIIAES OJSC % 13. Termoxid PNF CJSC % 14. Atomtekhexport CJSC 51% For additional updates on the Concern, please visit Appendix 2 Corporate and Contact Details

165 GRI Content Index For Comprehensive Report Variant Prepared According to Sustainability Reporting Guidelines for Global Reporting Initiative (GRI), RSPP GENERAL STANDARD DISCLOUSURES GRI Index Disclosure Comprehensiveness / Comment / Report Section Report, pp. External Assurance (+/-, p. Report) STRATEGY AND ANALYSIS G4-1 Address of the Chairman of the Board of Directors Address of the General Director , 176 G Risk Management , 176 ENTITY S PROFILE G4-3 General Information Appendix 1. About the Annual Report Appendix 2. Corporate and Contact Details 22, , 176 G4-4 General Information 22 +, 176 G4-5 Appendix 2. Corporate and Contact Details 161 +, 176 G4-6 Concern operates in 3 countries +, 176 G4-7 General Information Appendix 2. Corporate and Contact Details G4-8 Geography of Activity 3.1 Situation in the Electric Power Industry G General Information 1.3. Corporate Structure G4-10 Appendix 14. Main Personnel Characteristics Accounting of contractors total number of employees is not performed G Social Capital. Developing Areas of Presence. Charity and Sponsorship Accounting of contractors number of employees within the scope of the collective contract is not performed 22, 161 +, , , , , , , 176 G Business Model 8-9, , 176 G Corporate Structure 4. Corporate Governance 4.1. Structure of Concern Executive Management 4.7. Purchase Management 24-25, , 134, 146 +, 176 G Risk Management , 176 G International Activities , 176 G International Activities , 176 EU Production Capital. Generating Capacity. Appendix 13. Installed Capacity and Electrical Power produced by Russian NPPs in 2014 by Energy Source and Geography (Regions of Russia) 42-61, 194 +, 176 EU Production Capital. Generating Capacity. Appendix 13. Installed Capacity and Electrical Power produced by Russian NPPs in 2014 by Energy Source and Geography (Regions of Russia) 42-61, 194 +, 176 EU3 Not applicable as the Concern is not responsible for sales activity +, 176 EU4 Not applicable as the Concern is not responsible for power transmission +, 176 EU5 Not applicable as emissions of CO2 and its equivalents are negligible +, 176 IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-17 Information and data in the report refer to Concern and its subsidiaries (NPPs ) performance Appendix 1. About the Annual Report 160 +, 176 Appendix 3 GRI Content Index

166 163 GENERAL STANDARD DISCLOUSURES GRI Index Disclosure Comprehensiveness / Comment / Report Section Report, pp. External Assurance (+/-, p. Report) G Material Aspects of Performance Appendix 1. About the Annual Report 34-35, 160 +, 176 G Material Aspects of Performance , 176 G Material Aspects of Performance , 176 G Material Aspects of Performance , 176 G Material Aspects of Performance , 176 G Material Aspects of Performance , 176 STAKEHOLDER ENGAGEMENT G Interaction with Stakeholders 152, , 176 G Interaction with Stakeholders 152, , 176 G Interaction with Stakeholders 152, , 176 G Interaction with Stakeholders Appendix 15. Table on Consideration of Suggestions Made by Stakeholders 152, , 194 +, 176 REPORT PROFILE G4-28 Year 2014 Appendix 1. About the Annual Report 160 +, 176 G4-29 June , 176 G4-30 Annual Appendix 1. About the Annual Report 160 +, 176 G4-31 Appendix 18. Feedback Form 198 +, 176 G4-32 This Appendix +, 176 G4-33 Appendix 1. About the Annual Report Appendix 5. Conclusion on Public Affirmation Appendix 6. Statement on the Results of Independent Assurance of Public Annual Report of Open Joint-Stock Company Concern for Production of Electric and Thermal Energy at Nuclear Power Plants 2014 Appendix , , 176 CORPORATE GOVERNANCE G Structure of Concern Executive Management 4.2. Governing Bodies and Controls Board of Directors has no committees G Structure of Concern Executive Management 4.2. Governing Bodies and Controls 4.3. KPI. Employee Evaluation and Remuneration , , , 176 G Structure of Concern Executive Management , 176 G Interaction with Stakeholders 5.3. Stakeholders Commission 5.4. Public Reporting System G Structure of Concern Executive Management Board of Directors has no committees , , , 176 G Governing Bodies and Controls 128 +, 176 G Structure of Concern Executive Management 4.2. Governing Bodies and Controls , 176 G Internal Control and Auditing 97, , 176 G Corporate Governance 4.1. Structure of Concern Executive Management 4.2. Governing Bodies and Controls G Structure of Concern Executive Management There are no special measures for development and enhancing collective value of members of supreme corporate governance body due to economic, environmental, and social information , , 176 G Governing Bodies and Controls 128 +, 176 Appendix 3 GRI Content Index

167 164 GENERAL STANDARD DISCLOUSURES GRI Index Disclosure Comprehensiveness / Comment / Report Section Report, pp. External Assurance (+/-, p. Report) G Governing Bodies and Controls 4.5.Risk Management G Governing Bodies and Controls 4.5. Risk Management , , , , 176 G Governing Bodies and Controls 129 +, 176 G Governing Bodies and Controls Appendix 1. About the Annual Report 129, 160 +, 176 G Governing Bodies and Controls 129 +, 176 G Governing Bodies and Controls 4.5. Risk Management , , 176 G Corporate Governance , 176 G Corporate Governance 135 +, 176 G Corporate Governance 135 +, 176 G KPI. Employee Evaluation and Remuneration 136 +, 176 G KPI. Employee Evaluation and Remuneration 136 +, 176 ETHICS AND INTEGRITY G Internal Control and Auditing 5.4. Human Resources. Labor Protection Appendix 11. Report on the Concern s Compliance with Provisions of the Corporate Conduct Code 97, , , 192 +, 176 G , 176 G , 176 SPECIFIC STANDARD DISCLOSURES DMA and Indicators RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of GRI (+/-, p. Report) EC ECONOMIC CATEGORY Aspect: Economic Performance DMA Financial Capital. Performance Results +, 176 G4-EC1 1.2., 1.3., 1.4., 1.5., Financial Capital. Performance Results +, 176 G4-EC , Risk Management. Specific GRI Indicators by Categories/Subcategories G4-EC Social and Reputational Capital. Developing Areas of Presence. Charity G4-EC Investments in Development. Specific GRI Indicators by Categories/Subcategories Aspect: Market Presence DMA Social Capital and Goodwill. Developing Areas of Presence. Charity G4-EC5 137, Human Resources. Labor Protection Appendix 14. Main Personnel Characteristics G4-ЕС6 169 Specific GRI Indicators by Categories/Subcategories +, 176 +, 176 +, 176 +, 176 +, 176 +, 176 Aspect: Indirect Economic Impact DMA Social Capital and Goodwill. Developing Areas of Presence. Charity G4-EC Social Capital and Goodwill. Developing Areas of Presence. Charity +, 176 +, 176 Appendix 3 GRI Content Index

168 165 SPECIFIC STANDARD DISCLOSURES DMA and Indicators RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of GRI (+/-, p. Report) G4-EC Social Capital and Goodwill. Developing Areas of Presence. Charity +, 176 Aspect: Procurement Practices DMA Purchase Management +, 176 G4-EC Purchase Management +, 176 Aspect: Availability and Reliability DMA Strategic Goals and Initiatives +, 176 G4-EU10 /scheme/, 169 Specific GRI Indicators by Categories/Subcategories +, 176 ЕN CATEGORY: ENVIRONMENTAL Aspect: Energy DMA Natural Capital. Environmental Impact +, 176 G4-EN Concern s data collection system is based on energy consumption accounting in metric units. The Concern intends to present the disclosures per G4-EN3 in full in subsequent reports Production Capital. Generating Capacities +, 176 G4-EN4 G4-EN5 Energy consumption outside the organization is not accounted for. Not calculated due to restrictions on disclosure of the indicator G4-EN3. G4-EN Production Capital. Generating Capacities +, 176 G4-EN7 Not applicable. +, 176 Aspect: Water DMA Natural Capital. Environmental Impact +, 176 G4-EN8 2.3., Natural Capital. Environmental Impact +, 176 G4-EN Natural Capital. Environmental Impact +, 176 G4-EN Natural Capital. Environmental Impact +, 176 Aspect: Effluents and Waste DMA Natural Capital. Environmental Impact +, 176 G4-EN , , , 2.8., G4-EN , The accounting system used in the Concern does not provide for calculation of the ratio of waste volume to energy generation (per MWh). The Concern intends to present the disclosures per G4-EN23 in full in subsequent reports 79, Natural Capital. Environmental Impact Specific GRI Indicators by Categories/Subcategories 79, Natural Capital. Environmental Impact. Specific GRI Indicators by Categories/Subcategories G4-EN Specific GRI Indicators by Categories/Subcategories +, 176 G4-EN Specific GRI Indicators by Categories/Subcategories +, 176 G4-EN Specific GRI Indicators by Categories/Subcategories +, 176 Aspect: Compliance DMA Natural Capital. Environmental Impact +, 176 G4-EN Natural Capital. Environmental Impact +, 176 Aspect: Overall DMA Natural Capital. Environmental Impact +, 176 +, 176 +, 176 +, 176 +, 176 Appendix 3 GRI Content Index

169 166 SPECIFIC STANDARD DISCLOSURES DMA and Indicators RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of GRI (+/-, p. Report) G4-EN The system used by the Concern for the cost accounting does not permit to separate the costs on the environmental management system Natural Capital. Environmental Impact +, 176 CATEGORY: SOCIAL LA SUBCATEGORY: LABOR PRACTICES AND DECENT WORK Aspect: Employment DMA Human Resources. Labor Protection +, 176 G4-LA The data collection system used by 194 Appendix 14. Main Personnel Characteristics +, 176 the Concern does not permit to provide information on this indicator in full. The Concern plans to disclose information on the indicator G4-LA1 in the subsequent reports. G4-LA , Specific GRI Indicators by Categories/ Subcategories +, 176 G4-LA3 The information collection system used 169 Specific GRI Indicators by Categories/ Subcategories +, 176 by the Concern does not permit to calculate the share of employees who remained in the organization upon returning from 12-month parental leave. EU15 The data collection system used by +, 176 the Concern does not permit to provide consolidated information on this indicator for The company plans to disclose the information on indicator EU15 in subsequent reports. EU17 The data collection system used by +, 176 the Concern does not permit to provide consolidated information on this indicator for The company plans to disclose the information on indicator EU17 in subsequent reports. G4-EU Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Labor/Management Relations DMA Human Resources. Labor Protection. +, 176 G4-LA Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Occupational Health and Safety DMA Human Resources. Labor Protection. +, 176 G4-LA Human Resources. Labor Protection +, 176 G4-LA6 The data collection system used by the Concern does not permit to provide information on this indicator in full. The Concern plans to disclose information on the indicator G4-LA6 in the subsequent reports. 100, Human Resources. Labor Protection. Specific GRI Indicators by Categories/ Subcategories +, 176 G4-LA , , , Human Resources. Labor Protection. Specific GRI Indicators by Categories/ Subcategories G4-LA , Human Resources. Labor Protection +, 176 Aspect: Training and Education DMA Human Resources. Labor Protection +, 176 +, 176 Appendix 3 GRI Content Index

170 167 SPECIFIC STANDARD DISCLOSURES DMA and Indicators RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of GRI (+/-, p. Report) G4-LA9 The accounting broken down by gender is not kept. The Company plans to disclose information on the indicator G4- LA9 in full in the subsequent reports Human Resources. Labor Protection +, 176 G4-LA , Specific GRI Indicators by Categories/Subcategories +, 176 G4-LA Human Resources. Labor Protection +, 176 HR SUBCATEGORY: HUMAN RIGHTS Aspect: Investment DMA Human Resources. Labor Protection +, 176 G4-HR1 169 Specific GRI Indicators by Categories/ Subcategories +, 176 G4-HR2 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Freedom of Association and Collective Bargaining DMA Human Resources. Labor Protection +, 176 G4-HR Specific GRI Indicators by Categories/Subcategories +, 176 Aspect: Security Practices DMA Human Resources. Labor Protection +, 176 G4-HR7 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Indigenous Rights DMA Human Resources. Labor Protection +, 176 G4-HR8 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Assesment DMA Human Resources. Labor Protection +, 176 G4-HR Human rights compliance or impact in connection with human rights were not evaluated. +, 176 SO SUBCATEGORY: SOCIETY Aspect: Local Communities DMA Social Capital and Goodwill. Developing Areas of Presence. Charity G4-SO , 169 G4-SO , Social Capital and Goodwill. Developing Areas of Presence. Charity. Specific GRI Indicators by Categories/ Subcategories 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity. Specific GRI Indicators by Categories/ Subcategories EU Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Disaster/ Emergency Planning and Response DMA (former EU21) Ensuring safety of Russian NPPs. Radiation effect on personnel and population Aspect: Anti-corruption DMA Internal Control and Audit 4.5. Risk Management G4-SO , 169 G4-SO , Internal Control and Audit. Specific GRI Indicators by Categories/ Subcategories 4.4. Internal Control and Audit. Specific GRI Indicators by Categories/ Subcategories +, 176 +, 176 +, 176 +, 176 +, 176 +, 176 +, 176 Appendix 3 GRI Content Index

171 168 SPECIFIC STANDARD DISCLOSURES DMA and Indicators RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of GRI (+/-, p. Report) G4-SO Internal Control and Audit +, 176 Aspect: Public Policy DMA , International Activity 4.4. Internal Control and Audit G4-SO6 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Compliance DMA Ensuring safety of Russian NPPs. Radiation effect on personnel and population +, 176 G4-SO8 169 Specific GRI Indicators by Categories/ Subcategories +, 176 PR SUBCATEGORY: PRODUCT RESPONSIBILITY Aspect: Customer Health and Safety DMA Social Capital and Goodwill. Developing Areas of Presence. Charity G4-PR , Ensuring safety of Russian NPPs. Radiation effect on personnel and population Specific GRI Indicators by Categories/ Subcategories G4-PR , Ensuring safety of Russian NPPs. Radiation effect on personnel and population Specific GRI Indicators by Categories/ Subcategories EU Human Resources. Labor Protection +, 176 Aspect: Marketing Communications DMA Ensuring safety of Russian NPPs. Radiation effect on personnel and population +, 176 G4-PR6 Not applicable +, 176 G4-PR7 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Compliance DMA Ensuring safety of Russian NPPs. Radiation effect on personnel and population +, 176 G4-PR9 169 Specific GRI Indicators by Categories/ Subcategories +, 176 Aspect: Access DMA Production Capital. Generating Capacities +, 176 EU Appendix 13. Installed Capacity, Electricity Generation, and ICUF at NPPs of Rosenergoatom Concern OJSC in 2014 by Geographical Regions +, 176 +, 176 +, 176 +, 176 +, 176 SPECIFIC ASPECTS OF ROSENERGOATOM CONCERN OJSC BASIC STANDARD ASPECTS OF REPORTING Aspect Report Section Report, pp. NPP operation safety 3.3. Ensuring safety of Russian NPPs. Radiation Effect on Personnel and Population Reliability of power delivery to consumers 3.1. Situation in the Electric Power Industry Social allowability 5. Interaction with Stakeholders Interaction with state supervisory authorities and public organizations 5. Interaction with Stakeholders Production selling price 3.1. Situation in the Electric Power Industry Company transparency 5. Interaction with Stakeholders Social responsibility 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Appendix 3 GRI Content Index

172 169 SPECIFIC GRI INDICATORS BY CATEGORIES/SUBCATEGORIES CATEGORY / SUBCATEGORY Economic Environmental Social/ Practice in the Area of Labor Relations and Occupation Social/ Human Rights Social/ Society Social/ Product Responsibility COMMENT TO GRI INDICATORS Evaluation of financial implications and other risks and opportunities for the activities of the organization due to climate change was not carried out. The government provided no financial assistance in the reporting period. The government does not participate in the organization as a stockholder. Employees salaries do not depend on their gender. 100% of senior management (Deputy General Directors of Concern and Directors of Branches operating NPPs and NPPs under construction) are citizens of the Russian Federation, where the Concern operates. Workforce migration occurs only within the Concern s branches. Senior managers in regions of the Concern s core activities (regions where NPPs are located) are not hired from the local community. Construction of nuclear power industry facilities is carried out according to the energy strategy of the Russian Federation for the period up to 2030 and the master plan of power industry facility location for the period up to 2020, inclusive of outlooks for up to In 2014 NPPs did not discharge any waste water outside the schedule/ The Concern did not discharge hot water since NPPs do not discharge hot water into surface waters thanks to the branch channel system and coolers. The Concern refers to the classification established by Resolution No dated October 19, 2012 of the Government of the Russian Federation On Criteria of Allocation of Solid, Liquid, and Gaseous Waste to Radioactive Waste, Criteria of Allocation of Radioactive Waste to Special Radioactive Waste and Disposable Radioactive Waste, and Classification Criteria of Disposable Radioactive Waste. There were no significant spills in the reporting period. NPP do not transport, import, or export hazardous waste. Discharges by NPPs have no significant impact on water bodies. Water bodies used by NPPs are not specially protected sites in terms of biodiversity (do not form part of the Ramsar list). All employees enjoy benefits irrespective of their amount of working hours. Approximately 100% of employees return to work after child care leave. 100% of Concern s contractor and subcontractor employees attend health and safety training. Concern complies with legislation of the Russian Federation (Labor Code) with respect to minimum notice periods regarding significant operational changes. Collective Agreement provides for the notice on coming staff reduction. The indicated term is two weeks. and industry documents do not contain any requirements on maintaining rates of injury, occupational diseases, lost days, and absenteeism data. Information about system of rules used in registration of occupational accidents is contained in the Labor Code of the Russian Federation. Some employees of are professionally involved in activities associated with occupational hazard. These categories of employees are distributed according to classes of labor conditions. The system of obligatory training of employees adopted in provides for enhancing knowledge in the area of labour safety as well as acquisition of first aid skills in case of occupational accidents and in everyday life. Educational and mandatory training programs implemented in the Concern enhance professional level of employees and their subsequent employment in case of dismissal. All existing investment agreements are concluded in strict compliance with requirements of Russian legislation and provide for conformance with human rights. No separate evaluation of conformance with human rights is carried out. Once employed, 100% of employees are made familiar with internal labor rules, policies, and procedures of the Company, including those related to human rights aspects. Training of each employee takes at least two hours. The Concern builds up its activity in strict compliance with applicable legislation of the Russian Federation. In the reporting period there were no restrictions on freedom of associations and collective bargaining. Standard duty regulations for all Concern employees provides for knowledge of and compliance with legislation of the Russian Federation, this includes conformance with human rights. No third-party personnel are engaged in this type of work. No incidents of violations involving rights of indigenous peoples were identified in the reporting period. Pursuant to legislation of the Russian Federation, in all cases of planning an activity which may significantly affect the environment and local people, the Concern participates in public hearings and public consultations. The Concern has no subsidiaries which significantly and adversely affect, in fact or potentially, the local community. Taking into account the high level of safety of modern NPPs, nuclear plants cannot be considered as such subsidiaries. The Concern did not perform any activity requiring displacement of people. There was no need to change the source of income due to the activity of the Concern in the reporting period. The risks connected with corruption are evaluated based on specific facts (communications) with respect to all subsidiaries. All regular employees and governing bodies of the Concern have been informed about the existence of the Anti-Corruption Policy in the organization. According to Federal Law 135-FZ of August 11, 1995, On Charitable Activities and Organizations and Guidelines on Accounting of Charitable Contributions (approved by Order No. 1/811-P of Rosatom State Corporation of September 26, 2011), no financial contributions for political purposes are allowed. In reporting period no significant fines were applied to Concern for non-compliance with legislation and statutory requirements. Evaluation of nuclear, radiation, industrial, technical, and fire safety is performed throughout all life-cycle phases. No incidents of non-compliance with regulations and voluntary codes concerning the impact on health and safety of products and services were identified in the reporting period. No incidents of non-compliance with legislation or statutory requirements were identified in reporting period (indicators G4-PR7 and G4-PR9). Appendix 3 GRI Content Index

173 System of Public Reporting Indicators at INDICATOR ITEM REPORT SECTION/CHAPTER EFFICIENCY OF MAINLINE ACTIVITY ELECTRICAL POWER SUPPLY TO THE RUSSIAN ECONOMY Generation of electrical power by NPPs Use of installed capacity of NPPs Power units capacity increase Share of electrical power generated by nuclear plants in total production of electrical power in the Russian Federation 3.2. Production Capital. Generating Capacities Electrical power generation by nuclear plants in the reporting year 3.2. Production Capital. Generating Capacities NPP installed capacity utilization factor 3.2. Production Capital. Generating Capacities Target for increase of equivalent capacity 3.5. Development of Generation Capacity Number of retrofitted VVER-1000 units (in reporting period and total) 3.5. Development of Generation Capacity Number of retrofitted RMBK units (in reporting period and total) 3.5. Development of Generation Capacity Service life of power units Number of power units with service life extended to 15 years in the reporting period 3.5. Development of Generation Capacity Power units operation mode Power units built and commissioned in the Russian Federation Number of NPP nuclear power units for which the documents for service life extension, upgrade and retrofitting were prepared Total reduced time of planned repairs, after rescheduling, including through reducing repair time periods rescheduled repair start without changing its total duration Development of Generation Capacity 3.2. Production Capital. Generating Capacities Availability ratio 3.2. Production Capital. Generating Capacities Number of power unit construction projects in Russia 3.5. Development of Generation Capacity SECURING LEADERSHIP FOR RUSSIAN COMPANIES IN THE GLOBAL MARKET Financial stability Gross profit 3.6. Financial Capital. Performance Results Total profit tax accrued and paid 3.6. Financial Capital. Performance Results Net operating profit after taxes (NOPAT) 3.6. Financial Capital. Performance Results Income (total products, work, and services sold) 3.6. Financial Capital. Performance Results Production efficiency Labor efficiency 3.6. Financial Capital. Performance Results Own production efficiency (added value) 3.6. Financial Capital. Performance Results Financial stability Debt/ equity ratio 3.6. Financial Capital. Performance Results Significant funds obtained from the government 3.6. Financial Capital. Performance Results Positions of Russian engineering on global NPP construction market Investments in equity in the reporting period ASSURANCE OF NUCLEAR AND RADIATION SAFETY Projects to create national systems to process RAW and spent nuclear fuel Emergency response and readiness Number of power plants in construction abroad (in the reporting period) Total spending under the investment policy (indicating the share of funds used to retrofit plants and technology) Pieces of legislation to support creation of treatment and storage for RAW and used nuclear fuel were adopted Description of reliable safety barriers for nuclear and radiation hazardous sites and their lifecycle planning 3.5. Development of Generation Capacity Investments in Development 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Appendix 4 System of Public Reporting Indicators at

174 171 INDICATOR ITEM REPORT SECTION/CHAPTER Description of the emergency response system, including improvement of safety control monitoring systems at nuclear power facilities, organization of professional rescue teams 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Assuring physical protection of nuclear power facilities Violations during handling of nuclear and radiation hazardous materials Description of public alert and communication systems 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Description of protection system for employees, citizens, and areas in radiation emergencies Description of up-to-date engineering and technological systems of control and personnel access management Number of registered cases at nuclear power facilities according to the International Nuclear Events System (INES) 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Decommissioning Number of decommissioned nuclear and radiation hazardous sites 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Reclamation of contaminated territories Area of reclaimed contaminated territories 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population CREATING INNOVATIVE NUCLEAR TECHNOLOGIES AND PROMOTING THEM TO VARIOUS SECTORS OF THE ECONOMY Inventions related to use of nuclear power Participation in international innovation projects Number of patents, utility models, and industrial samples 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Expenses on R&D, total 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Participation in implemented international innovation projects (INRFC, ITER, Generation-IV, and FAIR) International Activity VVER-TOI Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Work Plan Implementation Progress 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Floating NPP Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Line of Fast Breeder Reactors Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management Radiation Technologies Description of plans for radiation technology development (targets, tasks, and efficiency) CREATING EFFICIENT MANAGEMENT MECHANISMS FOR THE NUCLEAR INDUSTRY Implementation of Rosatom s Production System Reorganizing financial and economic management Results of the implementation of the program to raise production efficiency (reduced area of preparation shops; shorter production cycle; fewer defects per specific components; lower manufacturing cost of specific equipment; and greater output in specific product positions) Economic benefit from implemented production development programs and cost reduction in business units 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management 3.2. Production Capital. Generating Capacities 3.2. Production Capital. Generating Capacities Evaluation of reorganization results (evaluation of targets achieved) 4. Corporate Management Purchase management Tools used to ensure more open and transparent purchasing 4.7. Purchase Management Total savings as a result of open tender purchasing procedures (% and 4.7. Purchase Management rubles) Developing in-house communication Projects to develop communication channels between executives and employees 5. Interaction with Stakeholders Risk Management 4.5. Risk Management IT-based management List of IT implementation projects 4.9. Information Technologies Control of financing and business activities 4.4. Internal Control and Audit. MAKING DEVELOPMENT OF THE NUCLEAR POWER INDUSTRY PUBLICLY ACCEPTABLE Public reports of the Concern and its units Compliance with international requirements for non-financial reports and interaction with stakeholders Appendix 1. Information about the Annual Report Appendix 4 System of Public Reporting Indicators at

175 172 INDICATOR ITEM REPORT SECTION/CHAPTER Interaction with stakeholders while preparing public reports 5. Interaction with Stakeholders Compliance with corporate requirements to public reports Appendix 1. Information about the Annual Report Industry information resources Number of information centers 5. Interaction with Stakeholders Public and culture activities (museums, popular science, career consulting, and other) 5. Interaction with Stakeholders Industry-level mass media 5. Interaction with Stakeholders Training for employees Employees subject to routine performance evaluation and career development 3.7. Human Resources. Labor Protection Expenses on training of employees 3.7. Human Resources. Labor Protection Building and using human reserves Number of employees in staff reserve 3.7. Human Resources. Labor Protection Share of employees appointed to open positions from the staff reserve 3.7. Human Resources. Labor Protection EFFICIENCY IN SUSTAINABLE GROWTH ENVIRONMENTAL IMPACT (IMPACT ON THE ENVIRONMENT AND ENVIRONMENTAL PROTECTION) Initiatives to reduce hazardous atmospheric emissions, reduction achieved Information on initiatives to reduce hazardous atmospheric emissions 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Initiatives to reduce harmful discharge to water bodies, reduction achieved Information on initiatives to reduce harmful discharges to water bodies 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Quantitative data on reduction of harmful discharges to water bodies 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Environmental management systems adopted in structural units of the Corporation Number of structural units certified for compliance under ISO Social Capital and Goodwill. Developing Areas of Presence. Charity Consumption of water for own needs Payments for air-polluting emissions from permanent and mobile sources, discharges of pollutants to surface and ground water bodies, and emplacement of production and consumption waste Radionuclide emissions to atmosphere Discharge of waste waters containing radionuclides Radionuclide-polluted areas Consumption of water for own needs 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Payments for air-polluting emissions from permanent and mobile sources, discharges of pollutants to surface and ground water bodies, and emplacement of production and consumption waste 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Total radionuclide emissions to atmosphere 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Volume of discharge of waste waters containing radionuclides 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Total volume of discharge of waste waters containing radionuclides 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Area of radionuclide-polluted areas 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Gamma radiation dose in polluted areas 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity SOCIAL AND LABOR RELATIONS (ORGANIZATION OF LABOR AND RESPECT FOR LABOR) Share of employees under 35 years of age Average age of employees (by category) Average paycheck compared to labor market average Number of employees with non-government pension plans Share of employees under 35 years of age 3.7. Human Resources. Labor Protection Average age of employees (by category, excluding part-time employees and employees who are not included in payroll) 3.7. Human Resources. Labor Protection Average paycheck compared to labor market average 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Number of employees with non-government pension plans 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Appendix 4 System of Public Reporting Indicators at

176 173 INDICATOR ITEM REPORT SECTION/CHAPTER Total personnel expenses Total personnel expenses 3.7. Human Resources. Labor Protection Total expenses on social programs for employees Social payments per employee per year Expenses on additional health insurance Control of personnel exposure to radiation Total expenses on social programs for employees 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Social payments per employee per year 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Expenses on additional health insurance 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Annual average effective exposure of personnel to radiation 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Number of cases when established standard exposure limits were exceeded Share from the total number of employees subject to individual radiation control, included in the ARMIR system 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Share of employees exposed to negligible risk of radiation 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population Share of employees exposed to life-long radiation risk 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population INFLUENCE ON THE SOCIAL AND ECONOMIC SITUATION IN THE AREAS OF PRESENCE INTERACTION WITH THE PUBLIC Preparing ZATO development program Charity projects and the volume of funds for these projects ETHICAL PRACTICES AND PUBLIC REGULATION Organization format for ethical practices Preparing ZATO development program 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Charity projects and the volume of funds for these projects 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity Existence of the Code of Ethics 3.7. Human Resources. Labor Protection Appendix 4 System of Public Reporting Indicators at

177 Opinion about Public Affirmation OPINION ABOUT PUBLIC AFFIRMATION OF THE ANNUAL REPORT OF ROSENERGOATOM CONCERN OJSC PREAMBLE (hereinafter, the Concern) requested that we assess its, the completeness and relevance of information disclosed therein, and the way responds to and takes into account stakeholders proposals and inquiries. We have the required knowledge and competencies in corporate responsibility, sustainable growth, and non-financial reporting. While we comply with ethical requirements of independent and unbiased judgment, we express our personal opinion as experts, but not that of the corporate entities we represent. We were offered an opportunity to participate in public consultations that discussed the draft report held on May 6, 2015, and in dialogs with stakeholders (on November 10, 2014 an absentee dialog was held in Moscow where the concept of the was discussed by over 30 representatives of stakeholders; on March 5, 2015 the dialog on Safety of the Russian Nuclear Power Industry was held in the city of Udomlya, Tver Oblast, Branch of Kalinin Nuclear Power Plant, and 22 representatives of stakeholders took part in this dialog). In the course of these activities all participants and stakeholder representatives were able to ask questions and state their opinions without any restrictions. The following materials were given to us: draft and the final version of the, and minutes of dialogs and hearings, including the table on consideration of suggestions made by stakeholders. As a merit of the 2014 report we should note that the international standards (Guidance on Reports of Sustainable Growth, Global Reporting Initiative (GRI, Ver. G4), series АА1000 Institute of Social and Ethical Accountability) were applied during the procedure of public affirmation of the report; however, our opinion is not intended to evaluate the conformance of the report with the international reporting systems. We are unaware of any facts that would make us question any information contained in the report. However, this public affirmation is not intended to confirm the authenticity of the actual data contained in the report. We have not received any reward or remuneration from for our participation in the public affirmation. The text of this opinion has been approved by all signatories. may use it for internal purposes and for communications with stakeholders and publish it without any changes. EVALUATIONS, COMMENTS, AND RECOMMENDATIONS Based on all information we reviewed, including text of the report, company s website, and collective discussion we confirm the following: In its report, the Concern has reflected all aspects of significance to stakeholders, including issues of nuclear plant safety, increase of capacity of power units with VVER-type reactors, impact on the environment, social sphere, and economy in the Concern s areas of presence, and operating efficiency. All significant aspects of activities are disclosed with a reasonable level of detail. The report represents Concern s strategic development to a sufficient extent and describes its approaches to principles of responsible business practice. The report contains information significant for stakeholders. Furthermore, the priority subjects of the report were selected taking into account the opinion of stakeholders after the dialog held with them. We regard the format and scope of information represented in the report favorably. The report is prepared in accordance with the Guidance on Reports of Sustainable Growth of the international organization Global Reporting Initiative (GRI, version G4), and the principle of laying emphasis on particular crucial aspects and interaction with the stakeholders was implemented (in compliance with recommendations of Standard АА1000SES). The stakeholders participated in discussions during these dialogs, public consultations and public affirmation. During preparation of the Annual Report, the Concern s management enthusiastically responded to opinions, suggestions and recommendations offered by stakeholders involved in the discussions and dialogs. Noting the advantages of the 2014 report, we think that certain aspects should be taken into account in the subsequent reporting cycles: We find that the material included in the report should be simplified, and excessive use of specific terms understandable only to narrow circle of specialists should be avoided; key processes should be described in plain language. More attention should be paid to comprehensive representation of Concern s contribution to the development of regional economy, including creation and development of infrastructure of the towns of presence. The information about managing non-financial risks (environmental, social, etc.) should be disclosed to a greater extent. Appendix 5 Opinion about Public Affirmation

178 175 Most questions raised by representatives of stakeholders were answered in the course of dialogs and public consultations. We would like to make a special note about the use by the Concern of modern communication means (website, blogs, virtual tours, availability of feedback, etc.) to keep the community and stakeholders informed about Concern s position. INTERACTION WITH STAKEHOLDERS OF ROSENERGOATOM CONCERN OJSC AND CONSIDERATION OF THEIR COMMENTS AND SUGGESTIONS During its activities that involved stakeholders in November 2014 through March 2015, made available an extensive information about Concern s strategic goals, development priorities, and operating performance. We would like to note the wide circle of participants who actually represented key stakeholders and active participation in discussions of Concern s management. Our experience shows that Concern s management actively responds to stakeholders questions, comments, and proposals. In particular, it is confirmed by adjustment of the final version of the report which contains clarifications and additional information included as per suggestions of the participants involved in consultations. We conclude that during preparation of the final version of the Concern s management demonstrated high level of openness, availability for dialog, and positive response to problems and suggestions indicated by stakeholders. In view of the above, we favorably evaluate the Concern s report and support Concern s commitment to the principles of responsible business practice. We also confirm that 2014 report of the Concern has successfully passed public affirmation. Chairman of Committee for Social Policy of the Council of Federation of the Federal Assembly of the Russian Federation Chairman of Inter-Regional Public Environmental Organization Green Cross Director of Institute for Safe Development of Nuclear Energy under RAS, Science Research and Coordination of Future Developments Head of Bellona Ecology and Law Center President, General Director of the Nongovernmental Ecological Fund named after V.I. Vernadsky Chairman of Association of Areas of Presence of Nuclear Plants Fund, Chairman of Volgodonsk City Duma Head of Council of Territories public organization for support of Baltic NPP Construction Project Head of urban district of Novovoronezh Chairman of Subcommittee for Legal Support to the Nuclear Power Industry, Panel on Power Industry in the State Duma of the Federal Assembly of the Russian Federation Head of Kurchatov Center of Nuclear Technologies, Kurchatov Institute Head of Center of Corporate Social Responsibility and Non-Financial Reporting, the Russian Union of Manufacturers and Entrepreneurs Chairman of Russian Trade Union of Employees of Nuclear Power Industry Chairman of Oka Inter-regional Environmentalist Movement Director of Moscow Regional Office, WANO V.V. Ryazansky S.I. Baranovsky L.A. Bolshov A.K. Nikitin V.A. Grachev P.P. Gorchanyuk A.A. Zhuravleva Yu.I. Pegusov V.T. Potsyapun Yu.M. Semchenkov E.N. Feoktistova I.A. Fomichev A.V. Khasiev V.I.Aksenov Appendix 5 Opinion about Public Affirmation

179 Statement on the Results of Independent Assurance of Public Annual Report G4-33 of Open Joint-Stock Company «Concern for Production of Electric and Thermal Energy at Nuclear Power Plants» 2014 INTRODUCTION The subject of assurance is the annual report of Open Joint-Stock Company Concern for Production of Electric and Thermal Energy at Nuclear Power Plants (hereinafter referred to as the Report) for Our statement is addressed to the management of Open Joint-Stock Company Concern for Production of Electric and Thermal Energy at Nuclear Power Plants (hereinafter referred to as Rosenergoatom Concern OJSC). RESPONSIBILITIES OF THE PARTIES The management of Rosenergoatom Concern OJSC bears full responsibility for preparation and accuracy of the Report. We are responsible for the results of independent assurance of the Report only to Rosenergoatom Concern OJSC within the engagement and do not assume any responsibility to any third party. SCOPE, CRITERIA AND LEVEL OF ASSURANCE The subject of assurance is the Report, including information on Rosenergoatom Concern OJSC without its subsidiaries. The Report was evaluated considering the following criteria: Nature and level of compliance with the principles of the AA1000 Accountability Principle Standard 2008 inclusivity, materiality, responsiveness. Compliance of the Report with the GRI Sustainability Reporting Guidelines G4 (Comprehensive option). Compliance of the Report with the requirements of the International Integrated Reporting Framework. Compliance of the Report with the Russian law requirements to annual reports of joint-stock companies in terms of disclosure. The engagement was planned and performed in accordance with AA1000 Assurance Standard 2008 and International Standard on Assurance Engagement ISAE 3000 Assurance engagements other than audits or reviews of historical financial information. The statement corresponds to type 2, as defined by АА1000AS 2008, in accordance with the limitations specified in section Limitations of the engagement of the present statement. In our statement, we have fulfilled the following requirements on the level of assurance: Moderate in accordance with standard AA1000 AS 2008, Limited in accordance with International Standard on Assurance Engagements ISAE 3000 Assurance engagements other than audits or reviews of historical financial information. The selective verification of information in the Report can not pretend to provide a high level of assurance. The work was based on the supporting materials provided by the management of the entity and its employees, publicly available information and analytical methods of confirmation. In relation to the quantitative information contained in the Report the work performed cannot be considered sufficient for identification of all possible defi-ciencies and misstatements. However, the collected evidence is sufficient for expressing our conclusion in accordance with the above levels of assurance. METHODOLOGY OF ASSURANCE In our engagement, we have performed the following procedures: Study and selective testing of systems and processes implemented by Rosenergoatom Concern OJSC to ensure and analyze the compliance of the activities with AA1000APS 2008 principles and efficiency management in the field of sustainable development. Collection of evidence confirming practical implementation of system processes in accordance with the principles of AA1000 APS Interviews with the management of Rosenergoatom Concern OJSC. Study of documents and statements of the management in order to obtain evidence regarding the compliance of the activities with the principles of AA1000 APS. Participation in public dialogues and consultations with stakeholders, study of minutes of public dialogues and consultations. Appendix 6 Statement on the Results of Independent Assurance of Public Annual Report

180 177 Study of information on the website of Rosenergoatom Concern OJSC related to its activities in the context of sustainable development. Study of public statements of third parties related to economic, environmental and social aspects of the Rosenergoatom Concern OJSC operations, in order to check validity of the declarations made in the Report. Analysis of non-financial reports of foreign companies working in the similar market segment for benchmarking purposes. Analysis of the current system of internal audit of non-financial reporting in Rosenergoatom Concern OJSC Selective review of documents and data on the efficiency of the management systems of economic, environmental and social aspects of sustainable development in Rosenergoatom Concern OJSC. Study of the existing processes of collection, processing, documenting, verification, analysis and selection of data to be included into the Report. Examination of adequacy of the statements and data included into the Report. Analysis of information in the Report for compliance with the aforementioned criteria. LIMITATIONS OF THE ENGAGEMENT The assurance is limited to the period from January 01, 2014 to December 31, In respect to the quantitative performance indicators the conformity assessment to the audited financial statements and other provided to us external and internal reporting documents related to economic, environmental and social aspects is performed. Assurance does not apply to forward-looking statements, as well as statements expressing the opinions, beliefs and intentions of Rosenergoatom Concern OJSC to take any action relating to the future. The assurance on the statements which are based on expert opinion is not performed. Assurance is performed only in relation to the Russian version of the Report in the MS Word format which includes information to be published in a hard-copy form as well as in electronic form. We had no chance to verify publication of the Report on the corporate website of Rosenergoatom Concern OJSC due to the fact that the date of signing this statement preceded the planned date of the Report publication on the Company s website. This statement is the translation of the Russian original. The Russian version prevails. CONCLUSIONS The following conclusions are based on the assurance work performed within the engagement indicated above. 1. In general, the Report adequately reflects management tools and performance indicators of Rosenergoatom Concern OJSC concerning economic, social and environmental aspects of sustainable development. 2. As a result and within the scope of our work, we did not identify material misstatements in the Report information which discloses the Rosenergoatom Concern OJSC activity in the field of sustainable development and its results. NATURE AND EXTENT OF COMPLIANCE WITH AA1000 APS 2008 PRINCIPLES As a result and within the scope of our work, we did not identify material non-compliance with criteria of AA1000 APS 2008 in respect to adherence to the principles (Inclusivity, Materiality, and Responsiveness). COMPLIANCE OF THE REPORT WITH THE GRI SUSTAINABILITY REPORTING GUIDELINES G4 (COMPREHENSIVE OPTION) In order to form an opinion on this issue, we analyzed implementation of GRI G4 Guidelines concerning principles and standard disclosures for the chosen option to prepare a report in accordance with the Guidelines. PRINCIPLES FOR DEFINING REPORT CONTENT MATERIALITY Materiality assessment is based on the survey involving internal and external stakeholders of Rosenergoatom Concern OJSC conducted in As part of preparation of the report for 2014 the list of material aspects was updated. Information included into the Report encompasses the topics and performance indicators that reflect significant impact of Rosenergoatom Concern OJSC on the economy, environment and society or can substantively influence the assessments and decisions of stakeholders. Report touches on the main issues brought up in the reports of foreign companies working in the similar market segment STAKEHOLDER INCLUSIVENESS Rosenergoatom Concern OJSC presented in the Report information on stakeholders and mechanisms of incorporation of their interests, when determining the contents of the Report. The report demonstrates the commitment of Rosenergoatom Concern OJSC to take into account the interests of the stakeholders in its activities. The Report contains detailed information on the stakeholders suggestions made as part of the public dialogues and consultations on the Reports and Companies feedback on the suggestions. Appendix 6 Statement on the Results of Independent Assurance of Public Annual Report

181 178 SUSTAINABILITY CONTEXT The Report presents the results of Rosenergoatom Concern OJSC operations in a wide range of sustainable development issues, including various aspects of economic, social and environmental activities. COMPLETENESS Within the claimed boundaries the Report with a sufficient degree of completeness covers information on the activities of Rosenergoatom Concern OJSC without its subsidiaries. In order to ensure full disclosure of information, the Company applied the GRI Electric Utilities Sector Disclosures. PRINCIPLES FOR DEFINING REPORT QUALITY BALANCE The Report has a balanced nature, reflecting both the results and the issues that require solution. COMPARABILITY The comparability of the Report and non-financial reports of other organizations is achieved by using GRI G4 Guidelines as the basis for disclosure of performance indicators for sustainable development. The comparability of financial information in relation to the reports of other companies is not fully achieved in connection with the application of the rules of the Federal legislation in Russia and the Regulations of the Russian accounting (rather than International Financial Reporting Standards) for its disclosure. Some quantitative indicators are presented in a three-year dynamics, making it possible to analyze relevant development trends in the Company s activities. ACCURACY The level of accuracy of actual information in the Report is sufficient for stakeholders to estimate the performance of Rosenergoatom Concern OJSC in the field of sustainable development. The calculations of performance indicators are based on the methods approved in the GRI G4 Guidelines. TIMELINESS The Report is prepared with a view to be submitted to the Annual meeting of shareholders. CLARITY In general the information in the Report is shown clearly and intelligibly for the key groups of stakeholders. The Report contains the Glossary that facilitates understanding of the information for the users of the Report. RELIABILITY The information in the Report about the performance is based on the internal reporting documents of Rosenergoatom Concern OJSC and the ROSATOM State Atomic Energy Corporation and the statements submitted to regulatory authorities. Issues of auditing efficiency of the control and order of preparation of non-financial reports are within competence of the Internal Control and Audit Department. We were provided by Statement by the Rosenergoatom Concern OJSC Internal Control and Audits Department on the Results of an Internal Audit to Examine Rosenergoatom Concern OJSC Process of Generating Public Reports.. We have not identified any facts that would call into question reliability of the information contained in the Report. GENERAL STANDARD DISCLOSURES General standard disclosures are reported mainly in compliance with the requirements of GRI G4 for the chosen in accordance option. General standard disclosures G4-10, G4-11 are reported with omissions, which is indicated in the GRI Content Index. SPECIFIC STANDARD DISCLOSURES DISCLOSURES ON MANAGEMENT APPROACH In general the Report contains the disclosures on management approach on material aspects in economic, social and environmental field; in particular, the impacts that make the aspects material, the company s approach to managing the material aspects, as well as evaluation of the management approach for some material aspects, are reported. Appendix 6 Statement on the Results of Independent Assurance of Public Annual Report

182 179 INDICATORS All indicators required for the Comprehensive option are reported in accordance with guidance contained in GRI G4, including disclosures with omissions which are indicated in the GRI Content Index. OVERALL ASSESSMENT OF THE REPORT As a result and within the scope of our work, we did not identify material non-compliance with requirements to the report prepared in accordance with the Comprehensive option of the G4 Guidelines. COMPLIANCE OF THE REPORT WITH THE REQUIREMENTS OF THE INTERNATIONAL INTEGRATED REPORTING FRAMEWORK Based on the procedures performed and evidence obtained, we did not identify material non-compliance with the guiding principles of the International Integrated Reporting Framework and with requirements to the structure of content elements of integrated reports. COMPLIANCE OF THE REPORT WITH THE RUSSIAN LAW REQUIREMENTS TO ANNUAL REPORTS OF JOINT-STOCK COMPANIES IN TERMS OF DISCLOSURE Based on the procedures performed and evidence obtained, we did not identify material non-compliance with the Regulation on information disclosure by issuers of securities (Provision of Central Bank of the Russian Federation from of No 454-P) in terms of disclosure in the annual report of joint-stock company. 1. Consider the possibility of increasing the extent of disclosure of information on the material aspects concerning subsidiaries in the next report. 2. It is expedient to disclose GRI indicators in relation to target values. 3. Increase the completeness of material aspects disclosure by reduction the share of disclosures with omissions. 4. In case of disclosure with omissions due to absence of a recording system provide more specific information about plans to obtain data in future. 5. Take into account remarks in the foregoing sections of the statement. STATEMENT OF COMPETENCE AND INDEPENDENCE JSC NP Consult is an independent audit firm, professionally rendering assurance services. JSC NP Consult is a member of self-regulated organization Nonprofit Partnership Institute of Professional Auditors and acts in accordance with the IFAC Code of Ethics. The company has a system of quality control of audit services, including control of compliance with ethical norms. JSC NP Consult states that the present statement is an independent auditor s assessment. JSC NP Consult and its staff have no relations with Rosenergoatom Concern OJSC, its subsidiaries and affiliates that could result in the conflict of interest related to the assurance of the Report. JSC NP Consult is an organizational stakeholder of GRI, licensed provider of assurance services in accordance with AA1000 AS. The team involved in the assurance of annual report included the employees of JSC NP Consult with necessary experience in auditing and reporting under GRI Guidelines, as well as with certificates in this area. The head of the assurance team completed trainings in the assurance of sustainability reports in Accountability training center and has LCSAP certificate CEO JSC NP Consult V.Y. Skobarev Moscow June 19, 2015 Appendix 6 Statement on the Results of Independent Assurance of Public Annual Report

183 Statement of the Internal Control Department of on the Results of the Internal Audit of Conformance of Preparation of Concern s 2014 Annual Report with the Requirements of the Policy of Rosatom State Corporation in the Area of Public Reporting and Standard of Public Annual Reporting of The internal audit of preparation of the public Annual Report of (hereinafter, the Concern) is performed in accordance with the Rules for Organization and Performance of Internal Audit as a part of the Internal Audit process carried out by the Internal Audit Department of the Concern approved by order No. 9/300-P dated March 24, 2015 of the Concern taking into account the Policy of Rosatom State Corporation in the area of public reporting approved by order No. 1/403-P dated May 13, 2011 of Rosatom State Corporation, Standard for Public Annual Reporting of the Concern approved by order No. 9/526-P dated June 6, 2012 of the Concern, main provisions of the Guidance on Reports of Sustainable Growth of GRI (version G4), series of international standards AA1000, and recommendations of the Russian Union of Industrialists and Entrepreneurs (RUIE) for use in management practice and corporate non-financial reporting. Pursuant to Sub-Clause 1.1 of Section 3.4 of the Procedure for Preparation of the Concern s Annual Report brought into force by order No. 9/841-P dated August 4, 2014, the Concern issued order No. 9/1176-P dated October 29, 2014 On Organization of Work on Preparation of the Annual Report of for the Year 2014 approving the composition of the work group for preparation of the of Rosenergoatom Concern OJSC (Head of the Working Group is D.L. Tkebuchava, First Deputy General Director). A.V. Timonov, Director of the Department for Information and Public Relations, Deputy Head of the Working Group, was instructed to organize work in accordance with the Regulations on Working Group on Preparation of the Annual Report of (order No. 9/945-P dated September 1, 2011). The following are the main stages of the actual order of preparation of the Concern s Annual Report: Preparation of the concept of the Annual Report; Discussion of the concept of the Annual Report with stakeholders; Expertise of the draft concept of the Annual Report in Rosatom State Corporation; Approval of the concept of the Annual Report by the General Director of the Concern; Collection of materials for preparation of the text of the report; Preparation of the draft Annual Report; Expertise of the draft Annual Report in Rosatom State Corporation; Improvements of the draft Annual Report; Opinion of the Permanent Technical Commission of the Concern; Approval of the text of the Annual Report with Deputy General Directors and Chief Accountant of the Concern; Signing of the Annual Report by the General Director and Chief Accountant of the Concern; Preliminary approval of the Annual Report of the joint stock company by the Board of Directors of the Concern; Approval of the Annual Report of the joint stock company by the General Meeting of Stockholders. In the course of the audit: The efficiency of the internal control system with respect to preparation of public reporting (including analysis of regulation and formal description of key processes related to preparation of public reporting) was assessed; Compliance with the public report preparation procedure with applicable Russian legislation and corporate standard requirements that regulate the business process of public report preparation was checked; Recommendations on steps to improve the internal control system during preparation of public reporting were developed. Based on the results of the audit we have concluded that the system of internal controls over the process of preparation of public reporting is efficient, and the procedure for preparation of public reporting of the Concern complies with legislation of the Russian Federation, the Policy of Rosatom State Corporation regarding public reporting, and the Concern s internal corporate standards regulating the business process of public report preparation. Director, Department of Internal Control and Audit Chief Controller V.V. Tatarchuk Appendix 7 Statement of the Internal Control Department of

184 Business/Financial Accounting Statement ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 Organization Taxpayer ID Type of economic Generation of electric power by nuclear plants Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) Units of measurement: Thousand rubles Location (address): , Moscow, ul. Ferganskaya, d. 25 CODES OKUD Form Date (day, month, year) By OKPO INN By OKVED by OKOPF/OKFS By OKEI 384 COMMENTS ITEM DESCRIPTION CODE DECEMBER 31, 2014 DECEMBER 31, 2013 DECEMBER 31, , 6.1 ASSETS I. NON-CURRENT ASSETS Intangible assets ,119, ,070 1,112, , 6.2 Results of research and development ,220,566 6,226,265 6,236, , 6.3 Fixed assets ,188,688,823 1,081,795, Buildings, machines, equipment and other fixed assets ,301, ,522, ,938, Construction in progress invested in fixed assets ,723, ,179, ,551, Advanced payments to suppliers and contractors for capital construction, suppliers of fixed asset items ,663, ,093, ,309,616 Yield-bearing investments in material values ,270 79, , , 6.6 Financial investments ,344,996 41,180,564 38,983, Miscellaneous non-current assets ,826,311 22,064,607 19,424,929 Section I subtotal ,259,284,080 1,152,338,523 1,003,778, , 6.8 II. CURRENT ASSETS Inventory ,862,422 42,448,269 34,904,834 Materials, stock and similar assets ,527,976 41,587,572 34,194,942 Finished products and resellable stock ,164, , ,728 Shipped goods , Miscellaneous inventory and costs ,164 Value Added Tax on values purchased ,391,041 1,614,072 1,680, Accounts receivable ,689,446 33,327,930 39,130,439 Settlements with buyers and customers ,593,278 17,864,046 16,290,242 Advanced payments issued ,428 1,291,899 7,941,777 Miscellaneous debtors ,984,740 14,171,985 14,898, , 6.10 Financial investments (except cash equivalents) ,572, ,200 6,721, Cash and equivalents ,860,813 10,364,734 1,548,816 Miscellaneous current assets ,255 46,631 61,969 Section II subtotal: ,542,691 88,622,836 84,047,740 BALANCE ,355,826,771 1,240,961,359 1,087,825,834 Appendix 8 Business/Financial Accounting Statements

185 182 ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 Organization Taxpayer ID Type of economic Generation of electric power by nuclear plants Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) Units of measurement: Thousand rubles Location (address): , Moscow, ul. Ferganskaya, d. 25 CODES OKUD Form Date (day, month, year) By OKPO INN By OKVED by OKOPF/OKFS By OKEI 384 COMMENTS ITEM DESCRIPTION CODE DECEMBER 31, 2014 (3) DECEMBER 31, 2013 (4) Form page 2 DECEMBER 31, 2012 (5) 6.14 LIABILITIES III. EQUITY AND PROVISIONS Registered capital (share capital, registered fund, partners contributions) ,516, ,516, ,011,527 Shareholders capital contributions before records of constituent documents ,297,167 80,079,544 Surplus capital (not revalued) ,496 6, Reserve capital ,627, ,840, ,322, Provisions established under legal requirements ,913, ,237, ,720,122 Provisions established under incorporation documents ,713,223 1,602,689 1,602, Retained profits (unrecovered loss) ,550, ,359, ,373,958 Section III subtotal ,180,017,341 1,057,722, ,788, , 6.17 IV. LONG-TERM LIABILITIES Borrowed funds ,697,638 81,890,352 60,178, , 6.18 Deferred tax liabilities ,869,716 1,592,492 1,018, Appraisal-related liabilities ,365,287 5,627,630 4,823, Miscellaneous liabilities ,779,533 11,033,023 13,756,370 Section IV subtotal ,712, ,143,497 79,775, , 6.17 V. SHORT-TERM LIABILITIES Borrowed funds ,752,173 22,435,801 22,138, Accounts payable ,186,967 51,973,324 42,694,181 Suppliers and contractors ,332,931 38,266,410 29,829,810 Advance payments received ,990 9,464 22,459 Owed to employees , , ,873 Owed to government off-budget funds , , , Debts in taxes and duties ,890,250 1,908,866 1,946,896 Miscellaneous creditors ,247,486 10,504,788 9,748, Deferred revenue ,227,656 1,290,045 1,365, Appraisal-related liabilities ,661,579 7,046,918 6,674, Special-purpose financing , , ,662 Section V subtotal ,097,256 83,095,199 73,261,885 BALANCE ,355,826,771 1,240,961,369 1,087,825,834 Manager E.V. Romanov Chief Accountant A.V. Shalimov 24 February 2015 Appendix 8 Business/Financial Accounting Statements

186 183 PROFIT AND LOSS STATEMENT FOR THE YEAR OF 2014 Organization Taxpayer ID Type of economic Generation of electric power by nuclear plants Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) Units of measurement: Thousand rubles CODES OKUD Form Date (day, month, year) By OKPO INN By OKVED by OKOPF/OKFS By OKEI 384 COMMENTS (1) ITEM DESCRIPTION CODE , 7.1 Revenues ,215, ,856, ,7.1 Sales costs 2120 (147,607,968) (136,547,466) Gross profit/loss ,607,430 96,309, Commercial expenses 2210 (14,727) (15,910) 2.11 Administrative costs 2220 (81,900,769) (81,084,376) Profit/loss after sales ,691,934 15,208,929 Gains from interest held in other corporate entities , , Interest receivable ,309,776 2,131, Interest payable 2330 (1,375,392) (1,255,455) 2.10, 7.2 Miscellaneous incomes ,375,732 3,669, ,7.2 Miscellaneous expenses 2350 (18,133,005) (11,968,087) Profit/loss before tax ,449,457 8,137, Current profit tax 2410 (9,324,801) (6,112,395) Including fixed tax liability/assets 2421 ( ) (5,048,050) 6.18 Change in deferred tax liability 2430 (94,729) (659,345) 6.18 Change in deferred tax assets 2450 (219,518) 96, Other ,026 (13,356) 6.18 Profit tax reallocation within the consolidated taxpayers group ,352, ,845 Net profit/loss ,238,182 2,210,670 COMMENTS (1) ITEM DESCRIPTION CODE REFERENCE Result of non-current assets revaluation not included in the net profit/ loss of the period 2510 Result of miscellaneous operations not included in the net profit/ loss of the period ,082,900 16,781,283 Consolidated financial result of the period ,321,082 18,991, Base profit/ loss per share of stock Diluted profit/ loss per share of stock 2910 Manager E.V. Romanov Chief Accountant A.V. Shalimov Appendix 8 Business/Financial Accounting Statements

187 184 EQUITY DYNAMICS STATEMENT FOR 2014 Organization Taxpayer ID Type of economic Generation of electric power by nuclear plants Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) Units of measurement: Thousand rubles CODES OKUD Form Date (day, month, year) By OKPO INN By OKVED by OKOPF/OKFS By OKEI CASH FLOW ITEM DESCRIPTION CODE REGISTERED CAPITAL OWN STOCK REDEEMED FROM STOCK- HOLDER SHAREHOLD- ERS CAPITAL CONTRIBUTIONS BEFORE RECORDS OF CONSTITUENT DOCUMENTS SUR- PLUS CAPITAL RESERVE CAPITAL RETAINED PROFIT/ UNCOVERED LOSS TOTAL Size of capital as of December 31,2012 For year 2013, Increment in capital, total: ,011,527 80,079, ,322, ,373, ,788, ,505,036 61,425,492 6,498 70,457,849 2,210, ,605,545 Including, net profit 3211 X X X X X 2,210,670 2,210,670 Revaluation of assets 3212 X X X Income recognized directly as capital increment 3213 X X 6,498 X 6,498 Additional issue of stock ,505,036 61,425,492 X X 202,930,528 Increase in par value of stock 3215 X Reorganization of corporate entity 3216 Engaged industry-level reserves for purposes of investment Shareholders capital contributions before records of constituent documents 3217 X X X X 70,457,849 X 70,457, X X X X X Decrement in capital, total: 3220 (141,505,036) (141,505,036) Including, loss 3221 X X X X X Revaluation of assets 3222 X X X Expenses recognized directly as capital decrement 3223 X X X Decrease in par value of stock 3224 X Decrease in number of stock 3225 X Reorganization of corporate entity 3226 Dividends 3227 X X X X X Shareholders capital contributions before records of constituent documents 3228 X X (141,505,036) X X X (141,505,036) Industry-level reserves usage 3229 X X X X (11,166,000) X (11,166,000) Change in surplus capital 3230 X X X Change in reserve capital 3240 X X X X X Change due to commissioning of fixed assets objects built (purchased) with industry-level Size of capital as of December 31, X X X X (16,774,472) 16,774, ,516,563 6, ,840, ,359,100 1,057,722,663 Appendix 8 Business/Financial Accounting Statements

188 185 ITEM DESCRIPTION CODE REGISTERED CAPITAL OWN STOCK REDEEMED FROM STOCK- HOLDER SHAREHOLD- ERS CAPITAL CONTRIBUTIONS BEFORE RECORDS OF CONSTITUENT DOCUMENTS SUR- PLUS CAPITAL RESERVE CAPITAL RETAINED PROFIT/ UNCOVERED LOSS TOTAL For year 2014, Increment in capital, total: ,297,167 18,684 70,576,072 9,238, ,130,105 Including, net profit 3311 X X X X X 9,238,182 9,238,182 Revaluation of assets 3312 X X X X Income recognized directly as capital increment 3313 X 18, Additional issue of stock 3314 X X X Increase in par value of stock 3315 X X Reorganization of corporate entity Engaged industry-level reserves for purposes of investment Shareholders capital contributions before records of constituent documents 3316 X 3317 X X X X 70,576,072 70,576, X X 55,297,167 X X X 55,297,167 Decrement in capital, total: 3320 Including, loss 3321 X X X X X Revaluation of assets 3322 X X X X Expenses recognized directly as capital decrement 3323 X X Decrease in par value of stock 3324 X X Decrease in number of stock 3325 X X Reorganization of corporate entity 3326 X Dividends 3327 X X X X X Shareholders capital contributions before records of constituent documents 3328 X X X X Industry-level reserves usage 3329 X X X X (12,835,427) X (12,835,427) Change in surplus capital 3330 X X X X Change in reserve capital 3340 X X X X 110,534 (110,534) X Change due to commissioning of fixed assets objects built (purchased) with industry-level Size of capital as of December 31, X X X X (22,064,216) 22,064, ,516,563 55,297,167 25, ,627, ,550,964 1,180,017,341 Manager E.V. Romanov Chief Accountant A.V. Shalimov Appendix 8 Business/Financial Accounting Statements

189 ADJUSTMENTS DUE TO ACCOUNTING POLICY CHANGE AND CORRECTION OF ERRORS ITEM DESCRIPTION CODE DECEMBER 31, 2012 EQUITY CHANGES IN 2013 DECEMBER 31, 2013 On account of net profit/loss Other EQUITY, TOTAL Вefore adjustments Adjustment due to: accounting policy change ,708,610 2,210, ,803,383 1,057,722, ,079, (80,079,544) --- correction of errors After adjustments ,788,154 2,210, ,723,839 1,057,722,663 Including retained profit/ uncovered loss: before adjustments adjustment due to: accounting policy change ,373,958 2,210,670 16,774, ,359, correction of errors after adjustments ,373,958 2,210,670 16,774, ,359,100 Other equity items adjusted (per item) before adjustments adjustment due to: accounting policy change ,334, ,028, ,363, ,079,544 (80,079,544) --- correction of errors after adjustments ,414, ,949, ,363, NET ASSETS ITEM DESCRIPTION CODE DECEMBER 31,2014 DECEMBER 31,2013 DECEMBER 31,2012 Net assets ,181,244,997 1,059,012, ,153,680 Manager E.V. Romanov Chief Accountant A.V. Shalimov Appendix 8 Business/Financial Accounting Statements

190 187 ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 Organization Taxpayer ID Type of economic Generation of electric power by nuclear plants Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) Units of measurement: Thousand rubles CODES OKUD Form Date (day, month, year) By OKPO INN By OKVED by OKOPF/OKFS By OKEI 384 ITEM DESCRIPTION CODE CASH FLOW FROM CURRENT OPERATIONS Revenue - total ,557, ,968,298 Including: from sold products, works, services ,729, ,046,089 payments in lease, rent, royalty fees, commission fees and similar amounts , ,434 resold financial investments 4113 miscellaneous revenue ,569,119 5,535,775 Payments, total 4120 (152,638,792) (138,327,228) Including: to suppliers/contractors, for materials, products, works, services 4121 (94,732,480) (85,553,349) to employees 4122 (27,502,799) (26,638,302) interest payable on debentures 4123 (952,977) (1,110,967) profit tax 4124 (8,631,899) (5,601,245) miscellaneous payments 4129 (20,818,637) (19,423,365) Balance of cash flow from current operations ,918,282 94,641,070 CASH FLOW FROM INVESTMENTS Revenue - total ,241, ,512,531 Including: from sold non-current assets (except financial investments) , ,132 from sold corporate stock or holdings in other corporate entities ,862,982 from repaid loans issued, sold debentures (claim rights to third parties ,372, ,010,975 dividends, interest on financial debt investments, and similar revenue from holdings in other corporate entities ,579,439 2,292,445 miscellaneous revenue , ,997 Payments - total 4220 (404,250,868) (390,353,661) Including: to purchase, create, upgrade, retrofit and set up non-current assets 4221 (139,824,705) (167,883,711) to purchase corporate stock or holdings in other corporate entities 4222 (30,000) (2,134,645) to purchase debentures (claim rights to third parties), issue loans to third parties 4223 (256,032,694) (214,186,947) interest payable on debentures included in the price of an investment asset 4224 (8,363,469) (6,148,358) miscellaneous payments 4229 Balance of cash flow from investments 4200 (158,009,757) (165,841,130) Appendix 8 Business/Financial Accounting Statements

191 188 ITEM DESCRIPTION CODE CASH FLOW FROM FINANCIAL OPERATIONS Revenue - total ,999, ,741,077 Including: Received loans and credits ,699,396 73,604,495 Cash investments from owners (partners) 4312 from issued stock or increased holdings ,297,167 58,136,582 from issued bonds, promissory notes, security debentures, etc government budget allocations, and other government financing 4315 miscellaneous revenue ,800 Payments - total 4320 (76,512,712) (51,738,814) Including to incorporators/ stockholder to finance buyout of stock/holdings in the corporate capital, or their retirement from the corporation 4321 Paid as dividends and otherwise to distribute profits among owners/partners 4322 redemption/buyout of promissory notes and other securities, repayment of loans and credits 4323 (76,512,712) (51,738,814) Miscellaneous payments 4329 (304) Balance of cash flow from financial operations ,486,651 80,002,263 Balance of cash flow for the reporting period 4400 (4,604,824) 8,802,203 Balance of cash and equivalents at the beginning of the reporting period ,361,255 1,548,765 Balance of cash and equivalents at the end of the reporting period ,859,106 10,361,255 Impact by change of foreign currency exchange rate to the ruble ,675 10,287 Appendix 8 Business/Financial Accounting Statements

192 Statement on the Results of Independent Assurance of Public Annual Report of Open Joint-Stock Company «Concern for Production of Electric and Thermal Energy at Nuclear Power Plants» 2014 Audit Opinion To Shareholders of Open Joint-Stock Company Russian Concern for Production of Electric and Thermal Energy at Nuclear Power Plants AUDITED ENTITY CORPORATE NAME: Open Joint-Stock Company Russian Concern for Production of Electric and Thermal Energy at Nuclear Power Plants (hereinafter Rosenergoatom Concern OJSC). LOCATION: , Moscow, ul. Ferganskaya, d. 25. STATUTORY REGISTRATION: Registered by Federal Tax Service Interdistrict tax inspectorate No. 46 in the city of Moscow, on September 17, 2008; Certificate: series 77 No Record of September 17, 2008 in the Unified State Register of Legal Entities, Primary State Registration Number AUDITOR CORPORATE NAME: Accountants & Business Advisers Limited Liability Company (FBK LLC). LOCATION: , Moscow, ul. Myasnitskaya, 44/1, str. 2AB. STATUTORY REGISTRATION: Registered by Moscow Chamber of Registration, on November 15, 1993, Certificate: series UZ 3 No RP. Record of July 24, 2002, in the Unified State Register of Legal Entities, Primary State Registration Number MEMBERSHIP IN SELF-REGULATED ASSOCIATION OF AUDITORS: Russian Chamber of Auditors Not-for-Profit Partnership. ID RECORD IN THE REGISTRY OF THE SELF-REGULATED ASSOCIATION OF AUDITORS: Certificate of association in Russian Chamber of Auditors Not-for-Profit Partnership, No. 5353, ORNZ (Primary Registration Entry Number) We have reviewed the attached accounting (financial) statements filed by comprising its Accounting Balance Sheet Statement as of December 31, 2014, its Profit and Loss Statement, its Equity Dynamics Statement, and its Cash Flow Statement for 2014, and other appendices to the Accounting Balance Sheet Statement and Profit and Loss Statement for Appendix 9 Statement on the Results of Independent Assurance of Public Annual Report

193 190 AUDITED ENTITY S RESPONSIBILITY FOR ITS ACCOUNTING (FINANCIAL) STATEMENTS The audited entity s management shall assume responsibility for the aforementioned accounting (financial) statements and reports, and shall ensure that they are prepared reliably, accurately, and in compliance with Russian accounting standards, and shall enforce the internal control system as may be required to prepare accounting (financial) statements free of any material misrepresentation through either fraudulence or error. AUDITOR S RESPONSIBILITY Our responsibility is to form and state our judgment as regards reliability of the said accounting (financial) statements based on the review conducted by ourselves. We conducted the audit in conformity with Russian Federal auditing standards, which require that we should adhere to applicable standards of ethics, and that we should plan and conduct our audit in a manner that ensures reasonable certainty that the said accounting (financial) statements are free of any material misrepresentation. Our review consisted of auditing procedures designed to obtain auditing evidence to confirm numeric values and disclosure of information in the accounting (financial) statements. Selection of such auditing procedures was based on our judgment, which in turn relied on assessment of the risk of material misrepresentation through either fraudulence or error. As we assessed such risk, we examined the corporate control system used to prepare and verify the accounting (financial) statements, and the purpose of such examination was to enable selection of auditing procedures, but not to express an opinion about efficiency of the said corporate control system. Our audit also established compliance of the adopted corporate accounting policy and the grounds underlying the value indicators furnished by the management of the audited entity, as well as integral assessment of the filed accounting (financial) reports as a whole. We hold that the evidence collected in the course of our audit give sufficient grounds for our judgment about the accounting (financial) statements as true and reliable. OPINION It is our opinion that the reviewed accounting (financial) statements reliably represent all relevant aspects of the financial situation in Rosenergoatom Concern OJSC as of December 31, 2014, its financial and business performance, and its cash flows during 2014, in conformity with the Russian standards for accounting (financial) statements. S.M. Shapiguzov FBK LLC President By virtue of the Articles of Association, Auditor Qualification Certificate , ORNZ (Primary Registration Entry Number) Audit opinion date: March 2, 2015 Appendix 9 Statement on the Results of Independent Assurance of Public Annual Report

194 Opinion of the Internal Auditing Committee on the Results of Review of Financial and Business Activities of for 2014 Moscow April 1, 2015 In accordance with the Federal Law on Joint Stock Companies, the Charter of (hereinafter, the Company), and the Company s Regulation on the Internal Auditing Committee the Company s Internal Auditing Committee reviewed the Company s financial and business operations in 2014 between March 16, 2015 and April 1, The Internal Auditing Committee was formed based on Resolution No. 7 of the Аnnual General Meeting of Stockholders of of June 24, 2014, with the following designated members: Pyotr Anatolyevich Stepayev Chairman of the Internal Auditing Committee, Deputy Director on Capital Investments Head of the Department of Programs for Capital Investments, Rosatom State Corporation Marina Igorevna Kiseleva Liudmila Nikolayevna Demidova Member of the Internal Auditing Committee, Director of the Department of NPP Lifecycle of Rosatom State Corporation Member of the Internal Auditing Committee, Secretary, Director of the Department of Economics and Controlling of The Internal Auditing Committee did not receive any requests from the company s stockholders or the Board of Directors calling for any extraordinary checks or audits. In the course of the check, the Internal Auditing Committee randomly selected and examined documents related to the Company s financial and business operations which represent essential aspects of the Company s activities. In the course of the check the Internal Auditing Committee relied, among other things, on the auditor s opinion prepared by Accountants & Business Advisers LLC (FBK LLC) on the accounting (financial) statements of for Following the review, the Internal Auditing Committee: 1. States its opinion regarding authenticity of the information contained in the Company s accounting (financial) statements in all material aspects. 2. Has not established in the Company s financial and business activities any facts of non-compliance with the rules and procedures of business accounting and financial reporting under applicable legal instruments of the Russian Federation, or any other legislation of the Russian Federation which might have material impact on the authenticity of the Company s reporting information. Chairman of the Internal Auditing Committee Member of the Internal Auditing Committee Member of the Internal Auditing Committee, Secretary Pyotr Anatolyevich Stepayev Marina Igorevna Kiseleva Liudmila Nikolayevna Demidovа Appendix 10 Opinion of the Internal Auditing Committe

195 Report on the Concern s Compliance with the Corporate Management Code Recommended by the Bank of Russia The Concern pays big attention to the matters of corporate management and its improvement. The Concern strives to follow main provisions of the Corporate Management Code (hereinafter, the Code) recommended for use by the Bank of Russia, with due regard to the specifics of the composition of stockholders and activity of the Concern. The Concern applies recommendations of the Code to its practice of corporate governance considering them an important source for development of own internal documents, defining standards of the corporate management. The Concern also applies recommendations of the Code aimed at increasing efficiency of operation of managing bodies and control over their activity. In its operation the Concern strives to pay big attention to the following areas of corporate management indicated in the Code: Rights of stockholders and equitable treatment of stockholders when they exercise their rights; Regulation of activity of the Board of Directors; Disclosure of information about the Concern; Improving risk management and internal control system. For more details about application of recommendations provided in the Code please refer to Section 4 Corporate Management of this Annual Report. Appendix 11 Report on the Concern s Compliance with the Corporate Management Code Recommended by the Bank of Russia

196 Active Nuclear Power Units POWER PLANT UNIT NO REACTOR TYPE ELECTRICAL CAPACITY, MW JOINED THE GRID Balakovo NPP 1 VVER VVER VVER VVER Beloyarsk NPP 3 BN Bilibino NPP 1 EGP EGP EGP EGP Kalinin NPP 1 VVER VVER VVER VVER Kola NPP 1 VVER VVER VVER VVER Kursk NPP 1 RBMK RBMK RBMK RBMK Leningrad NPP 1 RBMK RBMK RBMK RBMK Novovoronezh NPP 3 VVER VVER VVER Rostov NPP 1 VVER VVER VVER Smolensk NPP 1 RBMK RBMK RBMK Appendix 12 Active Nuclear Power Units

197 Installed Capacity, Electricity Generation, and ICUF at NPPs of Rosenergoatom Concern OJSC in 2014 by Geographical Regions ITEM NO. NAME OF NPP UNIFIED POWER SYSTEM (UPS) CONSTITUENT ENTITY OF RUSSIAN FEDERATION NUMBER OF POWER UNITS POWER UNIT TYPE INSTALLED CAPACITY, MW* GENERATION OF ELECTRICAL POWER, MILLION KWH ICUF, % AVAILABILITY FACTOR, % 1 Kalinin NPP Center Tver Oblast 4 VVER 4,000 28, Kursk NPP Center Kursk Oblast 4 RBMK 4,000 29, Novovoronezh NPP Center Voronezh Oblast 3 VVER 1,834 13, Smolensk NPP Center Smolensk Oblast 3 RBMK 3,000 23, Kola NPP NW Murmansk Oblast 4 VVER 1,760 10, Leningrad NPP NW Leningrad Oblast 4 RBMK 4,000 25, Rostov NPP South Rostov Oblast 3 VVER 2,000 15, including power unit No. 3 (power start up on December 27, 2014) South Rostov Oblast VVER low power testing 8 Balakovo NPP Middle Volga Saratov Oblast 4 VVER 4,000 29, Beloyarsk NPP Ural Sverdlovsk Oblast 1 BN 600 4, Bilibino NPP East Chukotka Autonomous Okrug 4 EGP TOTAL for 34 25, , * Installed capacity of NPPs of in 2014 excluding power unit No. 3 of Rostov NPP (low power testing period, power start up on December 27, 2014). Appendix 14 Main Personnel Characteristics and Appendix 15 Table on Consideration of Suggestions Made by Stakeholders G4-27 may be found in the interactive version of the Report Appendix 13 Installed Capacity, Electricity Generation, and ICUF at NPPs of in 2014 by Geographical Regions

198 Glossary Automated radiation background control an automated system that measures strength of exposure to gamma rays within residential communities. Automated radiation control system an automated system including information and instrumentation systems and equipment that enable its functioning. This system collects and processes information about controlled parameters that characterize the radiological status in NPP controlled areas, at industrial sites, in the buffer area and radiation-control area, in all NPP operating modes, including project-specific and unforeseen emergency, as well as the NPP condition during decommissioning of its power units. Availability factor (AF) Refers to the capability of rated electrical load bearing of the power unit, expressed as the ratio of the sum of power generated by unit and power that wasn t generated by reasons unrelated to the power unit, to the power generated during this period of time under rated (installed) capacity. The standard value for a NPP is AF = 80%. ВОО (Build-Own-Operate) design circuit, where the design company that constructs the facility also subsequently owns and operates this facility. This form of project financing allows the accumulation of necessary financial resources, decreased investment risk, and combines the interests of various parties being members of the project. Closed nuclear fuel cycle a nuclear fuel cycle (NFC), where spent nuclear fuel unloaded from the reactor is recycled to recover uranium and plutonium to be reused in nuclear fuel. Commissioning a process when the systems and equipment of the power unit or the entire NPP are launched, and their project compliance is checked. The process includes pre-commissioning setup, physical and power commissioning, and production test operation; it concludes when the NPP is signed off for commercial operation. Concern Crisis Center a key component within the structure of emergency support to NPPs, it monitors main parameters of production, radiation, environment, and fire safety in the 24/7 mode. Conditional emergency a scenario assuming multiple damage failures and equipment, under which nuclear plant employees and emergency services drill issues of rapid response to unusual situations at the nuclear plant, and test readiness of personnel and equipment to eliminate likely emergencies. Core zone part of the reactor that houses nuclear fuel, the moderator, beta absorber, heat medium, reactive impact devices, and structural elements used to enable a controlled nuclear fission chain reaction and transmit the energy to the heat medium. Emergency drill set a set of exercise activities the Concern uses to train its NPP management, forces, and facilities to respond to an emergency. Fast reactor (fast neutron reactor) nuclear reactor in which the fission chain reaction is sustained by fast neutrons (with an energy of >105 ev). Floating thermal nuclear power plant (FTNPP) a mobile floating nuclear thermal and electric plant with small output capacity to be used in remote regions in Russia and abroad, including for the desalination of seawater. These units are non-propelled crafts with nuclear power unit, transported to the region of operation via waterways. Fuel element the key structural component in a nuclear reactor s core zone in which nuclear fuel is encapsulated. INES International Nuclear Events Scale, adopted to facilitate communication and understanding between nuclear industry specialists, mass media, and the public, as regards the magnitude of events/ incidents at nuclear units in terms of safety. The Scale places all events into one of its seven levels: higher-level events (4-7) are known as emergency ; lower-level events (1-3) are incidents. Events that are negligible in terms of safety are placed at level 0 beyond the Scale, and are known as departures. Events irrelevant to safety are placed beyond the Scale, and are known to be off-scale. Installed capacity use factor ratio of arithmetical unit (NPP) mean capacity to installed capacity for a specific time interval. Intellectual capital organizational intangible assets, including development of potential of already hired personnel and prospective employees (graduates ofinstitutions of higher education). NPP lifecycle all stages of evolution that a nuclear plant passes through during its existence; this includes design, construction, commissioning, operation, and decommissioning. Nuclear Energy Agency (NEA) dedicated agency under the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization of developed nations, having its headquarters in Paris, France. To date 30 countries are part of OECD. NEA s objective is to promote research and technological development and harmonization of national regulatory documents of member countries for safe, cost-effective, and ecologically clean use of nuclear power for peaceful purposes. Nuclear plant nuclear equipment used to generate energy in preset operational modes and conditions, installed within project-defined boundaries that uses for that purpose one or more nuclear reactors and a set of related systems, devices, equipment, and buildings with personnel. Appendix 16 Glossary

199 196 Nuclear plant safety a nuclear plant s ability, during normal and abnormal operation, including emergencies, to keep the radiation impact on its personnel, citizens, and the environment within specific required limits. Nuclear power industry section of the power industry that engages nuclear energy to produce heat and electric power. Nuclear reactor protection shell a device in a nuclear reactor designed to hold radioactive nuclides within the volume of the shell, in the event of emergency decompression of the reactor equipment. Nuclear reactor shell a tight reservoir designed to hold the core zone of the nuclear reactor, neutron reflector, monitoring and experimental hardware, and to organize the cooling of the reactor using a heat medium flow. Organization for Economic Cooperation and Development (OECD) international economic association of developed nations adherent to the principles of representative democracy and free market economy, whose mission is to promote economic growth in the OECD member states, and raise their contributions to global economic growth and development, fighting poverty in countries that are not OECD members. Power efficiency efficient (rational) use of energy resources, to achieve economically justified efficiency at the existing level of engineering and technology, given compliance with environmental protection regulations. Quality management system the entire set of organizational structure, methodology, processes, and resources needed for general management of quality; designed to ensure continuous improvement of operations, making the business more competitive on the domestic and global markets, the system is part of the corporate management system and determines any entity s competitive ability. Radiation dose in radiation safety, a measure of impact by ionizing radiation on a biological object, typically a human. Doses can be by exposure, absorption, and equivalent. Radiation monitoring collecting information about the radiation situation at nuclear plants in the environment, and exposure to humans. Radiation safety condition when the existing and future human generations are protected against health-damaging impacts of ionizing radiation. Radioactive emission a substance (or mix) as a gas and/or aerosol, released into the environment (air) from emitting sources. RBMK (large-capacity multi-channel reactor) channel-type, water-graphite energy reactor with electric capacity equal or above 1 GW, where water boils in duct channels, and saturated steam is supplied from separators into the turbines. Reactor unit a set of NPP systems and components designed to convert nuclear energy to heat, including a reactor and directly related systems that support its normal operation, emergency cooling, emergency protections, and safety assurance, and provide compliance with mandatory auxiliary and support functions from other systems of the power plant. The limits for the reactor unit are stated specifically for each NPP in its project pack. Safety culture culture where all individuals are trained, skilled, and psychologically prepared, ensuring that NPP safety becomes a priority and inherent need that results in understanding and self-control during safety-related activities. Safety protections systems (components), designed to prevent or mitigate damage to nuclear fuel storage, thermal housing, equipment, and pipelines that contain radioactive substances. Situation Crisis Center a center that ensures technical, technological, information exchange, and analytic support to activities of the HQ of Rosatom State Corp., and involvement in information support to ongoing management of the industry both under routine conditions and in emergencies. Spent nuclear fuel nuclear fuel contaminated in the reactor s core zone and withdrawn from it completely. Unforeseen emergency an emergency caused by triggers not considered in project-specific emergencies, or accompanied by additional, compared to project-specific, emergency scenarios, failures of safety systems in excess of the single-failure scenario, and complicated by human error. Uniform State System to Prevent and Eliminate Emergencies (UPEE) an organizational system that integrates bodies of management, forces and means commanded by the Federal Government, the governments of constituent subjects of Russian Federation, local governments, and organizations, whose functions include addressing issues regarding protecting the public and territories in emergencies. The system is designed to protect citizens and land against natural, industrial, or other disasters, to provide defense at times of peace for citizens, territories, and the environmental, material, and cultural values of the land. WANO World Association of Nuclear Plant Operators, whose mission is to maximize the safety and reliability of nuclear plant operations worldwide through exchange of information and encouraging contacts among its members, comparing their working results and promoting best practices. Water-Water Energy Reactor (VVER) a shell-protected power reactor using water under pressure as heat medium, moderator, and neutron reflector. Appendix 16 Glossary

200 Abbreviations AF availability factor AMCS access management and control system АRCS automated radiation control system ASIDC automated system of individual dosimeter control, used by personnel at a nuclear plant ASRSC automated system of radiation situation control DEDC decommissioning experimental demonstration center (NPP) EDC emergency drill complex ESL extension of service life FE fuel element FPU floating power unit FTNPP floating thermal nuclear power plant HPF hazardous production facilities ICT information and communication technologies ICUF installed capacity use factor IRG inert radioactive gas LSRWS liquid and solid radioactive waste storage MDGU mobile diesel generator units MCP main circulation pipeline NPF nuclear power facility NPP nuclear power plant NPP DEU nuclear power plant drill exercise units OECD Organization for Economic Cooperation and Development OO operating organization PD permissible discharge PE permissible emissions PO pilot operation PS pollutant substances QAP quality assurance program RBMK large-capacity channel reactor RCR resource characteristics recovery (RBMK reactors) RCS radiation control center R&D research and development RW radioactive waste SBC standing buying committee SCC Situation Crisis Center (Rosatom) SFA spent fuel assembly SNF spent nuclear fuel SNFS spent nuclear fuel storage TSC technical service center UPEE united system for prevention and elimination of emergencies VVER water-water energy reactor WANO World Association of Nuclear Plant Operators Appendix 17 Abbreviations

201 Feedback Form Dear Readers, We have been pleased to offer for your consideration the Annual Report for It is important to us to ensure that the dialogue with all of our stakeholders is as transparent and as honest as possible. Please take the time to fill out the feedback form below. Your comments and suggestions are essential, as they will help us to improve the quality of future reports, and make them more informative and relevant. Please send the completed form to:, ul. Ferganskaya, d. 25, Moscow , or by to: Contact person for report content Aleksandr Berenzon, Senior Specialist, Department of Information and Public Relations, tel. +7 (495) TO WHICH GROUP OF INTERESTED PARTIES DO YOU BELONG? Shareholder/ investor Employee of the Concern Representative of government structures/ public organizations Media representative Member of the expert community Other (please specify) 1. DID THIS REPORT ANSWER YOUR QUESTIONS? Yes, all of them Yes, partly No 2. WHAT OTHER INFORMATION WOULD YOU LIKE TO SEE IN THE NEXT ROSENERGOATOM CONCERN OJSC ANNUAL REPORT? 3. PLEASE ASSESS THIS REPORT USING THE FOLLOWING CRITERIA: Criterion Excellent Good Satisfactory Poor Relevance and substance of issues addressed Reliability of information Structure of information and ease of search Design THANK YOU FOR TAKING PART! Appendix 18 Feedback Form

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