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GENERATING RECORDS

2014ANNUAL REPORT 2

Strategy and Outlook page 26

«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». ALEXANDER LOKSHIN Chairman of the Board of Directors, Rosenergoatom Concern OJSC, First Deputy General Director for Operations Management, Rosatom State Corporation 9 1 189 NPP power units ﬂoating power unit bln KWh – under construction under construction production plan for the year 2015

Key Performance Results page 36

bln KWh – additional power generation years with no events due to VVER-type power above Level 1 according 14.3units capacity increase 15to the INES scale

NPP installed capacity share NPP electricity production Power generation compared in total capacity of Russia’s share in total production of to the FTS balance 11 UES Russia’s UES VVER-type power units operate at increased capacity

10.9% 17.6% 107.3% 3

Corporate Governance page 124

bln rubles – MAIN PRINCIPLES e*$,!%&% &$ #!$&,+)+,$' %* economic impact of the OF CORPORATE safeguard of funds provided )+,%#2 %"$*+&, $!*$ #!$&,4+$? competitive procurement MANAGEMENT procedures e/4"& !*,*$,'$&,,% all stockholders when they exercise their 5.8 right to take part in management.

e$#%3&!,!%&% +,,4*%*)*!3 ,+ of stakeholders.

e!'$")&##4*,$!+#"%+4*$% 4 22 546 !& %*',!%&%&""+!3&! #&,$-$&,+ associated with Concern's activity. general meetings of meetings mln rubles – shareholders held of the Board o remuneration of the key in 2014 f Directors managerial personnel

Interaction with page 150 Stakeholders

Sosnovy Bor

regions taking town of Kurchatov part in the Novovoronezh Atom-Class project Zarechny 6 settlement Volgodonsk of Novy Eroglyk

16 8,000 5,000 41 Public discussions public discussions Persons visit the Community project recognized participants Information Centers the winner of the socially held in the Concern of NPPs yearly +!3&! #&,(*%1$#,+ presence regions competition 4

Contents

Key Performance Results ...... 6 OVERVIEW STRATEGY AND OUTLOOK Business Model ...... 8 2014 Calendar of Key Events ...... 10 1.1. General Information...... 22 2.1. Mission ...... 28 Business Geography ...... 12 1.2. History ...... 23 2.2. Business Model ...... 28 Address by Board 1.3. Corporate Structure ...... 24 2.3. Strategic Goals and Initiatives . . . 32 of Directors Chairman ...... 15 2.4. Material Aspects Address by General Director...... 16 of Performance...... 34 Concern’s Awards ...... 18 Public Reporting Awards ...... 19 2 5

KEY PERFORMANCE RESULTS CORPORATE GOVERNANCE INTERACTION WITH STAKEHOLDERS

3.1. Situation in Electric 4.0. Corporate Governance...... 126 5.1. Interaction with Stakeholders Power Industry ...... 38 4.1. Concern’s Corporate in Reporting Period ...... 152 3.2. Production Capital. Governance Structure ...... 127 5.2. Interaction as this Annual Generating Capacities ...... 42 4.2. Governance and Control Report Was Prepared ...... 156 3.3. Ensuring Safety of Russian Bodies ...... 128 5.3. Stakeholders Commission...... 157 NPPs. Radiation Impact on 4.3. KPI. Employee Evaluation 5.4. Public Reporting System ...... 158 Personnel and Citizens ...... 62 and Remuneration ...... 136 3.4. Natural Capital. 4.4. Internal Control and Auditing . . . 138 Environmental Impact ...... 76 4.5. Risk Management ...... 141 3.5. Developing Generating 4.6. Quality Management ...... 143 Potential ...... 82 4.7. Purchase Management ...... 146 3.6. Financial Capital. 4.8. Property Management...... 147 APPENDICES Performance Results ...... 86 4.9. Information Technology...... 148 TO THE ANNUAL REPORT ...... 159 3.7. Human Capital. Labor Protection ...... 91 3.8. Intellectual Capital. Knowledge Preservation 3and Transfer. Innovations 45 Management ...... 102 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity ...... 106 3.10. Investments in Development . . . 113 3.11. International Activities ...... 116 6

Key Performance Results

The second place among 0 0 the world’s leading companies The first place among in terms of NPP installed Russian electric power capacity and operating N 1generation companies N 2units quantity Asset value, mln rubles Registered capital, Net asset value, Power generation, Investments in equity, mln rubles mln rubles bln KWh mln rubles

1,355,827 1,240,961 1,181,245 177,270.3 1,059,013 154,191.0 1,087,826 671,517 671,517 177.3 180.5 146,230.5 936,154 172.2 530,012

2012 2013 2014 2012 2013 2014 2012 2013 2014 2012 2013 2014 2012 2013 2014

Labor efficiency, Average headcount, Charitable contributions, Installed capacity use EBITDA margin, % thousand rubles/pers. pers. mln rubles factor (ICUF), %

6,753.8 44.95 44.26 37,492 586 6,420.3 35,933 36,269 40.66 80.9 81.6 466.7 77.9 5,743.3 396

2012 2013 2014 2012 2013 2014 2012 2013 2014 2012 2013 2014 2012 2013 2014

9.2 2.6 417.8 34.1 bln rubles – ln rubles – % – net proﬁt increase bln rubles – labor safety expenditures social policy expenditures in 2014 international orders portfolio Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 7

years with no events above Level 1 according NPP share in Russia’s 15to the INES scale 17.2%energy balance 1. In 2014, 8,632 mln rubles 1 Revenue, mln rubles Net profit, mln rubles Taxes paid, mln rubles, including: were transferred to Atomenergo- prom JSC – a responsible 9,238 21,094 participant in the consolidated group of taxpayers (CGT) for the 253,215 3,609 purpose of proﬁt tax payment 232,857 (5,601 mln rubles in 2013). 200,526 18,274

182 4,280 2,211 11,043

13,572 189 -1,849 3,991 6,867 2012 2013 2014 2012 2013 2014

Gross profit, mln rubles Total volume of profit tax payments accrued, 204 mln rubles 6,967 105,607 96,309 9,325 6,938 76,115 6,254

5,351 4,801 – Personal income tax – local budgets 2,411 – Budgets of constituent entities of the Russian Federation – Federal budget 2012 2013 2014 2012 2013 2014 2012 2013 2014

180.5 107.3 106.6 189 bln KWh – power generation % – FTS balance fulﬁllment % – total value of the KPI bln KWh – in 2014 fulﬁllment in 2014 power generation plan for 2015 8

Business Model*

Resources Key business processes

12PRODUCTION AND INNOVATIVE CAPITAL

33 10 25.2 KEY PROCESSES Units NPPs GW — Installed capacity Operation of existing 11.9 118.3 NPPs Procurement bln rubles incl. VAT procedures totaling Construction management of new NPP units FINANCIAL CAPITAL (BLN RUBLES) Sale of electrical 232.9 2.211 476.7 and thermal power Revenue Net proﬁt Investments in 2013 in 2013 in equity Service of NPPs for 3 years designed in Russia abroad

HUMAN CAPITAL DEVELOPMENT PROCESSES 37,492 Organization/performance Persons — headcount of R&D work

Modernization of existing NPPs SOCIAL AND NATURAL CAPITAL

11 200 Development of international activity Geographical Ha — Area of NPPs with VVER-type regions high capacity units of operations

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 9

* For the detailed business model description see Page 25

Value Creation. Results of 2014

PRODUCTION AND INNOVATIVE3 CAPITAL 180.5 81.6% Bln KWh — ICUF generation 17.2% Share in Russia’s energy balance

FINANCIAL CAPITAL (BLN RUBLES)

253.2 9.2 18.3 Revenue Net proﬁt Taxes paid

HUMAN CAPITAL

4.9 6.7 Mln hours — Mln rubles/pers — employees labor efﬁciency training

SOCIAL AND NATURAL CAPITAL

-5.9% 0.4 Atmospheric Bln rubles — emissions Investments reduction in communities

2014 Calendar of Key Events

MAY JUNE AUGUST OCTOBER

TheThe NinNinthth IInterna-Inn CoCommenceCommencementmmencem of RRosenergoaRosenergoatomosenergoa Con- The contract extending RostekhnadRostekhnaRostekhnadzor granted ttionalional ScScieScientifiient c and work on bribrinbringingn the cern was rerecrecognizedc the operation term for tthehe lilicensecense ffor an TTechnicalechnihnicalcal CoConference BN-BN-800800 rreareactorea of the as the best ttechnical the 5th power unit to aadditionaldditional ooperating “Safet“Safety,y, EfEffifi ciency, and new ppowerower uunit No. 4 susupervisorpervisor sservice of 60 years was executed pperioderiod ooff 25 years for EEconomicsconomics oof Nucle- ooff the BeloBeloyBeloyarsky NPP Rosatom SStStatet Corpo- between the consor- ppowerower unit NNo. 4 of the ar Power InIndIndustry”d to the loweloweslowests capacity rrationation in 2202014.0 tium of Rosenergoatom KKolaola NPPNPP.. ((MNTK-2014)MNTK-20011 orga- lelevel.vel. Concern OJSC – Ru- nized bbyy ththehe Concern satom Service CJSC – took place iinn Moscow. EDF, and the Kozloduy NPP. 07.08 27.06 08.10 21-23.04

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 11

More detailed information on the key events may be found in the interactive version of the Report

DECEMBER

Memorandum of Co- The aannualnnual task of IInn ththee nnightight between PoPowerwer uunitnit NNo. 3 of For the fi rst time ever operation was signed tthehe FTFTSS ooff RRussia tthehe 21 aandnd 22 of De- tthehe RRostovostov NNPP was in the nuclear power between the AAP NP on power gegeneration cecembermber RusRussian NPPs iincludedncluded iinn tthe Russian industry Russian NPPs Fund and the Hun- ((168.3168.3 blnln KKWh) was ffollowedollowed thrththroughr with uniunififi ed eneenergynerr system. achieved a record garian Association of comcompletedpleted aahead of the tartargetget iinindicatorn of aggregate capacity of Social Inspection and scscheschedulehedule Rosatom StState Corpo- over 26.4 GW (with the Information (TEIT). ration havihavingvinn gener- NPP installed capacity ated 1717555bl bblnl KWh of of 25.2 GW). electrical ppopower.o 27.12 11.12 21-22.12

12 Business Geography

KOLA NPP

LENINGRAD NPP KALININ NPP

SMOLENSK NPP

KURSK NPP

NOVOVORONEZH NPP

BELOYARSK NPP ROSTOV NPP BALAKOVO NPP

installed capacity 25.2 GW

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 13

Active NPP Active units

BILIBINO NPP

2.5% Beloyarsk NPP 0.12% 5.7% Bilibino NPP Kola NPP 16.5% 7.3% Balakovo NPP Novovoronezh NPP

8.7% Rostov NPP Generated in 2014 vs all 16.2% electric power of Kursk NPP the Concern 13.1% Smolensk NPP

15.7% Kalinin NPP 14.1% Leningrad NPP

of electric power generated in 2014 180.5BLN kWh

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 2015.

The strategy of the Concern as an electric power branch of Rosatom State Corporation is tradition- ally based on the strategic goals and objectives of the Corporation. Pursuant to this strategy, the priority development objectives of the Concern are safe, efﬁ cient, and reliable operation of the functioning NPPs, increase of the nuclear generation share in the power balance of Russia, Dear colleagues, implementation of innovative projects, entry into the international market, and general increase of The year 2014 was not easy for the Concern. efﬁ ciency.

Power start-up of the 3rd power unit of the Every year the Concern performs increasingly am- Rostov NPP completed ahead of schedule be- bitious tasks set by the state and Rosatom State came one of the most important events for the Corporation thus confi rming its leading position in entire nuclear industry. This achievement was the market in the era of fi erce competition. I hope recognized at the annual competition “Rosa- that despite all the hardships Rosenergoatom will tom’s Person of the Year” where a joint team of successfully continue to perform a demanding the Concern and NIAEP-ASE received the fi rst task of ensuring Russia’s energy security. award in the nomination “Victory of the Year” for early power start-up of the 3rd power unit of the Rostov NPP. Alexander Lokshin, Chairman of the Board of Directors, Rosenergoat- At the same time postponement of start-up of the om Concern OJ SC, First Deputy General Director 4th power unit of the Beloyarsk NPP and the 6th for Operations Management, Rosatom State power unit of the Novovoronezh NPP for 2015 Corporation

Address by General Director

of electricity production. In 2014 the Concern achieved the record output of 180.5 bln kWh which amounts to 104.8% of the production in the previous year. The balance of the Federal Tariff Service was fulﬁ lled by 107.3%.

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 2013. The aggregate reduction of repair timelines of generating power units in 2014 amounted to 158.5 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 Dear Sirs and Madams, and No. 2 of the Leningrad NPP were completed. Both repairs were performed in accordance with I am pleased to present you the seventh inte- duration target values – within 180 days. grated Rosenergoatom Concern Annual Report describing the main results of operations in the THE LAUNCH OF THE GENERATING POWER UNIT year 2014. The report covers ﬁ nancial, produc- NO. 3 OF THE ROSTOV NPP BECAME ONE OF THE tion, social, and environmental aspects of the PRINCIPAL ACHIEVEMENTS OF THE YEAR FOR THE Concern’s activity and has been put together by ENTIRE RUSSIAN NUCLEAR INDUSTRY. THE EVENT a big team of technical specialists and managers TOOK PLACE ON DECEMBER 27, 2014 AND BECAME in accordance with the best practices and best TWICE AS VALUABLE FOR THE CONCERN WHICH IS Russian and international reporting standards. AN ORDERING CUSTOMER OF NEW GENERATING POWER UNITS BECAUSE THE LAUNCH WAS INITIAL- For several years in a row the Concern has been LY SCHEDULED FOR 2015. holding a leading position among the largest Russian energy companies in terms of volumes

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 17

One of the challenges of our construction sites I am sure that the Concern will make every effort lies in increasing efforts in order to ensure a safe to complete the ambitious goals set by Rosatom work environment and reduce the injury rate. Al- State Corporation and the state, and this work will though the overall injury rate at the Concern is the contribute to the further development of our com- lowest in the nuclear industry, construction sites petitive advantages both in domestic and interna- of our subcontractors leave room for improve- tional markets. We are confi dent that our work on ment. We are well aware of it and are implement- increasing labor effi ciency to the level of the best ing integrated system of labor protection which international practices will help us achieve the brings along actual results. goals. Guided by the principles of responsibility, professionalism, and mutual trustin general and days – total reduction The Concern confi rms its reputation as a socially in our interaction with the stakeholders, we will 158.5of power units sched- responsible company. In 2014 the Concern spent be able to ensure sustainable development of the uled repair time in 2.6 bln rubles on its social policy. Yet another Concern in the long-term perspective. 2014 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 Yevgeny Romanov, Oblast), a stadium and a sports complex became General Director operational in the city of Novovoronezh where the of Rosenergoatom Concern OJSC fi rst 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 efﬁ ciently enter the global markets.

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.

Concern’s Awards

1st place in the “Gener- The winner of the “Best Technical Super- The Russian Federation ating Companies: Mar- 11th Anniversary visor Service of Rosa- Government science ket Efﬁ ciency” rating, V.I. Vernadsky Na- tom State Corporation and technology prize compiled by Market tional Environmental 2014”. for 2014 to the team of Council Non-Commer- Award Contest in the the Concern’s specialists cial Partnership basing nomination “Energy who have resolved an on the results of 2014. Industry of the Future: unprecedented task of Developing New resource characteristics Energy Sources and recovery of the graphite Increasing Efﬁ ciency of stack of RBMK reactors. Renewable Sources of Energy” for the project “Implementation Sys- tem of Environmental Policy of Rosenergoat- om Concern OJSC and ecoIts Branches”

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 19

Public Reporting Awards

Diploma for active Five-time winner of the Nominee of the Annual 1st place in the 3rd place in the cor- participation in the 1st international MarCom Reports Competition nomination “Best porate transparency All-Russia Exhibition Awards 2014: Plat- organized by Ex- Electronic/Interactive rating among the larg- of Sustainable Devel- inum Award winner pert-RA rating agency Annual Report”, 2nd est Russian companies opment Reports. in the nominations in the nomination “Best place in the nomina- basing on the results of “Annual Report on Cor- Interactive Annual tions “Best Level of the year 2013 pre- porate Social Respon- Report”. Information Disclosure pared by the Russian sibility” and “Electronic in Annual Report” and Regional Network for Communications/ “Best System of Public Integrated Reporting. Electronic Annual Reporting”, 3rd place in Report”, Gold Award the nomination “Best winner in the nomina- Public Annual Report” tions “Annual Report” of the 6th Public and “Annual Report Reporting Competition of the Corporation”. among organizations “Honorable Mention” in of Rosatom State the nomination “Text/ Corporation. Annual Report”.

awards won at awards won at the 54MarComAwards 6th Public Report- 2014 ing Competition among organizations of Rosatom State Corporation

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

1.1. General Information

Rosenergoatom Concern OJSC is one of the THE CONCERN HAS JOINED THE FOLLOWING largest electric power generation companies in CHARTERS AND INITIATIVES AND IS A MEMBER OF THE FOLLOWING ASSOCIATIONS Russia, and Russia’s only nuclear plant operator Pursuant to the resolution of the general meet- The Concern has integrated, as branch compa- ing of the Concern on July 17, 2014 (Minutes nies, active nuclear plants, directorates of nuclear No. 8), the Concern jointly with TVEL JSC, Science plants under construction and the Facilities and Innovations CJSC, Russian Nuclear Soci- Construction Directorate, Science-Research ety Non-Governmental Organization, and the Center for Emergency Response at NPPs, Science Association of Institutions of Higher Education and Engineering Center, Pilot and Demonstration “Consortium of Supportive Institutions of Higher Engineering Center for Decommissioning, Engi- Education of Rosatom State Corporation” took neering Design Branch Offi ce, Technology Branch part in setting up the association National Nuclear Offi ce, Resource-Bulgaria Historical Perspective Innovation Consortium. The association is aimed Fund, and Directorate for Construction and Op- at promoting expert community of the organi- eration of Floating Thermal Nuclear Power Plants zations which form Rosatom State Corporation (see Section 1.3). The Concern also maintains its and specialized institutions of higher education, representative offi ce in the People’s Republic of accrediting educational programs, setting up a China. fi nal profi ciency examination of educated young professionals prior to their employment in the The Concern’s main occupation is generation of industry (qualifi cation approval), and monitoring electrical and thermal energy at its nuclear plants, by industry organizations of young specialists’ as well as management of nuclear plants, sourc- education quality. es of radiation, nuclear material and radioactive substance storage sites pursuant to the procedure set forth by the legislation of the Russian Federation.

The stockholders of Rosenergoatom Concern OJSC are Atomenergoprom JSC (96.9907%) and Rosatom State Corporation (3.0093%).

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 23

1.2. History

1992 2001

State-owned enterprise “Russian State Concern In accordance with the Federal Government Direc- for Production of Electric and Thermal Energy at tive No. 1207-r of September 8, 2001, starting Nuclear Power Plants” Open Joint-Stock Compa- on April 1, 2002, with the intention to improve ny (Rosenergoatom Concern OJSC State-Owned operating efﬁ ciency of nuclear plants, Rosen- Enterprise) was established by Presidential ergoatom Concern SOE was reorganized into a Decree No. 1055 of September 7, 1992 On generating company (Rosenergoatom Concern Operating Entity of Nuclear Plants of the Russian FSUE) by merging with all nuclear plants, both in Federation. operation and under construction.

The Decree ruled that Rosenergoatom Concern Apart from its functions as an operator, this entity State-Owned Enterprise (SOE) was a state- was able to act independently in the power mar- owned enterprise that independently and through ket and sell power generated by the nuclear plants outsourcing was engaged in all stages of the life to solvent users. cycle of nuclear plants, regarding the selection of construction sites, project design, construction, commissioning, operation, decommissioning, and 2007 other operating functions. To assist further development of the nuclear pow- The same Decree ruled that the assets of nuclear er industry and to restructure the nuclear power plants which at that moment were in operation, complex in Russia, as instructed by Presidential under construction, in project design phase, or Decree No. 556 of April 27, 2007, the Federal abandoned, were owned by the Federal Govern- Government issued Resolution No. 319 of May ment and assigned to Rosenergoatom Concern 26, 2007, under which Atomenergoprom JSC SOE, who was fully in charge and in control was incorporated in July 2007, of which Rosatom of them. The idea was to use Rosenergoatom State Corporation is the sole stockholder. Concern SOE as a platform to integrate all nuclear plants, which under the Decree had received the exclusive rights of self-governed business units. 2008

During the 1990s one of the main tasks facing By Directive No. 1235-r of the Federal Agency for Rosenergoatom Concern SOE was to overcome State Property Management of August 11, 2008, the transition difﬁ culties and, ﬁ rst and foremost, Rosenergoatom Concern FSUE was reorganized to resolve the problem of non-payments for the into Energoatom Concern OJSC, which surrendered energy supplied by NPPs. 100% of its stocks to Atomenergoprom JSC.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 24

for Production of Electric and Thermal Energy at 2009 Nuclear Power Plants (Rosenergoatom Concern OJSC). By Federal Government Resolution No. 1307-r of September 14, 2009, the Concern became entitled to use the word “Russian” in its corporate 2011 name. In November 2009 the sole stockholder of Energoatom Concern OJSC decided to add mod- In 2011 Rosatom State Corporation became iﬁ cations into the Concern’s Articles of Incorpo- another stockholder of Rosenergoatom Concern ration related to its new name: Russian Concern OJSC, together with Atomenergoprom JSC.

1.3. Corporate Structure

CENTRAL ADMINISTRATION OF ROSENERGOATOM CONCERN OJSC

AFFILIATES – NPPS AFFILIATES AFFILIATES – REPRESENTATIVE IN OPERATION DIRECTORATES OFFICE OF NUCLEAR PLANTS UNDER 1 2 3CONSTRUCTION 4 Balakovo NPP Science-Research Center Directorate of Len- Russian Representative for Emergency Response ingrad NPP-2 (under Office in Lianyungang Bilibino NPP at NPPs construction) (People’s Republic of Beloyarsk NPP China) Directorate for Construc- Directorate of Baltic NPP Kalinin NPP tion and Operation of (under construction) Floating Thermal Nuclear Directorate of Kursk Kola NPP Power Plants NPP-2 (under Kursk NPP Engineering Design Branch construction) Ofﬁ ce Leningrad NPP Directorate of Nizhny Novovoronezh NPP Technology Branch Ofﬁ ce Novgorod NPP (under construction) Rostov NPP Resource-Bulgaria HPF Directorate of Voronezh Science and Engineering Smolensk NPP NPP (under construction) Center Directorate of Kostroma Pilot and Demonstration NPP (under construction) Engineering Center for Decommissioning Directorate of Bashkiria NPP (under construction)* Facilities Construction * Under liquidation Directorate

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 25

^ Balakovo NPP CONCERN CONSOLIDATION PERIMETER1 and systems, engineering operations on technical support of active power units of Russian and foreign ROSENERGOATOM CONCERN OJSC NPPs, and training of NPP personnel. The main activity of the Concern is production of electricity and heat by nuclear plants and manage- VNIIAES JSC ment of nuclear plants, radioactive sources, nuclear Research and technology support, operations material, and radioactive substance storage sites support of Concern’s NPPs: dealing with issues pursuant to the procedure set forth by the legisla- of NPPs’ operations, increase of efﬁ ciency, tion of the Russian Federation. extension of the operation term, safety and cost effectiveness of NPPs, development of technical ATOMENERGOREMONT JSC requirements and concepts of new NPPs with Maintenance, repair, and modernization of VVER reactors. Design, system integration, and equipment of nuclear plants, including design and supply of automated process control system com- technology, repair, and assembly operations. plexes for the NPPs that are operating or under construction, as well as development and supply ATOMENERGOSBYT JSC of simulators. Supply of electricity to consumers in Kursk, Tver, Smolensk, and Murmansk Oblast as a guaranteed VPO ZAES JSC supplier. Sale of additional goods and services as Organization and provision of services on manu- part of AtomEnergoSbyt JSC product line devel- facture quality control and acceptance of equip- opment. A sole executive body of the subsidiaries ment and nuclear fuel for companies of Rosatom and afﬁ liates of Atomenergopromsbyt JSC, Atom- State Corporation, Rosenergoatom Concern OJSC, TeploSbyt LLC. An independent power supply and foreign customers; expert appraisal of design company, including power supply to companies and process control documentation of nuclear in- of Rosatom State Corporation from the wholesale stallations and storage sites of nuclear materials market of electrical power and capacity (Order of and radioactive substances. Rosatom State Corporation No. 701 of October 8, 2009).

ATOMTEKHENERGO JSC 1. The list of subsidiaries Organization, management, and actual commis- and affiliates is provided in sioning of NPPs, including all types of start-up Appendix 2 – Banking Details and Contact Information. and adjustment operations for all NPP equipment

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 2. STRATEGY AND OUTLOOK

Nuclear power generation efﬁ ciency 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

2.1. Mission

Rosenergoatom Concern OJSC sees its mission as federal standards and security rules, compli- supplying consumers with electrical and thermal ance with institutional standards; • economic efﬁ ciency of electrical and thermal power produced by the Concern NPPs, with guaran- energy production at NPPs; teed safety as its top business priority. • safety culture improvement.

The Concern’s core values are energy security and As a corporate operator, the Concern is fully economic development of Russia, protection and responsible for ensuring nuclear and radiation safety of people, and environmental protection. safety at all stages of the NPPs life cycle: loca- The Concern implements the following principles tion, design, construction, operation, and decom- during its main activity of NPPs operation: missioning of NPPs.

• ensuring nuclear, radiation, technical ﬁ re, 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 de- The business model reﬂ ects processes and re- scription of the Concern’s internal and external sources participating in the value chain. processes and is provided as a transformation of input resources to tangible and marketable results The Concern’s value chain forms part of Rosatom (cost for stockholders, products, and services). State Corporation common industry processes organized in accordance with fuel and equipment The Concern’s business processes include two life cycles. main areas:

1. Main processes. 2. Development processes.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 29

KEY PARTNERS PROCESSES AND ASSETS PRODUCTS, SALES CHANNELS, AND RESOURCES AND CONSUMERS

KEY PARTNERS KEY PROCESSES PRODUCTS

• Construction, assembly, • Operation of existing NPPs; • Electrical and thermal power; and repair organizations • Construction management of new • Services. and enterprises; NPP units; • Supplier of nuclear fuel, • Sale of electrical and thermal power; and plants involved in spent • Service of NPPs designed in Russia SALES CHANNELS nuclear fuel; abroad. • Suppliers of systems and • Wholesale market equipment; DEVELOPMENT PROCESSES for electricity and power; • Design organizations; • AtomEnergoSbyt OJSC; • Engineering departments; • Organization/performance • Regional market for thermal power; • Research and development of R&D work; • Rusatom Service CJSC. centers. • Modernization of existing NPPs; • Development of international activity.

CONSUMERS

RESOURCES MAIN ASSETS • Major industrial enterprises; • Guaranteed suppliers; • Financial; • 33 units with total installed capacity • Energy supply companies; • Human; of 25.2 GW; • End consumers. • Natural. • Intellectual Property.

KEY PARTNERS AND RESOURCES SUPPLIERS OF SYSTEMS AND EQUIPMENT

CONSTRUCTION, ASSEMBLY, AND REPAIR First of all these are the companies manufac- ORGANIZATIONS AND ENTERPRISES turing equipment and management and control systems for the NPPs, as well as third party Organizations and enterprises providing services suppliers of materials and services which help the for the Concern during construction and operation Concern to obtain materials and services from the of the NPPs. open market.

SUPPLIERS OF NUCLEAR FUEL AND PLANTS DESIGN ORGANIZATIONS THAT SPECIALIZE IN SPENT NUCLEAR FUEL REGENERATION Design institutions involved in the development of preliminary and detailed design documentation Companies supplying reactor fuel assemblies for the NPPs scheduled for construction. (FAs) to the NPPs and accepting spent nuclear fuel for storage and reprocessing.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 30

ENGINEERING DEPARTMENTS KEY PROCESSES

Industry companies that deal with engineering OPERATION OF EXISTING NPPS reactor plants for new NPP power units, auxiliary equipment, and its components. Management of equipment, nuclear fuel, and the operating process to produce electrical power and RESEARCH AND DEVELOPMENT CENTERS heat for sale.

Research, development, design, and engineering NEW NPP POWER UNITS CONSTRUCTION organizations of nuclear power industry providing MANAGEMENT research and technical support to nuclear power plants and striving to increase reliability, safety, Formation of the Concern’s fi xed productive as- and economic effi ciency of NPP power units. This sets and infrastructure from the investment plan work also includes developing intelligent systems, to delivery of a fi nished asset for operation. software and hardware complexes, simulators, automated process control system complexes, ELECTRICAL AND THERMAL POWER SALE NPP technical diagnostics, and virtual modeling systems for new projects. Electrical power sale in the Electrical Power (Ca- pacity) Wholesale Market (ECWM) and directly to FINANCIAL end consumers of electricity and heat.

Revenues from the federal budget, incomes from DEVELOPMENT PROCESSES the wholesale market for electricity and power, credit resources from banks and ﬁ nancial insti- Organization/performance of R&D work by the tutions necessary for carrying out ﬁ nancial and Concern aimed at resolving long-term tasks of the economic activity. Concern’s production and technical research activity to the extent of modernization of NPP power HUMAN unit design and construction processes, increase of service life of main equipment, implementation The Concern uses the open labor market to of new materials and processes, and development select labor resources with required competence. of new reactor units. However, specialized skillsets absent in the open market are formed by the Concern in-house. MODERNIZATION OF EXISTING NPPS

NATURAL Activity aimed at increasing operating performance of NPPs, subject to unconditional safety at Mainly water resources required for electrical all stages of their life cycle. power and heat production process at NPPs, as well as land plots for new NPP power units DEVELOPMENT OF INTERNATIONAL ACTIVITY construction. CONSISTS OF FIVE MAIN BLOCKS:

The Concern strives to further reduce the environ- Marketing – collection and analysis of information mental impact of its activity. to determine parameters of effective demand, desired commodity (consumer) properties, target markets and consumers, and promotional channels.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 31

Service development – the Concern’s activity on After-sale service – includes reclamation pro- forming a line of services with required consumer cessing and provision of paid and free additional properties, approaches to pricing and interaction services to ensure competitive performance as with target clients. part of long-term interactions with consumers.

Sales and contracting – corresponds to activity PRODUCTS, SALES CHANNELS, AND on service promotion, consumer search, and inter- CONSUMERS. VALUE CREATION FOR action with consumers up to signing a contract. STAKEHOLDERS

Production (provision) of services – performance The Concern uses sales channels for sale of of contractual obligations up to accepting the products (electrical power and heat) and services provided services and receiving the payment. to consumers.

CONCERN’S KEY PARTNERS

NIAEP JSC 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.

ATOMPROEKT JSC The only company in Russia designing NPPs with various types of nuclear reactors: VVER, BN, and RBMK, as well as thermal power facilities.

Atomenergoproekt JSC 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 JSC 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 ﬂ eet.

GHK FSUE 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.

PO Mayak FSUE Reprocessing of spent nuclear fuel of nuclear reactors.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 32

2.3. Strategic Goals and Initiatives

The Concern’s strategy is part and parcel of the Efﬁ ciency improvement of nuclear generation in business strategy of Rosatom State Corporation the Russian Federation, closure of the nuclear fuel cycle, and international expansion, servicing and is based on provisions of Russian Energy of VVER power units abroad, comprise the main Strategy up to 2030. 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 Strategic goals Strategic objectives Contribution State Corporation of the Concern of the Concern in 2014

Ensuring nuclear radiation Ensuring safe, efficient, and reliable operation • A set of measures on safe and sustainable work of operating See Section 3.3 safety, legacy issues solving of existing NPPs, nuclear and radiation safety NPP power units (OBURDE) (modernization of NPP systems of facilities which use nuclear power, protection and equipment aimed at safe, reliable, and sustainable work of personnel, population, and environment of NPPs, Program for Recovery of Resource Characteristics of RBMK power units).

Providing electricity to the Increasing electrical power generation while • Generating electrical power while ensuring a necessary safety Generation (+4.8% vs 2013) national economy ensuring a necessary safety level level

Technology leadership Closure of nuclear fuel cycle at the power units • Implementation of the R&D Program See Section 3.8 with BN-800, BN-1200, and VVER-TOI with • Construction of NPP power units with fast breeder reactors mixed uranium plutonium fuel operating in the nuclear energy system with a closed nuclear fuel cycle • Construction of NPPs based on the VVER-TOI project

Implementation of projects on construction of • Project development for medium capacity power units See Section 3.8 NPP power units with low and medium capacity • Project development for low capacity power units

Scale Increasing the share of nuclear generation • Implementation of projects on NPP construction (9 NPP Power unit No. 3 of the Rostov due to NPP installed capacity growth, and power units and 1 floating power unit are currently under NPP start-up in December generation of nuclear power while ensuring a construction) 2014 necessary safety level • Location and design of new NPPs

Global operation Development of international activity • Construction of NPPs abroad according to the BOO rule (Build – See Section 3.11 Own – Operate) • Servicing Russian-designed NPPs abroad, including maintenance, repair, modernization, preparing of documentation, and personnel training • Improving energy sales abroad

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 33

Strategic goals of Rosatom Strategic goals Strategic objectives Contribution State Corporation of the Concern of the Concern in 2014

Product competitiveness Increasing NPPs operating efficiency • Increasing the capacity of operating VVER-1000 power units See Section 3.2 • 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 efficiency of design and capital • Increasing the capacity of operating VVER-1000 power units See Section 3.5 construction of NPPs • 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)

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 34

2.4. Material Aspects of G4-18, G4-19, G4-20, Performance G4-21, G4-22, G4-23

When preparing the Annual Report concept under the aspects’ importance were determined basing the GRI G4 Public Reporting Guidelines, represen- on the ranking map and taking into account the opinion of the Concern’s top management. tatives of stakeholders and top management of the Concern took part in a 2013 survey to identify ma- The description of impact boundaries for the as- terial aspects of the Concern’s performance and the pects are provided in the Concern’s annual report for 2013 (pages 36-37). All material aspects are subsequent disclosure of these aspects in the Annu- important for the organization within the report al Report. perimeter. There are no specifi c limits regarding aspect boundaries within the organization. All aspect boundaries outside the organization are immaterial, except for the matters of suppliers’ occupational injury rate. Based on the survey and with due regard to the reporting principles used to determine the content There is no redefi nition of the indicators provided of the report and in accordance with the public in the previous reports. All provided data cor- reporting standard, as well as with the Rules of relates with the previous reports. The “Emissions” Preparing the Public Annual Report of the Con- aspect has been deemed immaterial because cern, the concept of the Concern’s Annual Report NPP emission values are situated close to the low was developed and approved determining the limit of indicator measurement. The ranking map content and material aspects of activity subject to of importance of various aspects of activity is disclosure in the report. provided in the Concern’s annual report for 2013 (Page 35). Ranking map was updated following the discussion of the concept as part of the fi rst 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 specifi ed in the ranking map below (yellow and blue areas of the diagram). The aspects included 32signifi cant aspects are in the white area of the diagram were recognized provided in the Report as immaterial at this point. The boundaries of

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 35

G4-18, G4-19, Ranking Map of Signiﬁ cant Aspects of Activity G4-20, G4-21, G4-22, G4-23 1.0 1 3 21

10 Material aspects 46 17 2 47 37 3 4 9 6 32 28 7 35 44 21 11 8 45 19 53 24 Immaterial aspects Influence on evaluation and decisions of stakeholders Influence on evaluation 0.5 34 25 18 12 22 27 15 41 31 2327 14 13 29 49 16 33 43 30 50 38 40 48 35 39 53 5 42 26 35 20 51 052 0.5 1.0 Significant economic, environmental, and social influences

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

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 3. KEY PERFORMANCE RESULTS

Rosenergoatom Concern OJSC 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

3.1. Situation in Electric Power Industry

Rosenergoatom Concern OJSC is one of the larg- On December 27, 2014 the turbo generator est companies of the electric power industry in the of 3rd power unit of the Rostov NPP with the installed capacity of 1,000 MW was synchronized world and the only organization in Russia mainly with the energy system. On February 2, 2014 the acting as an operator of nuclear power plants. 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 ELECTRIC POWER reactor with sodium cooling. AND CAPACITY MARKET In terms of installed capacity of the NPPs and After 2014 the installed capacity of electric pow- the amount of operating power units the Concern er plants of the Uniﬁ ed Energy System (UES) of holds the 2nd place in the world among leading Russia has increased by 2.6% and amounted to global companies operating NPPs (1st place – 232.45 GW as of January 1, 2015. EDF, France).

The total installed capacity of the Concern’s In 2014 electricity generation in Russia totaled nuclear power plants is 25.2 GW which made 1,024.9 bln KWh which is 0.1% more than in 10.86% of the total capacity of the UES of Rus- 2013. Furthermore has been the Concern’s NPPs sia in 2014. New capacity introduced at electric generated 180.5 bln KWh which is 4.8% more than power plants of the UES of Russia in 2014 taking the amount of electrical power generated in 2013. into account electric power plants of industrial facilities, totaled 7,296.31 MW. 1,762.6 MW of Over many years the Concern has been consis- inefﬁ cient and obsolete generating equipment tently keeping the leading position among Rus- GW – NPP installed was decommissioned in Russia in 2014 (NPP sian generating companies in terms of installed 25.2capacity capacities were not decommissioned in 2014). capacity and power generation.

The Concern’s Position Among the Largest Companies of the Russian Federation in Terms of Installed Capacity, GW

38.5 36.2 37.5 36.5 38 37.5 37.7 35.2

25.2 25.2 25.2 24.2 22.9 21.3 19.5 19.5 19.7 19.5 15.8 16.8 14.7 12.9 14.5

2011 2012 2013 2014

– Rosenergoatom Concern OJSC – Gazprom Energoholding LLC – RusHydro OJSC – INTER RAO – Electric Power Plants OJSC – EuroSibEnergo OJSC – Integrated Energy Systems CJSC

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 39

Top 6 Companies: Number of Reactors, Installed Capacity as of End of 2014, and Electric Power Generation in 2011-2013

No. Operator company Int’l Country Number Number of Installed Installed Generation in Generation in Generation in abbreviation of power sites capacity, capacity, 2013 2012 2011 units net gross GWh GWh GWh MW (e) MW (e) (generation) (generation) (generation)

(as of December 31, 2014)

1. Électricité de France EDF France 58 19 63,130 65,880 405,898.51 407,437.88 423,509.48

2. Rosenergoatom REA Russia 34,(33)1 10 23,643 25,242 161,718.08 166,293.44 162,018 (supply) (supply) (supply) 172,217.4 177,290.4 172,681.3 (generation) (generation) (generation)

3. Korea Hydro and Nuclear KHNP South Korea 23 6 20,739 21,628 132,465.24 143,549.92 147,763.46 Power

4. Exelon Corporation Exelon USA 22,(17)2 13,(10) 17,373 18,199 147,422.71 145,175.47 144,998.51

5. NNEGC Energoatom NNEGC Ukraine 15 4 13,107 13,835 78,166.16 84,885.59 84,893.98

6. Tokyo Electric TEPCO Japan 113 3 12,233 12,612 0 3,345.54 42,983.66

^ The share of NPPs in power generation in the total generation of the UES of Russia 1. On December 27, 2014 power unit No. 3 of the Rostov NPP was (excluding isolated energy systems) in 2014 was distributed as follows: introduced. The data on generation in 2011-2013 includes 33 power units. Uniﬁ ed Energy System Total power generation, mln KWh* Power generation by NPP, mln KWh Share of NPP generation, % (UES) 2. In March 2012 following the acquisition of Constellation Russia 1,024,943.4 180,255.2 17.6 Energy the amount of Exelon’s units increased up to 22 at 13 Central UES 239,225.6 94,472.4 39.5 sites. The data on generation in 2011-2013 includes 17 power Volga UES 105,035.3 29,819.5 28.4 units. 3. In May 2011 4 power units Northwest UES 102,464.2 35,734.8 34.9 (Nos. 1-4) of the NPP Fukushima Dai-Ichi which were unﬁ t for use South UES 84,755.5 15,704.9 18.5 were shut down. In December 2013 power units Nos. 5 and 6 Urals UES 259,762.4 4,523.6 1.7 of the NPP Fukushima Dai-Ichi were also shut down. Source: Report of the System Operator on Operating UES in 2014 (http://so-ups.ru).

The Concern’s Position Among the Largest Companies of the Russian Federation in Terms of Power Generation over 2011-2014, bln KWh

180,5 173 177 172 167 162 152,2 135 124 113 113,6 109 104 102,7 89 80 78 77 79,0 60,4 61 58 57

2011 2012 2013 2014

– Rosenergoatom Concern OJSC – Gazprom Energoholding LLC – RusHydro OJSC – INTER RAO – Electric Power Plants OJSC – EuroSibEnergo OJSC – Integrated Energy Systems CJSC

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 40

SALES MARKET contractual campaign. During this approval proce- AND PRODUCT CONSUMERS dure the projects are optimized taking into account the interests of market participants. The Concern’s products (electricity and capacity) is 1,069.66 sold in the Electrical Power (Capacity) Wholesale Demand for electricity and power capacity supplied rubles per MWh – weight- Market (ECWM) which is a sphere of circulation of by the Concern in the ECWM is generally steady ed average year-aver- special goods of electric power and capacity within with some deviations due to seasonal changes in age sales price of NPP the UES of Russia. electricity consumption and water content condi- electric power in the tions with the appropriate change in hydrogene- day-ahead market The buyers are sales companies which for the major ration in the volume of electricity production on a part have a status of guaranteed suppliers and a scale of the Unifi ed Energy System of Russia. number of major consumers (for details see clause 2 of the Register of Entities of Wholesale Market In geographical terms the market covers the area of for Electricity (Power)). the unifi ed energy system of Russia and is divided into two pricing zones: the fi rst (the area of Europe The composition and amount of buyers of elec- and the Ural which includes a number of regions of tricity and power capacity of the Concern are not geographical Siberia, such as Tyumen Oblast and a constant and do not depend on the Concern’s part of Tomsk Oblast) and the second pricing zone preferences. The amount, composition, and struc- (the most part of Siberia and Trans-Baikal). All ture of consumers are determined by a commercial NPPs, except for Bilibino, are located in the Euro- operator of the ECWM (Trading System Administra- pean part of Russia and belong to the fi rst pricing tor OJSC) each year during centralized contractual zone of the wholesale electricity market. campaign of the ECWM (and in case of introduction of signifi cant amendments to regulations deter- In addition to special regions electricity is bought at mining the procedure for the ECWM functioning regulated prices by guaranteed suppliers through- within a calendar year and requiring changes in out Russia in the amount intended for the popula- contractual relations – more than once per year). In tion. Contracts with other buyers are free, and their order to ensure compliance with the principles of prices and scopes are established by participants proportionality and fair distribution of contracting themselves. agents under the contracts supporting sale of electricity and capacity at regulated prices, the projects In 2014 the Concern supplied electricity under reg- pending distribution undergo approval procedure ulated contracts, to the day-ahead market, to the by market participants during preparation for the balancing market, and under free contracts. Power

Concern’s Electricity Supply Structure in ECWM between 2010 and 2014, Bln KWh

148.15 150.21 143.48 142.84

104.76

– Balancing market 62.79

– Regulated contracts 29.05 29.55 29.85 30.43 Day-ahead market – 1.99 0.64 1.45 0.40 1.43 1.02 1.12 0.95 1.29 0.90 – Free bilateral contracts 2010 2011 2012 2013 2014

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 41

Electricity sales in 2014 Power capacity sales in 2014

Day-ahead Supply under regulated Supply of power generated by Supply under regulated Supply under sales contracts market supply contracts new facilities under sales con- contracts subject to competitive tracts (power supply contracts) process

1,069.66 rubles/MWh – In 2010 1,915 contracts were concluded In 2014 the capacity corresponding weighted average year sales price of with consumers of the wholesale market to with the volume which had passed NPP electric power in the day-ahead obtain funds totaling 4.4 tln rubles (excl. competitive selection in 2013 was sold. market. VAT) from sales of capacity generated by 8 new NPP units from 2011 to 2038. As of 2015 all the NPP units have passed the competitive selection (taking into account the increased number In 2014 the sales of electric power totaled of unselected capacity following com- 183.046 bln KWh. petitive selection in 2014 (15 GW). For regulated activity the sales of electric power totaled 30.427 bln KWh For all other markets the sales of power totaled 152.618 bln KWh, including: • 152.443 bln KWh – to the wholesale market; • 0.175 bln KWh – to the retail market.

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 2014.

capacity was supplied under regulated contracts, nuclear power plant obtaining the status of a capacity sale contracts executed following compet- uniﬁ ed heat supply organization in the urban itive selection of price quotes for capacity sale, and district of Zarechny of Sverdlovsk Oblast. The capacity sale contracts of new NPP facilities. awarding of uniﬁ ed heat supply organization status to the nuclear power plant will make it In 2014 the actual volume of electricity generated possible to increase reliability of heat supply to by the NPPs amounted to 180.5 bln KWh, with the end consumers of thermal energy. planned value of 168.3 bln KWh recorded by the FTS of Russia, among which: As part of implementation of the strategy of “entry into retail markets of electric power”, in • 180.3 bln KWh (or 99.88%) were supplied to 2014 AtomEnergoSbyt JSC won the competi- ECWM; tive process and was awarded the status of the • 0.22 bln KWh (or 0.12%) were supplied to the guaranteed supplier in Kursk, Smolensk, Tver, and retail market (generated by the Bilibino NPP). Murmansk Oblast. Moreover, in order to divide regulated and non-regulated types of activity DEVELOPMENT Atomenergopromsbyt JSC was created. Nucle- OF POWER SALES IN 2014 ar industry enterprises and other consumers which had previously received power supply from As a part of comprehensive measures of the AtomEnergoSbyt JSC were transferred to the new Concern’s heat sales concept a pilot project was company for service. implemented in 2014 resulting in Beloyarsk

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 42

3.2. Production Capital. Generating Capacities

The record indicator Reduced timelines for Cancel/postponement Operation of power of power generation scheduled repairs of of current repairs of units at a nominal 180.5 in 2014 was achieved power units power units for 2015 capacity bln kWh – in 2014 the due to the following highest ever indicator factors Rostov, Balakovo, Balakovo NPP power Leningrad NPP – of power generation Kalinin, and Smolensk units Nos. 2, 3, and 4 power unit No. 1 (from was achieved by NPPs, Leningrad NPP, 13.01.2014 to Rosenergoatom Con- power unit No. 1 31.08.2014) cern OJSC (104.8% of power generated 123On recovery of On recovery of Kursk NPP – pow- in 2013.) resource character- resource character- er unit No. 2 (from istics: Kursk NPP istics: Kursk NPP, 22.03.2014 to p.u. No. 2, Lenin- p.u.No. 1 31.12.2014) grad NPP p.u. No. 2

Non-fulﬁ llment of Kola NPP Novovoronezh NPP Beloyarsk NPP 168.3 FTS balance by other NPPs was caused by Power units were oper- Two unscheduled stops FAs of BN-800 reactor bln KWh – the balance the following: ating in a limited due to manufacturing of power unit No. 4 of the FTS for 2014 dispatching mode due defects in turbogene- required remedial (minimum amount of to consumption rator at the manufac- actions. power to be generated decrease and power turing plant. by the Concern in a year transit restrictions. (the plan was fulﬁ lled 107.3%)

Power Generation at the Concern’s NPPs, Bln KWh

3KLN was put 177.3 180.5 into operation 170.1 172.7 172,2 1RST was put 162.3 163.3 into operation 158.3 154.7 4KLN was put 4BAL was put 148.6 into operation into operation 143.0 139.8 2RST was put 3RST was put into operation into operation 128.9 147.6 119.6 120.0 134.9 108.8 108.3 103.5 119.2 97.8 99.3

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 43

Installed Capacity Use Changes in ICUF and AF, % Factor, Availability Factor 83.6 83.8 82.8 83.2 83.7 81.5 82.2 79.5 78.9 78.3 79.2 – ICUF 75.4 76.2 % 73.2 73.7 81.6 – AF 81.3 81.2 80.9 81.6 67.5 79.5 80.2 77.7 77.9 76.3 installed capacity utilization 63.2 63.1 76.0 factor (ICUF) in 2014 (3.7% 61.4 73.2 73.4 70.3 71.7 higher vs 2013) 69.1 67.3 64.9 64.5

58.3 58.2 % 53.4 55.6 83.7 52.6 availability factor (AF) in 2014 (4.2% higher vs 2013)

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Deviation from TsU Fulﬁllment of Balance Target Set Forth by FTS and Generation of Power by Concern’s NPPs, % and Mln KWh 1.87 29,224.0

25,373.4 15,704.9 180,475.5 220.2 29,819.5 28,331.9 >4.5 23,673.7 bln kWh

1.72 10,361.4 13,242.9 4,523.6 2.18

Deviation from the balace set forth by FTS

1.99 107.3% 125.5% 111.0% 108.4% 108.2% 106.6% 104.4% 102.5% 98.4% 98.2% 97.7%

2.34 Concern Kursk Bilibino Leningrad Rostov Balakovo Kalinin Smolensk Kola* Novo- Belo- >11 voronezh** yarsk*** bln kWh Chart of Actual Load and FTS Plan in 2014, MW

7.30 – De facto

FTS balance target – Change of repair conditions – with recovery of resource characteristics and operation of units after repairs 21,879 – Reduction of scheduled repair 20,903 20,540 20,364 timelines, including according 20,043 20,240 to ESL, cancelation of minor repairs 18,468 18,702 18,121 Operation of VVER-1000 – 17,232 17,118 units at 104% of capacity 16,956 during pilot operation

January February March April May June July August September October November December

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 44

Concern’s Generating Capacities

88.5% — Best NPP of Russia: Generation 1995, 1999, 2000, 2003, Balakovo NPP 2005–2009, 2011-2013, vs 2013 and 2014. The largest electricity producer in Russia

29.8 106.6% 85.1% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of power produc- Saratov Oblast electric power of the tion in the Volga Federal First place in All-Russia Contest “Leader of Envi- Concern Okrug 12.5 km ronmental Protection Activity in Russia”. It is for To Balakovo the seventh time that the plant has received this satellite town award for active participation in environmental protection and rational use of natural resources. 145 km 16.5% 25% To the regional cen- The plant has for the ninth time been recognized ter (city of Saratov) as the Best NPP of Russia in the area of safety culture.

NPP power units: No Type of reactor Installed capacity, Age MW 1 VVER-1000 1,000 29 years 660.5 2 VVER-1000 1,000 27 years bln kWh –

3 VVER-1000 1,000 26 years Generated from power start up of power unit No. 1 4 VVER-1000 1,000 21 years

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 45

109.8% — Best NPP of Russia: Generation Beloyarsk NPP 1994, 1995, 1997, and 2001. vs 2013

The only nuclear power plant in Russia with a commercial fast breeder reactor BN-800

4.52 97.7% 86.1% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Electricity production Sverdlovsk Oblast electric power of the share in the Sverdlovsk Power unit No. 4 with a 880 MW BN-800 reactor Concern energy system 3,5 km was completed and physically launched in Febru- To Zarechny ary 2014. Due to remedial actions required for the satellite town reactor fuel assemblies, the power start up has been postponed for 2015. 45 km 2.5% 10% To the regional Due to remedial actions required for the reactor center (city of fuel assemblies, the power start-up is postponed Yekaterinburg) for 2015.

NPP power units: No Type of reactor Installed capaci- Age ty, MW 3 BN-600 600 34 years 164.5 4 BN-800 880 Physical launch bln kWh – Generated from power start up of power unit No. 1

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 46

102% — Best NPP in Terms of Safety Generation Bilibino NPP Culture: 2009. vs 2013

The most remote of Russian nuclear power plants

0.22 111% 52.4% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of power produc- in the Chukotka electric power of the tion of the Chaun-Bilibino Autonomous Okrug Bilibino NPP will be shut down in 2019-2022 and Concern isolated energy system; substituted by a ﬂ oating NPP (currently under the only heat source in 4,5 km construction). the city of Bilibino To Bilibino satellite town The Bilibino NPP backbones vital activity of the Bilibino city, and ore and gold mining companies 610 km of the Bilibino district. 0.12% 80% To the administrative center (city of Anadyr)

NPP power units: No Type of reactor Installed capacity, Age MW 1 EGP-6 12 40 years 9.4 2 EGP-6 12 40 years bln kWh – 3 EGP-6 12 39 years Generated from power start up of power unit No. 1 4 EGP-6 12 38 years

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 47

94.5% — Best NPP of Russia: 2002. Generation Best nuclear plants of the Kalinin NPP year: 2012. vs 2013

On June 27, 2014 the Rostekhnadzor license was obtained for power unit No.1 operating term extension for another 30 years

28.3 104.4% 80.9% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of electric power Tver Oblast electric power of the produced in the Pursuant to the industry-speciﬁ c Program for Concern Tver Oblast 4 km Increasing Power Generation at operating NPP To Udomlya power units in 2011-2015 power units Nos. 1, 2, satellite town and 3 of Kalinin NPPhas been operating at 104% of the rated capacity. 125 km 15.7% 70% To the regional center (city of Tver)

NPP power units: No Type of reactor Installed capacity, Age MW 1 VVER-1000 1,000 30 years 475.7 2 VVER-1000 1,000 28 years bln KWh – 3 VVER-1000 1,000 10 years Generated from power start up of power unit No. 1 4 VVER-1000 1,000 2 years

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 48

100% — Generation Kola NPP vs 2013

First nuclear power plant of Russia built beyond the Arctic circle

10.4 98% 67.2% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located at the Kola ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of power Peninsula electric power of the production in the Power units of Kola NPP are currently operating Concern Murmansk Oblast 11 km in a limited dispatching mode due to consumption To Polyarnye Zori decrease and power transit restrictions. satellite town On October 8, 2014 the Rostekhnadzor license 170 km was obtained for power unit No.4 operation peri- 5.7% 60% To the administra- od of 25 years. tive center (city of Murmansk)

NPP power units: No Type of reactor Installed capacity, Age MW 1 VVER-440 440 41 years 379.8 2 VVER-440 440 40 years bln kWh – 3 VVER-440 440 33 years Generated from power start up of power unit No. 1 4 VVER-440 440 30 years

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 49

124% — Best NPP Generation Kursk NPP of Russia: 2009 vs 2013

It is among the ﬁ rst four nuclear power plants in Russia with equal power capacity

29.2 125.5% 83.4% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of the installed Kursk Oblast electric power of the capacity of all power plants The Kursk NPP is a major element of Russia’s Concern of the Black Earth area 4 km Uniﬁ ed Energy System. The main consumer is the To the Kurchatov Central UES which covers 19 Oblasts of Russia’s satellite town Central Federal Okrug.

40 km To the regional cen- 16.2% 50% ter (city of Kursk)

ДейNPP power units: No Type of reactor Installed capacity, Age MW

1 RBMK-1000 1,000 38 years

2 RBMK-1000 1,000 35 years 801.9 bln kWh – 3 RBMK-1000 1,000 31 years Generated from power start up of power unit No. 1 4 RBMK-1000 1,000 29 years

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 50

131.7 — Best nuclear plants of the Generation Leningrad NPP year: 2012 and 2013. vs 2013

The largest electricity producer in Northwest Russia.The ﬁ rst plant in Russia with reactors of RBMK-1000 type

25.3 108.4% 72.4% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of electric power in the Leningrad electric power of the production of the Oblast Ensures more than 50% of power consumption of Concern Northwest geographic Saint Petersburg and Leningrad Oblast. region 5 km To Sosnovy Bor Between 2012 and 2014 a unique program was satellite town implemented to recover the reactor performance characteristics at power unit No.1 14.1% 28% 70 km To the regional center (city of Saint Petersburg)

NPP power units: No Type of reactor Installed capacity, Age MW 1 RBMK-1000 1,000 41 years 915.8 2 RBMK-1000 1,000 39 years bln kWh – Generated from power 3 RBMK-1000 1,000 35 years start up of power unit No. 1 4 RBMK-1000 1,000 31 years

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 51

94.1% — Best nuclear plants Generation Novovoronezh NPP of the year: 2013 vs 2013

The ﬁ rst NPP in Russia with VVER reactors

13.2 98.2% 82.4% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of electric Voronezh Oblast electric power of the power production For the ﬁ rst time ever in Europe a unique set of Concern of the Voronezh Oblast 3.5 km work aimed at service life extension for 15 years To Novovoronezh was performed at power units Nos. 3 and 4; appro- satellite town priate licenses of Rostekhnadzor were obtained.

70 km Power unit No. 5 of Novovoronezh NPP initially 7.3% 100% To the regional pertained to the second generation now pertains center (city of to the third generation as a result of work per- Voronezh) formed. It completely complies with modern Rus- sian requirements and recommendations of IAEA, and its additional operating term was extended for another 25-30 years.

NPP power units: No Type of reactor Installed capacity, Age MW

3 VVER-440 417 42 years 499.7 bln kWh – 4 VVER-440 417 41 years Generated from power 5 VVER-1000 1,000 34 years start up of power unit No. 1

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 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 91.7% — 2014 (Rostov-3 was scheduled to start only in 2015), and also with Generation cost saving.” vs 2013

Sergey Kirienko, Best NPP of Russia: Chief Executive Rostov NPP 2004, 2011, and 2013. Officer, Rosatom State Corporation Winner of the industry competition in the area of safety culture: The largest power industry enterprise 2005, 2008, 2010, and 2014. in southern Russia. The southernmost Russian NPP

15.7 108.2% 89.5% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of power Rostov Oblast electric power of the production in the Rostov On December 27, 2014 power start up of power Concern Oblast 16 km unit No. 3 took place, now it is in pilot operation. To Volgodonsk Delivery of the unit for industrial operation is satellite town scheduled for 2015.

205 km Power unit No. 4 is currently under construction. 8.7% 40% To the regional center (city of Rostov-on-Don)

NPP power units: No Type of reactor Installed capacity, Age MW

1 VVER-1000 1,000 13 years 142.9 bln kWh – 2 VVER-1000 1,000 4 years Generated from power In pilot 3 VVER-1000 1,070 start up of power unit No. 1 operation

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 53

Best NPP of Russia: 119.5% — 1992, 1993, 2006, and 2010. Generation Smolensk NPP vs 2013 Best NPP in the area of safety culture in 2011.

City-forming leading enterprise of the Best nuclear plants of the year: region, the largest in the fuel and energy 2012.

balance plan of the geographic region Russian Organization of High Social Efﬁ ciency: 2000. 23.7 102.5% 90.1% mln KWh – power Fulﬁ llment of the ICUF generation FTS balance

Located in the ACHIEVEMENTS OF 2014 Generated in 2014 vs all Share of power production Smolensk Oblast electric power of the in the Smolensk Oblast It was the ﬁ rst among Russian NPPs to obtain Concern 4.5 km the international certiﬁ cate of conformance of To Desnogorsk quality management system to ISO 9001:2000 satellite town standard and was recognized as the best NPP of Russia in providing social safety and work with 105 km personnel: 2007. 13.1% 80% To the regional center (city of Smolensk)

NPP power units: No Type of reactor Installed capacity, Age MW

3 RBMK-1000 1,000 32 years 570.2 bln kWh – 4 RBMK-1000 417 29 years Generated from power 5 RBMK-1000 1,000 24 years start up of power unit No. 1

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 54

VVER Power Units Capacity Increase

One of the options to increase power generation AFTER START OF THE PILOT OPERATION OF VVER at NPP power units with VVER reactors consists POWER UNITS AT AN INCREASED CAPACITY, NO in increasing heat capacity of reactor plants using SIGNIFICANT ENVIRONMENTAL CHANGES WERE engineering reserves of equipment taking into REVEALED AT ANY OF NPPS. account the actual characteristics obtained upon its manufacturing and recorded during operation. During operation of power units at an increased capacity we conducted and continue conducting an analysis of the main parameters of reactor unit Increase of power capacity by 1 KW is to ensure compliance with permissible operating approximately 10 times cheaper than the limits. According to this analysis, the values of construction cost of 1 KW of new power capacity. neutronic and thermohydraulic characteristics of the active zone are compliant with design parameters and meet the requirements and design The program on operation of VVER power units at limitations set forth in the process rules for safe an increased capacity forms part of a big program operation of power units. aimed at increasing power generation at operating NPP power units of Rosenergoatom Concern. Results of tests and operating experience con- ﬁ rmed the possibility of stable and safe operation Pursuant to the Concern’s plan, power unit No. 1 of NPP power units with VVER-type reactors at of Balakovo NPP, No. 1 of Rostov NPP, and No. an increased capacity level. 4 of Kola NPP were switched to an industrial operation (IO) at an increased capacity in 2014. 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 2015.

Program results 9214.26 40 VVER-1000 reactors VVER-440 reactors bln KWh – reactor years operate at an increased operate at an increased additional energy gen- is the additional capacity of 104% capacity of 107% eration in 2008-2014 operation time from the program start

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 55

Source: Atomny Expert Journal http://atomicexpert.com/ Schedule of Switching VVER-1000 Units to content/vygodnoe-povyshenie Operation at an Increased Capacity of 104% Nnom

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 – PO Pilot Оperation 1st unit of Rostov NPP

– IO 2nd unit of Rostov NPP Industrial Operation 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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 3,115-3,120 3,120 regulating system), MW

Heating heat transfer agent in reactor, оC 29.7-32.5 33.5

Maximum heating of heat transfer agent in reactor loop/maximum capacity of reactor loop, 30.0-32.4/758-797 33.0/800 oC/MW

Maximum heating of heat transfer agent in FA per ICIS readings, oC 39.4-43.0 44.5

Temperature of heat transfer agent at the reactor inlet in any operating loop, oC 287-290.3 291

Reactor neutronics

FA maximum capacity as per ICIS readings, MW 23.8-26.0 27

FA energy release variance ratio as per ICIS readings 1.24-1.40 –

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 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 56 How to Get 104% in 4 Steps

Increase in heat capacity is implemented due to intensification of fuel fission. In this case, 1 950˚С the temperature in the reactor has increased Temperature inside by 1.5oC — from 320 to 321.5 in average in the the fuel active zone.

INCREASE OF INCREASE OF GENERATED URANIUM STEAM VOLUME 1 FISSION RATE 2 When the reactor unit is switched to 104% capacity versus nominal capacity, operating By increasing the temperature of water safety limits at the output of the reactor it is are not breached. possible to submit more heat to the steam generator. In this case the They are not parameters inside the steam generator even reached! (pressure and temperature) remain the In case of capacity increase the pressure same. The volume of generated steam inside the reactor remains the same and increases. is equal to 160 atm. However, the vessel is capable to support by far higher loads: pressure of hydro-testing of about 1 400 t/h — steam generator 250 atm. productivity

URANIUM FISSION PROCESS Descendants Moderator 20 U235 3х10 Uranium nucleons are split Free released inside the reactor every neutron secondary neutron second

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 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.

TURBINE GENERATOR CAPACITY 3 MODERNIZATION 4 INCREASE

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, In order to ensure that more volume the density of the cooling gas of steam is produced, the turbine (hydrogen) was increased. wheel space and last buckets were also modernized. Also, deeper dehydration of resulting steam from 24 000 V — terminal voltage steam generators is provided for. of electricity generator

> turbine modernization: treatment of last stage blades

>> Balakovo NPP generator

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 58

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

In NPP reactor hall

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 59

SERVICE LIFE EXTENSION Currently investment projects on SLE are imple- FOR EXISTING NPP POWER UNITS mented at 8 power units: power units Nos. 1, 2, 3, and 4 of Balakovo NPP, power unit No. 2 Service life extension for existing NPPs power of Kalinin NPP, power unit No. 4 of Kursk NPP; units once they exhaust the determined service life power units Nos. 2 and 3 of Smolensk NPP. is one of the vital tasks at the current development stage of Russian nuclear industry and an efﬁ cient RESULTS OF WORK ON SERVICE LIFE ﬁ nancial investment which permit to maintain gen- EXTENSION FOR NPP POWER UNITS IN 2014: erating capacities and increasing NPP safety. • Completion of work and approval of resolution Economically feasible duration of an extended on continuing operation of power unit No. 4 of operation timelines for NPP power units is 15-30 Kola NPP for an additional term of 25 years; GW is an aggregate years and depends on both technical and eco- operation license for the extended time was installed capacity of nomic factors on a case by case basis. obtained; 13.2NPP power units with • Completion of work and formalization of the an extended resource. We have been working on service life extension for resolution by Rosatom State Corporation about operating power units of Russian NPPs since 1998. continuing operation of power unit No. 1 of Kalinin NPP for an additional term of 30 years; By the end of 2014, the operations on extending Rostekhnadzor license was obtained; operation timelines of 21 NPP power units with • Rosatom State Corporation approved the an aggregate installed capacity of 13,242 MW investment project on service life extension for were completed. The licenses permitting opera- power unit No. 4 of Balakovo NPP; tion of these power units outside the determined • Design documentation “Measures on Mod- service life were issued by Rostekhnadzor. NPP ernization of Smolensk NPP in order to power units with an extended resource gener- extend service life of power unit No. 3” was ated 435 bln KWh of power and the aggregate prepared. capacity amounts to 52.5% of the installed capacity of operating NPPs of the Russian Federation.

Maintaining NPP Generating Power Capacities after Extension of the Operating Term, MW +3 SMО +3 BAL 20,242 +4 КUR +2 BAL +2 SМО 19,242 +2 КLN 18,242 +1 BAL 17,242 +4 КОL 16,242 +1 КLN +3 KUR 13,242 +3 КОL +1 SМО +5 NVО 11,802 +3 BEL 10,802 +4 LEN 9,802 +2 KUR +3 LEN 8,362 +1 KUR 6,762 +2 LEN +4 BIL +2 KOL +1 LEN +3 BIL 4,762 +1.2 BIL +1 KOL 3,780 +4 NVO 2,738 +3 NVO 2,274 834 417

2001 20022003 2004 2005 2006- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 60

Main Results of the Repair Campaign in 2014 401.6 158.5 repairs of 33 NPP bln rubles – days – general optimization power units were ﬁ nancial effect of repair terms completed in 2014

According to the approved annu- The 2014 repair campaign is 40 repairs of 33 NPP al repair schedule of nuclear fulﬁ lled in full scope and with power units with a total actual station power units, the follow- due quality in terms of power duration of 1,892.5 days were ing operations were planned for generation and reduction of completed in 2014. 2014: expenses for repairs. • General optimization of • Repairs of 33 power units. • Optimization of repair repair terms – 158.5 days. duration of 26 power units • 2,051 repair days. amounted to 181.5 days. • Financial effect: 1.6 bln rubles. • Increase in repair duration of 5 power units – 23 days. • Additional generation: 1,745 mln KWh.

MAIN RESULTS OF THE REPAIR ENERGY SAVING G4-EN3, CAMPAIGN IN 2014 PROGRAM IMPLEMENTATION G4-EN6

General optimization of repair times became pos- The target indicator of cost saving due to reduc- sible due to the following: tion of energy consumption in the similar conditions versus 2009 set forth for 2014 by the • Targeted search and removal of downtimes Order of Rosatom State Corporation is complied during scheduled repairs as a part of Rosatom with mainly thanks to increasing energy produc- production system development; tion. The target indicator amounted to 23.11%. In • Conservative approach to preparation of power 2014, thermal and electric energy savings totaled unit repair schedules, allowing for time margin 29.9% (4,753.6 GJ) and 17.0% (487,257.2 GJ), to remove possible defects; accordingly. • Absence of defects that may affect the duration of the critical path of repairs; Consolidated program for energy saving is • Justiﬁ cation of canceling minor repairs of the implemented in the scope scheduled for 2014. mln kWh – additional power units switched to 18-month fuel cycle; NPPs currently undergo implementation of energy power generation due • 12 unscheduled stops of power units due to resource accounting systems and modernization 1,745to repair schedule equipment failure with a total duration of 53 of lighting systems using LED lights. Also, we pur- optimization days occurred in 2014. sue reduction of heat loss in heat supply systems

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 61

and replace obsolete thermal insulation. Some The system permits collecting, generalizing, and work is currently at the design stage. analyzing information about changes in energy resource consumption and provides access to We continued working on replacement of turbine information on all levels of management in the condensers at Balakovo, Kalinin, and Novov- Concern and Rosatom State Corporation. oronezh NPPs, modernization of separator superheaters at Kursk NPP aimed fi rst of all at increasing safety and reliability of work of main equipment at the same time improving energy effi ciency 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 fi nancing totaled 3.7 bln rubles in 2014.

Inspection audit conﬁ rmed the compliance of the Concern’s energy management system with the requirements of the international standard ISO 29.9% 50001:2011. Automated Energy Performance in 2014 thermal and Management System was put into operation. electric energy savings

Energy Consumption

Name Unit 2012 2014 2014

in kind thou in kind thou in kind thou rubles rubles rubles

Nuclear power Fuel 4,425 * 3,557 * 4,683 * (used as a fuel) assemblies, pcs

Automotive gasoline t (GJ) 287 10,714 201 8,075 429 16,229 (12,599) (8,824) (18,833)

Diesel fuel t (GJ) 2,432 84,415 4,436 162,793 2,848 94,574 (103,846) (189,417) (121,610)

Residual oil t (GJ) 11,460 137,490 16,790 186,955 13,096 141,083 (446,940) (654,810) (510,744)

Gas (natural) m3 No purchase 24,125 98,021 (GJ) (811)

Oil, carbon, shale oil, and peat – No purchase

* The information constitutes commercial secret.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 62

3.3. Ensuring Safety of Russian NPPs. Radiation Impact on Personnel and Citizens

Ensuring safety of Russian NPPs throughout their (RBMK-1000), and Beloyarsk NPP (BN-600). The entire life cycle is the top priority of the Concern inspection conducted by the Council of Federa- tion brought the following results: as an operator. The Concern sets forth new global safety standards. • The Concern’s NPPs comply with applicable Russian requirements and current international recommendations on nuclear and radiation safety. SAFETY OF RUSSIAN NPPS: RESULTS OF • The Concern has developed and takes mea- INSPECTIONS CONDUCTED BY THE COUNCIL sures seeking to increase stability of operating OF THE FEDERATION OF THE RUSSIAN NPPs against extreme external impacts. FEDERATION • Modern Russian NPP designs comply with “post-Fukushima” requirements. The measures In early 2014 ad hoc work group was created stipulated during construction of power units by the Council of the Federation Committee on permit us to additionally improve reliability of Vladimir Potsyapun, Member of State Duma Economic Policy following orders by Valentina NPP operation and responsiveness to emer- Committee on Energy Matvienko, Chairwoman of the Council of the gency situations. Federation of the Federal Assembly of the Rus- “Now we can say that we sian Federation, to review matters of safety at ALL NPPS OPERATING IN RUSSIA CURRENTLY actually set new global operating nuclear plants of Russia. COMPLY WITH RUSSIAN AND INTERNATIONAL safety standards, since everything was greatly STANDARDS. ALL RUSSIAN PROJECTS IN THE improved in terms of safety. Members of work group reviewed the materials AREA OF NPPS COMPLY WITH “POST-FUKUSHIMA We have visited Russian submitted by nuclear enterprises and visited the STANDARDS”. NPPs as well as nuclear Concern’s NPPs with reactors of various types: power plants in Europe, Novovoronezh NPP (VVER-1000), Leningrad NPP and we can compare many parameters. The safety of our plants not only matches ENSURING SAFETY OF NPPS that of foreign plants, but currently ranks ﬁ rst. The Strict compliance with all international and internal safety regulations. portfolio of foreign orders Rostekhnadzor The Concern obtained licenses for the right of operation of all NPP power units. All power units are operated for Russian nuclear power in accordance with the terms and condition of licenses. In 2014 there were no cases of suspension of units conﬁ rms that.” licenses for operation of power units due to non-compliance with the terms and condition of licenses.

Insurance companies The Concern provided for 100% of insurance of all types of civil liability according to the requirements of the licenses obtained.

State regulatory agencies on The Concern’s employees involved in safety use of nuclear power duly undergone assessment of their safety knowledge of safety requirements and proper operating skills and received authorization to conduct relevant operations.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 63

IN 2014 NPPS OF RUSSIA OPERATED SAFELY AND • 2 ﬁ res (power unit No. 3 of Kursk NPP, RELIABLY, UNCONDITIONALLY COMPLYING WITH THE 20.03.2014; power unit No. 4 (under con- REQUIRED SAFETY LEVEL. struction) of Beloyarsk NPP, 30.03.2014). Incidents with radio- • 2 ﬁ re outbreaks (power unit No. 3 of Beloyarsk active consequences In 2014, the Concern registered the following NPP, 24.02.2014; Leningrad NPP-2 (under (Regulation NP-004- events: construction), 02.02.2014). 08), loss of nuclear • 2 Concern employees were severely injured materials and radioac- • 37 deviations in operation of NPP at the level (at Beloyarsk and Kalinin NPPs). tive substances: “0”/”below scale” at the INES scale. NONE • 2 events with the level “1” at the INES scale: In all instances which required stop and unload of On 02.03.2014 and 04.11.2014 – power unit reactors, the availability of safety systems was No. 4 of Beloyarsk NPP (physical launch stage). complete and provided safe switching of reac- • 10 instances of unscheduled automatic stop of tors to sub-critical mode or to a required level of reactors due to critical condition (of them 1 – at capacity. power unit No. 4 of Beloyarsk NPP).

Accidents and inci- Deviations at Operating Power Units of NPPs, Injuries, dents occurred at the Unscheduled Automated Stops of Reactors, Fires (Fire Outbreaks) Concern’s registered NPP Deviations Unscheduled automatic Injuries Fires/ﬁ re outbreaks hazardous facilities: stops of reactor due to (amount) (amount) NONE critical state 2013 2014 2014 2014 2014/2013 2014/2013 Bal3310 00 00 Bel 2 1 0 0 1 0 0/1 0 Bil2010 00 00 Kln5513 10 00 Kol 6 4 2 1 0 0 0 0 Kur 7 9 1 1 0 0 1/0 0 Failures of safety sys- Len8422 00 00 tem items which could Nvo 1 3 0 0 0 0 0 0 Ros 4 4 0 1 0 0 0 0 lead to loss of safety: Smo4421 00 00 NOT REGISTERED Total 42 37 10 9 2 0 1/1 0

Deviations in operation of the Russian NPPs according to the INES scale between 2008 and 2014

2 3 25+13* 1 2* 21 26+4* 25+4* 30 20+2* 1

* Events associated with low power testing at the stage of 17 17+1* putting NPPs into operation. 14 7+5* 12 11 In 2014 – events of the level 1 on the INES scale at 5 power unit No. 4 of Belo- yarsk NPP during physical 2008 2009 2010 2011 2012 2013 2014 launch (02.03.2014 and 04.11.2014). – Beyond scale – Level 0 – Level 1 – Level 2 and higher

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 64

Dynamic Development of Automatic Stops of Reactor from Critical Condition for Period from 2009 to 2014, Cumulative Numbers by Months

16+(3*)

16 15 14+(1**) 14 13 12 * events associated with low power 9+(1***) testing at the stage of putting 10 10 10 into operation of power unit 9 9 9 7+(2**) 9 9 No. 2 of Rostov NPP. 8 7 7 7 6 ** events associated with low power 6 6 6 6 6 testing at the stage of putting 5 into operation of power unit 4 4 4 4 No. 4 of Kalinin NPP. 3 3 3 2 2 2 1 1 *** events at the stage of physical 1 launch of power unit No. 4 of 00000 00 000 Beloyarsk NPP. 2009 2010 2011 2012 2013 2014

NPP SAFETY ASSURANCE CONTROL

10 Organization of NPP Safety Assurance Control safety inspections of operating NPPs and NPPs under construc- General Director of Rosenergoatom Concern OJSC tion were conducted

8 First Deputy General Director Deputy General Direc- Deputy General Direc- material breaches tor – General Inspector tor – Director of the were revealed Facilities Construction Deputy General Director – Director for Production Management Branch and Operation of Nuclear Power Plants

Chief engineers of operating NPPs Chief Inspectors of oper- Chief Engineers of the ating NPPs and NPPs Directorate of NPPs Activity plans to under construction under construction remove the revealed concerns were developed and are currently Production Control Subdivisions NPP Inspection Control Subdivisions for Techni- being implemented Subdivisions cal Supervision of NPP Construction

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 65

INCREASING SAFETY AND STABILITY • Analysis of degree of facility protection against OF NPPS AGAINST EXTREME EXTERNAL extreme external impacts according to the IMPACTS guidelines suggested by Rostekhnadzor; Short-time (immediate) • A program for implementation of additional activities, 2011-2012. In connection with the events in Japan which design solutions intended to mitigate conse- COMPLETED caused the accident at NPP Fukushima, the Con- quences of off-design accidents at NPPs; cern has developed and implemented an analysis • Installment of additional equipment: self-con- of possible accident development scenarios at tained mobile diesel generator and mobile Russian NPPs, determining activities aimed at pumping power units. mitigating consequences and reducing impact on population and environment in case of a severe Activities at operating NPPs and NPPs under off-design accident (Plan of Activities Intended construction permits enhancing stability of NPPs Mid-term activities, to Improve Safety of Operating NPPs and Activi- against natural and man-made impacts, including: 2012-2014. ties Intended to Reduce Consequences of Severe COMPLETED Off-Design Accidents at NPPs). • Prevention of severe accidents; • Use of technical means to prevent building up Activities intended to improve stability of nucle- of explosive hydrogen concentrations during ar power plants against natural and man-made zirconium-steam reaction; impacts are performed in three phases: • Zero tolerance to radioactive emissions and effl uents to environment in excess of the pre- Long-term activities, 1. Short-time (immediate) activities, 2011-2012. scribed standards. 2012-2021. Aimed at reducing man-made risks. All NPPs were CURRENTLY supplied with additional mobile accident-preven- Each year one of the Concern’s NPPs hosts Com- ARE BEING tion machines. Completed. prehensive Emergency Response Drills (CERD). In IMPLEMENTED the course of the drill NPP personnel and subdi- 2. Mid-term activities, 2012-2014. Aimed at visions of the Ministry of Emergency Situations improving durability of NPPs. Preparation of of Russia jointly practice using all emergency design specifi cations and estimates, calcula- response mobile machines available at NPPs. tions, analyses, and feasibility studies, supply of additional equipment and materials according to In 2014 comprehensive emergency response drill design specifi cations. Completed. were held at Kola NPP. CERD 2014 showed that the number and capacity of the available mobile 3. Long-term activities, 2012-2021. Implemen- machinery are suffi cient to support a power unit tation of additional design solutions at NPPs, in a stable and steady condition for the required adjustment of accident-prevention documenta- amount of time in case of any natural or man- tion. Currently are being inplemented. made anomalies.

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:

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 66

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

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 67

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

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 68

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

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 69

SAFETY CULTURE Management’s policy in the area of safe and reliable operation of NPPs is communicated to Safety culture is a basic principle of NPP safety personnel using mass media, posters, and title management. screens on PCs. Also, Internet consulting portals are set up by management of operator compa- The Concern’s activity in the area of safety culture nies, and awareness day campaigns are regularly is aimed at forming a high level of commitment to held. The safety matters are discussed with NPP safety among the Concern’s and NPP’s personnel. personnel during visits of the Concern’s management to NPPs and in the course of conference High level of commitment to safety is shown in calls and visiting meetings of the Concern’s continuous improvement of activity that affects management. safety, self-consciousness of employees who understand their responsibility in the area of The achieved level of safety culture and com- safety and their self-control during performance mitment of personnel to the principles of safety of all operations. All this together guarantees a culture are evaluated systematically at all NPPs. steadily high level of NPP safety. Training materials on safety culture have been developed. The programs for preparation to a The Concern has developed and put into prac- position and programs for maintaining person- tice by an administrative order the Procedure for nel qualiﬁ cation include the “Safety Culture” Organization of Work on Developing and Main- section. Training on the subject “Psychological taining Safety Culture in Rosenergoatom Concern Aspects of Safety Culture” is organized on-site OJSC which sets forth distribution of functions on at NPPs. development and maintenance of safety culture within the company.

Levels of Commitment to Safety Culture

• Declaration about policy in the area of safety Commitment • Management structure at the political level • Resources • Self-regulation

• Determination of responsibility Commitment • Work practice determination and control at the management level • Personnel qualiﬁ cation and training • Incentives and penalties • Revisions, analytical reviews, and comparisons

• Critical position Individual commitment • Strictly regulated and weighted approach • Communicative approach

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 70

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

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 71

In order to ensure uninterrupted control over dos- From here, data are submitted to the indus- age intensity at the location of NPPs, automated try-speciﬁ c system of Rosatom State Corporation. radiation control system (ARCS) operates around each NPP. The system is a functional sub-sys- ARCS stands located in populated areas with- tem of the Uniﬁ ed State Automated System for in the NPP supervised zone are equipped Monitoring Radiation Situation on the territory of with information panel displaying data about the Russian Federation. Its main purpose consists dose intensity at the location. Radiation data in controlling radiation in the sanitary protection is also available on the Concern’s website at zone and supervised area at NPPs and providing http://www.russianatom.ru both in real-time mode information and analytical support of emergency and as archived data for previous periods. structures, NPP management, governing agencies and state authorities of various levels in case of an Pursuant to Resolution of the Government of the accident at NPP. ARCSs of all NPPs of Russia are Russian Federation No. 639 dated July 10, 2014 connected through data transmission channels in “On State Monitoring of Radiation in the Russian

Kola NPP ^ an industry-wide sub-system whose central con- Federation”, organization and maintenance of trol panel is located in the Concern’s Crisis Center. a uniﬁ ed state automated system for radiation

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 72

Sliding (over Three Years) Collective Radiation Exposure at NPPs by Types of Reactor Units (Person-Sv/Unit)

– RBMK 10.28 9.36 – All NPPs 8.57 VVER 7.81 – 7.10 6.48 – Custom-built reactors 6.07 (EGP, AMB, BN) 5.40 4.52 4.83 4.06 4.00 3.85 3.67 3.57 3.53 3.16 3.40 3.31 3.34 3.34 3.19 3.14 2.91 3.13 2.68 2.45 2.20 1.87 1.72 1.61 1.56 1.51 1.47 1.45 1.31 1.38 1.30

94–96 96–98 98–00 00–02 02–04 04–06 06–08 08–10 10–12 12–14

Collective Radiation Exposure at NPPs in 2013-2014, Person-Sv/Unit

4.18 – 2013 – 2014 3.45 3.40 3.24

2.45 2.42

1.29 1.36 0.79 0.71 0.68 0.65 0.61 0.55 0.56 0.51 0.31 0.23 0.23 0.34 0.18 0.05

All NPPS KUR SML LEN BALKOL BIL KLN NVO BEL RST

monitoring is stipulated, taking into account the preparing techniques for radiation risk man- efforts on creating ARCS of NPPs of Russia. agement. We worked on evaluating ratios of individual radiation risk for NPP personnel. The Thanks to focused organizational and technical evaluation served as a basis for development of efforts at NPPs, personnel’s radiation exposure is a software module for automated workstation steadily decreasing. which calculates individual radiation risk (ARMIR AES, version 6.1). The module permits making From 1995 to 2014, the value of collective radi- decisions on radiation risk management based ation exposures decreased by more than 3 times. on source data of personnel working at Russian The main limits of NPP personnel’s radiation NPPs. In 2014 we also worked on improving con- exposures were not exceeded in 2014. trol over personnel’s internal radiation doses.

In 2014, a set of work was performed on eval- In 2014, the Concern established standards uating personnel’s individual radiation risk and on emission limits and allowable discharges of

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 73

Emissions of Inert Radioactive Gases, in Percentage of Allowable Emissions

EGP RBMK VVER BN 25.8 – – – – 25.7 21.0 20.5 25.8

17.7

18.0 21.5 24.3 18.1 18.8 17.0 17.0

11.1 10.2 9.2 10.4 8.6 7.3 6.6 5.5 7.5 6.8 3.2 6.0 4.0 4.7 3.6 3.6 2.0 4.1 3.8 3.2 2.8 2.3 1.8 1.6 0.8 1.5 1.3 1.0 0.3 0.6 0.5 0.8 0.3 0.4 0.8 0.5 0.6 0.4 0.6

2002 20032004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

radioactive substances into environment pursuant radioactive substances are assumed to be present to Resolution of the Government of the Russian in emissions (even if they are not detected by cur- Federation No. 717 dated September 13, 2010 rent devices and methods) at the level of 0.5 of “On Amendments to Certain Resolutions of the the minimum detectable amount, i.e. the emission Government of the Russian Federation on the evaluation became more conservative. Matters of Authorities of the Ministry of Natural Resources and Ecology of the Russian Federa- The analysis of data on NPP emissions and dis- tion, Federal Service for Supervision of Natural charges conﬁ rms the stable and reliable operating Resources, and Federal Service for the Super- level of NPP power units and the efﬁ ciency of vision of Environment, Technology and Nuclear protective barriers created to prevent dissipation Management”. of radioactive substances.

No unauthorized discharge of radioactive nuclides Systematic measurement of concentration of took place in 2014. Like in the previous years, radioactive substances in the atmosphere and the actual gas-aerosol emissions and liquid heat sinks, measurement of soil and plant activity discharges were signiﬁ cantly lower than the and food stuff at the control points located at a standards established by Rostekhnadzor. distance of 50 km from NPP conﬁ rm the absence of detectable impact of NPP operation on the The picture shows IRG emissions in percentage to condition of objects of outside environment. the standards for allowable emissions. New (for some NPPs) and more “strict” standards for allowable emissions were introduced at NPPs in 2014. Furthermore, in 2014 the procedure for accounting of emissions changed. After such change

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 74

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

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 75

Kursk NPP Each year a physical inventory count of nuclear January 15, 2011 was completed (Kalinin, Kursk, 3,262 materials takes place in order to comply with the Leningrad, and Rostov NPPs). First line of RAW procedure for accounting and control of nucle- treatment facility of Leningrad NPP was put into 2,530 ar fuel at the places of storage and use of fuel industrial operation. assemblies (FAs). For the entire term of operation 1,728 of the Concern’s NPPs there were no losses or DECOMMISSIONING theft of nuclear materials. OF NPP POWER UNITS

HANDLING RADIOACTIVE Decommissioning of NPP power units after the WASTE AND SPENT end of designed service life is a natural and NUCLEAR FUEL necessary stage of their life cycle. This work was performed in 2014 in accordance with the activ- Leningrad NPP The main area of efforts in handling radioactive ity programs for NPP decommissioning approved 5,847 waste (RAW) is further reduction in generation of by Rosatom State Corporation as well as as a initial RAW and their transformation to a condi- within the scope of the Federal Special Purpose tioned state which is safe for temporary storage Program “Ensuring Nuclear and Radiation Safety at NPPs. for 2008 and Until 2015”.

2,387 2,125 The Concern equips NPPs with RAW treatment Amendments to the terms and conditions of the facilities, reconstructs the existing and creates license of Rostekhnadzor authorizing operation new storages for RAW at NPPs which provide of power units Nos. 1 and 2 of Beloyarsk NPP for environmental safety of NPPs throughout were received in order to perform the following the entire term of their operation. All work on operations: removal of the building of gas storage – Amount of spent FAs, extraction, treatment, and conditioning of col- tank for accident containment, deconstruction segmented in 2014 lected and incoming RAW is performed at NPP in of south-west structure of KhSO-1, disassembly – Total spent FAs segmented accordance with federal legislation. of equipment, pipelines, and ﬁ ttings of machine from start of operation hall, etc. – Spent FAs removed to FSUE GKhK The following techniques are used at NPPs for RAW treatment and conditioning: evaporation Programs for comprehensive inspection of power to the maximum salt, cementing, ion-selective units Nos. 1 and 2 of Leningrad NPP, No. 3 of cleansing, burning, ﬂ attening, melting, and Novovoronezh NPP were prepared. Programs for fragmentation. In 2014 at the expense of the decommissioning of power units Nos. 1 and 2 of Concern, the container storage and segmenting Kursk NPP were updated. Equipment was dis- facility for spent FAs was put into industrial assembled and 250 t of metallic low-level RAW operation at the spent nuclear fuel storage facility was removed from power units Nos. 1 and 2 of of Leningrad NPP, and proper work criteria were Beloyarsk NPP. Operational testing of plasma achieved at the container storage and segmenting treatment of RAW at power units Nos. 1 and 2 facility for spent FAs at the spent nuclear fuel of Novovoronezh NPP started. Required routine storage facility of Kursk NPP in the industrial operations intended to ensure safe condition of operation mode. power units Nos. 1 and 2 of Beloyarsk and Novov- oronezh NPPs were performed. 1957 t of metal waste contaminated with radioactive substances were removed from NPP sites (Balakovo, Beloyarsk, Kalinin, Kola, Novov- oronezh, Kursk, Leningrad, and Smolensk NPPs). Initial registration of RAW generated before

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 76

3.4. Natural Capital. Environmental Impact

Ecological safety, environmental protection, The Concern pursues a comprehensive approach and rational use of natural resources in the areas to managing environmental impact which includes of industrial activities constitute strategically complete accountability to Rosatom State Corporation and transparency of all indicators of important objectives for the Concern. The purpose environmental activity. of the Concern’s environmental policy is to provide the level of NPP safety when the impact on the The Concern’s environmental activity principles and obligations regarding ecological safety and environment, personnel, and population would be environmental protection are speciﬁ ed in the minimal, thus conserving natural systems and sup- Environmental Policy available at: porting their integrity and life-supporting functions. http://www.rosenergoatom.ru/ environment_safety/environment/

In 2014 NPPs were THE MAIN SIGNIFICANT WORK PERFORMED BY CONCERN AS A PART operated subject to OF ITS ENVIRONMENTAL POLICY IN 2014 unconditional compliance with statutory environmental standards and rules. NPPs Rostov NPP: capital repairs of ﬁ ltration ﬁ eld No. 1 Balakovo NPP: certain measures were taken to operated in a reliable of waste treatment facilities in the radiation free maintain (recover) design characteristics of the and safe manner, area; waste treatment facilities for storm water Kristall oily water treatment facility and biologi- with a minimum drainage of power units Nos. 3 and 4 were put cal treatment station in order to reduce adverse possible impact on into operation; algol treatment of heat sink and impact on the environment by treating and the environment. dam area of the Tsimliansk water basis in order to reducing pollutants in discharging water suppress biological interference (preventing water bloom)

ATMOSPHERIC EMISSIONS

Priority areas in environmental Discharges Production waste protection activity into waters recovery

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 77

NPP Ecological Ecological control Making Efﬁ cient Minimization Services and Safety Evaluation Decisions of environmental impact of NP

IN 2014, 1,514 T OF POLLUTANTS WERE EMITTED INTO ATMOSPHERE, MAIN INDICATORS WHICH IS 35.5% OF THE AMOUNT PERMITTED IN THE REPORTING YEAR OF ENVIRONMENTAL IMPACT (4,290 T). THE VOLUME OF POLLUTANT EMISSIONS RESULTED FROM FUEL COMBUSTION IN BOILERS AND EMERGENCY DIESEL GENERATORS ON THE ATMOSPHERIC EMISSIONS BOOKS OF NPPS TOTALED 948 T WHICH IS 62.6% OF GROSS EMISSION OF OF POLLUTANTS POLLUTANTS. THE VOLUME OF SOLID POLLUTANTS EMITTED IN 2014 TOTALED 63 T, GASEOUS AND LIQUID POLLUTANTS – 1,451 T. GAS CLEANING AND Notwithstanding the minimum values of indica- DUST-CAPTURING UNITS RECEIVED 190 T OF POLLUTANTS, OUT OF WHICH tors for pollutant emissions, nuclear power plants 182 T WERE CAPTURED AND DECONTAMINATED (CAPTURE EFFICIENCY IS strive to reduce harmful impact on atmosphere: APPROXIMATELY 96%). OVER MANY YEARS THE SHARE OF NPPS IN THE we improve technology used for increasing VOLUME OF POLLUTANTS EMITTED INTO ATMOSPHERE BY ALL ENTERPRISES efﬁ ciency of fuel consumption, use fuel oil of a OF THE RUSSIAN FEDERATION IS BELOW 0.01%. better quality (with less sulfur content), improve technologies used in painting, put into operation efﬁ cient gas cleaning and dust-capturing units.

Volume of Pollutant Emissions into Atmosphere Emissions of NOX, SOX and Other Signiﬁcant Pollutants into Atmosphere, Indicating their Type and Mass, t* by Nuclear Power Plants in 2012-2014, tons 4,290 3,913 1,491.2 1,511.6 1,450.6 3,769 Sulfur dioxide – 779.8 851.6 723.3 – Carbon oxides – Nitrogen oxides

(in NO2 equivalent) 1,587 1,602 1,514 – Hydrocarbons (excl. volatile organic compounds) 170.2 143.0 – Volatile organic compounds 156.5 229.9 – Other gaseous and liquid 245.2 208.9

238.0*** 200.8 205.0**

70.8 68.4 90.9 24.4 21.2 25.5

2012 2013 2014 2012 2013 2014

– Actual emissions – Standard

* * Excluding solid pollutants. ** Incl. 201.0 of methane. *** Incl. 230.3 of methane.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 78

* (among them 7.5 – ground water) Emission of Ozone-Destroying Substances (ODS) Use of Water by Sources, mln m3 ** (among them in 2012-2014 7.8 – ground water) 6,492.3 11.8*** *** (among them 6,233.0 11.5* Name of ODS ODS emitted, t 7.5 7.6 – ground water) 7.2 5,378.7 2012 2013 2014 9.3** 1,818.9 1,706.1 6.8 CFC-12 0.142 0.204 0.163 1,818.6 4,654.1 4,508.2 Total, incl. ODP 0.142 х 1 = 0.204 х 1 = 0.163 х 1 = (metric, t) 0.142 0.204 0.163 3,544.0

HCFC-22 1.832 1.259 6.943

Total, incl. ODP 1.832х0.055= 0.259х0.055= 6.943х0.055= (metric, t) 0.101 0.069 0.382

2012 2013 2014

CFC-12 – dichlorodifluoromethane – Potable water from natural water sources (ozone depletion potential (ODP) = 1.0) – Potable water from water supply utility systems Fresh process water from natural bodies of water HCFC-22 – difluorochloromethane (ODP = 0.055) – – Sea water

DISCHARGE OF POLLUTANTS Waste waters discharged in 2014 totaled INTO WATERS 6,076 mln m3, and the share of polluted waste waters totaled approximately 0.09%. It is a good Water sources used by nuclear power plants do indicator compared to other enterprises of the not belong to protected areas. It is worth noting Russian Federation. that the Concern’s NPPs have no effect on wet- lands included in the Ramsar List 6,063 mln m3 of partially clean waste waters and (http://www.ramsar.org/). 6.3 mln m3 of waste waters treated to standard quality were discharged in water bodies in 2014, In 2014, NPP wastewater disposal was within the including: limits of water balance and the amount of generated power and totaled 93.6% of the volume of • 5.9 mln m3 at the mechanical water treatment water used. It is a good indicator of water use and facilities; complies with the limits established by environ- • 0.4 mln m3 at the biological water treatment mental authorities. facilities.

34,130 At all NPPs waste waters of household sewage The discharge volumes of polluted waste waters t of waste generated at and storm water drainage were treated before are steadily reduced thanks to consistent mod- NPPs in 2014 (1,835 t their discharge into surface waters. Control over ernization and reconstruction of waste water less than in 2013) content of pollutants entering surface water with treatment facilities at NPPs. waste waters from NPPs was effected in accordance with duly agreed and approved rules.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 79

HANDLING PRODUCTION Total Volume of Multiusable AND CONSUMPTION WASTE and Reusable Water, mln m3

As far as handling production and consumption 28,167.5 28,399.9 28,777.8 waste (hereinafter, waste) is concerned, NPPs effect their environmental protection activities in accordance with legislation of the Russian Feder- ation in the area of environmental protection and based on the license and approved draft standards for waste generation and limits on waste emplacement.

The main volume (95.1%) of waste generated in 2014 consists of class 4 waste (low hazardous 425.4 312.7 358.9 4.52 5.28 4.43 waste) and class 5 waste (virtually non-hazard- 0.07 0.06 0.06 ous waste) – 15,406 t and 17,043 t, accordingly. 2012 2013 2014 The increase in generation of class 2 waste is due to scheduled replacement of lead accumulators – In recycled water systems at Balakovo, Kola, and Novovoronezh NPPs. – 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 2012 2013 2014

Class 1 52 59 56

Class 2 123 57 256

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 Existed Generated Used Decon- Handed over to other enterprises Emplaced at Existed hazard at the in 2014 taminated own facilities in 2014 at the end class beginning of 2014 of 2014 Total Among them Total Among them on sites:

for for for for storage dumping use decontami- storage dumping nation

1 2 3 4 5 = 6+7+ 6 7 8 9 10 11 12 13 = 1+2- 8+9 3-4-5-12

I 7.1 56.4 0 3.6 52.5 0.7 51.8 0 0 0.6 0.6 0 7.4

II 23.2 256.3 0 0 262.0 260.2 1.8 0 0 1.5 1.5 0 17.5

III 155.0 1,369.2 0.3 0 1,337.8 844.4 322.6 20.0 150.8 38.5 5.5 33.0 153.1

IV 14,833.8 15,405.6 800.5 0 12,171.5 57.0 1,184.1 27.8 10,902.6 3,199.9 1,942.2 1,257.7 16,009.7

V 1,166.3 17,042.7 83.1 0 16,705.1 9,438.5 1,211.0 0 6,055.6 717.7 264.5 453.2 967.6

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 80

Environmental Costs Current (Operating) Payment for – For ensuring environmental radiation safety Incurred, mln rubles Environmental Costs, Environmental Services, mln rubles mln rubles – Collection and treatment of waste waters – Waste handling

Protection of atmospheric air and prevention 3,196 – 3,141 of climate change 2 81 175 2 27 9 39 Protection and rehabilitation of lands, surface 2,458 193 1,058 – 11 and ground waters 44 220 – Other areas of activity in the environmental protection sphere

– For preservation of biodiversity and protection of natural areas

Research activities aimed at reducing adverse 276 133 477 – human-induced impact on the environment 2012 2013 2014 466 – Protection of environment against noise, vibration, and other types of physical impact

The volume of waste generated at NPPs at the In 2014, ﬁ nes for breach of statutory require- beginning of 2014 was 16,185 t, at the end of ments in the area of production and consumption the year – 17,155 t. Following waste handling waste handling were levied on Leningrad NPP and activities at NPPs, in 2014 3.6 t of class 1 waste totaled 140,000 rubles. (extremely hazardous) was decontaminated, 884 t of classes 3, 4, and 5 waste (moderately Applicable legislation provides for a fee for hazardous, low hazardous, and virtually non-haz- adverse environmental impact as a form of partial ardous) was reused; 30,529 t of waste was compensation for damage caused to the environ- handed over to other enterprises; and 1,744 t of ment by a natural resource user. waste of classes 3, 4, and 5 was dumped at own facilities. ENVIRONMENTAL RISK MANAGEMENT All production and consumption waste is emplaced at specially equipped sites, in special In 2014, comprehensive research in evaluation of storages, and their disposal is controlled by NPP radiation and chemical risks for human health in ecological services. local communities situated close to NPP locations were carried out in the Sverdlovsk and Voronezh ENVIRONMENTAL COSTS Oblast where Beloyarsk and Novovoronezh NPPs, accordingly, are located and where it was decided Environmental costs incurred by NPP include to construct new units. The results of these risk expenses for protection and rational use of evaluations were taken into account in prepara- water resources (including payments to other tion of the Concern’s environmental policy and enterprises for acceptance and treatment of development of the Concern’s environmental waste waters), atmospheric air, environmental management system (EMS). protection from adverse impact of production and consumption waste (including payment under NPP radiation impact on environment through its 3,141 contracts on transfer of waste to specialized actual emissions and discharges of radioactive mln rubles – environ- organizations) and remediation of violated and substances into atmospheric air and bodies of mental costs in 2014 contaminated lands. water is signiﬁ cantly below allowable values and

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 81

Standards developed Fee for Adverse Impact on the Environment, thousand rubles and introduced by Concern pursuant to Name Actually paid during the year requirements of Rus- sian legislation and 2012 2013 2014 regulations Fee for allowable and excessive emissions (discharges) of 9,691 11,064 15,705* pollutants (emplacement of production and consumption waste)

Funds (charges) and fines recovered in compensation for damage 222.6 0 140 “Fundamental Rules caused by breach of environmental legislation for Environmental Protection at Nuclear * The growth is generally caused by increase in fee for emplacement of production and consumption waste. Power Plants”

“Guidelines for Orga- nization of Production does not exceed the minimum signifi cant dose ENVIRONMENTAL AUDIT AND EMS and Environmental equal to 10 mSv per year. With such volume of CERTIFICATION Monitoring at Nuclear emission of radionuclides to environment the Power Plants” radiation risk for population is guaranteed to be Improvement of EMS and its certifi cation on unconditionally acceptable (less than 10-6). It per- conformance with international standard ISO “Manual on Organiza- mits us to consider the actual level of emissions 14001 is an effi cient way for the Concern to tion of Work Con- and discharges of NPPs as optimized. confi rm its commitment to ideas of environmen- nected with Handling tal protection and an opportunity to increase its Production and Con- ECOLOGICAL ACCEPTABILITY competitiveness and to enhance interaction with sumption Waste” stakeholders and general public. The Concern has developed program activities in “Procedure for Produc- key areas, including environmental, along with In 2014, inspection and/or recertifi cation audits tion Control in Waste corporate standards which refl ect short-term of certifi ed EMS were conducted at the Concern’s Handling Activities in goals and comply with the Concern’s strategic headquarters and operating NPPs. Rosenergoatom Con- concept on EMS improvement. cern OJSC”

“Guidelines. Technol- ogies for Reducing Key Results of 2014 Volumes and Ways of Reusing Hazardous Waste Generated during Operation of NPPs” The following Concern’s Inspection and/or recerti- Favorable opinions of the The activities stipulated in standards were updated fi cation audits of certifi ed state environmental exper- the “Comprehensive Plan 1234and put into operation: environmental manage- tise were obtained based for Implementation of the “Water Use at Nuclear ment systems of Concern’s on justifi cation materials to Environmental Policy of Power Plants. Classifi cation headquarters and operating the licenses for operation Rosatom State Corporation of Cooling Water Supply NPPs were organized and of the following power for 2012 and until 2015” Systems”, “Manual for conducted to ensure con- units at 104% capacity vs and scheduled for 2014 Environmental Manage- formance with international nominal: No. 1 of Balakovo were performed to the ment System”, “Procedure standard ISO 14001:2004. NPP, No. 2 and 3 of Kalinin extent referring to Rosen- for Internal Audit of the Validity of environmental NPP. ergoatom Concern OJSC Environmental Manage- certifi cates was confi rmed. and its branches – ment System”. operating NPPs.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 82

3.5. Developing Generating Potential

Novovoronezh NPP-2 and Leningrad NPP-2 In 2014, construction work on erection of 9 new are the fi rst plants to be built in Russia from power units and 1 fl oating power unit was in progress at the Concern’s nuclear power plants. scratch for the last thirty years. Six of them were constructed according to the NPP-2006 design which became an evolutionary step in development of the Russian nuclear power industry. BUILDING NEW NPP POWER UNITS In 2014, construction of new power units was Pursuant to Energy Strategy of Russia until 2030, effected under general contractor agreements General Allocation Pattern for Energy Facilities with engineering companies NIAEP JSC, Atom- 9/1 of Russia until 2020, and taking into account the energoproekt JSC, and UK Uralenergostroy LLC. 9 (and 1 fl oating) long-term development until 2030, the Concern General contractors and contractors were selected new NPP blocks were provides for increase in the share of nuclear power according to the requirements of the Unifi ed under construction in energy balance of Russia at the same time Industry Procurement Standard of Rosatom State in 201 ensuring necessary safety level, including by way Corporation. of building new power units of NPPs.

NPP Power Units under Construction: Volume of Construction Work Performed (% of Plan Fulfilled) 245.2 No. Name of NPP Power unit availability bln rubles Physical launch 1 Beloyarsk NPP, power unit No. 4, BN-800 was spent on (start) construction of 2 Novovoronezh NPP-2, power unit No. 1, VVER-1200 81% NPP-2006 3 Novovoronezh NPP-2, power unit No. 2, VVER-1200 40%

4 Leningrad NPP-2, power unit No. 1, VVER-1200 62%

5 Leningrad NPP-2, power unit No. 2, VVER-1200 27%

Physical launch, 6 Rostov NPP, power unit No. 3, VVER-1000 6/7 power start up 7 Rostov NPP, power unit No. 4, VVER-1000 17% 6 years 7 months – period of the NPP- 8 Baltic NPP, power unit No. 1, VVER-1200 14%

2006 power unit 9 Baltic NPP, power unit No. 2, VVER-1200 2% construction

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 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 The dome was covered with internal containment (20UJA- (NPP-2006 project) reactor building). The ring of the base RU was assembled.

Leningrad NPP-2 No. 1 VVER-1200 Reactor vessel was installed on its proper location (NPP-2006 project) (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 De-aerator is installed on its proper location. project) 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 Operations performed as a part of activities following (NPP-2006 project) decision on additional placement of power units of low and medium capacity. No. 2 VVER-1200 (NPP-2006 project)

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 2013-2014

Work types Unit 2013 2014

Reinforcement t 45,011 27,186

Concreting m3 377,419 313,044

Process pipelines t 19,131 18,367

Metal structures t 32,714 16,351

Equipment assembly t 30,176 23,141

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 84

COST OF NPP CONSTRUCTION was developed and implemented in 2014 by the Concern’s Facility Construction Management Due to the current economical situation and Branch in order to regulate operations, make tough competition in the NPP design market the them compliant with international standards, as Concern faces the task of signifi cant reduction of well as to meet the requirements for participation cost and timelines for construction of new NPP in international tenders on NPP construction. power units. NPP-2006 is currently the basic Certifi cation audit in TÜF Thüringen certifi ca- design for organized serial construction of NPPs tion authority was successfully passed, and we of the Russian design both in Russia and abroad. received the certifi cate on conformance of the management system with standard 9001:2008 in The construction cost of a standard two-unit NPP the area of design and construction management according to this design totals 43.4 bln rubles in of facilities intended for peaceful use of nuclear bln rubles invested in the basis prices of the year 2000, or 245.2 bln energy as well as production and supply of electric construction of new rubles in prices of the 1Q 2014. The power start power (reg. No. TIC 15 100 128018). 123.5NPP power units in of the fi rst power unit of an NPP constructed 2014 under the NPP-2006 design is accomplished Unifi ed requirements were introduced for the in 6 years and 7 months, and of the second organization, collection, and analysis of data on power unit – in 7 years and 7 months after project production (work, services) quality in the civil launch. Maximum expenses on fi nancing of a nuclear power industry of the Russian Feder- two-unit NPP are incurred on the fi fth year of ation, formation and evaluation of successful construction. management solutions, implementation of quality policy of Rosatom State Corporation. Require- New techniques based on the Rosatom Produc- ments were introduced for organization of the tion System are implemented in order to reduce monitoring system of construction and assembly construction timelines of new power units: work providing for unifi ed (for all construction sites) collection and analysis of data and • Preassembly of main circulation pipelines in information about quality of construction and the pre-installation preparation workshop assembly work. 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-1000-60/300 in the form of fi ve preassembled blocks; • Manufacture and assembly of preassembled blocks of the internal containment of the reactor building.

For the ﬁ rst time in Russia, at Leningrad NPP-2 the 328 t reactor vessel of the ﬁ rst power unit was installed using the open top technique using heavy-duty caterpillar crane Liebherr LR 11350. 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”

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 85

Financial and Economic Indicators of NPP Construction in 2014

Indicator Unit Plan Actual

Financing* bln rubles 107.5 109.3

Compliance with annual plan % - 102

Increments of non-financial assets bln rubles 151.2 151.8

Compliance with annual plan % - 100

Assimilation of capital expenses bln rubles 155.8 157.5

Compliance with annual plan % - 101 * Investments in ﬁ xed capital.

Number of Organizations and Employees Involved in Construction of NPPs in 2014

NPP Number of main Total employees including: organizations involved engaged engineers and tech- blue collar workers nical employees

Baltic NPP, power units Nos. 1 and 2 4 90 10 80

Beloyarsk NPP, power unit No. 4 59 5,960 762 5,198

Novovoronezh NPP-2, power units Nos. 1 41 8,021 1,668 6,353 and 2

Leningrad NPP-2, power units Nos. 1 and 2 19 4,043 377 3,666

Rostov NPP, power units No. 3 and 4 33 6,062 465 5,597

Total: 156 24,176 3,282 20,894

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 86

3.6. Financial Capital. Performance Results

The main factor in growth of net proﬁ t by 7,027 mln rubles is achievement of the record power generation for the entire history of the Russian nuclear industry.

108.7% 253,215 vs revenue in 2013 mln rubles – revenue from sales of Concern’s products in 2014

247,489 mln rubles – from sales of 250,256 own products mln rubles – actual revenue from selling Concern’s power and capacity at ECWM in 2014 2,767.2 (incl. Bilibino NPP) mln rubles – from sales of purchased products

417.82% 9,238 vs net proﬁ t in 2013 mln rubles – net proﬁ t from sales of Concern’s products in 2014

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 87

In 12 months of 2014, THE GROWTH OF REVENUE FROM SALES IS CAUSED BY THE FOLLOWING: power and capacity sold by Rosenergo- atom Concern OJSC PRICING FACTORS VOLUME FACTORS totaled 295,506,639 mln rubles. (including Bilibino NPP, by 34.86 by 7,505.83 AtomEnergoSbyt rubles/MWh – mln KWh – JSC, Voronezh- actual prices in the free market of actual volumes of power supply atomenergosbyt OJSC, electric power in the free market VAT included). by 22,193.70 by 556 rubles/MWh – MW – actual price of capacity according to RD actual volume of capacity supply under competitive capacity auction

by 81,002.80 by 96 rubles/MWh – MW – actual price of capacity under power actual volume of capacity supply supply agreements of power unit No. 2 under power supply agreements of Rostov NPP

Main Financial and Economic Indicators (Mln Rubles)

Indicator 2012 2013 2014 Δ2014/2013

Revenue 200,527 232,857 253,215 9%

Gross profit 76,116 96,309 105,607 10%

Percent of gross profit to revenue 38% 41% 42%

Business expenses 20 16 15 -7%

Management expenses* 10,157 10,637 11,325 7%

Net profit -1,849 2,211 9,238 318%

Net cash flow -3,661 8,802 -4,605 -152%

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 0.09 0.10 0.08

Current liquidity ratio 1.30 1.19 1.31

* Management expenses are Equity 943,788 1,057,723 1,180,017 12% shown excl. accrued industry-speciﬁ c reserves (allocated to Borrowed funds 82,317 104,326 94,450 -9% prime cost).

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 88

Value Created and Distributed by Rosenergoatom Concern OJSC according to Russian Accounting Standards, Bln Rubles

Indicator 2012 2013 2014

Created economic value 208.4 239.0 266.5

Incomes (sales revenue, gains from financial investments, and sold assets) 208.4 239.0 266.5

Distributed economic value 136.4 143.4 160.0

Operating costs (payments to suppliers and contractors, cost of purchased materials) 92.6 95.6 108.8

Salaries and other payments and benefits for employees 26.2 27.2 27.6

Payments to capital providers 0.7 1.1 1.4

Gross tax payment (before individual profit tax and VAT) 16.2 19.0 21.8

Investments in communities, including donations 0.6 0.5 0.4

Retained economic value 72.0 95.6 106.5

Contribution to GDP 115.8 143.4 157.7

NET ASSETS BALANCE SHEET STRUCTURE

THE GROWTH IN NET ASSETS VALUE IN 2014 WAS The amount of assets of Rosenergoatom Concern DUE TO THE GROWTH IN THE ASSETS CONSIDERED OJSC increased by 9% (114,865 mln rubles). BY 114,865 MLN RUBLES WITH SIMULTANEOUS The increase in the amount of assets is due to REDUCTION OF LIABILITIES CONSIDERED BY 7,367 increase in value of both non-current assets by MLN RUBLES 9% (106,946 mln rubles) and current assets by 9% (7,920 mln rubles). Increase in value of As of December 31, 2014, net assets of Rosen- non-current assets is caused by growth in capital ergoatom Concern OJSC exceed registered capital investments in-progress in fi xed assets by 26% by 43%. Taking into account that net assets both (141,544 mln rubles) which shows signifi cant exceeded registered capital and increased during amount of investments in fi xed assets made by the reporting period, we may say that, based on the Concern. this indicator, fi nancial state of Rosenergoatom Concern OJSC is quite healthy.

by 122,232 mln rubles by 114,865 mln rubles 1,181 ,245 1,355,827 mln rubles – the Concern’s net asset value as of mln rubles – the Concern’s asset value as of December 31, 2014 (as per balance sheet) December 31, 2014 (as per balance sheet)

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 89

Evaluation of Net Assets of Rosenergoatom Concern OJSC

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 mln rubles % to balance thousand rubles sheet total sheet total

1 2 3 4 5 6 = (col - col 2)

Net assets 1,059,013 85 1,181,245 87 122,232

Registered capital 671,516 54 671,516 50 0

Net assets over registered 387,496 31 509,728 37 122,232 capital

Dynamic Changes in Non-Current Assets of Dynamic Changes in Non-Current Assets of Rosenergoatom Concern OJSC, mln rubles Rosenergoatom Concern OJSC, mln rubles

1,259,284 91,712 1,152,338 84,097 1,003,778 100,143 1,180,017 79,776 83,095 73,262 1 057,723 934,788

84,048 88,623 96,543

2012 2013 2014 2012 2013 2014

– Current assets – Long-term liabilities – Non-current assets – Short-term liabilities – Equity

As of December 31, 2014, non-current assets The Concern approved regulatory documents total 1,259,284 mln rubles, which is 93% of the and guidelines on fi nancial statements internal total asset value. control system (FS ICS). The main purpose of FS ICS is to provide reasonable assurance of the The cost of property of Rosenergoatom Concern reliability of fi nancial statements for external and OJSC as of the end of the reporting period totaled internal users. The Plan on improvement the FS 1,355,827 mln rubles. ICS in Rosenergoatom Concern OJSC, comprising measures aimed at enhancing the quality of The Concern’s structure of sources of funds is accounting and ensuring the reliability of fi nancial dominated by equity ratio 87%. statements, is prepared each year.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 90

BUDGETING Budgeting process products are approved key performance indicators which are decomposed In order to achieve key performance indicators, down to the level of NPPs and the Concern’s the Concern applies a systematic approach to headquarters. planning and accounting of incomes, costs, and cash fl ows. On an annual basis, to ensure the COST MANAGEMENT Concern’s production program fulfi llment and guaranteed funding for priority areas of industrial Pursuant to the action plan aimed at limitation of and economic activities and development, bud- the fi nal cost of goods and services provided by gets (including the cash fl ow budget) and income infrastructure companies while maintaining their and expense estimates by activity are prepared fi nancial stability and investment appeal which in the context of structural units of the Concern was approved by Chairman of the Government and the Concern as a whole; these are the basic of the Russian Federation D.A. Medvedev in documents for expenditures of the Concern and Resolution No. 6732p-P9 dated November 11, its branches for the planning period. 2013, operating expenses in 2014 were agreed at the same level as the budget of 2013, without The budgeting process is implemented within the indexation. Also, when preparing the Concern’s approved standards of Rosatom State Corpora- budget for 2014, we took into account the task of tion put into effect by orders of the Concern and reducing the costs associated with administration represents a short term planning process (plan- and maintenance activity by 10% (in comparable ning horizon of 1 year with a breakdown by quar- prices of 2013). ters). The Company is also engaged in operational fi nancial planning (planning horizon of 1 month). Thus, strict control over compliance by the Con- cern’s branches and structural subdivisions with Funds are spent strictly within the limits commu- assigned limits formed with due regard to the nicated to structural subdivisions in accordance task of reducing the costs contributed to EBITDA with the approved consolidated income and increase comparing with the indicator in 2013. 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 fl ow budget.

Expenses of structural subdivisions of the headquarters and branches of the Concern are monitored on a monthly basis; the fulﬁ llment 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 2012 2013 2014 2014/2013, %

EBITDA, mln rubles 81,536 104,664 112,079 107.08

EBITDA margin, % 40.66 44.95 44.26 98.46

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 91

3.7. Human Capital. Labor Protection

Pursuant to the Concern’s development strategy, Key components of the effi cient functioning of the Distribution of Training Hours per Employee safety, increase in economic effi ciency in the Concern’s HR system are personnel training and of Operating NPPs domestic and external markets, stability, and psychological assessment. The Concern’s employees by Years technology leadership remained the main objectives undergo training in accordance with the require- in 2014. The strategy implementation determines ments of legislative instruments and regulations priorities in work with personnel, because such issued by federal executive agencies and local 140 138 important objectives cannot be achieved without regulations of Rosatom State Corporation and the 135 qualifi ed and committed employees. Concern.

HR POLICY TRAINING, MAINTAINING The Concern’s employees undergo training accord- QUALIFICATION, AND ADVANCED ing to training programs prepared by the Concern’s TRAINING OF PERSONNEL training and apprenticeship units and educational 2012 2013 2014 institutions. THE GOAL OF THE CONCERN’S HR POLICY CONSISTS IN PROVIDING THE COMPANY WITH COMPETENT AND Routine Performance Evaluation and Career QUALIFIED EMPLOYEES WHICH IS POSSIBLE ONLY Development IF THERE IS A PERSONNEL MANAGEMENT SYSTEM CAPABLE OF RESPONDING TO CHANGING MARKET Employees subject to routine performance evaluation 11,288 REQUIREMENTS QUICKLY AND PROPERLY. and career development, pers. Men 54%

The Concern resolves current tasks in the HR area Women 46% also through successfully functioning system for Managers 30.86% training, maintaining qualiﬁ cation, and advanced training of personnel. Specialists 69.14%

Training for Employees

Indicator Hours of training, Hours of training, total per 1 employee

Total hours of in-house training (in TAU NPP and subdivisions) 3,651,579 97.5

Total hours of training with third-party providers 1,217,778 32.5 130 Total hours of training, including: 4,869,357 130 hours of training – Managers 1,015,694 155 on average, each Specialists and white collar workers 1,821,148 125 Concern’s employee received in 2014. Blue collar workers 2,032,515 124

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 92

In order to make perfect practical skills in vocational education (hereinafter, external educa- Distribution of Costs production process management, training and tion). The main providers of external education for for Training of Concern’s Employees, thousand apprenticeship units of nuclear power plants the Concern are such institutions as Non-State rubles (TAU NPP) were equipped with technical train- Educational Institution CPE “Rosatom Central 399,207 ing aids, including comprehensive simulators Institute for Continuing Education and Training”, (CSs). National Research Nuclear University MEPhI, 324,029 283,000 Rosatom Corporate Academy, and Federal State In 2014, in accordance with the Concern’s reg- Educational Autonomous Institution of Additional ulations TAU of Balakovo and Kola NPPs were Professional Training Petersburg Power Institute certiﬁ ed, CS of FTNPP was admitted for train- of Professional Upgrading. ing, analytical simulator for training operating personnel of power unit No. 4 of Beloyarsk NPP Each year managers and specialists of nuclear

2012 2013 2014 obtained permission for use. 42 sample items of power plants – holders of permits issued by Ros- NPP equipment, 15 stands for performance of tekhnadzor authorizing work in the fi eld of nucle- various operations on NPP equipment, 8 dummy ar energy use – attend a qualifi cation maintaining systems and items of equipment of NPP, and 10 course provided at National Research Nuclear stands modeling various operation mode of NPP University MEPhI. In 2014, 296 employees of equipment were put into operation in TAU NPP. NPPs attended a qualifi cation maintaining course.

In order to ensure standardized approaches to In the reporting period the Concern successfully professional training of personnel the Concern carried out activities in personnel evaluation and operates the Instructor School. 345 NPP instruc- development, including the corporate program tors attended advanced training courses in 2014. on teaching the English language, trainings on commitment and mentoring, and managerial skills In 2014 in-house training of employees of development programs. As a part of managerial operating NPPs in TAU NPP and NPP subdivi- skill development, training was provided on the sions totaled 3,646,183 hours. On average, each programs “Work Planning and Organization”, employee of operating NPPs received 105.5 “7 Skills of Highly Efﬁ cient People”, and “Change hours of in-house training. Management”.

In order to enhance safety and economic efﬁ cien- As required by regulations, NPP employees cy of maintenance and repair of NPP equipment undergo routine assessment of knowledge they and systems the Concern has prepared and need to perform their job functions. Assessment implements the Program for Manning, Training, cover rules and standards of nuclear energy use, and Retaining Electrotechnical Personnel of NPP, industrial safety, labor safety, radiation safety, Program on Upgrading the Status of Foremen at ﬁ re safety, basic rules of nuclear plant operation, NP Repair Services, and Program for Development job descriptions, and operating procedures. of Training System for Maintenance and Repair Personnel. NPP personnel training also includes psychological and psycho-physiological training provided The Concern has also introduced standard by specialists from psycho-physiological support 2,500 programs for preparation to a position. In 2014, laboratories (NPP PPSL). In 2014, 10,020 NPP the total number of 67 training programs were updated. employees attended psychological training, and persons who partici- 8,144 NPP employees underwent psycho-physio- pated in the develop- The Concern’s employees attend annual training logical examination. ment programs in external educational institutions for additional

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 93

In 2014, NPP PPSL specialists participated in The achieved level of safety culture and com- 399,207 committees investigating 38 violations and 89 mitment of personnel to the principles of safety thousand rubles – deviations in operation of nuclear power plants. culture are evaluated systematically at all NPPs. cost of external training Based on the investigations, PPSL specialists for the Concern’s developed corrective actions aimed at prevention Pursuant to the Concern’s regulations in 2014 employees in 2014 of the same breaches in the future. Bilibino, Novovoronezh, and Leningrad NPP-2 which is 10.6 thou- were certiﬁ ed by PPSL. sand rubles per person per year The main personnel characteristics are provided in Appendix 14.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 94

Due to speciﬁ cs of nuclear power industry, the issue of highly qualiﬁ ed personnel availability is one of the most important for the Concern to achieve its strategic goals and ensure its economic stability. The Con- cern 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 THE PROGRAM OF EMPLOYER-SPONSORED EDUCA- DEVELOPMENT TION ON THE SUBJECT OF NPPS FOR PROFESSION ORIENTED SPECIALIZATIONS IN 2015. “SCHOOL – INSTITUTION OF HIGHER EDUCATION – DIVISION” Among the leaders in training of personnel for the Concern are such institutions of higher education The Concern is directly interested in attracting as National Research Nuclear University MEPhI best students and graduates for work at NPPs with branches (Volgodonsk, Obninsk, and Sev- and other organizations forming part of the man- ersk), Ivanovo Power Engineering Institute (IPEI) agement circuit. Professional orientation starts (Ivanovo), Tomsk Polytechnic University (TPU) at school. In the cities where NPPs are located (Tomsk), Voronezh State Technical University “nuclear classes” are created to serve as a basis (VSTU) (Voronezh), and Ural Federal University for holding specialized academic competitions in (UFU) (Yekaterinburg). Employer-sponsored physics and mathematics for secondary school education has become a tradition for the Con- students. cern. Since 2014 each prospective student must conclude an agreement on employer-sponsored IN LATE 2014, MULTI-PROFILE ENGINEERING education with the Concern as a prerequisite for ACADEMIC COMPETITION “FUTURE OF RUS- entering the employer-sponsored selection. If SIA” STARTED WITH THE CONCERN’S SUPPORT. such employer-sponsored students are successful OVER 800 SECONDARY SCHOOL STUDENTS in their studies, they receive additional ﬁ nancial TOOK PART IN THIS ACADEMIC COMPETITION. support in addition to their study allowance, THIS FEDERAL-LEVEL ACADEMIC COMPETITION attend practical training at NPPs, and obtain an WAS ORGANIZED FOLLOWING THE ASSIGNMENT employment offer upon completion of the edu- GIVEN BY PRESIDENT OF THE RUSSIAN FEDER- cational institution. In 2014, 121 students were ATION V.V. PUTIN AND WAS HELD FOR THE FIRST accepted to the ﬁ rst academic term as part of the TIME. THE CONCERN WAS CO-ORGANIZER OF Concern-sponsored education program. THE ACADEMIC COMPETITION ON THE SUBJECT OF NUCLEAR ENERGY INDUSTRY AND TECHNO- Each year the Concern participates in profes- LOGIES: NOW SATELLITE TOWNS OF NPPS COULD sional orientation activities for students of ALSO TAKE PART IN THE COMPETITION. WINING leading technical institutions of higher education. THE ACADEMIC COMPETITION GIVES HIGH SCHOOL In 2014, the Concern organized business games GRADUATES ADVANTAGES AND BENEFITS WHEN for students as a part of the Rosatom’s Career ENTERING LEADING RUSSIAN INSTITUTIONS OF Days which took place in Tomsk, Yekaterinburg, HIGHER EDUCATION IN THE TECHNICAL FIELD AS and Moscow. The winners were awarded with a WELL AS ADDITIONAL POINTS WHEN ENTERING study allowance of Rosatom State Corporation

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 95

Indicators of Efficiency of Personnel Reserve, % of Appointments from the Personnel Reserve in 2014

Appointments from the personnel reserve to critically 34.48 important positions

Participants of the personnel reserve who received the 29.90 appointment

minimum diploma and received advantages applicable to practi- as well as to manage career expectations of average grade point – cal training and employment in the Concern’s employees increasing their level of involvement. 4.2prerequisite for gradu- organization. Also, in 2014, the Concern took Development of personnel reserve is one of the ates applying for a job part in industry-specifi c contest of young links of career and succession management. at NPPs professionals TeMP which is a large-scale event organized in order to select the best students The Concern successfully implements the uni- studying engineering specializations in Russian fi ed industry-specifi c system for development institutions of higher education. Students and of personnel reserve for various position levels: graduate students had to solve real production Rosatom’s Talents for initial management level, tasks – business cases prepared specifi cally for Rosatom’s Capital for medium management level, the contest, with support of experts, employees and Rosatom’s Legacy for top management level. of the Concern and other organizations involved Employees who have potential to management in the industry. TeMP is a unique site: students activities, are motivated to achieve high results, solve real tasks suggested by companies, and professional growth and development become it permits employers to select the employment selected to the personnel reserve. candidates who are most suitable for the real production environment. On the other hand, during Each year employees are selected to the person- the contest students interact with representa- nel reserve. As of late 2014, 318 employees of tive of their future employer, because company the Concern who completed training on the devel- experts provide direct advice to participants, and opment program were included into the reserve. 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

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 96

PERSONNEL INVOLVEMENT employees consider the Concern the best place for work, make every effort to achieve goals, and A survey held in late 2014 among personnel take pride in their work (at the companies con- showed that the Concern in terms of its work- sidered the best employers in Russia the level of ing environment and team spirit is close to the personnel involvement is 84%). level of the best employers in Russia: 79% of Following common corporate values makes it possible for the Concern to achieve strategic goals.

79% Kola NPP Balakovo NPP Kursk NPP Novovoronezh NPP of employees consider the Concern the best place for work 92% 91% 88% 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 STAYING STRIVING

Involved employees Involved employees Involved employees always speak positively really want to stay in make extra effort to about the organization. the organization. contribute to the success of the organization.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 97

ETHICAL PRACTICE relationship with Rosatom State Corporation, society, and business partners. Ethic Councils Following common corporate values makes it pos- are created and Authorized Ethics Offi cers are sible for the Concern to achieve strategic goals selected at all NPPs. More details about the Ethics Code are available at: http://www.rosener- The Concern has prepared and approved the fol- goatom.ru/partners/Ethical_practice/. In 2014 an lowing: Corporate Ethics Code, Ethics Regulation updated version of the Ethics Code was prepared; Panel, and Regulations on the Authorized Ethics its adoption is scheduled for 2015. Offi cer. G4-41, 56-58 In 2015, Committee on Settling the Confl ict The Ethics Code defi nes the ethical basis of activ- of Interests was established. The objective of ity of the Concern, its branches, and employees. the Committee is to make sure the Concern’s It covers ethical principles, basic mechanisms employees comply with their duties on prevention of their execution, and the Concern’s commit- and settlement of confl ict of interests and to ments in specifi c areas of activity, including its perform anti-corruption activities.

The Concern’s activity is based on corporate values which are common One step ahead Accountability Efﬁ ciency for the entire nuclear power industry:

One team Respect Safety

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 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 DIVISIONAL NOMINATIONS – NOMINATIONS GENERAL DIRECTOR OF ROSATOM STATE FOR EMPLOYEES OF THE ELECTRIC ENERGY CORPORATION: DIVISION:

• The joint team of Rosenergoatom Concern • Vyacheslav Yuryevich Klimov, Dosimeter OJSC, including Rostov NPP, VNIIAES JSC, Ros- Specialist at the Radiation Safety Department tovatomtekhenergo, and NIAEP – ASE JSC took of Balakovo NPP became the winner in the the 1st place in the nomination “Victory of the nomination Dosimeter Specialist; Year” for starting power unit No. 3 of Rostov • Tatyana Mikhailovna Sadovnikova, Laboratory NPP ahead of schedule; Chemical Analysis Specialist of the 7th dis- 1• The team of Rosenergoatom Concern OJSC charge of Balakovo NPP became the winner in comprising Balakovo NPP and Balakovoatome- the nomination “Laboratory Chemical Analysis nergoremont, took the 1st place in the nomi- Specialist; nation “Efﬁ ciency” for the project on reducing • Sergey Alexeyevich Tsymlyakov, Senior Oper- the timeline of replacing turbine condenser in ator of the Reactor Compartment of Kola NPP power unit No. 4 of Balakovo NPP in 56 days. became the winner in the nomination Operator of the Reactor Compartment; • Alexey Ilyich Pecherkin, Driver Lineman of Tur- bine Equipment of the 7th discharge became CORPORATION-WIDE NOMINATIONS – the winner in the nomination Driver Lineman of NOMINATIONS FOR ALL EMPLOYEES OF Turbine Equipment; ENERGY INDUSTRY COMPANIES: • Oleg Alexandrovich Shamarov, Electrician Repair Specialist of Relay Protection and Auto- • Sergey Vladimirovich Zakharkov, Head of the mation of Smolensk NPP became the winner in Information and Public Relations Department the nomination “Electrician”. of Leningrad NPP took the 1st place in the nomination Mass Media and Internal Communi- cations Management; • Anatoly Yevgenyevich Muraviev, Chief Special- ist of Information and Communication Tech- nologies of Balakovo NPP took the 1st place in the nomination Information Technologies Management; • Marina Mikhailovna Shindina, Leading Special- ist for Staff Development of Smolensk NPP took the 1st place in the nomination Human Resource Management.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 99

Labor Protection

Ensuring safe working conditions for nuclear plant and safety are included in the Corporate Agree- employees and contractor personnel is the Con- ment in the Area of Labor and Social Relations cern’s key objective in labor protection, and one of concluded between employer and the trade union the key operating principles. for 3 years. G4-LA8

In 2014, the Concern continued systematic work In the reporting period, 2 the Concern’s employees to improve safety level, including reduction of suffered injuries (Beloyarsk and Kalinin NPPs), industrial injuries and reduction of the impact of both cases are classiﬁ ed as severe. Evgeny Romanov about Labor Safety harmful factors on personnel. Matters of health

“Today we hear a lot of suggestions on how to avoid injuries at construction sites. In my opinion, Number of Injuries at Operating NPPs in 2007-2014 the proven and efﬁ cient 2007 2008 2009 2010 2011 2012 2013 2014 solution consists in fur- Balakovo 0 0 0 0 0 0 0 0 ther development of our Beloyarsk 0 0 0 1s 1f 0 0 1s proven industrial Labor Safety Management Sys- Bilibino 0 0 0 0 0 0 0 0 tem and its introduction Kalinin 0 0 0 0 1s 0 0 1s to the daily practice of the Kola 1 0 0 0 1s 0 0 0 entire chain of our exter- Kursk 0 0 0 0 1f 0 0 0 nal contractors followed Leningrad 0 0 0 0 1 0 0 0 by a strict and rigorous monitoring of compliance. Novovoronezh 0 1 1s 1 0 1 0 0 I think that we must part Rostov 0 0 0 0 1s 0 0 0 with the companies and Smolensk 0 0 0 0 0 1s 0 0 managers who are not ca- Total: 1 1 1s 2 (1s) 6 (2f, 3s) 2 (1s) 0 2s pable to comply with our requirements, notwithstanding their operating performance, because it is better to lose a job in Dynamic Change in Injuries at Concern’s Operating NPPs in 1992-2014* the nuclear industry than 49 one’s life or health.” * All injuries – Minor injuries happened to men 45 – Severe injuries – Fatalities 34 32 30 24 22 17 14 16 13 99 6 4 3 2 2 2 111 0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 100

Standard Regulations on the Labor Protection Com- WORK WITH CONTRACTORS mittee (Commission) were approved by Order of the Ministry of Labor of Russia No. 412n dated June Contractors’ employees working at the operating 24, 2014. The Order was registered with the Minis- NPPs suffered fi ve accidents involving injuries try of Justice of Russia under No. 33294 dated July in 2014 (among them two fatalities), in 2013 28, 2014 and entered into force from August 29, six accidents involving injuries occurred (three of 2014 (published in the Rossiyskaya Gazeta, issue them were severe injuries). No. 185 of August 18, 2014). G4-LA5 Out of fi ve accidents involving injuries in 2014 Based on the Standard Regulations, labor pro- three happened to employees of Atomener- tection committees (commissions) were estab- goremont JSC. In order to analyze the causes of lished at each NPP by orders of Deputy General increase in injury rate, extraordinary inspection Directors – Concern’s NPP Branch Directors with was carried out resulting in implementation of a due regard to opinion of the trade union orga- specifi c program for remedial actions at Atomen- nization. There are no such committees in the ergoremont JSC. headquarters. Among six accidents involving injuries suffered Committees are an integral part of the labor pro- by contractors’ employees at NPPs under con- tection management system as well as one of the struction, fi ve accidents were caused by falling form of employees’ participation in labor protec- from height (including four fatalities and one case tion management. Committees operate pursuant of severe injury due to falling into an unfenced to the principles of social partnership. opening).

Dynamic Changes in Injury Rate among Contractor’s Personnel

NPP Injuries, total:

2013 2014

At construction facilities of the Concern’s operating NPPs

Balakovo - 3 (1f)

Kalinin 1 (1s) 1

Kursk 21f

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)

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 101

General decrease in the amount of accidents ECONOMIC INDICATORS OF LABOR involving injuries among contractors over the last PROTECTION EXPENSES years was achieved thanks to the implementation of standard approaches to the organization of These funds were spent on the following: the labor protection management system at NPP construction sites, including the following: • Labor protection activities according to collective agreement; • Implementation of the Standard Regulations • Ensuring normal working environment; on the Labor Protection Management System • Improvement of labor conditions and at NPP Construction Sites (SR LPMS); protection; • Implementation of the Plan of Additional Activ- • Acquisition of personal protection equipment; ities on Safety and Injury Prevention during • Therapeutic and preventive nutrition. Construction, Repair, Reconstruction, and Mod- ernization of Facilities where Nuclear Power NPP Expenses (thousand rubles) is Used according to Order of Rosatom State Balakovo 471,121 Corporation No. 1-1/15-PP dated February Beloyarsk 141,014

11, 2014; Bilibino 156,966

• Implementation of activities according to Kalinin 1,022,303 Concern’s order No. 9/846-P dated August 5, Kola 4,806,241 2014 “On Injury Prevention during Construc- tion of NPP Facilities”. 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 2013 – 9.2 Key Results in Labor Protection in 2014 1.2 bln rubles)

Planned activities The condition of labor Labor protection work- A set of actions on aimed at enhancing protection at NPPs shops were held for implementation of labor protection at was checked according deputy general directors the Federal Law 1234operating NPPs and to safety inspection of general contrac- “On Special Evaluation NPPs under construc- schedule for 2014. tors involved in NPP of Labor Conditions” tion were put into construction. No. 426-FZ was practice. performed.

Priority tasks for 2015

Implementation of a set Exclusion of condi- Not to exceed the Lost of actions on providing tions that may lead Time Injury Frequency proper labor conditions to injuries. Rate (LTIFR) value of 123for employees during 0.15 which is the most construction and startup ambicious indicator in of NPP facilities. the industry.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 102

3.8. Intellectual Capital1. Knowledge Preservation and Transfer. 1. The term intellectual capital is described in the glossary (Appendix 16). Innovations Management

Results of Employing WORKING WITH GRADUATES total amount of new hires totaled 18% (74 per- Graduates with Higher sons) which is 6% more than in 2013. Education in 2014, % In 2014, 415 graduates with higher education were hired by branches and organizations of The following main areas of preparation were 12 the Concern’s management circuit. The share of especially important in 2014: heat power 32 supportive institutions of higher education of engineering and heat technology; electric pow- Rosatom State Corporation in the total amount of er engineering and electric technology; nuclear new hires has increased in 2014 comparing with power plants: design, operation, engineering, and 2013 by 3% and totaled 68% – 283 persons. nuclear reactors and materials. Comparing with Among them the share of MIFI National Nuclear 2013, in 2014 the need in specialists majored 6 Science Research Institute and branches in the in the area of nuclear reactors and materials 50

Number of Graduates Employed in 2013 and 2014 by Institutions of Higher Education – Other institutions of higher education (132 pers), 34 institutions of higher 102 – Hired in 2013 education – Hired in 2014 MIFI NNSRI (23 pers) – 70 67 – 11 supportive institutions 51 50 45 of higher education (209 pers) 37 32 33 3 branches: INPE, VETI, 26 21 23 25 – 17 and STI (51 pers) 13 11

IPEIBranches TPU VSTU MIFI NNSRIUFU n.a. MPEI Yu.Gagarin of MIFI NNSRI B.N.Yeltsin STUS (INPE, VETI)

Number of Employed Graduates in 2013 and 2014 by Areas of Preparation

Heat power engineering 67 Process and production 29 and heat technology 65 automation 17 Electric power engineering 55 Power engineering 12 and electric technology 52 16 48 14 Nuclear power plants: Physics design, operation, engineering 45 16 15 Nuclear reactors and materials Construction 10 34 9

Nuclear physicsand technology 37 Economics 28 23 6

Nuclear power engineering 30 Heat and power supply to specialized 13 and thermal physics 23 technical systems and facilities 5 Electronics and automatics 22 Chemical technology of materials 11 of physical installations 18 in modern power industry 1

– Hired in 2013 – Hired in 2014

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 103

Recruitment Plan has increased, and the need in specialists majored The main part of IP is created during performance for Graduates in the area of nuclear physics and technologies of research and development work under con- of Institutions of Higher has decreased. The need in specialists majored in tracts ﬁ nanced by the Concern itself. All research Education in 2015-2021 all other areas remained at the same level. and development work initiated by the Concern Institutions of Higher Education where More has applied nature and aimed at resolving real than 50 Graduates By 2021 more than 3,000 graduates with higher current needs at NPPs and detecting long-term are Planned for education are to be employed by branches and objectives of Concern’s production and research Recruitment by 2021 organizations forming part of the Concern’s man- activity. agement circuit, and the share of Rosatom’s supportive institutions of higher education will com- The main areas of the Concern’s research activ- prise approximately 70% of this amount, which is ities include modernization of NPP power unit the highest indicator in the entire industry. design and construction processes, extension of service life of the main equipment through devel- KNOWLEDGE TRANSFERRING SYSTEM opment and use of new materials and processes AND MENTORING as well as development of new reactor units subject to unconditional safety at all stages of life A mentoring system has been introduced at all NPPs. cycle of NPPs. – 707 (22%) Branches A mentor chosen from among highly skilled employ- of MIFI NNSRI ees is assigned to every newly employed young spe- The Concern’s intellectual property portfolio com- – 533 (17%) IPEI cialist and trainee. Mentor helps the young specialist prises exclusive rights to 319 items of intellectual – 510 (16%) Other during their on-boarding period, transfers knowledge property, including 162 invention patents and 60 institutions of higher necessary for the specialist to carry out their work, utility model patents, 95 items of software for PC education and monitors performance of assigned tasks. and databases, among them two items of soft- – 437 (14%) TPU ware for PC have certiﬁ cate issued by the Federal – 286 (9%) MIFI NNSRI Veteran employees play an important role in Service for Intellectual Property (Rospatent), and knowledge transfer. Rosenergoatom Concern two trademarks. There was no activity on legal – 178 (5%) VSTU OJSC has an agreement with the interregional protection of intellectual property abroad. – 178 (5%) UFU n.a. non-governmental organization of Concern’s vet- B.N.Yeltsin eran employees on veterans’ (pensioners’) social In 2013-2014 the Concern was not involved in – 132 (4%) MPEI protection which provides, among other things, for legal protection of know how. – 101 (3%) SPbPU transfer of expertise and knowledge to the young – 94 (3%) Yu.Gagarin STUS generation of employees and education of youth – 50 (2%) Bauman MSTU in the spirit of patriotism and continuation of the Concern’s glorious labor traditions.

INTELLECTUAL PROPERTY MANAGEMENT

2013 2014 In the Concern intellectual property (IP) management is aimed at creation, efﬁ cient use (including Invention patents obtained 8 6 matters of commercialization), and protection of Utility model patents obtained 7 1 company’s IP. Certificates on trademark 02 registration obtained The main objectives of IP management are as follows: Applications for invention 53 • Creating environment for efﬁ cient use of IP patents filed

• Providing efﬁ cient protection of rights to IP Applications for utility 3 1 • Providing efﬁ cient mechanisms and procedures models filed (two patents for utility for IP commercialization models obtained) • Developing labor-saving and innovative culture Applications for trademark 40 registration filed among employees.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 104

INNOVATION MANAGEMENT units using new designs with enhanced performance indicators. Innovation development of Rosenergoatom Concern OJSC is an integral part of maintaining In 2014 the Concern acted as the owner of work positions of technology leader of Rosatom State to develop new nuclear energy technologies, while Corporation and one of the main areas of strate- simultaneously solving the following tasks: gic development of the company. • Developing proposals and supporting the Con- The main areas of innovative development of cern’s uniform science and technology policy; Rosenergoatom Concern OJSC are the following: • Systematic implementation of results of scientifi c research in production; conducting the full • Improving competitiveness in the nuclear innovative cycle of R & D; power market by: enhancing processes of • Coordinating scientifi c research and engineer- design and construction of nuclear pow- ing to support the NPP operation; er units; extending service life of principal • Providing for an integrated system to control bln rubles invested in equipment, including during development research in science and technology in order to R&D fi nancing in 2014 and implementation of new materials and maintain high effi ciency and competitiveness; 3.5as part of the Concern’s processes; • Working out a patent and license policy regard- Integrated Investment • Creating new processes and products for ing intellectual activities. Program energy markets through development of new reactor units; Based on “Rosatom State Corporation Long-Term • Gradual process and product diversifi cation Action Plan (2009–2015)” approved by Resolu- through transfer of own achievements to new tion of the Government of the Russian Federation (for Rosenergoatom Concern OJSC and Rosa- No. 705 dated September 20, 2008, and local tom State Corporation) markets. corporate regulations, the Concern prepares annual R&D action plans on an annual basis. The Solving high-priority tasks of innovative develop- approved spending target is stated in the respec- ment is aimed at achieving the following strategic tive section of the Investment Program for the goals: planning year.

1. Closure of nuclear fuel cycle at the power units In 2014, R & D ﬁ nancing totaled 3.5 bln rubles with BN-1200 and VVER-TOI with mixed urani- under the Concern’s Integrated Investment Pro- um plutonium fuel: gram, including over 1 bln rubles for innovative designs with fast breeder reactors. • Implementation of the R&D program; • Construction of NPP power units with fast FAST BREEDER REACTORS breeder reactors operating in nuclear energy system with closed nuclear fuel cycle. To date, the Russian nuclear industry has accu- mulated unique practical experience on creation The work on achieving this goal is performed as of fast breeder reactors and their successful a part of the program “New Technology Platform: operation over a long term. They are expected to Closed Nuclear Fuel Cycle and Fast Breeder enable the transition of the nuclear power indus- Reactors”. try to a closed fuel cycle that will ensure more efﬁ cient use of uranium resources and a solu- 2. Increasing competitiveness of nuclear power tion to environmental problems associated with industry through construction of VVER power handling spent nuclear fuel and radioactive waste.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 105

The technologies used in fast breeder reactors power plant is in progress. The general engineer- BN-800 and the closed fuel cycle have great innovative ing contractor Atomenergo CJSC completed design reactor of power unit potential, while the start and operation of power and survey work and ﬁ nalized the preparation of No. 4 at Beloyarsk NPP unit No. 4 at Beloyarsk NPP with a BN-800 design documents for the FTNPP onshore and reactor unit in 2015 is of special importance. hydraulic facilities. In 2014 the documents were Currently there are no similar foreign facilities submitted to Federal Autonomous Institution (operating power units with fast breeder reactors “State Expert Evaluation Department” with industrial capacity). (Glavgosekspertiza) to obtain their opinion.

In 2014 R & D on substantiating the design of a In 2015-2016, it is planned to complete the power unit with the BN-1200 fast breeder reactor installation and piping of steam-generating continued as a part of the Rosatom State Corpo- units on the ﬂ oating power unit, approve design ration Long-Term Activity Program (2009-2015). documentation with the Concern, and obtain a In 2014 the detailed design of the BN-1200 reac- permission with Rosatom State Corporation for tor core with MOX fuel and main developments the construction of FTNPP onshore and hydraulic on construction and process components of facilities, ﬁ nalizing the assembly of FPU super- BN-1200 power unit were completed. Power unit structure sections, storage facility equipment process parameters, including in case of breaches for SFA and solid RAW, and nuclear fuel loading in normal operation were reviewed. facilities.

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 fi rst (head) 70 MW fl oating thermal nuclear power plant (FTNPP) based on the fl oating 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 2019.

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, 2014. The volume of constructed 70 MWh hull structures totaled 100%, with 78% com- the capacity of the ﬁ rst (pilot) pletion of general onboard systems. Component ﬂ oating thermal nuclear power plant manufacturing for systems supporting the nuclear (FTNPP)

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3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity

Development of social capital and areas of presence VOLUNTARY INSURANCE forms an integral part of the Concern’s development FOR EMPLOYEES strategy. The social policy implemented by the In accordance with current legislation, the Concern in its areas of presence enjoys active Concern employees are entitled to medical care support of communities and reﬂ ects the needs and in Russian Federal Medical-Biological Agencies (FMBA) institutions. In addition to local Compul- goals of social development in these communities. sory Health Insurance (CHI) programs and state guarantee programs, the Concern provides to its employees voluntary medical insurance and SOCIAL POLICY1 insurance against accidents and disease. Employ- ees can insure their family members at their own Under the collective agreement employees of expense using the corporate discount. Under the Rosenergoatom Concern OJSC are entitled to VHI program employees and their family members voluntary health insurance (VHI), private pension can receive special information, consulting, and insurance (PPI), and health-improving programs. medical assistance both in the medical institu- Great attention is paid to support long serving tions of their region and in institutions located in employees of the industry and develop the poten- Moscow and St. Petersburg. tial of the youth. G4-11, including footnote 2

bln rubles – The Concern’s Social Expenditures in 2012-2014, thousand rubles 2.65In 2014 the funds channeled to imple- 2012 2013 2014 Plan for 2015 mentation of the Costs per employee 68.7 75.8 70.8 74.14 social policy Total costs for implementation of social policy 2,399,639 2,750,786 2,653,527 2,813,457

Including by main programs 1. The main provisions of the social policy and liaison with 1 Health programs (VHI, accident insurance) 274,203 309,718 326,477 324,470 trade union are disclosed in the 2 Concern’s Annual Report for 2 NGO 547,584 1,126,185 218,707 203,535 2013 (pages 203-206). 3 Health resort treatment 204,528 219,069 299,488 325,502 2. Concern’s order No. 1720 dated December 23, 2010 on 4 Support of retirees 324,836 331,300 343,898 314,200 co-ﬁ nancing canceled order No. 5 Assistance in housing acquisition 21,280 148,962 184,252 338,445 891 dated September 22, 2006 on private pensions starting from 6 Organization of culture and sports events 458,672 309,529 522,541 472,190 January 1, 2014.

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PERSONNEL length of service in nuclear power industry – at 986.3 REHABILITATION least 15 years at the time of achieving retirement mln rubles – the Con- age according to pension legislation of the Rus- cern’s expenses on Each year the Concern conducts activities for sian Federation. health rehabilitation personnel rehabilitation in departmental clinics and improvement in and health resort institutions. In the year of The Concern’s expenses on private pension 2014 2014, for example, 11,298 persons received arrangement in 2014 totaled 218.7 mln rubles. health rehabilitation and treatment in 10 clinics at The total number of the Concern’s retir- the nuclear plants, under rehabilitation programs ees receiving non-government pension in to treat cardiovascular, musculoskeletal, nervous Atomgarant Non-Government Pension Fund is system, gastrointestinal, and other conditions. 15,308 persons. The average private pension Another 7,660 employees enjoyed health rehabil- amounts to 2,137 rubles. itation treatment away from home, in rehabilitation institutions and resorts in 20 health centers The pension funds paid by NGPF Atomgarant as on the Black Sea, the Mineral Waters area of the a non-government pensions to retirees for 2014 Caucasus, and midland Russia. total 284.2 mln rubles. 6,339 employees participate in the Concern’s program on co-ﬁ nancing of PRIVATE PENSION pension. INSURANCE G4-EC32

The Concern provides for private pension insur- 19.97 ance of employees through industry-based Atom- mln rubles – the costs garant Non-Government Pension Fund under the of insurance against executed pension agreement. accidents and disease in 2014 Pension obligations are covered from the general resources of Rosenergoatom Concern OJSC Information on Share of Salary Contributed which assessed value was 218.7 mln rubles in by Employee/Employer 2014. The obligations are covered in their entirety Age of the Ratio of pension contributions according to the pension beneﬁ t arrangement. participant (in % of employee’s monthly salary) The obligations with respect to the pension plan

for 2014 were evaluated as of December 31, Employee Employer 2013 and obtained on the basis of the actuarial expectation with due regard to the number of 18-29 0.8 1.6 employees who participate in the Concern’s pen- 30-35 1 2

sion plan and an average contribution per pension 36-39 1.3 2.6 plan participant employee. 40-44 1.5 3

Upon retirement of an employee of Rosenergo- 45-49 1.7 3.4 atom Concern OJSC, the degree of participation 50 and older 2 4 in the pension plan is determined based on the

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 108

YOUTH POLICY, MASS SPORTS IN 2014 OVER 2,500 PERSONS FROM THE AND PHYSICAL CULTURE CONCERN’S TEAMS AND CREATIVE TEAMS OF NPPS TOOK PART IN CORPORATE SPORTS AND CULTURAL As a part of its youth policy the Concern tradition- EVENTS. THE FUNDS SPENT TO SUPPORT SPORTS ally pays special attention to working with young AND PHYSICAL CULTURE TOTALED 522,541 people increasing their educational level and lit- THOUSAND RUBLES. eracy, promoting academic and research activities among young people.

Activities aimed at implementation of the youth The most important cultural and sports policy in 2014 activities held in 2014

In May the 10th International Tournament in Brain The 8th Summer Spartakiada Games for employ- Games (“What? Where? When?” and “Brain Ring”) ees of Rosenergoatom Concern OJSC “Sport NPP- was held among young employees of the nuclear 2014” (Rostov NPP, 300 persons). power industry in the city of Zarechny (Beloyarsk NPP). “Nuclear Regata-2014” water sports open tournament for prizes of Rosenergoatom Concern OJSC In September a team from the Union of Explo- (Kola NPP, 150 persons). ration Troops of Rosenergoatom Concern OJSC participated in the inter-regional Memory Watch Energy of Life-2014” competition among creative in the Kaluga Oblast. teams of retirees of Rosenergoatom Concern OJSC (Novovoronezh NPP, 160 persons). In October Smolensk NPP hosted the 12th Inter- national Youth Festival “Automn Maximum” for Ceremonial events dedicated to the 60th anniver- Teams of the Club of the Cheerful and Quick-Wit- sary of Russian power energy industry (city of ted from various companies operating in nuclear Obninsk, 400 persons). power industry. 6th Spartakiada Games for employees of the In October Smolensk NPP hosted the Coordi- Headquarters of Rosenergoatom Concern OJSC nation Board of Authorized Representatives of (Moscow, 250 persons). Youth Organizations of Rosenergoatom Concern OJSC.

In November Novovoronezh NPP hosted the International Research Conference of Young NPP Employees “Youth of NPPs: Safety, Science, and Production”.

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IMPROVING HOUSING CONDITIONS

The Concern annually provides signiﬁ cant support IN 2014 THE ACTUAL NUMBER OF RETIRED 870 to hundreds of employees’ families to improve EMPLOYEES IN THE INTER-REGIONAL ORGANIZATION their housing conditions. In 2014, housing OF CONCERN´S VETERANS (MOOVK) TOTALED 16,100 apartments were built construction and assistance to employees in PERSONS, INCLUDING: 1,072 PARTICIPANTS IN in 2014 under the obtaining permanent housing was carried out in EMERGENCY RESPONSE CAMPAIGN OF THE CHER- program accordance with the Concern housing program NOBYL NPP AND PO MAYAK, 546 GREAT PATRIOTIC approved in 2012. The Concern helps its employ- WAR, WARTIME HOMEFRONT VETERANS, AND CON- ees with purchasing permanent housing and, CENTRATION CAMP PRISONERS, AND 7,102 VETER- depending on their needs, employees can request AN EMPLOYEES OF THE NUCLEAR POWER INDUSTRY. interest-free loans to pay their ﬁ rst mortgage installment, and/or partial reimbursement of FROM THE FUNDS ALLOCATED BY THE CONCERN interest on the mortgage loan. UNDER CHARITY CONTRACTS, MOOVK PROVIDED 47.3 MLN RUBLES AS FINANCIAL AID TO RETIREES VETERANS’ MOVEMENT IN DIFFICULT SITUATIONS; 10.4 MLN RUBLES FOR HEALTH RESORTS AND MEDICAL REHABILITATION Taking care of its veteran employees is an import- OF RETIREES. THE EXPENDITURES ON EXECUTION ant directive of the Concern’s social policy. The OF DIRECT CONTRACTS WITH NFM TO PROVIDE main objective for the veterans’ movement is to MEDICAL SERVICE TO VETERANS TOTALED 13.4 MLN maintain the achieved level of cooperation with RUBLES, ON ORGANIZATION OF HEALTH IMPROVING veterans, getting them involved in activities of REST AND CULTURAL ACTIVITIES TOTALED 3.9 MLN their choice, allowing them to share their experi- RUBLES. VETERANS RECEIVED NURSING SERVICES ences with younger specialists, providing skilled AND PRESENTS ON HOLIDAYS AND ANNIVERSARIES. medical assistance, and helping them with daily COUNTING ALL EXPENSE ITEMS, FINANCIAL AID chores. WAS PROVIDED TO RETIREES IN 23,891 CASES.

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Social and Economic DEVELOPING AREAS OF PRESENCE development of infrastructure in 2014. Informa- Influence on Areas of tion about the Concern’s contribution to infra- Presence In 2014 the spending on activities under con- structure of geographical regions in the previous tracts with regional governors in the regions where time periods is provided in the Concern’s annual Russian NPPs are located totaled 1.22 bln rubles. report for 2013 (pages 208-209). The indicator of implementation of the contracts, based on the activity program in 2014, totaled PURSUANT TO A COMPREHENSIVE PROGRAM 103.4%. ON PROVISION OF THE CONCERN’S EMPLOYEES Investments in WITH HOUSING, OVER 625,000 M2 OF HOUSING infrastructure In 2014 the Concern transferred 8,632 mln rubles IS PLANNED TO BE BUILT, WHICH MEANS ABOUT to the settlement account of the responsible 10,500 APARTMENTS UNTIL THE YEAR 2020. participant of the consolidated taxpayers group (Atomenergoprom JSC) for payment of corporate CONSTRUCTION OF HOUSING IS ONE OF THE MOST income tax (in 2013 – 5,601 mln rubles). IMPORTANT CONDITIONS IN ATTRACTING QUALIFIED PERSONNEL. IT IS ESPECIALLY IMPORTANT GIVEN Creation and support Investments in infrastructure form an important THE SCALE OF CONSTRUCTION OF NEW POWER of housing stock aspect of the Concern’s social responsibility. The UNITS. Concern’s investment programs typically include construction of social facilities and infrastructure. Key infrastructure components in the home- towns of nuclear plants were built simultaneously with construction of NPPs. The table below Improving housing con- contains data about past investments into the ditions for employees

Infrastructure Facilities Created in Areas of Presence with Concern’s Support in 2014 Programs on liason with educational insti- Areas Infrastructure facilities put into operation and work completed tutions, veteran and Beloyarsk NPP, • Neptun swimming pool (the largest social facility of all put into operation in 2014); youth organizations Town of Zarechny, • Youth theater; Sverdlovsk Oblast • 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, • New sports and fitness center in the integrated center for social services; Murmansk Oblast • 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.

Kursk NPP, town of Kurchatov, • 14 storey apartment building is put into operation in the town of Kurchatov; Kursk Oblast • 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.

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Areas Infrastructure facilities put into operation and work completed

Leningrad NPP, town of Sosnovy • Funds were allocated to the Malakhit sports and culture complex for the acquisition of equipment Bor, Leningrad Oblast 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 co- financing, No. 2 to repair sports ground.

Novovoronezh NPP, town of • Construction of bell-tower in the Cathedral of the Christ the Savior and construction of the John the Novovoronezh, Voronezh Oblast 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.

Smolensk NPP, town of • An apartment building with 135 apartments was put into operation; Desnogorsk, Smolensk Oblast • 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 More details about work with youth is pro- in the areas of NPP presence includes career vided in Section 3.8. Intellectual Capital. consulting for high-school students, and support Knowledge Preservation and Transfer Innovation of target-oriented education of students, orga- Management. nization of academic competitions and contests. For example, the Concern is involved in annual CHARITY vacancy fairs for students of specialized institutions of higher education, offering internships The Concern implements charitable programs and apprenticeships at nuclear plants. Among since its incorporation, and considers this activity the unique projects are educational projects for one of its best corporate traditions. After years schoolchildren, such as the Children’s Nuclear of cooperation, main principles and terms of Academy at Kola NPP, Atom Classes, a lecture interaction have evolved between the Concern cycle “My Profession” for high school students at and charity recipients. Co-ﬁ nancing is one of such Leningrad NPP, and others. principles: the Concern partners up with other businesses and organizations in virtually every Programs for young employees of the Concern project. In addition, the Concern’s charity projects seek to create conditions for efﬁ cient work and to have input from private individuals, including help developing creative potential. Key directions employees of nuclear plants and headquarters. to support young specialists are as follows: Traditional areas for charity and sponsorship • A system of adaptation, training, and mentor- include: assistance to socially disadvantaged ing for young specialists; citizens – orphaned children or persons in dire • Youth organizations in science and technolo- straights, the disabled, Chernobyl disaster gy, occupational training, social activities and liquidators, war and homefront veterans, large sports; families, etc.; restoring and renovating places • Additional higher education and advanced related to Saint Sergius of Radonezh and Ser- training programs; aphim of Sarov; church building in the towns of • “Housing for Youth” project; NPP presence; support and promotion of sports • Plans for career growth and development of and a healthy lifestyle, and patriotism; events management skills. aimed to improve social and sport infrastructure

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in communities around NPP, landscaping; support Charity and Sponsorship Costs, mln rubles for cultural projects that promote moral values 428.9 and responsibility. mln rubles are to be Charity and sponsorship 2012 2013 2014 destined to charity and category Completed construction of the Seraphim of Sarov sponsorship in 2015 Cathedral in the town of Kurchatov in 2013 Traditional events under the 191.4 187.7 169.1 became one of the important projects funded by charity and sponsorship policy

the Concern’s charitable contributions. In 2014 Charitable activities and 186.0 112.0 120.5 work on interior ﬁ nishing and decoration and sponsorship in nuclear plant locations (including aid to external improvement of the Cathedral was in retirees, persons in need, progress. In 2014 the Concern participated in institutions for children, sports infrastructure, etc.) celebration of the 700th anniversary of Sergius

of Radonezh in the Holy Trinity St. Sergius Lavra Industry-level programs 209.2 167.0 106.8 (ﬁ nancing of hotel construction for pilgrims) which also represented an important contribution. Total 586.6 466.7 396.4

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.

> Seraphim of Sarov Cathedral in Kurchatov City

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3.10. Investments in Development

The Concern’s investment activities through capital investments seek to implement the Long-Term (2009–2015) 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 efﬁ cient 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 Investment Activities (100%) in full conformity with strategic goals of the Electric Energy Division aimed at providing con- 2 2 sumers with electrical and heat power produced 22 at Russian NPPs with guaranteed safety as a top priority of its activities.

Distribution of functions among the parties involved in the investment process is regulated 74 in the Investment Agreement between Rosatom State Corporation, Atomenergoprom OJSC, and Rosenergoatom Concern OJSC. – Investment projects on – Investment projects at the construction of NPP power facilities with spent nuclear fuel units, including the Floating and radioactive waste Investment activities of Rosenergoatom Concern Thermal Nuclear Power Plant OJSC are fi nanced from the Concern’s own funds, construction project and – Other investment projects and financing of research work activities: facility conservation, from assets contributed by Rosatom State Cor- for new NPP power unit research and development work, poration, and, when necessary, using borrowed construction sites technical regulations and other pre-design work funds. – Projects and activities at operating NPPs: investment projects on service life Pursuant to the resolution of the General Meeting extension at power units of 1st of Stockholders of Rosenergoatom Concern OJSC and 2nd generations, Ensuring safe and stable operation (Minutes No. 7 of June 24, 2014), the Concern’s of operating power units profi t of 281.7 mln rubles were used for investments in development.

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The Investment Program of Rosenergoatom • Activities of Atomtekhenergo JSC (acquisition Concern OJSC for 2014 was duly submitted to of equipment for start-up work etc.) – 97.79 the Ministry of Energy of the Russian Federation, mln rubles, VAT included; with the planned investments of 185,356.91 mln • Activities of VNIIAES JSC (construction of lab- rubles (210,450.46 mln rubles VAT included). The oratory and storage complex etc.) – 63.05 mln actual level of fulﬁ llment of the Investment Pro- rubles, VAT included. gram of Rosenergoatom Concern OJSC in 2014 totaled 190,875.18 mln rubles (216,499.39 mln In 2014, following competitive processes, rubles VAT included). AtomEnergoSbyt JSC was awarded the status of guaranteed supplier in Kursk, Tver, Smolensk, and Furthermore, the funds of the Rosatom State Cor- Murmansk Oblasts (orders of Ministry of Energy poration’s asset contribution totaling 55,297.2 of Russia Nos. 116 and 117 dated March 19, mln rubles were channeled to investment projects 2014 and No. 311 dated May 23, 2014, and No. related to construction of NPP power units. 843 dated November 18, 2014).

The following projects were implemented in 2014 The goals of these projects include extending in subsidiaries of Rosenergoatom Concern OJSC competencies of Rosatom State Corporation, (fi nancing totaled 3,229.85 mln rubles, VAT ensuring stability of its positions in the energy included): market, increasing consolidated profi t and revenues of Rosatom State Corporation from sales of • Projects of guaranteed suppliers of electric power, guaranteed sales market for energy AtomEnergoSbyt JSC in Kursk, Tver, and produced by organizations of Rosatom State Smolensk Oblast – 2,992.74 mln rubles, VAT Corporation, and increasing signifi cance and infl u- included; ence of the State Corporation throughout Russia. • Construction, reconstruction, and equipment of production bases of Atomenergoremont JSC – 76.27 mln rubles, VAT included;

Dynamic Changes in Investments in 2009-2014, The Estimated Demand for investments to Fixed mln rubles Capital in 2015 and in 2016 -2018 is as follows:

201,778.4 2015 2016 2017 2018 178,981.2 177,270.3 154,191.0 136,554.3 146,230.5 106,573.10 101,161.94 106,944.60 132,808.32

88,297.3 68,496.5 57,208.2 According to the Investment Program of Rosenergoatom Concern OJSC 53,239.8 58,207.5 55,297.2 for 2016-2018 submitted to the Ministry of Energy of Russia with letter of Rosenergoatom Concern OJSC No. 9/01/335 dated March 31, 2015.

2009 2010 2011 2012 2013 2014

– Changes in contributions to ﬁxed capital – Changes in asset contribution

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The following standalone subdivisions of Atom- • The algorithm for substantiation of changes EnergoSbyt JSC were created in order to per- in electric energy consumption norms for own form the function of the guaranteed supplier: needs was developed; KurskAtomEnergoSbyt SS, TverAtomEnergoSbyt • The Plan for Organizational Arrangements was SS, branches SmolenskAtomEnergoSbyt, and prepared and implemented in order to start KolAtomEnergoSbyt with a ramifi ed network of DPC construction; departments and stations which ensure maximum • A set of actions in order to conclude the General available and comfortable service to all consumers Contractor Agreement for construction of DPC of electric power in the regions. were carried out (Investment Committee’s resolution is obtained, Operating Committee’s reso- These projects permitted AtomEnergoSbyt JSC to lution is obtained, Expert Commission on Capital implement the strategy of entry into the sales of Construction’s resolution was obtained, and mln rubles – electric power. The revenues of AtomEnergoSbyt competitive procedures were complied with). net profi t of JSC in 2014 totaled 29,809.8 mln rubles, net 13.6profi t totaled 13.6 mln rubles. Key Results of Project Implementation “Infor- AtomEnergoSbyt mation System for Project Portfolio Manage- Key Results of the Project “Creation of Elec- ment” (ISPPM) in Rosenergoatom Concern OJSC tric Power Commercial Accounting Systems” and Its Subsidiaries in 2014: in 2014: • The ISPPM system was introduced into com- • A subsidiary of AtomEnergoSbyt JSC was cre- mercial operation in the Concern; the imple- ated – Atomenergopromsbyt JSC. Unregulated mentation of the project REA-B-KSP-1 “Trans- type of activity was separated to become an formation of IT Architecture of the Information independent energy sales company; System of Project Portfolio Management and • Negotiations with companies were held; at Updating KSP Methodology” commenced. As a the fi rst stage, 10 nuclear industry companies part of the project, in 2014 the requirements will be introduced in the wholesale market of for NPP construction schedules were updated electric power and capacity; and specifi c modules were developed in order • Design and exploration work started with a to automate control processes over preparation view to create automated information and of management reports during implementation measuring system for commercial accounting of capital construction projects. The informa- of energy (AIMS CAE). tion system is about to be introduced into pilot operation. For 2015 we additionally plan work Key Results of Project Implementation “Cre- on extending the list of projects to be planned ation of Support Center for Processing and and monitored using the Concern’s ISPPM; Storage of Data of Rosenergoatom Concern • Starting from 2014, the reporting of invest- OJSC” in 2014: ment projects and activities of the Concern’s subsidiaries shall be submitted to Rosatom • Design and exploration work performed in full State Corporation in the ISPPM system as a scope, including expertize of design documen- part of the second rollout stage in order to tation under the title of Data Processing Center facilitate monitoring of the investment activity. (DPC); • Design documentation of the TP stage was prepared under the title DPC Energy Supply System;

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3.11. International Activities

In accordance with the general strategy of the Con- • Bushehr NPP – provision of technical support cern its international activity is mainly aimed at during operation and preventive repairs; • Tyanvan NPP – provision of services on mod- safety and reliability of operation of NPPs built ernization, maintenance, and repairs. abroad under Russian designs as well as at extension of service life of equipment. In collaboration We continued working on the contract on radiation treatment of cobalt. The revenue from sales with leading international organizations and com- of Co-60 to a foreign customer in 2014 totaled panies we work on a bilateral basis seeking to 228.5 mln rubles. share our experiences. We also hold conferences, In the reporting year the Concern was actively subject-oriented workshops, and mutual on-the-job involved in increasing foreign order portfolio trainings. on new products for ten years which totaled 34,111.56 mln rubles thus exceeding the target indicator by 3,5 times.

OBJECTIVES FOR 2015 Rosenergoatom Concern OJSC is one of the main AND MEDIUM TERM participants of the integrated offer of Rosatom State Corporation in the international markets of In the mid-term the Concern will continue work- NPP construction. One of the strategic initiatives ing on developing new markets and increas- of the Electric Energy Division is development ing its portfolio as a part of fulﬁ llment of the of the line “NPP Service” which goals consist in program of Rosatom State Corporation on increase in volume of services during life cycle construction and putting into operation of NPP of NPPs and increase in presence in the foreign abroad in 2014-2019 while implementing market of nuclear industry services. projects in Turkey, Jordan, Belarus, Bangladesh, Vietnam, Iran and China, as well as on business The line “NPP Service” is coordinated by the Con- development of electricity sales in the foreign cern and organizations of the Division which have markets. necessary competences and reference experience in implementation of projects abroad at all stages In 2015-2019 we plan to increase our share in of NPP life cycle. the market of operating NPPs from 2 to 17% by developing the following areas: The main increase in revenues is caused by successful implementation of the following projects: • Supply of equipment and spare parts; • Modernization of systems and equipment; • Kozloduy NPP – comprehensive examina- • Technical support of NPP operation and tion and evaluation of the remaining life of service; equipment and structures of power units • Service life extension of Kozloduy NPP and Nos. 5 and 6; Armenia NPP.

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The product portfolio of the Electric Energy Division for Foreign Market in 2014

Nuclear Provision of Technical Personnel Putting into infrastructure Supervisor’s services preparation operation

Operation Service (moderniza- ASUTP simulators Decommissioning tion, SLE, maintenance and elements and repairs, and supply of spare parts, tools and accessories)

OBJECTIVES FOR 2015 IN AREA OF REACTOR DEVELOPMENT OF ELECTRICITY ISOTOPES PRODUCTION: SALES IN FOREIGN MARKETS

• Preparation of an integrated offer on organiza- Following resolution of Rosatom State Corpora- tion of production of Mo-99 using production tion, the Concern jointly with AtomEnergoSbyt capacities of Kursk, Leningrad, and Smolensk JSC were determined as the sole responsible NPPs. The availability of such potential for entities within Rosatom State Corporation for Mo-99 production will permit us to enter into development of electricity sales abroad to end the global market and become the key player in consumers. As a part of development of the inter- production of Molybden-99; national business a relevant competency is being • Provision of services on radiation treatment created in AtomEnergoSbyt JSC, and this area of of cobalt (production of Co-60) under new business will be among priority areas in 2015. contract conditions. Strategic goal of this area consists in entering into priority sales markets of the countries in the Cen- Taking into account the available experience on tral and Eastern Europe and Turkey pursuing the chemical cleanup of equipment of NPPs with following goals: building up an integrated portfolio VVER reactors the Concern plans to prepare an for hedging pricing risks of NPPs abroad under integrated offer for chemical cleanup of steam management of Rosatom, seeking a possibility generators at foreign NPPs. In the long-term the to obtain additional margin in more proﬁ table Concern will extend its presence in the area of markets, and opening new markets for the corpo- services to external customers using new prod- ration in general. Mid-term objectives: Develop- ucts, such as decommissioning and engineering ment of export-oriented Baltic NPP, conclusion of services in traditional power industry. long-term contracts on power supply with foreign

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

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1. The project VVER-TOI was reviewed to check NPPs with VVER Reactors based on the Crisis the consistency with the IAEA standards on Center of Rosenergoatom Concern OJSC, activity safety (results: 99% IAEA requirements were of WANO’s representatives at Russian NPPs. evaluated as satisfi ed or partially satisfi ed in the project). In 2014 the Concern’s top management participated in the Global Board of Governors in the 2. The materials of the Environmental Impact Tokyo Regional Center, two Boards of Governors Statement (EIS) of Baltic NPP (project NPP- of WANO MC, the International Conference of 2006) were reviewed to check their consis- Technical Managers of Operators and Chief Engi- 6 tency with the requirements of IAEA and the neers of NPPs, and International Conference of peer audits were Expo Convention in terms of ensuring radia- Repairs Personnel. conducted by World tion safety of people and environment (gener- Association of Nuclear al conclusion: the EIS materials are consistent Six peer audits were conducted by WANO at Operators at Russian with these requirements). Russian NPPs. The Concern’s headquarters NPPs hosted the event on transfer of best practices to In 2014 the Project Offi ce on Nuclear Infrastruc- the management of Armenia NPP on the sub- ture (PONI) was created in the Concern’s struc- ject “Mid- and Long-Term Planning of Operator’s ture. Its main area of activity is implementation of Activity”. The Concern’s headquarters held two the project “Assistance in Creation or Enhance- technical support missions on the following sub- ment of National Infrastructures of Nuclear Power jects: “Goals and Methods for Self-Evaluation of Industry in the Countries Building or Planning to NPP Safety Assurance System and Self-Evalua- Build Nuclear Facilities under Russian Designs”, tion Effi ciency” and “Creation and Development of including training of foreign specialists on all ele- Commitment to Safety Culture at the Operator’s ments of nuclear infrastructure according to IAEA Level”. We continue working on post-Fukushima classifi cation, organization of work of joint work- projects and initiatives. ing groups with partner countries, such as Bangla- desh, Belarus, Vietnam, and others, preparation ÉLECTRICITÉ DE FRANCE (FRANCE) and carrying out international events, participation in IAEA activity in nuclear infrastructure. In 2014 cooperation of the Concern and the French energy company Électricité de France Competitive process among candidate contrac- (EDF) celebrated the 20th anniversary. On Sep- tors for preparation of teaching materials on all tember 16, 1994 the Concern and EDF signed elements of nuclear infrastructure for training rep- the Memorandum on Cooperation in the Area of resentatives of partner countries was held. Cur- Enhancement of Safety and Reliability of Rus- rently the matter of creation of basic permanent sian NPPs”. Today the cooperation is based on training courses aimed at preparation of repre- the agreement between the Concern and EDF sentative of newly joined countries in all elements dated April 4, 2011 and provides for cooperation of nuclear infrastructure and practical aspects of in a number of areas, including the following: self-evaluation of national infrastructure using operation, engineering, and operation support, the IAEA methodology is being reviewed together designs of new NPPs, fast breeding reactors with IAEA Secretariat. The work start is scheduled (since 2014), personnel training, inspections and for March-April 2015. control, procurement activity, nuclear risks and insurance (since 2013), and general organization WANO1 and development.

The Concern is the largest WANO member orga- The cooperation program provides for workshops nization in the Moscow Center (MC). In 2014 the and work meetings, participation of company Concern pursued the following design objectives: experts in crisis emergency drills, inspections of 1. WANO is the World Associa- tion of Nuclear Plant Operators. pilot operation of the Regional Crisis Center for NPPs in Russia and France, and scientiﬁ c and

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

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Key activities in 2014

International Scientiﬁ c The 6th meeting of OSART mission Coordination Commit- Workshop with Élec- and Technical Confer- contracting parties on at Kola NPP. tee with Électricité de tricité de France on ence “Safety, Efﬁ cien- review of the Conven- France in commemora- measures to improve cy, and Economics of tion on Nuclear Safety tion of the 20th anni- safety in connection Nuclear Power Indus- (participation in prepa- versary of cooperation. with the accident and try” (MNTK-2014) ration and presentation Fukushima Daiichi. (attended by 51 for- of the National Report eign representatives). of the Russian Feder- ation and in work of a group of countries).

Participation in the Comprehensive emer- Peer audits of WANO’s Follow-up peer audits Pre-start peer audits 40th annual confer- gency drills at Kola Moscow Center at of WANO’s Moscow of WANO’s Moscow ence of the Spanish NPPs (attended by Leningrad and Kalinin Center at Kola and Center at Beloyarsk Nuclear Society 24 foreign observers). NPPs. Beloyarsk NPPs. and Rostov NPPs. (ENS-2014) with a report “Innovative Development Projects of Nuclear Industry in Russia.”

the matters of quality assurance during opera- information model can be applied to designs of tion of NPP power units, and on the matters of VVER-TOI; as well as the best practice in the area decommissioning and construction of new power of preparation to decommissioning. units. Specialists of the Spanish company took part in the international conference on heating COOPERATION WITH NORDIC COUNTRIES machinery equipment, integrated emergency drills at Kola NPP, in the international scientiﬁ c In 2014 Leningrad and Kola NPPs continued and technical conference MNTK-2014, and in the their cooperation with Nordic countries – Norway, Atomexpo-2014 forum. The Concern’s represen- Finland, and Sweden. The agreements among tatives took part in the 40th annual conference of REA and SSM (Sweden), STUK (Finland), and the Spanish Nuclear Society (ENS-2014) with a IPE/NRPA (Norway) regulate mutually beneﬁ cial report “Innovative Development Projects of Nucle- international cooperation in different areas: emer- ar Industry in Russia”. gency preparedness, decommissioning, and RAW handling and disposal. 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

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Map of International Activity

1. CANADA 3. BELARUS4. CZECH REPUBLIC 6. HUNGARY 8. BULGARIA

Export of isotope Evaluation Control over NPP Nuclear fuel manufac- Nuclear fuel manufac- materials (cobalt-60) of conformance nuclear fuel manu- turing quality control, turing quality control, of equipment facturing quality supply of spare parts, substantiation of of Belarus NPP, tech- tools and accessories service life extension nical supervision, and to Paks NPP. of power unit No. 5 of start-up operations. Kozloduy NPP up to 60 2. FINLAND 5. SLOVAKIA 7. UKRAINE years. Control over NPP Technical and Contract on supply nuclear fuel consulting work during of equipment and manufacturing quality completion of spare parts, tools construction of power and accessories units Nos. 3 and 4 of Mochovce NPP

Revenues from international operations in 2014 3.5 bln rubles

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2012 324 mln rubles (21.5%)

1.502 2014 686 mln rubles bln rubles (46%) Net exports revenue 3 since 2012 to 2014 2013 4 5 7 492 mln rubles 6 (32.5%) 8 9 10

11 12

9. TURKEY 10. ARMENIA 11. IRAN 12. CHINA

Preparation of section of Performance of work Engineering services Engineering and con- supply of equipment the "Report on Akkuyu and provision of sup- and technical support sulting services on and spare parts, tools NPP Site Parameters" plies and services for of operation, preven- support of the opera- and accessories for and support during ap- extension of service tive repairs, modern- tion of the Chinese power units Nos. 1 proval of the reporting life of power unit ization of CSs of Experimental Fast and 2 of Tyanvan NPP. documents by the Turk- No. 2 of Armenia NPP. power unit No. 1 of Reactor (CEFR), engi- ish Agency on Nuclear Bushehr and NPP neering services and Power, completion of power units under technical support of work on the terms of construction. operation of power reference for develop- units of Tyanvan NPP, ment of design documentation for Akkuyu NPP (power units Nos. 1, 2, 3, and 4).

Portfolio of foreign orders for new products for 10 years – 34.2 bln rubles

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 4. CORPORATE GOVERNANCE

Rosenergoatom Concern places high emphasis on the issues of corporate governance and its improvement.The total value of key performance indicators fulﬁ llment is

126

4.0. Corporate Governance

The Concern applies certain norms of the Corporate Conduct Code recommended by letter No. 06-52/2463 dated April 10, 2014 of the Bank of Russia to its daily practice taking into account the specifi cs of the legal status of Rosatom State Cor- poration set forth in regulations of the Russian Fed- eration which provides for unifi ed management of times a year the Board of Directors considers organizations operating in the nuclear power indus- a report on execution try; these norms of the Corporate Conduct Code are of decisions made refl ected in a number of local regulations. 2

GOALS OF CORPORATE MANAGEMENT • Improving perception of Concern’s activity through timely and quality disclosure of information. Strategic priorities in the corporate • Introducing best Russian and international practice into the corporate management management system in the area of corporate management, business ethics, and principles of openness and transparency.

MAIN PRINCIPLES OF CORPORATE • Creation of an efficient system for safeguard of funds provided by MANAGEMENT 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 • Disclosure of the information subject to mandatory disclosure according to MANAGEMENT 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).

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4.1. Concern’s Corporate Governance Structure

GENERAL MEETING OF STOCKHOLDERS AUDITING COMMITTEE as of December 31, 2014 Atomenergoprom JSC – 96.9907%; Rosatom State Corporation – 3.0093% AUDITOR

BOARD OF DIRECTORS

GENERAL DIRECTOR – CENTRAL COMMITTEE THE SOLE EXECUTIVE BODY Yevgeny Vladimirovich Romanov DIRECTORATE Collegiate bodies

The current system of Pursuant to Order No. 1/218-P dated March 4, • Provides for Operation Management management of the 2013 of Rosatom State Corporation “On Approval of Organizations which form part of its organizations of the of the Regulations on the Management Model management circuit; nuclear power industry: of the Civil Part of the Industry”, the Concern is • Manager of the Division is included in the the management company of the Electric Energy decision-making system of the Corporation. Division. Division means an organizational unit CORPORATE which activity is aimed at the implementation of Main Competences of the Division: MANAGEMENT the strategic business goals of Rosatom State Corporation. Division includes organizations • Organization of efficient performance of • Board of Directors from the management circuit of the management operating processes; • Beneral meeting company. One of the main tasks of the current • Formation of liaison system between of Shareholders management model is the optimization of the organizations included in its management circuit. horizontal management of interaction of subdivisions of Rosatom State Corporation and vertical Liaison rules is a joint document that determines interaction of Rosatom State Corporation and its the procedure for liaison of the Corporation and OPERATIONS organizations in process groups. the Concern when the Concern and organiza- MANAGEMENT tions operate within the limits of the Concern’s Division is an organizational unit and comprises management circuit and sets forth bases and • Industry-specific rules Corporation’s organizations by speciﬁ c types of conditions for participation of the Corporation in activities and areas of business. decision-making associated with industry-speciﬁ c • Interaction procedure processes. Characteristics of the Division: The new version of the liaison rules for the • Implements development strategy of the Concern and Rosatom State Corporation was Division; approved in September 2013.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 128

4.2. Governance and Control Bodies

The General Meeting of Stockholders is the supreme The Board of Directors was elected at the Con- management body. In its activity the General Meet- cern’s Annual General Meeting of Stockholders on June 24, 2014 (minutes No. 7) with the following ing of Stockholders is guided by legislation of the members: Russian Federation, Charter and Regulation on the Concern’s General Meeting of Stockholders. • Alexander Markovich Lokshin (Board Chairman, non-executive director); • Sergey Anatolyevich Adamchik (Non-executive director); • Kirill Borisovich Komarov The General Meeting of Stockholders is the su- (Non-executive director); preme management body. • Yevgeny Vladimirovich Romanov (Executive director); In its activity the General Meeting of Stockhold- • Boris Georgievich Silin ers is guided by legislation of the Russian Feder- (Non-executive director). G4-39 ation, Charter, and Regulation on the Concern’s General Meeting of Stockholders. The Board of Directors operates in this composition from January 1, 2014 to December 31, 2014. In 2014 four general meetings of stockholders were held at the decision of the Board of There were no changes in the composition of the Directors. Board of Directors during the year.

The Board of Directors is a collegiate governing The Concern’s Board of Directors has no body in charge of overall management of the committees. Concern. It is responsible for development of the strategy and controls activity of executive bodies Members of the Board of Directors do not partic- ensuring observance of rights and legitimate ipate in the Concern’s registered capital, do not interests of the Concern’s stockholders. hold the Concern’s common stock, and have not entered into transactions on acquisition or alien- Members of the Board of Directors are elected ation of the Concern’s stock. through a transparent procedure that permits stockholders to obtain information about candi- Performance of the Board of Directors was not dates sufﬁ cient to get an idea about their person- evaluated in 2014. al and professional qualities. Sole Executive Body is represented by the The activity of the Board of Directors is regulated General Director who is in charge of the Concern’s by applicable legislation, norms of the Concern’s operations management. 4 Charter, and Regulations on the Board of Direc- general meeting of tors approved in its new version by resolution of The General Director does not participate in the shareholders were held the general meeting of stockholders on July 29, Concern’s registered capital, does not hold the in 2014 2014 (Minutes No. 9). Concern’s common stock, and has not entered

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into transactions on acquisition or alienation of for 2014, main reference points for activity in the Concern’s stock. the long-term, and approved key performance indicators. Information about the General Director is provided in the section «Information about Members of In 2014 the Board of Directors held 22 meetings the Board of Directors» as of December 31, 2014. and reviewed 49 issues. Meetings of the Board of Directors were held with all members present. Auditing Committee is a body elected by the Con- cern’s General Meeting of Stockholders to exercise The most important resolutions adopted in the control over ﬁ nancial and economic activity of the reporting year: company. • The Board of Directors made a resolution The Auditing Committee was elected at the Con- to amend the resolution on additional issue The Concern’s internal documents are available cern’s Annual General Meeting of Stockholders on of securities in terms of extension of the at: http://www.rosen- June 24, 2014 (minutes No. 7) with the following period of distribution of the securities for 1 ergoatom.ru/partners/ members: year (until September 15, 2015) in order to shareholdersAndInvestors/ ensure budget financing and reduce costs of inner-documents/ • Pyotr Anatolyevich Stepayev; supporting additional issue. • Liudmila Nikolayevna Demidova; • At the initiative of the Board of Directors in • Marina Igorevna Kiseleva. 2014 amendments were made to the Concern’s Charter extending the area of competence This composition of the Auditing Committee was of the Board of Directors in order to arrange in place in the Company from January 1, 2014 to for control over specific transactions with December 31, 2014. immovable property. • The Board of Directors made a resolution to The advisory collegiate bodies include the Con- terminate Concern’s participation in certain cern’s Directorate and Central Committee headed companies due to inexpediency of further by the General Director. participation in line with optimization of the Concern’s management circuit. The list of main local regulations in the area of • In 2014 the Board of Directors approved corporate management is provided in the Con- recommendations to the general meeting of cern’s Annual Report for 2013. stockholders to approve the Regulations on the Board of Directors and the Regulations on REPORT ON ACTIVITIES OF BOARD OF the Concern’s General Meeting of Stockholders DIRECTORS in order to establish control over fulfillment of resolutions made by the Concern’s One of the most important functions of the Board management bodies. of Directors is general governance of the Concern. • In 2014 four general meetings of stockholders The area of competence of the Concern’s Board of were held at the decision of the Board of Directors includes determination of priority lines Directors. of business (according to Federal Law No. 208- • As a part of preparation to the Concern’s FZ dated December 26, 1995 “On Joint Stock annual general meeting of stockholders the Companies” and the Charter of the Concern). Board of Directors tentatively approved the annual report and annual financial statements In 2014, as a part of its current activity, the Board of 2013, and gave recommendations on of Directors determined the main parameters of distribution of profits and payment of business in the approved budget, planned indica- dividends. tors of ﬁ nancial and economic activity, and target performance indicators of the Concern’s activity

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Board of Directors

ALEXANDER MARKOVICH SERGEY ANATOLYEVICH LOKSHIN ADAMCHIK

Board Chairman, Rosenergoatom Concern OJSC; Board Member of Rosenergoatom Concern OJSC First Deputy General Director for Operations (since 2010), Inspector General of Rosatom Management, Rosatom Nuclear Energy State Nuclear Energy State Corporation. Corporation. Born in 1954. Born in 1957. Education: Tomsk Polytechnic Institute. Education: M.I. Kalinin Leningrad Polytechnical Institute. Professional Experience: Professional Experience: 2007–2008 – Deputy Head of the Federal Service for 2001–2006 – Acting Director, Director, Deputy General Environment, Technological, and Nuclear Supervision of Director of Rosenergoatom Concern; Director of Smolensk the Russian Federation. Nuclear Plant (Branch of Rosenergoatom Concern). November 2008 to June 2010 – Deputy Inspector 2006–2008 – First Deputy General Director, Acting General, Rosatom Nuclear Energy State Corporation. General Director in FSUE Rosenergoatom Concern. Since July 2010 – Inspector General, Rosatom Nuclear 2008–2010 – Deputy General Director, Rosatom Nuclear Energy State Corporation. Energy State Corporation. 2010–2011 – Deputy General Director, Director of the Directorate for Nuclear Energy Complex, Rosatom Nuclear Energy State Corporation. 2011–2012 – 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.

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KIRILL BORISOVICH YEVGENY VLADIMIROVICH BORIS GEORGIEVICH KOMAROV ROMANOV SILIN

Board Member of Rosenergoatom Concern OJSC Board Member, Rosenergoatom Concern OJSC Board Member, Rosenergoatom Concern OJSC (since 2010); Director of Atomenergoprom (since 2012); General Director, Rosenergoatom (since 2010); Advisor to First Deputy General JSC; Deputy General Director for Development Concern OJSC Director for Operations Management, Rosatom and International Business of Rosatom State Nuclear Energy State Corporation. Corporation. Born in 1961. Education: Urals Polytechnic Institute. Born in 1973. Born in 1954. Education: Urals State Law Academy. Candidate of Law. Professional Experience: Education: Moscow Institute of Chemical Machine 1990–1995 – Head of Economic Analysis Group; Deputy Building Professional Experience: Head of Economic Planning Section; Chief Accountant, 2005–2006 – Deputy Head of the Federal Agency for Urals Electrochemical Plant. Professional Experience: Water Resources, Russian Federation. 1995–1998 – Advisor to Deputy Chairman of the 2004–2008 – Head of Department, Deputy Head of 2006–2007 – Vice President, TVEL OJSC; General Director, Management Board, Deputy Head of Corporate Client Management for Nuclear Power Industry and Nuclear Atomenergomash OJSC. Base Management, Vice President of United Export- Fuel Cycle of the Federal Agency for Nuclear Energy 2007–2010 – Deputy Director, Executive Director, Import Bank OJSC – ONEXIM Bank. (Rosatom). Atomenergoprom JSC. 1998–2000 – Vice President, ROSBANK JSCB. 2008–2010 – Head of Department, Deputy Director of Since April 2010 – Director, Atomenergoprom OJSC, 2000–2001 – Advisor to First Deputy General Director, the Department for Nuclear Power Complex of Rosatom simultaneously holds the office of Executive Director of RAO Norilsk Nickel. Nuclear Energy State Corporation. Nuclear Energy Complex Directorate, Rosatom Nuclear 2001–2004 – First Deputy General Director, acting 2010–2012 – Advisor, Nuclear Energy Complex Energy State Corporation. General Director, General Director, Kola GMK OJSC. Directorate, Rosatom Nuclear Energy State Corporation. Since April 2011 – Deputy General Director for 2004–2008 – First Deputy Director, First Deputy Since 2012 – Advisor to First Deputy General Director for Development and International Business, Rosatom Nuclear Chairman of the Management Board, Deputy Director, Operations Management, Rosatom Nuclear Energy State Energy State Corporation. Simultaneously holds the office Head of Mining and Metallurgy Directorate, Deputy Corporation. of Director in Atomenergoprom OJSC. Chairman of the Management Board, Zapolyarye Branch Board Member, OKB GIDROPRESS JSC. Director, Board Member, Atomenergoprom JSC; Board of Norilsk Nickel GMK OJSC. Chairman, Atomenergomash JSC; Board Member, TVEL 2008–2009 – General Director, VSMPO-AVISMA OJSC. JSC, Atomstroyexport CJSC, Techsnabexport International 2009–2010 – Engaged in comprehensive audits of Business Company (OJSC), Atomredmetzoloto JSC, Power financing and business activities of RusSpetsStal OJSC. Machines Group OJSC, INTER RAO UES Energy Efficiency 2010–2011 – General Director, Rostekhnologii – Center LLC, NIAEP JSC, New Composite Materials LLC; Metallurgy OJSC. Management Board Member, Rosatom State Corporation; Since August of 2011 – General Director, Rosenergoatom Board Chairman, AKKUYU NGS ELEKTRİK ÜRETİM Concern OJSC. ANONİM ŞİRKETİ. In 2011 was elected to the World Association of Nuclear Operators (WANO). Board Chairman, Baltic NPP OJSC.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 132

Directorate

YEVGENY VLADIMIROVICH STANISLAV IVANOVICH BORIS ALEXANDROVICH PAVEL LEONIDOVICH OLEG MAKAROVICH ROMANOV ANTIPOV BOKAREV IPATOV SARAYEV General Director Deputy General Director – Deputy General Director, Deputy General Director, Deputy General Director – Director of Science and Director for Energy Policy Director for Strategy and Project Manager Engineering Center (Branch and Sales in Retail and Corporate Development. of Rosenergoatom Concern Foreign Markets. Awarded with medal «Dis- OJSC). Rewarded with Order of Red tinguished Work» (1973), Banner of Labor (1988), Order of Red Banner of Labor Rewarded with Order of Honor Order of Peoples’ Friendship (1981), and Order of Honor (2002) and with honorary (1994), and Order of Honor (1995). Winner of USSR State title “Honored Power Engineer (2000). Winner of the Prize of Prize (1988). of the Russian Federation” the USSR Council of Ministers (1995). (1991) and Prize of the Government of the Russian Federation in Science and Engineering (2001). VLADIMIR GRIGORYEVICH ASMOLOV

First Deputy General Director SERGEY NIKOLAYEVICH Rewarded with Order of ZAVYALOV Fortitude (1997) and Order of Deputy General Director, Honor (2009). Director of Directorate for Since March 2015 works for Construction of Floating NIKOLAY NIKOLAYEVICH Rosatom State Corporation Thermal Nuclear Power Plants SAFRONOV as Advisor to the General ALLA IGOREVNA (Branch of Rosenergoatom ARKHANGELSKAYA Concern OJSC Deputy General Director, Director. Director for Special Security Deputy General Director, Awarded with the honorary ALEXANDER VASILYEVICH Director for Economics. title «Honored Shipbuilder» PALAMARCHUK (2011). Deputy General Director, Director of Facilities Construc- tion Management (Branch of Rosenergoatom Concern OJSC) Rewarded with Order Medal «For Merits to the Homeland» II degree (2003) and Order Medal «For Merits to the Homeland» I degree (2007). VLADIMIR YURYEVICH VLADIMIR ALEXEYEVICH MYASNIKOV SERVETNIK First Deputy General Director BESLAN ANDREYEVICH ALEXANDER Deputy General Director, Director BARGANJIYA ALEXEYEVICH KHVALKO for Purchases and Logistics of Rosenergoatom Concern OJSC Deputy General Director, Deputy General Director – Director for Energy Policy Sales Director and Sales in Retail and Foreign Markets

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NIKOLAY MIKHAYLOVICH ALEXEY VITALYEVICH MIKHAIL VASILYEVICH VASILY VASILYEVICH VLADIMIR PETROVICH SOROKIN SHALIMOV BAKANOV OMELCHUK POVAROV Deputy General Director – Chief Accountant Deputy General Director, Deputy General Director, Deputy General Director, Direc- Inspector General Director of Beloyarsk Director of Kola Nuclear Plant tor of Novovoronezh Nuclear Nuclear Plant (Branch of (Branch of Rosenergoatom Plant (Branch of Rosenergoat- Awarded with the honorary Rosenergoatom Concern OJSC) Concern OJSC) om Concern OJSC) title «Honored Power Engineer of the Russian Federation» Rewarded with Order Medal Rewarded with Order Medal (2010). «For Merits to the Homeland» «For Merits to the Homeland» II degree (2000) and Order II degree (2003). Medal «For Merits to the Homeland» I degree (2006).

ALEXANDER VIKTOROVICH SHUTIKOV

Deputy General Director, MIKHAIL YURYEVICH Director for Production and KANISHEV Operation of Nuclear Plants JUMBERI LEONTOVICH Deputy General Director, Di- TKEBUCHAVA Awarded with honorary title rector of Kalinin Nuclear Plant «Distinguished Contributor (Branch of Rosenergoatom First Deputy General to Power Industry of the CIS» Concern OJSC) VLADIMIR IVANOVICH ANDREY ALEXANDROVICH Director of Rosenergoatom (2013) PEREGUDA Concern OJSC Awarded with the honorary SALNIKOV title «Honored Power Engineer Deputy General Director, Direc- Deputy General Director, of the Russian Federation» tor of Leningrad Nuclear Plant Director of Rostov Nuclear Plant (2011). (Branch of Rosenergoatom (Branch of Rosenergoatom Concern OJSC) Concern OJSC) Rewarded with Order Medal «For Merits to the Homeland» II degree (2010).

ANDREY YUVENALYEVICH VIKTOR IGOREVICH PETROV IGNATOV Deputy General Director, Direc- Deputy General Director, Direc- tor of Smolensk Nuclear Plant tor of Balakovo Nuclear Plant VYACHESLAV KONSTANTIN (Branch of Rosenergoatom (Branch of Rosenergoatom ALEXANDROVICH GENNADYEVICH Concern OJSC) Concern OJSC) FEDYUKIN KHOLOPOV Awarded with the honorary Awarded with Order Deputy General Director, Deputy General Director, Director title «Honored Power Engineer «Friendship of Peoples» Director of Kursk Nuclear Plant of Bilibino Nuclear Plant (Branch of the Russian Federation» (1994) and Order Medal (Branch of Rosenergoatom of Rosenergoatom Concern OJSC) (2009) «For Merits to the Homeland» Concern OJSC) II degree (2001)

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 134

Structure of Concern’s Managerial Bodies, by Gender and Age

Indicator Board of Directors Directors

Men Women Total Men Women Total

505 28129

Under 30 years old (inclusive) 0 0 0 0 0 0

From 31 to 50 years old 101 505 (inclusive)

Over 51 years old 4 0 4 23 1 24

Total 5 0 5 28 1 29

REPORT ON DIVIDENDS PAID part of remuneration depends on achieved key performance indicators (KPI). Key performance The Concern’s Annual General Meeting of Stock- indicators are established for the Concern as a holders (Minutes No. 7 of June 24, 2014) made whole and included in the indicator matrix of the the following resolution: no dividends on common General Director. KPIs for Rosenergoatom Concern stock of the Concern shall be declared or paid with OJSC are decomposed and translated to execu- respect to results of 2013. tives of all levels.

INFORMATION ABOUT MAJOR TRANSACTIONS 546.0 mln rubles is the total remuneration paid in AND INTERESTED PARTY TRANSACTIONS 2014 to key management personnel: executives (General Director and his Deputies) and other No major transactions or interested party trans- ofﬁ cers vested with authority and responsibility actions subject to approval by the Concern’s for planning, directing, and controlling activities of mln rubles is the total management bodies were conducted in 2014. the company1. G4-52 546.0remuneration paid in 2014 to key manage- CRITERIA FOR DETERMINING Total performance ratio in 2014 adjusted by ment personnel REMUNERATION OF GENERAL DIRECTOR, weight factors was 106.58% (with 112.79% in DIRECTORATE, AND BOARD MEMBERS 2013).

As regulated in clause 12.2.9 of the Concern’s For more information on KPIs, see Section 4.3. Charter, if so decided by the General Meeting of KPI. Personnel Evaluation and Remuneration. Stockholders, members of the Concern’s Board of Directors, while in ofﬁ ce, may be entitled INFORMATION ABOUT to remuneration and reimbursement of costs REGISTERED CAPITAL related to their functions as Board Members. The sums of such remunerations shall be estab- As of December 31, 2014, the Concern’s regis- lished by resolution of the General Meeting of tered capital totaled 671,516,563,474 rubles. Stockholders. The amount of the registered capital did not change comparing with 2013. In 2014 no remuneration was paid to the Con- cern’s Board Members. The registered capital is divided into 671,516,563,474 common stocks with a nominal The General Director’s remuneration is regulated value of one (1) ruble. 1. No remuneration consultants by the employment contract and payable after its took part in the determination of the remuneration. approval by the Board of Directors. The variable

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 135

KPIs of General Director of Rosenergoatom Concern OJSC for 2014

KPI % of fulfillment in 2014

Adjusted free cash flow of State Corporation, bln rubles 108.5

EBITDA, bln rubles 107.9

Growth of labor efficiency vs 2013, % 119.6

Index of fulfillment of the Investment program of Rosenergoatom Concern OJSC, % 96.3

NPP generation, bln KWh 104.6

Integral performance on new products, % 153.2

Specific semi-fixed cost, rubles/MWh 104.0

Reduction of process flow time 120.0

LTIFR, % Fulfilled

No incidents above Level 2 on the INES scale in the industry and no personnel exposure incidents over 50 Fulfilled 119.6 mSv per year No incidents above Level 2 on the INES scale in the industry Fulfilled Growth of labor Specific forecast cost of NPP construction, taking into account the time limits, rubles/KW 100.9 efﬁ ciency vs 2013, %

As a part of distribution of securities of the From January 1, 2014 to December 31, 2014 Concern’s additional issue 55,297,167,000 as a part of the resolution on increase of the common stocks totaling 55,297,167,000 rubles Concern’s registered capital, 55,297,167,000 were distributed to Atomenergoprom JSC in common stocks totaling 55,297,167,000 rubles order to attract funds channeled from the federal were distributed to Atomenergoprom JSC. budget to development of nuclear power industry complex. The time period for distribution of In September 2014 the Concern’s Board of Direc- additional stock of the Concern was extended tors made a resolution to extend the time period until September 15, 2015. of distribution of the securities until September 15, 2015. In this connection necessary amend- MATERIAL CHANGES ments with respect to increase of the Concern’s IN SIZE, STRUCTURE OR OWNERSHIP registered capital will be done to the Concern’s IN REPORTING PERIOD Charter when the time period of distribution of the securities ends. 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 1-01-55417-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.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 136

4.3. KPI. Employee Evaluation and Remuneration

The personnel performance management and mo- The SAP-based automated performance manage- tivation system was introduced in Rosenergoatom ment system is currently implemented in order to Concern OJSC in 2010. It is based on the use of enhance convenience and increase performance key performance indicators (KPIs) that permits and control over fulfi llment of KPI. measuring the effi ciency and defi ne performance criteria of each individual employee. The remu- The procedure to remunerate the Concern’s em- neration process and its relation to personnel ployees is set forth in the following regulations: performance and development have become open and transparent. • The Standard Procedure for Remuneration of Labor of Branch Employees; KPI target values for the current and subsequent • Procedure for Remuneration of Labor of years are set up based on the out-performance Employees of the Headquarters. on the main indicators that characterize the target status – implementation of the Concern’s strategic The amount of remuneration depends on the goals. position level (with differentiation factors), type of job functions, and the level of fulfi llment of assigned key performance indicators (KPI).

KPI DEVELOPMENT PRINCIPLES 1234 SMART CRITERIA DECOMPOSITION PRINCIPLE OF FREQUENCY COMPLIANCE PRINCIPLE BALANCE PRINCIPLE PRINCIPLE KPIs match each other: Performance assess- Each set goal should KPIs of subordinates they are consistent ment is conducted on be realistic and achiev- derive from KPIs of and non-contradictory. annual basis. KPIs are able. The result should managers. communicated to the be measured in ﬁ gures employee at the begin- or deﬁ ned with quality ning of the period and indicators. are valid throughout the year.

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Amount of Remuneration by Employee Category, thousand rubles per year

Employee category Base salary KPI achievement bonus

2012

Managers 396.7 up 139.9 up

Specialists 203.9 up 41.5 up

Shop floor 86.0 up 8.6 up

2013

Managers 413.3 up 144.6 up

Specialists 214.4 up 42.9 up

Shop floor 93.5 up 9.4 up

2014

Managers 436.4 up 149.4 up

Specialists 226.4 up 44.3 up

Shop floor 98.8 up 9.9 up

Minimum Salary of an Employee in Concern’s Branch, 51.26 3.3 rubles 8,600 The ratio of the total The ratio of the total 8,050 7,540 annual remuneration annual remuneration 6,800 of the highest paying of the highest paying offi cial vs average offi cial vs percent of annual remuneration of growth of average all employees (exclud- annual remuneration of ed this offi cial) all employees (excluded this offi cial) Before July 1, Before July 1, After July 1, After 2012 2013 2013 September 1, with a minimum 2014 monthly wage of with a minimum 5,205 rubles monthly wage of 5,554 rubles

In 2014 the minimum salary of a Branch em- weighted value assigned against the total sum of ployee totaled 8,050.0 rubles before September bonuses. The total amount of bonuses is based 1, 2014 and 8,600.0 rubles from September 1, on the annual total of base salaries for each po- 2014 (with the federally regulated minimum wage sition, adjusted by a specifi c coeffi cient; the top of 5,554.0 rubles). limit depends on the position level and can be as high as 248% if the target KPI level is achieved. The evaluation system used to assess managers’ Bonuses are only paid upon achievement of KPI performance is based on the annual evaluation threshold values that are also specifi ed in the system (which, among other things, is based on individual KPI matrix. If achievements signifi cantly key performance indicators achievement). excel the target, the bonus can be increased.

The system of incentives is based on bonuses for achieved KPIs, where each indicator has a

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4.4. Internal Control and Auditing

Seeking higher business effi ciency, the Concern 379 organizational and technical activities (73% continues to improve its internal control and higher versus 2013). Fulfi llment of such organizational and technical activities is under constant auditing system, and takes anti-corruption control of the DICB. measures. The Concern’s Arbitration Committee (hereinafter – the Committee) met its targets of pre-trial disputes settlement and ensuring procurement The Concern provides for independent and procedures legitimacy. unbiased operation of the Dedicated Internal Control Body (DICB), professional competence Committee’s priorities are: transparency, open- of its employees, and unrestricted and effi cient ness, and information availability. They are imple- performance of the entrusted functions. mented by participation in the largest all-Russia forums (Atomex and Goszakaz), routine publi- In 2014 the DICB conducted 19 control activ- cation of reviews of the arbitration practice, and ities using risk-oriented approach. They were posting of each opinion of the Committee on the performed by way of synchronizing audit ele- Concern’s portal. ments with control and revision methods (“two-in- one”). Audits are aimed at improving the reliability The methodology on fulfi llment of Committee’s of internal control systems and risk management, opinions was developed and put into practice, providing comprehensive assessment of exist- permitting us to signifi cantly increase quality, ing business processes, and are combined with timeliness, and completeness of implementation verifi cation of the legality and validity of specifi c of resolution of the Committee. The methodology business operations that are intrinsic to control is the fi rst of its kind in the industry. As a result, and auditing activities. The application of dis- the share of justifi ed complaints versus reviewed ciplinary actions and fi nes to persons in breach complaints has decreased by one third, and contributes to increasing the level of responsi- versus the total amount of purchases of the bility. The combination of various methodologies division – almost by half. A set of measures on permits us to perform tasks of the DICB in an adjustment of activity of senior auditors – in- extensive, comprehensive, and effi cient way and ternal controllers of the Concern’s branches, achieve strategic goals of the Concern. operating NPPs.

As a result of control activities in the sphere of The following are the key areas of development international technical assistance, research and for internal control and audit: thorough control development work, labor remuneration, patent actions, increase in quality of reporting materials, use, fi nancing of investment projects, insurance, review of organization processes and integration IT services, fi nancial and economic activities of of appropriate, reliable, and effi cient control checkup activities subsidiaries, etc. in 2014 recommendations were procedures with allocation of responsibility of using a risk-oriented prepared in order to eliminate the defi ciencies business process participants for their proper 19approach were con- revealed and minimization of risk down to the ac- performance, and improvement of competencies ducted in 2014 ceptable level. Business process owners perform and potential of employees of DICB.

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^ ANTI-CORRUPTION ACTIVITY of Applications and Planned Transactions for General Director Evgeny Interest in Their Settlement were put into effect. Romanov and First Deputy In 2014 the main efforts of the Concern were Local regulations were adopted with a view to General Director Vladimir Asmolov at WANO meeting aimed at formation of local regulatory base on ensure anti-corruption practice of the external anti-corruption, improvement of prevention economic activities, as well as a number of local measures focused on organization of good faith regulations increasing responsibility for prepa- operation of the Concern, as well as performance ration of unoffi cial fi nancial and other reporting of recommendations issued by Rosatom State were introduced. Corporation. The Action Plan on Organization of Training and In order to implement specifi c provisions of the Legal Education of Concern’s Employees in the National Anti-Corruption Plan for 2014-2015 Matters of prevention and countering corrup- the Concern approved and put into effect the tion was approved. The Action Plan provides for Anti-Corruption Plan for 2014-2015. The Con- development of a training program for employees, cern’s administrative orders determined offi cials and preparation of schedule and organization and subdivisions responsible for work on pre- of training in educational institutions. In the vention of corruption and other offenses, and reporting period 27 employees of the Concern appropriate duties are allocated to such offi cials attended training on the subject “Formation and and subdivisions. The Concern’s Ethics Code and Verifi cation of the Initial (Maximum) Price during the Unifi ed Industry-Specifi c Procedure for Ver- Procedure for Order Placement and Structural ifi cation of Communications on Corruption and Analysis of the Pricing Mechanism of the Con- Other Offenses Received through Hot Line Chan- tracts Concluded in the Organizations of Rosatom nels were updated. The Guidelines on Analysis State Corporation.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 140

^ With a view to create conditions impeding avoid potential corruption risks and possible prop- Ecological expedition corruptive behavior and thus reducing corrup- erty damage totaling over 248 mln rubles. at Leningrad NPP-2 tion level in the Concern, the development of standards and procedures ensuring good faith In 2014 117 communications to the Hot Line operation of the Concern is introduced in daily and queries of people reporting corruption and practice. First of all, this activity is aimed at en- other offenses were verifi ed, and 33 of them suring transparency of transactions, openness of were confi rmed. As a result of the appropriate procurement procedures, prevention of bad faith measures the breaches revealed were eliminated, competition, and exclusion (minimization) of and 42 employees of the Concern were subjected corruptive risks during competitive processes for to disciplinary action. supply of equipment, and performance of work and services. In 2014 economic security subdivisions jointly with NPP subdivisions revealed and prevented A number of collegiate bodies involved in review 66 attempts to supply and use of equipment with of main issues of fi nancial and economic activity signs of illegal origin at NPPs, including by way of is created and currently functions in the Concern. substitution of such equipment with the legiti- Their meetings are held and accompanied by mate equipment. The information on 13 revealed audio and video recording. In the reporting period cases of supply of falsifi ed products was supplied Concern’s economic security subdivisions verifi ed to law enforcement agencies for further legal over 21,000 participants of procurement proce- evaluation. dures for their compliance with the requirements of UIPS, including in terms of corruptive practices. In 2014 no cases of breach of anti-corruption As a result, over 2,600 breaches of the procure- legislation of the Russian Federation and require- ment procedures were revealed. With respect to ments of industry-specifi c local regulations regu- 180 reported cases involving possible risks and lating anti-corruption activity resulting in impos- threats, the Concern’s and NPPs’ management ing of any sanctions and fi nes or property damage took preventive measures which permitted to for the Concern were revealed in the Concern.

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4.5. Risk Management

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

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 142

^ the entire complex of measures, such as imple- Due to specifi cs of activity the Concern pays Smolensk NPP mentation of fi nancial guarantee system and work main attention to the risks of nuclear, radiation, on improvement of payment discipline at ECWM. technical, and fi re safety, and physical protection In 2015 the tools and mechanism of infl uence on of NPPs. The detailed information on NPP safety non-payers will remain largely the same. is provided in subsection 3.3 – Ensuring Safety of Russian NPPs. Radiation Effect on Personnel and Risk of non-achievement of investment projects Population. of NPP construction in the Russian Federation (increase in expenses and construction timelines). In 2015 the Concern plans to continue its The risk impact is assessed as insignifi cant in the work aimed at further enhancement of the risk one year term. In order to minimize the risk in mid- management system. and long-term, the Concern implements activities (mostly organizational) aimed at increasing effi ciency 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.

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4.6. Quality Management

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

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which provide work and services to operators, application to the Concern’s Branches – evaluation of their results; Facilities Construction Management, Beloyarsk • Regular analysis of indicators of the Nuclear Plant, and Directorate for Construction Concern’s activity on the part of the of Floating Thermal Nuclear Power Plants, with management, organization of development obtaining a new conformance certificate No. and implementation of necessary measures on ROSS RU.0001.01АЭ00.77.11.0041; their improvement; • Development of the Concern’s quality system • Determination of causes of deficiencies in terms of introduction to organizational and and violations in quality, development and functional structure and personnel chart of fulfillment of measures on their elimination and the Concern of the structural subdivision – prevention at all stages of work; the Management on Liaison with Equipment • Involvement of all the Concern’s employees in Manufacturers subordinate to the Concern’s quality system improvement process Quality Director; • Review and application of positive Russian and • Creation of Certification System for Production foreign practices. Sites of Manufacturers of Equipment for the Concern’s NPPs; The Concern’s integrated quality system is based • Determination of the procedure for on the ISO standards of 9000 series, federal conformance evaluation of equipment of the standards and rules NP-090-11 «Requirements 4th safety class; for Quality Assurance Programs for Nuclear Facil- • Inspections of equipment manufacturing plants ities», IAEA manuals on safety of nuclear units of and inspections of organization of equipment GS-R series (General Safety Requirements). on-receipt checks at the Concern’s NPPs; • inspections of compliance with NPQAP (O) In accordance with the objectives set, the follow- and NPQAP (E) and GOST ISO 9001-2011 at ^ Quality Management System ing results were obtained in the area of quality Balakovo, Leningrad, Kalinin, Smolensk, Kola, and TÜV certiﬁ cates assurance in 2014: and Novovoronezh (units under construction) NPPs by the Directorate of Leningrad NPP-2 • Recertification of the Concern’s quality (under construction); system for compliance with the standard ISO • Internal audits in divisions of the Headquarters 9001:2008 «Quality Management Systems. and branches of the Concern regarding their Requirements» by the certification agency compliance with GOST ISO 9001-2011, NP- TÜV Thuringen e.V. (Germany) obtaining 090-11, and GS-R-3; new conformance certificate No. TIC 15 100 • Implementation of PSR projects to the extent 128018 with an extended area of application: of ensuring product quality, on-receipt check, «Management of Design and Construction of evaluation of conformance of the products Facilities of Peaceful Use of Nuclear Power, delivered to operating NPPs and NPPs under Electricity Production and Supply» (previously construction, and monitoring of progress the certificate with the area of application towards goals in the area of quality; «Management of Electricity Production and • Developing and enacting guidelines of the Supply» was in place). The validity term of the operator aimed at ensuring the quality of conformance certificate: from May 23, 2015 to products supplied to NPPs (in operation and May 22, 2018; under construction), organizing and carrying • Confirmation of validity of the conformance out audits for compliance of NPPs and 7 certificate of the Concern’s quality system organizations performing work and services to power plants passed issued by the certification agency ANO the operator with quality assurance programs inspections of compli- Atomsertifika on conformance with the and GOST ISO 9001-2011, assessing the ance with NPQAP (O) and standard GOST ISO 9001-2011, NP-090- efficiency of NPP quality assurance programs; NPQAP (E) and GOST ISO 11, IAEA manuals on safety of nuclear units • Organization of development, mutual 9001-2011 of GS-R-3 series, extension of its area of agreement, and approval, and put into effect

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^ NPP satellite city of the quality assurance programs in the area operating NPPs and NPPs under construction of responsibility of operators according to of a structural subdivision «Department the requirements NP-090-11 «Requirements for Organization of On-Receipt Control and to Quality Assurance Programs for Nuclear Evaluation of Conformance»; Facilities». • Inspections of compliance with quality assurance programs and GOST ISO 9001- All activities regarding the Concern’s quality 2011 by the Concern’s branches and system development scheduled for 2014 by the organizations performing work and services, administrative order on target benchmarks for the including: quality assurance programs for Concern’s core activities were performed in full. development and manufacturing of equipment by manufacturers of equipment important for MAIN PLANS FOR 2015 AND NEAR FUTURE: NPP safety; • Implementation of the Certification System • Development of the integrated quality system for Production Sites of Manufacturers of towards forming and implementing a single Equipment for the Concern’s NPPs; technical policy in the area of quality, updating • Performance and scaling of results of PSR of statutory base of the Concern’s quality projects in the area of quality assurance of the system, including quality assurance of the products supplied to operating NPPs and NPPs products supplied to operating NPPs and NPPs under construction. 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

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4.7. 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”).

The UIPS regulates relations connected with pur- In 2014 structural subdivisions of Rosenergo- chases for the needs of Rosatom State Corpora- atom Concern OJSC and its branches conducted tion and entities thereof so as to ensure effi cient 11,913 purchase procedures totaling 118,319 use of funds, open and transparent placement mln rubles, VAT included. of orders, and the required level of safe operation of the nuclear energy sector and industry Savings from competitive purchasing proce- facilities. dures totaled 5,811 mln rubles, VAT included (9.1%). Pursuant to Federal Law No. 223- FZ of July 18, 2011, «Purchasing of Products, Work, and The share of the contracting agents from the Services by Specifi c Corporate Entities» and the «local suppliers» as a result of purchasing pro- UIPS, information on goods, work, or services to cedures totaled 18%, where «local suppliers» be purchased is published on the Internet on the means suppliers on supply of goods, work, and offi cial website of the government www.zakupki. services located at the are of location of Rosener- gov.ru, and on the offi cial website on purchas- goatom Concern OJSC and its branches. ing in the nuclear sector www.zakupki.rosatom. ru; thus a wide range of bidders may join the In 2014 the Concern’s purchase performance procedure. indicators were fulfi lled in full.

In order to reduce times of the processes and The Concern’s purchasing objectives for 2015 increase efﬁ ciency of purchases in 2014 the are as follows: Concern regulated purchase processes, including those determining the procedure for interaction of • Share of public purchasing procedures – 94%; structural subdivisions of the organization during • Economic effect from implementation of competitive purchases, and areas of responsibility category strategies – 5%. at all stages of purchase are additionally distrib- mln rubles incl. VAT (or uted and allocated. 5,8119.1%) – savings from competitive purchasing procedures

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4.8. Property Management

As of December 31, 2014 Rosenergoatom • 743 land plots are registered with cadaster, Concern OJSC (hereinafter, the «Concern») including, by way of declaration, the lands of de-facto uses 790 land plots with the total area the forest fund. 47 land plots are currently of 21,839 ha, among them: subject to survey work with subsequent registration with cadaster. • 430 land plots with the total area of 6,266 ha are owned by the Concern, 11 of them are As of December 31, 2014, the Concern owns formed in 2014 as a result of the optimization 6,926 items of immovable properties (buildings of the area of previously accounted land and structures), among them: plots, 1 land plot is currently pending state registration of title; • 6,810 items are own by the Concern; • 360 plots with a total area of 15,574 ha are • 116 items are pending state registration Leningrad NPP leased by the Concern, including 149 plots of title. under a short-term lease in 2014.

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4.9. Information Technology

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

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Balakovo NPP to the extend of managing regulato- • keeping the shift operation logs; ry documents of the Headquarters and production • keeping the logs of administrative and and technical documents of Balakovo NPP. The technical orders; System ensures storage and quick access to over • management of normal operation mode 15,000 technical documents of the Headquarters and management of shift assignments for and over 75,000 production and technical docu- operating personnel; ments and notifi cations of Balakovo NPP. • selection of personnel for shifts and management of shifts of operating personnel; The development of the system functionality to • preparation of operation reporting the extent of storage and management of design following rounds and data recorded in and detailed design documentation of NPPs un- the operating logs). der construction and other operating documents of NPPs, replication of the system for all NPPs are In 2014 the Integrated System for Centralized scheduled for 2015-2016. Operation Planning and Production Management is put into commercial operation at Balakovo, The information subsystem for supporting Smolensk, and Kalinin NPPs and at the Headquar- qualifi cation on labor protection, rules for oper- ters. Its implementation at Rostov and Kursk NPP ation repairs and safety (hereinafter, ISSQ) was is currently in process. developed and put into commercial operation at Balakovo NPP. The subsystem is a part of the The implementation of the integrated system is Concern’s personnel management system in ad- scheduled for 2015-2016 at four NPPs of the dition to its basic part – industry-level system for Concern. The implemented functionality pro- personnel management ISPPM. ISSQ is replicated vides for data collection, storage, transmission, and prepared for putting into pilot operation at calculation; analytical functions, and display of Leningrad NPP. Here, ISPPM has been commer- information about the current status of NPP. It cially operated since 2011. facilitates operation with 2,000-2,500 process parameters with their collection and storage at ISSQ functionality development is planned for NPP level as well as transmission of all these 2015-2016. The development will include stor- parameters to the Concern’s Crisis Center which age and processing of historical personnel data of is the main data consumer. Also, it constitutes NPPs, replication of the Concern’s personnel man- the basis platform for the tasks of reservation agement system (ISPPM integrated with ISSQ) to of collection and storage of parameters in the all remaining NPPs, except for Bilibino NPP. protected emergency response control post. In addition to the option of data transmission from As a part of implementation of the Program for NPP level to the level of the Headquarters the Development of Information Systems of NPP Pro- platform permits organizing data transmission duction and Operation Block, in 2014 the basic from the Headquarters to NPPs. functionality of the Information System for NPP Operation Support (IS OS) was developed and implemented at the 3rd power unit of Smolensk 75,000 NPP. The system is currently being implemented production and technical at the 1st and 2nd power units. The following documents and notifi - objects are subject to automation within the IS cations of the Balakovo OS of NPPs: NPP are available via the automated system of • NPP current operation processes (maintenance technical documentation of equipment database; management • management of rounds;

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 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 support by regional population amounted to

86%

152

5.1. Interaction with Stakeholders G4-24, G4-25,

in Reporting Period G4-26, G4-27

The Concern strives for ensuring the highest The map of stakeholders and the nature of inter- level of openness and transparency of its activity action are provided in the Concern’s annual report for 2012 (page 196). by implementing the principle of active dialog with stakeholders. The Concern supports active PUBLIC DISCUSSIONS communications with all interested stakeholders, In strict compliance with legislation of the Russian timely providing significant information on all Federation, when planning its activities that can aspects of its activity and responding to requests have considerable impact on the environment and and suggestions of stakeholders. 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 The approach to interaction is based on the fol- government agencies, NGOs, environmentalists, lowing principles: the press, and the broader public.

• Regular and meaningful dialog; Public discussions are a set of activities forming • Partnership; part of evaluation of environmental impact of • Mutually beneficial cooperation; prospective economic and other activity held with • Confidence and sincerity; a view to inform the public about planned activi- • Publicity and transparency; ties and its possible impact on the environment, • Fulfilment of assumed obligations. to identify public preferences and consider them

Main Forms of Communications and Information Sharing

ROSENERGOATOM • Public discussions POPULATION CONCERN OJSC • Environmental reports AND COMMUNITY • Presentations • Mass media • Special Projects • Blogosphere • Interaction as a part of preparation of public annual report

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 153

for impact assessment, and to protect the rights, execution committees of the Minsk and Grodno liberty, and legitimate interests of citizens within Oblasts of the Republic of Belarus. In November areas targeted for speciﬁ c business operations of the Agreement on Establishing Twin-Cities Rela- signiﬁ cance. tions between the Towns of Harkany (Hungary) and Kurchatov (Russia). In September the delega- Overall, in 2014, 16 public discussions were held tion of the Fund visited Finland to exchange best in the Concern’s areas of presence. More than practices in the areas of municipal construction 8,000 persons took part in them. The «case» of and work with communities in the area of safe use each public discussions includes 100 or more of nuclear power. In December the Memorandum activities involving communities, regulatory on Cooperation was signed between the Fund and agencies, and mass media and involves explaining Non-Governmental Organization on Control, In- of planned activity and its safety principles for formation, and Regional Development of Hungary human and environment. (TEIT).

AAP NP FUND Being 2014 the Year of Culture in the Russian Federation, the Fund organized visiting exhibi- The Fund for Promotion of Development of tions and master classes of the Hungarian photo Municipalities «Association of Areas of Presence artist Bálint Vincze at all locations of NPPs and of Nuclear Plants» (AAP NP Fund) was created in became one of the sponsors of the 7th Festival 2013. Their founders are Rosenergoatom Concern of Accordionists and Bayanists in Paks (Hungary). OJSC and municipal entities where nuclear plants Children from the Russian towns located around are located. The fund is yet another efﬁ cient NPPs took part in the competitive program of the mechanism of interaction between the Concern’s festival. management with municipal governments in the area of implementation of projects and programs In 2014 AAP NP Fund carried out another facilitating social, economic, and infrastructural contest of the socially important projects among development of satellite towns of nuclear plants, non-commercial organizations of the areas of NPP increasing their attraction as a place to live. location. 41 project were recognized as winners, and all projects were successfully implemented. In 2014, 4 meetings of the Management Board of the AAP NP Fund were held. Members of the LIAISON WITH Management Board of the Fund took part in the NON-GOVERNMENTAL 9th International Dialog Forum «Nuclear Pow- AND ENVIRONMENTAL er, Society, and Safety» in Moscow, in the 7th ORGANIZATIONS Regional Dialog Forum in Krasnoyarsk, in the conference and ceremonial events in the city of Non-Governmental Environmental Organizations Obninsk dedicated to the 60th anniversary of the have a real possibility to obtain unbiased informa- nuclear industry, and in industry-level workshop tion about the state of ecological, radiation, and on monitoring of the social and political situa- energy safety of NPPs. Representatives of various tion in the regions of presence of Rosatom State environmental organizations and movements form 41 Corporation. part of the Stakeholders Commission. project were recognized as In 2014 the great attention was paid to the In particular, the Inter-Regional Non-Governmen- winners, and all international cooperation of the Fund with the tal Environmental Movement «Oka» routinely projects were Concern’s partner countries in the nuclear power conducts ecological expeditions to operating successfully industry. In April the Memorandum on Coopera- NPPs and construction sites of new nuclear implemented tion was signed between the Fund and the district power units as a part of the long-term program

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 154

«Civic Watch in Nuclear Power Industry». In 2014 notifi cation involving press editions of towns and ecological expeditions were conducted at Rostov areas of location of NPPs, urban and regional and Smolensk NPP. The movement carried out television and radio channels, information agen- research using their own specialists and profes- cies, press services of the governor and regional sional certifi cation equipment, with participation government, press services of regional depart- and under supervision of independent mass ments of the Ministry of Emergency Situations media, and announced the obtained unbiased and and the Ministry of Internal Affairs of Russia. The reliable results to wide public and government au- notifi cation mechanism is used not just in case of thorities. The results of this work attracted great emergency situations but also against attempts attention of the largest industry-level, Russian, of information attacks, in case knowingly false and international mass media. information is distributed.

At the meeting of the Public Council of the Press tours and visits to nuclear power plants State Corporation S.V. Kirienko, the General Di- involving representatives of Russian mass media rector of Rosatom, awarded Novovoronezh NPP and foreign journalists became a tradition. for activity in the development of environmental culture. Kalinin and Beloyarsk NPPs were SPECIAL PROJECTS also awarded at the Concluding Conference on Environmental Culture at the end of the year. One of the most important areas of information- al interaction is educational work among popu- MASS MEDIA lation and communities. Exhibitions located in Community Information Centers of NPPs receive The information on operation of nuclear plants from 3 to 5 thousand visitors each year. Special and radiation environment in the towns of NPP education projects are implemented, such as location is available on the Concern’s ofﬁ cial the «Nuclear Academy for Children» (Kola NPP), website and websites of nuclear power plants. «Kurchatov Public Readings for Children» (Belo- Press releases and information communications yarsk NPP), and «Today’s Fiction is Tomorrow’s are posted there without delays. The Concern’s Reality» (Kalinin NPP) addressed to schoolchil- website – www.rosenergoatom.ru. The website dren and students. This includes a unique project www.russianatom.ru contains real-time informa- called «Atom Classes» implemented in areas of tion about radiation monitoring of Russian nucle- presence of the Concern as a part of the civic ar power plants. Furthermore, all nuclear power educational initiative «Rosatom’s School». The plants have 24/7 automatic responding machines project provides for complete re-equipment of providing information about current operation of physics classrooms in schools with advanced NPP and radiation environment on a daily basis. equipment and devices, including interactive multimedia and special tool kits for laboratory The information support of the operation of and science experiments. In 2014 new Atom nuclear power plants is coordinated by the Classes opened in the Physics and Mathemat- Departments of Information and Public Relations ical School No. 3 of the town of Kurchatov and every year, up to 5,000 of each NPP. Reports on production and social Ye.I. Ignatenko Secondary School No. 62 in the 5,000visitors attend the materials are posted on the Concern’s website, in settlement of Novy Eroglyk (Rostov Oblast). exhibitions located in corporate and regional print editions, in broadcast Currently Atom Classes function in the following Community Information programs of local and federal television channels, towns: Angarsk, Volgodonsk, Glazov, Zarechny Centers of NPPs in blogs, etc. (Sverdlovsk Oblast), Zelenogorsk, Kovrov, Nizhny Novgorod, Novovoronezh, Novouralsk, Rostov- In case of emergency situations in NPP opera- on-Don, Seversk, Sosnovy Bor, Elektrostal, and tion there is a mechanism in place ensuring quick Orlenok All-Russia Children’s Center.

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 155

Public Awareness Centers at nuclear plants have a chain of Clean Energy clubs as a meeting place Attitude to Nuclear Power Use in 2014, % for local reporters who regularly write on the issues of the nuclear sector. The clubs organize interviews, press conferences, and subject-orient- 46 86 – Actively develop The nuclear power ed press tours. – Maintain at the industry should current level be developed On November 18-19, 2014 the Concern and or maintained – Deescalate 40 nuclear plants hosted a videoconference work- – Abandon completely shop for teachers which connected all locations of Russian NPPs. Approximately 245 teachers of – Not sure 8 11 physics, biology, and basics of personal and social Deescalated 3 or abandoned safety took part in the event organized by the 3 Concern jointly with the V.I.Vernadsky Non-Gov- Polling results ernment Environmental Fund for Employees of Educational Institutions of NPP Towns. On No- vember 25-26 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 BLOGOSPHERE SURVEYS

The Concern’s management attaches great impor- In 2014 the blog of Yevgeny Romanov, the Con- tance to survey of public opinion on the issues of cern’s General Director (http://publicatom.ru/blog/ development of the nuclear power industry. romanov/), and blogs of nuclear plants (http:// publicatom.ru/blogs/) continued their operation at In September 2014 NTTs Perspektiva (www. the blog platform of Rosatom State Corporation. ntcpa.ru) conducted a survey in Voronezh, Kursk, The blogs are used to post answers of the General Leningrad, Murmansk, Rostov, Saratov, Sverd- Director to questions asked by the readers as lovsk, Smolensk, and Tver Oblasts (regions where well as to post current information about NPP NPPs are located). The survey showed that in one operations. The readership audience of the blog year the opinion of local residents about nuclear totals 20,000 users per month. From start of the plants in the areas of presence improved. 86% of blog, approximately 500 questions and more than residents of Russian regions where nuclear plants 1,000 comments were submitted to Yevgeny Ro- (branches of Rosenergoatom Concern) are located manov, the General Director in one year. In 2014 were in favor of the active development of nuclear the project «The General Director’s Blog» took the power industry or its maintenance on the current 2nd place in the annual industry-wide contest level. In 2013 they constituted 73%: 56% of of the best personnel management practices respondents considered their opinion to NPPs as «Simple Stories of Success» of Rosatom State positive, and 74% told so in 2014. Furthermore, Corporation. 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%.

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 156

5.2. Interaction as this Annual Report Was Prepared

In view of the nature of the Concern’s activity the visiting meeting at Kalinin NPP. During the dialog following subjects were selected as the priority the participants visited operating power units of issues of the Report: «Safety of the Russian Nu- Kalinin NPP, saw the operations on increasing clear Industry» and «Increasing Capacity of NPP capacity of VVER power units, and could ask Power Units with VVER-Type Reactors». questions regarding disclosure of information in the annual report regarding the Concern’s activity Key stakeholder representatives were involved in 2014 and measures on safety assurance at Mikhail Kanyshev, in dialogs discussing the overall concept, priority Russian NPPs. Stakeholders expressed certain Director, Kalinin NPP issues, and the draft of the Annual Report, as comments and suggestions regarding refl ection well as participated in selection of the signifi cant of information on this priority subject in the “The community eval- aspects and public affi rmation of the Report. annual report. These comments and suggestions uates the business of were taken into account during preparation of the a company based on Dialog No. 1 on “Discussing the Concept of the report. the offi cial reporting information. Such a wide 2014 Annual Report of Rosenergoatom Concern representation of dialog OJSC” with stakeholders took place on December PUBLIC CONSULTATIONS participants guaran- 2014 in absentia (by survey). During the dialog tees that the report will all participants received the draft concept of Public consultations on the draft Annual Report be discussed from the the Concern’s Annual Report. Representatives took place in the Concern’s Headquarters on points of view of all of stakeholders could express their comments May 6, 2015. A wide range of interested parties parties interested in the and suggestions. Following the dialog, a number took part in the consultations. They expressed meaningful dialog and of signifi cant changes were introduced to the suggestions and comments to the draft report. faithful refl ection of the Annual Report (see the table on consideration of In general, a high level of information disclosure specifi cs of our operating suggestions made by Stakeholders – Appendix and refl ection of opinions and suggestions of organization.” 15 in the interactive version). interested parties expressed during the reporting campaign was recognized Dialog No. 2 on the subjects «Safety of the Rus- sian Nuclear Industry» and «Increasing Capacity of NPP Power Units with VVER-Type Reactors» took place on March 5, 2014 in the format of a

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report 157

5.3. Stakeholders Commission

^ Dialog at Kalinin NPP. In order to improve Concern’s public reporting power industry in Russia, joint preparation of March, 2015. system and to ensure acceptance of the Concern’s recommendations for decision-making in the area activity by communities through involving stake- of sustainable development of the Concern and holders in the dialog, in 2013 the Stakeholders nuclear power industry in general, and com- Commission was created at the Concern’s initia- munications with people and non-government tive which included representatives of key groups organizations on the issues connected with the of stakeholders: local communities, non-govern- use of nuclear energy. Members of the Stake- ment and environmental organizations and asso- holders Commission take an active part in dialogs ciations, scientists and experts, public persons, and community consultations, discussing annual and representatives of mass media, suppliers, and reports of the Concern as well as in the procedure contractors. of public afﬁ rmation of the annual reports.

The Commission’s goals consist in ensuring acceptance by communities of development of nuclear

1. Overview 2. Strategy 3. Key Performance 4. Corporate 5. Interaction and Outlook Results Governance with Stakeholders 158

5.4. Public Reporting System

The Concern has in place a public reporting system • The Concern’s Standard of Public Annual which is a set of interrelated and connected Reporting; • Procedure for Preparation of the Concern’s elements forming a certain integrated activity on Annual Report; public reporting and its development. • List of Standard Elements of Public Annual Reporting of the Concern; • Regulations on the Concern’s Stakeholders The main elements of the Concern’s public Commission. reporting system stipulated by the Policy and Standard of Rosatom State Corporation in the The functioning of the Concern’s public report- area of public reporting are the functional center ing system is based on the work of a number of of responsibility (managers and the working structural subdivisions which representatives group), regulatory framework, representatives form part of the working group on report prepa- of stakeholders participating in preparation of ration. The main functions are divided between reporting during dialogs and operation of the the First Deputy General Director – Head of the Stakeholders Commission, as well as infrastruc- Working Group on Report Preparation, Deputy tural support (consulting, internal and external General Directors, and the Department for Infor- independent audit, etc.). mation 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 of the Depart- Work Group, Depart- Structural Director - Head of the ment of Information and ment of Information subdivisions Work Group on Report Public Relations - Deputy and Public Relations Preparation Head of the Work Group

CONTROL Internal control Non-ﬁ nancial Stakeholders and audit audit Commission

Regulatory documents on reporting

Rosenergoatom Concern OJSC www.rosenergoatom.ru 2014 Annual Report Appendices to the Annual Report

1. About the Annual Report ...... 160 10. Opinion of the Internal Auditing Committee on the Results of Review 2. Corporate and Contact Details ...... 161 of Financial and Business Activities of 3. GRI Content Index for Comprehensive Rosenergoatom Concern OJSC for 2014 .191 Report Variant Prepared According to 11. Report on the Concern’s Compliance Sustainability Reporting Guidelines for with the Corporate Management Code Global Reporting Initiative (GRI), RSPP . .162 Recommended by the Bank of Russia . . .192 4. System of Public Reporting Indicators 12. Active Nuclear Power Units ...... 193 at Rosenergoatom Concern OJSC...... 170 13. Installed Capacity, Electricity 5. Opinion about Public Affirmation...... 174 Generation, and ICUF at NPPs of 6. Statement on the Results of Rosenergoatom Concern OJSC in 2014 Independent Assurance of Public by Geographical Regions ...... 194 Annual Report of Open Joint-Stock 14. Main Personnel Characteristics* Company «Concern for Production of Electric and Thermal Energy at Nuclear 15. Table on Consideration of Suggestions Power Plants» 2014 ...... 176 Made by Stakeholders*

7. Statement of the Internal Control 16. Glossary ...... 195 Department of Rosenergoatom 17. Abbreviations ...... 197 Concern OJSC on the Results of the Internal Audit of Conformance of 18. Feedback Form ...... 198 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 Rosenergoatom Concern OJSC ...... 180

8. Business/Financial Accounting Statements ...... 181

9. 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 * Appendices 14 and 15 may be found in the interactive version Power Plants» 2014 ...... 189 of the Report – report2014.rosenergoatom.ru 160

1. About the Annual Report

DESCRIPTION OF THE REPORT This Annual Report of Rosenergoatom Concern OJSC for 2014, and for six previous years, is an integrated report that combines the usual Annual Report and the sustained development report fi led 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. 06-52/2463, “On Recommendations for Applying the Corporate Gover- nance 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-fi nancial reports; • Rosatom State Nuclear Energy Corporation’s Public Accountability Policy; • Public Annual Reporting Standard of Rosenergoatom Concern OJSC; • Rosenergoatom Concern OJSC 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 effi cient 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 com- prehensively discloses fi nancial, 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 identifi ed “Increasing Capacity of NPP Power Units with VVER-Type Reactors” as the second priority topic refl ecting 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 affi rmation. 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 Rosenergoatom Concern OJSC About the Annual Report 2014 Annual Report 161

DIFFERENCES FROM THE 2013 ANNUAL REPORT There is no signiﬁ cant differences. In preparing the Annual Report, closer attention was paid to the materiality principle that allowed speciﬁ cation 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 fi gures as an attempt to describe future events or future fi nancial 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 signifi cantly 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 www.rosenergoatom.ru.

2. Corporate and Contact Details

Full business name Auditor details Stockholders details For additional updates on and abbreviation According to decision of General 1. Atomenergoprom JSC – 96.9907% the Concern, please visit Open joint-stock company Russian Meeting of Stockholders dated 2. Rosatom State Corpora- www.e-disclosure.ru Concern for Production of Electric June 24, 2014 (Minutes No. 7), tion – 3.0093% www.rosenergoatom.ru. and Thermal Energy at Nuclear the Accountants & Business Subsidiaries and afﬁ liated Power Plants (Rosenergoatom Advisers Limited Liability Company companies details Concern OJSC). (FBK LLC) was approved as the List of Subsidiaries: Concern’s Auditor. Location 1. Atomenergoremont OJSC – 100% 109507, Moscow, Registrar details 2. Energoatominvest LLC – 100% ul. Ferganskaya, d. 25 The registrar for the Concern’s 3. EREC JSC – 100% inscribed security holders’ registry Contact phone 4. Baltic NPP OJSC – 100% is the Registrar R.O.S.T. OJSC. +7 (495) 647-41-89 5. IKAO CJSC – 100% Details of the Concern’s registrar: 6. Atomtrans JSC – 100% Fax Full business name: open joint- 7. All-Russian Production Associa- +7 (495) 647-46-03 stock company Registrar R.O.S.T. tion Zarubezhatomenergostroy E-mail Location: Moscow, ul. Stromynka, JSC – 100% [email protected] d. 18, korp. 13. 8. Nuclear Power Plant Equipment License details: No. 10-000-1- Research and Testing Center Website 00264, issued by FCSM of Russia OJSC – 100% www.rosenergoatom.ru on December 3, 2002. 9. Atomtehenergo JSC – 100% 10. Rusatom Service CJSC – 96.21% 11. Beloyarsk NPP-2 OJSC – 80.6% 12. VNIIAES OJSC – 75.002% 13. Termoxid PNF CJSC – 67.9087% 14. Atomtekhexport CJSC – 51%

Appendix 2 Rosenergoatom Concern OJSC Corporate and Contact Details 2014 Annual Report 162

3. 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 15-17 +, 176 Address of the General Director G4-2 4.5. Risk Management 141-142 +, 176

ENTITY’S PROFILE G4-3 General Information 22, 160-161 +, 176 Appendix 1. About the Annual Report Appendix 2. Corporate and Contact Details 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 22, 161 +, 176 Appendix 2. Corporate and Contact Details G4-8 Geography of Activity 12-13, 38-41 +, 176 3.1 Situation in the Electric Power Industry G4-9 1.1. General Information 22, 24-25 +, 176 1.3. Corporate Structure G4-10 Appendix 14. Main Personnel Characteristics 194 +, 176 Accounting of contractors’ total number of employees is not performed G4-11 3.9. Social Capital. Developing Areas of Presence. Charity and Sponsorship 106 +, 176 Accounting of contractors’ number of employees within the scope of the collective contract is not performed G4-12 2.2. Business Model 8-9, 28-31 +, 176 G4-13 1.3. Corporate Structure 24-25, 126-127, +, 176 4. Corporate Governance 134, 146 4.1. Structure of Concern Executive Management 4.7. Purchase Management G4-14 4.5. Risk Management 141-142 +, 176 G4-15 3.11. International Activities 116-123 +, 176 G4-16 3.11. International Activities 116-123 +, 176 EU1 3.2. Production Capital. Generating Capacity. 42-61, 194 +, 176 Appendix 13. Installed Capacity and Electrical Power produced by Russian NPPs in 2014 by Energy Source and Geography (Regions of Russia) EU2 3.2. Production Capital. Generating Capacity. 42-61, 194 +, 176 Appendix 13. Installed Capacity and Electrical Power produced by Russian NPPs in 2014 by Energy Source and Geography (Regions of Russia) 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 160 +, 176 Appendix 1. About the Annual Report

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 163

GENERAL STANDARD DISCLOUSURES

GRI Index Disclosure Comprehensiveness / Comment / Report Section Report, pp. External Assurance (+/-, p. Report)

G4-18 2.4. Material Aspects of Performance 34-35, 160 +, 176 Appendix 1. About the Annual Report G4-19 2.4. Material Aspects of Performance 34-35 +, 176 G4-20 2.4. Material Aspects of Performance 34-35 +, 176 G4-21 2.4. Material Aspects of Performance 34-35 +, 176 G4-22 2.4. Material Aspects of Performance 34-35 +, 176 G4-23 2.4. Material Aspects of Performance 34-35 +, 176

STAKEHOLDER ENGAGEMENT G4-24 6.1. Interaction with Stakeholders 152, 156-158 +, 176 G4-25 6.1. Interaction with Stakeholders 152, 156-158 +, 176 G4-26 6.1. Interaction with Stakeholders 152, 156-158 +, 176 G4-27 6.1. Interaction with Stakeholders 152, 156-158, 194 +, 176 Appendix 15. Table on Consideration of Suggestions Made by Stakeholders

REPORT PROFILE G4-28 Year 2014 160 +, 176 Appendix 1. About the Annual Report G4-29 June 2014 +, 176 G4-30 Annual 160 +, 176 Appendix 1. About the Annual Report G4-31 Appendix 18. Feedback Form 198 +, 176 G4-32 This Appendix +, 176 G4-33 Appendix 1. About the Annual Report 160, 174-180 +, 176 Appendix 5. Conclusion on Public Afﬁ rmation 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 7.

CORPORATE GOVERNANCE G4-34 4.1. Structure of Concern Executive Management 126-128 +, 176 4.2. Governing Bodies and Controls Rosenergoatom Concern OJSC Board of Directors has no committees G4-35 4.1. Structure of Concern Executive Management 126-128, 129-137 +, 176 4.2. Governing Bodies and Controls 4.3. KPI. Employee Evaluation and Remuneration G4-36 4.1. Structure of Concern Executive Management 127-137 +, 176 G4-37 5.1. Interaction with Stakeholders 152-155, 157-158 +, 176 5.3. Stakeholders’ Commission 5.4. Public Reporting System G4-38 4.1. Structure of Concern Executive Management 128-133 +, 176 Rosenergoatom Concern OJSC Board of Directors has no committees G4-39 4.2. Governing Bodies and Controls 128 +, 176 G4-40 4.1. Structure of Concern Executive Management 127-129 +, 176 4.2. Governing Bodies and Controls G4-41 4.4. Internal Control and Auditing 97, 138-140 +, 176 G4-42 4. Corporate Governance 126-129 +, 176 4.1. Structure of Concern Executive Management 4.2. Governing Bodies and Controls G4-43 4.1. Structure of Concern Executive Management 126-129 +, 176 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. G4-44 4.2. Governing Bodies and Controls 128 +, 176

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 164

GENERAL STANDARD DISCLOUSURES

GRI Index Disclosure Comprehensiveness / Comment / Report Section Report, pp. External Assurance (+/-, p. Report)

G4-45 4.2. Governing Bodies and Controls 128-137, 141-142 +, 176 4.5.Risk Management G4-46 4.2. Governing Bodies and Controls 127-129, 141-142 +, 176 4.5. Risk Management G4-47 4.2. Governing Bodies and Controls 129 +, 176 G4-48 4.2. Governing Bodies and Controls 129, 160 +, 176 Appendix 1. About the Annual Report G4-49 4.2. Governing Bodies and Controls 129 +, 176 G4-50 4.2. Governing Bodies and Controls 128-135, 141-142 +, 176 4.5. Risk Management G4-51 4. Corporate Governance 134-135 +, 176 G4-52 4. Corporate Governance 135 +, 176 G4-53 4. Corporate Governance 135 +, 176 G4-54 4.3. KPI. Employee Evaluation and Remuneration 136 +, 176 G4-55 4.3. KPI. Employee Evaluation and Remuneration 136 +, 176

ETHICS AND INTEGRITY G4-56 4.4. Internal Control and Auditing 97, 138-140, +, 176 5.4. Human Resources. Labor Protection 156-158, 192 Appendix 11. Report on the Concern’s Compliance with Provisions of the Corporate Conduct Code G4-57 97 +, 176 G4- 58 97 +, 176

SPECIFIC STANDARD DISCLOSURES

DMA and RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of Indicators GRI (+/-, p. Report)

EC ECONOMIC CATEGORY Aspect: Economic Performance DMA 86-89 3.6. Financial Capital. Performance Results +, 176 G4-EC1 1.2., 1.3., 1.4., 88 3.6. Financial Capital. Performance Results +, 176 1.5., 1.6. G4-EC2 141-142, 4.5. Risk Management. +, 176 169 Specifi c GRI Indicators by Categories/Subcategories G4-EC3 1.8. 106-107 3.9. Social and Reputational Capital. Developing +, 176 Areas of Presence. Charity G4-EC4 113-115 3.10. Investments in Development. +, 176 Specifi c GRI Indicators by Categories/Subcategories Aspect: Market Presence DMA 106-112 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity G4-EC5 137, 196 3.7. Human Resources. Labor Protection +, 176 Appendix 14. Main Personnel Characteristics G4-ЕС6 169 Specifi c GRI Indicators by Categories/Subcategories +, 176

Aspect: Indirect Economic Impact DMA 106-112 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity G4-EC7 110-112 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 165

SPECIFIC STANDARD DISCLOSURES

DMA and RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of Indicators GRI (+/-, p. Report)

G4-EC8 110-112 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity Aspect: Procurement Practices DMA 146 4.7. Purchase Management +, 176 G4-EC9 146 4.7. Purchase Management +, 176 Aspect: Availability and Reliability DMA 32-33 2.3. Strategic Goals and Initiatives +, 176 G4-EU10 www.e-apbe.ru Speciﬁ c GRI Indicators by Categories/Subcategories +, 176 /scheme/, 169

ЕN CATEGORY: ENVIRONMENTAL Aspect: Energy DMA 76-81 3.4. Natural Capital. Environmental Impact +, 176 G4-EN3 2.2. Concern’s data collection system is 60-61 3.2. Production Capital. Generating Capacities +, 176 based on energy consumption accounting in metric units. The Concern intends to present the disclosures per G4-EN3 in full in subsequent reports. G4-EN4 Energy consumption outside the organi- +, 176 zation is not accounted for. G4-EN5 Not calculated due to restrictions on +, 176 disclosure of the indicator G4-EN3. G4-EN6 60-61 3.2. Production Capital. Generating Capacities +, 176 G4-EN7 Not applicable. +, 176 Aspect: Water DMA 78 3.4. Natural Capital. Environmental Impact +, 176 G4-EN8 2.3., 2.3.1. 78 3.4. Natural Capital. Environmental Impact +, 176 G4-EN9 78 3.4. Natural Capital. Environmental Impact +, 176 G4-EN10 2.4. 78 3.4. Natural Capital. Environmental Impact +, 176 Aspect: Effl uents and Waste DMA 76-81 3.4. Natural Capital. Environmental Impact +, 176 G4-EN22 2.7., 2.7.1., 79, 169 3.4. Natural Capital. Environmental Impact +, 176 2.7.2., 2.8., Specifi c GRI Indicators by Categories/Subcategories 2.8.1. G4-EN23 2.9., 2.10. The accounting system used in the 79, 169 3.4. Natural Capital. Environmental Impact. +, 176 Concern does not provide for calculation Specifi c GRI Indicators by Categories/Subcategories 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 G4-EN24 169 Specifi c GRI Indicators by Categories/Subcategories +, 176 G4-EN25 169 Specifi c GRI Indicators by Categories/Subcategories +, 176 G4-EN26 2.11. 169 Specifi c GRI Indicators by Categories/Subcategories +, 176 Aspect: Compliance DMA 76-81 3.4. Natural Capital. Environmental Impact +, 176 G4-EN29 80 3.4. Natural Capital. Environmental Impact +, 176 Aspect: Overall DMA 76-81 3.4. Natural Capital. Environmental Impact +, 176

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 166

SPECIFIC STANDARD DISCLOSURES

DMA and RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of Indicators GRI (+/-, p. Report)

G4-EN31 2.12. The system used by the Concern for 80 3.4. Natural Capital. Environmental Impact +, 176 the cost accounting does not permit to separate the costs on the environmental management system.

CATEGORY: SOCIAL

LA SUBCATEGORY: LABOR PRACTICES AND DECENT WORK Aspect: Employment DMA 91-101 3.7. Human Resources. Labor Protection +, 176 G4-LA1 3.1.1. 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-LA2 3.1.2., 3.1.3. 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 G4-LA3 The information collection system used 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 by the Concern does not permit to calculate the share of employees who remained in the organization upon re- turning 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 2014. 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 2014. The company plans to disclose the information on indicator EU17 in subsequent reports. G4-EU18 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Labor/Management Relations DMA 91-101 3.7. Human Resources. Labor Protection. +, 176 G4-LA4 3.1.4. 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Occupational Health and Safety DMA 91-101 3.7. Human Resources. Labor Protection. +, 176 G4-LA5 100 3.7. Human Resources. Labor Protection +, 176 G4-LA6 The data collection system used by 100, 169 3.7. Human Resources. Labor Protection. +, 176 the Concern does not permit to provide Specifi c GRI Indicators by Categories/ Subcategories information on this indicator in full. The Concern plans to disclose information on the indicator G4-LA6 in the subsequent reports. G4-LA7 3.1.5., 3.1.6., 99-101, 3.7. Human Resources. Labor Protection. +, 176 3.1.7. 169 Specifi c GRI Indicators by Categories/ Subcategories G4-LA8 3.1.8., 3.1.9. 99-101 3.7. Human Resources. Labor Protection +, 176 Aspect: Training and Education DMA 91-99 3.7. Human Resources. Labor Protection +, 176

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 167

SPECIFIC STANDARD DISCLOSURES

DMA and RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of Indicators GRI (+/-, p. Report)

G4-LA9 The accounting broken down by gender 91-92 3.7. Human Resources. Labor Protection +, 176 is not kept. The Company plans to disclose information on the indicator G4- LA9 in full in the subsequent reports.

G4-LA10 3.1.10., 169 Speciﬁ c GRI Indicators by Categories/Subcategories +, 176 3.1.11. G4-LA11 91 3.7. Human Resources. Labor Protection +, 176

HR SUBCATEGORY: HUMAN RIGHTS Aspect: Investment DMA 91-101 3.7. Human Resources. Labor Protection +, 176

G4-HR1 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 G4-HR2 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Freedom of Association and Collective Bargaining DMA 91-101 3.7. Human Resources. Labor Protection +, 176 G4-HR4 3.2.2. 169 Specifi c GRI Indicators by Categories/Subcategories +, 176 Aspect: Security Practices DMA 91-101 3.7. Human Resources. Labor Protection +, 176 G4-HR7 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Indigenous Rights DMA 91-101 3.7. Human Resources. Labor Protection +, 176 G4-HR8 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Assesment DMA 91-101 3.7. Human Resources. Labor Protection +, 176 G4-HR9 3.2.3. Human rights compliance or impact in +, 176 connection with human rights were not evaluated.

SO SUBCATEGORY: SOCIETY Aspect: Local Communities DMA 106-112 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity G4-SO1 3.3.3. 106-112, 3.9. Social Capital and Goodwill. Developing Areas +, 176 169 of Presence. Charity. Specifi c GRI Indicators by Categories/ Subcategories G4-SO2 106-112, 3.9. Social Capital and Goodwill. Developing Areas +, 176 169 of Presence. Charity. Specifi c GRI Indicators by Categories/ Subcategories EU22 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Disaster/ Emergency Planning and Response DMA (former 62-75 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 EU21) effect on personnel and population Aspect: Anti-corruption DMA 138-142 4.4. Internal Control and Audit +, 176 4.5. Risk Management G4-SO3 138-140, 4.4. Internal Control and Audit. +, 176 169 Specifi c GRI Indicators by Categories/ Subcategories G4-SO4 138-140, 4.4. Internal Control and Audit. Specifi c GRI Indica- +, 176 169 tors by Categories/ Subcategories

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 168

SPECIFIC STANDARD DISCLOSURES

DMA and RSPP Excluded Information/ Comment Report, pp. Report Section External Assurance of Indicators GRI (+/-, p. Report)

G4-SO5 3.3.4. 138-140 4.4. Internal Control and Audit +, 176 Aspect: Public Policy DMA 3.3.5. 116-123, 3.11. International Activity +, 176 138-140 4.4. Internal Control and Audit G4-SO6 169 Speciﬁ c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Compliance DMA 62-75 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 effect on personnel and population G4-SO8 169 Speciﬁ c GRI Indicators by Categories/ Subcategories +, 176

PR SUBCATEGORY: PRODUCT RESPONSIBILITY Aspect: Customer Health and Safety DMA 62-75 3.9. Social Capital and Goodwill. Developing Areas +, 176 of Presence. Charity G4-PR1 62-75, 169 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 effect on personnel and population Specifi c GRI Indicators by Categories/ Subcategories G4-PR2 3.4.2. 62-75, 169 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 effect on personnel and population Specifi c GRI Indicators by Categories/ Subcategories EU25 91-101 3.7. Human Resources. Labor Protection +, 176 Aspect: Marketing Communications DMA 62-75 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 effect on personnel and population G4-PR6 Not applicable +, 176 G4-PR7 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Compliance DMA 62-75 3.3. Ensuring safety of Russian NPPs. Radiation +, 176 effect on personnel and population G4-PR9 169 Specifi c GRI Indicators by Categories/ Subcategories +, 176 Aspect: Access DMA 42-61 3.2 Production Capital. Generating Capacities +, 176 EU30 194 Appendix 13. Installed Capacity, Electricity Genera- +, 176 tion, and ICUF at NPPs of Rosenergoatom Concern OJSC in 2014 by Geographical Regions

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. 62-75 Reliability of power delivery to consumers 3.1. Situation in the Electric Power Industry 38-41 Social allowability 5. Interaction with Stakeholders 152-158 Interaction with state supervisory authorities 5. Interaction with Stakeholders 152-158 and public organizations Production selling price 3.1. Situation in the Electric Power Industry 38-41 Company transparency 5. Interaction with Stakeholders 152-158 Social responsibility 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity 106-112

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 169

SPECIFIC GRI INDICATORS BY CATEGORIES/SUBCATEGORIES

CATEGORY / SUBCATEGORY COMMENT TO GRI INDICATORS

Economic • Evaluation of fi nancial implications and other risks and opportunities for the activities of the organization due to climate change was not carried out. • The government provided no fi nancial 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 2030. Environmental • 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 classifi cation established by Resolution No. 1069 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 Classifi cation Criteria of Disposable Radioactive Waste.” • There were no signifi cant spills in the reporting period. • NPP do not transport, import, or export hazardous waste. • Discharges by NPPs have no signifi cant 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). Social/ Practice in the Area of • All employees enjoy benefi ts irrespective of their amount of working hours. Labor Relations and Occupation • 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 signifi cant operational changes. • Collective Agreement provides for the notice on coming staff reduction. The indicated term is two weeks. • Rosenergoatom Concern OJSC 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 Rosenergoatom Concern OJSC 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 Rosenergoatom Concern OJSC provides for enhancing knowledge in the area of labour safety as well as acquisition of fi rst 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. Social/ Human Rights • 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 identifi ed in the reporting period. Social/ Society • Pursuant to legislation of the Russian Federation, in all cases of planning an activity which may signifi cantly affect the environment and local people, the Concern participates in public hearings and public consultations. • The Concern has no subsidiaries which signifi cantly 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 specifi c 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 fi nancial contributions for political purposes are allowed. • In reporting period no signifi cant fi nes were applied to Concern for non-compliance with legislation and statutory requirements. Social/ Product Responsibility • Evaluation of nuclear, radiation, industrial, technical, and fi re 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 identifi ed in the reporting period. • No incidents of non-compliance with legislation or statutory requirements were identifi ed in reporting period (indicators G4-PR7 and G4-PR9).

Appendix 3 Rosenergoatom Concern OJSC GRI Content Index 2014 Annual Report 170

4. System of Public Reporting Indicators at Rosenergoatom Concern OJSC

INDICATOR ITEM REPORT SECTION/CHAPTER

EFFICIENCY OF MAINLINE ACTIVITY

ELECTRICAL POWER SUPPLY TO THE RUSSIAN ECONOMY 1.1.1. Generation of electrical 1.1.1.1. Share of electrical power generated by nuclear plants in total produc- 3.2. Production Capital. Generating Capacities power by NPPs tion of electrical power in the Russian Federation 1.1.1.2. Electrical power generation by nuclear plants in the reporting year 3.2. Production Capital. Generating Capacities 1.1.2. Use of installed capacity 1.1.2.1. NPP installed capacity utilization factor 3.2. Production Capital. Generating Capacities of NPPs 1.2.1. Power units capacity 1.2.1.1. Target for increase of equivalent capacity 3.5. Development of Generation Capacity increase 1.2.1.3. Number of retrofi tted VVER-1000 units (in reporting period and total) 3.5. Development of Generation Capacity 1.2.1.4. Number of retrofi tted RMBK units (in reporting period and total) 3.5. Development of Generation Capacity 1.2.2. Service life of power units 1.2.2.1. Number of power units with service life extended to 15 years in the 3.5. Development of Generation Capacity reporting period 1.2.2.2. Number of NPP nuclear power units for which the documents for 3.5. Development of Generation Capacity service life extension, upgrade and retrofi tting were prepared 1.2.3. Power units operation 1.2.3.5. Total reduced time of planned repairs, after rescheduling, including 3.2. Production Capital. Generating Capacities mode through – reducing repair time periods – rescheduled repair start without changing its total duration. 1.2.3.7. Availability ratio 3.2. Production Capital. Generating Capacities 1.3.1. Power units built and 1.3.1.1. Number of power unit construction projects in Russia 3.5. Development of Generation Capacity commissioned in the Russian Federation

SECURING LEADERSHIP FOR RUSSIAN COMPANIES IN THE GLOBAL MARKET 2.1.1. Financial stability 2.1.1.1. Gross profi t 3.6. Financial Capital. Performance Results 2.1.1.2. Total profi t tax accrued and paid 3.6. Financial Capital. Performance Results 2.1.1.3. Net operating profi t after taxes (NOPAT) 3.6. Financial Capital. Performance Results 2.1.1.4. Income (total products, work, and services sold) 3.6. Financial Capital. Performance Results 2.1.2. Production effi ciency 2.1.2.1. Labor effi ciency 3.6. Financial Capital. Performance Results 2.1.2.2. Own production effi ciency (added value) 3.6. Financial Capital. Performance Results 2.1.3. Financial stability 2.1.3.1. Debt/ equity ratio 3.6. Financial Capital. Performance Results 2.1.3.2. Signifi cant funds obtained from the government 3.6. Financial Capital. Performance Results 2.2.1. Positions of Russian 2.2.1.1. Number of power plants in construction abroad (in the reporting 3.5. Development of Generation Capacity engineering on global NPP period) construction market 2.3.1. Investments in equity in 2.3.1.1. Total spending under the investment policy (indicating the share of 3.10. Investments in Development the reporting period funds used to retrofi t plants and technology)

ASSURANCE OF NUCLEAR AND RADIATION SAFETY 4.1.1. Projects to create national 4.1.1.1. Pieces of legislation to support creation of treatment and storage for 3.3. Ensuring safety of Russian NPPs. Radiation systems to process RAW and RAW and used nuclear fuel were adopted effect on personnel and population spent nuclear fuel 4.1.4. Emergency response and 4.1.4.1. Description of reliable safety barriers for nuclear and radiation hazard- 3.3. Ensuring safety of Russian NPPs. Radiation readiness ous sites and their lifecycle planning effect on personnel and population

Appendix 4 Rosenergoatom Concern OJSC System of Public Reporting Indicators at Rosenergoatom Concern OJSC 2014 Annual Report 171

INDICATOR ITEM REPORT SECTION/CHAPTER

4.1.4.2. Description of the emergency response system, including improvement 3.3. Ensuring safety of Russian NPPs. Radiation of safety control monitoring systems at nuclear power facilities, organization of effect on personnel and population professional rescue teams 4.1.4.3. Description of public alert and communication systems 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 4.1.4.4. Description of protection system for employees, citizens, and areas in 3.3. Ensuring safety of Russian NPPs. Radiation radiation emergencies effect on personnel and population 4.1.5. Assuring physical protec- 4.1.5.1. Description of up-to-date engineering and technological systems of 3.3. Ensuring safety of Russian NPPs. Radiation tion of nuclear power facilities control and personnel access management effect on personnel and population 4.2.2. Violations during handling 4.2.2.1. Number of registered cases at nuclear power facilities according to the 3.3. Ensuring safety of Russian NPPs. Radiation of nuclear and radiation hazard- International Nuclear Events System (INES) effect on personnel and population ous materials 4.3.1. Decommissioning 4.3.1.1. Number of decommissioned nuclear and radiation hazardous sites 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 4.4.1. Reclamation of contami- 4.4.1.1. Area of reclaimed contaminated territories 3.3. Ensuring safety of Russian NPPs. Radiation nated territories effect on personnel and population

CREATING INNOVATIVE NUCLEAR TECHNOLOGIES AND PROMOTING THEM TO VARIOUS SECTORS OF THE ECONOMY 5.1.1. Inventions related to use 5.1.1.1. Number of patents, utility models, and industrial samples 3.8. Intellectual Capital. Knowledge Preservation and of nuclear power Transfer. Innovation Management 5.1.2.3. Expenses on R&D, total 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management 5.2.2. Participation in interna- 5.2.2.1. Participation in implemented international innovation projects (INRFC, 3.11. International Activity tional innovation projects ITER, Generation-IV, and FAIR) 5.3.1. VVER-TOI 5.3.1.1. Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management 5.3.1.2. Work Plan Implementation Progress 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management 5.3.3. Floating NPP 5.3.3.1. Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Transfer. Innovation Management 5.4.3. Line of Fast Breeder 5.4.3.1. Description of work accomplished in the reporting year 3.8. Intellectual Capital. Knowledge Preservation and Reactors Transfer. Innovation Management 5.5.2. Radiation Technologies 5.5.2.2. Description of plans for radiation technology development (targets, 3.8. Intellectual Capital. Knowledge Preservation and tasks, and efﬁ ciency) Transfer. Innovation Management

CREATING EFFICIENT MANAGEMENT MECHANISMS FOR THE NUCLEAR INDUSTRY 6.1.2. Implementation of 6.1.2.1. Results of the implementation of the program to raise production 3.2. Production Capital. Generating Capacities Rosatom’s Production System effi ciency (reduced area of preparation shops; shorter production cycle; fewer defects per specifi c components; lower manufacturing cost of specifi c equipment; and greater output in specifi c product positions). 6.1.2.2. Economic benefi t from implemented production development programs 3.2. Production Capital. Generating Capacities and cost reduction in business units 6.1.3. Reorganizing fi nancial and 6.1.3.1. Evaluation of reorganization results (evaluation of targets achieved) 4. Corporate Management economic management 6.1.5. Purchase management 6.1.5.1. Tools used to ensure more open and transparent purchasing 4.7. Purchase Management 6.1.5.2. Total savings as a result of open tender purchasing procedures (% and 4.7. Purchase Management rubles) 6.1.6. Developing in-house 6.1.6.1. Projects to develop communication channels between executives and 5. Interaction with Stakeholders communication employees 6.1.8. Risk Management 4.5. Risk Management 6.1.9. IT-based management 6.1.9.1. List of IT implementation projects 4.9. Information Technologies 6.1.11. Control of fi nancing and 4.4. Internal Control and Audit. business activities

MAKING DEVELOPMENT OF THE NUCLEAR POWER INDUSTRY PUBLICLY ACCEPTABLE 7.1.1. Public reports of the 7.1.1.1. Compliance with international requirements for non-ﬁ nancial reports Appendix 1. Information about the Annual Report Concern and its units and interaction with stakeholders

Appendix 4 Rosenergoatom Concern OJSC System of Public Reporting Indicators at Rosenergoatom Concern OJSC 2014 Annual Report 172

INDICATOR ITEM REPORT SECTION/CHAPTER

7.1.1.2. Interaction with stakeholders while preparing public reports 5. Interaction with Stakeholders 7.1.1.3. Compliance with corporate requirements to public reports Appendix 1. Information about the Annual Report 7.1.2. Industry information 7.1.2.1. Number of information centers 5. Interaction with Stakeholders resources 7.1.2.2. Public and culture activities (museums, popular science, career consult- 5. Interaction with Stakeholders ing, and other) 7.1.2.3. Industry-level mass media 5. Interaction with Stakeholders 9.1.2. Training for employees 9.1.2.1. Employees subject to routine performance evaluation and career 3.7. Human Resources. Labor Protection development 9.1.2.3. Expenses on training of employees 3.7. Human Resources. Labor Protection 9.1.3. Building and using human 9.1.3.1. Number of employees in staff reserve 3.7. Human Resources. Labor Protection reserves 9.1.3.2. 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) 11.1.4. Initiatives to reduce haz- 11.1.4.1. Information on initiatives to reduce hazardous atmospheric emissions 3.9. Social Capital and Goodwill. Developing Areas of ardous atmospheric emissions, Presence. Charity reduction achieved 11.1.5. Initiatives to reduce 11.1.5.1. Information on initiatives to reduce harmful discharges to water 3.9. Social Capital and Goodwill. Developing Areas of harmful discharge to water bodies Presence. Charity bodies, reduction achieved 11.1.5.2. Quantitative data on reduction of harmful discharges to water bodies 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity 11.1.11. Environmental manage- 11.1.11.1. Number of structural units certiﬁ ed for compliance under 3.9. Social Capital and Goodwill. Developing Areas of ment systems adopted in struc- ISO 14001 Presence. Charity tural units of the Corporation 11.2.5. Consumption of water for 11.2.5.1. Consumption of water for own needs 3.9. Social Capital and Goodwill. Developing Areas of own needs Presence. Charity 11.3.15. Payments for 11.3.15.1. Payments for air-polluting emissions from permanent and mobile 3.9. Social Capital and Goodwill. Developing Areas of air-polluting emissions from sources, discharges of pollutants to surface and ground water bodies, and Presence. Charity permanent and mobile sources, emplacement of production and consumption waste discharges of pollutants to surface and ground water bodies, and emplacement of production and consumption waste 11.5.1. Radionuclide emissions 11.5.1.1. Total radionuclide emissions to atmosphere 3.9. Social Capital and Goodwill. Developing Areas of to atmosphere Presence. Charity 11.5.2. Discharge of waste wa- 11.5.2.1. Volume of discharge of waste waters containing radionuclides 3.9. Social Capital and Goodwill. Developing Areas of ters containing radionuclides Presence. Charity 11.5.2.2. Total volume of discharge of waste waters containing radionuclides 3.9. Social Capital and Goodwill. Developing Areas of Presence. Charity 11.5.4. Radionuclide-polluted 11.5.4.1. Area of radionuclide-polluted areas 3.9. Social Capital and Goodwill. Developing Areas of areas Presence. Charity 11.5.4.2. 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) 12.1.4. Share of employees 12.1.4.1. Share of employees under 35 years of age 3.7. Human Resources. Labor Protection under 35 years of age 12.1.5. Average age of employ- 12.1.5.1. Average age of employees (by category, excluding part-time employ- 3.7. Human Resources. Labor Protection ees (by category) ees and employees who are not included in payroll) 12.1.8. Average paycheck com- 12.1.8.1. Average paycheck compared to labor market average 3.9. Social Capital and Goodwill. Developing Areas of pared to labor market average Presence. Charity 12.3.3. Number of employees 12.3.3.1. Number of employees with non-government pension plans 3.9. Social Capital and Goodwill. Developing Areas of with non-government pension Presence. Charity plans

Appendix 4 Rosenergoatom Concern OJSC System of Public Reporting Indicators at Rosenergoatom Concern OJSC 2014 Annual Report 173

INDICATOR ITEM REPORT SECTION/CHAPTER

12.3.4. Total personnel expenses 12.3.4.1. Total personnel expenses 3.7. Human Resources. Labor Protection 12.3.5. Total expenses on social 12.3.5.1. Total expenses on social programs for employees 3.9. Social Capital and Goodwill. Developing Areas of programs for employees Presence. Charity 12.3.6. Social payments per 12.3.6.1. Social payments per employee per year 3.9. Social Capital and Goodwill. Developing Areas of employee per year Presence. Charity 12.3.7. Expenses on additional 12.3.7.1. Expenses on additional health insurance 3.9. Social Capital and Goodwill. Developing Areas of health insurance Presence. Charity 12.4.5. Control of personnel 12.4.5.1. Annual average effective exposure of personnel to radiation 3.3. Ensuring safety of Russian NPPs. Radiation exposure to radiation effect on personnel and population 12.4.5.2. Number of cases when established standard exposure limits were 3.3. Ensuring safety of Russian NPPs. Radiation exceeded effect on personnel and population 12.4.5.4. Share from the total number of employees subject to individual 3.3. Ensuring safety of Russian NPPs. Radiation radiation control, included in the ARMIR system effect on personnel and population 12.4.5.5. Share of employees exposed to negligible risk of radiation 3.3. Ensuring safety of Russian NPPs. Radiation effect on personnel and population 12.4.5.6. 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 13.2.1. Preparing ZATO develop- 13.2.1.1. Preparing ZATO development program 3.9. Social Capital and Goodwill. Developing Areas of ment program Presence. Charity 13.4.1. Charity projects and 13.4.1.1. Charity projects and the volume of funds for these projects 3.9. Social Capital and Goodwill. Developing Areas of the volume of funds for these Presence. Charity projects

ETHICAL PRACTICES AND PUBLIC REGULATION 14.4.2. Organization format for 14.4.2.1. Existence of the Code of Ethics 3.7. Human Resources. Labor Protection ethical practices

Appendix 4 Rosenergoatom Concern OJSC System of Public Reporting Indicators at Rosenergoatom Concern OJSC 2014 Annual Report 174

5. Opinion about Public Affirmation

OPINION ABOUT PUBLIC AFFIRMATION OF THE ANNUAL REPORT OF ROSENERGOATOM CONCERN OJSC

PREAMBLE Rosenergoatom Concern OJSC (hereinafter, the Concern) requested that we assess its 2014 Annual Report, the completeness and relevance of information disclosed therein, and the way Rosenergoatom Concern OJSC responds to and takes into account stakeholders’ proposals and inquiries. We have the required knowledge and competencies in corporate responsibility, sustainable growth, and non-fi nancial 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 2014 Annual Report 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 Rosenergoatom Concern OJSC 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 fi nal version of the 2014 Annual Report, 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 Initia- tive (GRI, Ver. G4), series АА1000 Institute of Social and Ethical Accountability) were applied during the procedure of public affi rmation 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 affi rmation is not intended to confi rm the authenticity of the actual data contained in the report. We have not received any reward or remuneration from Rosenergoatom Concern OJSC for our participation in the public affi rmation. The text of this opinion has been approved by all signatories. Rosenergoatom Concern OJSC 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 confi rm the following: • In its report, the Concern has refl ected all aspects of signifi cance 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 effi ciency. All signifi cant aspects of activities are disclosed with a reasonable level of detail. • The report represents Concern’s strategic development to a suffi cient extent and describes its approaches to principles of responsible business practice. • The report contains information signifi cant 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 affi rmation. • 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 fi nd that the material included in the report should be simplifi ed, and excessive use of specifi c 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-fi nancial risks (environmental, social, etc.) should be disclosed to a greater extent.

Appendix 5 Rosenergoatom Concern OJSC Opinion about Public Affirmation 2014 Annual Report 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, Rosenergoatom Concern OJSC 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 confi rmed by adjustment of the fi nal version of the report which contains clarifi cations and additional information included as per suggestions of the participants involved in consultations. We conclude that during preparation of the fi nal version of the 2014 Annual Report 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 Con- cern’s report and support Concern’s commitment to the principles of responsible business practice. We also confi rm that 2014 report of the Concern has successfully passed public affi rmation.

Chairman of Committee for Social Policy of the Council of Federation of the Federal Assembly of the Russian Federation V.V. Ryazansky

Chairman of Inter-Regional Public Environmental Organization “Green Cross” S.I. Baranovsky

Director of Institute for Safe Development of Nuclear Energy under RAS, Science Research and Coordination of Future L.A. Bolshov Developments

Head of “Bellona” Ecology and Law Center A.K. Nikitin

President, General Director of the Nongovernmental Ecological Fund named after V.I. Vernadsky V.A. Grachev

Chairman of “Association of Areas of Presence of Nuclear Plants” Fund, Chairman of Volgodonsk City Duma P.P. Gorchanyuk

Head of “Council of Territories” public organization for support of Baltic NPP Construction Project A.A. Zhuravleva

Head of urban district of Novovoronezh Yu.I. Pegusov

Chairman of Subcommittee for Legal Support to the Nuclear Power Industry, Panel on Power Industry in the State Duma V.T. Potsyapun of the Federal Assembly of the Russian Federation

Head of Kurchatov Center of Nuclear Technologies, Kurchatov Institute Yu.M. Semchenkov

Head of Center of Corporate Social Responsibility and Non-Financial Reporting, the Russian Union of Manufacturers E.N. Feoktistova and Entrepreneurs

Chairman of Russian Trade Union of Employees of Nuclear Power Industry I.A. Fomichev

Chairman of Oka Inter-regional Environmentalist Movement A.V. Khasiev

Director of Moscow Regional Ofﬁ ce, WANO V.I.Aksenov

Appendix 5 Rosenergoatom Concern OJSC Opinion about Public Affirmation 2014 Annual Report 176

6. Statement on the Results G4-33 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

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 2014. 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 Engage- ment ISAE 3000 “Assurance engagements other than audits or reviews of historical fi nancial information”. The statement corresponds to type 2, as defi ned by АА1000AS 2008, in accordance with the limitations specifi ed in section “Limitations of the engagement” of the present statement. In our statement, we have fulfi lled 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 fi nancial information”. The selective verifi cation 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 confi rmation. In relation to the quantitative information contained in the Report the work performed cannot be considered suffi cient for identifi cation of all possible defi -ciencies and misstatements. However, the collected evidence is suffi cient 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 effi ciency management in the fi eld of sustainable development. • Collection of evidence confi rming practical implementation of system processes in accordance with the principles of AA1000 APS 2008. • 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 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 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-fi nancial reports of foreign companies working in the similar market segment for benchmarking purposes. • Analysis of the current system of internal audit of non-fi nancial reporting in “Rosenergoatom” Concern OJSC • Selective review of documents and data on the effi ciency 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, verifi cation, 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, 2014. In respect to the quantitative performance indicators the conformity assessment to the audited ﬁ nancial 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” Con- cern 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 reﬂ ects 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 ﬁ eld 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 2013. 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 refl ect signifi cant impact of “Rosenergoatom” Concern OJSC on the economy, environment and society or can substantively infl uence 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 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 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 sufﬁ cient 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, reﬂ ecting both the results and the issues that require solution.

COMPARABILITY • The comparability of the Report and non-fi nancial 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 fi nancial 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 suffi cient for stakeholders to estimate the performance of “Rosenergoatom” Concern OJSC in the fi eld 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 effi ciency of the control and order of preparation of non-fi nancial reports are within competence of the Internal Control and Audit De- partment. 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 identifi ed 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 ﬁ eld; 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 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 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 30.12.2014 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 speciﬁ c 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 fi rm, professionally rendering assurance services. JSC “NP Consult” is a member of self-regulated organization Nonprofi t 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 “Rosen- ergoatom” Concern OJSC, its subsidiaries and affi liates that could result in the confl ict 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 certifi cates in this area. The head of the assurance team completed trainings in the assurance of sustainability reports in Accountability training center and has LCSAP certifi cate

CEO JSC “NP Consult” V.Y. Skobarev

Moscow June 19, 2015

Appendix 6 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 180

7. 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 Rosenergoatom Concern OJSC

The internal audit of preparation of the public Annual Report of Rosenergoatom Concern OJSC (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-fi nancial 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 Rosenergoatom Concern OJSC for the Year 2014” approving the composition of the work group for preparation of the 2014 Annual Report of Rosenergo- atom Concern OJSC (Head of the Working Group is D.L. Tkebuchava, First Deputy General Director). A.V. Timonov, Director of the Department for Informa- tion 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 Rosenergoatom Concern OJSC (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 effi ciency 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 effi cient, 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 Rosenergoatom Concern OJSC Statement of the Internal Control Department of Rosenergoatom Concern OJSC 2014 Annual Report 181

8. Business/Financial Accounting Statement

ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 CODES

OKUD Form 0710001 Date (day, month, year) 31 12 2014 Organization Rosenergoatom Concern OJSC By OKPO 08844275 Taxpayer ID INN 7721632827 Type of economic Generation of electric power by nuclear plants By OKVED 40.10.13 Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) by OKOPF/OKFS 12247 12 Units of measurement: Thousand rubles By OKEI 384 Location (address): 109507, Moscow, ul. Ferganskaya, d. 25

COMMENTS ITEM DESCRIPTION CODE DECEMBER 31, DECEMBER 31, DECEMBER 31, 2014 2013 2012

ASSETS I. NON-CURRENT ASSETS 2.3, 6.1 Intangible assets 1110 1,119,114 992,070 1,112,416 2.5, 6.2 Results of research and development 1120 6,220,566 6,226,265 6,236,231 2.4, 6.3 Fixed assets 1150 1,188,688,823 1,081,795,936 937 799 734 Buildings, machines, equipment and other fi xed assets 1151 379,301,528 358,522,677 354,938,386 6.4 Construction in progress invested in fi xed assets 1152 690,723,601 549,179,817 414,551,732 6.5 Advanced payments to suppliers and contractors for capital con- 1153 118,663,694 174,093,442 168,309,616 struction, suppliers of fi xed asset items Yield-bearing investments in material values 1160 84,270 79,081 221,715 2.7, 6.6 Financial investments 1170 36,344,996 41,180,564 38,983,069 6.7 Miscellaneous non-current assets 1190 26,826,311 22,064,607 19,424,929 Section I subtotal 1100 1,259,284,080 1,152,338,523 1,003,778,094 2.6, 6.8 II. CURRENT ASSETS 1210 47,862,422 42,448,269 34,904,834 Inventory Materials, stock and similar assets 1211 46,527,976 41,587,572 34,194,942 Finished products and resellable stock 1213 1,164,458 859,539 704,728 Shipped goods 1214 169,757 927 – Miscellaneous inventory and costs 1219 231 231 5,164 Value Added Tax on values purchased 1220 1,391,041 1,614,072 1,680,680 6.9 Accounts receivable 1230 26,689,446 33,327,930 39,130,439 Settlements with buyers and customers 1231 15,593,278 17,864,046 16,290,242 Advanced payments issued 1232 111,428 1,291,899 7,941,777 Miscellaneous debtors 1233 10,984,740 14,171,985 14,898,420 2.7, 6.10 Financial investments (except cash equivalents) 1240 14,572,714 821,200 6,721,002 6.11 Cash and equivalents 1250 5,860,813 10,364,734 1,548,816 Miscellaneous current assets 1260 166,255 46,631 61,969 Section II subtotal: 1200 96,542,691 88,622,836 84,047,740 BALANCE 1600 1,355,826,771 1,240,961,359 1,087,825,834

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 182

ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 CODES

Form 0710001 page 2

COMMENTS ITEM DESCRIPTION CODE DECEMBER 31, DECEMBER 31, DECEMBER 31, 2014 (3) 2013 (4) 2012 (5)

LIABILITIES III. EQUITY AND PROVISIONS Registered capital (share capital, registered fund, partners’ 6.14 contributions) 1310 671,516,563 671,516,563 530,011,527 Shareholders’ capital contributions before records of constituent 1330 55,297,167 – 80,079,544 documents Surplus capital (not revalued) 1350 25,496 6,812 314 6.14 Reserve capital 1360 223,627,151 187,840,188 145,322,811 6.15 Provisions established under legal requirements 1361 221,913,928 186,237,499 143,720,122 Provisions established under incorporation documents 1362 1,713,223 1,602,689 1,602,689 6.14 Retained proﬁ ts (unrecovered loss) 1370 229,550,964 198,359,100 179,373,958 Section III subtotal 1300 1,180,017,341 1,057,722,663 934,788,154 2.8, 6.17 IV. LONG-TERM LIABILITIES 1410 81,697,638 81,890,352 60,178,290 Borrowed funds 2.9, 6.18 Deferred tax liabilities 1420 1,869,716 1,592,492 1,018,119 6.15 Appraisal-related liabilities 1430 3,365,287 5,627,630 4,823,016 6.21 Miscellaneous liabilities 1450 4,779,533 11,033,023 13,756,370 Section IV subtotal 1400 91,712,174 100,143,497 79,775,795 2.8, 6.17 V. SHORT-TERM LIABILITIES Borrowed funds 1510 12,752,173 22,435,801 22,138,794 6.22 Accounts payable 1520 61,186,967 51,973,324 42,694,181 Suppliers and contractors 1521 47,332,931 38,266,410 29,829,810 Advance payments received 1522 429,990 9,464 22,459 Owed to employees 1523 900,189 911,725 846,873 Owed to government off-budget funds 1524 386,121 372,071 300,073 6.19 Debts in taxes and duties 1525 1,890,250 1,908,866 1,946,896 Miscellaneous creditors 1526 10,247,486 10,504,788 9,748,070 6.12 Deferred revenue 1530 1,227,656 1,290,045 1,365,526 6.20 Appraisal-related liabilities 1540 8,661,579 7,046,918 6,674,722 6.13 Special-purpose ﬁ nancing 1546 268,881 349,111 388,662 Section V subtotal 1500 84,097,256 83,095,199 73,261,885 BALANCE 1700 1,355,826,771 1,240,961,369 1,087,825,834

Manager E.V. Romanov Chief Accountant A.V. Shalimov

“24” February 2015

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 183

PROFIT AND LOSS STATEMENT FOR THE YEAR OF 2014 CODES

OKUD Form 0710002 Date (day, month, year) 31 12 2014 Organization Rosenergoatom Concern OJSC By OKPO 08844275 Taxpayer ID INN 7721632827 Type of economic Generation of electric power by nuclear plants By OKVED 40.10.13 Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) by OKOPF/OKFS 12247 12 Units of measurement: Thousand rubles By OKEI 384

COMMENTS (1) ITEM DESCRIPTION CODE 2014 2013

2.10, 7.1 Revenues 2110 253,215,398 232,856,681 2.11,7.1 Sales costs 2120 (147,607,968) (136,547,466) Gross profi t/loss 2100 105,607,430 96,309,215 2.11 Commercial expenses 2210 (14,727) (15,910) 2.11 Administrative costs 2220 (81,900,769) (81,084,376) Profi t/loss after sales 2200 23,691,934 15,208,929 Gains from interest held in other corporate entities 2310 580,412 350,821 6.9 Interest receivable 2320 3,309,776 2,131,753 6.17 Interest payable 2330 (1,375,392) (1,255,455) 2.10, 7.2 Miscellaneous incomes 2340 9,375,732 3,669,827 2.11,7.2 Miscellaneous expenses 2350 (18,133,005) (11,968,087) Profi t/loss before tax 2300 17,449,457 8,137,788 6.18 Current profi t tax 2410 (9,324,801) (6,112,395) Including fi xed tax liability/assets 2421 (6149157) (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) 96,133 6.18 Other 2460 75,026 (13,356) 6.18 Profi t tax reallocation within the consolidated taxpayers group 2465 1,352,747 761,845 Net profi t/loss 2400 9,238,182 2,210,670

COMMENTS (1) ITEM DESCRIPTION CODE 2014 2013

REFERENCE Result of non-current assets revaluation not included in the net profi t/ loss of the period 2510 _ _ Result of miscellaneous operations not included in the net profi t/ loss of the 2520 22,082,900 16,781,283 period Consolidated fi nancial result of the period 2500 31,321,082 18,991,953 7.3 Base profi t/ loss per share of stock 2900 0 0 Diluted profi t/ loss per share of stock 2910 _ _

Manager E.V. Romanov Chief Accountant A.V. Shalimov

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 184

EQUITY DYNAMICS STATEMENT FOR 2014 CODES

OKUD Form 0710003 Date (day, month, year) 31 12 2014 Organization Rosenergoatom Concern OJSC By OKPO 08844275 Taxpayer ID INN 7721632827 Type of economic Generation of electric power by nuclear plants By OKVED 40.10.13 Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) by OKOPF/OKFS 12247 12 Units of measurement: Thousand rubles By OKEI 384

1. CASH FLOW

ITEM DESCRIPTION CODE REGISTERED OWN STOCK SHAREHOLD- SUR- RESERVE RETAINED TOTAL CAPITAL REDEEMED ERS’ CAPITAL PLUS CAPITAL PROFIT/ FROM CONTRIBUTIONS CAPITAL UNCOVERED STOCK- BEFORE RECORDS LOSS HOLDER OF CONSTITUENT DOCUMENTS

Size of capital as of December 3100 530,011,527 — 80,079,544 314 145,322,811 179,373,958 934,788,154 31,2012 For year 2013, Increment in 3210 141,505,036 — 61,425,492 6,498 70,457,849 2,210,670 275,605,545 capital, total: Including, net proﬁ t 3211 X X X X X 2,210,670 2,210,670 Revaluation of assets 3212 X X — — X — — Income recognized directly as 3213 X X — 6,498 X — 6,498 capital increment Additional issue of stock 3214 141,505,036 — 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 3217 X X X X 70,457,849 X 70,457,849 for purposes of investment Shareholders’ capital con- 3218 — X X X X X — tributions before records of constituent documents 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 3223 X X — — X — — capital decrement 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 con- 3228 X X (141,505,036) X X X (141,505,036) tributions before records of constituent documents 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 3250 X X X X (16,774,472) 16,774,472 ﬁ xed assets objects built (purchased) with industry-level Size of capital as of December 3200 671,516,563 — — 6,812187,840,188 196,359,100 1,057,722,663 31,2014

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 185

For year 2014, Increment in 3310 — — 55,297,167 18,684 70,576,072 9,238,182 135,130,105 capital, total: Including, net proﬁ t 3311 X X X X X 9,238,182 9,238,182 Revaluation of assets 3312 X X X — X — — Income recognized directly as 3313 — — X 18,684 — — 18684 capital increment Additional issue of stock 3314 — — X — X X — Increase in par value of stock 3315 — — X — X — — Reorganization of corporate 3316 — — X — — — — entity Engaged industry-level reserves 3317 X X X X 70,576,072 — 70,576,072 for purposes of investment Shareholders’ capital con- 3318 X X 55,297,167 X X X 55,297,167 tributions before records of constituent documents 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 3323 — — X — X — — capital decrement Decrease in par value of stock 3324 — — X — X — — Decrease in number of stock 3325 — — X — X — — Reorganization of corporate 3326 — — X — — — — entity Dividends 3327 X X X X X — — Shareholders’ capital con- 3328 — X — X X X — tributions before records of constituent documents 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 3350 X X X X (22,064,216) 22,064,216 — ﬁ xed assets objects built (purchased) with industry-level Size of capital as of December 3300 671,516,563 — 55,297,167 25,496 223,627,151 229,550,964 1,180,017,341 31,2014

Manager E.V. Romanov Chief Accountant A.V. Shalimov

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 186

2. 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 proﬁ t/loss Other

EQUITY, TOTAL 3400 854,708,610 2,210,670 200,803,383 1,057,722,663 Вefore adjustments Adjustment due to: 3410 80,079,544 --- (80,079,544) --- accounting policy change correction of errors 3420 ------After adjustments 3500 934,788,154 2,210,670 120,723,839 1,057,722,663 Including 3401 179,373,958 2,210,670 16,774,472 198,359,100 retained proﬁ t/ uncovered loss: before adjustments adjustment due to: 3411 ------accounting policy change correction of errors 3421 ------after adjustments 3501 179,373,958 2,210,670 16,774,472 198,359,100 Other equity items adjusted 3402 675,334,652 --- 184,028,911 859,363,563 (per item) before adjustments adjustment due to: 3412 80,079,544 (80,079,544) --- accounting policy change correction of errors 3422 ------after adjustments 3502 755,414,196 --- 103,949,367 859,363,563

3. NET ASSETS

ITEM DESCRIPTION CODE DECEMBER 31,2014 DECEMBER 31,2013 DECEMBER 31,2012

Net assets 3600 1,181,244,997 1,059,012,708 936,153,680

Manager E.V. Romanov Chief Accountant A.V. Shalimov

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 187

ACCOUNTING BALANCE SHEET STATEMENT AS OF DECEMBER 31, 2014 CODES

OKUD Form 0710004 Date (day, month, year) 31 12 2014 Organization Rosenergoatom Concern OJSC By OKPO 08844275 Taxpayer ID INN 7721632827 Type of economic Generation of electric power by nuclear plants By OKVED 40.10.13 Form of incorporation/ownership: Open Joint Stock Company (owned by the Federal Government) by OKOPF/OKFS 12247 12 Units of measurement: Thousand rubles By OKEI 384

ITEM DESCRIPTION CODE 2014 2013

CASH FLOW FROM CURRENT OPERATIONS Revenue - total 4110 260,557,074 232,968,298 Including: from sold products, works, services 4111 251,729,143 227,046,089 payments in lease, rent, royalty fees, commission fees and similar amounts 4112 258,812 386,434 resold fi nancial investments 4113 – – miscellaneous revenue 4119 8,569,119 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) profi t tax 4124 (8,631,899) (5,601,245) miscellaneous payments 4129 (20,818,637) (19,423,365) Balance of cash fl ow from current operations 4100 107,918,282 94,641,070 CASH FLOW FROM INVESTMENTS Revenue - total 4210 246,241,111 224,512,531 Including: from sold non-current assets (except fi nancial investments) 4211 176,873 236,132 from sold corporate stock or holdings in other corporate entities 4212 – 1,862,982 from repaid loans issued, sold debentures (claim rights to third parties 4213 242,372,302 220,010,975 dividends, interest on fi nancial debt investments, and similar revenue from holdings in other 4214 3,579,439 2,292,445 corporate entities miscellaneous revenue 4219 112,497 109,997 Payments - total 4220 (404,250,868) (390,353,661) Including: to purchase, create, upgrade, retrofi t 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 fl ow from investments 4200 (158,009,757) (165,841,130)

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 188

ITEM DESCRIPTION CODE 2014 2013

CASH FLOW FROM FINANCIAL OPERATIONS Revenue - total 4310 121,999,363 131,741,077 Including: 4311 66,699,396 73,604,495 Received loans and credits Cash investments from owners (partners) 4312 – – from issued stock or increased holdings 4313 55,297,167 58,136,582 from issued bonds, promissory notes, security debentures, etc. 4314 – – government budget allocations, and other government fi nancing 4315 – – miscellaneous revenue 4319 2,800 – Payments - total 4320 (76,512,712) (51,738,814) Including to incorporators/ stockholder to fi nance buyout of stock/holdings in the corporate capital, or their 4321 – – retirement from the corporation Paid as dividends and otherwise to distribute profi ts 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 fl ow from fi nancial operations 4300 45,486,651 80,002,263 Balance of cash fl ow for the reporting period 4400 (4,604,824) 8,802,203 Balance of cash and equivalents at the beginning of the reporting period 4450 10,361,255 1,548,765 Balance of cash and equivalents at the end of the reporting period 4500 5,859,106 10,361,255 Impact by change of foreign currency exchange rate to the ruble 4490 102,675 10,287

Appendix 8 Rosenergoatom Concern OJSC Business/Financial Accounting Statements 2014 Annual Report 189

9. 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

To Shareholders of Open Joint-Stock Company Audit Opinion “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: 109507, 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; Certiﬁ cate: series 77 No. 010416448. Record of September 17, 2008 in the Uniﬁ ed State Register of Legal Entities, Primary State Registration Number 5087746119951.

AUDITOR

CORPORATE NAME: Accountants & Business Advisers Limited Liability Company (FBK LLC).

LOCATION: 101990, Moscow, ul. Myasnitskaya, 44/1, str. 2AB.

STATUTORY REGISTRATION: Registered by Moscow Chamber of Registration, on November 15, 1993, Certiﬁ cate: series UZ 3 No. 484.583 RP. Record of July 24, 2002, in the Uniﬁ ed State Register of Legal Entities, Primary State Registration Number 1027700058286.

MEMBERSHIP IN SELF-REGULATED ASSOCIATION OF AUDITORS: Russian Chamber of Auditors Not-for-Proﬁ t Partnership.

ID RECORD IN THE REGISTRY OF THE SELF-REGULATED ASSOCIATION OF AUDITORS: Certifi cate of association in Russian Chamber of Auditors Not-for-Profi t Partnership, No. 5353, ORNZ (Primary Registration Entry Number) 10201039470. We have reviewed the attached accounting (fi nancial) statements fi led by Rosenergoatom Concern OJSC comprising its Accounting Balance Sheet Statement as of December 31, 2014, its Profi t and Loss Statement, its Equity Dynamics Statement, and its Cash Flow Statement for 2014, and other appendices to the Accounting Balance Sheet Statement and Profi t and Loss Statement for 2014.

Appendix 9 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 190

AUDITED ENTITY’S RESPONSIBILITY FOR ITS ACCOUNTING (FINANCIAL) STATEMENTS The audited entity’s management shall assume responsibility for the aforementioned accounting (ﬁ nancial) 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 (ﬁ nancial) 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 (fi nancial) 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 (fi nancial) statements are free of any material misrepresentation. Our review consisted of auditing procedures designed to obtain auditing evidence to confi rm numeric values and disclosure of information in the accounting (fi nancial) 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 (fi nancial) statements, and the purpose of such examination was to enable selection of auditing procedures, but not to express an opinion about effi ciency 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 fi led accounting (fi nancial) reports as a whole. We hold that the evidence collected in the course of our audit give suffi cient grounds for our judgment about the accounting (fi nancial) statements as true and reliable.

OPINION It is our opinion that the reviewed accounting (fi nancial) statements reliably represent all relevant aspects of the fi nancial situation in Rosenergoatom Concern OJSC as of December 31, 2014, its fi nancial and business performance, and its cash fl ows during 2014, in conformity with the Russian standards for accounting (fi nancial) statements.

S.M. Shapiguzov FBK LLC President By virtue of the Articles of Association, Auditor Qualiﬁ cation Certiﬁ cate 01-001230, ORNZ (Primary Registration Entry Number) 29501041926

Audit opinion date: March 2, 2015

Appendix 9 Rosenergoatom Concern OJSC Statement on the Results of Independent Assurance of Public Annual Report 2014 Annual Report 191

10. Opinion of the Internal Auditing Committee on the Results of Review of Financial and Business Activities of Rosenergoatom Concern OJSC for 2014

Moscow April 1, 2015 In accordance with the Federal Law on Joint Stock Companies, the Charter of Rosenergoatom Concern OJSC (hereinafter, the Company), and the Company’s Regulation on the Internal Auditing Committee the Company’s Internal Auditing Committee reviewed the Company’s ﬁ nancial and business operations in 2014 between March 16, 2015 and April 1, 2015. The Internal Auditing Committee was formed based on Resolution No. 7 of the Аnnual General Meeting of Stockholders of Rosenergoatom Concern OJSC 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 Member of the Internal Auditing Committee, Director of the Department of NPP Lifecycle of Rosatom State Corporation Liudmila Nikolayevna Demidova Member of the Internal Auditing Committee, Secretary, Director of the Department of Economics and Controlling of Rosenergoatom Concern OJSC

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 fi nancial 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 Advis- ers LLC (FBK LLC) on the accounting (fi nancial) statements of Rosenergoatom Concern OJSC for 2014. Following the review, the Internal Auditing Committee: 1. States its opinion regarding authenticity of the information contained in the Company’s accounting (fi nancial) statements in all material aspects. 2. Has not established in the Company’s fi nancial and business activities any facts of non-compliance with the rules and procedures of business accounting and fi nancial 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 Pyotr Anatolyevich Stepayev Member of the Internal Auditing Committee Marina Igorevna Kiseleva Member of the Internal Auditing Committee, Secretary Liudmila Nikolayevna Demidovа

Appendix 10 Rosenergoatom Concern OJSC Opinion of the Internal Auditing Committe 2014 Annual Report 192

11. 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 Corpo- rate Management Code (hereinafter, the Code) recommended for use by the Bank of Russia, with due regard to the specifi cs 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, defi ning standards of the corporate management. The Concern also applies recommendations of the Code aimed at increasing effi ciency 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 Rosenergoatom Concern OJSC Report on the Concern’s Compliance with the Corporate Management Code Recommended by the Bank of Russia 2014 Annual Report 193

12. Active Nuclear Power Units

POWER PLANT UNIT NO REACTOR TYPE ELECTRICAL CAPACITY, MW JOINED THE GRID

Balakovo NPP 1 VVER-1000 1000 28.12.1985 2 VVER-1000 1000 08.10.1987

3 VVER-1000 1000 24.12.1988 4 VVER-1000 1000 11.04.1993 Beloyarsk NPP 3 BN-600 600 08.04.1980 Bilibino NPP 1 EGP-6 12 12.01.1974 2 EGP-6 12 30.12.1974 3 EGP-6 12 22.12.1975 4 EGP-6 12 27.12.1976 Kalinin NPP 1 VVER-1000 1000 09.05.1984 2 VVER-1000 1000 03.12.1986 3 VVER-1000 1000 16.12.2004 4 VVER-1000 1000 22.11.2011 Kola NPP 1 VVER-440 440 29.06.1973 2 VVER-440 440 09.12.1974 3 VVER-440 440 24.03.1981 4 VVER-440 440 11.10.1984 Kursk NPP 1 RBMK-1000 1000 12.12.1976 2 RBMK-1000 1000 28.01.1979 3 RBMK-1000 1000 17.10.1983 4 RBMK-1000 1000 02.12.1985 Leningrad NPP 1 RBMK-1000 1000 21.12.1973 2 RBMK-1000 1000 11.07.1975 3 RBMK-1000 1000 07.12.1979 4 RBMK-1000 1000 09.02.1981 Novovoronezh NPP 3 VVER-440 417 12.12.1971 4 VVER-440 417 28.12.1972 5 VVER-1000 1000 31.05.1980 Rostov NPP 1 VVER-1000 1000 30.03.2001 2 VVER-1000 1000 16.03.2010 3 VVER-1000 1070 27.12.2014 Smolensk NPP 1 RBMK-1000 1000 09.12.1982 2 RBMK-1000 1000 31.05.1985 3 RBMK-1000 1000 17.01.1990

Appendix 12 Rosenergoatom Concern OJSC Active Nuclear Power Units 2014 Annual Report 194

13. Installed Capacity, Electricity Generation, and ICUF at NPPs of Rosenergoatom Concern OJSC in 2014 by Geographical Regions

ITEM NAME OF NPP UNIFIED CONSTITUENT NUMBER POWER INSTALLED GENERATION ICUF, % AVAILABILITY NO. POWER ENTITY OF RUSSIAN OF POWER UNIT TYPE CAPACITY, OF ELECTRICAL FACTOR, % SYSTEM (UPS) FEDERATION UNITS MW* POWER, MILLION KWH

1 Kalinin NPP Center Tver Oblast 4 VVER 4,000 28,331.9 80.9 81.5 2 Kursk NPP Center Kursk Oblast 4 RBMK 4,000 29,224.0 83.4 84.3

3 Novovoronezh NPP Center Voronezh Oblast 3 VVER 1,834 13,242.9 82.4 83.0 4 Smolensk NPP Center Smolensk Oblast 3 RBMK 3,000 23,673.66 90.1 90.7

5 Kola NPP NW Murmansk Oblast 4 VVER 1,760 10,361.4 67.2 84.1 6 Leningrad NPP NW Leningrad Oblast 4 RBMK 4,000 25,373.4 72.4 73.9 7 Rostov NPP South Rostov Oblast 3 VVER 2,000 15,704.9 89.5 91.8 including power unit South Rostov Oblast VVER low power 20.1 No. 3 (power start up on testing December 27, 2014) 8 Balakovo NPP Middle Volga Saratov Oblast 4 VVER 4,000 29,819.5 85.1 85.6 9 Beloyarsk NPP Ural Sverdlovsk Oblast 1 BN 600 4,523.6 86.1 86.1 10 Bilibino NPP East Chukotka 4 EGP-6 48 220.21 52.4 81.2 Autonomous Okrug TOTAL for Rosenergoatom Concern OJSC 34 25,242 180,475.5 81.6 83.7

* Installed capacity of NPPs of Rosenergoatom Concern OJSC 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 – http://report2014.rosenergoatom.ru

Appendix 13 Rosenergoatom Concern OJSC Installed Capacity, Electricity Generation, and ICUF at NPPs of Rosenergoatom Concern OJSC in 2014 by Geographical Regions 2014 Annual Report 195

16. Glossary

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

Appendix 16 Rosenergoatom Concern OJSC Glossary 2014 Annual Report 196

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

Appendix 16 Rosenergoatom Concern OJSC Glossary 2014 Annual Report 197

17. Abbreviations

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

Appendix 17 Rosenergoatom Concern OJSC Abbreviations 2014 Annual Report 198

18. Feedback Form

Dear Readers, We have been pleased to offer for your consideration the Rosenergoatom Concern OJSC Annual Report for 2014. 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 ﬁ ll 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: Rosenergoatom Concern OJSC, ul. Ferganskaya, d. 25, Moscow 109507, or by e-mail to: [email protected] Contact person for report content – Aleksandr Berenzon, Senior Specialist, Department of Information and Public Relations, tel. +7 (495) 647-46-36.

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Appendix 18 Rosenergoatom Concern OJSC Feedback Form 2014 Annual Report 199

Notes

Rosenergoatom Concern OJSC 2014 Annual Report 200

Notes

Rosenergoatom Concern OJSC 2014 Annual Report