JSC Atomenergoprom Annual Report 2017 Table of Contents Chapter 1 JSC Atomenergoprom Today 4 Chapter 5 Innovations and New Products 78 6 Company Overview 5.1. Research and Innovations 80 7 Report Profile 5.2. Business Diversification 82 Address by the Chair of the Board of Directors 8 Address by the Director 10 Chapter 6 Governance System 86 JSC Atomenergoprom Today 12 6.1. Corporate Governance 88 History of JSC Atomenergoprom 14 6.2. Risk Management 94 Key Events in 2017 15 6.3. Financial Management 105 Key Results in 2017 16 6.4. Investment Management 108 Financial and Economic Results 17 6.5. Internal Control System 111 Chapter 2 Business Strategy 24 HR Policy and Social Chapter 7 112 2.1. Business Strategy until 2030 26 Responsibility 2.2. Markets Served by Atomenergoprom 31 7.1. Personnel Management 114 7.2. Developing the Regions of Operation 119 International Business Chapter 3 42 7.3. Stakeholder Engagement 120 Performance 3.1. International Business 44 Chapter 8 Safe Operation 126 3.2. International Cooperation 51 8.1. Nuclear and Radiation Safety; Occupational Safety and Health 128 Chapter 4 Performance of Divisions 54 8.2. Environmental Safety 130 4.1. Mining Division 56 Glossary 132 4.2. Fuel Division 61 List of Abbreviations 136 4.3. Mechanical Engineering Division 65 Appendices 138 4.4. Engineering Division 69 Feedback Form 156 4.5. Power Engineering Division 74 Contact Details 157 1. JSC Atomenergoprom Today No. 1 No. 1 No. 2 292.3 970 202.9 in the world in terms of the number in the world in terms of uranium in the world in terms of uranium reserves EBITDA, RUB billion number of wind farms to be electricity output at 35 operating power of NPP power units in the portfolio enrichment (36% of the global market) and 14% of global production commissioned in Russia by 2022 units of Russian NPPs in 2017, billion kWh of foreign projects (33 power units) (including the project portfolio of ROSATOM) ~17% 18.9% 747.1 43% 33 814.1 share of the global nuclear fuel market share of electricity generation in Russia revenue in 2017, RUB billion of the Russian wind power market power units in 12 countries around the portfolio of orders for new products world (outside the scope of the nuclear industry), RUB billion Company Overview Report Profile The Public Annual Report (hereinafter referred achievements in the sphere of nuclear and the period from January 1 through December Joint-Stock Company State registration date: July 19, 2007. Location: 24 Bolshaya Ordynka Street, to as the Report) of JSC Atomenergoprom radiation safety and environmental protection, 31, 2017. It also discloses some information on (hereinafter referred to as JSC Atomenergoprom its contribution to the development of its regions and results of the entire Russian nuclear industry. Atomic Energy Power Corporation State registration authority: Inter-District Moscow. (JSC Atomenergoprom) or the Company) for 2017 has been prepared in of operation, implementation of social policy The Annual Report of JSC Atomenergoprom is Inspectorate No. 46 of the Federal Tax Tel.: +7 (495) 969-29-39 the integrated format. and other aspects of sustainable development. approved by the Board of Directors. Primary state registration Service in Moscow. Fax: +7 (495) 969-29-36 The Report provides an integrated account of the JSC Atomenergoprom issues reports on a yearly number (OGRN): Official website: Company’s strategy and JSC Atomenergoprom’s basis. The previous annual report was published 1077758081664. www.atomenergoprom.ru key financial, economic and operating results for in 2017. This Report covers the operating results 2017. The Report also outlines the Company’s of the Company and its organizations during 1. Shareholders of JSC Atomenergoprom Standards and regulatory requirements 1. State Atomic Energy 2. Russian Federation represented The Report has been prepared Reporting Council (The International <IR> Federal Law No. 208-FZ on Joint-Stock Holders of record of JSC Corporation Rosatom. by the Russian Ministry of Finance. in accordance with the following Framework); Companies dated December 26, 1995; documents: Atomenergoprom as Location: 24 Bolshaya Ordynka Street, Moscow, Location: 9 Ilyinka Street, Moscow, 109097. The Global Reporting Initiative (GRI) Regulations of the Central Bank of Russia of December 31, 2017: 119017. The Public Reporting Policy of ROSATOM Sustainability Reporting Standards: this No. 454-P on Disclosure of Information Status of the holder of record: shareholder. and the Public Reporting Standard of Report has been prepared in accordance with by Issuers of Issue-Grade Securities dated Status of the holder of record: shareholder. Stake in the Company’s authorized share ROSATOM and its organizations; individual GRI Standards listed in Appendix 1; December 30, 2014. Stake in the Company’s authorized share capital: 5.55%. The International Integrated Reporting The AA1000 AccountAbility Principles capital: 94.45%. Portion of voting shares held by the entity: 0%. Framework of the International Integrated Standard; Portion of voting shares held by the entity: 100%. Process for determining the materiality of disclosures The materiality of information was prioritized material topics (based on the assessment to include various GRI performance indicators and 2. Auditor of JSC Atomenergoprom determined through the following process: of materiality of each of the proposed topics); performance indicators stipulated in ROSATOM’s Public Reporting Standard was based on the Location: 44/1 Myasnitskaya Email: [email protected] A working group compiled a list of material Following the ‘two-stage filtering’, a list of materiality of the topics to which the indicators are Street, Moscow, 101990. topics related to the Company’s operations; material topics to be disclosed in the Report was Full name: LLC Accountants JSC KPMG is the auditor for the summary related. The boundaries of information disclosure compiled. and Business Advisors INN: 7701017140 consolidated IFRS financial The Company’s management, members of on various topics were determined by the working (LLC FBK). OGRN: 1027700058286 statements for 2017. the working group preparing the Report and As a result, a ranking map of material topics to be group. representatives of major stakeholder groups disclosed in the Report was prepared. The decision Tel.: +7 (495) 737-53-53 Fax: +7 (495) 737-53-47 3. Registrar of JSC Atomenergoprom’s shares Verification of reporting Disclaimer Location: 18, Bldg. 13, Stromynka Street, (Federal Financial Markets Service). information The Report contains information about the economic and political environment; situation Moscow, 107996. Company’s medium- and long-term objectives on the key markets; amendments to the tax, The shareholder register Date from which the registrar has kept the issuer’s of JSC Atomenergoprom is kept by Reporting information was certified as accurate and initiatives. The objectives are forward- customs and environmental legislation, etc.). INN: 7726030449 shareholder register: October 28, 2009. looking, and their actual achievement will Therefore, actual performance in the future Joint-Stock Company R.O.S.T. Registrar. OGRN: 1027739216757 and reliable by an independent auditor which JSC R.O.S.T. Registrar also maintains certifies the annual financial statements. depend, among other things, on a number of years may differ significantly from the forward- Licence: 045-13976-000001 shareholder registers of the majority of economic, political and legal factors beyond looking statements contained herein. Abbreviated company name: Issue date: December 3, 2002. JSC Atomenergoprom’s subsidiaries, which the Company’s control (the global financial, JSC R.O.S.T. Registrar. Expiry date: perpetual licence. enables more rapid and reliable transactions in their shares when restructuring the corporate Licensing authority: Russian Federal group. Commission for the Securities Market 6 ANNUAL REPORT JSC ATOMENERGOPROM 2017 CHAPTER 1 / JSC ATOMENERGOPROM TODAY / 7 COMPANY OVERVIEW, REPORT PROFILE Address by the Chair of the Board of Directors Dear colleagues and partners, 2017 was a successful year for The Company continued mass significantly to sustainable economic projects are underway in such a programme to improve their energy JSC Atomenergoprom. The Company production and commissioning of development in Russia. In 2017, areas as supercomputers, additive efficiency and introducing energy achieved all objectives that it had set power units at nuclear power plants electricity output at 35 power units of manufacturing and life cycle management systems complying with as part of the long-term strategy for in Russia and abroad. In February 2017, 10 operating NPPs totalled 202.9 billion kWh, management of complex engineering international standards. the development of the Russian nuclear the innovative power unit No. 1 of or 18.9% of the total electricity output facilities. I would like to thank the Company’s industry. Novovoronezh NPP-2 with a generation in Russia. In the course of its operations, employees and partners for their All of its key financial indicators 3+ VVER-1200 reactor started full- JSC Atomenergoprom creates JSC Atomenergoprom gives special efficient work throughout the year. We increased, which provides evidence of scale operation. In December, the first breakthrough technologies and focus to minimizing its environmental will continue to work together towards the stable position and operational criticality programme was launched innovative infrastructure to facilitate footprint and using resources new achievements! efficiency of JSC Atomenergoprom. at power unit No. 4 of Rostov NPP and long-term development and meet sustainably and efficiently. As in recent Revenue reached RUB 747.1 billion (up power unit No. 1 of Leningrad NPP-2. the energy needs of mankind. In years, in 2017, no events rated at level 2 by 6.7% year on year); EBITDA totalled As part of NPP construction projects 2017, the Company continued to or higher on the international INES scale RUB 292.3 billion (up by 16.7% year abroad, the power start-up of power implement the Proryv (Breakthrough) were detected at nuclear facilities (level on year), while profit increased to unit No.