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 10 2014 Calendar of Key Events MAY JUNE AUGUST OCTOBER TheThe NinthNinth Interna-IInn CommencementCoCommencemmencem of RosenergoatomRRosenergoaosenergoa Con- The contract extending RostekhnadRostekhnaRostekhnadzor granted ttionalional ScScieScientifiient c and work on bribrinbringingn the cern was recognizedrerecc the operation term for tthehe lilicensecense ffor an TechnicalTechnihnicalcal ConferenceCo BN-800BN-800 reactorrreaea of the as the best technicalt the 5th power unit to additionaladditional operatingo “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 rationration in 2014.2200 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 generationge cembercember RussianRus NPPs includedincluded inin thet Russian industry Russian NPPs Fund and the Hun- ((168.3168.3 blnln KKWh) was ffollowedollowed ththrthroughr 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