Multi-D NIAEP technology $POUFOUT About the Annual Report ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––4 Address by the Chairmanof the Board of Directors of JSC NIAEP –––––––––––––––––––––––––––––6 Address by the Directorof JSC NIAEP –––––––––––––––––––––––––––––––––––––––––––––––––––8 Key Performance Indices of JSC NIAEP –––––––––––––––––––––––––––––––––––––––––––––––– 12 Key Events of 2010 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 14 Awards of JSC NIAEP –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 16 SECTION 1. GENERAL INFORMATION –––––––––––––––––––––––––––––––––––––––––––––––– 19 1.1. General Information about JSC NIAEP ––––––––––––––––––––––––––––––––––––––––––––– 22 1.2. General Description of Activities ––––––––––––––––––––––––––––––––––––––––––––––––– 28 1.3. Corporate Management ––––––––––––––––––––––––––––––––––––––––––––––––––––––– 36 1.4. Mission and Strategy –––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 42 1.5. Values and the Public Stance on Sustainable Development Issues ––––––––––––––––––––––– 50 1.6. Corporate Structure of JSC NIAEP –––––––––––––––––––––––––––––––––––––––––––––––– 56 1.7. JSC NIAEP Management ––––––––––––––––––––––––––––––––––––––––––––––––––––––– 58 SECTION 2. OPERATING ACTIVITIES –––––––––––––––––––––––––––––––––––––––––––––––––– 61 2.1. Basic Financial Statement –––––––––––––––––––––––––––––––––––––––––––––––––––––– 62 2.2. Operating Activity Results –––––––––––––––––––––––––––––––––––––––––––––––––––––– 66 2.2.1. Designing ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––66 2.2.2. Construction ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––68 2.2.3. Поставки оборудования и материалов ––––––––––––––––––––––––––––––––––– 71 2.3. Management of Operating Activities–––––––––––––––––––––––––––––––––––––––––––––– 72 2.4. Investment Projects ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 82 SECTION 3. SUSTAINABLE DEVELOPMENT ACTIVITIES ––––––––––––––––––––––––––––––––––– 85 3.1. Personnel ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 86 3.1.1. Personnel Description –––––––––––––––––––––––––––––––––––––––––––––––––– 86 3.1.2. Personnel Management ––––––––––––––––––––––––––––––––––––––––––––––––– 90 3.2. Quality Management ––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 101 3.3. Innovation Activities ––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 105 3.4. Risk Management ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 111 3.5. Economic Impact –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 116 3.5.1. Economic Impact Assessment ––––––––––––––––––––––––––––––––––––––––––– 116 3.5.2. Economic Impact Management –––––––––––––––––––––––––––––––––––––––––– 121 3.6. Social Impact ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 123 3.6.1. Social Impact Assessment –––––––––––––––––––––––––––––––––––––––––––––– 123 3.6.2. Social Impact Management ––––––––––––––––––––––––––––––––––––––––––––– 127 Multi-D NIAEP technology 3.7. Environmental Impact –––––––––––––––––––––––––––––––––––––––––––––––––––––––– 130 3.7.1 Environmental Impact Assessment ––––––––––––––––––––––––––––––––––––––– 130 3.7.2. Environmental Impact Management –––––––––––––––––––––––––––––––––––––– 136 3.8. Cooperation with the Parties Concerned ––––––––––––––––––––––––––––––––––––––––– 143 SECTION 4. COOPERATION BETWEEN THE PARTIES CONCERNED FOR DRAFTING THE REPORT – 149 4.1. Dialogues with the Parties Concerned ––––––––––––––––––––––––––––––––––––––––––– 150 4.2. Public Consultation on the Report ––––––––––––––––––––––––––––––––––––––––––––––– 153 4.3. Plans and Liabilities to the Parties Concerned ––––––––––––––––––––––––––––––––––––– 156 4.4. Conclusion on the JSC NIAEP Annual Report Public Assurance –––––––––––––––––––––––– 159 SECTION 5. APPENDICES ––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 165 Appendix 1. Report of Board of Directors on JSC NIAEP Activities Results in Priority Activity Areas –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 166 Appendix 2. Information on the Observance of JSC NIAEP’s Corporate Behaviour Code –––––––– 169 Appendix 3. Financial Statements for 2010 ––––––––––––––––––––––––––––––––––––––––––– 178 Appendix 4. Audit Report Confirming the Reliability of the Annual Financial Statements ––––––– 198 Appendix 5. The Auditing Commission Report ––––––––––––––––––––––––––––––––––––––––– 203 Appendix 6. Report on Large Deals and Interest-Bearing Transactions –––––––––––––––––––––– 205 Appendix 7. Conclusion of the Internal Control and Auditing Department on the Reliability of Data Contained in the Report –––––––––––––––––––––––––––––––––––––––––––––––––––– 206 Appendix 8. Independent Auditor’s Conclusion on Non-Financial Data Assurance –––––––––––– 207 Appendix 9. Table of Standard Disclosures and Performance Indicators ––––––––––––––––––––– 213 Appendix 10. Key Events in NPP Construction in 2010 –––––––––––––––––––––––––––––––––– 223 Appendix 11. Plans for NPP Construction in 2011 –––––––––––––––––––––––––––––––––––––– 225 Appendix 12. Glossary –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 227 Appendix 13. List of Abbreviations –––––––––––––––––––––––––––––––––––––––––––––––––– 229 Appendix 14. Feedback Questionnaire –––––––––––––––––––––––––––––––––––––––––––––– 231 "OOVBM3FQPSU]]+4$/*"&1 "CPVUUIF"OOVBM3FQPSU This public Annual Report (hereinafter-the Report) is to describe activity of Joint-Stock Company NIZHNY NOVGOROD ENGINEERING COMPANY «ATOMENERGOPROEKT» (JSC NIAEP) within 2010. The Annual Report is the third integrated Report covering financial and not-financial aspects of the Company activities. The previous integrated report was issued in 2010 to make information public within the span of January 01 to December 31, 2009. There are no essential changes concerning the previous periods of reporting with regard to the scope, range and methods used in the Report. The Report Drafting Process As the Report drafting proceeded, the principle of interested parties (stakeholders) interaction enacted by the «Public Reporting Policy of the State Atomic Energy Corporation «Rosatom» has been implemented. The target audience of the Report is such interested parties of the Company, as the stockholder, customers, suppliers, subcontractors, labor collective and management of JSC NIAEP, public organizations, governmental authorities, local population, and mass media. During the Report drafting JSC NIAEP engaged representatives of the principle interested parties into the detailed estimation and perfection of the activity by supporting their participation in dialogues, public hearings and public assurance. Prior to the Report generation, the matters of priority had been specified and coordinated with the concerned parties of the Company: «Strategy of the Company up to 2020» and «Activities for Steady Development». Dialogues and public consultations with the concerned parties were conducted as per requirements and recommendations of the «Concerned Parties Interaction Standard AA 1000 SES». Within the scope of the procedures some vital points were specified with deliverables set in Section 4. Information Disclosure Level For drafting the Report JSC NIAEP's management and audited financial statements as per RSBU standard were used. The Report draft passed an internal audit by the Company's Corporate Review and Audit Department with the audit report displayed in Appendix 7. The report has been drafted with the «Guidelines of the GRI Sustainability Reporting Framework (Global Reporting Initiative)» taken into account. The Report is provided with analysis of essential impacts in terms of sustainable development and efficiency indices specified by the Guidelines are used. For drafting the Report version G3 was used as version G3.1 was issued on March 23, 2011, that is after the drafting works had started. The GRI leaves decision making G3 or G3.1 use to option of the entity engaged into report drafting. The Report information disclosure corresponds to level «B+» and that is confirmed by outcomes of independent external audit Multi-D NIAEP technology 5BCMF(3**OGPSNBUJPO%JTDMPTVSF-FWFMT Уровень применения GRI C C+ B B+ A A+ Mandatory Self-declared Third party checked Optional GRI checked conducted by ZAO «Bureau Veritas Certification Rus». The Limitation of Liability audit report is shown in Appendix 8. The Annual Report contains statements of The Report Scope forecasting nature regarding the financial, economic and social indices to describe the further development The Report is endowed with the Company performance of the Company. The actual events and deliveries can financial and non-financial aspects, which have vital differ from the forecasted ones. The assumptions and importance for the parties concerned. The Company's intentions feasibility is directly linked to the political, reporting scope is defined by having wholly-owned economic, social and legal situation both in the Russian subsidiaries what gives the Company the right for Federations and across the globe. For this reason, management of the enterprises financial and operational actual results of the Company business can differ from policies. The Company and its subsidiaries activity results the forecast statements specified in the Report. are reported here basically consolidated. For cases of not consolidated information reporting appropriate notes are The Report is released in Russian and English and given. published on the corporate