The subsidiary companies of TVEL JSC (AECC JSC, SGChE JSC, UEIP JSC, PA ECP JSC, KMZ PJSC) also publish their integrated reports, which can be found on their official websites.

The purpose of the Report:

• Informing the target audiences, stakeholders and the general public on the results of TVEL JSC in 2017, development strategies and plans for the short and medium term;
• Providing expertise of public acceptability of TVEL JSC performance through the involvement of stakeholders in the dialogue and detailed acquaintance with the reporting materials.

Objectives of the Report:

• Providing complete, reliable and balanced information about the Company's activities in accordance with the GRI Standards requirements;
• Ensuring compliance of the process of preparation of the Report and information in it with the current industry and international standards and recommendations;
• Organization of constructive interaction with stakeholders;
• Development of the institution for interaction with subsidiaries;
• Development and improvement of the system of public annual reporting.

This Report is prepared in compliance with the following regulatory documents:

• Federal Law No. 208-FZ d/d December 26, 1995 "On Joint Stock Companies";
• Federal Law No. 402-FZ d/d December 6, 2012 "On Accounting";
• RF Government Regulation No. 1214 d/d December 31, 2010 (as revised on July 19, 2017) "On improving management procedure of open joint stock companies, the shares of which are under federal ownership and owned by federal state unitary enterprises";
• Provision of the Bank of Russia No. 454-P d/d December 30, 2014 "On Disclosure of Information by the Issuers of Equity Securities";
• Corporate Governance Code (recommended by letter of the Central Bank of the Russian Federation d/d April 10, 2014);
• Uniform Industry Specific Guidelines on Execution of Public Reports in ROSATOM and its organizations;
• Sustainability Reporting Guidelines of the Global Reporting Initiative;
• Standard АА1000 APS 2015 of Accountability;
• International Integrated Reporting Framework, version 1.0.

The integrated format of the Report provides detailed description of the Company’s performance in the context of the environment and shows its impact on the stakeholders.

The Report discloses the essential information which is important to those who use this Report to assess the performance of the Company. In the course of execution of the Report, a questionnaire was conducted for internal and external stakeholders, and a matrix of material aspects was drawn up.

Aspect boundaries and content of the Report were determined by the Committee on Public Annual Reporting involving the Committee of Stakeholders, and agreed on by TVEL JSC subdivisions. Disclosed issues are material for all subsidiaries from the Report profile, unless otherwise is specified herein. Occupational Health and Safety aspect is important not only for the Company, but also for contractor organizations rendering capital construction services at the Company's facilities. The data on "Occupational Health and Safety" were disclosed on all organizations of TVEL Fuel Company. Data on government subsidies and training in anti-corruption practices are shown only for TVEL JSC.

Coverage of the aspects had no changes as compared to the previous reporting period. No significant reformulations of the indicators given in previous reports were done.

Material aspects matrix (GRI Standards themes are italicized)

Materiality Determination Process

Under conceptual development of the Report 2016, the materiality analysis was carried out in November 2016 in accordance with new GRI Standards, including GRI principles. Representatives of the Company and its key stakeholders were invited to evaluate both the GRI and TVEL Fuel Company-specific themes, which complies with GRI Standards recommendations. Materiality matrix was prepared based on the survey result. When developing the concept of the Report for 2017, in December 2017 the stakeholders were asked to confirm the relevance of the material aspects selected in 2016, or propose changes. As a result of this questionnaire, the matrix of significant aspects did not change.

The matrix has been prepared in axes of "e;The significance of the Company's impact on economics, environment and society"e; (average assessment made by managers of the Fuel Company, who took part in survey) and "e;Influence on stakeholder assessments and decisions"e; (external stakeholders' assessments). The most essential issues were highlighted in dark blue.

The GRI content index is placed in the interactive version of the Report http://tvel.ru/wps/wcm/connect/tvel/tvelsite/finance/annual_report/

Rationale for choosing priority topics of the Report

Based on the analysis of the Company’s performance during the reporting period, the basic results and the key events the priority aspects of the Report has been formulated to be disclosed in the integrated Report 2017: TVEL strategic initiatives – efficiency improvement and sustainable development.

Stakeholder Engagement

Stakeholders engagement is an integral element of public reports preparation and day-to-day activity of the Fuel Company. The Stakeholders Commission was established by the Company in 2013 to promote regular feedback on the matters pertaining to the activity of the Company and its public position on specific matters.

Stakeholders’ suggestions were taken into account while preparing the Report, as well as the analysis of the best Russian and international practices of disclosure in annual reports. Details see in Section "Stakeholder Engagement".

Following the 2017 reporting campaign 18 suggestions of stakeholders were received: 8 of them have been taken into account while preparing the Report, 1- partially considered, 3 - will be taken into account while preparing the next reports. The minutes of the respective dialogues are available on the website http://tvel.ru/wps/wcm/connect/tvel/tvelsite/finance/annual_report/dialog/.

Reliability of the information contained in the Report has been confirmed by:

• The Statement of the Director for Internal Control and Audit of TVEL JSC (with respect to efficiency of the internal control system applicable to generation of the Report and compliance of generation procedures with requirements of law, internal regulations of ROSATOM and TVEL JSC in the sphere of public reporting);
• The Statement of the audit organization Nexia Pacioli LLC, confirming the reliability of 2017 Financial Statement of TVEL JSC;
• The Statement of the audit organization confirming the reliability of non-financial data published in the Report.

The Organization that renders services of independent assurance of non-financial data of the Report was selected through competitive procurement practices.

The Report was approved by TVEL JSC Board of Directors.

This Report covers the year 2017. All prior and future periods are mentioned herein in description of corporate strategy, collation of performance indicators and results, forecasts and risk assessments. In addition to factual information, this Report describes and assesses potential and probable events. Any statements herein other than statement of facts shall be construed as forecasts. Forecasts of this kind are relevant only at the time of publishing. TVEL JSC (unless otherwise specifically provided for by applicable legislation) is not obliged to review or update the said forecasts or factors in any new pieces of information. Actual performance results may differ from the forecasted ones.

The Company appreciates the employees who took part in preparation of this Report, and all participants of public consultations and dialogues. We hope you will find this Report interesting and informative in terms of the new information about TVEL Fuel Company. Our working team is open to your feedback and suggestions on the matters and the issues that you would like to see in the next annual report. Feedback form is available in the interactive version of the Report on the site http://tvel.ru/wps/wcm/connect/tvel/tvelsite/finance/annual_report/.