Introduction

The Independent Assurance Report is addressed to the Management of Joint-Stock Company TVEL (hereinafter referred to as JSC TVEL).

The subject of assurance is sustainability activities of JSC TVEL as well as the annual report of JSC TVEL including information on key organisations of TVEL Fuel Company of Rosatom within the declared consolidation perimeter (hereinafter referred to as the Report).

Responsibilities

The management of JSC TVEL bears full responsibility for the preparation and accuracy of the Report.

We are responsible for the results of independent assurance of the Report only to JSC TVEL within the engagement and do not assume any responsibility to any third party.

Scope, criteria and level of assurance

Sustainability activities of JSC TVEL was evaluated considering the following criterion:

• Nature and level of JSC TVEL compliance with the principles of the AA1000 Accountability Principle Standard 2008 – inclusivity, materiality, responsiveness.

The Report was evaluated considering the following criteria:

• Compliance with the requirements of GRI Sustainability Reporting Standards (Comprehensive option);
• Compliance with the requirements of the International Integrated Reporting Framework;
• Compliance of the Report preparation process with the requirements of State Corporation Rosatom in the sphere of public reporting.

The engagement was planned and performed in accordance with AA1000 Assurance Standard 2008 (moderate level of assurance) and International Standard on Assurance Engagement 3000 (revised) "Assurance engagements other than audits or reviews of historical financial information" (limited level of assurance). The statement corresponds to type 2, as defined by АА1000AS 2008, in accordance with the limitations specified in section "Limitations of the engagement" of the present statement.

The selective verification of information in the Report performed under aforementioned levels of assurance does not claim 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 confirmation. In relation to the quantitative information contained in the Report the work performed cannot be considered sufficient for identification of all possible deficiencies and misstatements. However, the collected evidence is sufficient 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 JSC TVEL to ensure and analyze the compliance of the activities with AA1000APS 2008 principles; collection of evidence confirming practical implementation of these principles.
• Participation in the dialogues and public presentation of the Report, study of minutes of public dialogues.
• Interviewing the management and employees of JSC TVEL and obtaining documentary evidence.
• Study of information available on the websites of JSC TVEL and its subsidiary companies related to their activities in the context of sustainable development.
• Study of public statements of third parties concerning economic, environmental and social aspects of activities of JSC TVEL and its subsidiary companies in order to check validity of the declarations made in the Report.
• Analysis of non-financial reports of foreign companies working in the similar market segment for benchmarking purposes.
• Analysis of the current system of internal audit of non-financial reporting in JSC TVEL.
• Selective review of documents and data on the efficiency of the management systems of economic, environmental and social aspects of sustainable development in JSC TVEL.
• Study of the existing processes of collection, processing, documenting, verification, analysis and selection of data to be included into the Report.
• Analysis of information in the Report for compliance with the aforementioned criteria.

Limitations of the engagement

The engagement was performed only in relation to data for the year ended 31 December 2017.

The evaluation of reliability of the information on performance in the Report was conducted in relation to compliance with the criteria to be applied to prepare sustainability report ‘in accordance’ with the GRI Standards and nonfinancial information referred to in the GRI Content Index, as well as in relation to compliance with requirements of the International Integrated Reporting Framework. In respect to the quantitative performance indicators the conformity assessment to external and internal reporting documents provided to us is performed.

Assurance does not apply to forward-looking statements, as well as statements expressing the opinions, beliefs and intentions of JSC TVEL 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 digital form on the JSC TVEL website.

This assurance report is the translation of the Russian original. The Russian version prevails.

Conclusions

The following conclusions are based on the assurance work performed within the limitations of the engagement specified above.

Nature and extent of compliance of JSC TVEL 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 AA1000APS 2008 in respect to adherence of JSC TVEL to the principles (Inclusivity, Materiality, and Responsiveness).

Compliance of the Report with the GRI Sustainability Reporting Standards (Comprehensive option). Analysis of compliance to the GRI Standards requirements

In order to form a position on this issue, we have performed analysis of compliance to the GRI Standards requirements concerning principles and disclosures for the chosen ‘in accordance’ option.

• General disclosures are reported in compliance with the requirements of the standard GRI 102 (2016) for the chosen ‘in accordance’ option.
• Management approach disclosures are reported mainly in compliance with the requirements of the standard GRI 103 (2016): explanations of why the topic is material and of how the organization manages the topics are reported for material topics as well as explanations of how the organization evaluates the management approach for some material topics.

Topic-specific disclosures required for the Comprehensive option are reported in compliance with requirements of GRI Standards. If it is not possible to disclose required information, the Report identifies the information that has been omitted and explains reason for omissions.

Overall assessment of the Report

As a result and within the scope of our work, we did not identify material non-compliance to the requirements to the report prepared ‘in accordance’ with the Comprehensive option of the GRI Standards. The conclusion is stated taken into account abovementioned analysis of compliance to the GRI Standards requirements.

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 preparation process with the requirements of State Corporation "Rosatom" in the sphere of public reporting

Based on the procedures performed and evidence obtained, we did not identify material non-compliance of the Report preparation process with the Unified Sectoral Policy of the State Corporation Rosatom in the sphere of public reporting and the Standard of Public Reporting of the State Corporation Rosatom and its organisations.

Recommendations

1. It is reasonable to disclose GRI indicators in relation to target values.
2. Increase completeness of reporting on material topics by reducing the number of disclosures with omissions.
3. In case of disclosure with omissions due to absence of a recording system, provide more specific information about plans to obtain data in future.
4. Take into account remarks in the foregoing sections of the statement.

Statement of competence and independence

"NP Consult" LLC, an independent audit firm, professionally rendering assurance services, is a licensed provider of assurance services in accordance with AA1000 Assurance Standard.

"NP Consult" LLC is a member of Self-regulatory organization of auditors Association "Sodruzhestvo".

"NP Consult" LLC complies with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Standard Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

"NP Consult" LLC applies International Standard on Quality Control 1 and, accordingly, maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

"NP Consult" LLC employs a system of quality control of audit services, including control of compliance to ethical norms.

"NP Consult" LLC states that the present assurance report is an independent auditor’s position on the Report.

"NP Consult" LLC and its staff have no relations with JSC TVEL and its subsidiary companies that could result in the conflict of interest related to the independent assurance of the Selected Indicators.

General Director LLC "NP Consult"
N.Y. Khrenov

Moscow, 02 July, 2018