Appendix 4.
Report on results of independent assurance of Annual Report of Joint-Stock Company “TVEL” for 2015

Introduction

The subject of assurance is Public annual report of Joint-Stock Company “TVEL” (hereinafter referred to as the Report) for the period from January 1 to December 31, 2015. Our statement is addressed to the management of Joint-Stock Company “TVEL” (hereinafter referred to as JSC “TVEL”).

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

The subject of assurance is the Russian version of the Report, including information on including information on JSC “TVEL” and key enterprises of TVEL Fuel Company within the declared consolidation perimeter.

The Report was evaluated considering the following criteria:

  • Nature and level of compliance with the principles of the AA1000 Accountability Principle Standard 2008 — inclusivity, materiality, responsiveness;
  • Compliance of the Report with the GRI Sustainability Reporting Guidelines G4 (Comprehensive option);
  • Compliance of the Report with the requirements of the International Integrated Reporting Framework;
  • 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”.

The engagement was planned and performed in accordance with AA1000 Assurance Standard 2008 (moderate level of assurance) and International Standard on Assurance Engagement ISAE 3000 “Assurance engagements other than audits or reviews of historical financial information” (limited level of assurance). The statement corresponds to type 2, as defined by AA1000AS 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;
  • Interviewing the management and employees of JSC “TVEL” and obtaining documentary confirmation;
  • Performing assurance procedures in subsidiaries of JSC “TVEL”: JSC MSZ and SC “VNIINM”;
  • Participation in the Report public presentation, study of minutes of public dialogues;
  • 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 the JSC “TVEL” activities, 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 assurance is limited to the period from January 1, 2015 to December 31, 2015.

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 G4 Guidelines and nonfinancial information referred to in the GRI Content Index. 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.

This statement 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 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 to the principles (Inclusivity, Materiality, and Responsiveness).

Compliance of the Report with the GRI Sustainability Reporting Guidelines G4 (Comprehensive option)

In order to form an opinion on this issue, we have performed analysis implementation of GRI G4 Guidelines concerning principles and standard disclosures for the chosen option to prepare a report ‘in accordance’ with the Guidelines.

  • General standard disclosures are reported mainly in compliance with the requirements of GRI G4 for the chosen ‘in accordance’ option;
  • The Report discloses general information on impacts that make the aspects material, the company’s approach to managing the material aspects, as well as evaluation of the management approach for some material aspects;
  • Indicators required for the Comprehensive option are reported mainly in accordance with guidance contained in GRI G4. If it is not possible to disclose required information the Report identifies the information that has been omitted. The reasons for omissions and explained for all indicators except G4-LA3. Remeasurement of historical data on G4-EC1 in view of change in measurement method was not performed.

As a result and within the scope of our work, we did not identify any material misstatements in the Report information referred to in the GRI Content Index.

Overall assessment of the Report

  • As a result and within the scope of our work, we did not identify material non-compliance with requirements to the report prepared ‘in accordance’ with the Comprehensive option of the G4 Guidelines.

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 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”

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”.

Recommendations

1. It is reasonable to disclose GRI indicators in relation to target values.

2. Increase the extent of disclosure of indicators in relation to which GRI guidance is not fully taken into account (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

JSC “NP Consult”, an independent audit firm, professionally rendering assurance services, is a licensed provider of assurance services in accordance with AA1000AS. JSC “NP Consult” is a member of self-regulated organization Nonprofit Partnership “Institute of Professional Auditors” and acts in accordance with the IFAC Code of Ethics. The company employs a system of quality control of audit services, including control of compliance with ethical norms.

JSC “NP Consult” states that the present statement is an independent auditor’s assessment. JSC “NP Consult” and its staff have no relations with JSC “TVEL”, or its subsidiaries and affiliates that could result in the conflict of interest related to the independent assurance of the Report.

General Director JSC “NP Consult”

Moscow, July 8, 2016