TO THE MANAGEMENT OF JOINT-STOCK COMPANY TVEL

We have undertaken a limited assurance engagement of nature and level of Joint-stock company TVEL (hereinafter referred to as TVEL JSC) compliance with the principles of the AA1000 Accountability Principle (2018) (hereinafter referred to as AA1000 AP 2018) in the process of stakeholder engagement in sustainability activities, compliance of the accompanying integrated annual report of TVEL JSC for 2018 (hereinafter referred to as the Report) preparation process with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting as well as compliance of Report with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Comprehensive option and with the requirements of the International Integrated Reporting Framework.

RESPONSIBILITY OF TVEL JSC

TVEL JSC is responsible for its compliance with the principles of the AA1000 AP 2018 in the process of stakeholder engagement in sustainability activities, for compliance of the Report preparation process with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting as well as preparation of the Report in compliance with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Comprehensive option and with the requirements of the International Integrated Reporting Framework. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error.

OUR INDEPENDENCE AND QUALITY CONTROL

We have complied with the independence and other ethical requirements of the Rules of Independence of the Auditors and Audit Organizations and The Code of Professional Ethics of the Auditors, which are in accordance with Code of Ethics for Professional Accountants issued by the International Ethics Standards

Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior, and we have fulfilled our other ethical responsibilities in accordance with these requirements

The firm applies International Standard on Quality Control 1, Quality Control for Firm that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, 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.

OUR RESPONSIBILITY

Our responsibility is to express a limited assurance conclusion on nature and level of TVEL JSC compliance with the principles of the AA1000 AP 2018 in the process of stakeholder engagement in sustainability activities as well as compliance of the Report with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Comprehensive option and with the requirements of the International Integrated Reporting Framework based on the procedures we have performed and the evidence we have obtained. We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information, as well as in accordance with AA1000 Assurance Standard 2008 (type 2, as defined by АА1000AS 2008). These standards require that we plan and perform this engagement to obtain limited (moderate as defined by АА1000AS 2008) assurance about whether TVEL JSC complies with the principles of the AA1000 AP 2018 in the process of stakeholder engagement in sustainability activities, whether the Report preparation process complies with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting and whether the Report is free from material misstatement.

A limited assurance engagement undertaken in accordance with these standards involves assessing the following criteria (hereinafter referred to as Criteria):

• Nature and level of TVEL JSC compliance with the principles of the AA1000 Accountability Principle 2018 – inclusivity, materiality, responsiveness and impact – in the process of stakeholder engagement in sustainability activities;
• Compliance of the Report preparation process with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting;
• Compliance of the Report with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Comprehensive option;
• Compliance of the Report with the requirements of the International Integrated Reporting Framework.

A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks.

The procedures we performed were based on our professional judgment and included inquiries, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records.

Given the circumstances of the engagement, in performing the procedures listed above we have performed the following procedures:

• Study and selective testing of systems and processes implemented by TVEL JSC to ensure and analyze the compliance of the activities with the AA1000 AP 2018 principles; collection of evidence confirming practical implementation of these principles.
• Study and selective testing of systems and processes implemented by TVEL JSC to ensure the compliance of the Report preparation process with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting; collection of evidence confirming compliance with the regulatory requirements of State Corporation “Rosatom”.
• Interviewing the management and employees of TVEL JSC and obtaining documentary evidence.
• Participation in public dialogues with stakeholders and consultations with stakeholders as well as the analysis of protocols of the specified events.
• Study of information available on the websites of TVEL JSC and its subsidiaries related to their activities in the context of sustainable development.
• Study of public statements of third parties concerning economic, environmental and social aspects of TVEL JSC and its subsidiaries activities, in order to check validity of the declarations made in the Report.
• Analysis of non-financial reports of companies working in the similar market segment for benchmarking purposes.
• Analysis of the current system of internal audit of non-financial reporting in TVEL JSC.
• Selective review of documents and data on the efficiency of the management systems of economic, environmental and social aspects of sustainable development in TVEL JSC.
• 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 requirements of Criteria.

The procedures were performed only in relation to data for the year ended 31 December 2018.

The evaluation of reliability of the information on performance in the Report was conducted in relation to compliance with the requirements of Standards to the report prepared in accordance with the Comprehensive option and information referred to in the annex to the Report “GRI Standards” as well as in relation to compliance with the 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 was performed.

The procedures were not performed in relation to forward-looking statements; statements expressing the opinions, beliefs and intentions of TVEL JSC to take any action relating to the future; as well as statements based on expert opinion.

The procedures were performed in relation to the Russian version of the Report, which includes information to be published in a hard-copy form as well as in digital form on the TVEL JSC website.

We had no chance to verify that the Report was published on the TVEL JSC website as well as that Global Reporting Initiative was notified of the use of the Standards in the Report preparation, due to the fact that the date of signing this Assurance Report preceded the planned dates of these procedures completion.

We had no chance to verify that TVEL JSC has received the certificate of public endorsement of the Report by Non-Financial Reporting Council of the Russian Union of Industrialists and Entrepreneurs due to the fact that the date of signing this Assurance Report preceded the planned date of the procedure completion.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about TVEL JSC adherence to the principles of the AA1000 AP 2018 as well as about compliance of the Report, in all material respects, with the Criteria.

LIMITED ASSURANCE CONCLUSION

Nature and extent of compliance of TVEL JSC with AA1000 AP 2018 principles

Based on the procedures performed and evidence obtained, nothing has come to our attention that causes as to believe that TVEL JSC stakeholder engagement in sustainability activities has not complied, in all material aspects, with the criteria of AA1000 AP 20018 in respect to adherence of TVEL JSC to the principles (Inclusivity, Materiality, Responsiveness and Impact).

Compliance of the Report preparation process with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting

Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that the Report preparation process has not complied, in all material aspects, with the regulatory requirements of State Corporation “Rosatom” in the sphere of public reporting.

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

Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that the Report has not complied, in all material aspects, with requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Comprehensive option.

Compliance of the Report with the requirements of the International Integrated Reporting Framework

Based on the procedures performed and evidence obtained, nothing has come to our attention that causes as to believe that the Report has not complied, in all material aspects, with the guiding principles of the International Integrated Reporting Framework and with requirements to the structure of content elements of integrated reports.

Recommendations

Based on the results of the limited assurance engagement we recommend:

• Disclose in more detail in the Report the methodology for identification the boundaries for the material topics.
• It is reasonable to disclose GRI indicators in relation to target values.
• Increase the extent of disclosure of indicators in relation to which requirements of GRI Standards is not fully taken into account (disclosures with omissions). In case of disclosure with omissions due to absence of a recording system, provide more specific information about plans to obtain data in future.
• Extend disclosure of information on how the organization evaluates the management approach to all material topics.

The recommendations are not intended to detract from the practitioner’s conclusion. Our conclusion is not modified in respect of the matters referred to in the recommendations.