Corporate Governance

TVEL JSC abides by basic Russian and international standards and corporate practices of the ROSATOM State Corporation in the area of corporate governance. Improvement of corporate governance practices aims to increase capitalization of the Company at the expense due to efficiency, accountability and transparency of its operations and management.

During the implementation of corporate policies the activities of subsidiaries are coordinated and monitored in the industrial, scientific, technical, investment, financial, pricing, sales, social and human resource areas. Legal and organizational relationships between TVEL JSC and its subsidiaries are regulated in the implementation of deci- sion-making procedures in production and economic activities. TVEL JSC interacts with the ROSATOM State Corporation and its SA in accordance with approved regulations.

Corporate procedures at TVEL JSC and its SA are implemented in accordance with provisions and principles set forth in the Code of Corporate Conduct recommended by the Federal Commission on Securities Market of Russia (FCSMR) (approved by Order of FCSMR No. 421/r dated April 4, 2002).

In accordance with the Regulation on disclosure of information by issuers of securities (approved by the Federal Financial Matkets Service Order No. 11-46/pz-n dated October 4, 2011), the Company discloses the following information on Website http://www.e-disclosure.ru/portal/company.aspx?id=400: Articles of Association, amendments and modifications to the Articles of Association, annual reports, annual financial reports, reports on the approval of the annual financial reports, notes to the annual financial reports, audit reports, lists of affi­ liates, changes made to the list of affiliated persons, and notices about the disclosure of the list of affiliated persons.

Management bodies of TVEL JSC are established in accordance with its Articles of Association.

Decisions on the matters within competence of the General Meeting of Shareholders are made by the sole shareholder of TVEL JSC — Atomenergoprom JSC.

Supreme executive bodies of the companies comprising TVEL FC are represented by the General Meeting of Shareholders (Participants). The General Meeting of Shareholders (Participants) of the companies comprising TVEL FC makes decisions in accordance with procedures set forth in their respective bylaws.

In addition, TVEL JSC and companies comprising TVEL FC are governed by the boards of directors and by the sole executive bodies who conduct their activity in accordance with applicable bylaws approved by the General Meeting of Shareholders.

TVEL JSC and companies comprising TVEL FC are controlled by the audit commissions that conduct their activity in accordance with applicable bylaws approved by the General Meeting of Shareholders (Participants).

Equity Capital Structure
Authorized capital of the Company comprises of par value of the Company’s shares owned by the sole shareholder — Atomenergoprom JSC

Authorized capital of the Company amounts to RUB 22,961,670 (Twenty­two million nine hundred and sixty-one thousand six hundred and seventy rubles).

The Company floated 22,961,670 (Twenty­two million nine hundred and sixty­one thousand six hundred and seventy) registered ordinary shares, each worth RUB 1 (One ruble).

All shares of the Company are issued in a book-entry form.

No changes happened to the structure of equity capital in the year of report.

Board of Directors

The Board of Directors of TVEL JSC plays the key role in management of the Fuel Company.

By decision of the sole shareholder of TVEL JSC No. 21 dated on June 28, 2013, the Board of Directors comprises of:

• Alexander Markovich Lokshin — First Deputy General Director of ROSATOM State Corporation, Operations Department;
• Lyudmila Mikhaylovna Zalimskaya — Techsnabexport JSC General Director;
• Kirill Borisovich Komarov — Deputy General Director of ROSATOM State Corporation, Development and International Business;
• Vladislav Igorevich Korogodin — Lifecycle Management Director for Nuclear Fuel Cycle and NPP of ROSATOM State Corporation;
• Nikolai Iosifovich Solomon — First Deputy General Director for Corporate Functions — Chief Financial Director of the ROSATOM State Corporation;
• Yuri Alexandrovich Olenin — President of TVEL JSC.

Members of the Board of Directors do not hold shares of TVEL JSC and its SA.

The Company has no independent members of the Board of Directors within the meaning of the Corporate Code of Conduct recommended by Decree of Federal Commission on Securities Market (FCSM) of the Russian Federation No. 421/r dated on April 4, 2002.

Members of the Board of Directors of TVEL JSC are entitled to no remuneration and refund of expenses related to the performance of their duties.

All Members of the Board of Directors of the Company get their salary at the place of their primary employment.

No committees and commissions functioned with the Board of Directors over the period of report.

LOKSHIN Alexander Markovich	ZALIMSKAYA Lyudmila Mikhaylovna	KOMAROV Kirill Borisovich
Date and place of birth: October 11, 1957; Chita. Education: Leningrad Polytechnic Institute named after Kalinin Employment history: 1980–1996 - Engineer, Senior Engineer at the Thermal Test Laboratory, Senior Engineer for Power Generating Unit Control, Shift Supervisor at the Turbine Workshop, Shift Supervisor at Power Generating Unit №2, Shift Supervisor of the First-stage Station at Smolensk Nuclear Power Plant (Desnogorsk, Smolensk Region). 1996-2008 - Deputy Head of the General Directorate, Deputy Head of the Commerce Department; First Deputy Director for Marketing, Economy and Commercial Activity; Acting Director, Director, Deputy General Director of Rosenergoatom Concern JSC — Director of Smolensk Nuclear Power Plant; First Deputy General Director, Acting General Director of Rosenergoatom Concern JSC. 2008–2010 - Deputy General Director of State Corporation ROSATOM. 2010–2011 - Deputy General Director – Director of the Directorate for Nuclear Energy Complex of the State Corporation ROSATOM. 2011-2012 - First Deputy General Director – Director of the Directorate for Nuclear Energy Complex of the State Corporation ROSATOM. Since 2012 - First Deputy General Director for the Operations Department. Honorable Power Engineer of the Russian Federation.	Date and place of birth: July 31, 1956; Moscow Education: Moscow State Institute for International Relations with the Ministry of Foreign Affairs of the USSR. 2009 - MBA Degree at the State University of Management. Employment history: Since 1978 - Techsnabexport JSC. Made career from correspondent to commercial manager of the Company (since 1999). Since 2007 - First Deputy General Director, Since 2013 - General Director of Techsnabexport JSC. Order of Merit for Country of the II Degree; Badge «Nuclear Power Engineering and Industry Veteran»; Badge «Academician I.V. Kurchatov» of the II and III Degree; commemorative medal «65th Anniversary of the Russian Nuclear Industry»; Badge of Merit for Nuclear Industry of the I Degree.	Date and place of birth: December 29, 1973; St.-Petersburg. Education: Law Lyceum with the Ural State Academy of Law Ural State Academy of Law Employment history: 2000-2005 - Director for Legal Affairs and Project Management, First Deputy General Director of RENOVA CJSC; General Director of RENOVA-Razvitie CJSC. 2005-2006 - Deputy Head of Federal Agency of Water Resources of the Russian Federation. 2006-2007 - Vice-President of TVEL JSC. 2007-2012 - General Director of Atomenergomash JSC. 2007-2010 - Deputy Director, Executive Director of Atomenergoprom JSC. Since 2010 - Director of Atomenergoprom JSC. Combined office with the position of Executive Director of the Directorate for Nuclear Energy Complex of the State Corporation ROSATOM. Since 2011 - Deputy General Director of the State Corporation ROSATOM for Development and International Business. Combines the office with the position of Director of Atomenergoprom JSC. Candidate of Legal Sciences
KOROGODIN Vladislav Igorevich	SOLOMON Nikolai Iosifovich	OLENIN Yuri Alexandrovich
Date and place of birth: October 25, 1969; Moscow Education: Moscow Institute of Physics and Technology Employment history: 1994-1995 - Expert, Senior Expert of Basmanny Branch of Presentcombank JSCB. 1995-1997 - Expert, Head of Department of Khoroshevsky Branch of Conversbank JSCB. 1997-1999 - Deputy Head of Department, Head of Department, Deputy Head of Administration of Conversbank JSCB. 1999-2004 - Head of Department, Techsnabexport JSC. 2004-2007 - Deputy Head of Administration of the Federal Agency for Nuclear Energy. 2007-2010 - Director of the Department for Marketing and Market Outlets, Deputy Director of Atomenergoprom JSC. 2010-2012 - Deputy Director of the Directorate for Nuclear Energy Complex with the State Corporation ROSATOM. Since 2012 - Lifecycle Management Director for Nuclear Fuel Cycle and State Corporation ROSATOM.	Date and place of birth: January 3, 1971; Moscow Education: Moscow Automobile and Road Construction Institute Moscow Finance Academy with the Government of the Russian Federation Employment history: 1994-2003 - various positions in the departments of audit and management consulting of PricewaterhouseCoopers (consulting major companies of the energy sector). 2003-2005 - Director of Project Management Department, Acting General Director of the Financial and Accounting Center of Yukos-Moscow JSC. 2005-2009 - Financial Controller and Director for Economy and Controlling at Siberian Coal Energy Company JSC (SUEK OSC). 2009-2010 - Deputy General Director of the State Corporation ROSATOM for Finance. 2010-2011 - Deputy General Director of the State Corporation ROSATOM for Economy and Finance. Since 2011 - First Deputy General Director for Corporate Functions – Chief Financial Director of the State Corporation ROSATOM. Member of Association of Chartered Certified Accountants of England and Wales.	Date and place of birth: November 13, 1953; Kirovabad Education: Yerevan Polytechnic Institute Penza State Technical University Manchester Business School German Academy of Management Employment history: 1978-1989 - Engineer, Senior Engineer, Senior Research Officer, Head of Laboratory of the Special Design and Technology Bureau. 1989-1993 - Chief Design Engineer at the Research and Design Institute of Radio-Electronic Engineering (NIKIRET). 1993-2004 - Director of Subsidiary State Unitary Enterprise NIKIRET — Deputy General Director of the State Unitary Enterprise (SNPO) Eleron. 2004-2007 - General Director of Federal State Unitary Enterprise Federal Research and Production Centre Production Complex (FNPC FGUP PO) «Start». Since 2007 - First Vice-President, President of TVEL JSC. Ph.D. in Technical Sciences, Professor Medal of Honor; medals; Honored Structural Designer of the Russian Federation Since 2002 - Member of Legislative Assembly of Penza Region 2005-2007 - President of the Association of Manufacturers and Industrialists of Penza Region

Sole Executive Body

Yuri Alexandrovich Olenin, President of TVEL JSC, performs functions of the Sole Executive Body in accordance with Articles of Association of TVEL JSC, decision of the Sole Shareholder of the Company (No. 17 dated on June 28, 2012) and on the basis of contract entered into with the Company.

In accordance with the contract between TVEL JSC and the President of TVEL JSC, the amount of the President’s remuneration due at the end of the year shall be determined by Resolution of the Company’s Board of Directors based on the financial and economic performance of the Company.

The Key Performance Indicators (KPI) Chart for the President of TVEL JSC includes:

1. adjusted free cashflow of the ROSATOM State Corporation, bln. RUB (new KPI from 2013);
2. adjusted free cashflow of TVEL, bln. RUB (new KPI from 2013);
3. proceeds of the division * On March 3, 2013, the Fuel Company becase the administrator of Fuel Division of ROSATOM State Corporation. Techsnabexport JSC is not a member of the Fuel Division and represents a stand-alone industrial complex (Order of ROSATOM State Corporation No. 1/218-P dated March 3, 2013). from joint products, mln. RUB (new KPI from 2013);
4. reduction of uranium­bearing reserves by FE NFC on the whole, bln. RUB (new KPI from 2013);
5. portfolio of foreign orders for traditional products over a period of 10 years, USD mln.;
6. labor efficiency, mln.RUB/person;
7. level of employee engagement, %;
8. assessment of the manager;
9. LTIFR , % * Frequency of injuries resulting in temporary disability (lost time injury frequency rate) is the key indicator of the Company’s performance in the sphere of labor protection and industrial safety in accordance with international practices. LTIFR = number of injured persons / man-hours worked by the entire Company)*1,000,000. ;
10. no violations above INES Level 2 within the sector and no irradiation of employees in excess of 50 mSv a year;
11. no violations above INES Level 2 within the sector;
12. changes in unit costs by principal product, %.

For details concerning the annual income of Yuri Alexandrovich Olenin, President of TVEL JSC, in 2013 visit the official Website of the ROSATOM State Corporation * www.rosatom.ru .

Auditing Commission

The Auditing Commission controls financial and business operations of TVEL JSC. By Decision of the Sole Shareholder of TVEL JSC No. 21 dated on June 28, 2013, the Auditing Commission comprises of:

• Vladimir Vladimirovich Vas’kovsky — Head of Department of Operating Cash Flow and Key Products Price Modeling with Efficient Operations Administration of the ROSATOM State Corporation;
• Oleg Ivanovich Linyaev — Head of the Department of Projects the Life Cycle of NFC with LC NFC Projects Management Administration of the ROSATOM State Corporation;
• Irina Mikhaylovna Leonova — Head of Economic Planning Department with Administration for Economy and Controlling of the ROSATOM State Corporation.

Management of Subsidiaries and Affiliates

Boards of Directors play significant role in management of subsidiaries and affiliates (“the SA”) and are competent to handle vital issues concerning the operation of the SA. Preparation of the meetings of the SA Board of Directors involves the departments of TVEL JSC in the study of materials on the agenda and draft decisions.

Property management in TVEL JSC aims to improve the structure and efficient use of non-current assets, including stakes in subsidiaries and other business companies, as well as fixed assets, including real estate. The management covers property of TVEL JSC and its SA alike.

Management of the stakes of business entities is based on the mechanism of corporate relations as well as internal documents that define the order of interaction between TVEL JSC and its subsidiaries and affiliates in various areas of their operational and financial activities.

The most important decisions regarding management of non-current assets are made by the General Meeting of Shareholders (the Sole Shareholder) and the Board of Directors of TVEL JSC within their respective competencies.

Non-current assets of the Company are managed with the help of an integrated capital assets database that covers federal property operated by the SA of TVEL JSC.

Acquisition and alienation of a real estate by the SA, regardless of its value, is carried out only subject to the approval of the relevant transactions by the Board of Directors of these subsidiaries and affiliates. The sale of real estate shall be carried out on a competitive basis at market prices.

Property management procedures promote efficiency and transparency of decisions made with regard to transactions involving non­current assets and serve to increase profit of the Company.

Management bodies of enterprises comprising the Fuel Company have approved target values of their strategic development and comprehensive efficiency enhancement programs based on optimization of the production function structure and cost reduction through establishment of new and modernization of the existing production facilities, improvement of technological processes, enforcement of the efficient incentive system and restructuring of non­core assets and production lines.

TVEL JSC Board of Directors Report on the Results of the Company’s Development by Priority activities

In 2013, the Board of Directors convened its meetings by correspondence 18 times (with attendance > 90%) to make decisions on the most pressing issues in TVEL FC activities, including:

• approval of budget and financial and economic targets for the year of 2013;
• approval of target organizational chart;
• approval of a series of transactions with equity and share capital of the enterprises comprising TVEL FC, including purchase of additional shares and stakes in KMP OJSC, JSC VPA Tochmash, TSOU CJSC, NF Plant PJSC (Ukraine), KLM LLC, Promyshlennye Innovatsii CJSC * KLM LLC, Promyshlennye Innovatsii CJSC — SA of TVEL JSC that are not included in this Report by the principle of materiality. ;
• recommendation to the Sole Shareholder to decide about participation of TVEL JSC in non­profit organizations, such as “Association League to Support Defense Industry and National Association of Procurement Institutes”;
• approval of recommendation regarding the distribution of net profit at the end of year 2012;
• approval of termination of TVEL JSC activities in Slovakia in pursuance of ROSATOM State Corporation Policy for the Development of Global Presence Management System and in connection with RUSATOM Overseas CJSC (affiliate of Atomenergoprom JSC) opening its representative office in Slovakia at the end of 2012.

TVEL JSC did not make any transactions in 2013 that would qualify under applicable laws as major transactions or related-party transactions that are subject to prior approval by the Board of Directors.