Message by Y.A. Olenin, President of TVEL JSC

This Report is a representation of performance of TVEL JSC and its subsidiary companies in 2013. According to financial, economic and production indicators, the Company was remarkably successful — both in terms of the national customers and deliveries to international markets.

Despite the increasing competition and the decrease in demand on the global nuclear market, the Company overfulfilled the quotas for sale of products and services, thereby securing further growth of productivity and salaries at its enterprises.

The Company kept moving strongly toward technological dominance on the market of front end nuclear fuel cycle. Pursuant to the adopted and updated 2013 strategy, the Company mastered modern technologies and market outlets while modernizing and concentrating its production and conducting infrastructural and personnel optimization.

The purpose and the objective of the reforms is to promote innovative approach and mobilize the scientific and production potential of the Company for the enhancement of its efficient projects, quality products and services. The innovative approach contributed greatly to the successful development of high capacity gas centrifuges and implementation of the “zero failure level” program while extending the operation cycle of the power units. We signed and successfully implement a contract with a PWR operator in Western Europe for the delivery of prototype TVS-KVADRAT assemblies. To date TVEL FC has fulfilled its current contract obligations in full and within the established terms.

TVEL JSC has also fulfilled all of its international obligations. The company completed the historical inter-governmental agreement (also known as HEU-LEU Contract) under which deliveries of low-enriched uranium extracted from the Russian weapons-grade uranium to the United States have been continuing for twenty years. All these years the Fuel Company facilities converted the uranium into fuel for the U.S. nuclear power plants. The Company strengthened and in some areas expanded its presence in Central ad Eastern Europe. We signed a contract with Chinese customers for the delivery of fuel and the related engineering services for a period of 12 years, which is indicative of recognition of high level of Russian technologies by strategic partners of TVEL JSC.

In addition to development of traditional sectors, the Company focused on development of non-nuclear facilities. All-purpose products greatly contributed to business economics, development of business environment and creation of jobs. The potential of the second point of growth is based on the productive fusion of applied science and production facilities of the Fuel Company and its desire to stay in the forefront of the national nuclear industry.

Sustainable balance between the economic efficiency, social and environmental continuity represents fundamental principle of TVEL JSC. Production activity of its enterprises was steadily bolstered by introduction of the ROSATOM Production System (“the RPS”), involvement of employees in management process and collective final result orientation.

All that we have accomplished over the reporting period is the result of common effort of the entire staff of the Fuel Company. Innovative spirit, competence, safety, environmental and social responsibility contributed to business environment at every enterprise and organization. I am confident we will keep it that same way in the current year as well.

Yuri OleninPresident of TVEL JSC