JSC Atomenergoprom Annual Report

GOVERNANCE SYSTEM JSC ATOMENERGOPROM / ANNUAL REPORT / 124 Measures to improve investment efficiency In the reporting year, employees in the industry continued to develop their competences at the Project Management School. 306 people underwent assessment, subsequent training and certification in 2022. Investment processes were adapted, given the need for prompt response amid the deteriorating international situation: project ranking criteria for building the project portfolio were revised; review and approval processes for import substitution projects were simplified. Given external restrictions imposed on the Russian Federation in 2022, the Company restructured its project portfolio in order to minimise risks. Projects exposed to risks related to the actions of unfriendly countries were refocused on the Russian Federation and/or friendly countries in terms of supplies (equipment and components required for implementation) and revenue generation. The Company adopted an approach to the financial autonomy of its Divisions depending on the level of risk involved in investment projects. It enables JSC Atomenergoprom to monitor projects that are the most significant in terms of risks and at the same time to speed up investment decision-making by delegating projects not involving risks to which JSC Atomenergoprom is exposed to the level of Financial Responsibility Centre 2. The project to reduce red tape in the investment process produced the first results: the project review process was streamlined; a new project manager tool for verifying the completeness and content of project data sheets was introduced; a network scheduling tool based on standard office software was developed to replace specialised IT systems. The Investment Strategy tool was operationalised in Financial Responsibility Centre 2; this is an additional medium-term investment and project planning tool that contains information on focus areas of investment activities and organisations in the industry that are participating in them. The tool was incorporated into the overall industry-wide investment strategy. A project to migrate the Sirius information system (project portfolio management) to a new software platform that does not rely on imported technology has been approved and is being implemented in accordance with ROSATOM's plans. Plans for 2023 and for the medium term: - To continue to reduce red tape in investment and project processes and to develop project methodology on a systematic basis; To align the medium-term investment planning mechanism (investment strategy) with strategic and budget planning tools and schedules; To expand the practical application of road maps in portfolio investment management; To adjust project execution plans in order to minimise the lag caused by COVID-19 pandemic restrictions imposed in 2021 and the deterioration of the international situation in 2022; To increase the level of digitisation of projects and investment activities. 7.5. INTERNAL CONTROL SYSTEM Key results in 2022: Based on the findings of monitoring, internal control performance was highly rated by internal customers (with a score of 6.4 out of 7 against a target of 5.7). The internal control system in ROSATOM and its organisations (including JSC Atomenergoprom) is based on: Russian laws and regulations; - The IAEA requirements; The COSO model (The Committee of Sponsoring Organisations of the Treadway Commission); Guidelines for Internal Control Standards for the Public Sector by the Internal Control Standards Committee of the International Organisation of Supreme Audit Institutions (INTOSAI). The Company's internal control system covers all organisations of JSC Atomenergoprom. The Company recognises the importance of building and improving the internal control system both in the parent company and in subsidiaries. Key characteristics of the work of specialised internal control bodies (SICBS) in JSC Atomenergoprom's organisations, which perform internal control and audit functions in the Company, include the following: Preventive control and development of timely, comprehensive and practicable corrective measures; Efficient communication and cooperation with operating divisions at all stages of operations; Proactive change management; Growing demand from executives in the Company's organisations for advisory services provided by the SICBS. Results in 2022 The following measures were implemented in the reporting year in order to improve the internal control system: - Methodological Approaches to the Internal Audit of Performance of the System of Internal Controls in Business Processes were developed; The application of incentives for SICB employees who have special knowledge (expertise and practical experience) and act as competence centres in the Divisions was examined taking into account performance in 2021; The SICBS of the Company's organisations assumed greater responsibility through an updated leadership model; Progress was made in the development of control activities in terms of assisting the business in the achievement of sustainable development goals. - GOVERNANCE SYSTEM JSC ATOMENERGOPROM / ANNUAL REPORT / 125

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