Appendix № 9. Conclusion on the External Audit of Non-Financial Information in the Report
The object of the verification is the JSC "TECHSNABEXPORT" Annual Report (hereafter – the Report) for the period from 1 January until
This Report is addressed to the management and stakeholders of
LIABILITY OF PARTIES
The management of JSC "TECHSNABEXPORT" (hereafter – the Company) is held fully liable for the preparation and accuracy of this Report.
We are liable for the results of the Report verification process solely towards JSC "TECHSNABEXPORT" under the agreed assignment and we do not assume any liability towards any third parties.
SCOPE, CRITERIA AND LEVEL OF VERIFICATION
The Report has been assessed based on the following criteria:
- the nature and extent of the Company's compliance with the principles of AA1000 Accountability Principle Standard 2008 – inclusivity (engagement), materiality, responsiveness;
- compliance of the Report with the B+ level (the Company's self-evaluation) of GRI G3.1 Guidelines.
Our audit was planned and carried out in accordance with the AA1000 Assurance Standard 2008 and International Standard on Assurance Engagements ISAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information.
The verification complies with type 2 in accordance with the definition of the АА1000AS 2008 standard inclusive of the limitations stated in the Boundary of verification section of this statement.
While providing services we complied with the following requirements with regard to the level of verification:
- moderate – in accordance with AA1000 AS 2008 standard;
- limited – in accordance with ISAE 3000 standard Assurance Engagements Other than Audits or Reviews of Historical Financial Information.
The selective verification of the Report under the above-mentioned verification levels that we have carried out does not qualify to ensure the highest level of guarantee. The verification was done based on the analysis of the supporting information provided by the Company's management and its employees, as well as the information from open sources and analytical methods of corroboration. As far as the numerical information provided in the Report is concerned, the verification that has been carried out cannot be considered sufficient to elicit all possible inaccuracies and misrepresentations. However, the confirmations that we have acquired are sufficient for us to form an opinion in accordance with the levels of verification stated above.
We have carried out the following procedures in order to form an opinion:
- selectively examining and testing the systems and processes implemented by JSC "TECHSNABEXPORT" in order to ensure and analyse compliance of the operations with the principles of AA1000 APS, as well as to manage the performance in the area of sustainable development;
- holding questionnaire surveys and interviews with the
JSC "TECHSNABEXPORT"top management and representatives of the management involved in the preparation of the Report;
- collecting evidence that proves practical implementation of system processes using AA1000 APS principles;
- holding interviews with the Company's employees, studying the documents and announcements of the management in order to obtain confirmation that the Company's operations comply with AA1000 APS principles;
- examining the minutes of the discussions and public consultations at JSC "TECHSNABEXPORT" with stakeholders;
- examining the statement on the public verification of the Report;
- examining the information presented at the websites of
JSC "TECHSNABEXPORT"and JSC "SPb "IZOTOP" relevant to the sustainable development issues;
- examining the published announcements from the third parties related to the economic, environmental and social aspects of the Company's operations in order to assess soundness of the statements in the Report;
- comparative analysis of the Company's Report with a Report of a foreign company in the same market segment;
- analysis of the processes of internal audit of non-financial reporting used within the Company;
- selectively examining the documents on the performance of the systems for management of economic, environmental and social aspects of the Company's sustainable development;
- examining existing processes for collection, processing, documenting, transfer, analysis and selection of data that is to be included in the Report;
- examining the adequacy of statements, claims and data included in the Report;
- analysing the information in the Report for compliance with the principles of the АА1000 APS standard and recommendations of GRI G3.1
THE BOUNDARY OF VERIFICATION
The verification is limited by the reporting period (01.01.-31.12.2011).
The reliability of the performance data provided in the Report has been assessed with regard to compliance with the recommendations of GRI G3.1 for В+ level.
The verification with regard to the reliability of numerical performance indicators disclosed in the Report is limited by the assessment of compliance with the data of the audited accounting Reports and provided documents of external and internal reporting with regard to other production, economic, environmental and social aspects of the operations.
The statements related to the projections or the statements expressing opinions, convictions or intentions of JSC "TECHSNABEXPORT" to undertake actions in the future have not been subject to verification.
The statements originating from expert opinions as stated in the Report have not been subject to verification.
Field audits were carried out only in the office of JSC "TECHSNABEXPORT".
Only the Russian version of the Report has been subject to verification.
We did not have an opportunity to verify that the Report had been published on the corporate website of JSC "TECHSNABEXPORT" due to the fact that the date when this statement was signed preceded the date of scheduled publication of the Report on the Company's website.
The following conclusions are based on the verification procedures that we have carried out in the scope and within boundaries stated above.
- The Report adequately represents the implemented management mechanisms and performance indicators of JSC "TECHSNABEXPORT" with regard to the economic, social and environmental aspects of the Company's activities in the area of sustainable development.
- As a result and within the limits of the activities that we have carried out we have not identified significant misrepresentations of the information contained in the Report about the JSC "TECHSNABEXPORT" activities in the area of sustainable development and its outcomes.
NATURE AND EXTENT OF COMPLIANCE WITH AA1000 APS PRINCIPLES
- JSC "TECHSNABEXPORT" engages with a wide range of stakeholders. In the course of preparing the Report a list of Company stakeholders was determined with their rankings, which is represented in the form of a rank map. A stakeholder commission has been formed within the Company.
- In the process of preparing the Report JSC "TECHSNABEXPORT" conducted 3 discussions with stakeholders, as well as public consultations on the Report draft.
- The Company utilises a range of different methods of communicating with stakeholders, such as Reports, meetings between the Company's top management and personnel, information messages, press releases, interviews, negotiations, conferences, forums, surveys, the Company's website, including the internal website, publications in mass media, audits and other communication mechanisms.
- Based on the work that we have carried out we can draw a conclusion that JSC "TECHSNABEXPORT" understands the composition of its stakeholders and employs certain mechanisms in order to take their interests and expectations into account in its operations.
- The Report reflects the aspects of the Company's operations in the economic, social and environmental areas that are significant for the key stakeholders.
- The risk management system employed within the Company helps identify risks that could potentially play an important role in achieving the sustainable development targets.
- The Report demonstrates that JSC "TECHSNABEXPORT" strives to take into account the substantial interests of stakeholders in its operations.
- The Report contains information on how JSC "TECHSNABEXPORT" addressed the observations and suggestions from stakeholders expressed during the public discussions.
- The Company has fulfilled the majority of obligations formulated in the 2010 annual report and in the course of stakeholder engagement during the preparation of 2011 annual report. Fulfillment of a number of obligations has been postponed until the following reporting periods.
- The Company pursues client-oriented policy. The Company monitors consumer satisfaction with the quality of its products and services on an annual basis. In the reporting period the satisfaction index reached 100%.
COMPLIANCE OF THE REPORT WITH THE B+ LEVEL OF GRI G3.1 GUIDELINES
In order to form an opinion on this issue we analysed the compliance with GRI G3.1 Guidelines in the course of Report preparation with regard to the principles, standard disclosures and performance indicators for the specified level of disclosure.
PRINCIPLES OF DETERMINING THE REPORT CONTENT
- The information included in the Report covers performance areas and indicators that reflect significant impacts of JSC "TECHSNABEXPORT" on the economy, environment and society and can significantly influence the assessments and decisions of the stakeholders.
- A top-priority area, "New challenges – new solutions", has been identified and described in detail in the Report.
- The issues that are addressed in the similar Reports of international companies in the same market are dealt with in this Report.
- The information about the environmental impact and environmental safety of products and services is provided not only for the Company, but also for the subsidiary that is the most significant in this respect.
- JSC "TECHSNABEXPORT" provided the information about stakeholders and mechanisms for taking their interests into account when determining the content of the Report.
SUSTAINABLE DEVELOPMENT CONTEXT
- The Report describes the results of JSC "TECHSNABEXPORT" operations in the broad context of sustainable development that takes into account various production, economic, social and environmental aspects.
- Within the stated scope the Report provides sufficient information about the operations of JSC "TECHSNABEXPORT".
- The boundary of the Report includes the Company without its subsidiaries and affiliates. However, the section on the environmental performance of the Report has been extended by including a subsidiary with a substantial environmental impact, JSC "SPb "IZOTOP".
- The Report does not contain information about significant aspects of
JSC "TECHSNABEXPORT"operations in the area of human resources management or social policy.
QUALITY ASSURANCE PRINCIPLES FOR THE REPORT
- The Report is well balanced and reflects both positive and problematic aspects of JSC "TECHSNABEXPORT" operations.
- Comparability of the Report with non-financial reporting of other companies is ensured by following the GRI G3.1 Guidelines as a foundation for disclosure of the performance indicators in the area of sustainable development.
- Comparability of financial data with the reporting of other companies is not ensured fully due to fulfilling the requirements of the Russian legislation in the area of accounting Reports (not the international financial reporting standards) for disclosure of financial information.
- The majority of numerical values are provided for a three-year period, which helps analyse the trends in the Company's operations.
- The accuracy of the factual information in the Report is sufficient for the stakeholders to assess the performance of JSC "TECHSNABEXPORT" in the area of sustainable development.
- The performance indicators are calculated based on the methodologies approved in the GRI G3.1. Guidelines and JSC "TECHSNABEXPORT" Public reporting standard that is based on the methodological recommendations of the State Atomic Energy Corporation ROSATOM.
- The Report has been prepared in order to be presented at the annual general shareholders meeting.
- In general, the information in the Report is presented in a clear manner and is accessible to different groups of stakeholders.
- The Report contains a list of abbreviations and terms (Appendix № 10), which facilitates understanding of the information presented in the Report.
- The performance information presented in the Report is largely based on the internal reporting documents, as well as the documents submitted to the regulatory bodies.
- The Internal Control and Audit Department oversees the audits of the process of preparing the annual report.
- We have not identified any evidence that would call into question the reliability of material information presented in the Report.
STRATEGY AND CHARACTERISTICS
JSC "TECHSNABEXPORT" realises that pursuing the sustainable development policy is a prerequisite for long-term successful operations.
The Report mostly discloses the information on sustainable development that is subject to disclosure according to the GRI G3.1 Guidelines for the content of the Report.
As far as the standard disclosures are concerned (in particular 1.1. and 4.7.), it is desirable that the GRI G3.1 Guidelines are followed more closely.
The Report describes the management approaches in the production and economic areas, in particular the strategic targets, as well as the mechanisms for achieving these targets.
The Company's approach to risk management features prominently in the Report.
The Report describes the management approaches in the social area, including human resources management and social responsibility, as well as environmental safety management.
The Report contains performance indicators for all the categories and in the quantity required by GRI G3.1 in order for the Report to comply with В+ level.
In addition, the Report contains a number of performance indicators that are not disclosed fully in accordance with the protocol system to the GRI G3.1 indicators (partial disclosure).
GENERAL ASSESSMENT OF THE REPORT
The work that we have carried out enabled us to draw a conclusion that the content and the number of disclosures that are required to ensure compliance of the Report with B+ level, are presented in the Report and soundly reflected in the Table of use of standard reporting elements, the State Atomic Energy Corporation ROSATOM public reporting indicators and GRI performance indicators (Appendix № 8).
- To disclose GRI indicators linked to the target values and projections.
- To extend the scope of the Report in the social impact section by including information on JSC "SPb "IZOTOP".
- To improve the level of disclosure of the indicators where GRI protocols are not fully taken into account (partial disclosure).
- It is advisable that the Table of use of standard reporting elements, the State Atomic Energy Corporation ROSATOM public reporting indicators and GRI performance indicators contains links to pages with the corresponding sections.
STATEMENT ON COMPETENCE AND INDEPENDENCE
CJSC NP Consult is an independent auditing company that provides professional verification services. CJSC NP Consult is a member of a self-regulating non-commercial partnership Institute of Professional Auditors and abides by the Code of Conduct of professional accountants of IFAC.
CJSC NP Consult officially states that the present Statement represents an evaluation of an independent auditor. CJSC NP Consult and its employees have no relationship with JSC "TECHSNABEXPORT", its subsidiaries and affiliates that could result in a conflict of interest while providing the verification services for the Report.
CJSC NP Consult is an organisational stakeholder of GRI and a licensed provider of verification services in accordance with AA1000 AS standard.
The team of verification of the reporting in sustainable development includes the experts of CJSC NP Consult that possess the required experience of providing verification services, preparing the reporting in accordance with GRI G 3/3.1 and holding trainings on the preparation of such reporting certified by GRI. The leading experts completed training in preparing sustainability reporting at the training centre of the Institute of Social and Ethical reporting Accountability.
Deputy Director General at Closed Joint Stock Company NP Consult
25 June 2012