MNP – ONSHORE & OFFSHORE GROUP QUALITY MANAGEMENT SYSTEM

1. MNP – ONSHORE & OFFSHORE GROUPQUALITY MANAGEMENT SYSTEM

2. MNP – ONSHORE & OFFSHORE GROUP ENGINEERING DESIGN BUREAUQUALITY MANAGEMENT SYSTEM Quality Management System has been developed and implemented in the Design Bureau MNP.The system provides for the realization of the Quality Policy established by the MNP Directorate top management and aims at achieving the objectives set by the management along with ensuring production in compliance with the Customer's (Consumer's) requirements.

3. MNP – ONSHORE & OFFSHORE GROUP ENGINEERING DESIGN BUREAUQUALITY MANAGEMENT SYSTEM MNP – Onshore & Offshore Groupobjectivesareto manufacture high-quality and safe products, to ensure competitiveness and profitability by introducing modern quality management procedures, to realize the shipbuilding potential within EPIC projects (engineering, procurement, installation, commissioning). MNP – Onshore & Offshore Groupfunctions : - commercial vessels engineering / building / upgrading; - integral logistic support exercised continuously throughout the life-cycle of shipbuilding production. Functional distribution for the Directorate personnel is regulated via the organizational documentation in force: Departments Provisions (for Management Departments, Divisions etc) and Personnel Functional Statements. Quality management system is developed in accordance withISO 9001:2000 «Quality Management Systems. Requirements».

4. QUALITY POLICY MNP – ONSHORE & OFFSHORE GROUP (LTD) MNP - Onshore & Offshore Group (Ltd.) declares Quality Policy in the sphere of shipbuilding design and project management in an attempt to secure actual and growing customer demand in competitive shipbuilding production. Main strategic goal of the company in the sphere of quality is to create high-quality and safe products, ensure competitiveness and profitability by introducing modern quality management procedures. Quality Policy is based on mandatory implementation of national and international standards (rules and regulations), customer demand and covers all design and management organization levels. Quality Policy is assured by introducing an effective QUALITY MANAGEMENT SYSTEM complying with ISO 9001:2000 in the MNP - Onshore & Offshore Groupby means of:

5. QUALITY POLICY MNP – ONSHORE & OFFSHORE GROUP (LTD) • keeping the high level of employee qualification; • efficient distribution of employee responsibility and authorities; • strict compliance with and monitoring of compliance with national and international standard and regulatory documents – instructions, procedures and guides; • forming and keeping optimal infrastructure and production environment including uninterrupted operation of office facilities, software and communication means; • quick and adaptable reaction to market changes; • regular analysis of MNP - Onshore & Offshore Groupactivities; • adherence of MNP - Onshore & Offshore Groupto continuous development and improvement of Quality Management System meeting the ISO 9001:2000 requirements.

6. QUALITY POLICY MNP – ONSHORE & OFFSHORE GROUP (LTD) • MNP - Onshore & Offshore Groupundertakes to ensure: • guaranteed, reliable and quality performance of design work, research and development work and project management following the national and international standards, rules and regulations, being the main responsibility of each employee at all levels in the organization with account of customer demand fulfilment; • provision of all main business processes with adequate resources; • optimisation of shipbuilding expenses to increase production effectiveness and obtain guaranteed profit; • continuous improvement of design processes and shipbuilding technologies to gain customer confidence; • adherence to commonly accepted business ethics and mutually beneficial customer relationship;

7. QUALITY POLICY MNP – ONSHORE & OFFSHORE GROUP (LTD) systematic approach to management and effective decisions based on information analysis; increasing quality and reducing cost of design documentation development by implementing electronic data media, automation of design processes, documentation registration and storage; improvement of labour organization in the Shipbuilding Directorate office, conditions to raise workmanship and realize creativity for each employee, to obtain appropriate reward for effective and high-quality work.

8. MNP – ONSHORE & OFFSHORE GROUP ENGINEERING DESIGN BUREAUQUALITY MANAGEMENT SYSTEM EDB Quality Management System was checked in July, 2005 and found to be in accordance with ISO 9001:2000 in respect of shipbuilding design, which is confirmed by the Certificate of Conformity No.05.255.026 of 29 August, 2005 issued by the Russian Maritime Register of Shipping.

9. CERTIFICATES

10. CONTINUOUS QMS IMPROVEMENT CONSUMERSAND OTHER INTERESTED PARTIES CONSUMERSAND OTHER INTERESTED PARTIES Analysis on the part of the management RESOURCES MANAGEMENT ALTERNATION, ANALYSISAND IMPROVEMENT SATISFACTION Design Planning Engineering and Design Designer Supervision REQUIREMENTS PRODUCTION QUALITY MANAGEMENT SYSTEM MODEL Input

11. QMS DOCUMENTATION • Quality Manual comprising a declaration of quality policy and objectives, a description of QMS structure and structural principles; • documented procedures, including those required by MS ISO 9001:2000 ; • documents necessary for effective processes planning, realization and control; • records maintained for the confirmation of conformity and QMS effectiveness. • The full list of documents is provided in С-001-000 «Total list of QMS documents».

12. JSC “KRASNOE SORMOVO SHIPYARD” QUALITY MANAGEMENT POLICY

13. The main strategic target of the company’s quality policy is to provide competitiveness and profitability of the company by production and realization of products which meet Customers’ requirements. • Tasks that the top management determined to the company’s personnel to achieve the main strategic target • Production and realization of the products which meet the requirements of the clients • To make products of high quality by exact following a production process (technology of production) • Quality management system certification in accordance with GOST and ISO requirements, permanent perfectibility and effectivization of the system QUALITY MANAGEMENT POLICY

14. QUALITY MANAGEMENT POLICY The main tasks for the stated target achievement. Production of qualitative products and permanent quality improving. Control and analysis of the references, proposals and claims of the clients and Register during building period, trials, and operation of the product. Appropriate functioning of the quality management system and permanent work for its improvement. Development and execution of measures for product quality and work performance improvement (quality reporting system and measurement assurance improvement, modification and replacement of the old equipment, improvement of the information support system and management structure system, personnel training, etc.)

15. QUALITY MANAGEMENT POLICY Initial action principles Initial action principles for policy realization and tasks solutions · Personal responsibility of the top management of the company for the development, implementation, maintaining and control of the quality system. Assigning of the authorized representative (responsible person) · Allocation of funds to conduct the quality policy and to achieve the stated objective · Information of the employees about the general targets and tasks · Integrated solutions of the tasks about the production of the high quality goods and prevention of the quality problems The responsibility of each employee for the quality of their work and goods produced by them. Each person is to know his task and responsibility extent, to be a professional, to improve his professional skills, to analyze his working results and to contribute suggestions for improving of the labor and production quality.

16. QMS JSC "KRASNOE SORMOVO" SHIPYARD" • 2 Measurements, analysis and improvements. • Production monitoring and measurements • Process monitoring and measurements • Consumer satisfaction monitoring and measurements • Internal auditing • Corrective and preventive actions • 3 Measuring equipment management. • Metrological evaluation of technical documentation • Management of production control, measurement and test equipment • Management of control, measurement and test equipment, metrological assurance • 1 QMS Analysis, Planning and Continuous Improvement • Analysis of quality management system • Quality policy and objectives management • Quality planning and resource allocation • 4 Production manufacturing and delivery planning, finance management • Contract analysis • Production planning • Finance management • 5 Production Preparation • Project design documentation management • Special and vital technological processes management • Technological performance control • Planning of the technical development of the company • 8 Production • Production planning • Equipment and outfitting management • Production monitoring and measurements • Management of control, measurement and test equipment, metrology • Non-standard production management • Infrastructure and ecology • Health and industrial safety • 6 Purchasing • Vendors evaluation and selection • Purchasing contracts signing and management • Incoming inspection • Analysis of purchases quality • 7 Personnel Management • Determination of need in staff and supply with staff • Planning and conduction of training • Personnel attestation • Motivation QUALITY MANAGEMENT SYSTEM

17. SAFETY MANAGEMENT SYSTEM Professional recruitment, medical control in the yard hospital, employees training and attestation in the yard training center and technical college Free medical service, arrangement of employees rest at leisure and during vacation Safety and healthy conditions, work clothes, hygiene and protection means for employees QUALITY MANAGEMENT SYSTEM

18. CERTIFICATES

19. QUALITY SYSTEM COVERAGE