Corporate governance system of the Company ensures proper management and control of activities, and aims to increase goodwill and sustainable development. Corporate governance is based on effectiveness and operational efficiency.
TVEL JSC is not a public joint-stock company, the Company discloses all the required information on the website of IA Interfax in conformity with the Regulation on Disclosure of Information by the Issuers of Equity Securities on a voluntary basis, assuming no obligations on regular and required disclosure.
The basic documents regulating the activity of the corporate governance system are the Articles of Association of TVEL JSC and the Regulations on the Board of Directors of TVEL JSC.
TVEL JSC puts into practice some provisions of the Corporate Governance Code recommended by the letter dated April 10, 2014 N 06-52/2463 of the Central Bank of Russia, with due regard to specific character of the legal status of Rosatom set by legal regulatory acts of the Russian Federation, providing for unity of nuclear industry enterprises management.
TVEL JSC considers the improvement of corporate governance as an integral part of the work to improve the efficiency and competitiveness of the Company and subject to continuous monitoring by the Board of Directors and the executive body of the Company.
In the reporting year, the improvement of the corporate governance system in TVEL JSC was aimed at improving the effectiveness of governance bodies and preventing the adoption of wrong decisions. Similar plans were also determined for the next year.
STRUCTURE OF GOVERNANCE BODIES
The governance bodies are formed in accordance with the Articles of Association of the TVEL JSC. Decisions on the issues referred to the competence of the General Meeting of Shareholders are taken by the sole shareholder of the Company – Atomenergoprom JSC.
The supreme executive bodies of TVEL Fuel Company’s subsidiaries are general meetings of shareholders (members), the decision-making of which is determined by internal regulations on these bodies.
The governance bodies of TVEL JSC and its subsidiaries also include the boards of directors and the sole executive bodies acting on the ground of relevant regulations approved by the general meetings of shareholders.
One of the governance bodies in the subsidiaries of TVEL Fuel Company is audit committees , operating on the ground of relevant regulations approved by the general meetings of shareholders (members).
No committees and commissions operated within the Board of Directors of TVEL JSC during the reporting period.
The Board of Directors plays a key role in strategic management of TVEL JSC and TVEL Fuel Company in general. The Board of Directors is formed by the Sole Shareholder of TVEL JSC – Atomenergoprom JSC with due regard to qualification and expert knowledge that are required to solve the specified problems.
The Board of Directors consists mainly of outside directors (not the employees of the Company), professionals who have wide experience in the industry and understanding of the specifics of the nuclear industry and the Company activities. In the reporting period there were no committees and commissions of the Board of Directors.
Members of the Board of Directors are not shareholders of TVEL JSC. In 2018, members of the Board of Directors committed no transactions on acquisition or alienation of the Company’s shares. Information on TVEL JSC shareholding must be disclosed by the candidates to the position of the member of the Board of Directors at the time of filling the consent form for election.
There are no independent members in the Board of Directors within the meaning of the Corporate Governance Code of TVEL JSC.
In accordance with the Articles of Association of TVEL JSC the decision on payment of remuneration to the members of the Board of Directors of the Company falls within the competence of the General Meeting of Shareholders (decision of the Sole Shareholder of TVEL JSC - Atomenergoprom JSC).
No remuneration and compensation of the expenses related to performance of obligations were provided for the members of the Board of Directors of TVEL JSC in 2018. All members of the Board of Directors of the Company get salary according to the place of their primary business.
REPORT OF THE BOARD OF DIRECTORS ON THE RESULTS OF THE COMPANY’S DEVELOPMENT IN THE PRIORITY FIELDS
In 2018, the Board of Directors held 21 meetings and made decisions on the most important issues of TVEL JSC activity, including:
- approval of the budget and scheduled financial-economic indicators of activity of TVEL JSC;
- pre-agreed appointments to the posts directly subject to TVEL JSC President;
- changes in Procurement Regulations;
- approval of recommendations to the Sole Shareholder concerning net income distribution following the results 2017;
- consent to the transaction on real estate rental;
- approval of recommendations to the Sole Shareholder concerning dividend payment following the results of six months of the reporting year;
- approval of recommendations to the Sole Shareholder concerning the new membership of the Board of Directors of TVEL JSC
- approval of changes in ownership of CPTI JSC, KMZ PJSC, SGChE JSC, contribution to the property of RusAT LLC;
- creation of RusWellGroup JSC.
COMPOSITION AS OF 01.11.2017 | COMPOSITION AS OF 29.06.2018 | COMPOSITION AS OF 15.10.2018 |
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In accordance with the Articles of Association and by the Resolution of the Sole Shareholder (No. 40 dated September 25, 2017), and on the ground of the Contract executed with the Company the functions of the Sole Executive Body are performed by the President of TVEL JSC – Natalia Vladimirovna Nikipelova.
Natalia Vladimirovna holds no shares of TVEL JSC. In 2018, she committed no transactions on acquisition or alienation of the Company’s shares. In accordance with the contract concluded between TVEL JSC and the President of TVEL JSC, the amount of remuneration following the year results shall be determined by the resolution of the Board of Directors based on the financial-economic performance of the Company and the key performance indicators (KPI) percentage of the President of TVEL JSC.
KPI | KPI LEVEL | |
Target value | Actual value | |
Adjusted free cash flow of Rosatom State Corporation (including AFCF of the Divisions: TVEL+Techsnabexport+Atomredmetzoloto+ Uranium One Group), RUB mln | 309.4 | 321.5 |
124.6 | 133 | |
Contribution to EBITDA (FE NFC), RUB bln | 116.0 | 119.5 |
Labor efficiency, RUB mln/person | 10.67 | 11.53 |
Semi-fixed costs, RUB bln | 35.7 | 35.5 |
Investment activity integrated efficiency indicator, % | 100.0 | 98.1 |
Integral indicator for new products, % | 100 | 107.7 |
Proceeds from sales of new products beyond the profile, RUB bln | 8.7 | 8.3 |
New products portfolio for 10 years (beyond the profile), RUB bln | 5.4 | 23.8 |
Integral index of foreign orders portfolio, % | 100 | 107 |
Foreign orders portfolio for 10 years, USD mln | 11,918 | 13,344 |
Foreign orders portfolio for lifetime cycle, USD mln | 57,480 | 59,201 |
Export proceeds, USD mln | 839 | 961 |
LTIFR and reduction of injuries at industrial sites of the enterprises, including the contractors (of basic level 2017) | 0.3/25% | 0.08/50% |
No INES events level 2 and above | No events | 0 |
State orders, including State Defence Orders, other governmental customers and organizations, % | 100 | 100 |
Subsidiaries Management
The important role in subsidiaries management is given to the boards of directors; their competence extends to the most important issues of subsidiaries’ activity. Preparation of the meetings of the board of directors of the subsidiaries is performed with engagement of structural subdivisions of TVEL JSC in order to elaborate the materials of the agenda and development of draft decisions.
Asset management in TVEL JSC is aimed at improvement of the structure and increase of the efficiency of non-current assets that include shareholding of subsidiaries and other business companies, and capital assets, in particular the real estate units.
Management of shareholding of the companies of TVEL Fuel Company is based on the mechanism of corporate relations and on internal documents determining the procedure of interaction between TVEL JSC and its subsidiaries in different fields. The most important decisions on non-current assets management are made by the General Meeting of the Shareholders (the Sole Shareholder) and the Board of Directors of TVEL JSC within their competence. Management of the Company’s non-current assets is performed through the unified database of capital assets including non-private federal facilities used by the subsidiary companies of TVEL JSC.
Acquisition and disposal of the real estate property of the subsidiaries regardless of its cost is performed subject to approval of the transactions by the Board of Directors of these companies. Real estate is sold on a competitive basis at a market price.
Asset management procedures ensure efficiency and transparency of the decisions made on non-current assets transactions; and such procedures are aimed at increase of the Company’s income.
In 2018, the list of subsidiaries underwent the following changes:
- Uralpribor LLC was affiliated with Tochmash VPA JSC;
- changing of the name in OKB-Nizhny Novgorod JSC to TVEL-KC JSC;
- creation of a new subsidiary - RusWellGroup JSC.
“Atomic Energy Power Corporation” Joint Stock Company (Atomenergoprom JSC) is the owner of 100% of voting shares of TVEL Joint-Stock Company.
The Company’s authorized capital amounts to Twenty-two million nine hundred sixty-one thousand six hundred seventy (22,961,670.00) rubles.
The Company placed registered common shares with nominal value of one (1) ruble per each in the amount of Twenty-two million nine hundred sixty-one thousand six hundred seventy (22.961.670) pieces.
All shares of TVEL JSC are issued in non-documentary form.
No changes were made in the share capital structure in the reporting year.
RELATED-PARTY TRANSACTIONS AND MAJOR TRANSACTIONS
During the period 01.01.2018 till 31.12.2018, TVEL JSC made no transactions classified as related-party transactions.
Provisions of chapter XI of the Federal Law “On Joint-Stock Companies” are not applied to TVEL JSC in accordance with p. 3.12 of the Articles.
TVEL JSC made no transactions classified as major transactions during the period 01.01.2018 - 31.12.2018.