Annual Report 2018
New Businesses and Products
TVEL Fuel Company of Rosatom
Annual Report 2018

Effective risk management is one of the most important prerequisites for business sustainability of TVEL Fuel Company. The current risk management system is aimed at timely identification of risks, as well as the implementation of measures to manage them

Current trends in risk management assume a transition from formal description of risks to the integration of risk management mechanisms into business processes, mainly related to the adoption of strategic management decisions.

By order No. 4/253-п of June 28, 2018 the introduction of the Unified Industry Order for organizing the work of the early risk response system of the Russian Federation state program “Development of the Nuclear Energy Industrial Complex” was approved.

Risk Management of TVEL Fuel Company is based on continuous monitoring of its external and internal environment, complex analysis of threats and opportunities affecting achievement of both economic and social goals of the Company.

Main goal of the Risk Management System (RMS) is identification, assessment and minimization of threats that may affect the results of activities of the Company.

Main RMS objectives are the following:

  • timely identification of risks that may affect the achievement of the goals of TVEL Fuel Company;
  • support of stable financial environment of the companies of TVEL Fuel Company with due consideration of the risks;
  • continuous monitoring of risks and control over implementation of the plans of arrangements aimed at reduction of likelihood of risks occurrence and minimization of the consequences of such occurrences.

In 2018, work continued on the development of risk management in TVEL Fuel Company:

  • in project management - an electronic designator of project risks was approved (Order No. 4/420-П dated 09.28.2018);
  • in the quality management system - the standards “Integrated Management System. Risk management in the corporate management system” (Order No. 4/225-П dated 04.06.2018) and “Integrated Management System. Hazard Identification. Risks. Evaluation and Management” (Order No. 4/144-П dated 04/04/2018)
Scheme 10
Participants of TVEL FC risk management processes and their roles
President of TVEL JSC
  • approval of the risk management policy of the Company;
  • approval of the list of key risks;
  • appointment of key risks holders and distribution of responsibility for risks management;
  • approval of the limits of particular risks, strategies, programs of particular risks management;
  • consideration of the issues related to distribution of authorities and responsibilities for particular risks management.
Risk holders (Responsible for risks management)
  • identification and assessment of risks
  • development of key risk indicators
  • development and implementation of programs for particular risks management
Risk Officer of TVEL JSC
  • organisation and methodological support of risks identification
  • organization and methodological support of the process of development of risk management activity

The Risk Management System of TVEL Fuel Company is built and optimized in accordance with the most modern world practices, principles and approaches reflected in the international standard ISO 31000:2018 (over the past few years has been developed by the International Organization for Standardization), as well as in the concept of COSO Enterprise Risk Management (it has applied significance in building the relationship between risk management and the value of the business).

Analysis of the risks affecting the achievement of target values of financial and economic activities of TVEL JSC and the, companies forming TVEL Fuel Company management system shall be carried out at the stage of development of the budget and medium-term plans, and at the stage of their control and performance forecast, as well as at the stage of making strategic management decisions, selecting the best ways to implement the key projects.


  1. The Order No. 4/493-п dated 12.12.2017 provides for such risk management method as transfer (insurance) to certain key risks of TVEL JSC and its subsidiaries;
  2. The Order No. 4/467-п dated 23.10.2018 provides for the property insurance program of TVEL JSC for 2018- 2019;
  3. The Order No. 4/190-п dated 10.05.2018 determines the size of risks self-retention and the procedure for determining the optimal level of deductibles when insuring risks of TVEL JSC and its subsidiaries.

PLANS ON FURTHER DEVELOPMENT OF THE RISK MANAGEMENT SYSTEM FOR 2019 include the development of a risk management system in terms of strategic risks, as well as the promotion of a risk-based approach in investment projects management.

Table 9
Management of TVEL Fuel Company key risks




Trends in likelihood of risk occurrence in the reporting year

Trends in risk significance in the reporting year


Risk of NFC product/service sale volumes reduction

  • Delays in commissioning of power units;
  • Transition to NF fabrication with increased long-term performance
  • Improvement of fuel technical characteristics and introduction of new types of fuel, improvement of fuel economic characteristics;
  • Promotion of products in new market segments


Price and currency risks

  • Reduction of prices for the products and services of TVEL Fuel Company due to changes of market prices for natural uranium and its conversion and enrichment services;
  • Reduction of prices for the products and services of TVEL Fuel Company due to changes of prices deflator indices;
  • Mismatch in assets and liabilities denominated in the same currency;
  • Growth of volatility courses of the main world currencies (Euro, dollar)
  • Use of hedging techniques in contracts of TVEL Fuel Company;
  • Natural hedging of currency risks


Risk of failure on the part of counterparties (suppliers, customers) to fulfil obligations in full and on time

  • Decreased financial and economic stability of customers/suppliers
  • Provision by the contracts of payment methods and/ or methods to secure obligations to reduce the credit risk level;
  • Monitoring of financial standing of the counterparties with the purpose to detect any signs of changes in financial standing, leading to changes in the level of the credit risk and/or the measures of the credit risk management;
  • Qualification of counterparts using non-financial indicators


Risk of increase of costs of fabrication, enrichment and conversion services

  • Changes in service tariffs of natural monopolies, sole suppliers;
  • Reduced equipment loading level;
  • Appearance of unforeseen weak points in production chain;
  • Incorrect information on resource state
  • Application of the principles of the Uniform Industrial Procurement Standard of Rosatom while working with suppliers;
  • Implementation of Rosatom Production System;
  • Implementation of the long-term programs and investment projects aimed at optimization of engineering and production processes;
  • Development and introduction of the programs of efficiency increase at all enterprises of the Company;
  • Adoption of production cost management concept in order to personalize the cost;
  • Long-term forecasts of the demands and production capacity balance (together with Rosatom and relative divisions of Rosatom State Corporation);
  • Stock optimization and turnover increase


Risk of nuclear, radiation safety

  • Violation of requirements related to environment protection and nuclear radiation safety;
  • Insufficient level of emergency preparedness;
  • Lack of resources for decommissioning of nuclear and radiation hazardous facilities, securing nuclear and radiation security, etc
  • Modernization and automation of facilities, safe operation management;
  • Decommissioning of nuclear and radiation hazardous facilities of TVEL Fuel Company, as well as the “nuclear heritage” objects using the funds of FTP NRS-2 and the sectoral reserves;
  • Professional development of personnel;
  • Continuous monitoring of nuclear and radiation safety state;
  • Setting and implementation of tasks, objectives, elaboration of measures aimed at reduction of risks in the field of NRS;
  • Complex and technical inspections


Risk of environmental safety

  • Inability to comply with the requirements to environment protection;
  • Insufficient level of emergency preparedness;
  • Lack of resources for implementation of environmental safety actions
  • Setting of tasks and objectives, and elaboration of measures aimed at reduction of risks in the field of environment protection, operational health and labor safety;
  • Review of draft regulations containing requirements to environment protection. Interpretations of the practical application of the requirements;
  • Implementation of actions aimed at safety improvement using special reserve funds of Rosatom State Corporation;
  • Emergency response drills and personnel training, provision of information with the purpose of unscheduled inspections;
  • Comprehensive and technical inspections, audits, ecological monitoring;
  • Improvement of the integrated system of environmental safety management (ISO 14001:2004), and occupational health and industrial safety management (OHSAS 18001:2007)


Risk of personnel health and safety

  • Violations of safety requirements;
  • Hazardous and harmful production factors;
  • Violation of the corporate code of conduct. Failure to comply with work and rest schedule;
  • Lack of resources for safety actions implementation
  • Improvement of safety culture;
  • Implementation of actions to prevent injuries;
  • Promotion of safe labor;
  • Provision of the Company’s staff with personal protective equipment;
  • Complex and technical inspections, audits;
  • Setting of tasks and objectives, and elaboration of measures aimed at reduction of risks in the field of industrial safety;
  • Planning of costs for labor protection in accordance with the Industrial Agreement;
  • Improvement of the integrated professional (labor safety), industrial and environmental safety management system (ISO 14001: 2004; OHSAS 18001:2007)


Risk of industrial safety violation

  • Insufficient level of emergency preparedness;
  • Lack of resources for safety actions implementation
  • Emergency response drills;
  • Complex and technical inspections;
  • Performance review of outside emergency response teams;
  • Setting of tasks and objectives, and elaboration of measures aimed at reduction of risks in the field of industrial safety;
  • Reservation of funds and resources, public liability insurance;
  • Improvement of the integrated professional (labor safety), industrial and environmental safety management system (ISO 14001: 2004; OHSAS 18001:2007)


Social and political risks

  • Events (political conflicts and/or mass social protests) resulting in substantial change in the parameters of actions of TVEL Fuel Company and its enterprises, for instance, missed deadlines of commissioning or cancellation of construction, unscheduled termination of operating activity, damage to goodwill of TVEL Fuel Company and its governance
  • Implementation of actions aimed to mitigate the risks of social and political tension in the regions of presence;
  • Cooperation with regional and municipal public authorities on issues relating to the territories’ development, regional taxes gain and maintenance of social and economic stability;
  • Implementation of charitable social efforts in the cities of TVEL Fuel Company’s presence;
  • Formation of the system of multi-level internal (including on a cascade basis) and external communications;
  • Holding of social forum-dialogues in the regions of presence of the enterprises of TVEL Fuel Company


Reputation risk

  • Large-scale accidents in nuclear sector;
  • Distribution of negative information about Rosatom State Corporation, its enterprises;
  • Mass protests against nuclear power engineering;
  • Election campaigns in regions and cities of presence;
  • Construction of burial sites for radioactive wastes in the regions of presence of TVEL JSC subsidiaries
  • Observance of the industrial regulation concerning organization of delivery of information to the public in case of emergencies constituting a threat to business and social reputation of Rosatom State Corporation;
  • Implementation of the project “Publicity Capital Management” aimed at creating a positive social attitude to the development of nuclear technologies, increasing the information favoured index of TVEL JSC activity;
  • Implementation of the Uniform information policy of TVEL Fuel Company of Rosatom;
  • Integrated communications;
  • Implementation of target communication programs to promote products and services of TVEL JSC and its subsidiary companies;
  • Formation of corporate culture values and implementation of the project “Public response to Rosatom values”;
  • Enhanced activity of the information conciliatory committees in municipal districts of presence

Without change