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Internal Control System

Since September 2012 the Arbitration Committee operates in TVEL JSC; the Arbitration Committee is vested with authority to consider complaints against actions (or omission thereof) of any customer, competent authority, procurement manager and/or procurement commission during the implementation of procurement procedures on behalf of organizations of TVEL FC management system.

22

Number of control activities conducted by the specialists of the SDIC of TVEL JSC in 2016

Internal Control System (ICS) of TVEL Fuel Company is an interconnected integral complex of organizational structures, processes, their rules, and characteristics of management system that continuously or from time to time performs internal control function and ensures internal control goal achievement.

Special Department of Internal Control (SDIC) is a subdivision of TVEL Fuel Company’s organization engaged in internal control activities with respect to various spheres of business.

SDIC of TVEL JSC (the unit of the Director for Internal Control and Audit) operates in accordance with regulatory legal acts of the Russian Federation, local regulations of TVEL JSC and ROSATOM, and the provisions on these structural subdivisions.

SDIC of TVEL JSC

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Special department for internal control of TVEL JSC provides functional guidance of 8 SDIC companies forming the management system of TVEL Fuel Company: AECC JSC, VNIINM JSC, KMZ JSC, MSZ JSC, NCCP JSC, SGChE JSC, UEIP JSC, ChMP JSC.

In accordance with ROSATOM Internal Control Development Concept the main purpose of ICS is to promote the achievement of the Fuel Company’s strategic goals, to contribute to corporate governance improvement in TVEL JSC and companies forming the management system of the Fuel Company, in compliance with the requirements of the Russian Federation law, regulatory state authorities and international standards.

The purpose of ICS development is to maintain corporate governance mechanisms, primarily the regulatory ones, consistent with changing external and internal conditions.

Priority objective of the Director’s Unit for Internal Control and Audit is to maintain governance of ICS functioning and development processes.

Main subjects of the internal control system in the Fuel Company are: the President of TVEL JSC, the Board of Directors of TVEL JSC, TVEL JSC Management, the Director’s Unit for Internal Control and Audit, and the Executive Bodies and SDIC of TVEL JSC subsidiary companies.

Objects of control are: TVEL JSC, subsidiary companies, and their structural subdivisions.

Number of control activities conducted by the specialists of the Director’s Unit for Internal Control and Audit of TVEL JSC

Indicator 2014 2015 [i] 2016 2016/2015
Number of control activities in accordance with the plan, including:

52

31

22

71%

   with Audit Committees

25

7

0

   audit of financial and economic activities including procurement and personnel record management

21

18

15

83%

   internal audit

6

6

7

117%

Apart from the scheduled inspections, in 2016 the workers of the Unit of the Director for Internal Control and Audit conducted three unscheduled inspections by the order of the governance, two workers participated in the inspection within the working groups, and one worker was engaged in the audit of ROSATOM.

MAIN RESULTS 2016

Plan 2016 was framed under the principle of special inspections of different business profiles at all SC of the Fuel Company, including with the purpose to achieve strategic goals set by the Company. The practice proved to be efficient as compared to the previous periods, efficiency of the scheduled control activities made 100%.

Basic documents that regulate the procurement activities and set the supplier and contractor selection criteria in TVEL Fuel Company are the following:

  • Federal Law d/d July 18, 2011 No. 223-FZ “On Procurement of Goods and Services by Particular Legal Entities”;
  • Uniform Industrial Procurement Standard of ROSATOM State Corporation;
  • TVEL JSC Corporate Standard Procurement Process.

In accordance with the approved plans of control activities for the next half-year 2016, the workers of the Unit of the Director for Internal Control and Audit conducted 22 control activities, including 7 internal audits. Reduction of the number of scheduled inspections, as compared to the previous period, is connected with the change in the approach to control activities, and introduction of the methods and practice of appraisal and assessment activities.

In 2016 the Arbitration Committee of TVEL JSC received 118 complaints, 15 were recognized as reasonable, 2 — partially reasonable, 56 — unreasonable, 13 — withdrawn, 32 — left without consideration.

In accordance with the requirements of professional standards the workers of the Control and Audit Office in 2016 successfully passed independent qualification in compliance with the requirements of the professional standard “Specialist of Internal Control (internal auditor)”.

KEY DIRECTIONS OF TVEL FC INTERNAL CONTROL SYSTEM DEVELOPMENT

  • further integration of adequate control procedures, allocation of duties and responsibilities for the efficiency of internal control;
  • development of the mechanisms of stakeholders involvement in internal control;
  • ICS reliability and efficiency monitoring development through introduction of various methods to promote continuous and regular assessment of ICS state;
  • development of SDIC competence and potential.

PLANS 2017

  • timely and full identification of material violations in the activity of the companies of TVEL Fuel Company;
  • contribution to strategic goals of the Company with regard to increase of the share in the international market, reduction of prime cost, increase of revenue from new products.

Plan 2016 was framed under the principle of special inspections of different business profiles at all SC of the Fuel Company. The practice proved to be efficient as compared to the previous periods, efficiency of the scheduled control activities made 100%.

Reduction in number of the audits as compared to 2014 is connected with the abolition of the audit commissions as per it.3 art.66.3 of the Federal law d/d May 5, 2014 No.99-FZ.

1.
Москва
АО «ТВЭЛ», АО «ВНИИНМ»,
АО «МЗП», АО «ЦПТИ»

2.

Московская область

АО «МСЗ» (электросталь)

3.

Санкт-Петербург

Филиал ООО «НПО «Ценротех»

4.

Владимирская область

АО «ВПО «Точмаш» (Владимир),
ПАО «КМЗ» (Ковров)

5.

Удмуртская республика

АО ЧМЗ (Глазов)

6.

Свердловская область

АО «УЭХК»,
ООО «НПО «Центротех» (Новоуральск)

7.

Новосибирская область

ПАО «НЗХК» (Новосибирск)

8.

Красноярский край

АО «ПО «ЭХЗ» (Зеленогорск)

9.

Томская область

АО «СХК» (Северск)

10.

Иркутская область

АО «АЭХК» (Ангарск)