Chapter 1.
General

Basic Characteristics

The core activity of TVEL FC is development, production and sale of nuclear fuel for power and research reactors in Russia and abroad, as well as of associated nuclear and non-nuclear products. All activities comply with safety requirements: nuclear, radiation, industrial, fire, environmental, labor safety, physical protection of nuclear facilities and emergency preparedness.

TVEL FC takes a central place in the structure of ROSATOM State Corporation at the front end nuclear fuel cycle.

TVEL Fuel Company is the only supplier of nuclear fuel to Russian nuclear power plants. It provides with nuclear fuel 78 power reactors in 15 countries all over the world, research reactors in 9 countries worldwide and transportation reactors of the Russian Nuclear Powered Fleet.

One out of every six power reactors in the world operates with fuel manufactured by TVEL FC [ i ].

SC “TVEL” is the management center of the Fuel Company.

Subsidiaries of the Fuel Company are located in 11 regions of the Russian Federation.

Social environment of TVEL FC operation is characterized by the fact that three enterprises of the Company are located within Closed Administrative Territorial Units [ i ] (Seversk, Novouralsk, Zelenogorsk), and one is located within a mono-town (Glazov). Those enterprises are town-forming organizations and major taxpayers [ i ].

Core business of the Company involves production of nuclear fuel, besides TVEL FC supplies the Russian and international market with the wide range of non-nuclear products:

• zirconium
• lithium
• calcium
• magnets
• thin-walled pipes
• polishing powders
• pinch rolls, zeolite catalysts
• superconductor materials

Hydrometallurgical, metalworking, machine-building and rolling facilities operate successfuly at TVEL FC enterprises supported by research and development subdivisions.

Separation-Sublimation Complex comprises of a group of integrated plants for enrichment and conversion of uranium

Nuclear Fuel Fabrication Complex comprises of industrial enterprises that manufacture nuclear fuel for various reactors

Gas Centrifuge Complex is a group of enterprises producing gas centrifuges and accessories for enterprises of the separation-sublimation complex

Enterprises of tahe Research and Engineering Complex

Novouralsk Research Design Centre LLC (NRDC LLC), Novouralsk, the Sverdlov Region.
www.nrdc.ru

SC EDB-Nizhniy Novgorod, Nizhny Novgorod.
www.okb-nn.ru

SC “Centrotech-SPb”, Saint Petersburg.
www.ecrgc.ru

Uralpribor LLC, Novouralsk, the Sverdlov Region.
www.uralpribor.com

Stock Company “A.A. Bochvar High-technology Research Institute of Inorganic Materials” (SC “VNIINM”), Moscow.
www.bochvar.ru

Value (integrated value) generated by the Fuel Company involves both obtaining of marketable product and increase of profitability of TVEL FC enterprises, and also a great variety of economic, social and environmental effects of activities. TVEL FC seeks to enhance positive effects of its activity.

The Company activity is marked with a specific uncontaminating environmental impact of its production facilities and indirect environmental impact of its key products, in particular, at the back end of the nuclear fuel cycle.

The Company activity depends on a great number of external and internal factors, it provides for close cooperation with stakeholders.

This cooperation is characterized by the fact that tangible and intangible resources (financial, environmental, production, human, social and intellectual capitals) used by the Company, are controlled by TVEL FC and its stakeholders . Therefore, conversion of capital in the course of activities is of great importance to the Company and its team.

Business model describes the activity for integrated value creating as a system to the capital employed, production process, products and results obtained. The purpose of the system is to achieve strategic goals through implementation of competitive advantages. The business model considers activity-specific risks, possibilities and risk-management capabilities of the Company.

Business model presents: capitals (resources and relations) of the Fuel Company, performance results ensuring changes of capitals, including increment of resources and consolidation of relations with stakeholders.

* Refer to the tables “TVEL FC Operational Resource” and “Results 2014 affecting changes of the Company capitals” of this Chapter.

Financial Capital is most vital to TVEL FC. Capital gains ensure current operations and promote investments thereby generating growth of other capitals used by the Fuel Company.

Natural Capital is transformed in the course of productive activities of the Fuel Company. There are two core businesses of the Company, i.e. nuclear and non-nuclear products manufacture. The business model scheme represents detailed nuclear production chain from uranium concentrate processing to nuclear fuel assemblies and customers servicing. Emphasis is placed on the Company’s competence in the use of both natural, and regenerated, waste uranium.

One of the most important factors ensuring efficient business is availability of high technology base, modern equipment, machinery and materials (Production Capital) that enable timely and full implementation of production plans.

Research and development activity (Intellectual Capital) related to improvement of the industrial and technological base has considerable impact on TVEL FC business and the entire nuclear industry and Russian science on the whole.

Priorities for the nuclear industry involve development and enhancement of personnel qualification (Human Capital). It is impossible to overestimate the degree of business dependence on competent staff and impact of human capital on the Company.

The relationship between TVEL FC and its stakeholders determines the Social Capital which has a considerable impact on the business. The most important elements of social capital are relationships in supply chain, interaction with authorities and local population in terms of development of regions of presence, and finally, relations with the Customers. TVEL FC is a reliable supplier notwithstanding the political environment, ready to offer a flexible and sustainable solution to its partners.

TVEL FC is a responsible company that interacts with the environment and generates both intrinsic value and value to its stakeholders.

The positive effects of TVEL FC activities on the stakeholders:

• dividends;
• taxes and deductions;
• promotion of nuclear and radiation safety;
• development of sectoral research and fundamental science;
• development of personnel within the regions of presence;
• promotion of social accord and business activity in the regions of presence (for more detailed information refer to “Respect” Section).

Mission of TVEL FC is to meet the requirements of the customers of the Fuel Company in the sphere of nuclear fuel cycle and in the related sectors, in strict compliance with requirements of safety, security, environmental and social awareness.

Strategic vision of TVEL FC is focused on global leadership in FE NFC and achievement of global competitiveness in NFC in an atmosphere of social cohesion.

Workers of the Fuel Company are governed by the Values shared by all organizations and enterprises of ROSATOM State Corporation. These core values were formed throughout the course of history of nuclear sector in Russia and conform with global approach to determination of fundamental principles of sector performance. In 2014 TVEL FC has implemented a pilot project of ROSATOM State Corporation for translation and strengthening of ROSATOM State Corporation’s values in corporate culture of the Fuel Company (for details about the project please refer to Corporate Culture Section) [ i ].