This section contains information on organisation and development of the risk management activities in the reporting period, as well as the major risks impacting on the Company's operations and applicable ways of addressing these risks.
The Company understands the risk management process as a set of coordinated activities undertaken by the corporate management bodies, managers and all employees, aimed at developing the habit of taking into account the risk-profitability ratio when taking decisions, and improving the efficiency and sustainability of the Company's business processes by identifying risks in a timely manner, estimates of risks and developing, and implementing procedures of addressing risks to ensure reasonable confidence in achieving the Company's objectives.
The Company's risk management system (RMS) is developed on the basis of the State Atomic Energy Corporation ROSATOM risk management policy13 and other guiding and methodological documents in this area, as well as recommendations of international standards and best practices. The objectives of the risk management system include:
- support of development and implementation of the corporate strategy of the State Atomic Energy Corporation ROSATOM, Fuel division and the Company, as well as strategic initiatives in which the Company takes part;
- maintaining the Company's risk exposure within the State Atomic Energy Corporation ROSATOM risk preparedness limits and thus achieving an optimum risk-profitability ratio when making the key decisions on negotiating the Company's deals and in other areas of the Company's economic activities;
- conducting risk assessment of the Company and its projects within the key risks of the Fuel division and the State Atomic Energy Corporation ROSATOM in general, and when distributing the capital between the organisations and projects by the State Atomic Energy Corporation ROSATOM;
- incorporation of the risk management process into a number of the Company's business processes and the mechanism of making management decisions for the optimum usage of the Company's resources through managing the balance of risks and profitability;
- forecasting possible deviations of the Company's future performance indicators from the expected, target or planned values (including, but not limited to, the market share, sales volume in actual and monetary form, revenue, operating income, operational and net cash flow, net debt factor, indicators of liquidity, financial stability and turn-round, assumed obligations to creditors – covenants for maintaining a number of the Company's indicators in the acceptable range, etc.) under the influence of risks in order to introduce measures for maintaining these indicators within the acceptable range;
- improving and maintaining continuity (stability) of the business processes of the Company and its contractors, including those within the frameworks of the quality management systems (QMS), environmental management systems (EMS), supply chain security management systems (SCSMS), informational security management systems (ISMS) through identification, evaluation and analysis of the operational risks emerging within these business processes and devising, and implementing measures for reducing these risks;
- providing informational support to the management of the Company and the State Atomic Energy Corporation ROSATOM when making management decisions.