2013 Integrated Annual Report
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2013 INTEGRATED ANNUAL REPORT 2013 Integrated Annual Report of OJSC Atomenergomash 2013 TABLE OF CONTENTS KEY ACHIEVEMENTS IN 2013 4 5. CORPORATE GOVERNANCE 46 5.1. Corporate governance system 46 6 2013 KEY INDicatORS 5.1.1. Management structure and bodies 46 5.1.2. Key performance indicators and remuneration 1. MESSAGE FROM for the management 54 THE TOP MANAGEMENT 8 5.1.3. Interaction with subsidiary, affiliate 1.1. Message from the Chairman of the Board of Directors 8 and supervised companies 55 1.2. Message from the CEO 10 5.2. Ethics and Integrity 56 5.3. Economic security 56 2. INFORMATION 5.4. Internal control and audit 58 ABOUT THE REPORT 13 5.5. Risk management 59 2.1. Objectives, content and basic parameters of the Report 13 2.1.1. Objectives and basic parameters of the Report 13 6. CAPITAL MANAGEMENT 2.1.2. Regulatory framework for Report preparation 13 (RESOURCES AND ACTIVITY) 64 2.1.3. A process for definition of content and preparation of the Report 14 6.1. Financial and economic activity 2.2. Disclaimer 16 (financial and economic capital) 64 2.3. Assurance of quality of the Report 16 6.1.1. Economic performance 64 2.3.1. Internal procedures 16 6.1.2. Investment activities 67 2.3.2. Independent professional assurance 17 6.1.3. Description of key strategic risks and opportunities 69 2.3.3. Stakeholders Committee and public 6.2. Production activities (production capital) 70 assurance of the Report 17 6.2.1. Results of productionI activities 70 6.2.2. Quality and safety 70 3. GENERAL INFORMATION 20 6.2.3. Optimization of production processes 74 3.1. General information about the Company 20 6.2.4. Description of key strategic risks and opportunities 78 3.1.1. Main Company details 20 3.1.2. Equity capital 20 6.3. Innovation (Innovation capital) 78 3.2. Geography of business and Division structure 21 6.3.1. Innovative activities 78 3.3. Key products 25 6.3.2. R&D results 79 3.4. The Company’s business model 27 6.3.3. R&D expenditures 81 3.5. The Company’s management model 31 6.3.4. Description of key strategic risks and opportunities 81 3.6. The role and place of the Company 6.4. HR management (human capital) 84 in the Nuclear Industry 33 6.4.1. Employment 84 4. COMPANY DEVELOPMENT 6.4.2. Efficiency of personnel 85 6.4.3. Remuneration 86 STRATEGY 36 6.4.4. Training and provision of information 87 4.1. Primary focuses of the Company’s strategic 6.4.5. Occupational health and safety 90 development 36 4.2. Power engineering market in 2013 39 6.4.6. Relations between employees and management, resolution of labor disputes 93 4.3. The Company’s position in the global and Russian power engineering industry 40 6.4.7. Availability of replacement personnel 94 4.4. Sustainable development strategy of the Company 42 6.4.8. Description of key strategic risks and opportunities 101 6.5. Effect on the community (social capital) 101 APPENDIX 125 6.5.1. Regional presence 101 Appendix 1. Glossary 125 6.5.2. Indirect economic impacts 103 6.5.3. Social investment and charity practices 104 Appendix 2. Material aspects and their boundaries 127 6.5.4. Resolution of public disputes 104 Appendix 3. Performance Indicators Index as per 6.5.5. Marketing communications 104 Public Reporting Standard of OJSC Atomenergomash 129 6.5.6. Description of key strategic risks and opportunities 105 Appendix 4. GRI Index (in accordance with the core level) 131 6.6. Impact of the environment (the natural capital) 108 Appendix 5. Index of the International Standard 6.6.1. Energy 108 for Integrated Reporting 135 6.6.2. Materials 110 Appendix 6. Internal Auditor’s Opinion 136 6.6.3. Water 110 Appendix 7. Audit Commission’s Conclusion 137 6.6.4. Environmental compliance 112 Appendix 8. Accounting statement 6.6.5. Description of key strategic risks and opportunities 113 of OJSC Atomenergomash 138 6.7. Stakeholder Engagement (communication capital) 113 Appendix 9. Auditor’s report on the combined 6.7.1. Stakeholder description 113 accounting statement 148 6.7.2. Foreign partner engagement 115 Appendix 10. Non-Financial Auditor’s Opinion 152 6.7.3. Cooperation with customers 116 6.7.4. Cooperation with educational institutions 118 Appendix 11. Conclusion on the public assurance 157 6.7.5. Cooperation with suppliers 118 Appendix 12. Compliance with the corporate conduct code 160 6.7.6. Cooperation with public organizations and NPOs 121 Appendix 13. Table on the consideration 6.7.7. Internal communications 122 of the opinions of stakeholders 169 6.7.8. Description of key strategic risks and opportunities 124 Appendix 14. Contact information 174 REFERENCES/LINKS AND SYMBOLS Link to on-line version GRI GRI indicators Links for cross-referenced (off-line) reading AEM AEM indicators of the report Link to document library in the on-line version 4 Key achievements in 2013 KEY ACHIEVEMENTS IN 2013 Human BUSINESS PRODuctiON RESOURCES activities ● The integration of the Volgodonsk branch of CJSC AEM Technologies At the industry’s annual conference OJSC ZiO-Podolsk became ● ● into OJSC Atomenergomash “People of Rosatom”, OJSC a winner in the contest for building production chain was completed Atomenergomash was awarded of a reactor and other shell with signing a long-term lease “The most active employer for equipment for RITM-200 plant for contract. the best graduates”, “Creating a new generation universal nuclear career opportunities”, and icebreaker. ● OJSC Alstom Atomenergomash “The best practices to increase made a decision to deploy the involvement” prizes. CJSC AEM Technologies signed ● the turbine plant’s equipment contracts for making reactor production at the facilities of In 2013, according to research plant equipment and core melt ● the Volgodonsk branch using by the rating agency Expert RA, localization device for power units a French technology Arabelle. OJSC Atomenergomash was rated Nos. 1 and 2 at Belarusian NPP. In as A.hr — “High level of employer addition, the Volgodonsk branch ● OJSC Energomashspetsstal attractiveness”. will make eight steam generators for the first time ever casted for these power units. a unique ingot weighing 415 tons During an IAEA’s consulting ● to manufacture an elongated shell session for nuclear knowledge OJSC ZiO-Podolsk signed ● for the VVER-TOI reactor core. management, OJSC a contract for supply of a heat Atomenergomash presented recovery steam generator ● OJSC GSPI completed the design the Bridge between Generations for power unit No.12 at of the nuclear fuel fabrication plant project, which was acknowledged Verkhnetagilskaya TPP. (Kirovograd region, Ukraine). as one of the best practices recommended internationally. ● OJSC SNIIP won tenders for supply of equipment for modernization ● Employees of OJSC Afrikantov of power unit No. 1 at Kalinin OKBM were awarded the Russian NPP and construction of power Federation’s State Prizes: units Nos. 3 and 4 at Tianwan NPP The Director, General Designer, (China). D. Zverev, received the Honored Designer of the Russian Federation award; the Deputy Director for Production and Integrated Delivery, V. Rogozhin, and the turner/borer, F. Sitdikov, received the Honored Engineer of the Russian Federation award. AEM — 2013 Annual Report 5 Efficiency INNOvatiON AND COOPERatiON DevelOpment ● OJSC Atomenergomash became ● OJSC Atomenergomash represented the best in the fundamental by OJSC OKB Gidropress signed an efficiency rating for the Russian ● A. Dub, the Director of OJSC NPO agreement with Bauman Moscow companies operating in the TsNIITMASH, was awarded the State Technical University on real sector of economy in 2012, Russian Federation’s State Prize strategic partnership, providing for presented by the rating agency for creation of a new class of training of subject matter experts Interfax-ERA. high strength radiation-resistant and joint scientific research. materials used in production of ● A joint project of CJSC AEM ● OJSC Afrikantov OKBM got the 35th nuclear reactor shells with service Technologies and Petrozavodsk place in the list of the most life from 60 to 100 years. State University became one of the environmentally and energy winners in the contest announced efficient enterprises in 2012 made ● OJSC TsKBM designed an advanced by the Ministry of Education and by the rating agency Interfax-ERA. version of the main circulation pump unit (MCPU). Science of the Russian Federation. ● Following the implementation of ● The First ATOMEX-Region Forum for RPS projects, OJSC ZiO-Podolsk ● Two works performed by groups of authors from OJSC NPO TsNIITMASh nuclear industry suppliers organized produced a record number of by OJSC Atomenergomash took 9 steam generators per year. were awarded the 2013’s Prize of the Government of the Russian place in Volgodonsk. ● OJSC Energomashspetsstal became Federation in the field of science ● OJSC ZiO-Podolsk and OJSC ZIOMAR one of the first industrial enterprises and technology. EC agreed with NEM Energy b.v. of Ukraine with its energy (Netherlands) to extend cooperation management system audited ● Modernization of OJSC PZM was in the field of heat recovery steam according to the international completed with the establishment generator engineering for another standard ISO 50001:2011. of new steam generator (full cycle) 5 years. and MCP shell production for nuclear power plants. ● In OJSC NPO TsNIITMASh, a center of modern automated welding technologies started its operation. 6 2013 KEY INDicatORS 42% 25% Share of revenue Reduction of LTIFR from non-nuclear (injury frequency rate) 150 billion rubles sectors 73% Order Book Engagement level of the Division thousand rubles/ 20% 16% 2 122 people per year 23% Share of revenue Russian power engineering Labor productivity Reduction of energy market share from foreign consumption operations 46 billion rubles 21 940 people Combined revenue Headcount 166 million rubles 74 ea.