The Internal Control System
Internal control in IDGC of Centre, JSC ensures the completion of such tasks as trust-building with investors and the protection of shareholders’ investments and of the assets of the Company; the provision of complete, reliable and authentic financial, accounting, statistical and management information and reporting; and compliance with the regulatory legal acts of the Russian Federation and resolutions of the management bodies of the Company and by-laws of the Company.
The Internal Control and Risk Management System is the element of the corporate governance system of the Company that ensures the adoption by the management bodies of the Company of reasonable decisions aiming to increase the shareholder value of the Company by means of increasing the level of responsibility and accountability of participants in the corporate governance system at all management levels of the Company.
Control over the financial and commercial activities of the Company is exercised in accordance with the Articles of Association, Corporate Governance Code of the Company, Regulations on the Internal Control Procedures and other by-laws of the Company.
Documents aiming to develop the Internal Control and Risk Management System of the Company are as follows:
The Risk Management Policy at IDGC of Centre, JSC determines basic principles of organisation, implementation and control of risk management processes in the Company. The Internal Control Policy specifies the principles of organisation of internal control, processes and procedures of internal control, and roles and responsibilities of participants in the internal control system.
Regulations on the Control Environment and Risks of Business Processes standardise the control environment of business processes and establish risks and control procedures built into the business processes.
The Internal Audit and Risk Management Department of IDGC of Centre, JSC, performs a direct valuation of the adequacy and effectiveness of internal control procedures, as well as systemic control over the observance of internal control procedures.
On a quarterly basis, the Audit Committee reviews data on how documents setting out improvements to and development of the Company’s Internal Control System are being put into practice.
In 2011, a pilot risk-oriented audit of the internal control system on the “Management of Logistics, Procurement and Material Support” business process was carried out. Work is being carried out on improvements based on the internal control system’s evaluation of that business process and the internal audit’s recommendations.
There are plans for internal audits of the internal control system of other key business processes in 2012, as well as the continuation of work on describing the control environment and risks of other business processes of the Company.