Internal Control System

• controls financial and economic activity of the Company and based on these results prepares offers / recommendations on ICS improvement;
• performs independent evaluation of reliability of data contained in the annual report and annual financial statements of the Company

• defines principles and approaches to ICS organization, including approval of Company internal documents defining organization and the strategy of ICS development and improvement, approves Company Internal Audit Policy;
• controls activity of Company executive bodies in the main (priority) directions;
• reviews report made by the Management Board on organization and functioning of Company ICS;
• annually reviews reports of an internal auditor on ICS efficiency;
• reviews results of external independent evaluation of ICS efficiency

• preliminary reviews internal documents of the Company before their approval by the Board of Directors, defining structure and strategy of development and improvement of Company ICS, Policy of Internal Control and future amendments thereto;
• preliminary, before consideration by the Board of Directors, reviews results of assessment of ICS efficiency according to internal auditor’s report on ICS efficiency and reports following results of making external independent assessment of ICS, prepares offers / recommendations on Company ICS improvement;
• supervises ICS in a part of consideration of issues related to supervision over reliability of Company bookkeeping (financial) reporting of the Company, over election of an external auditor and conduct of external audit, and over ensuring compliance with regulatory legal requirements, in a part of consideration of a report of the Management Board on ICS organization and functioning, and in a part of consideration of issues related to analysis and evaluation of compliance with the Policy of Internal Control

• supervise implementation of the established financial and operational indicators, compliance with applicable law, rules and procedures established by local regulatory acts, as well as reliability and timeliness of reporting formed by the Company

• secure creation and efficient functioning of ICS;
• are in charge of execution of decisions made by the Board of Directors in the sphere of ICS organization

• forms directions and plans of ICS development and improvement;
• prepares reports on Company financial and economic activity and on Company ICS organization and functioning;
• studies results of independent external assessment of ICS efficiency, forms measures on ICS development and improvement

• approves regulating and methodological documents of the Company on the issues of ICS organization and functioning, except for documents approval of which is included within the competence of Company Board of Directors;
• ensures fulfillment of Company action plans needed to solve its tasks;
• organizes bookkeeping and management accounting and preparation of bookkeeping (financial) and other reporting;
• submits for consideration of the Company Board of Directors reports on Company financial and economic activity and on Company ICS organization and functioning

• implement control procedures and/or develop recommendations on the improvement of control procedures, separate components (elements) of internal audit and internal audit system

• control over a situation with payments for rendered services on power transmission for troubled debtors

• control over execution of planned indicators of cancellation of accounts receivable/payable

• control over settlement of issues related to observation of norms of corporate ethics and settlement of conflicts of interests in regard to chairmen and members of Commissions of branches

• evaluation of economic justification of considered investment plans and target investment programs

• considers and approves purchases in accordance with the Uniform Purchase Standard;
• initiates holding of internal audit, official investigations and submits suggestions to Company Director General on holding Company employees liable for nonperformance or improper implementation of standards of purchase activity

Fulfill functions on design, documentation, implementation, monitoring and development of ICS in the functional spheres of Company activity responsibility for organization and coordination / implementation under which is vested on them by regulatory documents of the Company / provisions on structural subdivisions, including:

• Ensure implementation of internal audit principles
• Organize formation of efficient processes (directions of activity), including development and implementation inclusive of the newly identified risks or change in the existing control procedures
• Ensure regulation of processes (directions of activity) supervised
• Organize performance of control procedures
• Perform evaluation (monitoring) of control procedures performance
• Evaluate processes (directions of activity) supervised on the subject of a need for their optimization aimed at improvement of efficiency and correspondence to the changing conditions of the external and internal environment, organize development of offers on control procedures improvement
• Ensure elimination of drawbacks revealed in control procedures and processes (directions of activity)

• Execute control procedures
• Ensure timely informing of immediate managers about cases when performance of control procedures has become impossible for some reasons and/or a design of control procedures shall be changed due to alteration of internal and/or external conditions of Company functioning
• Submit offers on introduction of control procedures in corresponding activity areas for the review by immediate managers

• Develops and ensures implementation of main and methodological documents on creation and improvement of ICS
• Facilitates management in the process of control environment building, develops recommendations on description and implementation in the processes (directions of activity) of control procedures and assignment of responsibilities to officials
• Coordinates activity on maintenance and monitoring of target state of ICS
• Prepares information about ICS state for the interested parties
• Interacts with state control and revision bodies on the issues of internal control
• Audits quality management system

• Controls execution of commercial transactions in terms of economic security and degree of contractors’ reliability
• Fulfills control measures aimed at identification of corruption breaches of law by Company employees

• Ensures protection of Company rights and legal interests in courts, in relations with law enforcement, supervisory and controlling bodies and other organizations
• Carries out legal examination of draft contracts and local regulatory acts of the Company

• Exercises control over implementation of instructions contained in the Minutes of the Management Board, Company orders, minutes of the meetings and instructions of Company Director General, thus, minimizing risks related to untimely implementation of major instructions

• Exercises control over compliance of resolutions passed by executive authorities of Company management with the legislation of the Russian Federation, Company standards, Company organization-administrative documents and Company interests, thus, minimizing risks of noncompliance with requirements of legislation on shareholding and internal regulatory documents on Company management

• Control over compliance with requirements of rules and regulations of production security, laws and other regulatory and legal acts in the field of labor protection

• Following the results of internal audit, designs recommendations on improvement of control procedures, particular components (elements) of internal control and ICS;
• Exercises independent internal evaluation of ICS efficiency and issues recommendations for improvement of ICS efficiency and performance