The Internal Audit Department

The purpose of the Internal Audit Department (IAD) is to assist the Board of Directors and Company management in attainment of their goals through a systematized and consistent approach to assessment of (and improvement to) the efficiency of risk management processes, control and corporate governance. The tasks of the IAD are:

• conducting an internal audit at the Company in order to improve the efficiency of the system of risk management, corporate governance, internal control, and operating efficiency of business processes in the Company;
• providing the Board of Directors, Management Board, President, Board Audit Committee, Risk Management Committee and Company managers with objective information about Company risks and about the efficiency of the corporate governance system, including the system of risk management and internal control;
• implementing decisions of the Board of Directors, Management Board, President, and Board Audit Committee as part of the exercise by the IAD of its functions.

The IAD has organizational and functional independence, and cooperates in its work with the Control and Audit Department and the external auditor in order to improve the efficiency of audit procedures. The Board Audit Committee ensures direct access for the Head of the IAD to the Committee Chairman, and vice-versa.

Main documents regulating the activity of the IAD are:

• the section of the Regulation on the Board Audit Committee regarding interaction of the Committee with Company subdivisions responsible for internal control and audit;
• the Regulation on the subdivision, which defines the goals and tasks of the IAD, its functions, rights, and duties, its interaction with other structural subdivisions, and limitations on the activity of the IAD.

All significant processes associated with Company business fall within the remit of the IAD.

The IAD carries out its functions on the basis of an annual plan, which is prepared on the basis of a risk-oriented approach, taking account of opinions expressed by Company management, and is approved at a meeting of the Board Audit Committee.

The most significant results of audits that have been carried out are reported at meetings of the Board Audit Committee in the course of the year. After the end of the calendar year the head of the IAD prepares a report for the Board Audit Committee on the results of the IAD’s activities during the year.

In accordance with its approved plan of work for the year the IAD carries out monitoring of execution of corrective measures, which were prepared by management based on the results of IAD audits.