Internal control and audit
The internal control system for the Company’s financial and operational activities includes:
1. Risk identification and assessment both on the level of the Holding and of the business units, lines of business and processes –directors and executives of the Holding’s companies are responsible;
2. Implementation and improvement of internal control procedures aimed at governance –directors and executives of the Holding’s companies are responsible;
3. Independent assessment of the effectiveness of internal control procedures and development of recommendations on the improvement of the internal control system – the Holding’s internal audit system is responsible.
The Holding’s internal audit system consists of:
4. The Finance, Budgeting and Audit Committee of the Board of Directors of the METALLOINVEST Management Company, LLC (hereinafter referred to as the Audit Committee of the Board of Directors), headed by an independent director;
5. The internal audit department of the METALLOINVEST Management Company;
6. The internal audit services of the companies controlled by the Holding.
To ensure the independence and objectivity of the internal audit function:
1. On functional matters, the internal audit department reports to the Board of Directors' audit committee and on administrative matters, the committee reports to the Chief Executive Officer of the METALLOINVEST Management Company, LLC;
2. The internal audit services of the companies controlled by the Holding Company report to the director of the internal audit department of the Management Company on functional questions and to the managing director of the relevant company on administrative issues.
The goals, objectives, responsibility and independence of the internal audit function are defined by the Regulations on internal audit in the Holding. The main task of the internal audit function is to provide an independent assessment of control processes, risk management and corporate governance within the Holding.
The said processes are assessed to ensure that:
1. The Holding’s financial and operational activities are accurately rendered in management and external financial reporting;
2. The Holding Company's financial and operational activities are effective;
3. The Holding’s assets are protected from illegal actions by Holding employees or third parties;
4. The Holding’s activities are in compliance with internal regulatory documents, legislation and contractual obligations.
Each year the annual internal audit plan, the budget required for its implementation and the number of employees in the Holding’s internal audit system are submitted to the Audit Committee of the Board of Director for consideration. The annual plan is based on an assessment of the risk of economic loss. Using the results of this assessment, the internal audit system develops recommendations to improve the said processes and monitors their implementation.
In addition, drawing on its knowledge and experience, the Holding’s internal audit system also provides consulting services to enterprises and structural units within the Holding.
