Internal Control and Audit
The Company’s system of internal control is intended to identify and assess risks, prepare recommendations to reduce their negative impact on the Company’s operations; and to introduce and improve internal control procedures. The heads of the Company’s departments and its subsidiaries are responsible for the implementation of internal control measures. An independent assessment of the efficiency of internal control procedures, and the development of recommendations on the improvement of the internal control system are key activities in this area.
The Board of Directors pays particular attention to the Company’s risk management system to ensure that the system is consistent with the global best practices and functions effectively.
Metalloinvest’s Board of Directors considers internal control and audit functions as an essential mechanism for the Company’s sustainable development. The Board of Directors relies on the experience of Galina Aglyamova, Chairwoman of the Audit Committee, and expertise of Vladimir Manuilov, Director of the Internal Audit Department of Metalloinvest Management Company, a holder of a CIA certificate (Certified Internal Auditor), to assist in the development of these functions.
The internal audit system covers all management levels and consists of the Audit Committee of the Board of Directors of Metalloinvest Management Company, the Internal Audit Department of Metalloinvest Management Company and the internal audit services of the managed companies.
The structure is described in the Regulations on the Internal Audit, and ensures independence and objectivity (an Independent Director should be appointed as the head of the Audit Committee under the Board of Directors). The internal audit services of the managed companies report to the Director of the Internal Audit Department, who, in turn, is accountable to the Audit Committee.
The corporate risk management system is always at the centre of everything that the Board of Directors does. Its efforts are aimed at ensuring that the system adheres to global best practices and functions effectively.
The executives of the managed companies and subsidiaries are responsible for the efficient risk control and management and oversight of corporate governance processes in the subordinated units. Internal audit services oversee the executives' activities in these areas. These processes are assessed to ensure:
- the efficiency of the Company’s financial activities and business operations;
- the protection of the Company’s assets from illegal actions by its employees or third parties;
- compliance of the Company’s activities with the internal regulations, le- gislation and the Company’s contractual obligations;
- accurate recording of the Company’s financial activities and business operations in management and financial reports.
The description of the identified significant risks and proposals to reduce their negative effects are presented at various levels of management in accordance with the approved reporting procedures.
On the basis of the evaluation results, the Company prepares recommendations to improve these processes and monitor the implementation of such recommendations. To define priorities for audits, the Company uses a riskbased approach.