Arrangement of Risk Management and Internal Control Systems
Full description of the structure of the Issuer's bodies monitoring financial and economic
activities and their terms of reference pursuant to the Issuer's Charter (constituent documents) and
internal documents:
In accordance with Clause 20.1 of Article 20 of the Company's Charter, the General Meeting of
Shareholders shall elect the Internal Audit Commission of the Company annually in order to control
financial and economic activities of the Company.
The Internal Audit Commission of the Company is elected at the General Meeting of Shareholders
of the Company on an annual basis in the amount of five (5) persons. The Internal Audit Commission of
the Company takes decisions by a majority vote of its members.
The Internal Audit Commission of the Company acts within its terms of reference established by the
Federal Law "On Joint-Stock Companies", Charter of the Company, as well as Regulations "On the
Internal Audit Commission of the Company," approved by the decision of the Management Board of JSC
RAO UES of Russia, acting as the General Meeting of Shareholders of the Company (Minutes № 15 dated
July 29, 2016)
The Company's Internal Audit Commission shall be empowered to:
1) Confirm the reliability of information contained in the annual report, balance sheet, and the
income statement of the Company;
2) Analyze the financial condition of the Company, identify existing reserves for improving the
financial condition of the Company, and develop recommendations for the management entities of the
Company;
3) Organize and conduct audits of the financial and economic activities of the Company, in
particular:
- Audits of financial, accounting, payment-and-settlement and other documents of the Company
related to its financial and economic activities in respect of its compliance with the laws of the Russian
Federation, Charter and internal documents of the Company;
- Control over the preservation and use of fixed assets;
- Control over compliance with the established procedure for charging insolvent debtors' liabilities to
the losses of the Company;
- Control over the Company's expenditures in accordance with the approved financial documents of
the Company;
- Control over formation and use of the reserve fund and other specialized funds of the Company;
- Checking if dividends on the Company's shares, interest on bonds, and return on other securities
are correctly and timely calculated and paid;
- Checking if earlier prescriptions to remedy violations or defects revealed by previous audits have
been satisfied;
- Other actions (measures) related to the audits of financial and economic activities of the Company.
In accordance with Clause 20.9. of Article 20 of the Company's Charter, the auditor shall audit the
Company's financial and economic activities in accordance with the legislation of the Russian Federation
and pursuant to an agreement entered into with it.
The General Meeting of Shareholders shall approve the Company's auditor with no financial interest
in the Company or its shareholders on an annual basis. The remuneration for the auditor's services shall be
determined by the Company's Board of Directors.
Information on the auditor of PJSC RusHydro is given in Clause 1.3 of the Quarterly Report.
In accordance with Article 16 of the PJSC RusHydro Charter, committees of the Board of Directors
are formed under the decision of the Board of Directors and created in order to examine issues within the
terms of reference of the Board of Directors or examined by the Board of Directors in order to control
activity of executive bodies of the Company, and to develop necessary recommendations for the Board of
Directors and executive bodies of the Company.
Information on arrangement of risk management and internal control systems in relation to
financial and economic activities of the Issuer, including:
Information on the Audit Committee of the Board of Directors (Supervisory Board) of the
Issuer, its functions, personal and numerical composition:
Audit Committee of the Company's Board of Directors elected by Company's Board of Directors on
10.08.2016, (Minutes No. 240) consists of 3 members in the Audit Committee under the Company's Board
of Directors:
Sergey Nikolaevich Ivanov (Chairman)
Maksim Sergeeevych Bystrov
Vyacheslav Viktorovych Pyvovarov
The Audit Committee acts on the basis of the Regulations on the Audit Committee under the Board
of Directors (approved by the Board of Directors of PJSC RusHydro on 23.06.2016, Minutes №239).
The purpose of the Audit Committee is to promote the effective implementation of the functions of
the Board of Directors particularly concerning control of financial and economic activities of the
Company.
The competence of the Audit Committee includes: control (ensuring completeness, accuracy and
truthfulness) of Company’s financial statements; of system operation of internal control, risk management
and corporate management; ensuring of the independence and objectivity of the internal audit function;
monitoring of system operation of notification system on potential cases of unethical practices of
employees of the Company (including the dishonest use of insider or confidential information) and third
parties, as well as control over the implementation of measures taken by the Company in the framework of
such a system.
Information on availability of separate structural subdivision(s) for risk management and
internal control (other body (structural subdivision) different from the Internal Audit Commission
(Internal Auditor) performing internal control over financial and business activity of the Issuer), its
tasks and functions, information on availability at the Issuer of separate structural subdivision
(service) of internal audit, its tasks and functions:
The Company operates the Department of control and risk management.
The Department is a structural subdivision of the Company subordinate to the Company’s Chairman
of the Management Board—CEO.
The main tasks and functions of the Department concerning internal audit are as follows:
- the organization of an effective enterprise risk management, internal controls, anti-corruption
system in the Company;
- Development and monitoring of the execution of plans and programs for improving corporate risk
management and internal control of the Company and the companies with his participation (indirect
participation) (hereinafter - S&A).
- Interaction with the territorial bodies of the Russian Federation, the executive, the Accounts
Chamber of the Russian Federation, the Company's Audit Commission and other supervisory authorities
on internal control, as well as in the course of their audit of the Company and S&A;
- Control over the disclosure of information on Company and S&A;
Information on the Issuer's separate structural unit (service) internal audit, its tasks and
functions:
The Internal Audit Service operates in The Company. Service is a structural division of the
Company’s Head of the Internal Audit Service functionally subordinated to the Audit Committee of the
Board of Directors, administrative – Chairman of the Board – General Director of the Company.
The tasks and functions of the Internal Audit Service are:
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