Data on internal control system
Internal control system of the Company is based on cooperation and distribution of powers of its entities (bodies and individuals), executing the elaboration, approval, appliance and evaluation of the efficiency of the internal control procedures.
The internal control system established in the Company presupposes that the control functions accompany all the levels of the Company’s operation management and the level of business processes.
Until April, 2008 functions of internal control of the Issuer were performed by Controlling and Internal Audit Service established in August, 2004.
According to the contract No.407/30-1143/26 concluded between “Kubanenergo”, JSC and “IDGC of the South”, JSC “On Transfer of Powers of Sole Executive Body” dated September 14, 2007, from April, 2008 functions related to providing efficient functioning of internal control system in the Company shall be performed by Internal Check and Audit Department of “IDGC of the South”, JSC.
The internal control system of the Company includes the following procedures:
- executing control over drawing of and adherence to the budget approved by Board of Directors;
- carrying out comprehensive and auditor’s checks, monitoring and analysis of the results of checks of the Company’s branches' activity;
- carrying out activities for prevention of violations by providing all departments of the Company with information on the revealed material violations and drawbacks;
- exercising control over elimination of the revealed violations;
- revealing and analysis of risks of financial and economic activity of the Company;
- monitoring and elaboration of measures for minimization of risks of financial and economic activity;
- arrangement of accumulating, processing and transfer of operational, financial and other information on the Company's activity as well as establishment of effective channels and means of communication providing vertical and horizontal communications in the Company;
- determining employees` duties in the sphere of internal control and bringing this information to notice of the Company's employees;
- ensuring fulfillment of internal control procedures approved in the Company;
- appropriate documenting of internal control procedures;
- carrying out procedures for preventive control through the system of reconciliation of transactions terms, organizing tenders, auctions, commissions on the assets write-off, coordination of standards and other internal normative documents.
Board of Directors of “Kubanenergo”, JSC approved Regulations on Internal Control Procedures of “Kubanenergo”, JSC on February 12, 2009 (Minutes No.66/2009 dated February 12, 2009).
