QUARTERLY REPORT Quarter 2 of 2012 - Холдинг МРСК

participate in voting on the election of members of the Company’s Internal Audit Commission.
Pursuant to a decision adopted by the General Meeting of Shareholders, remuneration and/or
reimbursement for expenses associated with the performance of their duties may be paid to members of the
Company’s Internal Audit Commission during their office. The size of such remuneration and reimbursement
shall be determined by the General Meeting of Shareholders.
The reliability of the Company’s accounting statements is confirmed by the auditor (auditing
organization) under a contract with the auditor.
The Auditor of the Company shall be recommended to the General Meeting of Shareholders by the Board
of Directors of the Company according to the results of a competitive selection of the auditing organization for
the mandatory audit of the Company, which selection is conducted in accordance with the procedure prescribed
in the Board of Directors of the Company.
The General Meeting of Shareholders shall approve the Auditor (auditing organization) of the Company.
The size of the Auditor’s fee shall be defined by the Company’s Board of Directors.
Information about the Auditor of JSC IDGC Holding is contained in paragraph 1.3 of this Quarterly
Report.
The Audit Committee of the Board of Directors of JSC IDGC Holding was established in accordance
with the Regulations for the Board of Directors of JSC IDGC Holding for the purposes of rendering
assistance to the Board of Directors of the Company in the accomplishment of its objectives.
The goal of the Audit Committee is to ensure effective participation of the Board of Directors in
exercising control of the financial and economic activities of the Company.
The principal objective of the Audit Committee is to prepare and submit recommendations to the Board
of Directors concerning control over:
- the preparation process and procedures for financial (accounting) statements, including reviewing
financial (accounting) statements;
- the efficiency of the internal control and risk management systems;
- the selection of the independent external auditor and the evaluation of its performance;
- the activities of the Company’s internal control/audit function;
- the Company’s compliance with Russian laws, industry standards, and its internal regulatory
documents.
In order to provide members of the Company’s Board of Directors with objective and independent
information, the following powers are vested in the Audit Committee to ensure that it achieves its goals:
1. Review the Company’s financial (accounting) statements.
2. Oversee the functioning of the Company’s internal control and risk management systems.
3. Supervise the selection of an independent external auditor and the evaluation of its work.
4. Ensure compliance by the Company with the requirements set forth in laws of the Russian Federation,
industry-specific standards, and internal regulatory documents, including the requirements applicable to
preventing insider information misuse and market manipulation and the insider information control
requirements contained in Directive 2003/6/EC of the European Parliament and of the Council on insider
dealing and market manipulation (market abuse) (“EU Directive”) as incorporated into English law.
In order for the Audit Committee to exercise its powers, it has the following functions:
1) Interact with the division performing the Company’s internal control/audit functions.
2) Interact with the Company’s Internal Audit Commission.
3) Interact with the Company’s Auditor.
4) Interact with the Company’s Director General and officers.
5) Interact with audit committees, executive bodies, and divisions of subsidiaries and dependent companies.
The issuer established an internal audit function (a function different from the internal audit
commission (internal auditor) and responsible for the internal control of the issuer’s financial and economic
activities).
Information concerning the existence of the internal audit function (a function different from the internal
audit commission (internal auditor) and responsible for the internal control of the issuer’s financial and economic
activities), the number of its employees, and the term of their appointment:
The internal audit functions are imposed by the Company on the Internal Audit and Risk Management
Department (hereinafter, the “Department”), which is part of the organizational structure of JSC IDGC Holding.
The Internal Audit and Risk Management Department was established on July 1, 2008, for an indefinite
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