QUARTERLY REPORT Quarter 2 of 2012 - Холдинг МРСК

term and consists of 16 staff members.
The Department is headed by Izumrud Aligadzhievna Alimuradova, Director for Internal Audit and Risk
Management.
The Internal Audit and Risk Management Department is composed of four units:
- Unit for Inspections and Expert Reviews;
- Unit for Risk Management and Internal Control;
- Unit for Internal Audits;
- Unit for Insider Information Control.
Key roles of the internal audit function (a function different from the internal audit commission (internal
auditor)); its subordination and interaction with the issuer’s executive management bodies and the issuer’s Board
of Directors (Supervisory Board):
The Internal Audit and Risk Management Department is a function of JSC IDGC Holding which reports
to the Director General of the Company in accordance with the Company’s organizational structure and the
functional duties specified in the Order of the Director General of the Company. The Internal Audit and Risk
Management Department reports to the Audit Committee of the Board of Directors of JSC IDGC Holding. The
Department submits audit reports at meetings of the Audit Committee on a regular basis.
The Department relies in its activities on the laws of the Russian Federation, the Articles of Association
of the Company, the resolutions of the General Meetings of Shareholders, the Board of Directors, the Audit
Committee, the orders and directives of the Company, the Department Regulations.
The Department Regulations set forth the following functions of the Department:
- carrying out internal audits and assessing the efficiency of internal control and risk management
systems of the Company and its subsidiaries and dependent companies (SDCs);
- organizing the implementation and improvement of internal control and risk management systems of
the Company and SDCs;
- organizing internal inspections and exercising control of the financial and economic activities of
SDCs;
- ensuring control of the timely identification of risks, their assessment and measures aimed at risk
management in relation to the financial and economic activities of the Company and SDCs;
- supervising compliance with internal control procedures applicable to the financial and economic
activities of the Company and SDCs and informing the Audit Committee of any discovered noncompliance and
corrective actions;
- coordinating the work of the audit committees of SDCs’ boards of directors;
- evaluating the operational efficiency of business processes of the Company and SDCs;
- exercising control of the Company’s activities’ compliance with legal requirements of the Russian
Federation, industry standards, and internal regulatory documents, including requirements applicable to
combating insider information misuse and market manipulation.
In addition, in accordance with the Instructions “On the Disclosure by Counterparties of Owner
Information” issued by the Government of the Russian Federation on December 28, 2011, the Internal Audit and
Risk Management Department organizes work on sending contract information to the Ministry of Energy of the
Russian Federation, the Federal Taxation Service of the Russian Federation, and the Federal Service for Fiscal
Monitoring of the Russian Federation every month not later than the 5th day of the month immediately following
the reporting month and organizes the performance of the functions listed below:
- consolidating, analyzing, and sending to federal executive authorities information provided by
counterparties about their contracts with the Company, including owner (and ultimate beneficiary) information;
- coordinating SDCs’ activities related to consolidating, analyzing, and sending to the Company
information provided by counterparties about their contracts with SDCs and subsidiary subsidiaries and
dependent companies, including owner (and ultimate beneficiary) information.
The Department is also involved in the business process “Corporate Administration of SDCs" by
formulating the final instructions issued to the Company’s representatives for voting on agenda items of
meetings of SDCs’ boards of directors within the competence of the Department.
The Company issued an order to set the Uniform Requirements Applicable to the Organizational and
Functional Composition of Internal Audit and Risk Management Divisions of Subsidiaries and Dependent
Companies, prepared on the basis of the functional composition of the Department.
The Company applies generalized requirements to the professional competencies of internal audit
personnel, with the major competencies including as follows:
- higher economic education or higher legal (technical) education conditional on professional retraining in
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