Internal Control System

The Board of Directors is responsible for establishing and operating the bank’s internal control system. Coordination of the day-to-day operation of the control system over the bank’s financial and economic activities is carried out by the Board of Directors’ Audit Committee.

The General Meeting of Shareholders elects the Audit Commission, which provides independent control over the bank’s financial and economic activities. Internal control system monitoring is carried out by the Internal Audit Service, which also supports the bank’s management to ensure its efficient functioning.

The Audit Commission

The annual General Meeting of Shareholders elects members of the bank’s Audit Commission for the period until the General Meeting of Shareholders’ elects a new Commission. The Audit Commission is composed of four people who cannot be members of the Board of Directors or members of the Management Board.

Inspection of the bank’s financial and economic activities is carried out by the Audit Commission based on the end-ofyear bank operation results, and at any other time by decision of the General Meeting of Shareholders, the Board of Directors, at the request of the bank’s shareholder (or shareholders), owning at least 10% of the voting shares of the bank, or at the initiative of the Audit Commission in accordance with the approved plan.

Members of the Audit Commission:

  • Dmitry Strashok, Chairman
  • Tamara Lapinskaya
  • Svetlana Markina
  • Dmitry Obryvalin

The Auditor

To carry out the annual audit and validation of the annual accounts in accordance with the Russian Accounting Standards and International Financial Reporting Standards, the bank engages an external auditor not connected to the bank or its shareholders by property interests.

The bank also ensures the auditor representatives’ participation in the annual General Meetings of Shareholders. Results of the bank’s audit report review, which is prepared by the Audit Committee, are included in the scope of materials for the annual General Meeting of Shareholders. The auditor is elected by the General Meeting of Shareholders upon the Board of Directors’ proposal. CJSC PricewaterhouseCoopers Audit (PwC) has been the bank’s auditor since the bank’s foundation in 1991.

The Internal Audit Service

The Internal Audit Service is accountable to the Board of Directors and has an independent status. Its operation is carried out without any interference on the part of executive bodies, departments or employees who are not Internal Audit Service employees. The bank’s management is not entitled to restrict in any way the scope and extent of internal audits. The Head of the Internal Audit Service reports to the Board of Directors on his/her own initiative on matters arising in the process of implementation, and makes suggestions for their solution as well as discloses this information to the Management Board and its Chairman. Candidates for the position of the Head of the Internal Audit Service are considered by the Audit Committee and approved by the Board of Directors.

Over 2014 the Internal Audit Service carried out comprehensive audits of 33 branches and five internal divisions of the bank’s Head Office. The audits revealed certain drawbacks and violations which, however, were not of a substantial nature and did not threaten the interests of creditors, depositors and shareholders, and had no impact on the bank’s financial stability or its image. Based on the audits’ results the Audit Service elaborated recommendations on how to eliminate these violations and change transaction procedures in the future. All the inspected internal divisions submitted reports on elimination of deficiencies and violations stated in the audit materials.

My Report

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