Investor Presentaiton
En+
GROUP
En+ Group Annual Report 2021
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
APPENDICES
STRATEGIC REPORT
INTERNAL CONTROL
AND RISK MANAGEMENT
A comprehensive framework of internal controls is in place across
the Group, designed to protect the Group's assets, improve business
processes, and ensure compliance of the Group's operating companies
with applicable laws and regulations.
Audit and Risk Committee
The Board of Directors has responsibility
for the efficiency and effectiveness of the
financial and economic activities of the
Group and is responsible for maintaining
and reviewing the effectiveness of
the Company's systems of internal
control and risk management.
The Board has established an Audit
and Risk Committee (the "A&RC"),
which assists the Board in its review of
the financial statements of the Group;
ensures that systems of internal control
and risk management are in place and
operating effectively; oversees the
internal and external audit processes
and performs such other activities
as are requested by the Board.
The Company's structure includes the
Internal Audit Directorate (the "IAD"),
which is independent of management,
and which reports to the A&RC and the
Board. The IAD assists the A&RC and
the Board in overseeing the financial
and economic activities of the Group
and the related systems of internal
control and risk management.
The IAD reports regularly to the A&RC
concerning the results of both scheduled
and unscheduled audits; any deficiencies
identified in the system of internal
control; recommendations and corrective
measures to be taken by management;
identified risks and related financial
exposures and mitigation measures.
Internal control system (ICS)
The IAD seeks to provide assurance
to management and shareholders
of the Company that the Group's
assets are safeguarded and profits are
maximised; that the Company complies
with the requirements of applicable
laws and regulations; and that proper
accounting records are maintained.
The IAD seeks to ensure that an
effective system of internal control
is in place and operating effectively
across the Group, including:
1. Operational and financial control
Conducting audits of the efficiency
•
•
and effectiveness of business
processes across the operating
companies in order to identify
and minimise risks associated with
ineffective management, and to
enhance control of operational
and technological processes,
commercial activities, personnel
management, implementation of
investment projects, financing, etc.
Conducting audits to prevent and
identify fraudulent activities by
management, employees and third-
party contractors (such as fraud,
misappropriation, misuse of the Group's
assets, sub-optimal use of materials and
time), and mitigate the effects thereof
Exercising control over commercial
activities (including the selection
of suppliers of raw materials, other
materials and services, including
construction and/or installation
works) in the interests of effective
cost management for the Group
(including by participating in the
Tenders Committee and overseeing
the work of Tenders Committee across
the Group's operating companies)
The operational and financial control
objectives are achieved through
comprehensive audits and controls
inspections conducted by the IAD
in accordance with the annual audit
plan (approved by the A&RC) using
a risk-based approach. In addition,
the IAD conducts unscheduled audits
as requested by management and
provides an independent opinion in the
fields and areas requiring immediate
decision-making by management. The
IAD uses audit findings to develop
corrective actions aimed at minimising
or eliminating any failures or weaknesses
identified by audits, with a view to
preventing such breaches in the future.
The IAD regularly updates management
and the A&RC on its audit and review
findings, and on the status and
implementation of the recommendations
it has provided to management.
2. Compliance control
Auditing compliance with the
requirements of creditor banks, listing
rules and other financial regulators,
including with respect to sanctions, etc.
Auditing compliance with the internal
regulations and policies of the Group,
designed to ensure compliance with
the requirements of the supervisory
authorities, financial institutions and
other counterparties of the Company
3. Regulation of business processes
• Development of the Group's system
of internal control and mitigation of
risks of common process violations/
losses and particular aspects of
the Group's activities (system of
authority delegation; control over
conflicts of interest, related-party
transactions, compliance procedures;
control over business travel, etc.).
Development of uniform standards
of commercial activities (e.g.
Generalised Regulations on Purchases
in accordance with applicable law
and regulations; regulations on sales
of illiquid assets of the Company)
4. Development and implementation
of projects to improve ICS
Identifying cost management
opportunities in commercial activities
(e.g. sales of illiquid assets - regulations
are reviewed and tools and measures
introduced aimed at improving the
Company's commercial services
efficiency, including the reduction in
cost of goods, works, and services)
Providing recommendations and
development of terms of reference for
automation of separate modules of the
e-document flow, general accounting
and management accounting systems
Improvement of the corporate
system of internal control
The IAD achieved substantial results in
2021 in controlling and improving the ICS.
1. Targets for control over the Group's
commercial activities and development
of measures to increase the
efficiency of commercial activities
Reduction of costs for the purchase of
services, construction and assembly
works and key commodities and
materials was achieved through
improved commercial conditions,
broadened competitive environment
and negotiations as part of the
control of procurement activities
Goals regarding standardised control
over commodities and turnover
of goods and materials in the
Power segment's companies were
achieved; specialised automated
forms for inventory management
were developed and implemented
The target for the sale of the Group's
illiquid assets was exceeded by 100%
General Guidelines for forming initial
minimum prices for purchasing
in the Group's Power segment
Third update of the General
Procurement Regulations for all
enterprises of the Company
Second update of the General
Regulations on Illiquid and Non-
core Assets of the Company
2. Development and adoption of a
framework of regulations for the ICS
The contracting regulations of the
Group companies have been updated
The automated work travel
documentation execution process
has been improved to comply
with the respective regulations
Development of the Group's
regulations portal has been launched
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