The Audit Commission is a permanent internal control body of JSC FPC, which is responsible for regular control over financial and business activities of the Company, its branches, officers of JSC FPC’s management bodies and administrative units of JSC FPC to ensure compliance with the laws of the Russian Federation, JSC FPC’s Articles of Association and the Company’s internal regulations.
The Audit Commission acts in the best interests of the Company’s shareholders and is accountable to JSC FPC’s General Shareholders Meeting.
The Audit Commission is independent of officers of JSC FPC’s management bodies and administrative units of JSC FPC.
The Audit Commission is elected every year by JSC FPC’s annual General Shareholders Meeting in accordance with the Company’s Articles of Association and is composed of five members. JSC FPC employees are not elected to the Audit Commission of JSC FPC.
In June 2015, the annual General Shareholders Meeting of JSC FPC elected members of the Audit Commission as follows:
1. Anton Avramets, Head of Section at the Subsidiaries and Affiliates Management Department of JSC RZD. Positions as at the date of the election to JSC FPC’s Audit Commission.
2. Oleg Ivanov, Director for Internal Control and Audit at JSC RZD. Positions as at the date of the election to JSC FPC’s Audit Commission.
3. Natalia Lem, Head of the Accounting Department at the Accounting Service of JSC RZD.
4. Aleksandr Romanov, Deputy Head of the Corporate Finance Department at JSC RZD.
5. Olesya Chernysheva, Deputy Head of the IFRS Consolidated Statements Department at the Accounting Service of JSC RZD.
Incentives for members of the Audit Commission are established by the Regulations on Remuneration and Reimbursement for Members of the JSC FPC’s Audit Commission and imply payment of remuneration for participation in every audit of the financial and business activities of the Company as well as annual remuneration.
For every audit the participating member of the Audit Commission receives remuneration which equals three times the minimum wage at Joint-Stock Company Russian Railways.
Payment of annual remuneration to members of the Audit Commission is decided by the annual General Shareholders Meeting of JSC FPC based on a recommendation by JSC FPC’s Board of Directors. The amount of annual remuneration paid to members of JSC FPC’s Audit Commission may not exceed an amount equivalent to twenty times the minimum wage at JSC RZD for every completed audit.
Pursuant to decision of the annual General Shareholders Meeting, in 2015, members of JSC FPC’s Audit Commission were paid annual remuneration totalling RUB 426,745.
To audit and verify the Company’s annual financial accounts the General Shareholders Meeting of JSC FPC approves an Auditor on an annual basis.
In June 2015, the Annual General Shareholders Meeting approved OOO ERNST&YOUNG as the Company’s Auditor for 2015 to conduct the audits of JSC FPC’s financial statements prepared under the Russian Accounting Standards (RAS), the International Financial Reporting Standards (IFRS), and the Group’s IFRS consolidated financial statements.
FPC has set up the Internal Audit Centre, a separate structural unit which helps the Board of Directors and executive bodies to enhance the Company’s governance practice, improve its financial and business operations through a systemic and consistent approach to the analysis and assessment of the risk management and internal control systems and corporate governance as tools to provide reasonable assurance that the Company will achieve its goals.
The objectives of the Internal Audit Centre are as follows:
Under the Regulations on the Audit Committee of the Board of Directors of FPC, to ensure independence and objectivity of the internal audit function the Audit Committee reviews the Company’s internal audit policy and internal audit plan, existing restrictions on the powers or budget constraints of the internal audit function that are capable of adversely affecting the internal audit function, and evaluates the effectiveness of the internal audit function.
The Head of the Internal Audit Centre reports to the Audit Committee of FPC’s Board of Directors on internal audits in FPC.
The Head of the Internal Audit Centre is appointed by the Company’s General Director.
Vasily Novak is the current Head of the Internal Audit Centre.