Audit Commission
The Audit Commission is a permanent body, which is elected annually by the General Meeting of Shareholders and is responsible for exercising control over the Company’s financial and business operations, its governing bodies and structural units.
In its operations, the Audit Commission is governed by the Federal Grid’s Articles of Association and the Regulations on the Audit Commission a revised version of which was approved by the Annual General Meeting of Shareholders on 26 June 2015 (Minutes No. 16 dated 30 June 2015).
The main functions of the Audit Commission are as follows:
- To confirm the reliability of data contained in the Company’s annual report, accounting balance sheet, and profit and loss statement
- To analyse the Company’s financial position, discover ways for improving thereof, and develop recommendations to the governing bodies
- To organise and perform audits (revisions) of the Company’s financial and business operations
Members of the Audit Commission1
| elected by the Annual General Meeting of Shareholders on 26 June 2015 | |||
|---|---|---|---|
| Name | Year of birth | Education | Position |
| Nikolay Varlamov | 1974 | Higher | Deputy Director – Chief of Staff of PJSC ROSSETI |
| Marat Izmailov | 1983 | Higher | Head of Division of Department of the Russian Ministry of Energy |
| Marina Lelekova | 1961 | Higher | Head of the Control Department of PJSC ROSSETI |
| Denis Kant Mandal | 1987 | Higher | Deputy Head of Department of the Federal Agency for State Property Management (Rosimuschestvo) |
| Roman Litviniov | 1982 | Higher | Deputy Head of Division of PJSC Gazprom |
| acting from 27 June 2014 to 26 June 2015 | |||
| Name | Year of birth | Education | Position |
| Nikolay Varlamov | 1974 | Higher | Deputy General Director for Control and Audit of JSC ROSSETI |
| Anna Drokova | 1985 | Higher | Head of the Department of organisations of Fuel and Energy Sector of the Department of Property Relations and Privatisation of the Federal Agency of State Property Management |
| Marina Lelekova | 1961 | Higher | Head of the Control and Internal Audit Department of JSC ROSSETI |
| Vladimir Skobarev | 1952 | Higher | Director General of MOO RE STEPHENS RUS, Ltd |
| Alan Khadziev | 1981 | Higher | Director on Internal Audits of JSC Far East Energy Management Company |
Remuneration of the Audit Commission members
The amount of and the procedure for paying remuneration and compensation to members of the Audit Commission of Federal Grid Company are established by the Regulations on Remuneration and Compensation Payable to Members of Audit Commission of Federal Grid Company, a new version of which was approved by the General Meeting of Shareholders on 26 June 2015. The total remuneration paid to the members of the Federal Grid’s Audit Commission in 2015 amounted to RUB573.5 thousand.
Auditor
Federal Grid Company annually engages an external auditor to perform an independent and unbiased assessment of quality of its RAS and IFRS financial statements.
Auditor Selection Process
In accordance with the resolution of the Federal Grid’s Board of Directors (Minutes No. 245 dated 31 December 2014), a centralised procurement of services on performing a statutory audit of the Federal Grid’s statements for 2015–2017 was conducted by PJSC ROSSETI.
A candidate for the position of the Company’s auditor was proposed based on the results of the open single stage tender for performing a statutory audit of statements of subsidiaries and associates of PJSC ROSSETI for 2015–2017, conducted by PJSC ROSSETI under the Federal Law “On Contract System of Federal and Municipal Procurement of Goods, Works and Services” No. 44-FZ dated 05 April 2013.
On 26 June 2015, the General Meeting of Shareholders approved RSM RUS, LLC to conduct an independent audit of the Company’s accounting statements prepared under RAS, and the consolidated financial statements prepared under IFRS. RSM RUS, LLC is a full member of the leading international auditing and consulting organisation RSM International and a member of the self-regulatory organisation of auditors, Non-Profit Partnership Auditor Association Sodruzhestvo.
Auditor Remuneration
The amount of remuneration of the Auditor RSM RUS, LLC paid for the audit of the Company’s financial statements under RAS and IFRS for 2014 was RUB25,000 thousand including VAT.
The Company’s Board of Directors determined (Minutes No. 280 dated 24 August 2015) the amount of the Federal Grid’s Auditor’s remuneration for the audit of the Company’s acсounts for 2015 of RUB24,682,983 and 68 kopeks, including VAT.
During the reporting period, the external auditor did not provide any non-audit services to the Company.
Review of the External Auditor’s Effectiveness
At the meeting held in May 2015, the Audit Committee considered a matter on the assessment of the External Auditor’s performance with regard to the audit of the Company’s statements for 2014. Upon consideration of the matter, the Committee concluded that the services of RSM RUS, LLC were provided strictly in accordance with the terms and conditions of the contract and in compliance with the requirements of legislation of the Russian Federation.