Position of society: POSITION ABOUT INTERNAL CONTROL joint stock company "Uzkishlokelektrkurilish"

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«APPROVED»

decision of the general meeting of shareholders

JSC "Uzkishlokelektrkurilish"

dated June 15, 2019

protocol No. 1

 

 

 

 

 

 

 

 

 

 

 

 

 

POSITION

ABOUT INTERNAL CONTROL

joint stock company

"Uzkishlokelektrkurilish"

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GENERAL PROVISIONS

1. This Regulation on internal control (hereinafter referred to as the Regulation) of Uzkishlokelektrkurilish JSC (hereinafter referred to as the Company) was developed in accordance with the current legislation of the Republic of Uzbekistan, the charter of the Company, the Corporate Governance Code, the Corporate Governance Code, approved by the minutes of the meeting of the Commission to improve the efficiency of joint stock companies and improvement of the corporate governance system dated 31.12.2015. No. 9 and internal documents of the Company.

2. This Regulation defines the goals and objectives of the internal control system, principles of its functioning, as well as the bodies of the Company and persons responsible for internal control.

 

ОПРЕДЕЛЕНИЕ И ЦЕЛИ СИСТЕМЫ ВНУТРЕННЕГО КОНТРОЛЯ

3. Internal control is a continuously operating process built into the activities of the Company and aimed at improving the efficiency of risk management, control and corporate governance processes in order to obtain reasonable and sufficient confirmation in relation to the achievement of the Company's goals in the following areas:

- efficiency and productivity of activities, including the degree of operational efficiency, profit making and asset protection;

- reliability and reliability of financial statements;

- compliance with the legislation and legal norms that govern the activities of the Company.

4. The internal control system is a set of organizational structure, control measures, procedures and methods of internal control, regulated by internal documents, organized and implemented in the Company by the audit commission, internal audit service, supervisory board, executive body and other employees at all levels (hereinafter - subjects of internal control) and for all functions. The qualifications of members of the internal control bodies of the Company can be established in the Regulations on their activities.

5. Internal control procedures are a set of measures carried out by the Company's audit commission, the audit committee of the company's supervisory board, the company's supervisory board, the Company's executive body, as well as the Company's divisions authorized to exercise internal control (hereinafter referred to as the Company's divisions), and aimed at identifying violations of legislation and internal documents of the Company in the implementation of financial and economic activities, to assess the effectiveness of the achievement of the goals set by the Company, as well as the interaction of subjects of internal control with each other in the process of implementation of internal control procedures.

6. The main purpose of internal control is to ensure the protection of the rights and legitimate interests of all shareholders, including minority shareholders.

7. Internal control is designed to ensure in an operational mode:

safety of assets, economical and efficient use of the Company's resources;

compliance with the requirements of the current legislation and internal documents of the Company;

implementation of the company's development strategy for the medium and long term, the Company's business plans;

completeness and reliability of accounting documents, financial statements and management information of the Company;

identification, identification and analysis of risks at the time of their occurrence in the activities of the Company;

planning and managing risks in the Company's activities, including making timely and adequate decisions on risk management;

establishing and maintaining a positive reputation of the Company

in business and consumers;

the adequacy, transparency and objectivity of the payment of remuneration and compensation, including its size, to members of the executive body, the supervisory board and the audit commission.

PRINCIPLES OF FUNCTIONING OF THE INTERNAL CONTROL SYSTEM

8. The internal control system in the Company is based on the following principles:

uninterrupted operation - the constant and proper functioning of the internal control system allows the Company to timely identify any deviations from the norm and prevent their occurrence in the future;

accountability of all participants in the internal control system - the quality of performance of control functions by each person is controlled by another participant in the internal control system;

separation of duties - the Company strives to prevent duplication of control functions, and these functions should be distributed among employees in such a way that the same person does not combine functions related to the approval of transactions with certain assets,

taking into account operations, ensuring the safety of assets and conducting their inventory;

proper approval and approval of transactions - the Company seeks to establish a procedure for approval of all financial and business transactions by authorized persons within their respective powers;

ensuring the organizational isolation of the Company's division that carries out daily internal control and its functional accountability directly to the Supervisory Board through the Audit Committee;

responsibility of all subjects of internal control working in the Company for the proper performance of control functions;

implementation of internal control based on clear interaction of all divisions of the Company;

continuous development and improvement - the Company strives to provide conditions for flexible adjustment of the internal control system so that it can be adapted taking into account the need to solve new problems, expand and improve the system itself;

timeliness of transmission of messages on deviations - the Company has established the shortest possible time for the transfer of relevant information to persons authorized to make decisions on elimination of deviations;

determining the priority of the areas of the Company's activity in which control is being established - strategic directions covered by the internal control system are highlighted.

INTERNAL CONTROL SYSTEM COMPONENTS

9. The internal control system includes the following interrelated components:

the control environment, which includes the ethical values ​​and competence of the Company's employees, the management policy, the method of distribution of authority and responsibility by the management, the structure of the organization and staff development, as well as management and management by the supervisory board;

risk assessment - which is the identification and analysis of the relevant risks in the achievement of certain tasks, interconnected at different levels and internally consistent;

control activities, which summarize the policies and procedures that guarantee the proper execution of decisions of the Company's management, and include a number of different actions, such as: issuing approvals, sanctions, confirmations, conducting inspections, monitoring current activities, guaranteeing the safety of assets and separation of powers;

information support and information exchange activities aimed at the timely and effective identification of data, their registration and exchange, including, among other things, the creation of effective information exchange channels in order to form an understanding of the internal control and provision policies and procedures adopted in the Company by all subjects of internal control their execution. The company takes measures to protect against unauthorized access to information;

monitoring - a process that includes the functions of management and supervision, during which the quality of the system is assessed over time. An assessment of the internal control system is carried out to determine the likelihood of errors that affect the reliability of financial statements, to clarify the materiality of these errors and to determine the ability of the internal control system to ensure the fulfillment of the assigned tasks. To assess the efficiency of the internal control system in the Company by a decision of the general meeting of shareholders on the basis of the proposal of the Supervisory Board, an independent professional organization - a consultant may be involved.

BODIES AND PERSONS RESPONSIBLE FOR INTERNAL CONTROL

10. Internal control is carried out by the Audit Commission, the Audit Committee under the Supervisory Board, the Supervisory Board of the Company, the head of the executive body, the Internal Audit Service, as well as other employees of the Company at all levels, within their powers stipulated by the current legislation and internal local acts of the Company.

11. Functions, rights and obligations, responsibility, procedure for calculating compensations and paid remuneration of the divisions functioning in the Company are provided for by the internal documents of the Company. These documents, as well as other documents directly or indirectly affecting the issues of internal control, cannot contradict these Regulations.

12. In order to ensure the systemic nature of control over the financial and economic activities of the Company, the internal control procedures are carried out by the Internal Control Commission, the Internal Audit Service, the General Director, the Legal - Accounting Service, heads of departments and all employees of the Company on functional responsibilities who must carry out the internal control of the Company.

13. The functions of the Supervisory Board include:

determination of the direction of development and approval of certain operations and strategies of the internal control system;

annual report at the annual general meeting of shareholders of the Company on the results of the analysis and assessment of the reliability and efficiency of the internal control system based on data from regular reports of the head of the executive body of the Company, internal and external audits, the audit commission, information from other sources and own observations on all aspects of internal control, including: financial control, operational control, control over compliance with legislation, control of internal policies and procedures;

determination of the structure and composition of the Company's division responsible for internal control;

continuous improvement of internal control procedures.

14. The responsibility for organizing control over the reliability and completeness of financial statements, reliability and efficiency of the Company's internal control system rests with the Audit Committee of the Supervisory Board, the role, goals, objectives and powers of which are reflected in the Regulations on the Audit Committee of the Supervisory Board of the Company.

15. Responsibility for its functioning, in accordance with the policy in the field of internal control of the Company approved by the Supervisory Board, rests with the head of the executive body. The head of the executive body of the Company implements the procedures of the internal control system and ensures its effective functioning, promptly informing the Supervisory Board about all risks of the Company, significant shortcomings of the internal control system, as well as plans and results of measures to eliminate them.

16. Employees (including heads) of departments of any level within their competence are directly involved in the detailed development of strategies and procedures for the implementation of control.

Employees report on significant issues or risks arising from a specific transaction to the higher management of the Company.

17. Responsibility for exercising control over the financial and economic activities of the Company and its separate subdivisions is assigned to the permanent internal control body - the Audit Commission, whose role, goals, tasks, powers are reflected in the Regulations on the Audit Commission.

18. Responsibility for the implementation of regular control over the implementation of internal control procedures, namely, over the compliance of the performed financial and business operations of the Company with the legislation of the Republic of Uzbekistan and the Charter of the Company as a whole, its separate divisions, as well as over the completeness and reliability of accounting and financial reporting lies with the internal audit, role, goals, tasks, powers of which are reflected in the Regulation on the Internal Audit Service.

The Regulation on the Internal Audit Service is approved by the Supervisory Board of the Company.

19. The Internal Audit Service of the Company reports to the Committee of the Supervisory Board for Audit on the results of internal audit and internal control system. The Internal Audit Service of the Company is subordinate to the Audit Committee of the Supervisory Board.

20. The following persons are not entitled to hold positions in the internal audit service of the Company:

- persons who have an outstanding conviction for crimes in the sphere of economics or for crimes against order;

- persons who are the head or members of the executive body of the Company;

Other requirements for persons who are part of the internal audit service may be established by the audit committee of the supervisory board.

21. The proper functioning of the internal control system also depends on the professionalism of the staff. The Company strives to ensure that the system of selection, recruitment, training, training and promotion of employees ensures their high qualifications and compliance with high ethical standards.

INTERNAL CONTROL PROCEDURES AND METHODS

22. The Company's internal control procedures include:

determination of interrelated and consistent goals and objectives at various levels of the Company management;

identification and analysis of potential and existing operational, financial, strategic and other risks that may hinder the achievement of the goals of the Company;

assessment of the essential components of internal control;

assessment of the effectiveness of the internal control system of business processes;

determination of criteria and assessment of the effectiveness of the work of structural divisions, officials and other employees of the Company;

consideration of financial and other information in comparison with comparable information for previous periods or with expected results of operations;

use of adequate methods of recording events, operations and transactions;

checking the safety of assets;

proper documentation of internal control procedures;

regular assessments of the quality of the internal control system;

communicating to all employees of the Company their duties in the field of internal control

distribution of key responsibilities between the employees of the Company (including responsibilities for approving and approving operations, accounting for operations, issuing, storing and receiving resources, analyzing and verifying operations);

approval and implementation of operations only by those persons who are endowed with the appropriate powers;

other procedures necessary to achieve the goals of internal control.

23. When carrying out internal control procedures, methods of inspection, observation, confirmation, recalculation, as well as other methods necessary for the implementation of internal control procedures are used.

FINAL PROVISIONS

24. This Regulation, as well as amendments and additions to it, are approved by the decision of the general meeting of shareholders.

25. Additions and changes to these Regulations are made at the suggestion of the members of the Supervisory Board of the Company, the external auditor of the Company, the Audit Commission of the Company, the Internal Audit Service of the Company, the head of the executive body of the Company.

 

26. If, as a result of changes in the legislation and regulations of the Republic of Uzbekistan, individual articles of this Regulation conflict with them, these articles become invalid, and until the amendments are made to the Regulation, the Company is guided by the legislation and regulations of the Republic of Uzbekistan. In this case, the invalidity of any part of this provision does not entail the invalidity of the entire provision as a whole.