Internal Audit

The division responsible for implementation of internal audit function in the Company is the Internal Audit Office.

Internal audit is functionally accountable to the Company’s Board of Directors, which means that the Board of Directors shall implement control and organization of internal audit division activity, including approval of internal audit activity plan, report on implementation of internal audit activity plan and internal audit division budget, approval of decisions on appointment, dismissal, and definition of remuneration to the head of internal audit division.

The purposes, principles of implementation, functions and powers of internal audit are defined in the Internal Audit Policy of PJSC Kubanenergo approved by the Decision of the Board of Directors (Minutes No. 196/2014 of September 12, 2014).

The following documents regulating internal audit function are approved by the Company:

  • Internal Audit Policy of PJSC Kubanenergo (approved by the Decision of the Board of Directors, Minutes No. 196/2014 of September 12, 2014);
  • Regulation on Internal Audit and Control Department (approved by the Audit Committee of the Board of Directors, Minutes No. 25/2015 of February 27, 2015, approved by the Director General of the Company on March 24, 2015);
  • Form of the report of internal audit division on implementation of the work plan and results of internal audit (approved by the Audit Committee of the Board of Directors, Minutes No. 29/2015 of April 29, 2015);
  • Instruction “Procedure for Preparation of Internal Audit Division Report on Implementation of the Work Plan and Results of Internal Audit” (approved by the Audit Committee of the Board of Directors, Minutes No. 29/2015 of April 29, 2015);
  • Instruction on Formation and Use of the Unifiied Violations and Deficiencies Classifier approved by Order of the Company No. 600 of July 20, 2015;
  • Regulation on Organizing Activities of the Internal Audit and Control Department of PJSC Kubanenergo approved by Order of the Company No. 511 of June 23, 2015.

Main objectives of internal audit are the following:

  • granting of independent and objective guarantees to the Board of Directors / Audit Committee of the Board of Directors and to executive bodies of the Company about the fact that the Company has adequate systems of internal control, risk management and corporate governance;
  • help to the Company’s management in creation of effective systems of internal control, risk management and corporate governance by providing consultations, recommendations, opinions and other practical help that is of advisory nature.
    In 2015, the number of employees carrying out internal audit function amounted to 5 persons.

In 2015, the internal auditor carried out 23 checks, including.

Control activities carried out by internal auditor in 2015

Control activities carried out by internal auditor in 2015



Following the results of the control activities carried out by internal audit in 2015, 87 corrective actions aimed at elimination and further prevention of violations and deficiencies detected during the audit are subject to be done.

All 65 corrective actions which term of implementation matured in the reporting year, are executed by the Company’s management.

Corrective actions

Corrective actions

Implementation of the corrective actions is controlled by the Audit Committee of the Board of Directors by analyzing the Company’s management reports on implementation of corrective action plans in order to eliminate the deficiencies detected by the Company’s Revision Commission, the internal auditor of the Company, and external control bodies.