At a glance
Effectiveness and accountability underpin MegaFon's corporate governance principles. To ensure such effectiveness and accountability in our operations, the Company has a number of dedicated bodies and internal controls in place.
The Revision Commission is elected annually by the General Meeting of Shareholders to control MegaFon's financial and business operations. The Commission members cannot be members of the Board or other management bodies of the Company. The Revision Commission cannot have more than three members. The current members of the Revision Commission are: Pavel Kaplun (Chairman), Managing Director, Head of the Investment and Analytical Department at LLC USM Advisors; Yuri Zheimo, Director of Internal Audit at MegaFon; and Sami Haavisto, Senior Business Controller at TeliaSonera Eurasia.
More information on the powers of the Revision Commission is available on Company's website.
The Company's Internal Audit team reports administratively to the Chief Executive Officer, and functionally to the Audit Committee of the Board of Directors. Its operations are based on the Regulations on Internal Audit approved by the Board of Directors, as well as the International Standards for the Professional Practice of Internal Auditing. The Company's branches and MegaFon Retail have their own Internal Audit teams, which in turn report to the Internal Audit team at the Company's headquarters. The Internal Audit team provides assurance to, and advises on the Company's operational processes, including procurement, investment, construction, customer service, processes for external and internal reporting, IT and information security systems, as well as participaties in the development of various internal procedures.
The internal control system in place at MegaFon is a set of organisational measures, policies, instructions and procedures designed to ensure the preparation of reliable financial statements and compliance with statutory/regulatory requirements in this area. The effectiveness of this system is maintained through the following actions:
In 2015, as part of our efforts to further develop the Company's internal control system (ICS), MegaFon adopted a unified methodology for the performance of ICS activities designed to regulate the Company's actions and aimed at maintaining the effectiveness of internal controls.
MegaFon engages independent external auditors to audit the annual financial statements and review the quarterly financial statements. The Audit Committee makes an annual assessment of prospective auditors and makes recommendations to the General Meeting of Shareholders (in particular, recommendations regarding the auditors' fees). The selected independent auditors are then approved by the General Meeting of Shareholders.
The annual General Meeting of Shareholders held on 30 June 2015 approved JSC KPMG as the Company's external auditors.
The Company had not previously engaged JSC KPMG to audit its consolidated accounting statements. The total fees paid to JSC KPMG for its audit services provided during 2015 amounted to RUB 58m, and RUB 38m were paid for non-audit services. JSC KPMG was engaged to provide non-audit services due to its knowledge and understanding of MegaFon's business.