Risks and internal control management

Risks and internal control management

Risks and internal control management is an integral part of Kazakhtelecom JSC activity and play an important role in realization of strategic goals.

Mission of Corporate system for risks and internal control management in the company is included in building complex integrated system, which provides to shareholders reliable guarantee for achievement of results by company’s management, secures company’s managerial authorities with modern information on threats and resources. Operative and actual information on risks is necessary for decision making and effective resources distribution by priority directions for securing risks level and proper reaction to deviation from planned indices.

Group of companies of Kazakhtelecom JSC strives to make affiliated companies’ activity and our activity to follow international standards in sphere of risks and internal control management. We follow the experience of successful companies and implement modern instruments, following the world practice.

For protection of assets cost of the Group and effective reaction to the risks, respective methodological and normative documents are formed, proper renewal with changes in internal and outer environment is secured.

Organizational structure of Kazakhtelecom JSC is built in such way that risks and internal control management process of the company would involve all organizational levels– from Board of directors to structural sub-division employees.

Risks management

Support of risks management system allows company managing and distributing resources by priority directions. This work allows securing safe level of risks indices and receives necessary feedback from investments at expense of operative identification, evaluation, management and monitoring of risks.

Both internal experts of Kazakhtelecom JSC and leading world risks management consultants are attracted to analysis and control of risks. Committee for risks management was established in the company, which is an authority at the Board, taking decision on key risks management. Strategic risks management issues of the company are bound to Auditing committee at Board of directors.

Necessity of implementing advanced experience is conditioned that in terms of dynamically developing market of infocommunication services and the sector is necessary also quick and effective implementation of perspective technologies, and this, in its turn, also connected with some risks.

Thereby, in its practice of risks management Kazakhtelecom JSC follows not only world standards of risks management and best practices of risks management of leading telecommunication companies, but considers specific of various trends of Kazakhtelecom JSC activity. Our company exchanges experience with leading telecommunication companies that apply on practice advanced risk management standards, for instance, group of ISO 31000 standards and follows proactive risks management concepts. Within corporate system of risks management by each of the risks an owner at level of member of the Board is defined and approved complex of measures, directed both to removal of risks realization reasons, and minimization of consequences in event of realization of risks events. By each of measures responsible persons were specified. Constant monitoring and control over measures is performed, report on results for the period will be heard at Board of directors.

Within improving and developing of KSUR and for overcoming weak and developing strong sides avoiding threats and using resources the following tasks are set before the company:

1. Improving of structure and form of internal statements for risks management.

2. Integration of risks managerial settlements and implementing of automated information system for internal control system procedures on base of SAP for monitoring.

3. Constant increase of risk managers’ qualification level and risk coordinators of structural sub-divisions of the company for further development of the culture of proactive risks management and responsible approach of employees to risks management process.

Internal control

Internal control of Kazakhtelecom JSC that corresponds to the scale and complexity of the business is built on basis of process approach. Mutual functioning of internal control systems and process management allow purposefully coordinating company’s activity, securing proper and effective control over operations, transparency, control balance and innovations, processes flexibility.

Acting System of internal control is directed to achievement of goals and securing control over activity efficiency, in particular:

- risks management, built pursuant to the standards of telecommunication industry and best world practices will allow securing safety of assets and raising authorized cost;

- integration of processes, internal control systems and risks management will allow raising efficiency and transparency of activity, react in time to threats and resources, operatively transforming productive and managerial processes to new calls;

- internal control system will allow to react in time to deviations from the plans, raise quality and management efficiency.

Aggregate of processes of internal control system is performed by the company due to world COSO IC standards. Support of effective internal control system is a priority task of directors, management and authorized personnel of the company that allows regularly analyzing processes and form total matrix of actual indices, which secure interaction of all business processes of the company by minimizing resources for material risks.

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