PROVISION on Auditing Committee. of Open Joint Stock Company «Russian Insurance People s Company «ROSNO»

Transcription

1 Approved by Resolution of General shareholders meeting of Open Joint Stock Company Russian Insurance People s Company ROSNO «19» April 2005 Minutes 24 PROVISION on Auditing Committee of Open Joint Stock Company «Russian Insurance People s Company «ROSNO» Moscow

2 TABLE OF CONTENT Introduction.. 1. Subject of activity and legal status of Auditing Committee 2. Regulation for forming Auditing Committee 3. Terms of reference of Auditing Committee 4. Rights, obligations and responsibility of Auditing Committee 5. Regulation for Auditing committee to implement activity 6. Documents of Auditing committee 7. Final provisions 2

3 Introduction 1. This Provision on Auditing Committee of Open Joint Stock Company Russian Insurance People s Company «ROSNO» (hereinafter- Company) has been developed pursuant to the valid legislation and the Company Charter. 2. The Provision is an internal document of the Company. It establishes for the Auditing committee: legal status, subject of activity, terms of reference (together with the Company Charter), order for forming, rights and obligations of members, major objectives and functions, regulation for implementing activity (organization of work, order for carrying out revisions, interaction with management authorities of the Company and its shareholders, etc.). 1. Subject of activity and legal status of Auditing committee 1.1. The Company Auditing committee, being a continuing elected body, carries out a periodic monitoring of the Company financial and economic activity, activity implemented by the Company management authorities and officials (including separate divisions, services, branches and representative offices) through documentary and actual revisions of: - legality, economic justification and effectiveness (expediency) of financial and economic operations carried out by the Company within the period under revision; - completeness and correctness of reflection of economic and financial operations in the Company management documents; - compliance of legality, economic justification and effectiveness of actions taken by the Company management authorities and Heads of the Company divisions (services, branches, representative offices) with the legislation of the Russian Federation, Company Charter, approved plans, programs and other internal documents of the Company In its activity the Auditing committee is guided with the valid law, Company Charter, this Provision and other internal documents of the Company approved by the General shareholders meeting and related to the Auditing committee activity The Auditing committee is independent of officials of the Company management bodies, and it is accountable only to the General shareholders meeting (every year the Auditing committee renders a report to the General shareholders meeting). 3

4 The Auditing committee bears responsibility to the General shareholders meeting for plausibility and objectivity of results of revisions carried out Officials of the Company executive management bodies, Heads of structural and separate divisions (services, branches and representative offices) shall render assistance to the Auditing committee during revisions. The Company officials bear responsibility for hampering the revisions performed by the Auditing committee. 2. Regulation for forming the Auditing committee 2.1. The decision of the General shareholders meeting defines a quantitative membership of the Auditing committee, and it shall be not less than 3 individuals A personal membership of the Revision committee is elected during Annual General shareholders meeting pursuant to the procedure established by the Charter, for one year (for a period till the next Annual General meeting), by a majority vote out of the nominees proposed by shareholders holding 2 and more percents of voting shares. In the event that the shareholders did not propose any nominees to elect the Auditing committee, or if the number of proposed nominees is lower of the number of vacancies, the Company Board of directors is entitled at its discretion to include nominees to the list of nominees to elect the Auditing committee. Nominees proposed for the Auditing committee membership must confirm in writing their consent to be put to the vote Nominees who collected a majority vote of shareholders holding voting shares and taking part in a meeting are considered as individuals elected to the Auditing committee membership. Individuals elected to the Auditing committee membership may be re-elected more than once The members of the Company Auditing committee shall not at the same time be the members of the operating (newly elected) Board of directors of the Company, members of the Company returning board, occupy the post of a single executive authority of the Company (hereinafter- General director) and the post of the Chief accountant The information on nominees to the Company Auditing committee and information regarding availability or absence of nominees written consent shall be obligatorily submitted to shareholders during preparation for conducting the General shareholders meeting. 4

5 2.6. Shares held by the Company Board of directors members newly elected during Annual General meeting do not take part in voting during election of the Auditing committee members. Such shares are not taken into consideration either when the quorum on the issue is being determined. Extraordinary General shareholders meeting with the agenda including the issue on election of the Committee members cannot be conducted by absentee voting (polling) Upon decision taken by the Extraordinary General shareholders meeting the powers of any member (all members) of the Auditing committee may be ceased before the appointed time. The Extraordinary General shareholders meeting is entitled to solve the issue on early termination of the powers of all members of the Auditing committee only together with the issue on election of a new membership of the Auditing committee. In case of an early termination of the powers of a member of the Auditing committee or his retirement the powers of the rest of the members of the Auditing committee shall remain valid In the event that the Company Auditing committee or its particular members are elected during Extraordinary General shareholders meeting, the Auditing committee (its particular members) is considered elected for a period till the date of conducting the Company General shareholders meeting Upon decision taken by the members of the Auditing committee remuneration may be paid to the members of the Auditing committee, or costs incurred when they were executing their duties may be indemnified. The Board of directors submits amounts for such remuneration and compensations, and the General shareholders meeting by its decision approves these amounts The Chairman of the Auditing Commission organizes and manages the Auditing committee activity. The Chairman of the Auditing committee is elected out of the members of the Auditing committee during its first meeting, and he can be re-elected at any time by a majority vote of the total number of elected members of the Company Auditing committee. The Chairman bears a personal responsibility for arrangement of activity to be implemented by the Company Auditing committee The secretary of the committee is responsible for keeping records of the Auditing committee. 5

6 The secretary of the Company Auditing committee is elected out of the members of the Auditing committee during its first meeting, and he can be re-elected at any time by a majority vote of the total number of elected members of the Company Auditing committee. 3. Functions and tasks of Auditing committee 3.1. In accordance with its terms of reference defined on the basis of the valid law and Company Charter the Auditing committee: а) carries out a planned documentary revision of financial and economic activity of the Company based on activity results for a year, as well as nonscheduled documentary revisions upon its own initiative, decision (instruction) of the General shareholders meeting, Board of directors of the Company or upon request from a shareholder (shareholders) of the Company who holds in aggregate not less than 10 percents of voting shares of the Company; b) produces a conclusion based on results of revisions, and this conclusion contains (depending on the revision subject): - Information on facts of violation by the Company of : legal acts of the Russian Federation, procedure for keeping accounting and submitting financial accounting, approved internal documents of the Company, budgets, estimates, plans, programs, etc.; - Confirmation of plausibility of data containing in the Company annual report, annual bookkeeping accounting, financial accounts and other financial documents of the Company; - Evaluation of expediency and effectiveness of financial and economic operations accomplished by the Company; - Proposals for upgrading of systems of management of the Company financial and economic activity and internal monitoring; - Proposals to implement activities targeted on improving the Company financial and economic condition; c) makes demand to convene the Company Board of directors meeting; d) makes demand to convene the Company Extraordinary General shareholders meeting; e) arranges calling of Extraordinary General shareholders meeting in the events stipulated by Clause 55 Item 8 of the Federal law On joint stock companies ; f) elects the Chairman and secretary of the Company Auditing committee; g) elaborates and approves its operational plan for a period till a regular Annual General shareholders meeting; 6

7 h) determines on its own the procedure and form to carry out scheduled and nonscheduled revisions and prepare conclusion based on results of revisions; i) provides monitoring of progress in elimination of deficiencies and violations revealed during revisions, fulfilling recommendations given by the Auditing committee and plan of activities aimed at eliminating deficiencies and violations; j) takes decisions to carry out nonscheduled revisions upon initiative of the Company executive management authorities Issues to be considered during revisions are as follows: а) Company s compliance with legal acts of the Russian Federation while implementing financial and economic activity, bookkeeping accounting and submitting financial accounting; plausibility of data containing in reports and other financial documents of the Company; observance by officials of the Company economic interests; other issues, including: - Completeness and plausibility of reflection of the Company capital, property and transaction parameters in the Company documents; - observance by the Company officials of legislative regulations and economic interests of the Company while concluding contracts and transactions on behalf of the Company, particularly, transactions that should be preliminarily approved by the Company Board of directors (i.e. transactions attributed to the category of large-scale transactions and related party transactions ), as well as other transactions which conclusion requires a preliminary consent from the Board of directors, including transactions not provided for by the Company financial and economic plan (budget); - Execution of approved plans, budges, estimations, limits; - Preserving monetary funds and property, property and non-property rights, employing assets and other resources of the Company, revealing nonproductive losses and expenses; - Compliance of prices for the property acquired (sold) by the Company with the market prices; - Validity of the Company s payable, timeliness of fulfilling by the Company its liabilities (settlements with creditors, and payments to budget, and etc.); - Validity of the Company s receivable and timeliness to recover it; - Results of inventories of property, compliance of factual property with the data of initial bookkeeping accounting; - Justification to attribute costs (expenses) to the price of products (works, services); - Justification for penalty sanctions applied to the Company; 7

8 - Revision of correctness of forming of the Company financial results and their reflection on the account of profits and losses; - Revision of arrangement of documents circulation and storage of documents; b) evaluation of the Company financial condition, financial condition indicators, presence of signs of insolvency (bankruptcy); c) fulfilling decisions taken by the General shareholders meeting, Board of directors; d) evaluation of legality of decision taken by the Company Board of directors, their compliance with decisions taken by the General meeting and with the Company Charter; e) evaluation of compliance of decisions taken by the Company executive management authorities for the issues of financial and economic activity with decisions taken by the Board of directors, General meeting and Company Charter; f) elimination by the Company executive management authorities of deficiencies reflected in conclusions of previous revisions; g) other issues stipulated by specific peculiarities of the Company financial and economic activity the revisions for which will promote decrease in risks of the Company financial and economic activity and upgrade of its financial indicators. 4. Rights, obligations and responsibility of Auditing committee 4.1. The Company Auditing committees, while fulfilling its functions, is authorized to: 1) enter freely all the Company office premises, inspect storage locations, check an actual availability and safety of property, monetary funds and documents of the Company, get access to all documents of the Company (bookkeeping accounting, financial accounting, reports, references, estimates, etc.); 2) get from Heads of the Company management bodies, Heads of structural divisions (services, branches, representative offices), persons bearing material responsibility and from Company employees verbal and written explanations and references on the issues arisen in the course of revisions; 3) based on the power of attorney issued by the Company General director verify the settlements with debtors and creditors of this Company, get acquainted with the Company bank documents in their storage locations in banks (if necessary, and if possibility is available); 8

9 4) carry out monitoring of availability, completeness and plausibility of reflection of property and monetary funds in accounting and reporting documents, as well as monitoring of forming costs and profits, production volumes, works performed and services rendered; 5) give instructions to officials of the Company executive management bodies, Heads of structural divisions (services, branches, representative offices) and individuals bearing material responsibility to take immediate measures for violations revealed, provided the non-taking of such measures can result in loss of values, documents or promote further abuses; 6) be present during inventories and ask the Company executive management authorities to conduct nonscheduled general or partial inventory of the Company property and operations (fixed assets, inventory holdings, settlements with buyers and suppliers, securities, monetary funds and etc.); 7) get from officials of the Company management bodies, Heads of structural divisions and individuals bearing material responsibility the documents required for the Auditing committee for revision (documents produced in the course of activity implementation by the Company or associated with the activity of the Company and its management bodies), in particular, the following documents: - constitutive, registration, right-establishing, planned, reporting, bookkeeping accounting, financial accounting, administrative and other documents; - minutes of meetings of the Company management bodies (General meeting, Board of directors), business correspondence, reports from auditors, documents of the Company revisions by state and municipal financial and tax control bodies. Requested documents shall be submitted to the Committee not later than in 2 working days from the date of request; 8) submit to officials of the Company management bodies for their consideration the issue on applying disciplinary and material sanctions to the Company employees (including officials of the Company executive management bodies) in the event that the Auditing committee revealed facts of violation by the Company employees of the Company Charter, job descriptions, or other internal documents of the Company; 9) get schedule and agenda for planned meetings of the Board of directors and Company General meetings, ask the Company Board of directors for a permission for a representative of the Auditing committee to take part in meetings of the Board of directors and, upon invitation from the Chairman of the Board of directors, be present during meetings of the Company Board of directors; take part in meetings of the Company Board of directors with the right of advisory vote on issues associated with reports delivered by the Auditing committee; 9

10 10) give recommendations for improving the internal monitoring system, enhancing the Company activity effectiveness, reducing risks of financial and economic activity; 11) make suggestions to operational plans of the Company management bodies, ask to convene the Board of directors meeting and/or General shareholders meeting of the Company (pursuant to the procedure established by the law of the Russian Federation and Company Charter) in the event that the violations or operations revealed during revision have resulted or can result in an essential damage to the Company shareholders economic interests, and taking necessary decisions is within the terms of reference of the mentioned management bodies; 12) if necessary, upon agreement with the Company General director involve (on a contract basis, provided availability of necessary funds in the Committee budget and observance of confidentiality and nondisclosure of commercial classified information) in revisions experts who occupy no posts in the Company and who are experienced in relevant fields (law, economics, finances, bookkeeping accounting, management, economic security, construction and others), including specialized companies The Company Auditing committee shall: 1) provide revision of the Company financial and economic activity based on the Company activity results for a year, as well as at any time by the initiative of individuals designated in the Federal law On joint stock companies Company Charter and this Provision; 2) draw up a conclusion based on results of revision of the Company financial and economic activity; 3) objectively reflect in revision material all revealed facts of deficiencies, violations and abuses with indication of causes, parties at fault, extent of material damage sustained; 4) take care in its activity of observance of the procedure established in the Company for dealing with documents, nondisclosure of commercial classified information and observance of confidentiality of information which the Committee members got to know during revisions; 5) when revealing facts of abuse by officials and Heads of structural divisions of the Company of the powers they were vested with, squandering, cash shortage and illegal spending funds and material values make up an interim report and inform the Company General director of all those facts; 6) when revealing facts of financial or official violations which severely threaten to the Company economic interests put forward at the Auditing committee meeting the demand to convene the Board of directors meeting and/or Extraordinary General shareholders meeting of the Company, provided the decisions on these issues are within the terms of reference of the mentioned management bodies of the Company; 10

11 7) inform timely the Board of directors and report to the General shareholders meeting of the Company about results of scheduled and nonscheduled revisions of the Company financial and economic activity, revealed facts of inefficiency and /or invalidity of financial and economic operations, violations of the RF law, Company Charter and internal documents, other financial and official violations committed by the Company officials and Heads of structural divisions (services, branches, representative offices); 8) with respect to revisions carried out upon request of a shareholder (shareholders) of the Company who holds (hold) in the aggregate not less than 10% of the Company voting stock- inform about results of revision of such shareholders; 9) monitor the progress in elimination of deficiencies and violations revealed during previous revisions and in implementation of activities aimed at eliminating these deficiencies and violations The Auditing committee members bear responsibility for non-conscientious fulfillment of obligations imposed on them. A member of the Auditing committee, upon request from a shareholder (shareholders) who holds (hold) in the aggregate not less than 10% of the Company voting stock and who voted for election of this member, shall provide such shareholders with a report regarding his operation. 5. Regulation for Auditing committee to operate 5.1. The Chairman of the Company Auditing committee: 1) plans operation for the Company Auditing committee; 2) convenes meetings and presides at them, resolves issues linked to preparation for and conducting a meeting of the Company Auditing committee, approves agenda of meetings of the Company Auditing committee; 3) arranges current activity to be implemented by the Company Auditing committee, including procedure for carrying out revisions, issues of revisions and spread of these issues among the Committee members; 4) представляет Ревизионную комиссию на Общем собрании акционеров Общества и заседаниях Совета директоров Общества; 5) signs minutes of the Auditing committee meeting and other documents issuing on behalf of the Company Auditing committee; 6) fulfills other functions required for the Auditing committee to arrange monitoring of the Company financial and economic activity, management activity and reporting to shareholders The Secretary of the Company Auditing committee: 11

12 1) keeps minutes of meetings of the Auditing committee; 2) informs timely the Company management bodies of results of revisions carried out, submits copies of conclusions made by the Company Auditing committee; 3) executes and signs together with the Chairman of the Auditing committee minutes of meetings of the Company Auditing committee and extracts from them; 4) arranges record keeping, document circulation and storage of documents of the Company Auditing committee; 5) arranges preliminary (not later than 5 days before) notification of the Company Auditing committee members about conducing meetings of the Auditing committee, scheduled and nonscheduled revisions; 6) fulfills other functions required to provide the Auditing committee activity and record keeping Operational planning by the Company Auditing committee Scheduled revisions of the Company activity and meetings of the Auditing committee are held pursuant to the approved annual Operational Plan of the Auditing committee Operational plan of the Company Auditing committee is approved at the first organizational meeting of the Auditing committee Operational plan of the Company Auditing committee includes: 1) objects for revisions (types of the Company financial and economic activity, particular activity areas of the Company); 2) determination of form of revision for each object; 3) schedule of revisions of the Company activity, approximate time frames for revisions (annual, quarterly); 4) schedule of the Auditing committee meetings to resolve issues regarding preparation for and conducting revisions of the Company activity and approval of the conclusion on revision results; 5) approximate list of financial and(or) economic documentation required for revisions of objects designated in the plan; 6) distribution of obligations (issues) among the Committee members during revisions; 7) other issues linked to arrangement of meetings and revisions to be carried out by the Company Auditing committee Auditing committee meetings and taking decisions The Auditing committee implements its activity based on collective nature- Auditing committee takes all decisions during its meetings by a majority vote of the members present at the meeting. The Auditing committee meetings are convened by the Chairman or any other two members of the Committee. The secretary is obliged to notify all members of the Committee of the next meeting, not later than 10 days prior to it. 12

13 Quorum is determined at meetings of the Committee. Quorum cannot be less that two thirds of the present members of the Committee list membership. Agenda items are voiced, Committee members reports are listened to, draft resolution (conclusion) is formulated, voting takes place, and results are summed up The Company Auditing committee meeting is considered legally qualified (it has quorum) if more than a half of elected members of the Company Auditing Committee take part in it. If there is no quorum, and if the absent members do not have good reasons for their absence, the Committee meeting is postponed for some period, but not longer than 10 days Voting on agenda items of the Committee meeting is made by a majority vote of the Company Committee members participating in the meeting. It is not allowed for a member of the Committee to transfer the vote to another individual, including other member of the Committee. When solving issues at the Committee meeting, each member of the Committee has one vote. In case of equality of votes, the Committee Chairman s vote is casting Meetings of the Auditing committee are conducted by voting by a show of hands (joint presence of the Committee members during discussion of and taking decisions on issues put to the vote) and by absentee voting (without joint presence, with voting by way of polling). The form to conduct meetings and date to conduct nonscheduled meetings are determined by the Chairman of the Committee. The Committee member absent from the meeting is entitled to give his opinion in writing on the issue under consideration, and this opinion will be taken into consideration when determining quorum of the meeting and summing up results of voting The first (organizational) meeting of the Auditing committee elected by the General shareholders meeting is held not later than in 15 days after the General shareholders meeting which elected a new membership of the Auditing committee Meetings of the Company Auditing committee are held within time limits specified by the Operational Plan of the Auditing committee, as well as any time prior to the beginning of a revision and for summing up results of that revision During the Company Auditing committee meeting conducted prior to the beginning of each revision the following issues are considered: 1) determination of object for revision; 2) procedure and time frame for carrying out the revision, and its volume; 3) determination of list of information and material required for revision, methods and sources to receive them; 4) determination of list of individuals to be involved for revision (for providing explanations, clarifications for particular issues); 5) appointment of date to conduct a meeting of the Auditing committee for summing up revision results; 13

14 6) appointment of participants of revision, distribution of issues of revision among them; 7) resolving other issues. The Committee meeting targeted on preparing for revision and conducting it may be held without a joint presence of the Committee members, by absentee voting (polling) During meeting of the Company Auditing committee held for summing up results of each revision the following issues are considered: 1) discussion of information received during revision and sources this information was received from; 2) summing up results of revision; 3) summary of conclusions and forming proposals on the basis of results of revision; 4) approval and signing the Auditing committee conclusion on results of revision; 5) identification and analysis of causes for violations revealed and discussion of possible options to eliminate them and avoid them in future; 6) taking decision regarding the address to the Company management bodies and Heads of structural divisions to eliminate violations revealed during revision; applying punitive measures towards individuals who allowed those violations; 7) other issues associated with summing up results of revision The request to convene an extraordinary general meeting is satisfied by two thirds of votes of the Committee list membership. The Chairman of the Auditing committee signs the request. The Auditing committee s request to convene an extraordinary general meeting is delivered to the Chairman of the Board of directors or Corporate secretary of the Company, and they put their signatures on receipt. The Auditing committee s request to convene an extraordinary general meeting shall contain: - wording of agenda items and decisions on them; - grounds for these agenda items; - proposals regarding the form to conduct a meeting The Committee meeting for approval of the Committee s conclusion on the Company annual report, bookkeeping balance, account of profits and losses (annual meeting) is held not later than in 150 days after completion of the Company fiscal year While preparing for the Committee meeting, the Company Auditing committee Chairman: 1) defines the date, time and venue for a meeting and form to hold it; 14

15 2) approves agenda of the meeting; 3) determines list of material and documents required for consideration of agenda items; 4) defines list of individuals to be invited to participate in the meeting (during joint presence); 5) solves other issues associated with preparation for the Committee meeting In the event that the information regarding violations of the RF legislation, Company Charter, other internal documents of the Company, and regarding facts of financial and official violations severely threatening to the Company shareholders economic interests is delivered to the Company Auditing committee, the Chairman of the Revision committee is obliged to convene a meeting of the Committee for taking decision on conducting a nonscheduled revision When the above violations have been revealed, a member of the Auditing committee is obliged to forward to the Committee Chairman a written application with description of nature of violations and persons at fault, not later than in 3 working days after the moment when they were revealed The secretary of the Auditing committee is keeping minutes at a meeting of the Auditing committee. In the event that the Committee members do not agree with the decision taken by the Committee, they set out in writing their special opinions, and these opinions are enclosed to the meeting minutes and brought to the notice of the Board of directors and General meeting. The minutes of the meeting of the Company Auditing committee are made up in two counterparts not later than in 3 working days after this meeting (summing up results of absentee voting) and signed by the Chairman and Secretary of the Company Auditing committee. The Company is obliged to store the minutes and submit them upon request from the Company shareholders Procedure to perform revisions: Scheduled revision of the Company financial and economic activity is performed pursuant to the approved annual Operational Plan of the Auditing committee Nonscheduled (extraordinary) revision of the Company financial and economic activity is performed based on the grounds mentioned in Item 3.1 of this Provision. Nonscheduled revision performed upon a shareholder s request, or based on the instruction received from the Board of directors or decision taken by the General shareholders meeting begins not later than in 30 days from the date of receiving a written request or decision. The time period for conducting a revision shall not exceed 90 working days. 15

16 Shareholders triggering a revision shall send a written request to the Auditing committee, and this request should contain: - names (name) of shareholders; - data on shares they hold (quantity, category, type); - reasoned grounds for such request. The request is signed by a shareholder or his authorized person. If the request has been signed by an authorized person, his power of attorney shall be enclosed. In the event that shareholders- legal entities trigger a revision, the signature of a representative of the legal entity acting pursuant to its Charter without power of attorney shall be certified with the stamp of this legal entity. If the request has been signed by a representative of the legal entity acting on its behalf with power of attorney, this power of attorney is enclosed to the request. Shareholders which ownership for shares is taken into account in depositary shall enclose to the request an extract from the Depositary account The initiators request to conduct a revision is forwarded to the Company s address to the name of the Chairman of the Auditing committee or delivered to the Company. The date to submit the request is fixed in accordance with the date the request has been delivered to the Company Within 5 (five) working dates from the date the request has been delivered to the Auditing committee the Auditing committee shall take decision on carrying out a revision of the Company financial and economic activity or give reasoned grounds for refusal to conduct the revision. In the event that the Auditing committee takes decision to conduct a revision, the Chairman of the Auditing committee is obliged to arrange this revision and begin to carry it out The Auditing committee may refuse to carry out a revision in the following events: - shareholders who made the request do not hold the required quantity of the voting stock; - the request does not contain relevant grounds to carry out a revision; - the revision has already been carried out, and the Auditing committee has approved the conclusion; - the request does not correspond to the law and normative acts of the Russian Federation or the Company Charter s provisions. 16

17 The initiators to carry out a revision of the Company financial and economic activity are entitled at any time before the Auditing committee has taken decision to carry out the revision to withdraw their request with a written notice delivered to the Auditing committee Prior to the beginning of a revision the Chairman of the Auditing Committee notifies the Company General director of conduction of this revision Based on revision results the Auditing committee draws up an act and approves the Conclusion The conclusion by the Company Auditing committee is drawn up in three counterparts. A member of the Auditing committee who does not agree with the conclusion is entitled to prepare his special opinion which is attached to the Auditing committee conclusion, and it is its integral part. One counterpart of the conclusion remains in the Auditing committee files, the second one is submitted to the Company General director, and the third counterpart is submitted to the Board of directors After the Company General director has received the Conclusion, he is obliged to get acquainted with the revision material within 10 working days and in case of existence of reasoned objections in writing submit them to the Committee Chairman, having attached approving documents to them The Auditing committee Chairman is obliged to check (if necessary, together with secondary revision to settle disputes) justification of the objections (remarks, additions) and, in case of approving them, introduce corresponding corrections to the Report. In case of disagreements, the Company General director s objections (or Protocol of disagreements) are attached to the Conclusion If the revision was carried out upon request from the Company shareholder (s) holding in the aggregate not less than 10% of the Company voting stock, one more counterpart of the Conclusion on the revision results is prepared, and it is submitted to this shareholder (s) within 3 days after it has been approved. A shareholder (shareholders) who asked for a revision of the Company financial and economic activity is entitled to make the next request to carry out a revision not earlier than in 90 days after he submitted to the Auditing committee the first request out of the mentioned ones. 17

18 The Company is obliged to store acts and conclusions made by the Auditing committee and provide access to them upon the Company shareholders request The Company General director organizes preparation of the Plan of activities aimed at eliminating the revealed violations (deficiencies) with indication of time for elimination and persons responsible for elimination of violations. The Auditing committee renders methodological assistance for preparation of the Plan of activities and monitors its execution. 6. Documents of Auditing committee 6.1. The documents of the Auditing committee include: - minutes of meetings of Auditing committee; - acts of Auditing committee prepared based on revision results; - conclusions made by Auditing committee; - copies of requests for convocation of extraordinary general meeting The minutes contain: 1) date, time, venue and form for conducting a meeting (summing up results of voting); 2) list of Auditing committee members and persons present at a meeting (participating in polling); 3) information of meeting quorum; 4) issues included to agenda of a meeting; 5) major statements, reports delivered pursuant to agenda items (only for a meeting conducting in form of joint presence); 6) results of voting with indication of Committee members who expressed a special opinion; 7) decisions taken by Auditing committee The following is indicated in Auditing committee s acts drawn up based on revision results: - place and date of revision; - Auditing committee members involved in revision; - appropriate grounds for carrying out a revision; - data on demands made by Auditing committee to provide information (documents and material) mentioned to the Company bodies, Heads of divisions and services, branches and representative offices and to officials; - data on refusals to provide information (documents and material); 18

19 - description of revealed violations of the legislation, normative legal acts, requirements of the Charter and internal documents of the Company; - data regarding written explanations from the Company General director, members of the Board of directors, officials and employees of the Company; - indication of persons who allowed violations of the legislation, normative legal acts, requirements of the Charter and internal documents of the Company; - references to regulations (their violation was revealed during revision) of the legislation, normative legal acts, Charter and internal documents of the Company As a rule, the Conclusion made by the Auditing committee contains three parts: introduction, analytics and a final part. Introduction includes: 1) name of the document, as a whole, - "Conclusion made by the Auditing Committee of Open Joint Stock Company Russian Insurance People s Company ROSNO ; 2) date and place where the conclusion has been made; 3) grounds for revision (decision taken by Auditing committee, General shareholders meeting, Board of directors, Company shareholders (shareholder), other); 4) objective of revision; 5) subject of revision; 6) list of normative-legal, internal and other documents and material used during revision. An analytical part shall contain an objective evaluation of the state of objects under revision. A final part of the Conclusion made by the Company Auditing committee includes reasoned conclusions by the Auditing committee regarding the confirmation of plausibility of data containing in reports and other financial documents of the Company. This part shall contain information on violations of RF legal acts, Charter and internal documents of the Company while implementing financial-economic activity of the Company, etc. This part shall also contain recommendations and proposals to eliminate causes and consequences of violations and deficiencies revealed in the Company activity. 19

20 In particular, the conclusions made by the Auditing committee indicate the following: - conclusions on observance or violation of the legislation, normative legal acts, Charter and internal documents of the Company; - evaluation of plausibility of data included to the Company annual reporting and containing in the Company annual bookkeeping accounting; - data on Auditing committee requests to convene meetings of the Board of directors and/or extraordinary general meeting; - description of violations in the law, normative legal acts, Charter, provisions, rules and instructions of the Company by the Company employees and officials; - data on involving in work of Auditing committee the experts who are experienced in particular fields of financial and economic activity and who do not occupy any posts in the Company The Auditing committee s documents are signed by its Chairman, and it is not necessary to put the Company s stamp on them The Auditing committee Chairman gives the originals of documents of the Auditing committee to the Company archive for storage, and a corresponding act is drawn up The Auditing committee Chairman stores the following documents: - requests to carry out a revision; - Auditing committee s refusals to carry out a revision; - Company officials written refusals to submit information The Company represented by the General director provides an access to the Auditing committee s documents. Upon a shareholder s request the Company is obliged to provide him in consideration of payment copies of documents of the Auditing committee. The Company determines the amount of payment, and this amount shall not exceed expenses for producing copies of documents and expenses related to sending documents by post. 7. Final provisions 7.1. The present Provision shall be approved by the General shareholders meeting by a majority vote of shareholders owning the Company voting stock and participating in the General shareholders meeting. 20

21 7.2. Decision to introduce additions and changes to the Provision shall be taken by the General shareholders meeting by a majority vote of shareholders owning the Company voting stock and participating in the General shareholders meeting The Company shareholders make proposals on introduction of changes and additions to the Provision or approval of a new version of the Provision in accordance with the procedure stipulated by the law or by the Charter for introducing proposals to the agenda of the Company General shareholders meeting If the RF law or the Company Charter undergoes changes, and particular clauses of this Provision contradict these changes, these clauses become invalid, and until these changes are introduced to the Provision the Provision shall be applied in the part not contradicting the valid legislation of the Russian Federation and the Company Charter. 21