PJSC Mostotrest’s risk management policy ensures the timely detection of possible risks and focuses on risk reduction or mitigation to prevent or mitigate financial, material or business reputation losses.
The risk management process involves:
· Risk identification and assessment
∑ Elaboration of risk response measures and risk containment within admissible limits
∑ Continuous monitoring of risk factor dynamics
∑ Ensuring effectiveness of control measures and activities
The Board of Directorsí Audit Committee oversees the managementís performance with regard to its duty to control compliance with the adopted risk management rules and procedures. The Companyís Internal Control Service assists the Audit Committee in controlling and overseeing the system. The Internal Control Service carries out scheduled and random audits of risk management controls and procedures, and submits its reports to the Audit Committee.
Mostotrest Key Risk Management Methods
∑ Rejection of risky investments, unreliable partners and customers;
∑ Financial planning;
∑ Compliance with relevant standards;
∑ Coordination and coherence of management programs and processes supporting the Companyís development.
Primary areas of focus for the risk management function of the Company:
∑ Develop corporate culture of risk management
∑ Formation of sufficient and reliable information and analytical base for decision making
∑ Implementation of Project Management standards (EPCM) based on the international project management standards developed by the Project Management Institute (PMI), a leading worldwide project management association
∑ Planning of risk management, identification, analysis and evaluation of risks
∑ Investment activity risk management
∑ Provision of insurance for contractor works
∑ Permanent monitoring of competitors, their management approaches and competitive activity
∑ Risk forwarding to subcontractors (receipt of ‘mirrorí counter-guarantees from them)
∑ Enhancement of internal budgeting system
∑ Centralised purchasing system
Mostotrest uses an integrated IT system comprising software supplied by major Russian and foreign vendors. Different segments of Mostotrestís IT system are designed for management of Mostotrestís branches and subsidiaries and supervision of their financial reporting, developing its business and financial models, and monitoring its operating costs. One of the key components of Mostotrestís IS is Spider Project, a cutting-edge professional project management software that allows the Company to generate detailed calendar and resource models for upcoming projects, including assessments of deadlines, budgets and likely financial outcomes. Currently, the calendar and resource planning and reporting system covers the entire backlog of the Company.
The project management system enables Mostotrest to generate realistic production schedules, balance distribution of resources between in-house and subcontracted volumes, evaluate economic benefits of various production solutions, monitor the revenue and expenditure sides of the budget, and ultimately manage construction in the most effective way.