Risk management
Risk management is an integral part of the strategic planning and corporate governance of Transtelecom and the maintenance of financial stability. Transtelecom has incorporated the corporate risk management system (CRMS) into its essential operational and managerial procedures, and the CRMS Policy is applicable to all of the company's operations.
Transtelecom is guided by the following interrelated elements that correspond to the business life cycle in order to ensure the efficient operation of CRMS at all levels of its activities:
- management and culture;
- strategy and goal setting;
- operational efficiency;
- monitoring and implementation of changes;
- information, communication and reporting.
Components and principles of CRMS:
| Component | Principles |
| Control environment |
|
| Risk assessment |
|
| Control procedures |
|
| Information and communications |
|
| Monitoring |
|
The implementation and improvement of the CRMS is a prerequisite for achieving the strategic and operational objectives of Transtelecom and involves the establishment and development of the necessary infrastructure and culture. It covers the application of logical and systematic methods of identification, analysis, and evaluation, monitoring, control, and management of risks inherent in all activities, functions, or processes of Transtelecom in order to prevent losses and maximise benefits.
CRMS goals
The main goal of CRMS is to increase the effectiveness of threat and opportunity management, which should contribute to the process of increasing capitalization. CRMS also sets the following goals:
- creation and implementation of uniform, consistent methods for identifying, evaluating, and managing risks within the company; simplification of processes for sharing information on risks both vertically (management) and horizontally (exchange of experience);
- presenting Transtelecom with the opportunity to establish and track the effectiveness of its risk management practises using simple, comprehensible criteria;
- establishment of an information base for creating an asset accounting system, as well as determining the market value and equity valuation of the assets;
- prompt response to emerging risk events, tracking changes in the external and internal environment;
- organization of targeted risk management activities in order to reduce them to an acceptable level, or transfer them to third parties (insurance, hedging);
- systematization and continued accumulation of data regarding the company's risks, enhancing business manageability;
- as a result – increasing the capitalization of Transtelecom by increasing the efficiency and optimizing risk management.
CRMS Principles
The Board of Directors of Transtelecom oversees the effectiveness of risk management and internal control. the Audit Committee supports the Board of Directors of the company in matters pertaining to control over the accuracy and efficiency of the CRMS and internal control.
The Management Board of Transtelecom ensures the creation and maintenance of an effective risk management and internal control system.
To ensure horizontal communication and effective implementation of the Risk Register, Transtelecom has a Risk Committee, which is an advisory and advisory body to the Management Board of Transtelecom and develops proposals in terms of risk management. In performing their duties, Management Board and Board of Directors rely on the Three Lines of Defense model:
CRMS approaches
Effective risk management requires a continuous and cyclical process, which consists of the following five steps:
