Corporate governance

One of the key focus points for Ilim Group's efforts is introduction of the international corporate governance principles.

Ilim Group is committed to ensuring excellent financial results for its shareholders and providing its employees, business partners and communities of the regions where the Company is operating with an opportunity to prosper.

Board of Directors

Ilim Group is managed by an international Board of Directors consisting of Russian and Western experts with unique experience in the industry. All members of the Board are duly renowned in the industry and in the international business community.

The expertise of the members of the Board of Directors of Ilim Group is attested by their active involvement in sectoral committees, working groups, boards and other structures formed by the Russian government, relevant ministries, reputable NGOs, international and industry-related organizations. The Company's proposals aimed at improving the efficiency of the Russian pulp and paper industry enjoy support of the highest state authorities and are usually considered during the draft hearings.

First level team

Guided by the best cross-sector management practices, the Company builds an international team of managers, comprising reputable experts with an international experience. The key decisions are made in the Company by the Executive Directorate or First Level Team consisting of Russian and foreign experts. The area of their responsibility encompasses the issues related to implementation of the approved Company strategy, achievement of the target financial and production indicators, overall operational management of the Company and other key issues.

Financial reporting

IFRS is the approved international financial reporting standard for Ilim Group. One of the Big Four companies performs an audit of the Group's financial statements in accordance with the international standards annually.

The Company also prepares and publishes financial statements in accordance with the Russian Accounting Standards.

Internal control

Having a strategic partner — International Paper, a NYSE listed company, Ilim Group complies with both Russian legislation requirements and the Sarbanes — Oxley Act. Such compliance is ensured by a highly efficient internal audit and control system which guarantees reliability of the financial statements presented by the Company to its shareholders. These requirements define the internal control and audit system development priorities for Ilim Group.