OREANDA-NEWS  On 28 November International rating agency Standard & Poor’s announced its decision to upgrade the corporate governance rating (CGR) of VolgaTelecom based on the Russian scale, lifting it from RCG 5.2 to RCG 5.4.  The company’s rating on the international scale was confirmed at RCG-5.

According to the opinion of the agency’s analysts “the Russian-scale rating upgrade reflects mainly improvement in the level of financial transparency: in 2008 VolgaTelecom released for the first time an auditor’s report without reservations about its annual IFRS financial statement”.

According to Standard & Poor’s, the strong points of VolgaTelecom’s corporate governance practice are as follows:

The company adheres to a high level of information disclosure.  In 2008, VolgaTelecom released for the first time an auditor’s report without reservations about its annual IFRS financial statement.  In addition, the Volga operator pursues active mutual relations with investors.

On the whole, the procedure for preparing for and conducting shareholder meeting is effective. Minority shareholders are vested with broad rights in accordance with Russian legislation and the company’s articles of association.

The company uses the services of an external auditor which has an international reputation and which was selected in the process of a public tender.

The board of directors includes minority shareholder appointees.

The board of directors holds extensive powers.  The board’s operations are supported by four committees which are attached to it; outside directors sit on all committees.

VolgaTelecom’s RCG is the result of an evaluation based on four analytical components on the international/Russian scale with scores ranging from 1 to 10: ownership structure and outside influence – 5/5.0; shareholder rights and relations with financially interested parties – 7/7.1; financial transparency, information disclosure and audit – 6/6.3; composition and effectiveness of the board of directors – 4+/4.7.