OREANDA-NEWS. On 4 September 2009 Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; ММВБ: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line telecommunications operator in the territory of the Southern Federal District of Russia, announced that rating agency Standard & Poor’s has affirmed its corporate governance rating for UTK at CGR-5.  At the same time, Standard & Poor’s has its Russian-scale rating for the company from CGR 5.2 to CGR-5.3.

According to Standard & Poor’s report, the upgrade is attributable to an improvement in the disclosure level of financial information.  UTK received for the first time in 2009 a clean auditor’s conclusion for its international financial statement and shortened the timeframe for release by publishing its IFRS report before the annual general shareholders meeting.

According to Standard & Poor’s, UTK has been working hard with investors and retained an auditor which has an international reputation and was selected during a public tender.

Among UTK’s strong points, the following should be noted: the Board of Directors is vested with significant powers and carries out active operations which support the four Committees attached to the Board, the lineup of which includes external directors.  In addition, the company has efficient procedures for the preparation and conduct of annual shareholders meetings, while minority shareholders are vested with broad rights in accordance with Russian legislation.

UTK’s CGR is the result of an evaluation based on four analytical components on the international/Russian scale.

·        ownership structure and external influence – 4+/4.8;

·        shareholder rights and relations with financially interested parties - 7/7.1;

·        financial transparency, disclosure of information and audit - 6/6.2;

·        composition and efficiency of the Board of Directors - 4+/4.7.

More detailed information on the upgrade of UTK’s corporate rating can be found on the website  http://www.standardandpoors.ru/.