On 28 May 2004 Russian Institute of Directors and Expert RA Rating Agency consortium ("RID-Expert R?") assigned its “B++” national rating of corporate governance to "Southern Telecommunications Company" PJSC. This rating proves that "UTK" PJSC does not break requirements of the Russian legislation in the field of corporate governance and follows in general recommendations of the Code of Corporate Conduct suggested by the FCSM of Russia. According to the technique of RID-Expert R? the rating of corporate governance is assigned to the company on the basis of estimation of the following groups of indices: observance of shareholders’ rights and risk of their violation, control and management bodies` performance, information disclosure and transparency of the company as well as a observance by a joint –stock company of interests of other parties concerned and corporate social responsibility.

In the opinion of "RID-Expert R?" experts corporate governance practice of "UTK" PJSC related to observance of shareholders’ rights is estimated positively. During the rating estimation of "UTK" PJSC “RID-Expert R?” has not revealed any facts of limitation and violation of minority shareholders’ rights. According to the Code of corporate conduct "UTK" PJSC notifies its shareholders on annual General Shareholders' Meeting beforehand, thus giving them additional opportunity to familiarize with all shareholder materials prepared for the General Shareholders' Meeting through electronic media including corporate Internet site. The Company pays dividends under shares on a regular basis. Risks of violation of shareholders’ rights in case of merger, takeover or reorganization are reduced to a minimum. Leading auditing companies are engaged to perform annual audit. Usage of inside information is regulated by the Company’s bylaws.

Corporate governance practice of "UTK" PJSC related to control and management bodies` performance is rated highly. The Board of Directors includes independent directors. The procedure of operation, rights and duties of the members of governing bodies are determined by separate internal documents. Board of Directors” sessions are hold on a regular basis. Internal documents of "UTK" PJSC state that the size of remuneration to be paid to the members of the Company’s governing bodies depends on operating results of the Company. According to the recommendations of the Code of corporate conduct "UTK" PJSC has created Committees of the Board of Directors.

UTK system of control over financial and economic operations is estimated positively because internal control service operates in the Company, and the Board of Directors carries out regular analysis and estimation of the results of work of the internal control service. According to the rating of the Company’s internal control system the Board Audit Committee has large powers. According to "RID-Expert RA" technique investing into the assets of companies of class B++ gives the investors the best "risk - reward" ratio. On this level of corporate governance practice there forms an optimal correlation between the risks of corporate governance that are taken by investors and premium obtained from them by issuing companies. Detailed information about the national rating of corporate governance "RID-Expert RA" can be viewed on the site "Expert RA".