The company has a young and very capable management team that is committed to such improvement. There are, however, traditional Russian governance weaknesses that are partly due to the highly concentrated influence of one major shareholder, insufficient transparency, and the lack of independent controls. The company has merged with nine other telecoms operators in the Southern Federal District, and its governance structure has yet to be finalized. "Standard & Poor's", however, expects positive changes.

The overall CGS is a result of four component scores on a scale of 1 to 10 (10 is high):

• Ownership structure and influence 5.5
• Financial stakeholder rights and relations 6.3
• Financial transparency and information disclosure 4.7
• Board structure and process 4.4

The full analytical report on "UTK" PJSC's CGS is available under the section "Ratings" or at Standard & Poor's public Web site at www.governance.standardandpoors.com, and on its Russian language Web site at www.standardandpoors.ru.

At present "UTK" PJSC management undertakes active measures on improvement of corporate management practice. Code of the Company corporate policy is to be worked out and approved by the Board of Directors. Extraordinary General Shareholders' Meeting elected the new Board of Directors including 3 (three) independent directors (out of 11 members of the Board of Directors).

The Company's information disclosure has improved considerably since the beginning of 2003. In the nearest future English version of the Company's web site www.stcompany.ru will be launched. The Company's management will do its best to organize the corporate management practice in accordance with international standards that will increase confidence of investors and shareholders in "UTK" PJSC.