Moscow. 5 November 2004. At its regular meeting, the Audit Committee of the Board of Directors of RAO "UES of Russia" approved the draft IFRS Accounting Policies of RAO "UES of Russia". The Committee recommended that the Management Board of RAO "UES of Russia", simultaneously with the resolution on approval of the Policies, produce and coordinate with the Audit Committee the draft resolution regarding the procedure for revision and amendment of the Accounting Policies, especially to the extent necessary to keep current with the progress of RAO UES reform.

The Committee heard a report on insider trading in the third quarter of 2004 and approved the Regulation on Insider Trading in Securities of RAO "UES of Russia" and its SDCs. The notion of "insider information about securities" covers any undisclosed information on securities and transactions in securities, the issuer of these securities and issuer's activities, the disclosure of which information may have a material influence on the market price of such securities. Insiders are private individuals and legal persons having access to insider information under a law or any other legal regulation, job description, or any other internal document of the Company, or under a contract with the Company.

The Committee approved the draft Resolution and Regulation on the Establishment of a Working Group to Develop and Implement an Internal Control and Audit System to Oversee Fuel Supply and Fuel Use, and appointed the Group members. The Working Group is to develop and implement the modern mechanisms for internal control of fuel supply to the Holding Company's thermal power plants. In particular, the internal control system is to cover the fuel procurement procedures relating to the selection of suppliers, determining the price and terms of supply, organizing the inventory management and working capital financing used in the fuel procurement system.

On the Committee's suggestion, the Working Group is to include representatives of the Corporate Center, Business Units of OAO RAO "UES of Russia", and members of the Audit Committee of the Board of Directors of RAO "UES of Russia". The Committee intends to approve the recommendations for implementation of new internal control mechanisms for the fuel procurement system at RAO "UES of Russia" not later than April 2005.