| Moscow. 28 June 2006. Today, RAO "UES of Russia" is holding its the Annual General Meeting in Zelenograd, an administrative district of Moscow. Record date: The list of persons entitled under the laws of the Russian Federation to take part in the AGM was made as at 12 May 2006. As provided for by Clauses 5.6 and 5.6.1 of Article 5 of RAO UES Charter, holders of preferred shares are not entitled to vote at this AGM, as the previous AGM approved dividend payment on preferred shares.
Pursuant to Article 53 of the Federal Law on Joint-Stock Companies, the Board of Directors of RAO "UES of Russia" approved the AGM agenda at its meeting held 31 March 2006. The items of business are as follows:
1. Approval of the Annual Report 2005 of RAO "UES of Russia", the annual financial statements, including the statement of operations (income statement), and allocation of profit and loss based on the financial year performance.
The Annual Report contains key information on the Company's business and finance, the electricity reform, and the measures being taken to increase the UES reliability. The Company posted revenues of RUB28,095 million, sales profit of RUB22,368 million, and net income of RUB20,898 million in 2005.
2. Payment of dividends:
The Board meeting held 21 April recommended that the shareholders approve the following dividends for 2005:
- on ordinary shares: a total of RUB2,355,793,360.45, or RUB0.0574 per share;
(2004: RUB0.0559 per share).
- preferred shares: a total of RUB402,370,929.04, or RUB0.1939 per share;
(2004: RUB0.2233 per share).
The Board of Directors recommended that the dividends on ordinary and preferred shares be paid by 1 December 2006.
3. Approval of amendments and additions to the Charter of RAO "UES of Russia":
Also, the Board of Directors submitted draft amendments and additions of the Charter of RAO "UES of Russia" for shareholder approval at the AGM.
On 6 March 2002, the Board of Directors approved the divestiture by RAO UES Group entities of their non-core assets in order to cut costs. In this connection, the Board of Directors was authorized to make decisions regarding disposal of non-core assets worth in excess of RUB30 million.
A provision to that effect is to be included in the Company's Charter, while the amount of such deals will be specified in the restated Procedure for Interaction between RAO "UES of Russia" and its Subsidiaries and Dependent Companies (SDCs).
In order to ensure that RAO representatives' actions are taken on a prompt and timely basis, it is proposed that the right to appoint the Company's representatives taking part in members' meetings of the business companies whose shares or stakes are owned by RAO "UES of Russia" be transferred from the Management Board to the Chairman of the Management Board of RAO "UES of Russia".
Also, it is proposed that the right to consider, on behalf of the employer in the energy industry, of a draft collective agreement with respect to the SDCs, be removed from the terms of reference of the Management Board of RAO "UES of Russia". Under to the Russian law and the Charter of RAO "UES of Russia", these functions are currently performed by the All-Russian Power Industry Employers Association, which conducts collective bargaining, and enters into agreements with trade unions and their associations.
4. Approval of amendments to the Company's Regulations governing the activities of its management bodies.
A proposal was made to amend the Regulation on the Board of Directors and the Regulation on the Management Board of RAO "UES of Russia". The proposed amendments are primarily intended to clarify the process to be used to prepare for meetings of these management bodies, and control implementation of their decisions.
The Board of Directors approved the Restated Procedure for Interaction with Business Companies Whose Shares (Stakes) are Held by RAO "UES of Russia".
The restated Procedure became necessary in light of the changes in the corporate relationships between RAO "UES of Russia" and its SDCs. For instance, the activities of RAO UES representatives at OAO "UES SO-CDA", OAO "UES FGC", and the WGCs will be governed by separate regulatory documents of RAO "UES of Russia".
In particular, the restated Procedure contains provisions that expand the powers of the Board of Directors of RAO "UES of Russia" with respect to its control over transactions in subsidiaries' shares, stakes, and assets. From now on, the Board of Directors of RAO "UES of Russia" will determine the stance of the Company's representatives at SDCs regarding transactions involving disposal of their core assets where the book value and/or market value of assets is in excess of RUB15 million.
5. Approval of the appointment of the Auditors of RAO "UES of Russia":
The Board recommended that the AGM of shareholders approve the appointment of ZAO "PricewaterhouseCoopers Audit" as Auditor of the Company's annual financial statements for 2006 in accordance with the Russian Accounting Standards (RAS) and International Financial Reporting Standards (IFRS).
6. Election of members of the Board of Directors of RAO "UES of Russia". The following candidates were nominated by RAO UES shareholders to fill the 15 positions on the Board of Directors (titles as at the date of nomination):
| Abyzov, Mikhail Anatolyevich |
Director General, ZAO "Kuzbassrazrezugol" |
| Androsov, Kirill Gennadyevich |
Deputy Minister of Economic Development and Trade of the Russian Federation |
| Berezkin, Grigory Victorovich |
Chairman of Board of Directors, OOO "ESN Energo" |
| Bugrov, Andrey Evgenyevich |
Managing Director, ZAO "Interros Holding Company" |
| Voloshin, Alexander Stalyevich |
Advisor to Head of Administration of President of the Russian Federation |
| Gref, German Oskarovich |
Minister of Economic Development and Trade of the Russian Federation |
| Dementyev, Andrey Vladimirovich |
Deputy Minister of Industry and Energy of the Russian Federation |
| Medvedev, Yury Mitrofanovich |
Deputy Head of the Federal Agency for Federal Property Management |
| Nikitin, Gleb Sergeyevich |
Head of Directorate of the Federal Agency for Federal Property Management of the Russian Federation |
| Oganesyan, Sergey Aramovich |
Head of the Federal Energy Agency (Rosenergo) |
| Pushkareva, Olga Stanislavovna |
Director of Department of the Government of the Russian Federation |
| Rashevsky, Vladimir Valeryevich |
Director General, OAO "SUEK" |
| Remes, Seppo Juha |
Chairman of Audit Committee under Board of Directors, OAO RAO "UES of Russia"; Senior Advisor to Chairman, Finnish Institute under the Parliament of Finland |
| Seleznyov, Kirill Gennadyevich |
Member of Management Board, OAO "Gazprom"; Head of Marketing, Gas and Liquid Hydrocarbons Processing Department, OAO "Gazprom"; Director General, OOO "Mezhregiongaz" |
| Urinson, Yakov Moiseyevich |
Deputy Chairman of Management Board, OAO RAO "UES of Russia" |
| Herne, David Alexander |
Chairman of Strategy and Reform Committee under Board of Directors of RAO "UES of Russia"; Managing Director, Halcyon Advisors |
| Khristenko, Victor Borisovich |
Minister of Industry and Energy of the Russian Federation |
| Chubais, Anatoly Borisovich |
Chairman of the Management Board, OAO RAO "UES of Russia" |
| Sharonov, Andrey Vladimirovich |
First Deputy Minister of Economic Development and Trade of the Russian Federation |
| Yuzhanov, Ilya Arturovich |
Chairman of the Supervisory Board, ZAO "NOMOS-BANK" |
7. Election of members of the Auditing Commission of RAO "UES of Russia". The Board of Directors considered the shareholder proposals and approved the following list of candidates for the Audit Commission (titles as at the date of nomination):
| Brzhezyansky, Stanislav Edmondovich |
Head of Department, Federal Tariff Service of Russia |
| Bystrov, Maxim Sergeyevich |
Deputy Director of Department, Ministry of Economic Development and Trade of Russia |
| Myasnikov, Victor Mikhailovich |
Division Head of Department, Ministry of Industry and Energy of Russia |
| Rumyantsev, Sergey Yuryevich |
Deputy Chairman of Management Board, NP "ATS" |
| Samokhina, Galina Evgenyevna |
Deputy Head of Department, Ministry of Industry and Energy of Russia |
| Sannikov, Alexey Valeryevich |
Head of Department, Federal Tariff Service of Russia |
| Stefanenko, Svetlana Mikhailovna |
Deputy Head of Department, Federal Agency For Federal Property Management of Russia |
8. Approval of a transaction (or a series of transactions) involving the acquisition by RAO "UES of Russia" of additional shares in OAO "HydroWGC", which constitute(s) an interested party transaction.
The Board of Directors of RAO "UES of Russia" submitted for shareholder approval the purchase of additional ordinary shares in OAO "HydroWGC" during the second phase of the company's restructuring. Payment for the additional shares in HydroWGC is expected to be made in shares of AO-hydropower plants (including additional shares), shares in hydrogeneration companies established in the course of regional energos' restructuring, and the property of hydropower plants owned by RAO "UES of Russia".
The transaction amount is RUB37,375,000,237.3. The additional shares in OAO "HydroWGC" will be placed through closed subscription (private placement) at RUB1.01 per share.
9. Approval of a transaction (or a series of transactions) involving the acquisition by RAO "UES of Russia" of additional shares in OAO "UES FGC", which constitute(s) an interested party transaction.
The Board of Directors of RAO "UES of Russia" submitted for shareholder approval at the AGM the acquisition of additional shares in OAO "UES FGC".
The resolution to increase the authorized capital of OAO "UES FGC" through issuance of additional ordinary shares was taken by the Board of Directors of RAO "UES of Russia" acting in the capacity of a shareholder meeting of OAO "UES FGC", on 21 November 2005.
RAO "UES of Russia" will pay for the additional shares in FGC with its shares in Trunk Grid Companies spun off from the regional energos, and the assets of the Unified National Energy Grid (UNEG), and money for the total amount of RUB33.5 billion.
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