Moscow, 26 May 2006. The Board of Directors of RAO "UES of Russia" considered the matters relating to the Annual General Meeting of the Company.

The Board of Directors approved the Company's draft Annual Report and annual financial statements for 2005, and submitted them for shareholder approval at the AGM of RAO "UES of Russia". The Board also resolved to include in the Annual Report the assessment of the auditor's report by ZAO "PricewaterhouseCoopers Audit" on the Company's annual financial statements for 2005, which assessment was given by the Audit Committee under the Board of Directors of RAO "UES of Russia". The draft Annual Report will be posted on the Company's website 20 days before the AGM.

With respect to the AGM working bodies, the Board of Directors of RAO "UES of Russia" approved the appointment of the AGM Presidium consisting of the members of the Company's Board of Directors; and the AGM Secretariat consisting of the members of the Company's executive staff.

The AGM of RAO "UES of Russia" will be held on 28 June 2006 in the Zelenograd Palace of Culture located in the administrative district of Zelenograd, Moscow, Russia. Record date: The list of persons entitled under the laws of the Russian Federation to take part in the AGM of RAO "UES of Russia" was made as at 12 May 2005.

AGM agenda includes the following items of business:

· 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.

• Payment of dividends.
• Approval of amendments and additions to the Charter of RAO "UES of Russia":
• Approval of amendments to the Company's Regulations governing the activities of its management bodies.
• Approval of the appointment of the Auditors of RAO "UES of Russia".
• Election of members of the Board of Directors of RAO "UES of Russia".
• Election of members of the Auditing Commission of RAO "UES of Russia".
• 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.
• 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" reviewed reports on the work done by the Audit Committee and Appraisal Committee under the Board of Directors of RAO "UES of Russia" for 2005-2006.

Since September 2005, the Audit Committee has held 12 meetings and plans to hold another 3 before new Committee members are elected in July 2006.

Over the reporting period, the Audit Committee controlled the reliability and completeness of the released audited financial statements of RAO "UES of Russia", participated in the selection and appointment of external auditors within RAO UES Group, and undertook a comprehensive analysis of efficiency of the Company's risk management systems and internal controls of the key business processes. Specifically, the Committee analyzed gas supplies process to RAO UES power plants, management of idle cash and accounts receivable at the subsidiaries and dependent companies (SDCs) of RAO "UES of Russia", the disposal of non-core assets and investment processes at OAO "UES FGC".

Having considered the work done during the reporting period, the Committee held that the Company's financials under the IFRS met the requirements regarding completeness of information disclosure and contained a lot of useful information that could and must be used by the Company's internal control and audit bodies and by the Company's managers to analyze its performance.

According to the Audit Committee, the selection, appointment and control of auditors' activities in RAO UES Group meets the requirements imposed on the use of independent auditors' services, and recommended that RAO UES managers select external auditors through public tender in four lots.

Also, the Audit Committee developed a set of standard documents governing the internal control system in the companies to be formed as a result of the electricity reform, i.e. wholesale generation companies (WGCs), territorial generation companies (TGCs), and interregional distribution companies (IDCs). This step is intended to create a common format that would serve as a basis for a management system ensuring effective internal control and increase shareholders and investors' confidence in the governance of newly-established market entities.

During the reporting period, the Appraisal Committee held 29 meetings and considered 70 items of business.

In 2005-2006, in the course of merger of the WGCs and TGCs with their respective subsidiaries, the Appraisal Committee approved the valuation reports on the estimated market value of the six thermal WGCs and ten TGCs (TGC-1, TGC-2, TGC-4, TGC-5, TGC-6, TGC-8, TGC-9, TGC-10, TGC-11, and TGC-13). The Board took decisions to establish the above WGCs and TGCs (except for TGC-1, TGC-10, and TGC-11, on which no decisions have been taken yet) with account taken of the conversion ratios calculated by investment banks on the basis of the valuation reports approved by the Committee.

As part of the process to establish OAO "HydroWGC", the Committee reviewed in 2005 the company's share valuation report for the purpose of additional share issue, and in 2006 reports on the valuation of RAO UES assets to be used as payment for the additional shares in OAO "HydroWGC".

In 2006, in order to enable transfer of the assets owned by RAO "UES of Russia" to the authorized capital of OAO "UES FGC", the Appraisal Committee approved the policy for determining the market value of distribution and transmission (trunk grid) companies provided by the consortiums headed by ZAO "Deloitte & Touche CIS" and OOO "Ernst & Young Valuation Advisory Services", respectively. Also, the Committee reviewed the valuation reports on 42 transmission (trunk grid) companies (TCs) and the property of transmission grid branches of OAO "UES FGC".

In order to carry out reform in the Far East energy system, the Committee created a Task Group which prepared forecasts of fuel prices, electricity consumption, electricity balances of the East IES, and the average weighted electricity and heat tariffs for end consumers.

The Committee approved appraisal reports estimating the market value of shares and property of OAO "Amurenergo", OAO "Dalenergo", ZAO "LuTEK", OAO "Khabarovskenergo", and OAO "Yuzhnoe Yakutskenergo" for the purpose of establishment of OAO "Far East Energy Company", OAO "Far East Generation Company", and OAO "Far East Distribution Company".

For the purpose of transactions involving major core assets, the Committee also approved the appraisal report estimating the start price of 100% shares in OAO "Taymyrenergo", 12.5% shares in OAO "Petersburg Generation Company", and 47.36% shares in OAO "Yaroslavl Retail Company". Besides, the Committee approved the appraisal of the starting price for the sale of some large non-core assets.

Until the expiry of the committee's term in July this year, when the Board of Directors appoints new Committee members, the Committee expects to consider appraisal reports on the valuation of TGC-7 and TGC-14, shareholdings in some distribution companies for the purposes of merger with IDCs, and the appraisal report estimating the value of RAO UES shares for the repurchase within the framework of the first stage of reorganization.

* * *

The Board of Directors of RAO "UES of Russia" approved the Regulation on the third-party liability insurance (D&O) of the Board and Management Board members.

The Board ordered the drafting of this Regulation at its meeting held 26 February 2006.

The document sets out the general principles of insurance coverage for RAO UES executives and the procedure to be followed for such insurance. The insurance protection planning will be included in the particular Programme which the Management Board of RAO "UES of Russia" is to submit to the Board of Directors in June 2006.

The Board recommended that the Regulation be used in RAO UES subsidiaries and dependent companies.

The insurance of Board and Management Board members is intended to provide a reliable source of covering possible losses for RAO "UES of Russia" and its top managers in the event of insured loss. The limit of indemnity for all losses for all management members is set at USD30 million.

The Company's captive insurance broker, OAO "Energozashchita Insurance Broker", will select he insurance carriers for this purpose through competitive tender process.

* * *

The Board approved the merger of OAO "COTenergo"* with and into OAO "Krzhizhanovsky Energy Institute" (OAO "ENIN").**

OAO "ENIN" is being reorganized according to the "Guidelines for the Reform of the Scientific and Research Entities of RAO "UES of Russia". The merger of OAO "COTenergo" with and into OAO "ENIN" is intended to establish new and develop the existing research schools, create the conditions required to implement the scientific and commercial potential, improve operational efficiency of OAO "ENIN" in a competitive environment, and turn the institute into an electricity research centre able to compete internationally.

As part of this process, the Board approved the outsourcing of management functions at OAO "Scientific and Research Institute of Energy Industry Economics" (SRIEIE), to a fiduciary, OAO "ENIN", by transferring to it the 100% stake in SRIEIE held by RAO "UES of Russia".

In addition, the Board approved the co-founding by OAO "ENIN" of a not-for-profit scientific organization, together with the Academy of National Economy under the Russian Government and the Scientific Association for High Temperatures of the Russian Academy of Sciences. The admission fee to be paid by OAO "ENIN" is RUB50,000. This organization will be set up in order to carry out strategic fundamental research needed to create new, advanced technologies for the electricity industry.

** OAO "ENIN" is wholly owned by RAO "UES of Russia" and is a unique scientific and research institute. The company's objective is to formulate a development strategy for the electricity industry and carry out R&D and other similar projects to create competitive technologies, products, and solutions for the electricity industry and other sectors of the national economy.

* * *

The Board of Directors of RAO "UES of Russia" formulated the Company's stance on the items to be considered by shareholder and Board meetings at some SDCs of RAO "UES of Russia".

The Board instructed RAO UES representatives on the Boards of Directors of OAO "WGC-3" and OAO "WGC-5" to vote FOR the approval of companies in Non-profit Partnership "Administrator of Trading System" (NP "ATS").

OAO "WGC-3" and OAO "WGC-5" need not pay the admission fee, as they are legal successors to the companies that merged with them, OAO "Kostromskaya TPP", OAO "Konakovskaya GRES", which previously were members of NP "ATS".

Membership in NP "ATS" will enable the companies to more effectively take part in the creation and development of a competitive marketplace for electricity and participate in the management of the partnership's operations.

* * *

The Board took a number of decisions aimed at completing the reforms in the energy systems of the Russian Far East.*

The restructuring plan for the energy systems in the Far East includes a number of concurrent corporate actions.

As of today, OAO "Yakutskenergo" has set up a subsidiary, OAO "Yuzhnoe Yakutskenergo", on the basis of the Southern energy area of OAO "Yakutskenergo". Simultaneously, OAO "Far East Generation Company" (FEGC) and OAO "Far East Distribution Company" (FEDC) have been set up and registered with the state authorities. Both companies have an authorized capital of RUB5 million.

In January 2007, it is planned to create a single holding company, OAO "Far East Energy Company" (FEEC), through consolidation of OAO "Khabarovskenergo", ZAO "LuTEK", OAO "Amurenergo", OAO "Yuzhnoe Yakutskenergo", and OAO "Dalenergo".

In order to complete the corporate process needed to establish OAO "FEGC" and OAO "FEDC", the management bodies of those companies are to take decisions to increase their authorized capital through issuance of additional shares; at the same time, the management bodies of OAO "Dalenergo", OAO "Khabarovskenergo", OAO "Amurenergo", ZAO "LuTEK", and OAO "Yuzhnoe Yakutskenergo" are to approve the purchase of the additional shares in OAO "FEGC" and OAO "FEDC". Payments for such additional shares are to be made in form of property of said regional energos.

In this connection, the Board of Directors instructed RAO UES representatives on the management bodies of OAO "FEGC" and OAO "FEDC" to vote FOR the increase of the companies' authorized capital through issuance of additional shares. OAO "FEGC" and OAO "FEDC" will additionally issue 3,222,090,100,000 and 990,876,600,000 shares, respectively, par value RUB0.01 per share.

The Board of Directors of RAO "UES of Russia" also instructed the Company's representatives in the management bodies of OAO "Dalenergo", OAO "Khabarovskenergo", OAO "Amurenergo", ZAO "LuTEK", and OAO "Yuzhnoe Yakutskenergo" to approve the acquisition by these regional energos of stakes in OAO "FEGC" and OAO "FEDC".

The additional shares in OAO "FEGC" are expected to be placed through closed subscription (private placement) in accordance with the following breakdown: OAO "Khabarovskenergo" 1,094,387,000,000 shares, OAO "Amurenergo" 177,878,000,000 shares, OAO "Yuzhnoe Yakutskenergo" 240,727,100,000 shares, OAO "Dalenergo" 779,895,900,000 shares, and ZAO "LuTEK" 929,202,100,000 shares.

OAO "FEDC" plans to issue 258,188,000,000 additional shares to OAO "Khabarovskenergo", 312,409,800,000 shares to OAO "Amurenergo", 53,379,200,000 to OAO "Yuzhnoe Yakutskenergo", and 366,899,600,000 to OAO "Dalenergo".

The Board of Directors of RAO "UES of Russia" instructed the Company's representatives in the management bodies of OAO "Dalenergo", OAO "Khabarovskenergo", OAO "Amurenergo", ZAO "LuTEK", and OAO "Yuzhnoe Yakutskenergo" to vote FOR the acquisition by these regional energos of stakes in OAO "FEGC" and OAO "FEDC".

In addition, the Board of Directors instructed representatives of RAO "UES of Russia" at OAO "Khabarovskenergo", OAO "Amurenergo", OAO "Yuzhnoe Yakutskenergo", OAO "Dalenergo", and ZAO "LuTEK" to vote FOR the companies' consolidation, approval of the Consolidation Agreement, transfer deed, and the Charter of OAO "Far East Energy Company" (FEEC), the entity to be established as a result of such consolidation.

The Consolidation Agreement specifies the ratios to be used to convert regional energos' shares into shares of OAO "FEEC". The following amounts of shares are expected to be converted into one ordinary share in OAO "FEEC", par value RUB1 [per share]:

• 2.50/4.60 of an ordinary share and/or 2.50/4.21 of a preferred share in OAO "Khabarovskenergo", par value RUB1 [per share]; and/or
• 2.50/11.97 of an ordinary share and/or 2,2.50/10.96 of a preferred share in OAO "Amurenergo", par value RUB1 [per share]; and/or
• 2,50/0,85 ordinary shares in OAO "Yuzhnoe Yakutskenergo", par value RUB1 [per share]; and/or
• 2.50/0.72 ordinary shares and/or 2.50/0.65 preferred shares in OAO "Dalenergo", par value RUB0.02 [per share];
• 2.50/2511.67 of an ordinary share in ZAO "LuTEK", par value RUB1.000 [per share].

After the restructuring in the Far East energy system is completed, OAO "FEEC" will remain the only shareholder in OAO "FEGC" and OAO "FEDC".

* The Board of Directors of RAO "UES of Russia" approved the restructuring plan for the energy systems in the Far East of Russia at its meeting held 2 September 2005. The plan seeks to increase reliability of the energy system in the area, create a system of control over the energy sector in the Far East after the functional unbundling of RAO "UES of Russia", and raise the capitalization and investment attractiveness of the region's energy companies.

As a result of the competitive tender, CIT Finance Investment Bank was selected to act as an independent appraiser to estimate the share exchange and conversion ratios that would be fair to the companies' shareholders, taking into account the reports on the market value of the regional energos' shares and assets prepared by the consortium of appraisers.

* * *

The Board of Directors of RAO "UES of Russia" decided that it would be advisable to merge OAO "Apatitskaya CHPP" with and into OAO "TGC-1", and transfer shares in OAO "Murmanskaya CHPP" as payment for additional shares in OAO "TGC-1".*

The Board decided in favour of the merger of OAO "Apatitskaya CHPP" with OAO "TGC-1" after it considered the options available for the integration of Murmanskaya CHPP and Apatitskaya CHPP with the thermal generation assets owned by other companies in the region.

This transaction will enable Apatitskaya CHPP to raise the funds needed to take part in the project to improve efficiency of thermal generation capacity in the Apatitsko-Kirovsky area of the Murmansk Region, and create a common management framework for the generation assets in the region.

In light of the plant's weak financial position, RAO "UES of Russia" will continue exploring the options for integrating the thermal assets in the city of Murmansk, and to develop the city's district heating system, with TGC-1 being made responsible for ensuring reliable power to customers in Murmansk.

* * *

The Board of Directors of RAO "UES of Russia" approved the merger of OAO "Petersburg Generation Company", OAO "Kolskaya Generation Company", OAO "Karelenergogeneratsiya", and OAO "Apatitskaya CHPP" with and into OAO "TGC-1", and later on, transfer of shares in OAO "Murmanskaya CHPP" as payment for additional shares in TGC-1. These transactions are intended to complete the establishment of the intended corporate structure of OAO "TGC-1".

The Board decided that the preferred scenario for the establishment of OAO "TGC-1" would be merger of all of the above regional generation companies (RGCs) with and into OAO "TGC-1".

In the event that shareholders in one or several RGCs do not approve their companies' merger with and into OAO "TGC-1", OAO "TGC-1" will issue additional shares which will be exchanged for shares in such RGC(s). Shareholders who vote FOR the reorganization or do not take part in the general shareholder meeting on this item will be able to purchase the shares in OAO "TGC-1".

The Board of Directors of RAO "UES of Russia" approved the ratios for share conversion of the companies merging with and into OAO "TGC-1"**. The following amounts of shares will be converted into one share in OAO "TGC-1"***:

· 162/315,096.8960 of an ordinary share and/or 162/288,565.6824 of a preferred share in OAO "Petersburg Generation Company", par value RUB10 [per share]; and/or

· 162/270,791.5354 of an ordinary share and/or 162/247,990.8881 of a preferred share in OAO "Kolskaya Generation Company", par value RUB4 [per share], and/or

· 162/71,854.9119 of an ordinary share in OAO "Karelenergogeneratsiya", par value RUB3.8945 [per share]; and/or

· 162/23,084.9494 of an ordinary share and/or 162/21,141.1966 of a preferred share in OAO "Apatitskaya CHPP", par value RUB0.6 [per share].

Also, OAO "TGC-1" will issue additional ordinary shares which will be exchanged for shares in OAO "Murmanskaya CHPP". The following amount of shares will be accepted as payment for one ordinary share in OAO "TGC-1":

· 162/9,484.5141 of an ordinary share and/or 162/8,685.9180 of a preferred share in OAO "Murmanskaya CHPP", par value RUB0.6 [per share].

The Board of Directors instructed RAO UES representatives at board and shareholder meetings of OAO "TGC-1" and the merging companies, and at the companies' joint shareholder meeting to vote FOR the approval of transactions intended to complete the creation of a target structure of OAO "TGC-1".

It is expected that RAO "UES of Russia" will hold a 55,6% stake in OAO "TGC-1" after the company's reorganization is completed (taking into account the exchange of Murmansk CHPP shares for TGC-1 shares). The establishment of TGC-1 is scheduled to be completed 1 December 2006.

* OAO "Apatitskaya CHPP" and OAO "Murmanskaya CHPP" were spun off from OAO "Kolenergo" and have the same ownership structure as OAO "Kolenergo". Currently, the power plants' shares are managed by a fiduciary, OAO "TGC-1".

** At its meeting held 26 November 2004, the Board of Directors of RAO "UES of Russia" approved the establishment of OAO "TGC-1" by OAO "Kolenergo", OAO "Lenenergo", and OAO "Karelenergogeneratsiya". OAO "TGC-1" was registered with the Interdistrict Inspectorate of the Federal Tax Service of Russia for the city of St.-Petersburg on 25 March 2005.

*** The share conversion/exchange ratios were calculated by ZAO "United Financial Group" based on the estimates of the market value of the companies' shares made by a consortium of independent appraisers, ZAO "Rossiyskaya Otsenka" ("Russian Appraisal"), and OOO "Expert Consulting Group".

* * *

The Board of Directors of RAO "UES of Russia" noted the key parameters of the Projected Balance for the electricity industry and the Holding Company for years 2006-2010. *

The electricity consumption forecast for Russia uses two scenarios of the country's economic growth as determined by the Ministry of Economic Development and Trade of the Russian Federation. Under the moderate scenario, electricity consumption in Russia will reach 1,026 billion kWh by 2010, while under the optimistic scenario, consumption will make 1,045 billion kWh. Accordingly, electricity consumption is expected to grow within the range of 1.8% to 2.2% annually. The strongest growth is projected in Siberia's IES (2.1-2.6%) and the IES of the Center of Russia (2.1-2.5%), and the weakest growth will be in the Middle Volga IDES (1.1-1.2%).

The winter peak loads are expected to increase by an average of 2.5% annually. This means that in five years, this figure will rise by 18,000 MW to 160,000 MW in 2010 compared to 142,100 MW in 2005. If the extremely cold weather observed in the winter of 2005/2006 occurs again, the extra load by 2010 might reach 3,200 MW.

In light of the expected increase in electricity consumption and winter peak loads, Russia may need up to 221,200 MW of installed capacity at power plants by 2010, which represents a 24,900 MW increase. Also, the need for reserve capacity in 2005 - 2010 is estimated at 3,000 MW. The need for generating capacity for electricity exports in 2010 will reach 5,600 MW, up 3,400 MW compared to 2005.

Due to equipment removal (including for the purpose of subsequent replacement), the installed capacity of Russia's power plants will decline in 2006-2010 by 4,200 MW. The combined installed capacity of the existing power plants is projected to decline 5,900 MW from 210,500 MW in 2005 to 204,600 MW in 2010.

The above metrics of the Projected Balance were used as a guidance for determining the structure and sources of funds, including the tariff component, in the mid-term investment programme for the electricity industry until 2010.

The Investment Programme provides for generating capacity expansion until 2010, i.e. construction of new power plants with a combined capacity of 23,800 MW, including 3,000 MW at NPPs, 4,400 MW at HPPs, 13,400 MW at TPPs, and 3,000 MW at the isolated power plants.

The part of the Programme covering power grids development until 2010 provides for the construction of 11,600 km of new and modernization of the existing power transmission lines. The Company plans to bring on line 58,000 MVA of transformer substations capacity, of which 37,300 MVA will be newly-built substations. The new generating capacity and power grid facilities expected to be commissioned in 2006-2010 will ensure a deficit-free energy balance.

The electricity industry will need RUB2373.1 billion to expand its generating and power grid capacity in 2006-2010, of which RUB1355.7 billion is needed for generation projects, RUB1017.4 billion, and RUB25 billion for dispatching projects.

The Board of Directors gave the Management Board of RAO "UES of Russia" to finalize and approve, by 1 August 2006, the Projected Balance for the electricity industry and Holding Company for 2006-2010, taking into account the comments and suggestions made by the Board of Directors on the key parameters of the document.

* According to the rules and regulations currently in effect at RAO "UES of Russia", the Projected Balance for the electricity industry and the Holding Company for 2006-2010 is being developed by ZAO ""Agency for Power Balance Forecasting" (APBF). Also, the Institute for Energy Research of the Russian Academy of Sciences, OAO "Institute Energosetproekt", and OAO "Scientific and Research Institute for Economics of the Energy Industry" ("NIIEE") have been contracted to carry out specialized works. Also involved in the process were divisions of the Corporate Center and Business Units of RAO "UES of Russia", OAO "UES SO-CDA", OAO "UES FGC" using the forecast data of the Holding Company's entities, independent generators, and fuel suppliers.

* * *

The Board of Directors of RAO "UES of Russia" approved the setting up of OAO "Mobile Gas-Turbine Electrical Stations" (OAO "Mobile GTES").

RAO "UES of Russia" will be an only founder in OAO "Mobile GTES". The Company will have an authorized capital of RUB60 million.

OAO "Mobile GTES" is expected to implement a project providing for the installation of mobile gas turbine stations (GTES) in the nodes of the Moscow energy system suffering from energy shortages.

The equipment used in a gas turbine station is a mobile counterpart of a stationary power plant which can be moved from one prepared site to another, and promptly respond to energy shortfalls. RAO "UES of Russia" expects to place 10 GTES at five substations in Moscow and the Moscow Region exactly in those nodal points where increased energy use leads to an overload of transformers and grids. Output of additional power during peak load demand in the energy system will help reduce the load on the transformer substations where the GTES will be installed, thus preventing damage to electrical equipment and improving reliability of power to customers.

* * *

The Board of Directors of RAO "UES of Russia" approved the Company's Restated Corporate Governance Code.* This became necessary due to the amendments to the laws and by-laws of the Russian Federation and the corporate governance practices within the Company.

The national standards of corporate governance are stated in the Corporate Governance Code and recommended for use by the Federal Service for Financial Markets of Russia (FSFM). Specifically, the Restated Code contains provisions designed to protect shareholder rights, additional requirements to the conduct of general shareholder meetings, and improved information disclosure standards.

Moreover, since the previous version of the Corporate Governance Code was adopted, there have been significant changes in the structure of RAO UES Holding Company which resulted in the establishment of new energy sector entities; in addition, the vision of the intended corporate governance conduct system has changed.

The Restated Corporate Governance Code of RAO "UES of Russia" contains a revised provision on independent directors, who are expected to ensure a greater impartiality of the decisions taken by the Board of Directors, and maintain a balance of interests of different shareholder groups represented on the Board of Directors. Under the provisions of the Restated Corporate Governance Code, an independent member of the Board of Directors may not be a government representative or a representative of RAO UES management; a Board member that has previously been an officer with the Company shall be deemed independent only if he is elected to the Board after over three years have passed since his/her resignation from the Company. Furthermore, an independent director may not represent a company whose HR and Remunerations Committee includes representatives of RAO UES Management.

The Corporate Governance Code of RAO "UES of Russia" will be posted on the Company's website. Similar codes are expected to be drafted and adopted at RAO UES subsidiaries and dependent companies.

The previous version of the Code was adopted by the Board of Directors of RAO "UES of Russia" on 9 January 2001.

* * *

The Board of Directors of RAO "UES of Russia" approved the measures required to complete the formation of OAO "TGC-10".*

The Board approved the merger of OAO "TGC-10" and OAO "Chelyabinsk Generation Company" with and into OAO "Tyumen Regional Generation Company", which will subsequently be renamed OAO "TGC-10".

If the merger is not approved by the shareholders of OAO "Chelyabinsk Generation Company", RAO "UES of Russia" will issue additional shares of OAO "TGC-10", which will be exchanged for shares in OAO "Chelyabinsk Generation Company" and OAO "Tyumen Regional Generation Company". Shareholders in OAO "Chelyabinsk Generation Company" will also be offered shares in TGC-10.

After the shareholder meeting of OAO "Chelyabinsk Generation Company", the Management Board of RAO "UES of Russia" in the capacity of a shareholder meeting of OAO "TGC-10" and OAO "Tyumen Regional Generation Company will take resolutions on the companies' reorganization.

RAO UES representatives at the shareholder meeting of OAO "Tyumen Regional Generation Company" were instructed to vote FOR the reorganization of the company through merger of TGC-1 and Chelyabinsk Generation Company with and into OAO "Tyumen Regional Generation Company", approval of the Merger Agreement, and increase of the authorized capital of OAO "Tyumen Regional Generation Company" through issuance of 175 million additional ordinary shares, RUB1.66 par value, worth a total of RUB290.5 million. Method of placement: shares in the merging companies will be converted into the additional shares of the surviving company, OAO "Tyumen Regional Generation Company".

The Board of Directors approved the conversion ratios for shares of the companies merging with and into OAO "Tyumen Regional Company". The following amounts of shares will be converted into one ordinary share of OAO "Tyumen Regional Generation Company" of RUB1.66 par value:

· 3449456121/100545659 of an ordinary share and/or 3449456121/92079714 of a Type A preferred share in OAO "Chelyabinsk Generation Company", par value RUB0.41 [per share]; and/or

· 3449456121/1000000 of an ordinary share in OAO "TGC-10", par value RUB0.01 [per share].

The Board of Directors of RAO "UES of Russia" approved the payment procedure for the additional shares in OAO "TGC-10". Thus, the following amounts of shares will be accepted as payment for one additional share in OAO "TGC-10":

· 1000000/100545659 of an ordinary share and/or 1000000/92079714 of a Type A preferred share in OAO "Chelyabinsk Generation Company";

· 1000000/3449456121 of an ordinary share in OAO "Tyumen Regional Generation Company".

Only a whole number of such shares may be exchanged for at least one additional ordinary share in OAO "TGC-10".

At the next stage (once the establishment of OAO "TGC-10" is completed and the OAO "Kurgan Generation Company" is registered with the authorities), shareholders in OAO "Kurgan Generation Company" will vote on the merger of their company with and into OAO "TGC-10".

The resolution to establish OAO "TGC-10" as a wholly-owned subsidiary of OAO RAO "UES of Russia" was approved by the Board of Directors of RAO "UES of Russia" on 29 October 2004.

* * *

The Board of Directors of RAO "UES of Russia" noted the information on the negotiations with the Moscow City Government regarding the relocation of OAO "Main Computation Center of the Electricity Industry" (OAO "MCC EI").

OAO "MCC EI" is a wholly-owned subsidiary of RAO "UES of Russia". All of its facilities are located in the Central Administrative District of Moscow where the authorities are implementing a city programme to develop a tourist, leisure and business area called "Golden Island".

An Agreement on Interaction has been signed by the Moscow City Government and RAO "UES of Russia" to relocate OAO "MCC EI". The Moscow City Government has committed to finding a new site to which OAO "MCC EI" might be moved, and to draft and negotiate the relevant documentation with RAO "UES of Russia". These documents must contain the details of relocation and compensation of any losses relating to it and the release of the plot of land.

Under the Agreement, RAO "UES of Russia" and the Moscow City Government will assist in the relocation of OAO "MCC EI", including the preparation of the required development approval and permitting, and other documentation.

The Agreement provides that the parties will jointly select appraisal firms, consider technical specifications, and set a deadline for the preparation of a report on the market value of the real property owned by OAO "MCC EI". The Agreement also provides that the procedure, terms and conditions of OAO "MCC EI" relocation will be determined by separate agreements.

The Board instructed the Management Board to consider, together with OAO "UES FGC", the entire range of issues relating to the relocation of the Moscow-based power facilities and other property owned by the Holding Company.