Moscow. 20 July 2004. RAO "UES of Russia" has published the financial statements of the Group of RAO "UES of Russia"* prepared in accordance with the International Financial Reporting Standards (IFRS) for year 2003.

Consolidated Balance Sheet as of 31 December 2003:

As of 31 December 2003, the aggregate assets of the Group of RAO "UES of Russia" were RUB1,087.5 billion, including RUB902.4 billion in capital assets and RUB 185.1 billion in current assets.

As at year end 2003, the total assets of RAO "UES of Russia" Group stood at RUB872.2 billion, an increase of RUB8.491 billion compared to 2002. The increase in the capital assets was due to the growth of investments in plant assets and acquisition of energy facilities in Georgia and Armenia.

The accounts receivable of RAO UES Group totalled RUB105.3 billion as of 31 December 2003, up RUB12.4 billion compared to year-end 2002. At the same time, this indicator grew at a lower rate (13%) than the operating income growth (18%). In 2003, the Group's accounts payable grew RUB5.5 billion to RUB 89.8 billion.

Consolidated Income Statement for 12 Months of 2003:

The operating income of RAO "UES of Russia" Group in 2003 amounted to RUB 593.1 billion, an increase of RUB89.7 billion on 2002. The increase in the operating income was primarily due to the growth of the production and sales of electricity by the Group's entities.

The Group's operating expenses in 2003 grew RUB43.6 billion to RUB 528.7 billion. The increase in the operating expenses is explained by the fuel price rise by an average of 25.8% without taking into account inflation. Besides, the fuel consumption by the entities of RAO "UES of Russia" has grown, taking into consideration the positive dynamics of production. The increase in the energy repairs at the Group's entities and higher prices of materials and services needed for energy repairs have also contributed to the growth of the Group's expenses.

The Group posted an operating profit of RUB64.5 billion in 2003, an increase of almost 3.5 times from RUB18.3 billion in 2002. The net profit of the Group of RAO "UES of Russia" in 2003 totalled RUB27 billion. The decrease in the net profit by RUB8 billion from 2002 was due to the fact that in 2002 the Group recognized the effect of deferred profit tax in connection with revaluation of fixed assets.

Consolidated Cash Flow Statement for 2003:

The cash flows from operating activities in the reporting period totalled RUB81 billion, an increase of RUB23 billion, or 39%, on 2002. This allowed the Group of RAO "UES of Russia" to finance its operations from the cash inflows from the operating activities. The cash investments of the Group in 2003 totalled RUB61.6 billion, up RUB22.6 billion from 2002.

* The Group includes RAO "UES of Russia" as the Parent Company, the regional energos, power plants, and other subsidiaries and dependent companies. The financial statements of the Group of RAO "UES of Russia" under the IFRS have been prepared since 1997.