Moscow, 2 February 2005. RAO "UES of Russia" has published the financial statements of RAO "UES of Russia" Group* prepared in accordance with the International Financial Reporting Standards (IFRS) for the first nine months of 2004.

As at 30 September 2004, the fixed assets of RAO "UES of Russia" Group stood at RUB879,490 million, an increase of RUB7,311 million from the beginning of the year. The increase in Property, Plant and Equipment (PP&E) was due additions (CAPEX) was in excess of depreciation, disposals and impairment charges.

The total assets of the Group increased over the nine months ended 30 September 2004 by RUB32,055 million to RUB1,119,596 million. Of this amount, the value of the Group's non-current assets amounted to RUB915,487 million, up RUB13,031 million, while the current assets were RUB204,109 million, an increase of RUB19,024 million compared to the beginning of the year.

The accounts receivable increased by RUB9,246 million during the period under review to RUB114,586 million as at 30 September 2004. The accounts payable in the first nine months of 2004 totalled RUB96,828 million, which represents an increase of RUB7,070 million from the beginning of the year.

The movements in the accounts receivable and payable during the period under review were largely influenced by seasonal factors. In particular, the accounts payable were influenced by the seasonal growth in advances issued to suppliers and repair and maintenance contractors, and increase in tax prepayments. The increase in the accounts payable was largely due to the seasonal growth in debts owed to suppliers and contractors.

Consolidated Income Statement for the First 9 Months of 2004

The Group's income from operations in the first nine months of 2004 was RUB477.713 billion, an increase of RUB57.894 billion (or 14%) compared to the same period of 2003.

The operating expenses in January-September 2004 grew RUB52,544 million, or 14%, to RUB435,160 million. The increase in overall expenses was mainly driven by the fuel prices, which grew by an average of 15.9%. At the same time, fuel consumption reduced by 1.6% as a result of increased hydro generation.

Over the reporting period, the Group's operating profit grew in year-on-year terms by RUB5,350 million (14%) to RUB42,553 million. The income before profit taxes and minority interests amounted to RUB30.757 billion, up RUB1,303 million, or 4%.

The earnings before minority interests grew in the first nine months of 2004 by RUB5,974 million (52%) to RUB17,430 million.

In January-September 2004, the Group's net profit amounted to RUB14,103 million, down RUB2,502 million compared to the same period of 2003. Such a decrease in the net profit is largely due to the increased profit attributable to minority interests**. The net profit attributable to minority shareholders in the nine months of 2004 was the result of the relative increase in the profitability of the Group's entities in which minority shareholders hold a significant interest. For instance, in the first nine months of 2003, the minority shareholders in some of the Group's entities suffered a loss, whereas in the nine months of 2004, minority shareholders made a profit.

Consolidated Cash Flow Statement for the First 9 Months of 2004

The cash flow from operating activities in the reporting period totalled RUB44,956 million, an increase of RUB2,279 million on the first nine months of 2003. In January-September 2004, the Group allocated RUB53,113 million for investments, an increase of RUB15,219 million compared to the same period of 2003.

The financial statements were audited by ZAO "KPMG", approved as the Group's external auditors by the AGM of RAO "UES of Russia" shareholders.