Moscow, 7 July. RAO "UES of Russia" publishes its Consolidated Financial Statements [of RAO "UES of Russia" Parent Company and RAO "UES of Russia" Group]* for the year ended 31 December 2002 prepared in accordance with the International Accounting Standards (IAS).

RAO UES Group Consolidated Balance Sheet for the year ended 31 December 2002:

Total assets of RAO UES Group as at 31 December 2002 amounted to RUB 1,061.4 bln, of which RUB 898.1 bln were the non-current assets and RUB 163.2 bln were the current assets.

Accounts receivables made RUB 92.9 bln, which is RUB 11.3 bln (by 11%) less than in 2001. During the year 2002, accounts payable were reduced by 18% and reached RUB 84.3 bln.

Consolidated P&L Account for the year ended 31 December 2002.

The Group’s revenues in the year ended 31 December 2002 amounted to RUB 503.4 bln, which is RUB 42.7 bln more compared to 2002, whereas costs and other deductions in 2002 amounted to RUB 485.1 bln, a RUB 37.1 bln increase compared to 2001. Thus, in 2002 the Group’s revenues grew at a greater pace than its costs, which is a successful result of RAO UES Group’s Costs Management Program.

As a result, income from operations of RAO UES Group in 2002 made RUB 18.3 bln, which is 1.5 times over the figures of 2001 (RUB 12.5 bln).

Net income of RAO UES Group in 2002 amounted to RUB 35 bln. This is less than in 2001 (RUB 48 bln), when the amount of net income of RAO UES Group was, in principle, determined by the financial result received through implementation of the Resolution of the Russian Government on the Repayment of Debt of Russian Federation to Czech Republic.

Consolidated Cash Flow Statement for the year ended 31 December 2002:

Cash flows provided by the Group’s operating activities in 2002 amounted to RUB 58.5 bln, RUB 39 bln were allocated for investing activities. This is the first time the Group financed its investing activities at the account of net cash from operating activities.

RAO "UES of Russia" Parent Company Financial Statements:

Balance Sheet for the year ended 31 December 2002:

Total assets of RAO UES Parent Company as at 31 December 2002 amounted to RUB 269.6 bln, of which RUB 227.3 bln were the non-current assets and RUB 42.3 bln were the current assets. The Balance reflects the changes in the structure of non-currents assets due to transfer of property to the balance of OAO "UES FGC" and OAO "UES SO-CDU" and respective reflection of the value of shares in such companies in the balance of RAO "UES of Russia".

Accounts receivable of RAO UES Parent Company as at 31 December 2002 made RUB 17.2 bln, which is 2.6 times less compared to 2001 (RUB 45.1 bln). Accounts payable made RUB 3.1 bln, which 12 times less than in 2001 (RUB 37 bln). At the same time, a significant reduction of long-term loans took place – by RUB 10.5 bln, or 59%.

Liquidity of RAO UES Parent Company increased: current assets are more than two-fold larger than the short-term loans (as at the end of 2001 they were more by 1.24 times). The shareholders’ equity increased substantially, by RUB 24.7 bln, or 12%, as a result of larger net income.

P&L Account for the year ended 31 December 2002:

There’s a growth in revenues of the Parent Company: in 2002 the revenue amounted to RUB 60.4 bln, which is RUB 11.2 bln more compared to 2001. Operating costs also increased by RUB 11.2 bln and amounted to RUB 37.9 bln. At the same time, income from operations remained almost unchanged from 2001 and made RUB 22.5 bln.

Net income of the Parent Company in 2002 amounted to RUB 26.4 bln, which is RUB 1.3 bln, or 5%, more compared to 2001.

Statement of Cash Flows for the year ended 31 December 2002:

Cash flows from the operating activities of the Parent Company amounted to RUB 40.8 bln, which is RUB 52.3 bln more compared to 2001, when the figure was in the red. Net cash used for investing activities in 2002 made RUB 16.2 bln, which is more than RUB 3 bln more compared to 2001.

Audit of RAO UES Financial Statements was performed by PricewaterhouseCoopers Company which was approved as Auditor of RAO UES Group by the Annual General Meeting of shareholders of RAO "UES of Russia"

* This takes into account RAO "UES of Russia" proper as the Parent Company, regional AO-energos, power plants and other subsidiary and dependent companies. Financial Statements of RAO "UES of Russia" Group have been prepared in accordance with IAS since 1997.

** Financial Statements of RAO "UES of Russia" was prepared taking into account the purchase power of Russian Ruble as at 31 December 2002.