SHARE CAPITAL OF OAO "RAO "UES OF RUSSIA"

As at 31 December 2007, the share capital of OAO RAO "UES of Russia" amounted to RUB21,558,451,684, and was divided into 43,116,903,368 shares of RUB0.50 par value each, including 41,041,753,984 ordinary shares and 2,075,149,384 preferred shares.

Of that amount, 139,989,946 shares were placed during the first issue in 1993, and further 42,976,913,422 shares were placed during the second issue which took place in 1995.

On 17 June 2003 the FCSM of Russia issued Order No. №03-1131/r whereby the additional share issues of OAO RAO "UES of Russia" were consolidated:

• the issues of ordinary shares of OAO RAO "UES of Russia" were assigned a new state registration number, 1-01-00034-А, and the old state registration numbers, 73-1P-1553 of 18 August 1993, and MF 73-1-00901 of 16 October 1995, were cancelled;

• the issues of preferred shares of OAO RAO "UES of Russia" were assigned a new state registration number, 2-01-00034-А, and the old state registration numbers, 73-1P-1553 of 18 August 1993 and MF 73-1-00901 of 16 October 1995, were cancelled.

Holders of the Company's ordinary shares have the following rights:

• to participate in person, or by proxy, in a General Meeting of shareholders and to vote on all matters reserved to the general meeting;

• to elect and be elected to the management and control management bodies and control bodies of the Company as provided by Russian laws and the Charter of the Company;

• to dispose of the shares held by them without the consent of other shareholders or the Company;

• to receive their share of the net profit (dividends) distributable among shareholders in accordance with the provisions of Russian laws and the Charter of the Company;

• to have access to the Company's documents as provided by Russian laws and the Charter of the Company;

• to require repurchase by the Company of all or some of their shares in the cases provided by Russian laws;

• the pre-emptive right to purchase, in the event that the Company issues through open subscription additional shares or securities convertible into shares, such shares or securities pro rata to the quantity of shares of the category (type) held by them;

• to receive part of the Company's property (liquidation value) pursuant to the procedure provided by Russian laws and the Charter of the Company;

• to exercise other rights provided by Russian laws, the Charter and decisions of the General Meeting of shareholders on the reserved matters.

Type A preferred shares entitle their holders to a fixed annual dividend. The amount of dividend payable on each Type A preferred share makes 10 percent of the Company's full-year net income divided by the number of preferred shares, which make up 25 percent of the Company's authorized capital. If the dividend amount to be paid by the Company on each ordinary share in a particular year is greater than the dividend payable per Type A preferred share, the preferred dividend amount is to be increased to the amount of the ordinary dividend.

Holders of Type A preferred shares are entitled to attend general shareholders meetings and vote on all matters reserved to such meetings, beginning from the meeting following the Annual Meeting of shareholders which, regardless of the reasons, decided not to pay dividends or decided to pay partial dividends on preferred shares of that type. The right of holders of Type A preferred shares to participate in General Meetings of shareholders shall terminate from the date of the first full dividend payment on such shares.

Holders of Type A preferred shares have the right to attend the Company's General Meeting of shareholders and vote on the matters relating to reorganization and liquidation of the Company. Holders of Type A preferred shares acquire the right to vote if the Company's general meeting of shareholders is to consider amendment of the Company Charter restricting the rights of holders of Type A preferred shares and granting the holders of other types of preferred shares advantages in terms of dividend payment priority and/or liquidation value of shares. A decision to make such amendments shall be deemed taken if supported by at least three-quarters of the votes cast by the holders of voting shares present at the General Meeting of shareholders, except for the votes of holders of Type A preferred shares, and three-quarters of the votes cast by all holders of Type A preferred shares.

The Company shareholders have a pre-emptive right to purchase additional shares of the Company offered through open subscription (public offering) and securities convertible into shares of the Company, pro rata to the number of shares of the type held by them. The shareholders of the Company who vote against or do not participate in the vote on the proposal of private placement of (closed subscription for) the Company’s shares or securities convertible into shares of the Company, become entitled to a pre-emptive right to purchase additional shares and securities convertible into shares of the Company that are offered through private placement, pro rata to the number of shares of the type held by them. Such right does not extend to the placement of shares and other securities convertible into shares through closed subscription among the existing shareholders only if the shareholders can acquire a whole number of such shares or other securities convertible into shares in proportion to the number of shares of the type held by them.

In the event of the Company's liquidation, the Company's property remaining after the creditors' claims are met is used for payments in the following order of priority: firstly, payments are to be made in respect of shares subject to redemption under Article 75 of the Federal Law On Joint Stock Companies; secondly, payments are made in respect of any accrued, but unpaid dividends on preferred shares and the liquidation value of preferred shares as provided in the Company Charter; and thirdly, the property is to be distributed among holders of ordinary shares and all types of preferred shares.

The Company may authorize the issuance, in addition to the shares outstanding, of 6,467,535,504 (six billion four hundred and sixty-seven million five hundred and thirty-five thousand five hundred and four) ordinary shares, par value of RUB0.50 (fifty kopecks) each, worth a total of RUB3,233,767,752 (three billion two hundred and thirty-three million seven hundred and sixty-seven thousand seven hundred and fifty-two Rubles) .

The Company may issue additional shares only to the extent of the number of shares authorized for issuance.

The state owns 22,715,371,537 shares, or 52.68% of all shares outstanding.

NUMBER OF SHARES IN OAO RAO "UES OF RUSSIA" HELD BY THE STATE*

OWNERSHIP STRUCTURE OF OAO RAO "UES OF RUSSIA", %

RUSSIAN FEDERATION RESIDENT VS. NON-RESIDENT OWNERSHIP OF SHARES IN OAO RAO "UES OF RUSSIA", %

MARKET FOR SHARES OF OAO RAO "UES OF RUSSIA"

Ordinary shares of OAO RAO "UES of Russia" are included in the A-1 Level Quotation Lists, on the trading floors of ZAO "MICEX Stock Exchange" (ZAO "MICEX SE"), Non-Profit Partnership "Russian Trading System Stock Exchange" (NP "RTS SE"), and OAO "Russian Trading System Stock Exchange" (OAO "RTS SE").

Preferred shares of OAO RAO "UES of Russia" are included in the A-1 Level Quotation List on ZAO "MICEX SE", the A-2 Level Quotation List on NP "RTS SE", and OAO "RTS SE".

OAO RAO "UES of Russia" established a Global Depositary Receipt Program (Reg S) and a Level 1 American Depository Receipts (ADR) for its ordinary shares in 1997. The Level 1 ADR programme for preferred shares was launched in May 2000.

The Company's DRs are traded OTC in the USA, United Kingdom, Germany, and Austria.

DR PROGRAMMES OF OAO RAO "UES OF RUSSIA"

PRICE DYNAMICS OF RAO UES SHARES ON MICEX STOCK EXCHANGE, %

PRICE DYNAMICS OF RAO UES SHARES ON RTS STOCK EXCHANGE, %

Over 2007, the capitalization of OAO RAO "UES of Russia" grew by 25.8%, or US$11.33 billion, to US$55.17 billion from US$43.84 billion, while the RTS index grew by 27%. On 11 April 2007, RAO UES shares reached an all-time high on the stock market, with the price of ordinary shares on the MICEX reaching RUB38.05 and the Company's capitalization rising to US$62.35 billion.

Among the key corporate events had a major effect on RAO UES stock prices in 2007: completion of the first stage of RAO "UES of Russia" reorganization, approval of the final stage of the Company reorganization, sale of the "government stake" in generation companies.

The share repurchase price approved by the Board of Directors of RAO "UES of Russia" on 27 July 2007 based on the report prepared by the independent appraiser Deloitte & Touche at RUB32.15 per ordinary share and RUB29.44 per preferred share of OAO RAO "UES of Russia", which offers investors a hedge ensuring a minimum price for more than half a year (after 26 October and until 11 December, the shareholders who voted against or did not take part in the vote were entitled to tender their shares for repurchase at the above prices).

At end-2007, shares of OAO RAO "UES of Russia" traded at a discount to the value of the energy assets owned by its entities. According to the investment analysts' consensus forecast, the RAO UES assets were valued at US$80 billion at end-2007, while the market capitalization of OAO RAO "UES of Russia" stood at US$57 billion as at 28 December 2007. This means that the aggregate value of RAO UES Holding Company assets was 40 percent higher that that of OAO RAO "UES of Russia".

Last year saw continued reassessment of the power grid sector. The approval of ratios for exchanging DC shares for shares in IDCs resulted in an increased demand in this equity market segment.

The ratio most often used for the assessment of power grid companies is EV/Output. The average value of the EV/Output ratio for transmission (trunk grid) companies is US$15/MWh. The average value of the EV/Output ratio for distribution companies is US$43/MWh.

TRADING VOLUMES IN RAO UES SHARES ON RUSSIA'S MAJOR STOCK EXCHANGES, 2007, MILLION OF USD

PRICE DYNAMICS OF RAO UES DR ON THE LONDON STOCK EXCHANGE (LSE), USD

CAPITALIZATION OF OAO RAO "UES OF RUSSIA" (ACCORDING TO MICEX), billions of USD