Corporate governance system

SHAREHOLDER MEETING

The supreme governing body of RAO "UES of Russia" is a General Shareholders Meeting. The procedure for convocation, preparation, conduct of the General Shareholders Meeting and the tally of votes is set forth in the Regulation on General Meeting of Shareholders of RAO "UES of Russia" approved by the shareholders at the AGM of 2002.

Shareholders of the Company owning, in the aggregate, at least 2 percent of the Company's voting shares may propose items to be included on the agenda of the Annual General Meeting. Such proposals are to be submitted to the Company not later than 60 days after the fiscal year-end; the proposals shall be in writing and contain the name(s) of the proposing shareholder(s), the quantity and class (type) of the shares held by them, and shall be signed by the shareholder(s). Such shareholders may also nominate candidates for the Board of Directors of the Company whose number should not exceed the number of members on the Board. If nominations are submitted for election to the Board of Directors at an Extraordinary General Meeting of shareholders, they must be received by the Company not later than 30 days before the meeting date.

A nomination for the Board of Directors must contain each candidate's name, details of his/her identification document, and the body he/she is being nominated for.

A nomination is deemed received on the day it is delivered to the Company.

An Extraordinary General Meeting of shareholders is held pursuant to a decision of the Board of Directors of RAO "UES of Russia" on its own initiative, on the requirement of the Company's Auditing Commission, the Company Auditors, and the shareholders who hold at least 10% voting shares as of the date on which the relevant notice is given to the Board of Directors. The items of business to be considered by the EGM are proposed by the person requiring to call the Meeting.

In 2007, RAO "UES of Russia" held two General Meetings of shareholders.

The Annual General meeting of shareholders held on 26 June 2007 approved the Company's Annual Report for 2006, the annual financial statements, appointed the Company's independent auditors, approved the amendments to the Charter of the Company, elected members of the Board of Directors and the Auditing Commission of the Company, decided not to pay final dividends on ordinary and preferred shares (after that, the preferred shareholders became entitled to vote on all items of business considered by the Company's general meetings of shareholders), and approved interested transactions (series of transactions) involving the purchase by RAO "UES of Russia" of additional shares in OAO "FGC UES".

The meeting results can be viewed on the Company's website.

The Extraordinary General Meeting of shareholders held by way of postal vote on 26 October 2007 approved by reorganization of the Company through spin-off of 28 companies, approved the mergers of 19 companies into the relevant WGCs, TGCs or OAO "Sochinskaya TPP", the mergers of State HoldCos and Minority HoldCos with and into OAO "HydroWGC" and OAO "FGC UES", the final merger of RAO "UES of Russia" into OAO "FGC UES", and elected members of the Boards of Directors and Auditing Commissions of all companies to be established pursuant to the meeting's resolutions.