1) Pursuant to the Agreement #67 of June 23, 1998, between ZAO INTERAUDIT and RAO UES of Russia, we have conducted an audit of the attached Financial Statements of RAO UES of Russia with Affiliates for 1998. RAO UES of Russia with Affiliates prepared these Financial Statements in compliance with the requirements approved by Order #170 of the Russian Federation Ministry of Finance On Guidelines for Accounting and Reporting, dated December 26, 1994; The Chart of Accounts approved by Order #56 of the USSR Ministry of Finance, dated November 10, 1991 with subsequent amendments and additions; “Regulation on the constitution of cost of production (of products and services) and formation of financial results for taxation purposes,” approved by Statement #552 of the Russian Federation Government of August 5, 1992 with subsequent amendments and additions, as well as Instructions of the Russian Federation Ministry of Finance On the Scope and Format of Annual Balance Sheets of Enterprises and the Procedure for Drawing them up for an appropriate accounting period, and other regulatory documents governing the procedure for recording business transactions in books and for preparing Financial Statements.
        2) RAO UES of Russia with Affiliates assumes responsibility for the preparation of the said Financial Statements. Our responsibility is to express an opinion on the basis of the conducted audit regarding fairness of the said Financial Statements in all material aspects.
        3) We conducted this audit in compliance with Provisional Rules for Audit Activities in the Russian Federation approved by Presidential Decree #2263, dated December 22, 1993. The audit included random verification on a sample basis of numeric values and explanations provided in the Financial Statements. We believe that the conducted audit is sufficient to express an opinion on the fairness of the said Financial Statements.
        4) In our opinion, the Financial Statements attached hereto, are fair, i.e. prepared in such a manner as to ensure the reflection of assets and liabilities of RAO UES of Russia with Affiliates as of January 1, 1999 and its financial results for 1998 in compliance with the above regulatory documents governing accounting and reporting.