1. Department of shareholder capital of RAO «EES Russia» V.Yu. Sinugin RELATIONS WITH SHAREHOLDERS AS AN ELEMENT OF CORPORATE WITH SHAREHOLDERS AS AN ELEMENT OF CORPORATEGOVERNANCE

2. Copyright © OECD 19992 Characteristics of the company’s volume RAO «EES RUSSIA» - a unique power company 3 Installed capacity 155 million Kwh (78,68% of the national level) 3 Percent of nationwide production is: electric power 73,43% thermal power 89,69% 3 The number of employees exceeds 700 thousand people

3. Copyright © OECD 19993 Scope of activity  The company services the RF territory occupying 17, 075.4 thousand sq.km  The company’s structure incorporates some 200 JSC, including  73 energyJSC  32 station JSC The length of system-forming power transmission lines is 41,7 thousand km, of which  330 Kw - 7,09 thousand km  400-500 Kw - 30,48 thousand km  750 Kw and more - 3,19 thousand km

4. Copyright © OECD 19994 Structure of joint-stock capital 4Charter capital 21,6 billion rubles 4Regular stocks 41 041 753 984 4 Privileged stocks 2 075 149 384 4Nominal 0.5 rubles 4In RTS and MMVB listing

5. Copyright © OECD 19995 Structure of corporate management

6. Copyright © OECD 19996 Management objectives and the main corporate events 4Strengthening shareholders’ and potential investors’ trust 4Preparation and coordination of justified and mutually acceptable decisions by the shareholders’ meeting 4Corporate events - within the system of relationships with shareholders ñelection of the Board of Directors, appointment of the Chairman and members of the Board ñapproval of the annual report, distribution of profit ñintriduction of amendments to the Charter ñdisclosure of information

7. Copyright © OECD 19997 Legislative regulation 4Federal legislation ïFederal law 74-FZ ïFederal law «On Joint-Stock Companies» ïFederal law «On Protection of Investors’ Rights and Legal Interests» 4Particularities and contradictions in the legislation

8. Copyright © OECD 19998 Dynamics of the price of «EES Russia» stocks in 1998

9. Copyright © OECD 19999 System of relations with shareholders  Fulfillment of obligations before shareholders, fixed by the RF normative acts and the Company Charter 3providing information obligatory for disclosure 3consideration of shareholders’ appeals  Additional actions with respect to shareholders 3holding regular meetings with the Company leadership 3forming a methodology of relations between the shareholders and the Company leadership 3interaction with associations of the securities market participants and investors  Perspective activities 3formation of a data base on interaction with shareholders 3elaboration and adoption of the Code of Relations of the Company with shareholders

10. Copyright © OECD 199910 Factors stimulating relations with shareholders  Existence of RF legislation on compulsory disclosure of information  Institution of compulsory annual auditing  Special Federal Law «On Protection of Investors’ Rights and Legal Interests»  Forming a system of information disclosure on initiative of the Federal Commission for Securities

11. Copyright © OECD 199911 Problems in the activity of joint-stock companies  Conflict of interests 3The state is the main shareholder, consumer of electric and thermal power, and also the regulator of the market of services in electric power engineering  Lack of distinctive legislative mechanisms of distribution of profit and budgeting procedures  Lack of special procedures of holding corporate events for large shareholders  Problem of unrealistic time frames of information disclosure