ANNUAL REPORT 2005

Dear ladies and gentlemen!

Novosibirskenergo OJSC has com­pleted one more successful year of development and advancement. Its im­pressive results reflect high profession­alism and skills of the personnel, flex­ible and efficient governance, compe­tently implemented reforms. Reliability, dynamism, and operational efficiency are the business card of our company as an energy producer.

I am pleased to note that 2005 was a year of skyrocketing and impressive success. The consistent implementa­tion by the Novosibirskenergo OJSC management of the main strategic di­rections of the company’s development brought highly positive results. We at­tained excellent financial and produc­tion performance, fulfilled all the plans and tasks we had set and provided sustainable foundation for our future development. This year we conducted intensive investment activity, owing to which new energy objects emerged on the Novosibirsk maps, i.e. electric power substations Chelyuskinskaya and Vympel, step-down pumping sta­tion (PNS-11).

The Company continues its dynamic development. Reforms helped it to cut down non-core directions, improve the promising business activities. In 2005, on the basis of five affiliates, a new in­tegrated enterprise Engineering centre OJSC was set up. These measures are to make the operation of Novosibirsk­energo OJSC even more efficient, reli­able, and attractive for investors.

In 2005, we paid special attention to personnel management. Personnel is the main value of Novosibirskenergo OJSC, therefore we take pride in the highly professional qualities of our team, which joins their efforts, potential, and energy to fulfil the Company’s mis­sion. We take special care of the health promotion among our staff, foster team spirit and culture; organize sports and corporate holiday events.

Novosibirskenergo OJSC is an open company. We comply with the western standards of public relations and trans­parency, inform the government struc­tures, general public, and businesses about the key directions of our activity, and give extensive press coverage of our most significant events. This gives us confidence that all our undertakings aimed at the welfare and development of Novosibirsk and Novosibirsk oblast will elicit response and support of the community citizens.

Community development has be­come the focus of the Company’s social activity. The priorities of our charity program still include youth and sports because the secret of successful future is a strong and healthy young genera­tion. We participate in students and ed­ucational programs, provide on-going sponsorship to Orphanage #1, support important cultural and spiritual events, because giving rather than taking is the measure of success.

The activity of our energy com­pany in 2005 implemented our motto “To develop is to act”. There are new challenges and goals ahead. Market economy calls for the optimisation of all the resources, efficient and flexible government, introduction and master­ing innovative technologies, attract­ing new investment. I can assure you that the mission of Novosibirskenergo OJSC is the same  to provide all the consumers with high-quality heating and energy.

With best regards,

Kornei Gibert,

Director General

Novosibirskenergo OJSC