	NOVOSIBIRSKENERGO
	OPEN JOINT STOCK COMPANY OF POWER-ENGINEERING AND ELECTRIFICATION

Address of Novosibirskenergo OJSC Director General

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	ANNUAL REPORT 2005


	ANNUAL REPORT 2004


	ANNUAL REPORT 2003


	ANNUAL REPORT 2002


	News


	Brief History


	Financial statements 2005


	Financial statements 2006


	Financial statements 2007

ANNUAL REPORT 2002

Chief Executive Officer Address to Shareholders

Dear Shareholders,

Open joint stock company (OJSC) Novosibirskenergo has celebrated a decade in business. It was a difficult period in history of our country that we have successfully passed. It may be said that the initial period of transformation of our company is concluded. During this time, we have become the biggest independent Russian company in our business. We have adapted to the new business conditions; and now we set new goals - from the strategy of survival we have moved to the strategy of development.

Last year was a successful year for all of us. Much is done, and, foremost, for the personnel policy, for strengthening of the management, and for the financial state of the company. The new team has brought about significant changes to the system of management of economic processes.

We put a stake on intelligence, professionalism, will, and ability to develop new solutions for energy system challenges that is all the main distinction of our management team. OJSC Novosibirskenergo actively develops public relations with residents, executive and legislative branches of power, mass media, employees, explaining position of the management on all issues of our development.

I feel privileged to thank our shareholders and members of the Board of Directors for the hard work which has brought us much success.

Chief Executive Officer of
OJSC Novosibirskenergo
K.K. Gibert

Results of Development of the Company By Main Activities

Electricity generated by Open Joint Stock Company (OJSC) Novosibirskenergo in 2002 amounted to 11,242 million KWh. Deployed capacity on January 1, 2003 was 2,537 MW.
The planned balance of energy by OJSC Novosibirskenergo for 2002 was approved with the following control indicators:

electricity consumption - 13041 million KWh,

electricity generation - 11791 million KWh (incl. heat and electricity stations - TEC - 9,991 million KWh, hydroelectric station - GES - 1,800 million KWh),

electricity purchased from Federal Wholesale Market of Energy and Capacity (FOREM) - 1,250 million KWh.

	2000 report	2001 report	2002 plan	2003 report	Deviation from the plan, 2002	Deviation from the plan, 2001	Deviation from the plan, 2000
Electricity generation
Incl. TEC-2	1641	1280	1337	1280	-57	0	-361
TEC-3	1836	1533	1924	1736	-188	203	-100
TEC-4	1566	1427	1528	1430	-98	3	-136
TEC-5	5039	4321	4952	4505	-447	184	-534
BTEC	244	237	250	246	-4	9	2
Total TEC	10326	8798	9991	9197	-794	399	-1129
GES	1970	1962	1800	2045	245	83	75
All	12296	10760	11791	11242	-549	482	-1054
Electricity consumption	12808	12768	13041	12583	-458	-185	-225
Purchased electricity	512	2008	1250	1341	91	-667	829

Reported numbers for 2002 as compared to the planned indicators show decline in electricity consumption by 458 million KWh. Company stations generated electricity less than planned by 549 million KWh, however hydroelectric power station generated 245 million KWh more electricity than it was planned due to the increased water resources of Novosibirsk water reservoir. Heat stations have freed 794 million KWh as a result of optimization of energy procedures and decreased electricity consumption.

Purchased electricity was planned in the amount of 1250 million KWh, factually electricity purchased from FOREM amounted to 1341 million KWh, of which for execution of the planned balance 566.139 million KWh, for execution of contracts concluded upon results of trade sessions on extra-plan energy of hydroelectric power station 774.861 million KWh. (Economic effect for the company from the purchase of energy on trade sessions amounted to 55.774 million rubles. Fuel savings amounted to 249 thousand tons of standard coal or to 145 million rubles.)

Production Activity

	2000 report	2001 report	2002 plan	2003 report	Deviation from the plan, 2002	Deviation from the plan, 2001	Deviation from the plan, 2000
Electricity generation
Incl. TEC-2	1641	1280	1337	1280	-57	0	-361
TEC-3	1836	1533	1924	1736	-188	203	-100
TEC-4	1566	1427	1528	1430	-98	3	-136
TEC-5	5039	4321	4952	4505	-447	184	-534
BTEC	244	237	250	246	-4	9	2
Total TEC	10326	8798	9991	9197	-794	399	-1129
GES	1970	1962	1800	2045	245	83	75
All	12296	10760	11791	11242	-549	482	-1054
Electricity consumption	12808	12768	13041	12583	-458	-185	-225
Purchased electricity	512	2008	1250	1341	91	-667	829

Financial Results

For the last three years, continuous growth of profits from sales of the company's main products has been observed: from the minimum of 220,863 thousand rubles in 2000 to the maximum of 883,340 thousand rubles in the reporting year.

As a whole, during the considered period, the structure of the gross profits has remained unchanged: the largest share comes from sales of electricity (58.8 percent according to the results of the reporting period); at the same time, profits from sales of heat have been constantly increasing, from 0.5 percent in 2000 to 27.2 percent in 2002.

The trend of the net (undistributed) profits for the last three years has not been well defined: 14,846 thousand rubles in 2000, -380,143 thousand rubles (loss) in 2001, 50,121 thousand rubles in the reporting year.

Last year results show significant growth of the net assets as compared to 2000 (Table 1). This fact signifies shaping of a tendency of rising financial stability and significant decline of the degree of dependency on external creditors.

Table 1. Trends of Net Assets

Indicator	Row code	Jan 1, 2001	Jan 1, 2002	Jan 1, 2002
ASSETS
Non-material assets	110	6 878	-	-
Fixed assets	120	3 636 006	12 100 065	11 520 202
Unfinished construction	130	2 445 179	2 683 596	2 788 050
Long-term financial investment	140	6 477	12 473	185 264
Other non-working capital	150	-	-	-
Inventory	210	497 883	903 622	585 344
VAT for reimbursement	220	212 134	324 365	405 245
Long-term payables	230	42 686	43 877	36 778
Short-term payables	240	3 070 709	2 044 389	1 979 241
Short-term financial investment	250	26 254	15 817	41 206
Cash and money in accounts	260	14 709	106 806	359 121
Other working capital	270	702	825	552
TOTAL ASSETS		9 959 617	18 195 835	17 901 003
LIABILITIES
Targeted investment		109 247	121 550	121 269
Borrowed funds	510, 610	340 001	383 108	220 000
Receivables	620	3 724 215	2 778 766	2 696 922
Dividends	630	8 221	4 553	3 926
Reserves for expected expenditures	650	-	-	-
Other liabilities	520, 660	20	1 033 504	984 402
TOTAL LIABILITIES		4 181 704	4 321 481	4 026 519
NET ASSETS VALUE		5 777 913	13 874 354	13 874 484

The observed growth of the value of net assets is accompanied by significant improvement of the company's main financial indicators in the reporting year. Significant decline in the value of non-working capital, caused by a decrease of value of fixed assets resulted by spin-offs of a number of branches from the company into independent closed joint stock daughter companies and closures of non-specialized businesses, when own capital remained practically unchanged, lead to significant increase of own working capital resources from 64,967 thousand rubles in the beginning of the year to 325,854 thousand rubles on January 1, 2003.

In the reporting period, indicators of financial stability have improved due to decline of short- and long-term liabilities of the company, and unchanged value of own capital.

Table 2. Indictors of Liquidity and Financial Stability

Indicator	2000	2001	2002
Coefficient of current liquidity	0.91	1.02	1.11
Coefficient of inventory coverage	2.30	1.83	2.30
Coefficient of financial dependence	1.73	1.31	1.29
Ratio of borrowed to own funds	0.73	0.31	0.29
Value of own working capital (in thousand rubles)	-366,456	64,967	325,854

Annual sales were 8,348 million rubles without VAT, including:

Sales of electricity 5,646 million rubles (67.7%);
Sales of heat 2,482 million rubles (29.7%);
Sales of other goods 220 million rubles (2.6%).

According to the end year results, total payables declined by 32,247 thousand rubles (by 1.6%), and on January 1, 2003 amounted to 2,016,019 thousand rubles. The main share (98%) of payables is short-term payables, payments of which are expected within 12 months of the report date.

Investment

Investment in OJSC Novosibirskenergo in 2002 amounted to 470,895 thousand rubles, with the year plan, approved by the Regional Energy Commission, of 592 million rubles, that was 79.5% of the annual plan. Besides, for the entity of RAO UES of Russia - Novosibirsk hydroelectric power station, investment for the technical modernization was 10,691 thousand rubles with the plan of 77,053 thousand rubles. Total investment in fixed capital in 2002 amounted to 481,586 thousand rubles with the plan of 669,053 thousand rubles.

Investment in non-material assets and other capital investment amounted to 173,042 thousand rubles.

From the total amount of capital investment, the following has been utilized:

Production construction 474,682 thousand rubles;
Non-production construction 6,466 thousand rubles;
Shared housing construction 2,793 thousand rubles.

Investment in equipment not requiring deployment and not included in expense sheets for construction, that is instruments and inventory, amounted to 126,120 thousand rubles.

Investment for technical modernization and reconstruction was 311,209 thousand rubles (66.1% of the annual plan). Investment utilized in new construction for production amounted to 170,377 thousand rubles (86% of the annual plan).

Personnel Description

The number of registered employees on January 1, 2003 was 10,180 people. As compared to the last year, it has declined by 3,608 people. Optimization of employment numbers was done through transfer of personnel into independent businesses (foundation of closed joint stock companies PRP, NESR, Stroitel, and other) and through closures of unspecialized businesses. Thus, employment numbers dropped because of spin offs by 3,281 people, and because of layoffs by 327 people.

Characteristics of the company personnel are the following:

The largest share of personnel is of the most productive age, 30-50 y.o. (59.66%),
Average age of personnel is 37.5 years,
Average tenure of personnel in energy business 11.7 years.

A qualitative indicator is qualification of personnel; qualification levels have been increasing over last 4 years: as compared to the last year, it has increased by 3.6% and amounted to 95.2%. The number of employees with higher and professional education has increased by 6.37% (2001 - 51.03%, 2002 - 57.4%).

During last year the coefficient of layoffs turnover has increased by 3.5 times, and was 46.15%. From 5,900 people, 4,346 or 74% were fired according to company regulations. Turnover of personnel was 9.01%, that is by 1.02 % greater than in 2001. Such increase was due to introduced measures for optimization of personnel.

Capital Stock (Charter Capital) and Company Shares

On January 1, 2002 charter capital amounted to 160,746,190 rubles, and was divided into 13,524,401 common registered shares of nominal value 10 rubles, and 2,550,218 preferred registered shares of Type A of nominal value 10 rubles.

The company monitored flows of its shares during 2002, and analyzed information received on the 1st and the 15th day of each month from the company's registrar - CJSC «Reestr A - Plus.»

Structure of Capital Stock

Name of shareholder	Share of stock, %
Name of shareholder	January 01, 2002	January 01, 2003
RAO «UES Russia»	14.17	14.17
Foreign investors	6.6	5.52
Other legal entities	63.33	65.42
Physical persons - company employees	10.64	9.89
Physical persons - outside shareholders	5.26	5.0
Total	100	100

The company has been attending needs of shareholders by organizing filling of questionnaires about changes to the shareholders registry, by providing access to information about corporate affairs of OJSC Novosibirskenergo, by preparing answers to questions of shareholders. Section "For Shareholders" on the web site of the company is also the source of information for shareholders.

Company Management

The chief governing board of the company - Shareholders Meeting - reviewed results of the company, evaluated quality of business management.

Board of Directors during the year has controlled execution of decisions approved by Shareholders Meeting, defined the development strategy of the company, reviewed and approved the business plan, the budget, and reports on execution of the business plan and the budget, effectively controlled activities of the Company and its executive branches.

During 2002, 17 sessions of Board of Directors were held, 9 of which were meetings, and 8 were organized as voting by mail. The Corporate Department has overseen preparation of meetings of Board of Directors.

Board of Directors of OJSC Novosibirskenergo has made the decision on October 14, 2002 to liquidate as of December 31, 2002 the following branches of OJSC Novosibirskenergo: «Proizvodstvenno-remontnoe predpriyatie (production and repair company)», «Novosibirskenergospetsremont (special repairs company)», «Novosibirskenergosnabkomplektoborudovanie (company for supply of specialized equipment)».

As a restructuring measure, 7 daughter companies were founded:

CJSC «Sibirenergoinvest (Siberian energy investment company)»,
CJSC «Novosibirskenergosnabkomplektoborudovanie»,
CJSC «Proizvodstvenno-remontnoe predpriyatie»,
CJSC «Sibirskaya energiya (Siberian energy)»,
CJSC «Sibirskaya lizingovaya kompaniya (Siberian leasing company)»,
CJSC «Stroitel (Builder)»,
CJSC «Novosibirskenergospetsremont».

In 2002 the Company has opened a representation office in Moscow. The Company has prepared registration documents for the representation office. The Company has issued regulations on «Branches and Representation Offices of OJSC Novosibirskenergo.»

In 2002 the 4th issue of common shares and the 3rd issue of Type A preferred shares have been carried out. The means of distribution was conversion. As a result, the nominal value of company shares has increased from 1 ruble to 10 rubles per one share.

Work of Board of Directors

CJSC «Sibirenergoinvest (Siberian energy investment company)»,
CJSC «Novosibirskenergosnabkomplektoborudovanie»,
CJSC «Proizvodstvenno-remontnoe predpriyatie»,
CJSC «Sibirskaya energiya (Siberian energy)»,
CJSC «Sibirskaya lizingovaya kompaniya (Siberian leasing company)»,
CJSC «Stroitel (Builder)»,
CJSC «Novosibirskenergospetsremont».

Members of Board of Directors

9 people for Board of Directors have been elected by the Annual Shareholders Meeting on April 30, 2003.

Members of Board of Directors of OJSC Novosibirskenergo

NN	Last and First Name, Middle Name	Position, Employment
1	Gibert Korney Korneevich	Chief Executive Officer of OJSC Novosibirskenergo
2	Epifantsev Andrei Vladislavovich	CEO of CJSC "Law company "Gravis"
3	Velikanov Valeriy Mihaylovich	Chief Executive Officer of OJSC "Investresurs"
4	Kolodnikov Igor Vladimirovich	Director for Corporate Policy of OJSC Novosibirskenergo
5	Pelipasov Aleksandr Nikolaevich	Director for Material and Fuel Supply of OJSC Novosibirskenergo
6	Podchasova Tatyana Nikolaevna	Director for Energy Sales - Director of Energosbyt (holds 111 common shares and 414 preferred shares)
7	Rogozhin Aleksandr Nikolaevich	Director of LLC "Gestor RiK"
8	Solovyanov Vladimir Dimitrievich	Consultant of CEO of OJSC Novosibirskenergo (holds 9,171 common shares and 1,044 preferred shares)
9	Toropkin Oleg Anatolyevich	Deputy of Novosibirsk Oblast Soviet (Regional Legislative Board)

Secretary of Board of Directors is Kolodnikov Igor Vladimirovich, Director for Corporate Policy of OJSC Novosibirskenergo.

On Company's Observance of the Code of Corporate Conduct

On April 4, 2002, by Decree of Federal Commission on Securities Market of Russian Federation (henceforth FCSM RF) number 421/r «On Recommendations for Adoption of the Code of Corporate Conduct,» joint stock companies (corporations), founded in Russia, were advised to follow rules of the Code of Corporate Conduct which was appended to this Decree.

By this Decree FCSM intended to increase the level of corporate management and the level of trust of potential investors to the mechanisms attracting capital investment (and, on this basis, for further capitalization of Russian companies).

The international practice of adoption of the codes of voluntary accepted standards and internal documentation, which set and bound corporate decision making, does not have long history, it is only about 10 years old.

Novosibirskenergo, as a company striving to adhere to international standards in its activities, consecutively follows the policy of adaptation of recommendations for corporate management, set in the Code of Corporate Conduct.

Dividend History of OJSC Novosibirskenergo

	1999	2000
Amount of accrued dividends on preferred stock in thousand rubles	612	1836
Dividend on 1 preferred share, kopecks per share	0.245	0.717
Amount of accrued dividends on common stock, thousand rubles	0	0
Dividend on 1 common share, kopecks per share	0	0
Total amount of accrued dividends, thousand rubles	14.17	14.17

Public relations

Information strategy of the Company in the past year was aimed at attaining the following goals:

Development of relations between the Company and the outside world using mass media for creation of the Company's positive image,
Support of dissimilation of positive information about the Company's business among population, mass media, and groups of clients,
Development of good, working relations with branches of power,
Improvement of the psychological climate inside the work collective, dissimilation of information about goals, business, and news about the Company,
Monitoring and analysis of media reports on problems of the energy sector.

The Company has its web site at www.nske.ru, where useful information is placed for shareholders, customers, journalists, and other interested parties. The site is updated twice a week, news in the form of press releases are distributed to more than 100 addresses of local media, and to interested press services.

Since November 2002, a monthly corporate newspaper «Vestnik Novosibirskenergo» (News of Novosibirskenergo) has been published. It informs the work collective about goals and activities of the Company. This is an important way to decrease psychological tension in the work collective during restructuring period, and to organize information flows among departments and daughter companies.

General information

General Director (Chief Executive Officer)

Person who executes functions of the Chief Executive Officer is Gibert Korney Korneevich.

He was elected as CEO of the Company on May 27, 2003.

He was born 1957, is a graduate of Tomsk Polytechnical Institute.

Information about the Company

Location and postal address:
ul. Sverdlova, 7, Novosibirsk 630007, Russian Federation.

Information about state registration:
Date of state registration of the issuer of shares: February 23, 1993
Number of certificate of state registration (other document confirming state registration of the issuer of shares): GR 247
Registering state body: Mayor's Office of Novosibirsk. Main State Registration Number 1025403195674.

INN (Tax ID): 5411100018
Contact telephone number: 7 (3832) 29-81-59
Fax number: 7 (3832) 23-86-36
E-mail: kanc@nske.ru kanc@www.nske.ru, kanc@nske.elektra.ru kanc@nske.elektra.ru
Web site: www.nske.ru
Bank information: Ruble account no. 40702810600005220518 in OJSC Bank Alemar Novosibirsk, corresponding account no. 30101810500000000874, BIK 045004874.