Dividends

In July 2003, the Board of Directors of Severstal adopted the key principles of Severstal’s corporate dividend policy.

Pursuant to the current dividend policy, Severstal will pay dividends on an annual basis provided that there are sufficient available annual profits to do so, after accounting for, inter alia, capital expenditure commitments. Whilst the amount of such annual dividends will vary according to  Severstal’s net profit and cash flow, Severstal intends to declare dividends for the medium term (until 2008) in an average amount equivalent to 25% of net profit (calculated in accordance with IFRS) for the relevant reporting period subject to availability of funds. In the long-term (after 2008), Severstal may  increase dividend payments, subject to a decrease in capital expenditure requirements. Severstal may declare an interim dividend if it believes its  financial position for such period is sustainable.

The current number of issued ordinary shares is  837,718,660.

Important notes:

In December 2004 Severstal completed a 1:25 share split resulting in a change in the number of outstanding shares from 22,074,192 to  551,854,800. The new number of shares should be used to calculate the size of dividends for all periods starting from the financial year 2004. Dividends per  share for the previous periods are stated according to the decisions in the shareholder’s meetings and must be divided by 25 to receive comparable data.

The following table illustrates the complete history of  Severstal’s dividend payments: