Management Company and General Director

In accordance with the Resolution of the General Shareholders’ Meeting dated May 23, 2003 and the Agreement between Severstal and ZAO Severstal-Group dated May 23, 2003 (the ‘Management Agreement’), ZAO Severstal-Group was vested with the powers of the chief executive body of Severstal. ZAO Severstal-Group appoints the General Director of Severstal, who acts as its representative on the basis of a power of attorney and the Management Agreement. The General Director is competent to take decisions regarding all aspects of Severstal’s current activities, except for those matters, which fall within the exclusive power of the General Shareholders’ Meeting and the Board of Directors. The powers which can only be exercised by the General Director include a power of discretion over Severstal’s assets, including cash, of up to 10% of the total book value of those assets at the time of the transaction; the ability to take decisions involved in the day-to-day management of Severstal; being the primary signatory for financial documents; deciding labor management and policies; and other functions set out in the current legislation of the Russian Federation and in Severstal’s Charter. The General Director is currently Mr. Anatoly N Kruchinin. The General Director may be dismissed by either ZAO Severstal-Group or the Board of Directors of Severstal.

On October 27, 2006 the EGM has to vote the termination of Management Agreement with ZAO Severstal-group, beginning December 16, 2006.