OMK social policy is based on four key principles:

-    OMK develops open effective business in line with the long-term interests of the country and society.

-    OMK seeks to share its achievements with the regions where it operates and is involved in the development of local social infrastructure.

-    OMK considers successful performance and concern for its employees and their families as an organic unity.

-    OMK seeks to have a positive impact on the life of society not only with its business results but also by implementing social investment and charitable programs.

OMK puts those principles into practice in all aspects of its activity. Meanwhile, UMC considers social investment to be investment in development that must be effective and generate tangible results.

OMK is one of Russia's leading industrial companies, makes products competitive in the world market, satisfies a demand of the country's largest transportation and energy companies, insures that orders are placed with many Russian plants, thus creating new jobs in related industries. OMK understands that the establishment of a transparent and honest business environment in Russia is a precondition for developing a positive image for the Russian business in the world. The Company's strategy is based on strict business conduct and competition standards. OMK establishes honest relationships with customers and suppliers, provides environmentally safe products and services, fulfills its contractual obligations timely and fully.

OMK considers paying taxes in strict conformity with the law to be one of the main elements of its social responsibility. The Company's major assets—the Vyksa Steel Works and Chusovoy Steel Works — are the enterprises making the most important contributions to the development of the towns where they are situated. Since the future of the towns of Vyksa and Chusovoy depends directly on the development of the enterprises, OMK regards production and financial performance as an important component of social responsibility. The taxes paid by the Vyksa Steel Works and Chusovoy Steel Works, which rank among the largest taxpayers in the Nizhni Novgorod and Perm Regions, are of paramount importance to the regional budgets. The amount of the taxes paid by OMK grows year by year. In 2004, the Vyksa Steel Works paid to budgets of different levels more than 1.8 billion rubles; the Chusovoy Steel Works, over 0.5 billion rubles.

The Vyksa Steel Works and Chusovoy Steel Works pay close attention to the social development of the enterprises and the towns of Vyksa and Chusovoy. In 2004, the amount of the two enterprises' expenses for the financing of medical care, sports, leisure and recreational activities, special charitable and sponsorship programs, as well as social benefits, was approximately 200 million rubles.

In November 2004, the Vyksa Steel Works, OMK, the Administration of the Vyksa District, and the Legislative Assembly of the Nizhni Novgorod Region signed an agreement on the basic measures to be taken in relation to the 250th anniversary of the Vyksa Steel Works in November 2007. In the next three years, OMK and the Vyksa Steel Works intend to create the historical and architectural complex "Batashev House," restore a recreation center, build a new town hotel in cooperation with the Administration, overhaul the Metal-makers Cultural Center, and restore the unique facilities located in the Works' premises that were created by the famous Russian engineer V. G. Shukhov. OMK's total financial participation in the program will exceed 600 million rubles. The Company establishes a relationship with the Administration of the Perm Region in a similar way. In October 2004, OMK and the Administration of the Perm Region signed a socioeconomic cooperation agreement that provides for the implementation of a large-scale investment program covering the Chusovoy Steel Works and Gubakha Coke. In the near future, OMK also intends to propose to the Chusovoy and Gubakha municipal authorities a combined action program aimed at the improvement of the sociocultural situation in these towns.

OMK understands that, in many respects, the current successes of the Company have been achieved thanks to its personnel. Creating favorable labor conditions, insuring the possibility of growth and self-actualization, and providing social protection for its employees, the Company forms a highly qualified and well-consolidated team able to efficiently fulfill the Company's business tasks. OMK focuses on three directions of social programs for employees: creating conditions for remuneration growth, providing support for public health, and developing leisure and sports activities.

-               OMK believes that being socially responsible to its employees, to a considerable extent, means insuring a proper level of salaries and wages. In 2004, the average wage at the Vyksa Steel Works increased by 32%; at the Chusovoy Steel Works, by 54%. OMK applies employee incentives for professional achievements. The Vyksa Steel Works has the Ivan and Andrey Batashev Foundation established in 2003 and named after the founders of the Works, which annually selects the best employees and specialists in eight professional areas. According to the 2004 performance results, 24 employees of the Vyksa Steel Works received Foundation awards, prize money, and diplomas.

-               OMK pays close attention to health of its personnel. The Company's employees are provided with medical treatment; the OMK enterprises have their own medical centers and regularly provide immunization for employees. Health insurance plans are developed for employees of the enterprises and the head office. The high-quality level of medical care produces a direct economic effect. According to the 2004 results, the measures taken by the Vyksa Steel Works led to a considerable reduction in occupational injuries and diseases. This entitled the Works to a 34% discount on the insurance rate of compulsory accident and occupational disease insurance.

-               OMK considers it a priority of its social policy to create a favorable social environment in its work collectives and in the areas where the Company operates. The Company provides its employees and the general public with access to sports and cultural centers, regularly finances cultural and sports events. The Company invests in the maintenance of cultural centers, museums, and cinema theaters. In 2004, on a regular basis, OMK held the first panel games and sports events (OMKiad games) for its employees. The first OMKiad took place in Chusovoy in December 2004; the next will be held in the summer of 2005 in Vyksa.

OMK is implementing a number of targeted social programs aimed at satisfying specific requirements of people and regions. This mainly concerns such areas as social infrastructure development, educational and sports programs implementation, assistance to the unprivileged and victims of crisis situations.

OMK's principal social project relating to education is the cooperation with the Moscow State Institute of Steel and Alloys (MISIS). In 2004, OMK, the Vyksa Steel Works, the Administration of the Vyksa District, and MISIS signed a cooperation agreement. The major lines of cooperation between the Company and MISIS include providing support for the Vyksa branch of MISIS and organizing the engineer staff training in the region. In November 2004, OMK and MISIS announced a grant competition aiming to engage specialists with industrial and metallurgical experience to teach at MISIS. Five competition winners will receive monthly grants from OMK for a period of five years.

In addition, the OMK enterprises on a rotating basis provide financial assistance to general education schools, participate in supplying equipment for computer classes.

A traditional component of the OMK social policy is assistance to unprivileged population groups. Every year, the Company's enterprises render financial assistance to children's homes and boarding schools, disabled persons, war and labor veterans.

OMK develops the cultural potential of the regions where the Company operates. Its sponsorship and charitable projects cover a wide range of local museums, cultural centers, and creative teams. Understanding that the regions where the Company conducts its business are quite distant from the cultural life centers, OMK finances tours and concerts of famous performers. In 2004, the Company arranged for a series of concerts of entertainment stars at the OMK enterprises on the occasion of national and professional holidays and the Chusovoy Steel Works and Shchelkovo Steel Works anniversaries.

OMK pays close attention to providing support for professional sport. The Vyksa Steel Works is a sponsor of the Vyksunsky Metallurg soccer club, annually holds all-Russian tournaments of the art of self-defense (sambo), supports professional sportsmen achieving high results. Tatiana Firova, an athlete from Vyksa, earned the silver medal for the women's 4 x 400 m relay at the Athens Olympic Games. Aleksandr Kolobnev, a graduate from the Vyksa cycling school, became the best Russian cyclist in the group road race at the Athens Olympic Games. The Chusovoy Steel Works regularly holds Yermak motor rally competitions for the Cup of Russia; the Works also sponsors skiing race competitions and maintains the Metallurg skiing lodge.