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OAO Severstal and subsidiariesOAO Severstal and subsidiaries158Notes to the consolidated financial statementsfor the years ended December 31, 2008, 2007 and 2006(Amounts expressed in thousands of US dollars, except as stated otherwise)December 31,Company 2008 2007 2006 Location ActivityMining segment:Subsidiaries:OAO Karelsky Okatysh 100.0% 94.8% 90.8% Russia Iron ore pelletsOAO Olkon 100.0% 92.7% 91.8% Russia Iron ore concentrateSeverstal Liberia Iron Ore Ltd 61.5% n/a n/a Liberia Iron oreOAO Vorkutaugol 94.0% 93.1% 89.2% Russia Coking coal concentrateOAO Mine Vorgashorskaya 75.0% 75.0% 73.6% Russia Coking coal concentratePBS Coals Limited 100.0% n/a n/a Canada Coking coal concentrateOAO Mine Pervomaiskaya n/a 99.4% 99.1% Russia Coking coal concentrateOAO Mine Berezovskaya n/a 97.5% 96.3% Russia Coking coal concentrateOAO SShEMK n/a 75.6% 75.6% Russia EngineeringOAO Severokuzbasskoe PTU n/a 87.3% 87.3% Russia TransportationOAO Anzhero-Sudzhenskoe PTU n/a 94.4% 94.4% Russia TransportationOOO Nerengri-Metallik 100.0% 100.0% n/a Russia Gold miningZAO Rudnik Aprelkovo 100.0% 100.0% n/a Russia Gold miningCeltic Resources Holdings Plc 100.0% 86.3% n/a Ireland Holding companyAlel JSC 100.0% 86.3% n/a Kazakhstan Gold miningZherek LLP 100.0% 86.3% n/a Kazakhstan Gold miningHigh River Gold Mines Ltd 53.8% n/a n/a Canada Holding companyOJSC Buryatzoloto 45.7% n/a n/a Russia Gold miningBerezitovy Rudnik LLC 53.3% n/a n/a Russia Gold miningSociete Des Mines de Taparko 48.4% n/a n/a Burkina Faso Gold miningTOO Semgeo 100.0% n/a n/a Kazakhstan Gold miningOOO SPB-Giproshakht 100.0% 100.0% n/a Russia EngineeringOAO Pechorugol n/a n/a 99.3% Russia Holding companyOOO Olkon-Invest n/a n/a 100.0% Russia Holding companyOOO Terra n/a n/a 100.0% Russia Holding companyOOO Holding Gornaya Company 100.0% 100.0% 100.0% Russia Holding companyLybica Holding B.V. 100.0% n/a n/a the Netherland Holding company7029740 Canada Limited 100.0% n/a n/a Canada Holding companyZAO Impulse-Consult n/a n/a 100.0% Russia Holding companyOOO Investment Company Kuzbassugol n/a n/a 100.0% Russia Holding companyMetalware segment:Subsidiaries:OAO Severstal-Metiz 100.0% 97.0% 97.0% Russia Steel machiningOAO Dneprometiz 96.8% 58.2% 58.2% Ukraine Steel machiningCarrington Wire Ltd 100.0% 97.0% 97.0% UK Steel machiningRedaelli Tecna S.p.A. 100.0% n/a n/a Italy Steel machiningOOO Volgometiz n/a n/a 100.0% Russia Steel machiningOOO Policher n/a n/a 87.3% Russia Polymer coatingsOOO UniFence 100.0% 97.0% n/a Russia Steel machiningOOO ChSPZ MKR (UniSpring) 100.0% 97.0% 48.5% Russia Mattress springsCompanies classified as held for sale:OOO “ Severstal-metiz: weldingconsumables” 100.0% n/a n/a Russia Welding consumablesIn addition, at the balance sheet date, a further 42 (December 31, 2007: 46; December 31, 2006: 26) subsidiariesand associates, which are not material to the Group, either individually or in aggregate, have been included in theseconsolidated financial statements.Information on carrying amounts of associated companies is disclosed in Note 21 of these consolidated financialstatements.Notes to the consolidated financial statementsfor the years ended December 31, 2008, 2007 and 2006(Amounts expressed in thousands of US dollars, except as stated otherwise)Acquisitions from Majority ShareholderDuring 2008, 2007 and 2006, Severstal completed acquisitions of controlling stakes in a number of companiespreviously controlled by Severstal’s Majority Shareholder. These consolidated financial statements take account ofsuch acquisitions as if they had occurred at the beginning of the earliest comparative period presented or, if later, atthe date on which control was obtained by the common controlling shareholder.In March 2006, the Meeting of Shareholders of the Parent Company approved the additional share issue to acquirecontrolling stakes in coal and iron ore mining assets controlled by its Majority Shareholder and approved anindependent appraiser.In March 2006, having received a fairness opinion on the proposed transaction from Citigroup, the Board of Directorsapproved the independent appraiser’s valuations of the Parent Company shares being issued at RUR 320.74 per share(US$ 11.24 at the exchange rate on the date of valuation - October 1, 2005) and of the mining assets being acquired atRUR 117,202 million (US$ 4,107.0 million at the exchange date on the date of valuation – October 1, 2005).In May 2006, an extraordinary shareholder meeting approved the price and other terms of the share issue foracquiring the mining assets and on June 6, 2006, the transaction was completed.Shareholders of the Parent Company, which were entitled to voting on March 27, 2006 but did not participate in it orvoted against the deal, had the right to participate in the additional share issue by purchasing for cash the amountof shares that maintained their current shareholding interest at a price of RUR 320.74 per share. The market price ofshares on March 27, 2006 was RUR 384 (US$ 13.79) per share. The Parent Company issued 13,516,489 shares to theshareholders that used these pre-emptive purchase rights.In May 2006, the Group completed the process of purchasing back controlling stakes in certain service andconstruction companies, which were disposed by the Group on December 31, 2004 to related parties. Purchase pricestotalled US$ 60.8 million, which is not significantly different from the amounts received by the Group for disposal ofthese entities on December 31, 2004.In October 2006, the Group completed the acquisition of a 50.8% stake in Lucchini SpA for Euro 550.0 million,comprising redemption of loans issued by the Group to related parties and a Euro 182.3 million (US$ 234.3 million)cash payment.In December 2006, the Group completed the acquisition of a 100.0% stake in ZAO Severstal-Resource fromSeverstal’s Majority Shareholder for a negligible consideration. ZAO Severstal-Resource is the management companyfor the companies of Mining segment.In July 2007, the Group acquired a 100.0% stake in each of the companies OOO Petrovtormet and OOOSeverstalskrap-Komi, for a total consideration of US$ 0.02 million and US$ 0.2 million, respectively, and a 75.01% anda 75.1% stake in OAO Arhangelskii vtormet and in OAO Murmanskvtormet, for a total consideration of US$ 2.2 millionand US$ 2.9 million, respectively.In January 2008, the Group completed the acquisition of a 100.0% stake in Baracom Limited for a total considerationof US$ 84.4 million. Baracom Limited owns 79.9% of the voting stock of the holding structure which controls 74.2%of SeverCorr LLC. SeverCorr is mini-mill which produces high quality steel for motor-car, construction, pipe andengineering industries.159