OREANDA-NEWS. September 29, 2008. As part of introduction of the prospective organizational structure of Belon Group, the architecture of the Capital Construction Directorate of OAO Belon has been approved.

With a view to regulate the execution and control of construction, assembly and design works at the Group’s enterprises, a new architecture of the Capital Construction Directorate has been approved.

From the geographical viewpoint, the new structure of the capital construction subdivisions of Belon Group looks as follows: the Directorate is located in Novosibirsk (CCD of OAO Belon); the Capital Construction Department of the Group’s Belovo-Belon Office is based in the town of Belovo, and it also serves for coordination and control of the capital construction departments of the Group’s subsidiaries. Now, the interaction between the Capital Construction Department and the Directorate is fully regulated—the list of functions performed, the scope of responsibilities, and the decision level have been clearly defined.

The functions of construction and reconstruction planning, coordination of the Coal Division’s work plans, activity based costing, and control over the subdivisions’ reporting are now performed by the Capital Construction Directorate of OAO Belon. In addition, according to the regulations adopted, the Capital Construction Directorate holds tenders to select design and building contractors, coordinates cost estimates, and monitors work process. Another important function of the Capital Construction Directorate of OAO Belon is to develop qualification requirements for employees of the Capital Construction Departments, as well as to control their compliance with these requirements. Therefore, the Capital Construction Departments of the enterprises now operate based on a unified model, which will positively impact on both the quality of their work and the level of its efficiency for the Group in general.

Introduction of the new structure will raise the cooperation efficiency both in work planning and in work execution. In addition, the management decision speed should increase considerably.

Currently, Belon is performing a set of procedures to evaluate and rank the positions of the Directorate employees. As a result, all the positions will be divided into groups (grades) in accordance with their value for the Company. The names of the positions held by the Directorate employees will be updated, and an organizational chart will be developed. The employee motivation system will be changed as well: new quarterly and yearly bonus indices will be used. The development of the new organizational chart of the Directorate is planned to be completed by October 3, 2008.