HMS Group presentation, Morgan Stanley EMEA Conference (April 2011)

HMS Group Presentation for Morgan Stanley EMEA conference

April 2011

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Disclaimer

2

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This document is confidential and has been prepared by HMS Hydraulic Machines & Systems Group plc (the “Company”) and it subsidiaries and associates (the "Group") solely for use at

the presentation and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose.

This presentation does not constitute or form part of and should not be construed as an advertisement of securities or a securities prospectus, an offer or invitation to sell or issue or the

solicitation of an offer to buy or acquire or subscribe for securities of the Company or the Group or any depositary receipts representing such securities in any jurisdiction or an invitation or

inducement to engage in investment activity in relation thereto.

No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.

No representation, warranty or undertaking, express or implied, is given by or on behalf of the Company or any of its directors, officers, employees, shareholders, affiliates, advisers,

representatives or any other person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or

any other material discussed at the presentation. The information contained in this presentation does not purport to be comprehensive and has not been independently verified. The

Company is under no obligation to update or keep current the information contained in this presentation and any opinions expressed herein is subject to material change without notice.

Neither the Company nor any of its directors, officers, employees, shareholders, affiliates, advisors, representatives or any other person shall have any liability whatsoever (in negligence or

otherwise) for any loss howsoever arising from any use of this presentation or any other material discussed at the presentation or their contents or otherwise arising in connection with the

presentation.

This presentation includes statements that are, or may be deemed to be, “forward-looking statements”, with respect to the financial condition, results, operations and businesses of the

Company. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as

”anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal” believe”, or other words of similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond the Company's control. As a

result, the Company‟s actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements. The Company assumes no

responsibility to update , complete or revise any of the forward looking statements contained in this presentation.

This presentation is directed only at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act

2000 (Financial Promotion) Order 2005, (the “Order”) or (iii) high net worth entities, and other persons to whom they may lawfully be communicated, falling within Article 49(2) of the Order

(all such persons together being referred to as “relevant persons”). Any investment activity to which the materials relate is available only to, and will be engaged in only with relevant

persons. Any person who is not a relevant person should not act or rely on the information contained in this presentation or any of its contents.

Neither the Company‟s share nor global depositary receipts representing the same have been, nor will they be, registered under the U.S. Securities Act of 1933 (the "Securities Act”), as

amended, or under the applicable securities laws of Australia, Canada or Japan. Any such securities may not be offered or sold in the United States or to, or for the account or benefit of, US

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Any failure to comply with these restrictions may constitute a violation of United States, Australian, Canadian or Japanese securities laws. The distribution of this presentation in certain

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For Russian law purposes, the securities mentioned in this presentation (the "Securities") represent securities of foreign issuers. It is not permitted to place or publicly circulate the Securities

on the territory of the Russian Federation at present or for the benefit of persons who are not "qualified investors" (in the meaning of the Russian securities laws). No prospectus for the issue

of the Securities has been or is intended to be registered with the Federal Service for Financial Markets of the Russian Federation. The information provided in this presentation is not

intended to advertise or facilitate the offer of the Securities in the territory of the Russian Federation. This presentation does not represent an offer to acquire the Securities or an invitation to

make offers to acquire the Securities.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. Some of the information is still in draft form

and neither the Company nor any other party is under any duty to update or inform recipients of this presentation of any changes to such information or opinions. In particular, it should be

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information and estimates.

** NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,

JAPAN OR THE RUSSIAN FEDERATION **

15% 58%

12.8% 14.5% 13.9% 11.7%

2008 2009 9m 2009 9m 2010 2004 2008

24%

11.7% 23.5%

HMS at a glance

The leading pump manufacturer and provider of flow

control solutions and related services to the oil and

gas, nuclear and thermal power and water sectors in

Russia and the CIS

Blue-chip customer base

Advanced R&D and significant experience in pump

development

Three complementary business segments

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65%

2008 2009 9m 2009 9m 2010

Financial Highlights (RUR bn)

5%

20.6

9.5

Sources: Audited IFRS financials for 2007-2009, reviewed IFRS financials for 9m 2010, Company data, Frost & Sullivan report 1 Research, engineering and design services for the upstream oil industry 2 Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue

(*) Refer to note (*) on page 21 for a discussion of the Group‟s methodology for the calculation of backlog and of the limitations associated with the calculation of backlog

Backlog estimates (*) (RUR bn)

31 Dec 2009

Business segment Market share (core) by

revenues

Industrial pumps 41%

Modular equipment 35%

Engineering, procurement and construction (EPC)

10%1 30 Sep 2010

117%

3

2004 2008

47%

Revenue CAGR

Adjusted EBITDA CAGR / EBITDA margin ²

before crisis crisis after crisis

History of growth: Industry consolidation From pumps to integrated solutions

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2007–2008

2003

2009–Today

Oil and gas production Oil transportation Water utilities

2004–2006

1993–2002

4

EPC

Modular Equipment

Design

and Manufacturing

Pump Design and

Manufacturing Pump Trading

Construction

Modular Equipment

Design

and Manufacturing

Pump Design and


Modular Equipment

Design

and Manufacturing

Pump Design and


Pump Design and


Pump Trading

Power generation

http://rosneft.ru/news/photogallery/Upstream/Overview/2/

Strong management team

Key senior managers

HMS’ founders remain shareholders and continue to be actively involved in managing the business

Founders / Shareholders

The management team…

…is comprised of professionals with significant experience in

pump and oil and gas industries

…includes founders, who have led HMS since its inception

…has a strong commitment to the business

Anatoliy Nazarov

Head of Modular

Equipment

Industry experience:

More than 35 years

Years with HMS:

4 years

Kirill Molchanov

First Deputy CEO


17 years

Years with HMS:

17 years

Andrey Nasledyshev

Deputy CEO


11 years

Years with HMS:

6 years

Nikolay Yamburenko

Head of Industrial Pumps


32 years

Years with HMS:

7 years

Igor Tverdokhleb

Head of R&D


24 years

Years with HMS:

6 years

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Artem Molchanov

CEO


17 years

Years with HMS:

17 years

HMS Group shareholder structure

5

Source: Company data

Free-float37.25%

V. Lukianenko24.00%

Other managers

21.42%

G. Tsoy17.33%

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6

Attractive industry fundamentals 1

The leading provider of flow

control solutions in Russia 2

Advanced R&D capabilities 3

Diversified and well-established

customer base 4

Operational and product quality

excellence 5

Strong management team 7

History of resilient financial

growth and strong backlog 6

Russian energy and utilities infrastructure investments (RUR bn)

Significant increase in capital spending in core end markets drives growth of all HMS’ businesses

Comments

Infrastructure modernization and expansion

– Large portion of Russian infrastructure is outdated and at

or near end of useful life

– Economic growth driving demand for new infrastructure

– Very large expected spending by public and private sectors

in energy generation, public utilities and oil and gas

industries

State development programs

– Large on-going projects in the public utilities and electricity

generation with ongoing impact until 2020-30

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1,586

743303

489

1,011

311

1,103

3,340

2009 2015E

Water utilities

Thermal power generation

Nuclear power generation

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CAGR

’09-’15

21.7%

21.7%

16.1%

810

6161,226

285230

540

2,576

1,131

2009 2015E

Oil refining and

petrochemicals

Oil pipelines

Oil exploration

and extraction

CAGR

’09-’15

15.3%

19.0%

12.2%

Russian oil sector investments (RUR bn)

Russian pumps market history and forecast1 (RUR bn)

Russian modular equipment market history and forecast2 - HMS core segments (RUR bn)

EPC market history and forecast3- HMS core segments (RUR bn)

79

224

2009 2015E

22

10

2009 2015E

Source: Frost & Sullivan report 1 Includes pumps for water injection, oil refining and petrochemicals, oil pipelines, energy generation (thermal and nuclear (excluding MCP)), water utilities pumps, household vibration

pumps, as well as integrated solutions and aftermarket 2 Includes pump stations, automated group metering units, associated gas processing and transport units 3 Includes oil field infrastructure construction, oil and gas transportation, construction and engineering, research and design services for oil and gas industry (upstream)

Attractive industry fundamentals

7

CAGR 18.8% CAGR 14.0% 511

231

2009 2015E

CAGR 14.1%

1

Source: Frost & Sullivan report Source: Frost & Sullivan report

8

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North


► ► ► ►

►

► ► ► ►

►

►

► ►

Oil product storage

Oil refinery Main oil pipeline

Oil field

Filling station

► ►

Oil and gas sector

Filling station

Source: Frost & Sullivan report, Transneft website (www.transneft.ru)

Novorossiysk

Moscow

Unecha

Primorsk

Kozmino

Skovorodino

Verkhnechonskoye

Tengiz

Timano-Pechora

basin

Caspian Pipeline Consortium

expansion

(35 MMt, 1,510 km)

Baltic Pipeline

System-II

(50 MMt, 1,000 km)

ESPO-I and ESPO-I

capacity expansion

(50 MMt, 2,694 km)

Russia

ESPO-II and ESPO-II

capacity expansion

(47 MMt, 2,046 km)

Talakanskoye

Purpe-Samotlor (25

MMt, 430 km)

Vankor

Salymskoye

Samotlor

Nizhnevartovsk

Priobskoye

Purpe

Prirazlomnoye

Tyamkinskoye

Russkoye

Taishet

Zapolyarnoye-Purpe

(45 MMt, 536 km)

Syzran

Tikhoretsk-Tuapse 2

(12 MMt, 295 km)

Haryaga Yuzhny

Khylchuyu

Haryaga-Yuzhny

Khylchuyu

(8 MMt, 160 km)

Yurubcheno-

Tokhomskoe

Yurubcheno-

Tokhomskoe-Taishet

(18 MMt, 600 km)

Tuapse

Tikhoretsk

Komsomolsky NPZ

-port De-Kastry

(9 MMt, 313 km)

Oil pipeline projects

Mature oil producing regions

Underdeveloped oil producing regions

Developing oil fields

HMS participation confirmed

Oil products pipeline projects

Komsomolsky

NPZ

De-Kastri

“Yug” (South)

(9 MMt, 1,465 km)

Komsomolsky NPZ

-De-Kastry

(n.d., 300 km)

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New milestone projects Oil & gas production and oil transportation

Zapolyarnoye

9

South

> 3 bn tons of oil reserves to be

developed in the next several

years

Oil production development

> 10,000 km of pipelines to be constructed or

replaced

> 140 of pump stations to be constructed or

reconstructed

> 550 reservoirs with total capacity of almost

10 mln m3 to be reconstructed

Transneft investment program 2010-2017

Central Asia

Rapidly growing sales of modular equipment to oil

and gas sector in Kazakhstan

Iraq

Significant installed base of HMS pumps from Soviet

and post Soviet periods

Currently undertaking projects for Oil Ministry and BP

Export markets

1

26 oil refineries are to be

reconstructed

Oil refining development

http://www.transneft.ru/

10

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North


Nuclear power generation

Reactor hall

Turbine hall

Feed pumps

Condensate pumps

Pumps for security systems

Pumps for lubrication systems

Pumps for auxiliary systems

TGC-13 (Enisei) Investment 2010-2015:

RUR 10 bn

TGC-9 Investment 2010-2015:

RUR 28 bn


RUR 18 bn

TGC-7 (Volga) Investment 2010-2015:

RUR 11 bn


RUR 16 bn


RUR 14 bn

TGC-3 (Mosenergo) Investment 2010-2015:

RUR 39 bn


RUR 8 bn TGC-12 (Kuzbas) Investment 2010-2015:

RUR 21 bn


RUR 26 bn

TGC-10 (Fortum) Investment 2010-2015:

RUR 47 bn


RUR 21 bn


RUR 28 bn


RUR 73 bn

Source: Frost & Sullivan

Nuclear Power Plants HMS participation confirmed Projects under construction Planned projects

Leningradskaya-II

Kalininskaya

Rostovskaya

Novovoronezhskaya-II

Beloyarskaya

Kurskaya Smolenskaya

Kolskaya

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New milestone projects Thermal and nuclear power utilities

11

South 1

Rostovskaya

Number of power units to be

constructed or reconstructed

Additional generation

capacity, MW

Investments

2010-2015 (RUR bn)

TGC n/a 13,627 359

OGC n/a 11,962 467

Nuclear plants

(Russia) 41 21,500 808

Nuclear plants

(Foreign) 17 17,880 1,940

Summary of total investments in power generating capacity

Name Country No of power units /

Unit capacity (MW)

Investments

2010-2015 (RUR bn)

Belene NPP Bulgaria 1 / 1,000 128

Tianwan NPP China 2 / 1,000 86

Kudankulam NPP India 2 / 1,000 65

Mokhovtse NPP Slovakia 2 / 440 53

Akkuyu NPP Turkey 4 / 1,200 27

Other projects

Ukraine 2 / 1,200

1,581 Belarus 2 / 1,200

Armenia 1 / 1,200

Vietnam 1 / 1,200

Selected nuclear power plant projects abroad using Russian

technology

12

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North


Reuse of treated wastewater

Sewage treatment

Borehole water intake

Surface water intake

Water treatment

Water conditioning

Irrigation

Release of wastewater

►

►

► ► ►

► ► ► ► ►

► Water industry

Water supply to industrial enterprises

Urban water supply

►

Water industry

Kirov

Perm

Barnaul

Petrozavodsk

Vladimir

Rostov-on-Don

Azov

Kaluga

Tver

Orenburg

Omsk

Tyumen Krasnodar

393471

606724

844

1,011

311372295

2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E

Source: Frost & Sullivan report, media sources 1 Figures have been taken from various media sources; they are not final and may change in the

future

2 The “Clean Water” program is a nationwide large investment plan aimed at improving drinking water quality.

Capex in water projects, RUR bn (2007–2015)

Source: Frost & Sullivan report

Large-scale State Programmes Total Capex 2010-

2015 (RUR bn) Capex period

Federal Programme "Zhilische" (public

housing)

620 2011-2015

Regional programmes "Clean Water“2

(unconfirmed budget)

520 2011-2017

Water Strategy of Russian Federation until

2020 (excl. "Clean Water")

351 2009-2020

Reconstruction of Grozny utilities 105 2010-2011

St. Petersburg Water Utilities Development

Programme

103 2010-2025

JSC RKS JSC Evraziysky JSC Rosvodokanal

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New milestone projects Water utilities

13

Central Asia

Recently undertook turnkey construction of

pumping stations in Turkmenistan and Uzbekistan

Presence in water markets of Tajikistan and

Kyrgyzstan

Offices in Ashkhabad (Turkmenistan) and Tashkent

(Uzbekistan)

South 1

Moscow

Kaliningrad

St. Petersburg

Volgograd Kazan

N.Novgorod

Yaroslavl

Ekaterinburg

Sochi

Samara

FIFA World Cup 2018 Investment 2010-2018: RUR 1.6 trn1

Olympic Games in Sochi in 2014 Investment 2010-2014: RUR 930 bn1

Asia-Pacific Economic Cooperation

Summit in Vladivostok in 2012 Investment 2010-2012: RUR 660 bn1

Vladivostok

Export markets

Leading integrated water utilities

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Significant upside from aftermarket

14

1

Water injection pumps

HMS supplies

87%

Other 13%

Total number of pumps: 4,500

Oil trunk pipeline pumps1

HMS supplies

98%

Other 2%

Total number of pumps: 1,044

Note: In red are highlighted the pump‟s components that

suffer the greatest degree of deterioration during operation

of the pump and which can be replaced in order to extend

the pump‟s operation life

Source: Company data, Frost & Sullivan

Installed base Key drivers for aftermarket services growth

Very large installed base requires repair and maintenance services

Large portion of installed base is outdated, creating opportunity for upgrades as well as replacement

Energy represents 80% of operating cost for a typical pump

Trend for modernization of equipment to increase energy efficiency

Most repair and maintenance historically largely in-house

HMS has contracts with companies including

– TNK-BP (full outsourcing of maintenance of water injection pumps at the Samotlor field)

– Transneft

Exceptional installed

base

Energy efficiency

Outsourcing trend

Example of pump servicing

Source: Frost & Sullivan, Company data 1 In Transneft‟s pipeline system

The leading provider of flow control solutions in Russia

Comments

Source: Frost & Sullivan report (for 2009) Source: Frost & Sullivan report (for 2009)

HMS Other

Leading player in core business segments:

– Almost half of market share in core pump market segments

with no close local or international competitors

– Strong position in modular equipment

– Leading independent player in oil and gas field project

design

Leading market positions in core segments

Source: Frost & Sullivan report (for 2009) 1 HMS‟ subsidiary GTNG – a leading independent Russian oil and gas R&D center

… and modular equipment Leading market share in pumps …

Leading independent player in oil and gas field project design

65%

59%

54%

41%

41%

35%

41%

46%

59%

59%

71%

73%

80%

41%

20%

27%

29%

59%

1.1

1.9

0.8

1.1

1.0

9.0

1.0

1.1

1.0

Total HM S' core segments

Submersible water well pumps

Water injection pumps

Oil pipeline pumps

Water utilities pumps

Thermal power generation pumps

Nuclear power generation pumps

Oil refining and petrochemical pumps

Household vibration pumps

56%

30%

7%

44%

70%

93%

35% 65%

3.2

2.2

4.6

10.0Total HM S' core

segments

Pump stations

Automated group

metering units

Associated gas

processing and

transport units

Market size

RUR bn HMS Other

Total market size:

RUR 19.1 bn

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2

Market size

RUR bn

HMS1, 10%

Other, 31%

SurgutNIPIneft, 21%

Rosneft-NTC, 12%

UfaNIPIneft, 7% TomskNIPIneft, 7%

Giprovostokneft, 7%

NizhnevartovskNIPIneft, 5%

Very strong in-house R&D and significant experience

in pump development

– 5 in-house R&D facilities in Russia and the CIS,

centralized research coordination

Unique testing facility (one of the largest in the

former Soviet Union and globally) for all types of

large specialized pumps for nuclear power plants

and oil transportation

– Current facility allows to test pumps up to 8MW

in power; new facility for pumps up to 14MW

under construction

Deep integration with clients‟ R&D

– HMS‟ R&D works closely with clients‟ R&D

divisions in developing pre-tender

documentation and helps clients adopt new

design solutions and technical regulations

– Increases the likelihood of the use of HMS

equipment in projects

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Pump design and working mode modeling1

1 Using ANSYS CFX, which is a high-performance, general purpose computational fluid dynamics

(CFD) and flow modeling software used to solve wide-ranging fluid flow problems

Top right picture: Different colors of lines in a stream depict different velocity of parts of the stream. A

modeler‟s task is to equalize velocities in the flow to ensure the most optimal operation of a pump

Advanced R&D capabilities: Pumps

16

3

Only a few global pump manufacturers have comparable R&D capabilities

Tyumen

West Siberia province: Oil & gas field map

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Advanced R&D capabilities: Project design

Project design capabilities a major competitive advantage in provision of integrated solutions

Recently acquired Giprotyumenneftegaz (GTNG),

leading Russian R&D center specializing in design of

on-surface (as opposed to sub-surface) facilities for

oil and gas fields

– Designed over 200 oil and gas condensate

fields in Russia including many of the largest

(e.g. Samotlor, Mamontovskoye, Priobskoye)

Significant R&D resources for design of water utilities

projects (RVKP)

3D design and real view of oil preparation facility

Selected oil and gas clients

17

Oil field designed by

GTNG

Other

3

http://www.lukoil.com/

Pre-tender project

preparation

(up to 24 months)

Design of large-scale

projects, including

pipelines, water utilities

and O&G fields

Frequent co-operation

with technical teams of

potential clients on

development of tender

documentation

Limited competition in

customized pumps

Key decision factors:

– Local engineering

expertise

– Timely execution

Competition in standard

pumps driven by:

– Historical relationship

– Quality

– Price

Tender, pricing

and contract

negotiation

(1–3 months)

Local engineering

expertise is one of the

most important factors for

clients

Raw materials to start

production are generally

financed from customers‟

prepayments

Design and

production

(1–24 months)

Timely delivery,

installation and testing are

crucial

Installation services

accounts for significant

part of overall revenue

from a contract

Delivery and

installation

(1 month)

Spare parts

Maintenance

Modernization (after 5-15

years of operation)

After market

services

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Modernization

Reconstruction

Replacement

Pre-tender preparation/aftermarket support are crucial for establishing/maintaining strong relationships with clients

HMS‟ ability to participate in pre-tender preparation stage creates unique competitive advantage

18

Advanced R&D capabilities: Unique business model

3

Diversified and well-established customer base


Premium customer base, which requires integrated solutions

Selected customers by industries in 2007-2010

Examples of customers for integrated solutions

Client Pumps Modular equipment EPC

Rosneft

TNK-BP

Transneft

SurgutNG

LUKOIL

Gazprom

Gazprom Neft

Salym Petroleum

Oil and gas

Power

Infrastructure

and water

Turkmenistan

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4

Sales breakdown (9m 2009-2010)

Source: Company data, audited 2007-2009 IFRS financials

6,456 7,076

954736451970537

1,037580

2,597

997

3,741

9m 2009 9m 2010

Other TNK-BP Gazpromneft OrionStroy Transneft Rosneft

9,975

16,158

http://www.lukoil.com/

http://www.tgc1.ru/en/home/

http://eng.rzd.ru/isvp/public/rzdeng/fp?STRUCTURE_ID=704

Operational and product quality excellence

20

Plants are certified in accordance with

ISO:9001:2008

Products are compliant with API 610 standard

Modern software systems for R&D and project

management

– SolidWorks, ANSYS CFX, Bentley,

Primavera

Equipment from well-established foreign producers

for critical manufacturing processes

– Skoda, Schiess, Doosan, Demag, Schenk,

Sodik, Ibarmia and other

HMS‟ products include high-precision, safety-

critical equipment for hazardous facilities (nuclear

plants, refineries, pipelines)

HMS has a strong focus on operational excellence and manufactures top quality products

Submersible water well pumps HMS Grundfos

Model 3ЭЦВ6-10-110 SP17-11

Flow rate, m3/h 10 10

Head, m 110 110

Efficiency ratio, % 57.0-59.2 53.9-58.3

Model 3ЭЦВ6-25-100 SP30-12


Head, m 100 100

Efficiency ratio, % 59.8-62.1 57.4-61.7

Comparative analysis examples

Water utilities pumps HMS KSB

Model 1Д315-75 Omega 100-250A


Head, m 75 75

Efficiency ratio, % 83.0 82.6

Weight, kg 190 210

Source: The Russian Association of Pump Manufacturers

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Skoda Ibarmia Schiess Demag

5

8.0 9.2

1.1 1.1 0.4

10.3 9.5

20.6

31 Dec 2009 30 Sep 2010

Other Nuclear pumps Oil transportation pumps

3.0

14.0 14.8

9.8

16.2

0.7 1.6 1.9 1.4 2.3

23.5%

11.7% 12.8%

14.5% 13.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0

5.0

10.0

15.0

20.0

2004 2008 2009 9 m 09 9m 10

Revenue EBITDA adj. EBTDA margin

History of resilient financial growth and strong backlog

Backlog estimates (*) (RUR bn)

Comments

Revenue, EBITDA1 (RUR bn) and EBITDA1 margin (%)

Source: Audited IFRS financials for 2007-2009, reviewed HMS and GTNG IFRS financials for 9m 2010, Company data 1 Adjusted EBITDA

(*) HMS estimates backlog according to its own methodology, which may differ materially from the methodology of other companies in the industry. The amount of backlog at any reporting date is estimated to be the amount of backlog as at

the preceding backlog reporting date, plus new or additional customer orders booked during the reporting period, less amounts of contract value booked as revenue under Russian GAAP on an unconsolidated basis under the relevant

contracts, plus or minus adjustments made in the judgment of HMS' management, including adjustments to reflect amendment, expiry or termination of contracts, cancellation of orders, changes in price terms under contract or orders

factors affecting the amount of potential revenue which HMS may be recognised under such contracts and other adjustments for certain large contracts based on IFRS revenue recognition principles.

Backlog is not an IFRS concept. HMS backlog estimates are not derived from IFRS figures, are subject to certain adjustments based on management‟s judgment and are not comparable to IFRS figures. When preparing its backlog

estimates, HMS estimates how much revenue has been accrued under Russian GAAP on an unconsolidated basis, subsidiary by subsidiary, and deducts that amount from the contract value. The amount of this accrued revenue under

Russian GAAP on an unconsolidated basis is likely to differ materially from revenue that would be accrued under IFRS on a consolidated basis. HMS does not take into account the potential timing of future performance in calculating

backlog. Backlog estimates are not an indication of potential revenues under IFRS or otherwise, and may differ materially from revenues actually recognized under the relevant contracts in future periods. Figures shown include contracts

obtained through the acquisition of GTNG in 2010; therefore, backlog at 31 December 2009 may not be comparable to backlog at 30 September 2010

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Revenue growth

– 2004-2008 CAGR 47%

– Resilient performance during crisis

– Accelerated growth post-crisis: 65% in 9m 2009-

2010

– Mostly organic growth in recent years

21

6

Comments

Strong backlog (*)

– 117% growth in 9m 2010

117%

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Current trading

Contracts – Winner / Spring

Traditional flow of usual contracts including oil transportation and nuclear pumps for clients‟ current facilities

Transneft contract on a track

M&A Activity

Active discussions with several targets including one in a final stage

1 deal in a stage of finalizing

In addition to current 40% of DKHM, 11% to be bought at the beginning of 2012

HMS is in line with its growth strategy and continues to deliver on promises to its shareholders and investors

Coming Events

2010 results will be released in the second half of April 2011

11-12 April: Morgan Stanley EMEA Conference in London

13-14 April: Morgan Stanley EMEA Conference in New York

31 May – 2 June: VTB Capital Russia Calling in London

09 June: Credit Suisse Oils & Gas Conference in London

28 June: Renaissance Capital Investor Conference in Moscow

Latest Events

Listing on the London Stock Exchange

Repayment of RUR 3.3 bn bank loans

Strengthen position in core markets

including aftermarket and

export opportunities

Take advantage of positive market trends in existing core markets

Organic expansion into attractive market segments

Increase of aftermarket services component to generate higher-margin and recurring revenue

Core export opportunities: water projects in FSU, Rosatom nuclear contracts, O&G in Kazakhstan and Iraq

Higher margin than stand-alone products and services

HMS‟ largest customers increasingly seek to work with manufacturers that can offer integrated and

customized solutions

Creates strong ties to customers, pull-through demand for aftermarket services

Focus on integrated solutions and other highly-engineered

products

Continue to integrate and optimize current production assets and continue to capture synergies between

acquired businesses

Standardization and continuous improvement of operations and business processes

(e.g. financial reporting, R&D, procurement and IT)

Improve operational efficiency

Leverage leading R&D capabilities in order to develop next-generation customized pumps, technological

upgrades and integrated pump systems

Work closely with customers to develop technical policies and standards

Expand research and development

capabilities

Acquire technology and R&D facilities

Pursue acquisition opportunities in high-growth sectors where HMS has limited presence

Seek cost and revenue synergies

Pursue selective, value-enhancing

acquisitions

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Business strategy

Key investment highlights 169.196.203

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24

Attractive industry fundamentals 1

The leading provider of flow

control solutions in Russia 2

Advanced R&D capabilities 3

Diversified and well-established

customer base 4

Operational and product quality

excellence 5

Strong management team 7

History of resilient financial

growth and strong backlog 6

Appendix (i)

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25

Livny

Russia

Ukraine

Tomsk

Nizhnevartovsk

Tyumen

Dimitrovgrad

Nizhnevartovskremservice (NRS)

Services: Maintenance and repair of pump

equipment, drilling and other oil and gas

field equipment

HMS Neftemash

Products: Modular equipment for oil and

gas and water industries

Sibneftavtomatika (SibNA)

Products: High-precision measuring

equipment for oil, gas and water flow rates

Tomskgazstroy (TGS)

Services: Trunk oil and gas pipeline and

auxiliary facilities construction

Sibkomplektmontazhnaladka (SKMN)

Services: Design, construction and

commissioning of oil and gas field projects

Rostov Vodokanalproekt (RVKP)

Services: Project design for water utilities

Rostov

Sumy

HMS Household pumps

Products: Household vibration pumps

HMS Group

Headquarters

Promburvod (PBV)

Products: Water well submersible

pumps

Livnynasos (LN)

Products: Water well submersible

pumps

Nasosenergomash (NEM)

Products: Pumps for thermal and nuclear

power generation and oil & gas industry

VNIIAEN

Description: R&D center for pumps used in

nuclear, thermal power generation, oil and

gas industry

Dimitrovgradhimmash (DGHM)

Products: Equipment for oil and chemical

industries and pumps for oil refining

HMS Pumps

Products: Industrial pumps for oil and gas,

power generation

Giprotyumenneftegaz (GTNG)

Services: Project and construction design

of oil and gas facilities

Belarus

Minsk Moscow

Bavleny

Industrial pumps Modular equipment EPC


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Production assets

26

Competitive environment in Russia 169.196.203

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27 Source: Company data

Customized pumps Standard pumps

Ch

ines

e p

laye

rs

Lack of relevant technologies to produce customized

pumps

No brand names

No established relationships with Russian clients

Ru

ss

ian

pla

ye

rs

Limited R&D

Small scale of operations

Pump manufacturing is a non-core business for most of

players

Products are often not in direct competition with HMS

product line

Key names: NPO Frunze, Votkinsk Plant, Uralhydromash

Not well-positioned in terms of operational

efficiency due to limited scale of operations

Glo

ba

l p

laye

rs

Lack of local engineering expertise

Water pumps: KSB, Grundfos

Oil trunk pumps: Sulzer, Flowserve

Power: Weir, KSB

Not well-positioned in terms of price of products

Oil Pipelines

Surface Oil

Production

Oil Refining and

Petrochemicals

Pumps for Drilling

Subsurface Oil

Production

Submersible Water

Well Pumps

Water (Clean Water Supply and

Dry-pit Sewage)

Water (Wet-pit Sewage and

Waste Water Treatment

Household

Vibration Pumps

Submersible

Household Pumps

Nuclear Power

(excl. MCP)

Main Circulation Pumps for

Nuclear Power Generation

Thermal Power

Pumps for Metallurgy

and Mining

Pumps for

Chemical

Industry

Other

10

15

20

25

30

35

40

45

500 1,500 2,500 3,500 40,000

Fast growing core segments

CAGR ’09-’15

2009 market size (RUR mm)

%

Water and infrastructure Oil and gas Power Non-core

Core segments CAGR2: 26.9%

Total market CAGR: 18.8%

Source: Frost & Sullivan report 1 Including integrated solutions and aftermarket sales

2 CAGR calculated using total market size of core segments

Note: All CAGR figures are based on the Frost & Sullivan report

Attractive industry fundamentals HMS core markets in pump manufacturing1

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Subject of

discussion

HMS representatives

for negotiation A typical client’s hierarchy

Best-in-class sales team reaching clients at all levels, supported by R&D throughout process

Large-scale project

(e.g. ESPO, Vankor,

Rosatom)

Integrated solutions

Cross-selling

Head office

Deputy CEO

Head of Development

Head of Procurement

Head of Construction

Group CEO

Head of Project Management

CEO Deputy CEO Heads of divisions

Heads of R&D units Technical specialists

Large supplies of

customized pumps

and modular

equipment

Large construction

contracts

Cross-selling

Senior management of operating subsidiaries

Operating subsidiaries

Senior sales managers1

R&D engineers

Regular supplies of

pumps and

equipment and

services

Local production units

Middle management of local production units

Technical specialists of local production units

Sales managers1

R&D engineers

Source: Company data 1 Total number of HMS‟ sales force as of 30 September 2010 is approximately 200

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Project management

Construction

Load / unload facilities

Metal works

Wall panels Installation and assembly

Tanks / Vessels Tanks / Vessels / Storages

Commissioning Commissioning Commissioning

Supervision Supervision Supervision

Automation Automation Automation

Ventilation Ventilation Ventilation

Safety system Safety system Safety system

Lubrication system

(seal, bearing, coupling)

Lubrication system


Lubrication system


Pipework Pipework Pipework

Cabling Cabling Cabling

Pressure gauge Pressure gauge Pressure gauge

Flow meter Flow meter Flow meter

Valves Valves Valves

Frequency inverter Frequency inverter Frequency inverter

Solution / project design Solution / project design Solution / project design

Pump System Design Pump System Design Pump System Design Pump System Design

Skid (baseplate) Skid Skid Skid

Coupling Coupling / Hydraulic coupling Coupling / Hydraulic coupling Coupling / Hydraulic coupling

Electric motorElectric motor / Turbine /

Diesel motor

Electric motor / Turbine /

Diesel motor

Electric motor / Turbine /

Diesel motor

Pump (standard / customized) Pump (standard / customized) Pump (standard / customized) Pump (standard / customized) Pump (standard / customized)

Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps)


(non-modular)


(modular design)Turnkey solution

Bare shaft pump Pump based system


Low (< 15%) Medium (15-30%) High (> 30%) High (> 30%) High (> 30%)

Pump / pump unit

EBITDA margin level Source: Frost & Sullivan report

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HMS’ integrated solution services overview

Growing demand for single source solutions

― Optimize supply chain

― Reduced complexity and risk of compatibility issues

― Lower client life-cycle costs

Favor larger manufacturers with stronger R&D

Forecast to grow to up to 45-50% of the size of the

global pump market by 2015 (Frost & Sullivan)

Integrated solutions highlights

30

Growth strategy: Selective acquisitions in key segments

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Source: Company data 1 The Group has an option to acquire 11.0% of the voting shares of its associate, DGKhM, in 2012

Core focus for potential acquisitions Acquisition objectives and rationale

Oil

an

d g

as

Flow control solutions in oil and gas

Pumps for oil and gas, chemical and petrochemical

applications

Modular equipment, tanks and vessels

Dimitrovgradkhimmash (DGKhM)1

Increase of market share

Diversification of product offering

Expansion into new segments

Wa

ter

Pumps for wet-pit sewage applications

Pumps for water utilities, nuclear and thermal power

generation

Modular equipment for wastewater treatment


Strengthening positions in water segment


Expansion into wastewater treatment segment

Po

we

r

Pumps for nuclear and thermal power generation, marine

applications

Pumps for nuclear and thermal power generation, oil

refining, chemical and petrochemical applications

Pumps for thermal power generation, water utilities



Oth

er

Pumps for oil refining and metals and mining

Pumps for oil refining, oil transportation, water utilities and

vessels

Pumps for oil transportation, oil refining, metals and mining

Pumps for chemical applications, nuclear power

generation, water utilities


Expansion into new segments


East Siberia – Pacific Ocean pipeline

32 Source: Company data, Transneft

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North

Number of contracted pumping stations 21

Pumping stations under construction by HMS 12

Pumping stations constructed by Sulzer and

Turbonasos 9

Krasnoyarsk

region

1 2

3 4 5

6 7

8

9

10

11

12 13 14

15

16 17

18

19

20

21 22 23

24 25

26 27

28 29

30 31 32

33 34

35

36

37

38

39

40

41

Buryat

region

Chita

region

RUSSIA

MONGOLIA

Irkutsk Chita

Ust’-Kut

Yakutsk

Skovorodino

Blagoveschensk

Vladivostok

Taishet

Irkutsk

region

Khabarovsk

region

Sea of

Okhotks

CHINA

Purposes of new pumping stations – increasing

capacity 20

For Komsomolsk and Khabarovsk refineries 9

For Primorsk refinery 4

Not information the present time. Supposedly – for

increasing of capacity after launching new branches from

oilfields

7

Total number of pumping stations 41

A pumping station for ESPO-I pipeline

Case study: ESPO-I expansion and ESPO-II contracts

Segment Products / Services Design and

manufacturing

Pumps Design, production and testing of

pumps

HMS and other

suppliers including

Siemens

EPC

Design of integrated pumping

solution

Overall project management

Procurement for supply of

engines, cooling sleeves, valves

and other equipment

Turn-key commissioning

HMS

Key contract highlights

HMS is supplying pump systems (pumps, motors, cooling

sleeves, valves and etc.) to Transneft for ESPO-I and

ESPO-II pipelines

HMS designed unique type of pumps for the project,

constructed a special pump testing facility

HMS prepared target specification for design of hardware

(engines, cooling sleeves, valves and etc.) for European

producers (Siemens, Voit and etc.) as well as coordinated

full cycle procurement

Key features of the project include:

– New approach for oil pumping: Variable motor

revolution, which saves energy

– Integrated approach for project management: HMS

coordinated procurement from multiple suppliers,

R&D process for supplementary equipment and

performed turnkey commissioning

– Construction of a special testing facility

– New approach to modeling: 3D design in ANSYS

CFX was used to model operation of an entire

pumping system

1. Trunk pump

2. Motor

3. Coupling

4. Oil coolers

9. Friction oil pipelines

10. Air cooling unit

11. Antifreeze feed pipes for oil coolers

12. Antifreeze feed pipes for motor coolers

13. Antifreeze air cooling unit

5. Adsorptive dryers

6. Air collectors

7. Compressors

8. Joints

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33

South

Case study: Vankor contract

34

Segment Products / Services Design and manufacturing

Pumps Water injection pumps

Oil transportation pumps

Other supplementary pumps

HMS

Modular equipment Design and production of "super-modular" blocks

Supplementary equipment HMS

Key contract highlights

HMS designed and supplied 30 "super-modular" blocks to Rosneft for

development of the Vankor field

A "super-modular" block is an approximately five-floor-size

construction containing a range of different types of pumps and

equipment (e.g. water injection pumps, oil transportation pumps,

pumps for oil preparation and separation systems, metering

equipment and etc.)

All the pumps were newly designed for this project by HMS

Currently, the blocks are ready for supply to the Vankor field in

dismantled form and will be assembled at the field

Pumping station at the Vankor oil field

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Case study: Turkmen water contract

HMS signed an agreement with the Ministry of Water Industry of

Turkmenistan for turnkey construction of a pumping station of first

level for pumping water from Amu Darya river to Yilgynagyzsky

channel

This pumping station is part of the plan for new urban development in

Lebapsky velayat and is to replace two existing floating pumping

stations of lesser capacity

Capacity of the station is 35 m3/s, which makes it one of the most

powerful stations in Turkmenistan

HMS designed a new customized pump (3.5 m3/s capacity) with three

changeable rotors adjusted for operating in desert conditions

The contract for construction was signed in December 2008 and the

pumping station will be commissioned in December 2010

Segment Products / Services Design and

manufacturing

Pumps 12 newly developed pumps with capacity of 3.5 m3/s each (incl. 2 standby pumps)

Supplementary pumps HMS

Modular

equipment Pumping station (length 96 meters) and power hall

Other supplementary equipment incl. cables and pipes HMS

EPC

Design of pumping station

General contracting, supervision and overall project management

Procurement and logistics

Turn-key construction

HMS

Key contract highlights Pumping station in Turkmenistan

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Source: Company data 35

http://ru.wikipedia.org/wiki/%D0%A4%D0%B0%D0%B9%D0%BB:Flag_of_Turkmenistan.svg

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Operating costs, debt and working capital

Conservative financial policy

– Net debt1 of RUR 3.2 bn

– Net debt / adjusted EBITDA2 of 1.2x

– Effective interest rate of 10.4%3

– Largely RUR denominated debt to match cash

flows

Organic capital expenditures (RUR mm)

Working capital as % of revenue

19.0%

6.3%

15.8%14.7%

2007 2008 2009 9m 2010 LTM

Debt highlights (as of 30 September 2010)

507

661

212

478

2007 2008 2009 9m 2010

Source: Audited IFRS financials for 2007-2009, reviewed IFRS financials for 9m 2010 1 Calculated as total borrowings plus total finance lease liability less cash and cash equivalents 2 Last twelve months 3 Weighted-average interest rate for RUR-denominated debt

Total

RUR 13,688 mm

Other expenses

6.9%

Depreciation and

amortization

1.9%

Construction and

installation works

of subcontructors

3.2% Cost of

goods sold

12.6% Labour

costs

13.1%

Supplies

and

raw materials

45.2%

Total operating costs (2009)

Other

1.6% General and

administrative

13.3%

Distribution

and

transportation

3.5%

Costs of sales

5,378 5,5346,187

7,860

1,5671,975

1,798

1,817

2,606 1,366

1,721

1,492

972

430

391

257

194

670768

545

471211 259575

10,80710,773

11,164

12,300

2007 2008 2009 9m 2010

Other expenses

Depreciation and amortization

Construction and installation w orks of subcontractors

Cost of goods sold

Labour costs

Supplies and raw materials

Cost structure

Cost of sales breakdown (RUR mm)

Main components of raw materials and supplies are ferrous metals

Low currency exposure as most of suppliers are domestic

Natural hedging of commodity price and currency risks:

― For long-term contracts: by fixing supplier prices and making

advance payments

― For short-term contracts: by passing price fluctuations on to

clients through price adjustments

High cost of goods sold in 2007 explained by a one-off resale contract

2008-2009 COGs growth due to increased share of integrated

solutions

HMS able to curtail labour costs through financial crisis

Comments

1

1 Cost of goods sold include products purchased for resale as part of integrated solutions Source: Audited IFRS financials for „07-‟09, reviewed IFRS financials for 9m 2010

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Other

expenses

6.9%

Depreciation and

amortization

2.3% Construction and

installation works

of subcontructors

3.9%

Cost of

goods sold

15.4%

Labour

costs

16.1%

Supplies

and

raw materials

55.4%

Cost of sales structure, 2009 (%)

Total:

RUR 11,164 mm

Source: Audited IFRS financials

Appendix (ii) List of publicly announced projects in Russia & CIS1

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1 Frost & Sullivan report

38


Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts

Capex forecast for oil exploration and production

Oilfield Operator Reserves,

mln t

Project

time line

Total CAPEX,

RUR bn

CAPEX,

2010E – 2015E

RUR bn

2010E 2011E 2012E 2013E 2014E 2015E

Vankor Rosneft 524 2009-2017 369 316

Verkhnechonsk TNK-ВР 202 2009-2015 138 120

Tyamkinsk (Uvat region) TNK-ВР 75 2010-2012 85 85

Samotlor TNK-ВР 400 2009-2014 166 138

Russkoye TNK-ВР 306 2009-2015 135 115

Talakan and Alinsk Surgutneftegaz 135 2010-2014 231 231

Prirazlomnoye Sevmorneftegaz 46 2009-2011 70 47

Priobskoe Rosneft 694 2008-2013 130 87

Sakhalin offshore Rosneft, Gazprom 394 2006-2030 6,300 1,512

Other projects (Yurobcheno - Tоkhomskoe, Korchaginsk, East-Messoyakhsk group, Sakhalin 1 and 2,

Novoport, YANAO - North of Krasnoyarsk Krai, Titov and Trebs, Salym, Pyakyahinskoe,Verkhnekolik-

Yeganskoe, Kamennoe, Moskovtsova, Labaganskoe, Osoveyskoe, Koltogorskoe, Ozernoe, Lyaminskoe,

Rogonizhnikovskoe, Vysotnoe , Taas-Yuryakch, etc. )

1,990

Replacements and upgrades 1,226

Total CAPEX 5,869

Total investments on pump systems for exploration (pumps for: water injection, oil production,

drilling) 280

Total investments on pump systems incl. integrated solutions for exploration 340

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Capex forecast for refining

Investment project Project Project

timeline

Total CAPEX per

project, RUR bn

Total CAPEX

per project till

2015E, RUR bn

2010E 2011E 2012E 2013E 2014E 2015E

Komsomol'sk refinery reconstruction and upgrading 2010-2012 24 24

Tuapse refinery upgrading 2010-2014 4 4

Kuybyshev refinery reconstruction and upgrading 2010-2015 7 7

Syzran' refinery reconstruction and upgrading 2010-2015 25 25

Novokuybyshevsk refinery reconstruction and upgrading 2010-2015 24 24

Achinsk refinery reconstruction and upgrading 2010-2014 13 13

Angarsk refiery reconstruction and upgrading 2010-2014 12 12

Nakhodka refinery construction of a plant 2009-2017 270 180

Grozny refinery construction of a plant 2011-2014 12 12

Saratov refinery reconstruction and upgrading 2011-2012 9 9

Volgograd refinery reconstruction and upgrading 2011 11 11

Nizhny Novgorod refinery reconstruction and upgrading 2011-2015 30 30

Kirishi refinery reconstruction and upgrading 2011-2020 198 175

Yaroslavl refinery reconstruction and upgrading 2011 4 4

Moscow refinery reconstruction and upgrading 2011-2020 33 15

Omsk refinery reconstruction and upgrading 2010-2017 7 5

Ufa refinery reconstruction and upgrading 2011-2014 9 9

Ufaorgsintez reconstruction and upgrading 2011-2014 4 4

Salavatorgsintez reconstruction and upgrading 2011 55 5

Orskneftegazsintez reconstruction and upgrading 2010-2012 9 9

Khabarovsk refinery reconstruction and upgrading 2009-2012 40 40

Mariy refinery reconstruction and upgrading 2011-2015 60 60

TANECO Oil Refining and

Petrochemical Complex upgrading and construction of a plant 2009-2015 220 220

Verkhotursk refinery construction of a plant 2011-2014 72 72

Tomsk refinery construction of a plant 2011-2015 45 45

Yaisk refinery construction of a plant 2008-2014 22 15

Other projects including mini refinery plants construction 920

Upgrading and replacement 509

Total CAPEX 2,459

Total CAPEX on pumping systems for refining 26

Total CAPEX on pumping systems including complex solutions for refining 40

169.196.203

170.70.67

147.193.150

69.114.167

65.152.175

200.193.188

227.24.52

207.213.225

137.165.78



40

Capex forecast for thermal power generation

Investment, RUR mm Project timelines

Investment project Generation

capacity, MW

Year of project

commissioning Total CAPEX

CAPEX,

2010E-2015E 2010E 2011E 2012E 2013E 2014E 2015E

TGC-1 1,520 2006-2015 115,874 72,514

TGC-2 1,410 2006-2015 31,502 27,950

TGC-3 Mosenergo 1,992 2006-2014 87,895 39,487

TGC-4 Kvadra 1,040 2006-2015 30,254 20,616

TGC-5 710 2007-2014 22,068 14,074

TGC-6 750 2007-2014 22,000 16,192

TGC-7 Volga 470 2006-2012 19,834 10,641

TGC-8 890 2006-2013 38,916 17,642

TGC-9 1,409 2006-2017 54,395 27,930

TGC-10 Fortum 2,359 2006-2015 57,619 46,762

TGC-11 302 2007-2015 32,889 26,119

TGC-12 Kuzbassenergo 428 2006-2013 30,546 21,199

TGC-13 Yenisei 320 2006-2013 15,177 10,317

TGC-14 27 2006-2010 9,569 7,687

OGC-1 2,130 2006-2015 83,636 42,222

OGC-2 1,860 2006-2016 53,220 36,870

OGC-3 2,042 2006-2014 62,757 45,776

OGC-4 2,509 2006-2014 104,364 76,225

OGC-5 1,600 2007-2013 61,976 31,716

OGC-6 1,821 2007-2014 252,017 233,710

Other projects (including public utilities and

industrial enterprises) 1,510 2010-2015 785,100 785,100

Investments of modernization and repairs 2010-2015 350,000 350,000

Thermal power generation investment 1,960,750

Pumping equipment investment 17,000

Pumping equipment with integrated solutions investment 26,500

169.196.203

170.70.67

147.193.150

69.114.167

65.152.175

200.193.188

227.24.52

207.213.225

137.165.78



41

Capex forecast for nuclear power generation

Investment, RUR mm Project timelines

Investment project

Generation

capacity,

MW

Year of project

commissioning

Total

CAPEX

CAPEX

2010E-2015E 2010E 2011E 2012E 2013E 2014E 2015E

Rostov NPP: reactor No 2 1000 2005-2011 30,120 1,000

reactor No 3 1100 2009-2015 64,860 47,637

reactor No 4 1100 2011-2017 67,550 67,550

Kalininsk NP: reactor No 4 1000 2006-2012 48,832 12,698

Beloyarsk NPP: reactor No 4 800 2007-2013 65,578 33,721

Novovoronezh NPP-2: reactor No 1 1100 2007-2013 66,025 31,715

reactor No 2 1100 2008-2014 64,894 46,769

Leningrad NPP-2: reactor No 1 1100 2008-2014 69,024 49,712

reactor No 2 1100 2009-2015 67,735 61,745

reactor No 3 1100 2010-2016 67,276 67,276

reactor No 4 1100 2011-2017 67,550 67,550

Kursk NPP-2: reactor No 1 1100 2010-2016 67,276 67,276

reactor No 2 1100 2012-2018 67,735 59,141

reactor No 3 1100 2013-2019 67,735 39,080

reactor No 4 1100 2014-2020 67,735 20,707

Smolensk NPP-2: reactor No 1 1100 2012-2018 67,735 55,741

reactor No 2 1100 2013-2019 67,735 39,080

reactor No 3 1100 2014-2020 67,735 20,707

reactor No 4 1100 2015-2021 67,735 7,727

Kolsk NPP-2: reactor No 1 1100 2015-2021 67,735 7,727

NPP “Mochovce” (Slovakia): reactors No 3 and No 4 440 2010-2013 53,458 53,458

NPP “Belene” (Bulgaria): reactor No 1 1000 2011-2015 128,000 128,000

NPP “Kudankulam” (India): reactors No 3 and No 4 1000 2012-2017 108,000 64,800

NPP “Tianwan” (China): reactors No 3 and No 4 1000 2011-2016 108,000 86,400

NPP “Akkuyu” (Turkey): reactors No 1–4 1200 2014-2019 204,000 27,100

Investments in other projects: Ukraine (2 reactors), Belarus (2 reactors), Armenia (1 reactor), Vietnam (1 reactor) etc.

1200 2012-2019 2,500,000 1,580,530

Spending on repair, maintenance and extension of service life 2010-2015 500,000 500,000

Nuclear power generation investment 3,244,848

Pumping equipment investment (incl. MCP) 27,000

Pumping equipment (incl. MCP) with integrated solutions investment

41,000

169.196.203

170.70.67

147.193.150

69.114.167

65.152.175

200.193.188

227.24.52

207.213.225

137.165.78



42

Capex forecast for oil pipelines

Project Oil pipe

range

Rate of

flow,

mln.t/p.y.

Project

timelines

Total CAPEX,

RUR bn

CAPEX,

2010E-2015E

RUR bn

2010E 2011E 2012E 2013E 2014E 2015E

ESPO 1 2,694 20 2006-2011 450 50

ESPO 1–extension 30 2010-2013 200 200

ESPO 2 2,046 30 2009-2013 283 230

ESPO 2–extension 300 17 2012-2015 172 172

BTS-2 1,000 50 2009-2012 120 100

Zapolyarnoe-Purpe 536 45 2011-2015 120 120

Purpe-Samotlor 430 25 2010-2012 45 45

Project "Yug" (South) 1,465 9 2011-2013 81 81

Haryaga - Yuzhny Khylchuyu 160 8 2010-2012 90 90

KTK -2 1,510 35 2012-2014 88 88

Yurobcheno - Tоkhomskoe - Taishet 600 18 2012-2013 63 63

Tikhoretsk - Tuapse 2 295 12 2011-2012 20 20

Komsomolsky NPZ - port De-Kastry (oil-products

pipeline) 313 9 2012-2014 50 50

Komsomolsky NPZ - port De-Kastry (oil pipeline) 300 n.d. 2012-2014 45 45

Other projects ( Crude oil flow expansion for pipelines: Purpe-Kholmogory, Usa-Ukhta-Yaroslavl, pipeline from N.Kaspy oil region, Kirishi-Primorsk, etc )

1,204

Replacements and upgrades 850

Total CAPEX 3,408

Total investements on pumps systems for pipeline 40

Total investements on pumps systems incl. integrated solutions for pipeline 60

169.196.203

170.70.67

147.193.150

69.114.167

65.152.175

200.193.188

227.24.52

207.213.225

137.165.78



43

Capex forecast for water utilities

Programmes

Company Project timeline Total CAPEX,

RUB mm

CAPEX

2010E-2015E,

RUB mm

2010E 2011E 2012E 2013E 2014E 2015E

JSC Evraziysky

Water supply in Rostov-on-Don and South-West of

Rostov Oblast 2009-2026 21,903 7,300

Investment project "Clean Don" 2009-2019 3,306 1,802

Water supply and sewage systems in Azov and the

Black sea region 2009-2013 4,300 3,440

JSC RKS

Modernization of water supply system in Perm 2009-2011 474 316

Construction and modernization of water supply

system in Petrozavodsk 2009-2012 394 296

Development of heat supply system in Vladimir and

Vladimir Oblast 2009-2012 362 272

Modernization of biological water-treatment facilities 2009-2011 360 240

Water supply systems in Kirov (Federal programme

"Zhilische") 2009-2011 132 66

JSC Rosvodokanal

Barnaul vodokanal 2009-2011 6,932 4,772

Kaluga vodokanal 2009-2011 3,319 2,116

Krasnodar vodokanal 2009-2011 1,890 1,260

Omsk vodokanal 2009-2010 1,587 794

Orenburg vodokanal 2009-2011 946 630

Tver vodokanal 2009-2015 2,525 2,165

Tyumen vodokanal 2009-2011 2,700 1,800

State Programmes

St. Petersburg Water Utilities Development

Programme 2010-2025 274,200 102,825

Grozvodokanal 2010-2011 105,127 105,130

Russian Federal Target Investment

Programme

"Economic and social development in the Far East

and Transbaikal" 2010-2013 100 100

FGUP "Capital construction division # 900 under the

Federal Agency for Special Construction", Moscow 2010-2013 1,018 1,018

Water utilities and Environmental Protection 2010 7,251 7,251

Regional programmes "Clean Water"

(unconfirmed budget) 2011-2017 1,500,000 500,000

Water Strategy of Russian Federation until

2020 (excl. "Clean Water")

Public and industrial water supply 2009-2020 184,145 92,073

Protection and reconstruction of water objects 2009-2020 186,109 93,055

Protection from unfavourable impacts of water 2009-2020 326,182 163,090

Federal Programme "Zhilische" (public housing) 2011-2015 2011-2015 620,000 620,000

Sub-programme "Modernization of municipal infrastructure objects" 2011-2012 6,696 6,696

Investments in other projects 1,743,065

Replacement and amortization 580,000

Total investments in water utilities 4,041,570

Total investments on pump equipment in water utilities 93,987

Total investments on pump equipment with complex solution in water utilities 120,000

169.196.203

170.70.67

147.193.150

69.114.167

65.152.175

200.193.188

227.24.52

207.213.225

137.165.78



44

Investor Relations

HMS Group presentation, Morgan Stanley EMEA Conference (April 2011)