CONTENTS

02 SGM GROUP OF COMPANIES

08 ENGINEERING

10 PROCUREMENT

12 CONSTRUCTION

38 MAJOR REPAIRS

40 HEALTH, SAFETY AND ENVIRONMENT

42 EMPLOYMENT AND SOCIAL POLICY SGM GROUP OF COMPANIES IS A LEADER IN PROVIDING CIVIL INFRASTRUCTURE ENGINEERING AND CONSTRUCTION SERVICES FOR THE OIL AND GAS SECTOR. IT TAKES PART NEARLY IN ALL MAJOR RUSSIAN OIL AND GAS INFRASTRUCTURE PROJECTS OF STRATEGIC IMPORTANCE SGM GROUP OF COMPANIES

LLC «STROYGAZMONTAZH» EST. 2007 SGM GROUP OF COMPANIES

JSC «LENGAZSPETSSTROY» JSC «KRASNODARGAZSTROY» 03 EST. 1968 EST. 1979

LLC «SCC GAZREGION» LLC «NEFTEGAZKOMPLEKTMONTAZH» EST. 2010 EST. 2005

JSC «VOLGOGAZ» LLC «SGM-MOST» EST. 1958 EST. 2015

LLC «INVESTMENTS AND CONSTRUCTION» LLC «FORESTRY SPHERE» EST. 2014 EST. 2015

CORE ACTIVITIES:

ENGINEERING PROCUREMENT CIVIL CONSTRUCTION CROSS-COUNTRY GAS PIPELINE CONSTRUCTION OFFSHORE CONSTRUCTION ONSHORE FACILITIES CONSTRUCTION GAS INFRASTRUCTURE DEVELOPMENT MAJOR REPAIRS

STROYGAZMONTAZH:

a member of the Self-regulatory a member of the International organization “Association of gas & oil Pipeline & Offshore Contractors complex builders” (“SO AGOC”), Association (IPLOCA) Association “Union of companies performing engineering surveys in the oil & gas industry “Surveying- SGM GROUP OF COMPANIES Engineer” (Association “Surveying- Engineer”) and Association “Union of companies performing design works in 05 the oil & gas industry “Design-Engineer” (NP “Design-Engineer”)

authorized to perform work using the information containing state secrets KEY PERFORMANCE AND FINANCIAL INDICATORS, TECHNICAL CAPABILITIES PERFORMANCE INDICATORS

Units 2013 2014 2015

Gas pipelines constructed by SGM Group km 2,491 2,469 1,780 Incl. cross-country gas pipelines km 683 826 688 Gas infrastructure development km 1,808 1,643 1,093 Compressor stations pcs. 6 5 6 Major repair works at gas pipelines km 476 976 820

FINANCIAL INDICATORS

2013 2014 2015

Total revenue, Rub. 207,643,674 190,672,330 236,431,052 Linear construction 91,183,255 92,524,881 130,459,850 Onshore construction 30,499,733 26,525,066 31,880,861 Gas infrastructure development 15,348,442 12,543,861 9,368,510 Major repairs 36,988,325 32,113,034 24,157,899 Maintenance and repair 1,237,316 1,962,217 2,376,668 Diagnostic study 2,834,032 3,534,923 3,891,771 Infrastructure construction 2,536,234 Industrial construction 6,247,060 Production 7,477,432 7,168,023 5,528,875 Sales/usage of materials/inventory 19,369,508 11,433,270 16,664,972 Miscellaneous 2,705,632 2,867,054 3,318,353

TECHNICAL CAPABILITIES SGM GROUP OF COMPANIES CONSTRUCTION MACHINERY MOTOR VEHICLES 07 AND EQUIPMENT Main groups QTY (excl. labor-saving devices) Crew change buses 175 Main groups QTY Regular buses 68 Bulldozers 198 High-sided vehicles 130 Pipelayers 332 Dump trucks 265 Excavators 317 Stalk trucks 197 Backhoe loaders 31 Towed vehicles 393 Mobile welding machines 220 Special vehicles 280 Process machines 267 Haul trucks 131 Cranes 146 Light-duty vehicles 382 Hoisting machines 19 Vans 149 Tractors 38 TOTAL 2,170 Loaders 69 Road equipment 55 TOTAL 1,692 SGM GROUP OF COMPANIES ENGINEERING

WE PERFORM TURNKEY CONTRACTS, STARTING FROM DESIGN UP TO COMMISSIONING AND HANDOVER. IT’S A NEW COURSE OF DEVELOPMENT FOR STROYGAZMONTAZH. WE USE THIS FORM OF CONTRACTING RELATIONS IN SUCH LARGE-SCALE PROJECTS AS THE KERCH STRAIT BRIDGE CONSTRUCTION AND THE ARTEK INTERNATIONAL CHILDREN’S CENTER MODERNIZATION SGM OFFERS FULL RANGE OF CONTRACT, DESIGN AND We engage experienced CONSTRUCTION ENGINEERING SERVICES: design companies to provide front-end engineering and special consulting services. We prefer Selection and control of contractors to rely upon the design solutions, Background data acquisition; which are based on reasonable Terms of Reference preparation choice of required equipment and Work planning in accordance with the ToR materials, domestic products and Expert appraisal and approval of structural effective technologies. Project and technological solutions management groups provide Development of the design and estimate supervision at all stages of design, documentation as well as detail documentation approval and construction works Obtaining all necessary permits and approvals resulting in high-quality, flexible Construction maintenance and supervision project management and risk Supply chain management mitigation. SGM GROUP OF COMPANIES 09 SGM GROUP OF COMPANIES PROCUREMENT

SGM GROUP APPLIES AN EFFECTIVE FACILITY PROCUREMENT MANAGEMENT SYSTEM

ALL IN ALL, THE SAVINGS ACHIEVED THROUGH SINGLE SOURCE PROCUREMENT IS UP TO 10% While arranging the delivery of materials and spare parts to our facilities we use up-to-date information technology and precise supply chains, thus covering any Russian facility despite its location. We can deliver materials and equipment by air, train and water, as well as with the help of special transport and logistics companies, if necessary. Duly organized delivery has highly contributed to successful completion of such projects as the Bovanenkovo – Ukhta gas pipeline construction, Urengoy – Surgut gas-condensate pipeline (2nd string) construction, gas processing facility modernization at Novy Urengoy license area.

We build temporary infrastructure facilities to perform major projects. In particular, for the Kerch Strait Bridge construction project we have built bypass roads to transport loads, four concrete mixing stations, offloading terminals and reception platforms for construction machinery. This ensures trouble-free procurement and improved construction processes.

We purchase materials and equipment from the list of authorized suppliers, provided by our clients, as well as from bidders, who meet client demands better than others. We try to reduce expenses by improving the bid phase. All materials, equipment, mechanical appliances, spare parts, fuels, lubricants and temporary facilities suppliers are requested to pass rigorous evaluation and selection procedure to enter the contract with maximum cost savings and minimum risk. SGM GROUP OF COMPANIES 11 SGM GROUP OF COMPANIES CONSTRUCTION

SGM GROUP’S MAJOR PROJECTS:

THE KERCH STRAIT BRIDGE SAKHALIN – KHABAROVSK – VLADIVOSTOK THE POWER OF SIBERIA GAS PIPELINE GAS PIPELINE SYSTEM UKHTA – TORZHOK GAS PIPELINE SYSTEM DZHUBGA – LAZAREVSKOYE – SOCHI GAS PIPELINE BOVANENKOVO – UKHTA GAS PIPELINE SYSTEM POCHINKI – GRYAZOVETS GAS PIPELINE THE SOUTHERN CORRIDOR GRYAZOVETS – VYBORG GAS PIPELINE GAS PIPELINE SYSTEM ARTEK INTERNATIONAL CHILDREN’S CENTER THE KERCH STRAIT BRIDGE TRANSPORT CROSSING OVER THE KERCH STRAIT

Transport crossing over TOTAL LENGTH the Kerch Strait is a giant Russia’s top-priority infrastructure project. After completion it’ll be the longest bridge in Europe with traffic capacity up to 40 thousand 19 км vehicles and 47 train pairs per day. Two parallel structures – one for four-lane road and another for double-track OVER WATER LENGTH rail road – will link the Crimean Peninsula with the Taman Peninsula. It’ll be built over the Strait, across the Tuzla Island and the Tuzla Spit. When MORE THAN 7 KM in operation the Bridge will provide the consistent connection of the mainland with the peninsula, giving a new impetus to investment activities and tourism in the region. CLIENT: TAMAN FEDERAL The route has been chosen with due regard HIGHWAY AGENCY to geological and ecological aspects of the area. COMPLETION DATE: 2019 The bridge will avoid areas of seismic activities and (Highway opening date: 2018) mud volcanoes, as well as important natural and historical sites. There will be no impact to existing infrastructure. During bridge construction the ferry services will be available. Technical solutions used for bridge construction provide excess structural strength and seismic resistance, thus 595 bridge pillars will be used along with 7 thousand piles of SGM GROUP OF COMPANIES three types: prismatic, tubular and bored. An arch span, 227-meter long and 35-meter high, will be built over the navigable part of 13 the Kerch – Yeni-Kale Channel.

THE POWER OF SIBERIA GAS PIPELINE

The Power of Siberia gas pipeline is constructed LENGTH OF PIPELINE under large-scale Gazprom’s Eastern Gas Program to transport gas from Irkutsk and Yakutia gas SECTION CONSTRUCTED production centers to the Russia’s Far Eastern regions and China. BY SGM GROUP Total pipeline length is 2,200 km. SGM Group is responsible for 1,124-km pipeline section – from Aldansky Region (the Sakha Republic, Yakutia) to the Chinese border (the Amur Region). км The route of the Gas Transmission System 1,124 (GTS) passes within the corridor of the Eastern Siberia – Pacific Ocean, existing oil pipeline. It runs across swamp, mountainous and seismically active zones. Laying the pipeline in the hard-rock CLIENT: mountainous territory with slope inclination of 33-34 GAZPROM TRANSGAZ TOMSK, LLC degrees requires blasting. COMPLETION DATE: 2018 During pipeline construction the import PIPE DIAMETER: 1,420 mm substitution program is extensively used, which PRESSURE: 9.8/11.5 MPa means that the builders use mostly domestic power units, radio-electronic devices, telecontrol equipment and other high-tech equipment and parts. SGM GROUP OF COMPANIES 15

UKHTA - TORZHOK, UKHTA - TORZHOK - 2 GAS PIPELINE SYSTEM

The Ukhta – Torzhok gas pipeline system LENGTH OF PIPELINE SECTION is constructed as part of gas transmission system connecting the Yamal Peninsula CONSTRUCTED BY SGM GROUP with central regions of Russia. The first construction phase has been completed in 2012. STROYGAZMONTAZH supervised construction of 483-kilometer long section, while км the total pipeline length is 972 km. Moreover 483 four compressor stations were constructed: (UKHTA - TORZHOK) Novosindorskaya, Novoprivodinskaya, Novonyuksenitskaya and Novoyubileynaya. The next project, the Ukhta – Torzhok – 2, has become the next step of SGM Group to develop and expand the gas transmission 485 км system. It will construct 485 km of linear section, which is precisely half of the total (UKHTA - TORZHOK - 2) pipeline length. SGM’s sections run across the Arkhangelsk and Vologda Regions. For the purpose of the project 9 highway crossings will be built, including Kholmogory federal road (Moscow – CLIENT: GAZPROM INVEST, LLC Arkhangelsk). River crossings will be also built COMPLETION DATE: SGM GROUP OF COMPANIES across Sukhona River (983 m) and Little North 2012 (UKHTA – TORZHOK) Dvina River (1,200 m) using HDD technique. 2018 (UKHTA – TORZHOK – 2) From 2016 to 2019 SGM Group will PIPE DIAMETER: 1,420 mm 17 construct three compressor stations for PRESSURE: 9.8 MPa the Ukhta – Torzhok – 2 gas pipeline system.

BOVANENKOVO - UKHTA GAS PIPELINE SYSTEM

The Bovanenkovo – Ukhta gas pipeline system LENGTH OF PIPELINE SECTION has been constructed to transport natural gas from the Bovanenkovo field to the central regions CONSTRUCTED BY SGM GROUP of Russia with its subsequent transportation to the European customers. Implementation of this project is one of the major commercial stages of Yamal development. Yamal’s gas transmission км system has to become over time the key linking 139 element of the Unified Gas Supply System. SGM Group has constructed pipeline (1ST STRING) sections passing through the Yamal Peninsula to Baydaratskaya Bay. Some sections of the pipeline were provided with the ring-shaped insulation increasing the pipe diameter up to 1,620 mm. 197 км The construction has been carried out in extreme climate conditions of the Far North with (2ND STRING) nearly complete lack of infrastructure, at a significant distance from procurement bases. All sections of the pipeline cross the territory of continuous permafrost distribution. As part of the project Intinskaya CS and CLIENT: YAMALGAZINVEST, JSC Baydaratskaya CS were constructed. Baydaratskaya COMPLETION DATE: 2016 CS is located beyond the Polar Circle PIPE DIAMETER: 1,420 mm and known to be the northernmost PRESSURE: 11.8 MPa Russian compressor station. SGM GROUP OF COMPANIES 19

THE SOUTHERN CORRIDOR GAS PIPELINE SYSTEM

The construction of the Southern Corridor gas pipeline LENGTH OF PIPELINE system provides delivery of additional gas volumes to central and southern regions of Russia, thus facilitating SECTION CONSTRUCTED the development of industrial and municipal facilities, growth of gas infrastructure development and trouble- BY SGM GROUP free gas exporting via the Black sea. SGM Group has constructed the western and eastern routes of the Southern Corridor gas pipeline system, which runs across the Krasnodar Territory, Rostov Region, км Voronezh Region, Volgograd Region, Saratov Region, 1,259 Penza Region, Nizhny Novgorod Region and the Republic of Mordovia, as well as Russkaya CS, Kubanskaya CS, Korenovskaya CS and Shakhtinskaya CS. The Russkaya CS is the most powerful compressor CLIENT: GAZPROM INVEST, LLC station among above named. It comprises seven gas COMPLETION DATE: 2016 pumping units with aggregate capacity of 224 MW. PIPE DIAMETER: 1,420 mm The Southern Corridor gas pipeline system was PRESSURE: 9.8 MPa constructed in accordance with the highest ecological standards. All works were performed by SGM Group with due regard to ecological characteristics of the region, thus 65-km pipeline was harmlessly constructed across rice paddies with no harm to the harvest. Rehabilitation measures were taken as well. SGM GROUP OF COMPANIES 21

SAKHALIN - KHABAROVSK - VLADIVOSTOK GAS PIPELINE SYSTEM

The Sakhalin – Khabarovsk – Vladivostok gas LENGTH OF PIPELINE pipeline system enabled gas to be supplied to consumers of the Khabarovsk and Primorye SECTION CONSTRUCTED Territories (The Sakhalin Region). The commissioning of the Sakhalin – Khabarovsk – Vladivostok gas BY SGM GROUP pipeline became the starting point of large-scale gas infrastructure development of the eastern regions of Russia. STROYGAZMONTAZH is the General Contractor км for construction of 537 km linear gas pipeline and 537 Sakhalin head compressor station. Almost a half of the pipeline route was laid in the earthquake-prone areas. Geotechnical monitoring system was installed at the site to continuously monitor the ground and CLIENT: pipe movements. GAZPROM INVEST VOSTOK, LLC In the Primorye and Khabarovsk Territories COMPLETION DATE: 2011 the gas pipeline passes through active faults zones. PIPE DIAMETER: 1,220 mm This was also taken into consideration while selecting PRESSURE: 9.8 MPa construction technologies. SGM Group has built the unique 3-km crossing under the Eastern Bosphorus, Primorye Territory, using the horizontal directional drilling (HDD) SGM GROUP OF COMPANIES technique, thus providing the delivery of gas to the Russky Island and facilities of 24th APEC meeting. 23

DZHUBGA - LAZAREVSKOYE - SOCHI GAS PIPELINE SYSTEM

The first offshore gas pipeline constructed by SGM Group, LENGTH OF PIPELINE SECTION a part of the Program of Olympic Facilities Construction and Development of Sochi as a Year-Round Alpine Resort, approved CONSTRUCTED BY SGM GROUP by the RF Government. Ninety percent of the pipeline passes across the Black Sea. It has provided consistent gas supply to the facilities of the 2014 Winter Olympic Games and decreased the lack of energy in the Black Sea coast of the Caucasus. км The route of the pipeline, across the sea, was chosen to 177 decrease the impact on the coastal ecosystem and protect old- growth forests. SUBSEA LENGTH The onshore and offshore gas pipeline sections are connected with each other by five crossings, being built by HDD technique. Construction of all crossings was performed in extremely complicated soils accompanied by significant altitude differences, fractures and hidden cavities. 159.5 км During construction the unique 1,547-meters well was bored. Four gas distributions stations have been constructed: Dzhubga-1, Dzhubga-2, Novomikhailovskaya and Tuapse, as well CLIENT: PITER GAZ, LLC as several engineering facilities. COMPLETION DATE: 2011 STROYGAZMONTAZH was named the winner of the 100 Best Companies of Russia, Environment and Environmental PIPE DIAMETER: 530 mm SGM GROUP OF COMPANIES PRESSURE: 9.8 MPa Management contest, within the Technologies of the Year category, for using the HDD technique in the Dzhubga – Lazarevskoye – Sochi gas pipeline construction. The competition expert committee 25 considered the project as the best implementation of available technologies to decrease the negative impact on the environment.

POCHINKI - GRYAZOVETS GAS PIPELINE

The Pochinki – Gryazovets gas pipeline provides LENGTH OF PIPELINE delivery of additional gas volumes from Yamal gas fields to the north-western and central regions of SECTION CONSTRUCTED Russia, as well as European customers as part of the Nord Stream project. BY SGM GROUP The route of the Pochinki – Gryazovets gas pipeline runs across the territory of Nizhny Novgorod, Vladimir, Ivanov, Yaroslavl and Vologda regions. It passes through several natural and industrial км facilities, including rail roads, highways and water 506 basins. During construction the underwater crossing was made by the ordinary trenching method. The length of the main line is 1,099 m, while the length of the backup CLIENT: YAMALGAZINVEST, JSC line is 1,072 m. COMPLETION DATE: 2011 The linear pipeline and onshore facilities have PIPE DIAMETER: 1,420 mm been constructed as part of the project, including PRESSURE: 7.4 MPa Ivanovskaya and Vyaznikovskaya compressor stations. SGM GROUP OF COMPANIES 27 SGM GROUP OF COMPANIES 28 GRYAZOVETS - VYBORG GAS PIPELINE

The Gryazovets – Vyborg gas pipeline construction LENGTH OF PIPELINE SECTION (first and second strings) has provided gas delivery to the customers of the Northwestern region and to connect CONSTRUCTED BY SGM GROUP Russian Unified Gas Supply System with European gas transmission system directly via the Nord Stream transnational gas pipeline. The builders have faced various technical challenges км during construction. Major part of the pipeline, which has 300 been laid in the Leningrad and Vologda Regions, runs (1ST STRING) through swamps. At most complicated parts of the route with unstable soils (blue clay) SGM Group has applied new domestic stabilization technique. Construction works had to be done in rock formations as well. The crossings over Neva River and Saimensky 681 км Channel, Vyborg – Buslovskaya haul of the Oktyabrskaya railroad have been constructed by microtunneling (2ND STRING) technique in challenging geological conditions. STROYGAZMONTAZH was the General Contractor responsible for construction of six compressor stations (out of 7) on first and second strings CLIENT: of the pipeline: Gryazovetskaya, GAZPROM INVEST, LLC Volkhovskaya, Sheksninskaya, COMPLETION DATE: Babaevskaya, Pikalevskaya and 2012 Elizavetinskaya. PIPE DIAMETER: 1,420 / 1,200 mm

PRESSURE: SGM GROUP OF COMPANIES 9.8 MPa 29

ARTEK INTERNATIONAL CHILDREN’S CENTER

SGM Group provides full range of services on SGM GROUP CARRIES reconstruction of the Artek International Children’s Center (ICC) in accordance with national programs. The services OUT WORKS provided include design, repairs and reconstruction of the existing facilities, as well as new facilities construction, equipment and inventory delivery. Not only children’s and counselor’s campuses are IN 11 ARTEK’S currently under reconstruction but the residential facility for Artek’s staff, utility systems, pools, playgrounds, canteens, fire zones and sea-front as well. CAMPS In 2016, fifteen guest campuses in Camp Lesnoy, Camp Polevoy and Camp Kiparisny were put into operation, as well as staff residential facility, eight sports grounds, two canteens, hospital and supplementary education center. Climbing wall and ropes course have been constructed. CLIENT: ICC ARTEK Some facilities have been equipped with air conditioning COMPLETION DATE: 2020 systems. The progress made enabled to accommodate around 30 thousand campers in 2016, that is three times more than in 2015. SGM GROUP OF COMPANIES 31 SGM GROUP OF COMPANIES 32 ONSHORE FACILITIES

FROM 2013 TO 2016 WERE SINCE 2013, CONSTRUCTED AND RECONSTRUCTED SGM GROUP HAS PUT COMPRESSOR STATIONS: INTO OPERATION Russkaya (224 MW) Korenovskaya (125 MW) Shakhtinskaya (125 MW) Kubanskaya (48 MW) ONSHORE 2 3 Baydaratskaya, Compressor Yard #2 (96 MW) FACILITIES Intinskaya, CY #1 and CY #2 (224 MW) with an aggregate capacity of Novosindorskaya, 1st string (100 MW) Novoprivodinskaya, 1st string (100 MW) Novoyubileynaya, 1st string (125 MW) MW 1,798 Volkhovskaya (64 MW) Sheksninskaya (64 MW) Pikalevskaya, 1st and 2nd string (80 MW)

Ekaterinovka (64 MW) MORE FACILITIES Bubnovka (96 MW)

1 0 SGM GROUP OF COMPANIES ARE CURRENTLY Pisarevka (112 MW) Georgievsk (40 MW) UNDER CONSTRUCTION Nyuksenitsa, CY #4 (32 MW) 33 UNDERGROUND GAS STORAGE FACILITIES: Nevskoye (15 MW) Punginskoye First Phase (64 MW) GAS PROCESSING FACILITY CONDENSATE PRE-TRANSPORT PREPARATION PLANT

Second andThirdPhases FIELD INFRASTRUCTUREDEVELOPMENT UNDERGROUND GASSTORAGEFACILITY OIL PUMPINGSTATION COMPRESSOR STATIONS: AND RECONSTRUCT IN 2017,WE’LLCONSTRUCT Kovykta gascondensatefield, Punginskoye, Urengoyskaya Portovaya Maikopskaya Krasnoarmeyskaya Yubileynaya Novoyubileynaya, Novonyuksenitskaya, Novoprivodinskaya, (installation ofair-coolingunit) (64MW) (16MW) SecondPhase(64MW) 2ndstring(100MW) (32MW) 2ndstring(100MW) 2ndstring(100MW)

35

SGM GROUP OF COMPANIES SGM GROUP OF COMPANIES GAS INFRASTRUCTURE DEVELOPMENT FROM 2013 TO 2015

328 GAS FACILITIES HAVE BEEN CONSTRUCTED AND PUT INTO OPERATION IN 58 REGIONS OF THE RF TOTAL LENGTH

4,544 КМ

SGM GROUP IS ACTIVELY INVOLVED IN IMPLEMENTATION OF THE NATIONAL RUSSIAN REGIONS GAS INFRASTRUCTURE DEVELOPMENT PROGRAM INITIATED BY PAO GAZPROM In 2016, 166 inter-settlement gas pipelines were under construction.

Major part of construction activities has been carried out in Tambov, Ulyanovsk, Rostov and Kursk Regions, as well as in the Republic of Karelia.

Moreover in 2016, 10 gas laterals and related gas distribution stations have been constructed. Construction activities have been carried out in the Volgograd, Novosibirsk and Sakhalin Regions, Kamchatka and Khabarovsk Territories.

In 2017, it’s planned to complete the construction of gas lateral and gas distribution station in the Republic of Karelia.

SCOPE OF WORK. CONSTRUCTION OF INTER-SETTLEMENT GAS PIPELINES IN 2016-2017

Ulyanovsk Region (13 facilities) 227 97 Ivanovo Region (8 facilities) 59 25 Astrakhan Region (7 facilities) 65 Rostov Region (5 facilities) 65 88 Tula Region (9 facilities) 27 SGM GROUP OF COMPANIES Tambov Region (49 facilities) 229 90 Smolensk Region (1 facilities) 17 37 Pskov Region (4 facilities) 30 Perm Territory (7 facilities) 32 10 Orlov Region (4 facilities) 25 Leningrad Region (2 facilities) 23 Kursk Region (7 facilities) 94 Kurgan Region (6 facilities) 32 Vladimir Region (1 facilities) 12 Stavropol Region (3 facilities) 35 Krasnodar Territory (5 facilities) 43 11 The Udmurt Republic (3 facilities) 31 35 The Republic of Mari El (1 facilities) 20 The Republic of Karelia (5 facilities) 126 0 50 100 150 200 250 300 350

2016 Scope of work, km Works to be completed in 2017, km SGM GROUP OF COMPANIES MAJOR REPAIRS STROYGAZMONTAZH IS THE STRATEGIC PARTNER OF PAO GAZPROM ON EXECUTION OF MAJOR REPAIRS, DIAGNOSTIC STUDY, MAINTENANCE AND REGULAR REPAIR PROGRAMS

SGM GROUP ANNUALLY TAKES PART IN BUSINESS ACTIVITIES OF 20 GAZPROM’S SUBSIDIARIES DEALING WITH GAS PRODUCTION AND GAS TRANSPORTATION, THUS FROM 2013 TO 2015 IT HAS REPAIRED OVER 2,270-KM PIPELINES WITHIN RUSSIAN GAS TRANSMISSION SYSTEM (GTS) We perform major repairs to onshore and offshore facilities of PAO Gazprom’s GTS, including process pipelines, underwater crossings, gas distribution stations, water and heat supply system, power facilities, buildings and structures. From 2013 to 2015 we have completed repairs to over 10.4 thousand facilities, as well maintenance and regular repair of more than 20.2 thousand facilities.

More than 26 thousand kilometers gas pipelines were inspected by pigging, more than 26 thousand facilities were diagnostically studied by SGM Group to provide trouble-free operation of Gazprom’s Unified Gas Supply System.

km SCOPE OF WORK. 1,100 976.1 MAJOR REPAIRS OF LINEAR GAS PIPELINES 900 IN 2013-2015 820.2 700 SGM GROUP OF COMPANIES

500 475.6 39 300 2013 2014 2015

km SCOPE OF WORK. 12,000 11,278.9 PIG INSPECTIONS IN 2013-2015 10,000

8,000 7,574.0 7,574.0

6,000 2013 2014 2015 SGM GROUP OF COMPANIES HEALTH, SAFETY AND ENVIRONMENT ESTABLISHING A SAFE AND HEALTHFUL WORK ENVIRONMENT FOR EMPLOYEES IS A TOP-PRIORITY OBJECTIVE FOR SGM GROUP. IT STRICTLY COMPLIES WITH ENVIRONMENTAL, HEALTH AND SAFETY FEDERAL LAWS, NATIONAL AND INTERNATIONAL STANDARDS. SGM GROUP HAS APPROVED CERTIFICATES ISSUED UPON COMPLETION OF RECERTIFICATION AND COMPLIANCE AUDITS All companies of SGM Group continuously monitor compliance with occupational health and safety laws and regulations, take preventive measures to minimize work-related incidents and diseases, work on establishing safe and healthful work environment.

All of our employees receive medical services. Usually they undergo pre-employment and regular medical screening.

We offer training and professional certification to our employees dealing with occupational health and safety issues. SGM GROUP FULLY UNDERSTANDS ITS RESPONSIBILITY FOR THE ENVIRONMENTAL IMPACT CAUSED BY LARGE- SCALE CONSTRUCTION PROJECTS AND DOES IT BEST TO MINIMIZE THE IMPACT.

For this purpose we conduct preliminary environmental surveys at construction sites, design the project with due regard to the SGM GROUP OF COMPANIES results of the surveys, apply effective construction techniques, high-quality materials and structures, take measures on environment protection and rehabilitation. We supervise 41 work of our contractors to ensure their compliance with environmental laws.

The results of environment protection strategy implemented during construction by the SGM Group are highly appraised by the expert group: thus STROYGAZMONTAZH took place in the Ecology and Ecological Management Contest. 100 Best Companies and became the prizewinner in the Technology of the Year category (for using HDD technique during gas pipeline construction) and the Best Ecological Service category. SGM’s employees got the title of the Ecologist of the Year and the Best Manager of Ecological Service. SGM GROUP OF COMPANIES EMPLOYMENT AND SOCIAL POLICY COMMON MISSION, VALUES AND RESPONSIBILITY FOR SUCCESSFUL COMPLETION OF OBJECTIVES HELP EMPLOYEES OF SGM GROUP FEEL LIKE THEY ARE PART OF A LARGE TEAM

NEARLY 16,000 EMPLOYEES OUR EMPLOYEES ARE THE KEY TO OUR SUCCESS AND THE FUTURE OF SGM GROUP EMPLOYMENT AND SOCIAL POLICY IN 2015, SGM GROUP DONATED MORE THAN 190 MILLION RUBLES TO CHARITY

The core principle of SGM certification centers development, help Group’s employment policy is to partnership with educational and effectively use and develop skills institutions. careful and competencies of the personnel, As a result of effective policy attention, to offer them adequate standard implementation SGM Group’s in turn, they of living. employees successfully took part share their labor Employee incentive in professional events. In 2016, and life experience with our young program comprises competitive our workers were among the workers. wage, bonuses for professional winners at All-Russian Contest SGM Group demonstrates achievements, complimentary of Young Professionals in the Oil the successful model of socially social protection of employees and Gas Industry, in four out of six responsible business. Among various and their families. categories. sponsorship and charity activities, it We pay special attention We try the same hard to supports social regional initiatives, to professional growth of our ensure that our employees have keeps partnership with Dynamo employees. It’s so important also a good rest. We implement health hockey club and provides targeted because one fourth of our staff is resort treatment programs, arrange assistance. The targeted teams under the age of 30. Key activities sport events, festivities and specific of SGM Group take part in charity aimed at improving skills of our tours. events, support orphanages, restore

employees include mentoring We never forget our veterans. forests, develop and modernize the SGM GROUP OF COMPANIES system, internal learning and Our group of companies offers them World War II memorials. 43

SGM GROUP SGM GROUP STAFF SGM GROUP SGM GROUP STAFF COMPOSITION COMPOSITION BY LEVEL STAFF COMPOSITION STAFF COMPOSITION BY CATEGORY OF EDUCATION BY AGE BY GENDER

Management 11% University 25% Under 30 23% Female 31% Professionals education 24% and office staff

Secondary 55% 31–50 Workers (vocational 77% Male 65% 69% and laborers or other) education 20% 51 and over

2015 Data

LLC «STROYGAZMONTAZH» 53 Prospect Vernadskogo, Moscow 119415, Russia Tel: +7 (495) 782-06-06; Fax: +7 (495) 782-07-06 [email protected]; www.ooosgm.ru