HMS Group JP Morgan Russia Corporate access days Investor presentation

13-14 March 2012 Agenda

WHO WE ARE 3 Operating environment 4 HMS at a Glance 5 Development of Business Model 6 INVESTMENT HIGHLIGHTS 7 Attractive Industry Fundamentals 8 The Leading Provider of Flow Control Solutions 9 Advanced R&D Capabilities 10 Main Shareholders Run the Business 11 Healthy Debt Position 12 Hedging & Risk Management 13 FINANCIAL PERFORMANCE 14 Financial Highlights for 9M 2011 15 Pumps 16 Oil & Gas Equipment 17 EPC 18 EBITDA Development in 9M 2011 19 Capex & Working Capital as of 30 June 2011 20 2011 & 2012 BUSINESS UPDATE & OUTLOOK 21 HMS Group M&A Strategy & Outlook 22 Backlog 23 Selected End-market Prospects for Mid-term 24 Business Update 25 CONTACTS 26 APPENDIX 27

2 WHO WE ARE

3 HMS at a Glance

Key investment highlights Key financial indicators for 2005-9m’11

23,070  Growing markets in Russia and the CIS: 20,560 21.4%  oil & gas  power generation 16.5% 14,772 14,046  13,399 12.8% 15.3% water 12.3% 11.7%  Leader in flow control solutions on these markets 10.6%

 Best team in Russia: 6,724

 management 4,498 4,398 3,519 1,890  1,423 1,644 sales 744 830

 research & development 2005 2006 2007 2008 2009 2010 9M 2011

 Resilient financial growth and healthy debt position Revenue, Rub mn EBITDA, Rub mn EBITDA margin, %

Source: Company data

9 months 2011 key financials contribution by business segments

9M’11 total revenue Rub 20,560 mn EBITDA adj. Rub 4,398 mn profit for the period Rub 2,972 mn

Industrial pumps Oil & gas equipment EPC Revenue Rub 12,136 mn Revenue Rub 3,722 mn Revenue Rub 4,385 mn EBITDA Rub 3,628 mn EBITDA Rub 220 mn EBITDA Rub 431 mn

New photo

Pump station of Baltic pipeline system, Transneft Oilfield Pump Station 2, Vankor oilfield, Rosneft Oil Pump Station “Tayezhnaya”, Transneft Notes: Hereinafter “EBITDA” read as “EBITDA adjusted”, “EBITDA margin” read as “EBITDA adjusted margin” and “Net Income” read as “Profit for the period/year” 4 Pumps read as Industrial pumps Operating Environment

Oil production in Russia, history & perspectives HMS revenue by segments, 2010

Greenfield CAGR 11.2% 600 10.8% 2012F-2020F Oil upstream Oil refining Oil trasportation 9.2% 9.0% 500 50% 2% 18% 7.4% 400

300

2.4% 2.3% 2.1% 2.2% 200 1.4% 1.5% 1.3% 1.0%

mn mn tonnes 0.4% 0.4% 0.2% 0.4% 0.1% 0.1% 0.0% Water 100 -0.6% 12%

0 2000 2002 2004 2006 2008 2010 2012F 2014F 2016F 2018F 2020F Others Metal Nuclear Thermal Total production, 2000-2008 Traditional oil regions, 2009-2020F 8% 1% 1% 8% Greenfield, 2009-2020F Change in total production, % YoY

Source: REnergyCo, Rosstat Source: Company data, Management accounts

Installed base of HMS Group in Russia Announced investment programs1 Company Investments Time frame Investments in oil upstream Gazprom Neft US$ 80 bn by 2020 100% 90% 13% 13% 2% Lukoil US$ 50 bn by 2017 30% 80% 43% Rosneft US$ 125 bn by 2020 70% TNK-BP US$ 45 bn by 2020 60% Total US$ 300 bn 50% 98% Investments in oil downstream 40% 87% 87% 70% Gazprom Neft US$ 11 bn by 2018 30% 57% 20% Lukoil US$ 20 bn by 2020 10% TNK-BP US$ 3 bn by 2016 0% Water well Water injection Thermal power Oil pipeline Nuclear power Total US$ 34 bn pumps pumps (CNS) generation pumps, generation - Investments in oil transportation pumps Transneft Feed pumps HMS Group Others Transneft, capex US$ 43 bn by 2017 Transneft, modernization US$ 15 bn by 2017 Total US$ 58 bn by 2017 Investments in nuclear Rosatom US$ 350 bn by 2030 Source: Public data, companies’ websites Source: Company data 5 1 Selected companies Development of Business Model

Why integrated solutions ESPO-I pipeline is an example of integrated solutions Type of project / Standard pumps Integrated solutions Service & customized pumps

Source Array of small-size Large-scale projects contracts Research & development Normal Critical Technical entry-barriers Average High Competition type Price R&D and references Competition level High Limited Revenue growth potential Limited Unlimited

EBITDA margin 10-15% 25-30% Revenue downside Limited Limited, nearest 1.5 potential year Frequency High n/a 1. Trunk pump 8. Joints Aftermarket demand Average High 2. Motor 9. Friction oil pipelines 3. Coupling 10. Air cooling unit 4. Oil coolers 11. Antifreeze feed pipes for oil coolers 5. Adsorptive dryers 12. Antifreeze feed pipes for motor coolers 6. Air collectors 13. Antifreeze air cooling unit 7. Compressors Integrated solutions’ revenue contribution Producers Products / Services . HMS and other suppliers . Design, production and testing of pumps including Siemens 95% 94% 75% 75% 64% . Design of integrated pumping solution . Overall project management . Procurement for supply of engines, . HMS 5% 6% 25% 25% 36% cooling sleeves, valves and other equipment 2008 2009 9M 2010 2010 9M 2011 . Turn-key commissioning Revenue from integrated solutions Revenue from standard equpment

Source: Company data 6 INVESTMENT HIGHLIGHTS

7 Attractive Industry Fundamentals

Mix of growing markets

Russian selected pumps market revenues, Russian energy & utilities infrastructure Russian oil sector investments, Rub bn investments, Rub bn Rub bn

CAGR 18.0% CAGR 16.2% CAGR 11.8% 2,576 58.1 3,340 Oil refining & petrochemicals Power generation Municipal water

9.8 540 Oil pipelines Municipal water 1,011 Thermal power

Oil exploration & extraction Oil & Gas, surface Nuclear power 810

CAGR 16.1% 30.4 1,320

25.4 1,586 271 1,359 5.2 392 337

12.2 1,226 610 7.7 17.9 712 1.1 743 4.2 8.0 357 2.4 2002 2010 2015E 2010 2015E 2010 2015E

CAGR 2002-10 ‘10-15E CAGR 2010-15E CAGR 2010-15E

Power generation 21.4% 13.5% Municipal water 17.1% Oil refining & petrochemicals 12.2% Municipal water 14.3% 20.0% Thermal power 17.3% Oil pipelines 15.7% Oil & Gas, surface 16.2% 17.5% Nuclear power 13.0% Oil exploration & extraction 9.5%

Source: Frost & Sullivan 2010 8 The Leading Provider of Flow Control Solutions

Leading market share on key markets…

Oil industry1 Water utilities2 Power generation3

Market growth +24% Market growth +32% Market growth +36%

575,7 135,2 81,8 465,7 102,7 +41% 243,9 61,4 60,2 32,9 173,1 +43% 42,9 +15% 28,6

331,8 73,8 48,9 292,6 59,8 31,6

2009 2010 2009 2010 2009 2010

HMS Group revenue, US$ mln HMS Group revenue, US$ mln HMS Group revenue, US$ mln Other Other Other

Key conclusions

 HMS Group has leading positions in all key markets of presence with ~ 40% share on pumps market.

 HMS Group managed to expand its market share in the most key segments of business

 In the oil industry and water utilities the company’s share outperformed overall market growth

 Decrease in power generation pumps is attributable to the nuclear industry’s specifics expressed in long-term only contracts. Revenue from signed in 2009 contracts will be recognized during 2011/2012

Notes: Source: Frost & Sullivan 2010 1 includes pumps and oil and gas equipment 2,3 includes pumps 9 Advanced R&D Capabilities

Pumps Project design

 Very strong in-house R&D and significant experience in pump  Giprotyumenneftegaz (GTNG) is the leading Russian R&D development centre specializing in design of on-surface (as opposed to sub-surface) facilities for oil and gas fields, e.g. it  Unique testing facility (one of the largest in the former Soviet Union and globally) for all types of large specialized pumps designed over 200 fields in Russia including many of the for nuclear power plants and oil transportation largest (e.g. Samotlor, Mamontovskoye, Priobskoye)  Significant R&D resources for design of water utilities  Deep integration with clients’ R&D projects (RVKP)

Pre-tender preparation/aftermarket support is crucial for establishing/maintaining strong relationships with clients HMS ability to participate in pre-tender preparation stage creates unique competitive advantage

Tender, Pre-tender pricing and Design and Delivery and project contract production installation After-market preparation negotiation services

1–24 months 1 month up to 24 months 1–3 months

10 Main Shareholders Run the Business

Board of Directors Comments     The Board is comprised of professionals with significant experience in pump and oil and gas industries

 It includes founders, who have led HMS since its inception

German Tsoy Artem Molchanov Kirill Molchanov  HMS is the core business of the largest Chairman of the Board Managing Director (CEO) First Deputy CEO (CFO) Shareholder Shareholder Shareholder shareholders In company since 1993 In company since 1993 In company since 1993  Long-term commitment to the business from shareholders

Shareholders Structure

Vladimir Lukyanenko Nikolay Yamburenko Yury Skrynnik Shares are held through HMS Technologies Non-executive Director Head of Industrial Pumps Director for Strategic Marketing German Shareholder Shareholder Shareholder Tsoy In company since 2005 In company since 2003 In company since 2005 Managers 17% 22%

Vladimir Lukyanenko 24% Free-float 37% Philippe Delpal Andreas Petrou Gary Yamamoto Independent Non-executive Independent Chairman Audit Chairman Remuneration Source: Company data as of December 6, 2011 Committee Committee

 Founders 11 Healthy Debt Position

Moderate leverage… …with comfortable repayment schedule…

Including Rub 3 bn bonds issue 4,885 4,539 4,297

3,455 2.4 2.0

1.2 0.9

2008 2009 2010 9M 2011 Net Debt, Rub mn Net Debt to EBITDA LTM

Source: Company data Source: Company data as of 01 March, 2012

…and low currency and maturity risks Comments

Short-term debt Long-term debt . Low leveraged business profile with Net Debt to S&P corporate EBITDA LTM ratio of only 0.9 with internal credit rating: 15,9% 84,1% covenant of 2.5 BB- Outlook: . Easy access to additional liquidity with more than Stable Rub 1.7 bn of undrawn credit facilities Rub Euro Others . Steady debt repayment schedule with negligible 96.4% 1.7% 2.0% currency risk and prudent maturity structure . More than 96% of Rub-nominated debt with fixed interest rate Fixed rate Floating rate . Interest rate of 8.9%, down from 11% a year ago, 1 98.3% 1.7% while interest coverage ratio of 15.4

Source: Company data as of 01 March, 2012 12 1 EBIT LTM / Interest expenses as of September 30 Hedging & Risk Management

Risk type Coverage

 Raw materials price fluctuations Sale price adjustments for standard products in line with raw materials costs changes Advances received under the long-term projects are transferred to the suppliers in order to fix raw materials price for the whole project life-cycle  Delay of projects execution Day-to-day monitoring and control over of projects implementation

 Currency risks Revenue, expenses and debt are nominated in Rubles

 Interest risk 99% of debt with fixed interest rate

 Short-term oil price drop Limited impact on business based on standard products and solutions High opportunity costs for customers with complicated long- term projects: - HMS solutions are mission critical for the infrastructure projects - Only 1-2% of total project’s CAPEX relates to pumps - HMS solutions are usually implemented on the final stages of project execution

 Long-term oil price decline – influence on Low risk due to limited competition and large market share, margin and also because of commodities price correlation (steel and oil)

– Long-term oil price decline – fallen revenues Not covered

13 FINANCIAL PERFORMANCE

14 HMS Group Financial Highlights

Financial highlights Revenue performance

3Q’11 2Q’11 chg, QoQ Rub, mn 9M’11 9M’10 chg, YoY

6,703 6,806 -1.5% Revenue 20,560 16,158 +27.2%

2,056 2,221 -7.4% Gross profit 6,349 3,781 +67.9%

1,265 1,545 -18.1% EBITDA 1 4,398 2,251 +95.4%

1,169 1,364 -14.3% Operating profit 3,912 1,988 +96.8%

1 890 1,091 -18.5% Net income (loss) 2,972 1,052 +182.6% 3,835 5,314 7,009 6,912 7,051 6,806 6,703 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

Revenue, Rub mn Linear ( Revenue, Rub mn) 5,689 4,599 +23.7% Total debt 5,689 5,088 +11.8% Source: Company data

4,885 4,105 +19.2% Net debt 4,885 3,189 +53.2% EBITDA performance 0.9 0.7 Net debt to EBITDA LTM 0.9 1.2 22.5% 22.7%

18.4% 18.9% 30.7% 32.6% -195bps Gross margin 30.9% 23.4% +748bps 15.8% 13.4% 18.9% 22.7% -383bps EBITDA margin 1 21.4% 13.9% +746bps 11.2%

17.4% 20.0% -260bps Operating margin 19.0% 12.3% +672bps

13.3% 16.0% -276bps Net income margin 14.5% 6.5% +795bps

431 709 1,111 1,268 1,588 1,545 1,265 ROCE 2 38.6% 28.0% +1,006bps 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

EBITDA, Rub mn EBITDA margin Source: Company data 1 Hereinafter, read EBITDA as EBITDA adjusted, Net income as Profit for the period / year, EBITDA margin as EBITDA adjusted Source: Company data margin 2 EBIT LTM / average capital employed 15 Pumps

Pumps financial highlights, Rub mn

. 9M 2011 vs. 9M 2010 . 3Q 2011 vs. 3Q 2010 . 3Q 2011 vs. 2Q 2011

revenue revenue 4,090 revenue 12,136 +60% 3,942 -8% 31.5% -12% 29.9% 3,619 29.1% 29.1% 3,619

7,598 19.8% 20.2%

1,289 3,628 ebitda ebitda ebitda +142% 1,054 +32% 1,054 -18% 796 1,502

9M 2010 9M 2011 3Q 2010 3Q 2011 2Q 2011 3Q 2011

Revenue Pumps, Rub mn Revenue Pumps, Rub mn Revenue Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA margin Pumps, % EBITDA margin Pumps, % EBITDA margin Pumps, %

Source: Company data

Pumps: ■ Execution of the project in the oil transportation segment as well as delivery of standard pumps resulted in high EBITDA and EBITDA margin growth, YoY

■ Revenue from pumps excluding integrated solutions grew by 5.5% YoY with EBITDA margin of 18.7% due to growth of demand and effective cost control

■ EBITDA margin is lower in 3Q 2011 vs. 2Q 2011 due to unusual high 22.4% EBITDA margin in 2Q 2011 for standard pumps, resulted from signing of a good number of lucrative contracts

16 Oil & Gas Equipment

Oil & gas equipment financial highlights, Rub mn

. 9M 2011 vs. 9M 2010 . 3Q 2011 vs. 3Q 2010 . 3Q 2011 vs. 2Q 2011

4,033 revenue revenue revenue -8% 1,410 1,402 -1% 1,402 +20% 3,722

1,172

10.5% ebitda ebitda 6.7% ebitda -48% 9.7% -32% n/a 5.9% 6.7% 422 137 220 93 93 -1.4%

-16 9M 2010 9M 2011 3Q 2010 3Q 2011 2Q 2011 3Q 2011

Revenue OG equipment, Rub mn Revenue OG equipment, Rub mn Revenue OG equipment, Rub mn EBITDA OG equipment, Rub mn EBITDA OG equipment, Rub mn EBITDA OG equipment, Rub mn EBITDA margin OG equipment, % EBITDA margin OG equipment, % EBITDA margin OG equipment, %

Source: Company data

Oil & gas equipment: ■ Absence of orders for integrated solutions in 9 months of 2011 affected revenue and EBITDA margin performance

■ Situation is expected to brighten in 4Q 2011 – beginning of 2012 due to participation in current tenders for new infrastructure projects in Eastern Siberia as well as entrance into new market segments

■ 3Q 2011 revenues up QoQ due to recently acquired Sibneftemash

■ EBITDA margin grew to 6.7% in 3Q 2011 compared to the previous quarter also thanks to Sibneftemash’s EBITDA margin of more than 20%

17 EPC

EPC financial highlights, Rub mn

. 9M 2011 vs. 9M 2010 . 3Q 2011 vs. 3Q 2010 . 3Q 2011 vs. 2Q 2011

revenue revenue revenue 4,392 4,385 1,587 1,587 -0% 1,535 +3% +18%

1,347

ebitda ebitda 15.3% ebitda 9.8% +64% -42% -63% 6.0% 8.5% 206 431 131 4.8% 4.8% 262 76 76

9M 2010 9M 2011 3Q 2010 3Q 2011 2Q 2011 3Q 2011

Revenue EPC, Rub mn Revenue EPC, Rub mn Revenue EPC, Rub mn EBITDA EPC, Rub mn EBITDA EPC, Rub mn EBITDA EPC, Rub mn EBITDA margin EPC, % EBITDA margin EPC, % EBITDA margin EPC, %

Source: Company data

EPC: ■ Revenue remained stable at Rub 4,385 mn for 9M 2011, compared to Rub 4,392 mn in 9M 2010

■ HMS’ policy of participation in the construction projects with higher than average profitability led to slower revenue growth

■ EBITDA grew by 64.5% YoY with average EBITDA margin of 9.8%:

– Construction sub-segment’s EBITDA margin grew to 3.9% in 9M 2011 though revenue contracted – Project & design sub-segment of EPC stood at 19.4% EBITDA margin for 9M 2011 while revenue amounted to Rub 1,675 mn ■ EBITDA margin dropped to 4.8% in 3Q 2011 compared to 2Q 2011 due to temporary change of contracts mix

■ Signing of a large contract in August 2011 hasn’t substantially influenced construction sub-segment’s revenue for 3Q 2011 18 EBITDA Development in 9M 2011 40,000

20,000 EBITDA key drivers, % of revenue 0 9M 2010 9M 2011

operating expenses 14.2 bn vs. 16.6 bn in 9M’11 | +18% yoy revenue in 9M’11 | +27% yoy ebitda in 9M’11 | +95% yoy

69% 77% 12% 2% 11% 2%

12% 19% 14% 21%

Revenue Revenue Cost of salesCost of salesSG&A expensesSG&A & expenses others & othersOperating profitOperating profitDepreciationDepreciation & amortisation & amortisationEBITDA EBITDA w other deductionsw other deductions

Source: Company data Net income components, Rub mn Cost of sales components, Rub mn

3,912 63.5% 60.5%

2,972

1,988 20.8% 1,052 15.1% 12.1% 11.8% 9.4% 6.9% 46 13 9 67

Materials Labour Cost of goods sold Other costs (326) (323) (668) (693) Operating Finance Finance Share of Income tax Net income profit income costs results of expense 9M 2010 9M 2011 associates

9M 2010 9M 2011 19 Source: Company data Source: Company data CAPEX & Working Capital as of 30 Sept 2011

Cash flow performance in 9M’11, Rub mn Capital expenditures in 9M’11 vs. 9M’10

745 Bobruisk acquisition 4,216 (272) Rub mn 2.2x (5,317) 1.8x + + 456 804 351 346 + = (1,815) IPO proceeds 249 (715) 3,373 Rub mn 4,244 WC changes (4,825) Rub mn Sibneftemash acquisition (1,280) Rub mn (1,992)

Cash as of Operating WC Income tax Net cash Net cash Net cash Cash as of 9M 2010 9M 2011 Jan 1, 2011 cash flow changes & interest used in used in from Jul 1, 2011 Organic capex, Rub mn Depreciation, Rub mn before WC &others paid operating investing financing Capex to Deprecation ratio, x changes activities activities activities

Source: Company data Source: Company data Comments Working capital as of 30 Sept 2011, Rub mn

 HMS Group generated Rub 4,216 mn of operating cash flow before 28% changes in working capital 28%  Substantial working capital increase in 9M 2011 led to the negative operating cash-flow due to ongoing execution of the large 6,833 7,576 infrastructure oil transportation contract with significant advance 23% payments received last year  Working capital is expected to fit target range of 10-15% of revenue with positive operating cash flow in 9M 2012 as a result of: 6% 6% 13%  Next payment of more than Rub 2 bn under the contract  Prepayments on contracts signed in 2H 2011, and contracts in 791 (1,355) process of signing 9M 2010 9M 2011 9M1,307 2010 9M 2011  Investing cash flow consisted of: Working capital to Revenue LTM - Working capital to Revenue LTM  Organic capex of Rub 745 mn, in line with target level of Working capital Inventories Receivables Payables Working capital 1.5-2.5 times depreciation 9M 2010 change change change 9M 2011 1H 2010 1H 2011  Acquisition of Sibneftemash for Rub 1,280 mn, and Bobruisk WC to Revenue LTM for Rub 272 mn Source: Company data 20 2011 & 2012 BUSINESS UPDATE & OUTLOOK

21 HMS Group M&A Strategy & Outcome

EV/EBITDA of recently acquired companies What does HMS Group buy

 Pumps, compressors, oil & gas equipment, project & design 16.5  Russia and the CIS  Revenue within $ 20-100 mn  Low-leveraged companies 10.4  Friendly management 9.3

7.5 Acquisitions rationale: 5.6  Broadening of HMS Group’s product portfolio with complementary 4.1 equipment  Potential growth of revenues and EBITDA margin of acquired companies:

GTNG Sibneftemash Bobruisk – Sales power and R&D capability of HMS Group – Well-known brands and/or technical equipment base of EV/EBITDA Acquisition Year EV/EBITDA next year after Acquisition Year acquired companies Source: Company data  Potential growth of revenues and EBITDA margin of the whole Group through integrated solutions

CAGR of selected subsidiaries’ revenue & EBITDA: from M&A to 2012 (RAS) The Acquisition of Dimitrovgradkhimmash (DGHM) PUMPS OIL & GAS CONSTRUCTION PROJECT & in Feb’12 EQUIPMENT DESIGN . Key financials, RAS: 37.2% 37.5% 37.2% 35.1% 2011E Revenue of Rub 1.6 bn 24.1% 2011E EBITDA Rub 387 mn 18.5% 18.2% 18.5% 2011E EBITDA margin 24.5% 11.2% . Deal details: n/a Rub 206 mn for next 11% of the -0.8% company (followed by several previous transactions resulted in -9.7% Rub 543 mn for 51%) HMS Pumps NEM HMS Neftemash TGS SKMN GTNG M&A in 2003 M&A in 2005 M&A in 2004 M&A in 2006 M&A in 2007 M&A in 2010 2.2x EV/EBITDA 2011E (9.8x EV/EBITDA in 2006) CAGR Revenue 2011 CAGR EBITDA 2011 Source: Company data HMS not only grew through acquisitions but managed to achieve significant organic growth 22 Backlog

Backlog structure performance

Revenue recognition depends on production period for various type of equipment and the 1 nature of the project

There is no direct correlation between decline in backlog and potential decline in revenues 2 because of backlog’s diversification and different production periods of equipment as well as projects’ nature

Production period Rub mn 9M 2011 6M 2011 chg, QoQ 9M 2010 chg, YoY /Annual revenue

Products & services on demand, short production cycle about Rub 4 bn

Core equipment & services 7,364 7,323 +1% 7,622 (3%) 2-8 months

Construction component of EPC 1,595 1,492 +7% 2,847 (44%) 6-18 months

Oil transportation pumps 3,138 4,914 (36%) 10,101 (69%) 12-36 months

ESPO pumps 2,306 4,011 (43%) 10,101 (77%) 12-36 months

Non-ESPO pumps 832 903 (8%) 0 n/a 6-12 months

Total backlog 12,097 13,728 (12%) 20,570 (41%)

Source: Company data, Management accounts 23 Order intake development

Overview Total order intake

 Although overall order intake in 2011 contracted by 21% as compared with the previous year and amounted to Rub 23.2 bn… 29 318

 The Group enjoyed 37% YoY order intake growth, net of a large ESPO-related contract amounted to Rub 12.4 bn that had been signed in the first half of 12 404 2010

 Order intake in industrial pumps business segment down by 67% YoY due to a high-base effect resulted from the massive ESPO-related contract obtained in 2010 16 914 23 222  Order intake in the oil and gas equipment segment demonstrated impressive growth of 101% YoY and amounted to Rub 7,832 mn versus Rub 3,897 mn in 2010 2011 the beginning of 2011. ПроектESPO ВСТО, project, млн. Rubруб. mn  Order intake in the EPC segment rose by 93% from Rub 4,003 mn to 7,731 mn ПолученныеOrder intake, заказы, net искл. of ESPO,ВСТО, млн.Rub руб. mn mainly due to significant contracts signed by the Group in the second half of 2011: Source: Company data – orders in the construction sub-segment grew by 108% from Rub 2,634 mn to Rub 5,478 mn – project and design orders up 65% from Rub 1,368 mn to Rub 2,253 mn. Industrial pumps Oil and gas equipment EPC

7 731 19 780

4 003 12,404 5 533 2 637

7,376 6,597 3 897 7 832 1 366 2 198

2010 2011 2010 2011 2010 2011

ВСТО,ESPO млн. project, руб. Rub mn ПолученныеOil and gas заказы equipment, на нефтегазовое Rub mn оборудование, млн. руб. ПолученныеOrders for заказы construction на строительство, works, Rubмлн. руб.mn ПолученныеIndustrial pumpsзаказы на excluding промышленные ESPO, насосы, Rub mn млн. руб. ПолученныеOrders for заказы project на проектированиеand design, Rub и дизайн, mn млн. руб.

Source: Company data 24 Selected End-market Projects for Mid-term

FinancialIncreased and numberOperational of highlightsHMS end -market projects Project Brief description Completion Key metrics Comments Rosneft Vankor 2 stage Further development. Capex for 2011 $ 2.6 bn next stage by 2014 Min capex Rub 480 bn HMS won a number of tenders Yurubcheno-Tokhomsk oilfield Start of oil production in 2013. Oil reserves & resources 513mt by 2013 pick production 10mtpa Komsomolskoe, Priobskoe oilfields Achievement of 95% level of associated gas utilization HMS participated in previous stages Lukoil & Bashneft JV JV. Project development stage. Reserves 141 mt. Start of HMS has good references for previous Trebs and Titov fields by 2013 Capex c.$ 5.9 bn production is expected in 2013. Max capacity 6 mtpa projects Transneft OPS to be constructed to deliver oil to Khabarovsk and ESPO expansion 9 OPS by 2015 HMS participated in previous stages Komsomolsk refineries Oil transportation from YANAO and Northern Krasnoyarsk region Zapolyarye – Pur-pe pipeline 4 OPS by 2016 Capex Rub 120 bn HMS participates in a project design  to ESPO pipeline ESPO expansion OPS to be constructed to deliver oil to Primorsk refinery 4 OPS by 2017 HMS participated in previous stages Pur-pe – Samotlor expansion Construction of 2 OPS 2 OPS by 2017 Capex Rub 53 bn HMS participated in previous stages Yurubcheno-Takhomskoe-Taishet Oil transportation from Yurubcheno-Tokhomsk and Kuyumbinsk Investment decision by Capex Rub 63 bn HMS participated in previous stages pipeline oilfields to ESPO-1. Length ~600 km. Capacity ~18mtpa 2011-end TNK-BP Giant oilfield in YANAO with specific oil. Project production 20 Russkoe oilfield Capex $ 4.5 bn HMS participates in a project design mtpa Samotlor Further development of an active oilfield in Nizhnevartovsk. by 2014 Capex $ 4.6 bn HMS participated in previous stages Uvat 21 oilfields in Tyumen region HMS participated in previous stages East- and Novo- Urengoy gas & Planned production for 2011 is 3.2bcm, up 17% in 2010 HMS participates in a project design condensate fields Oilfield located in the Eastern Siberia, Irkutsk region. Development Peak production by Verkhnechonsk oilfield Additional $3-4 bn HMS participated in previous stages was stimulated by close proximity of ESPO pipeline. 2014 Gazprom The field will become a resource base for Russian pipeline gas and HMS produces units for complex gas Shtokman gas and condensate field liquefied natural gas (LNG) exports to the Atlantic Basin markets preparation Gazprom Neft Priobskoe oilfield Western Siberia. Recoverable reserves ~600 mt HMS participates in a project design Urmanskoe and Shinginskoe oilfields Eastern Siberia Kuyumbinskoe oilfield 50/50 w TNK-BP thru Slavneft. Reserves C1 65 mt, C2 151 mt Sberbank Capital Dulisma oilfield Irkutsk region. Further development. 3rd resource base for ESPO Total reserves 15 mt HMS participated in previous stages Taas -Yuriah oilfield Sakha region. Further development. Total reserves ~130 mt Capex Rub 15-30 bn Iraq Rumaila brownfield Consortium headed by BP Capex $ 15 bn HMS submitted technical survey Az Zubair Consortium headed by Eni Capex $ 20 bn HMS participates in a tender Municipal water Central Asia Irrigation stations for Uzbekistan and Turkmenia HMS has good references Nuclear Rosatom Pumps for 5 blocks. Tender to be held at 2011-end –2012-beg By 2014 Tenders Rub 1.5 bn HMS has good references Source: Public information, Company data as of December 6, 2011  Contracts signed 25 Business Update

FinancialSelected and contracts Operational and highlights events up to date Core events

 First TURNKEY project on Srednebotuobinskoe oil & gas condensate field, Rub 2.6 bn

 Development of the second stage of the East-Siberian oilfield totaled Rub 2.7 bn

 UNIQUE testing facility was put into operation to increase R&D capacities

 First large contract for AFTERMARKET services on an East-Siberian oil and gas field, Rub 480 mn

Large contracts & significant events

 Contract worth more than Rub 1 bn for construction of well clusters and their support infrastructure facilities on a gas field in Western Siberia (2H 2011)

 Contract to provide engineering services on a gas field in Eastern Siberia, Rub 1.27 bn (2H 2011)

 Contract for production of pumps for Rostov and Baltic nuclear stations of Rub 613 mn

 Contract for delivery of modular equipment for Surgutneftegaz of Rub 668 mn

 Contract for provision of replacement and overhaul services for Transneft, Rub 186 mn

Permanent inflow of standard contracts In 3Q 2011 HMS Group sold products

 Contract for production of pumping equipment for Norilsk Nickel and services for Rub 3,554 mn to

 Contract for production of oil and gas equipment for Surgutneftegaz and Rosneft 3,426 clients (excluding three largest

 Contract for production of modular equipment for Vingapur oil and gas field clients) with average revenue per client

 Contract for delivery of group measuring units to Gazprom Neft of around Rub 1 mn

Source: Company data 26 Contacts and HMS Group Key Details

Investor Relations Company address: Phone +7 (495) 730-66-01 7 Chayanova Str. [email protected] Moscow 125047 http://grouphms.com/shareholders_and_investors/ Russia Twitter HMSGroup and HMSGroup_Rus

Sergey Klinkov, Head of Investor Relations [email protected]

Inna Kelekhsaeva, Deputy Head of Investor Relations [email protected]

HMS Hydraulic Machines & Systems Group Plc is listed on the London Stock Exchange

Identifier Number Number of shares outstanding ISIN US40425X2099 117,163,427 Ticker HMSG Bloomberg HMSG LI Reuters HMSGq.L

Credit Rating Standard & Poor’s BB- (Outlook stable) affirmed on 29 November, 2011

27 APPENDIX

28 HMS Group Business Strategy

Focus on integrated . Higher margin than stand-alone products and services solutions and other . HMS Group’s largest customers more often prefer to work with manufacturers highly-engineered that can offer integrated and customized solutions products . Creates strong ties with customers, pull-through demand for aftermarket services

Strengthen position . Take advantage of positive market trends in existing core markets in core markets . Organic expansion into attractive market segments . Increase of aftermarket services component to generate higher-margin and including regular cash flows aftermarket and . Core export opportunities: water projects in FSU, Rosatom nuclear contracts, export O&G in Kazakhstan and Iraq

Expand research . Leverage leading R&D capabilities in order to develop next-generation customized and development pumps, technological upgrades and integrated pump systems capabilities . Work closely with customers to develop technical policies and standards

. Commitment to integration and optimization of current production assets and commitment to increase synergies between acquired businesses Improve operational . Standardization and continuous improvement of operations and business efficiency processes (e.g. ERP, budgeting and reporting methodology and software development, etc.)

Pursue selective & . Our targets are technology and R&D facilities . Pursue acquisition opportunities in high-growth sectors where HMS has limited value enhancing presence acquisitions . Search for cost and revenue synergies

29 HMS Group Positioning

From pumps to integrated solutions based on excellent R&D base

1993–2002 Pump Trading

Pump Design and 2003 Pump Trading Manufacturing

Pump Design and Modular Equipment Design 2004–2006 Pump Trading Manufacturing and Manufacturing

Pump Design and Modular Equipment Design 2007–2008 Pump Trading Manufacturing and Manufacturing Construction

Pump Design and Modular Equipment Design 2009–Today Pump Trading Manufacturing and Manufacturing Integrated Solutions

The sole domestic engineering company in Russia Eurasia Dresser Baker Industry HMS Integra Weir Flowserve Technip Schlumberger Drilling Rand Hughes Power generation √ √ √ Oil and Gas √ √ √

Pumps Water √ √ √ Above ground Oil and gas equipment √ √ √ √

ME* Repair √ √ √ Oil and Gas √ √ √ √

Power generation √ EPC Water √ Seismic research √ √ √ √ Under Well service √ √ √ √ ground

Drilling √ √ √ √ Service Oil production increase √ √ √ √ Russian Foreign

Note: * Modular Equipment (Oil & gas equipment) 30 Financial Performance for 2010

Comments Revenue, 2009 vs 2010 EBITDA, 2009 vs 2010

 Total revenue up 56% yoy to Rub 15.3% 23,070 mn 12.8% +56% The growth reflects: +86% 23,070 3,519  Significant increase in size of orders for pump-based

integrated solutions 14,772  Completion of key projects 1,890

 Consolidation of GTNG

 Stable growth of revenue from ordinary contracts

 Organic revenue growth of 47% yoy, excluding impact from GTNG 2009 2010 2009 2010 EBITDA margin

Source: Company data Source: Company data

EBIT, 2009 vs 2010 ROCE, 2009 vs 2010 Net income, 2009 vs 2010

+1,825bps +133% 36.2% +2,156% 3,027 1,581

18.0% 1,298

70

2009 2010 2009 2010 2009 2010

Source: Company data Source: Company data Source: Company data

31 EBITDA Development in 2010

Comments Cost of sales components comparison, 2009 vs 2010

 EBITDA increased by 86% yoy to Rub 3,519 mn due to:

 Strong revenue growth in all business units 60% 55%  Focus on innovative high-margin contracts

 Effective cost control

 Consolidation of GTNG 16% 16% 15% 13%  EBITDA organic growth of 72% yoy 4% 5% 5% 3% 2% 2% 2% 1%  EBITDA margin increased to 15.3% Materials Labour Cost of Construction D&A Utilities Others  SG&A grew less than revenue due to economy of scale goods sold works by and cost optimization strategy sub- contractors 2009 2010 Source: Company data 50,000 EBITDA key drivers, 2009 vs 2010 (% of revenue) 0 operating expenses 20.2bn vs 13.7bn in 2009 |+47.2% yoy 2009 2010 revenue in 2010 +56.2% yoy

75.3% 75.6% 3.3% 2.5% 9.1% 12.4% 0.5% 1.9% 0.7% 15.3% 12.6% 3.1% 12.8% 1.5% 7.3% 2.3%

RevenueRevenue Cost ofCost sales of salesDistributionDistribution and and GeneralSG&A & OtherOther expenses expenses OperatingOperating profit profit DepreciationDepreciation & & OthersOthers EBITDAEBITDA* transporttransport Administrative amortisationamortisation Source: Company data expensesexpensesexpenses expenses 32 Revenue & EBITDA Contribution by Segments

Highlights by core segments, 2009 vs 2010 Comments

. Pumps 22.1% Pumps: 16.0%  Sales up 70% yoy to Rub 10,712 mln, enjoying strong demand 10,712 revenue +70% for integrated pumping solutions primarily in oil transportation and upstream 6,308  EBITDA grew by 134% yoy, and EBITDA margin rose to 22.1%,

2,367 ebitda primarily attributable to increasing share of contracts for pump- 1,012 +134% based integration solutions

2009 2010

Revenue, Rub mln EBITDA, Rub mln EBITDA margin, %

. Modular equipment Modular equipment: 18.9% 5,805  Sales up 39% yoy, driven by demand from the major oil revenue +39% companies to equip new oil fields and modernize existing 4,166 installed base of modular equipment 10.3%  EBITDA decreased 24% yoy and EBITDA margin also down to 10.3% due to execution of low-margin contracts concluded in ebitda 786 599 -24% 2009

2009 2010

Revenue, Rub mln EBITDA, Rub mln EBITDA margin, %

. EPC 9.0% EPC: 6,135 revenue  Revenue growth of 46% yoy is primarily attributable to an +46% impact of GTNG acquisition and entering the market of projects 4,189 and design. Revenue growth, excluding an effect of acquisition, was c. 14% yoy

 EBITDA increased significantly to Rub 550 mln, and EBITDA margin rose to 9.0%. Newly acquired GTNG added to EPC’s ebitda 0.8% 550 EBITDA Rub 271 mln 33 +1,548%  Such a significant EBITDA growth is primarily attributable to a 2009 2010 low EBITDA base in 2009, caused by significant price pressure Revenue, Rub mln EBITDA, Rub mln EBITDA margin, % connected to investment cutbacks by oil companies Source: Company data 33 New Milestone Projects Oil & Gas Production and Oil Transportation Mature oil producing regions Haryaga-Yuzhny Zapolyarnoye-Purpe Underdeveloped oil producing regions (45 MMt, 536 km) Khylchuyu Oil pipeline projects (8 MMt, 160 km) Trebs & Titov Baltic Pipeline (140 MMt, 2,151 km) Oil products pipeline projects System-II (50 MMt, 1,000 km) Primorsk Prirazlomnoye Developing oil fields HMS participation confirmed Timano-Pechora basin Tikhoretsk-Tuapse 2 Haryaga Moscow Yuzhny ESPO-II and ESPO-II Komsomolsky NPZ (12 MMt, 295 km) Khylchuyu Zapolyarnoye capacity expansion -De-Kastry Unecha Russia (47 MMt, 2,046 km) (n.d., 300 km) Salymskoye Purpe Russkoye Vankor “Yug” (South) Tikhoretsk Priobskoye Yurubcheno- (9 MMt, 1,465 Syzran Samotlor Tokhomskoe Talakanskoye km) Tyamkinskoye Novorossiysk Nizhnevartovsk Verkhnechonsko Tuapse ye Tengiz De-Kastri Skovorodino Taishet Komsomolsky NPZ Caspian Pipeline Consortium Purpe-Samotlor expansion (25 MMt, 430 km) Komsomolsky NPZ (35 MMt, 1,510 km) -port De-Kastry ESPO-I and ESPO-I Yurubcheno- (9 MMt, 313 km) Tokhomskoe-Taishet capacity expansion (18 MMt, 600 km) (50 MMt, 2,694 km) Kozmino

Transneft investment program 2010-2017 Oil production development Export markets

 > 10,000 km of pipelines to be constructed or  > 3 bn tons of oil reserves to Central Asia replaced be developed in the next  Rapidly growing sales of modular equipment to oil several years and gas sector in Kazakhstan  > 140 of pump stations to be constructed or Iraq reconstructed Oil refining development  Significant installed base of HMS pumps from Soviet  > 550 reservoirs with total capacity of almost and post Soviet periods  26 oil refineries are to be 10 mln m3 to be reconstructed  Currently undertaking projects for Oil Ministry and reconstructed BP

Source: Frost & Sullivan report 2009, Transneft website (www.transneft.ru) 34 New Milestone Projects Thermal and Nuclear Power Utilities

TGC-3 (Mosenergo) TGC-1 TGC-2 TGC-6 Investments 2010-2015: Investments 2010-2015: Investments 2010-2015: Investments 2010-2015: RUB 39 bn RUB 73 bn RUB 28 bn RUB 16 bn

Kolskaya Leningradskaya-II TGC-9 TGC-4 Investments 2010-2015: Investments 2010-2015: RUB 28 bn RUB 21 bn

TGC-13 (Enisei) Investments 2010-2015: Kalininskaya RUB 10 bn Smolenskaya TGC-11 Kurskaya Investments 2010-2015: Novovoronezhskaya-II RUB 26 bn Rostovskaya Rostovskaya Beloyarskaya TGC-14 TGC-12 (Kuzbas) Investments 2010-2015: TGC-5 Investments 2010-2015: RUB 8 bn Investments 2010-2015: RUB 21 bn RUB 14 bn

TGC-8 TGC -7 (Volga) TGC-10 (Fortum) Selected nuclear power plant projects abroad Investments 2010-2015: Investments 2010-2015: Investments 2010-2015: RUB 18 bn RUB 11 bn RUB 47 bn using Russian technology No of power units / Investments Name Country Unit capacity (MW) 2010-2015 (RUB bn) Summary of total investments in power generating capacity Belene NPP Bulgaria 1 / 1,000 128 Tianwan NPP China 2 / 1,000 86 Number of power units to be Additional generation Investments 2010- constructed or reconstructed capacity, MW 2015 (RUB bn) Kudankulam NPP India 2 / 1,000 65 Mokhovtse NPP Slovakia 2 / 440 53 TGC n/a 13,627 359 Akkuyu NPP Turkey 4 / 1,200 27 OGC n/a 11,962 467 Ukraine 2 / 1,200 Nuclear plants 41 21,500 808 (Russia) Belarus 2 / 1,200 Other projects 1,581 Nuclear plants Armenia 1 / 1,200 17 17,880 1,940 (Foreign) Vietnam 1 / 1,200 Source: Frost & Sullivan report 2009 Nuclear Power Plants HMS participation confirmed Projects under construction Planned projects 35 New Milestone Projects Water Utilities

Asia-Pacific Economic Cooperation Olympic Games in Sochi in 2014 FIFA World Cup 2018 Summit in Vladivostok in 2012 Investment 2010-2014: RUB 930 bn1 Investment 2010-2018: RUB 1.6 trn1 Investment 2010-2012: RUB 660 bn1

Kaliningrad Petrozavodsk

St. Petersburg Tver Vladimir Export markets Moscow Yaroslavl Central Asia Kaluga Kirov  Recently undertook turnkey construction of N.Novgorod Perm Rostov-on-Don pumping stations in Turkmenistan and Uzbekistan Volgograd Kazan Ekaterinburg Azov Tyumen  Presence in water markets of Tajikistan and Krasnodar Samara Orenburg Kyrgyzstan Sochi Omsk  Offices in Ashkhabad (Turkmenistan) and Tashkent (Uzbekistan) Barnaul

Leading integrated water utilities JSC Rosvodokanal JSC Evraziysky JSC RKS

Vladivostok Total Capex 2010- Capex Large-scale State Programs 2015 (RUB bn) period Capex in water projects, RUB bn (2007–2015) Federal Program "Zhilische" (public 620 2011-2015 housing) 1,011 Regional programs "Clean Water“2 520 2011-2017 844 (unconfirmed budget) 724 606 Water Strategy of Russian Federation 351 2009-2020 471 372 393 until 2020 (excl. "Clean Water") 295 311 Reconstruction of Grozny utilities 105 2010-2011 St. Petersburg Water Utilities 103 2010-2025 Development Program 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E

Source: Frost & Sullivan report 2009, Media sources Source: Frost & Sullivan report 2009 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. 36 East Siberia – Pacific Ocean pipeline

Total number of pumping stations 41

Yakutsk Sea of 14 Okhotks Krasnoyarsk 12 13 15 16 region 11 17 10 18 9 RUSSIA 19 8 7 20 6 Khabarovsk Taishet 5 Ust’-Kut 3 4 Skovorodino 21 region 1 22 2 23 Buryat 24 25 Irkutsk region 26 34 region 27 33 31 35 Chita 28 30 32 Chita 29 36 region Blagoveschensk Irkutsk 37 38 CHINA 39 40 41 MONGOLIA Vladivostok

Number of contracted pumping stations 20 Number of new pumping stations for increasing capacity 21

Pumping stations under construction by HMS 12 To supply Komsomolsk and Khabarovsk refineries 9

Pumping stations constructed by Sulzer 7 To supply Primorsk refinery 4

Pumping stations under construction by Turbonasos 2 No information at the present time 8

Source: Company data, Transneft 37 Zapolyarnoe-Pur-pe pipeline

Project figures Implementation Capacity, mtpa up to 45 Construction period 2012-2016 Total length, km 488 1st stage 2014 Projected cost, RUB bn 120 2nd stage 2015 Total length of inlet pipelines, km 1,200 3rd stage 2016

Inlet pipelines Max capacity Inlet point Oilfield License holder in 2020, mt Main OPS 1 Vostochno-Messoyakhinskoe Slavneft * 10.9 Main OPS 1 Zapadno-Messoyakhinskoe Slvaneft 2.4 3rd stage Total Main OPS 1 13.3 OPS 2 Russkoe TNK-BP 6.8 OPS 2 Zapolyarnoe Gazprom 2.3 OPS 2 Tazovskoe Gazprom 1.0 OPS 2 Northern Urengoyskoe Gazprom n/a OPS 2 Salekaptskoe Lukoil 0.3 2nd stage Total OPS 2 10.9 OPS 3 Urengoyskoe Gazprom 7.4 OPS 3 Pestsovoe Gazprom n/a OPS 3 En-Yakhinskoe Gazprom n/a OPS 3 Samburgskoe SeverEnergiya ** 0.2 OPS 3 Yaro-Yakhinskoe SeverEnergiya 0.5 OPS 3 License plot of Western Urengoyskoe TNK-BP 1.1 Total OPS 3 9.7 Total capacity to Pur-pe 34.0-45.0 1st stage Legend Projected Zapolyarnoe–Pur-pe pipeline Inlet pipelines from main perspective oilfields (with production level over 2mln tons in 2020) New OPS Maximum level of pumping capacity by 2020, mtpa Main OPS – main oil-pumping station of the future Zapolyarnoe-Pur-per pipeline OPS – oil-pumping station

Source: Public sources, Transneft site * TNK-BP and Gazprom Neft have per 50% share 38 ** Gazprom holds 51%; this shareholding should be sold to Novatek Diversified and Well-established Customer Base

Revenue by Clients*, 9M 2011 vs. 9M2010 Comments

. 9M 2010 Total revenue  Stable growth of revenue generated by Other clients Rub 16,158 mn received from replacement and modernization works

Transneft Orion Stroy Gazprom Neft TNK-BP Surgutneftegaz 16% 6% 6% 5% 2%  Sharp increase in contracts’ quantity from Transneft, Salym Petroleum 1% Lukoil Rosneft and Gazprom Neft played its role in a 1% Hors Group 1% substantial revenue growth Dulisma 1%  New types of contracts include:

Rosneft Others 23% 38% – Integrated pump-based solutions (i.e. pumping stations for Transneft) . 9M 2011 Total revenue Rub 20,560 mn – Turnkey projects (i.e. Srednebotuibunskoe oil & gas fields) Gazprom Neft TNK-BP Dulisma Lukoil Hors Group 7% 5% 3% 2% 2% Stroygazconsulting – Rosneft 2% Aftermarket contracts 10% Surgutneftegaz 2% Gazprom 1% Salym Petroleum 1% Case study: Gazprom Neft’s revenue breakdown

Transneft Others Gazpromneft-NNG 33% 32% . 9M 2011 21.85%

Gazpromneft- . Revenue structure by clients Noyabrskneftegas 18.38% Rub mn Gazpromneft-ONPZ 0.24% 6,567 Gazprom Neft 6,049 7%

13,994 10,109

9M 2010 9M 2011 Gazpromneft-Vostok 36.21% Large clients, Rub mn Others, Rub mn Gazpromneft-Hantos 23.31% Source: Company data Source: Company data 39 * Large client - a client that brings revenue more than Rub 100 mn per period Competitive Environment in Russia

Customized Pumps Standard Pumps Russian  Limited R&D  Not well-positioned in terms of operational efficiency due to limited scale of players  Small scale of operations 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

Global  Lack of local engineering expertise  Not well-positioned in terms of price of products players  Water pumps: KSB, Grundfos

 Oil trunk pumps: Sulzer, Flowserve

 Power: Weir, KSB

Chinese  Lack of relevant technologies to produce  No brand names customized pumps players  No established relationships with Russian clients

Source: Company data 40 Export Markets

Central Asia Europe  Recently undertook turnkey construction of pumping station  Office in Milan * on Amu Darya river in Turkmenistan and construction of Iraq pumping station on water-storage basin Arnasai in Uzbekistan  Significant installed base of HMS pumps, particularly in oil and gas, from Soviet and post Soviet periods  Rapidly growing sales of modular equipment to oil and gas sector in Kazakhstan  Office in Baghdad diversifies customer base, currently undertakes projects for Oil Ministry and BP  Presence in water markets of Tajikistan and Kyrgyzstan  Offices in Ashkhabad (Turkmenistan) and Tashkent The UAE (Uzbekistan)  Office in Dubai * Russia Belarus

Ukraine Kazakhstan

Bulgaria Uzbekistan Italy Kyrgyzstan Turkey Turkmenistan Tajikistan China Iraq

UAE India Vietnam

Nuclear Exports  Long history of HMS involvement in Rosatom’s foreign as well as domestic projects  International agreements in place for the construction of 19 reactors in China, India, Belarus, Turkey, Ukraine, Armenia, Slovakia, Bulgaria and Vietnam using Russian technology ― Current tenders for development of 16 other reactors worldwide HMS office

Source: Company data, media sources Note: * To be opened at 2011-end 41 Production Assets

Promburvod (PBV) Livnynasos (LN) HMS Household pumps Dimitrovgradhimmash (DGHM), associate 40%  Products: Water well submersible  Products: Household vibration pumps  Products: Equipment for oil and chemical  Products: Water well submersible pumps pumps industries and pumps for oil refining

HMS Neftemash Bobruisk Machine Building Plant (BMBP) . Products: Modular equipment for oil and gas and water industries  Products: Pumps for oil refining and metals & mining

Nizhnevartovskremservice (NRS) . Services: Maintenance and repair of pump equipment, drilling and other oil and gas HMS Pumps field equipment  Products: Industrial pumps for oil and gas, Belarus power generation Minsk Ukraine Bobruisk Moscow Russia Sibneftavtomatika (SibNA) . Products: High-precision measuring Bavleny Sumy equipment for oil, gas and water flow rates Nasosenergomash (NEM) Livny  Products: Pumps for thermal and nuclear Dimitrovgrad power generation and oil & gas industry Nizhnevartovsk Sibneftemash Rostov Tyumen . Products: Tanks and vessels for oil and Tomsk oilfield service companies

VNIIAEN, associate 47%

 Description: R&D center for pumps used in nuclear, thermal power generation, oil and HMS Group Tomskgazstroy (TGS) gas industry  Headquarters . Services: Trunk oil and gas pipeline and auxiliary facilities construction

Rostov Vodokanalproekt (RVKP) Giprotyumenneftegaz (GTNG) Sibkomplektmontazhnaladka (SKMN) . Services: Project design for water utilities . Services: Project and construction design of . Services: Design, construction and oil and gas facilities commissioning of oil and gas field projects

Industrial pumps Modular equipment EPC

Source: Company data 42 Growth Strategy: Selective Acquisitions in Key Segments

Core Focus for Potential Acquisitions Acquisition Objectives and Rationale Oil & Gas  Flow control solutions in oil and gas  Increase of market share  Pumps for oil and gas, chemical and petrochemical  Diversification of product offering applications  Expansion into new segments  Modular equipment, tanks and vessels

 Dimitrovgradkhimmash (DGKhM)1

Power  Pumps for nuclear and thermal power generation,  Increase of market share marine applications  Diversification of product offering  Pumps for nuclear and thermal power generation, oil refining, chemical and petrochemical applications

 Pumps for thermal power generation, water utilities

Water  Pumps for wet-pit sewage applications  Diversification of product offering  Pumps for water utilities, nuclear and thermal power  Strengthening positions in water segment generation  Increase of market share  Modular equipment for wastewater treatment  Expansion into wastewater treatment segment

Other  Pumps for oil refining and metals and mining  Diversification of product offering  Pumps for oil refining, oil transportation, water utilities  Expansion into new segments and vessels  Increase of market share  Pumps for oil transportation, oil refining, metals and mining

 Pumps for chemical applications, nuclear power generation, water utilities

Source: Company data 1 The Group has an option to acquire 11.0% of the voting shares’ current quantity of its associate, DGKhM, in 2012, as a result HMS Group will own 51.0% of the voting shares of DGKhM 43 Calculations

Notes to the presentation and formulas used for some figures’ calculations

 All figures in millions of Russian Rubles, unless otherwise stated

 Management of the Group assesses the performance of operating segments based on a measure of adjusted EBITDA, which is derived from the consolidated financial statements prepared in accordance with IFRS

 EBITDA is defined as operating profit/loss adjusted for other operating income/expenses, depreciation and amortization, impairment of assets, provision for obsolete inventory, provision for impairment of accounts receivable, unused vacation allowance, defined benefits scheme expense, warranty provision, provision for legal claims, provision for VAT and other taxes receivable, other provisions, excess of fair value of net assets acquired over the cost of acquisition. This measurement basis excludes the effects of non-recurring income and expenses on the results of the operating segments

 EBIT is calculated as Gross margin minus Distribution & transportation expenses minus General & administrative expenses

 Total debt is calculated as Long-term borrowings plus Long-term financial lease liabilities plus Short-term borrowings plus Short-term financial lease liabilities

 Net debt is calculated as Total debt minus Cash & cash equivalents at the end of the period

 Working capital is calculated as Inventories plus Trade and other receivables minus Trade and other payables

 ROCE is calculated as EBIT LTM divided by Average Capital Employed (total debt + total equity), where EBIT equals Gross profit minus SG&A, and Total debt equals the above formula

 Backlog is calculated as the preceding backlog 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 the Group’s management. The Group may also make certain adjustments to bookings to reflect amendment, expiry or termination of contracts, cancellation of orders, changes in price terms under contracts or orders, or other factors affecting the amount of potential revenue which the Group believes may be recognized under such contracts. The Group’s backlog estimates are not an indication of potential revenues. Actual revenues and other measures of financial performance under IFRS may differ materially from any estimate of backlog, and changes in backlog between periods may have limited or no correlation to changes in revenue or any other measure of financial performance under IFRS 44 Disclaimer

The information contained herein has been prepared using information available to HMS Group (“HMS” or “Group” or “Company”) at the time of preparation of the presentation. External or other factors may have impacted on the business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information about HMS Group may not be included in this presentation. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information.

Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and HMS Group cautions that actual results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Report for a description of the major risk factors. This presentation should not be relied upon as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to these statements.

This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in HMS Group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision.

45