First year oF work: results04.07.2014 - 04.07.2015

New MaNaGeMeNt

Roman RomanovUKROBORONPROM Director GeneralAppointed on July 4, 2014

20+ years’ experience in variousmanagement positions, both inbusiness and in state governance.

Sergii Pinkas, First Deputy Director General (since October 3, 2014)

Arthur Heru vimov, Deputy Director General for Development (since July 1, 2015)

Denis Gurak, Deputy Director General of Foreign Economic Activity (since August 12, 2014)

Oleksandr Stetsenko, Deputy Director General (since March 27, 2014)

Yurii Pashchenko, Deputy Director General of Aircraft Industry and Operations (since June 10, 2015)

Svitlana Khromets, Deputy Director General of Financial and Economic Issues (since July 9, 2014)

On July 4, 2014 Roman Romanov was appointed UKROBORONPROM Director General by the Decree of the President of Ukraine, Petro Poroshenko. To cope with serious problems in the new Environment, he assembled a team of highly qualified (MBA) professionals with successful track records in working on leadership positions during crisis not only in Ukraine, but also abroad:

eCoNoMiC iNDiCators

11.2* bln. UAH.in goods produced

+5 000 new jobs

2.7 bln. UAHin taxes and other transfers to the

budget or 8% growth despite reduction of reporting enterprises from 120 to 96

+12.6* bln. UAH.in net revenue

4464 UAH.The average monthly salary of the Concern

employees, which is 15% more than the average one in Ukraine (May 2015) and + 18% growth

over the previous period

+4.9* billion. UAH. gross profit, or 11.3% growth

+810* million. UAH. net profit, compared with a loss of -99

million. UAH. for the comparable period **

*operational data** Excluding foreign exchange differences

96+ enterprises

3 more enterprises, transferred by the Government under the management of UKROBORONPROM (+ 20 thousands employees):

«Antonov» SE «Kharkiv State Aviation Production Enterprise» SE «Plant 410 civil aviation»

MaNaGeMeNt DeCisioNs

* Developed by Ukrainian company

The launch of the electronic trading platform «IT Enterprise» *:9912 tender procedures conducted (from 06/11/2014) - 171.1 million. UAH saved.: Q4 2014: 730 tenders conducted - 12.5 million. UAH saved; Q1 2015: 3876 tenders conducted - 65.5 million. UAH. Saved; Q2 2015: 5306 tenders conducted - 93.1 million. UAH. saved;

+ 2586 new contractors engaged due to electronic trading platform use

Implementation of the new system of payments monitoring - about 130 mln. UAH. saved

Launched efficient logistics system: the cost of freight container transportations declined by half, leading to saving of 1.2 mln. UAH. per month.

Signed contracts with insurance companies on competitive basis: 1 mln. USD. savings per month.

MaNaGeMeNt DeCisioNs

* plan

The launch of the enterprise restructuring process, including turn-around and bunkrapcy recovbery, as a result:

Attracting top specialists in management and engineering: Launching of http://ukroboronprof.com.ua/ to attract highly skilled professionals: + 586 CV of top candidates. + 16 new managers and, as a result, - 13+ enterprises, generating profits for the half year

Professional development of the State Concern management: Cooperation with the top 5 business schools in Ukraine. Five top managers of Concern accomplish MBA graduate

program of the International Institute of Management.

171 million UAH production growth

+ 23.6 billion. UAH. * - net profit of 2015

+ 3.3 bn. UAH. * - Transfer to budgets of different

levels in 2015

Cooperation with leading universities of Ukraine, such as Kyiv-Mohyla Academy and Kyiv Polytechnic Institute: The UAV project of KPI is planned to series production

at JSC «Meridian, n. S.P.Korolyov.»

oNe year oF work For tHe arMy 3936 units of new and modernized weapons and equipment, manufactured and delivered to the Armed Forces of Ukraine (which is 36 times more than in the previous period), including:

+2799 units of weapon systems were repaired and restored at the plants, including:

55 crews are organized (unique experience !!) to repair military equipment in ATO zone; restored:

+105 of armoured and special

vehicles

+ 2 686 units of missiles and

ammunition

+605 rocket and artillery units

+ 459 units of communications,

electronic warfare and navigation equipment

+1442 of armored and special

vehicles

641 units of rocket artillery and

equipment

+553 communications equipment

units

987units of armored and special vehicles

+36 units of air defence systems

ato ZoNe eNterPrises: saVeD PoteNtial

SE «Donetsk state enterprise ofChemical products», Donetsk

Branch №1 SE «EF «Artem»Malyn, Zhytomyr region.State Research Institute of Chemicalproducts, Shostka, Sumy region.

military precision weapons

SE «State MakyivkaDesign Institute», Makyivka,Donetsk region.

State Research Institute of Chemicalproducts, Shostka, Sumy region.

production design of special chemicals and ammunition

State Enterprise «Research Institute of integrated automation» Donetsk

SE «Scientific and Production Complex» Iskra»Zaporizhzhya

development and production of radio equipment and systems

SE «Lugansk Aviation repair plant», Lugansk

SE «Lviv State Aircraft Repair Plant», SE «Konotop Aviakon Plant»

repair of engines and major helicopter gearboxes

SE «Chemical State Association of Petrovsky» , Krasniy Luch, Luhansk region.

Shostka state «Zirka» plant, Shostka, Symi region Production of powder for ballistic missiles

ProDuCtioN CaPaCity: restart Import substitution: 11,185 units. mastered (~ 30% of the required total)

Memorandums with Regional State Administrations (on cooperation with regional authorities and solution of import substitution problems), with the following RSA: Lviv Regional State Administration Ternopil Regional State Administration Kherson Regional State Administration Mykolayiv Regional Administration Chernihiv Regional State Administration 12 more state administrations are planning to take part

in the given program

3500 units, mastered by aviation repair facilities (~ 46% of the required amount)

+ 4156 units are planned to master by armored industry enterprises, short and medium term (~ 40% of the required amount)

ProDuCtioN CaPaCity: restart

New developments: guided anti-tank missiles R-3, R-2M complex «Korsar» helicopter missiles «Alta» triaxial survey radar 80K6K1 special combat modules for imported armored vehicles «Saxon» and NMMWV tactical wheeled fighting vehicle «Dozor-B» (mass production)

New BRDM-2DI «Khazar» (armored reconnaissance patrolling vehicles)

Modernized heavy infantry fighting vehicle, based on the T-64

Cooperation for production of the following units: BTR-3 (10 enterprises- participants of the Concern) BTR-4 (13 enterprises- participants of the Concern) BM «Oplot» (8 enterprises- participants of the Concern)

CooPeratioN witH autHorities

More than 30 draft laws of Ukraine, decrees of the Government are prepared, aimed to reform defense industry to meet international standards

13 bills are prepared and submitted to the Chairman of the Verkhovna Rada of Ukraine on National Security and Defence, aimed to develop the defense industry

initiated the approved amendments to the Tax and Customs Codes of Ukraine, allowing to exempt from duties and taxes products (spare parts, and units), necessary for the production of arms and military equipment for the Armed Forces.

ukroboroNProM: FiGHtiNG CorruPtioN

28 agency checks: about 15 administrators were disciplined, 2 were fined Concern terminated employment relationship with 9 General Directors

of the enterprises-participants;

40 cases of information submition to law enforcement bodies: on the basis of material provided, 20 cases were commenced to criminal proceedings.

the illigal transfer of 600 million UAH to 622 contractors, whose activities were provedfictitious and money laundering stopped.

1.7 mln. UAH - the amount of funds, returned in the process of audit.

Since November 2014 electronic workflow was introduced. >50% of the approved list of documents has already been already translated into electronic format.

ForeiGN eCoNoMiC aCtiVity UKROBORONPROM works in cooperation with international partners and has signed agreements of

understanding with foreign partners to deploy production in Ukraine (for example, the letter of intent with the company Lubawa (Poland).

Negotiations with world-class companies are in progress; The Concern took part in all the major world exhibitions (10+), having signed

more than 150 contracts

Ensuring internal needs - establishing a system of import from scratch: + 312 of new partners-suppliers + 37 new contracts for the supply of arms and equipment

Resources for foreign exchange earnings to the country - export: 265 contracts, worth 1 billion US dollars, were signed (+ 17% similar

to the previous period) + 207 new partners-suppliers

Additional regulatory approvals income of 9.7 million US dollars are received due to optimization of regulatory procedures.

Nato: iNteGratioN Representatives of the State Concern, together with the Ministry of Defense of Ukraine, participated in group

meetings of the Conference of National Armaments Directors of NATO (CNAD).

NATO is considering the possibility of participation of the equipment, developed in Ukraine (including «OLIMP-2», developed by the state enterprise «Kyiv Research Institute of Hydrodevices»), in the military naval exercises in 2015.

Cooperation with NATO Agency NSPA

utilization of light weapons and small arms and ammunition in Ukraine (NATO Trust Fund

under the «Partnership for Peace»

participation in matters on logistics and standardization (2015), together with the MOU Trust Fund

negotiations on involving of the Agency in the recovery of lost capacity of ATO zone

NATO Industrial Advisory Group (NIAG)

Specialists of the state enterprises «Scientific and Production Complex» Iskra» were the first of Ukrainian enterprises, joined the study NIAG «combined radar use for detection of air attack.»

In addition, State Concern is actively working on modernization of Ukrainian defense industry products to up to NATO standards. A separate unit was organized within the Concern.

8 companies participated in the project with the working group on NATO Codification AS-135 and have access to the NATO database online.

we Make ukraiNe stroNG!

WE ExECUTE THE TASKS OF THE PRESIDENT: DEFENCE INDUSTRY IS THE ECONOMIC RECOVERY DRIVER OF UKRAINE!

WE BRING TECHNOLOGICAL DEVELOPMENT OF THE COUNTRY TO A NEW LEVEL!

WE ENCOURAGE THE ECONOMIC DEVELOPMENT OF THE COUNTRY!

WE ARE WORKING TO ENSURE PEACE IN OUR COUNTRY!