The state concern "Ukroboronprom" gives a summary of company's results for the 2016

1. 2016

2. 2
UKROBORONPROM TODAY:
130+enterprises
~80 000employees
labour dynasties
missioned to ATO area
participated in military
operations
368
400
262
R&D centerskey defence industries m2
production
facilities
315 9 000 000

3. 3
UKROBORONPROM 2016
DEFENCE CAPABILITY COMPETITIVENESS
6 209weapons and military
equipment
Transferred to Ukrainian Security
Authorities
growth +20% growth +9%
Export sales
mln $592 3,374
Taxes paid
~700R&D projects from HEIs
Development of Applied Science
and Education
Investments in production of new
products carried out with the working
capital of enterprises
528 through one of ProZorro platform
375
Savings
mln UAH mln UAH
bln UAHunits
*as of 30.09.2016 and 30.09.2015
$ 494 mln for 2015 UAH 3,1 bln for 2015
growth +11%
UAH 476 mln for 2015

4. 4
KEY PERFORMANCE FIGURES
OF PROFIT UKROBORONPROM PAID TO THE STATE WHICH ELIMINATES
THE POSSIBILITY TO REINVEST IN PRODUCTION AND DEVELOPMENT75%
*as of 30.09.2015 and 30.09.2016
**Capital investments were performed with no state budget participation
***as of 30.09.2016
Average wage, UAHCAPEX, UAH **
475 933 500 5 354
527 729 900 6 897
Taxes paid, UAHNet revenue, UAH
14 431 758 000 3 099 565 3002015
18 535 698 000 3 374 550 2002016
Financial results from
operations, mln UAH EBITDA, mln UAH Operating margin
Assets
depreciation ratio
Number of full-
time employees
1 394 2 452 7,5% 67% 77 925
*
OTHER RESULTS ***

5. 5
6 209
1 019 19
units of weapons and
military equipment
TRANSFERRED TO UKRAINIAN
SECURITY AUTHORITIES
68256Precision weapons
and ammunition
Aviation
1 362
PRODUCED AND MODERNIZED
Armored vehicles,
artillery, special
equipment
Radar systems,
electronic
warfare and
communications
323 64902 94Precision weapons
and ammunition
Aviation
1 389
REPAIRED
Armored vehicles,
artillery, special
equipment
Radar systems,
electronic
warfare and
communications
6Shipbuilding
3 458
Nodes and
aggregates
*as for 9 m 2016

6. 6
DEFENCE STATE ORDER
COMMITTED FOR 2016
4,2
2,8PRODUCTION
OF NEW
WEAPONS
REPAIRS
2,8
actually funded for 9 months 2016
overall defence state
order comprises
UAH 11,3 bln
Precision weapons
and ammunition
AviationArmored vehicles,
artillery, special
equipment
Radar systems,
electronic warfare and
communications
67 % 38,9 %
SHARE OF UKROBORONPROM IN DEFENCE STATE ORDER FOR 2016
1,4
UKROBORONPROM UKROBORONPROMOTHER OTHER
33 % 61,1 %
20162015
bln UAH
bln UAHbln UAH
bln UAH

7. 7
digital fire control system
MYSLYVETS
60mm mortar
KBA.118
OUR RESPONSE TO HYBRID WAR
UAVs
GORLYTSYA
multipurpose unmanned
armored vehicle
PHANTOM
combat module combat module
TAIPAN DUPLET
combat module
KASTET
transport aircraft
АN-132
LIST OF INITIATIVE PROJECTS:UKROBORONPROM DEVELOPED
AND INTRODUCED AT ITS OWN EXPENCE:
Mineral KRTSO
«Kolchuga 2»
Modification number of the new
generation armored combat vehicles
based on a modular concept
120-mm self-propelled mortar,
code «Nabat»
Efforts are being made with Ukrainian MoD as to the funding of R&D NABAT
and development of operational-tactical requirements and tactical and technical
assignments for the rest of projects
2016 - YEAR OF INNOVATIONS
and other...
INNOVATION PLATFORM (ANALOGUE OF AMERICAN DARPA)
WILL UNITE DEVELOPERS, START-UPS, INVESTMENT FUNDS AND MILITARY
(ITS ESTABLISHMENT WAS ANNOUNCED ON 11TH
OCTOBER 2016)

8. 8
IMPORT SUBSTITUTION -
PRIORITY OF ENTERPRISES
30% 35%
13% 15%
70% 65%
87% 85%
2015
2016
BTR-3Е1 BTR-4Е
35%10%
Russia RussiaOtherUkraine Ukraine
55% 45%10%45%
2014
Ukraine Ukraine
Ukraine Ukraine
Other
Other Other
Other
Other

9. 9
TRANSPARENT TENDERS -
OUR COUNTERMEASURE TO CORRUPTION
for 9 months
2016 saved
mln UAH
375
Number of e-procurements conducted
14 483
730
20 571
2015
2014
2016
Number of new suppliers registered at ETP
4 836
12 323
2015
2016
Average amount saved per one e-procurement, UAH
15 000
18 000
2015
2016
+75%growth compared
to 9 m 2015
214mln UAH for
9 months 2015
UKROBORONPROM IS THE EARLY BIRD IN E-PROCUREMENTS IMPLEMENTATION
8302014
17 0002014

10. 10
DEVELOPMENT OF EXPORT CAPACITY
9 m 2015 9 m 2016
+20%
EXPORT SALES
mln
SHARE OF EXPORTED MILITARY GOODS BY
UKROBORONPROM IN TOTAL VOLUME OF
UKRAINIAN EXPORT
* expected for 2016 - certain volume of contracts are in the pre-conclusion stage
growth compared to
9 m 2015
VOLUME OF EXPORT CONTRACTS SIGNED DURING 2014 - 10 MONTHS 2016 COMPRISES $ 3,150 bln*
ORDER BOOK AS OF NOVEMBER 30, 2016$1,446 bln
2%1,9%
mln
$ 592$ 494

11. 11
MORE THAN 65 MEMORANDA WERE SIGNED
ON NEW POINTS OF COOPERATION WITH 20 COUNTRIES
PARTNERSHIP ON THE GLOBAL MARKET
BELGIUM
FRANCE
CANADA
USA
MEXICO
EQUATORIAL GUINEA
CYPRUS
GREAT BRITAIN
GERMANY
POLAND
UAE
DENMARK
ISRAEL
SWITZERLAND
INDIA
TURKEY
MALAYSIA
SAUDI ARABIA
CHINA
INDONESIA

12. 12
COOPERATION WITH NATO
for the first time in the history of Ukraine the Day of Ukrainian Defence
Industry in NATO Headquarter (Brussels, Belgium) and NATO Agency HQ
on NSPA Support and Supplies (Kappelen, Luxembourg) was held, where
Ukroboronprom presented its products, particularly new projects
30.11.16 - 01.12.16
UKROBORONPROM JOINTLY WITH NATO INFORMATION AND DOCUMENTATION CENTER INTENDS TO CREATE CONCERN
BASED TRAINING CENTRE FOR UKRAINIAN EXPERTS IN DEFENCE AND SECURITY SECTOR UNDER THE ALLIANCE PROGRAM.
ASSUMED ENGAGEMENT OF EMPLOYEES FROM SUBJECT MINISTRIES, ENTITIES AND STATE ORGANISATIONS
NATO office of advisory
support has been opened at
Ukroboronprom
3 enterprises have inplemented
the management and quality
assurance system AQAP 2000,
fourth enterpise - shortly
70% of enterprises certified
for ISO 9001
SKDB Luch took part in the
NIAG 204 Industrial Advisory
Group study on lifecycle arms
NATO decided to use
Ukrainian AN-124 for strategic
transport carriages by the
SALIS program

13. 13
UKROBORONPROM AS DRIVER OF APPLIED SCIENCE
AND EDUCATION IN UKRAINE. RESULTS:
491
20023
R&D
projects
from HEIs
R&D
projects
from NASU
is already being implemented
at enterprises of Ukroboronprom
1024
54
899
74
174
123
343 554
1306
60
184
26 30
production of energy savings equipment and facilities,
improvement of energy efficiency in production and reducing
energy and material intensity in production
production of new critical materials with specified
physical and chemical features
production of equipment for communications and
information space protection
VITAL DIRECTIONS OF COOPERATION WITH SCIENTISTS
students completed
internships at 56
enterprises of
Ukroboronprom
interns employed
at enterprises of
Ukroboronprom
3 681
370
under primary expertise
for 9 m 2016

14. 14
KEY STRATEGIC INITIATIVES
REFORM OF THE DEFENCE INDUSTRY COMPLEX IN UKRAINE:
CORPORATISATION
AUDIT
CLUSTERIZATION
INNOVATION PLATFORM
TECHNOLOGY PROTECTION

15. 15
CORPORATISATION
TRANSPARENT AND EFFICIENT
MANAGEMENT STRUCTURE
SUPERVISORY BOARD. COLLEGIATE
DECISION MAKING
UNDERSTANDABLE PROCEDURES FOR
INTERNATIONAL INVESTORS
CLEAR MECHANISMS OF FINANCING
AND FINANCIAL FLOWS CONTROL
2015 - pilot project
2016 - established aircraft building
corporation on the basis of SE Antonov
2 enterprises in the course of
corporatisation corporatisation is approved
by subject ministry
5 enterprises
developed changes to the legislation
and submitted for approval to the
subject ministry
67enterprises

16. 16
AUDIT
OBJECTIVE VIEW ON THE CONCERN
FROM THE LEADING INTERNATIONAL
EXPERTS
JUSTIFIED ASSURANCE AND
INVESTMENTS PROTECTION
CLEAR PRINCIPLE OF ENTRY INTO
CAPITAL FOR INVESTORS
FOCUS ON EFFICIENT USE
OF RESOURCES
DEVELOPED TERMS OF REFERENCE FOR
THE INDEPENDENT AUDIT BY LEADING
INTERNATIONAL CONSULTING AND
AUDIT COMPANIES
improving the business processes
management, adoption of
international standards
identification of unique market
proposal and most promising
markets
roadmap development for
implementation of Concern`
selected strategy
transition plan development as to
preparation of financial statements
in compliance with international
standards
OBJECTIVES

17. 17
CLUSTERIZATION
5 PRODUCTION SEGMENTS
EFFECTIVE COLLABORATION WITH PRIVATE
COMPANIES
OPTIMISATION OF COOPERATION BETWEEN
PRODUCERS AND SCIENTISTS
ADVANCED TECHNOLOGIES AND INNOVATION
EQUIPMENT
SYNERGY EFFECT AND CLOSED PRODUCTION CYCLE
THROUGH INTEGRATION WITHIN THE INDUSTRY
IN JUNE 2016 AIRCRAFT CLUSTER WAS CREATED
4 clusters are under formation in armored vehicles, shipbuilding, precision
weapons systems, radar, electronic warfare and communications

18. 18
INNOVATION PLATFORM
DEVELOPING HI-TECH DECISIONS
EFFECTIVE TOOL FOR DEVELOPERS,
INVESTORS AND MILITARISTS
POTENTIAL FOR POWERFUL
BREAKTHROUGH IN DEFENCE INDUSTRY
DEVELOPMENT
IN OCTOBER 2016, CONCERN INITIATED THE ESTABLISHMENT OF «INNOVATION
PLATFORM» FOR DEVELOPMENT OF INNOVATION PROJECTS IN DEFENCE SECTOR
AND ATTRACTING INVESTMENTS FOR THEIR REALIZATION

19. 19
TECHNOLOGY PROTECTION
PROTECTION OF INTELLECTUAL
PROPERTY ACCORDING TO
INTERNATIONAL STANDARDS
SUSTAINING OF INTELLECTUAL CAPITAL
OF THE COUNTRY
IMPROVING COMPETITIVENESS
BOOSTING FURTHER
INNOVATIVE ACTIVITY
POWERFUL COMMUNITY OF SCIENTISTS AND ENGINEERS FROM 31DESIGN BUREAU OF
UKROBORONPROM MAKE SIGNIFICANT CONTRIBUTION TO PROGRESS OF THE COUNTRY IN
SCIENCE AND TECHNOLOGY, THEREFORE INTELLECTUAL PROPERTY PROTECTION IS VERY
IMPORTANT ASPECT TO DEVELOPMENT OF NATIONAL DEFENCE CAPABILITY

20. 20
KEY REFORM OBJECTIVES
OPENNESS AND TRANSPARENCY
INNOVATIVENESS
PASSIONARITY
EFFICIENCY
RELIABILITY
elimination of corruption schemes, transparent ownership of assets, favorable
information policy, openness to international investors
dynamic step in advancing the innovation development , engaging to cooperation of
all scientific links, partnership with global R&D centers
driver and encouragement of Ukrainian defence industry reform, creating a
favorable regulatory environment
ultimate productivity, strengthening financial position, expansion of trade area,
human capital development
national defence capability support, prevention of new security threats to the
state, strengthening the international authority of Ukraine

21. 21
CHANGES TO LEGISLATION -
MANDATORY REQUIREMENT FOR REFORM
corporatization
of enterprises
establishment of joint ventures
with foreign partners
support of aircraft
industry
14 July 2016 was approved a legislative bill
№4809 as to сreation of conditions for international
cooperation of aircraft parties and development of
domestic aviation
20 October 2016 was adopted the Law «On debt
restructuring of SE «Antonov»
26 October 2016 government allowed reversion of income
tax rate from 75% to 35% since 01 January 2017
taxation of defence enterprises
and other
34
11
legislative drafts developed by Concern
amendments to primary laws were
submitted to the Verkhovna Rada

22. 22
PRIMARY EVENTS OF THE YEAR
UKROBORONPROM PRESENTED
SNIPER RIFLE VM2 MP-UOS
UKROBORONPROM AND NAS
OF UKRAINE AGREED FOR
COOPERATION. 200 JOINT R&D
PROJECTS AVAILABLE
UKROBORONPROM
TRANSFERRED TO UKRAINIAN
ARMY FIRST BATCH OF
LOCALLY PRODUCED UAVS
BTR-4 WITH NEW NATO ENGINES
WERE INTRODUCED INTO
SERVICE OF UKRAINIAN ARMY
UKROBORONPROM INITIATED
FIRST «UKRAINIAN FORUM ON
DEFENCE AND SECURITY 2016»
WAS SIGNED MEMORANDUM
OF COOPERATION WITH
SAUDI ARABIA FOR AN-132
MANUFACTURING
UKRAINIAN MILITARY RECEIVED
THE FIRST BATCH OF NEW
MORTARS «MOLOT»
«SHIPBUILDING PLANT NAMED
61 COMMUNARDS» FLOATED
OUT ON THE WATER THE
MISSILE BOAT «PRYLUKY»
UKROBORONPROM ENTERED
THE TOP-10 MOST INNOVATIVE
COMPANIES OF UKRAINE BY
FORBES
KBTZ transferred to National
Guard first batch of modern
BTR-3E1
UKRAINIAN AN-178 PERFORMED
DEMONSTRATION FLIGHTS FOR THE
FIRST TIME AT THE INTERNATIONAL
EXHIBITION «ILA BERLIN AIR SHOW»
FIRST CLUSTER - UKRAINIAN
AIRCRAFT CORPORATION WAS
CREATED
UKRAINIAN MILITARY AVIATION,
MODERNIZED BY THE CONCERN IN
COMPLIANCE TO NATO STANDARDS,
PARTICIPATED IN THE INTERNATIONAL
AVIATION SHOW «SKRYDSTRUP-2016»
10 «DOZORS» WERE
TRANSFERRED TO ARMED
FORCES OF UKRAINE
UKROBORONPROM
TRANSFERRED OVER 71 UNITS
OF WEAPONS AND MILITARY
EQUIPMENT TO UKRAINIAN
MILITARY
UKROBORONPROM PRESENTED
LATEST UAVS «PHANTOM» AND
«GORLYTSYA»
UKROBORONPROM MOVED
UP 24 POSITIONS IN THE
WORLD RATING OF WEAPONS
PRODUCERS BY «DEFENCE
NEWS»
15.01 25.01 26.01 05.02 18.02 24.02 03.03
16.03 04.05 16.05 06.06 10.06
17.06 20.07 23.08 29.08 15.09
UKROBORONPROM PRESENTED
THE REFORM STRATEGY OF
DEFENCE INDUSTRY COMPLEX
AND INNOVATION PLATFORM
PREMIERE AT THE EXHIBITION
«ZBROYA TA BEZPEKA» OF
COMBAT MODULES «DUPLET»,
«TAIPAN», «VIY» AND UAVS
«ANSER»
UKRAINIAN DEFENDERS
RECEIVED 119 UNITS OF
WEAPONS AND MILITARY
EQUIPMENT FROM
UKROBORONPROM
LATEST RADAR «PELICAN»
FROM UKROBORONPROM WAS
SUCCESSFULLY TESTED BY
UKRAINIAN MILITARY
UKROBORONPROM AGREED
WITH MEDT OF UKRAINE THE
POSSIBILITY TO CORPORATISE
5 ENTERPRISES
DAYS OF UKRAINIAN DEFENCE
AT THE NATO HEADQUARTERS:
UKROBORONPROM AT FIRST
PRESENTS ITS POSSIBILITIES TO
ALLIANCE
UKROBORONPROM MOVED
UP 11 POSITIONS IN THE
WORLD RATING OF WEAPONS
PRODUCERS BY «SIPRI»
ROLL OUT OF AIRCRAFT-
DEMONSTRATOR AN-132D
11.10
12.10 17.10 23.10 28.11 29.11 05.12 20.12
33 UNITS OF WEAPONS AND MILITARY
EQUIPMENT WERE TRANSFERRED TO
THE MILITARY ARMED FORCES WITH THE
PARTICIPATION OF THE PRESIDENT OF
UKRAINE
HELD SUCCESSFUL TEST
OPERATIONS OF NEW MISSILES
ARMS
23.03
26.08
16 BTR-4 WERE TRANSFERRED
TO ARMED FORCES OF UKRAINE
27.04
AND MORE ...

23. 23
INFORMATION ATTACKS
ON UKROBORONPROM
WORLD EXPERT EVALUATION AND
RECOGNITION
21%
64% from Russian
mass media
from mass media of
temporarily occupied
territory
Each success of Ukrainian defence industry suffers
attacks of aggressor`s propaganda machine that
continues to disseminate false populist statements
about Ukraine’s dependence on Russia
positions
2015
2016
92
place
68
place +24in annual TOP-100 global
defence companies
SEPTEMBER 2016
Rank Company
79 Pilatus Aircraft
80 Meggitt
81 UKROBORONPROM
82 Cubic Corp.
83 Moog
92 UKROBORONPROM
positions
+11
DECEMBER 2016
TOP-100 ARMS-PRODUCING COMPANIES
INFORMATION ATTACKS -
PART OF AGGRESSOR`S HYBRID WARFARE

24. 36 Dehtiarivska Str., Kyiv, 04119, Ukraine
+380 44 458-4681
kanc@ukroboronprom.com
www.ukroboronprom.com