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Al Ritaj Investment Company

Al Ritaj SME Forum. Al Ritaj Investment Company. Investment Process Presentation. 14 th November 2007. Yasser Dib – Chief Investment Officer. Al Ritaj Investment - Private Equity Model. Private Equity. Asset Management. Advisory. Placement. Direct Investments. Special Purpose Vehicles.

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Al Ritaj Investment Company

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  1. Al Ritaj SME Forum Al Ritaj Investment Company Investment Process Presentation 14th November 2007 Yasser Dib – Chief Investment Officer

  2. Al Ritaj Investment - Private Equity Model Private Equity Asset Management Advisory Placement Direct Investments Special Purpose Vehicles • Paid-up capital of KD 25m to be primarily invested by Ritaj in SME’s within the region • Stringent & specific investment criteria • Returns to Ritaj are dependent on post-investment management and exit • Ritaj creates & manages SPV’s such as Private Equity Funds and Holding Companies • Ritaj may choose to also directly invest in these investment structures • SPV’s may have a defined theme, including specific sector and investment focus • Returns to Ritaj are dependent on post-investment management and exit

  3. Investment Strategy & Criteria Invest in small to medium size privately held companies with growing markets, strong products / services, and recognized brand name. Investment Strategy Geography Kuwait (initially) GCC Middle East MENA Target Sector All sectors Target Company Stage Growth stage, early stage, or turnaround situations Investment Size KD 1m to KD 10m Participation Majority or Active Minority Stake Investment Period Target 3-5 years investment horizon Shariah Law Compliant with Shariah Law within 3 years

  4. Deal Size vs Transaction Cost Transaction Cost as % of Deal Size Deal Size Challenges Value Added By Ritaj Non-Optimal Commercial and Legal Structure • Ritaj will work with the Target owners to optimize the commercial and legal structure in line with industry standards and regulations Corporate Governance • Ritaj will introduce industry best practice Corporate Governance policies & procedures Planning • Ritaj will ensure the correct planning systems and techniques are executed within the Target HR Gaps (Personality Based) • Ritaj will work with the Target’s management to develop an appropriate succession plan and cover any HR deficiencies Systems • Ritaj will utilize its expertise to introduce appropriate accounting, IT and management information systems Personal / Company Mixed Accounts • Ritaj will ensure that the personal accounts of the Owners are at an arm’s length with the Company

  5. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  6. Screening Process Roles and Responsibilities Target Owners Al Ritaj Investment Advisors Assess Criteria Agrees To Shariah Compliant Shariah Compliancy Reputation of business partner Active Participation in Management by Ritaj Investment not financing Develop & Restructure Co. No Involvement At This Stage Investment Criteria Change Legal Status (if necessary) Geography Ritaj Exit Scenarios Deal size Outcome Strategic Fit Full Disclosure of Financial / Non Financial Information % Ownership Signed LOI / MOU / Exclusivity

  7. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  8. Post-Investment Plan Company Description Technology Shari’ah Compliant Partner / Management Industry Attractiveness Commercial / Financial Plan Valuation / Financial Analysis Risk Factors Exit Options Investment Analysis Form • Size of Target and business plan conducive to IPO? • Trade sale ? • Sale to other potential investors such as funds etc. • Business mix, size, market share, growth issues • Historical financial performance • Product description, pricing, brand, promotion etc • Current non-shariah compliant issues • Willingness of partners to be shariah compliant • Post-investment business plan • Plan to enhance management and achieve objectives • Reporting requirements • Ritaj Board participation • Industry Size and Growth Rate • Market Analysis • Industry Key Success Factors • Competitive landscape • Industry Risk Analysis TARGET COMPANY • DCF, Comparable and NAV valuation methods • ROI, ROE, IRR etc calculations • Sensitivity Analysis on key drivers of Target • Strengths / Weaknesses of current Management • Credibility and track record of potential Partners • Alignment of interests • Commercial and financial risk • Product and supplier / customer risk • Legal risk • Key management risk • Technology requirements • Technology advantages / disadvantages • Technology partner credibility and background • Current shareholding structure • Financing plan of investment • Post-investment capital and financial structure

  9. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  10. Preliminary Due Diligence Roles and Responsibilities Target Owners Al Ritaj Investment Advisors Evaluates Agrees To Provide Engaged to Provide Market Size and Potential Last 3 year audited financial statements Specific Market and Industry Reports Competitive Analysis Company’s Articles of Association Management Evaluation Value Proposition 5 year business plan and forecast Drivers of Growth / Turnaround Industry and company reports (if available) Outcome Possible Exit Options Initial Valuation Organizational Structure Major KPI’s Develop an Offer

  11. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  12. Development of Offer Roles and Responsibilities Target Owners Al Ritaj Investment Advisors Develops Agrees To Legal Advice Detailed Valuation Model Price Financial Advice Optimum Equity Stake Equity Stake Technical Advice Board Seat Representation Ritaj Board Participation Obtains Preliminary Internal Approvals Other specific commercial terms Outcome Key commercial terms Commercial / financial and legal restructuring (if necessary) Ritaj Makes Offer to Target Owners – Subject to Detailed Due Diligence

  13. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  14. Detailed Due Diligence Roles and Responsibilities Target Owners Al Ritaj Investment Advisors Evaluates Agrees To Provide Engaged to Provide Legal Due Diligence Financial Integrity of Audited Statements Support to External Advisors Financial Due Diligence Any Commercial and/or Legal Issues of Target Company Furnish all Company Information as requested by Advisors & Ritaj Technical Due Diligence Technical Issues HR Due Diligence HR Issues Outcome Any Additional Liabilities Risk Analysis & Management Capabilities Agreement of Final Price, Main Contract Terms & Closing Schedule

  15. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

  16. Closing Roles and Responsibilities Target Owners Al Ritaj Investment Advisors Undertakes to Undertakes to Engaged to Provide Negotiate Final Terms and Conditions in Good Faith Legal Advice and Support Negotiate Final price and Main Commercial Terms Contract Negotiation Commercial and Financial Structure of Investment Change Legal and Commercial Status (if necessary) Broker Services Legal Structure of Investment Contract Negotiations File and obtain approval from all concerned authorities Outcome Prepare Post-Investment Plan Agree on post-investment plan Obtain Final Approval Signed Share Purchase Agreement and Execution of Buy / Sell Orders

  17. Continuously Update Form Approve Approve Approve Priority order Approve Prelim Approval Final Approval Final Approval Approve Prelim Approval Final Approval Sign MOU Final Signature Investment Approval Process Preliminary Due Diligence Develop Offer Subject to DD Detailed Due Diligence Screening Closing Prepare Investment Analysis Form Investment Group Investment Committee Peer Review & Challenge Shariah Board Raise Shariah Compliance Issues Ex Comm / Board Notify CEO Time Sequence (4-5 months)

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