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Investment Presentation Q2 - 2011

Taking a fresh look on Kurdistan. Investment Presentation Q2 - 2011. Kurdistan Investment Company Kurdistan Investment Company Idrottsgatan 4 Nishtiman Market Phone : +46 46 122617 2229 Lund Erbil Web: www.kurdistaninvestmentcompany.com

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Investment Presentation Q2 - 2011

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  1. Taking a fresh look on Kurdistan Investment Presentation Q2 - 2011 Kurdistan Investment Company Kurdistan Investment Company Idrottsgatan 4 Nishtiman Market Phone: +46 46 122617 2229 Lund Erbil Web: www.kurdistaninvestmentcompany.com Sweden Kurdistan/Iraq E-mail: info@godvigcapital.com

  2. Presentation of Godvig Godvig Capital Corp Godvig Analytics Sarl Godvig Foundation Iraq Godvig Capital Management * Investing into Kurdistan- dependant securities * Size: 1.5 MUSD * Investing into Iraqi- dependant securities * Size: 22 MUSD * Offshore Fund (BVI) * Bank: VP bank (A+) * Admin: ATU/VP bank 2/30 As of April 2011

  3. Presentation / Road map • Investment Case • Kurdistan Investment Company Structure 3/30

  4. Executive Summary • Investment Case 1: Lowered risk 2: High growth 3: Reform & Progress 4: Cheap valuations 5: Earnings growth 6: Flow & Access 7: Oil reserves 8: Uncorrelated • Kurdistan Investment Company Structure 1: Accessible 2: Liquid 3: Experience 4: Well-known Service Providers 5: Performance 6: Transparent 8: Unique 4/30

  5. Macro Economy • Iraq • High GDP growth: 11,5 % 2011 • Debt levels vanishing • Inflation tamed • Hugh FX Reserves • Iraqi Kurdistan Region • Growth: above Iraqi average: Oil production & • exports, sustained security, non-oil sectors improve • Structural Reforms Progress: The Investment law 6/30 IMF Stat 2010

  6. The Oil Story  • Oil reserves estimated to 45 • billion barrels, sixth largest • in the world • Low production costs • (about $2/barrel) • Oil fields left mainly • unexplored • Exports started June 2009 9/30

  7. Production Sharing Contract (PSC) Blocks in Kurdistan

  8. Political Agenda and risks • Kirkuk • Federalism • Reconstruction • National elections • US troop pull-out and the future of the Peshmerga • National Oil Law and revenue-sharing law 12/30

  9. ISX - Snapshot • Trading – 5 days / week 10.00 - 12.00 • Listings – 35 with ongoing trading • Market Cap – 2.8 billion USD • Turnover – 1 - 2 MUSD per trading hour • Electronic Trading - Since spring 2009 • System – Nasdaq/OMX – Horizon Trade • Foreigners – Full ownership rights • Erbil Stock Exchange (ESX) expected in 2011 14/30

  10. Investment Snapshot Kurdistan International Bank • First Bank in Kurdistan Region – one of the largest banks in Iraq • Established in 2005 • Branch network: 4 • New building in Erbil – Some areas • to serve as Erbil Stock Exchange • Total employees is 325 20/30

  11. Investment Snapshot • Profits 2009 : +15% YOY • Market Cap: 200 bn IQD (166 m USD) • P/E: 6.3 • P/B: 1.3 • Loan/Deposits 0.1 %

  12. Investment Snapshot • Objectives: Explore, develop and produce oil and gas, primarily in North Africa and the Middle East. • Focused on under-developed oil and gas fields that can be exploited economically and profitably. • Major oil discovery in August 2009 at Shaikan-1. The block is estimated to contain 4,2 bn barrels. • P/E neg Market Cap: £1,100 million 20/30

  13. Investment Structure Sectors Assets 23/30

  14. Portfolio Performance Market Triggers in 2010 • Economic Growth • Oil Export Revenues • ISX – Accessibility for foreigners • Trust in bank sector rising • New Laws- Oil, Investments, Reconc. • National elections & Kirkuk issue • Diplomatic / Geopolitical progress • Budget execution rising • Dinar appreciation • Diversification needs for foreigners 22/30

  15. Investment Process • Screening • Universe: Kurdish-dependency • Market Cap weighted • Eliminate non-compliant stocks • 50 30 securities • 2. Research • Market Liquidity analysis • Fundamental analysis • Techs, Sentiment, Flow and Momentum • analysis to the extent possible • 30 20 securities • 3. Construction • Portfolio optimization: • Diversification • Sector balancing • Correlation analysis • 20 7/15 securities • 4. Monitoring • Ongoing analysis • Re-adjustment policies • Risk management process 24/30

  16. Management of Godvig Capital Mr. Englund, 41 years, is the founder of, and a fund manager for, Godvig Capital Management. In total, Björn has spent 15+ years in front-office positions, mainly in large Scandinavian banks. Former positions have varied from manager of pre-emerging market pools to trading strategist on institutional Scandi-desks. In the Mid-East region, he was stationed with the UN in Iraq and Kuwait in 1991, and in Lebanon in 1989. Investment ManagerBjörn Englund Advisory Team Dara Maghdid ISX Market Analyst Lund & Erbil, Kurdistan/Iraq Mohammed Mohammed ISX Prop Trader / Analyst Baghdad, Iraq Harald Karlsson Oil Analyst Lund, Sweden Rod Monger, PhD, USA Iraqi Financials, Accounting Sulimaniya, Kurdistan/Iraq Al-Fawz Brokers Investment Analysis Baghdad, Iraq Rabee Securities Investment Analysis Baghdad, Iraq Rasul& TRC Legal Analysis Erbil, Kurdistan/Iraq Iraqi Advisors 25/30

  17. Organisation Lawyers (Kurdistan) Sulaiman Rasull Auditors Ernest & Young KIC Investment Adviser Godvig Analytics Banks Swedbank, CBIQ 26/30

  18. Fact&Fees Plain Vanilla • Management fee – 2% / Year • Performance fee – 20% • Other – High-water mark • NAV Calculation – Monthly • Jurisdiction - KIC – Sweden • Jurisdiction – Godvig – Luxembourg 27/30

  19. Recap– Kurdistan Investment Company offers… 1: Macro, 2: Oil story 3: Reform Agenda 4: Reconstruction & Aid Flows 5: Performance 6: Market Size 7: Trend 8: Commitment • Strong Investment Case • Easy Exposure – To the “Kurdistan Investment Story” • Liquidity – To be listed in Sweden • Secure Structure – Well-known Service Providers • Unique Product – Only investment company with a Kurdistan focus 29/30

  20. Contact Kurdistan Investment Company Office: Idrottsgatan 4 222 29 Lund Tel: 046 - 12 26 17 www.kurdic.sewww.kurdistaninvestmentcompany.com www.godvigcapital.com info@godvigcapital.com BjörnEnglund – CEO Mobile: + 467 352 95 333 E-mail: bjorn.englund@godvigcapital.com DaraMaghdid – CFO Mobile: + 46 73 90 727 90 E-mail: dara.maghdid@godvigcapital.com Harald Karlsson – Analyst Mobile: + 467 365 22 824 E-mail: harald.karlsson@godvigcapital.com Ludvig Sandell – Marketing Mobile: + 467 079 40 086 E-mail: ludvig.sandell@godvigcapital.com

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