Donaev Management Consulting

1. ISO 9001:2008 Tashkent, 100047, Uzbekistan Donaev Management Consulting, Uzbekiston Ovozi str., 2 Hotel Le Grand Plaza, 11 floor Room 1119-1129 Tel: (+998 71) 239-11-83, 239-89-42 Tel /Fax: (+998 71) 239-45-15 E-mail: marketing@donaev.uz Website: www.donaev.uz Information on ceramic brick manufacture of «Surxon-G’isht-Qurilish» LLC in Muzrabad district of Surkhandarya region of the Republic of Uzbekistan – with the purpose of sale Donaev Management Consulting

2. Donaev Management Consulting Content • Potential growth • Actual potential of the branch • Potential growth of the demand for brick at construction market of Surkhandarya region • Assessment of perspectives for enterprise product sales. • Assessment of perspectives for development of construction branch in the Republic of Uzbekistan • 2. Competitive environment • Expected competition from the side of actual and potential local and foreign manufacturers • Key competitors of the company «Surxon-G’isht-Qurilish» LLC • 3. Enterprise • About the company «Surxon-G’isht-Qurilish» LLC • Company potential • 4. Production process • Provision of power resources • Stages of production technologic process • Equipment placement layout • 5. Potential benefit • Expediency for purchase of «Surxon-G’isht-Qurilish» LLC assets • Sale cost of the plant • Contacts of agent

3. Donaev Management Consulting Potential growth Actual branch potential • Today the construction of new and rehabilitation of already existing industrial objects, housings, schools, medical institutions and other objects of social-household purpose, sport facilities etc is put in wide scale in the Republic of Uzbekistan. • At the present time in the Republic of Uzbekistan there are produced more than 100 types of basic construction products: cement, lime, gypsum, wall, roofing, finishing materials, glass, marble and granite plates, sanitary ware ceramics, hydro-isolation materials are produced in Uzbekistan. • In accordance with the “Program of complex social-economic development of Surkhandarya region for 2008-2012»implementation of over 120 projects, including the development of construction materials industry in the regions of the Republic, creation of new type construction materials – plaster slab, vermiculite, foam concrete, slab materials of particle board and MDF type, laminated parquet and other perspective investment proposals is provided.

4. Donaev Management Consulting Potential growth Actual potential of the branch (Continuation) Given data is official statistics and characterize the tendency of country economy growth as a whole. Considering that 80% of housing fund in Uzbekistan – is private houses, and 80%-90% of construction works are fulfilled mainly by household way, without involving construction organizations, then one can say that the majority part of construction materials is sold in retail for construction of private houses.

5. Donaev Management Consulting Potential growth Potential growth of demand for bricks at construction market of Surkhandarya market In accordance with the “Program of complex social-economic development of Surkhandarya region for 2008-2012» (Decree N136 of the CM of RUz. dd. 20.06.2008) against the financing of state funds in Surkhandarya region for 2009-2012 only the construction is planned: • More than 500 rural houses • 3 comprehensive schools • Capital rehabilitation of 52 schools • Commissioning of 12 colleges and lyceums • Construction of 8 music schools • Construction of 30 gyms, pool • rehabilitation of existing sport clubs • 2 surgical complexes and diversified clinics • rehabilitation and capital refurbishment of 37 medical institutions • Restoration and rehabilitation of historical and cultural sights Moreover, construction of stadium for 12 000 seats on FIFA standards shall be introduced at the territory of Surkhandarya region, which shall be completed until end 2012.

6. Donaev Management Consulting Potential growth Assessment of development perspectives for the enterprise product sales Brick products of «Surxon-G’isht-Qurilish»LLC is already having its own potential consumers:

7. Donaev Management Consulting Potential growth Assessment of branch development perspectives in the Republic of Uzbekistan

8. Donaev Management Consulting • Competitive environment • Expected competition from the side of actual and potential local and foreign manufacturers • At the territory of the Republic of Uzbekistan a quality brick, able to compete with the brick manufactured by «SURXON-G’ISHT-QURILISH» LLC on the volume and quality of the brick produced is practically lacking. • In the present there is a number of ceramic brick manufacturing enterprises in Uzbekistan, including: • Bagatbrick factory (Khorezm region, Bagat village); • Brick factory (Tashkent region, Chirchik town); • «DELFIN EXKLUZIVE» LLC (Tashkent region, Yangiyul town); • Collective enterprise «Kokandstroymaterialy» (Fergana region, Kokand); • Complex of construction structures (Surkhandarya region, Jarkurgan); • Kuvaconstruction materials complex (Fergana region, Mingchinor village); • Nukuswall materials production plant (Republic of Karakalpakstan, Nukus city); • Termezstroymaterialy (Termez city); • Shargun brick factory (Surkhandarya region, Shargun); • Yangierconstruction materials complex (Syrdarya region, Navruzabad village) and others.

9. Donaev Management Consulting • Competitive environment • Key competitors of the enterprise “Surkhon gish qurilish” LLC

10. Donaev Management Consulting • 3. Enterprise • About the Company “Surkhon-gisht-qurilish” LLC • «SURXON-G’ISHT-QURILISH» LLC was created in 2008 in the form of limited liability company. • Charter Fund of «SURXON-G’ISHT-QURILISH» LLC comprises 332 000 000 Soums – is fully formed. • «SURXON-G’ISHT-QURILISH» LLC has no branches at the territory of the Republic of Uzbekistan. As well it is not a shareholder of similar and other organizations. • Main activity direction of «SURXON-G’ISHT-QURILISH» LLC – is production of ceramic brick of 250х120x65mm size for provision of Surkhandarya region population with brick. • Activity of «SURXON-G’ISHT-QURILISH» LLC is also regulated by the Decree of the CM of the RUz. №136 dd. 20.06.2008 «Program of complex social-economic development of Surkhandarya region for 2008-2012».

11. Donaev Management Consulting • 3. Enterprise • Company potential • Advanced equipment, voluminous dryers and annular furnace with 24 chamber have been mounted; • Technologic equipment of «SURXON-G’ISHT-QURILISH» LLC is allowing producing big variety of products, selected type of product is having a big demand with customers; • Land plot, transferred to permanent use to the enterprise, is comprising 2 ha – basic area itself and 10ha – opencast area; • Owing to the support to construction materials production by legislative acts, the risks of «SURXON-G’ISHT-QURILISH» LLC have significantly been reduced; • Contracting of 5 000 000 brick units on internal market on the 1st of March • Starting from March 1, 2010 4 556 113 brick units have been produced in the factory (average per month – 1 882 000 units); • Contraction of 4 000 000 brick units in internal market as of May 15, 2010; • Export contract was concluded for 1 000 000 brick units.

12. Donaev Management Consulting • Production process • Provision with power resources • Total demand of «SURXON-G’ISHT-QURILISH» LLC in engineering resources for production of ceramic brick after commissioning (estimated for 2009)

13. Donaev Management Consulting • Production process • Stages of production technologic process • Technologic process of ceramic brick production is comprising of the following stages: • Loess extraction – is accomplished in accordance with opencast development plan; • Delivery and dosing of loess – loess delivered from the opencast is loaded to loading site into receiving hopper; • Bar forming from clay mixture – after mixing the obtained clay mixture is proceeding to expeller, where its extrusion under the pressure with the help of vacuum thru orifice (forming nozzle) in the form of bar with target sizes is taking place; • Bar cutting – automatic cutter, which performs a bar cutting to the target size brick; • Laying of raw brick on to drying cars; • Drying of raw brick – cars, loaded with raw brick, are delivered by rail ways to tunnel dryers; • Baking of raw brick – cars with raw brick after drying in tunnel dryers are kicked into parcels and are delivered to annular furnace by trolleys. • Storage of finished brick is accomplished on special expo site. Each batch of brick is received by technical control of the enterprise and stored separately from other batches.

14. Donaev Management Consulting • Production process • Equipment displacement layout

15. Donaev Management Consulting • 5. Potential benefit • Expediency of «Surxon-G’isht-Qurilish» LLC shares purchase • Main advantages of this Enterprise in its decision to purchase are: • Availability of new ceramic brick production with the capacity of 22 mln. Brick a year of standard sizes 250х120х65mm – single brick, 250х120х88mm – one-and-a-half (thickened) brickand 250х120х138mm – double brick (ceramic stone); • Advanced equipment, voluminous dryers and annular furnace with 24 chamber have been mounted. Enterprise is power-efficient, as natural gas is not applied, and the overall brick baking process is accomplished by natural coal, extracted nearby the factory in the same region; • «Surxon-G’isht-Qurilish» LLC has a serious preferences – exemption from payment up to 01.01.2012 of following taxes: • Income tax; • Value added tax; • Subsoil use tax; • Water resources use tax; • Property tax; • Land tax; • Tax for improvement and social infrastructure development; • Single tax payment; • Mandatory deductions to state purposed Funds and non-budget school education Fund, calculated based on the volume of sold goods.

16. Donaev Management Consulting • 5. Potential benefit • Expediency of «Surxon-G’isht-Qurilish» LLC assets purchase • (Continuation) • Worked schemes of raw materials and fuel supplies • Availability of labor-abundant village Jartepa of Muzrabad district; • Availabilityof required raw materials for long-term period; • Availability of required technological peripheral equipment and sufficient engineering infrastructure; • High demand of Surkhandarya region in construction materials, including in ceramic brick; • Real opportunity to expand the business; • Big package of tax benefits and preferences; • Participation in initial scaled construction in Afghanistan. Factory is situated in 10 km from boundary with Afghanistan; • Opportune geographical location of the enterprise; • Administrative support from regional khokimiyat.

17. Donaev Management Consulting • 5. Potential benefit • Preliminary sale cost of the factory 2500 000 USD

18. Donaev Management Consulting • 5. Potential benefit • Contacts of the Factory sales agent: • “Donaev Management Consulting” Companyhttp://www.donaev.uz/ru/about/shall guarantee assistance to Buyer • Our address in Tashkent:Tashkent, 100047, Uzbekiston Ovozi str., 2, Le Grande Plaza, 11 floor, rooms 1119-1129 • Contact phones in Tashkent: • +998 (71) 239-89-42, +998 (71) 239-89-39, +998 (71) 239-11-83 • Fax:  +998 (71) 239-45-15 • E-mail: info@donaev.uz