AllurGroup company presentation

October 2017

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Kazakhstan today is modern, politically stable country in the heart of Eurasia, at the shores of Caspian sea. While it has only 17 million population, it has waste land – with around 3 thousands км² superficies it is 9th largest country in the World.

Kazakhstan – the heart of Eurasia

Industrial country with commodity-dependent economy, strategically located between China and Russia

GDP (in ppp) $460,7 billion

39,3% 50,9%

Oil&Gas Mining

9,8%

Other

GDP per capita (in ppp)

GDP structure by sector

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Kazakhstan today

$26 000

Kazakhstan plays important transit role in the Silk Way and Western Europe – Western China development projects

Total EAU population

3 mln*

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Eurasian Economic Union

EAU automotive market potential * Combined peak achievements by country

180 mln

EAU GDP combined $4,4 trillion

Kazakhstan

Russia

Belorussia

Armenia Kyrgyzstan

China

• Free movement

of goods and labor

• No cross-border custom duties for domestic products

• Common technical regulations

AllurGroup Is the only domestic manufacturer with:

• industrial licenses for all types of vehicles – passenger cars, trucks and buses, executing manufacturing contracts with GM, Hyundai, Peugeot, JAC, Iveco

• own distribution network and export facilities

• own retail outlets, corporate, fleet and government sales

established in 2003

The company

• 27th place in Forbes KZ Top-50 largest private owned companies with $113 mln of annual revenues

• National Champion of industrial development

• President’s award “The Best National Product – Altyn Sapa”

• JAC cars recognized as “People’s Brand”, made in Kazakhstan

• “Best foreign plant” award by JAC

Awards

Manufacturing facilities

• Production capacity: 80,000 units per annum with 2 shift operation (60,000 CKD and 20,000 SKD)

• 1,500 people are employed in manufacturing, planning, logistics, distribution and retail

• The only and the first in KZ passenger car assembly enterprise with full-scale CKD method, including welding, painting and assembly

• Temporary storage area – 59,000 м2 • Railway – 1 km./ 3 ways, • Container yard: • CBU yard (completely build units) –

24,500 м2 • Storage capacity per one time up to

2,400 vehicles

SAP plant Strategically located in Kostanai, northern Kazakhstan, with

• proximity to Russian border, at the main rail and road transportation arteries

• population of 5,5 mln people living within 600 km reach (one-day trucking)

• market potential of only three neighboring districts of Russian Federation is 510 thousand vehicles per annum*

*2016 data

Strategic location

Price build-up Benefit SKDCBU

IMPORT

Ex-works -$ 6,100$ 6,100$

Transportation -$ 1,360$ 1,360$

Customs duties 1,268$ -$ 1,268$

Utilization tax 2,545$ -$ 2,545$

SAP assembly 1,600-$ 1,600$ -$

VAT 12% 1,047$ -$ 1,047$

Total showroom cost 3,261$ 9,060$ 12,321$

Special Investment Contract is signed with the government in February 2017 for the period of 15 years

• No import duties for KD kits

• 100% compensation of the utilization tax

• Subsidized export for the amount of KAZ utilization tax

• VAT exemption from January 2018 onwards

Government support measures are translated into $ 3,000 per unit benefit*, compared to straight import of CBU vehicles

That means $ 80 mil of extra benefits accumulated in 5 years**

Export price build-up Benefit SAP Export RF IMPORT

Ex-works 2,960-$ 9,060$ 6,100$

Transportation 760$ 600$ 1,360$

Customs duties 1,865$ -$ 1,865$

Utilization tax 3,412$ 2,545-$ 867$

VAT 18% 60-$ 1,739$ 1,679$

Total showroom cost 3,016$ 8,854$ 11,870$

Benefit per

unit

Benefit

per 1,000

Benefit

per 10,000

KAZ Domestic 3,261$ 3,260,584$ 32,605,840$

Export to RF 3,016$ 3,016,367$ 30,163,667$

*JAC S3 1,6 M5 as an example ** considering 5 years sales KAZ and RF combined

Government support of manufacturers

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Government support measures to strengthen industry diversification and to support retail sales of domestic vehicles include:

• Subsidized retail loans and leasing programs for retail customers (operated by DBK)

• Compensations of utilization fee, paid in Kazakhstan

•Investments funding at discounted rate through DBK LEASING facilities and funding of working capital through DBK loans.

Subsidized loan gives customer $ 5,436 benefit over 3 years loan period

*JAC S3 1,5 Int Auto as an example

Government support of domestic retail sales

People

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1500 Total employees

11% Employed over 10 years over 3 years – 47%

31% Female employees

25% Younger employees (under 29)

Education opportunities: • Personal development and training center at the plant • University branch at the plant • Dual education available (work and study)

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Export Champion

Vehicles produced at SAP plant by CKD method are recognized as “EAU domestic products” and may circulate free within EAU – making it a “door” for Chinese brands into EAU/Russian market with total market potential of 3 mln cars, trucks and buses

58 models of 8 brands are being produced at AllurGroup plant currently

Operational plant with CKD production capacity of 60 000 vehicles and SKD capacity 20 000 annually, totaling 80 000 units per annum in two shifts

Industry leader

First and only full-cycle (CKD) passenger vehicles and trucks manufacturing plant in Kazakhstan

New Energy Vehicles Champion driving EV strategic development and charging infrastructure creation in Kazakhstan with EV sales scheduled to begin in 2018

Summary

Thank you!

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