IRAN – RESILIENT ECONOMY

STRESS TESTED AND BECOMING MORE STABLE DECEMBER 2017

ASSET MANAGEMENT AND PRIVATE EQUITY

-100

-50

0

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150

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-10%

0%

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Inflation, average consumer prices GDP growth Oil revenue

STRESS TESTED: RESILIENT ECONOMY DESPITE WAR AND SANCTIONS

2Proprietary and Confidential

1979 U.S. bans Iranian imports

1995 U.S. bans energy investment, trading in Iran. Sanctions foreign firms investing in Iranian energy sector

2006 U.N. freezes assets of those linked with nuclear program

Mar 07 U.N. imposes arms, financial sanctions, extends asset freeze Oct 07 U.S. sanctions Banks Melli, Bank Mellatand Bank Saderat

Mar 08 U.N. imposes travel and financial curbs, trade ban

Jan 11 U.S. announces new unilateral sanction on IranNov 11 Wester states step up sanctions on Iran in response to a report suggesting it had worked on designing an atomic bomb

Jan 14 JPOA outline agreed between Iran 5+1. Iran EU lifts sanctions on petrochemicals, Auto and gold. Iran receives $700 million every month from blocked oil sales proceeds.

80 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

War

US Sanctions

UN Sanctions

EU Sanctions

1980 – 1988 almost 200,000 killed or MIA

Estimated economic loss of US$550 - 650 billion

Oil Production level dropped from 7 million bpd to almost 1 million bpd as fields were targeted by Iraq.

(%) (%) (bn USD)

16

Jan 16 JCPOA Implementation day on January 2016

CURRENCY- LOWER INFLATION & MORE CURRENCY STABILITY

3Proprietary and Confidential

• The average annual depreciation of the Iranian rial versus the US dollar, over the last 3 years, has been ~ 6.5%/year.

• Current US/IR CPI differential is around 7-8%. With increase in oil and export revenues since the Nuclear deal was struck, the

risk of devaluation has significantly diminished. Nevertheless, despite the recent stability its prudent to consider a gradual

depreciation in line with the CPI differential.

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100%

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Q3

FX change (free market rate) Inflation differential (Iran & US)

WHAT ABOUT SANCTIONS?

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• Vast majority of sanctions removed (EU, UN & US secondary)

• Risk is now to a large extent eliminated, especially for non-US persons

• US persons for the most part fall outside the scope of the JCPOA

• A number of sanctions remain (namely nuclear and human rights related)

• According to IAEA Iran is in compliance with the agreement (JCPOA). Certain steps taken by Iran to comply are irreversible. In the unlikely event that sanctions return, the flow of funds will become restricted as many of the banks that currently deal with Iran will likely halt/reduce their operations.

• The agreement is between Iran and 5+1 meaning Germany, UK, Russia, France, US and China. A series of none compliance reports/warnings and voting would need to take place for sanctions to return. It will not be an overnight event and there will be ample opportunity to unwind liquid positions.

• As for PE and VC its important to note that even during sanctions many large foreign owned multinationals continued to operate in Iran in the consumer sector. Sectors related to food and medicine were never targeted by sanctions.

DISCLAIMER

5Confidential

“IMPORTANT: This presentation (the “Presentation”) has been prepared by Griffon Capital exclusively for the benefit of the recipient to whom it isaddressed, which shall in particular not include any US or any other persons subject to the remaining sanctions laws or authorities (the “Recipient”).The Recipient (i) is not permitted to reproduce in whole or in part the information provided in this Presentation (the “Information”) or tocommunicate the Information to any third party without Griffon Capital’s prior written consent; and (ii) is to keep permanently confidential allInformation that is not already public.

This Presentation (i) is for discussion purposes only; (ii) is not intended as an invitation, offer or solicitation for making an investment in anyjurisdiction; and (ii) speaks only as of the date it is given, reflecting prevailing market conditions. The views expressed are subject to change basedupon a number of factors, including market conditions. Neither the delivery of this Presentation at any time nor any future investments shall underany circumstances create an implication that the Information is correct as of any time after such date.

Neither Griffon Capital nor any of its affiliates, subsidiaries, employees, members, advisors, representatives or agents (collectively,"Representatives") have made or make any representation or warranty as to the accuracy or completeness of the Information and theRepresentatives shall have no liability for any misstatement or omission of fact or any opinion expressed herein.

The Presentation is not exhaustive and does not serve as legal, business, accounting, tax or any other advice, and it may not be relied upon by theRecipient in evaluating the merits of investing in the suggested jurisdictions. Nothing herein shall be taken as constituting the giving of investmentadvice and this Presentation is not intended to provide, and must not be taken as, the basis of any decision and should not be considered as arecommendation by Griffon Capital. The Recipient must make its own independent assessment and such investigations as it deems necessary suchas consulting business, legal and tax advisors. Only these business, legal and tax advisors will be able to appropriately take into account thecircumstances relevant to the legal implications and/or tax treatment of each investor. It is the responsibility of the investors to satisfy themselvesthat any investments made will not expose them to liability under the laws of any state to which they are or may become subject.

Under no circumstances is Griffon Capital or any of its Representatives acting or deemed to be acting as the agent representative or fiduciary of theRecipient.

Griffon Capital, together with a group of international legal sanctions experts, have integrated a robust compliance procedure to adhere to theremaining US and EU sanctions against Iran, and related international regulations.

The Recipient of this Presentation, acknowledges and agrees that neither Griffon Capital nor its Representatives shall have (a) any duty to provideaccess to any additional information or to update or correct any information or (b) any liability to the Recipient or its Representative resulting fromthe use of such Information.

Proprietary and Confidential

DECEMBER 2017

101, No 38, Golfam Alley, Africa Blvd, Tehran, IranTel: +98 21 26231278 www.griffoncapital.com

ASSET MANAGEMENT AND PRIVATE EQUITY