No.QTC. CS 021/ May Notification of the purchase of shares in Green Earth Power (Thailand) Co., Ltd. (4 rd Revision)

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1 No.QTC. CS 021/ May 2017 Subject: Attention: Notification of the purchase of shares in Green Earth Power (Thailand) Co., Ltd. (4 rd Revision) Directors and Manager The Stock Exchange of Thailand Enclosure: 1. Information Memorandum re: the purchase of shares in Green Earth Power (Thailand) Co., Ltd. to invest in Minbu Solar Power Plant Project in Myanmar (4rd Revision) QTC Energy Public CompanyLimited ( Company ) had the meeting of board of directors no. 4/2017 on 29 March 2017 which had the resolution approving the purchase of shares in Green Earth Power (Thailand) Co., Ltd. by its subsidiary, i.e. QTC Global Power Co., Ltd., as the purchaser for investment in Minbu Solar Power Plant Project in Myanmar as disclosed to the Stock Exchange of Thailand. The Company had the changes in order to revise the calculation of transaction sizes to be in consistent with the report of the independent financial advisor dated 9 May 2017, and to add more details for considering the payment installments. The Company would like to disclose the amendment of information memorandum as per the details in the enclosure. Please be informed accordingly. Yours faithfully, (Mr. PoonphiphatTantanasin) Chief Executive Officer BAN-# v2 1

2 Information Memorandum of QTC Energy Public Company Limited Re: the purchase of shares in Green Earth Power (Thailand) Co., Ltd. to invest in Minbu Solar Power Plant Project in Myanmar (4rd Revision) The board of directors meeting of QTC Energy Public Company Limited( Company )no. 4/2017 held on 29 March 2017 has a resolution to approve and propose the extraordinary general meeting of shareholders no. 1/2017 on 31 May 2017to approve QTC Global Power Company Limited ( QTCGP ), an affiliate of the Company holding percent of its paid-up registered capital in QTCGP, invests in the power plant project in Minbu City of the Republic of the Union of Myanmar with the installed capacity of 220 MW (and contracted capacity of 170 MW) ( Project ). QTCGP as the purchaser will enter into the share purchase agreement of Green Earth Power (Thailand) Co., Ltd. ( GEP Thailand ) to purchase the shares in GEP Thailand fromnoble Planet Pte. Ltd. andplanet Energy Holdings Pte. Ltd. (collectively called Sellers ) ( Share Purchase Agreement ) with the conditions precedent to enter into the transaction and the conditions subsequent to enter into the transaction whereby each party has obligation to complete such conditions as stipulated in the Share Purchase Agreement. In addition, all shareholders in GEP Thailand including QTCGP and the Sellers will enter into the shareholders agreement to agree on the relationship between each shareholder in GEP Thailand ( Shareholders Agreement ), key details of which are set out in clause 10 below. The investment in the Project is deemed to be an acquisition of assets under the notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules for the Transaction with Significant Acquisition or Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposal of Assets B.E (2004) ( Announcement of the Acquisition or Disposition ). The highest transaction size is percent of the value of total assets of the Company according to the consolidated financial statements for the period ended 31 December 2016 (which is the highest transaction size in accordance with total value of consideration criteria) considered to be class 1 transaction with the size of 50 percent or higher but lower than 100 percent according to the Announcement of the Acquisition or Disposition. As a result, the Company has the obligations to disclose the information memorandum to the Stock Exchange of Thailand ( SET ) and seek the approval from the shareholders meeting to approve the transaction with at least three-fourth of the total votes of shareholders who attend the meeting and are eligible to vote, excluding the vote of the shareholders having an interest on the matter. In order to seek the approval from the shareholders meeting, the Company must appoint an independent financial advisor ( IFA ) to provide an opinion on the transaction for acquisition of assets. The IFA must give an opinion in the relevant issues e.g. rationales behind the transaction and benefits of the transaction to the Company, and fairness of the price and conditions in entering into the transaction. In this regard, the Company will submit the information memorandum of the transaction for the acquisition of assets to the shareholders of the Company together with the shareholders meeting notice to propose such agenda for the approval of the transaction in relation to the share purchase in GEP Thailand to the shareholders meeting. The details of the transaction are as following: 1

3 1. The Date of Transaction After the extraordinary general meeting no.1/2017 which will be held on31 May 2017 has a resolution to approve QTCGPto enter into such transaction and all conditions precedent under the share purchase agreement as stipulated in clause 9 of this information memorandum have been completed, the Company expect that QTCGP will be able to enter into the transaction within the second quarter of The Relevant Parties and Relationship with the Company The Purchaser : QTCGP, an affiliate of which percent of the paid-up registered capital is held by the Company The Sellers : Noble Planet Pte. Ltd. andplanet Energy Holdings Pte. Ltd., wherebyeach of the Sellers has Mr. Aung Thiha and Mr. SupasitPokinjaruras as the ultimate major shareholder, holding 50% of shares each. Noble Planet Pte.Ltd. andplanet Energy Holdings Pte. Ltd.have no relationship with the Company or QTCGP and are not the related persons of the Company or QTCGP. 3. Details, Category, and Transaction Size of the Acquired Assets 3.1 Details of the Acquired Assets The acquired assets are (1) the ordinary shares of GEP Thailand in an amount of 38,634 shareswith the par value at Baht 100 per share, the value of which is approximately Baht million, equivalent to 15 percent of the paid-up registered capital including the ordinary shares under the capital increase to be subscribed in accordance with the shareholding portion when there is capital increase in the future until the completion of construction of the Project, the value of which are approximately Baht million, and (2) the provision of Cash DeficiencySupport ( CDS ) in accordance with the shareholding proportion. Under the Share Purchase Agreement, QTCGP has an obligation to be bounded with the lenders providing loans to the Project, to providecds in accordance with the shareholding portionbut not exceeding USD million or equivalent to not exceeding approximately Baht million. The total value of the acquired assets is approximately Baht million. As of 24 March 2017, GEP Thailand has paid-up registered capital in an amount of Baht 25,755,800 comprised of 257,558shares with the par value at Baht 100 per share. GEP Thailand operates as holding company with the main objectives to invest in companies operating business in relation to the generation and distribution of electricity from renewable energy. At present, GEP Thailand only holds shares in GEP (Myanmar) Company Limited ( GEP Myanmar ) and does not hold share in any other company. GEP Thailandis the shareholder holding 100 percent of the paid-up registered capital in GEP Myanmar who is the Build-Operate- Transfer (BOT) concessionaire to develop and operate the Project and the signatory in the power purchase agreement ( Power Purchase Agreement or PPA ) withelectric Power Generation Enterprise ( EPGE )for the period of 30 years from the commercial operation date of phase one 2

4 with the total contracted capacity of 170 MW comprised of 4 phases. Each of phase 1, phase 2 and phase 3 of the Project has contracted capacity of 40 MW and phase 4 of the Project has contracted capacity of 50 MW. It is expected that the construction of phase 1 of the Project will be completed and commence commercial operation within first quarter of the year Summary of the PPA between GEP Myanmar andepge Project Parties Project Location the power plant project in Minbu City, the Republic of the Union of Myanmar with the contracted capacity of 170 MW EPGEand GEP Myanmar Minbu City, the Republic of the Union of Myanmar Date of Agreement 20 March 2016 Scheduled Commercial Operation Date(SCOD) Term of Agreement Contracted Capacity Phase 1: 480days after the date of PPA Phase 2: 360days after the commercial operation date of phase 1 Phase3: 360days after the commercial operation date of phase 2 Phase4: 360days after the commercial operation date of phase 3 30 years after the commercial operation date of phase 1. In the event that the Project commences its commercial operation of phase 1 within first quarter of the year 2018, the term of the PPA will end in the first quarter of the year Phase1: 40 MW Phase2: 40 MW Phase3: 40 MW Phase4: 50 MW Total of170 MW Tariff Rate Termination USD per kwh If GEP Myanmar fails to comply with any provision under the PPA within a period of 90 days (except the noncompliance in relation to the commercial operation date, such period shall be extended to 240 days), EPGE may give a notice in writing to GEP Myanmar to remedy such default. If GEP Myanmar fails to remedy within the specified period, 3

5 EPGE may terminate the PPA. Currently, GEP Myanmar has not breached any provision under the PPA and has not received any notice notifying the breach of the PPA from EPGE. Details of GEP Thailand andgep Myanmar are summarized as following: GEP Thailand (1) General information ofgep Thailand Company s name : Green Earth Power (Thailand) Co., Ltd. Type of business : Investment in companies operating business in relation to the generation and distribution of electricity from renewable energy Company s address : 63 Athenee Tower, 30th Floor, Room Number 3006, Wireless Road, Lumpini Sub-District, Pathumwan District, Bangkok Registered number : Date of incorporation : 30 April1985 (2) List of shareholders ofgep Thailand as of 29 April 2016 comparing to post-transaction No. Shareholder Number of shares held: pretransaction (Share) Shareholding ratio: pretransaction (Percentage) Number of shares held: posttransaction (Share) Shareholding ratio: posttransaction (Percentage) 1. Planet Energy 123, , Holdings Pte. Ltd. 2. Noble Planet Pte. 103, Ltd. 3. Vintage Engineering 30, , Public Company Limited ( VTE ) 4. QTCGP , Total 257, ,

6 (3) List of directors ofgep Thailand as of 24 march 2017 comparing to post-transaction No. Name of directors: pre-transaction Name of directors: post-transaction 1. Mr. SupasitPokinjaruras Mr. SupasitPokinjaruras 2. Mr. Aung Thiha Mr. Aung Thiha 3. Mr. David William Yang Mr. David William Yang 4. Mr. SarojRojanabenjakul Mr. SarojRojanabenjakul 5. Mr. Foong Sai Kong Mr. Foong Sai Kong 6. Pol.Maj.Gen. MongkolHrungerngjai Pol.Maj.Gen. MongkolHrungerngjai 7. - To appoint 3 additional new directors whose names have not been decided, where QTCGP will have a right to nominate 1 new director (4) Financial information ofgep Thailand Summary of financial position and operating results of GEP Thailand for the fiscal year 2014, 2015, and 2016 according to the consolidated financial statements are as following: Unit: Baht Statement of financial position Assets Cash and cash equivalent 1,091,645 39,927,028 19,832,801 Other receivables 143,662 1,971, ,326,607 Retention receivables under investment agreement - 283,025,973 - Other current assets - 41,245 2,908,764 Total current assets 1,235, ,965, ,068,172 Long-term investment ,013,764 Receivables under service concession agreement ,706,251 5

7 Unit: Baht Property, plant, and equipment 46,841 40,983,696 6,538,735 Intangible assets 6,265 10,818 20,298 Other non-current assets 7, , ,421 Total non-current assets 60,606 41,456, ,495,469 Total assets 1,295, ,421, ,563,641 Liabilities and equity Other payables - 55,448, ,986,497 Short-term loan from related parties Advance from related parties ,000,000 49,787, Total current liabilities 49,787,073 55,448, ,986,497 Provision for long-term employee benefits ,231 Total liabilities 49,787,073 55,448, ,179,728 Issued and paid-up share capital 500,000 25,755,800 25,755,800 Premium on ordinary shares - 364,620, ,620,050 Retain earnings (loss) (48,991,160) (79,402,780) (159,823,391) Other components of shareholders equity - - 1,831,454 Total shareholders equity (48,491,160) 310,973, ,383,913 Total liabilities and shareholders equitiy 1,295, ,421, ,563,641 Statement of comprehensive income Total revenue - 176, ,511,652 (1) Total expenses (48,612,413) (30,587,792) (304,883,106) Net profit (loss) (48,612,413) (30,411,620) (80,371,454) Remark: (1) GEP Thailand has not yet commenced its operation that generates any revenue. The revenue of Baht 224,511,652, which appeared in the statement of comprehensive income, was a result of the 6

8 recognition of, the same amounts of revenue and costs by GEP Thailand according to progress of the construction, which was in accordance with the accounting standards. GEP Myanmar (1) General information ofgep Myanmar Name of company : GEP (Myanmar) Company Limited Type of business : Develop and operate the solar power plant project in Minbu District of the Republic of the Union of Myanmar with the installed capacity of 220 MW (and contracted capacity of 170 MW) Company s address : Suite 213, 2 nd Floor, Pearl Condo, Kabar Aye Pagoda Road, Bahan Township, Yangon Date incorporation of : 16 February 2016 (2) List of shareholders ofgep Myanmaras of 8 November 2016 comparing to posttransaction (The list of shareholders will not be changed post-transaction, and GEP Thailand will remain holding 100 percent shares in GEP Myanmar.) No. Shareholder Number of share held: pretransaction (Share) Shareholding ratio: pretransaction (Percentage) Number of share held:posttransaction (Share) Shareholding ratio: posttransaction (Percentage) 1. GEP Thailand 3,364, ,364, Mr. SupasitPokinjaruras Total 3,365, ,365,000 3,365,000 7

9 (3) List of directors of GEP Myanmar as of 28 March 2016 comparing to post-transaction (The list of directors in GEP Myanmar post-transaction will be the same as those in GEP Thailand post-transaction.) No. Name of directors: pre-transaction Name of directors: post-transaction 1. Mr. SupasitPokinjaruras Mr. SupasitPokinjaruras 2. Mr. Aung Thiha Mr. Aung Thiha 3. - To appoint 7 additional new directors, provided that all directors in GEP Myanmar will be the same as those in GEP Thailand, where QTCGP will have a right to nominate 1 new director. (4) Financial information ofgep Myanmar Given that GEP Myanmar was just incorporated in 2016 and its first fiscal year will end on 31 March 2017, the information of financial statements and results of operation are not available. 3.2 Category and Transaction Size The entering into such transaction is deemed to be and acquisition of assets according to the Announcement of the Acquisition or Disposition. Details of transaction size calculation based on the financial information in the consolidated financial statements as of 31 December 2016 are as following: Calculation Criteria Calculation Methodology 1. Net Tangible Asset ( NTA ) = NTA of GEP Thailand on pro rata basis (1) / NTAof the Company according to the consolidated financial statements = Baht million / Baht million = 4.86 percent 2. Net Profit = not applicable as the Company has loss from operation 3. Total Value of Consideration = (value of ordinary shares of GEP Thailand + value of ordinary shares of GEP Thailand which will be subscribed on a pro rata basis in the event of increase of registered capital in the future + value of CDS on a pro rata basis) / total assets of the Company pursuant to the 8

10 consolidated financial statements = (Baht million+ Baht million+ Baht million)/ Baht 1, million = percent (2) 4. Value of Securities Issued = not applicable as the Company will not issue securities of listed company for consideration of the assets acquisition Remark: (1) As the disposed assets are securities, the calculation of transaction size will use book value ofnta. Book value of NTA of GEP Thailand is calculated based on the acquired portion of such asset by the Company referring to the information from audited consolidated financial statements as of 31 December (2) If the price adjustment occurs according to clause 1.4.3below and QTCGP has to pay the additional payment (in which the Share Purchase Agreement specify the maximum amount of USD million or Baht million based on the exchange rate of Baht per USD 1), the highest transaction size will be percent of total assets of the Company according to the consolidated financial statements as of 31 December The entering into the transaction has the highest transaction size of percent of total assets of the Company according to the consolidated financial statements as of 31 December 2016 (which is the highest transaction size in accordance with the total value of consideration criteria). As the Company has not acquired other assets in the past 6 months, the highest transaction size shall be percent in accordance with the total value of consideration criteria and is considered to be class 1 transaction with the transaction size of 50 percent or higher but lower than 100 percent according to the Announcement of the Acquisition or Disposition. Therefore, the Company has the obligations to disclose the information memorandum on the assets acquisitions to the SET, and seek the approval from the shareholders meeting to approve the transaction with at least three-fourth of the total votes of the shareholders who attend the meeting and are eligible to vote, excluding vote of the shareholders having an interest on the matter. In order to seek the approval from the shareholders meeting, the board of directors of the Company appointed Beyond Advisor Company Limitedas the independent financial advisor to provide an opinion on the transaction, as well as the rationales behind the transaction, benefits of the transaction to the Company, fairness of the price and conditions in entering into the transaction. The Company will deliver the opinion of IFA and information memorandum of the assets acquisition to the shareholders of the Company together with the invitation letter to the extraordinary general meeting no.1/2017 for information of shareholders in considering and approving such transaction. 9

11 The entering into transaction of the acquisition of shares in GEP Thailand is not considered as the purchase or acceptance of transfer of business of other company by the Company under Section 107(2)(b) of the Public Limited Company Act B.E (1992). 4. Total Value of Consideration and Payment Conditions 4.1. Total Value of Consideration Consideration Value (million USD) Value (million Baht) (1) Estimate purchase price of ordinary shares of GEP Thailand Estimate value of ordinary shares of GEP Thailand which will be subscribed on a pro rata basis in the event of increase of registered capital in the future until the completion of construction of the Project 7.63 (2)(3) (2) Maximum CDSof not more than Remark: (1) The estimate is based on the exchange rate of Baht per USD 1 according to the average counter rates quoted by commercial banks as of 28 March 2017 by the Bank of Thailand (2) The value includes the refundable deposit that QTCGP paid to the Seller on 26 December 2016 of USD 2.25 million or Baht million in accordance with the resolution of the board of directors meeting of the Company on 30 November 2016 (3) The value includes the advance payment for construction contractor that the Seller paid and QTCGP agrees to pay for the Seller at the value of USD 0.88 million or Baht million The Company may be entitled for additional number of shares of 1.15 percent of the paid-up registered capital of GEP Thailand pursuant to the conditions for price adjustment as mentioned in clause Payment Conditions The Share Purchase Agreement divides the payment into 4 installments as follows. Installment Timing of Payment Payment (million USD) Payment (million Baht) 1 st Refundable deposit on 26 December Installment nd Within 5 business days after the signing Installment of the Share Purchase Agreement

12 Installment Timing of Payment Payment (million USD) Payment (million Baht) 3 rd Installment On closing date (tentatively June 2017) th Installment Within 31 December Total The Company may be required to pay additional consideration (but not exceeding USD million) pursuant to the conditions for price adjustment as mentioned in clause Price Adjustment The factors for price adjustment can be divided into 2 cases, i.e. (1) the case which considers only factors relating to the credit facility agreement for the Project which are factors regarding the negotiation for the amendment of terms and conditions under the credit facility agreement in relation to phase 1 of the Project and the financing for phase 2, phase 3 and phase 4 of the Project whether they are more favourable than those in for phase 1 ( Factors regarding Credit Facility of the Project ) and (2) the case which considers all factors of the Project whether terms and conditions are more favourable ( All Project Factors ). Such factors will be used forthe calculation of Equity Internal Rate of Return ( EIRR ) of QTCGP. According to the Share Purchase Agreement, there will be 2 price adjustments as follows. Price Adjustment First Price Adjustment Date of Adjustment 31 December 2017 Adjustment If EIRR is calculated based on Factors regarding Credit Facility of the Project and it appears that the EIRR of QTCGP is less than 8.0 percent, the Sellers shall transfer the dividends and any monetary benefits received from GEP Thailand in relation to the additional shares to QTCGP (equivalent to 1.15 percent of total paid-up registered capital of GEP Thailand. However, the Sellers will not transfer such additional shares to QTCGP until the Second Price Adjustment. If EIRR is calculated based on All Project Factors and it appears that the EIRR of QTCGP is above 12 percent, QTCGP shall pay additional money to Sellers (only for the part where the EIRR is above 12 percent), subject to a maximum amount of USD million. But if it appears that the EIRR of QTCGP is not higher than 12 percent, QTCGP shall not be obliged to pay additional money to the Sellers. In order to calculate such additional money to be paid, the Parties will consider that the current share purchase price have the actual EIRR which is above 12 percent, and will then calculate the share purchase price which has EIRR of 12 percent. The difference between these share purchase prices will be the additional money which QTCGP shall have to pay (but not exceeding USD

13 Price Adjustment Date of Adjustment million). Adjustment Second Price Adjustment Upon commercial operation dates of all 4 phases If EIRR is calculated based on Factors regarding Credit Facility of the Project and it appears that the EIRR of QTCGP is less than 8.0 percent, the Sellers shall transfer the additional shares, which equivalent to 1.15 percent of total paid-up registered capital of GEP Thailand to QTCGP. If EIRR is calculated based on All Project Factors and it appears that the EIRR of QTCGP is above 12 percent, QTCGP shall pay additional money to Sellers (only for the part where the EIRR is above 12 percent), subject to a maximum amount of any additional money in the First Price Adjustment (if any) of USD million. But if it appears that the EIRR of QTCGP is not higher than 12 percent, QTCGP shall not be obliged to pay additional money to the Sellers. In order to calculate such additional money to be paid, the Parties will consider that the current share purchase price have the actual EIRR which is above 12 percent, and will then calculate the share purchase price which has EIRR of 12 percent. The difference between these share purchase prices will be the additional money which QTCGP (provided that such total additional money to be paid plus the additional money paid at the First Price Adjustment shall not exceed USD million). Minimum amount of shares to be acquired by QTCGP is 15 percent of the paid-up registered capital of GEP Thailand. In the event that the investment of QTCGP(taking into account only Factors regarding Credit Facility of the Project) has EIRR less than 8.0 percent, QTCGP will receive additional shares of 1.15 percent (all of such 1.15 percent of the paid-up registered capital of GEP Thailand will be transferred by the Sellers without having to consider the proportion of EIRR which is below 8.0), so that QTCGP will have total percent of the paid-up registered capital of GEP Thailand. 5. Value of the Acquired Assets 5.1 Ordinary shares of GEP Thailand in the amount of 38,634 shares, or equivalent to 15 percent of the total registered capital, at the value of approximately Baht million. 5.2 Ordinary shares of GEP Thailandwhich will be subscribed on a pro rata basis in the event of increase of registered capital in the future until the completion of construction of the Project, atthe value of approximately Baht million. 6. Basis for Determining the Value of Consideration 12

14 6.1 Total consideration for the purchase of ordinary shares of GEP Thailand in the amount of 38,634 shares, or equivalent to 15 percent of the total registered capital, of approximatelybaht267.09million, which is the negotiated consideration between the Company and the Sellers with reference to appropriate valuation methodology which is in accordance with the standard and generally accepted, i.e. present value of cash flow, conducted by the financial adviser, i.e. PrimeStreet Advisory (Thailand) Co., Ltd. The key assumptions are as follows: Tariff rate: USD per kwh Average energy output (after commercial operation of all 4 phases): approximately million kwh per year Debt to equity ratio: approximately 1.86 times Interest rate: approximately 5.0 percent percent per annum Loan tenor: 12 years Average forecast revenue of the Project (after commercial operation of all 4 phases): Baht 1,249 million per year Average forecast net income of the Project (after commercial operation of all 4 phases): Baht 445 million per year Shareholding percentage of QTCGP in Project: 15 percent EIRR: 8.0 percent 6.2 Total consideration for ordinary shares of GEP Thailand, which will be subscribed on a pro rata basis in the event of increase of capital in the future until the completion of construction of the Project, is approximately Baht million, and is based on the development cost of the Project that GEP Thailand expects to use in the development of the Project on a pro rata basis of QTCGP s shareholding. The estimated development cost to be used to develop the Project until the completion of construction of the Project, is USD million (comparing to the total investment of the Project of USD million) and the debt to equity ratio is approximately 1.86 times. 6.3 Total estimated CDS of the Project is approximately USD million. Therefore, QTCGP is required under the Share Purchase Agreement to provide CDS on a pro rata basis, which shall not be exceeding USD million. 7. Expected Benefits to the Company 7.1 The Company will be able to expand its business for sustainable growth and increase income sustainability, as well as reduce the risk of depending only on the business of transformers production and distribution. In addition, such investment is in line with the business policy in which QTCGP will be the principle investor in the power sector of the group company (power flagship), and will increase the Company value in the future. 13

15 7.2 Create opportunity to increase income from the investment with appropriate and continually return, and enhance the potential in long-term business operation of the Company on the grounds that the fluctuation of the business of power production and distribution is low. By investing in the Project, the Company will receive return from power distribution to the government of the Republic of the Union of Myanmar under the PPA for the total period of 30 years commencing from the commercial operation date of phase one, which will enhance financial strength and reinforce potential of business competitiveness of the Company in a long-run. 7.3 Increase the investors confidence towards the role of the Company in business of power production and distribution, especially as the Project is internationally development, which will enhance the opportunity to continually expand the investment in power sector in the future, both domestic and offshore, particularly the Republic of the Union of Myanmar. 8. Sources of Fund Sources of fund of the Company for entering into the transaction will be derived from (1) existing capital of the Company which will not affect the working capital required for the Company s operation because the Company still has capital from the capital increase since the extraordinary general meeting of shareholders no. 1/2016 of the Company, (2) cash from the exercise of rights to purchase ordinary shares of the Company according to warrant QTC-W1, and/or (3) credit facilities from the financial institutions which the Company may consider seeking. All 4 phases of the Project will be constructed one after another. Therefore, the Company is not required to raise the funds for the constructions of phase 2, phase 3, and phase 4 altogether immediately, and the Company is able to gradually raise funds for such purpose. 9. Conditions for the Transaction 9.1. Material conditions precedent to the transaction which must be completed within 31 May 2017 are as follows: GEP Myanmar obtains the investment permit from Myanmar Investment Commission (MIC Permit) and other relevant approvals from the government of the Republic of the Union of Myanmar (Based on the information as at 31 March 2017, the investment permit from Myanmar Investment Commission (MIC Permit) of GEP Myanmar has already been approved); GEP Myanmar enters into the land sub-lease agreement with AVA Capital Trading Limited for the land of 700 acres which can be used for the Project; the Environmental and Socio-economic Impact Assessment Report for the Project is approved by the Ministry of Natural Resources and Environmental Conservation; GEP Myanmar obtains the letter (or amendment) issued by EPGE to confirm that (i) all conditions precedent under the PPA are fulfilled (saved for the matters in clause and of this information memorandum), or to extend the deadlines for conditions precedent under the PPA (as the case may be), and (ii) the financial closing date of phase one of the Project has been met; 14

16 9.1.5 GEP Myanmar obtains a consent letter from the lenders under the credit facilities agreement of phase one for (i) the transfer of shares in GEP Thailand from the Sellers to the QTCGP, (ii) they are satisfied with the amendment providing for the change of off-taker under the PPA to EPGE, and (iii) they have agreed to the amendment to the Construction Services Contract dated 3 November 2016 and the amendment to the Supply Contract dated 3 November 2016; the lenders issue the term sheet for the loans in relation to phase two, phase three, and phase four of the Project together with their executed cover letter; and the Company obtains its shareholders approval for the transaction. If the conditions precedent are not satisfied or waived by the QTCGP within 31 May 2017, QTCGP may terminate the Share Purchase Agreement. Once GEP Myanmar has obtained all relevant licences and permits and entered into the land lease agreement as set out as conditions precedent, GEP Myanmar is able to commence the construction of phase 1 of the Project immediately Conditions subsequent to the transaction which the Sellers shall undertake within 31 December 2017 are as follows: GEP Myanmar obtains the approval from the Central Bank of Myanmar for the relevant financial transaction for the Project; GEP Myanmar enters into the land lease agreement with Ministry of natural Resources and Environmental Conservation for the land of 136 acres which can be used for the Project; GEP Myanmar obtains the letter (or amendment) issued by EPGE to extend the milestone under the PPA for the scheduled commercial operation date for phase one of the Project to be 31 December 2017 or any date not earlier than 31 December 2017; GEP Myanmar obtains a consent letter from the lenders under the credit facilities agreement of phase one for (i) the extension of commercial operation date of the PPA, (ii) the amendment to the PPA for the extension of the deadline for conditions precedent (if any), (iii) the amendment to extend the milestone under the PPA (if any), and (iv) the extension of the first repayment date, and Tranche A availability period (if applicable) under the credit facilities agreement of phase one; GEP Myanmar enters into the operation and maintenance agreement for the Project; and GEP Myanmar enters into the facilities agreement with the Lenders in relation to phase two, phase three and phase four of the Project. GEP Myanmar has engaged EPC contractors and EPC contractors have advanced the construction costs and expenses for phase 1 of the Project. Once the construction of phase 1 of the Project is completed, GEP Myanmar will have to drawdown from the bank under the credit facility agreement in order to pay the EPC contractors. GEP Myanmar has to fulfil all of the conditions subsequent above in order to make a drawdown from the bank under the credit facility agreement. 15

17 If the conditions subsequent are not satisfied or waived by QTCGP within 31 December 2017, QTCGP has a right to sell all purchased shares under the Share Purchase Agreement to the Sellers at the price equalled to all money that QTCGP has paid to the Sellers, GEP Thailand and/or GEP Myanmar. 10. Key details of Shareholders Agreement The dividend policy of GEP Thailand and GEP Myanmar shall be payments of dividends of not less than 90% of the net profit (after mandatory prepayments (MPP) of 50% and adjusted annual budget) After the transaction, both GEP Thailand and GEP Myanmar will have 9 directors, which QTCGP will be entitled to nominate 1 director who will be required to remain as director until the ending on the date falling 1 year after the last commercial operation date in respect of all 4 phases, or the date on which QTCGP sells all of its shares to a third party (whichever occurs earlier) In the event that the Sellers wish to transfer its shares in GEP Thailand to a third party, QTCGP has the right to require the Sellers to cause the said third party purchaser to purchase its sharesat terms and at the time (Tag Along Right) If any shareholder wishes to sell its shares to any third party, such shareholder shall first offer the sale shares to the other shareholders (Right of First Refusal). Each shareholder may transfer its shares to its affiliate without having to obtain consent from other shareholders At all times during the period until the ending on the date falling 1 year after the last commercial operation date in respect of all 4 phases, the Company shall have the control in QTCGP and the current directors of the Company as at the date of the shareholders agreement shall remain as majority of the board of directors of the Company, unless it is consented by the Sellers and VTE QTCGP has the veto right for the following reserved matters. Level of Reserved Matter Board of directors reserved matter Voting requires to Veto Director of any group of shareholders has the right to veto Reserved Matters capital increase and decrease of GEP Thailand and/or GEP Myanmar other than those provided in estimated development cost of the Project amendment to the dividend policy and approval of dividend payments of GEP Thailand other than payment of dividend of not less than 90% of the net profit less budget and reserve amendment to the dividend policy and approval of dividend payments of GEP Myanmar other than payment of dividend of not less than 90% of the net profit less budget, reserve and mandatory 16

18 Level of Reserved Matter Voting requires to Veto Shareholder of VTE group or directors of any two shareholder groups have the right to veto prepayment Reserved Matters investment by GEP Thailand and/or GEP Myanmar in any business or project sale, disposal or transfer of any share in GEP Myanmar any merger or amalgamation under which GEP Thailand or GEP Myanmar is a party any winding up or liquidation of GEP Thailand or GEP Myanmar incur any financial indebtedness by GEP Thailand or GEP Myanmar other than those provided in estimated development cost of the Project or any refinancing of the debt provided in estimated development cost of the Project approval of the annual budget of GEP Thailand or GEP Myanmar entering into any transaction or series of transactions by GEP Thailand or GEP Myanmar with a total value exceeding Baht 50 million which has not been listed in the annual budget or the investment plan approved by the board of directors incurrence of financial indebtedness in excess of Baht 100 million except for the credit facilities in relation to the Project creating of any encumbrance over the assets GEP Thailand or GEP Myanmar other than required by the credit facility agreement, the EPC contract, or other credit facilities in relation to the Project entering into any connected transaction between any related company assets GEP Thailand or GEP Myanmar in relation to the Project except any nonmaterial amendment to any existing contract any debt forgiveness by assets GEP Thailand or GEP Myanmar other than in favor of any Governmental Entity any compromising or settling of any arbitration or litigation of any case with the dispute value exceeding THB 50 million by assets GEP Thailand 17

19 Level of Reserved Matter Shareholders reserved matters Voting requires to Veto VTE group or any two shareholder groups have the right to veto Reserved Matters or GEP Myanmar other than in favor of any Governmental Entity. any amendment of the articles of association and/or the memorandum of association the liquidation or dissolution of GEP Thailand the capital increase and decrease of GEP Thailand the amalgamation with another company the issuance of new shares as fully or partially paid-up other than in money the conversion of GEP Thailand to a public company entering into any agreement with a value exceeding the registered capital of GEP Thailand incurrence of financial indebtedness by GEP Thailand in excess of the registered capital of GEP Thailand Non-competition provision in Myanmar for QTCGP Competing Business Restriction Non-power business Non-solar power business Solar power business No restriction If QTCGP will invest at least 50% of the total investment, QTCGP is required to offer the right to the Sellers and VTE to participate in such power businesses project of not less than 30% of the total investment. If QTCGP will invest more than 30% of the total investment or be the single largest investor, QTCGP is required to obtain the written consent from the Sellers. 11. Opinion of the Board of Directors on the Transaction The meeting of the board of directors of the Company no. 4/2017 on 29 March 2017, by taking into account the share purchase price, terms including the benefits and risks related thereto, was of the view that the acquisition of ordinary shares in GEP Thailand, the purchase price including other terms and conditions are reasonable and will provide the utmost benefits to the Company and the shareholders. Therefore, the board of directors of the Company resolved to approve the acquisition 18

20 of ordinary shares in GEP Thailand in the amount of 38,634 shares, equivalent to 15 percent of the total paid-up registered capital from the Sellers, and to propose such matter to the shareholders meeting for further consideration and approval. The details of the benefits for the Company and the shareholders, and the risks are below. Expected Benefits to the Company The Company will be able to expand its business for sustainable growth and increase income sustainability, as well as reduce the risk of depending only on the business of transformers production and distribution. In addition, such investment is in line with the business policy in which QTCGP will be the principle investor in the power sector of the group company (power flagship), and will increase the Company value in the future. Create opportunity to increase income from the investment with appropriate and continually return, and enhance the potential in long-term business operation of the Company on the grounds that the fluctuation of the business of power production and distribution is low. By investing in the Project, the Company will receive return from power distribution to the government of the Republic of the Union of Myanmar under the PPA for the total period of 30 years commencing from the commercial operation date, which will enhance financial strength and reinforce potential of business competitiveness of the Company in a long-run. Increase the investors confidence towards the role of the Company in business of power production and distribution, especially as the Project is internationally development, which will enhance the opportunity to continually expand the investment in power sector in the future, both domestic and offshore, particularly the Republic of the Union of Myanmar. Expected Benefits to the Shareholder The expansion of business into the power sector will diversify investment risk by reducing the risk of depending only on the business of transformers production and distribution, and reducing the fluctuation of business operation of the Company in the future, which will benefit the shareholders with more consistent dividend payment. In addition, such investment will enhance the potential in long-term business operation of the Company, which will provide opportunities for shareholders to receive return, apart from dividend payment, as the capital gain will likely be increased in the future. Relevant Risks However, the board of directors of the Company has taken into account the risks involving such Project and was of the view that: The success of the transaction is subject to several conditions precedent and conditions subsequent. If the material conditions precedent as mentioned in clause 9.1, i.e. the application for investment permit from Myanmar Investment Commission (MIC Permit) and other relevant approvals from the government of the Republic of the Union of Myanmar, or the entering into the credit facilities agreements in relation to phase two, phase three and phase four of the Project, have not been satisfied or waived, the Company may not be able to 19

21 invest in the Project. In the event that the conditions precedent has been satisfied or waived, and the Company has entered into the acquisition of shares in GEP Thailand, but the Sellers are unable to undertake the conditions subsequent as mentioned in clause 9.2 within the prescribed timeframe, or the conditions subsequent have not been waived, the Sellers shall accept the sale of 1) all ordinary shares in GEP Thailand which have been purchased by the Purchase from the Sellers, and 2) all ordinary shares in GEP Thailand which will subsequently be subscribed by the Purchaser on a pro rata basis. Such event will result in the Company not able to invest in the Project and not able to receive expected return from the investment in the Project. However, as the developer of the Project has intention to proceed the Project within the prescribed timeframe and has competent and experienced personals in power plant development, such factors provide confidence that the all conditions precedent and conditions subsequent for the development of the Project, which are material to the development of the Project, will be satisfied within the prescribed timeframe, and will enable the Company to invest in the Project and receive the expected return. If GEP Thailand does not distribute dividend payment to the Company who is a shareholder as a result of certain restrictions, i.e. GEP Thailand has not complied with all conditions set out by the bank, it will affect the Company as the Company will receive less income from dividend, and may adversely affect the operational result and financial position of the Company. However, as GEP Thailand has engaged professional consultant to study the Project feasibility and the study shows that the Project will operate and generate sufficient liquidity for GEP Thailand to comply will all conditions set out by the bank, and GEP Thailand will be able to distribute dividend payment to its shareholders. The acquisition of ordinary shares in GEP Thailand will result in the Company has certain income in foreign currency. As such, the Company will be at risk if the exchange rate is significantly fluctuated. If Thai Baht appreciates, the profits from investment in the Project will be lowered once converted into Thai Baht, which may affect the operational result of the Company. However, the Company has policy to use appropriate financial instruments to mitigate risk from fluctuation of such foreign exchange rate, and in the event that the Company invests in new project offshore which use the same currency as the foreign income received by the Company, the Company has policy to use such foreign income for additional investment, which will partially mitigate risk by way of natural hedge. At the present, the Company paid to the Seller in an amount of USD 3.75 million or equivalent to Baht million (according to foreign exchange rate). If it is compared to the total amount to be paid according to the agreement at USD 7.63 million or equivalent to Baht million (according to foreign exchange rate), it is appeared that the amount advanced to the Seller is 50% of the total amount to be paid which is a high proportion. This advanced amount is not normal condition for entering into transaction and cause the unfairness to the Company which leads to the oppotunity loss on the amount advanced by the Company. However, the management of the Company has informed that they have considered this condition for entering into this transaction in all aspects and such condition occurred from the best effort in negotiating by the Company to obtain other conditions which are advantageous to the Company such as Conditions Precedent, Conditions Subsequent and the payment term of forth installment of the purchase price within 31 December 2017 (which help to mitigate the uncertainty and risk of the Company in case that the Project cannot be 20

22 completed. In addition, the Company will also obtain the compensation in case that Equity IRR of the Company is lower than the specified rate in accordance with the details of the price adjustment. The details of Conditions Precedent, Conditions Subsequent can be seen in clause 9 (Conditions for the Transaction). The details of purchase price installment can be seen in clause 4.2 (Payment Conditions). The details of price adjustment can be seen in clause 4.3 (Price Adjustment). 12. Opinion of the Company s Audit Committee and/or Director which is different from the Opinion of the Board of Directors None. Two members of the audit committee of the Company, i.e. Mr. NatthaphonLilawatthananun and Mr. PholrachPiathanom, have attended the board of directors meeting and did not have any opinion which is different from the opinion of the board of directors. Another member of the audit committee, i.e. Mrs. WasaraChotithammarat, was unable to attend the meeting as she was engaged in the business oversea. Please be informed accordingly. Sincerely yours, (Mr. PoonphiphatTantanasin) Chief Executive Officer 21