-Information Memorandum- Amata B.Grimm Power Infrastructure Fund (ABPIF)

Transcription

1 1 The Management Company -Information Memorandum- Amata B.Grimm Power Infrastructure Fund (ABPIF) Kasikorn Asset Management Company Limited Office of the Management Company Listing Date 400/22, KASIKORNBANK Building, 6th Floor, Phahon Yothin Road, Samsen Nai Sub-district, Phaya Thai District, Bangkok Telephone: Facsimile: Website: The date the securities are to be listed: 27 September 2013 (starting to trade on 27 September 2013). Type of the Listed Securities 600,000,000 investment units with par value of Baht 10.50, totaling Baht 6.3 billion. Secondary Market Stock Exchange of Thailand (SET) Background Summary Kasikorn Asset Management Company Limited (the "Management Company") was approved by the Securities and Exchange Commission to establish and manage Amata B.Grimm Power Power Plant Infrastructure Fund on 10 July Initial public offering commences on 9 September 2013 and ends on 13 September The registration of the asset of the Mutual Fund was approved on 19 September Project Description Project Term Objectives Infrastructure fund for initial public offering, no repurchase arrangements. No pre-determined project term. However, if no additional investment was made to the Mutual Fund, the Revenue Sharing Agreement, in which the Mutual Fund initially invests will end on 27 September The objectives of the Project are to raise funds from general investors which are individual and entity investors, either domestic or foreign investors and to use the proceeds from such fundraising for investment in assets of infrastructure business. The infrastructure business, in which the Mutual Fund invests, is infrastructure business for general public interest in Thailand. The Mutual Fund will enter into an agreement to acquire assets of the infrastructure business and procure benefits from asset of the infrastructure business with the aim of generating income and returns for the Mutual Fund and for the

2 2 unitholders of the Mutual Fund including other benefits from investment in other property and/or other securities and/or, as prescribed by securities laws and/or other applicable laws. Since SEC granted a registration to the Mutual Fund and the Mutual Fund invested in assets of the infrastructure business, structure of unitholders, relationship between the Mutual Fund and unitholders and Trustee and the assets of the infrastructure business which is initial investment, the detail as follow: Asset Management B.Grimm 1 and B.Grimm 2 Revenue Sharing Agreement Make payment Mutual Fund Fund management Underwrite unit like equities Subscription Protect the benefits of the asset of infrastructure business Investors Trustee and asset of infrastructure business Investment Policy In its initial investment, the Mutual Fund will invest in the Revenue Sharing Agreement with B.Grimm 1 and B.Grimm 2 which carry out power plant business in Amata Nakorn Industrial Estate, Chonburi. The term of the Revenue Sharing Agreement will commence on the date that the Mutual Fund makes purchase price payment to B.Grimm 1 and B. Grim 2. With respect to B.Grimm 1, the expiration date of the revenue sharing period is 16 September With respect to B.Grimm 2, the expiration date of the revenue sharing period is 27 September B.Grimm 1 and B.Grimm 2 agree to share the revenue from power business, under the following formula, to the Mutual Fund based on operating results for each period of 6 months during January to June, and July to December. If the restricted payment conditions set out in a credit facilities agreement are complied with, the revenue will be shared in March and August of each year. Please consider the essence of the Revenue Sharing Agreement with regard to power purchasing agreement entered into with EGAT, power purchasing agreements entered into with industrial users, steam purchasing agreements and any agreement executed during the term of the Revenue Sharing Agreement. Proceeds from power business = cash flow earned from the power plant's revenues - cash outflow for the power plant's expenses + changes in allowances + cash balance at beginning of the installment - minimum cash balance.

3 3 General Information of the Assets of the Infrastructure Business Invested in by the Mutual Fund 1. Overview of Shareholders of B.Grimm 1 and B.Grimm 2 B.Grimm Group Amata Corporation PCL. Summit Sunrise Energy Co., Ltd % 13.77% 30% Amata B.Grimm Power 100% Amata B.Grimm Power Holding 69.3% 29.7% 30% 60% 62% 62% 100% 60% Amata B.Grimm Power 1 Amata B.Grimm Power 2 Amata B.Grimm Power 3 Amata B.Grimm Power Rayong 1 Amata B.Grimm Power Rayong 2 Amata B.Grimm Power Service Amata B.Grimm Power Bien Hoa Amata B.Grimm Power Limited ("Amata B.Grimm Power") is a major shareholder of B.Grimm 1 and B.Grimm 2, holding directly and indirectly at approximately 98% of total shares in B.Grimm 1 and 100% of total shares in B.Grimm 2 respectively. Amata B.Grimm Power was established on 2 March Its major business is to invest in power generating business. As of 30 June 2012, Amata B.Grimm Power's registered capital was Baht 1.7 billion, and its paid-up capital is Baht billion. Amata B.Grimm Power set business directions and strategies of B.Grimm 1 and B.Grimm 2 in accordance with business development goals, and the expansion of Amata B.Grimm Power Group. Its management has cumulative expertise and experience in power business. Ultimate shareholders of B.Grimm 1 and B.Grimm 2 are shareholders of Amata B.Grimm Power Limited, consisting of B.Grimm Group, Amata Corporation PCL. and Summit Sunrise Energy Co., Ltd. B.Grimm Group was established in B.Grimm Group runs a wide range of businesses, such as power, air-conditioning units, health, communications, real estate. B.Grimm Group established B.Grimm Power Co., Ltd. in 1993 to run its power business. B.Grimm Group currently owns a plant with production capacity at approximately 500 megawatts.

4 4 Amata Corporation PCL. was established in 1989 and listed on the Stock Exchange in Amata Corporation PCL. has developed and managed many industrial estates, i.e. Amata Nakorn Industrial Estate Chonburi, Amata City Industrial Estate Rayong, and Amata City Industrial Estate (Bien Hoa) Vietnam. Summit Sunrise Energy Co., Ltd. was established in Summit Sunrise Energy Co., Ltd. is a member of Sumitomo Corporation Group, a group of companies carrying out trading business, domestically and internationally. Summit Sunrise Energy Co., Ltd. carries out developing and investment business in power projects in Southeast Asia, including Thailand. At present, B.Grimm Group owns 4 active power plants, B.Grimm 1, B.Grimm 2, B.Grimm 3 and Amata B.Grimm Power Bien Hoa, with a gross capacity exceeding megawatts, and 4 plants under construction, with a gross capacity of approximately megawatts. In addition B.Grimm will increase its capacity at 132 megawatts in 2015, 240 megawatts in 2016, and 600 megawatts in Accordingly, in 2019, thus, B.Grimm Group will own 16 power plants in 6 industrial estates, with a gross capacity of approximately 2,000 megawatts. Hence, B.Grimm Group would become the second largest private small power producer in Thailand. Almost all of the companies running power business under the management of Amata B.Grimm Power are small power producers operating co-generation power plants with the aim to produce and sell power to EGAT, and to produce and sell power and steam to industrial users in industrial estates in Thailand. B.Grimm 1 and B.Grimm 2 are the first two power plant projects of Amata B.Grimm Power. Their commercial operation dates (CODs) were 17 September 1998 and 28 September 2001 respectively. Amata B.Grimm Power become well recognized among electric power and power industries due to success of B.Grimm 1 and B.Grimm 2. Amata B.Grimm Power's project has been developed continuingly. The commercial operation date of B.Grimm 3, which is a small power producer operating a cogeneration plant as well as B.Grimm 1 and B.Grimm 2, was 29 September B.Grimm 3, has a gross capacity of 130 megawatts. It produces and sells power to EGAT, and produces and sells power and steam to industrial users in Amata Nakorn Industrial Estate in order to accommodate power demand in Amata Nakorn Industrial Estates which have steadily grown every year. In 2013, the aforementioned 2 power plants under construction which are Power Rayong 1 Limited and Amata B.Grimm Power Rayong 2 Limited started their commercial operation. Both companies are cogeneration small power producers with a capacity of megawatts and megawatts respectively. Amata B.Grimm Power Rayong 1 Limited and Amata B.Grimm Power Rayong 2 Limited produce and sell power to EGAT, and produce and sell power and steam to industrial users in Amata Nakorn Industrial Estate in order to accommodate power demand in Amata City Industrial Estates Rayong. Amata B.Grimm Power expanded its power and power business overseas by investing in Amata Power Bien Hoa Limited, a diesel generator, with a gross capacity of 12.8 megawatts, commencing its operation to produce and sell power to industrial users in Amata City Bien Hoa Industrial Estate in May 1999.

5 5 2. Basic Information of Power Plants Owned by the Companies in Which the Mutual Fund Invests Amata B.Grimm Gas Purchase Agreements PTT Power Purchase Agreement for EGAT Industrial users Power purchasing agreements Amata B.Grimm Power 1 Amata B.Grimm Power purchase agreements Memorandum of Amata B.Grimm Reserve Power Agreement on Provision of Water Supply and Wastewater Consulting Service Agreement Facilities Service Agreement PEA Amata Water Amata B.Grimm Power Understanding Credit Facilities Agreement Creditors General Information B.Grimm 1 and B.Grimm 2 were established on 24 October 1995 and 4 June 1999 respectively. B.Grimm 1 and B.Grimm 2 are small power producers (SPPs) operating cogeneration power plants consuming natural gas as main fuel. The objectives for which those companies were incorporated are: to produce and sell power of 90 megawatts each to EGAT under the relevant power purchasing agreement, for the period of 21 years, ending 16 September 2019 for B.Grimm 1, and ending 27 September 2022 for B.Grimm 2; to produce and sell power to factories located in the industrial estates ("Industrial User: IU"); produce and sell steam to industrial users. B.Grimm 1 and B.Grimm 2 purchase natural gas under the gas purchasing agreements entered into with PTT for the period of 21 years. The gas purchasing agreement into which B.Grimm 1 entered expires on 31 December The gas purchasing agreement into which B.Grimm 2 entered expires on 27 September B.Grimm 1 and B.Grimm 2 installed capacity: Installed Capacity B.Grimm 1 B.Grimm 2 Power (MW) Steam (Ton/Hour) 30 30

6 6 Presently, B.Grimm 1 and B.Grimm 2 have main assets used for producing and operating power plant activities as follows: Registered Capital Main Assets B.Grimm 1 B.Grimm 2 Land 36.7 rai 21.6 rai Buildings 11 4 Gas turbine generators (GTG) 2 3 Heat recovery steam generators 2 3 (HRSG) Steam turbine generators (STG) 1 2 As of 31 December 2012, B.Grimm 1 and B.Grimm 2 registered capitals were: B.Grimm 1 B.Grimm 2 Registered capital (BHT million) 1,500 1,060 Paid-up registered capital (BHT 1,350 1,060 million) Par value per share (Baht) 7 (50 million shares) 100 and 10 (100 million shares) Address: B.Grimm 1: 700/370, Moo 6, Amata Nakorn Industrial Estate (Phase 5), Bangna-Trad, Highway 34, Tambon Nong Mai Dang, Amphoe Muang Chonburi, Chonburi B.Grimm 2: 700/371, Moo 6, Amata Nakorn Industrial Estate (Phase 5), Bangna-Trad, Highway 34, Tambon Nong Mai Dang, Amphoe Muang Chonburi, Chonburi Assessed Value: Assessed values of the assets of the infrastructure business, in which the Fund will invest, were assessed by corporate valuer. Please refer to clause 4.4 Valuer Assessed Value Assessment Date (Baht: Million) Ernst & Young Corporate 6,303-6, January 2013 Services Limited Capital Advantage Co., Ltd. 6,656-6,830 6 February 2013 Revenue Structure and Operating Results 1. Revenue Structure 1.1 Revenue from sale of power to EGAT EGAT is the largest customer of B.Grimm 1 and B.Grimm 2. In 2012, B.Grimm 1 and B.Grimm 2 received revenue from sales of power to EGAT equivalent to 45.0% and 1.2% of their total revenue. B.Grimm 1 and B.Grimm 2 entered into long term power purchasing agreements with EGAT with the term of 21 years, ending 16 September 2019 and on 27 September 2022 respectively. Those aforementioned agreements are power purchasing agreement for small

7 7 power producers ("SPP"), having standard form with similar substance among each small power producer. Under the agreement, a small power producer shall be responsible for its activities financial resources, construction, commissioning, power distribution, repair and maintenance of its power plant. EGAT is a public enterprise, established under the Power Generating Authority of Thailand Act, having a major role in Thai power business. EGAT is the sole purchaser of wholesale power, the operator of nation power distribution system, and is the largest power producer in Thailand. As of December 2012, Its gross capacity is 15,010 megawatts. Furthermore, its financial position is solid as, at present, shares of EGAT are wholly owned by the Ministry of Finance. In 2012, EGAT is the second highest income earner while PTT PLC. was the top earner. As of 31 March 2013, Standard & Poor's rated EGAT 'BBB+' which is a credit rating at the same level of the rating assigned to Thailand with stable credit trand B.Grimm 1 and B.Grimm 2 have good relationship with EGAT over 10 years during the operation period. B.Grimm 1 and B.Grimm 2 have strictly complied with the terms of the relevant power purchasing agreements and are prepared to give full cooperation to EGAT in resolving any potential issues at all times. Revenue structure under the power purchasing agreements entered into with EGAT consists of capacity payment and power payment. (1) Capacity Payment Subject to the capacity payment agreements, EGAT has the obligation to make a monthly minimum capacity payment at the specified rate in accordance with the capacity volume under the agreements, equivalent to 90 megawatts (B.Grimm 1) and 90 megawatts (B.Grimm 2), on a monthly basis. Such volume is the highest capacity volume that a small power producer may sell to EGAT which is the availability to produce power, regardless of whether or not EGAT instructed the power producer to operate electric generator and purchased power. As power production cost partially varies in accordance with USD exchange rate, 80% of capacity payment is based on USD exchange rate. That is, EGAT would pay B.Grimm 1 and B.Grimm 2 a difference between actual exchange rate and basic exchange rate (basic exchange rate is Baht 27/ USD) in order to reduce risk from exchange rate volatility. (2) Power Payment Power payment is consideration payable by EGAT to B.Grimm 1 and B.Grimm 2 for the production and distribution of power in accordance with instructions to start the electric generator given by EGAT. Power payment covers fuel cost for the production and variable cost incurred in running the generator and repair and maintenance provided to the power plants. With respect to power payment which covers fuel cost will be based on natural gas price in the base year. B.Grimm 1 and B.Grimm 2 applied 2 August 1995 as the base year, in which year natural gas price was Baht per million BTU. That is, EGAT would pay the difference of actual natural gas price and gas price in the base year, with the heat rate of 8,600 BTU/KW per hour. This reduces gas price volatility risk for B.Grimm 1 and B.Grimm

8 8 2. EGAT has fixed minimum power volume to purchase from B.Grimm 1 and B.Grimm 2 in each month. 1.2 Revenue from sale of power to industrial users. In 2012, B.Grimm 1 and B.Grimm 2 received revenue from sale of power to industrial users equivalent to 53.9% and 56.4% of their total revenue respectively. B.Grimm 1 and B.Grimm 2 entered into their respective long-term power purchasing agreements with industrial users. Generally, the term of the agreement is 15 years from the commencement date of agreement. Industrial users may express their wish to renew the agreement for the period of not less than 3 years but not more than 5 years each time. This is a normal standard of power plant business which enters into an agreement with an industrial user. Such agreement term enables B.Grimm 1 and B.Grimm 2 to maintain stability of their cash flow, to find potential customers, to be able to amend conditions or adjust price in the renewed agreement to be in line with economic situation at the moment. At present, the remaining terms of the agreements to sell power and steam to industrial users range approximately 3 years to 5 years. Over 10 years of their power plant operation, industrial users customers of B.Grimm 1 and B.Grimm 2 have a tendency to continue buying power and steam from them. Most of B.Grimm 1 and B.Grimm 2 industrial users in Amata Nakorn Industrial Estates are medium and large industrial works manufacturing automobile parts and relevant products, steel, metals or plastic manufacturers, and electronic parts manufacturers. Most of them are companies with solid financial standing, good reputation. Several of them are subsidiaries or associated companies of multi-national corporation. B.Grimm 1's and B.Grimm 2's policies to sell power to industrial users focus on capability to produce power with quality and reliability, and provision of good services. The foregoing are factors are crucial to industrial users intending to receive dependable electric currents, with prevention of probable power failure which may adversely affect production process of those industrial users. B.Grimm 1 and B.Grimm 2 arrange engineering teams available 24 hours a day to take action. Those arrangements are to guarantee power quality and ensure industrial users' satisfaction in order to continually maintain and expand their customer base. The main target group of B.Grimm 1 and B.Grimm 2 is industrial users with high and consistent power demand. Consequently, B.Grimm 1 and B.Grimm 2 may accurately anticipate power consumption demand and precisely design production plan. This will be factors that optimize efficiency of B.Grimm 1 and B.Grimm 2 power production. A basic revenue structure under power purchasing agreements entered into with industrial users is based on an power tariff imposed on large business by PEA. Discount may be provided depending on negotiation between B.Grimm 1, B.Grimm 2 and their industrial users. A basic revenue structure consists of demand charge, power charge, service fee, power charge under an automatic tariff adjustment formula (FT), reactive power charge (if any) and discount (if any).

9 9 (1) Demand charge Demand charge is based on PEA power charge. Power charge reflects the investment of PEA, such as, investment in power plant construction, transmission system and distribution system to ensure availability of power supply distribution upon consumer's demand. (2) Power charge Power charge is based on PEA power charge which reflects cost of fuels consumed in producing power, and in accordance with actual power consumption. (3) Service fee Service fee is based on a prevailing tariff published by PEA imposed during the term of the relevant agreement. (4) Power charge based on an automatic tariff adjustment formula or FT Power charge based on an automatic tariff adjustment formula or FT is in the same rate imposed by PEA from general users. The FT will be calculated from variable cost of EGAT in the purchase of fuels to produce and purchase power including transmission and generating cost and other variable costs, such as, currency exchange rate, inflation rate. Office of the Energy Regulatory Commission is in charge of reviewing and determining an automatic adjustment formula or FT. (5) Reactive power charge (if any) B.Grimm 1 and B.Grimm 2 determine power factor to control efficiency and power loss in transmission and generating system. Users are required to pay the difference if they fail to comply with the determined value. (6) Discount (if any) B.Grimm 1 and B.Grimm 2 provide to industrial users a discount on power payment at the determined percentage in comparison to EGAT power payment as incentive discount. As of 31 March 2013, agreements entered into between B.Grimm 1, and B.Grimm 2 and industrial users are: B.Grimm 1 entered into 40 power sale and purchase agreements with 35 industrial users - total power of megawatts, and a steam sale and purchase agreement - 6 tons per hours. B.Grimm 2 entered into 47 power sale and purchase agreements with 39 industrial users - total power of megawatts, and three steam sale and purchase agreements - 19 tons per hours In 2012, the ratios of revenue from sale of power to top ten industrial users of B.Grimm 1 and B.Grimm 2 are as follows:

10 10 Revenue from Sale of Power to top 10 industrial users B.Grimm 1 B.Grimm 2 Per revenue from the sale of power to industrial users 64% 50% Per total revenue 35% 26% Top 10 industrial users of B.Grimm 1 and B.Grimm 2 in 2011 (ordered by revenue) No. B.Grimm 1 B.Grimm 2 1 Siam Toyota Manufacturing Co., Ltd. Thai NOK Co., Ltd. 2 Vandapac Co., Ltd. Mitsubishi Electric Consumer Products (Thailand) Limited 3 AGC Techno Glass (Thailand) Limited Calsonic Kansei (Thailand) Co., Ltd. 4 Yamaha Motor Parts Manufacturing (Thailand) Thai Tohken Thermo Co., Ltd. Co., Ltd. 5 Colgate-Palmolive (Thailand) Limited Asahi Tec Aluminium (Thailand) Co., Ltd. 6 Srithai Superware PCL. Niles (Thailand) Co., Ltd. 7 Asahi Tec Aluminium (Thailand) Co., Ltd. TRW Fuji Serina Co., Ltd. 8 Daikin Industries (Thailand) Ltd. NSK Bearing Manufacturing (Thailand) Ltd. 9 Denso (Thailand) Co., Ltd. Denso (Thailand) Co., Ltd. 10 Cobra International Co., Ltd. Toyoda Gosei (Thailand) Co., Ltd Revenue from sale of steam In 2012, B.Grimm 1 and B.Grimm 2 gained revenue from sale of steam to industrial users, equivalent to 0.2% and 1.7% of total revenue of B.Grimm 1 and B.Grimm 2, respectively. B.Grimm 1 and B.Grimm 2 entered into their respective long-term agreements with industrial users with the agreement term of average 5 years. Basic revenue structure under steam sale and purchase agreement with industrial users consists of thermal power cost and water supply cost. (1) Thermal power costs Thermal power costs consist of capacity cost and power cost. Minimum capacity cost payable by industrial users must be paid at the rate determined for the month, based on the steam volume set out in the agreement. Power cost covers fuel costs, based on natural gas price of the month. (2) Water supply cost Industrial users will pay water supply cost at the rate set out in the relevant agreement. Water supply cost is based on a producer price index, divided in accordance with production activity of the business in the specified year. A producer price index indicates changes of average product price which domestic producer receives from sale of goods ex-factory, exclusive of transportation cost and VAT.

11 11 As of 31 December 2012, B.Grimm 1 entered into a steam sales agreement with: Sermsuk Beverage Co., Ltd. As of 31 December 2012, B.Grimm 2 entered into steam sales agreements with: Colgate-Palmolive (Thailand) Limited; Sermsuk Beverage Co., Ltd.; and Thai Daizo Aerosol Co., Ltd. B.Grimm 1 and B.Grimm 2 determined the price by offering discount from cost avoidable by customers if they purchase steam from B.Grimm 1 and B.Grimm 2 instead of producing steam by themselves ("Avoided Cost"). The foregoing determination method is efficient and provide good profit rate Revenue from sale of power among B.Grimm 1, B.Grimm 2 and B. Grimm 3 Sales of power among B.Grimm 1, B.Grimm 2 and B. Grimm 3 will be calculated based on the same calculation formula, consisting of 2 rates: a peak demand rate and off-peak rate. In principle, a revenue structure pertaining to sales of power among B.Grimm 1, B.Grimm 2 and B. Grimm 3 is to divide profits among the companies that produces power and the companies that sells power, based on an average price offered to EGAT or industrial users of B.Grimm 1, B.Grimm 2 and B. Grimm 3. Technical consultants would review such pricing formula and the formula would apply if found appropriate Revenue from provision of public utility services For 2012, B.Grimm 1 and B.Grimm 2 earned revenue from provision of public utility services, equivalent to 0.4% and 0.1% of total revenue of B.Grimm 1 and B.Grimm 2 respectively. As B.Grimm 1 and B.Grimm 2 share public utilities systems, they entered into a joint public utility agreement. Under such agreement, B.Grimm 1 owns and provides to B.Grimm 2 the services of public utilities systems, consisting of water pump stations and water tanks for fire prevention, buildings for administration work, work stations and warehouse for tools and equipment storage, a control room, fences, access to and within B.Grimm 1 and B.Grimm 2 power plants, PTT connected natural gas pipe located in B.Grimm 1 and B.Grimm 2, meter stations, wastewater treatment station, treatment facilities and chemicals, diesel reserve tanks, diesel generators, telecommunications systems within those power plants, 115 KW power cables, and a steam distribution station. While B.Grimm 2 owns and provides to B.Grimm 1 the service of a station distributing power to industrial users in Amata Nakorn Industrial Estate. B.Grimm 3 which started its commercial operation on 29 September 2012 entered into a joint public utility agreement with B.Grimm 1 and B.Grimm 2 which own the foregoing systems. A structure of revenue from provision of public utilities services consists:

12 12 (1) Machinery and facilities fees B.Grimm 3 agrees to pay fees for the provision of public utilities services, i.e.: machinery and facilities, on a monthly basis, in the amount of Baht 293,000 per month to B.Grimm 1, and Baht 215,000 per month to B.Grimm 2 for the period of 25 years, ending 17 October 2035; and (2) Special fees 1.6. Other revenue If the machinery and facilities need special repair or maintenance, other than a regular maintenance, B. Grimm 3 would be jointly responsible with B.Grimm 1 and/or B.Grimm 2 for the expenses incurred in the amount equivalent to 21.06% thereof. In 2012, B.Grimm 1 and B.Grimm 2 earned the remaining revenue from proceeds of B.Grimm 1 and B.Grimm 2, and other revenue incurred indirectly to core business of B.Grimm 1 and B.Grimm 2, equivalent to 0.5% and 0.5% of total revenue of B.Grimm 1 and B.Grimm 2 respectively. However, other revenue is not deemed a part of income of the Mutual Fund and would not be assessed in the value assessment of the infrastructure business in which the Mutual Fund would be invested. 2. Operating Expenses Structure 2.1. Production cost B.Grimm 1 and B.Grimm 2 production cost consists of natural gas expense, water supplies fee, power purchase fee between B.Grimm 1, B.Grimm 2 and B. Grimm 3, power reserve supply fee with PEA. Natural gas expense is a major production cost of B.Grimm 1 and B.Grimm 2's operation. In 2012, production cost of B.Grimm 1 and B.Grimm 2 was equivalent to 82.1% and 85.1% of their operation costs respectively while the natural gas expense was equivalent to 87% and 97% of the production cost of B.Grimm 1 and B.Grimm 2 respectively Expenses under management and maintenance agreement with B. Grimm Power Service The management and maintenance agreement entered into with Amata B.Grimm Service expired on 31 December B.Grimm 1 and B.Grimm 2 agreed with Amata B. Grimm Service to relocate personnel of Amata B. Grimm Service, having knowledge and skills in managing as well as understanding technologies of the power plants owned by B.Grimm 1 and B.Grimm 2, to be employees of B.Grimm 1 and B.Grimm 2. Personnel of these companies would be distinctly separated. The foregoing approach is intended to cut down management procedures, allow personnel to speedily work on repair/maintenance processes and also allow B.Grimm 1 and B.Grimm 2 to control performance quality of those personnel which then would enhance production efficiency and result in production and sale of high quality power and steam. This would also reduce certain operating costs as those personnel would be employees of B.Grimm 1 and B.Grimm 2, not Amata B. Grimm Service as well as boosting profitability of B.Grimm 1 and B.Grimm 2. From and on 1 January 2013, expenses mentioned in this clause would no longer be incurred.

13 Repair and maintenance costs Power plant repair and maintenance costs are not included in the management and maintenance agreement. The power plant repair and maintenance costs are as specified in the maintenance program plan. In 2012, B.Grimm 1 and B.Grimm 2 had such repair and maintenance costs in the amounts equivalent to 2.9% and 2.5% of their operating costs respectively. B.Grimm 1 and B.Grimm 2 pay special attention to power plant repair and maintenance which is one of major operation in power plant business. This ensures that B.Grimm 1 and B.Grimm 2 power plants can operate uninterruptedly with sufficient efficiency to produce power in accordance with the terms of the long-term power purchasing agreements. Maintenance program plan includes a hot gas path inspection program which will be carried out every 3 years and a major overhaul program every 3 to 6 years, based on a maintenance standard of each machinery. B.Grimm 1 and B.Grimm 2 would at their own cost engage suppliers to supply spare parts for the maintenance. The most recent major overhaul program for B.Grimm 1 power plant was carried out in 2012 for gas turbine generator I. B.Grimm 1 plans to carry out next major overhaul program for gas turbine generator II in The most recent major overhaul program was carried out by B.Grimm 2 in 2012 for its gas turbine generator II and III. B. Grimm 1 plans to carry out next major overhaul program for its gas turbine generator I in When the maintenance is needed, B.Grimm 1 will use power generator from Siemens AG Limited and will engage an independent supplier to provide spare parts and repair its facilities. While, B.Grimm 2 had entered into an agreement with GE Thailand Limited ("GE"), the manufacturer of B.Grimm 2's power generator to provide spare parts, repair its facilities and provide technical supports. The term of such agreement covers the term of the power purchasing agreements made with EGAT, and the Revenue Sharing Agreement entered into by B.Grimm 2. GE's scope of services covers planned maintenance, encompassing of a major overhaul program and an unplanned maintenance. The agreement is intended to build confidence in quality of B Grimm 2's spare part inventory and to reduce operating costs incurred in spare part storage and spare part prices. A limit on annual maximum increased rates set out in the agreement allows B. Grimm 2 to project cost of e maintenance service in advance throughout the agreement term, as well as increasing quality of the production of power and steam as GE guarantees the quality of spare parts supplied by it, as well as guaranteeing efficiency of the operation. This is to ensure that the power plant will produce power uninterruptedly and with efficiency to achieve the goal. B. Grimm 1 and B.Grimm 2 entered into a power reserve sale and purchase agreement with PEA in order to distribute power supply to industrial users during the course of the maintenance service, in order to ensure that the industrial users will receive uninterrupted distribution of power and minimize potential interruption to their machinery Overhead Overhead consists of contribution to the power development fund established under the notification of the Energy Regulatory Commission RE: Submission of Contributions to Power Development Fund for Power Generating Business Licensees B.E (2010) at the rate of Baht 0.01 per unit produced, contributions to the power development fund under section 97 (1) of Energy Business Act B.E (2007) to subsidize power fee for the underprivileged, at the rate of Baht 0.12 per unit produced, power

14 14 plant insurance fees, expenses on joint public utility service. In 2012, B. Grimm 1 and B. Grimm 2 had the overhead expenses equivalent to 1.1% and 0.9% of total operating expenses of B.Grimm 1 and B.Grimm 2, respectively Depreciation and amortization Depreciation and amortization consist of depreciation of land development, power plant, power distribution stations, transmission cable systems, office fittings and loan cost amortization. For 2012, B.Grimm 1 and B.Grimm 2's depreciation and amortization was equivalent to 8.8% and 7.1% of total operating expenses incurred by B.Grimm 1 and B.Grimm 2, respectively Standard management fee Standard management fee of B.Grimm 1 and B.Grimm 2 consist of fines payable to EGAT due to the ratio of thermal energy consumed in a thermal process is less than 10% which is required under the power purchasing agreements entered into by and between B.Grimm 1, B.Grimm 2 and EGAT (please refer to summary of agreement), professional fees of Amata B.Grimm Power for consulting services in relation to administration and technology, and management services in relation to accounting, finance, legal, engineering, and marketing activities, insurance, business plan and development, administrative work, provision of facilities for the operation, such as storage space of documents and files, computers and office equipment. In 2012, B.Grimm 1 and B.Grimm 2 had expenses in relation to standard management fees in the amount equivalent to 3.9% and 3.1% of total operating expenses incurred by B.Grimm 1 and B.Grimm 2, respectively. Summary of past operation: Balance sheet of B.Grimm 1 and B.Grimm 2 B.Grimm 1 (Million Baht) 31 December (Audited) Assets Current Assets Cash and cash equivalents Accounts receivable and accounts receivable - related companies Other current assets Total Current Assets 1, , , ,269.5 Land, building & equipment - Net 2, , , ,194.8 Other Non-Current Assets Total Assets 4, , , ,484.4

15 15 B.Grimm 1 (Million Baht) 31 December (Audited) Liabilities and shareholders' equity Current Liabilities Accounts payable Short-term loans from financial institution Current portion of long-term liabilities - Net Other current liabilities Total Current Liabilities ,052.5 Non-Current Liabilities Long-term loans from financial institutions 1, Other Non-Current Liabilities Total Non-Current Liabilities 1, Total Liabilities 1, , , ,372.5 Shareholders' Equity Issued and paid up share capital 1, , , ,350.0 Retained earnings Total Shareholders' Equity 2, , , ,111.9 Total Liabilities and Shareholders' Equity 4, , , ,484.4 Sources: B.Grimm 1 and B.Grimm 2

16 16 B.Grimm 2 (Million Baht) 31 December (Audited) Assets Current Assets Cash and cash equivalents Accounts receivable and accounts receivable - related companies Other Current Assets Total Current Assets 1, , , ,157.5 Non-Current Assets Land, buildings & equipment - Net 3, , , ,463.9 Total Non-Current Assets 3, , , ,463.9 Total Assets 5, , , ,621.5 Liabilities and Shareholders' Equity Current Liabilities Trade payable and other accounts payable Short-term loans from financial institutions Current portion of loans from financial institutions - Net Other Current Liabilities Total Current Liabilities , ,388.3 Non-Current Liabilities Long-term loans from financial institutions - Net 2, , , Total Non-Current Liabilities 2, , , Total Liabilities 3, , , ,077.5

17 17 B.Grimm 2 (Million Baht) Shareholders' Equity 31 December (Audited) Issued and paid up share capital 1, , , ,060.0 Additional paid-in capital Retained earnings ,213.8 Total Shareholders' Equity 1, , , ,544.0 Total Liabilities and Shareholders' Equity 5, , , ,621.5 Sources: B.Grimm 1 and B.Grimm 2 Debt-to-Equity Ratio and Debt Service Coverage Ratio of B.Grimm 1 and B.Grimm 2 31 December B.Grimm 1 Debt-to-Equity Ratio B.Grimm 2 Debt-to-Equity Ratio B.Grimm 1 Debt Service Coverage Ratio B.Grimm 2 Debt Service Coverage Ratio Total Debt Service Coverage Ratio of B.Grimm 1 Sources: and B.Grimm B.Grimm 2 1 and B.Grimm Most assets of B.Grimm 1 and B.Grimm 2 are land, buildings, and equipment, equivalent to 63% and 75% of total assets of B.Grimm 1 and B.Grimm 2 as of 31 December Long-term liabilities of B.Grimm 1 and B.Grimm 2 steadily decrease. As of 31 December 2012, debt-to-equity ratio of B.Grimm 1 and B.Grimm 2 is equivalent to 0.6 and 0.8 respectively. Prior to the investment of the Mutual Fund in assets of the infrastructure business under the Revenue Sharing Agreement, B.Grimm 1 and B.Grimm 2 will amend their refinance agreements by extending the repayment period, thus, the full payment will be made by 2018 and 2019 respectively. Following the amendment to the refinance agreements, B.Grimm 1 debt to equity ratio will increase to 0.96 and B.Grimm 2 to 1.2, exclusive of other liabilities under the Revenue Sharing Agreement. In order to minimize volatility of cash flow initially transferred to the Mutual Fund, additional loans will be used for a major overhaul program to be carried out in Once the Mutual Fund is established, B.Grimm 1 and B.Grimm 2 will reserve funds in money reserve list for the major overhaul program on order to minimize volatility of cash flow transferred to the Mutual Fund. B.Grimm 1 and B.Grimm 2 have financial limitation under the refinance agreement which bars B.Grimm 1 and B.Grimm 2 from incurring more debts. Under the draft long-term financial institutions loan agreement to be entered into between B.Grimm 1 and B.Grimm 2, 3 Thai commercial banks and 2 foreign banks, the details of credit facilities are:

18 18 long-term credit facilities of Bath 1,967 million for refinancing of the existing loans, money reserve for the major overhaul expense and for the investment cost of the power plant in ; long-term credit facilities of USD 24.3 million for refinancing of the existing loans; revolving credit facilities with guarantee agreement of Baht 365 Million for operation and borrower's obligation guarantee between EGAT and PEA; and revolving credit facilities of Baht 490 million for working capital, including overdraft, short-term loans, guarantee letters, letters of credit and trust receipts. Thai and foreign commercial banks have applied financial terms on B.Grimm 1 and B.Grimm 2 under the relevant credit facilities agreement as follows: (a) the debt to equity ratio (D/E) may not exceed 2:1; (b) (c) the debt service coverage ratio (DSCR) may not less than 1.1:1; and B. Grimm 1 and B.Grimm 2 may transfer cash surplus from the bank accounts specified by the creditors, and may share the revenue from power business to the Mutual Fund only if the DSCR is not less than 1.2:1 or with the written consent by the creditors; and Net debt per earnings before proceeds, taxes, depreciation and amortization (Net debt/ebitda) may not exceed 3.5:1. In the event that the security under the agreements are enforced, the Mutual Fund is entitled to receive payment after other creditors. The approximate balance of long-term USD and Baht credit facilities owed by B.Grimm 1 and B.Grimm 2 in the year are detailed in the tables below, based on currency exchange rates of Baht 29 - Baht 30/USD (Million Baht)/Year Balance of long-term loans 2,571 2,229 1,813 1, Earning statements of B.Grimm 1 and B.Grimm 2 B.Grimm 1 (Million Baht) Starting 1 January, Ending December (Audited) Revenue from sale of power to: EGAT 1, , , ,759.4 Industrial users 1, , , ,107.1 Total: 3, , , ,866.5 Revenue from sale of steam

19 19 B.Grimm 1 (Million Baht) Starting 1 January, Ending December (Audited) Revenue from provision of public utilities services Other revenue / Total Revenue 3, , , ,907.8 Production Cost 2, , , ,030.9 Expenses under management and maintenance agreement with B. Grimm Power Service Power plants repair and maintenance costs Overhead Depreciation and amortization Standard management fees Total Operating Costs 2, , , ,690.5 Revenue after operating costs Earnings (Losses) from exchange ( 2.2) 0.2 rate Earnings before financial costs and corporate income tax Financial costs Earnings before corporate income tax Corporate income tax Net Profit for the Year Source: B.Grimm 1 and B.Grimm 2

20 20 B.Grimm 2 (Million Baht) Starting 1 January, Ending 31 December (Audited) Revenue from sale of power to: EGAT 1, , , ,823.3 Industrial users 1, , , ,495.5 Total 3, , , ,318.7 Revenue from sale of steam Revenue from provision of public utilities services Other revenue / Total Revenue 3, , , ,422.7 Production Costs 2, , , ,425.6 Expenses under management and maintenance agreement with B. Grimm Power Service Power plants repair and maintenance costs Overhead Depreciation and amortization Standard management fees Total Operating Costs 2, , , ,025.6 Earnings after operating costs Earnings (losses) from exchange rate Earnings before financial cost and corporate income tax Financial cost

21 21 B.Grimm 2 (Million Baht) Starting 1 January, Ending 31 December (Audited) Earnings before corporate income tax Corporate income tax Net Profit for the Year Sources: B.Grimm 1 and B.Grimm 2 Remark: Other revenues are not regarded as part of revenue of the Mutual Fund and is not projected in the value assessment of the infrastructure business assets in which the Mutual Fund will invest. Total revenue of B.Grimm 1 and B.Grimm 2 have constantly increased. In 2012, approximately 98% of total revenue came from sale of power in which 44% of such amount was earned through sale of power to EGAT and 56% of such amount was earned through sale of power to industrial users. In 2012, earnings before corporate income tax and earnings before depreciation and amortization margin (EBITDA margin) is equivalent to 13.9% and 15.4%. B.Grimm 2 was granted tax privilege for 8 years under the investment promotion certificate issued by the Board of Investment. The tax privilege for block 2.0 of B.Grimm 2 was expired in June However, such tax privilege was further granted and expired in March 2013 as production efficiency with respect to energy and environment was improved. The investment promotion certificate granted to B.Grimm 2 for block 2.1 will expire in August In 2012, B.Grimm 1 and B. Grimm 2's growth rates of revenue from power sale, equivalent to 12% and 10%, are less than the growth rates of their production cost, equivalent to 16% and 20%. The main reason of the increase of production cost is due to the increase of gas price while the adjustment of FT was delayed. As FT adjustment did not take place in the first half of the year, thus, there is no effect on the revenue. Even though, the FT was adjusted up Baht 0.3 in June, and up by Baht 0.18 to Baht 0.48 in September 2012, net profit of B.Grimm 1 had increased from that its net profit recorded in While, net profit of B.Grimm 2 had dropped because B.Grimm 2 planned to carry out its major overhaul program in 2012 with expenses exceeding Baht 100 million under the maintenance program which was carried out every 3 years - 6 years. Upon the establishment of the Fund, B.Grimm 1 and B.Grimm 2 will set up reserve list in order to minimize volatility of their cash flow. B.Grimm 1 and B.Grimm 2 must maintain their debt service recovery rate not less than 1.1:1 under the refinance agreements; otherwise, such failure shall be deemed a default of payment. If B.Grimm 1 and B.Grimm 2 wish to transfer cash surplus from the accounts specified by the creditors and transfer the

22 22 revenue from power business to the Mutual Fund, B.Grimm 1 and B.Grimm 2 must have their debt service recovery rate not less than 1.2:1 under the credit facilities agreement and the refinance agreements. In 2012, the debt service recovery rates of B.Grimm 1 and B.Grimm 2 are equivalent to 1.4 and 1.0, respectively. Volume and Prices of B.Grimm 1 and B.Grimm 2 Power and Steam B.Grimm 1 (Million Baht) Starting 1 January and Ending 31 December (Audited) Power distribution (GWh) to: EGAT Industrial users Total 1, , , ,177.4 Steam (1000 tons) Average power price rate (million Baht/GWh) EGAT Industrial users Total Average steam price rate (million Baht/thousand tons) B.Grimm 2 (Million Baht) Starting 1 January and Ending 31 December (Audited) Power distribution (GWh) to: EGAT Industrial users Total , , ,227.8 Steam (1000 tons) Average power price rate (million Baht/GWh) EGAT Industrial users Total Average steam price rate (million Baht/thousand tons) Source: B.Grimm 1 and B.Grimm 2

23 23 Subject to the power purchasing agreements entered into with EGAT, B.Grimm 1 and B.Grimm 2 are required to sell power to EGAT at a volume equivalent to 90 megawatts. If B.Grimm 1 and B.Grimm 2 fail to comply with the power purchasing agreements, they must pay a fine set out in the agreements. B.Grimm 1 and B.Grimm 2 occasionally sold power to EGAT at a volume less than 90 megawatts; hence, B.Grimm 1 and B.Grimm 2 were liable for the fine in an amount equivalent to 20% of the power volume which is lower than 90 megawatts. Previously, average power price charged to industrial users was higher than the price charged to EGAT. The financial statements were affected as the revenue from sale of power to EGAT would reduce as a result of the drop of sales volume and the fine, while the revenue from sale of power to industrial users would increase. EGAT also requires that thermal energy used for the thermal process or steam production process be at least 10% and the efficiency value of power production from the production process be not less than 45%. During the last four years, B.Grimm 1 and B.Grimm 2 paid fines (steam fines) imposed to EGAT because thermal energy used for the thermal process failed to reach 10%, in an amount equivalent to 50% of the capacity payment paid by EGAT to B.Grimm 1 and B.Grimm 2 over the year, multiplied by the ratio equivalent to the difference of the specified thermal energy required and the actual energy produced by B.Grimm 1 and B.Grimm 2. This would affect expenses in relation to standard management fees recorded in the financial statements. However, B.Grimm 1 and B.Grimm 2 were not subject to a fine imposed on the efficiency of power production from the production process during the past four years. Value of Assets and Assessed Value 1. Assessed value of the infrastructure business assets, in which the Mutual Fund will be invest, prepared by valuers: Valuer Assessed Value Assessment Date (Baht: Million) Ernst & Young Corporate Services Co., Ltd. 6,303-6, January 2013 Capital Advantage Co., Ltd. 6,656-6,830 6 February Approaches and significant assumptions applied in the assessment by valuer No. 1, Ernst & Young Corporate Services Co., Ltd. With respect to the assessment, the valuer applied the approach based on income less expenses of B.Grimm 1 and B.Grimm 2, specified in the Revenue Sharing Agreement (the income approach). Calculation method of the net present value of income which are cash flows (discounted cash flow analysis) is a significant assumption applied to valuing the assets in the assessment report. As the establishment date of the Infrastructure Fund was scheduled for 1 February 2013, the projections of cash flows for the Infrastructure Fund would be, in case of B.Grimm 1, projections for the period starting 1 February 2013 and ending 16 September 2019, approximately 7 years, and incase of B.Grimm 2, projections for the period starting 1 February 2013 and ending 27 September 2022, approximately 10 years according to the expiration of the power purchasing agreement made with EGAT or the expiration of the Revenue Sharing Agreement. The significant assumptions include: revenue of B.Grimm 1 and B.Grimm 2 consisting of revenue from sale of power to EGAT, sale of power and steam to industrial users, and joint public utility service;