(Translation) Opinion of the Independent Financial Advisor on Acquisition of Asset Transaction for

Transcription

1 (Translation) Opinion of the Independent Financial Advisor on Acquisition of Asset Transaction for Inter Far East Engineering Public Company Limited Prepared by JVS Financial Advisory Company Limited 18 September 2015 Disclaimer: The English translation report has been prepared solely for the convenience of foreign shareholders only. If there is discrepancy between the English translation and Thai report, the Thai report shall be definitive and the official document and supersede the English translation report in all aspect of any inconsistency with this English translation report.

2 Table of Contents Executive Summary 5 Part 1 Acquisition of Asset Transaction 1. Characteristics and Details of Acquisition of Asset Transaction 1.1 Transaction Date Related parties and Relationship with the Company General Characteristics of the Transaction Transaction Size Detail of Asset Being Acquired Total Value of Consideration Basis for Determining Value of Consideration Sources of Fund Expected Benefit to the Company Conditions for entering into the Transaction Objectives, Benefits, Cons, and Risk Factors of the Transaction 2.1 Background and Objectives of the Transaction Benefits of the Transaction Cons of the Transaction Risk Factors Sources of Fund Return Evaluation and Rationale of Project Return Evaluation of Lomligor Project Condition of the Transaction Summary of the Independent Financial Advisor s Opinions 83 Part 2 Details of Inter Far East Engineering Public Company Limited 87 Details of Inter Far East Wind International Co., Ltd. 100 Details of Lomligor Co., Ltd. 104 Annex Report on Feasibility Study of Wind Farm Project along the Coast of Pak Phanang, Nakhon Sri Thammarat (Prepared by management of the Company and amended by Independent Financial Advisor)

3 Abbreviations and Definitions SEC, The Office of SEC SET, The Stock Exchange The Company, IFEC IWIND LLG GG SGC IFA, Independent Financial Advisor Acquisition of Asset Transaction Pak Phanang Project 1 Lomligor Project Base Tariff, TOU Rate Automatic Adjustment Mechanism (Ft) Adder FiT Securities and Exchange Commission of Thailand Stock Exchange of Thailand Inter Far East Engineering Public Company Limited Inter Far East Wind International Co., Ltd., formerly named Green Growth Co., Ltd. (GG), a subsidiary of the Company Lomligor Co., Ltd., formerly named SGC Wind Energy Co., Ltd. (SGC), a subsidiary of Inter Far East Wind International Co., Ltd. (IWIND) Former name of Inter Far East Wind International Co., Ltd. SGC Wind Energy Co., Ltd., former name of Lomligor Co., Ltd. JVS Financial Advisory Company Limited Acquisition of asset which is investment in wind power plant of Lomligor Co., Ltd. Wind Power Plant with a capacity of 10 MW. The project is located in Banpeang Subdistrict, Pak Phanang District, Nakhon Si Thammarat. The power purchasing contract No. VSPP-PEA-004/2556 was signed on April 22, 2013 with agreed sales of 10 MW. Commercial Operating Date (SCOD) is expected within late September Wind Power Plant with a capacity of 10 MW. The project is located in Banpeang Subdistrict, Pak Phanang District, Nakhon Si Thammarat. The power purchasing contract No. VSPP-PEA-006/2557 was signed on June 23, 2014 with agreed sales of MW. It is expected that the Commercial Operating Date (SCOD) would be in late of Q This rate calculated based on the true cost of transmission line and distribution line investment. It reflects the true cost at a given time under the assumption on cost of fuel, inflation, foreign exchange rate, and efficiency improvement of the power utilities at a certain level. Ft is a variable tariff. It will be adjusted in line with changes in cost of fuel and power purchase which are beyond control of the power utilities and differ from base tariff In order to promote renewable energy, the Adder was introduced. It is an additional rate on top of the power purchase price with an objective to subsidize renewable energy project or alternative energy project. It will mark up on the electricity price during On Peak (the period of high electricity consumption) and Off Peak plus Ft. FiT (Feed in Tariff) is calculation of investment return considering all costs such as technology trend, materials, land, construction, wage, inflation, interest, etc. Unlike Adder, which adjusted in line with Base tariff and Ft, the state will pay FiT at fixed rate throughout the period of contract

4 No. Jor. 146/ September 2015 Subject: Opinion of the Independent Financial Advisor on Acquisition of Asset of Inter Far East Engineering Public Company Limited. To: Audit Committee and Shareholders Inter Far East Engineering Public Company Limited Refer: 1) Resolution of Inter Far East Engineering Public Company Limited Board of Directors meeting No. 11/2558 held on August 28, 2015, which the Board of Directors had resolved to approve the Acquisition of Asset (and its amendment). 2) Information Memorandum of Inter Far East Engineering Public Company Limited regarding the Acquisition of Asset Transaction (and its amendment). 3) Financial Statements of Inter Far East Engineering Public Company Limited and its subsidiaries as of December 31, 2012, December 31, 2013, and December 31, 2014 audited by AST Master Co., Ltd. and Karin Audit Co., Ltd. respectively. Financial Statements of Inter Far East Engineering Public Company Limited and its subsidiaries as of June 30, 2015 reviewed by Karin Audit Co., Ltd. 4) Financial Statements of Inter Far East Wind International Co., Ltd. and Lomligor Co., Ltd. as of December 31, 2012, December 31, 2013, December 31, 2014, and June 30, ) Report on Feasibility Study of Wind Farm Project along the Coast of Pak Phanang, Nakhon Sri Thammarat (Jointly prepared by management of the Company and Gold wind) 6) Notification regarding details about the acquisition of Green Growth Co., Ltd. dated September 24, ) Notification regarding Acquisition of shares of SGC Wind Energy Co., Ltd. dated May 29, ) Notification Regarding investment in 16 subsidiaries and investment in Wind Power Plant Project dated August 21, ) Company Certificate, Memorandum of Association and other documents, including interviews with the management and relevant advisors, of Inter Far East Engineering Public Company Limited and/or its subsidiaries

5 Disclaimers: 1) The study results and opinions, rendered by JVS Financial Advisory Company Limited ( Independent Financial Advisor or JVS FA ) in this report, are based on information and assumptions obtained from the management of Inter Far East Engineering Public Company Limited and its subsidiaries and also from publicly disclosed information available in websites of the Office of the Securities and Exchange Commission ( and of the Stock Exchange of Thailand ( 2) The Independent Financial Advisor will not be responsible or liable for any profit, loss or effect incurred by the Transaction and/or by the Company s future performance from the Transaction. 3) The Independent Financial Advisor's study was conducted by using knowledge, skills, and cautions, based on sound professional practices. 4) The Independent Financial Advisor determined and analyzed the Transaction based on current situations and information available to our knowledge. If there is any material adverse change and effect of the situations and information, it may affect the opinions provided herein by the Independent Financial Advisor. 5) The Independent Financial Advisor s opinions provided to the Inter Far East Engineering Public Company Limited s Board of Directors, Audit Committee and shareholders do not ensure any success or completeness of the Transaction including the success of the Company to operate Lomligor Co., Ltd. to complete its construction and operation to produce and sell electricity to Provincial Electricity Authority, which might impact Lomligor operating result in the future

6 Executive Summary The Board of directors meeting of Inter Far East Engineering Public Company Limited (the Company or IFEC ) No. 11/2558 held on August 28, 2015 had resolved to approve Inter Far East Wind International Company Limited ( IWIND ), a subsidiary of the Company which produces and distributes electricity from wind power, to make an additional investment in its subsidiary namely Lomligor Company Limited ( LLG ), formerly named SGC Wind Energy Company Limited. IWIND s directors were authorized by the Board of Directors of the Company to consider, contact and negotiate to the seller as well as settle final conditions before entering into the transaction with total investment value not exceeding 800,000,000 baht. The above transaction is considered an acquisition of assets pursuant to the Notification of the Capital Market Supervisory Board No. ThorJor. 20/2551 entitled Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and its amendments and the Notification of the Board of Governors of the Stock Exchange of Thailand entitled Disclosure of Information and Other Acts of Listed Company concerning the Acquisition and Disposition of Assets, B.E (2004) and its amendments (collectively referred to as the Acquisition or Disposal Notification ). When considering the transaction size pursuant to the Acquisition or Disposal Notification, the size of the above transaction is of the highest value when calculated from Total Value of Consideration, based on the latest reviewed consolidated financial statement ended June 30, 2015, which equals to 10.12%. In addition, when aggregating the above transaction with other thirteen transactions entered into by the Company within the past six months, the cumulative transaction size together with the thirteen acquisitions during the past six months were equivalent to 55.32%. This is calculated based on Total Value of Consideration (44.12 per cent calculated based on Net Profit or per cent calculated based on Asset Value) which is higher than 50 per cent but lower than 100 per cent and classified as Class 1 Transaction under the Acquisition or Disposal Notification. Accordingly, the Company is required to disclose certain information regarding the entering into the above transaction to the Stock Exchange of Thailand ( SET ) and is required to hold a Shareholders Meeting to consider and approve the investment which requires an affirmative vote of not less than three fourths of the total number of votes of the shareholders attending the meeting and eligible to vote, excluding the vote of the shareholders having a special interest on this matter. As such the Board of Directors meeting resolved to convene the Extraordinary General Meeting of the Shareholders No. 1/2015 on October 9, 2015 to propose to shareholders for an approval of the Company s entering into Acquisition of Asset Transaction. Appropriateness of the Fair Price Summary of investment in Lomligor Project The Independent Financial Advisor opined that Free Cash Flow to Project (FCFP) Valuation Approach is appropriate for this valuation on wind power plant business, namely Lomligor Project. Net Present Value (NPV) of the project after deducting investment in the project is between million baht while Internal Rate of Return of the project (Project IRR) is between %. The Project s Equity IRR is between % and its payback period is approximately years. Therefore it can be seen that Net Present Value (NPV) of the project after deducting investment in the project discounted with the rate of 8.00% is between million baht, so the project has positive NPV. The Project IRR is between %, which is appropriate rate of return. As such Independent Financial Advisor opined that the Company s investment in Lomligor project under this Acquisition of Asset Transaction is appropriate

7 Reasonableness of the Transaction. Independent Financial Advisor opined that investing in Lomligor Project will enable the Company to expand its business of production and distribution of electricity from wind power in order to achieving sustainable growth and reducing the company s risk from rely on its business of production and distribution of electricity from Solar Power. The investment will expand business scope of the Company. After the Commercial Operation Date (COD), the Company will realize revenue and profit of IWIND and LLG in its financial statement. The Company expected to realize income in the beginning of the 2nd half of This investment will help diversify the Company s business risk as the Company will invest in various types of alternative energy business. As such it will stabilize the growth of the Company s revenue from production and distribution of electricity in the future, which will help IWIND to achieve business continuity in its business of production and distribution of electricity from wind power. The Company planned to expand its wind power business via IWIND in the future. The Company might also plan to spin-off or issue new share and offer for sale to public, and list IWIND securities on the Stock Exchange of Thailand in the future. This would create value added and generate income to the Company in the long term. Nonetheless, this acquisition of asset transaction by investing in Lomligor project is a new project (the construction and the distribution of electricity have not yet acheived). There is uncertainty on the completion of its construction and operation to produce and sell electricity to Provincial Electricity Authority. Moreover, by investing in Lomligor project, wind power, which will be used to produce electricity, is uncontrollable due to the uncontrollable nature of wind. Thus wind power source is depends on times and wind direction. Although the Company had tested the wind power and conducted the feasibility study of the project based on yearly average wind power on site. The Company cannot set and control the wind power due to uncontrollable nature of wind source. In addition, the Company s investment in Lomligor Project will be exposed to certain risks as investment in other investment in other alternative energy business including changing of government s policies and supports, and wholesale power purchasing price in the future. Benefits, Cons, and Risk Factors of the Company s investment in Lomligor Project under this Acquisition of Asset Transaction can be summarized as follow: Benefits of the Transaction 1. By investing in Lomligor project, the Company will engages in business of wind power production and distribution, which is expected to generate revenue from the production and distribution of electricity. It would also expand the business operation of the Company. After the Commercial Operation Date (COD), the Company will realize revenue and benefit of IWIND and LLG in its financial statement. The Company expected to realize income from the beginning of the 2nd half of By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. By investing in 1 more wind power project with regard to the Company s 16 projects in production and distribution of electricity as of 30 June 2015 (12 projects have started Commercial Operation Date with total capacity of MW and the other 4 projects are in the preparation process), the Company will diversify its business risk as the Company will invest in various types of alternative energy business. As such it will stabilize the growth of the Company s revenue from production and distribution of electricity - 6 -

8 3. By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. Pak Phanang Project 1 is the first a wind power project of the Company. The Project is located nearby the Lomligor project. So in the future the Company can save some of its investment through lower operating cost, maintenance expenses, and management and administration expenses. 4. Investing in Lomligor project is one of the project that serves the government s policies and it increase the number of alternative energy project in Nakhon Si Thammarat and nearby province. The wind power used to generate electricity is free, clean, and can be used to generate electricity during both day and night time. Generating electricity with alternative energy (wind power) does not pollute the environment and does not create greenhouse effect. Thus, it differs from generating electricity with other fuels. Lomligor project serves the government s policies regarding electricity generating, which have targeted to increase the portion of electricity from the renewal and alternative energy to at least 25% of total electricity generation that rely on fuels by within Investing in Lomligor project will help IWIND to achieve business continuity in its production and distribution of wind power business. The Company has planned to expand its wind power business via IWIND in the future. According to the interview with the management of the Company, the Company might also planned to spin-off or issue new share and offer for sale to public, and list IWIND securities on the Stock Exchange of Thailand in the future. Cons of Transaction 1. Investing in Lomligor project is a new project (the construction and the distribution of electricity has not yet started). There is uncertainty on the completion of its construction and operation to produce and sell electricity to Provincial Electricity Authority. 2. Investing in Lomligor project, wind power which will be used to produce electricity is uncontrollable due to the uncontrollable nature of wind and period of time. It is beyond control of the Company. Although the Company had tested the wind power and conducted the feasibility study of the project based on yearly average wind power, the Company cannot set and control the wind power due to uncontrollable nature of wind. 3. By investing in Lomligor project, the Company will have to make large investment of approximately 800 million baht. According to the Company s expected sources of fund, the Company s Debt to Equity ratio will be approximately 2.25 times. The Company had already invested in Lomligor in the amount of 250 million Baht. 4. Lomligor project is located nearby the existing wind project namely Pak Phanang Project 1, located in Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat. Both of the wind power projects of the Company are located in the same area so the Company cannot diversify its risk by having its projects located in different areas such as risk from natural disaster

9 Risk Factors 1. Risk from the completion of its construction and operation to produce and sell electricity to PEA. By investing in Lomligor project, the Company might has risk from the completion of the business operation to meet its investment objectives such as budgeting control, completion of the construction, cost control, direct and indirect expenses. 2. Risk from the completion of the project construction. Risk from completion of the construction to the point where the wind power project can operate. Risk from acquisition of land for the project which the Company is purchasing from current land owner. Risk from the project delay. Risk from obtaining loan from financial institution. 3. Risk from the business operation of the Lomligor project. Risk on wind speed. Risk from natural disasters. Risk from policies and support from government. Risk of dilapidated equipment. Nonetheless, the Company is conducting system testing for its Pak Phanang Project 1 and starting to sell electricity to Provincial Electricity Authority, which expected to start its Commercial Operation Date within September or early October As it will be completed before the approval of the Company s investment in Lomligor project, the Company will has data and experience regarding wind power electricity production in the same area. Therefore the Company can reduce certain investment risks such as installment, capacity, nature of wind in Pak Phanang area, and proper qualification and types of wind turbine. Therefore, considering the benefits, cons, risk of the transaction, and appropriateness of investing in Lomligor project of Lomligor Co., Ltd., a subsidiary of the Company. Independent Financial Advisor deems that the Acquisition of Asset is appropriate and benefits to the Company and its shareholders mutually. The Company s shareholders should resolve to approve the Acquisition of Asset Transaction. Nonetheless, the consideration whether to approve the Company to enter into the Transaction mainly depends on discretion of the Company s shareholders. The Company s shareholders can review the Company s other information and the report of the Independent Financial Advisor s opinions as shown below - 8 -

10 Part 1 Acquisition of Asset Transaction - 9 -

11 1. General Characteristics, Type of Transaction, and Transaction Value: (1) Transaction Date The Board of directors meeting of Inter Far East Engineering Public Company Limited (the Company or IFEC ) held on August 28, 2015 had a resolution to approve Inter Far East Wind International Company Limited ( IWIND ) to invest in Lomligor Company Limited ( LLG ) with total investment value not exceeding Baht 800,000,000 in order to finance the construction of wind power plant with installed capacity of MW. (2) Counterparties and their relation to the company Currently the Company is processing and negotiating precondition in order to find its contractor to undertake the Company s wind turbine installment and equipment, and production testing, including construction of electric substation and construction of infrastructure in the project (Engineering Procurement and Construction Agreement : EPC). Moreover the Company has initially set the specification of the wind turbine as follow: 4 wind turbines branded Goldwind, Model GW 121/250, capacity of 2.5 MW per unit totaling MW at an altitude of 120 metre. The project is expected to be completed within Q including the construction of electric substation, and utilities infrastructure of the power plant such as road, waterworks system, and electrical system in the project that is unrelated to connecting transmission line to the wind turbine. (3) General Characteristics, Type of Transaction, and Transaction Value The Board of directors meeting of Inter Far East Engineering Public Company Limited No. 11/2015 held on August 28, 2015 had a resolution to approve Inter Far East Wind International Company Limited ( IWIND ), a subsidiary of the Company, to make an additional investment in wind power project of Lomligor Company Limited ( LLG ) with total investment value not exceeding Baht 800,000,000 (including land value of approximately 50.0 million Baht). This is in accordance with power purchase agreement to buy electric generated by wind power with the capacity of MW (VSPP-PEA-006/2557). The project is located at Pak Phanang, Nakhon Sri Thammarat. (4) Type of Transaction, and Transaction Value The mentioned transaction is considered an acquisition of assets pursuant to the Notification of the Capital Market Supervisory Board No. ThorJor. 20/2551 entitled Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets (and its amendments) and the Notification of the Board of Governors of the Stock Exchange of Thailand entitled Disclosure of Information and Other Acts of Listed Company concerning the Acquisition and Disposition of Assets, B.E (2004) (and its amendments). The size of the transaction calculated based on the latest reviewed consolidated financial statement ended June 30, 2015 is detailed as follows: IFEC s financial information Unit: million Baht Total Asset 7, Deduct Intangible asset -1, Deduct Total Liabilities -2, deduct Non-controlling interest Net tangible asset (NTA) 3, Profit (loss) attributable to majority interests in the past 12 months Remark: Financial statement of the Company as of 30 June 2015 reviewed by the Company s auditor

12 Transaction sizes calculated by four methods under the Acquisition or Disposal Notification are as follows: Calculation Basis Formula Transaction size 1. Net Tangible Asset % of NTA in proportion to acquisition Not applicable * (NTA) NTA of the Company 2. Net Profit % of net profit in acquisition to the disposition Not applicable * Net profit of the Company 3. Total value of Total consideration paid (800.0 million Baht) 10.12% consideration Total asset of the Company (7, million Baht) 4. Equity share value Number of shares issued for payment Not applicable as the Company Total issued and paid up shares of the Company does not issue shares for payment Highest value 10.12% Remark: *not applicable for comparison as the transaction is not an acquisition of common shares. The calculation of transaction size as detailed above has the highest value of 10.12% which derived from the total value of consideration method based on the latest reviewed consolidated Financial Statement ended June 30, In addition, when aggregating the above transaction with other thirteen transactions entered into by the Company within the past 6 months, the cumulative transaction size together with the thirteen acquisitions during the past six months was equivalent percent calculated based on Total Value of Consideration (44.12 per cent calculated based on Net Profit or percent calculated based on Asset Value) which is higher than 50 per cent but lower than 100 percent and classified as Class 1 Transaction under the Acquisition or Disposal Notification as mentioned above. Accordingly, the Company is required to disclose certain information regarding the entering into the above transaction to the Stock Exchange of Thailand ( SET ) and is required to hold a Shareholders Meeting to consider and approve the investment which requires an affirmative vote of not less than three fourths of the total number of votes of the shareholders attending the meeting and eligible to vote, excluding the vote of the shareholders having a special interest on this matter. Such information and Independent Financial Advisor s Opinion Report will be sent to its shareholders at least 14 days prior to the date of the Shareholders Meeting

13 (5 ) Details of asset being acquired The Board of directors meeting of Inter Far East Engineering Public Company Limited No. 11/2015 held on August 28, 2015 had a resolution to approve the investment in wind power project of LLG with total investment value not exceeding Baht 800,000,000. The details are as follow: Summary of key points. Name Lomligor project (Pak Phanang 2) Agreement No. VSPP-PEA-006/2557 Agreement Date 23 June 2014 Project Location Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Nature of Business Production and distribution of wind power Electricity Seller Lomligor Co., Ltd. Electricity Buyer Provincial Electricity Authority Total Capacity 10.0 MW Promotion Certificate (BOI) Agreed Sales Volume Adder The Company is applying for investment promotion MW, as stated in Power Purchase Agreement (VSPP-PEA) No. 006/2557 dated 23 June 2014, for a period of 5 years from the started COD and automatically renew every 5 years for total period of 25 years Baht for a period of 10 years since COD is granted by PEA. Started Commercial Operation Date (SCOD) Within Q (according to the existing power purchase agreement, SCOD was set to be on February 19, 2016, which the Company had informed 2 nd postpone and the new SCOD was set to be on February 19, 2017). The approval of investment budget of not exceeding 800,000,000 million Baht for the construction of wind power plant with capacity of 10 MW. Sources of fund are financial support by the Company and loan from financial institution. Details are as follow: 5.1 Wind turbine, Transportation, and other equipment million baht 5.2 Construction million baht 5.3 Land and Land Improvement 50.0 million baht 5.4 Others 20.0 million baht Total million baht

14 Source: Report on feasibility study of Lomligor project of IWIND on Production process of electricity from wind energy has major elements as follows: 1.) Wind turbines with wind speed and direction censor for wind turbine control. 2.) Generator 3.) Control Systems 4.) Electricity distribution to transmission line system. Details of project and investment Project Location: Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Under the authority of Pak Phanang District, consist of 8 villages as follows: No. 1 Ban Bang Rad, No. 2 Ban Boon Lorm, No. 3 Ban Nhong Sri Phrom, No. 4 Ban Mhak, No. 5 Ban Bang Mhun, No. 6 Ban Perng, No. 7 Ban Tha Phraya, No. 8 Ban Bang Chatra Area: The sub district is a coastal area located along the Gulf of Thailand. It lay from west to the Gulf of Thailand in the east. Boundary: Northern border: border with Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Southern border: border with Khanabnak Sub-district and Pakprak Sub-district, Pak Phanang District, Nakhon Si Thammarat Eastern Border: border with Gulf of Thailand and Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Western border: border with Pak Phanang River and Pakprak Sub-district, Pak Phanang District, Nakhon Si Thammarat

15 Transportation approximately 3 km of BangYa Kao Fai Rd., approximately 4 km of Bang Chatra Ban Tha Phraya Road, approximately 3.5 km of Ban Pak Bang Tha Khen Rd., and approximately 2.5 km of Ban Perng Wat Jang Road. Project design The Company has planned to install 4 units of wind turbine in a straight line with one another. The project location is an open area with strong wind. The project of LLG is located in Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat. Each wind turbine will be installed approximately 360 meters from one another in the project area of approximately 122 rais. - Wind turbine The Company planned to install Horizontal Axis Wind Turbine, Low Speed Wind Turbine, IEC class III, which is gearless wind turbine (Gearless Technology). Electricity production capacity of each unit is approximately 2.5 MW totaling 10 MW for 4 units. The total electricity offer for sale is MW. The altitude of wind turbine is 120 metre. It will be lifted with crane to place on its foundation. The rotor diameter is approximately 121 metre. Low Speed Wind Turbine, IEC class III-B is best suit for the project location as the average wind speed is metre per second. Source: Report on feasibility study of Lomligor project of IWIND on

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17 Specification of 2.5 MW Wind Turbine branded GOLDWIND (PMDD WIND TURBINE SERIES) Parameter GW121/2500 Operation Parameters IEC Wind Class IIIB Rated Power 2500 kw Cut-in Wind Speed 3 m/s Rated Wind Speed (Static) 9.3 m/s Cut-out Wind Speed 22 m/s Rotor Diameter 121 m Number of Blades 3 Power Control Collective Pitch Control / Rotor Speed Control Swept Area m² Safety System Independent Blade Pitch Control / Hydraulic Disk Brake /Hydraulic Rotor Lock Generator Permanent Magnet Direct Drive Synchronous Generator Yaw System 4 Induction Motors with Hydraulic Brakes Tower Tubular Steel Tower Foundation Flat Foundation (Others Possible) Converter Full Power Converter (IGBT) Modular System Control System Microprocessor Controlled with Remote Monitoring Dynamic Power Curve Source: Report on feasibility study of Lomligor project of IWIND on

18 Currently the Company is in its initial stage of contractor selection, to find its contractor to undertake the Company s wind turbine installment and equipment, and production testing, including construction of electric substation and construction of infrastructure in the project (Engineering Procurement and Construction Agreement : EPC). Moreover the Company has initially set the specification of the wind turbine as follow: 4 wind turbines branded Goldwind, Model GW 121/250, capacity of 2.5 MW per unit totaling MW at an altitude of 120 metre. The contract shall be signed within Q Wind Speed Testing The wind testing was conducted using wind energy monitoring station located in Pak Phanang District, Nakhon Si Thammarat. The Company had installed the wind speed and direction censor, namely NRG Data Logger Symphonies PLUS, which is capable of monitoring wind speed in the range of 0 44 m/s with the resolution of 0.19m/s. The error is less than 3% at the wind speed of m/s. The censor has 360 degree radius with the resolution of 1.4 degree. The automatic recording equipment branded NRG was used to collect and record the wind speed and temperature. The time accuracy of the equipment is in between 0-2 second for the first set of collected data of approximately every 5 second per week recorded at 25 degree Celsius. It is installed in the weatherproof container. Since August 2011 the wind and temperature have been recorded every 10 minutes. - Construction period The construction of foundation, machine installment, and production testing will take around 8 months. In the beginning stage, the budget for construction which will be paid by the end of 2015 is not exceeding 150 million baht. The details are as follow: Schedule of Lomligor project construction Details Period (months) - Machinery orders 4 - Plant construction 5 - Transmission line construction 5 - Sub station construction (PEA) 5 - Wind turbine logistic (from plant to 5 installment area) - Road construction and land reclaimation 5 before wind turbine installment - Wind turbine foundation construction 4 - Sub station construction 4 - Wind turbine installment 4 - Production system testing and data 2 analysis - Wind turbine testing 2 - Commercial Operation Date Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

19 - Project Administration The personnel required for the project operation are power plant manager, engineer, technician, accountant, general service officer, housemaid, and community relation officer. The work hour of personnel that responsible for system maintenance will be divided into 3 shifts of 8 hours. - Environmental Impact The operation of wind power plant does not fall under Notification of the Ministry of Natural Resources and Environment Re: defining type, size and procedure for Project or Activity which require to prepare environmental impact assessment report and principle, method, procedure and guideline in preparation environmental impact assessment report, dated September 24, B.E (2014). (6) Total value of consideration The Company will make an additional investment in LLG with an objective to invest in importing wind turbine equipment and wind power plant construction, which located in Nakhon Sri Thammarat. The wind power project has capacity of 10 MW (4 units of wind turbine with capacity of 2.5 MW each). Total investment will not exceed 800 million baht. (7) Basis Used to Determine Total Value of Consideration and Payment According to the feasibility study, prepared by analysts of the Company, using Discount Cash Flow method for the project period of 25 years. It is expected that LLG will start its COD within Q The Company sees that the project will provide proper rate of return on investment to the Company, calculated with level of electricity generation of P50, having Project IRR of approximately 12.04% and payback period of approximately years. The Company will be able to engage in business that is related to core business of the Company and realize income and profit of the project in the Company s financial statement after COD has started within Q The total value of consideration was set in regard to the investment in construction of 10 MW wind power project (4 wind turbines with capacity of 2.5 MW each) with the electricity generation of MW. The investment in the project will not exceed 800 million baht (including land value of 50.0 million baht). The study was referred to the current wind power project of the Company which is 10 MW Wind Farm Project along the Coast of Pak Phanang Wind Park (Pak Phanang 1). The construction of Pak Phanang 1 has been completed and it is ready for sale of electricity. (8) Sources of Fund The sources of fund to for LLG s investment in construction of wind power plant will rely on cash flow of the Company and loan from financial institution. Details are as follow: Unit: million baht Estimated sources of fund - Capital of the Company (Cash flow of the Company) Loan from financial institution (70% of investment) Estimated use of fund - Investment in construction of wind power plant Total Total Sources: Financial projection prepared by analysts of the Company

20 In the beginning, investment in construction of wind power plant of approximately million baht will be funded by the Company s cash flow and the issuance of short term financial instrument such as bill of exchange. The payment will be made in line with progress of the construction. The Company is seeking long term loans from commercial bank, which at this stage some commercial banks has already shown interest in providing financial support for the project. (9) Expected benefit to the Company The Company will engage in business of wind power production and distribution which is expected to continuously generate income, profit, and cash flow in the future. The investment will expand the boundary of business operation of the Company and the Company is in a position to recognize IWIND s revenue and earnings in its financial statements when COD has started. (10) Conditions for entering into the transaction The Company will make an additional investment in LLG with total investment value not exceeding Baht 800,000,000. IWIND s directors were authorized by the Board of Directors of the Company to consider, contact and negotiate to the seller as well as settle final conditions before entering into the transaction. Moreover, for the convenience of construction preparation and construction of foundation, road, and others by completing construction work before rainy season, the Company will take control and monitor the progress of the project to make sure the relevant personnel keep the project on schedule and operate within the approved budget

21 2. Objectives, Benefit, Cons, and Risks of the Transaction 2.1 Objectives and Background of the Transaction The Board of directors meeting of Inter Far East Engineering Public Company Limited (the Company or IFEC ) No. 11/2015 held on August 28, 2015 had a resolution to approve Inter Far East Wind International Company Limited ( IWIND ), a subsidiary of the Company which produces and distributes electricity from wind power, to make an additional investment in its subsidiary namely Lomligor Company Limited ( LLG ), formerly named SGC Wind Energy Company Limited. IWIND s directors were authorized by the Board of Directors of the Company to consider, contact and negotiate to the seller as well as settle final conditions before entering into the transaction with total investment value not exceeding Baht 800,000,000. The above transaction is considered an acquisition of assets pursuant to the Notification of the Capital Market Supervisory Board No. ThorJor. 20/2551 entitled Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and its amendments and the Notification of the Board of Governors of the Stock Exchange of Thailand entitled Disclosure of Information and Other Acts of Listed Company concerning the Acquisition and Disposition of Assets, B.E (2004) and its amendments (collectively referred to as the Acquisition or Disposal Notification ). When considering the transaction size pursuant to the Acquisition or Disposal Notification, the size of the above transaction is of the highest value when calculated from Total Value of Consideration, based on the latest reviewed consolidated financial statement ended June 30, 2015, which equals to per cent. In addition, when aggregating the above transaction with other thirteen transactions entered into by the Company within the past six months, the cumulative transaction size together with the thirteen acquisitions during the past six months was equivalent per cent calculated based on Total Value of Consideration (44.12 per cent calculated based on Net Profit or per cent calculated based on Asset Value) which is higher than 50 per cent but lower than 100 per cent and classified as Class 1 Transaction under the Acquisition or Disposal Notification. Accordingly, the Company is required to disclose certain information regarding the entering into the above transaction to the Stock Exchange of Thailand ( SET ) and is required to hold a Shareholders Meeting to consider and approve the investment which requires an affirmative vote of not less than three fourths of the total number of votes of the shareholders attending the meeting and eligible to vote, excluding the vote of the shareholders having a special interest on this matter. As such the Board of Directors meeting resolved to convene the Extraordinary General Meeting of the Shareholders No. 1/2015 on October 9, 2015 to propose to shareholders for an approval of the Company s entering into Acquisition of Asset Transaction

22 2.1.1 Details of investment in Inter Far East Wind International Co., Ltd. ( IWIND ) The meeting of the Board of Directors of Inter Far East Engineering Public Company Limited (the "Company" or "IFEC") No. 18/2557 held on September 23, 2014, had passed the resolution to approve the Company's investment in Green Growth Co., Ltd ("GG"), which operates wind power plant with a capacity of 10 MW located in Banpeang Sub District, Pak Phanang District, Nakhon Si Thammarat of which GG has entered into a power purchase agreement with the Provincial Electricity Authority on September 24, Green Growth CO., Ltd. Had been renamed to Inter Far East Wind International Co., Ltd., which operates in production and distribution of electricity generated with wind power under its Pak Phanang 1 project. Details are as follow: Name Pak Phanang 1 Project Location Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Nature of Business Production and distribution of wind power Promotion Certificate (BOI) No. 1324(1)/2557 Total Capacity 10.0 MW Agreed Sales Volume 10 MW, as stated in Power Purchase Agreement No.VSPP-PEA-004/2556 dated 22 April 2013, for a period of 5 years from the date of COD and automatically renew every 5 years for total period of 25 years. Adder 3.50 Baht for a period of 10 years after the date COD is granted by PEA. Started Commercial Operation 25 September 2015 Date (SCOD) The Company s Board of Directors meeting no. 10/2558 held on 21 August 2015 had passed the resolution to invest in wind power project named Pak Phanang 1, which located in Pak Phanang District, Nakhon Si Thammarat. The Company had approved the investment of approximately 800,000,000 baht in 10 MW wind power plant, which the construction was funded by the Company and loan from financial institution. Details are as follow: Pak Phanang 1 unit: million baht 1. Wind turbine, Transportation, and other equipment Construction Land and Land improvement Others 30.0 Total Construction progress For Pak Phanang 1, the construction of foundation, electrical system, and wind turbine installment had been completed. Currently the project is under production testing and SCOD is expected to be in the end of September

23 Financial Position of IWIND Statement of Financial Position 31 December 2014 (Audited) 30 June 2015 (Reviewed) million baht % million baht % Cash and cash equivalents % % Account receivable trade and others % % Short term loan to company and others % - 0% Other current assets - 0% % Total Current Assets % % Deposit pledged as collateral - 0% % Investment in subsidiary - 0% % Property, plant and equipment % % Intangible assets - 0% % Other non-current assets % % Total Non-Current Assets % 1, % Total Assets % 1, % Short-term loans from financial institutions - 0% % Account payable-trade and others % % Current portion of liabilities under finance lease % % agreements Other current liabilities - 0% % Total current liabilities % 1, % Liabilities under finance lease agreements % % Retirement benefit obligations - 0% % Total Non-Current Liabilities % % Total Liabilities % 1, % Authorized share capital and Issue and paid up % % share capital Premium on share capital % % Retained earning % % Total shareholders equity % % Total Liabilities and Shareholders equity % 1, %

24 In September 2015, the Company had invested in 1,599,998 ordinary shares of Green Growth Co., Ltd. (former name of IWIND) or in the proportion of 25% at baht per share totaling 45 million baht. The Company had also paid for capital increase of 40 million baht or in the proportion of 25%. In October 2014, the Company had subscribed remaining newly issued ordinary shares of Green Growth Co.,Ltd. at 50 baht per share totaling 80 million baht. Total investment was 165 million baht at baht per share, accounting for 80% of registered capital. On 18 December 2014, The Company had subscribed newly issued ordinary shares of GG by the shareholding ratio at 80% equal 200,000 shares at 540 Baht per share, with the par value of 100 baht. As of year ended 2014, the Company held 80% of IWIND s registered capital of 225 million baht. The Company had invested in the amount of 273 million baht (calculated with share payment of 45 million baht and capital increase in proportion to current shareholding of 108 million baht in December 2014). In 2014, IWIND s total assets was million baht which consist of Cash of million baht, account receivable trade and others of million baht, short term loan to company and others of million baht, and property, plant and equipment of million baht. As of 6 months period ended June 30, 2015, IWIND s total asset was 1, million baht which consist of cash of million baht, account receivable trade and others of million baht, deposit pledged as collateral of million baht, investment in subsidiary (Lomligor Co., Ltd.) of million baht, and property, plant and equipment of million baht. Meanwhile, short term loan to company and others had already been paid off. In 2014, IWIND had invested in property, plant, and equipment in the amount of million baht which can be separated into land of 20 million baht, construction in progress of million baht, and others of 1.70 million baht. As of 6 months ended of 2015, the Company had made an additional investment of million baht. It was an investment in Pak Phanang 1 project, which is wind power plant for the production and distribution of wind power with electricity generation capacity of 10 MW. Its Scheduled Commercial Operation Date (SCOD) is expected by the end of September 2015 or within Q In 2014, total liabilities of IWIND was 5.97 million baht which consist of account payable-trade and others of 5.15 million baht, current portion of liabilities under finance lease agreements of 0.81 million baht. As of 6 months period ended June 30, 2015, total liabilities of IWIND was 1, million baht comprised of short-term loans from financial institutions of 600 million baht, account payable-trade and others of million baht (most of which is Lomligor s construction expenses), liabilities under finance lease agreements of 0.65 million baht, and others of 0.94 million baht. In 2014, IWIND s total shareholders equity was million baht consist of issue and paid up capital of 225 million baht, premium on share capital of 110 million baht, and negative retained earnings of million baht. As of 6 months period ended june 31, 2015, total shareholders equity of IWIND was 225 million baht which comprised of issue and paid up capital of 225 million baht, premium on share capital of 110 million baht, and negative retained earnings of million baht. The negative retained had increased due to the net loss of 4.34 million baht in the same period

25 Financial Performance of IWIND Income Statement 2014 (Audited) 6 months period 2015 (reviewed) Million baht % Million baht % Rental and service income % - 0% Other income % % Total revenue % % Administrative expenses % % Total expenses % % Profit (Loss) before financial costs and income % % tax expenses Financial cost % % Profit (Loss) before income tax expenses % % Income tax expenses - 0% - 0% Net Profit (Loss) % % In 2014, IWIND had total income of 0.15 million baht comprised of rental and service income of 0.08 million baht and other income (interest income) of 0.07 million baht. Meanwhile IWIND had administrative expenses of 8.35 million baht (most of which are paid for salary, office rental, transportation, advisory, allowance, and others). As such the Company had net loss of 8.27 million baht. For 6 months period ended June 30, 2015, IWINF had other income (interest income) of 3.71 million baht, while its administrative expenses and financial cost were 8.03 and 0.03 million baht respectively. Therefore IWIND had net loss of 4.34 million baht. IWIND is undertaking its wind power plant construction with the electricity generation capacity of 10 MW. The sale of electricity to Provincial Electricity Authority is expected to start within Q Details of Lomligor Co., Ltd., formerly named SGC Wind Energy Co., Ltd. (SGC) The meeting of the Board of Directors of Inter Far East Engineering Public Company Limited (the "Company" or "IFEC") No. 4/2558 held on May 13, 2015, had passed the resolution to approve the Inter Far East Wind International Co., Ltd. ( IWIND ), a subsidiary of the Company which engage in business of production and distribution of wind power, to acquire ordinary shares of SGC Wind Energy Co., Ltd. in the proportion of 100% of issue and paid up share capital. On May 29, 2015, Inter Far East Wind International Co., Ltd. ( IWIND ), a subsidiary of the Company, had invested in ordinary share of Lomligor Co., Ltd in the proportion of 99.99% of issue and paid up share capital. Lomligor Co., Ltd., a company registered in Thailand, operates in business of production and distribution of wind power. The subsidiary paid for the acquisition in cash of 330 million baht

26 SGC Wind Energy Co., Ltd. (SGC) was renamed to Lomligor Co., Ltd. which engages in business of production and distribution of wind power via its Lomligor Project. Details are as follow: Name Lomligor project (Pak Phanang 2) Agreement No. VSPP-PEA-006/2557 Agreement Date 23 June 2014 Project Location Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat Nature of Business Production and distribution of wind power Electricity Seller Lomligor Co., Ltd. Electricity Buyer Provincial Electricity Authority Total Capacity 10.0 MW Promotion Certificate (BOI) The Company is applying for investment promotion. Agreed Sales Volume MW, as stated in Power Purchase Agreement (VSPP-PEA) No. 006/2557 dated 23 June 2014, for a period of 5 years from the started COD and automatically renew every 5 years for total of 25 years. Adder 3.50 baht for a period of 10 years since COD is granted by PEA. Started Commercial Operation Date (SCOD) Within Q (according to the existing power purchase agreement, SCOD was set to be on February 19, 2016, which the Company had informed 2 nd postpone and the new SCOD was set to be on February 19, 2017). The approval of investment budget of not exceeding 800,000,000 million Baht for the construction of wind power plant with capacity of 10 MW. Sources of fund are financial support by the Company and loan from financial institution. Details are as follow: Unit: million baht 1. Wind turbine, Transportation, and other equipment Construction Land and Land Improvement Others 20.0 Total

27 Financial Position of LLG Statement of Financial Position 31 December 2014 (Audited) 30 June 2015 (Reviewed) million baht % million baht % Cash and cash equivalents % % Account receivable trade and others % - 0% Short term loan to company and others % - 0% Total Current Assets % % Total Assets % % Other current liabilities % - 0% Total current liabilities % % รวมหน ส น % % Authorized share capital and Issue and paid up % % share capital Retained earning % % Total shareholders equity % % Total Liabilities and Shareholders equity % % In 2014, LLG s Total asset was million baht comprised of cash of 0.25 million baht, account receivable trade and others of 2.45 million baht, and short term loan to company and others of 245 million baht. As of 6 months period ended 30 June 2015, LLG s Total asset was million baht comprised of cash of million baht. Meanwhile the account receivable trade and others and short term loan to company were fully paid off. In 2014, LLG s total liabilities was 0.47 million baht. As of 6 months period ended 30 June 2015, LLG had fully paid its liabilities so there is no liabilities. In 2014, LLG s shareholders equity was million baht comprised of issue and paid up capital of 250 million baht, and negative retained earnings of 2.33 million baht. The negative retained earning had decreased as the operating performance for the first 6 months of 2015 was 0.46 million baht

28 Financial Performance of LLG Income Statement 2014 (Audited) 6 months period 2015 (reviewed) Million baht % Million baht % Other income % % Total revenue % % Administrative expenses % % Total expenses % % Profit (Loss) before financial costs and income tax % % expenses Financial cost - 0% - 0% Profit (Loss) before income tax expenses % % Income tax expenses - 0% - 0% Net Profit (Loss) % % In 2014, LLG had other income (interest income) of 2.45 million baht and administrative expenses of 0.02 million baht. LLG s net profit for the period was 2.44 million baht. For 6 months period ended 30 June 2015, LLG had other income (interest income) of 1.39 million baht and administrative expenses of 0.94 million baht so LLG had net profit of 0.46 million baht. LLG is proposing to its shareholder for the approval to enter into transaction on investment in wind power plant (Lomligor) with electricity generation capacity of 10 MW. It is expected that, after receive the Shareholder s approval, the construction will be completed and the project will start its Started Commercial Operation Date (SCOD) to Provincial Electricity Authority by the end of Q or beginning of Q

29 2.1.3 Inter Far East Engineering Public Company Limited Company Name Trading Symbol Nature of Business Industry Authorized Capital Common Stock Paid-up Capital Nature of Business Inter Far East Engineering Public Company Limited IFEC Engage in managing its subsidiaries which operate in business related to production and distribution of alternative energy that the Company had invested. Energy and Utilities sector under Resources industry Stock Exchange of Thailand 2,691,819, baht 1,824,597,829 shares with par value of 1.00 baht 1,824,597, baht Previously the Company conducted its business as a copier distributor and rental and later on in the 4 th quarter of 2013 the Company has invested in businesses related to the production and distribution of electricity from renewable energy. On July 1, 2014, as the dealership agreement with Konica Minolta Business Solutions Asia Pte., Ltd. has expired, the Company sold its copier distributor and rental business to Konica Minolta Business Solutions (Thailand) Co., Ltd. pursuant to the resolution of the Extraordinary General Meeting of Shareholders No. 1/2014 on June 3, The Company's main income, therefore, has been only from business related to the production and distribution of electricity from renewable energy. The Company started to concentrate on the management and investments in subsidiaries with the business related to production and distribution of electricity from various types of renewable energy. The investment of the Company can be classified into 3 business groups as follow: 1. Alternative Energy Power Plant 1.1 Solar Power Plant 1.2 Wind Power Plant 1.3 Biomass Power Plant 2. Waste Management 3. Others

30 Business Structure of the Company and its subsidiary as of September 30, 2015 Remarks: Company Name Abbr. Type of Business Percentage of Holding (%) Inter Far East Thermal Power Co., Ltd. IFEC-T Holding company investing in business of alternative energy. Green Energy Technology In (Thailand) Co., Ltd. GE Solar power generation and distribution Clean City Co., Ltd. (Holding by IFEC-T) CC Waste management J.P. Solar Power Co., Ltd. JP Solar power generation and distribution SUNPARK Co., Ltd. SP Solar power generation and distribution SUNPARK 2 Co., Ltd. SP-2 Solar power generation and distribution V.O. Net Bio Diesel Asia Co., Ltd. VON Solar power generation and distribution Scan Inter Far East Energy Co., Ltd. SFEE Solar power generation and distribution Inter Far East Wind International Co., Ltd. IWIND Wind power generation and distribution ISENERGY Co., Ltd. IS Solar power generation and distribution Wangkarnkha Rongroj Co., Ltd. WR Solar power generation and distribution True Energy Power Lopburi Co., Ltd. TEPL Biomass power generation and distribution C R Solar Co., Ltd. CR Solar power generation and distribution IFEC (Cambodia) Co., Ltd. ICEC-C Solar power generation and distribution Somprasong International Co., Ltd. SPS Solar power generation and distribution LOMLIKOR Co., Ltd. (Holding by IWIND) LLG Wind power generation and distribution Universal Provider Co., Ltd. UP Solar power generation and distribution RAK Power generation and distribution using waste Rung Ake Raya Engineering (Sa-Kaeo) Co., Ltd. energy ICAP Engage in investment and management of project Inter Far East Cap Management Co., Ltd. other than production and distribution of electricity from alternative energy. Smart Tree Co., Ltd. SMT Produces and distributes network communication and transmission systems

31 Key investment in subsidiaries for the year 2014 and first six months of In April 2014, the Company invested in 299,997 ordinary shares of SUNPARK Co., Ltd. at a price of Baht per share, for a total of Baht million, which represents percent of the registered share capital. In April 2014, the Company invested in 419,996 ordinary shares of SUNPARK 2 Co., Ltd. at a price of Baht per share, for a total of Baht million, which represents percent of the registered share capital. In June 2014, Inter Far East Energy Company Limited had increased its authorized share capital from Baht 1 million to Baht 350 million. In August 2014, the Company invested in 199,996 ordinary shares of V.O. Net Bio Diesel Asia Co., Ltd. at a price of Baht 245 per share, for a total of Baht 49 million, which represents percent of the registered share capital. In September 2015, the Company had invested in 1,599,998 ordinary shares of Green Growth Co., Ltd. or in the proportion of 25% of paid up share capital at baht per share totaling 45 million baht. The Company had also paid for capital increase of 40 million baht or in the proportion of 25%. In October 2014, the Company had subscribed remaining newly issued ordinary shares of Green Growth Co., Ltd. at 50 baht per share totaling 80 million baht. Total investment was 165 million baht at baht per share, accounting for 80% of registered capital. On 18 December 2014, The Company had subscribed newly issued ordinary shares of GG by the share ratio at 80% equal 200,000 shares at 540 Baht per share, with the par value of 100 baht. Green Growth Co., Ltd. was renamed to Inter Far East Wind International Co., Ltd. In September 2014, the Company invested in 5,999,986 ordinary shares of Scan Inter Far East Energy Co., Ltd. at a price of Baht per share, for a total of Baht million, which represents percent of the registered share capital. New subsidiary company (IFEC (Cambodia) Co., Ltd.), which the Company will hold 100% of registered capital of USD 100,000 to conduct study and make an investment in business of power generation and distribution, waste manage, and environment in Cambodia. This subsidiary will sign Memorandum of Understanding with Phnom Penh Municipality. Under the MOU, the subsidiary will conduct feasibility study, means, and investment plan for waste management and waste processing in Phnom Penh. In December 2014, the Company invested in 776,998 ordinary shares of East Energy Co., Ltd. at a price of Baht per share, for a total of Baht million, which represents percent of the registered share capital. In January 2015, the Company invested in 299,998 ordinary shares of Wangkarnkha Rongroj Co., Ltd. at a price of Baht per share, for a total of Baht 101 million, which represents percent of the registered share capital. In February 2015, the Company invested in 1,299,998 ordinary shares of C R Solar Co., Ltd. at a price of Baht per share, for a total of Baht 155 million, which represents percent of the registered share capital. In April 2015, the Company invested in 460,800 fully paid ordinary shares and 39,200 fully paid preferred shares of Somprasong International Co., Ltd. at a price of Baht per share and Baht per share, respectively, for a total of Baht million, which represents percent of the registered share capital. In June 2015, the Company invested in 113,998 fully paid ordinary shares of Universal Provider Co., Ltd. at a price of Baht per share, for a total of Baht million, which represents percent of the registered share capital. In June 2015, the Company had established a subsidiary named Inter Far East Cap Management Co., Ltd. with an objective to investing and managing projects other than power plants from renewable energy. The Company holds ordinary shares of 4,999,998 shares at a price of 100 baht per share, representing 99.99% of the registered share capital of the mentioned subsidiary. In June 2015, the company paid for its investment in capital increase of two subsidiaries as follows:

32 1. Somprasong International Co., Ltd. had increased its authorized share capital from Baht million to Baht 50 million by issuing 255,000 new shares capital at the par value of Baht 100 per share, totaling Baht million. 2. Inter Far East Thermal Power Co., Ltd. had increased its authorized share capital from Baht 350 million to Baht 000 million by issuing 25 million new shares capital at the par value of Baht 10 per share, totaling Baht 250 million. Therefore the Company had invested in whole amount of share capital of this subsidiary. Then the subsidiary invested in capital increase of other subsidiaries which are Clean City Co., Ltd. and True Energy Power Lopburi Co., Ltd. in order to enhance theirs potential. The Company had invested through its 20 subsidiaries. The investment can be categorized into 3 business group as follow: Alternative Energy Power Plant Business: 16 subsidiaries and associated companies. Subsidiary Name Shareholder Electricity Percent of Issued and Paidup Share Capital Generation Adder Shareholding Capacity (Baht) (%) (million baht) (MW) Operation has been started 1. Green Energy Technology In (Thailand) Co., Ltd.* Company J.P. Solar Power Co., Ltd. Company SUNPARK Co., Ltd. Company SUNPARK 2 Co., Ltd. Company V.O. Net Bio Diesel Asia Co., Ltd. Company Scan Inter Far East Energy Co., Ltd. Company ISENERGY Co., Ltd. Company Wangkarnkha Rongroj Co., Ltd. Company True Energy Power Lopburi Co., Ltd. IFEC-T C R Solar Co., Ltd. Company Somprasong International Co., Ltd. Company Universal Provider Co., Ltd. Company Operation has not been started 13. Inter Far East Wind International Co., Ltd. Company IFEC (Cambodia) Co., Ltd. Company LOMLIKOR Co., Ltd. IWIND Rung Ake Raya Engineering (Sa-Kaeo) Co., Ltd. IFEC-T Remark: In Q3 2015, the Company had made an additional investment in a solar power plant with capacity of 2.88 MW. The Company had also set up a new company to select and invest in business of solar power plant. Moreover, a total of 11 subsidiaries of the Company had set up a total of 16 new companies in order to support expansion of the business of solar power production and distribution in the future

33 Waste Management Business: 2 subsidiaries and associated company. Inter Far East Thermal Power Co., Ltd. (IFEC-T), a subsidiary of the Company, had conducted study on the project and invested in Clean City Co., Ltd. which operated in business of waste management. Other business: other 2 subsidiaries of the Company engage in business other than alternative energy, business of set up network, and those related to telecommunication respectively. Subsidiary Name Shareholder Percent of Shareholding (%) Issued and Paid-up Share Capital (million baht) Other business 1. Inter Far East Cap Management Co., Ltd. Company Smart Tree Co., Ltd. ICAP Remark: In Q3 2015, ICAP set up a new company (ICON) which operates in business of dealer of machinery, equipment, and other spare parts related to transportation and others

34 Consolidated Statement of Financial Position of Inter Far East Engineering Public Company Limited and its Subsidiaries. Financial Position as of 31 December Consolidated Financial Statements (Audited) million baht % million baht % million baht % 30Jun 2015 (Reviewed) million baht % Cash and cash equivalents , , Short term investment Accounts receivable - trade and others Short-term loan to subsidiary and other company Inventories Non-current assets held for sale Other current assets Total Current Assets , , , Trade accounts receivable - long-term portion Deposits pledged as collateral Other long-term investments Investment properties Property, plant and equipment , , Intangible assets Goodwill , Deferred income tax assets Other non-current assets Total Non-Current Assets , , Total Assets , , , Short-term loans from financial institutions , , Accounts payable - trade and others Liabilities under financial lease agreements Current portion of liabilities under financial lease agreements Short-term loans from other persons Advance received under the agreement to sale of the property Accrued income tax Other current liabilities Total current liabilities , , Long-term loans Liabilities under finance lease agreements Retirement benefit obligations Deferred income tax liabilities Total non-current liabilities Total liabilities , ,

35 Financial Position as of 31 December Consolidated Financial Statements (Audited) million baht % million baht % million baht % 30Jun 2015 (Reviewed) million baht % Share capital Authorized share capital , , , Issued and paid up share capital , , Premium on treasury stock Premium on share capital , , Retained earnings Appropriated for legal reserve Appropriated for other reserve Unappropriated Other components of equity Total shareholders' equity , , , Non-controlling interests Total shareholders' equity , , , Total liabilities and shareholders' equity , , , * Remark: As of June 30, 2015, the Company had inventories of million baht increased by million baht or 4,188.89% from December 31, This can be explained by the increase in equipment which the Company had prepared for power generation of its subsidiaries project that the Company undertaking construction. Summary of Independent Auditor s Report for the past 3 years. Independent Auditor s Report as of 6 months ended June 30, 2014 Auditor : Karin Audit Co., Ltd. Independent Auditor s Report as of December 31, 2014 Auditor : Karin Audit Co., Ltd. Independent Auditor s Report as of December 31, 2013 Auditor : AST Master Co., Ltd. Independent Auditor s Report as of December 31, 2012 Auditor : AST Master Co., Ltd

36 Statements of Comprehensive Income of the Company and its Subsidiaries for 6 months period ended 30 June 2015, and for year ended Statements of Comprehensive Income months 2015 as of year ended million baht % million baht % million baht % million baht % Sales Rental and service income Other income Total revenues Cost of sales Cost of rental and services Selling expenses Administrative expenses Total expenses Profit before financial costs & income tax expenses Financial costs Profit (loss) before income tax expenses Income tax expenses Net profit (loss) for the year Other comprehensive income Unrealized gain from changes in value of investments Premium on asset revaluation Currency translation differences (0.07) - - Actuarial gain arising from post-employment benefits Total comprehensive income for the year Total comprehensive income attributable to: Owners of the parent Non-controlling interests Key Financial Ratios Key Financial Ratios months 2015 Liquidity Ratio Quick ratio (times) Account receivables turnover ratio (times) Average Collection Period (days) Account payables turnover ratio (times) Profitability Ratio Gross Profit Margin (%) Operating Profit Margin (%) Net Profit Margin (%) Return on Equity (%) Efficiency Ratio Return on Assets (%) Debt to Equity Ratio (times)

37 Analysis and Explanation on Financial Position and Operating Performance of the Company and its Subsidiaries Analysis report based on consolidated financial statement. Revenue from sales and services. Item 2012 million baht 2013 million baht Increase/ decrease million baht % change 2014 million baht Increase/ decrease million baht % change 6 months 2015 million baht Increase/ decrease million baht Sales of the Company Rental and service income of the Company Total income of the Company Sales of subsidiaries Service income of subsidiaries Total income of subsidiaries Less Related party transaction Total income In 2013, the Company had recognized revenue from the sale of the photocopier business of million baht, which decreasing from year 2012 for million baht or a decrease of % due to the market competition. But the income from rental and services was million baht increasing from year 2013 for million baht or 6.37 % increased. In the 3rd quarter of 2013, the Company had started its investment in 2 subsidiaries, one operated in electricity production and distribution and one operated in waste management. The Company had recognized revenues from business operations in its financial statements of the Company in the amount of 5.50 million baht and 0.7 million baht respectively. In 2014, the Company had recognized revenue from sales and services totaling million baht, decreased from the year 2013 for million baht or % due to the Company's contract of photocopier dealer had expired on 31 March As a result, revenue from copier business had declined significantly and ended when the Company had sold the sale and rental of photocopier on July 1, However the Company had expanded its business of alternative energy power production and distribution and the Company had revenue from subsidiaries of million baht, increased by million baht or 2,564.74% compared to For 6 months period 2015, the Company had revenue from Management Fee of 9.00 million baht, which collected from its subsidiaries. Meanwhile the Company has continuously expanded its alternative energy power production and distribution. As such, for 6 months of 2015, the Company had revenue from its subsidiaries, which operate in the business of power production and distribution, of million baht. The figure is higher than those for the year ended 2014 by million baht or 38.65%. For 6 months period 2015, the revenue from subsidiaries, which operate in business of waste management, was lower than those of year ended 2014 by 6.85 million baht or 35.08%. However it was higher compared to the same period of 2014 by 5.07 million baht or 66.58%

38 Other income Item 2012 million baht 2013 million baht Increase/ decrease million baht % change 2014 million baht Increase/ decrease million baht % change 6 months 2015 million baht Increase/ decrease million baht Other income of the Company Profit on sale of securities Profit on sale of land and buildings Profit from the sale of photocopier business Interest income from subsidiaries Other income Total Less Related party transaction Other income of the Company after deducting related party transaction Other income of subsidiaries Total other income In 2013, the Company had other income of million baht, decreased by million baht or 65.29% compared to Because in 2012, the Company had income from the sales of business held for sale of million baht. Subsidiaries had other income of 7.68 million baht, which was recorded in financial statement of the Company. In 2014, the Company had other income of million baht, increased by million baht or % compared to 2013 comprising of; 1. The profits from the sale of the "Sales and rental of photocopier" business in the amount of million Baht which gained from the sale of businesses and assets used in the business of selling photocopiers of million Baht and gained from the sale of land with office building of million Baht. 2. Interest income from loans to subsidiaries of million baht with an increase of million baht or % compared to previous year. 3. In 2014, other income was million baht, decreased by million baht or 58.01% compared to previous year. In 2014, the subsidiaries had other income of million baht with an increase of million baht or %. Among these was gain from the foreign exchange of 5.55 million Baht due to the repayment of foreign currency debt. For the first 6 months of 2015, the Company had other income of million baht, decreased by million baht or 26.19% compared to The main reason was the Company had gained from sale of Sales and rental of photocopier business of million baht in 2014 while the Company had gained from sale of Asset held for sale of million baht for 6 months period of Also interest income from subsidiaries and other income had decreased by million baht and 2.59 million baht respectively compared to For 6 months 2015, other income of subsidiaries was 8.41 million baht. It is expected that other income for the year 2015 will be close to those of

39 Item Opinion of the Independent Financial Advisor on Acquisition of Asset Transaction Cost of sales 2012 million baht 2013 million baht Increase/ decrease million baht % change 2014 million baht Increase/ decrease million baht % change 6 months 2015 million baht Increase/de crease million baht % change Cost of sales Cost of sales of the Company Cost of rental and services of the Company Total cost of sales of the Company Cost of sales of subsidiaries Cost of rental and services of the subsidiaries Total cost of sales of the subsidiaries Total In 2012, the Company had cost of sales, rental and service of million baht accounted for % of the revenue from sales, renting and services. In 2013, the Company had cost of sales, rental and service of million baht, decreased by million baht or 5.88% compared to The cost of sale was 48.08% of revenue from sales, rental and service of million baht. Subsidiaries had cost of sales and services of 2.32 million Baht, compared to revenues from sales and services totaling 6.24 million Baht, its subsidiaries had cost of sales at % of such income. In 2014, the Company had cost of sales, rental and service of million baht with a decrease of million Baht from 2013 or %. It was in accordance with the revenue from sales and services of the Company which decreased by % due to the sale of the photocopier business on July 1, The Company s cost of sales was 47.30% of income from sales, rentals and services of million Baht. In 2014, the subsidiaries had cost of sale and services of million Baht with an increase of million baht or 2, % compared to previous year due to its additional investment. The subsidiaries cost of sales was 31.12% of income from sales and services of million baht. In 2015, the Company does not have cost of rental and services due to the sale of the photocopier business on July 1, The subsidiaries had cost of sale and services of million baht higher those of the year 2014 in the amount of million baht or 70.63% due to its additional investment. Subsidiaries cost of sale was 40.85% of total income from sales and service of million baht

40 Selling and administrative expenses Item 2012 Selling and administrative expenses of the Company million baht 2013 million baht Increase/de crease million baht % change 2014 million baht Increase /decreas e million baht % change 6 months 2015 million baht Increase/ decrease Cost of sales Administrative expenses Total expenses Administrative expenses of subsidiaries Total selling and administrative million expenses In 2012, the Company had selling and administrative expenses of million baht, representing % of the revenues from sale, rental and service. In 2013, the Company had selling and administrative expenses of million baht, representing 37.46% of total income from sales, rental and service. The figure had decreased by million baht or 4.50% compared to Meanwhile its subsidiaries had administrative expenses of million baht, which % of that cost or million baht were expenses of Inter Far East Thermal Power Co., Ltd. (IFEC-T), a subsidiary engages in sourcing and investment in alternative energy. In 2014, the Company had selling and administrative expenses of million baht, representing 69.31% of total income from sales, rental and service. The figure had decreased by million baht or 25.30% compared to It was because the cost of the photocopier business had declined while the cost of advisory service for conducting Due Diligence for investment in the subsidiary had increased. In 2014, the subsidiaries had administrative expenses of million baht increased by million baht or %. The administrative expenses of million baht, accounted for 72.77% of the mentioned amount, was the expenses of IFEC-T (57.06 million baht of the amount was interest payment to the Company). The administrative expenses of 9.24 million baht, accounted for 6.01% of the mentioned amount, was the expenses of 2 subsidiaries, which are in the construction preparation stage. In 2015, the Company and its subsidiaries had selling and administrative expenses of million baht compared to million for the year It can be seen the downward trend of the mentioned expenses as the Company does not has selling expenses and the Company had decreased its operating expenses. Net Profit In 2013, the Company had net profit of million baht decreased by million baht or % compared to The main reasons were revenue from sale and services decreased by million baht or 6.97 %, gross profit decreased by million baht or 7.95 %, cost of sales and administrative expenses decreased by million baht or 4.50%, other income increased by million baht or %. For the year 2012, the Company s profits from the business sell out decreased by million baht and corporate income tax had also decreased by million baht baht

41 Subsidiaries had recorded a net loss of million baht, mainly resulted from losses in subsidiary "IFEC-T" or former named Inter Far East Energy Co., Ltd. (IFEE) registered on June 13, 2013, which operates as holding company of the investment in alternative energy project. The expenses including advisory fees for investment in power generation from renewable energy of million baht, administrative expenses of million baht (according to the management interview, the expenses consist of personnel expenses and depreciation of office building) and financial cost on loans from the Company of million baht. In 2014, the Company had net profit of million baht which increased by million baht or 67.53% compared to It can be explained as follow: 1. The profits from the sale of the "Sales and rental of photocopier business" in the amount of million baht comprised of; 1.1 The Company had profit from the sale of businesses and assets used in the selling photocopiers business of million baht. 1.2 Profit from sale of land and buildings of million baht. 2. Income from interest on loans to subsidiaries of million baht increased by million baht or %. 3. Business performance of the "sale and lease photocopiers business had dropped from the previous year of million baht as photocopier dealer contract of the Company had expired on 31 March 2014, which had caused the revenue to decline significantly and ended when the business of the Company was sold on July 1, 2014 as detailed below. 3.1 Income from sales and service of business of sale and rental of photocopier machine decreased by million baht or 59.63%. Also the gross profit had decreased by million baht or 59.02%. 3.2 Other income had decreased by million baht or 58.01% 3.3 Selling and administrative expenses had decreased by million baht or 25.30%. 3.4 Financial cost had increased by million baht or %. 4. Income tax of million baht, increased by million baht compared to previous year. In 2014, the subsidiaries had net loss of million baht due to the net loss of IFEC-T of million baht (57.06 million baht of this amount was interest paid to the Company for its loan). Total profit of the other 10 subsidiaries was million baht (3 subsidiaries which the Company had invested in late of 2014 and recognized revenues by approximately 1-3 months, 2 subsidiaries had recognized revenues by approximately 9 months, and other 2 subsidiaries did not have incomes as they did not started theirs business operation). For 6 months period ended 30 June 2015, the Company had net profit of million baht (net profit after corporate income tax of million baht). Because the Company had gain on sale of asset held for sale of million baht and its subsidiaries had profit totaling million baht which comprised of net profit from 13 subsidiaries, which had started theirs business operation in power plant and waste management, of million baht (of this amount, the Company had gradually invested in 5 subsidiaries in 2015). Meanwhile the Company had loss from 6 subsidiaries, which have not started theirs business operation, of 9.87 million baht. Also the Company had loss from IFEC-T of million baht. After deduct related party transaction, which are interest on loan and management fee, the Company and its subsidiaries had net profit of million baht

42 Analysis on Financial Position Based on Consolidated Financial Statement Asset In 2013, the Company and its subsidiaries had total assets of 1, million baht increased by million baht or million baht compared to Most of which are increased in cash and cash equivalents received from the capital increase of the Company. In 2014, the Company and its subsidiaries had total assets of 6, million baht increased by 4, million baht or %. The main reason can be summarized below: Cash and cash equivalents had increased by 2, million baht or % compared to 2013 due to capital increase of the Company to support its business expansion. The Company had expanded its investment in production and distribution of electricity from solar energy by investing in 9 subsidiaries with the investment value of 1, million baht. Changes in the assets of photocopier sales and rental business: As the Company had disposed its business of sale and rental photocopier on July 1, 2014, so the related asset had increase /decrease compared with the financial statements for the year ended December 31, 2013 as follows: - Accounts receivable as at December 31, 2014, the Company had net accounts receivable of million baht decreased by million baht or 91.97% compared to Other receivables. The Company had other receivables of million baht increased by million baht or % compared to The figure comprised of receivable from the business sell out of million baht, while most of the remaining were deposits and advance payment in investment projects or subsidiaries. - Inventories. The Company had inventories of 5.31 million baht decreased by million baht or 94.73% resulted from the decrease of inventories of sales and rent photocopier business of million baht and an increase of inventories of one of its subsidiary in the amount of 5.31 million baht. - Non-current assets held for sale. The Company had non-current assets held for sale of million Baht increased by million baht or 78.79%. Because of the remaining property after the termination of Sales agreement with NND (Thailand) Co., Ltd, which had been approved by the resolution of the Extraordinary General Meeting of Shareholders No. 1/2557 held on June 3, 2014, for the best interests of shareholders. As of June 30, 2015, the Company and its subsidiaries had total assets of 7, million baht increased by 1, million baht or 26.37% compared to those of year ended December 31, This was caused by the capital increase to support the business expansion of the Company, investment in business of solar power production and distribution by investing in 8 more subsidiaries with total investment value of 1, million baht (as detailed under section key investment in subsidiaries for the year 2014 and 6 months of 2015) Total Liabilities In 2013, the Company and its subsidiaries had total liabilities of million baht increased by million baht or 57.62% compared to It was the increase of advance payment of million baht for Land Sales Agreement, while most of the remaining was loan from financial institution for working capital of the Company

43 In 2014, the Company and its subsidiaries had total liabilities of 1, million baht, an increase of 1, million Baht from the year 2013 or %. These liabilities had been used to support the expansion of renewable energy business of the Company. However, the Company's debt to equity ratio still remains at the very low rate of As of June 30, 2015, the Company and its subsidiaries had total liabilities of 2, million baht increased by million baht or 44.59% compared to year ended December 31, The subsidiaries investment was funded by loan from financial institution accounted for 50.29% of total increase. Shareholders equity The shareholders' equity of the Company and its subsidiaries as at December 31, 2013 was 1, million baht, with an increase of million baht from year 2012 or %. The main reason was the capital increase which had caused the increase in registered capital by million baht, and premium on share capital of million baht. The shareholders' equity of the Company and its subsidiaries as at December 31, 2014 was 4, million baht, with an increase of 2, million baht from year 2013 or % due to the main reasons as the following. The capital increase: In 2014, the Company had received capital increase from the sale of shares to private person and/or institutional investors and/or qualifies investors (Private Placement) in accordance with the Notification of the Securities and Exchange Commission. This has caused the paid-up capital to increase by million baht and the premium on share capital of 1, million baht. Stock dividend and cash dividend: In 2014, the resolution of the meeting of shareholders held on April 3, 2014 had approved the dividend payout for the year 2013 to the shareholders of the Company with 45,870,524 ordinary shares of shares equivalent to million baht, and with cash dividend for 0.01 Baht per share totaling 9.17 million baht. The exercise of right to purchase ordinary shares of the IFEC-W1 warrants holder: In 2014, the Company had received capital increase from the IFEC-W1 warrant holders exercised ordinary shares of the Company in the amount of 1,300,549,388 shares at the book value of 1 baht per share, totaling million baht. ป 2557 Operating result of the Company: Shareholders equity had increased due to the profit and loss for the year of million baht. Shareholders equity of the Company and its subsidiary as at June 30, 2015 was 4, million baht increased by 2, million baht or % compared to The main reasons are as follow: The Company, as approved by Extraordinary meeting of its shareholder No. 2/2557 held on 24 October 2014, had allocated 172,660,769 capital increase shares to existing shareholder (Right Offering) at the price of 4 baht per share with the ratio of 9 existing shares to 1 newly issued share. As a result, the paid up capital increased by million baht and premium on share capital increased by million baht. Allocate the remaining 1,111,869 shares to specific investors at 6 baht per share. As a result, the paid up capital increased by 1.11 million baht and premium on share capital increased by 5.56 million baht. Annual Shareholders meeting of 2015 held on April 30, 2015 had resolved to approve the dividend payout for the year 2014 to the shareholders of the Company with 86,871,457 ordinary shares equivalent to million baht and also cash dividend of 0.01 baht per share totaling million baht

44 2.2 Benefits of the Transaction 1. By investing in Lomligor project, the Company will engage in business of wind power production and distribution, which is expected to generate revenue from the production and distribution of electricity. It will expand the business operation of the Company. After the Commercial Operation Date (COD), the Company will realize revenue and benefit of IWIND and LLG in its financial statement. The Company expected to realize income from the beginning of the 2nd half of By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. By investing in 1 more wind power project with regard to the Company s 16 projects in production and distribution of electricity as of 30 June 2015 (12 projects have started Commercial Operation Date with total capacity of MW and the other 4 projects are in the preparation process), the Company will diversify its business risk as the Company will invest in various types of alternative energy business. As such it will stabilize the growth of the Company s revenue from production and distribution of electricity 3. By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. Pak Phanang Project 1, a wind power project of the Company, is located nearby the Lomligor project so in the future the Company can save its investment, operating cost, maintenance expenses, and management and administration expenses. 4. Investing in Lomligor project is one of the project that serves the government s policies and it increase the number of alternative energy project in Nakhon Si Thammarat and nearby province. The wind power used to generate electricity is free, clean, and can be used to generate electricity during both day and night time. Generating electricity with alternative energy (wind power) does not pollute the environment and does not create greenhouse effect, so it differs from generating electricity with other fuels. Lomligor project serves the government s policies regarding electricity generating, which have targeted to increase the portion of electricity from the renewal and alternative energy to at least 25% of total electricity that rely on fuels within Investing in Lomligor project will help IWIND to achieve business continuity in its production and distribution of wind power business. The Company has planned to expand its wind power business via IWIND in the future. The Company might also plan to spin-off or issue new share and offer for sale to public, and list IWIND securities on the Stock Exchange of Thailand in the future. 2.3 Cons of Transaction 1. Investing in Lomligor project is a new project (the construction and the distribution of electricity has not yet started). There is uncertainty on the completion of its construction and operation to produce and sell electricity to Provincial Electricity Authority. 2. Investing in Lomligor project, wind power which will be used to produce electricity is uncontrollable due to the uncontrollable nature of wind and period of time. It is beyond control of the Company. Although the Company had tested the wind power and conducted the feasibility study of the project based on yearly average wind power, the Company cannot set and control the wind power due to uncontrollable nature of wind. 3. By investing in Lomligor project, the Company will has to make large investment of approximately 800 million Baht. According to the Company s expected sources of fund, the Company s Debt to Equity ratio will be

45 approximately 2.25 times. The Company had invested in Lomligor in the amount of 250 million Baht. As of June 30, 2015, Lomligor Co., Ltd. had paid for the capital increase of 250 million baht and had remaining cash of million baht. 4. Lomligor project is, same as Pak Phanang Project 1, located in Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat. Both of the wind power projects of the Company are located in the same area so the Company cannot diversify its risk by having its projects located in different areas such as risk from natural disaster. 2.4 Risk Factors 1. Risk from the completion of its construction and operation to produce and sell electricity to PEA. By investing in Lomligor project, the Company might has risk from the completion of the business operation to meet its investment objectives such as budgeting control, completion of the construction, cost control, direct and indirect expenses. 2. Risk from the completion of the project construction. Risk from completion of the construction to the point where the wind power project can operate. Risk from acquisition of land for the project which the Company is purchasing from current land owner. Risk from the project delay. Risk from obtaining loan from financial institution. 3. Risk from business operation of Lomligor s wind power plant 1 Risk on wind speed. In case of wind power plant, the Company had conducted feasibility study of the project along the coast of Nakorn Sri Thammarat in order to locate the project location that is most fit for the utilization of electricity generation capacity. 2 Risk from natural disasters. Natural disasters such as earthquake, flood, and storm could damage the project. Although, in its investment, the Company had considered the project location in regard to the safety of natural disasters, structural strength, and thunder protective system, natural disasters might breakdown the project s operation, interrupt the production, and resulted in high maintenance cost. 3 Risk from policies and support from government Government s policies and support play vital role in the sustainability of developing wind power and others alternative energy. According to alternative energy development plan, it will encourage the investment in wind power plant project. Changes of government s policies will provide significant impact and interrupt the development of wind power project and other alternative energy. 4 Risk of dilapidated equipment Dilapidated wind turbine and other equipment will directly impact to the electricity generation capacity. The Company is aware of this fact and has, therefore, appointed specialist and preventive maintenance technician in order to maintain its revenues at maximum level

46 (Please see details of Risk from business operation of Lomligor s wind power plant of LLG under section 3.1 Valuation of Lomligor project) 2.5 Sources of Fund for the Asset Acquisition The sources of fund to for LLG s investment in construction of wind power plant will rely on cash flow of the Company and loan from financial institution. Details are as follow: Unit: million baht Estimated sources of fund - Capital of the Company (Cash flow of the Company) Loan from financial institution (70% of investment) Estimated use of fund - Investment in construction of wind power plant Total Total Sources: Financial projection prepared by analysts of the Company. In the beginning, investment in construction of wind power plant of approximately million baht will be funded by the Company s cash flow and the issuance of short term financial instrument such as bill of exchange. The payment will be made in line with progress of the construction. The Company is seeking long term loans from commercial bank, which at this stage some commercial banks has already shown interest in providing financial support for the project. Moreover the existing wind power project of the Company named Pak Phanang 1 is close to its Commercial Operation Date (COD), which is expected in the end of July or the beginning of October Therefore Independent Financial Advisor opined that if the 1 st wind power project of the Company is successful by being capable of generating and distributing electricity with its full capacity, there will be more interested financial institutions and the Company can obtains sufficient amount of loan for Lomligor project as well

47 Independent Financial Advisor s Opinion Independent Financial Advisor opined that sources of fund for payment of LLG s asset are consist of cash of LLG, which as at June 30, 2015, LLG had cash of million baht (with registered capital of 250 million baht) and loans from financial institution for Lomligor project in the amount of approximately 560 million baht. Referring to Pak Phanang Project 1 with total value of approximately 800 million baht, IWIND had obtained loan with the credit line of 600 million baht from a financial institution in Thailand (short term loan in terms of Bill of Exchange (B/E) and the Company is submitting for long term loan from financial institution in Thailand). The Company expected that, in regard to the size of Lomligor project is comparable to those of Pak Phanang project, it should receive loan approval in the similar amount. Having registered capital of 250 million baht (with remaining cash of approximately million baht as at June 30, 2015), it is possible to obtaining loan from financial institution in the amount of approximately 560 million baht. Also because Lomligor project, production and distribution of electricity from wind power, is the second wind power project of the Company (not the first wind power project of the Company). IWIND, a subsidiary of the Company, is a listed company in the Stock Exchange of Thailand which has financial strength, and good operating result in the past. IWIND operates in energy industry under production and distribution of electricity from alternative energy, which has low risk compared to other business in energy industries. Moreover, according to the resolution of the Board of Directors meeting No. 11/2558 held on August 28, 2015, to enable the subsidiary to have sufficient fund for investment in Lomligor project, the Board of Directors therefore approved the capital increase of IWIND of Baht 500,000,000 from current registered capital of Baht 225,000,000 to Baht 725,000,000 by issuing 5,000,000 newly issued ordinary shares with a par value of 100 baht per share, which will be offer at 200 baht per share. In this connection, the Company as the shareholder with shareholding of 80 percent of the total paidup shares of IWIND will proportionately pay for the capital increase in an amount of Baht 800,000,000, whilst the other shareholders will proportionately pay for the capital increase in an amount of Baht 200,000,000. The mentioned amount of fund will be used to support part of the investment in current business operation and business expansion of IWIND in the future

48 3. Return Evaluation and Rationale of Project 3.1 Return Evaluation of Lomligor Project In the Company s return evaluation from the wind power plant of Lomligor Company Limited (LLG), the Independent Financial Advisor considers by using information from the interview with the Company s and its subsidiaries management and the review of performa financial statements of the Company and its subsidiaries together with available public information. However, the opinions of the Independent Financial Advisor are based on the assumptions that the received information and material documents are completed and correct and also found on the economic situation and data incurred during the study period. If the above assumptions or factors have substantially changed, the Company may be affected by the changes and this would eventually affect the Independent Financial Advisor s return evaluation of the Company and its shareholders decision. In order to consider the project s return and feasibility, the Independent Financial Advisor evaluated the value of wind power plant of Lomligor Company Limited (LLG) by incorporating Free Cash Flow to Project (FCFP) and applying the 3 project evaluation indication tools to consider the project s feasibility and expected return from the investment as follow: Evaluation Approach Definition 1. Net Present Value NPV To find the present value of the project s net cash flows which equal to the present value of the cash inflows subtracted by the present value of the cash outflows and using the weighted average cost of capital as the discount rate. After summing up the present value of the cash flows, the result is the Net Present Value (NPV). The approach is comparable to the Discounted Cash Flow Approach. 2. Internal Rate of Return IRR To find the return on investment of a project and it is the discount rate which makes the project s NPV equal to 0. In the other word, IRR is the rate of return that provides the invested money equal to the received money regarding time value of money. IRR can be categorized to Project IRR and Equity IRR. 3. Payback Period - "PB" To calculate the breakeven point of the project by having a measuring unit as the time of how long does it takes to regain the investment amount after the investment initiation by using the cumulative future cash inflows

49 Calculation of Free Cash Flow to Project The evaluation approach reflects the investment valuation of the Lomligor project by finding the net present value of the Lomligor project s future cash flows. The Independent Financial Advisor considers the Company s existing business by interviewing the Company s and its subsidiaries management. The Lomligor project has details as follow: Details Lomligor Project (Pak Phanang 2) Agreement Number VSPP-PEA-006/2557 MOU Date 23 June 2014 Project Location Area in Ban Pueng Sub-district, Pak Phanang District, Nakhon Sri Thammarat Province. Nature of Business Production and distribution of electricity from wind energy. Electricity Seller Lomligor Company Limited Electricity Buyer Provincial Electricity Authority Installed Capacity 10.0 MW BOI Privilege During the BOI applying process Amount sell under the contract Adder SCOD MW in accordance with the Power Purchase Agreement no. (VSPP-PEA) 006/2557 dated 23 June 2014 for 5 years from the COD date and automatically renewed every 5 years until 25 years in total baht for 10 years from the COD date by Provincial Electricity Authority Within Quarter 2 of 2016 (The current power purchase agreement specifies that the SCOD is by February 19, 2016 but the Company is requesting to postpone (2 nd time) the SCOD to by February 19, The investment budget of wind power plant construction with the capacity of MW is not greater than 800,000,000 baht. The fund will be derived from the Company s funding and the financial institution s loans for the construction. The preliminary expenses are as follow: Expected Investment unit : million baht 1 Wind Turbine equipment and system, Transportation and other equipment Construction / Civil Work Land and Land Improvement Others 20.0 Total

50 Nature of Business LLG is a subsidiary of the Company and LLG has received the Power Purchase Agreement from wind energy of MW (10.0 MW installed capacity) with the adder of 3.50 baht per kw-hour for 10 years from Provincial Electricity Authority. The location of LLG is Ban Pueng Sub-district, Pak Phanang District, Nakhon Sri Thammarat Province, which is the same area of the current project or the Pak Phanang 1 of IWIND. Lomligor Project Location The project is located on the land with the area of approximately 120 rais in Ban Pueng Sub-district, Pak Phanang District, Nakhon Sri Thammarat Province, and is nearby the Pak Phanang 1 Project of IWIND, the Company s subsidiary. The details are as follow: Location Map of Lomligor Project Gulf of Thailand Pak Phanang District, Nakhon Sri Thammarat Province Pak Phanang 1 Project Lomligor Project

51 Surrounding Area of Lomligor Project Land Area of approximately 120 rais Surrounding area picture taken from Lomligor Project which can see the wind turbines of the Pak Phanang

52 Electricity Load Forecast in Pak Phanang District, Nakhon Sri Thammarat Province Considering the electricity load statistic during A.C in Pak Phanang District, Nakhon Sri Thammarat Province (detail of changes is in the below figure), the electricity load had an upward trend. Thus, the electricity load forecast model is built by using the data (Autocorrelation) via a statistic program in order to forecast the electricity load in the next 10 years and 20 years shown below. The forecast shows that within 10 years and 20 years, the electricity load in Pak Phanang District will increase to 70 MW and 100 MW, respectively. Sources : Feasibility Study of Lomligor Project of IWIND in 2015 Sources : Feasibility Study of Lomligor Project of IWIND in

53 Overview of Wind Power Production Business Thailand has increased alternative energy consumption continuously which is resulted from the alternative energy development policy that has the target to increase alternative energy usages in every part of society. Not only to reduce the fossil energy consumption, it also can reduce energy import from other countries because Thailand s current alternative energy development are mainly from energy produced domestically including solar, wind, small hydro power, biomass, biogas, waste, and biofuel (ethanol and biodiesel). The alternative energy usages are described by heat rate of biofuel. Sources : Feasibility Study of Lomligor Project of IWIND in 2015 In 2013, Thailand had the alternative energy usages of 8,232 thousand crude oil tons which increased from the previous year of 12.9% and accounted as 10.9% of carbon dioxide release of million tons. Sources : Feasibility Study of Lomligor Project of IWIND in

54 Thailand is an energy importing country with the value of almost 1 trillion in the last 5 years and it affected the country development as well as the citizen that are affected directly from the electricity price increases. Energy Policy and Planning Office, Ministry of Energy ( has foreseen the essential to acquire variety of energy resources especially alternative energy produced domestically and set the policy to develop alternative energy as a major energy resource of the country by having the Alternative Energy Development Plan for 15 years (B.E ). The objectives of the Alternative Energy Development Plan are as follow: 1. To capably develop renewable energy as one of the country major energy sources in sustainable replacing of fossil fuel and oil import for the future. 2. To strengthen the country energy security. 3. To create using renewable energy at community level as of integrated green community. 4. To support the domestic renewable energy technology production industry. 5. To research, develop and promote Thailand renewable energy technology for competitive capability in the international market. The plan targets to increase the alternative energy usage portion to 25% of Thailand s total energy consumption by The measures and guidance to promote alternative energy are as follow: 1. Set alternative energy as the national agenda 2. Government has policy to support alternative energy continuously. 2.1 Has adder measure for electricity buying price from renewable energy until Has ESCO Fund measure to promote investment and risk protection 2.3 Has investment support measure to reduce initial investment in new renewable energy technologies including soft-loans for new renewable energy production. 2.4 Has BOI investment promotion measure for renewable energy investments and renewable energy related technology production investments. 3. Government provides infrastructure to support renewable energy expansion such as transmission/distribution system expansion. 4. Amend laws and regulations related to alternative energy such as Private Investment in State Undertaking Act, Urban Planning Act, etc. 5. Access to alternative energy data such as wind power and solar power

55 According to Alternative Energy Strategic Plan that has the objective to secure renewable energy capacity of 13,927 MW within 2012 while currently the renewable energy capacity is 3,788 MW, the Department of Alternative Energy Development and Efficiency has set strategies to reach the objective as follow: 1. Renewable Portfolio Standard ( RPS ) of 5% with the capacity of 80 MW 2. Promote renewable energy via adder measure with the total capacity of 13,927 MW. Under the capacity of 13,927 MW, the target electricity productions by each type of renewable energy are as follow: 2.1 Biomass 4,800 MW 2.2 Wind 1,800 MW 2.3 Solar 3,000 MW (Feed in Tariff) 2.4 Hydro 324 MW 2.5 Waste 200 MW 2.6 Biogas 100 MW Overview of Electricity Industry in Thailand According to the Thailand Energy policy and the changes of economic situation together with the increasing electricity demand, Energy Policy and Planning Office (EPPO) is revising the draft Power Development Plan A.C (Draft PDP 2015 by the Ministry of Energy) with the following key issues: 1. Changes in Thailand economic situation, the Government s transportation infrastructure investment plan, and the commencement of ASEAN Economic Community, AEC, in late 2015, which affect domestic energy consumption in Thailand. 2. Framework of Power Development Plan in Thailand A.C (PDP 2015) is to have the period align with the National Economic and Social Development Plan by NESDB and to prepare Energy Efficiency Development Plan (EEDP) and Alternative Energy Development Plan which have the period between A.C as PDP 2015 does

56 3. Objective of PDP Security: the security of power supply, transmission system and distribution system in response to the demand of electricity 3.2 Economy: adjusting the electricity price to reflect the cost of energy more appropriately and ensuring an efficient energy consumption 3.3 Ecology: to reduce negative impacts on the environment and communities the new PDP aims to reduce carbon dioxide emissions per unit of electricity production by promoting electricity production from renewable energy and promote energy efficiency Sources: Energy Policy and Planning Office (EPPO) New electricity capacity during (Draft PDP 2015) can be summarized as follow : Electricity capacity as of December ,612 MW New electricity capacity during ,467 MW Retired capacity -24,669 MW Total electricity capacity at the end of ,410 MW Remark: * The retired capacity is from the production cease of the old power plants due to the end of concession or PPA

57 Electricity capacity during (Draft PDP 2015) categorized by types of power plant Power Plant Type (unit MW) PDP 2010 Rev. 3 PDP 2015 Change Alternative 9,481 12,205 +2,724 Cogeneration 6,476 4,052-2,424 Combined Cycle (Gas) 25,451 17,478-7,973 Clean Coal 4,400 7,365 +2,965 Nuclear 2,000 2,000 - Gas and Diesel Turbine 750 1, Imported 6,572 11,016 +4,444 Pumped Storage Hydropower 2,101 +2,101 Total 55,130 57,467 +2,337 Remark : Alternative energy including solar energy, wind energy, biomass energy, waste to energy, and etc. It is clearly shown that PDP 2015 has a policy to promote renewable energy projects by increasing the proportion of renewable or alternative energy from 9,481 MW (17.2% of total electricity capacity) to 12,205 MW (21.24% of total electricity capacity) Sources: Energy Policy and Planning Office (EPPO)

58 Renewable Energy Buying Price of Feed in Tariff (FiT) The Government has changed the promotion scheme for renewable energy from Adder System to Feed in Tariff System, which has details as follow: Sources: Energy Policy and Planning Office (EPPO) Sources : Energy Policy and Planning Department (EPPO)

59 However, the change of buying electricity price from renewable energy to Feed in Tariff (FiT) above does not apply to LLG since the LLG is still in Adder scheme. Structure of electricity tariff of Adder System in the LLG is as follow: 1 Biomass Fuel/Technology Adder (old) (Baht/unit) Adder (new) (Baht/unit) Special Adder1 (Baht/unit) Special Adder for 3 Southern Border Provinces (Baht/unit) Promotion Period (Year) Installed capacity <= 1 MW Installed capacity > 1 MW Biogas Installed capacity <= 1 MW Installed capacity > 1 MW Municipal waste Digested or landfill Thermal Process Wind Installed capacity <= 50 kw Installed capacity > 50 kw Small hydro Installed capacity 50 kw - <200 kw Installed capacity < 50 kw Solar Energy Remark : 1 For the renewable energy power producers in the area with the diesel oil power generation of PEA 2 Fully subsidize all adder cost from power sale to the grid, without the deduction of the power purchased from the utilities only for those rooftop systems of residences Sources: Energy Policy and Planning Office (EPPO) Structure of electricity production from renewable energy can be summarized as follow: If the production and distribution of electricity is greater than 10 MW, the electricity will be sold directly to Electricity Generation Authority of Thailand (EGAT) and if the production and distribution of electricity is less than 10 MW, the electricity will be sold directly to Provincial Electricity Authority or Metropolitan Electricity Authority

60 SWOT of the Project Strength - Since the project is near sea shore, the project will have sufficient and consistent amount of wind throughout a year for electricity generation. - The business can certainly sell electricity to a buyer and is monopoly. - The project is located near the Pak Phanang 1 project, thus, it can be managed simply and reduce administrative expenses and spare part management costs. - The project has a plan to have towers higher than the existing project. The Pak Phanang 1 project uses 100-meter towers while the project uses 120-meter towers. Thus, in theory, the project will gain better wind speed and more steady. Weakness - The project has higher tower construction cost compared to the existing project because its towers used are higher than the existing project which has the towers height of 100 meters but the project has the towers height of 120 meters. Opportunity - The Government supports through many policies such as giving Adder to wind power plants with the capacity of more than 50 kw to less than 10 MW at 3.5 baht per unit for 10 years and tax privilege from Board of Investment Commission Office (BOI). - The variable tariff (Ft) increases continuously because of the increase of fossil fuel which is currently at baht (wholesale) - Provincial Electricity Authority (PEA) has experiences to connect wind power plants with distribution system 33 kv in the surrounding area such as Hua Sai District, Nakhon Sri Thammarat Province or Sating Pra District, Songkla Province. Threat - The wind turbine farm project is located along the sea coast on the Gulf of Thailand side in Pak Phanang District, Nakhon Sri Thammarat Province. It is a large project with the investment of more than approximately 75 million baht per MW and requires high experienced staff to develop the wind power plant. Therefore, finding sufficient sources of fund and/or investing partners to develop the project are crucial to the project success and if any of those is fail, it may cause the project to delay. - Since the area is a potential area along for the Gulf of Thailand coast. Presently, there are many private companies interested to invest and construct in the nearby area. All wind and other renewable energy can connect to limited distribution system according to the number of feeders specified by Provincial Electronic Authority which depends on electricity demand of local people and quality of PEA s distribution systems in the area. Therefore, if there is a wind power plant project of competitors constructed before the project, the feeders of Provincial Electronic Authority may be reduced until it cannot connect to the distribution system in the future. - Some of the project study areas which are near by the distribution station of Provincial Electronic Authority can support the project. Nonetheless, competitors may request for VSPP wind power plant before. Regarding the

61 IWIND s study, presently, the feasible area of the project (project location) reduce to approximately 5 km. along the coast. If the project needs to expand its area to connect with PEA s substations, there will be additional investment and the area expansion cost is approximately 2.5 million baht/km.. Wind Power Project Location The wind power plant project that the Company plans to invest by LLG, a subsidiary of IWIND which is the Company s subsidiary, is called Lomligor Project. The project is located in Ban Pueng Sub-district, Pak Phanang District, Nakhon Sri Thammarat Province. The project is nearby the Pak Phanang 1 Project which is the wind power plant that the Company is starting the investment currently (Pak Phanang 1 is expected to start generating electricity in September 2015). The project location is close to a coast and has sufficient wind speed for power generation almost throughout a year from the Southwest wind current during May to October of every year and from the Northeast wind current during November to January of every year. Moreover, according to EGAT s information, the location has wind speed approximately meters / second (The actual average wind speed of the project site is 5.3 meters / second conducted by IWIND since 2011). The project chooses the turbine technology of Low Speed Wind Turbine Class IIIB which can start generating electricity when the wind has speed of 3 meters / second. Figure shows the flows of Southwest Monsoon wind and Northeast Monsoon wind. Southwest Monsoon wind is Southwest monsoon blows through Thailand between the mid of May to the mid of October. It originates from a high air pressure area in southern hemisphere around Indian Ocean and it blows from its center as Southeast wind and changes to Southwest wind after passing the equator. The Monsoon will lead humidity mass from Indian Ocean to Thailand and resulting cloudy and raining in most of the country, especially, along the sea coast and mountain range which receive the wind directly will have higher amount of rain. Northeast Monsoon wind is that after the effect from Southwest monsoon around the mid of November there is Northeast Monsoon will blows through Thailand until the mid of January. The Monsoon originates from a high air pressure area in Northern hemisphere around Mongolia and China and it carries cold and dry air from the origin to Thailand. The Monsoon results to the clear sky, cold and dry weather in most of the country, especially in Northern and Northeastern parts of the country. In the Southern part, there will be rain particularly in its eastern part because the Monsoon will bring humidity from the Gulf of Thailand to the area. The beginning and the ending of the 2 Monsoons can be varied in each year

62 Company Analysis for the Lomligor Project Analysis of Business Profile Lomligor Company Limited (LLG) (previously named SCG Wind Energy Company Limited) is located in Pak Phanang District, Nakhon Sri Thammarat Province. It has the capacity of 10 MW by entering the Power Purchase Agreement (PPA) of MW with Provincial Electricity Authority (PEA) and receives the Adder of 3.5 baht per units for 10 years. The project has a Scheduled Commercial Operation Date (SCOD) according to the Power Purchase Agreement on February 19, The revenue of the project will be in accordance of a standard power purchase agreement by calculating from electricity units distributed to the system. The Power Purchase Agreement (PPA) is 5 years and automatically renewed every 5 years. The PPA can be terminated due to the 2 following incidents. 1. Electricity producer intend to stop selling or 2. Contract parties cannot satisfy obligations under the PPA and one party has notified the responsible parties to fulfill the obligation and the responsible party does not react accordingly. Then, the party will have a right to terminate the PPA. Therefore, the possibility that a power producer will not fulfill any obligation in the PPA is very low because it has adverse effects to the project itself. In addition, the PPA termination by PEA is also unlikely. The Company is selecting an Engineering, Procurement, and Construction (EPC) Contractor and the Company expects to use Turbines from Goldwind. In its existing Pak Phanang 1 Project with 10 MW capacities as well, the Company used to hire Italthai Engineering Company Limited and Goldwind as the co-epc and the wind power plant construction period was approximately 6 months and the Company had IFEC and IWIND team led by Dr. Sumet Suttapukti as the project manager. Dr. Sumet Suttapukti is a wind power plant specialist and has experiences to develop wind project with the capacity of 33 MW in Republic of Korea and also a counter party with the Ministry of Energy to install the wind measure towers. Dr. Sumet Suttapukti is the Company s business partner in the wind power plant development with the Company. Analysis of Production and Technology Wind Power Production Process - In general, wind power production has less complex processes than coal and gas power plant. A principle of wind turbine generator (WTG) is when wind blows through blades, kinetic energy incurred from wind will rotate rotors which are connected to a generator with a speed and rotation control system. In the rotation, mechanical energy will be released and the mechanical energy from the turbine will be transformed to electrical energy, then, the electricity will be distributed to a substation which has a voltage transformer to adapt voltage in order to distribute to electricity system afterwards. The electricity produced is depended mainly on wind speed, length of blades, and location and height of turbine

63 - The Wind Turbine Generator system is shown as follow: Key components and performance can be summarized below : I. Blade (Number 1 in the figure) is a part receiving wind energy and changes to mechanical energy in order to propel a rotor of the blade. The blade can be adjusted direction to receive wind. II. Brake system (Number 9 in the figure) is a part to control a halt of the blade rotation and the turbine rotor. III. Low speed shaft and high speed shaft (Number 7 in the figure) is a part to control speed of the rotor to rotate the blade slow or fast to the gear system. IV. Gear box (Number 8 in the figure) is a system to adjust and control relationship of rotation speed between the rotor and the generator. However, the project will use the Gearless Technology which is more efficient but also more expensive. One pro of the gearless technology is lower cost of maintenance. V. Generator (Number 6 in the figure) works to change the mechanical energy from the blade rotor to electrical energy. VI. Controller (Number 12 and 13 in the figure) works for controlling a wind speed meter. VII. Nacelle (Number 17 in the figure) is a large control room at the back of the blade to contain systems such as gear box, generator, break system, and controller. VIII. Yaw drive (Number 15 and 16 in the figure) controls the rotation of the nacelle in order to move the blade receiving wind and has a yaw motor to help the redirection. IX. Tower (Number 14 in the figure) is a part that shoulders all equipment on the top

64 - Moreover, the wind turbine generator has a hydraulic system to slowdown the rotation and to halt the blade rotation, a cooling system to extract heat from the systems which create heat from their continuous operation, and an anemometer to measure and collect wind speed that is installed on the vane. - The wind turbine technology selection to match with wind speed and temperature is very crucial for the project. IFEC chooses the 4 turbines from Goldwind Model 121/2500 with the size of 2.5 MW. Analysis of Market and Competition - No direct competition since all electricity produced can be sold entirely at the agreed rate under the power purchase agreement. Analysis of Sales, Customers and Distribution Channel - Even though the project has only one customer, PEA, the financial position of PEA, a state-owned enterprise, is stable. Moreover, the Government s policy is supporting electricity from alternative energy, thus, the Company can sell electricity through the power purchase agreement period and can be renewed automatically every 5 years. - Electricity distribution station is nearby the power plant, therefore, the energy loss between grids is low. Analysis of Related Laws and Regulations Because a power plant with its size less than 10 MW, the regulation does not require conducting Environmental Impact Assessments (EIA) report. Risks o o o Risks to invest in non-performing assets If the project cannot meet the COD target as set, the Company must reserve investment provision since it is a greenfield investment (no construction and no COD). However, the Company is requesting for an expansion of the COD period. Risks of the project construction delay or not success Although, the Company has the experienced team to monitor the installation and construction for the same project types nearby, moreover, there is condition that the Engineering, Procurement, and Construction Contract to insure its construction and to deposit a work guarantee such as bank guarantee or bond for the delay damage or performance guarantee, the Independent Financial Advisor has an opinion that the Company is testing system and starting to distribute electricity in Pak Phanang 1 project to Provincial Electricity Authority which is expected to start its operation around the end of September or the beginning of October 2015 which will be before the Lomligor project investment approval. Thus, the Company will have information and experience of the wind power production and distribution in the same area and the Company can reduce the investment risks of installation, production, wind situation in Pak Phanang, and quality and type of turbines. Risk of uncertainty of the wind power The project has the location quite similar to the Company s developing project which has an acceptable average wind speed. However, wind power is an act of god and cannot be controlled subjected to timing, season, location, and other factors. If wind speed occurred is too low, the electricity amount produced and distributed would be lower than the expected level. The project has studied the actual wind speed in the project site conducted by IWIND and Goldwind and the average wind speed is 5.3 meters / second

65 o o Risk of lack of liquidity The Company needs to use lot of cash to invest in the project and it may need to grant loan between the Company and the project since the project has to be constructed quickly in order to achieve its SCOD date. Moreover, the Company still operates its other projects which are in construction period and required massive investment. Thus, the Company may have a liquidity problem. However, because the Company s Pak Phanang 1 wind power plant project is about to commercial operation (COD) within the end of September or in the beginning of October 2015, the Independent Financial Advisor believes that if its first wind power plant is successful and can sell electricity as expected, there will be more financial institutions interested and the project can find loans adequate for the Lomligor project as well. Risk of exchange rate The project must enter the long-term O&M contract for 5 years (at least) with Goldwind in CYN currency which may fluctuate. The Independent Financial Advisor has an opinion that the project should consider having financial products such as FX swap or option to reduce the risk from CNY fluctuation in the future

66 Assumptions and Conditions for Return Evaluation and Conditions before entering the Transaction Lomligor Company Limited (LLG) can distribute electricity to Provincial Electricity Authority and receive electricity payment from Provincial Electricity Authority by the Scheduled Commercial Operation Date (SCOD) on July 1, 2016 stated in the Purchase Agreement. The tariff that Lomligor Company Limited (LLG) will receive from Provincial Electricity Authority is TOU Rate (calculated from the average of actual sale in On Peak/Off Peak from electricity during the periods) and Ft. The Adder that Lomligor Company Limited (LLG) will receive from Provincial Electricity Authority is 3.50 baht for 10 years. The investment amount in the study is from the Company s disclosed information and the Independent Financial Advisor also reviewed with referring information from the Company in order to examine lists of materials and workforces and consider price of the project construction

67 Assumptions for the Lomligor Project Cash Flow Projection To prepare the financial projection of the Lomligor wind power plant project, the Independent Financial Advisor has a method to calculate revenues as follow: 1. Conversion of Wind Speed to Electricity For the energy yield calculation, the Independent Financial Advisor uses the electricity energy information calculated and guaranteed by the turbine producer, Goldwind, who has guaranteed qualification of turbine and quality for electricity production based on the Guaranteed Power Curve. A turbine producer will guarantee electricity production according to actual wind speed which will be stated in a standard Turbine Service Agreement (TSA). The Company s technical advisor considers losses from the project electricity production in section 2 below and considers the model of the turbine and other factors, thus, the expected electricity amount expected to be produced to the grid is as follow: Calculation of Electricity Amount expected to produce Average Wind Speed /4 (m/s) Electricity Amount expected to produce (GWh / Year) P50 / P75 / P90 / Remarks : /1 Confident level at 50% (P50) means it is 50% confident that there will be a wind speed which can produce net electricity at least GWh per year. /2 Confident level at 75% (P75) means it is 75% confident that there will be a wind speed which can produce net electricity at least GWh per year. /3 Confident level at 90% (P90) means it is 90% confident that there will be a wind speed which can produce net electricity at least GWh per year. /4 The average wind speed is from the Feasibility Study of Lomligor Project of IWIND in 2015 which measured the wind on the project site

68 The Independent Financial Advisor applied P75 as the base case of electricity amount expected to be produced in the cash flow projection of the Lomligor project since amount and consistency of wind which is natural resource have high volatility. Compared to amount and consistency of solar energy, solar power plants in Thailand have sunlight intensity more consistent at P50. However, when comparing to wind power plants in Thailand that have already started their commercial operation date and sold to Electricity Generation Authority of Thailand (EGAT) since November 2012, that site is located on a hill in Nakorn Ratchasima Province, the wind amount is less consistent at around P75. That project s turbine equipment is an old model and it does not use a low speed wind turbine Class 3 type which is appropriate for low wind speed as the Lomligor Project that can produce electricity (Cut in wind speed) at the wind speed of 3 meters / second. That comparing examined project uses the turbine equipment Class 2 for a high wind speed area but installs longer blade instead. Therefore, in order to be conservative on the revenue assumption, the Independent Financial Advisor applies the P75 figure as the base case. 2. Assumptions of Key Production Efficiency Losses The Independent Financial Advisor assumes the efficiency after the losses in the electricity production to multiply with the expected electricity production amount in order to calculate the net electricity amount sold in the following table. Loss Category Impact Wake Effect 99.10% Availability WTG 97.00% Availability BOP 99.50% Availability Grid 99.50% Electrical Efficiency 97.00% Turbine Performance 99.70% Environmental 98.00% Grid Curtailment to10 MW 99.70% Noise Curtailment 98.60% Total 88.67% Sources : Feasibility Study of Lomligor Project of IWIND in

69 Definitions Wake effect : Impact to wind energy occurred from blades of turbines which affects a speed of wind current behind the blades resulting from the rotation of the blades to the others. Wind that blows through the blades will have less energy by efficiency energy laws. The wind flows through the blades will have less speed and combines and becomes turbulent at the tails compared to the wind in front of the blades. Hence, wind turbines are installed apart from each other at least 7 times of the diameters of the blades in order to avoid the turbulence at the back of the blades which may be the front of other blades. Availability : Possibility of availability of turbines, equipment of balance of power plant structure, electrical grid as a network for other producers distribution during the 10 years period of the usage. Electrical grid mostly comprises of electricity production station, high voltage grid to convey energy from remote areas to demanding centers, and low voltage grid to each customer. Electrical transmission efficiency Turbine performance : Losses of electricity energy between low voltage grid at wind turbines and electricity load via the grid and the electricity transfer between each other. Terminal voltage means electromotive force at an electrode tip to a wire, ending terminal connecting to a network. : Power curve can describe competency of wind power generating turbine. Generally, electricity load can be estimated from the power curve and the electricity amount produced depends on qualification of turbine types and property of wind sources in term of speed probability density which can analyze electricity amount produced from the turbine. Environmental : Electricity losses from environmental events such as heavy rain, heavy snow which result to close turbines for safety reason. Grid curtailment Noise curtailment : Due to a defect of electricity buyer s grid. In Thailand, the events occur frequently in the area or at the time that the usages of electricity are lower than normal level or the time of grid maintenance period. The electricity buyer can ask power plants to stop their operation during the event. : Due to a defect of electricity quality in a grid. The electricity buyer normally must study quality of electricity before buying or before First Syn. The event may occur when the buyer receive electricity from renewable energy too much and does not know when electricity will come

70 3. Electricity Tariff Wholesales Tariff : Peak Baht Wholesales Tariff : off Peak Baht Ft Baht Peak Hours 40% Off - Peak Hours 60% Remark : Using the most updated wholesale Ft for May July 2015 Peak Period Between hours from Monday - Friday Off-Peak Period Between hours from Monday Friday (2 hours in 12 hours) Between hours from Saturday Sunday, Labor Day, and Public Holidays \ (exclude compensatory holidays and Ploughing Ceremony day) Wholesale price Wholesale rate to MEA and PEA from January Based on Time of Use : TOU Rate Notification of Electricity Generation Authority of Thailand entitled Electricity Buying Rate for VSPP of the Non-Firm for Very Small Power Plants from renewable energy January 2013 March 2013 Ft Average wholesale Ft after deduction of expense pass-through in May July 2015 The Independent Financial Advisor considers the average rate for the electricity production and distribution during each period by using number of hours of the peak rate adjusted with number of normal operation days in each years after deducting Saturday, Sunday, and public holidays, then, adjusting to proportion of the production to a period in each day. The calculation results the proportion for the periods of 1) Peak of 40% and 2) Off-peak of 60%

71 Average Historical Electricity Tariff during / รวมอ ตราค าไฟฟ าเฉล ย ค าพล งงานไฟฟ าขายส งเฉล ยท กระด บแรงด น ค า Ft ขายส งเฉล ย ค า Ft ขายปล ก 0.00 ม.ค. ม.ย. พ.ย. เม.ย. ก.ย. ก.พ. ก.ค. ธ.ค. พ.ค Sources : Energy Regulatory Commission ต.ค. ม.ค. ส.ค. ม.ค. ม.ย. พ.ย. เม.ย. ก.ย. ก.พ. Average Changes of Electricity Wholesale Price in the last 10 years (Growth Rate of approximately %) 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Average Changes of Electricity Wholesale Price in the last 10 years Cummulative Average 12 m. Average Monthlly -12m ต.ค. พ.ค. ธ.ค. ก.ค. ก.พ. ก.ย. เม.ย. พ.ย. ม.ย. ม.ค. ส.ค. ม.ค. ต.ค. พ.ค. ธ.ค. ก.ค. ก.พ. ก.ย. เม.ย Sources : Energy Regulatory Commission

72 Other Key Assumptions of the Project s Financial Projection Key Factors Details of Assumptions Assumption References 1. Revenues The project has the power purchase agreement of IFEC s disclosed information and the review of the MW PPA The power plant has average efficiency after the In accordance with the Company s technical electricity production losses of 88.67% for the project advisor s report by using Program WindPRO for the life. calculation. 2. Constructi on Cost Starting its commercial operation date (COD) as stated in the PPA on July 1, According to the IFEC s disclosed information, the PPA specifies that the scheduled commercial operation date (SCOD) is by February 19, 2016, however, even though, the project is expected to start COD later than the above SCOD under the PPA condition (currently, the Company is requesting for the first SCOD postponing), the Company has put deposit of approximately 1.8 million baht with PEA (while the PPA will be terminated after 12 months from the SCOD date) and the project will be penalized of 0.33% of the deposit per day after 60 days from the SCOD date. Therefore, regarding to the Company s COD expected date, the Company may be penalized for approximately 431,934 baht. Nonetheless, if the Company cannot COD within 12 months, the PPA will be expired. Growth rate of base tariff is 3.0% per year. Use Wind Energy Yield at P75 which is GWh per year or equals to 21,070,109 kw/h per year before Loss Factors The project construction cost is approximately 800 million baht including other expenses related to project study, interest during construction period, bank fees, penalty of approximately 431,934 baht for the late COD, and contingency provision of 3% for conservative purpose. There will be no cost overrun since a chosen contractor must have experience and secure with the EPC contract as turnkey project which can reduce the cost overrun risk. Moreover, the project requires that the contractor must put a guarantee bond to the project owner in order to reduce losses from delay and quality of delivered works according to Liquidate Damages and Performance Bond conditions. Based on Thailand inflation rate (the growth rate of electricity wholesale price for the last 10 years is approximately 3.5% %) According to IFEC s disclosed information, the project uses 20,586,000 kw/h per year for the calculation which is around at P50 which is old information without Goldwind s cooperation. The IFA uses the most updated information prepared by IWIND with Goldwind. Based on the IFEC s disclosed information. The cost equals to the construction cost of the 10 MW Pak Phanang 1 Project. Although, the project does not need to build a foundation for off-shore towers as the existing project which has the balance of plant (BOP) construction cost higher than on-shore towers, the Lomligor project plans to install turbines higher than 100 meters to 120 meters which will raise the construction cost as same as the existing project. 3. O&M Service Costs** + Administr ative expenses Straight line method depreciation for 25 years. Equal to 20.3 million baht per year and increase 3.00% per year as inflation. The expenses are comprised of O&M expenses by Goldwind, insurance, crane expenses, and minor unscheduled annual maintenance (please see details in expense forecast). In addition, there is a fixed cost for the power development fund of approximately 2.65 million baht as well. 4. Loans Debt to Equity ratio is assumed by Loan amount of approximately 560 million baht and shareholders equity of approximately 250 million baht. Interest rate of 6.513% and the front end fee of 1% Loan tenor of 11 years in total and starts repay 10 years after COD which is in the Adder period. The IFA assumes the principal repayment and interest payment are annuity and the project must pay principal and interest of approximately million baht in total every year as a conservative basis. According to the normal guarantee period of turbines for 25 years. Expenses based on the 10 MW Pak Phanang 1 Project. With a conservative basis, the Independent Financial Advisor does not reduce any cost that can be saved from cost sharing and spare part expenses between the 2 projects. IFEC s disclosed information Equals to the average interest rate of the 4 largest commercial banks in Thailand (BBL, KBank, SCB, and KTB) IFEC s disclosed information and IWIND s business plan

73 Key Factors Details of Assumptions Assumption References 5. Tax Has the BOI : 0% in the year 1 8, 10% in the year 9 13, and 20% thereafter. IFEC s disclosed information and interview with the Company s management 6. Others Receivable collection days of 30 days From the invoice that PEA will pay for electricity and cheque received period Payable days 45 days From the spare part order and equipment maintenance Projection of Cash Flow from Revenues Assumptions of production amount before calculating Key Production Efficiency Losses in monthly basis and separated into 3 scenarios according to the possibility rate (confidence) of P50, P75 and P90 Wind Energy Yield / unit Annual Yield Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec P50 GWh / Year P75 GWh / Year P90 GWh / Year Remark : 1 GWh = 1,000,000 kwh Assumptions of production amount before calculating Key Production Efficiency Losses in monthly basis and separated into 3 scenarios according to the possibility rate (confidence) of P50, P75 and P90 (A) unit Total yearly Jan Feb Mar Apr May Jun Loss Assumption % Key Production Efficiency Losses = 88.67% P50 kwh 20,429,686 1,618,031 1,618,031 1,618,031 1,390,581 1,390,581 1,390,581 P75 kwh 18,682,000 1,479,614 1,479,614 1,479,614 1,271,621 1,271,621 1,271,621 P90 kwh 17,152,000 1,358,438 1,358,438 1,358,438 1,167,479 1,167,479 1,167,479 Jul Aug Sep Oct Nov Dec Loss Assumption % Key Production Efficiency Losses = 88.67% P50 kwh 1,541,079 1,541,079 1,541,079 2,260,204 2,260,204 2,260,204 P75 kwh 1,409,246 1,409,246 1,409,246 2,066,852 2,066,852 2,066,852 P90 kwh 1,293,833 1,293,833 1,293,833 1,897,583 1,897,583 1,897,583 Based on the assumptions of production amount before calculating Key Production Efficiency Losses, the Independent Financial Advisor applies the possibility rate (confidence) of P75 as the base case for the revenue from electricity sale projection because P75 is the confident level that is appropriate. Moreover, it is assumed that the project starts production and distribution in the second half of 2016 (according to the project s disclosed information) and the capacity is separated into quarterly basis. The base tariff of Peak Hours Rate and Off-Peak Hours Rate is assumed to increase 3.00% a year from the current wholesale price and the Adder is 3.50 baht

74 Example of Revenue Projection in 2016 and 2017 (unit : million baht) (B) Wholesale price Assumption Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Peak Hours (inc Ft.) Off-Peak Hours (inc Ft.) Adder Quarterly Capacity P75 4,227,737 6,200,556 4,438,843 3,814,864 4,227,737 6,200,556 (C) Revenue Projection (million baht) 2016 Revenue Projection (million baht) 2017 Peak Hours (inc Ft.) 40.00% Off-Peak Hours (inc Ft.) 60.00% Adder Total Yearly Example of Revenue Projection in 2018 and 2019 (unit : million baht) (B) Wholesale price Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019 Q3/2019 Q4/2019 Peak Hours (inc Ft.) Off-Peak Hours (inc Ft.) Adder Quarterly Capacity 4,438,843 3,814,864 4,227,737 6,200,556 4,438,843 3,814,864 4,227,737 6,200,556 (C) Revenue Projection (million baht) 2018 (C) Revenue Projection (million baht) 2019 Peak Hours (inc Ft.) Off-Peak Hours (inc Ft.) Adder Total Yearly The calculation of the revenue projection (C) is from the projection of electricity production in (A) x wholesale price (B) such as electricity production amount at P75 in Q3/2016 (A) = 4,227,737 kwh multiplied by electricity tariff in Q3/2016 (B) at the Peak Rate at 40% + Off-peak Rate at 60% with the Adder. The result is million baht ( respectively)

75 Revenue and Expense Projection between unit : thousand baht thousand % baht Revenue from electricity sale Base tariff - 33,579 61,545 63,412 65,336 67,320 Adder - 36,499 65,387 65,387 65,387 65,387 Total revenues from electricity sale - 70, , , , ,707 Expenses (exclude depreciation and interest expense) Expenses to power development fund 2, % 1,332 2,650 2,650 2,650 2,650 Insurance expenses 1, % 855 1,700 1,700 1,700 1,700 Administrative expenses 7, % 3,523 7,061 7,204 7,349 7,497 Crane expenses % Unscheduled minor work % Equipment and maintenance for BOP O&M % Equipment and maintenance for SAA O&M 5, % 2,574 5,178 5,336 5,497 5,664 OPEX Contingency % ,001 Total expenses (exclude depreciation and - 9,548 19,133 19,509 19,896 20,293 interest expense) Earnings before depreciation and interest 60, , , , ,414 expense Depreciation 16,000 32,000 32,000 32,000 32,000 Interest expense 40,674 33,631 30,648 27,464 24,066 Tax Net profit 3, ,168 46,641 51,363 56,

76 Revenue and Expense Projection between unit : thousand baht Revenue from electricity sale 7 Base tariff 69,360 71,465 73,633 75,869 78,168 80,540 82,983 Adder 65,387 65,387 65,387 65,387 65,387 28,888 0 Total revenues from electricity sale 134, , , , , ,428 82,983 Expenses (exclude depreciation and interest expense) Expenses to power development fund 2,650 2,650 2,650 2,650 2,650 2,650 2,650 Insurance expenses 1,700 1,700 1,700 1,700 1,700 1,700 1,700 Administrative expenses 7,648 7,802 7,959 8,120 8,283 8,450 8,620 Crane expenses Unscheduled minor work Equipment and maintenance for BOP O&M Equipment and maintenance for SAA O&M 5,836 6,013 6,196 6,383 6,577 6,777 6,982 OPEX Contingency 1,031 1,062 1,094 1,128 1,162 1,197 1,233 Total expenses (exclude depreciation and 20,700 21,118 21,547 21,988 22,440 22,905 23,382 interest expense) Earnings before depreciation and interest 114, , , , ,115 86,523 59,602 expense Depreciation 32,000 32,000 32,000 32,000 32,000 32,000 32,000 Interest expense 20,439 16,568 12,436 8,027 4,050 1,175 - Tax ,924 8,507 5,335 2,760 Net profit 61,608 67,165 73,036 71,317 76,559 48,013 24,

77 Revenue and Expense Projection between unit : thousand baht Revenue from electricity sale Base tariff 85,503 88,095 90,768 93,522 96,362 99, ,295 Adder Total revenues from electricity sale 85,503 88,095 90,768 93,522 96,362 99, ,295 Expenses (exclude depreciation and interest expense) Expenses to power development fund 2,650 2,650 2,650 2,650 2,650 2,650 2,650 Insurance expenses 1,700 1,700 1,700 1,700 1,700 1,700 1,700 Administrative expenses 8,794 8,971 9,152 9,336 9,525 9,716 9,912 Crane expenses Unscheduled minor work Equipment and maintenance for BOP O&M 998 1,028 1,059 1,091 1,124 1,158 1,194 Equipment and maintenance for SAA O&M 7,194 7,412 7,637 7,869 8,108 8,354 8,607 OPEX Contingency 1,271 1,309 1,349 1,390 1,432 1,476 1,520 Total expenses (exclude depreciation and 23,871 24,374 24,890 25,420 25,964 26,523 27,096 interest expense) Earnings before depreciation and interest 61,632 63,721 65,878 68,102 70,398 72,760 75,198 expense Depreciation 32,000 32,000 32,000 32,000 32,000 32,000 32,000 Interest expense Tax 2,963 6,344 6,776 7,220 7,680 8,152 8,640 Net profit 26, , , , , , ,

78 Revenue and Expense Projection between unit : thousand baht Revenue from electricity sale Base tariff 105, , , , , ,390 83,823 Adder Total revenues from electricity sale 105, , , , , ,390 83,823 Expenses (exclude depreciation and interest expense) Expenses to power development fund 2,650 2,650 2,650 2,650 2,650 2,650 1,982 Insurance expenses 1,700 1,700 1,700 1,700 1,700 1,700 1,272 Administrative expenses 10,112 10,316 10,524 10,736 10,952 11,173 8,503 Crane expenses , Unscheduled minor work Equipment and maintenance for BOP O&M 1,230 1,267 1,306 1,345 1,386 1,428 1,096 Equipment and maintenance for SAA O&M 8,868 9,137 9,415 9,700 9,995 10,298 7,906 OPEX Contingency 1,567 1,614 1,663 1,713 1,765 1,819 1,396 Total expenses (exclude depreciation and 27,685 28,290 28,912 29,550 30,205 30,878 23,545 interest expense) Earnings before depreciation and interest 77,713 80,309 82,979 85,736 88,578 91,513 60,278 expense Depreciation 32,000 32,000 32,000 32,000 32,000 32,000 16,000 Interest expense Tax 9,143 9,662 10,196 10,747 11,316 11,903 8,856 Net profit 36, , , , , , , Discount Rate (WACC) The discount rate used to estimate the present value of the future cash flow is calculated from the (Weighted Average Cost of Capital: WACC) of the business, which is formulated from: Debt-to-Equity Ratio Cost of Debt after tax: Kd*(1-t) Cost of Equity : Ke By using the following formula: WACC = Ke + [Kd*(1-T)*D/E Ratio] 1 + D/E Ratio Ke Rate of Return of Equity of 14.32% Kd Cost of Financing of the Company based on the average interest rate of 6.51% T Effective Tax Rate of 20% for the calculation D/E Debt to Equity of approximately 2.25 times to reflect the actual overall business s D/E ratio

79 WACC Weighted Average Cost of Capital of 7.98% (rounded to 8.00%) Ke is calculated by the following formula : Ke = Rf + β(rm Rf) Rf Yield of Government Bonds 3.67% Referring to the 25-year Government Bond Yield from as of August 28, 2015, which can reflect investment situations during different periods better than short period information. Rm β Average Rate of Return of Stocks in the Stock Exchange of Thailand Coefficient of the Variance of the SET Index and the Stock Price 15.00% Calculating the changes of the SET Index during the last 20 years plus 1% for a new project (data from the Stock Exchange of Thailand) which can represent the market situations in different periods better than short period information Average β of BCP, EA, EGCO, GLOW, RATCH, IFEC and SPCG (average in the last 2 years from Bloomberg) and the Independent Financial Advisor chooses the comparable companies because they are in energy business and have renewable energy power plant. The Independent Financial Advisor uses the rate of 8.00% as the discount rate for finding the net present value (NPV) of the Lomligor Project s cash flow. The sensitivity analysis is conducted by changing the discount rate of plus and minus 0.50% which results the discount rate of 7.50% % for the Lomligor Project valuation. The Independent Financial Advisor has calculated the Project IRR of the Lomligor Project. By using the Project IRR, the net present value of the cash flow after the investment will be zero. Thus, the said Project IRR is another indicator to evaluate whether the Company s investment in the project is appropriate

80 Summary of Projected Cash Flow of the Project From the assumptions for the net expected cash flow calculation of the project in the future and the financial projection by using the weighted average cost of capital (WACC) as the discount rate together with the tax rate in different periods and the capital structure change of the project, the cash flow projection can be summarized as follow: unit : million baht * Discounted Year Earning before depre. and interest Tax (7.92) Less Investment (150.00) (650.00) Changes of Working Capital (1.36) (0.09) (0.10) (0.10) (0.10) (0.11) (0.11) Net projected cash flow (150.00) (586.41) Discount rate of 8.00% Present value of cash flow (147.09) (532.43) unit : million baht Discounted Year Earning before depre. and interest Tax (8.51) (5.33) (2.76) (2.96) (6.34) (6.78) (7.22) (7.68) (8.15) (8.64) Less Investment Changes of Working Capital (0.11) (0.85) (0.70) (0.12) (0.13) (0.13) (0.13) (0.14) (0.14) (0.15) Net projected cash flow Discount rate of 8.00% Present value of cash flow unit : million baht Discounted Year Earning before depre. and interest Tax (9.14) (9.66) (10.20) (10.75) (11.32) (11.90) (8.86) Less Investment Changes of Working Capital (0.15) (0.16) (0.16) (0.16) (3.27) Net projected cash flow Discount rate of 8.00% Present value of cash flow Remarks : *Projection of earnings before depreciation and interest expenses for half year

81 From the evaluation of the net present value of the project s cash flow, the information can be summarized for comparing the net present value of the project s cash flow (NPV), the project s internal rate of return (Project IRR), the shareholder equity s internal rate of return (Equity IRR), and the payback period as follow: Evaluation Approach Result Sensitivity (WACC) Discount Rate (%) Net Present Value (NPV) million baht million baht million baht Project IRR 12.11% Equity IRR 14.21% Payback Period 7.69 years Remarks : The IFA chooses to sensitize the WACC at 0.50% for analyzing the impact to the present value of the net cash flow from the discount rate. The discount rate adjustment of 0.50% is appropriate because the range is wide enough by comparing the change of Thailand interest rate of approximately 0.25% at the time. Equity IRR of 14.21% is calculated from the equity investment in LLG of 250 million baht and if the equity investment in LLG increases to 330 million baht, the Equity IRR will be 11.17%. Based on the assumptions of the Independent Financial Advisor above, when the electricity amount at the confident level at P75 or GWh per year, the present value of the net cash flow (NPV) is million baht, the project return (Project IRR) is 12.11%, the shareholder equity return (Equity IRR) is 14.21%, and the payback period is 7.69 years. Therefore, according to the calculation to find the project return, the Independent Financial Advisor believes that the Company s wind power plant project is feasible and reasonable for the investment. Sensitivity Analysis from the Change of the Net Electricity Amount per year The Independent Financial Advisor has conducted the sensitivity analysis by increasing net electricity amount per year from the confident level at P50 which equals to the net energy production per year of GWh and reducing to the confident level at P90 which equals to the net energy production per year of GWh in order to comparing the net electricity amount in each confident level and the changes of net present value of the cash flow to equity (NPV), Project IRR, Equity IRR, and payback period as follow: Net energy production per year at confident level P50 P75 P90 Net present value (NPV) million baht million baht million baht Project IRR 14.05% 12.11% 10.39% Equity IRR 17.59% 14.21% 11.36% Payback Period 7.36 years 7.69 years 7.95 years

82 Summary of the Appropriate Invested Value of the Lomligor Project The Independent Financial Advisor has an opinion that the appropriate approaches to evaluate the value of the Lomligor wind power plant by calculating the net free cash flow to the project (FCFP) are the net present value (NPV) of between million baht, the project return (Project IRR) of between %, the shareholder equity return (Equity IRR) of between %, and the payback period of approximately years. 3.2 Condition of the Transaction The Company is preparing to invest more in LLG under the total investment no more than 800 million baht. The Company has granted the IWIND s director an authority to negotiate with buyers or other contractual parties and to consider final conditions to enter the transaction. Moreover, for convenience of construction preparation of foundation work, road, and other works before entering into the raining season which would be an obstructed for the project construction, the Company should control and govern the project s related people to take action according to the plan under the specified period and budget. Opinions of the Independent Financial Advisor The Independent Financial Advisor has opinions that since the asset acquisition transaction of the Lomligor Project is the investment for construction, land acquisition, machine and equipment, turbine with system, transportation, and land and building development of Lomligor Company Limited (the subsidiary of IWIND which is the Company s subsidiary), the conditions of the transaction above are normal practice conditions in order to control and manage construction cost and operating expenses until the COD and the project can produce and distribute electricity to Provincial Electricity Authority eventually

83 4. Summary of the Independent Financial Advisor s Opinions Appropriateness of the Fair Price Summary of investment in Lomligor Project The Independent Financial Advisor opined that Free Cash Flow to Project (FCFP) Valuation Approach is appropriate for this valuation on wind power plant business, namely Lomligor Project. Net Present Value (NPV) of the project after deducting investment in the project is between million baht while Internal Rate of Return of the project (Project IRR) is between %. The Project s Equity IRR is between % and its payback period is approximately years. Therefore it can be seen that Net Present Value (NPV) of the project after deducting investment in the project discounted with the rate of 8.00% is between million baht, so the project has positive NPV. The Project IRR is between %, which is appropriate rate of return. As such Independent Financial Advisor opined that the Company s investment in Lomligor project under this Acquisition of Asset Transaction is appropriate. Reasonableness of the Transaction. Independent Financial Advisor opined that investing in Lomligor Project will enable the Company to expand its business of production and distribution of electricity from wind power in order to achieving sustainable growth and reducing the company s risk from rely on its business of production and distribution of electricity from Solar Power. The investment will expand business scope of the Company. After the Commercial Operation Date (COD), the Company will realize revenue and profit of IWIND and LLG in its financial statement. The Company expected to realize income in beginning of the 2 nd half of This investment will help diversify the Company s business risk as the Company will invest in various types of alternative energy business. As such it will stabilize the growth of the Company s revenue from production and distribution of electricity in the future, which will help IWIND to achieve business continuity in its business of production and distribution of electricity from wind power. The Company planned to expand its wind power business via IWIND in the future. The Company might also plan to spin-off or issue new share and offer for sale to public, and list IWIND securities on the Stock Exchange of Thailand in the future. This will create value added and generate income to the Company in the long term. Nonetheless, this acquisition of asset transaction by investing in Lomligor project is a new project (the construction and the distribution of electricity have not yet started). There is uncertainty on the completion of its construction and operation to produce and sell electricity to Provincial Electricity Authority. Moreover, by investing in Lomligor project, wind power, which will be used to produce electricity, is uncontrollable due to the uncontrollable nature of wind, which depends on times and sir power. Although the Company had tested the wind power and conducted the feasibility study of the project based on yearly average wind power, the Company cannot set and control the wind power due to uncontrollable nature of wind. Also the Company s investment in Lomligor Project will be exposed to certain risks as investment in other investment in other alternative energy business including government s policies and supports, and wholesale power purchasing price in the future

84 Benefits, Cons, and Risk Factors of the Company s investment in Lomligor Project under this Acquisition of Asset Transaction can be summarized as follow: Benefits of the Transaction 1. By investing in Lomligor project, the Company will engages in business of wind power production and distribution, which is expected to generate revenue from the production and distribution of electricity. It will expand the business operation of the Company. After the Commercial Operation Date (COD), the Company will realize revenue and benefit of IWIND and LLG in its financial statement. The Company expected to realize income from the beginning of the 2 nd half of By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. By investing in 1 more wind power project with regard to the Company s 16 projects in production and distribution of electricity as of 30 June 2015 (12 projects have started Commercial Operation Date with total capacity of MW and the other 4 projects are in the preparation process), the Company will diversify its business risk as the Company will invest in various types of alternative energy business. As such it will stabilize the growth of the Company s revenue from production and distribution of electricity 3. By investing in Lomligor project, the Company will has 1 more investment in wind power project as it had already invested in its 1 st wind power project, namely Pak Phanang Project 1, via IWIND, its subsidiary. Pak Phanang Project 1, a wind power project of the Company, is located nearby the Lomligor project so in the future the Company can save its investment, operating cost, maintenance expenses, and management and administration expenses. 4. Investing in Lomligor project is one of the project that serves the government s policies and it increase the number of alternative energy project in Nakhon Si Thammarat and nearby province. The wind power used to generate electricity is free, clean, and can be used to generate electricity during both day and night time. Generating electricity with alternative energy (wind power) does not pollute the environment and does not create greenhouse effect, so it differs from generating electricity with other fuels. Lomligor project serves the government s policies regarding electricity generating, which have targeted to increase the portion of electricity from the renewal and alternative energy to at least 25% of total electricity that rely on fuels within Investing in Lomligor project will help IWIND to achieve business continuity in its production and distribution of wind power business. The Company has planned to expand its wind power business via IWIND in the future. According to the interview with the management of the Company, the Company might also planned to spin-off or issue new share and offer for sale to public, and list IWIND securities on the Stock Exchange of Thailand in the future. Cons of Transaction 1. Investing in Lomligor project is a new project (the construction and the distribution of electricity has not yet started). There is uncertainty on the completion of its construction and operation to produce and sell electricity to Provincial Electricity Authority. 2. Investing in Lomligor project, wind power which will be used to produce electricity is uncontrollable due to the uncontrollable nature of wind and period of time. It is beyond control of the Company. Although the Company had tested the wind power and conducted the feasibility study of the project based on yearly average wind power, the Company cannot set and control the wind power due to uncontrollable nature of wind

85 3. By investing in Lomligor project, the Company will have to make large investment of approximately 800 million baht. According to the Company s expected sources of fund, the Company s Debt to Equity ratio will be approximately 2.25 times. The Company had already invested in Lomligor in the amount of 250 million Baht. 4. Lomligor project is, same as Pak Phanang Project 1, located in Banpeang Sub-district, Pak Phanang District, Nakhon Si Thammarat. Both of the wind power projects of the Company are located in the same area so the Company cannot diversify its risk by having its projects located in different areas such as risk from natural disaster. Risk Factors 1. Risk from the completion of its construction and operation to produce and sell electricity to PEA. By investing in Lomligor project, the Company might has risk from the completion of the business operation to meet its investment objectives such as budgeting control, completion of the construction, cost control, direct and indirect expenses. 2. Risk from the completion of the project construction. Risk from completion of the construction to the point where the wind power project can operate. Risk from acquisition of land for the project which the Company is purchasing from current land owner. Risk from the project delay. Risk from obtaining loan from financial institution. 3. Risk from the business operation of the Lomligor project. Risk on wind speed. Risk from natural disasters. Risk from policies and support from government. Risk of dilapidated equipment. Nonetheless, the Company is conducting system testing for its Pak Phanang Project 1 and starting to sell electricity to Provincial Electricity Authority, which expected to start its Commercial Operation Date within September or early October As it will be completed before the approval of the Company s investment in Lomligor project, the Company will has data and experience regarding wind power electricity production in the same area. Therefore the Company can reduce certain investment risks such as installment, capacity, nature of wind in Pak Phanang area, and proper qualification and types of wind turbine. Therefore, considering the benefits, cons, risk of the transaction, and appropriateness of investing in Lomligor project of Lomligor Co., Ltd., a subsidiary of the Company. Independent Financial Advisor deems that the Acquisition of Asset is appropriate and benefits to the Company and its shareholders mutually. The Company s shareholders should resolve to approve the Acquisition of Asset Transaction

86 Nonetheless, the consideration whether to approve the Company to enter into the Transaction mainly depends on discretion of the Company s shareholders. The Company s shareholders can review the Company s other information and the report of the Independent Financial Advisor s opinions above. Yours Faithfully JVS Financial Advisory Company Limited... (Mr.Surapong Heng) Financial Advisor... (Mrs.UsanaphanVisutthisub and Mrs. Kanchana Kulteerathawat) Directors

87 Part 2 Information of Inter Far East Engineering Public Company Limited (IFEC)

88 1. Information of Inter Far East Engineering Public Company Limited 1.1 General Information Company Name Symbol Business Type 1.2 Key developments of the Company Inter Far East Engineering Public Company Limited IFEC Resources/Energy & Utilities Head Office No. 33/4, The Nine Tower, 29th Floor, Rama IX Road., Huai Khwang Sub-district, Huai Khwang Location District Bangkok Telephone Facsimile Website Registered Capital Number of Common Shares Paid-up Capital 2,691,819, Baht 1,824,597,829 Shares 1,824,597, Baht Year Details 1988 The Company was granted to bring its securities to be the listed securities on the Stock Exchange of Thailand Increased the registered capital to 120 million Baht Was registered as a public company and traded on the Stock Exchange of Thailand April 9, 2008, the Company increased the registered capital of 407,792, Baht as 407,792,810 common shares at par value of 1 Baht each share. On September 23, 2008 the Board of Directors has approved a share repurchase program for the financial management purposes. The Company has bought back shares totaling to 12,850,000 shares On June 13, 2013 setting up a subsidiary, Inter Far East Energy Co., Ltd. (IFEE) to handle the investment in the business related to the production and distribution of electricity from renewable energy businesses. August 26, 2013 IFEE has invested in Green Energy Technology In (Thailand) Co., Ltd. ( GE ) to produce and distribute electricity from solar farm business. August 28, 2013 The Extraordinary General Meeting of Shareholders No. 1/2013 approved a capital increase from 407,792, Baht to 1,376,300, Baht by issuing new shares of 968,507,923 shares. These shares were offered to the existing shareholders, Private Placement and also to accommodate the convertible securities

89 Year Details August 30, 2013 The Company's registered capital is 1,376,300, Baht. September 27, 2013 The Company's paid up capital is 605,177, Baht. December 3, 2013 The Company's paid up capital is 747,533, Baht. December 11, 2013 IFEE has invested in Clean City Co., Ltd. ( CC ) conducting waste management business January 10, 2014 IFEE has invested in J. P. Solar Power Co., Ltd. ( JP ) conducting production and distribution of electricity from solar farm business. April 3, 2014 at 2014 Annual General Shareholders Meeting approved the capital increase of the Company and allocation of ordinary shares to support the payment of dividends to ordinary shares and accommodate right adjustment to exercise of warrants IFEC-W1 from 1,376,300, Baht to 1,445,115, Baht. April 11, 2014 The Company has invested in 2 subsidiaries: Sun Park Co., Ltd. ( SP ) and Sun Park 2 Co., Ltd. ( SP2 ) conducting production and distribution of electricity from solar farm business. April 17, 2014 The Company's registered capital is 1,445,115, Baht. May 2, 2014 The Company's paid up capital is 963,404, Baht. June 3, 2014 The shareholders meeting approved the disposal of assets in connection with the sale and lease copiers to Konica Minolta Business Solutions (Thailand) Co., Ltd. (KM BTH) at about 407,045,000 Baht and sale of 12 real estate properties to NND (Thailand) Co., Ltd. ( NND ) at price 200,000,000 Baht which the latter the parties have cancelled the purchase of assets of million Baht in November 2014 for the best interests of shareholders. June 6, 2014 The Company entered into a memorandum of agreement with the Municipality of Phnom Penh for feasibility study of the model and investment plan for waste management in Phnom Penh and further processing to produce electricity from waste resource. July 1, 2014 The Company sold assets associated with sale and lease copiers to Konica Minolta Business Solutions (Thailand) Co., Ltd. July 21, 2014 The Company notified its new address from its old headquarters 33 Soi Ramkhamhaeng 22 (Chittanukraw) Hua Mak, Bang Kapi, Bangkok to 33/4 The 9th Tower Grand Rama 9 29th Floor, Rama 9 Road, Huay Kwang, Huay Kwang, Bangkok July 23, 2014 Dissolution all branch offices related to all copier business. August 15, 2014 The Company moved from its old headquarters 33 Soi Ramkhamhaeng 22 (Chittanukraw) Hua Mak, Bang Kapi, Bangkok to 33/4 The 9th Tower Grand Rama 9 29th Floor, Rama 9 Road, Huay Kwang, Huay Kwang, Bangkok August 26, 2014 The Company has invested in V. O. Net Biodiesel Asia Co., Ltd. (VON) conducting production and distribution of electricity from solar farm business. September 24, 2014 The Company has invested in Green Growth Co., Ltd. (GG) ) conducting production and distribution of electricity from wind resource and increased the capital to million Baht in

90 Year Details December GG is expecting to achieve its commercial operations date within September September 26, 2014 The Company has invested in Scan Inter Far East Energy Co., Ltd. (SFEE) conducting production and distribution of electricity from solar farm business. October 24, 2014 The Extraordinary General Meeting of Shareholders No. 2/2014 has approved the reduction of registered capital of the Company from 1,445,115, Baht to 1,445,047, Baht for shares that have not paid up. Then, increased registered capital of the Company from the existing registered capital of 1,445,047,854 Baht to 1,990,090,044 Baht by issuing newly ordinary shares of 545,042,190 shares at par of 1.00 Baht each for either the private placement and/or institutional investors and/or investors with specific characteristics and/or the existing shareholders and/or to accommodate right adjustment of warrants IFEC-W1. October 29, 2014 The Company's registered capital was 1,445,047, Baht. October 30, 2014 The Company's registered capital was 1,990,090, Baht. December 8, 2014 The Company has invested in IS Energy Co., Ltd. (IS) conducting production and distribution of electricity from solar energy. December 8, 2014 The Company's paid-up capital was 1,563,953, Baht. December 22, 2014 IFEE has transferred and sold Green Energy Technology In (Thailand) Co., Ltd. (GE) and J.P. Solar Power Co., Ltd. ( JP ) whom conducting production and distribution of electricity from solar energy to the Company January 14, 2015 The Company has invested in Wang Karn Ka Rung Roj Co., Ltd. ( WR ) conducting production and distribution of electricity from solar energy. January 16, 2015 IFEE has invested in True Energy Power Lopburi Co., Ltd. ( TEPL ) conducting production and distribution of electricity from biomass. February 12, 2015 The Company has invested in CR Solar Co., Ltd. ( CR ) conducting production and distribution of electricity from solar energy. Source : Form 56-1 of IFEC March 6, 2015 The Company's paid-up capital is 1,736,614, Baht

91 1.3 The Company s Business Overview of the Company s Business Inter Far East Engineering Company Limited, the Company or IFEC conducted the business as the photocopier dealer for Konica Minolta Business Solutions Asia Pte Ltd. (KM BSA), Japan under the name "Konica Minolta" and later has expanded its business by investing in other businesses that related to the production of electricity from renewable energy since Q The Company has continuously increased the investment to expand into such energy business. When the dealership contract ended on March 31, 2014, the Company decided to process with the disposition of the copier distribution and rental business on July 1, 2014 as per pursuant to the resolution of the Extraordinary General Meeting of Shareholders No. 1/2014 on June 3, Thus, the Company's core business is now the management of the subsidiaries that conduct businesses related to the production and distribution of electricity from renewable energy sources. The Company has classified its investment into 4 groups as follows: 1. Solar Power Plant 2. Wind Power Plant 3. Biomass Power Plant 4. Waste Management General information and operations of the subsidiaries 1) Inter Far East Energy Co., Ltd. (IFEE), (currently changed its name to Inter Far East Thermal Power Company Limited or IFEC-T) established on June 13, 2013 with the objectives to seek and invest in businesses related to the production and distribution of electricity from renewable energy. The initial registered capital was 1,000,000 Baht divided into 100,000 common shares at a par value of 10 Baht each. Later on, the Extraordinary General Meeting Shareholders No.1/2014 held on June 5, 2014, has approved the increase in the registered capital of 349,000,000 Baht at par value 10 Baht per share, totaling to 34,900,000 shares and consisting of 34,900,000 common shares. From this capital increase, IFEE has registered and paid-up capital of 350,000,000 Baht, divided into 35,000,000 ordinary shares at par value of 10 Baht each. It is the investment in production and distribution of electricity from renewable energy, and waste management that the Company holds 100%. 2) Green Energy Technology In (Thailand) Co., Ltd. (GE), established on August 28, 2008 located at Amphoe Bo Nok, Prachuap Khiri Khan. Registered and paid-up capital of 43,500,000 Baht, divided into 435,000 ordinary shares at par value of 100 Baht per share. It conducts the business of production and distribution of electricity from solar energy using silicon thin film technology. The solar farm has a production capacity of 1.0 MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from December IFEE has invested on August 26, 2013 and transferred this firm to the Company to hold 100% since December 22, ) J.P. Solar Power Co., Ltd. (JP) was established on September 28, JP located in Tambon Ta Ong, Amphoe Mueang, Surin. The company has registered and paid-up capital of 80,000,000 Baht, dividing into 80,000 ordinary shares at par value of 1,000 Baht each. JP conducts the business in production and distribution of electricity from solar energy using silicon thin film technology. JP has a capacity of 3.0 MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from June IFEE has invested on January 10, 2014 and later on transferred this firm to the Company to hold 100% since December 22, ) Sun Park Co., Ltd. (SP) was established on June 8, SP is located in Tambon Hua Na Kham, Amphoe Yang Talat, Kalasin. SP has registered and paid-up capital of 30,000,000 Baht, dividing into 300,000 ordinary shares at par value of 100 Baht each. SP conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. SP has a capacity of 1.0 MW. The added value price (Adder) is at 6.50 Baht per kilowatt - hours from April The Company holds 100% since April 11,

92 5) Sun Park 2 Co., Ltd. (SP 2) was established on June 29, SP2 is located in Tambon Hua Na Kham, Amphoe Yang Talat, Kalasin. SP 2 has registered and paid-up capital of 42,000,000 Baht, dividing into 420,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. SP 2 has a capacity of MW. The added value price (Adder) is at 6.50 Baht per kilowatt - hours from April The Company holds 100% since April 11, ) V.O. Net Biodiesel Asia Co., Ltd. (VON) was established on June 22, VON is located in Tambon Hua Na Kham, Amphoe Yang Talat, Kalasin. VON has registered and paid-up capital of 20,000,000 Baht, dividing into 200,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. VON has a capacity of MW. The added value price (Adder) is at 6.50 Baht per kilowatt - hours from June The Company holds 100% since August 26, ) Green Growth Co., Ltd. (GG), (Currently changed its name to IWind) was established on December 1, IWind s site is located in Tambon Ban Phoeng, Amphoe Pak Panang, Nakhon Si Thammarat. IWind has registered and paid-up capital of 225,000,000 Baht, dividing into 2,250,000 ordinary shares at par value of 100 Baht each. IWind is conducting the business of production and distribution of electricity from wind energy source. IWInd has a capacity of 10 MW. The Company holds 80% and Mr.Sumet Suthapakdi holds 20% since September 24, ) Scan Inter Far East Energy Co., Ltd. (SFEE) was established on March 10, SFEE is located in Tambon Yang Tone, Amphoe Nong Muang, Lopburi. SFEE has registered and paid-up capital of 60,000,000 Baht, dividing into 6,000,000 ordinary shares at par value of 10 Baht each. It conducts the business of production and distribution of electricity from solar energy using silicon thin film technology. SFEE has a capacity of 2.5 MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from December The Company holds 100% since September 26, ) ISEnergy Co., Ltd. (IS) was established on October 6, IS is located in Tambon Nong Bua Takiat, Amphoe Dan Khunthod, Nakhon Ratchasima. IS has registered and paid-up capital of 77,000,000 Baht, dividing into 777,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. IS has a capacity of 2.0 MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from September The Company holds 100% since December 8, ) IFEC Co., Ltd. (Cambodia) (IFEC-C) was established on August 5, 2014 in Cambodia. As at December 30, 2014 it had registered and paid-up capital of 1,000,000 USD, dividing into 1,000 ordinary shares at par value of 1,000 USD each. It plans to conduct the business of production and distribution of electricity from solar energy with a capacity of 20.0 MW and also to handle waste management. The Company holds 100% and expected to start the operation around September ) Wang Karn Ka Rung Roj Co., Ltd. (WR) was established on April 10, WR is located in Tambon Daeng Yai, Amphoe Mueang, Khon Kaen. WR has registered and paid-up capital of 30,000,000 Baht, dividing into 300,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. WR has a capacity of MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from November The Company holds 100% since January 14, ) True Energy Power Lopburi Co., Ltd. (TEPL) was established on March 2, TEPL is located in Tambon Nong Bua, Amphoe Phatthana Nikhom, Lopburi. TEPL has registered and paid-up capital of 180,000,000 Baht, dividing into 1,800,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from biomass. TEPL has a capacity of 7.5 MW. The added value price (Adder) is at 0.30 Baht per kilowatt - hours from November IFEE holds 100% since January 16,

93 13) C R Solar Co., Ltd. (CR) was established on June 18, CR is located in Tambon Mae Pa, Amphoe Thoen, Lampang. CR has registered and paid-up capital of 130,000,000 Baht, dividing into 1,300,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. CR has a capacity of 1.0 MW. The added value price (Adder) is at 8.00 Baht per kilowatt - hours from June The Company holds 100% since February 12, ) Clean City Co., Ltd. (CC) was established on June 3, CC is located in Tambon Khao Khan Song, Amphoe Si Racha, Chonburi. CC has registered and paid-up capital of 70,000,000 Baht, dividing into 700,000 ordinary shares at par value of 100 Baht each. It conducts the business of waste disposal. IFEE holds 100% since December 11, ) Rungakeraya Engineering (Sa Kaeo) Company Limited or RAK was established on October 7, Sa Kaeo is located in Ban Mai, Nong Sai, Aranyaprathet. Sa Kaeo has a registered capital of 60,000,000 Baht, dividing into 600,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from waste. Sa Kaeo has a capacity of 0.0 MW. The added value price (Adder) is at 3.5 Baht per kilowatt-hours. The COD is expected to be in December IFEC-T holds 95.0% shares since July 2, ) Somprasong International Company Limited (SPS) was established on December 24, SPS is located in Sang Kom, Udonthani with registered capital of 50,000,000 Baht, dividing into 500,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using silicon thin film (Amorphous) technology. SPS has a capacity of MW. The added value price (Adder) is at 8.0 Baht per kilowatt-hours since March 26, The Company holds 99.99% shares since April 2, ) Universal Provider Company Limited (UP) was established on June 8, UP is located in Ban Nong Ya Plong, Sisaket with registered capital of 114,000,000 Baht, dividing into 1,140,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from solar energy using multicrystalline silicon technology. UP has a capacity of 2.99 MW. The added value price (Adder) is at 8.0 Baht per kilowatt-hours since July The Company holds 99.99% shares since June 11, ) Lomligor Company Limited (LLG) (formerly SGC Wind Energy Company Limited or SGC) was established on October 20, LLG is located in Tambon Ban Phoeng Amphoe Pak Panang, Nakhon Si Thammarat with registered capital of 250,000,000 Baht, dividing into 2,500,000 ordinary shares at par value of 100 Baht each. It conducts the business of production and distribution of electricity from wind energy. LLG has a capacity of MW. Far East Wind International Company Limited holds 99.99% shares since May 29, ) Inter Far East Cap Management Company Limited (ICAP) was established on July 2, ICAP is located in Praram 9 road, Huay Kwang, Bangkok with registered capital of 500,000,000 Baht, dividing into 5,000,000 ordinary shares at par value of 100 Baht each. It conducts the business of investing in other companies other than renewable energy businesses. The Company holds 99.99% shares since July 2, ) Smart Tree Company Limited (SMT) was established on August 13, SMT is located in Rom Klao Road, Klongsam Prawet, Lat Krabang, Bangkok with registered capital of 500,000,000 Baht, dividing into 5,000,000 ordinary shares at par value of 100 Baht each. It conducts the business of installation of network systems and electricity

94 transmission systems with Inter Far East Cap Management Company Limited as a shareholder of 99.99% shares since June 29, Board of Directors and Management The Board of Directors of the Company as of September 1, 2015 consists of 14 persons as follow: No. Name Position 1 Mr. Wichai Thavornwattanayong Chairman of the Board 2 Mr. Wichai Thavornwattanayong Executive Chairman 3 Mr. Sitthichai Pornsupanan Vice President 4 Mr. Sitthichai Pornsupanan Chief Executive Officer 5 Mr. Champ Srichokchai Director 6 Mr. Thanawat Chansuwan Director 7 Mr. Suphanan Rittiphairoj Director 8 Mr. Banjong Orchunka Director 9 Mr. Abhichart Arbhabhirama Independent Director 10 Mr. Visit Ongpipattanakul Independent Director 11 Mr. Chayot Vitayanonektavee Independent Director 12 Mr. Abhichart Arbhabhirama Chairman of the Audit Committee 13 Mr. Visit Ongpipattanakul Audit Committee 14 Mr. Chayot Vitayanonektavee Audit Committee Management of the Company as of 31 December 2014 consists of 4 persons as follow: No. Name Position 1 Mr. Sitthichai Pornsupanan Chief Executive Officer 2 Mr. Thanawat Chansuwan Vice President and Chief Executive Officer of Administration 3 Mr. Suphanan Rittiphairoj Executive Director and Executive Vice President - Business Development and Asset Management 4 Mrs. Dharini Wattanadhirach Executive Director and Deputy Chief Executive Officer - Accounting and Finance

95 1.5 Shareholders Top 10 shareholders as of the most recent book closing date (as of 14 August 2015) Name No. of shares % 1. Mr. Wichai Thavornwattanayong 107,321, Mrs. Kanokwan Pornsapanun 84,805, Mr. Aphisak Theppadungporn 84,190, Mr. Amornwat Thirakritporn 72,735, Mr. Nares Ngam-Apichon 63,700, Mr. Narong Techachaiwong 24,062, Mrs. Prapaporn Choengwiwatkit 21,630, Thai NVDR Company Limited 21,168, Mr. Kraiwut Kunakasem 19,341, Mr. Surapong Poosanakom 17,745, Source: Major shareholders list from Thailand Securities Depository Company Limited 1.6 Key financial information and analysis of the Company s financial position and financial performance Summary of the financial position and financial performance of IFEC between 2012 Q2/2015 ending June 30, 2015 Summary of the financial position Items Q2/2015 Assets Current assets Cash and cash equivalents 50,885, ,716,903 3,156,933,084 2,267,460,083 Current investment ,539,153 Accounts receivable - trade and others 172,005, ,317, ,952, ,538,230 Short-term loan to other company ,000,000 73,257,309 Short-term loan to subsidiary Inventories 96,174, ,850,031 5,313, ,739,961 Non-current assets held for sale - 81,118, ,035,442 11,125,095 Other current assets 162, ,870 36,115, ,603,055 Land held for sale 81,118, Total current assets 400,346,070 1,077,201,188 3,756,349,762 3,350,262,886 Non-Current Assets Trade accounts receivable - long-term 108,115,525 50,448, portion Deposits pledged as collateral 20,774,949 47,289,287 43,823, ,952,872 Investment in subsidiary Other long-term investments 31,172,821 2,577,939 1,379,163 1,319,

96 Items Q2/2015 Investment properties 62,355,888 66,385, Property, plant and equipment 249,369, ,075,409 1,469,677,522 2,750,256,924 Intangible assets 2,127,216 24,642,346 20,613, ,074,618 Goodwill - 142,384, ,883,235 1,353,911,390 Deferred income tax assets 31,214,546 37,575,329 41,126,277 7,767,653 Other non-current assets 10,798,497 14,328, ,649, ,711,756 Total non-current assets 515,928, ,708,048 2,501,152,245 4,556,994,685 Total assets 916,274,648 1,891,909,236 6,257,502,007 7,907,257,571 Liabilities and Shareholders' Equity Current Liabilities Short-term loans from financial institutions 104,280, ,569,590 1,241,683,831 1,396,143,914 Trade accounts payable 62,674,423 64,147,830 43,419, ,591,481 Current portion of long-term loans ,287, ,193,344 Liabilities under finance lease agreement Current portion - 5,218,233 6,824,121 9,133,538 Short-term loans from other persons - 2,099, Advance received under 25,000,000 45,000,000 45,000,000 - the agreement to sale of the property Accrued income tax 9,212,109-13,279,483 2,551,224 Other current liabilities 1,613,105 4,632,235 4,469,298 14,625,985 Total current liabilities 202,780, ,666,898 1,455,963,707 2,011,239,486 Non-Current Liabilities Long-term loans ,462, ,293,644 Liabilities under finance lease agreements - 15,575,752 14,500,879 11,756,192 Retirement benefit obligations 21,053,048 23,034,024 3,772,678 4,481,710 Deferred income tax liabilities - 12,538,683 5,197,776 19,969,429 Total non-current liabilities 21,053,048 51,148, ,933, ,500,975 Total liabilities 223,833, ,815,357 1,995,897,523 2,885,740,461 Shareholders' Equity Share capital Authorized share capital 1,990,090,044 ordinary shares (2013: 1,376,300,733 ordinary shares) of 407,792,810 1,376,300,733 1,990,090,044 2,691,819,598 Baht 1 each Issued and paid up share capital

97 Items Q2/2015 1,563,953,734 ordinary shares (2013: 747,533,822 ordinary shares) of Baht 407,792, ,533,822 1,563,953,734 1,824,597,829 1 each Premium on treasury stock 16,110,971 16,110,971 16,110,971 16,110,971 Premium on share capital 503,806,998 2,331,362,296 2,853,240,924 Retained earnings - Appropriated for legal reserve 30,592,802 35,722,802 44,372,802 44,372,802 Appropriated for other reserve 4,000,000 4,000,000 4,000,000 4,000,000 Capital reserve for treasury stock Unappropriated 186,871, ,964, ,812, ,636,316 Other components of equity 47,073,022 50,954,704 75,722 6,236,157 Total shareholders' equity 692,440,971 1,539,093,879 4,200,688,447 4,958,194,999 Non-controlling interests ,916,037 63,322,111 Total Shareholders' Equity 692,440,971 1,539,093,879 4,261,604,484 5,021,517,110 Total Liabilities and Shareholders' Equity 916,274,648 1,891,909,236 6,257,502,007 7,907,257,571 * Remark: as of June 30, 2015, the Company has inventories of million Baht, increased million Baht or 4,188.89% from December 31, 2014 due to equipments in which the Company has prepared for the production of electricity for the subsidiary s project which will be constructed

98 Summary of the financial performance Items Q2/2015 Revenues Sales 283,105, ,084, ,228, ,488,808 Rental and service income 343,454, ,064, ,367,008 12,676,628 Gain on sale of business 94,375, Other income 31,229,574 40,823, ,471, ,077,270 Total revenues 752,164, ,971, ,067, ,242,706 Expenses Cost of sales 119,080,589 98,536,256 71,335,345 79,485,999 Cost of rental and services 178,711, ,070,319 91,712,279 8,815,082 Selling expenses 86,255,606 66,382,325 34,401,752 Administrative expenses 142,377, ,291, ,616, ,126,260 Total expenses 526,425, ,280, ,065, ,427,341 Profit before financial costs and income tax 225,739,062 63,690, ,001, ,815,365 expenses Financial costs (6,147,539) (18,986,802) (36,949,875) 46,338,692 Profit before income tax expenses 219,591,523 44,704, ,051, ,476,673 Income tax expenses (50,881,928) (17,890,493) (48,353,447) 33,240, ,709,595 26,813,614 72,698,368 90,236,251 Other comprehensive income for the year Unrealized gain from changes 744, , , ,539 in value of investments Premium on asset revaluation - 3,157, Currency translation differences - - (455,414) - Actuarial gain arising from post-employment benefits Insurance for post-employment benefits - 946, Total comprehensive income for the year 169,454,444 31,642,071 72,664,345 90,723,790 Total income attributable to Owners of the parent - 26,813,614 72,698,368 90,811,526 Non-controlling interests (575,275) - 26,813,614 72,698,368 90,236,251 Total comprehensive income for the period Owners of the parent - 31,642,071 72,664,345 91,299,065 Non-controlling interests (575,275)

99 Items Q2/ ,642,071 72,664,345 90,723,790 Earnings (loss) per share Basic earnings (loss) per share Weighted average number of share (shares) 405,882, ,018, ,120,598 1,698,100,677 Diluted earnings (loss) per share (baht per share) Key Financial Ratios of the Consolidated Financial Statements Key Financial Ratios of Inter Far East Engineering Public Company Limited Unit *2015 Liquidity Ratio Account recievables turnover times Average collection days days Inventory turnover times N/A N/A N/A N/A Average inventory conversion period days N/A N/A N/A N/A Account payables turnover times Average payable days days Profitability Ratio Gross profit margin % Operating profit margin % Net profit margin % Return on assets % Financial Policy Ratio Debt to equity ratio times *Annualized (See the details of key financial information and analysis of the Company s financial position and financial performance in Analysis of the financial status of the Company and subsidiaries in this Independent Financial Advisor report and further details in the Company s Information Memorandum)

100 Information of Inter Far East Wind International Company Limited (IWInd)

101 2. Information of Inter Far East Wind International Company Limited 2.1 General Information Project name Project Pak Panang 1 Location Tambon Ban Phoeng, Amphoe Pak Panang, Nakhon Si Thammarat Business Type production and distribution of electricity from wind energy BOI No. 1324(1)/2557 Total capacity 10.0 MW Sale quantity by contract 10.0 MW according to the power purchase agreement (PPA) No. VSPP-PEA-004/2556 dated April 22, 2013 with duration of 5 years from the COD and automatically renewed every 5 years Added value purchase price (Adder) 3.50 Baht for 10 years starting from commercial operating date (COD) from the Provincial Electricity Authority Scheduled Commercial September 25, 2015 Operation Date (SCOD) 2.2 The Company s Business Overview of the Company s Business Green Growth Co., Ltd. changed its name to Inter Far East Wind International Company Limited conducting production and distribution of electricity from wind energy through Project Pak Panang Board of Directors and Management The Board of Directors of the Company as of September 8, 2015 consists of 3 persons as follow: # Name Position 1 Mr. Wichai Thavornwattanayong Director 2 Mr. Sitthichai Pornsupanan Director 3 Mr. Sumet Suttapukti Director IWIND s managements are the management of Inter Far East Engineering Public Company Limited and Mr. Sumet Suttapukti. 2.4 Shareholders Shareholders as of September 8, 2015: # Name No. of shares % 1 Inter Far East Engineering PCL 1,799, Mr. Sumet Suttapukti 450, Mr. Wichai Thavornwattanayong Mr. Sitthichai Pornsupanan Total 2,250,

102 2.5 Key financial information and analysis of the Company s financial position and financial performance Summary of the financial position and financial performance of IWInd for the year 2014 Q2/2015 ending June 30, 2015 Summary of the financial position Items As of December 31, 2014 (Audited) As of June 30, 2015 (Reviewed) Million Baht % Million Baht % Cash and cash equivalents % % Accounts receivables and other receivables % % Short-term loan to other company and other parties % - 0% Other current assets - 0% % Total current assets % % Deposits pledged as collateral - 0% % Investment in subsidiary - 0% % Property, plant and equipment % % Intangible assets - 0% % Other non-current assets % % Total non-current assets % 1, % Total assets % 1, % Short-term loans from financial institutions - 0% % Trade accounts payables and other payables % % Liabilities under finance lease agreement current % % portion Other current liabilities - 0% % Total current liabilities % 1, % Liabilities under finance lease agreements % % Retirement benefit obligations - 0% % Total non-current liabilities % % Total liabilities % 1, % Authorized and paid up share capital % % Premium on share capital % % Retained earnings (loss) % % Total Shareholders' Equity % % Total Liabilities and Shareholders' Equity % 1, %

103 Summary of the financial performance Profit and loss statement 2013 (Audited) 6 months 2015 (Reviewed) Million Baht % Million Baht % Sales - 0% - 0% Rental and service income % - 0% Other income % % Total revenues % % Cost of sales - 0% - 0% Cost of rental and services - 0% 7% Administrative expenses % % Total expenses % % Profit before financial costs and income tax % % expenses Financial costs % % Profit before income tax expenses % % Income tax expenses - 0% - 0% Net profit (loss) % % Key Financial Ratios of the Consolidated Financial Statements Key Financial Ratios of Inter Far East Wind International Company Limited Unit 2014 *2015 Liquidity Ratio Account recievables turnover times N/A N/A Average collection days days N/A N/A Inventory turnover times N/A N/A Average inventory conversion period days N/A N/A Account payables turnover times N/A N/A Average payable days days N/A N/A Profitability Ratio Gross profit margin % N/A Operating profit margin % -5, Net profit margin % -5, Return on assets % N/A N/A Financial Policy Ratio Debt to equity ratio times * Annualized (See the details of key financial information and analysis of the Company s financial position and financial performance in Analysis of the financial status of the Company and subsidiaries in this Independent Financial Advisor report and further details in the Company s Information Memorandum)

104 Information of Lomligor Company Limited (LLG)

105 3. Information of Lomligor Company Limited 3.1 General Information Project name Lomligor project (Pak Panang 2) Contract No. VSPP-PEA-006/2557 Date of contract June 23, 2014 Project Location Tambon Ban Phoeng Amphoe Pak Panang, Nakhon Si Thammarat Business Type Production and distribution of electricity from wind energy Electricity seller Lomligor Company Limited Electricity buyer Provincial Electricity Authority Total capacity 10.0 MW BOI In the process of receiving BOI Sale quantity by contract MW according to the power purchase agreement (PPA) No. VSPP-PEA- 006/2557 dated June 23, 2014 with duration of 5 years from the COD and automatically renewed every 5 years Added value purchase price (Adder) 3.50 Baht for 10 years starting from commercial operating date (COD) from the Provincial Electricity Authority Scheduled Commercial By quarter 2 of 2016 Operation Date (SCOD) 3.2 The Company s Business Overview of the Company s Business LLG is a subsidiary of the Company. LLG has a contract for the selling of electricity of MW (capacity 10.0 MW) with adder of 3.50 Baht for 10 years from the Provincial Electricity Authority. The location of LLG is Tambon Ban Phoeng Amphoe Pak Panang, Nakhon Si Thammarat, which is in the same location as the current project, or Project Pak Panang 1 of IWIND. 3.3 Board of Directors and Management The Board of Directors of the Company as of September 8, 2015 consists of 5 persons as follow: # Name Position 1 Mr. Wichai Thavornwattanayong Director 2 Mr. Sitthichai Pornsupanan Director 3 Mr. Sumet Suttapukti Director 4 Mr. Kumaresan Chandrasekaran Director 5 Mr. Sivakumar Venugopal Director LLG s managements are the management of Inter Far East Engineering Public Company Limited and Mr. Sumet Suttapukti

106 3.4 Shareholders Shareholders as of September 8, 2015: # Name No. of shares % 1 Inter Far East Wind International Company Limited 2,499, Mr. Wichai Thavornwattanayong Mr. Sitthichai Pornsupanan Mr. Sumet Suttapukti Mr. Kumaresan Chandrasekaran Mr. Rattakorn Phuwitsawat Mr. Gautham Sundaresan Mr. Ramet Muthuswamy Mr. Jagadisan Muthuswamy Mr. Ramados kittu vandaior Sunshine Investment Trading Company Limited Mrs. Ratchanee Abdulrahim Mr. Anirudh Abdulrahim Total 2,500,

107 3.5 Key financial information and analysis of the Company s financial position and financial performance Summary of the financial position and financial performance of LLG for the year 2014 Q2/2015 ending June 30, 2015 Summary of the financial position Statement of financial position 31 December 2014 (Audited) 30 June 2015 (Reviewed) Million Baht % Million Baht % Cash and cash equivalents % % Accounts receivable - trade and others % - 0% Short-term loan to other company and other parties % - 0% Total current assets % % Total assets % % Other current liabilities % - 0% Total current liabilities % % Total liabilities % % Authorized share capital Issued and paid up share capital % % Retained earnings (loss) % % Total Shareholders' Equity % % Total Liabilities and Shareholders' Equity % % Summary of the financial performance Profit and loss statement 31 December 2014 (Audited) 30 June 2015 (Reviewed) Million Baht % Million Baht % Other income % % Total revenues % % Administrative expenses % % Total expenses % % Profit before financial costs and income tax % % expenses Financial costs - 0% - 0% Profit before income tax expenses % % Income tax expenses - 0% - 0% Earnings (loss) per share % %

108 Key Financial Ratios of the Consolidated Financial Statements Key Financial Ratios of Lomligor Company Limited Unit 2014 *2015 Liquidity Ratio Account recievables turnover times Average collection days days N/A N/A Inventory turnover times N/A N/A Average inventory conversion period days N/A N/A Account payables turnover times 0.00 N/A Average payable days days N/A N/A Profitability Ratio Gross profit margin % N/A N/A Operating profit margin % N/A N/A Net profit margin % Return on assets % Financial Policy Ratio Debt to equity ratio times * Annualized (See the details of key financial information and analysis of the Company s financial position and financial performance in Analysis of the financial status of the Company and subsidiaries in this Independent Financial Advisor report and further details in the Company s Information Memorandum)

109 Attachment Feasibility study of wind turbine fields on the coast of A. Pak Panang, Nakhon Si Thammarat (By management of the Company and revised by the Independent Financial Advisor)

110 Feasibility study of wind turbine fields on the coast of A. Pak Panang, Nakhon Si Thammarat (By management of the Company and revised by the Independent Financial Advisor) The Feasibility study of wind turbine fields on the coast of A. Pak Panang, Nakhon Si Thammarat was conducted in 2014 to study the feasibility of the wind turbine farm in the Gulf of Thailand in the areas of T. Ban Phoeng A.Pak Panang, Nakhon Si Thammarat (For Project Pak Panang 1 and Lomligor project (Pak Panang 2). Estimated investments are as follow: Total project value Value of land used for project development including land reclamation Wind turbine chosen Total capacity Sale quantity by contract 750 Million Baht (excluding land) Million Baht Goldwind Model GW121/ MW MW according to the power purchase agreement (PPA) No. VSPP-PEA-006/2557 dated June 23, 2014 with duration of 5 years from the COD and automatically renewed every 5 years Overview of the trend in alternative energy Alternative energy situation in Thailand for 2013 Thailand has an increase in usage of alternative energy continuously which is a result from policies on alternative energy that has a goal to increase usage of alternative energy in all parts of society. Other than decreasing use of fossil fuel, it decreases fuel imports since from the development of Thailand s alternative energy industry, the country will mainly use energy produced domestically which are solar power, wind, water, biomass, biogas, garbage and biofuel (ethanol and biodiesel). The uses of such alternative energy will be in forms of electricity from heat and biofuel

111 (Thousand tons crude oil equivalent) Thailand s alternative energy usage from In 2013, Thailand s alternative energy usage is 8,232 thousand tons crude oil equivalent, which increased from the previous year 12.9% and is equal to 10.9% of carbon dioxide emission of million tons) Thailand s alternative energy usage in 2013 Final energy use Final alternative energy use Fossil fuel Electricity (solar/wind/biomass/biogas/waste Small scale hydro power Renewable energy Heat(solar/biomass/biogas/waste Thousand tons crude oil equivalent Thousand tons crude oil equivalent Import of hydro power Large scale hydro power Biofuel Usage of energy from heat is the highest amounting to 64.1% of total alternative power use. Second and third is natural fuel (ethanol and biodiesel) and electricity which are 19.6% and 16.3% respectively

112 (Thousand tons crude oil equivalent) 2013 Heat Biofuel Ethanol Biodiesel Electricity Change (%) Alternative energy usage Amount (Thousand tons crude oil equivalent) Electricity (solar/wind/small scale hydro power/biomass/waste/biogas Heat(solar/biomass/waste/biogas Biofuel - Ethanol - Biodiesel Total Thousand tons crude oil equivalent Electricity Heat Biofuel

113 Investments in alternative energy From the public policy promoting use of alternative energy, other than resulted in increase in alternative energy use but also increases private sector s interest in investing in the alternative energy industry. In 2913, a public and private investment in the alternative energy industry is 75,822 million Baht with investments in wind energy as the highest at 45.6% of total investments. Solar, biofuel, biomass, biogas water and waste are at 21.4%, 17.9%, 11.3%, 3.0%, 0.6% and 0.2% respectively. Investment in alternative energy Solar Wind Small scale hydro power Biomass Biogas Waste Biofuel Total Value (million Baht) % Solar Biofuel Source: Biomass Biogas Water Waste 1/ Department of Alternative Energy Development and Efficiency 2/ The Board of Investment of Thailand Considering statistics of electrical load during in Amphoe Pak Panang, Nakhon Si Thammarat as seen in the figure, it is seen that there has been an increase. Therefore, a forecasting model has been constructed using such information (Autocorrelation) and statistics to forecast the electricity load for 10 and 20 years ahead. It is found that within 10 and 20 years, the electricity load of Amphoe Pak Panang will increase to 70MW and 100 MW

114 Figure showing changes in monthly electricity load from of Amphoe Pak Panang, Nakhon Si Thammarat Figure showing forecasted electricity load for 10 years of Amphoe Pak Panang, Nakhon Si Thammarat