Ichinoseki Solar Power Project Update

GPSC Structure Control GPSC deliberately uses GK structure to comprehend all information for the first investment in Japan Godo Kaisha (GK) Equity investment Full control Consolidation of Financial Return form performance Dividend income Japanese effective tax rate ~ 35% Project Co. Japanese taxation on dividend/ TK distribution Dividend: 15% withholding tax at source Cash received No Corporate income tax from dividend/ TK distribution Total effective tax rate* ~ 44% GPSC Tokumei Kumiai (TK) TK investment No control TK distribution ~ 35% TK distribution is treated as taxable expense Less taxable income Project Co. TK distribution: 15% withholding tax at source (tax credit) 20% Corporate income tax TK investor ~ - 20.00%-40% • . • • • Implication to GPSC As a first investment in Japan, GPSC would like to ensure its control over the project company GPSC is able to consolidate the project's financial performance onto GPSC's financial statement, hence, enhancing GPSC's revenue and balance sheet The project company is taxed at the same corporate income tax rate, where GK structure is taxed as normal Japanese corporate While TK structure allows project company to treat TK distribution as taxable expense, thus, the taxable income is lesser than the company using GK structure; implying low tax payment According to the Japanese tax treaty, TK distribution will be subjected to 15% withholding tax in case TK investor has operating business in Thailand, where it is recognized as tax credit GPSC's dividend income, from GK structure, is subjected to 15% withholding tax Corporate tax income exemption on GPSC's cash received from dividend according to Double Tax Agreement Whereas the TK distribution is not defined in the Double Tax Agreement, thus, Thai corporate income tax will be applied to the money received Even though GPSC has pay higher effective tax rate, the company consider control over the project co. as priority Remark: *Effective tax rate are calculated from assumptions and factors which may differ in other cases. The calculation of effective tax rate assumes transferring all profit to TK investor and 9 withholding tax paid in Japan is creditable for CIT paid in Thailand; according to Double Tax Treaty. GID Knowledge Sharing

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