Carabao Public : Notification of the resolution of the Board of Directors' meeting to approve joint investment

- Translation -

CBG 014/2022

21 July 2022

Subject:Notification of the resolution of the Board of Directors' meeting to approve joint investment

To:President

The Stock Exchange of Thailand

We, Carabao Group Public Company Limited (The "Company" or "CBG"), would like to inform that the Board of Directors' meeting No. 3/2022 held on 21 July 2022 by the disinterested directors has passed resolutions to approve a joint investment together with C.J. Express Group Company Limited ("CJ") and TD Tawandang Company Limited ("TD") (collectively referred to as the parties that may cause a conflict with the Company as a result of having common shareholders and/or directors (the "Conflicting Parties")), in establishing a joint venture company, namely TD Venture Company Limited ("TDV") to operate as a holding company, and in this connection approve TDV to enter into a joint venture agreement and other relevant agreements with Kasikorn Vision Company Limited ("KVISION"), a subsidiary whose 100.0% shares are held by KASIKORNBANK Public Company Limited ("KBANK"), in establishing a joint venture company, namely Kasikorn Carabao Company Limited ("KBAO"), to operate as a financial service company according to the initial business plan with core focus placed on our ecosystem at the present and further developed in the future (Own Ecosystem). Such scope of services includes, but not limited to, providing loans to a.) the owner of retail shops covered by our cash vans, b.) business partners and/or tenants on the retail businesses managed under CJ, c.) the owner of retail shops managed under TD and d.) individual consumers connected with all those operations as well as offering any other related services at the point of sales ("Our other investments under the Project").

The resolutions relating to Our other investments under the Project are set out below:

1. Approve the Company to jointly invest with CJ and TD in establishing TDV with capital equivalent to the amount of not exceeding THB 2,000 million at the par value of THB 100.0 per share to operate as a holding company, whereby we invest and hold 15.0% of the capital or equivalent to not exceeding THB 300 million investment value. On the other hand, CJ and TD invest and hold 15.0% and 70.0% of the capital, respectively. TDV is not considered an associated company of CBG; and
2. Agree for TDV to enter into a joint venture agreement and other relevant agreements with KVISION in establishing KBAO with total capital of not exceeding THB 4,000 million at the par value of THB 100.0 per share to provide financial and other related services in pursuance of the objectives set out for Our other investments under the Project. KVISION will hold two shares more than TDV.

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- Translation -

Summary of Our other investments under the Project 1.) Shareholding

Company			Shareholders
		Name		Shareholding
				(percentage)
TD Venture Company	1. CBG	15.0
Limited ("TDV")	2.	CJ	15.0
	3.	TD	70.0
Kasikorn Carabao	1.	TDV		50.0 minus 1 share
Company Limited	2.	KVISION		50.0 plus 1 share
("KBAO")

2.) Summary of Own Ecosystem

We are engaged in manufacturing and distributing energy drinks. We also manage distribution channels in Thailand, covering our branded product portfolio including the products we produce on our own account, i.e. energy drinks and sport drinks (Branded products by our own manufacturer) and those we outsource respective productions to third party suppliers, i.e. water, coffee 3 in 1 and coffee RTD (Branded products by 3rd party manufacturer) and other products we may be of interest to commercially endeavor in the future. Additionally, we are also in charge of distributing products for third parties in both food and non food categories (3rd party products for distribution). Key distribution channels span a.) traditional trade channel, through both the Multi tiered agent system and our own distribution centers and cash vans as well as b.) modern trade channel.

Distribution centers and cash vans help witness our substantial progress made towards increasing level of direct access to retailers. The Company has succeeded in developing of customer relationship management whereby database has been well established over time and in turn allows the Company to properly identify and group the subject retailers for more comprehensive analysis of turnover related information such as size, pattern of purchase order and payment for the individual products. The info derived is of valuable use to the benefits of building and strengthening our own retail network and deploying our marketing and sales plans in an effective result-based fashion. At the present, the Company operates 31 distribution centers and 330 cash vans to reach retailers nationwide.

CJ engages in the retail business and develops the products together with the value-added services not only to satisfy the different preferences of customer behavior in the market but to be more than a convenience store. CJ also has a product portfolio including more than 10,000 SKUs under 5 brands namely CJ Supermarket, Nine Beauty, BAO Café,

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- Translation -

UNO, the distribution of lifestyle products, fashion, stationery, and A-Home, the distribution of D.I.Y. equipment, tools, gardening equipment, plumbing, car care, kitchen appliances, and electrical appliances.

TD engages in providing one-stop services for retailers' owners. The services include preparing shelves, refrigerators, and other equipment needed for operation, designing stores to be modernized and enhancing efficiency by using technology to support management, sourcing good quality and various products at a cheaper price which is benefited from an expansion of retailer's network and also a power of bargain, giving a recommendation, and organizing activity for boosting sales including preparing point of sales advertising. Retailers' owners are still the owner of the store and TD is a supporter who invests to help the business to have all resources needed in order to enhance competitive ability and also profit.

3.) Rationale for Our other investments under the Project

• Our other investments under the Project is considered supportive to our financial and investment policies, i.e. investments in assets or business operations that reflect potential growth in the long run.
• Continuous expansions of retail business operations managed under CJ and the business of full range of services for the retailers' owners of TD do not conflict with ours from a commercial perspective. They are in fact considered a catalyst for enhancing our distribution channels and access to target consumers nationwide in an effective manner. Decisions on any transactions falling under related parties transactions shall be made on an arm's length basis and in compliance with relevant regulations.
• Seamless combination of the network of retail shops covered by our cash vans with those retail platforms managed under CJ and the business of full range of services for the retailers' owners of TD not only creates one larger ecosystem (Scalable operations) essentially filed up with business opportunities to extend service propositions to a diversified group of consumer profiles (Diversified portfolio) but also leads to strong fundamental factors in reflection of appropriate level of expected return on the investments (Justified Investments).
• Financial services are not our core business operations. Making joint investments with CJ and TD acts as effective mitigation of risks associated with the investments and does not cause significant impacts to our capital structure and funding plans in the long run.
• Benefits derived from joining forces with KBANK, which is one of the leading regional banks. KBANK shall take part in managerial roles, i.e. at the level of setting policies, business plans and evaluations, to day-to-day operations concerning analysis, risk control, collection and supporting services. KBANK also serves indirectly as a contributing factor to good corporate governance, balancing control to a satisfactory extent whereby transactions are made on an arm's length basis and on ground of fairly protecting all stakeholders' interest.

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- Translation -

• Scope of business operations and objectives of TDV is limited only to financial services as per the aforementioned and shall not be expanded into any other areas, particularly those that may conflict with ours from a commercial perspective.
• Directors who may have conflict will neither join nor cast a vote in the Board of Directors' meeting in relation to agenda items which fall under related parties transactions or may cause conflict of interest.

Our other investments under the Project reinforces our growth strategies in the long run through expansion of our business operations beyond what we are operating currently. Such a transaction is not considered a connected transaction as defined by the Notifications of the Capital Market Supervisory Board No. TorJor 21/2551 and the applicable notifications of the Board of Governors of the Stock Exchange of Thailand. Size of the transaction does not cause the Company to fall within the disclosure requirements under the Notifications of the Capital Market Supervisory Board No. TorJor 20/2551 re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposition of Assets and the Notifications of the Board of Governors of the Stock Exchange of Thailand re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets, 2547 and as amended. When taking into account all other asset acquisitions made during 6 months prior to the date the decision is made to enter into the transaction, total size of the said transactions by the highest value based on total consideration method is approximately 1.56.

Please be informed as accordingly

Sincerely yours,

Mr. Waranchai Jensiriwanich

Legal Director / Company Secretary

Corporate Secretary 02-636-6111

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