MPR AUSTRALIA LIMITED — AGM Information 2017

Nov 27, 2017

CHAIRMAN’S ADDRESS TO SHAREHOLDERS

Sydney – 28 November 2017 – Tag Pacific Limited (ASX: TAG)

We are a small group with a big agenda; and we believe that we’re ahead of the curve when it comes to renewable energy, hybrid systems and energy storage and the integration of all these elements into seamless power products and solutions where reliability and quality is paramount.

Hardly a day goes by without the Australian media highlighting the major changes that are underway in how power is being generated; how it is being distributed; how it needs to be reliable; and how the cost to the end user can, at worst, be contained – and at best how it can be reduced. At a macro level, it is a revolution. At a micro level, it is an evolution that is playing itself out on the back of a number of hypotheses and trials where learnings are rapid, but the markets capacity to implement commercially is lagging behind.

The investment community has difficulty in recognising the signs when it comes to our group. Whilst the sector has appeal and is generally understood, what is less understood about what we are doing is that we are creating value which is not always reflected in today’s P&L account.

As Warren Buffett famously said: “Someone is sitting in the shade today because someone planted a tree a long time ago”.

We believe that thematically there are parallels with us. Whilst we have prepared the ground and planted the seeds, we are now carefully nurturing what we have planted; protecting it from disease; and doing all the right things to help it grow.

Think about the announcement we made last month, when MPower was awarded a contract to design, build and implement a battery storage network augmentation system for a new residential estate in New South Wales. The main objective of the project is to augment the grid in times of peak demand, potentially delaying the need for major capital expenditure associated with growing power demand in this residential area. The sophisticated system will also be capable of forming its own grid and function as an islanded power system, thereby creating a microgrid. The benefit of the dual functionality is its ability to continue to provide power during times of power outages on the main grid.

It will be NSW’s largest grid support battery system and the first of its kind for Endeavour Energy, but like Warren Buffett’s tree that takes time to grow, the system will only be fully operational by the summer of 2018. What is of central importance to us is that what MPower is in fact doing is integrating large scale energy storage into a grid for a power

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utility. There will be many eyes watching the solution MPower is providing given it is a first and the potential scope and scale for wider application. The adoption of this technology is expected to experience exponential growth, with the cost of battery storage continually reducing at the same time as technology improves.

Then we announced that we had commenced delivery of the first of several sophisticated off-grid DC power systems for the Northern Gas Pipeline. These systems integrate a mix of solar PV arrays, battery energy storage and a sophisticated control system designed to provide cathodic protection along the length of the pipeline, which is over 600km long. By integrating the various aspects of the system, MPower is facilitating pipeline protection against corrosion. The remote location and the requirement for reliable and continuous power where there is no access to network power present challenges that fall within MPower’s core expertise.

Yesterday we announced the development of a hybrid residential power system that runs parallel to the grid with the aim of eliminating electricity usage from the grid by integrating the latest battery storage technology. The system, which integrates solar PV, battery storage and gas power generation, will be trialled by Jemena in the coming months.

These latest milestones come on the back of a number of other achievements that were detailed in the annual report – the battery storage project with advanced cloud prediction technology in Western Australia; the technological advances in Bardic emergency lighting; the construction of the 5MW solar farm in Samoa; the consortium with Broadspectrum to jointly identify, pursue and construct large scale solar projects; and the large scale renewable energy storage project currently underway in the Cook Islands.

MPower’s expertise in the new era power sector is strategic and unique in that its solutions are engineered in-house and encompass work for utilities; global leading energy providers; and a raft of blue chip enterprises.

The order book has increased further and is high in comparative terms, although the growth is not as rapid as management would like. The prospective pipeline for projects continues to grow and is in the hundreds of millions of dollars. The expanded business development, design and bid resources are fully deployed.

MPower’s distribution activities for power related products is continuing to improve slowly as the focus on batteries, solar componentry and the proprietary Bardic emergency lighting range intensifies. Residential battery energy storage products are still at an early stage and not yet a major revenue item for MPower, but is expected to be an area of growth in the future.

Management continues to focus on containing costs and reorganising various components of the business - such as premises, logistics and other elements which drive

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efficiency – to more adequately suit the needs of the business as they change. The general aim is to reduce the dependence on fixed costs in favour of more flexible and scalable operating methods.

In that regard, the company is resource constrained in its capacity to fund all of its aspirations. To ensure that its plans are not stymied, a number of options are under continuous review, including the raising of new capital, further partnering of selected activities and the refining of corporate structural elements.

The transition from centralised power generation facilities to a range of decentralised renewable energy sources is central to what MPower does. Renewable energy sources are intermittent by nature. Regulating that power, storing it and harmonising it with established power networks are sweet spots for MPower, both in its project work and also in its supply of products and componentry. We are working in a dynamic and changing environment. We have come a long way and it requires indulgence as we steer our way along the road ahead.

ENDS

For further information please contact:

Peter Wise Nathan Wise Chairman Chief Executive Officer Tag Pacific Limited Tag Pacific Limited T: +61 2 8275 6000 T: +61 2 8275 6000

ABOUT

Tag Pacific Limited is a Sydney-based investment house listed on the Australian Securities Exchange with a focus on niche areas of the power industry. Tag has invested in a diverse range of companies and activities that have been brought together primarily to operate under the banner of MPower. The company’s mission is to invest in the power industry in a manner that creates and enhances value over time.

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