2. INFORMATON ON EOGS, SPM TERMINALS AND ENRA SPM

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1 ENRA GROUP BERHAD ( COMPANY ) - SHAREHOLDERS AGREEMENT ENTERED INTO BETWEEN THE COMPANY S WHOLLY OWNED INDIRECT SUBSIDIARY, ENRA OIL & GAS SERVICES SDN BHD AND SPM TERMINALS PTY LTD 1. INTRODUCTION The Board of Directors of the Company ( Board ) is pleased to announce that ENRA Oil & Gas Services Sdn Bhd (Company No U), an indirect wholly owned subsidiary of the Company, with its registered office at D2-U3-10, Block D2, Solaris Dutamas, No. 1 Jalan Dutamas 1, Kuala Lumpur ( EOGS ) and SPM Terminals Pty Ltd (Australia Company No ), a company incorporated in Australia with its business office at Suite 5, 1 st Floor, 23 Richardson Street, South Perth, Western Australia, 6151 Australia ( SPM Terminals ) (collectively, the Parties ) had on 29 August 2016, entered into a Shareholders Agreement ( Agreement ) for the purpose of regulating their rights, duties and relationship inter se the joint venture company, ENRA SPM Sdn Bhd (formerly known as Trillion Standard Sdn Bhd) ( ENRA SPM ) to the extent and manner as provided in the Agreement ( Proposed JV ). 2. INFORMATON ON EOGS, SPM TERMINALS AND ENRA SPM 2.1 EOGS EOGS was incorporated on 6 February 2015 and has an authorised share capital of RM5,000, comprising 5,000,000 ordinary shares of RM1.00 each, of which 1,000,000 ordinary shares have been issued and fully paid. Its principal activities are the carrying on of the business of importing, exporting, leasing, trading, manufacturing, wholesaling, distributing, retailing, agency, stocking and dealership in all kind of industrial products, construction equipment and machineries, marine vessels, process and storage facilities, oil and gas product handling equipment and the provision of associated services, installation, commissioning, decommissioning, repair, maintenance, cleaning and enhancement services and provide advisory, consultancy, supervisory, skilled works and management services for relevant industries. The Directors of EOGS are Dato Mazlin bin Md Junid, Dato Kamaluddin bin Abdullah, Encik Kamalukhair bin Abdullah and Mr. Loh Chen Yook. EOGS is a wholly owned subsidiary of ENRA Energy Sdn Bhd, which in turn is a wholly owned subsidiary of the Company. 2.2 SPM Terminals SPM Terminals was incorporated in Australia on 6 March 2014 and specialises in the design and engineering of offshore loading/unloading terminals, refurbishment and installation of single point mooring, offshore production platform hook-up and 1

2 commissioning and offshore production platform modification and reactivation (brown fields) for the oil and gas service industry in South East Asia. The Directors of SPM Terminals are Mr. TAN, Kee Ju and Mr. Kosuke Fujikawa. The Shareholder of SPM Terminals is ZHOH Corporation Pty Ltd. 2.3 Information on ENRA SPM ENRA SPM was incorporated on 27 March 2015 and has an authorised share capital of RM400, comprising 400,000 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and fully paid. The Parties shall procure the acquisition of ENRA SPM by them via the subscription of 100,000 ordinary shares of RM1.00 each which shall be issued and paid up in the following proportions set out in the Agreement within 30 days from the date of the Agreement or such other period mutually agreed by the Parties: Parties Percentage Of No. of Ordinary Shares of Shareholdings RM1.00 each EOGS 60% 60,000 SPM Terminals 40% 40,000 The Parties agree that the name of the joint venture company shall be ENRA SPM. The business of ENRA SPM shall be to market, promote, sell or lease single point or other mooring systems and for offering installation, mobilisation, demobilisation, dry docking and generally management, operations, refurbishment, maintenance and other complementary services in relation to single point or other mooring systems for the oil and gas industry in Malaysia and elsewhere ( Business ) as mutually agreed by the shareholders of ENRA SPM ( Shareholders ) and to do such other things as may be reasonably ancillary thereto or agreed between the Shareholders with the following aims: (i) (ii) to maximise profits and minimise losses with a view to maximising the return to the Shareholders from the business; and at all times to keep under review the potential profitability of the activities provided for in or contemplated by the Agreement and to contract for services and works on terms that they may be discontinued at agreed cost or exposure if it becomes apparent that such activities are or may be unprofitable. 3. SALIENT TERMS OF THE AGREEMENT 3.1 The Parties shall procure the acquisition of ENRA SPM as stipulated in Section 2.3 above. Unless otherwise agreed by all Shareholders, all shares of whatever class held by them shall rank pari passu in all respects in such classes. 2

3 3.2 The Parties agree that unless otherwise transferred by any of the Parties in accordance with the terms of the Agreement or unless agreed by all Parties in writing, it is the intention of the Parties that the respective shareholdings of the Parties in ENRA SPM whether ordinary shares or any other classes, shall be as stipulated in Section 2.3 above. 3.3 EOGS shall be responsible to obtain all approvals, licenses, authorization and certification from the relevant authorities in Malaysia deemed by the Shareholders to be necessary for the Business including without limitation, the relevant licenses from Petroliam Nasional Berhad. SPM Terminals shall render all assistance necessary or reasonably required to facilitate the application and obtaining of the aforesaid approvals, etc. EOGS and SPM Terminals shall jointly be responsible for the business development for ENRA SPM and the creation of long-term value for ENRA SPM from customers, suppliers, markets and relationships. For the avoidance of doubt, the relevant licences from Petroliam Nasional Berhad shall be held by EOGS or such other company as shall be determined by EOGS. 3.4 SPM Terminals shall be responsible for the following: (a) (b) (c) (d) (e) (f) to design and supply the equipment, hardware and software on such terms, from such vendors and of such specifications acceptable to EOGS with EOGS as sole and exclusive primary agent or distributor and with ENRA SPM as the sole and exclusive sub-agent; to provide the installation, refurbishment and maintenance and other technical support, know-how and technical assistance to ENRA SPM deemed by ENRA SPM to be necessary for or relevant to the Business whether by way of secondment to ENRA SPM or otherwise; to provide technical support and expertise to secure operations and maintenance contracts, all on such terms acceptable to ENRA SPM; to procure the execution of a personal Guarantee in favour of ENRA SPM (in the format acceptable to EOGS) from its ultimate shareholder, Mr. TAN, Kee Ju, an Australian national, guaranteeing the due and punctual performance of and compliance by SPM Terminals of all SPM Terminal s obligations in respect of the specifications, design and performance of each Single Point Mooring unit to be manufactured and sold to ENRA SPM under and pursuant to a Memorandum of Agreement to be entered into in respect of the said sale of the Single Point Mooring, in accordance with the standards of the American Bureau of Shipping Rules for Buildings and Classing Single Point Moorings 2014; to cease and/or refrain from effecting or allowing to be effected, any change in the shareholdings in, authorized and paid up share capital, board of directors composition and constitutional documents of SPM Terminals and the issue of new shares stocks or other types of securities of SPM Terminals without the prior written approval of EOGS, which consent shall not be unreasonably withheld; to procure its ultimate shareholder, Mr. TAN, Kee Ju, to undertake in writing to EOGS, that he shall not effect or allow to be effected, any change in the shareholdings in, authorized and paid up share capital, board of directors 3

4 composition and constitutional documents of SPM Terminals and the issue of new shares stocks or other types of securities of SPM Terminals without the prior written approval of EOGS, which consent shall not be unreasonably withheld; and (g) to procure its ultimate shareholder, Mr. TAN, Kee Ju, the sole legal and beneficial owner with unfettered rights, of the tradename and trademark of Banner ( Mark ) to grant an exclusive license to EOGS and ENRA SPM to use the Mark, for no charge, only for purposes of the Business for as long as this Agreement subsists between the Parties and to enter into a license agreement in the form and content acceptable to EOGS at such reasonable time determined by EOGS. 3.5 The Shareholders shall each use all reasonable endeavours to procure a loan from a bank or other source and on such terms acceptable to the Shareholders to assist ENRA SPM to raise the funds required for the conduct of its business and each Shareholder shall with all reasonable expedition take such action reasonably required of it for such purpose including providing any proportionate guarantee or security in relation thereto the bank or such other source. Subject to all Shareholders agreeing, the Shareholders shall each from time to time lend ENRA SPM such sums as ENRA SPM requires over and above the loans from any third party on terms to be mutually agreed between the Shareholders and ENRA SPM. 3.6 The Board of Directors of ENRA SPM shall consist of not less than three (3) Directors. EOGS shall be entitled to nominate two (2) persons while SPM Terminals shall be entitled to nominate one (1) person, as Directors of ENRA SPM. Each Director will be authorised and empowered to make decisions on behalf of and to bind the Shareholders which appointed him. 3.7 While the Agreement remains in force and unless otherwise agreed between the Shareholders in the Agreement or otherwise in writing, no Shareholder shall be permitted to issue, allot, redeem, purchase, transfer, grant options over or otherwise deal with its Shares or reorganise ENRA SPM s share capital in any way, save that any disposal or sale of any shares held by a Shareholder shall first be offered to the other Shareholders or otherwise in accordance with the terms of the Agreement. 3.8 Note - Alternative 2Longer form giving non defaulting party power to require the defaulting party to acquire its shares. Not likely to be useful unless defaulting party is of substance or guaranteed by a person of substance.1212except as otherwise provided in the Agreement, the Agreement shall continue in full force and effect without limit in point of time until the earlier of the following events: (a) (b) (c) the Shareholders agree in writing to terminate the Agreement; in relation to any one Shareholder, upon that Shareholder ceasing to hold any shares, whether in accordance with Clause 5 of the Agreement; or following the occurrence of any of the following events of default in relation to any Shareholder: 1) a material breach by a Shareholder of its obligations under or pursuant to the Agreement and, in the case of a breach capable of remedy, failing to remedy the same within 30 days of receipt of a written notice by the other 4

5 Shareholders complaining of such breach and requiring remedy of such breach; 2) entering into any composition or arrangement with its creditors generally; 3) being in receivership and/or in liquidation and/or in the process of windingup; 4) the appointment of an administrator or receiver or other encumbrance over the whole or any material part of its assets or undertaking or suffering any similar act in consequence of debt; or 5) at any time there is a material adverse change in its condition or status such that, in the reasonable opinion of the non-defaulting party, it appears likely that it will be unable to meet its obligations under the Agreement or the Memorandum of Agreement. 3.9 In consideration of ENRA SPM agreeing at the request and desire of the ultimate shareholder of SPM Terminals, Mr. TAN, Kee Ju to acquire the Single Point Mooring upon the terms and conditions set out in the relevant Memorandum of Agreement from SPM Terminals, Mr. TAN, Kee Ju agreed to execute and deliver to ENRA SPM a Guarantee in favour of ENRA SPM and undertake the obligations and liabilities set out and upon the terms and conditions contained in the Guarantee as security for SPM Terminal s due and punctual performance of and compliance with all SPM Terminal s obligations in respect only of the specifications, design and performance of the Single Point Mooring in accordance with the standards of the American Bureau of Shipping (as defined) Rules for Buildings and Classing Single Point Moorings RATIONALE AND PROSPECTS The Proposed JV is in line with the Company s expansion plans to leverage on the potential growth in niche oil and gas related activities. It is expected to contribute positively to the profitability and growth of the Company in the future. 5. SOURCE OF FUNDING EOGS will fund its initial aforesaid investment in ENRA SPM through internally generated funds. 6. FINANCIAL EFFECTS 6.1 Share Capital The Proposed JV does not have any effect on the issued and paid-up share capital of the Company since the consideration for the acquisition and investment in ENRA SPM will be fully satisfied in cash. 6.2 Substantial Shareholders Shareholdings The Proposed JV does not have any effect on the substantial shareholders shareholdings in the Company. 5

6 6.3 Net Assets per Share and Gearing The setting up of the Proposed JV is not expected to have any material effect on the Net Assets per Share and Gearing in the Group for the financial year ending 31 March If ENRA SPM succeeds in obtaining the Business opportunities and contracts, the Company will assist ENRA SPM to obtain funds (from internal sources and bank borrowings) to support the operational and capital expenditure that those Business opportunities and contracts require. The type and quantum of such funding requirements for use in the ordinary course of business of ENRA SPM will be evaluated and determined based on the nature of the Business contracts awarded or given to ENRA SPM. 6.4 Earnings per Share The setting up of ENRA SPM is not expected to have any material impact on the earnings per share of the Company for the financial year ending 31 March The Parties to the Proposed JV are desirous of pursuing the Business opportunities and contracts that the Company reasonably expects will have a positive impact to the earnings and earnings per share of the Company. 7. RISK FACTORS The Proposed JV is subject to financial risks inherent in oil and gas businesses. Such risks may include competition in the industry, changes in economic and political conditions, changes in the legal and regulatory framework and increases in costs. The Board of Directors is not aware of any other material risk arising from the Proposed JV other than stated above. 8. ASSUMPTION OF LIABILITIES There are no liabilities, including contingent liabilities and other guarantees to be assumed by the Group arising from the Proposed JV. 9. INTEREST OF DIRECTOR, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and/or major shareholders of the Company and/or persons connected to them have any interest, neither direct nor indirect, in relation to the Proposed JV. 10. STATEMENT BY BOARD OF DIRECTORS The Directors of the Company, having considered all the relevant aspects of the Proposed JV, are of the opinion that it is in the best interest of the Company. 6

7 11. HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed JV pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 0.024% based on the latest audited financial statements of the Company for the financial year ended 31 March ESTIMATED TIME FRAME FOR COMPLETION The Parties proposed initial shareholding stipulated in Section 2.3 above is expected to be completed within thirty (30) days from the date of this announcement or such other period mutually agreed by the Parties. 13. APPROVALS REQUIRED The Proposed JV is not subject to the approval of shareholders of the Company and/or any other relevant authorities. 14. DOCUMENTS AVAILABLE FOR INSPECTION The Agreement is available for inspection at the Company s Registered Office located at D2-U3-10, Block D2, Solaris Dutamas, No. 1 Jalan Dutamas 1, Kuala Lumpur during normal business hours on Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 29 August