Prospectus - De Raj Group GROUP ..... 217 14.1 Explanations and Comparision of the Pro-forma Consolidated Income Statement FY 2016 and HY 14.2 Explanations of the pro forma consolidated

Prospectus

for admission to trading on the

Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter

Wertpapierbörse), sub-segment General Standard

of 35,000,000 ordinary bearer shares with no par value (Stückaktien)

- each with a pro-rata amount of EUR 1.00 in the share capital and with full dividend

rights for the financial year ending 31 December 2017, and for all subsequent financial

years -

of

De Raj Group AG Cologne

International Securities Identification Number: DE000A2GSWR1

German Securities Code (Wertpapier-Kenn-Nummer): A2GSWR

Trading Symbol: DRJ

Listing Agent

ACON Actienbank AG

15 November 2017

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TABLE OF CONTENTS

1. SUMMARY OF THE PROSPECTUS ...................................................................................... 7

A - Introduction and Warnings ................................................................................................. 7

B - Issuer .................................................................................................................................. 7

C - Securities .......................................................................................................................... 26

D - Risks …………………………………………………………………………………………..…26

E - Offer ……………………………………………………………………………………………..28

2. GERMAN TRANSLATION OF THE SUMMARY OF THE PROSPECTUS -

ZUSAMMENFASSUNG DES PROSPEKTES....................................................................... 30

A - Einleitung und Warnhinweise ........................................................................................... 30

B - Emittent ............................................................................................................................ 30

C - Wertpapiere. ..................................................................................................................... 51

D - Risiken .............................................................................................................................. 52

E - Angebot ............................................................................................................................ 54

3. RISK FACTORS .................................................................................................................... 56

3.1 Market and Business Risks .................................................................................... 56

3.2 Legal and Regulatory Risks .................................................................................... 73

3.3 Risks related to the Listing and the Shareholder Structure .................................... 77

3.4 Tax Risks ................................................................................................................ 78

4. GENERAL INFORMATION ................................................................................................... 80

4.1 Responsibility for the Content of this Prospectus ................................................... 80

4.2. Purpose of this Prospectus ..................................................................................... 80

4.3. Forward-Looking Statements ................................................................................. 80

4.4. Note on Third-Party Information on Market Information and Technical Terms ...... 82

4.5. Auditor..................................................................................................................... 82

4.6. Note on Figures and Financial Information............................................................. 82

4.7. Documents Available for Inspection ....................................................................... 84

5. THE LISTING ......................................................................................................................... 85

5.1 Admission to Exchange Trading, Individual Share Certificates, Delivery and

Transferability ......................................................................................................... 85

5.2 ISIN, WKN, Trading symbol .................................................................................... 85

5.3 Form, Voting Rights ................................................................................................ 85

5.4 Dividend Entitlement and Participation in Liquidation Proceeds ............................ 85

5.5 Disposal Restrictions and Transferability ............................................................... 85

5.6 Timetable of the Listing........................................................................................... 86

5.7 Listing Agreement ................................................................................................... 86

5.8 Lock-up Agreement ................................................................................................ 87

6. REASONS FOR THE LISTING AND COST OF THE LISTING ............................................ 88

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7. GENERAL INFORMATION ABOUT THE COMPANY ......................................................... 89

7.1 Name, Formation, Registration with the Commercial Register, Fiscal Year, Term

and Business Seat of De Raj .................................................................................. 89

7.2 Business Purpose of De Raj ................................................................................... 89

7.3 Formation and History of De Raj ............................................................................ 89

7.4 De Raj Group – Structure, Companies and Formation .......................................... 90

7.5 Tax status of De Raj ............................................................................................... 95

8. BUSINESS DESCRIPTION ................................................................................................... 96

8.1 Introduction and Overview ...................................................................................... 96

8.2 Market Overview ................................................................................................... 103

8.3 Regulatory Environment ....................................................................................... 104

8.4 Competitive Strengths and Competition ............................................................... 111

8.5 Strategy................................................................................................................. 116

8.6 Investment and Financing Requirements ............................................................. 117

8.7 Material Contracts ................................................................................................. 120

8.8 Insurance .............................................................................................................. 132

8.9 Litigation/ Administrative Proceedings .................................................................. 133

8.10 Research and Development ................................................................................. 133

8.11 Employees ............................................................................................................ 133

8.12 Intellectual Property Rights ................................................................................... 135

9. CAPITALISATION AND INDEBTEDNESS; WORKING CAPITAL .................................... 137

9.1 Capitalisation ........................................................................................................ 137

9.2 Liquidity and Net Financial Liabilities .................................................................... 138

9.3 Contingent Liabilities ............................................................................................. 138

9.4 Statement on Working Capital .............................................................................. 139

10. DIVIDEND POLICY AND EARNINGS PER SHARE .......................................................... 140

11. SELECTED FINANCIAL INFORMATION ........................................................................... 142

11.1 Selected Financial Information for De Raj Group AG ........................................... 144

11.2 Selected Financial Information for Hummingbird Energy (L) Inc .......................... 151

11.3 Selected Financial Information for Gryphon Energy (SEA) Sdn Bhd ................... 156

11.4 Selected Financial Information for De Raj Group from the Pro-Forma Consolidated

Financial Statements ............................................................................................ 159

12. MANAGEMENT’S DISCUSSION AND ANALYSIS OF NET ASSETS, FINANCIAL

CONDITION AND RESULTS OF OPERATIONS ............................................................... 162

12.1 Business Overview ............................................................................................... 163

12.2 Significant Factors affecting De Raj’s Net Assets, Financial Condition and Results of Operations ........................................................................................................ 165

12.3 Significant Accounting and Valuation Methods .................................................... 167

12.4 Management Discussion and Analysis of Hummingbird Energy (L) Inc. ............. 168

12.4.1 Results of Operation of Hummingbird Energy (L) Inc ........................................... 168

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12.4.2 Net Assets and Financial Position of Hummingbird Energy (L) Inc ...................... 175

12.4.3 Liquidity and Capital Resources of Hummingbird Energy (L) Inc ......................... 178

12.5 Management Discussion and Analysis of Gryphon Energy (SEA) Sdn Bhd ........ 181

12.5.1 Results of Operation of Gryphon Energy (SEA) Sdn Bhd .................................... 181

12.5.2 Net Assets and Financial Position of Gryphon Energy (SEA) Sdn Bhd ............... 184

12.5.3 Liquidity and Capital Resources of Gryphon Energy (SEA) Sdn Bhd .................. 186

12.6 Management Discussion and Analysis of De Raj Group AG ............................... 187

12.6.1 Results of Operation of De Raj Group AG ............................................................ 187

12.6.2 Net Assets and Financial Position of De Raj ........................................................ 189

12.6.3 Liquidity and Capital Resources of De Raj Group AG .......................................... 191

12.7 Further Information on De Raj Group ................................................................... 194

12.7.1 Liquidity and Capital Resources of De Raj Group ................................................ 194

12.7.2 Profit participation rights, Mezzanine finance instruments and Corporate Bonds of

De Raj Group ........................................................................................................ 194

12.7.3 Maturity Analysis of De Raj Group and effective interest rate of De Raj Group ... 194

12.7.4 Shareholders’ Equity of De Raj Group ................................................................. 194

12.7.5 Contingent Liabilities and Other Financial Obligations of De Raj Group .............. 194

12.7.6 Investments of De Raj Group ............................................................................... 194

12.7.7 Pensions and Retirement Payments of De Raj Group ......................................... 195

12.7.8 Qualitative and quantitative information on market risks of De Raj Group ........... 195

13. PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION OF DE RAJ GROUP ....... 196

13.1 Introduction ........................................................................................................... 196

13.2 Pro-forma consolidated accounts and notes ........................................................ 197

13.3 Auditor’s Report to the Pro-forma consolidated financial information .................. 215

14. EXPLANATORY REMARKS ON THE PRO-FORMA FINANCIAL INFORMATION OF DE

RAJ GROUP ........................................................................................................................ 217

14.1 Explanations and Comparision of the Pro-forma Consolidated Income Statement

FY 2016 and HY 2017 .......................................................................................... 218

14.2 Explanations of the pro forma consolidated Balance Sheet as of 30 June 2017 . 221

15. CORPORATE BODIES ....................................................................................................... 227

15.1 Overview ............................................................................................................... 227

15.2 The Management Board ....................................................................................... 228

15.3 The Supervisory Board ......................................................................................... 235

15.4 Shareholders’ Meeting .......................................................................................... 241

15.5 Shareholdings ....................................................................................................... 243

15.6 Corporate Governance ......................................................................................... 244

16. MAJOR SHAREHOLDERS AND LEGAL RELATIONSHIPS WITH RELATED PARTIES 246

16.1 Shareholder Structure ........................................................................................... 246

16.2 Legal Relationships with Related Parties ............................................................. 248

17. INFORMATION ON THE CAPITAL OF THE COMPANY ................................................... 251

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17.1 Issued Share Capital and Shares ......................................................................... 251

17.2 Authorized Capital ................................................................................................ 251

17.3 Contingent Capital ................................................................................................ 253

17.4 General Provisions on Changes in the Share Capital .......................................... 256

17.5 General Provisions Governing Subscription Rights ............................................. 257

17.6 Treasury Shares ................................................................................................... 258

17.7 Shareholding Notification and Disclosure Requirements ..................................... 258

17.8 Duty to Submit a Public Offer ............................................................................... 259

17.9 Exclusion of Minority Shareholders ...................................................................... 259

17.10 Disclosure of Directors’ Dealings .......................................................................... 261

18. THIRD PARTY INTERESTS ................................................................................................ 262

19. TAXATION IN THE FEDERAL REPUBLIC OF GERMANY ............................................... 263

19.1 Taxation of the Company...................................................................................... 263

19.2 Taxation of Shareholders...................................................................................... 265

19.3 Taxation of Capital Gains ..................................................................................... 269

19.4 Special Treatment of Companies in the Financial and Insurance Sectors and

Pension Funds ...................................................................................................... 273

19.5 Inheritance and Gift Tax ....................................................................................... 274

19.6 Other Taxes .......................................................................................................... 274

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FINANCIAL INFORMATION.………………………………………………………………………....……F-1

• Unaudited Interim Financial Information of De Raj Group AG for the six-months-period ended

June 30, 2017 (HGB) ............................................................................................................ F-4

• Audited Financial Statements of De Raj Group AG for the financial year ended

31 December 2016 (HGB) .................................................................................................. F-10

• Audited Financial Statements of De Raj Group AG for the abbreviated financial year ended

31 December 2015 (HGB) .................................................................................................. F-17

• Unaudited Interim Financial Information of Hummingbird Energy (L) Inc. for the six-months-

period ended June 30, 2017 (IFRS) .................................................................................... F-24

• Audited Financial Statements of Hummingbird Energy Inc. for the financial year ended

31 December 2016 (IFRS) .................................................................................................. F-40

• Audited Financial Statements of Hummingbird Energy Inc. for the financial year ended

31 December 2015 (IFRS) .................................................................................................. F-71

• Audited Financial Statements of Hummingbird Energy Inc. for the financial year ended 31

December 2014 (IFRS) ....................................................................................................... F-99

• Unaudited Interim Financial Information of Gryphon Energy (SEA) Sdn Bhd for the six-

months-period ended June 30, 2017 (IFRS) .................................................................... F-126

• Audited Financial Statements of Gryphon Energy (SEA) Sdn Bhd for the financial year start-

ed from 26 November 2015 and ended on 31 December 2016 (IFRS) ............................ F-131

RECENT DEVELOPMENTS AND OUTLOOK ....................................................................................O-1

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1. SUMMARY OF THE PROSPECTUS Summaries to Securities Prospectuses are made up of disclosure requirements known as elements (“El-ements”). These Elements are numbered in sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a summary of this type of securities and issuer. Because some Ele-ments are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of “not applicable”.

A - Introduction and Warnings

A.1 Warnings. This summary should be read as an introduction to this prospectus (the “Prospec-tus”). Any decision to invest in the securities should be based on consideration of this Prospectus as a whole by the investor.

If any claims are asserted before a court of law based on the information contained in this Prospectus, the investor appearing as plaintiff may have to bear the costs of translating this Prospectus prior to the commencement of the court proceedings pursuant to the national legislation of the member states of the European Econom-ic Area.

De Raj Group AG (the “Company”, “De Raj”, or the “Issuer”), together with ACON Actienbank, Munich, Germany (“ACON” or the “Listing Agent”) have assumed responsibility for the contents of this summary and any translation thereof pursuant to Section 5 paragraph 2b no. 4 of the German Securities Prospectus Act (Wertpa-pierprospektgesetz, “WpPG”). The persons responsible for the summary, including any translation thereof or for the issuing (Veranlassung), can be held liable but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, all necessary key information.

A.2 Information regarding the subse-quent use of the Pro-spectus.

Not applicable. Consent regarding the use of this Prospectus for a subsequent resale or placement of the shares has not been granted.

B - Issuer B.1 Legal and

commercial name.

The Company’s legal and commercial name is De Raj Group AG.

B.2 Domicile, legal form, legislation under which the issuer operates, country of incorpora-tion.

The Company has its registered seat in Cologne, Germany, (business address: c/o Heuking Kühn Lüer Wojtek, Magnusstr. 13, 50672 Cologne) and is registered with the commercial register of the local court (Amtsgericht) of Cologne, Germany, un-der the number HRB 92007. The Company is a German Stock Corporation (Ak-tiengesellschaft, AG) incorporated and existing in Germany and governed by the laws of the Federal Republic of Germany.

B.3 Current op-erations and principal business activities and princi-pal markets in which the issuer com-petes.

De Raj is the parent company of the companies Gryphon Energy (SEA) Sdn Bhd, Hummingbird Energy (L) Inc, Condor Energy (L) Inc, De Raj Energy Sdn Bhd and Gaea Power GmbH (“De Raj Group”). De Raj Group’s business is focussed on the oil and gas business in the South East Asian region and on the power business in Germany. Oil and Gas Division The oil and gas division of the De Raj Group is a service provider providing ser-vices encompassing the full spectrum of the offshore upstream oil and gas supply chain. The division is capable of being involved in (1) offshore exploration which involves the search for rock formations associated

with oil or natural gas deposits, and includes geophysical prospecting and/or exploratory drilling,

(2) well development, which occurs after exploration has located an economical-ly recoverable field, and involves the construction of one or more wells from the beginning (so-called “spudding”) to either abandonment if no hydrocar-

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bons are found, or to well completion if hydrocarbons are found in sufficient quantities,

(3) production, which is the process of extracting the hydrocarbons and separat-ing the mixture of liquid hydrocarbons, gas, water, and solids, removing the constituents that are non-saleable, and selling the liquid hydrocarbons and gas

and, finally, (4) site abandonment which involves plugging the well(s) and restoring the site

when a recently-drilled well lacks the potential to produce economic quanti-ties of oil or gas, or when a production well is no longer economically viable for production.

The oil and gas division of De Raj Group provides a high quality, comprehensive and cost effective solution for the monetization of oil and gas fields. The clients of the oil and gas division of De Raj Group AG are National Oil Companies (“NOC’s”), companies having stakes in oil fields as well as other technological enterprises. The division is strategically placed with a full range of assets ranging from jack-up rigs (a type of mobile platform that consists of a buoyant hull fitted with a number of movable legs, capable of raising its hull over the surface of the sea (“Jack-up Rigs”)), drilling equipment, processing equipment and marine equipment which are capable of handling offshore oil and gas extraction and production for so called green fields (i.e. oil and gas fields that have not been developed yet and thus have no existing infrastructure), brown fields (i.e. oil and gas fields that have already been developed and thus have to be built around an existing infrastructure) and marginal fields (i.e. oil and gas fields located in remote locations with little or no infrastructure and of a size or nature that often makes it impossible to predict with certainty the amount or composition of recoverable hydrocarbons in place). The business concept of the oil and gas division of De Raj Group is to enter into agreements on the deployment of its oil rigs in oil and gas fields. Oil rigs consist of the platform, i.e. the jack-up rigs, and the topside construction on the jack-up rigs, i.e. the topside equipment: The buoyant hull of the Jack-up rigs enables transportation of the unit and all at-tached machinery to a desired location. Once on location the hull is raised to the required elevation above the sea surface supported by the sea bed. The legs of such units may be designed to penetrate the sea bed, may be fitted with enlarged sections or footings, or may be attached to a bottom mat. De Raj Group currently holds five Jack-up Rigs. Furthermore, De Raj Group holds and leases as lessor the production facilities which are installed on the upper part of the oil rigs, e.g. the oil production plant, the accommodation block and the drilling rig (also referred to as “Topside Equip-ment”). Moreover, the lease agreements entered into by De Raj Group may also contain not only the lease of the equipment but also the obligation to operate and maintain the oil rig during the term of its deployment (so called “wet lease”). To fulfill the obligations for the operation and maintenance, De Raj Group may employ its own employees but also assigns an agency employed work force with this task. The oil and gas division of De Raj Group AG comprises of four companies each having its own function: 1. Gryphon Energy (SEA) Sdn. Bhd employs the vast majority of the labour

workforce and functions as management arm of the oil and gas projects and general operations and enters into contracts with the clients, namely National Oil Companies (“NOC’s”).

2. Hummingbird Energy (L) Inc. owns and leases the Topside Equipment. 3. Condor Energy (L) Inc. owns the Jack-up Rigs while they are not deployed in

oil or gas fields. 4. De Raj Energy Sdn Bhd holds the patents of the oil and gas division of the

De Raj Group The main market catchment area for the oil and gas division of the De Raj Group comprises of South East Asia, Central Asia and the Middle East. However, the division has also participated in market surveys, expression of interests and pre-qualifications for NOC’s and stakeholders from Europe and West Africa. German Power Division

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Gaea Power GmbH, a subsidiary of the Company, is the owner of 13 combined heat and power plants („CHP plants“) spread throughout Viersen, Straelen and Geldern, Germany. These CHP plants generate electricity, which is fed into the public power grid, and heat, which is delivered to nearby greenhouses. The CHP plants can be categorized into three groups based on their capacity of 330kW, 363kW and 400kW. The majority of the units owned by Gaea Power GmbH has a capacity of 400kW. However, only six CHP plants are currently in operation. Fur-ther seven units are currently not in operation due to ongoing modification works. The Group expects the recommissioning of three of these plants in fall 2017. Gaea Power GmbH does not operate the CHP plants itself, but leases them to five companies in the legal form of a German Unternehmergesellschaft (mit beschränk-ter Haftung), namely Rocky Kraft Unternehmergesellschaft (mit beschränkter Haf-tung), Freya Kraft Unternehmergesellschaft (mit beschränkter Haftung), Kilat Kraft Unternehmergesellschaft (mit beschränkter Haftung), Vision Kraft Unternehmerge-sellschaft (mit beschränkter Haftung) and Sutra Kraft Unternehmergesellschaft (mit beschränkter Haftung) which operate the plants and pay a monthly rent to Gaea. All CHP plants owned by Gaea Power GmbH are fired with palm oil and benefit from the promotion of renewables energies in Germany according to the Renewa-bles Energies Act (Erneuerbare-Energien-Gesetz – “EEG”). Currently, the German power division of De Raj Group is active in the territory northeast of Duesseldorf and close to the Dutch border, namely in Viersen, Geldern and Straelen.

B.4a Most signif-icant recent trends af-fecting the issuer and the industry in which it operates.

Since 31 December 2016, the effective date of the latest audited annual financial statement, the overall global economic outlook remains strong and the cyclical recovery continues. While there has been a better than expected growth rate in Malaysia, the growth in Indonesia has stalled in 2017. Oil prices have receded, reflecting strong inventory levels in the United States and a pickup in supply. However, Brent Crude Oil prices rose in recent weeks due to developments related to Hurricanes Harvey and Irma, as well as higher refinery demand in Europe and Asia. Since 31 December 2016, the following circumstances have occurred, which were of major relevance for the Company and De Raj Group: In February and June 2017, the companies of the oil and gas division of the De Raj Group entered into agreements for the deployment of an oil rig offshore Indonesia which constitute the main sources of revenue for De Raj Group at the moment. In April 2017, the loan facility granted for the financing of the business activities of the oil and gas division of De Raj Group was successfully restructured by way of a restructuring agreement with the bank granting the facility. In July 2017, the German power division of De Raj Group entered into several lease agreements on its combined heat and power plants. In October 2017, Alexander Arjun de Raj assigned a loan in the amount of EUR 3,810,000.00, which was granted to Gaea Power GmbH, to De Raj Group AG which was subsequently waived by De Raj Group AG. Finally, in October 2017 the shares in the other companies of the De Raj Group were contributed to the Company, partly by way of a capital increase against con-tribution in kind and partly by way of a contribution into the capital reserves of the Company, whereby the De Raj Group was formed. Furthermore, it is to be noted that some of the companies of De Raj Group acquired assets, i,e. Jack-up Rigs and patents, shortly before the contribution of their shares into the Company. One of the most significant developments for the De Raj Group since 31 December 2016, is the increase in the day-rates for the BOSS-1 oil rig, deployed in Indonesia and operated by De Raj Group from around USD 36,027 per day to USD 52,000 per day from 20 February 2017 on. This reflects the positive mood of the Oil & Gas industry in general and South East Asian prospects in particular. The Group had also undertaken significant cost saving measures, especially in the area of Operations and Maintenance of the assets, to cope with the negative price cycle, which are resulting in enhanced profitability now. De Raj Group is of the opinions that it has proven itself in the South East Asia re-gion to be a cost effective and an expedient contract partner. The next plan of ac-tion is to market these technologies to a wider global market. De Raj Group expects a serious upturn and to have at least four rigs in operations

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by year 2019 whereby the time gap is caused by the current requirement for cus-tomisation and refurbishment of the oil rigs at qualified shipyards. De Raj Group aims to expand rapidly its power generation portfolio in Germany, based on a proven and cash flow positive business model by 2018. The German Power division will also opportunistically expand horizontally and ver-tically in Germany, i.e. into grid supportive and utility bankrolled large energy stor-age facilities and technologies. Besides expanding its existing business, De Raj Group generally also observes the markets to validate potential further business opportunities and worthwhile chances to extend its business to further business sectors in the future, namely investments in conventionally generated power in the Middle East markets and supportive infra-structure.

B.5 Description of the group and the is-suer’s posi-tion within the group.

De Raj is the parent company of the De Raj Group. De Raj holds shares in the following five companies, Gryphon Energy (SEA) Sdn Bhd, Hummingbird Energy (L) Inc, Condor Energy (L) Inc, De Raj Energy Sdn Bhd and Gaea Power GmbH. Currently, the Company acts as a holding and service company. The essential functions of the Company are the management of the De Raj Group and the pro-curement of financing and equity. In the future, it cannot be ruled out that the Com-pany will also extend its activities beyond its function as a holding and service company and may also assume operational tasks itself. However, there are no definitive plans to do so at the date of this prospectus.

B.6 Persons who, direct-ly or indi-rectly, have a (notifiable) interest in the issuer’s capital or voting rights.

According to the Company’s information, as of the date of this Prospectus, the following persons, directly or indirectly, have a notifiable interest in the Company’s capital and voting rights:

De Raj Group AG (Germany)

Gaea Power GmbH(GER)

100%

German Power

Division

100%100%

HummingbirdEnergy (L) Inc

(Labuan)

GryphonEnergy (SEA)

Sdn Bhd(Malaysia)

CondorEnergy (L)

Inc(Labuan)

De Raj Energy Sdn

Bhd(Malaysia)

100%100%

Oil & GasDivision

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Shareholder Number of Shares (and Proportion) of Voting Rights held directly

Number of Shares (and Proportion) of Voting Rights at-tributed by other companies

Total number (and Proportion) of shares and voting rights held directly and at-tributed by other companies

Alexander Arjun De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

3,500,000

(10%) attributed by

Lexanda International Limited

Singapore

9,625,000

(27.5%)

Nicholas Arnand De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

None * 6,125,000

(17.5%)

Renata Anita De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

None * 6,125,000

(17.5%) Nagendran C Nadara-jah Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

1,750,000

(5 %) attributed by

Maya Terang Sdn. Bhd.,Kuala Lumpur,

Malaysia

7,875,000

(22.5 %)

Lexanda International Limited Singapore

3,500,000

(10%)

None * 3,500,000

(10 %) Maya Terang Sdn. Bhd. Kuala Lumpur, Ma-laysia

1,750,000

(5%)

None * 1,750,000

(5 %)

Free Float 5,250,000

(15%)

None * 5,250,000

(15%)

Total 35,000,000

(100%)

5,250,000

(15%)

* No attribution of shares by other companies

Different voting rights.

Not applicable. Each share in the Company carries one vote at the Company’s shareholders’ meeting. There are no different voting rights and no restrictions on voting rights.

Direct or indirect control over the issuer and nature of such con-trol.

The members of the De Raj Family hold directly and indirectly 85 % of the shares and voting rights in the Company in total. However, no individual shareholder holds directly and/or indi-rectly more than 50 % of the shares or voting rights in the Company. Furthermore, the Com-pany is not aware that members of the De Raj Family and/or other direct and/or indirect shareholders of the Company coordinate their behaviour in view of the Company by way of an agreement or otherwise. Thus, the Company is not controlled by any of its shareholders.

B.7 Selected key histor-ic financial

The following selected financial information for the company Hummingbird Energy (L) Inc for the fiscal years ended 31 December 2014, 31 December 2015 and 31 Decem-ber 2016, for the company Gryphon Energy (SEA) Sdn Bhd for the fiscal years ended 31

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infor-mation.

December 2016 and for De Raj Group AG for the fiscal years ended 31 December 2015 and 31 December 2016 summarised below has been extracted or derived from the audit-ed financial statements of Hummingbird Energy (L) Inc (IFRS), Gryphon Energy (SEA) Sdn Bhd (IFRS) and De Raj Group AG (HGB) for the respective fiscal years and the in-ternal accounting records or management reporting systems. The selected unaudited interim financial information from the abbreviated Profit and Loss Statement for the period from 1 January 2017 until 30 June 2017 and from the abbreviated Balance Sheet as of 30 June 2017 of Hummingbird Energy (L) Inc, Gryphon Energy (SEA) Sdn Bhd and De Raj Group AG has been extracted or derived from the internal accounting records or man-agement reporting systems of the respective companies. The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L) Inc and Gryphon Energy (SEA) Sdn Bhd are in accordance with the IFRS as adopted by the European Union. Where financial information in the following tables is labelled “audited”, this means that it was extracted from the audited financial statements of Hummingbird Energy (L) Inc (IFRS), Gryphon Energy (SEA) Sdn Bhd (IFRS) and De Raj Group AG (HGB) referred to above. Where financial information in the following tables is labelled “unaudited”, this means that it was extracted or derived from the internal accounting records or manage-ment reporting systems of companies of De Raj Group or is based on calculations of fi-nancial information from the above mentioned sources. Where financial information in the following tables is labelled “IFRS”, this means that the IFRS applied in the respective fi-nancial statements were applied in accordance with the IFRS as adopted in the European Union. All figures presented in this section are rounded to the nearest one decimal place. Be-cause of this rounding, the figures shown in the tables do not in all cases add up exactly to the respective totals given.

Selected Financial Information of Hummingbird Energy (L) Inc

Selected Financial Information from the Profit and Loss Statement of Hummingbird

Energy (L) Inc

HUMMINGBIRD ENERGY (L) INC (Incorporated in Federal Territory of Labuan, Malaysia )

STATEMENT OF PROFIT AND LOSS

<--------IFRS, Audited Figures----------------->

01.01. 01.01. 01.01. - - - 31.12. 31.12. 31.12. 2016 2015 2014 USD USD USD

Revenue 11.885.633 17.702.500 14.602.000 Cost of Sales (4.445.179) (5.424.377) (4.589.095) Net rental income 7.440.454 12.278.123 10.012.905 Administrative expenses (569.742) (1.880.972) (2.550.229) Other Income - 7 51 Other operating expenses - - - Total other operating income and expenses 7 51 Income from the disposal of Properties - -

Expenses in connection with the disposal of Properties

- - -

Result from the disposal of properties - - Valuations gains from properties - - -

Impairment loss from properties - - -

Valuations results Operation result 6.870.712 10.397.165 7.462.778

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Result from at equity-accounted investments

- - -

Interest income - 7 51 Finance Costs (2.309.710) (1.882.630) (635.688) Minority interests - - - Financial result (2.309.710) (1.882.623) (635.637) Net Profits/ (Loss) 4.561.002 8.514.528 6.827.039

Selected Financial Information from the Balance Sheet of Hummingbird Energy (L) Inc

HUMMINGBIRD ENERGY (L) INC

(Incorporated in Federal Territory of Labuan, Malaysia )

STATEMENT OF FINANCIAL POSITION

<--------------IFRS, Audited Figures---------------->

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

Assets

Non Current Assets - - -

Intangible assets - - -

Plant and Equipment 57.095.266 61.567.527 70.430.893

Inventories + Investment in an associated company

2.240.012 2.240.012 2.200.000

Total non-current assets 59.335.278 63.807.539 72.630.893

Current assets

Trade receivables

Income tax receivables

Other receivables and depos-its + Amount owed by Holding Company + Amount owing by related companies + Amount owing by related parties

13.064.574 23.370.336 21.690.078

Cash and bank balances 2.811.168 10.023.260 2.283

Total current assets 15.875.742 33.393.596 21.692.361

Total Assets 75.211.020 97.201.135 94.323.254

Equity and liabilities

Equity

- 14 -

Share capital 3.000.000 3.000.000 1

Share premium

Revaluation reserve

Retained profits 16.977.241 12.416.239 6.901.710

Treasury Shares

Total shareholders' equity 19.977.241 15.416.239 6.901.711

Non current liabilities

Minority interests

Financial liabilities 31.912.500 34.375.000 11.400.000

Derivative financial instru-ments

Other liabilities

Total non-current liabilities 31.912.500 34.375.000 11.400.000

Current liabilities

Provisions

Term Loan 5.900.000 13.750.000 20.000.000

Trade Payable 350.065 349.729 1.577.729

Accruals + Amount owing to Holding Company + Amount owing to related companies + Amount owing to related par-ties + Amount owing to a direc-tor + Provision for taxation

17.071.214 33.310.167 54.443.814

Total current liabilities 23.321.279 47.409.896 76.021.543

Total shareholders' equity and liabilities

75.211.020 97.201.135 94.323.254

Selected Financial Information from the Cash-Flow Statement of Hummingbird Energy

(L) Inc HUMMINGBIRD ENERGY (L) INC


STATEMENT OF CASH FLOWS

<--------------IFRS, Audited Figures--------------->

01.01. 01.01. 01.01. - - - 31.12. 31.12. 31.12. 2016 2015 2014 USD USD USD

CASH FLOWS FROM/(FOR) OPERATING ACTIVI-TIES

Profit before taxation: 4.565.908 8.519.188 6.832.761 Adjustments for: Depreciation of plant and 4.472.261 4.413.124 3.179.029

- 15 -

equipment Interest expenses 2.309.710 1.882.630 635.688 Unrealised foreign exchnage gain

- (511.467) -

11.347.879 14.303.475 10.647.478 Operating profit before work-ing capital changes

Decrease in inventories - - 800.000 (Increase)/decrease in other receivables and deposits

(348) 18.572 (114.901)

Increase/(decrease) in trade payables

336 (1.228.000) 1.557.365

Increase/(decrease) in accru-als

704.665 (10.475) 771

Decrease in amount owing by holding company

- 14.602.000 (14.602.000)

Decrease in amount owing to related company

(2.752.888) - (3.546.051)

Decrease/(increase) in amount ow-ing by related company

19.112.200 (18.854.500) 7.765.940

Decrease in amount owing to related parties

- (28.060.214) -

CASH FROM/(FOR) OPE-RATIONS

28.411.844 (19.229.142) 2.508.602

Interest paid (2.309.710) (1.882.630) (635.688) Income tax paid (4.906) (6.552) (6.552) NET CASH FROM/(FOR) OPERAT-ING ACTIVITIES

26.097.228 (21.118.324) 1.866.362

CASH FLOWS FOR INVEST-ING ACTIVITIES

Decrease/(Increase) in re-stricted bank balances

7.515.892 (10.021.684) -

Investment in associate - (40.012) - Purchase of plant and equip-ment

- - (44.833.316)

(Advances to)/ Repayments from related companies

(1.364.387) 2.553.776 -

Advances to related parties (6.944.995) (106) - Adjustment of plant and equipment due to price adjustment

- 4.450.242 -

NET CASH FOR INVESTING ACTIVITIES

(793.490) (3.057.784) (44.833.316)

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES

Drawdown of term loan - 85.000.000 40.000.000 Dividends paid - - (8.200.000) Repayment of term loans (10.312.500) (68.275.000) (8.600.000) Repayment to holding com-pany

(671.708) - 3.083.536

(Repayments to)/advances from related companies

(13.970.671) 21.277.718 6.229.317

Advance from related parties 1.017 40.011 (2.654.028) Repayment to a director (46.076) (13.867.328) 13.109.834

NET CASH (FOR)/FROM FINANC-ING ACTIVITIES

(24.999.938) 24.175.401 42.968.659

NET INCREASE/ (DECREASE) IN CASH AND BANK

303.800 (707) 1.705

- 16 -

BALANCES

CASH AND CASH EQUIVALENTS AT BEGINNING OF

THE FINANCIAL YEAR 1.576 2.283 578

CASH AND CASH EQUIVA-LENTS AT END OF

THE FINANCIAL YEAR 305.376 1.576 2.283

REPRESENTED BY: CASH ON HAND 6 124 - CASH AT BANKS 305.370 1.452 2.283

305.376 1.576 2.283

Selected Financial Information from the abbreviated Profit and Loss Statement for the

period from 1 January 2017 until 30 June 2017 and from the abbreviated Balance Sheet

as of 30 June 2017 of Hummingbird Energy (L) Inc

STATEMENT OF PROFIT AND LOSS 1 January

until 30 June 2017

(Unaudited)

1 January until 30

June2016 (Unaudited)

EUR EUR Revenue 4.800.263 5.684.051 Cost of sales (2.226.326) (2.221.171) Gross profit 2.573.937 3.462.880 Other income - 23.363 Administrative expenses (148.161) (47.228) Finance costs (748.822) (480.782) Profit / (Loss) befo-re taxation 1.676.954 2.958.234 Tax expense (3.957) (4.419) Profit / (Loss) for the year 1.672.997 2.953.815

Balance Sheet as of 30 June 2017 and 31 December 2016 30 June

2017 EUR (unaudited)

31 Decem-ber 2016 EUR (audited)

Fixed Assets

47,792,583 56,391,635

Current Assets

6,790,557 15,088,141

Current Liabilities

11,434,902 22,164,302

Long Term Liabilities

23,741,794 30,329,310

Retained Earnings / (Losses)

16,780,623 16,134,994

Selected Financial Information of Gryphon Energy (SEA) Sdn Bhd

Selected Financial Information from the Profit and Loss Statement for the Period from

26 November 2015 until 31 December 2016 RM (=Malaysian

Ringgit) (IFRS, audited)

OTHER INCOME 103,000 ADMINISTRATIVE EXPENSES (125,174) OTHER EXPENSES (152,371) LOSS/TOTAL COMPREHENSIVE EXPENSES FOR THE FINANCIAL PERIOD

(174,545)

LOSS/TOTAL COMPREHENSIVE EXPENSES

- 17 -

FOR THE FINANCIAL PERIOD ATTRIBUTABLE TO:- Owners of the Company

(174,545)

Selected Financial Information from the Profit and Loss Statement for the Period from

1 January 2017 until 30 June 2017

GRYPHON ENERGY (SEA) SDM BHD

(Incorporated in Malaysia)

STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDING 30 JUNE

Management Management

Account Account 1 January 2017

until 2017

(Unaudited)

1 January 2016 until 2016

(Unaudited) kEUR kEUR

Revenue 5.488 -

Cost of sales (4.554) -

Gross profit 934 -

Other income - -

Administrative expenses (666) (0.80)

Finance costs - -

Profit / (Loss) before taxation 269 (0.80)

Tax expense - -

Profit / (Loss) for the year 269 (0.80)

Difference from Currency translation (8)

Total comprehensive income for the financial year 261

Selected Financial Information from the Balance Sheet as of 31 December 2016

- 18 -

RM (IFRS, audited)

ASSET

CURRENT ASSETS

Prepayments 93,860 Amount owing by related companies 827,418 Bank balances 4,240 TOTAL ASSET 925,518

EQUITY AND LIABILITY

EQUITY Share Capital 1,000,000 Accumulated loss (174,545) TOTAL EQUITY 825,455 CURRENT LIABILITIES Other payables and accruals 93,656 Amount owing to a director 6,407 TOTAL LIABILITY 100,063 TOTAL EQUITY AND LIABILITY

925,518

Selected Financial Information from the Balance Sheet as of 30 June 2017

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 and 31 December 2016


Account Account 30 June 2017 31 December 2016

kEUR (Unaudited)

kEUR (audited)

Fixed Asset - -

Current Assets 9.156 -

Current Liabilities 8.719 (80)

Long Term Liabilities - -

Retained Earnings/ (Losses) 224 (80)

Selected Financial Information from the Cash-Flow Statement for the Period from

26 November 2015 until 31 December 2016

- 19 -

RM (IFRS, audited)

CASH FLOWS FOR OPERATING ACTIVITIES Loss for the financial period (174,545) Working capital changes:- Increase in prepayments (93,860) Increase in other payables and accruals 93,656 NET CASH FOR OPERATING ACTIVITIES (174,749) NET CASH FOR INVESTING ACTIVITY Advances to a related party (827,418) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares 1,000,000 Advances from a director 6,407 NET CASH FROM FINANCING ACTIVITIES 1,006,407 NET MOVEMENT IN CASH AND BANK BALANC-ES/CASH AND BANK BALANCES AT END OF THE FINANCIAL PERIOD

4,240

Selected Financial Information of De Raj Group AG

Selected Financial Information from the Profit and Loss Statement of De Raj Group

AG

De Raj Group AG (Cologne, Germany )


1 HY 2017 2016 2015 EUR

(unaudited) EUR (HGB,

audited)

EUR (HGB,

audited)

Revenue - - - Cost of Sales - - - Net rental income - - - Administrative expenses - - - Other Income - - - Other operating expenses - - - Total other operating income - and expenses

- -

Income from the disposal of Properties - - -


- - -

Result from the disposal of - properties

- -

- 20 -

Valuations gains from properties - - -

Impairment loss from properties - - -

Valuations results Operation result - - - Result from at equity-accounted investments

- - -

Interest income - - - Finance Costs - - - Minority interests - - - Financial result - - - Net Profits/ (Loss) - - -

Selected Financial Information from the Balance Sheet of De Raj Group AG

De Raj Group AG

(Cologne, Germany)


1 HY 2017 2016 2015

EUR (unaudited)

EUR (HGB,

audited)

EUR (HGB,

audited) Assets

Non-Current Assets - - -

Intangible assets - - -

Plant and Equipment - - -

Inventories + Investment in an associated company

- - -

Total non-current assets - - -

Current assets

Trade receivables - - -

Income tax receivables - - -

Other receivables and deposits + Amount owed by Holding Company + Amount owing by related companies + Amount owing by related parties

- - -

Cash and bank balances 50,000.00 50,000.00 50,000.00

Total current assets 50,000,00 50,000.00 50,000.00

Total Assets 50,000,00 50,000.00 50,000.00

- 21 -

Equity and liabilities

Equity

Share capital 50,000.00 50,000.00 50,000.00

Share premium - - -

Revaluation reserve - - -

Retained profits - - -

Treasury Shares - - -

Total shareholders' equity 50,000.00 50,000.00 50,000.00


Minority interests

Financial liabilities - - -

Derivative financial instruments - - -

Other liabilities - - -

Total non-current liabilities - - -

Current liabilities

Provisions - - -

Term Loan - - -

Trade Payable - - -

Accruals + Amount owing to Holding Company + Amount owing to related companies + Amount owing to related parties + Amount owing to a director + Provision for taxation

- - -

Total current liabilities - - -

Total shareholders' equity and liabilities

50,000.00 50,000.00 50,000.00

Selected Financial Information from the Cash-Flow Statement of De Raj Group AG

De Raj Group AG (Cologne, Germany)


1 HY 2017 2016 2015 EUR

(unaudited) EUR (HGB,

audited)

EUR (HGB,

audited) CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

Profit before taxation: - - - Adjustments for:

- 22 -

Depreciation of plant and equipment

- - -

Interest expenses - - - Unrealised foreign exchnage gain

- - -

- - - Operating profit before work-ing capital changes

Decrease in inventories - - - (Increase)/decrease in other receivables and deposits

- - -

Increase/(decrease) in trade payables

- - -

Increase/(decrease) in accru-als

- - -

Decrease in amount owing by holding company

- - -

Decrease in amount owing to related company

- - -

Decrease/(increase) in amount ow-ing by related company

- - -

Decrease in amount owing to related parties

- - -

CASH FROM/(FOR) OPE-RATIONS

- - -

Interest paid - - - Income tax paid - - - NET CASH FROM/(FOR) OPERAT-ING ACTIVITIES

- - -

CASH FLOWS FOR INVEST-ING ACTIVITIES

Decrease/(Increase) in re-stricted bank balances

- - -

Investment in associate - - - Purchase of plant and equip-ment

- - -


- - -

Advances to related parties - - - Adjustment of plant and equipment due to price adjustment

- - -

NET CASH FOR INVESTING ACTIVITIES

- - -

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES

Drawdown of term loan - - - Dividends paid - - - Repayment of term loans - - - Repayment to holding com-pany

- - -

(Repayments to)/advances from related companies

- - -

Advance from related parties - - - Repayment to a director - - -

NET CASH (FOR)/FROM FINANC-ING ACTIVITIES

- - -

NET INCREASE/ - - -

- 23 -

(DECREASE) IN CASH AND BANK BALANCES


THE FINANCIAL YEAR - - -

CASH AND CASH EQUIVA-LENTS AT END OF

THE FINANCIAL YEAR - - -

REPRESENTED BY: CASH ON HAND - - - CASH AT BANKS - - -

- - -

Selected Financial Information from the abbreviated Profit and Loss Statement for the

period from 1 January 2017 until 30 June 2017 and from the abbreviated Balance Sheet

as of 30 June 2017 of De Raj Group AG

STATEMENT OF PROFIT AND LOSS 1 January

until 30 June 2017

1 January until 30

June 2016 EUR

(unaudited) EUR

(unaudited) Revenue - - Cost of sales - - Gross profit - - Other income - - Administrative expenses - - Finance costs - - Profit / (Loss) befo-re taxation - - Tax expense - - Profit / (Loss) for the year - -

Balance Sheet as of 30 June 2017 and 31 December 2016 30 June

2017 EUR (unaudited)

31 De-cember 2016 EUR (HGB, audited)

Fixed Assets - - Current Assets 50,000.00 50,000.00 Current Liabilities - - Long Term Liabilities - - Retained Earnings / (Losses) - -

There has been a significant change to the Company’s financial condition and operating re-sults subsequent to the period covered by the historical key financial information above due to the fact that the Company acquired the shares in its subsidiaries and the De Raj Group was formed. The description of the impact is the subject matter of the selected pro-forma consoli-dated financial information for De Raj Group below under B.8.

B.8 Selected Pro-Forma key Financial Information

In October 2017, De Raj has acquired shares in the companies Gryphon Energy (SEA), Hummingbird Energy (L) Inc, De Raj Energy Sdn Bhd, Condor Energy (L) Inc and Gaea Pow-er GmbH whereby the now existing De Raj Group was formed. Furthermore, in October 2017, i.e. shortly before the aforementioned acquisition of shares, the company De Raj Energy Sdn Bhd acquired patents and the company Condor Energy (L) Inc acquired five Jack-up Rigs (the aforementioned transactions in the following referred to as “Formation of De Raj Group”). On the basis of the Formation of De Raj Group and the respective acquisitions, De Raj has prepared pro-forma consolidated profit and loss statements for the period from 1 January 2016 to 31 December 2016 and for the period from 1 January 2017 to 30 June 2017 as well as a pro-forma balance sheet as of 30 June 2017 and supplemented these with pro-forma notes (hereafter collectively referred to as the “Pro-Forma Consolidated Financial

- 24 -

Information”). The purpose of the Pro-Forma Consolidated Financial Information is to present the material effects the Formation of De Raj Group would have had on hypothetical consolidated financial statements of De Raj if the acquisitions which took place in the context of the Formation of De Raj Group had been a part of the De Raj Group throughout the entire fiscal year ended 31 December 2016 and the six months period ended 30 June 2017. Thereby, the reference to De Raj Group in the period from 1 January 2016 until 30 June 2017 has to be understood as hypothetical as there had been no De Raj Group during that period due to the fact that De Raj Group only came into existence upon the Formation of De Raj Group. The pro-forma consolidated profit and loss statements for the period from 1 January 2016 to 31 December 2016 and for the period from 1 January 2017 to 30 June 2017 were prepared based on the assumption that the acquisitions took place as of 1 January 2016. The Pro-Forma Consolidated Financial Information has been prepared for illustrative purposes only. Because of its nature, the Pro-Forma Consolidated Financial Information describes only a hypothetical situation and since it contains assumptions and uncertainties, the presentation does not reflect the actual net assets, financial position and results of operations of the De Raj Group as of any historical date nor does it project the future development of the net assets, financial position and results of operations of De Raj Group. The Pro-Forma Consolidated Financial Information is only meaningful in conjunction with the historic information of De Raj, Hummingbird Energy (L) Inc and Gryphon Energy (SEA) Sdn Bhd contained in the section “Financial Information” in this prospectus. The Pro-Forma Consolidated Financial Information was prepared in accordance with the rules of the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer (IDW)) for preparing pro-forma financial information (IDW Accounting Practice Statement: Preparation of Pro-Forma Financial Information (IDWAcPS AAB 1.004) (IDW Rechnungslegungs-hinweis: Erstellung von Pro-Forma-Finanzinformationen (IDW RH HFA 1.004)) and in accordance with the IFRS as adopted by the European Union. All figures presented in this section are rounded to the nearest one decimal place. Because of this rounding, the figures shown in the tables do not in all cases add up exactly to the respective totals given.

- 25 -

B.9 Profit fore-cast and estimate.

Not applicable. The Company has not issued a profit forecast or estimate.

B.10 Qualifica-tions in the audit re-port on the historical financial infor-mation.

Not applicable. The auditor’s reports on the historical financial information included in this prospectus have been issued without qualification.

B.11 Insuffi-ciency of the issu-er’s work-

Not applicable. The Company believes that the De Raj Group has sufficient working capital to be able to settle its liabilities as they fall due at least for the next twelve months.

De Raj Group AG Cologne, Germany

STATEMENT OF FINANCIAL POSITION (Pro Forma)

30 June 2017 31 Dec 2016 EUR EUR

Assets Non Curret Assets - -

Property, Plant and Equipment 52.658.297 57.910.525 Other receivable and assets - 37.958 Total non-current assets 52.658.297 57.948.483 Current assets Trade receivables 6.253.455 47.354 Inventories 1.927.795 - Other receivables and assets 98.098.974 14.809.766 Amount owing by related companies 547.161 - Cash and cash equivalents 174.162 2.724.209 Total current assets 107.001.520 17.581.329

Total Assets 159.659.817 75.529.812

Equity and liabilities Equity Share capital 35.000.000 35.000.000 Capital reserve 102.245.023 106.869.368 Reverse Acquisition reserve (20.789.773) (20.789.773) Reserve from currency translation -963.681 467.289 Retained earnings 4.136.944 - Profit for the period 1.914.058 4.137.387 Total shareholders' equity 121.542.570 125.684.271

Non current liabilities Liabilities to banks 29.951.434 30.274.642 Liabilities to shareholders 12 (78.721.608) Total non-current liabilities 29.951.446 (48.446.966) Current liabilities Amount owing to directors or related parties 6.360.608 15.523.539 Liabilities to banks - 5.597.191 Trade payables 636.684 339.112 Accrued expenses and Provisions 715.153 688.302 Other current and financial liabilities 453.356 (23.855.637) Total current liabilities 8.165.801 (1.707.493) Total shareholders' equity and liabilities 159.659.817 75.529.812

- 26 -

ing capital for its pre-sent re-quire-ments.

C - Securities C.1 Type and

class of the securities admitted to trading.

Ordinary bearer shares with no par value (Stückaktien), each representing a notional value of EUR 1.00 and full dividend entitlement from January 1, 2017.

Security identification number.

International Securities Identification Number (ISIN): DE000A2GSWR1 German Securities Code (Wertpapier-Kenn-Nummer): A2GSWR

Trading Symbol.

Trading Symbol: DRJ

C.2 Currency. Euro. C.3 The number

of shares is-sued and ful-ly paid.

35,000,000.00 bearer shares with no par value (Stückaktien) (“Shares”). The share capital has been fully paid up.

Notional value.

Each of the Shares of the Company represents a notional share of EUR 1.00 in the Compa-ny’s share capital.

C.4 A descrip-tion of the rights at-tached to the securities.

Each share in the Company carries one vote at the Company’s shareholders’ meeting. There are no restrictions on voting rights. The Shares carry full dividend entitlement from January 1, 2017.

C.5 A descrip-tion of any restrictions on the free transferabil-ity of the se-curities.

Not applicable. The Company’s Shares are freely transferable in accordance with the legal requirements for bearer shares. There are no prohibitions or restrictions on disposals with respect to the transferability of the Company’s shares.

C.6 Application for admis-sion to trad-ing on a regulated market and identity of regulated markets where the securities are to be traded.

The Company expects to apply for admission of the Shares to trading on the regulated mar-ket segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpa-pierbörse), sub-segment General Standard. The listing approval is expected to be an-nounced on 21 November 2017. Trading of the Shares on the Frankfurt Stock Exchange is expected to commence on 22 November 2017.

C.7 Dividend policy.

Due to the fact that the Company was a shelf company and its business purpose was re-stricted to the administration of its own assets until August 2017, there have been no net retained earnings available for distribution for the abbreviated financial year 2015 and the full financial year 2016. Correspondingly, there was no distribution of dividends for the ab-breviated financial year 2015 and the financial year 2016. The Company can make no pre-dictions as to the size of future profits available for distribution, or whether distributable prof-its will be achieved at all. Hence the Company cannot guarantee that dividends will be paid in the future. Moreover, the results of operations as set out in the financial statements may not be necessarily indicative of the results that should be expected in the future or amounts of future dividend payments

D - Risks D.1 Key risks

specific to When considering whether to purchase shares of De Raj investors should take into account, along with carefully considering the other information contained within this Prospectus, the

- 27 -

the issuer and its in-dustry

following risk factors. The occurrence of one or more of these risks may have material ad-verse effects on the business, assets and financial and earning positions of De Raj and its subsidiaries. The market price of the Company’s shares could drop significantly as a result of each of these risks and investors could lose all or part of their invested capital. Risks as-sociated with the Company and its industry are described below. The risks described below do not represent an exhaustive list of risks to which De Raj is exposed. Additional risks and uncertainties that are not currently known to the Com-pany could also adversely affect the business operations of De Raj and have a negative effect on the business, assets and fi-nancial and earning positions of the Company. The order in which the risks are listed does not correspond to or indicate the likelihood of their occurrence or the extent of their potential economic impact. Selection and content of the included risk factors were based on assump-tions that may subsequently prove incorrect. The risks described may occur individually or cumulatively.

Market and Business Risks • De Raj Group is dependent on a limited number of major customers. • Risks arise in view of contracts, which were entered into for the implementation of the

economically most important contract for De Raj Group regarding the deployment of an oil rig.

• De Raj Group may not be able to procure inputs, including equipment assembly parts and chemicals, from suppliers in a timely manner, on satisfactory terms or at all.

• Some of De Raj Group’s services contracts may be terminated prematurely under vari-ous circumstances.

• De Raj Group’s insurance coverage may not be adequate to cover all losses or liabili-ties that may arise in connection with the operations of De Raj Group.

• As De Raj Group continues to expand internationally, it is increasingly susceptible to legal, regulatory, political, economic and competitive conditions outside of Malaysia, as well as operational risks different from those that De Raj Group faces in Malaysia.

• De Raj Group may not be able to grow successfully through future acquisitions or to effectively integrate the acquired businesses.

• De Raj Group’s internal organizational structures, particularly its risk management, might prove insufficient and might fail to identify or avoid undesirable developments and risks and impending or already perpetrated violations of the law in a timely manner.

• Repair and maintenance of De Raj Group’s key assets, equipment and facilities may require substantial expenditure, and breakdown, non-performance or loss of the key assets, equipment and facilities on which De Raj Group is dependent may cause it to incur losses.

• De Raj Group may not be able to effectively manage its present or future assets and joint ventures.

• De Raj Group is exposed to the credit risk of its customers and counterparties with whom it does business.

• Global capital and credit market issues could negatively affect De Raj Group’s liquidity, increase its costs of borrowing and disrupt the operations of its suppliers and custom-ers.

• De Raj Group is exposed to foreign exchange risk arising from changes in the ex-change rates between the functional currencies of companies in its Group and other currencies.

• De Raj Group’s IT-systems could malfunction or become impaired. • The potential future use of derivative instruments, such as currency forward contracts,

may not fully hedge the risks of price fluctuations. • Forward-looking statements in this Prospectus may not be accurate. • Risks arise for the De Raj Group's business from the transformation of the energy mar-

ket, particularly in Europe. • Risks arise for the De Raj Group's business from an increase in renewable power gen-

eration and the resulting displacement of conventional power plants among the compe-tition.

• Risks arise for the De Raj Group's business from the availability of fossil fuels such as gas and oil as well as biomass.

• Risks arise for the De Raj Group's business from unusual seasonal fluctuations in de-mand for oil and gas as well as power generation.

• Risks arise for the De Raj Group's business from human errors, technical failures in operating procedures or interruptions of business operations.

- 28 -

• Risks arise for the De Raj Group's business from qualified personnel not being availa-ble and any inability to recruit qualified personnel or a high degree of staff fluctuation.

• Risks arise for the De Raj Group's business from increased competition. • There are reputational risks related to the De Raj Group's business. • De Raj is a holding company and, as a result, is dependent on dividends from its sub-

sidiaries. • Risks arise for the De Raj Group's business from the acquisition of patents • Risks arise for the De Raj Group's business from possible conflicts in view of intellectu-

al property rights • De Raj Group’s major shareholders may have interests that may not be aligned or may

conflict with those of its other shareholders. Legal and Regulatory Risks

• De Raj Group’s may be adversely affected by changes to the general legal, and regula-tory environment in the countries in which it operates.

• Risks arise for the De Raj Group's business from potential amendments of the German promotion scheme for renewables energies.

• Risks arise for the De Raj Group's business from possible political actions and/or legal measures with respect to the usage of palm oil as fuel for CHP plants.

• Risks arise for the De Raj Group's business from of legal uncertainties with regard to provisions on the determination of the promotion amount.

Tax Risks • De Raj Group may have to pay additional taxes following tax audits. • De Raj Group may subject to additional taxes in Germany. • De Raj Group’s business is subject to the general legal and tax environment in Germa-

ny and the other countries in which De Raj Group is active. D.3 Key risks

specific to the securi-ties

The key risks specific to the securities are summarized as follows: The trading volumes and market price for De Raj’s shares could fluctuate considerably,

and the market price could decline in the future Any future sales of a considerable number of De Raj’s shares by a major shareholder or

a number of shareholders could lead to a decrease in the market price of the shares Future capital measures could lead to a decrease in the market price for De Raj’s

shares and a substantial dilution of existing shareholders’ interests in De Raj A sale and/or transfer of shares of the Company may in the future be subject to financial

transaction tax. E - Offer E.1 The total net

proceeds and Estimate of the total expenses of the offering and listing, including es-timated ex-penses charged to the investor by the issu-er.

The subject matter of the prospectus is only a listing, there is no offer of shares. The Com-pany estimates that the total costs of the listing will amount to approximately EUR 515,000.00. The costs of the listing include, inter alia, costs for external advice (in particular by banks (including the listing agreement with ACON), legal and tax advisors), audit fees (auditors), transaction costs, costs for notarial recordings, costs for filings with the commercial register and costs of the planned stock exchange admissions, including their preparation. Neither the Company nor ACON will charge expenses to investors.

E.2a Reasons for the offering.

Not applicable. An offer of securities is not subject of the prospectus.

Use of Pro-ceeds, esti-mated net amount of the pro-ceeds.

E.3 Offer condi-tions.


E.4 Description of all inter-

Not applicable. There are no third parties who have an interest in the admission to trading of the Shares.

- 29 -

ests material to the offer.

E.5 Name of the person or entity offer-ing to sell the security.


Lock-up agreement: the parties involved; and indica-tion of the period of the lock up.

The shareholders of the Company Mr Nagendran C Nadarajah, Ms Renata Anita de Raj, Mr Nicholas Arnand de Raj, Mr Alexander Arjun de Raj, Maya Terang Sdn. Bhd. and Lexanda International Limited have agreed with ACON that, to the extent permitted by law, for a peri-od of six months after the listing of the shares to the Regulated Market of the Frankfurt Stock Exchnage not to directly or indirectly sell, offer, commit to sell or offer, or announce a sale or an offer to dispose of, any of their shares in the Company or rights that can be con-verted into, or exchanged for, such shares or that carry rights to acquire such shares and not to enter into other transactions (including transactions concerning derivative instru-ments) the economic effect of which would be similar to that of the measures described above, without the prior written consent of ACON.

E.6 Amount and percentage of immediate dilution re-sulting from the offer.


E.7 Estimated expenses charged to the investor by the issu-er.

Not applicable. Neither the Company nor ACON will charge expenses to investors.

- 30 -

2. GERMAN TRANSLATION OF THE SUMMARY OF THE PROSPECTUS -

ZUSAMMENFASSUNG DES PROSPEKTES Zusammenfassungen zu Wertpapierprospekten bestehen aus offenzulegenden Angaben, die als „Ele-mente“ bezeichnet werden. Diese Elemente sind in den Abschnitten A bis E (A.1 bis E.7) aufgeführt. Die-se Zusammenfassung enthält alle Elemente, die für diese Art von Wertpapieren und den Emittenten in die Zusammenfassung aufzunehmen sind. Weil einige Elemente nicht aufgeführt werden müssen, können sich Lücken in der fortlaufenden Nummerierung der Elemente ergeben. Selbst wenn ein Element auf-grund der Art des Wertpapiers und aufgrund des Emittenten in die Zusammenfassung mit aufgenommen werden muss, ist es möglich, dass hinsichtlich dieses Elements keine betreffende Information angegeben werden kann. In diesem Fall ist eine kurze Beschreibung des Elements in die Zusammenfassung aufge-nommen worden zusammen mit dem Hinweis „entfällt“. A - Einleitung und Warnhinweise A.1 Warnhinweise Diese Zusammenfassung sollte als Einleitung zu diesem Prospekt (der „Pros-

pekt“) verstanden werden. Bei jeder Anlage in die betreffenden Wertpapiere sollte sich der Anleger auf die Prüfung des gesamten Prospekts stützen.

Für den Fall, dass vor einem Gericht Ansprüche aufgrund der in diesem Pros-pekt enthaltenen Informationen geltend gemacht werden, könnte der als Klä-ger auftretende Anleger in Anwendung der einzelstaatlichen Rechtsvorschrif-ten der Staaten des Europäischen Wirtschaftsraums die Kosten für eine Über-setzung dieses Prospekts vor Prozessbeginn zu tragen haben, bevor das Ver-fahren eingeleitet werden kann.

Die De Raj Group AG (die „Gesellschaft“, „De Raj“ oder der „Emittent“) und die ACON Actienbank, München („ACON“ oder „Listing Agent“) haben nach § 5 Abs. 2b Nr. 4 Wertpapierprospektgesetz („WpPG“) die Verantwortung für den Inhalt dieser Zusammenfassung einschließlich etwaiger Übersetzungen übernommen. Diejenigen Personen, welche die Verantwortung für die Zu-sammenfassung einschließlich ihrer Übersetzung übernommen haben oder von denen der Erlass ausgeht (Veranlassung), können haftbar gemacht wer-den, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit den anderen Teilen des Prospekts gelesen wird, oder sie, wenn sie zusammen mit den anderen Teilen des Prospekts gelesen wird, nicht alle erforderlichen Schlüsselinformationen vermittelt.

A.2 Angabe über spätere Verwen-dung des Pros-pekts.

Entfällt. Eine Zustimmung zur Verwendung des Prospekts für eine spätere Weiterveräußerung oder Platzierung der Aktien wurde nicht erteilt.

B - Emittent B.1 Juristische und

kommerzielle Bezeichnung.

Die Firma und der Handelsname des Emittenten lauten De Raj Group AG.

B.2 Sitz und Rechts-form des Emit-tenten, gelten-des Recht, Land der Gründung.

Der Emittent hat seinen Sitz in Köln, Deutschland, (Geschäftsanschrift: c/o Heuking Kühn Lüer Wojtek, Magnusstr. 13, 50672 Köln), und ist im Handelsre-gister des Amtsgerichts Köln, Deutschland, unter HRB 92007 eingetragen. Der Emittent ist eine in Deutschland gegründete und bestehende Aktiengesell-schaft, für die das Recht der Bundesrepublik Deutschland anwendbar ist.

B.3 Art der derzeiti-gen Geschäfts-tätigkeit und Haupttätigkeiten des Emittenten sowie Haupt-märkte, auf de-nen der Emittent vertreten ist.

Die De Raj ist die Muttergesellschaft der Gesellschaften Gryphon Energy (SE-A) Sdn Bhd, Hummingbird Energy (L) Inc, Condor Energy (L) Inc, De Raj Energy Sdn Bhd und Gaea Power GmbH (“De Raj Gruppe”). Das Geschäft der De Raj Gruppe konzentriert sich auf die Sparte Öl und Gas in der Region Südostasien sowie die Sparte deutsche Energieerzeugung. Sparte Öl und Gas Die Sparte Öl und Gas der De Raj-Gruppe ist ein Dienstleistungsbereich, der das volle Spektrum der Erkundung und Förderung (Upstream) Öl-und-Gas-Lieferkette auf offenem Meer umfasst. Dieser Bereich kann in folgende Tätig-keiten involviert sein: 1. Erkundung (Exploration) auf offenem Meer; dies umfasst die Suche nach

Felsformationen mit Öl- und natürlichen Gasvorkommen sowie die geo-physikalische Suche nach Bodenschätzen bzw. Explorationsbohrungen,

2. Entwicklung von Bohrlöchern, die stattfindet, wenn ein ökonomisch för-

- 31 -

derbares Gebiet gefunden wurde; dies umfasst die Konstruktion von ei-nem oder mehreren Bohrlöchern vom Beginn an (das sog. „spudding“) oder auch die Stilllegung, wenn keine Kohlenwasserstoffe gefunden werden konnten, oder die Fertigstellung von Bohrlöchern, wenn Kohlen-wasserstoffe in ausreichender Menge gefunden werden konnten.

3. Produktion; dies umfasst den Prozess des Herauslösens der Kohlen-wasserstoffe und der Trennung des Gemischs von flüssigen Kohlenwas-serstoffen, Gas, Wasser und Feststoffen durch Herauslösen der Be-standteile, die nicht verkäuflich sind, und Verkauf des flüssigen Kohlen-wasserstoffes und Gases, und schließlich

4. Stilllegung des Gebiets; dies umfasst das Verschließen der Bohrlöcher und die Wiederherstellung des Gebiets, wenn ein vor kurzem gebohrtes Bohrloch nicht genügend Potential aufweist, um ökonomisch sinnvolle Mengen an Öl und Gas vorzubringen, oder wenn die Produktion nicht länger ökonomisch sinnvoll ist.

Die Sparte Öl und Gas der De Raj-Gruppe bietet eine hochqualitative, umfas-sende und kosteneffiziente Lösung für die monetäre Nutzung von Öl- und Gas-feldern. Die Kunden der Sparte Öl und Gas der De Raj-Gruppe sind staatliche Ölfirmen („National Oil Companies“ oder auch „NOC’s“), Firmen, die Beteili-gungen an Ölfeldern haben, sowie andere Technologieunternehmen. Die Sparte wurde strategisch ausgestattet mit dem gesamten Spektrum von Anlagen, angefangen mit Hubbohrinseln (eine Art mobile Plattform, die aus einem schwimmfähigen Rumpf besteht, der mit einer Anzahl beweglicher Bei-ne ausgestattet ist und in der Lage ist, seinen Rumpf über die Oberfläche des Meeres zu heben, „Jack-up Anlagen“), Bohrausrüstung, Verarbeitungsanla-gen und Schifffahrtsausrüstungen, die zur Gas- und Ölgewinnung und Produk-tion für sogenannten grünen Feldern (d.h. Öl- und Gasfeldern, die noch nicht bearbeitet wurden und bei denen daher keine Infrastruktur vorhanden ist), sogenannten braunen Feldern (d.h. Öl-und Gasfelder, die bereits entwickelt wurden und bei denen daher ein Aufbau um eine bestehende Infrastruktur erfolgen muss) und so genannte geringfügige Felder (d.h. Öl- und Gasfelder in entlegenen Gebieten mit keiner oder wenig vorhandenen Infrastrukturen, de-ren Größe oder Eigenschaft es oftmals schwer macht, die Menge oder Zu-sammensetzung der förderbaren Hydrocarbone vorherzusagen). Das Busi-nesskonzept der Sparte Öl und Gas der De Raj-Gruppe ist es, Verträge über den Einsatz ihrer Ölbohrplattformen in Öl- und Gasfeldern abzuschließen. Öl-bohrplattformen bestehen aus der Plattform, d.h. den Hubbohrinseln, und der oberen Konstruktion auf den Hubbohrinseln, d.h. die Aufbauten auf der Ober-seite. Der schwimmende Rumpf der Jack-up Anlage ermöglicht den Transport des Gerätes und aller angeschlossenen Maschinen an einen gewünschten Ort. Einmal am Standort wird der Rumpf auf die erforderliche Höhe über der Mee-resoberfläche angehoben, die vom Meeresboden unterstützt wird. Die Beine dieser Einheiten können so ausgelegt sein, dass sie in den Meeresboden ein-dringen, mit vergrößerten Abschnitten oder Fußböden versehen werden kön-nen oder an einer Bodenmatte befestigt werden können. Die De Raj Gruppe hält derzeit fünf Jack-up Anlagen. Darüber hinaus hält die De Raj-Gruppe die Anlagen, die auf dem Oberdeck der Ölbohrplattformen installiert werden, z.B. die Ölförderungsanlage, die Un-terkünfte für die Besatzung und den Bohrturm (die „Aufbauten“) und verleast diese Aufbauten als Leasinggeber. Ferner können die von der De Raj-Gruppe abzuschließenden Leasingverträge nicht nur das Leasing der Anlagen, sondern auch die Verpflichtung enthalten, die Ölbohrplattformen während des Zeitraums ihres Einsatzes zu betreiben und zu warten (so genannter „wet lease“). Um diese Verpflichtungen zu erfül-len, kann die De Raj-Gruppe ihre eigenen Mitarbeiter einsetzen, beauftragt mit den Tätigkeiten allerdings auch Arbeitskräfte über Drittunternehmen. Der Bereich Öl und Gas der De Raj Group AG umfasst vier Gesellschaften, die jeweils eine eigenständige Funktion ausüben: 1. Gryphon Energy (SEA) Sdn Bhd beschäftigt den Großteil der Arbeits-

https://translate.googleusercontent.com/translate_c?depth=1&hl=de&prev=search&rurl=translate.google.de&sl=en&sp=nmt4&u=https://en.wikipedia.org/wiki/Hull_%28watercraft%29&usg=ALkJrhhcxDfLVmrMMJxhdcr4Hlqr372Sdg

- 32 -

kräfte und agiert als Managementgesellschaft der Öl- und Gasprojekte und des allgemeinen Dienstbetriebes, und schließt die Verträge mit den Kunden, im Besonderen mit den staatlichen Ölunternehmen („NOC’s“), ab.

2. Hummingbird Energy (L) Inc. ist Eigentümerin der Aufbauten und ver-

least diese. 3. Condor Energy (L) Inc. ist Eigentümerin der Jack-up Anlagen, wenn

diese nicht in Öl- oder Gasfeldern eingesetzt werden. 4. De Raj Energy Sdn Bhd hält die Patente des Bereichs Öl und Gas der

De Raj-Gruppe. Der wesentliche Hauptabsatzmarkt für den Bereich Öl und Gas der De-Raj-Gruppe umfasst Südostasien, Zentralasien und den Mittleren Osten. Die De Raj-Gruppe hat allerdings auch an Marktsondierungen, Vertragsanfragen und Vorprüfungen für die Geeignetheit von staatlichen Ölunternehmen und ande-ren interessierte Dritten aus Europa und Westafrika teilgenommen. Sparte deutsche Energieerzeugung Die Gaea Power GmbH, eine Tochtergesellschaft der De Raj Group AG, ist Eigentümerin von dreizehn Kraftwerken mit Kraft-Wärme-Kopplung („CHP-Kraftwerke“) in Viersen, Straelen und Geldern, Deutschland. Diese CHP-Kraftwerke generieren Elektrizität, die in das öffentliche Stromnetz eingespeist wird, und Wärme, die an die nahe gelegenen Gewächshäuser geliefert wird. Die CHP-Kraftwerke können in drei Gruppen in Abhängigkeit von der Leistung von 330 kW, 336 kW und 400 kW eingeteilt werden. Die Mehrheit der von der Gaea Power GmbH gehaltenen CHP-Kraftwerke hat eine Kapazität von je 400 kW. Derzeit sind allerdings nur sechs CHP-Kraftwerke in Betrieb. Weitere sieben Kraftwerke sind derzeit nicht in Betrieb, da diese noch umgebaut wer-den. Die Gruppe erwartet die Wiederinbetriebnahme von drei weiteren Kraft-werken im Herbst 2017. Gaea Power GmbH betreibt die CHP-Kraftwerke nicht selbst, sondern verleast diese an fünf Unternehmen in der Rechtsform von Unternehmergesellschaften mit beschränkter Haftung, namentlich: • Rocky Kraft Unternehmensgesellschaft (mit beschränkter Haftung), • Freya Kraft Unternehmensgesellschaft (mit beschränkter Haftung), • Kilat Kraft Unternehmensgesellschaft (mit beschränkter Haftung), • Vision Kraft Unternehmensgesellschaft (mit beschränkter Haftung) und • Sutra Kraft Unternehmensgesellschaft (mit beschränkter Haftung), welche die Kraftwerke betreiben und eine monatliche Leasinggebühr an die Gaea Power GmbH zahlen. Alle CHP-Kraftwerke der Gaea Power GmbH werden mit Palmöl betrieben und profitieren von der Förderung erneuerbarer Energien in Deutschland gemäß dem Erneuerbare-Energien-Gesetz („EEG“). Derzeit ist der Bereich German Power der De Raj-Gruppe in dem Bereich nordöstlich von Düsseldorf und nahe der niederländischen Grenze, nämlich in Viersen, Geldern und Straelen, tätig.

B.4a Wichtigste

jüngste Trends, die sich auf den Emittenten und die Branchen, in denen er tätig ist, auswirken.

Seit dem 31. Dezember 2016, dem Datum des letzten geprüften Jahresab-schlusses, zeigt sich die Weltwirtschaft stark und in einem zyklischen Erho-lungsprozess. Während es im bisherigen Verlauf 2017 ein höher als erwartetes Wachstum in Malaysia gegeben hat, ist das Wachstum in Indonesien ins Sto-cken geraten. Die Ölpreise sind aufgrund großer Vorräte in den Vereinigten Staaten und einer Erhöhung des Angebots zurückgegangen. Der Preis für Rohöl der Marke Brent ist jedoch in den letzten Wochen aufgrund Entwicklungen im Zusam-

- 33 -

menhang mit den Hurrikanen Harvey und Irma, sowie aufgrund höheren Be-darfs der Raffinerien in Europa und Asien gestiegen. Seit dem 31. Dezember 2016 sind die folgenden Umstände eingetreten, die von wesentlicher Bedeutung für die Gesellschaft und die De Raj-Gruppe wa-ren: Im Februar und Juni 2017 haben die Gesellschaften der De Raj-Gruppe Ver-träge für den Betrieb einer Ölbohrplattform in Indonesien abgeschlossen, die die Haupteinnahmequelle für die De Raj-Gruppe zur Zeit darstellen. Im April 2017 ist die der der De Raj-Gruppe gewährte Kreditlinie zur Finanzie-rung der Geschäftstätigkeit im Öl- und Gasbereich erfolgreich auf Grundlage einer Restrukturierungsvereinbarung mit der kreditgebenden Bank restruktu-riert worden. In Juli 2017 hat die Sparte der deutschen Stromerzeugung mehrere Leasing-verträge über die die Vermietung von Blockheizkraftwerken abgeschlossen. Im Oktober 2017 hat Herr Alexander Arjun de Raj ein Darlehen in Höhe von EUR 3.810.000,00, welches der Gaea Power GmbH gewährt wurde, an die De Raj Gruppe AG abgetreten, die anschließend auf dieses Darlehen verzichtet hat. Schließlich sind im Oktober 2017 die Anteile an den anderen Gesellschaften der De Raj-Gruppe in die Gesellschaft eingebracht worden, teilweise durch eine Kapitalerhöhung gegen Sacheinlage und teilweise durch Einzahlung in die Kapitalrücklagen der Gesellschaft, wodurch die De Raj-Gruppe gebildet wurde. Ferner haben Gesellschaften der De Raj-Gruppe kurz vor der Einbrin-gung der Anteile in die Gesellschaft ihrerseits Vermögensgegenstände erwor-ben, namentlich Hubbohrinseln und Patente. Eine der bedeutendsten Entwicklungen für die De Raj-Gruppe seit dem 31. Dezember 2016 ist die Erhöhung der Tagesrate für die BOSS 1 Ölbohrplatt-form, welche in Indonesien im Einsatz ist und von der De Raj-Gruppe betrie-ben wird, von US-Dollar 36.027 pro Tag auf US-Dollar 52.000 pro Tag seit dem 20. Februar 2017. Dies spiegelt die positive Stimmung in der Öl- und Gasindustrie allgemein und die Aussichten in Südostasien im Besonderen wieder. Die De Raj-Gruppe hat auch bedeutende Kostensenkungsmaßnahmen vorge-nommen, insbesondere im Bereich des Betriebs und der Wartung der Anlagen, um auf die negative Preisentwicklung zu reagieren, was zwischenzeitlich in einer erhöhten Profitabilität resultiert. Die De Raj-Gruppe ist der Meinung dass sie sich als ein kosteneffizienter und erfahrener Vertragspartner in Südostasien erwiesen hat. Geplant ist die Tech-nologien in einem weitergehenden globalen Umfang zu vermarkten. Die der De Raj-Gruppe erwartet eine substantielle Steigerung und eine Inbe-triebnahme von wenigstens vier Hubbohrplattformen bis 2019, wobei die zeitli-che Verzögerung darauf zurückzuführen ist, dass diese derzeit in qualifizierten Schiffswerften angepasst und überholt werden. Die De Raj-Gruppe beabsichtigt, ihr Portfolio der Stromerzeugung in Deutsch-land auf der Basis eines nachhaltigen und liquiditätswirksamen Geschäftsmo-dells bis 2018 zu erweitern. Die Sparte deutsche Stromerzeugung wird bei passender Gelegenheit auch horizontal und vertikal in Deutschland expandieren, namentlich in netzange-bundene und durch Energieversorger finanzierte Stromspeicheranlagen und Technologien. Neben der Expansion des bestehenden Geschäftsbetriebs beo-bachtet die De Raj-Gruppe allgemein auch den Markt, um potentielle zukünfti-ge Geschäftsmöglichkeiten und lohnende Chancen zu identifizieren, um das Geschäft auf weitere Bereiche auszuweiten, namentlich Investitionen in her-kömmlich produzierten Strom im mittleren Osten sowie anbindende Infrastruk-tur.

B.5 Beschreibung des Konzerns und der Stellung des Emittenten innerhalb dieses Konzerns.

De Raj ist die Muttergesellschaft der De Raj-Gruppe. De Raj hält Anteile an den folgenden fünf Gesellschaften: • Gryphon Energy (SEA) Sdn Bhd, • Hummingbird Energy (L) Inc., • Condor Energy (L) Inc., • De Raj Energy Sdn Bhd und • GAEA Power GmbH.

- 34 -

Derzeit ist die Gesellschaft als Holding- und Servicegesellschaft tätig. Die we-sentlichen Funktionen der Gesellschaft sind das Management der De Raj-Gruppe und die Zurverfügungstellung von Finanzierung und Eigenkapital. Für die Zukunft kann nicht ausgeschlossen werden, dass die Gesellschaft ihre Aktivitäten über die Funktion als Holding- und Servicegesellschaft hinaus aus-weitet und sogar selber operative Aufgaben übernehmen wird. Konkrete Pläne hierfür bestehen allerdings zum Datum dieses Prospektes nicht.

B.6 Personen, die eine (melde-pflichtige) direk-te oder indirekte Beteiligung am Eigenkapital des Emittenten oder einen Teil der Stimmrechte halten.

Nach den der Gesellschaft vorliegenden Informationen halten zum Datum die-ses Prospektes die folgenden Personen, direkt oder indirekt, eine (meldepflich-tige) Beteiligung am Eigenkapital des Emittenten und der Stimmrechte: Aktionär Anzahl (und

Anteil) der di-rekt gehaltenen Aktien und Stimmrechte

Anzahl (und Anteil) der zugerech-neten Aktien und Stimm-rechte von anderen Ge-sellschaften

Gesamtzahl (und Anteil) der direkt und zugerechneten Aktien und Stimm-rechte

Alexander Arjun De Raj Kuala Lumpur, Malaysia

6.125.000

(17,5 %)

3.500.000

(10 %) zugerechnet von Lexanda International

Limited Singapore

9.625.000

(27,5 %)

Nicholas Arnand De Raj Kuala Lumpur, Malaysia

6.125.000

(17,5 %)

Keine * 6.125.000

(17,5 %)

Renata Anita De Raj Kuala Lumpur, Malaysia

6.125.000

(17,5 %)

Keine * 6.125.000

(17,5 %)

Nagendran C Nadarajah Kuala Lumpur, Malaysia

6.125.000

(17,5 %)

1.750.000

(5 %) zugerechnet

7.875.000

(22,5 %)

De Raj Group AG (Deutschland)

Gaea Power GmbH

(D)

100%

100%100%


(Labuan)

GryphonEnergy (SEA)

Sdn Bhd(Malaysia)

CondorEnergy (L)

Inc(Labuan)

De Raj Energy Sdn

Bhd(Malaysia)

100%100%

Sparte Öl & Gas

- 35 -

von Maya Terang Sdn.

Bhd.,Kuala Lumpur, Malay-

sia Lexanda Internati-onal Limited Singapore

3.500.000

(10 %)

Keine * 3.500.000

(10 %) Maya Terang Sdn. Bhd. Kuala Lumpur, Malaysia

1.750.000

(5 %)

Keine * 1.750.000

(5 %)

Free Float 5.250.000

(15 %)

Keine * 5.250.000

(15 %)

Gesamt 35.000.000

(100 %)

5.250.000

(15 %)

* Keine Zurechnung von anderen Gesellschaften

Unterschiedliche Stimmrechte.

Entfällt. Jede Aktie des Emittenten gewährt eine Stimme in der Hauptver-sammlung der Gesellschaft. Es bestehen keine unterschiedlichen Stimmrechte und keine Stimmrechtsbeschränkungen.

Unmittelbare oder mittelbare Beherrschung des Emittenten und Art der Be-herrschung.

Mitglieder der De Raj Familie halten insgesamt direkt und indirekt 85 % der Aktien und Stimmrechte an dem Emittenten. Allerdings hält keiner der Aktionä-re direkt und/oder indirekt mehr als 50 % der Aktien und Stimmrechte. Über-dies ist der Gesellschaft nicht bekannt, dass Mitglieder der De Raj Familie und/oder andere direkte und/oder indirekte Aktionäre der Gesellschaft ihr Ver-halten aufgrund einer Vereinbarung oder in sonstiger Weise in Bezug auf die Gesellschaft abstimmen. Daher wird der Emittent von keinem ihrer Aktionäre kontrolliert.

B.7 Ausgewählte wesentliche his-torische Finanz-informationen

Die folgenden ausgewählten Finanzinformationen der Gesellschaft Humming-bird Energy (L) Inc für die Wirtschaftsjahre endend zum 31. Dezember 2014, 31. Dezember 2015 und 31. Dezember 2016, der Gesellschaft Gryphon Ener-gy (SEA) Sdn Bhd für das Wirtschaftsjahr endend zum 31. Dezember 2016 und der De Raj Group AG für die Wirtschaftsjahre endend zum 31. Dezember 2015 und 31. Dezember 2016, die unten zusammengefasst wurden, entstam-men den geprüften Jahresabschlüssen der Hummingbird Energy (L) Inc (IFRS), der Gryphon Energy (SEA) Sdn Bhd (IFRS) und der De Raj Group AG (HGB) der entsprechenden Wirtschaftsjahre und dem internen Rechnungswe-sen sowie dem Management Berichtswesen. Die ausgewählten Zwischenfi-nanzinformationen aus der verkürzten Gewinn- und Verlustrechnung für den Zeitraum vom 1. Januar 2017 bis zum 30. Juni 2017 und der verkürzten Bilanz zum 30. Juni 2017 von Hummingbird Energy (L) Inc, Gryphon Energy (SEA) Sdn Bhd und der De Raj Group AG entstammen jeweils dem internen Rech-nungswesen und dem Management Berichtswesen der entsprechenden Ge-sellschaft. Die auf die Jahresabschlüsse der Malaysischen Gesellschaften Hummingbird Energy (L) Inc und Gryphon Energy (SEA) Sdn Bhd angewendeten IFRS stimmen mit den IFRS überein, die von der Europäsichen Union anerkannt wurden. Soweit Finanzkennzahlen in den nachfolgenden Übersichten mit „geprüft“ ge-kennzeichnet sind, bedeutet dies, dass sie den vorgenannten geprüften Jah-resabschlüssen der Hummingbird Energy (L) Inc (IFRS), der Gryphon Energy (SEA) Sdn Bhd (IFRS) und der De Raj Group AG (HGB) entnommen sind. Soweit Finanzkennzahlen in den nachfolgenden Übersichten als „ungeprüft“ gekennzeichnet sind, bedeutet dies, dass sie der ungeprüften internen Buch-

- 36 -

führung oder dem Management Berichtswesen von Gesellschaften des De Raj-Konzerns entnommen wurden oder auf Berechnungen auf Grundlage von Informationen aus den vorgenannten Quellen beruhen. Soweit Finanzkennzahlen in den nachfolgenden Übersichten mit „IFRS“ ge-kennzeichnet sind, bedeutet dies, dass die auf die betreffenden Jahresab-schlüsse angewendeten IFRS mit den IFRS übereinstimmen, die von der Eu-ropäsichen Union anerkannt wurden. Alle in diesem Abschnitt dargestellten Zahlen sind auf eine Stelle hinter dem Komma gerundet, wodurch Rundungsdifferenzen bei den entsprechenden Gesamtbeträgen entstehen können.

Ausgewählte Finanzinformationen aus der Gewinn- und Verlustrechnung



Gewinn- und Verlustrechnung

<------------------------------IFRS, geprüfte Abschlüsse--------

------->

01.01. 01.01. 01.01.

- - -

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

Einnahmen 11.885.633 17.702.500 14.602.000 Betriebskosten (4.445.179) (5.424.377) (4.589.095) Nettoeinnahmen 7.440.454 12.278.123 10.012.905

Verwaltungskosten (569.742) (1.880.972) (2.550.229)

Sonstige Erträge - 7 51 Sonstige betriebliche Aufwen-dungen

- - -

Summe sonstiger betrieblicher Erträge und Aufwendungen 7 51

Erträge aus der Veräußerung von Immobilien - -

Aufwendungen in Verbindung mit der Veräußerung von Immobilien

- - -

Ergebnis der Veräußerung von Immobilien - - Werterhöhungsgewinne aus Im-mobilien

- - -

Wertminderungsverlust aus Im-mobilien

- - -

Bewertungsergebnis

Betriebsergebnis 6.870.712 10.397.165 7.462.778

Ergebnis der at-equity bewerte-

ten Beteiligungen

- - -

Zinserträge - 7 51 Finanzierungskosten (2.309.710) (1.882.630) (635.688) Minderheitenanteile - - - Finanzergebnis (2.309.710) (1.882.623) (635.637)

Jahresüberschuss 4.561.002 8.514.528 6.827.039

Ausgewählte Finanzinformationen aus der Bilanz

- 37 -



Bilanz

<-------------------------IFRS, geprüfte Abschlüsse------------------>

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

Aktiva

Anlagevermögen - - -

Immaterielle Vermögensgegen-stände

- - -

Sachanlagen 57.095.266 61.567.527 70.430.893 Vorräte + Beteiligung an einer verbundenen Gesellschaft

2.240.012 2.240.012 2.200.000

Summe Anlagevermögen 59.335.278 63.807.539 72.630.893

Umlaufvermögen Forderungen aus Lieferungen und Leistungen

Forderungen aus Ertragssteuern Sonstige Forderungen und Vermögenswerte + Betrag For-derung ggü. Holding Gesell-schaft + Betrag Forderung ggü. Verbundenen Gesellschaften + Betrag Forderung ggü. Verbun-denen Parteien

13.064.574 23.370.336 21.690.078

Liquide Mittel + Bankguthaben 2.811.168 10.023.260 2.283 Summe Umlaufvermögen 15.875.742 33.393.596 21.692.361

Summe Aktiva 75.211.020 97.201.135 94.323.254

Passiva

Eigenkapital

Aktienkapital 3.000.000 3.000.000 1 Kapitalrücklage

Agio für Aktien

Gewinnrücklage 16.977.241 12.416.239 6.901.710

Eigene Anteile

Summe Eigenkapital 19.977.241 15.416.239 6.901.711

Langfristige Verbindlichkeiten Minderheitenanteile Darlehen 31.912.500 34.375.000 11.400.000 Derivative Finanzinstrumente Sonstige Verbindlichkeiten Summe langfristige Schulden 31.912.500 34.375.000 11.400.000

Kurzfristige Verbindlichkeiten Rückstellungen Finanzverbindlichkeiten 5.900.000 13.750.000 20.000.000 Verbindlichkeiten aus Lieferun-gen und Leistungen

350.065 349.729 1.577.729

Rückstellungen + Betrag Ver- 17.071.214 33.310.167 54.443.814

- 38 -

bindlichkeit ggü. Holding Ge-sellschaft + Betrag Verbindlich-keit ggü. Verbundenen Gesell-schaften + Betrag Verbindlich-keit ggü. Verbundenen Parteien + Betrag Verbindlichkeit ggü. Direktor + Rückstellung f. Steu-ern Summe kurzfristige Schulden 23.321.279 47.409.896 76.021.543

Summe Passiva 75.211.020 97.201.135 94.323.254

Ausgewählte Finanzinformationen aus der Kapitalflussrechnung



Kapitalflussrechnung <--------------IFRS, geprüfte Abschlüsse-----

---->

01.01. 01.01. 01.01.

- - -

31.12. 31.12. 31.12.

2016 2015 2014 USD USD USD

Cashflow aus betrieblicher Tätigkeit

Gewinn vor Steuern

4.565.908 8.519.188 6.832.761

Anpassungen für: Abschreibungen auf Sachanlagen

4.472.261 4.413.124 3.179.029

Zinsaufwendungen 2.309.710

1.882.630 635.688

Nichtrealisierte Währungsgewinne - (511.467) -

11.347.879 14.303.475 10.647.478

Betriebsergebnis vor Änderung des Nettoumlauf-vermögens

Abnahme der Vorräte - - 800.000 Zu-/Abnahme der Forderungen aus Lieferungen und Leistungen

(348)

18.572 (114.901)

Zu-/Abnahme der Verbindlichkeiten aus Lieferun-gen und Leistungen

336

(1.228.000) 1.557.365

Zu-/Abnahme der Rückstellungen 704.665

(10.475) 771

Abnahme der Forderung ggü. der Holding Gesell-schaft

- 14.602.000 (14.602.000)

Abnahme Betrag Verbindlichkeit ggü. verbundener Gesellschaft

(2.752.888)

- (3.546.051)

Abnahme (Zunahme) Betrag Forderung ggü. verbundener Gesellschaft

19.112.200

(18.854.500) 7.765.940

Abnahme Betrag Verbindlichkeit ggü. verbunde-nen Parteien

- (28.060.214) -

Cashflow aus betrieblicher Tätigkeit

28.411.844 (19.229.142) 2.508.602

Bezahlte Zinsen (2.309.710)

(1.882.630) (635.688)

- 39 -

Bezahlte Einkommenssteuer (4.906)

(6.552) (6.552)

Nettozu-/abflüsse aus der betrieblichen Tätigkeit 26.097.228

(21.118.324) 1.866.362

Cashflow aus der Investitionstätigkeit Zu-/Abnahme des Guthabens bei Kreditinstituten

7.515.892 (10.021.684) -

Anteile an assoziierten Unternehmen - (40.012) - Erwerb von Sachanlagen - - (44.833.316) (Zahlungen)/Rückzahlungen von verbundenen Unternehmen

(1.364.387)

2.553.776 -

Zahlungen an verbundene Parteien (6.944.995)

(106) -

Anpassung der Sachanlage durch Preisangleichung - 4.450.242 - Nettozu-/abflüsse aus der Investitionstätigkeit

(793.490) (3.057.784) (44.833.316)

Cashflow aus der Finanzierungstätigkeit Inanspruchnahme von Darlehen - 85.000.000 40.000.000 Gezahlte Dividenden - - (8.200.000) Rückzahlung von Darlehen

(10.312.500) (68.275.000) (8.600.000)

Rückzahlung an Holdinggesellschaft (671.708)

- 3.083.536

(Rückzahlungen an), Zahlungen von verbundenen Unternehmen

(13.970.671)

21.277.718 6.229.317

Zahlungen von verbundenen Parteien 1.017

40.011 (2.654.028)

Rückzahlungen an einen Direktor (46.076)

(13.867.328) 13.109.834

Nettozu-/abflüsse aus der Finanzierungstätigkeit

(24.999.938) 24.175.401 42.968.659

Nettozu-/abfluss in Zahlungsmittel und Guthaben bei

Kreditinstituten

303.800

(707) 1.705

Zahlungsmittel und Zahlungsmitteläquivalente 01.01.

1.576 2.283 578

Zahlungsmittel und Zahlungsmitteläquivalente

31.12

305.376

1.576 2.283

Aufgeteilt in: Kassenbestand

6 124 -

Bankguthaben 305.370

1.452 2.283

305.376

1.576 2.283

Verkürzte Gewinn und Verlustrechnung für den Zeitraum vom 1. Juni bis 30. Juni 2017 1. Januar

bis 30. 1. Januar

bis 30.

Verkürzte Bilanz zum 30. Juni 2017 und 31. Dezember 2016 30 June

2017 31 Decem-ber 2016

- 40 -

Juni 2017 (Ungeprüft)

Juni 2016 (Ungeprüft)

EUR EUR Einnahmen 4.800.263 5.684.051 Betriebskosten (2.226.326) (2.221.171) Rohertrag 2.573.937 3.462.880 Andere Einkünfte - 23.363 Verwaltungskosten (148.161) (47.228) Finanzierungskosten (748.822) (480.782) Gewinn / (Verlust) vor Steuern 1.676.954 2.958.234 Steuern (3.957) (4.419) Gewinn / (Verlust) 1.672.997 2.953.815

EUR (ungeprüft)

EUR (geprüft)

Anlagevermögen 47.792.583 56.391.635 Umlaufvermögen 6.790.557 15.088.141 Kurzfristige Verbindlichkeiten

11.434.902 22.164.302

Langfristige Verbindlichkeiten

23.741.794 30.329.310

Gewinn- / (Ver-lust) -Vortrag

16.780.623 16.134.994

Ausgewählte Finanzinformationen der Gryphon Energy (SEA) Sdn Bhd

Ausgewählte Finanzinformationen aus der Gewinn- und Verlustrechung für den Zeitraum vom

26. November 2015 bis 31. Dezember 2016 RM (= Malaysi-

scher Ringgit) (IFRS, geprüft)

SONSTIGE ERTRÄGE 103.000 VERWALTUNGSKOSTEN (125.174) SONSTIGE AUFWENDUNGEN (152.371) VERLUSTE/GESAMTSUMME KUMULIERTER AUFWENDUNGEN FÜR DEN RECHUNGSZEITRAUM

(174.545)

VERLUSTE/GESAMTSUMME KUMULIERTER AUFWENDUNGEN FÜR DEN RECHUNGSZEITRAUM ANTEILIG FÜR: - Eigentümer der Gesellschaft

(174.545)

- 41 -

Ausgewählte Finanzinformationen aus der Gewinn- und Verlustrechung für den Zeitraum vom

1. Januar 2017 bis 30. Juni 2017


(Eingetragen in Malaysia )

GEWINN- UND VERLUSTRECHNUNG FÜR DEN RECHNUNGSZEITRAUM BIS ZUM 30. JUNI

Unterlagen

der Geschäftsführung

Unterlagen

der Geschäftsführung


(Ungeprüft)


(Ungeprüft) TEUR TEUR

Erträge 5,488 -

Herstellungskosten (4,554) -

Bruttogewinn 934 -

Sonstige Einnahmen - -

Verwaltungskosten (666) (0,80)

Finanzierungskosten - -

Gewinne / (Verluste) vor Steuer 269 (0,80)

Steuerliche Aufwendungen - -

Gewinne / (Verluste) im Geschäftsjahr 269 (0,80)

Differenz durch Währungsumrech-nung (8)

Kumuliertes Gesamteinkommen für das Geschäftsjahr 261

- 42 -

Ausgewählte Finanzinformationen aus der Bilanz zum 31. Dezember 2016

RM

(IFRS, geprüft) AKTIVA

UMLAUFVERMÖGEN

Vorauszahlungen 93.860 Forderungen gegenüber verbundenen Ge-sellschaften

827.418 Bankguthaben 4.240 GESAMTSUMME AKTIVA 925.518

EIGENKAPITAL UND VERBINDLICHKEI-TEN

EIGENKAPITAL Aktienkapital 1.000.000 Kumulierte Verluste (174.545) GESAMTSUMME EIGENKAPITAL 825.455 LAUFENDE VERBINDLICHKEITEN Sonstige Verbindlichkeiten und angefallene Kosten

93.656 Verbindlichkeit gegenüber Direktor 6.407 GESAMTSTUMME VERBINDLICHKEITEN 100.063 GESAMTSTUMME EIGENKAPITAL UND VERBINDLICHKEITEN

925.518

Ausgewählte Finanzinformationen aus der Bilanz zum 30. Juni 2017

BERICHT ÜBER DIE VERMÖGENSLAGE ZUM 30. JUNI 2017 UND 31. DEZEMBER 2016


Berichtswesen Berichtswesen 30. Juni 2017 31. Dezember 2016

TEUR (Ungeprüft)

TEUR (Geprüft)

Anlagevermögen - -

Umlaufvermögen 9,156 -

Kurzfristige Verbindlichkeiten 8,719 (80)

Langfristige Verbindlichkeiten - -

Gewinn- / Verlustvortrag 224 (80)

- 43 -

Ausgewählte Finanzinformationen aus der Kapitalflussrechnung für den Zeitraum vom

26. November 2015 bis zum 31. December 2016

RM

(IFRS, geprüft) KAPITALFLUSS FÜR OPERATIVE TÄTIGKEITEN Verluste für den Rechnungszeitraum (174.545) Veränderungen im Umlaufvermögen:- Anstieg von Vorauszahlungen (93.860) Anstieg von sonstigen Verbindlichkeiten und angefallenen Kosten

93.656 NETTOLIQUIDITÄT FÜR OPERATIVE TÄTIGKEITEN (174.749) NETTOLIQUIDITÄT FÜR INVESTITIONEN Vorschusszahlungen an ein nahestehendes Unternehmen (827.418) KAPITALFLUSS AUS FINANZIERUNGSAKTIVITÄTEN Gewinne durch Ausgabe von Stammaktien 1.000.000 Vorschusszahlungen durch Direktor 6.407 NETTOLIQUIDITÄT AUS FINANZIERUNGSAKTIVITÄTEN 1.006.407 NETTOKAPITALFLUSS AUS BARGUTHABEN, BANKGUTHA-BEN/BAR- UND BANKGUTHABEN AM ENDE DES RE-CHUNGSZEITRAUMS

4.240

Ausgewählte Finanzinformationen der De Raj Group AG

Ausgewählte Finanzinformationen aus der Gewinn- und Verlustrechnung der De Raj Group AG

De Raj Group AG (Köln, Deutschland)

GEWINN- UND VERLUSTRECHNUNG

1. HJ 2017 2016 2015 EUR

(ungeprüft) EUR (HGB,

geprüft)

EUR (HGB,

geprüft)

Erträge - - - Verkaufskosten - - - Nettomieteinnahmen - - - Verwaltungskosten - - - Weitere Erträge - - - Weitere Betriebskosten - - - Gesamtsumme weitere Betriebseinnahmen und -ausgaben

- - -

Einkommen aus der Veräußerung von Immobilien - - -

Ausgaben bezüglich der Veräußerung von Immo-bilien

- - -

Ergebnissumme aus der Veräußerung von Immobi- - - -

- 44 -

lien Bewertungszugewinne aus Immobilien - - -

Wertminderungsaufwand aus Immobilien - - -

Bewertungsergebnis Betriebsergebnis - - - Ergebnisse der “at equity” bilanzierten Investi-tionen

- - -

Zinserträge - - - Finanzierungskosten - - - Minderheitsanteile - - - Finanzergebnis - - - Nettogewinn/ (-verlust) - - -

Ausgewählte Finanzinformationen aus der Bilanz der De Raj Group AG

De Raj Group AG

(Köln, Deutschland)

JAHRESABSCHLUSS

1. HJ 2017 2016 2015

EUR (ungeprüft)

EUR (HGB,

geprüft)

EUR (HGB,

geprüft) Aktiva

Anlagevermögen - - -

Immaterielle Vermögensgegenstän-de

- - -

Betriebsanlage und -ausstattung - - -

Inventar + Investment in Tochterge-sellschaften

- - -

Gesamtsumme Anlagevermögen - - -

Umlaufvermögen

Handelsforderungen - - -

Ertragssteuerforderungen - - -

Weitere Forderungen und Einlagen + Verbindlichkeiten von Holdingge-sellschaften + Verbindlichkeiten von verbundenen Unternehmen + Ver-bindlichkeiten von verbundenen Parteien

- - -

Bar- und Bankguthaben 50.000,00 50.000,00 50.000,00

Gesamtsumme Umlaufvermögen 50.000,00 50.000,00 50.000,00

Gesamtsumme Aktiva - - -

- 45 -

Vermögen und Verbindlichkeiten

Eigenkapital

Aktienkapital 50.000,00 50.000,00 50.000,00

Agio - - -

Neubewertungsrücklage - - -

Bilanzgewinne - - -

Eigene Aktien - - -

Gesamtsumme Eigenkapital 50.000,00 50.000,00 50.000,00

Langfristige Verbindlichkeiten

Minderheitsanteile

Finanzielle Verbindlichkeiten - - -

Derivative Finanzinstrumente - - -

Weitere Verbindlichkeiten - - -

Gesamtsumme Langfristige Ver-bindlichkeiten

- - -

Kurzfristige Verbindlichkeiten

Rückstellungen - - -

Befristete Darlehen - - -

Verbindlichkeiten aus Lieferungen und Leistungen

- - -

Rückstellungen + Darlehen von Hol-dinggesellschaften + Darlehen von verbundenen Gesellschaften + Dar-lehen von verbundenen Parteien + Darlehen durch Vorstände + Steuer-rücklagen

- - -

Gesamtsumme Kurzfristige Ver-bindlichkeiten

- - -

Gesamtsumme Eigenkapital und -Verbindlichkeiten

50.000,00 50.000,00 50.000,00

Ausgewählte Finanzinformationen aus der Kapitalflussrechnung der De Raj Group AG

De Raj Group AG (Köln, Deutschland)

KAPITALFLUSSRECHNUNG

1. HJ 2017 2016 2015 EUR

(ungeprüft) EUR (HGB,

geprüft)

EUR (HGB,

geprüft) CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

- 46 -

Gewinne vor Steuer: - - - Anpassungen für: Depreciation of plant and equipment - - - Zinskosten - - - Unrealisierte Gewinne aus Devisen - - -

- - - Betriebsgewinn vor Änderung des Umlaufkapitals

Verringerung des Inventars - - - (Steigerung)/Verringerung weiterer Außenstände und Rücklagen

- - -

Steiergung/(Verringerung) von Warenverbindlichkeiten

- - -

Steigerung/(Verringerung) von Rückstellungen

- - -

Verringerung von Schulden der Hol-dinggesellschaft

- - -

Verringerung von Schulden an ver-bundenes Unternehmen

- - -

Verringerung/(Steigerung) von Schulden des verbundenen Unternehmens

- - -

Verringerung von Schulen an ver-bundene Parteien

- - -

CASH FROM/(FOR) OPERATIONS - - - Gezahlte Zinsen - - - Gezahlte Ertragsteuer - - - NETTO-BARGUTHABEN AUS/(FÜR) BETRIEBSTÄTIGKEIT

- - -

KAPITALFLUSS AUS INVESTI-TIONSTÄTIGKEITEN

Verringerung/(Steigerung) in restric-ted bank balances

- - -

Investments in Tochterunternehmen - - - Erwerb von Betriebsanlagen und Ausstattung

- - -

(Vorausszahlungen an)/ Rückzah-lungen von verbundenen Unterneh-men

- - -

Vorauszahlungen an verbundene Parteien

- - -

Anpassungen von Betrieb und Ausstattung aufgrund von Preisanpassungen

- - -

NETTO-BARGUTHABEN FÜR IN-VESTITIONSAKTIVITÄTEN

- - -

KAPITALFLUSS (FÜR)/AUS FINANZIERUNGSAKTIVITÄTEN

Abbau befristeter Darlehen - - - Gezahlte Dividenden - - - Rückzahlungen befristeter Kredite - - - Rückzahlungen an Holdinggesell-schaft

- - -

(Rückzahlungen an)/Vorauszahlungen von verbun-denen Unternehmen

- - -

Vorauszahlungen durch verbundene Parteien

- - -

Rückzahlungen an Vorstand - - -

NETTO-BARGUTHABEN (FÜR)/AUS - - -

- 47 -

FINANZIERUNGSAKTIVITÄTEN

NETTOGEWINN/ (-VERLUST) VON BAR- UND BANK-GUTHABEN

- - -

ZAHLUNGSMITTEL UND ZAHLUNGS-MITTELÄQUIVALENTE ZU BEGINN DES

GESCHÄFTSJAHRES - - -

ZAHLUNGSMITTEL UND ZAH-LUNGSMITTELÄQUIVALENTE AM ENDE DES

GESCHÄFTSJAHRES - - -

VERTRETEN DURCH: BARGUTHABEN - - - BANKGUTHABEN - - -

- - -

Ausgewählte Finanzinformationen aus der verkürzten Gewinn- und Verlustrechnung für den

Zeitraum vom 1. Januar 2017 bis zum 30. Juni 2017 und aus der verkürzten Bilanz vom 30. Juni

2017 der De Raj Group AG

GEWINN- UND VERLUSTRECHNUNG 1. Januar

bis 30. Juni

2017

1. Januar bis

30. Juni 2016

EUR (ungeprüft)

EUR (ungeprüft)

Erträge - - Verkaufskosten - - Bruttoerträge - - Weitere Erträge - - Verwaltungskosten - - Finanzierungskosten - - Gewinne / (Verlus-te) vor Steuer - - Steuerkosten - - Jahresgewinn / (-verlust) - -

Bilanz vom 30. Juni 2017 and 31. Dezember 2016 30. Juni

2017 EUR

(ungeprüft)

31. Dezember

2016 EUR

(HGB, Geprüft)

Anlagevermögen - - Umlaufvermögen 50.000,00 50.000,00 Kurzfristige Verbindlichkeiten - - Langfristige Verbindlichkeiten - - Bilanzgewinn / (-verlust) - -

Die Finanzlage und Betriebsergebnisse der Gesellschaft haben sich nach

dem von den wesentlichen historischen Finanzinformationen abgedeckten Zeitraum erheblich geändert haben, da die Gesellschaft die Anteile an ihren Tochtergesellschaften erworben hat und dadurch die De Raj-Gruppe entstanden ist. Die Auswirkungen sind Gegenstand der nachfolgenden ausgewählten wesentlichen Pro-forma-Finanzinformationen unter B.8.

B.8 Ausgewählte we-sentliche Pro-forma-Finanzinformatio-nen

Im Oktober 2017 hat die Gesellschaft die Anteile an den Gesellschaften Gryphon Energy (SEA), Hummingbird Energy (L) Inc, De Raj Energy Sdn Bhd, Condor Energy (L) Inc and Gaea Power GmbH erworben, wodurch die De Raj-Gruppe entstanden ist. Ferner haben im Oktober 2017 kurz vor der Übertragung der Anteile auf die Gesellschaft die Gesellschaft De Raj Energy Sdn Bhd Patente und die Gesellschaft Condor Energy (L) Inc fünf Hubbohrplattformen erworben (die vorgenannten Transaktionen im nach-folgenden auch die „Entstehung der De Raj Gruppe“ genannt).Auf Grund-lage der Entstehung der De Raj Gruppe und den jeweiligen Akquisitionen

- 48 -

hat die Gesellschaft Pro-forma konsolidierte Gewinn und Verlustrechnun-gen für den Zeitraum vom 1. Januar 2016 bis zum 31. Dezember 2016 und für den Zeitraum vom 1. Januar 2017 bis zum 30. Juni 2017 sowie eine Pro-forma Bilanz zum Stichtag 31. Juni 2017 nebst Erläuterungen zu den Pro-forma Finanzinformationen erstellt (nachfolgend zusammen die „Pro-forma konsolidierten Finanzinformationen“ genannt). Der Zweck der Pro-forma konsolidierten Finanzinformationen ist es, die wesentlichen Effekte der Entstehung der der De Raj Gruppe in hypothetischen konsolidierten Finanzinformationen unter der Annahme darzustellen, dass die Akquisitio-nen im Rahmen der Entstehung der De Raj Gruppe bereits Teil der De Raj Gruppe im gesamten Zeitraum des Wirtschaftsjahres endend zum 31. De-zember 2016 und dem Sechstmonatszeitraum endend zum 30. Juni 2017 gewesen wären. Dabei ist der Verweis auf die De Raj Gruppe in dem Zeit-raum vom 1. Januar 2016 bis zum 30. Juni 2017 dahingehend als hypothe-tisch zu verstehen, dass während des vorgenannten Zeitraums keine der De Raj Gruppe bestanden hat, da diese erst mit der Entstehung der De Raj Gruppe entstanden ist. Die pro forma konsolidierten Gewinn und Verlust-rechnungen für den Zeitraum vom 1. Januar 2016 bis zum 31. Dezember 2016 und den Zeitraum vom 1. Januar 2017 bis zum 30. Juni 2017 wurden auf Basis der Annahme erstellt, dass die Erwerbe bereits vor dem 1. Janu-ar 2016 stattgefunden haben. Die Pro-Forma-Konzernfinanzinformationen wurden ausschließlich zu illustrativen Zwecken erstellt. Da die Pro-Forma-Konzernfinanzinformationen aufgrund ihrer Wesensart lediglich eine hypo-thetische Situation beschreiben und auf Annahmen und Unsicherheiten basieren, spiegeln sie folglich weder die tatsächliche Vermögens-, Finanz- und Ertragslage der De Raj Gruppe zu einem Zeitpunkt in der Vergangen-heit wider, noch prognostizieren sie die zukünftige Entwicklung der Vermö-gens-, Finanz- und Ertragslage der De Raj Gruppe. Die Pro-forma konsoli-dierten Finanzinformationen sind nur in Verbindung mit den historischen Finanzinformationen der De Raj, Hummingbird Energy (L) Inc and Gryphon Energy (SEA) Sdn Bhd im Abschnitt “Financial Information” aussagekräftig. Die Pro-Forma-Konzernfinanzinformationen wurden in Übereinstimmung mit dem vom Institut der Wirtschaftsprüfer (IDW) herausgegebenen IDW Rechnungslegungshinweis: Erstellung von Pro-Forma-Finanzinformationen (IDW RH HFA 1.004) erstellt. Alle in diesem Abschnitt dargestellten Zahlen sind auf eine Stelle hinter dem Komma gerundet, wodurch Rundungsdiffe-renzen bei den entsprechenden Gesamtbeträgen entstehen können.

- 49 -

De Raj Group AG (Köln , Deutschland )

GEWINN- UND VERLUSTRECHNUNG (Pro Forma)

1. HJ 2017 2016 EUR EUR

Mieterträge 7.844.000 12.150.798 Betriebliche Aufwendungen (4.089.654) (5.458.538) Nettomieterträge 3.754.346 6.692.260 Allgemeine Verwaltungsaufwen-dungen

(958.771) (586.714)

Sonstige betriebliche Erträge 86 232.808 Sonstige betriebliche Aufwendun-gen

(91.233) (114.318)

Sonstiges Betriebsergebnis 2.704.428 6.224.036 Erträge aus dem Abgang von Vermögensgegen-ständen

- -

Aufwendungen aus dem Abgang von Vermögensgegenständen

- -

Ergebnis aus dem Abgang von Vermögens-gegenständen

- -

Erträge aus der Neubewertung von Vermögensgegenständen

- -

Aufwendungen aus der Neubewer-tung von Vermögensgegenständen

- -

Ergebnis aus Neubewertungen Operatives Ergebnis 2.704.428 6.224.036 Ergebnis aus nach der Equity-Methode bilanzierten Finanzanlagen

- -

Zinserträge - - Zinsaufwendungen (790.371) (2.086.647) Erträge aus Minderheitsbeteiligungen - - Finanzergebnis (790.371) (2.086.647) Jahresüberschuss/ (Fehlbetrag) 1.914.057 4.137.389

De Raj Group AG (Köln, Deutschland )

Bilanz (Pro Forma)

1. HJ 2017 2016 EUR EUR

Aktiva Langfristige Vermögensgegenstände - -

Sachanlagen 52.658.297 57.910.525 Sonstige Forderungen und Vermögensgegenstände - 37.958 Summe Langfristige Vermögensgegenstände 52.658.297 57.948.483 Kurzfristige Vermögensgegenstände Forderungen aus Lieferungen und Leistungen 6.253.455 47.354 Roh-, Hilfs- und Betriebsstoffe 1.927.795 - Sonstige Forderungen und Vermögensgegenstände 98.098.974 14.809.766 Forderungen gegen verbundene Unternehmen 547.161 -

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Liquide Mittel und Zahlungsmitteläquivalente 174.162 2.724.209 Summe Kurzfristige Vermögensgegenstände 107.001.520 17.581.329

Summe Aktiva 159.659.817 75.529.812

Passiva Eigenkapital Gezeichnetes Kapital 35.000.000 35.000.000 Kapitalrücklage 102.245.023 106.869.368 Rücklage aus umgekehrtem Unternehmenserwerb (20.789.773) (20.789.773) Rücklage aus der Währungsumrechnung -963.681 467.289 Gewinnrücklagen 4.136.944 - Jahresüberschuss 1.914.058 4.137.387 Summe Eigenkapital 121.542.570 125.684.271

Langfristige Verbindlichkeiten Verbindlichkeiten gegenüber Kreditinstituten 29.951.434 30.274.642 Verbindlichkeiten gegenüber Gesellschaftern 12 (78.721.608) Summe langfristige Verbindlichkeiten 29.951.446 (48.446.966) Kurzfristige Verbindlichkeiten Verbindlichkeiten gegenüber verbundenen Unter-nehmen

6.360.608 15.523.539

Verbindlichkeiten gegenüber Kreditinstituten - 5.597.191 Verbindlichkeiten aus Lieferungen und Leistungen 636.684 339.112 Rechnungsabgrenzungen und Rückstellungen 715.153 688.302 Sonstige kurzfristige Verbindlichkeiten 453.356 (23.855.637) Summe kurzfristige Verbindlichkeiten 8.165.801 (1.707.493) Summe Passiva 159.659.817 75.529.812

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B.9 Gewinnprognosen

oder -schätzungen

Entfällt. Die De Raj Group AG hat keine Gewinnprognosen oder –schätzungen abgegeben.

B.10 Beschränkungen im Bestätigungsver-merk zu den histo-rischen Finanzin-formationen

Entfällt. Die in diesem Prospekt enthaltenen historischen Finanzinformatio-nen wurden jeweils mit einem uneingeschränkten Bestätigungsvermerk versehen.

B.11 Nichtausreichen des Geschäftskapi-tals des Emittenten zur Erfüllung beste-hender Anforderun-gen

Entfällt. Die Gesellschaft ist der Ansicht, dass die De Raj-Gruppe über ausreichendes Geschäftskapital verfügt, um mindestens in den nächsten zwölf Monaten ihre Verpflichtungen zu erfüllen, wenn diese fällig werden.

C - Wertpapiere. C.1 Beschreibung von

Art und Gattung der angebotenen und zum Handel zuzu-lassenden Wertpa-piere.

Auf den Inhaber lautende Stammaktien ohne Nennbetrag (Stückaktien), jeweils mit einem anteiligen Betrag am Grundkapital von EUR 1,00 und mit voller Dividendenberechtigung ab dem 1. Januar 2017.

Wertpapierkennung. Internationale Wertpapier-Identifikationsnummer (International Securities Identification Number, ISIN): DE000A2GSWR1

Wertpapierkennnummer (WKN): A2GSWR

Börsenkürzel: DRJ

C.2 Währung der Wert-papieremission.

Euro.

C.3 Zahl der ausgege-benen und voll ein-gezahlten Aktien.

35.000.000 auf den Inhaber lautende Stammaktien ohne Nennbetrag (Stückaktien). Das Grundkapital wurde vollständig eingezahlt.

Nennwert je Aktie. Jede Aktie der Gesellschaft repräsentiert einen anteiligen Betrag des Grundkapitals der Gesellschaft von EUR 1,00.

C.4 Beschreibung der mit den Wertpapie-ren verbundenen Rechte.

Jede Aktie der Gesellschaft berechtigt zu einer Stimme in der Hauptver-sammlung der Gesellschaft. Es bestehen keine Stimmrechtsbeschränkun-gen. Die Aktien gewähren volle Dividendenberechtigung ab dem 1. Januar 2017.

C.5 Beschreibung aller etwaigen Be-schränkungen für die freie Übertrag-barkeit der Wertpa-piere

Entfällt. Die Aktien der Gesellschaft sind in Übereinstimmung mit den ge-setzlichen Bestimmungen für auf den Inhaber lautende Stammaktien frei übertragbar. Es bestehen keine Verfügungsverbote oder -beschränkungen hinsichtlich der Übertragbarkeit der Aktien der Gesellschaft.

C.6 Angabe, ob für die angebotenen Wert-papiere die Zulas-sung zum Handel an einem geregelten Markt beantragt wurde bzw. werden soll, und Nennung aller geregelten Märkte, an denen die Wertpapiere ge-handelt werden o-der werden sollen.

Die De Raj wird die Zulassung der Aktien der De Raj zum regulierten Markt an der Frankfurter Wertpapierbörse, General Standard, beantragen. Die Zulassung wird voraussichtlich am 21. November 2017 erteilt. Der Handel der Neuen Aktien an der Frankfurter Wertpapierbörse wird voraussichtlich am 22. November 2017 beginnen.

C.7 Dividendenpolitik.

Aufgrund der Tatsache, dass die Gesellschaft als Vorratsgesellschaft ge-gründet wurde und ihr Geschäftsbetrieb bis zur wirtschaftlichen Neugrün-dung im August 2017 auf das Verwalten eigener Vermögensgegenstände

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beschränkt war, wurde weder im Rumpfgeschäftsjahr 2015 noch im Ge-schäftsjahr 2016 kein Bilanzgewinn erzielt. Daher gab es auch keine Aus-schüttung von Dividenden im Rumpfgeschäftsjahr 2015 und im Geschäfts-jahr 2016. Die Gesellschaft kann keine Prognose im Hinblick auf den Um-fang künftiger Gewinne, die für die Ausschüttung zur Verfügung stehen, treffen. Daher kann die Gesellschaft auch nicht garantieren, dass Dividen-den in der Zukunft gezahlt werden. Zudem lässt die Ertragslage, die in den Finanzinformationen enthalten ist, nicht zwingend auf die Ertragslage, die in der Zukunft erwartet wird oder auf den Umfang künftiger Dividendenzah-lungen schließen.

D - Risiken D.1 Zentrale Risiken,

die dem Emittenten oder seiner Bran-che eigen sind.

Der Erwerb von Aktien der Gesellschaft ist mit Risiken verbunden. Daher sollten Investoren bei der Entscheidung über eine Investition in Aktien der Gesellschaft die nachfolgend beschriebenen Risiken und die sonstigen in diesem Prospekt enthaltenen Informationen sorgfältig prüfen. Der Markt-preis der Aktien der Gesellschaft könnte bei der Verwirklichung jedes ein-zelnen dieser Risiken fallen; in diesem Fall könnten die Anleger ihre Inves-tition ganz oder teilweise verlieren. Die folgenden Risiken könnten allein oder zusammen mit weiteren Risiken und Unwägbarkeiten, die der Gesell-schaft derzeit nicht bekannt sind oder die sie derzeit als unwesentlich er-achtet, die Geschäfts-, Vermögens-, Finanz- und Ertragslage der De Raj erheblich negativ beeinträchtigen. Die Reihenfolge, in der die Risikofaktoren dargestellt sind, stellt weder eine Aussage über die Eintrittswahrscheinlichkeiten noch über die Bedeutung und Höhe der Risiken oder das Ausmaß der möglichen Beeinträchtigung der Geschäfts-, Vermögens-, Finanz- oder Ertragslage der De Raj dar. Die hier genannten Risiken können sich einzeln oder kumulativ verwirklichen.

Markt- und Geschäftsrisiken • Die De Raj Gruppe ist von einer begrenzten Anzahl von wesentlichen

Kunden abhängig • Es bestehen Risiken aus Verträgen, die zur Durchführung des wirt-

schaftlich wichtigsten Vertrages der De Raj Gruppe über den Einsatz einer Ölbohrplattform abgeschlosen wurden

• Die De Raj Gruppe könnte nicht in der Lage sein, Vorleistungen, ein-schließlich Ausrüstungsbestandteile und Chemikalien, von den Liefe-ranten rechtzeitig, unter angemessenen Bedingungen oder überhaupt zur Verfügung zu stellen

• Einige der Dienstleistungsverträge der De Raj Gruppe könnten unter diversen Umständen vorzeitig beendet werden

• Die Versicherungspolicen der De Raj Gruppe könnten nicht ausrei-chen sein, u all Verluste oder Verpflichtungen abzudecken, die im Zu-sammenhang mit der operativen Tätigkeit entstehen könnten

• Da die De Raj Gruppe international expandiert, ist die De Raj Gruppe abhängig von rechtlichen, regulatorischen, politischen, wirtschaftli-chen und wettbewerbsrechtlichen Faktoren auch außerhalb von Ma-laysia abhängig sowie von anderen operativen Risiken, als solchen, die in Malaysia bestehen

• Die de Raj Gruppe könnte nicht in der Lage sein durch zukünftige Erwerbe erfolgreich weiter zu wachsen oder neu hinzugewonnene Un-ternehmensbereiche erfolgreich zu integrieren

• Die interne Organisation der De Raj Gruppe, insbesondere das Risi-komanagement könnte unzureichend sein und daher nicht in der Lage sein, ungewünschte Entwicklungen sowie Risiken und drohende oder bereits erfolgte Rechtsverletzungen rechtzeitig zu identifizieren oder zu vermeiden

• Die Reparatur und Instandhaltung der wesentlichen Vermögensge-genstände, des Equipments und der Anlagen der De Raj Gruppe kann erhebliche Aufwendungen erfordern und der Ausfall, die Nichtleistung oder der Verlust der wesentlichen Vermögensgegenstände, des Equipments und der Anlagen, von der die De Raj Gruppe abhängig

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ist, kann zu Verlusten führen • Die De Raj Gruppe könnte nicht in der Lage sein, ihre gegenwärtigen

und zukünftigen Vermögensgegenstände und Joint Ventures effektiv zu verwalten

• Die De Raj gruppe ist dem Liquiditätsrisiko ihrer Kunden und Ver-tragspartner, mit denen sie Geschäfte betreibt, abhängig

• Globale Kapital- und Kreditmarktumstände könnten einen negativen Einfluss auf die Liquidität der De Raj Gruppe haben und zu höheren Kosten führen und so die Geschäfte mit Lieferanten und Kunden be-einträchtigen

• Die De Raj Gruppe unterliegt Währungsrisiken zwischen der Währung der Gesellschaften der Gruppe und anderen Währungen

• Das IT-System der De Raj gruppe könnte ausfallen oder gestört wer-den

• Der etwaige künftige Gebrauch von Derivaten, so wie Devisentermin-geschäfte, könnten das Risiko der Kursschwankungen nicht vollstän-dig auffangen

• Die in die Zukunft gerichteten Angaben in diesem Prospekt könnten unrichtig sein

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit der Änderung des Energiemarktes, insbesondere in Eu-ropa

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit einem Anstieg der erneuerbaren Energien und eine Verdrängung der konventionellen Heizkraftwerke aus dem Wettbe-werb

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit der Verfügbarkeit fossiler Brennstoffe wie Öl und Gas sowie Biomasse

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit unüblichen saisonalen Wechseln der Nachfrage nach Öl und Gas sowie der Stromerzeugung.

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit menschlichem Versagen, technischem Versagen in ope-rativen Abläufen oder Unterbrechungen von Geschäftsabläufen

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang damit, dass qualifizierte Personal nicht zur Verfügung steht und die Unfähigkeit, qualifiziertes Personal einzustellen sowie ein ho-he Maß an Fluktuation bei den Mitarbeitern

• Es bestehen Risiken für das Geschäft der De Raj Gruppe im Zusam-menhang mit einem gesteigerten Wettbewerb

• Es gibt Reputationsrisiken im Zusammenhang dem Geschäft der De Raj Gruppe

• Die De Raj ist eine Holdinggesellschaft und daher von den Dividen-denzahlungen ihrer Tochtergesellschaften abhängig

• Es könnten sich Risiken für das Geschäft der De Raj Gruppe aus dem Erwerb von Patenten ergeben.

• Es könnten sich Risiken für das Geschäft der De Raj Gruppe aus Konflikten im Hinblick auf das geistige Eigentum ergeben

• Die Interesse des Hauptgesellschafters der Der Raj könnten in Wider-spruch zu den Interessen der anderen Gesellschafter stehen

Rechtliche und Regulatorische Risiken • Änderungen der allgemeinen rechtlichen und regulatorischen Rah-

menbedingungen in den Ländern, in denen die De Raj Gruppe tätig ist, können sich nachteilig auf die De Raj Gruppe auswirken.

• Risiken für das Geschäft der De Raj Gruppe im Zusammenhang mit etwaigen Ergänzungen des deutschen Förderplans für erneuerbare Energien

• Risiken für das Geschäft der De Raj Gruppe im Zusammenhang mit etwaigen politischen und/oder rechtlichen Maßnahmen in Bezug auf die Nutzung von Palmöl als Brennstoff für CHP Kraftwerke

• Risiken für das Geschäft der De Raj Gruppe im Zusammenhang mit

- 54 -

Unsicherheiten in Bezug auf die Bestimmungen zur Festlegung der Förderhöhe

Steuerliche Risiken • Die De Raj Gruppe könnte dazu verpflichtet werden, Steuernachzah-

lungen nach Steuerprüfungen zu leisten • Die De Raj Gruppe könnte zusätzlichen Steuern in Deutschland unter-

liegen • Die Geschäftstätigkeit der De Raj Gruppe findet im rechtlichen und

steuerlichen Rahmen der Bundesrepublik Deutschland und den ande-ren Ländern, in denen die Gruppe tätig ist, statt

D.3 Zentrale Risiken, die den Wertpapie-ren eigen sind.

Nachfolgend sind die zentralen Risiken, die den Wertpapieren zu eigen sind, zusammengefasst: • Der Aktienkurs und das Handelsvolumen der Aktien der De Raj könn-

ten erheblich schwanken, und der Aktienkurs könnte in der Zukunft sinken

• Zukünftige Verkäufe einer erheblichen Anzahl von Aktien der De Raj durch einen Großaktionär oder mehrere Aktionäre könnten zu einem Rückgang des Aktienkurses führen

• Zukünftige Kapitalmaßnahmen könnten ein Fallen des Aktienkurses der Aktien der De Raj und eine erhebliche Verwässerung der Anteile der bestehenden Aktionäre der De Raj zur Folge haben.

• Der Anauf und /oder Verkauf von Aktien an der Gesellschaft kann in der Zukunft zu Finanztransaktionssteuern führen.

E - Angebot E.1 Gesamtnettoerlöse.

Gegenstand dieses Wertpapierprospekts ist lediglich eine Zulassung zum Handel im regulierten Markt (Listing); es gibt kein Angebot zum Erwerb von Aktien. Die Gesellschaft schätzt, dass ihr insgesamt Kosten für das Listing in einer Höhe von ungefähr EUR 515.000,00 entstehen werden. Die Kos-ten für das Listing umfassen unter anderem Kosten für externe Beratung (insbesondere von Banken (eingeschlossenes Listing Agreement mit der ACON), Rechts- und Steuerberater), Prüfungshonorare (Prüfer), Transakti-onskosten, Notarkosten, Kosten für Eintragungen im Handelsregister und Kosten für die Börsenzulassung, eingeschlossen deren Vorbereitungen.

Geschätzte Ge-samtkosten des Angebots und der Zulassung, ein-schließlich der ge-schätzten Kosten, die dem Anleger vom Emittenten in Rechnung gestellt werden.

Weder die Gesellschaft, noch ACON werden den Anlegern Kosten in Rechnung stellen.

E.2a Gründe für das An-gebot.

Entfällt. Es gibt kein Angebot von Wertpapieren in diesem Prospekt.

E.3 Angebotskonditio-nen.


E.4 Beschreibung aller für die Emission wesentlichen Inte-ressen.

Entfällt. Es gibt keine Dritten, die ein Interesse an der Zulassung der Aktien hätten.

E.5 Name der Person oder des Unter-nehmens, wel-che/welches das Wertpapier zum Verkauf anbietet.


Lock-Up-Vereinbarungen:

Die Aktionäre der Gesellschaft Nagendran C Nadarajah, Renata Anita de Raj, Nicholas Arnand de Raj, Alexander Arjun de Raj, Maya Terang Sdn.

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Die beteiligten Par-teien und die Lock-Up Frist.

Bhd. und Lexanda International Limited haben mit ACON vereinbart, bis zu dem gesetzlich zulässigen Umfang für einen Zeitraum von sechs Monaten nach der Zulassung der Aktien zum regulierten Markt der Frankfurter Wert-papierbörse ohne die vorherige Zustimmung der ACON die von ihnen an der Gesellschaft gehaltenen Aktien oder Rechte, die in Aktien umgewan-delt oder in Aktien umgetauscht werden können oder zum Erwerb von Ak-tien berechtigten, weder unmittelbar noch mittelbar zu verkaufen, anzubie-ten, sich zu einem Verkauf oder einem Angebot zum Verkauf zu verpflich-ten oder einen Verkauf oder ein Angebot zum Verkauf anzukündigen und keine weiteren Transaktionen abzuschließen (umfasst sind auch Transak-tion betreffend Derivate), die einen wirtschaftlich vergleichbaren Effekt haben wie die zuvor beschriebenen Maßnahmen.

E.6 Betrag und Pro-zentsatz der aus dem Angebot resul-tierenden unmittel-baren Verwässe-rung.


E.7 Schätzung der Aus-gaben, die dem An-leger vom Emitten-ten in Rechnung gestellt werden.

Entfällt. Weder die De Raj noch ACON wird den Anlegern Kosten in Rech-nung stellen.

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3. RISK FACTORS

When considering whether to purchase shares of De Raj Group AG (the “Company”, “De Raj”, or the “Issuer”) investors should take into account, along with carefully considering the other information contained within this Prospectus, the following risk factors. The occurrence of one or more of these

risks may have material adverse effects on the business, assets and financial and earning positions of

De Raj and its subsidiaries Gryphon Energy (SEA) Sdn Bhd, Hummingbird Energy (L) Inc, Condor

Energy (L) Inc, De Raj Energy Sdn Bhd and Gaea Power GmbH (De Raj Group AG and its subsidiar-

ies collectively “De Raj Group”). The market price of the Company’s shares could drop significantly as a result of each of these risks and investors could lose all or part of their invested capital. Risks asso-

ciated with the Company and its industry are described below. The risks described below do not rep-

resent an exhaustive list of risks to which De Raj is exposed. Additional risks and uncertainties that

are not currently known to the Company could also adversely affect the business operations of De Raj

and have a negative effect on the business, assets and financial and earning positions of the Compa-

ny. The order in which the risks are listed does not correspond to or indicate the likelihood of their

occurrence or the extent of their potential economic impact. Selection and content of the included risk

factors were based on assumptions that may subsequently prove incorrect. The risks described may

occur individually or cumulatively.

3.1 Market and Business Risks

3.1.1 De Raj Group is dependent on a limited number of major customers

Certain companies of the De Raj Group have historically derived a substantial amount of its revenue

from a limited number of major customers, such as certain subsidiaries of state owned oil companies

like Pertamina in Indonesia and Petronas in Malaysia. While De Raj Group expects to continue to be

awarded contracts from these major customers in the future, there may be changes in their opera-

tions, policies or business outlooks that could have a material adverse effect on De Raj Group’s pro-spects in view of the existing and future business relations.

A predominant share of the earnings of the companies of the De Raj Group is currently obtained from

a single contract entered into a with a subsidiary of Pertamina, an Indonesian state owned oil compa-

ny, regarding the deployment of an oil rig of De Raj Group at the “PHE-38 field”, offshore West Madu-ra Offshore, Indonesia. This contract is currently the only contract of De Raj Group in the oil and gas

business. The concentration of revenue sources exposes De Raj Group to a variety of risks, such as

the loss of substantial sources of revenue resulting from discontinuation of existing contracts by major

customers should De Raj Group fail to fulfil contractual obligations and/or the risk that major custom-

ers will not award contracts to De Raj Group in the future. Furthermore, the subsidiary of Pertamina

has different rights to withhold payments, such as a general withholding right in case of disputes of

invoices submitted for the services rendered. The potential withholding of payments poses a cash flow

risk for De Raj Group.

Moreover, given the volatitilty of the oil prices, there is a risk that the rates agreed under the contracts

may subsequently have to be decreased in view of a potential decrease in the oil and gas price even if

- 57 -

the rates are contractually fixed. De Raj Group may be forced to agree on a decrease of the agreed

rates even if contractually not obliged to do so due to economic reasons in order to maintain good

relationships with existing and future customers of De Raj Group.

Furthermore, in case of disputes with the subsidiary of Pertamina, there is a risk that De Raj Group

may not be able to enforce its claims against the subsidiary of Pertamina, even if De Raj Group ob-

tains an arbitral award, for practical reasons as an enforcement of an award against a subsidiary of a

state owned company may be extremely difficult as a practical matter.

Each of the aforementioned factors could have significant negative effects on the business, net as-

sets, financial position and results of operations of De Raj or the De Raj Group.

3.1.2 Risks arise in view of contracts, which were entered into for the implementa-

tion of the economically most important contract for De Raj Group regarding

the deployment of an oil rig A predominant share of the earnings of the companies of the De Raj Group is currently obtained from

a single contract entered into with a subsidiary of Pertamina, an Indonesian state owned oil company,

regarding the deployment of an oil rig offshore West Madura, Indonesia. This contract is currently the

only contract of De Raj Group with a customer in the oil and gas business. The contract for the de-

ployment of the oil rig was awarded by the subsidiary of Pertamina to a consortium consisting of three

companies. One of the three members of the Consortium is Gryphon Energy (SEA) Sdn Bhd, which is

a company of De Raj Group. The other two members are Indonesian companies which are not part of

De Raj Group. Gryphon Energy (SEA) Sdn Bhd has entered into two agreements with the other mem-

bers of the Consortium in which the rights and obligations of the members of the Consortium and the

allocation of the revenues under the contract with the subsidiary of Pertamina are regulated, namely a

Consortium Agreement (“CA”) and a Revenue Sharing Agreement (“RSA”).

There is a risk that in case of disputes between Gryphon Energy (SEA) Sdn Bhd and the other mem-

bers of the Consortium, Gryphon Energy (SEA) Sdn Bhd may not be able to enforce its rights. The CA

and the RSA provide for final resolution of disputes by arbitration in accordance with the rules of the

Singapore International Arbitration Centre (“SIAC”). Although arbitration awards are generally en-forceable, in Indonesia, enforcement of foreign arbitration awards in Indonesia can be extremely diffi-

cult, costly, time consuming and, ultimately, uncertain owing to the need to obtain the assistance of

the relevant Indonesian District Court in enforcing a foreign arbitration award. Moreover, for practical

reasons, there is a risk that the procedure in Indonesia may be non-transparent and open to manipula-

tion by domestic parties. Thus, Gryphon Energy (SEA) Sdn Bhd will be at a significant disadvantage in

trying to enforce, in Indonesia, any SIAC arbitration award against the other members of the Consorti-

um in case of disputes.

Secondly, the members of the Consortium have waived a stipulation which gives a non-defaulting

party a claim against a defaulting party to seek either specific performance or damages as a conse-

quence of the breach of the defaulting party. Thus, there is a risk that in case of breach of the CA

- 58 -

and/or the RSA by another member of the Consortium, Gryphon Energy (SEA) Sdn Bhd may not be

able to choose the most advantageous remedy due to this waiver.

Thirdly, there is a risk that the CA and the RSA may be void and unenforceable in the first place. This

is due to the fact that although the members of the Consortium have agreed that the CA and the RSA

shall be governed by English law, there is a risk that Indonesian law may nevertheless apply to the CA

and the RSA to a certain extent. If this were the case, the CA and the RSA may be void and unen-

forceable due to the fact that the CA and the RSA have not been translated to the Indonesian lan-

guage prior to execution. This is in contravention to Indonesian law and may render the CA and the

RSA void and unenforceable. If this were the case, Gryphon Energy (SEA) Sdn Bhd would not be able

to exercise or enforce any of its claims against the other members of the Consortium.



3.1.3 De Raj Group may not be able to procure inputs, including equipment assembly parts

and chemicals, from suppliers in a timely manner, on satisfactory terms or at all

De Raj Group’s operations are dependent on a sufficient supply of inputs, including equipment, as-sembly parts and chemicals, used in its provision of services. Some of these inputs, in particular cer-

tain technical equipment used in the offshore drilling rigs and Mobile Offshore Production Units (i.e. an

offshore unit capable of having gas compression equipment, crude oil export, power generation for

offshore platforms, enhanced oil recovery facilities etc., “MOPUs”). MOPUs, such as top drives, blow-

out preventers and related parts, are only available from limited suppliers. In addition, inventory man-

agement on De Raj Group’s drilling rigs is an important aspect of its drilling operations due to the high

cost of transporting spare parts and supplies by air, ship or other means on short notice to drilling rigs

operating offshore. De Raj Group cannot assure that there will not be any substantial fluctuations in

the supply and price of these inputs,that De Raj Group will be able to secure sufficient amounts of

these inputs from limited suppliers or that De Raj Group will be able to adequately manage its invento-

ries for certain inputs. In addition, if any of De Raj Group’s suppliers fail to supply these inputs in a

timely manner, on satisfactory terms or at all, and it is not able to obtain acceptable substitutes, its

operations may be disrupted and its relationships with customers may be harmed.



3.1.4 Some of De Raj Group’s services contracts may be terminated prematurely or sus-

pended under various circumstances

Some of De Raj Group’s customers have the right to terminate their services contracts upon payment of early termination or other fees, but these payments may not fully compensate for the loss of these

contracts. Some of De Raj Group’s customers may also terminate or suspend these contracts without

payment of early termination or other fees or further compensation under various circumstances, typi-

cally including, but not limited to, delayed commencement of operations or mobilisation of its drilling

- 59 -

rig, sustained periods of non-performance or deficient performance by the drilling rig or equipment,

prolonged periods of downtime due to force majeure events and other operational issues. Many of

these circumstances are beyond De Raj Group’s control. De Raj Group cannot assure that its custom-

ers will not terminate some of these contracts prematurely or suspend some of these contracts, or that

De Raj Group will be able to secure new contracts in a timely manner, on satisfactory terms or at all,

any of which may result in periods where its assets are underutilised and unable to generate revenue.



3.1.5 De Raj Group’s insurance coverage may not be adequate to cover all losses or liabili-ties that may arise in connection with the operations of De Raj Group

De Raj Group maintains insurance at levels which are customary in the businesses in which De Raj

Group operates to protect against various losses and liabilities. De Raj Group maintains insurance to

cover, among others, damage to its equipment, infrastructure and facilities, business interruption risks

and workers compensation. There can be no assurance that De Raj Group’s insurance will be ade-quate to cover all losses or liabilities that might occur in the operations in the future. The operation of

De Raj Group’s facilities involves inherent risks and occupational hazards, and if it were to incur a

significant loss or liability for which it were not fully insured, it could have a material adverse effect on

the business, reputation, results of operations and cash flows.

De Raj Group’s insurance coverage is also subject to periodic renewal. If the availability of De Raj

Group’s insurance coverage is reduced significantly for any reason, it may become exposed to certain risks for which it is not and/or could not be insured. Further, if premium levels for the insurance cover-

age required for De Raj Group’s operations increase significantly, De Raj Group could incur substan-

tially higher costs for such coverage or it may decide to reduce the coverage amount, either of which

could have significant negative effects on the business, net assets, financial position and results of

operations of De Raj or the De Raj Group.

3.1.6 As De Raj Group continues to expand internationally, it is increasingly susceptible to

legal, regulatory, political, economic and competitive conditions outside of Malaysia

and Germany, as well as operational risks different from those that De Raj Group fac-

es in Malaysia and Germany

De Raj Group operates internationally and expects to continue expanding its business activities out-

side of Malaysia and Germany. De Raj Group is required to comply with foreign laws and regulations

in the countries in which it operates including, but not limited to, trade laws, investment sanction laws,

environmental laws, tax laws, industry laws and capital control regulations. De Raj Group conducts

country risk assessments and in-country risk management to ensure that it understands the legal and

regulatory operating environment and the political, economic and competitive conditions of a particular

country, both when commencing work in that country and on an ongoing basis. De Raj Group cannot

ensure, however, that local legal, regulatory, political, economic or competitive developments in the

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countries in which it operates will not have a material adverse effect on its business, financial condition

or results of operations.

De Raj Group has expanded its business through investments and projects outside of Malaysia and

Germany, and it may continue to make similar investments or undertake similar projects in the future,

including seeking opportunities in promising oil and gas markets, such as Iran. These transactions

subject De Raj Group to different risks than those it faces in growing its operations in Malaysia, includ-

ing foreign legal and regulatory risks associated with cross-border transactions and operational risks

related to managing transactions outside of Malaysia and Germany, such as those arising from deal-

ing with entrenched domestic competitors in overseas markets and its relative lack of familiarity with

the rules and regulations in other jurisdictions. These risks may complicate De Raj Group’s efforts to complete these transactions and impede its efforts to integrate the overseas businesses into its global

operations. Addressing these risks may require De Raj Group to devote substantial management re-

sources, which could distract its management from overseeing its ongoing operations. Any failure to

address these issues could delay or prevent De Raj Group from completing any future overseas ex-

pansions or could make such transactions substantially more expensive to complete than De Raj

Group had anticipated.

De Raj Group’s operating licences are subject to periodic renewal, and it has been able to renew its

licences in the past. However, there can be no assurance that these licences will be maintained or

renewed upon expiry in the future. In addition, there can be no assurance that De Raj Group will be

able to obtain new licences to grow its business.

Failure to obtain, maintain or renew its licences would prevent it from being able to provide its services

to the relevant oil and gas sector.

Due to the fact that De Raj is a holding company and conducts substantially all of its operations

through its subsidiaries and is thus dependent upon dividends and other distributions received from its

subsidiaries as its principal source of income, any of the aforementioned factors having a significant

negative effect on the business, net assets, financial position and results of operations of a subsidiary

of De Raj will in turn also have a negative effect on the business, net assets, financial position and

results of operations of De Raj.

Thus, each of the aforementioned factors could have significant negative effects on the business, net

assets, financial position and results of operations of De Raj or the De Raj Group.

3.1.7 De Raj Group may not be able to grow successfully through future acquisitions or to

effectively integrate the acquired businesses

De Raj Group’s business strategy has included, and will continue to include, growth through the ac-quisition of other businesses and assets. De Raj Group may not be able to continue to identify attrac-

tive acquisition opportunities or successfully acquire identified targets on favourable terms. Currently,

competition for acquisition opportunities is limited but it may escalate, increasing De Raj Group’s ac-quisition cost or causing gusto refrain from making acquisitions. De Raj Group may be required to

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incur substantial indebtedness to finance future acquisitions, with additional debt service requirements

imposing a burden on its operations and financial condition. In addition, De Raj Group may not be

successful in integrating the current or future acquisitions into the existing operations, which may re-

sult in unforeseen operational difficulties or weaker financial performance and may require a dispro-

portionate amount of management attention.



3.1.8 De Raj Group’s internal organizational structures, particularly its risk management, might prove insufficient and might fail to identify or avoid undesirable developments

and risks and impending or already perpetrated violations of the law in a timely man-

ner

The De Raj Group has a risk management system that serves to sustainably safeguard the De Raj

Group’s existence and growth and to increase its value and competitiveness by ensuring the appropri-ate management and transparent communication of individual risks. It is intended to promptly identify

disproportionate risks of fact and law, control them, and avoid them to the extent possible. However,

the De Raj Group has grown strongly in recent years, placing strain on its internal organizational struc-

tures. Consequently, the De Raj Group is challenged to safeguard a further development of appropri-

ate organizational, risk monitoring, risk management system that enables the De Raj Group to identify

and avoid undesirable development and risks and potential violations of law at an early stage. If the

measures taken to improve the risk management system are inadequate, if the intended improve-

ments fail, or if the initiated measures are implemented too late or deficiently, the De Raj Group could

recognize risks and undesirable developments and impending or already perpetrated violations of the

law too late or not at all. This could result in significantly adverse business decisions.



3.1.9 Repair and maintenance of De Raj Group’s key assets, equipment and facilities may require substantial expenditure, and breakdown, non-performance or loss of the key

assets, equipment and facilities on which De Raj Group is dependent may cause it to

incur losses

De Raj Group’s operations are dependent on the operating efficiency and reliability of its key assets, equipment and facilities in terms of operational worthiness and compliance with safety standards, and

it is required to maintain its key assets (such as its offshore drilling rigs and MOPUs), equipment and

facilities through scheduled and unscheduled repair and maintenance. De Raj Group’s repair and maintenance programme is an important part of its business operations and involves substantial ex-

penditure and results in loss of opportunity from down-time of its equipment and facilities. Repair and

maintenance performed after any break-down of its key assets, equipment and facilities can be costly

and time-consuming and, in certain cases, can be more costly and time-consuming than De Raj Group

anticipated, any or both of which could result in significant tangible and intangible losses.

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Unexpected breakdowns, non-performance or loss of key assets, equipment and facilities are by their

nature unpredictable. In the event of downtime or loss of De Raj Group’s key assets equipment and facilities, De Raj Group may incur additional costs and losses arising from the disruption of its work-

flow and scheduled activities. Rectification of breakdown or non-performance of this type, depending

on its severity, may also require replacement or repair of key components, the procurement of which

may entail long lead times. Rectification on the affected key asset, equipment and facilities may re-

quire De Raj Group to incur substantial expenditures, which may result in the affected key asset,

equipment and facilities being out of service and unable to generate revenue for extended periods of

time. As De Raj Group is also dependent on small number of offshore rigs and MOPUs to provide its

services, De Raj Group may incur losses as a result of service disruption, damage to any of its drilling

rigs or MOPUs or loss of any of its drilling rigs or MOPUs.

The occurrence of any of the above developments may potentially disrupt the operation of De Raj

Group’s affected key asset, equipment or facilities and may result in being unable to meet the contrac-tual obligations with its customers or may otherwise have a material adverse effect on its business,

results of operations and cash flows. In addition, if De Raj Group were to dispose of or lose any of its

key assets, equipment or facilities, in particular its offshore drilling rigs and MOPUs, De Raj Group

may not be able to secure replacement for such key asset, equipment or facilities in a short timeframe

on satisfactory terms or at all. The loss of such key asset, equipment or facilities could have significant

negative effects on the business, net assets, financial position and results of operations of De Raj or

the De Raj Group.

3.1.10 De Raj Group may not be able to effectively manage its present or future assets and

joint ventures

De Raj Group has previously expanded its business through acquisitions, investments and joint ven-

tures. Acquisitions, investments or joint ventures may require De Raj Group to make significant cash

commitments and incur substantial debt. Further, problems may arise preventing the effective integra-

tion of expanded operations and the ability to maintain key pre-acquisition relationships.

De Raj Group may not be able to effectively manage or execute its strategies with respect to its pre-

sent or future assets and joint ventures. Its control over these assets and joint ventures is generally

subject to the terms of applicable agreements and arrangements.

In addition, De Raj Group’s partners in these assets and joint ventures may:

(i) have economic or business interests or goals that are inconsistent with the ones of De Raj;

(ii) take actions contrary to De Raj Group’s instructions or requests or contrary to its policies or objectives; or

(iii) be unable or unwilling to fulfil their obligations under the applicable agreement or arrange-

ment or to provide anticipated levels of support.

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A disagreement, depending on its severity, with any of De Raj Group’s partners could affect its ability to develop or operate the respective asset or joint venture, which could have significant negative ef-

fects on the business, net assets, financial position and results of operations of De Raj or the De Raj

Group.

3.1.11 De Raj Group is exposed to the credit risk of its customers and counterparties with

whom it does business

Adverse economic conditions affecting, or financial difficulties of, De Raj Group’s customers and coun-terparties could impair the ability of its customers and counterparties to pay for De Raj Group’s ser-vices or fulfil their contractual obligations or cause them to delay those payments or obligations. De

Raj Group depends on its customers and counterparties to remit payments on a timely basis. Any

delay or default in payment could have significant negative effects on the business, net assets, finan-

cial position and results of operations of De Raj or the De Raj Group.

3.1.12 Global capital and credit market issues could negatively affect De Raj Group’s liquidi-ty, increase its costs of borrowing and disrupt the operations of its suppliers and cus-

tomers

Global capital and credit markets have experienced extreme volatility, disruption and decreased liquid-

ity in recent years, making it more difficult for companies to access capital and credit markets. While

there have been periods of stability in these markets, the environment has become more volatile and

unpredictable. Recently, there has been particular focus on the potential for sovereign debt defaults

and banking failures in Europe. Volatility in global financial markets has added to the uncertainty of the

global economic outlook and a number of countries are experiencing slow economic activity. In addi-

tion, De Raj Group remains subject to the possibility of reduced access to, and increased costs of,

funding, a slowing down in the activity of its business partners or other adverse impacts on entities

with whom it has business dealings.

De Raj Group’s business is capital intensive, requiring drilling rigs, MOPUs and specialised equipment to provide its services, and may involve acquiring and/or upgrading its equipment and facilities, includ-

ing its offshore drilling rigs and MOPUs. De Raj Group depends on stable, liquid and well-functioning

capital and credit markets to fund its future projects and development, and failure to obtain sufficient

financing on a timely and satisfactory basis could cause it to forego acquisitions or opportunities to

tender for certain projects. If market conditions deteriorate due to economic, financial, political or other

reasons or if currently low interest rates were to increase, De Raj Group’s ability to obtain bank f inanc-

ing and access the capital markets in the future may be adversely affected. De Raj Group cannot en-

sure that any required additional financing, either on a short-term or long-term basis, will be made

available on terms satisfactory. If De Raj Group is unable to obtain adequate funding when needed or

obtain funding on favourable terms, it may find it difficult to meet its capital needs, take advantage of

business opportunities or respond to competitive pressures.



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3.1.13 De Raj Group is exposed to foreign exchange risk arising from changes in the ex-

change rates between the functional currencies of companies in its Group and other

currencies

De Raj Group is exposed to foreign exchange risk. Many of the companies in De Raj Group use USD

as their functional currency, but the pro-forma consolidated financial information included in this Pro-

spectus is in EUR, and the future reporting of the financial information by De Raj on a consolidated

basis will also be in EUR. Furthermore, De Raj Group incurs costs in other currencies, such as the

RM. A change in the exchange rate of the USD against the EUR and/or the other currencies relevant

for the De Raj Group, such as the RM, may have a material adverse effect on its financial perfor-

mance and financial position because De Raj Group may incur foreign exchange losses and foreign

currency translation losses. In addition, changes in currency exchange rates may result in significantly

higher domestic interest rates, liquidity shortages and capital or exchange controls, which in turn could

lead to a reduction of economic activity, economic recession, loan defaults, lower deposits and an

increased cost of funds. Changes in the exchange rate between the USD and other currencies, in

particular the EUR, could have an adverse impact on its results of operations and financial condition,

including as a result of translation differences when converting other currency amounts to EUR for

financial statement purposes.



3.1.14 De Raj Group’s IT-systems could malfunction or become impaired

The De Raj Group’s information technology systems and those of its outsourcing partners are essen-tial for its business operations and success. Any interruptions in, failures of, manipulation of, or dam-

age to, these information technology systems could lead to delays or interruptions in the De Raj

Group’s business process. Any malfunction or impairment of the De Raj Group’s computer system or those of its outsourcing partners could interrupt the Group’s operations, lead to increased costs, and may result in lost revenues or income. The De Raj Group cannot guarantee that anticipated and/or

recognised malfunctions can be avoided by appropriate preventive security or control measures in

every case.



3.1.15 The potential future use of derivative instruments, such as currency forward con-

tracts, may not fully hedge the risks of price fluctuations

De Raj Group may use derivative instruments, such as currency forward contracts or other similar

transactions, in the ordinary course of its business to hedge the risks of adverse fluctuations in foreign

exchange in the future. So far, De Raj Group has not made use of currency forward contracts, as most

of its payments are naturally hedged by revenues in the same currencies. Thus, as at the date of this

prospectus, the companies of the De Raj Group had no outstanding forward contracts or outstanding

- 65 -

derivative instruments. However, because foreign exchange markets are volatile, De Raj Group may

in the future decide to enter into forward contracts and/or derivative instruments to cover currency

exchange losses. Nevertheless, due to the volatility of foreign exchange markets, De Raj Group may

not be able to fully hedge the future gains or losses with these instruments against the corresponding

change in foreign exchange rates. Any severe or wide fluctuation in foreign exchange rates could have

an adverse effect on its business, financial condition and results of operations if it is unable to manage

such fluctuations effectively through these derivative instruments.



3.1.16 Forward-looking statements in this Prospectus may not be accurate

This Prospectus contains forward-looking statements. All statements, other than statements of histori-

cal facts included in this Prospectus, including, without limitation, those regarding De Raj Group’s fi-nancial position, business strategies, prospects, plans and objectives for future operations are for-

ward-looking statements. Such forward-looking statements are made based on numerous assump-

tions that De Raj Group aim to be reasonable as at the date of this Prospectus. Forward-looking

statements can be identified by the use of forward-looking terminologies, such as the words "may",

"will", "would", "could", "believe", "expect", "anticipate", "intend", "estimate", "aim", "plan", "forecast" or

similar expressions, and include all statements that are not historical facts. Such forward-looking

statements involve known and unknown risks, uncertainties and other factors that may cause our ac-

tual results, performance or achievements, or industry results, to be materially different from any future

results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding the present and

future business strategies and the environment of De Raj Group in which it will operate in the future.

Such factors include, among others, general economic and business conditions, competition, the im-

pact of new laws and regulations affecting our industry and initiatives of the Malaysian government.

In light of these uncertainties, the inclusion of such forward-looking statements in this Prospectus

should not be regarded as are presentation or warranty by De Raj Group or its advisors that such

plans and objectives will be achieved.



3.1.17 Risks arise for the De Raj Group's business from the transformation of the energy

market, particularly in Europe

The global energy market is subject to fundamental change. Both national and international initiatives

drive the transformation of the energy market.

- 66 -

As part of its strategy for an energy union within the EU, the EU Commission has submitted proposals

for the transformation of the European electricity market, for the updating of energy labeling, and for a

review of the emissions trading system. The initiative for a transformation of the European electricity

market is intended to improve the functioning of the domestic electricity market, among other things

through the abolition of regulated prices, the promotion of enabling technologies, such as intelligent

power grids, modern consumption measurement systems and storage systems, as well as the efficient

use of network capacities. The results of the sector inquiry by the EU Commission on capacity mech-

anisms in selected member states as well as the proposals on the future energy market and on the

risk preparedness in the area of security of electricity supply ("Summer Package") from 2015 will

contribute to the changed European legal framework.



3.1.18 Risks arise for the De Raj Group's business from an increase in renewable power

generation and the resulting displacement of conventional power plants among the

competition

Conventional generation of power faces the risk of losing competitiveness against renewable energy

and thus market share and, over the long term, even faces the risk of disappearing completely from

the market. Furthermore, there is a risk that customer demand for renewable energy increases to the

detriment of conventional energy. The shift from conventional fuels to renewable generation is hap-

pening in many countries around the world. The European member states have agreed in their 2030

energy strategy to reach at least a 27% share of renewables by this date.

The variable generation costs for generation from renewable energy, such as wind and solar energy,

are very low as they do not require any fuel to produce electricity. As a result the merit order typically

starts with renewables followed by power plants with high investments, but comparably low variable

generation costs, such as nuclear-, hydro- or lignite-fired power plants. Coal, gas or oil-fired power

plants constitute normally the middle / end of the merit order. The available power plant capacities,

fuel prices and technical parameters of the operators in individual countries differ widely; as a result

each country has its own characteristic merit order.

In Germany, the Renewable Energies Act (Erneuerbare-Energien-Gesetz, "EEG") supports and pro-

motes renewable energy generation. The EEG entered into force in 2000 and has been regularly

amended (EEG 2004, EEG 2009, EEG 2012, EEG 2014 and EEG 2017). The EEG enabled the

growth of Germany's renewable energy generation through feed-in tariffs and market premiums and

priority access to the electricity grid for energy from renewable sources. The latest amendments to the

EEG, effective as of 1 January 2017, introduce an auction system determining the promotion amount

(Förderhöhe) for the majority of new wind, photo-voltaic and biomass facilities.

The continuous growth of renewables results in a displacement of conventional power plants in the

merit order. In times of high feed-ins of renewable energy, and a given demand, conventional power

plants are no longer necessary to cover the demand. Additionally the marginal power plant determin-

- 67 -

ing the energy price has lower marginal cost which results in a lower energy price. Given the renewa-

bles target of the EU, it can be expected that conventional energy will be deployed to a lesser extent.

The shift of the energy mix towards a preference for power from renewable generation is leading to a

reduction of power generation from fossil primary energy sources and to a decline in wholesale power

prices.



3.1.19 Risks arise for the De Raj Group's business from the availability of fossil fuels such

as gas and oil as well as biomass

As a power producer and commodity trader the De Raj Group relies on the continuous availability of

fossil fuels, in particular gas and oil in sufficient quantity and at reasonable prices. Should the global

supply or the required transport infrastructure experience any shortage, e.g., as a consequence of

political instabilities in the producer countries or the geostrategic instrumentalization of natural re-

sources, it would be increasingly difficult to satisfy these needs in the future.

Should the De Raj Group prove unable to compensate for any supply bottlenecks or disruptions on

reasonable terms, and to ensure the continued availability of the quantities of primary fuels required

for power plants and the supply to customers, this could result in the De Raj Group's power generation

or its natural gas and other commodities supplies having to be stopped, in whole or in part. For exam-

ple, in the past it already occurred (to other plant operators) that palm oil prices increased so much

that the operation of palm oil fired CHP plants was not profitable any longer despite the promotion

according to the German EEG.



3.1.20 Risks arise for the De Raj Group's business from unusual seasonal fluctuations in

demand for oil and gas as well as power generation

The demand for oil and gas and power generation is subject to seasonal effects.

The De Raj Group is exposed to meteorological and hydrological conditions, both with regard to oil

and gas consumption as well as the power generation. Changes to the normal patterns of tempera-

ture, wind precipitation and duration of sunshine could have material adverse effects on the revenues

and operating results of the De Raj Group. A higher incidence of mild winters e.g., as a result of the

ongoing climate change, as well as of very humid or very dry weather periods could have a material

adverse effect on the De Raj Group's oil and gas business and / or the power generation business.



- 68 -

3.1.21 Risks arise for the De Raj Group's business from human errors, technical failures in

operating procedures or interruptions of business operations

Energy generation requires the use of technologically sophisticated production, generation, warehous-

ing, storage, distribution and loading equipment. There is a general risk that human errors, technical

failures, other damage or loss events and retrofitting requirements could completely or partially impact

the functioning of the equipment or even necessitate a complete or partial suspension of operations

under certain circumstances.

A severe malfunction could result in material adverse effects on the De Raj Group's business - even if

the malfunction is not due to the fault of the De Raj Group as the plant operator but is rather deemed

to be force majeure or an accident. A corresponding restriction could also be caused by such factors

as natural disasters, sabotage, piracy, terrorist attacks, political unrest, strikes, cyber-crime (for in-

stance in connection with the power plant control systems) and other damage or loss events, such as

the non-availability of buildings, damages to buildings, fires, explosions and the shipwrecking of cargo

freighters. In addition to limiting operations, technical disruptions or damage and loss events can ne-

cessitate significant repairs and result in personal injury, property damage and environmental contam-

ination, which, particularly in the event the De Raj Group is held liable, can result in considerable costs

and reputational damage as well as the disruption of ancillary activities (such as transport, communi-

cation, waste disposal, etc.). The De Raj Group could also be held liable for third- party losses and

damage. In addition, there is the risk of contractual penalties and a loss of revenues in the context of

capacity markets, where the actual output made available is remunerated, if the power plants to be

provided by the De Raj Group are not available.



3.1.22 Risks arise for the De Raj Group's business from qualified personnel not being avail-

able and any inability to recruit qualified personnel or a high degree of staff fluctua-

tion

The success of the De Raj Group depends significantly on qualified managers and employees, includ-

ing the members of the Issuer's board of management and key personnel. The De Raj Group, whose

business activities largely depend on production, trade and sale as well as technologies and engineer-

ing performance, competes intensely with other energy supply companies for qualified personnel.

Should qualified staff members leave the Issuer, or if the De Raj Group proves unable to recruit, retain

and motivate specialized and qualified staff members for the operation, the transition, and the expan-

sion of its business as well as the dismantlement of plants, this could restrict the De Raj Group's ability

to successfully operate its business and research activities, pursue strategic and financial objectives,

and to develop competitive technologies and processes. Moreover, the De Raj Group could lose expe-

rienced executives who are crucial to its business.

- 69 -



3.1.23 Risks arise for the De Raj Group's business from increased competition

In the business areas in which the De Raj Group is active, the De Raj Group is subject to intense

competition, which in recent years has sometimes resulted in significant decreases in sales. This

competition has intensified in the past and could further intensify in the future owing to the entry of

new market participants or a more competitive approach by existing competitors, thus increasing the

risk of declining sales or lower profit margins for the De Raj Group.

In particular, the current market environment in the area of gas trade and sales is characterized by

intense price competition which impacts the sales volume and/or margins that result from the spread

between sale and purchase prices. Considerable sales risks with regard to specific supply quantities

under long-term contracts (involving purchase obligations) that are not gas-indexed arise from the

competition in the gas market and rising trading volumes at virtual trading points as well as on gas

exchanges.

If the De Raj Group proved unable to maintain its existing customer base in its core business areas of

power and gas, or to compensate for the loss of customers through gaining new customers or by in-

creasing revenues from its business with the remaining customers, and to assert reasonable prices in

relation to such customers, this could result in an adverse effect on sales volume and/or the realizable

prices and margins and the relevant market position of the De Raj Group, as well as declining reve-

nues.



3.1.24 There are reputational risks related to the De Raj Group's business

As for all major energy utilities, the De Raj Group's reputation is influenced by discussions and events

related to energy policy, the energy transition, contractual partners and energy prices. As an energy

utility with a focus on conventional power generation the De Raj Group may be particularly exposed to

criticism. Moreover, in recent years many customers have come to prefer renewable generation, which

is also associated with corresponding criticism of conventional energy generation.

There is a risk that damage to reputation resulting from unforeseeable and non-controllable external

events could have material adverse effects on the financial condition and results of operations of the

De Raj Group beyond the direct impact of such events.



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3.1.25 De Raj is a holding company and, as a result, is dependent on dividends from its sub-

sidiaries

De Raj is a holding company and conducts substantially all of its operations through its subsidiaries.

Accordingly, dividends and other distributions received from its subsidiaries are its principal source of

income. Consequently, the amount of these dividends and distributions are an important factor in De

Raj’s ability to pay dividends. The ability of De Raj’s subsidiaries to pay dividends or make other distri-butions to the Company is subject to various factors, including applicable laws or agreements restrict-

ing their ability to pay dividends or make other distributions, the availability of their distributable re-

serves or profits, their solvency and their having sufficient funds that are not needed to fund their op-

erations, debt servicing and other obligations or business plans.

In addition, changes in applicable accounting standards may affect the ability of the subsidiaries of De

Raj Group, and consequently, De Raj Group’s ability, to declare and pay dividends. As De Raj Group

is a shareholder of its subsidiaries, De Raj Group’s claims as a shareholder will generally rank junior

to all claims of the subsidiaries’ creditors and claimants. In the event of a liquidation of a subsidiary, there may not be sufficient assets for De Raj Group to recoup its investment in that entity.



3.1.26 Risks arise for the De Raj Group's business from the acquisition of patents

In the context of the formation of the De Raj Group the company De Raj Energy Sdn Bhd was

assigned several patents in the oil and gas sector relating to different jurisdictions by the owners of the

patents Kingtime International Limited, Singapore, Ms. Renata Anita de Raj and Mr Nagendran Nada-

rajah. These patents form a significant asset and thus play a material role in the De Raj Group’s business. Hence, there is an economic dependency of De Raj Group on these patents.

The assignments of the patents have already been filed to the respective competent register for regis-

tration. However, the registration of the assignment of the patents in the competent register is still

outstanding at the date of this prospectus. Due to the fact that in some jurisdictions relevant for the

assigned patents the registration is conclusive for the legal effectiveness of the transfer, De Raj

Energy Sdn Bhd has effectively not become legal owner of some of the patents yet. However, the

assignors of the patents have already transferred the right to make use of the patents to De Raj

Energy Sdn Bhd and the patents are already considered as assets of De Raj Group in the Pro-forma

consolidated financial information included in this prospectus. Nevertheless, there is a risk resulting

from the fact that De Raj Energy Sdn Bhd has not become legal owner of some of the patents yet. The

risk is that the transfer of the patents may for unforeseeable reasons (e.g. due to presently unknown

third party’s rights to the patents) eventually not become effective. In this case the patents may not be

regarded as assets of De Raj Group. Further, De Raj Group would not be able to utilise the patent in

its business operations which could severely curtail De Raj Group’s ability to fulfill its current and/or

future business operations.

- 71 -

Moreover, in case of the existence of third party rights, the respective third party could sue De Raj

Group for infringement of their patents. As a consequence, De Raj Group could be obliged to cease

the use of the patents. Further, the third party owners of the patents could claim compensation for the

use of the patents (in the form of damages) and seize products using or incorporating such patent.

Court decisions could be issued ex parte by way of preliminary injunction and force De Raj Group to

immediately cease using the patent concerned upon having been served on De Raj Group. In this

case, De Raj Energy Sdn Bhd may not have corresponding or sufficient claims to damages against

the assignors of the patents for reimbursement or such claims, if any, could not be enforceable.



3.1.27 Risks arise for the De Raj Group's business from possible conflicts in view of intellec-

tual property rights

The intellectual property rights (“IP-Rights”) of De Raj Group, particularly the patents of De Raj Group,

could be challenged by older third party rights’ owners. In case such older rights exist, the owners of such rights could try to invalidate the patents of the De Raj Group. If they are successful, the protected

inventions could be used by anyone, freely. The same would apply, if the protected inventions were

not new at the time of the application for the respective patent. In such case, everybody could file for

cancellation of such patent. If such applications for cancellation are successful, the protected inven-

tions could be used by anyone, freely.

The operation of the business of De Raj Group could infringe third party IP-Rights. If so, the owners of

such rights could sue De Raj Group for infringement of their IP-Rights. As a consequence, De Raj

Group could be obliged to cease the use of certain trademarks, company names, designs, patents,

know how, copyright protected works, databases, etc. Further, the owners of the IP-Rights could claim

compensation for the use of the IP-Rights (in the form of damages) and seize products using or incor-

porating such IP-Rights. Court decisions could be issued ex parte by way of preliminary injunction and

force De Raj Group to immediately cease using the IP-Rights concerned upon having been served on

De Raj Group.



3.1.28 De Raj Group’s major shareholders may have interests that may not be aligned or may

conflict with those of its other shareholders

Members of the de Raj family in Kuala Lumpur, i.e. Mr Nagendran C Nadarajah, his wife Ms Renata

Anita de Raj, and their sons Mr Nicholas Arnand de Raj and Mr Alexander Arjun de Raj (in the follow-

ing referred to as “De Raj Family)” hold directly or indirectly 85 % of the shares and voting rights in De

Raj Group AG. Furthermore, members of the De Raj Family are also members of the management

- 72 -

and supervisory board of De Raj Group AG (Mr Nagendran C Nadarajah and Mr Nicholas Arnand de

Raj are management board members and Ms Renata Anita de Raj and Mr Alexander Arjun de Raj are

supervisory board members).

The members of the De Raj Family have business interests outside of the De Raj Group which are not

aligned and also intertwined with the business interests of the De Raj Group:

De Raj Group owns owns five jack-up rigs, a type of mobile platform that consists of a buoyant hull

fitted with a number of movable legs, capable of raising its hull over the surface of the sea, which may

be deployed in oil and gas fields (“Jack-up Rigs”). However, the company Lexanda International,

British Virgin Islands, which is utlimately held by Alexander Arjun de Raj, also owns two Jack-up Rigs.

Although De Raj Group has entered into an agreement with Lexanda International whereby De Raj

Group will be granted a right of first refusal for future corporate opportunities for the deployment of its

Jack-up Rigs to address potential conflicts of interest, there is nevertheless a risk that Lexanda Inter-

national may make use of corporate opportunities to the detriment of De Raj Group in the future. Any

potential claims for damages De Raj Group may have against Lexanda International under the con-

tract entered into between De Raj Group AG and Lexanda International may prove not to be sufficient

to cover the damages incurred and/or equal the profits missed by De Raj Group or may practically not

be realised due to insolvency of Lexanda International.

Furthermore, De Raj Group is party to a contract with an Indonesian National Oil Company regarding

the installation and operation of a Mobile Offshore Production Unit (MOPU) at the PHE-38 field, off-

shore Madura, Indonesia (the “Pertamina Contract”). The Jack-up Rig deployed for the fulfillment of

the Pertamina Contract is the MOPU BOSS 1. The MOPU BOSS 1 Jack-up Rig is leased by De Raj

Group as lessee from the Indonesian company PT Nuriraja Energy as owner and lessor of MOPU

BOSS 1. Mr Nagendran C Nadarajah indirectly holds a substantial stake of the shares in PT Nuriraja

Energy. Although De Raj Group is of the opinion that the lease rates charged by PT Nuriraja Energy to

De Raj Group are at current prevailing market prices, there is a risk that future conflicts of interest may

arise in the contractual relationship, e.g. in view of an increase of the lease rates or in view of any

obligations to be fulfilled by PT Nuriraja as lessor and/or De Raj Group as lessee. Further, any poten-

tial claims for damages De Raj Group may have against PT Nuriraja because of breach of the contract

may prove not to be sufficient to cover the damages incurred or may practically not be realised due to

an insolvency of PT Nuriraja.

Moreover, the subsidiary of De Raj Group AG, Gaea Power GmbH, is the owner of 13 combined heat

and power plants („CHP plants“) spread throughout Viersen, Straelen and Geldern, Germany. These CHP plants generate electricity, which is fed into the public power grid, and heat, which is delivered to

nearby greenhouses. Six CHP plants are currently in operation. Further seven units are currently not

in operation due to ongoing modification works. Gaea Power GmbH does not operate the CHP plants

itself, but leases them as lessor to five companies in the legal form of an Unternehmergesellschaft (mit

breschraenkter Haftung) (in the following referred to as “UGs”), which operate the plants and pay a

monthly rent to Gaea Power GmbH. The UGs are ultimately held by Nicholas Arnand de Raj and Al-

exander Arjun de Raj. Although De Raj Group is of the opinion that the lease rates charged by Gaea

Power GmbH to the UGs are at current prevailing market prices, there is a risk that there might be

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future conflicts of interests in the contractual relationship between Gaea Power GmbH as lessor and

the UGs as lessees, e.g. in view of potential future adjustments of leasing rates as Gaea Power GmbH

and the UGs have agreed to enter into negotiations on the lease rate every six months starting from

2018. Further, any potential claims for damages De Raj Group may have against the UGs because of

breach of the contracts may prove not to be sufficient to cover the damages incurred or may practical-

ly not be realised due to an insolvency of the UGs.

Furthermore, the company Maya Terang Sdn Bhd, which is ultimately held by Mr Nagendran C Nada-

rajah and his wife Ms Renata Anita de Raj, owns the premises which serve as office of De Raj Group

in Kuala Lumpur, Malaysia. Although De Raj Group is of the opinion that the rental rates charged to

De Raj Group are at current prevailing market prices, there is a risk that future conflicts of interest may

arise in the contractual relationship between De Raj Group and Maya Terang Sdn Bhd, e.g. in view of

an increase of the rent or in view of any obligations to be fulfilled by Maya Terang Sdn Bhd as landlord

and/or De Raj Group as tenant.



3.2 Legal and Regulatory Risks

3.2.1 De Raj Group’s may be adversely affected by changes to the general legal, and regula-tory environment in the countries in which it operates

The De Raj Group’s business is subject to the general legal and regulatory framework in several juris-dictions including those related to Health, Safety and Environmental Matters (“HSE”). These laws and

regulations govern, among others, HSE compliance, specifications related to project operations, speci-

fications related to offshore drilling rigs and MOPUs and requirements related to equipment operation.

In addition, De Raj Group’s operations rely on licences, permits and registrations to conduct business in the jurisdictions in which De Raj Group operates, including, among others, De Raj Group’s ability to secure oil and gas projects locally and globally. Even when De Raj Group has obtained the required

licences, permits and registrations, De Raj Group is subject to continued review under applicable laws

and regulations, the implementation of which is subject to change. Further, De Raj Group has in-

curred, and expects to continue to incur, operating costs to comply with applicable laws and regula-

tions, and De Raj Group has made, and expects to continue to make, capital expenditures on an on-

going basis to comply with relevant laws and regulations.

There can be no assurance that De Raj Group will be able to remain in compliance with applicable

laws and regulations, that De Raj Group will be able to obtain, maintain or renew required licences,

permits and registrations or that De Raj Group will not become involved in future litigation or other

proceedings (or be held responsible in any future litigation or other proceedings) relating to HSE mat-

ters, the costs of which could be material. In addition, there can be no assurance that the adoption of

new HSE laws and regulations, new interpretations of existing laws and regulations, increased gov-

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ernmental enforcement of these laws and regulations or other similar developments will not result in

De Raj Group being subject to fines and penalties or having to incur additional capital expenditures or

operating expenses to upgrade, supplement or relocate our equipment and facilities.

De Raj Group’s failure to comply with all applicable government laws and regulations, or a change in the government laws and regulations governing the industries in which De Raj Group operates, may

disrupt De Raj Group’s operations and could have a material adverse effect on the business, results of operations and cash flows.The legal situation may change in the future, possibly with retroactive or

retrospective effect at any time and on short notice. Changes to the legal framework due to new laws

or other regulations or their amendment, or as a result of changes to their legal application by public

authorities or legal rulings, could have considerable negative effects on the business activities of the

De Raj Group. This will apply, in particular, if there are amendments to the legal framework applicable

to the De Raj Group which result in increased expenses for the De Raj Group or restrict the ability to

pursue its business. Therefore, changes in the relevant laws or the application of the law, for example

concerning the oil and gas business, could lead to a reduction or further limitations of the existing

business, future business opportunities and, increasing costs and/or a decrease of the profitability of

the business.

Furthermore, changes in regulation or case law could have a considerable negative impact on the

economic success of the De Raj Group. Should the Group not succeed or not succeed in due time in

adapting its business policy, as well as its business strategy to possible changes to the changed statu-

tory or fiscal law framework, or if adaptation is not possible, this could have a considerable negative

impact on the business activities and therefore the net assets, financial position and results of opera-

tions of De Raj or the De Raj Group.

If these changes in the legal framework or its interpretation occur, individually or together, or if other

changes of the legal framework should arise affecting negatively the Group’s business, this could have significant negative effects on the business, net assets, financial position and results of operations of

De Raj or the De Raj Group.

3.2.2 Risks arise for the De Raj Group's business from potential amendments of the Ger-

man promotion scheme for renewables energies

The combined heat and power plants (“CHP plants”) owned by Gaea Power GmbH and operated by the different UGs (haftungsbeschränkt) (“UGs”) benefit from the German promotion scheme for re-

newables energies according to the Renewable Energies Act (Erneuerbare-Energien-Gesetz –

“EEG”). The continuation of the promotion pursuant to the EEG is precondition for the CHP plants’ profitable operation.

The EEG has been subject to numerous amendments, in the past. These amendments generally con-

cerned only new installations, i.e. installations which were commissioned after the coming into effect of

the new provisions, while existing plants were subject to transitional provisions (Übergangsregelung-

en) granting protection of the status quo (Bestandsschutz). However, it cannot be ruled out that future

adjustments of the EEG may also have an impact on existing plants, e.g. affecting operating condi-

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tions and/or the revenue of the respective plant operators. Due to the fact that the CHP plants are not

operated by Gaea Power GmbH but by the UG’s the aforementioned factors will have a significant

negative effect on the business, net assets, financial position and results of operations of the UGs in

the first place. However, due to the fact that Gaea Power GmbH receives revenues from contracts

entered into with the UGs on the leasing of its CHP plants to the UGs any negative effect on the busi-

ness, net assets, financial position and results of operations of the UGs will likely in turn also have a

negative effect on the business, net assets, financial position and results of operations of Gaea Power

GmbH as the UGs will presumably not be able to honour their obligations under the lease contracts

anymore.


assets, financial position and results of operations of the UGs respectively Gaea Power GmbH, De Raj

or the De Raj Group.

3.2.3 Risks arise for the De Raj Group's business from possible political actions and/or

legal measures with respect to the usage of palm oil as fuel for CHP plants

In the past, the usage of palm oil in CHP plants was subject to a broad political debate in Germany. In

consequence, the promotion of corresponding CHP plants fired with palm oil according to the EEG

was severely restricted respectively abandoned for new plants as of 2012. It cannot be excluded that

this or a similar political debate will arise again and result in political actions and/or legal measures

undermining Gaea Power GmbH’s business plans for Germany.

Due to the fact that the CHP plants are not operated by Gaea Power GmbH but by the UG’s the aforementioned factors will have a significant negative effect on the business, net assets, financial

position and results of operations of the UGs in the first place. However, due to the fact that Gaea

Power GmbH receives revenues from contracts entered into with the UGs on the leasing of its CHP

plants to the UGs any negative effect on the business, net assets, financial position and results of

operations of the UGs will likely in turn also have a negative effect on the business, net assets, finan-

cial position and results of operations of Gaea Power GmbH as the UGs will presumably not be able to

honour their obligations under the lease contracts anymore.




3.2.4 Risks arise for the De Raj Group's business from of legal uncertainties with regard to

provisions on the determination of the promotion amount

The CHP plants owned by Gaea Power GmbH and operated by the UGs (haftungsbeschränkt)

(“UGs”) benefit from the German promotion scheme for renewables energies according to the Renew-ables Energies Act (Erneuebare-Energien-Gesetz – “EEG”).

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The EEG 2017, which entered into effect on 1 January 2017, established an auction regime for the

purpose of determining the promotion amount (Förderhöhe) for renewable energy installations. How-

ever, with regard to facilities commissioned before 1 January 2017 the promotion amount was set out

in Eurocent per kWh by the EEG itself (as “applicable values” under the EEG 2014 and “feed-in tariffs” under the EEG 2012 and previous versions of the EEG) depending, inter alia, on the installed capacity

respectively the rated output (Bemessungsleistung) of the facility (principle of gliding tariffs). The ap-

plicable values for small installations (i.e. with a small installed capacity/rated output) were higher than

for large installations (i.e. with a large installed capacity/rated output), since certain operating costs do

not depend on the size of the plant (fixed costs), so that an uniform applicable value for all plant sizes

would result in a too low promotion for small plants and/or an excessive promotion of large plants.

However, this principle of gliding tariffs was partly misused by project developers building a number of

small plants (so-called splitting of installations – Anlagensplitting) instead of a single large one (which

would generally be the more economical solution under market conditions). Therefore, the legislator

adopted an explicit provision according to which under certain conditions multiple facilities on one site

or in direct geographical proximity have to be treated as one plant in the context of the determination

of the promotion amount regardless of the ownership. Although this explicit provision came into effect

on 1 January 2009 (EEG 2009), at first, some voices argued that the principle of joint treatment of

plants (Anlagenzusammenfassung) should also be applied to facilities commissioned under the EEG

2004 correspondingly. Inter alia, the government and the legislator (in the reasoning for the EEG

2009) stated that splitting of installations was illegal under the EEG 2004. However, in the context of a

further amendment of the EEG at the end of 2009, the legislator adopted a transitional provision ac-

cording to which the above-mentioned provision was not applicable to certain modularly constructed

installation parks commissioned before 1 January 2009. After all, the legal situation under the EEG

2004 is still quite unclear.

Against this background, it cannot be excluded that such a joint treatment of plants could also be ap-

plied to the CHP plants owned by Gaea Power GmbH, since some of these CHP plants are operated

on the same site. This could result in lower promotion payments or even in repayment claims of the

grid operator.

Due to the fact that the CHP plants are not operated by Gaea Power GmbH but by the UG’s the aforementioned factors will have a significant negative effect on the business, net assets, financial

position and results of operations of the UGs in the first place. However, due to the fact that Gaea

Power GmbH receives revenues from contracts entered into with the UGs on the leasing of its CHP

plants to the UGs any negative effect on the business, net assets, financial position and results of

operations of the UGs will likely in turn also have a negative effect on the business, net assets, finan-

cial position and results of operations of Gaea Power GmbH as the UGs will presumably not be able to

honour their obligations under the lease contracts anymore.




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3.3 Risks related to the Listing and the Shareholder Structure

3.3.1 The trading volumes and market price for De Raj’s shares could fluctuate considera-bly, and the market price could decline in the future

As is the case with the securities markets in general, the quoted market price of the Company’s may fluctuate strongly and decline in the future. Such developments are determined by the relationship

between supply and demand for the shares of the Company, as well as various other factors. These

factors also include the development of the net assets, financial position and results of operations of

the Company, general operational and business risks, deviation of the actual results from the ex-

pected results, changes to the profit forecasts, strategy and business prospects of the Company as

well as the assessment of the associated risks, changes in earnings estimates and recommendations

by financial analysts, changes to general economic conditions, changes in the perceived prospects of

the business of De Raj Group, in particular the oil and gas markets in Malaysia and worldwide, chang-

es in government policy, legislation or regulation, changes in interest rates, changes to the sharehold-

ers, modification of the statutory framework conditions, changes to the Articles of Association of the

Company, developments of the business and the stock market prices of the Company’s competitors

and the development of sectors which are of importance to the business of the Company, changes to

the stock exchange prices in general, as well as the stock exchange environment and mood of the

capital market, trading liquidity of the shares in the Company, derivative transactions pertaining to

shares of the Company, speculative investment decisions, or forecasts of security analysts and inves-

tors. De Raj does not have influence on many of these factors.

There is no guarantee that there will be a liquid trading in the Company’s shares. Under certain cir-cumstances, investors may not be able to sell their shares quickly or at a price higher than the acquisi-

tion price of the shares or at the market price if an active market for the shares fails to develop or may

not be able to re-sell their shares at all.

The above factors may cause considerable volatility with respect to the liquidity and stock exchange

price of the shares of the Company without being necessarily associated with the business activities or

the income prospects of De Raj or De Raj Group.

3.3.2 Any future sales of a considerable number of De Raj’s shares by a major shareholder or a number of shareholders could lead to a decrease in the market price of the

shares

It cannot be predicted with certainty which effects future sales of shares by shareholders may have on

the stock market prices of the Company’s shares. If a major shareholder or a number of shareholders sell shares of the Company to a significant extent, offer them for sale or market them, or if the market

expects such actions, the stock exchange prices of the shares of the Company may fall. As a result of

a decline in the stock exchange prices of the shares, it is also possible that additional pressure to sell

may result from liquidation of the shares which are held by shareholders who have financed their

shares in part or in whole by third-party borrowing or who have concluded derivative transactions with

respect to shares of the Company. Further, it cannot be excluded that the simultaneous sale of a sig-

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nificant portion of shares by one or more shareholders will have a material effect on the price of the

shares.

3.3.3 Future capital measures could lead to a decrease in the market price for De Raj’s shares and a substantial dilution of existing shareholders’ interests in De Raj

The Company could decide to issue new shares or other share related financing instruments, like e.g.

convertible bonds in the future. As a result, the market price of the shares in the Company may fall.

The future issue of shares or the exercising of conversion privileges or option rights with respect to the

Company’s shares, granted by means of bonds to be issued in the future may also dilute the ratio of the previous shares in the share capital of the Company and voting rights if the issue is carried out

without the granting of subscription rights or other rights granting the subscription or if such rights are

not exercised or cannot be exercised by shareholders outside Germany due to restrictions in other

jurisdictions.

In addition, convertible bonds issued by the Company may lead to a dilution of shares when exercised

or contain dilution protection provisions in case subscription rights or entitlements to dividend pay-

ments are excluded.

3.3.4 A sale and/or transfer of shares of the Company may in the future be subject to finan-

cial transaction tax

On January 22, 2013, the Council of the European Union adopted a decision authorizing eleven EU

member states, inter alia Germany, to proceed with the introduction of a financial transaction tax under

the European Union's "enhanced cooperation procedure". The European commission on February 14,

2013 adopted a draft directive for the implementation of the financial transaction tax. Since then the

introduction has been subject to controversial discussions resulting in uncertainty of its introduction,

scope, design and entry into force. The German government is still considering introducing a financial

transaction tax (Finanztransaktionssteuer). If and when such financial transaction tax will be intro-

duced, it may also be applicable on sales and/or transfers of shares in the Company resulting in the

respective shareholder’s obligation to pay those taxes when selling and/or transferring shares in the Company.

3.4 Tax Risks

3.4.1 De Raj Group may have to pay additional taxes following tax audits

The De Raj Group is subject to tax audits on a regular basis. No tax audits have been performed until

now at the level of De Raj. Tax assessment notices at the level of the De Raj Group companies are

not finally assessed, and thus, in general, are subject to future tax audits by the relevant competent

tax office. Tax audits or divergent legal interpretations by the tax authorities could lead to additional

tax liabilities including interest, which could have a significant adverse effect on the net assets, finan-

cial condition, and results of operations of De Raj or the De Raj Group.

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3.4.2 De Raj Group may subject to additional taxes in Germany

De Raj may be subject to the German Foreign Tax Act if it is (i) holding at least participations of more

than 50% in a foreign company at the end of the foreign company's relevant fiscal year, and (ii) such

foreign company is generating passive income, which (iii) is subject to tax at an income rate of less

than 25%. Since the lease income derived by Labuan Companies is subject to income tax of less than

25 % and De Raj holds directly all shares in such entities, in general, the German CFC rules are ap-

plied. However, the equipment lease income is derived only from operating leases and is only consid-

ered to be passive from a CFC perspective, if the leases do not form part of an operational business.

Provided De Raj is not able to prove that the income, e.g. derived by Hummingbird Energy Inc., is

generated in the course of an overall active business, the income, determined according to German

tax provisions, might be attributed to Germany and fully taxed for corporate income and trade tax pur-

poses at approximately 32%. The same would apply in case Gryphon Energy (SEA) and De Raj Ener-

gy are generating passive income which is subject to tax at an income tax rate below 25% and if no

active business is maintained. This could have a significant adverse effect on the net assets, financial

condition and results of operations of De Raj and De Raj Group.

3.4.3 De Raj Group’s business is subject to the general legal and tax environment in Ger-many and the other countries in which De Raj Group is active

De Raj Group’s business is subject to the general legal and tax framework in Germany and the other

countries in which De Raj Group is active. The legal situation may change in the future, possibly with

retroactive or retrospective effect at any time and on short notice. Thus, changes in tax legislation,

administrative practice of German or foreign tax authorities or case law could have adverse tax con-

sequences for De Raj and De Raj Group. For example, there could be increases in the rates of capital

gains tax. Additionally, changes could be applicable to the ability to depreciate assets held, which

could have a significant adverse effect on the attractiveness of De Raj Group’s assts. Further, the German government is currently considering introducing a financial transaction tax (Fi-

nanztransaktionssteuer) which, if and when introduced, may also be applicable on sales and/or trans-

fers of shares of the De Raj Group companies. If these changes in the legal or tax framework or its

interpretation occur, individually or together, or if other changes of the legal or tax framework should

arise affecting negatively De Raj Group’s business, this could have a significant adverse effect on the net assets, financial condition and results of operations of De Raj and De Raj Group.

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4. GENERAL INFORMATION

4.1 Responsibility for the Content of this Prospectus

De Raj Group AG (the “Company”, “De Raj”, or the “Issuer”), with its seat in Cologne and its regis-

tered office at c/o Heuking Kühn Lüer Wojtek, Magnusstr. 13, 50672 Cologne, along with ACON

Actienbank AG with its seat in Munich, Heimeranstr. 37, 80339 Munich, Germany (“ACON” or the

“Listing Agent”) assume responsibility for the contents of this securities prospectus (the “Prospec-

tus”) pursuant Section 5 paragraph 4 of the German Securities Prospectus Act (Wertpapierpro-

spektgesetz – WpPG) and declare that the information contained therein is, to the best of their

knowledge, correct and contains no material omissions, and that they have taken all reasonable care

to ensure that the information contained therein is, to the best of their knowledge, in accordance with

the facts and contains no omissions likely to affect the import of the Prospectus.

In accordance with Annex I of the Regulation 2004/809/EC (Prospectus Directive Regulation), De Raj

and ACON further declare, that they have taken all reasonable care to ensure that the information

contained in this Prospectus is, to the best of their knowledge, in accordance with the facts and con-

tains no omission likely to affect the import of this Prospectus. If an investor files claims in court on the

basis of the information contained in this Prospectus, the plaintiff investor may be required by the laws

of the individual member states of the European Economic Area (Europäischer Wirtschaftsraum) to

bear the cost of translating the Prospectus before proceedings begin.

The information in this Prospectus will not be updated subsequent to the date hereof except for any

significant new event or significant error or inaccuracy relating to the information contained in this Pro-

spectus that may affect an assessment of the shares of the Company and occurs or comes to light

following the approval of the Prospectus, but before the completion of the admission of the shares of

De Raj to trading. These updates must be disclosed in a prospectus supplement in accordance with

Section 16 paragraph 1 of the WpPG.

4.2. Purpose of this Prospectus

The subject matter of this Prospectus is the admission to trading on the regulated market (Regulierter

Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), sub-segment General Stand-

ard, of 35,000,000.00 ordinary bearer shares of the Company with no par value (Stückaktien), each

such share representing a notional value of EUR 1.00 and carrying full dividend entitlement from

1 January 2017 (the “Shares”) as described hereinafter in detail. The issuance of the Shares and the admission of the Shares to trading as explained above will be carried out according to German law

and in Euro currency.

4.3. Forward-Looking Statements

This Prospectus contains forward-looking statements. A forward-looking statement is any statement

that does not relate to historical facts and events. This also applies to statements in the sections

“3. Risk Factors”, “8. Business Description”, and “Recent Developments and Outlook” as well as

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wherever this Prospectus contains information on future earning capacity, plans and expectations

regarding business and management, growth and profitability and general economic and regulatory

conditions to which De Raj and its subsidiaries are exposed. Forward-looking statements in this Pro-

spectus are based on estimates and assessments made to the best of the Company’s present knowledge. The sections “3. Risk Factors”, “8. Business Description”, and “Recent Developments and Outlook” are of particular importance as they contain detailed descriptions of factors that could impact

the De Raj Group AG and its subsidiaries Gryphon Energy (SEA) Sdn Bhd, Hummingbird Energy (L)

Inc, Condor Energy (L) Inc, De Raj Energy Sdn Bhd and Gaea Power GmbH (De Raj Group AG and

its subsidiaries collectively “De Raj Group”) and the industry in which the De Raj Group is active.

These forward-looking statements are based on current plans, assumptions, estimates, projections

and expectations of the De Raj Group, which, while appropriate at this time, may later prove incorrect

for a variety of reasons and factors, the occurrence or non-occurrence of which could cause the per-

formance of the De Raj Group to differ materially from the performance and development of expecta-

tions expressed or implied in the forward-looking statements.

These factors include, among others:

• changes in general economic conditions in Germany or other countries in which De Raj

Group is active, business or legal conditions,

• political or regulatory changes,

• demographic changes,

• changes affecting interest rate levels,

• changes in the competitive environment of the De Raj Group,

• other factors as set forth in the section “3. Risk Factors” and

• factors that are not known to the Company at this time.

If risks or uncertainties materialise due to the occurrence of one or more of these factors in a single

instance or in multiple instances, or should the occurrence of any one or more of these factors prove

the underlying assumptions of the De Raj Group incorrect, it could cause actual results, including

causing the financial condition and profitability of the De Raj Group to differ materially from or fail to

meet expectations.

These forward-looking statements speak only as of the date of this Prospectus. Neither the Company

nor ACON assume any obligation, except as required by law, to up-date any forward-looking state-

ment or to conform any such statement to actual events or developments. Nevertheless, according to

Section 16 paragraph 1 WpPG, the Company has the obligation to disclose any significant new event

or significant error or inaccuracy relating to the information included in this Prospectus that may affect

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an assessment of the securities and arises or is noted following the approval of this Prospectus, but

before the completion of the admission of the securities to trading on an organised market. These

updates must be disclosed in a supplement to this Prospectus in accordance with Section 16 para-

graph 1 WpPG.

4.4. Note on Third-Party Information on Market Information and Technical Terms

Information in this Prospectus adopted from third parties has not been verified by the Company. Such

information was gathered by the Company and accurately reproduced. As far as the Company is

aware and is able to ascertain from the information published, no facts have been omitted which would

render the reproduced information inaccurate or misleading.

Information on the market environment, market developments, growth rates, market trends and the

competitive situation in the areas where the De Raj Group operates, was based on assessments of

the Company.

Information extracted thereof that is thus not derived from independent sources may differ from esti-

mates made by competitors of the De Raj Group or from the analyses of independent sources.

Technical terms used in this Prospectus are defined when first used and additionally in the glossary at

the end of this Prospectus.

4.5. Auditor

The auditor of the financial statements of the Company as of and for the fiscal years ended

31 December 2015 and 31 December 2016 was Crowe Kleeberg Audit GmbH, Augustenstr. 10,

80333 Munich, Germany (“Kleeberg”). Kleeberg is a member of the German Chamber of Public Ac-

countants (Wirtschaftsprüferkammer), Berlin, Germany.

Kleeberg audited the financial statements of the Company as of and for the fiscal years ended 31 De-

cember 2015 and 31 December 2016, which both were prepared in accordance with the principals of

the German Commercial Code (Handelsgesetzbuch) in accordance with Section 317 HGB and Ger-

man generally accepted standards for the audit of financial statements promulgated by the German

Institute of Public Auditors (Institut der Wirtschaftsprüfer, “IDW”) and issued an unqualified audit opin-

ion (uneingeschränkter Bestätigungsvermerk) thereon, in each case.

4.6. Note on Figures and Financial Information

The pro-forma consolidated financial information for De Raj Group as of and for the fiscal year ended

31 December 2016 and the interim period from 1 January 2017 until 30 June 2017 contained in this

Prospectus has been extracted or derived from the audited financial statements of the companies

Hummingbird (L) Inc., De Raj Energy Sdn Bhd, Gryphon SEA Sdn Bhd and Condor Energy (L) Inc

(each according to IFRS) and the audited financial statements of De Raj and Gaea Power GmbH

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(each according to HGB) as of 31 December 2017 and the respective internal accounting records or

management reporting systems of the aforementioned companies, unless stated otherwise.

The pro-forma consolidated financial information was prepared in accordance with the rules of the

Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer (IDW)) for preparing pro-forma

financial information (IDW Accounting Practice Statement: Preparation of Pro-Forma Financial Infor-

mation (IDWAcPS AAB 1.004) (IDW Rechnungslegungshinweis: Erstellung von Pro-Forma-Finanz-

informationen (IDW RH HFA 1.004)). The audited pro-forma consolidated financial information (IFRS)

mentioned above were audited by Kleeberg and are included in this Prospectus under “Financial In-formation”.

The financial information regarding the company Hummingbird Energy (L) Inc were derived from the

annual financial statements (IFRS) as of and for the fiscal years ended 31 December 2016, 31 De-

cember 2015 and 31 December 2014. The financial information regarding the company Gryphon En-

ergy (SEA) Sdn Bhd was derived from the annual financial statements (IFRS) as of and for the fiscal

year ended 31 December 2016. The aforementioned financial statements were audited by Crowe

Horwath (Labuan) LLP, Registered Office, Level 1, Lot 7, Block F, Saguking Commercial Building,

Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia.

The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L)

Inc, Gryphon Energy (SEA) Sdn Bhd, De Raj Energy Sdn Bhd, and Condor Energy (L) Inc are in ac-

cordance with the IFRS as adopted by the European Union.

Where financial information in this Prospectus is labelled “audited”, this means that it was extracted from (i) the audited pro-forma consolidated financial information (IFRS) of De Raj as of and for the

fiscal year ended 31 December 2016 and for the first half year 2017 ended 30 June 2017, (ii) the an-

nual financial statements (HGB) of De Raj as of and for the fiscal years ended 31 December 2016 and

31 December 2015 and (iii) the annual financial statements (IFRS) of Hummingbird Energy Inc. as of

and for the fiscal years ended 31 December 2016, 31 December 2015 and 31 December 2014. Where

financial information in this Prospectus is labelled “unaudited”, this means that it was extracted or de-rived from the internal accounting records or management reporting systems of De Raj Group or is

based on calculations of financial information from the above mentioned sources.

The financial information in this Prospectus is shown in thousands of Euro (in EUR thousand), unless

stated otherwise. Certain financial information (including percentages) has been rounded according to

established commercial standards. As a result, the aggregate amounts (sum totals or sub-totals or

differences or if numbers are put in relation) may not correspond in all cases to the aggregated

amounts of the underlying (unrounded) figures and may not add up exactly to the totals included. Fi-

nancial information presented in parentheses or with a minus (“-“) denotes the negative value of such number presented. In respect of financial information set out in this Prospectus, “n.a.” or a dash (“-”) signifies that the relevant figure is not available, while a zero (“0”) signifies that the relevant figure is available but has been rounded to zero.

- 84 -

4.7. Documents Available for Inspection

This Prospectus will be published on the Company’s website at http://www.thederajgroup.com. For the

period during which this Prospectus remains valid, hard copies of the following documents are availa-

ble for inspection during regular business hours at De Raj’s offices, located at c/o Heuking Kühn Lüer

Wojtek, Magnusstr. 13, 50672 Cologne, Germany:

(i) the articles of association of the Company (the “Articles of Association”);

(ii) the following financial information:

• Unaudited Interim Financial Information of De Raj Group AG for the six-months-

period ended June 30, 2017 (HGB)

• Audited Financial Statements of De Raj Group AG for the financial year ended

31 December 2016 (HGB)

• Audited Financial Statements of De Raj Group AG for the abbreviated financial

year ended 31 December 2015 (HGB)

• Unaudited Interim Financial Information of Hummingbird Energy (L) Inc. for the six-

months-period ended June 30, 2017 (IFRS)*

• Audited Financial Statements of Hummingbird Energy (L) Inc. for the financial year

ended 31 December 2016 (IFRS)*





• Unaudited Interim Financial Information of Gryphon Energy (SEA) Sdn Bhd for the

six-months-period ended June 30, 2017 (IFRS)*

• Audited Financial Statements of Gryphon Energy (SEA) Sdn Bhd for the financial

year started from 26 November 2015 and ended on 31 December 2016 (IFRS)*

• Audited Pro-Forma Consolidated Financial Information of De Raj Group AG

for the financial year ended 31 December 2016 and the six-months-period ended

30 June 2017 (IFRS, as adopted by the European Union)

(*The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L) Inc and Gryphon Energy (SEA) Sdn Bhd are in accordance with the IFRS as adopted by the European Union)

(iii) this Prospectus; and

(iv) any supplement to this Prospectus pursuant to Section 16 WpPG.

- 85 -

5. THE LISTING

5.1 Admission to Exchange Trading, Individual Share Certificates, Delivery and Transfer-

ability

The Company will apply for admission of 35,000,000 ordinary bearer shares with no par value

(Stückaktien), each with a pro-rata amount of EUR 1.00 per share in the share capital of the Company

and with full dividend rights for the financial year ending 31 December 2017 and for all subsequent

financial years (the “Shares”) to trading in the regulated market (Regulierter Markt) of the Frankfurt

Stock Exchange.

The admission of the Shares to trading on the regulated market of the Frankfurt Stock Exchange

(General Standard) is expected to take place on 21 November 2017. The commencement of trading of

the Shares is expected to take place on 22 November 2017.

According to the Company’s Articles of Association, shareholders are not entitled to demand individual share certificates.

5.2 ISIN, WKN, Trading symbol

The Shares will hold the following ISIN/WKN and trading symbol:

International Securities Identification Number (ISIN): DE000A2GSWR1

Securities Identification Number (WKN): A2GSWR

Trading symbol: DRJ

5.3 Form, Voting Rights

All of the Shares are ordinary bearer shares with no par value and a notional value of EUR 1.00. Each

of the Shares holds the same rights as all other shares of the Company and does not convey any

additional rights or advantages. The Shares carry full dividend entitlement from 1 January 2017.

Each Share confers one vote at shareholders’ meetings. There are no restrictions on voting rights.

5.4 Dividend Entitlement and Participation in Liquidation Proceeds

The Shares carry full dividend entitlement from 1 January 2017. In the event of the Company’s liquida-tion, shareholders are entitled to any remaining liquidation surplus in proportion to their shareholding

after deduction of the Company’s liabilities.

5.5 Disposal Restrictions and Transferability

The Shares are freely transferable.

- 86 -

5.6 Timetable of the Listing

The anticipated timetable for the Listing of the Shares to the regulated market of the Frankfurt Stock

Exchange (General Standard) is as follows:

15 November 2017

Approval of the Prospectus by the German Fed-eral Financial Supervisory Authority (Bundesan-stalt fur Finanzdienst/eistungsaufsicht, "BaFin").

Publication of the approved Prospectus on the Company's website.

Applications for listing filed with the Frankfurt Stock Exchange (Frankfurter Wertpapierborse)

21 November 2017

Listing approval issued by the Frankfurt Stock Exchange.

22 November 2017

First Day of Trading

The Prospectus will be published on the Company’s website at www.thederajgroup.com. Printed cop-

ies of the Prospectus will also be available upon publication from the Company and ACON free of

charge during normal business hours at the following addresses: ACON Actienbank AG, Heimeranstr.

37, 80339 Munich.

Further information on the website listed in this section and information accessible via these websites

is neither part of nor incorporated by reference into this Prospectus.

5.7 Listing Agreement

In connection with the Listing, Gaea Power GmbH and ACON have entered into a listing agreement.

The listing agreement includes customary representations and warranties given by Gaea Power

GmbH to ACON.

The listing agreement also stipulates that the Gaea Power GmbH must release ACON from certain

liabilities and that their obligations under the listing agreement are contingent on the fulfilment of cer-

tain conditions, including, for example, the receipt of a standard legal opinion that ACON deems satis-

factory.

ACON has a right to terminate the Listing Agreement for cause under certain circumstances. These

circumstances include, in particular, the non-occurrence of conditions precedent under the listing

agreement.

- 87 -

5.8 Lock-up Agreement

The shareholders of the Company Mr Nagendran C Nadarajah, Ms Renata Anita de Raj, Mr Nicholas

Arnand de Raj, Mr Alexander Arjun de Raj, Maya Terang Sdn. Bhd. and Lexanda International Limited

have agreed with ACON that, to the extent permitted by law, for a period of six months after the listing

of the shares to the Regulated Market of the Frankfurt Stock Exchnage not to directly or indirectly sell,

offer, commit to sell or offer, or announce a sale or an an offer to dispose of, any of their shares in the

Company or rights that can be converted into, or exchanged for, such shares or that carry rights to

acquire such shares and not to enter into o

ther transactions (including transactions concerning derivative instruments) the economic effect of

which would be similar to that of the measures described above, without the prior written consent of

ACON.

- 88 -

6. REASONS FOR THE LISTING AND COST OF THE LISTING

The Company intends to expand its business in the future. To facilitate this expansion, the Company

opted for the listing to gain direct access to the capital markets and thus benefit from additional

sources for financing of the future growth of the business.

The Company estimates that the total costs of the listing will amount to approximately

EUR 515,000.00.

The costs of the listing include, inter alia, costs for external advice (in particular by banks (including

the listing agreement with ACON mentioned in Section 5.7, Listing Agreement), legal and tax advi-

sors), audit fees (auditors), transaction costs, costs for notarial recordings, costs for filings with the

commercial register and costs of the planned stock exchange admissions, including their preparation.

- 89 -

7. GENERAL INFORMATION ABOUT THE COMPANY

7.1 Name, Formation, Registration with the Commercial Register, Fiscal Year, Term and

Business Seat of De Raj

De Raj Group AG was incorporated in Germany under the German Act on Stock Corporations (Ak-

tiengesetz, “AktG”) as a stock corporation on 14 January 2015 and firstly entered into the commercial

register of the local court of Berlin/Charlottenburg under the number HRB 165434 B on 6 March 2015.

The legal and commercial name of De Raj Group AG is “De Raj Group AG”. The business address is “c/o Heuking Kühn Lüer Wojtek, Magnusstr. 13, 50672 Cologne”. The telephone number is +49-

(0)221-2052-0.

The issued and paid-up nominal share capital of De Raj Group AG is EUR 35,000,000.00 comprising

of 35,000,000 ordinary bearer shares with no par value (Stückaktien) each with a pro-rata amount of

EUR 1.00 in the share capital.

7.2 Business Purpose of De Raj

According to Section 2 of the Company’s articles of association, the business purpose of the Company

is the management of its own assets and to acquire, manage and sell interests in enterprises in the

business segments biomass-cogeneration plants, oil and gas, in particular oil-exploration- and -

production industry as well as natural gas-power plants.

7.3 Formation and History of De Raj

Founders of De Raj

De Raj was founded by VRB Vorratsgesellschaften GmbH, Berlin. The founder of the Company, VRB

Vorratsgesellschaften GmbH, is a company active in the field of the formation and selling of shelf

companies. The intial name of the Issuer was Rubin 82. AG and its initial seat was in Berlin and the

initial nominal share capital amounted to EUR 50,000.00, divided into 50,000 bearer shares with no

par value (Stückaktien), each representing a notional value of EUR 1.00.

On 20 July 2017, VRB Vorratsgesellschaften GmbH sold all of its shares to Renata Anita De Raj, Al-

exander Arjun De Raj and Nicholas Arnand De Raj. After the sale of the shares, the name of the

Company was changed to De Raj AG and subsequently to De Raj Group AG. The seat of the Compa-

ny was transferred to Cologne and the business purpose was changed to the current business pur-

pose as set out above under sec. 7.2. The acquisition of the shares in the Company by Renata Anita

De Raj, Alexander Arjun De Raj and Nicholas Arnand De Raj, the change of the business purpose and

the company name constituted an economic new foundation of the Company according to the court

rulings which was notified to the commercial register accordingly. In this respect Renata Anita De Raj,

Alexander Arjun De Raj and Nicholas Arnand De Raj may be regarded as founders of the Company

not from a legal but from an economic point of view.

- 90 -

On 11 October 2017, the nominal share capital of De Raj Group AG was increased against contribu-

tion in kind from EUR 50,000.00 to EUR 35,000,000.00 by issuing 34,950,000 new bearer shares with

no par value (Stückaktien), each representing a notional value of EUR 1.00 (for details cf. Section

7.4.3 below “Formation of the De Raj Group”).

7.4 De Raj Group – Structure, Companies and Formation

7.4.1 Structure Chart of De Raj Group

The following chart provides an overview of the group structure of De Raj Group:

7.4.2 Companies of the De Raj Group

The Company holds shares in five companies (described in more detail in the following).

Currently, the Company acts as a holding and service company. The essential functions of the Com-

pany are the management of the De Raj Group and the procurement of financing and equity.

In the future, it cannot be ruled out that the Company will also extend its activities beyond its function

as a holding and service company and may also assume operational tasks itself. However, there are

no definitive plans to do so at the date of this prospectus.

The following companies are part of the De Raj Group:

7.4.2.1 Gryphon Energy (SEA) Sdn Bhd

(a) History and business

De Raj Group AG (Germany)

Gaea Power GmbH(GER)

100%

German Power

Division

100%100%


(Labuan)

GryphonEnergy (SEA)

Sdn Bhd(Malaysia)

CondorEnergy (L)

Inc(Labuan)

De Raj Energy Sdn

Bhd(Malaysia)

100%100%

Oil & GasDivision

- 91 -

Gryphon Energy (SEA) Sdn Bhd, with the Company number 1167327 - X, was incorporated

in Malaysia under the Companies Act 1965 (which is now superseded by the new Compa-

nies Act 2016) as a private company limited by shares

on 26 November 2015 and commenced its business on the same date.

The principal activities of Gryphon Energy (SEA) Sdn Bhd are project management, contract

management, operations, maintenance and management of the assets of the De Raj Group

and provision of related services.

Gryphon Energy (SEA) Sdn Bhd is currently a partner of a consortium which has a contract

with PT Pertamina Hulu Energi – West Madura Offshore (an Indonesian state owned oil

company) for the deployment of one of De Raj Group’s oil rigs, including operations and maintenance (the contract with Pertamina Hulu Energi – West Madura Offshore in the follow-

ing referred to as “Pertamina Contract”, cf. also section 8.7.1, “Material contracts during the

ordinary course of business”, for details).

(b) Share Capital

The issued and paid-up share capital of Gryphon Energy (SEA) Sdn Bhd is RM 1,000,000

comprising of 1,000,000 ordinary shares.

(c) Shareholder

De Raj Group AG holds 100% of the shares in Gryphon Energy (SEA) Sdn Bhd.

7.4.2.2 Hummingbird Energy (L) Inc


Hummingbird Energy (L) Inc., with the Company number LL07383, was incorporated in La-

buan, Malaysia under the Offshore Companies Act 1990 (which has been renamed to Labu-

an Companies Act 1990) as a company limited by shares on 3 December 2009 and com-

menced its business on the same date. Hummingbird Energy (L) Inc. is also subjected to the

Labuan Business Activity Tax Act 1990 and the Labuan Financial Services and Securities

Act 2010 due to the nature of assets leasing business.

The principal activities of Hummingbird Energy (L) Inc are the ownership of the production

facilities which are installed on the upper part of the oil rigs (e.g. the oil production plant, the

accommodation block and the drilling rig, also referred to as “Topside Equipment”, cf. also section 8., Business Description), the entering into leasing agreements regarding the Top-

side Equipment as lessor and provision of related services.

Hummingbird Energy (L) Inc. is currently leasing production facilities as lessor to Gryphon

Energy (SEA) Sdn Bhd as lessee, including operations and maintenance in view of the ful-

fillment of the Pertamina Contract (cf. also section 8.7.1, “Material contracts during the ordi-

nary course of business”, for details).

- 92 -

(b) Share Capital

The issued and paid-up share capital of Hummingbird Energy (L) Inc. is USD 3,000,000

comprising of 3,000,000 ordinary shares.

(c) Shareholder

De Raj Group AG holds 100% of the shares in Hummingbird Energy (L) Inc.

7.4.2.3 Condor Energy (L) Inc


Condor Energy (L) Inc., with the Company number LL08804, was incorporated in Labuan,

Malaysia under the Labuan Companies Act 1990 as a company limited by shares on 16

March 2012 and commenced its business on the same date.

The principal activity of Condor Energy (L) Inc is the ownership and holding of the Jack-up

Rigs of the De Raj Group which are not in use, presently the Jack-up Rigs GAEA 3, GAEA 4,

POSEIDON, Malaikat and GAEA 200 (cf. also the explanation under section 8, “Business

Description”, below), the holding of further assets (cf. the information below in Section 8.,

“Business Description”, 8.1 “Introduction and Overview”) and the provision of related ser-

vices.

(b) Share Capital

The issued and paid-up share capital of Condor Energy (L) Inc. is USD 79,000,000 compris-

ing 79,000,000 ordinary shares.

(c) Shareholder

De Raj Group AG holds 100% of the shares in Condor Energy (L) Inc.

7.4.2.4 De Raj Energy Sdn Bhd


De Raj Energy Sdn Bhd (formerly Sandakan Offshore (Marine) Sdn Bhd), with the Company

number 1156485-H, was incorporated in Malaysia under the Companies Act 1965 (which is

now superseded by the new Companies Act 2016) as a private company limited by shares

on 21 August 2015 and commenced its business on the same date.

The principal activity of De Raj Energy Sdn Bhd is mainly for the holding of patents of the De

Raj Group. De Raj Energy Sdn Bhd also accommodates several divisions of staffing which

includes the Licensing Division and Administrative support functions.

(b) Share Capital

The issued and paid-up share capital of De Raj Energy Sdn Bhd is RM 100,300,000 com-

prising 100,300,000 ordinary shares.

- 93 -

(c) Shareholder

De Raj Group AG holds 100% of the shares in De Raj Energy Sdn Bhd.

7.4.2.5 Gaea Power GmbH


Gaea Power GmbH with registered seat in Viersen was incorporated in Germany under the

German Act on Limited Liability Companies (GmbHG) as a private limited company on 14

January 2016 and was firstly entered into the commercial register of the local court of

Moenchengladbach under the number HRB 16934 on 22 January 2016. The business activi-

ties of Gaea Power GmbH are the trade and distribution of block heating power plants and

all activities associated therewith.

(b) Share Capital

The issued and paid-up nominal share capital of Gaea Power GmbH is EUR 25.000,00

comprising of 25.000 ordinary shares of EUR 1.00 each.

(c) Shareholder

De Raj Group AG holds 100% of the shares in Gaea Power GmbH.

7.4.3 Formation of the De Raj Group

In October 2017 De Raj acquired shares in the companies listed above in section 7.4.2 which now,

together with De Raj, form the De Raj Group. In this context it is to be noted that the shares in the

acquired companies were directly or indirectly held by members of the de Raj Family, i.e. Mr Nagen-

dran C Nadarajah (management board member), his wife Ms Renata Anita de Raj (supervisory board

member) and their sons Mr Nicholas Arnand de Raj (management board member) and Mr Alexander

Arjun de Raj (supervisory board member).

The acquisition of the shares and thus the formation of De Raj Group was conducted as follows:

Contribution of the shares in Hummingbird Energy (L) Inc

On 11 October 2017, Gryphon Energy Corporation PTE. LTD., Singapore, the former sole shareholder

of the company Hummingbird Energy (L) Inc, contributed all of its shares in Hummingbird Energy (L)

Inc to the Company on the basis of a contribution agreement which was entered into in the context of

an increase of the nominal share capital of the Company against contribution in kind. In this capital

increase the nominal share capital was increased from then EUR 50,000.00 to EUR 35,000,000.00 by

issuing 34,950,000 new bearer shares (Stückaktien), each representing a notional value of EUR 1.00,

to the former shareholder of Hummingbird Energy (L) Inc. The capital increase was resolved upon by

the shareholders’ meeting of the Company on 11 October 2017 and became effective with its registra-

tion in the commercial register on 20 October 2017. The capital increase against contribution in kind

constituted a post incorporation formation (Nachgründung) according to § 52 German Stock Corpora-

tion Act which was filed and registered with the commercial register accordingly.

- 94 -

Contribution of the shares in Gryphon Energy (SEA) Sdn Bhd, Condor Energy (L) Inc, De Raj

Energy Sdn Bhd and Gaea Power GmbH

On 11 October and 2 November 2017, the Company and its shareholder Alexander Arjun de Raj en-

tered into two contribution agreements whereby Alexander Arjun de Raj was obliged to contribute all

of the shares in the companies Gryphon Energy (SEA) Sdn Bhd, Condor Energy (L) Inc, De Raj Ener-

gy Sdn Bhd and Gaea Power GmbH to the Company as a voluntary payment into the capital reserves

(§ 272 para. 2 Nr. 4 German Commercial Code, Handelsgesetzbuch, HGB) of the Company without

any consideration (“Voluntary Contribution Agreements”). According to the Voluntary Contribution

Agreement, the shares in the aforementioned companies were supposed to be transferred by the re-

spective former shareholders in these companies, namely GRYPHON ENERGY CORPORATION

PTE. LTD., Singapore, Global Energy Opportunities S.a.r.l, Luxembourg, Mr Nagendran Nadarajah

and Mr Alexander Arjun de Raj in fulfillment of the obligations of Alexander Arjun de Raj under the

Voluntary Contribution Agreements (§ 267 German Civil Code, Buergerliches Gesetzbuch, BGB, ful-

fillment by third parties). The transfer of the shares was effected accordingly in October 2017 (for de-

tails cf. also Section 8.7.2, “Material contracts outside the ordinary course of business”).

As a consequence of these contributions the book value of the respective contributed shares was

booked into the capital reserves of the Company.

The book value ascribed to the shares in the respective company is listed in the following table:

Company Contribution Contributor Book Value

Gryphon Energy

(SEA) Sdn Bhd

100 % of the

shares

Alexander Arjun

de Raj

EUR

181,319.00

Condor Energy

(L) Inc

100 % of the

shares

Alexander Arjun

de Raj

EUR

66,050,818.00

De Raj Energy

Sdn Bhd

100 % of the

shares

Alexander Arjun

de Raj

EUR

20,060,150.00

Gaea Power

GmbH

100 % of the

shares

Alexander Arjun

de Raj

EUR

4,000,000.00

Contribution of the Patents

Furthermore, it is to be noted that De Raj Energy Sdn Bhd were assigned the patents listed in Section

8.12 (“Intellectual Property Rights”) in October 2017, i.e. shortly before the contribution of its shares

into De Raj Group AG, from Kingtime International Limited, which is ultimately held by members of the

De Raj Family, and Ms Renata Anita de Raj and Mr Nagendran Nadarajah personally. However, in

view of some of the patents the registration of the transfer of the patents is still pending so that the

transfer of the legal ownership in the patents has not become effective yet (for details and the risk

- 95 -

associated with the outstanding effectiveness of the transfer of the legal ownership cf. also the risk

factor under 3.1.26, “Risks arise for the De Raj Group's business from the acquisition of patents”, Sec-tion 8.12, “Intellectual Property Rights” and Section 8.7.2, “Material contracts outside the ordinary

course of business”).

Contribution of the Jack-up Rigs

Moreover, it is also to be noted that the ownership in the Jack-up Rigs currently held by Condor Ener-

gy (L) Inc (cf. Section 8., “Business Description”) were transferred by Lexanda International Limited,

British Virgin Islands, which is ultimately held by members of the De Raj Family, to Condor Energy (L)

Inc on 21 September 2017, i.e. shortly before the contribution of its shares into De Raj Group AG (for

details cf. also Section 8.7.2, “Material contracts outside the ordinary course of business”).

7.5 Tax status of De Raj

De Raj is currently registered for tax purposes under the name Rubin 82. AG in Berlin. The competent

tax office has been the Tax Office Berlin IV for corporations and its tax number is 30/138/31642. The

corporate income tax including solidarity surcharge for the year 2015 has been finally assessed. No

tax audit has been taken place since de Raj has been only established as shelf company at the begin-

ning of 2015.

However, since the seat and management of De Raj has been moved to Cologne the competence of

the tax authorities will also change and move to Cologne.

- 96 -

8. BUSINESS DESCRIPTION

8.1 Introduction and Overview

Oil and Gas Division

The oil and gas division of the De Raj Group is a service provider providing services encompassing

the full spectrum of the offshore upstream oil and gas supply chain. The division is capable of being

involved in

(1) offshore exploration which involves the search for rock formations associated with oil or nat-

ural gas deposits, and includes geophysical prospecting and/or exploratory drilling,

(2) well development, which occurs after exploration has located an economically recoverable

field, and involves the construction of one or more wells from the beginning (so-called “spud-ding”) to either abandonment if no hydrocarbons are found, or to well completion if hydrocar-bons are found in sufficient quantities,

(3) production, which is the process of extracting the hydrocarbons and separating the mixture

of liquid hydrocarbons, gas, water, and solids, removing the constituents that are non-

saleable, and selling the liquid hydrocarbons and gas

and, finally,

(4) site abandonment which involves plugging the well(s) and restoring the site when a recently-

drilled well lacks the potential to produce economic quantities of oil or gas, or when a pro-

duction well is no longer economically viable for production.

The oil and gas division of De Raj Group provides a high quality, comprehensive and cost effective

solution for the monetization of oil and gas fields. The potential clients of the oil and gas division of De

Raj Group AG are National Oil Companies (“NOC’s”), companies having stakes in oil fields as well as

other technological enterprises.

The division is strategically placed with a full range of assets ranging from jack-up rigs, drilling equip-

ment, processing equipment and marine equipment which are capable of handling offshore oil and gas

extraction and production for so called green fields (i.e. oil and gas fields that have not been devel-

oped yet and thus have no existing infrastructure), brown fields (i.e. oil and gas fields that have al-

ready been developed and thus have to be built around an existing infrastructure) and marginal fields

(i.e. oil and gas fields located in remote locations with little or no infrastructure and of a size or nature

that often makes it impossible to predict with certainty the amount or composition of recoverable hy-

drocarbons in place). The business concept of the oil and gas division of De Raj Group is to enter into

agreements on the deployment of its oil rigs in oil and gas fields. Oil rigs consist of the platform, i.e.

the jack-up rigs, and the topside construction on the jack-up rigs, i.e. the topside equipment:

- 97 -

Jack-up rigs (“Jack-up Rigs”) are a type of mobile platform that consists of a buoyant hull fitted with a number of movable legs, capable of raising its hull over the surface of the sea. The buoyant hull ena-

bles transportation of the unit and all attached machinery to a desired location. Once on location the

hull is raised to the required elevation above the sea surface supported by the sea bed. The legs of

such units may be designed to penetrate the sea bed, may be fitted with enlarged sections or footings,

or may be attached to a bottom mat.

Currently, the oil and gas division of De Raj Group holds the following five Jack-up Rigs in total owned

as property by Condor Energy (L) Inc.:

GAEA 3

GAEA 3 is a Bethlehem JU 200MC which is a Mat - Cantilever type Jack-up Rig. Having total legs

length of 269 ft, GAEA 3 is capable to operate up to 200 ft water depth. GAEA 3 is also ready to be

converted to a MOPU as and when it is needed.

GAEA 4

GAEA 4 is a Bethlehem JU 200MC which is a Mat - Cantilever type Jack-up Rig. Having total legs

length of 269 ft, GAEA 4 is capable to operate up to 200 ft water depth. GAEA 3 is also ready to be


POSEIDON

POSEIDON is a LeTourneau Technologies designed 116-S Class Independent Legs Slot Jack-up Rig

with 343 ft of legs which is able to operate up to 200 ft water depth. POSEIDON is also ready to be

converted to a MOPU as and when it is needed. Poseidon has previously worked with 477 ft of legs

giving the rig 350 ft water depth capability. The legs were shortened to 343 ft when the rig was moved

to the North Sea and upgraded to be in full compliance with North Sea requirements in 1992 with life

enhancement completed in 2009. Upgrades included adding a level to the accommodations and com-

plete rebuilding with two man rooms. The Poseidon can be restored to 350 ft water depth capability

with the simple addition of leg sections, or be returned to the North Sea with the current leg configura-

tion.

MALAIKAT

MALAIKAT is a LeTourneau Technologies designed 84-S Class Independent Legs Slot Jack-up Rig

rated for operation of up to 350 ft water depth. MALAIKAT is also ready to be converted to a MOPU as

and when it is needed.

GAEA 200

GAEA 200 is a Bethlehem JU 200MC which is a Mat - Cantilever type Jack-up Rig. It has 3 column

legs each having a total length of 269 ft. GAEA 200 is capable of operating in 200 ft of water. GAEA

- 98 -

200 is equipped with complete drilling facilities for a drilling depth of up to 20,000 ft. GAEA 200 can be


The following table provides an overview of further statistics regarding the Jack-up Rigs, including

their current location. The Jack-up Rigs are currently not in use but cold stacked. Cold stacking refers

to measures taken when rigs are out of service for a longer period of time to reduce maintenance

costs on the one hand and to protect the material on the other hand. In this case steps are taken to

protect the rig’s facilities, including applying protective coatings, filling engines with protective fluids

etc.

Statistics of De Raj Group AG’s Jack-up Rigs

Name

POSEIDON

MALAIKAT

Gaea 3

Gaea 4

Gaea 200

Location West Cameron, US

West Came-ron, US

West Came-ron, US

West Came-ron, US

Johor Bahru, Malaysia

Length (ft) 248 248 157 157 157

Width (ft) 201 201 132 132 132

Deep (ft) 26 26 18 18 18

Deck Area (ft2) 13600 (excl 2100 slot)

13600 (excl 2100 slot)

10500 10500 10500

Leg

Type Truss Truss Tubular Tubular Tubular

Length (ft) 477 343 (original 477)

269 269 269

Size 30ft x 30ft 30ft x 30ft 11ft (OD*) 11ft (OD*) 11ft (OD*)

OD = Outside Diameter

Furthermore, the oil and gas division of De Raj Group AG holds as owner of property topside equip-

ment for the oil rigs (including facilities for Production separation, Gas export compression, Produced

water, flare gas, gas lift, gas power generation, accommodation and Helideck for processing 6000

barrels per day of crude oil, 4000 barrels per day of producing water, 75 million standard cubic feet per

day of gas processing and flare and 20 million standard cubic feet per day of gas lift).

While the jacket structure, which constitutes the lower half of the platform structure, is partly sub-

merged in sea, the topside equipment (“Topside Equipment”) refers to the upper half of the structure, above the sea level, outside the splash zone, on which equipment is installed. This includes the oil

production plant, the accommodation block and the drilling rig. They are modular in design and so can

be changed out if necessary allowing the Jack-up Rigs to be readily updated with the technology re-

quired for the specific demands of the client and the requirements of the oil and gas field in which the

oil rig is employed.

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Finally, the oil and gas division of De Raj Group AG also holds as owner of property equipment used

in drill ships (merchant vessels designed for use in exploratory offshore drilling of new oil and gas

wells or for scientific drilling purposes, “Drill Ships”).

Currently, parts of the Topside Equipment held by De Raj Group are in use and located on a Jack-up

Rig which is deployed in the KE-38 field off the Indonesian coast (cf. the explanations below under

“Business Development of the Oil and Gas Division since 20 February 2017”). The other Topside Equioment and equipment used in Drill Ships held by De Raj Group is currently not in use and located

in a rented warehouse in Johor Baru, Malaysia.

The book value of the Jack-up Rigs, the Topside Equipment and the equipment used in Drill Ships is

as follows:

Asset Company

of De Raj Group owning the

Asset as property

Book Value

Jack-up Rig GAEA 3 Condor Energy (L) Inc USD 10 Mio.


Jack-up Rig POSEIDON Condor Energy (L) Inc USD 6 Mio.

Jack-up Rig MALAIKAT Condor Energy (L) Inc USD 6 Mio.


Topside Equipment Hummingbird Energy (L) Inc USD 54.6 Mio.

Topside Equipment Condor Energy (L) Inc USD 11 Mio.

Equipment used in Drill Ships Condor Energy (L) Inc USD 13 Mio.

EXIM Bank has a charge on the Topside Equipment owned by Hummingbird as well as the insurance

policies on the Topside Equipment owned by Hummingbird and over all existing, future and floating

assets of Hummingbird Energy (L) Inc. Otherwise, the tangible assets currently held by companies of

De Raj Group are free from encumbrances (for further charges granted to EXIM Bank in view of intan-

gible assets cf. Section 9.3.2, “Collateralisation”).

The oil and gas division of De Raj Group AG comprises of four companies each having its own func-

tion:

1. Gryphon Energy (SEA) Sdn. Bhd employs the vast majority of the labour workforce and func-

tions as management arm of the oil and gas projects and general operations and enters into

contracts with the clients, namely National Oil Companies (“NOC’s”) 2. Hummingbird Energy (L) Inc. owns and leases the Topside Equipment.

3. Condor Energy (L) Inc. owns the Jack-up Rigs while they are not deployed in oil or gas

fields.

4. De Raj Energy Sdn Bhd holds the patents of the oil and gas division of the De Raj Group

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The oil and gas division of De Raj Group AG has a total workforce of 23 people, 3 employed by De

Raj Energy Sdn Bhd, 2 people employed by Hummingbird Energy (L) Inc. and 18 people employed by

Gryphon Energy (SEA) Sdn Bhd. (the aforementioned figures excluding management). The division

has offices in Malaysia (Headquarter), Singapore, Indonesia and Iran. Besides, for the operations and

maintenance of an oil rig currently deployed in Indonesia there is an agency employed crew of 34

people in Indonesia.

According to the business concept, in a first step, the oil and gas division of De Raj Group has to be

assigned with the deployment of an oil rig. The assignments will usually be awarded by NOC’s in ten-der offers and the assignment will be made for a duration of several years, often with the possibility for

a further prolongation.

Currently, Gryphon Energy (SEA) Sdn. Bhd is the company of the oil and gas division of De Raj Group

entering into the assignments with the clients. Thereby, Gryphon Energy (SEA) Sdn. Bhd may enter

into the contracts alone or together with other companies, e.g. by forming a consortium (as is currently

the case, cf. below).

In order to fulfill the contractual obligations under the contract, there will be a lease contract or charter

contract for the lease / charter of the Jack-up Rigs. Due to national statutory requirements, the con-

tract for the lease / charter of the Jack-up Rigs usually may not be entered into by companies of the

De Raj Group as the owner of the Jack-up Rigs often has to be a company domiciled in the country of

its deployment. To meet these requirements the Jack-up Rigs will usually be sold and transferred from

Condor Energy (L) Inc to a company serving as special purpose vehicle for the lease of the Jack-up

Rig.

Furthermore, there will be a separate lease agreement regarding the Topside Equipment. The lease

agreement regarding the Topside Equipment is separate from the lease / charter of the Jack-up Rigs

as the Topside Equipment will have to be customized to the specific needs and requirements of the oil

and gas field in question. Hummingbird Energy (L) Inc. as the owner of the Topside Equipment is the

company of the oil and gas division of De Raj Group which will enter into the lease agreements re-

garding the Topside Equipment.

Moreover, the lease agreements entered into by De Raj Group may also contain not only the lease of

the equipment but also the obligation to operate and maintain the oil rig during the term of its deploy-

ment (so called “wet lease”). To fulfill the obligations for the operation and maintenance, De Raj Group may employ its own employees but also may assign an agency employed work force with the task.

The business development of the Oil and Gas Division of De Raj Group from 1 January 2014 until the

date of this prospectus was as follows:

Business Development of the Oil and Gas Division from 1 January 2014 until 19 February 2017

In 2014, companies of De Raj Group were awarded a prestigious contract by the Indonesian National

Oil Company PTPertamina Hulu Energy West Madura Offshore (“PHE-WMO”) to install and commis-

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sion a MOPU in their KE-38 field in Indonesia (the “Old Pertamina Contract”). The KE-38 field is a

small field that is currently operated by PHE-WMO. The Old Pertamina Contract ran from 1 January

2014 and, after extensions of the contract period, until 19 February 2017.

The Old Pertamina Contract was awarded to a consortium (“Consortium”) comprising of Gryphon

Energy (Asia-Pacific) Sdn. Bhd, PT. Anugerah Mulia Raya (the company has changed its name, the

former name of the company was PT Karya Bumi Lestari), and PT Pertamina Trans Kontinental.

Thereby, Gryphon Energy (Asia-Pacific) Sdn. Bhd served as a vehicle to enter into the Old Pertamina

Contract.

According to an agreement entered into between members of the Consortium (“Consortium Agree-

ment”), the basic task of Gryphon Energy (Asia-Pacific) Sdn Bhd was to acquire, prepare and provide

as well as to operate and maintain a Mobile Offshore Production Unit and the production facilities for

the required services under the Old Pertamina Contract (in view of the risks associated with the Con-

sortium Agreement cf. also the risk factor under 3.1.2, “Risks arise in view of the contracts entered into

in the context of the deployment of an oil rig”). In this respect, Gryphon Energy (Asia-Pacific) Sdn Bhd

was obliged to appoint the Indonesian company PT Nuriraja Energy, which holds the respective

MOPU BOSS 1 Jack-up Rig, which was chosen for the deployment in the KE-38 field.

The MOPU BOSS 1 was designed to handle crude oil as well as gas production in the KE-38 field and

was commissioned on 18 May 2014, which was the first oil / gas date. Since 18 May 2014 until 19

February 2017 De Raj Group continuously provided quality uptime performance to PHE-WMO. In

2016, forced by the falling oil prices, PHE-WMO requested the companies of De Raj Group to take a

temporarily lower lease rate for the MOPU, which De Raj Group agreed to in the light of the spirit of

the contractual relationship with PHE-WMO.

Business Development of the Oil and Gas Division since 20 February 2017

In 2017, PHE-WMO revised the rates for the deployment of the MOPU upward, in line with their com-

mitments and the contract has effectively been renewed for another 931 days from 20 February 2017.

Thereby, the Old Pertamina Contract was replaced by entering into a new contract (the “New Per-

tamina Contract”) with the Consortium. Thereby, in the context of the enterting into the New Pertami-

na Contract, the company Gryphon Energy (Asia-Pacific) Sdn Bhd used by De Raj Group under the

Old Pertamina Contract was replaced by Gryphon Energy (SEA) Sdn. Bhd. as party to the Consortium

Agreement.

The New Pertamina Contract runs from 20 February 2017 and has a term of 931 days. The New Per-

tamina Contract is the main source of revenue for the De Raj Group at the moment so that there is an

economic dependency of De Raj Group on the New Pertamina Contract.

To fulfill the New Pertamina Contract and the tasks assumed by Gryphon Energy (SEA) Sdn. Bhd

under the Consortium Agreement, the companies of the De Raj Group have entered into several con-

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tracts in this respect (cf. the explanations under Section 8.7.1, “Material contracts during the ordinary

course of business”).

German Power Division

The business development of the German Power Division of De Raj Group from 1 January 2014 until

the date of this prospectus was as follows:

In 2016, the companies of the De Raj Group decided to diversify into power generation and estab-

lished Gaea Power GmbH in February 2016 to generate power and heat and supply power to the grid

and heat to local farmers in Germany, using Palm Oil as a feedstock as part of the German Govern-

ment’s renewable energy drive. The De Raj Group initially installed around 1 MW of power generation

equipment and purchased an additional 4 MW of semi completed units. In July 2017, De Raj Group

also commissioned an additional 1.2 MW of power generation capacity in Germany and aims to com-

mission another 0.8 MW of power shortly.

Currently, Gaea Power GmbH is owner of property of 13 combined heat and power plants („CHP

plants“) spread throughout Viersen, Straelen and Geldern, Germany. These CHP plants generate electricity, which is fed into the public power grid, and heat, which is delivered to nearby greenhouses.

The CHP plants can be categorized into three groups based on their capacity of 330kW, 363kW and

400kW. The majority of the units owned by Gaea Power GmbH has a capacity of 400kW. Regarding

the three categories, these CHP plants provide the largest revenue, since they generate more electric-

ity to be fed into the public power grid. However, only six CHP plants are currently in operation. Fur-

ther seven units are currently not in operation due to ongoing modification works. The Group expects

the recommissioning of three of these plants in fall 2017.

Gaea Power GmbH does not operate the CHP plants itself, but leases them to five companies in the

legal form of a German Unternehmergesellschaft (mit beschränkter Haftung), namely Rocky Kraft

Unternehmergesellschaft (mit beschränkter Haftung), Freya Kraft Unternehmergesellschaft (mit be-

schränkter Haftung), Kilat Kraft Unternehmergesellschaft (mit beschränkter Haftung), Vision Kraft Un-

ternehmergesellschaft (mit beschränkter Haftung) and Sutra Kraft Unternehmergesellschaft (mit be-

schränkter Haftung) (these companies in the following referred to as “UGs”), which operate the plants

and pay a monthly rent to Gaea Power GmbH (cf. the explanations under Section 8.7.1, “Material

contracts during the ordinary course of business”). As a matter of consequence, the UGs bear the

operational risks related to the CHP plants, while Gaea Power GmbH bears the insolvency risk of the

UGs.

All CHP plants owned by Gaea Power GmbH are fired with palm oil and benefit from the promotion of

renewables energies in Germany according to the Renewables Energies Act (Erneuerbare-Energien-

Gesetz – “EEG”). The UGs as operators of the plants market the generated electricity by means of so-

called direct marketing (Direktvermarktung) as stipulated in the EEG. This means that the respective

UG operating the individual plant sells the generated electricity to the direct marketer (Direktver-

markter), usually an utility or a trader, and receives, in return, a power purchase price from the direct

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marketer and the so-called market premium (Marktprämie) from the grid operator to whose grid the

plant is connected.

Since the plants have been commissioned before the coming into effect of the EEG 2014, the UGs as

operators may opt for the so-called feed-in tariff (Einspeisevergütung) instead of the market premium

granted in case of direct marketing. In this case, the plant operator sells the generated electricity to the

grid operator and receives a fixes feed-in tariff in return from the grid operator. However, from a com-

mercial perspective, direct marketing is usually more attractive since the sum of purchase price and

market premium is usually higher than the feed-in tariff. Moreover, the CHP plants owned by Gaea

Power GmbH participate in the German Electricity Wholesale Market (Regelenergiemarkt) (and, thus,

generate an extra revenue) which is not possible in case of the feed-in tariff.

The promotion amount (Förderhöhe) of the individual plant depends, inter alia, on the date of commis-

sioning. All of Gaea Power GmbH’s CHP plants have been initially commissioned after 31 July 2004 and before 1 January 2009, thus, under the scope of the EEG 2004. Therefore, the promotion

amounts applicable to Gaea Power GmbH’s CHP plants are set out in the EEG 2004. Furthermore,

the date of the commissioning is decisive for the promotion period (Förderdauer) which lasts 20 calen-

dar years plus the part of the commissioning year as of the commissioning. Accordingly, for example

the promotion period of Gaea Power GmbH’s CHP plants which were commissioned in the year 2008 will last until 31. December 2028.

While the revenue generated from the power production is relatively stable due to the promotion ac-

cording to the EEG, the sale of heat and the purchase of palm oil are subject to free-market rules. The

heat generated in CHP plants is often sold under long-term agreements so that the respective income

is predictable for the plant operator to a certain extent, too. However, the UGs bear the risk resulting

from the volatile purchase prices of palm oil. The UGs lock in their palm oil purchases at forward pric-

es to mitigate this risk. Furthermore, palm oil production has been increasing steadily in both Indone-

sia and Malaysia, the two largest producers of palm oil in the world, to account for the increasing de-

mand in renewable energy over fossil fuels and natural gases. However, in the past it also occured

that palm oil prices increased to such an extent that the operation of palm oil fired CHP plants was not

profitable any longer despite the promotion according to the EEG.

8.2 Market Overview


The main market catchment area for the oil and gas division of the De Raj Group comprises of South

East Asia, Central Asia and the Middle East. However, the division has also participated in market

surveys, expression of interests and pre-qualifications for NOC’s and stakeholders from Europe and West Africa.

It is important to note that the oil and gas division of the De Raj Group is present in regions where

there are large volumes of offshore oil and gas reserves that require monetization solutions that are

cost effective and fast tracked, i.e. regions which require the core strengths of the oil and gas division

of the De Raj Group (cf. section 8.4 below “Competitive Strengths and Competition”).

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Currently, the German power division of De Raj Group is active in the territory northeast of Duessel-

dorf and close to the Dutch border, namely in Viersen, Geldern and Straelen.

Turnover

The following table shows the turnover generated by the two business sections of De Raj Goup (Oil &

Gas in Indonesia/Malaysia and German Power in Germany) in the business years 2014, 2015, 2016

and the first half year 2017:

2014

(Amount / Share of total turnover of the compa-nies of De Raj Group)

2015 (Amount / Share of total turnover of the compa-nies of De Raj Group)

2016 (Amount / Share of total turnover of the compa-nies of De Raj Group)

First Half Year 2017 (Amount / Share of total turnover of the compa-nies of De Raj Group)

Oil & Gas Division (Indonesia/Malaysia)

USD 14,602,000 / 100 %

USD 17,702,500 / 100 %

EUR 10,737,766.00 / 88.37 %

EUR 14,577,131.00 / 94,07 %

German Power Divi-sion (Germany)

n/a n/a EUR 1,413,032 / 11.63 %

EUR 919,124.90 / 5.93 %

8.3 Regulatory Environment

8.3.1 German Power Division

In Germany, the energy sector is highly regulated. The supply with power and gas through grids is

subject to the provisions of the Energy Industry Act (Energiewirtschaftsgesetz – “EnWG”) and its sub-

ordinated ordinances. In particular, the EnWG provides for a comprehensive regulation of the opera-

tion of power and gas grids comprising, inter alia, rules on third-party access, grid fee regulation and

provisions on so called unbundling between grid operation and other activities on the field of energy

supply such as production of gas/generation of power, storage of gas or sale of energy.

The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz – “EEG”) constitutes the legisla-

tive act promoting the use of renewable energies. The EEG came into force in 2000 and has been

amended several times with the latest substantial amendment as of 1 January 2017 (“EEG 2017”). Like the previous large amendment of 2014, the amendment of 2017 is to be seen against the back-

ground of the European Commission’s approach to qualify the German renewable energies promotion scheme as notifiable state aid. The German legislator designed the EEG 2017 based on the Guide-

lines on environmental and energy State Aid for 2014-2020 of the European Commission and notified

it to the European Commission in order to ensure its compliance with European Law.

In particular, the EEG 2017 introduced so called auction procedures as the basic method to determine

the promotion amount to be paid for power generated in renewable energy facilities. While this promo-

tion amount was determined by law in previous versions of the EEG, plant operators now generally

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have to participate in auctions in which a certain amount of capacity is allocated to the bidders with the

lowest bids (i.e. to the operators requiring the lowest promotion to realize their plant). Besides this, the

EEG 2017 contains provisions on the connection of installations for the generation of electricity from

renewable sources to the grid, on the (physical) offtake of the generated electricity by the grid opera-

tor, on the conditions under which the respective promotions, i.e. market premiums or feed-in tariffs,

are to be paid by the grid operators, and on a nationwide scheme to equalize the financial burden of

the promotion of renewable energies. Moreover, the EEG 2017 comprises numerous transitional pro-

visions to be applied on existing facilities commissioned under former versions of the EEG.

Priority grid connection and priority offtake

Facilities generating energy from renewable energy sources have priority regarding connection to the

grid. Moreover, grid operators are obliged to offtake, transmit and distribute electricity generated from

renewable sources. Upon request, grid operators shall immediately optimize, strengthen and expand

their grids in accordance with the best available technology in order to guarantee the offtake, trans-

mission and distribution of such electricity. In case of congestion in the grid, grid operators are obliged

to regulate the installations generating energy from renewable energy sources provided it is ensured

that the largest possible quantity of electricity from renewable energy sources and from combined heat

and power generation is being off taken (feed-in management). If, however, they have to do so, they

are obliged to compensate the installation operator (hardship clause).

Financial promotion

The EEG provides for two main types of financial promotion of renewable energy facilities: Direct mar-

keting (Direktvermarktung) with its so-called market premium (Marktprämie) and feed-in tariffs (Ein-

speisevergütung). Both the feed-in tariffs and the market premium are calculated on the basis of so

called applicable values (anzulegender Wert). In case of direct marketing, the plant operator sells the

electricity generated by his plant to a third party (generally the so-called direct marketer, i.e. an utility

company or a trader) which usually re-sells the electricity on the power market. By doing so, the plant

operator obtains the power price agreed with the purchaser (the direct marketer) on the one hand and

the market premium from the grid operator to whose grid the facility is connected on the other hand.

The market premium is calculated as set out in the EEG and equals, in principle, the respective appli-

cable value less the actual monthly average power price for power from the respective source (e.g.

onshore or offshore wind, photovoltaic and biomass). In case of feed-in tariffs, the plant operator de-

livers the generated power to the grid operator and receives the feed-in tariff which corresponds to the

applicable value reduced by a small amount. Therefore, direct marketing is usually more attractive for

the plant operator. Moreover, since the coming into effect of the EEG 2014, direct marketing is manda-

tory for the large majority of renewable energy plants. Only operators of facilities commissioned before

1 August 2014 and operators of certain smaller facility may opt for the feed-in tariff paid by the grid

operator. Additionally, a (reduced) feed-in tariff is granted for up to three calendar months in “excep-tional situations” (Ausfallvergütung), e.g. in case of an insolvency of the direct marketer.

As of 2017, the applicable value is determined in auctions (see above). However, the auction mecha-

nism does only apply on new installations. With regard to existing plants the respective applicable

value of the date of commissioning continues to apply. Under the EEG 2014 and earlier versions of

the EEG, the applicable values (which were referred to as “feed-in tariffs” under the EEG 2012 and

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previous versions of the EEG) were set forth in eurocent per kWh by law for each kind of renewable

energy source (e.g. photovoltaic, onshore wind, offshore wind, hydropower, biomass etc.) depending

on the installed capacity respectively the rated output (Bemessungsleistung) of the facility (principle of

gliding tariffs). Furthermore, the applicable values were subject to degression, i.e. they were reduced

over time. However, with regard to the individual renewable energy facility the applicable value calcu-

lated for the date of commissioning applies for the whole promotion period.

Since certain operating costs do not depend on the size of the plant (fixed costs), an uniform applica-

ble value for all plant sizes would result in a too low promotion for small plants and/or an excessive

promotion of large plants. Therefore, the applicable values for small installed capacities/rated outputs

are higher than for large installed capacities/rated outputs. However, in order to avoid that project de-

velopers misuse these principle by building a number of small plants (so-called splitting of installation

– Anlagensplitting) instead of a single large one (which would generally be the economical solution

under market conditions), the EEG explicitly determines that multiple facilities on one site or in direct

geographical proximity are to be treated as one plant with regard to the promotion amount under cer-

tain conditions and regardless of ownership, as of 1. January 2009. However, it is not clear if this prin-

ciple also applies to facilities commissioned under the EEG 2004: Although the explicit provision came

into effect on 1 January 2009 (EEG 2009), at first, some voices argued that the principle of joint treat-

ment of installations (Anlagenzusammenfassung) should also be applied to facilities commissioned

under the EEG 2004 correspondingly. Inter alia, the government and the legislator (in the reasoning

for the EEG 2009) stated that splitting of installations was illegal under the EEG 2004. However, in the

context of a further amendment of the EEG at the end of 2009, the legislator adopted a transitional

provision according to which the above-mentioned provision was not applicable to certain modularly

constructed installation parks commissioned before 1 January 2009. After all, the legal situation re-

garding the joint treatment of installations under the EEG 2004 is still quite unclear.

New CHP plants fired with liquid biomass such as palm oil cannot be promoted according to the EEG

any more. However, existing facilities commissioned before 1 January 2012 which are fired with palm

oil may still benefit from the promotion described above and, in addition, from different bonuses, such

as a bonus for using renewable raw materials (NaWaRo-Bonus), a CHP bonus (KWK-Bonus) and a

so-called technology bonus (Technologiebonus). Though, the EEG respectively its subordinated ordi-

nances contain certain provisions regarding the sustainability of liquid biomass used as fuel in CHP

plants.

The EEG provides for multiple legal requirements to be observed by the operator of the plant. E.g.

each plant is to be registered in the installations register (Anlagenregister) respectively the market

master data register (Marktstammdatenregister). Moreover, most plants have to be remote controlla-

ble by the grid operator and the direct marketer. Furthermore, operators of CHP plants which are fired

with biomass have to comply with certain obligations, inter alia to proof sort, quantity and origin of the

fuels used in the CHP plant. Non-compliance with these or other mandatory provisions may lead to a

reduction or a total cessation of the plant’s promotion according to the EEG.

The financial promotion of a renewable energy facility begins with its commissioning. The duration of

the promotion (promotion period) generally lasts 20 years as of commissioning for plants commis-

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sioned under the EEG 2017 and 20 calendar years plus the part of the commissioning year as of the

commissioning for plants commissioned under former versions of the EEG.

Nationwide equalization scheme

The costs resulting from the payment of market premiums and feed-in tariffs are passed on to the

energy suppliers (and, thus, in consequence to all power consumers) according to the so called na-

tionwide equalization scheme (bundesweite Ausgleichsregelung) set out in the EEG and in the Re-

newable Energies Ordinance (Erneuerbare-Energien-Verordnung - EEV). The equalization scheme

covers both electricity for which a feed-in tariff is paid and electricity which is directly marketed and,

thus, promoted by the market premium.

Promotion according to the Combined Heat and Power Generation Act (KWKG)

Under certain conditions, CHP plants may also obtain the so-called CHP surcharge (KWK-Zuschlag),

a promotion of cogeneration according to the Combined Heat and Power Generation Act (Kraft-

Wärme-Kopplungs-Gesetz – “KWKG”). However, this does not apply to facilities which are promoted

according to the EEG.

8.3.2 Oil and Gas Division

As operators and/or owner of oil rigs, the companies of De Raj Group may be subject to liability in

view of potential damages to the environment. The following section provides an overview over poten-

tial obligations to carry out countermeasures in the event of oil spills, potential liabilities for oil spills,

damages in respect of environmental disputes and sanctions for oil spills according to Indonesian

environmental laws and regulations in view of the ownership of oil rigs and/or the operation of oil rigs

in Indonesia.

Obligation to carry out countermeasures in the event of oil spills

Law No. 22 of 2001 regarding oil and gas makes business entities (eg, oil rig owners/operators) and

permanent establishments generally responsible for compliance with environmental management

obligations.

Government Regulation (“GR”) No. 35 of 2004 re Upstream Activities for Oil and Gas also makes con-tractors (eg, oil rig owners/operators), working in upstream oil and gas activities, responsible for envi-

ronment management, with “environmental management” being defined as the obligation to carry out prevention and undertake countermeasures in respect of pollution as well as recovery from environ-

mental damage.

GR No. 19 of 1999 re Control of Sea Pollution and/or Damage (“GR19/1999”) defines “sea pollution” as the entry or inclusion of living creatures, chemicals, energy or other components in the sea envi-

ronment as a result of human actions, which actions result in reducing the quality of the sea.

GR 19/1999 obliges the person in charge of a particular activity (eg, oil rig owners/operators) not to

pollute the sea as well as to not damage the sea. The act of polluting and/or damaging the sea is

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treated as being equivalent to polluting the environment, something which constitutes a violation of

Article 87 of Law No. 32 of 2009 re Protection and Management of Environment (“Law 32/2009”).

The obligation not to pollute and/or damage the sea is further addressed in GR No. 21 of 2010 re

Maritime Environment Protection (“GR 21/2010”), which imposes an obligation to take countermeas-ures in the event of pollution. Article 24 of GR 21/2010 sets out that the unit person-in-charge is re-

sponsible for taking all countermeasures to deal with pollution resulting from the units’ activities.

“Oil spills at sea” are only defined in Presidential Regulation No. 109 of 2006 re Countermeasures in the event of Oil Spill Emergencies at Sea (“PR 109/2006”). PR 109/2006 provides that “oil spills at the sea” refer to the entry/leakage of oil, whether directly or indirectly, into the sea as a result of shipping, oil and gas business activities or other activities. “Oil and gas business activities” are further defined as including both downstream and upstream activities.

Article 25 of GR 21/2010 and Article 2 of PR 109/2006 impose an obligation on (i) the captain or the

commander of a vessel (eg, an oil rig) and/or the owner or operator of a vessel, (ii) the Port Adminis-

trator or Head of Port Office, (iii) the person in charge (eg, chief) in an oil and gas business unit carry-

ing on offshore oil and gas activities (eg, oil rig owners/operators) and (iv) the head or responsible

person in the case of other relevant activities (each a “Relevant Responsible Person”) to:

(a) take countermeasures in the event oil spills at sea occur as a result of their business

and/or activities; and

(b) report, to the relevant authority, regarding the oil spills and the counter measurements tak-

en.

The obligation to report, as referred to above, also applies to all other persons having knowledge of an

oil spill.

The oil spills report must be conveyed to the following authorities:

(a) National Countermeasures Operation for Command and Control of Oil Spills at Sea Emer-

gency Events (Pusat Komando dan Pengendali Nasional Operasi Penanggulangan Keadaan

Darurat Tumpahan Minyak di Laut or PUSKODALNAS);

(b) Port Office;

(c) Directorate that carries out tasks and obligations in the fields of technical and environmental

matters related to oil and gas activities;

(d) Regional Government; or

(e) other governmental authority that is close by.

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Article 39.2 of GR 21/2010 provides that, in the event the Relevant Responsible Person fails to report

the pollution to the relevant authority, the Relevant Responsible Person will be subject to certain ad-

ministrative sanctions.

Aside from reporting to the relevant authorities, Article 53 of Law 32/2009 also obliges all parties (eg,

oil rig owners/operators) causing pollution and/or damage to the environment (each a “Specified Par-

ty”) to provide warnings to the public, regarding the environment pollution and/or damage.

Liability for Oil Spills

Article 88 of Law 32/2009 introduces a “strict liability” concept in respect of measures, business and/or other activity causing serious “threats” to the environment, without having to prove negligence on the part of the entity or person behind the relevant “threat” to the environment.

The “strict liability” concept also applies in the event of oil spills at sea. Article 11 of PR 109/2006 pro-vides that the owner or operator of a vessel (eg, an oil rig), the head of the relevant oil and gas busi-

ness activity (eg, oil rig owners/operators) or the highest level person-in-charge of the relevant off-

shore oil activity (eg, oil rig owners/operators) or other person holding a superior responsible position

is strictly liable for the costs of taking necessary countermeasures in respect of:

(a) oil spills at sea;

(b) environmental impact of oil spills at sea;

(c) society’s loss from oil spills at sea; and

(d) environmental damage as a result of the oil spills at sea.

Article 53 of Law 32/2009 requires Specified Parties to take all necessary countermeasures to:

(a) isolate the environmental pollution and/or damage;

(b) stop/halt the source of environment and/or damage; and/or

(c) utilize developments in science and technology for the purpose of dealing with environmental

pollution or damage.

Articles 54 and 85.1.b of Law 32/2009 obliges Specified Parties to address the polluted and/or dam-

aged environment, in stages, as follows:

(a) stop/halt the source of pollution and clean such pollution;

(b) remediation;

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(c) rehabilitation;

(d) restoration; and/or

(e) other measures in accordance with the development of science and technology.

GR 19/1999 also specifies two types of liability for Specified Parties in the event that their business

and/or activity causes environmental pollution and/or damage at sea, as follows:

(a) responsibility for the costs of all countermeasures, taken in respect of environmental pollu-

tion and/or damage at sea, as well as the recovery costs; and

(b) in the event any form of loss to third parties is caused, the Specified Party is obliged to pay

compensations to the third parties.

Damages in Respect of Environmental Disputes

The payment of environmental compensation (i.e., civil damages) and resolution of environmental

disputes may be handled by way of court proceedings or otherwise.

Calculation of environmental compensation is based on Minister of Environment Regulation No. 7 of

2014 re Environmental Loss as a Result of Environmental Pollution and/or Damage, which identifies

the following relevant factors:

(a) loss as a result of not meeting the relevant Environmental Quality Standard;

(b) loss as a result for reimbursement of the costs of environmental dispute resolution;

(c) loss as a result of compensation payable with regard to countermeasures taken in respect of

environmental pollution and/or damage as well as environmental recovery; and/or

(d) ecosystem damage.

The calculation of environmental compensation is carried out by authorities with expertise in environ-

mental pollution and/or damage. The amount of environmental damage is calculated based on the

consensus of the parties in the event the dispute is resolved other than by court proceedings and

based on court decision in the event the dispute is resolved by court proceedings.

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Sanction for Oil Spills

The applicable sanctions for unlawful acts resulting in pollution at sea are set out in Articles 98 and 99

of Law 32/2009 as follows:

(a) A party (eg, oil rig owners/operators) intentionally carrying out activities, which result in a

breach of the applicable Sea Quality Standard or Environmental Quality Standard is liable to

(i) imprisonment for not less than 3 years and not more than 10 years and/or (iii) a fine of not

less than Indonesian Rupiah 3,000,000,000 (Indonesian Rupiah hereinafter “Rp”) and not

more than Rp 10,000,000,000.

If the infringing activity results in injury and/or threat to human health, the relevant sanctions

become (i) imprisonment for not less than 4 years and not more than 15 years and/or (ii) a

fine of not less than Rp 4,000,000,000 and not more than Rp 12,000,000,000.

If the infringing activity results in severe injury or death, the relevant sanctions become (i)

imprisonment for not less than 5 years and not more than 15 years and/or (ii) a fine of not

less than Rp 5,000,000,000 and not more than Rp 15,000,000.

(b) A party (eg, oil rig owners/operators) who, as a result of negligence, causes a breach of the

applicable Sea Quality Standard or Environmental Quality Standard, is liable to (i) imprison-

ment for not less than 1 year and not more than 3 years, and/or (ii) a fine of not less than

Rp 1,000,000,000 and not more than Rp 3,000,000,000.

If the infringing activity results in injury and/or threat to human health, the relevant sanctions

become (i) imprisonment for not less than 2 years and not more than 6 years, and/or (ii) a fi-

ne of not less than Rp 2,000,000,000 and not more than of Rp 6,000,000,000.

If the infringing activity results in severe injury or death, the relevant sanctions become (i)

imprisonment for not less than 3 years and not more than 9 years, and/or (ii) a fine for not

less than Rp 3,000,000,000 and not more than Rp 9,000,000,000.

8.4 Competitive Strengths and Competition

8.4.1 Competitive Strengths


The oil and gas division of the De Raj Group was built with a vision to be a niche service provider to

the offshore oil and gas industry. It provides a full complement of services for offshore drilling, produc-

tion and storage.

Besides the above, having been built with a vision to be a niche service provider, the oil and gas divi-

sion of the De Raj Group strives to offer significant cost savings and accelerated revenues to its cli-

ents by delivering innovative and integrated solutions for early monetization of so called marginal oil

fields:

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Offshore oil and gas field developments typically adopt the “satellite principle”, where existing pipeline network and production facilities in the vicinity are used to minimise capital expenditure (“CAPEX”). The remaining unexploited fields are often located in remote locations with little or no infrastructure

and of a size or nature that often makes it impossible to predict with certainty the amount or composi-

tion of recoverable hydrocarbons in place. These fields are often referred to as small, marginal, un-

conventional reservoirs or stranded assets (in the following referred to as “Marginal Fields”).

Marginal Fields refers to any hydrocarbon bearing field which is relatively small and is commercially

not viable under the existing fiscal regime of the contracts and the projected capital expenditures to

develop and produce the field. Such fields, if developed by deploying conventional methods may not

be economically viable due to the relatively high capital expenditure involved in putting up the offshore

platforms and the corresponding operating expenses (“OPEX”) required to operate these facilities. The production profile of hydrocarbons will plateau out after a few years due to the size of the field and will

thus not provide sufficient cash flow to support the project economics. In addition to adjusting the fiscal

regime, Governments and oil companies are focused on bringing the cost and time down for develop-

ing Marginal Fields.

It is widely acknowledged that economics of exploiting Marginal Fields are easily affected by changes

in basic economic parameters such as capital expenditure, time to first oil, operating costs, production

levels, recoverable reserves and even abandonment costs which can have a major effect on the prof-

itability of the venture.

In particular, if a field is marginal because of the uncertainty over the level of reserves, a period of pre-

production often referred to as extended well testing will have to be conducted giving additional reser-

voir information which will reduce uncertainty thereby leading to improved decision making.

The task is to enable field owners or operators to exploit the assets in Marginal Fields in an incremen-

tal, optimal and cost effective manner. There is therefore a need for a solution that offers the following:

- Minimum CAPEX for the field owner or operator

- First oil or gas in weeks to optimise cash flow – Improving the internal rate of return (IRR)

- Extended Well Testing (EWT) to determine reservoir profile

- Minimum risk & development costs from optimal data evaluation

- Operation in water depths of up to 120 meters

- Fit-for-purpose to produce small hydrocarbon reserves

- Operate with crude oil production rates as low as 2,500 barrel per day (1 barrel equals app.

158.987 liter)

- Economically viable where recoverable reserves are as low as 5 million barrels

- Flexible to cater for uncertainties surrounding remote field developments

The conventional development concepts used by oil companies cannot support commercial viability

when it comes to Marginal Fields.

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The oil and gas division of the De Raj Group has specialised in the provision of low cost and fast de-

velopment methods for Marginal Fields to meet the aforementioned requirements and allow oil com-

panies the opportunity to exploit the development of Marginal Fields that lie within their contracted

areas. By doing so, the De Raj Group aims to provide Governments the opportunity to package Mar-

ginal Fields in their offering to the market for oil companies to invest in their oil and gas industry as

Marginal Fields become cheaper and faster to develop. The oil and gas division of the De Raj Group

understands the fact that National Oil Companies (NOC’s) and field stakeholders cannot support commercial viability of hydrocarbon exploration and production with the current dip in the crude oil

market in view of Marginal Fields.

Firstly, the oil and gas division of the De Raj Group offers the following solutions as part of its services

with a view to exploit Marginal Fields:

MOPU: Mobile Offshore Production Unit

In the event a field has proven to have sufficient resources, a decision is made to fully develop the

field and if the field is in relatively shallow water, fixed platforms will be designed, constructed and

installed. The installation of a fixed platform is very costly and often requires that there is an existing

pipeline network in the proximity.

However, if the field is considered marginal and the resources have not been proven as sufficient yet,

an early production system will usually have to be mobilised. An early production system will enable

further testing and initial production without having to incur the substantial costs of fixed platforms.

The costs of the installation of fixed platforms, which is not economically viable in marginal and un-

proven fields and in remote fields without pre-existing pipelines and production facilities, led to the

invention of the Mobile Offshore Production Unit (“MOPU”); i.e. an offshore unit capable of having gas

compression equipment, crude oil export, power generation for offshore platforms, enhanced oil re-

covery facilities etc. The MOPU typically comprises a hull which supports the production equipment,

legs, jacking system, a mat or spud cans. In addition to production equipment, the hull also supports

living quarters, cranes, and other marine equipment.

In contrast to a fixed platform a MOPU will not be fixed to the oil field. Thus, unlike a fixed platform, a

MOPU can be relocated without the need for crane barges or jack up drilling rigs’ derricks and as such is advantageous over the fixed platforms as it’s less costly to use. Economically MOPUs are a better

choice for marginal and unproven fields until a decision can be made whether to fully develop the field

and it becomes economically viable to install fixed platforms. Thus, if the reserves of the field prove to

be inadequate, the MOPU can be relocated thereby avoiding the costs of the installation and aban-

donment of a fixed platform. As a matter of conseuence, fixed platforms should only be installed once

it is clear that there are substantial reserves and that the field can be fully developed. However, if ade-

quate reserves are found, the MOPU may be used for an early production after which depending on

whether substantial reserves are found a decision can be made to fully develop the field at which point

fixed platforms can be installed.

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FPSO’s, FPUS’s and FSO’s: Floating Production Storage and Offloading, Floating Production Unit, Floating Storage and Offloading:

In addition to MOPU’s, Floating Production Storage and Offloading units (“FPSO’s”), Floating Produc-tion Units (“FPUS’s”), Floating Storage and Offloading units (“FSO’s”) will be deployed. These are

floating units (as opposed to elevated platforms) having the capability to produce, store and offload

crude oil and/or gas from a ship shaped platform. These mobile units are required if there is no pipe-

line network in the proximity to store and transport the produced oil or gas.

Furthermore, in addition to the aforementioned technics, the oil and gas division of the De Raj Group

has developed the following further propriety, patented concepts to cater for the industries push for

continuous cost effective solutions in view of Marginal Fields:

MOPSU: Mobile Offshore Production & Storage Unit

A MOPSU is a mobile offshore production unit using a jack-up rig which has integral crude oil and

condensate storage capabilities. The MOPSU solution would be suitable if there is no nearby infra-

structure to pipe the oil. The integral crude and condensate storage and offloading facilities eliminate

the need to install pipelines or deploy an FSO as the MOPSU offers the option of storing oil and of-

floading from the facility itself. Savings can be achieved in OPEX since there are no pipelines or FSO

to operate and maintain and less coordination as all the facilities are being accommodated on a single

platform. At the end of field life, savings can be realised since abandonment of the production and

storage facility involves only jacking and mooring operations. Thus, savings can be achieved by de-

ploying a MOPSU.

The MOPSU has not been put into practice as yet due to fact the MOPSU is in competition with the

market for so called Floaters. Floaters are converted or custom-built ship-shaped floating vessels,

employed to process oil and gas and for temporary storage of the oil prior to transshipment (Floating

Storage and Offloading (FSO)). Currently, the employment of Floaters is much cheaper for the pur-

pose of oil storage and offloading. However, De Raj Group expects that in time to come the MOPSU

solution would become a viable option as a single stop facility providing processing, storage and of-

floading of hydrocarbons.

MdWHP: MOU Detachable Well Head Platform – A mobile offshore unit that is capable of in-

stalling independent satellite platforms.

A MOU Detachable Well Head Platform is a Jack-up rig with the topside equipment of a Well Head

Platform (“WHP”) temporary installed on its cantilever skid beams for installation offshore. The jack up

rig, or what is also called the installer rig, not only has the WHP topside equipment on its skid beams

but also has the substructure of the WHP installed temporarily to its mat. Once at site, the substruc-

ture of the WHP is installed forming a foundation for the topside. The skid beams will be skidded out

over the substructure for the installation of the topsides. Once complete, the installer rig, using the

MdWHP solution, would have installed an independent satellite WHP. As opposed to the conventional

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method of installing a satellite WHP, this solution requires lesser marine vessels, completes installa-

tion in a shorter time frame and as a result is cost effective.

MdERF: MOU Detachable Enhanced Recovery Facility - A mobile offshore unit that is equipped

with enhanced oil recovery facilities for early monetization of hydrocarbons

A MOU Detachable Enhanced Recovery Facility is a Jack-up Rig equipped with topsides that cater

specifically for enhanced recovery facility (“ERF”). ERF is the implementation of various techniques to

enhance the amount of crude oil or natural gas from a reservoir. Equipment normally installed on an

ERF are water injection skids, gas injection/lift skids, equipment for artificial lifting and/or chemical

injection skids. The MdERF assists its users by maximizing production of oil and/or gas from a reser-

voir.

FAST: Flow Assured Systems & Technologies – An innovative solution to ensure optimal flow

of hydrocarbons within tanks, pipelines and well conductors.

FAST is a solution for the perennial issue of wax and asphaltene build-up in storage tanks, pipelines

and production wells. Problems associated with paraffin and asphaltene, in the form of deposition,

vary from field to field, and sometimes from well to well in the same field. These negative effects

steadily reduce the flow rate in the pipelines and wells, eventually stopping flow altogether whilst re-

ducing storage capacity and creating difficulties in offloading from storage tanks. FAST provides a

solution by making sure any blockages in any conduit is effectively liquefied and broken down to the

point where they can no longer precipitate again. Achieving optimal flow in pipelines, production wells

and storage tanks greatly increases the rate of production in any oil field.

To sum up, De Raj is of the opinion that its oil and gas division of the De Raj Group has a vast array of

high quality, fast tracked and cost effective solutions for various applications.

The solutions offered by De Raj Group are predominantly focused on using the patented solutions

while at the same time being also capable of offering the more standard solutions offered by De Raj

Group’s competitors. In the opinion of De Raj Group, the accumulated technological knowledge and its patents enable De Raj Group to provide tailor-made solutions that are required for the client’s assets. Thus, the De Raj Group is of the opinion that its knowledge, experience and patents provide the oil

and gas division with an advantage over its competitors.


Within the large and growing renewable energy space in Germany, biomass based generation is the

third largest after wind and solar. More than 95% of biomass is biogas based, generated by domestic

German corn feedstock, animal manure and various harvest waste.

Liquid biomass generation relies of competitive vegetable oils grown under strictly supervised sustain-

ability conditions. Biogas has the added advantage that it can be firmly contracted at fixed prices with

major suppliers of standing for more than five years and taken out of the public gas grid (even as natu-

ral gas) by way of feed-in offset compensation delivered anywhere else in Germany into the gas grid.

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De Raj Group sees its competitive advantage in the fact that it has a shareholder background in the

region of the world where the most competitive feedstock – palm oil - originates from: South East Asia,

namely Malaysia. In the opinion of De Raj Group, this allows De Raj Group to leverage on its corpo-

rate roots in Malaysia and to structure more favourable supply chain costing.

8.4.2 Competition


A marginal field that can be developed by a MOPU can also be developed by other comparable solu-

tions. Hence MOPU suppliers have to compete with suppliers of other competing production systems

as well.

De Raj Group sees the following global suppliers as its competitors in view of the provision of MOPU

and other comparable solutions:

Company

Country

Fred Olsen Norway GustoMSC (Subsidiary of SBM Offshore) Netherlands

Compass Energy Singapore Perisai Petroleum Malaysia MISC Bhd Malaysia Mercator Limited India Global Process Systems UAE


De Raj Group does not see any enterprises which may qualify as competitors as such. However, the

German power division naturally has to compete with other renewable energy sources like hydro, wind

and solar generated power. However, De Raj Group is of the opinion that there is an advantage in

biomass fuel compared to hydro, solar and wind based power generation as it is the only renewable

sector not dependent on weather and nature.

8.5 Strategy


It is the strategy of the oil and gas division of De Raj Group to continue to apply its core strengths, in

particular regarding Marginal Fields, and thus winning more contracts in order to sustain its recurring

income. Although De Raj does acknowledge the fact that the downturn in oil and gas prices has

slowed down the oil and gas market, De Raj is of the opinion that with its track record, the ability to

offer a variety of solutions with or without the use of its very own patented solutions plus its vast array

of assets, De Raj Group is well prepared to maintain itself in the business and to overcome the chal-

lenges it may encounter in the future.


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It is the objective of the De Raj Group to expand the power business to a total generation capacity of

20MW electric energy, based on biomass, in Germany. This will be driven by mostly liquid biomass,

such as refined palm oil, but also incorporate opportunistic acquisitions of biogas-fed assets.

Only locations and assets with a remaining concession life span of ten years or more will be targeted

and subject to favourable fixed feedstock prices, a return on investment of five years is the underlying

objective.

Along the growth path, strong efforts will be made to secure and improve margins by securing strate-

gic feedstock options, lowering supply chain cost and improving operational efficiencies.

The track record of De Raj Group’s German power operations in the field of renewable energy are destined to serve the company as a platform for future horizontal and vertical growth opportunities –

such as energy storage solutions for the same, existing utilities and grid operator customers as well as

for an international expansion in Europe and beyond.

By acquiring sufficient assets in a concentrated territory northeast of Duesseldorf and close to the

Dutch border, the company strives to enjoy operational economics of scale, fast track its technical

learning curves between the various operating assets and to gain leverage for the inevitable renego-

tiations with grid operators and utilities outside of the EEG umbrella – post end of concession.

As biomass is the only renewable sector not dependent of weather and nature, as opposed to hydro,

solar and wind based generation, its consistent and predictable reliability virtually assures a continued

operational understanding with grid operators that are keen to mitigate the increased volatility of the

power generation mix in Germany. Ever more lucrative power storage and grid balancing services can

be part of the service package to be offered and negotiated towards the end of concessions.

With sufficient demand created by Gea Power GmbH – 20MW would equate an annual demand of

approximately 45,000 tons annually - the resulting demand scale shall allow De Raj Group to leverage

on its corporate roots in Malaysia and to structure more favourable supply chain costing. The same

scale advantages will apply should global vegetable oil process spike for a period of time and necessi-

tate the switch to less profitable, yet still operationally profitable, supply of Biogas as alternative feed-

stock source.

8.6 Investment and Financing Requirements

Additional future investments are to be funded partially from the net proceeds of future capital increas-

es.

8.6.1 Funding and capital market orientation

In the past, the expansion of the companies of De Raj Group was mainly funded by the earnings of the

companies of De Raj Group and financing provided by the existing shareholders. However, the De Raj

Group’s, namely Hummingbird Energy (L) Inc, owns Topside Equipment for the oil rigs which was

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financed by bank debt via a loan granted by Export-Import Bank of Malaysia Bhd (cf. also section

8.7.1, Material Contracts during the ordinary course of business). There was no funding via capital

markets.

In line with the growth strategy defined by the Management Board, the Company now intends to gain

access to the capital market by way of the listing in order to obtain a potential further means of capital

sourcing to finance its further growth in the short and medium term. A broader investor base e.g. via

an increasing free float, is expected to provide a stronger basis to finance the envisaged growth.

Furthermore, the Company also takes into considerations to issue bonds, in particular convertible

bonds, for its future investment and/or financing purposes, thereby utilizing the authorization to issue

convertible bonds and the contingent capital in the articles of association of the Company, which was

resolved upon by the shareholders’ meeting of 11 October 2017 (cf. Section 17.3 “Contingent Capi-

tal”).

8.6.2 Investments and Financing Structure

The financing structure of De Raj Group Group is medium-term oriented. The current average debt

maturity as of 30 June 2017 is around 2.5 years with a homogenous maturity profile and a current

average cost of debt of 4,5%. The current loan to value (ratio of a loan to the value of an asset pur-

chased - “LTV”) is at about 54,2%.

Hummingbird Energy (L) Inc. has entered into a facilities agreement of up to USD 55 Million on 25

March 2015 with Export-Import Bank of Malaysia Berhad (“Exim Bank”). This facility (“Exim Facility”)

was mainly for the refinancing of the topside engineering equipment based on the MOPU BOSS 1 rig.

The interest payable is a floating rate of EXIM Bank’s Cost of Fund (“ECOF”) plus 2 % per annum.

ECOF is EXIM Bank’s borrowing cost which shall either be based on LIBOR or any other rate that is to

be determined by EXIM Bank at its absolute discretion, plus cost of borrowing by EXIM Bank. ECOF is

based on the prevailing rate at the point of drawdown of the facility. The term of the Exim Facility has

been restructured to 13 quarterly installments.

Hummingbird Energy (L) Inc. had bank borrowings under this Exim Facility of approximately USD 33

Million as of 30 June 2017, approximately USD 37 Million as of 31 December 2016 and approximately

USD 48 Million as of 31 December 2015. As of the date of this prospectus, the total banking facilities

available to Hummingbird Energy (L) Inc. under the Exim Facility amounted to kEUR 27,501, of which

all 100% were fully utilised. The Exim Facility is the only bank facility currently available to De Raj

Group and of major importance so that there is an economic dependency on the Exim Faciity for De

Raj Group.

The following table shows the investments of the companies of De Raj Group from 1 January 2014

until the date of this prospectus:

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Company of De Raj

Group

Subject Matter of the

Investment

Amount of the In-

vestment

2014 Hummingbird Energy

(L) Inc.

Topside Equipment for

the deployment on the

MOPU BOSS 1

(cf. explanation below)

USD

70,430,893.00

2015 Gaea Power GmbH CHP plants

(cf. explanation below)

EUR

4,800,000.00

2016 n/a n/a n/a

2017 until the date of

this prospectus

n/a n/a n/a

The investment of Hummingbird Energy (L) Inc in 2014 mentioned above related to the upgrading of

existing and acquisition of new Topside Equipment for the deployment on the MOPU BOSS 1 rig in

order to fulfill the Old Pertamina Contract entered into by the companies of De Raj Group (cf. above

under section 8.1, “Introduction and Overview”, “Business Development of the Oil and Gas Division

from 1 January 2014 until 19 February 2017”). This included facilities for Production separation, Gas

export compression, Produced water, flare gas, gas lift, gas power generation, accommodation and

Helideck for processing 6000 barrels per day of crude oil, 4000 barrels per day of producing water, 75

million standard cubic feet per day of gas processing and flare and 20 million standard cubic feet per

day of gas lift.

The investment of Gea Power GmbH in 2015 mentioned above related to the 13 CHP plants currently

owned by Gaea Power GmbH in order to implement the decision of the companies of De Raj Group to

diversify into power generation in February 2016 (cf. above under section 8.1, “Introduction and Over-view”, “German Power Division”). The power generation facilities in Germany have about 5 MW of

Power generation units, where 2.22 MW are installed and commissioned as of this prospectus date,

0.8 MW are refurbished and ready to instal and the balance awaiting refurbishment. These units run

on Palm Oil and cater to the renewable energy program of the German Government.

Apart from the above, there have been no investments by companies of the De Raj Group from 1 Jan-

uary 2014 until the date of this prospectus.

Investments made by De Raj Group are linked to projects relating to the specific deployments of oil

rigs and correspond to specific custom requirements of each customer, linked to that project. General-

ly, significant investments will be incurred for upgrading the existing assets to suit the requirements of

potential future projects. However, due to the fact that there are currently no specific further projects,

there are no outstanding investments that have already been concluded or approved by the Manage-

ment Board of the Company.

As a part of the further expansion of business activities, funds may be required in excess of the Com-

pany’s net proceeds from any potential future capital increases. In this case, the borrowing of capital,

e.g. by way of bank loans or issuance of bonds, including convertible bonds, may be necessary in

addition to any capital increase, particularly regarding major investments such as the upgrading of

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existing oil rigs or their custom Topside Equipment or procurement of new assets for upcoming project

work.

Should the Company prove unable to acquire sufficient equity and/or additional debt financing, it might

incur financing costs higher than anticipated or be unable to implement its growth strategy.

8.7 Material Contracts

8.7.1 Material Contracts during the ordinary course of business

Material contracts concluded by De Raj Group during the ordinary course of business which remain in

existence or were completed within the last two years prior to the Prospectus include:

Contracting Parties Date Agreement

PT. Pertamina Hulu Energi

West Madura Offshore and

Consortium consisting of

Gryphon Energy (SEA) Sdn

Bhd, PT Anugerah Mulia

Raya (before a name change:

PT Karya Bumi Lestari), PT.

Pertamina Trans Kontinental

6 June 2017 Contract for the provision of rental tem-

porary production facility (TPF) services

PT. Pertamina Hulu Energi West Madura

Offshore and the Consortium consisting of

Gryphon Energy (SEA) Sdn Bhd, PT Anu-

gerah Mulia Raya, PT. Pertamina Trans

Kontinental have entered into a contract on

the hire of a temporary production facility

on a rental basis equipped with processing

facilities in the “PHE-38 field”, offshore West Madura Offshore, Indonesia (in the

following referred to as “Pertamina Con-

tract”).

The contract runs from 20 February 2017

and has a term of 931 days.


Bhd, PT Karya Bumi Lestari

underwent (after name

change now: PT Anugerah

Mulia Raya), PT Pertamina

Trans Kontinental

13 February 2013

Consortium Agreement

Gryphon Energy (SEA) Sdn Bhd, PT Anu-

gerah Mulia Raya, PT and Pertamina Trans

Kontinental are party to a consortium

agreement (“Consortium Agreement”) regarding the fulfillment of the Pertamina

Contract (cf. above). The Consortium

Agreement was initially entered into by

Gryphon Energy Asia Pacific (AP) Sdn

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Bhd. The company Gryphon Energy Asia

Pacific (AP) Sdn Bhd was replaced by

Gryphon Energy (SEA) Sdn Bhd in 2016.

The basic task of Gryphon Energy (SEA)

Sdn Bhd according to the Consortium

Agreement is to acquire, prepare and pro-

vide as well as to operate and maintain the

MOPU and the production facilities for the

required services and to appoint PT Nurira-

ja Energy in this respect (in view of the

risks associated with the Consortium

Agreement cf. also the risk factor under

3.1.2, “Risks arise in view of the contracts

entered into in the context of the deploy-

ment of an oil rig”).


Bhd and PT Anugerah Mulia

Raya

20 February 2017 Revenue Sharing Agreement

Gryphon Energy (SEA) Sdn Bhd and PT

Anugerah Mulia Rayal have entered into a

Revenue Sharing Agreement in which the

scope of works of the parties for the fulfill-

ment of the Pertamina Contract (cf. above)

is set out and the split of revenues agreed

upon.

The basic task of Gryphon Energy (SEA)

Sdn Bhd according to the Revenue Sharing

Agreement is to acquire, prepare and pro-

vide as well as to operate and maintain the

MOPU and the production facilities for the

required services and to appoint PT Nurira-

ja Energy in this respect (in view of the

risks associated with the Revenue Sharing

Agreement cf. also the risk factor under

3.1.2, “Risks arise in view of the contracts

entered into in the context of the deploy-

ment of an oil rig”).

PT. Nuriraja Energy and BUT


20 February 2017

Bareboat Charter of MOPU BOSS 1

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Bhd PT. Nuriraja Energy and BUT Gryphon

Energy (SEA) Sdn Bhd have entered into a

bareboat charter whereby BUT Gryphon

Energy (SEA) Sdn Bhd (as charterer)

bareboat charters the MOPU BOSS 1 from

PT. Nuriraja Energy (as owner) of the

MOPU BOSS 1.

BUT Gryphon Energy (SEA) Sdn Bhd is a

representative office of Gryphon Energy

(SEA) Sdn Bhd in Jakarta, Indonesia es-

tablished for the purpose of participating in

the Consortium for the provision of the

MOPU BOSS 1 for the fulfillment of the

Pertamina Contract.

BUT Gryphon Energy (SEA)

Sdn Bhd (Jakarta, Indonesia)

and Gryphon Energy (SEA)

Sdn Bhd

20 February 2017

Headquarter Agreement

BUT Gryphon Energy (SEA) Sdn Bhd is a

representative office of Gryphon Energy

(SEA) Sdn Bhd in Jakarta, Indonesia es-

tablished for the purpose of participating in

the Consortium for the provision of the


Pertamina Contract in order to comply with

Indonesian law.

Gryphon Energy (SEA) Sdn Bhd will incur

costs and obligations in procuring and

providing the Topside Equipment for the


Pertamina Contract and as such, a head

office charge is payable by BUT Gryphon

Energy (SEA) Sdn Bhd to Gryphon Energy

(SEA) Sdn Bhd for these costs and obliga-

tions.

Hummingbird Energy (L) Inc

and Gryphon Energy (SEA)

Sdn Bhd

20 February 2017

Equipment Lease Agreement

According to the agreement, Hummingbird

Energy (L) Inc (as lessor) leases the top-

side equipment required for the deployment

- 123 -


of MOPU BOSS 1 in fulfillment of the Per-

tamina Contract (cf. above) to Gryphon

Energy (SEA) Sdn Bhd (as lessee).

Hummingbird Energy (L) Inc

and Export-Import Bank of

Malaysia Bhd

Facilities Agreement

dated 25 March 2015

and the Restructuring

Agreement dated 28

April 2017

Facilities Agreement and the Restructur-

ing Agreement: Overseas Investment

Financing Facility and Overseas Project

Financing Facility

Hummingbird Energy (L) Inc. and Export-

Import Bank of Malaysia Bhd have entered

into a Facilities Agreement for an Overseas

Investment Financing Facility of up to USD

45 million and an Overseas Project Financ-

ing Facility of up to USD 10 million.

According to the Restructuring Agreement

dated 28 April 2017, the facilities have

been restructured to an overall amount of

USD 34,375,000.00 and shall be repaid in

13 quarterly installments until February

2020.

Gaea Power GmbH and Sutra

Kraft UG (haftungsbe-

schränkt), Viersen

25 July 2017 Lease Agreement regarding a CHP plant

On 25 July 2017 Gaea Power GmbH as

lessor and Sutra Kraft UG (haf-

tungsbeschränkt), Viersen, as lessee en-

tered into a lease agreement regarding a

CHP plant located in Heiderperstraße 8,

47608 Geldern. The term of the lease is

fixed for a period of 8 years and subse-

quently prolongs for a further year unless

terminated with a six months’ notice. The

lease to be paid by Sutra Kraft UG (haf-

tungsbeschränkt) is EUR 1,000.00 monthly.

As of 1 February 2018, the parties will en-

ter into negotiations regarding the amount

of the lease every six months.

Gaea Power GmbH and Sutra



- 124 -


schränkt) On 25 July 2017 Gaea Power GmbH as

lessor and Sutra Kraft UG (haf-



CHP plant located in Borminger Weg 32,

47638 Straelen. The term of the lease is




lease to be paid by Sutra Kraft UG (haf-





Gaea Power GmbH and Kilat


schränkt)



lessor and Kilat Kraft UG (haf-



CHP plant located in Winternam 124,

47647 Kerken. The term of the lease is




lease to be paid by Kilat Kraft UG (haf-





Gaea Power GmbH and Kilat


schränkt)



lessor and Kilat Kraft UG (haf-







- 125 -



lease to be paid by Kilat Kraft UG (haf-





Gaea Power GmbH and Visi-

on Kraft UG (haftungsbe-

schränkt)



lessor and Vision Kraft UG (haf-



CHP plant located in Heiderperstraße 8,

47608 Geldern. The term of the lease is



terminated with a six months’ notice. The lease to be paid by Vision Kraft UG (haf-





Gaea Power GmbH and Visi-

on Kraft UG (haftungsbe-

schränkt)



lessor and Vision Kraft UG (haf-








lease to be paid by Vision Kraft UG (haf-





- 126 -

8.7.2 Material Contracts outside the ordinary course of business

Material contracts executed by the De Raj Group outside of its ordinary course of business, that are

either current or were completed within the last two years before this Prospectus, are as follows:


De Raj Group AG and Gryph-

on Energy Corporation PTE

LTD, Singapore

9 October 2017 Contribution Agreement on the contri-

bution of shares in Hummingbird En-

ergy (L) Inc

On 9 October 2017, the former share-

holder of the company Hummingbird En-

ergy (L) Inc, Gryphon Energy Corporation

PTE LTD, Singapore, contributed all of its

shares in Hummingbird Energy (L) Inc to

the Company in the context of an in-

crease of the nominal share capital of the

Company against contribution in kind. In

this capital increase the nominal share

capital was increased from then EUR

50,000.00 to EUR 35,000,000.00 by issu-

ing 34,950,000 new bearer shares with

no par value (Stückaktien), each repre-

senting a notional value of EUR 1.00 to

the former shareholder of the company

Hummingbird Energy (L) Inc. (cf. section

7.4.3 “Formation of De Raj Group”).

De Raj Group AG and Alexan-

der Arjun de Raj

11 October and 2

November 2017

Contribution Agreements on the con-

tribution of shares in Gryphon Energy

(SEA) Sdn Bhd, Condor Energy (L) Inc,

De Raj Energy Sdn Bhd and Gaea

Power GmbH to De Raj Group AG

On 11 October and 2 November 2017 the

shareholder of the Company Alexander

Arjun de Raj entered into two contribution

agreements with the Company according

to which Alexander Arjun de Raj as-

sumed the obligation to contribute all of

the shares in the companies Gryphon

Energy (SEA) Sdn Bhd, Condor Energy

(L) Inc, De Raj Energy Sdn Bhd and

- 127 -


Gaea Power GmbH as a voluntary pay-

ment into the capital reserves (§ 272

Abs. 2 Nr. 4 German Commercial Code

(Handelsgesetzbuch, HGB)) of the Com-

pany (“Voluntary Contribution Agree-

ments”). Thereby, the obligation was supposed to be fulfilled by the respective

shareholders of the contributed compa-

nies Gryphon Energy (SEA) Sdn Bhd,

Condor Energy (L) Inc, De Raj Energy

Sdn Bhd and Gaea Power GmbH on

behalf of Alexander Arjun de Raj accord-

ing to § 267 German Civil Code (Buerger-

liches Gesetzbuch, BGB, fulfilment by

third parties) (cf. also section 7.4.3 “For-mation of De Raj Group”).



LTD, Singapore

25 October 2017 Transfer of shares in Hummingbird

Energy (L) Inc to De Raj Group AG

On 25 October 2017 the former share-

holder of Hummingbird Energy (L) Inc,

namely Gryphon Energy Corporation PTE

LTD, Singapore, upon obtaining the ap-

proval of the Labuan Financial Services

Authority, transferred all of the shares in

the aforementioned company in fulfillment

of the Contribution Agreement entered

into between De Raj Group AG and

Gryphon Energy Corporation PTE LTD,

Singapore (cf. also section 7.4.3 “For-

mation of De Raj Group”).



LTD, Singapore

11 October 2017 Transfer of shares in Gryphon Energy

(SEA) Sdn Bhd to De Raj Group AG


holder of Gryphon Energy (SEA) Sdn

Bhd, namely Gryphon Energy Corpora-

tion PTE LTD, Singapore, transferred all

of the shares in the aforementioned com-

pany in fulfilment of the Voluntary Contri-

- 128 -


bution Agreements on behalf of Alexan-

der Arjun de Raj (cf. also section 7.4.3

“Formation of De Raj Group”).



LTD, Singapore, Lexanda In-

ternational Limited, British

Virgin Islands and Condor

Energy (L) Inc

Transfer of shares -

11 October 2017

Allotment of shares -

25 October 2017

Transfer and allotment of shares in

Condor Energy (L) Inc to De Raj Group

AG


holder of Condor Energy (L) Inc, namely

Gryphon Energy Corporation PTE LTD,

Singapore, transferred 1,000 shares in

the aforementioned company to De Raj in

fulfilment of the Voluntary Contribution

Agreements on behalf of Alexander Arjun

de Raj.

Furthermore, Condor Energy (L) Inc is-

sued additional 78,999,000 shares to De

Raj Group AG. These additional shares

were created by a conversion of claims of

Gryphon Energy Corporation PTE LTD

and Lexanda International Limited

against Condor Energy (L) Inc into shares

whereby the new shares resulting from

this debt conversion were directly allotted

to De Raj Group AG also in fulfilment of

the Voluntary Contribution Agreements

on behalf of Alexander Arjun de Raj (cf.

also section 7.4.3 “Formation of De Raj

Group”).

De Raj Group AG and Mr

Nagendran Nadarajah, Mr.

Alexander Arjun de Raj and

Kingtime International Lim-

ited, Singapore

Transfer of shares -

11 October 2017

Allotment of shares -

20 October 2017

Transfer and allotment of shares in De

Raj Energy Sdn Bhd to De Raj Group

AG


holders of De Raj Energy Sdn Bhd,

namely Mr Nagendran Nadarajah and Mr

Alexander Arjun de Raj transferred

300,000 shares in the aforementioned

company in fulfilment of the Voluntary

Contribution Agreements on behalf of

- 129 -


Alexander Arjun de Raj (cf. also section

7.4.3 “Formation of De Raj Group”). Furthermore, De Raj Energy Sdn Bhd

issued additional 100,000,000 shares to

De Raj Group AG. These additional

shares were created by a conversion of

claims of Kingtime International Limited,

Singapore, into shares whereby the new

shares resulting from this debt conversion

were directly allotted to De Raj Group AG

also in fulfilment of the Voluntary Contri-

bution Agreements on behalf of Alexan-

der Arjun de Raj (cf. also section 7.4.3

“Formation of De Raj Group”).

De Raj Group AG and Global

Energy Opportunities S.a.r.l.,

Luxembourg

11 October 2017 Contribution Agreement on the contri-

bution of shares in Gaea Power GmbH

to De Raj Group AG


holder of the company Gaea Power

GmbH, and Global Energy Opportunities

S.a.r.l., Luxembourg, transferred all of the

shares in the aforementioned company in

fulfilment of the Voluntary Contribution

Agreement on behalf of Alexander Arjun

de Raj (cf. also section 7.4.3 “Formation

of De Raj Group”).

De Raj Energy Sdn Bhd and

Kingtime International Lim-

ited, Singapore, Ms. Renata

Anita de Raj and Mr Nagen-

dran Nadarajah

18 September 2017

until 11 October 2017

Assignment Agreements on the Trans-

fer of Patents from Kingtime Interna-

tional Limited, Ms. Renata Anita de Raj

and Mr Nagendran Nadarajah

to De Raj Energy Sdn Bhd

From 18 September 2017 until 11 Octo-

ber 2017, De Raj Energy Sdn Bhd and

Kingtime International Limited, Ms. Re-

nata Anita de Raj and Mr Nagendran

Nadarajah entered into several contracts

whereby Kingtime International Limited,

- 130 -


Ms. Renata Anita de Raj and Mr Nagen-

dran Nadarajah assigned the patents

listed below in section 8.12 (“Intellectual

Property Rights”) to De Raj Energy Sdn

Bhd (in view of the fact that the transfer of

the legal ownership in view of some of

the patents has not become effective at

the date of this prospectus yet cf. also the

risk factor under 3.1.26, “Risks arise for

the De Raj Group's business from the

acquisition of patents”).

Condor Energy (L) Inc and

Lexanda International Limited,

British Virgin Islands

10 July 2017 Sale and Purchase Agreements re-

garding the Jack-up Rigs Gaea 3, Gaea

4, Gaea 200, Poseidon and Malaikat as

well as Sale and Purchase Agreements

on Topside Equipment

On 10 July 2017, Condor Energy (L) Inc

and Lexanda International Limited, British

Virgin Islands, entered into several Sale

and Purchase Agreements according to

which Lexanda International Limited sold

and transferred the Jack-up Rigs Gaea 3,

Gaea 4, Gaea 200, Poseidon and Ma-

laikat as well as Topside Equipment to

Condor Energy (L) Inc.

As consideration for the sold and trans-

ferred assets, Condor Energy (L) Inc

issued 63,000,000 new shares in the

nominal amount of USD 63,000,000 to

Lexanda International Limited.




21 September 2017 Bill of Sale regarding the Transfer of

the MOPU GAEA 3 Jack-up Rig

On 21 September 2017 Lexanda Interna-

tional Limited, British Virgin Islands is-

sued a Bill of Sale according to which

Condor Energy (L) Inc was transferred

the ownership in the MOPU GAEA 3

- 131 -


Jack-up Rig.











Jack-up Rig.





the MOPU POSEIDON Jack-up Rig





the ownership in the MOPU POSEIDON

Jack-up Rig.





the MOPU MALAIKAT Jack-up Rig





the ownership in the MOPU MALAIKAT

Jack-up Rig.











Rig.

- 132 -


De Raj Group AG and Lexanda

International Limited, British

Virgin Islands

11 October 2017

Agreement on the utilization of future

corporate opportunities in view of the

Jack-up Rigs

On 11 October 2017 De Raj Group AG

and Lexanda International entered into an

Agreement on the utilization of future

corporate opportunities in view of the

Jack-up Rigs held by De Raj Group and

further Jack-up rigs held by Lexanda

International, which have not been inject-

ed to De Raj Group. According to this

agreement, Lexanda International is

obliged to enter into agreements on the

deployment of its Jack-up rigs only if De

Raj Group AG has been informed about

the intention to do so beforehand and

only if De Raj Group AG has declined to

take the business opportunity itself.

Gaea Power GmbH, Alexander

Arjun de Raj and De Raj

Group AG

15 May 2016 and 6

November 2017

Granting, assignment and waiver of a

loan granted by Alexander Arjun de

Raj to Gaea Power GmbH

On 15 May 2016, Alexander Arjun de Raj

granted a loan to Gaea Power GmbH in

the amount of EUR 3,810,000.00 at an

interest rate of 6 % p.a.

On 6 November 2017 Alexander Arjun

de Raj assigned the loan to De Raj Group

AG and De Raj Group AG subsequently

agreed on a waiver of the loan with Gaea

Power GmbH.

8.8 Insurance

De Raj Group has purchased various operating insurance policies, which include, inter alia: insurance

to cover, among others, damage to its equipment, infrastructure and facilities, business interruption

risks and workers compensation. In addition, a Directors’ & Officers’ insurance policy (Ver-

mögensschadenshaftpflichtversicherung) is in force for the members of the Management Board and

Supervisory Board.

- 133 -

The Company considers the De Raj Group to be appropriately covered with regard to the nature of its

business activities and the related risks in the context of the available insurance offerings and rates.

However, it is impossible to exclude the possibility that De Raj Group will incur damages that are not

covered by its insurance policies or that exceed the coverage limits of these insurance policies. More-

over, there can be no guarantee that it will be possible for De Raj Group to obtain adequate insurance

coverage in the future.

8.9 Litigation/ Administrative Proceedings

The Issuer, respectively De Raj Group, is subject from time to time to claims and lawsuits in connec-

tion with its ordinary business activities. During the last twelve months, however, no member of the De

Raj Group was a party to any governmental, legal or arbitration proceedings (including any such pro-

ceedings which are pending or threatened of which the Company is aware), during the previous 12

months which may have, or have had in the recent past significant effects on the Company’s and/or De Raj Group’s financial position or profitability.

8.10 Research and Development

De Raj Group does not conduct any research and development activities.

8.11 Employees

As of the date of this prospectus, the De Raj Group has 23 employees (excluding management, train-

ees, apprentices and employees on parental leave and partial retirement).

The following table contains a summary of the average number of employees (excluding manage-

ment, trainees, apprentices and employees on parental leave and partial retirement) of De Raj Group

as of the date of this prospectus as well as for the end of the fiscal years 2016, 2015 and 2014. De Raj

Group does not and has not employed temporary employees in the period from 1 January 2014 until

today.

As of the date

of this prospectus

As of 31 December

2016 2015 2014

Total 23 employees

thereof all of them in Malay-

sia

(besides, there is also an

agency employed crew of 34

people in Indonesia respon-

sible for the operations and

maintenance of an oil rig

currently deployed in Indo-

nesia)

23 employees

thereof all of

them in Malay-

sia

(besides, there

is also an agen-

cy employed

crew of 34 peo-

ple in Indonesia

responsible for

45 employees,

in Malaysia with

the entire opera-

tions and

maintenance

scope out-

sourced.

45 employees,

in Malaysia

with the entire

operations and

maintenance

scope out-

sourced.

- 134 -

the operations

and mainte-

nance of an oil

rig currently

deployed in

Indonesia)

- 135 -

8.12 Intellectual Property Rights

In the context of the Formation of the De Raj Group (cf. section 7.4.3, “Formation of the De Raj

Group”) the company De Raj Energy Sdn Bhd was assigned several patents in the oil and gas sector

by the owner of the patents Kingtime International Limited, Singapore, Ms. Renata Anita de Raj and

Mr Nagendran Nadarajah (cf. above section 8.7.2, Material Contracts outside the ordinary course of

business). These patents form a significant asset and thus play a material role in the De Raj Group’s business. Hence, there is an economic dependency of De Raj Group from these patents.

Thereby, it is to be noted that the assignments of the patents has already been filed to the respective

competent register for registration. However, the registration of such assignments in the competent

register is still outstanding. Thus, due to the fact that in some of the relevant jurisdictions the registra-

tion is conclusive for the legal effectiveness of the transfer, De Raj Energy Sdn Bhd has not become

legal owner of some of the assigned patents as of the date of this prospectus yet. However, the as-

signors of the patents have already transferred the right to make use of the patents to De Raj Energy

Sdn Bhd and the patents are already considered as assets of De Raj Group in the Pro-forma

consolidated financial information included in this prospectus. (cf. section 13., “Pro-forma Consolidat-

ed financial information of De Raj Group”). Nevertheless, due to the fact that De Raj Energy Sdn Bhd

has not become legal owner of some of the patents yet, there is a risk for De Raj Group resulting from

the fact that for unforeseeable reasons the transfer of the legal ownership may eventually not become

effective (cf. the risk factor under 3.1.26, “Risks arise for the De Raj Group's business from the acqui-

sition of patents”). The following table shows the patents assigned to De Raj Energy Sdn Bhd. The

table also lists the status of the legal effectiveness of the transfer of the ownership at the date of this

prospectus in the column “Legal Ownership Already Transferred?”.

Patents

Country Status Patent Number Date of Filing / Date

of Grant Details

Legal Ow-

nership

Already

Transferred?

Australia Granted PCT/MY2008/000043 14/05/2008

12/05/2016

Offshore unit and method

of installing wellhead

platform using the off-

shore unit

No

Europe Granted 2 501 610 16/11/2009

18/2/2014

An Enclosed Offshore

Tank for Storing Crude Oil

No

Indonesia Granted IDP000039940 17.11.2015 An Enclosed Offshore

Tank for Storing Crude Oil

No

Iran Granted 61798 13/5/2009

10/11/2009




shore unit

No

Iraq Granted 3969 3/5/2009 6/8/2014




shore unit

No

- 136 -

China Granted 1366260 19 March 2009




shore unit

Yes

Europe Granted 2 313 605 2nd October 2013




shore unit

No

Europe Granted 2 514 913 27th November 2013

Method of demobilizing a

self-elevating mobile

platform

No

Europe Granted 2 514 914 14th October 2015

Method of Installing

Wellhead Platform Using

An Offshore Unit

No

Indonesia Granted IDP000036837 26th September

2014




shore unit

No

Mexico Granted 340779 25th July 2016




shore unit

No

Nigeria Granted NG/C/2010/820 10th February 2011




shore unit

No

US Granted 8.403.058 26th March 2013




shore unit

Yes

US Granted 8.689.881 8th April 2014




shore unit

Yes

Vietnam Granted 13380 3rd November 2014




shore unit and method of

demobilizing a self elevat-

ing mobile platform

No

Malaysia Granted MY-134886-A 31 December 2007 Method and means of

repairing a pipe

No

Thailand Granted 0901001833 11 September 2017




shore unit

No

GCC Pending




shore unit

No

Brazil Pending




shore unit

No

- 137 -

9. CAPITALISATION AND INDEBTEDNESS; WORKING CAPITAL

9.1 Capitalisation

The following table provides an overview of the capitalisation of De Raj Group on a consolidated basis

as per 31 August 2017, taken or derived from De Raj Group’s internal accounting records:

As of 31 August 2017

(unaudited) (in EUR thousand)

Total current debt 5,602

thereof Guaranteed

5,602*

thereof Secured 5,602**

thereof Unguaranteed/unsecured

0

Total non-current debt (excluding current portion of long-term debt) 21.899

thereof Guaranteed

21.899*

thereof Secured 21.899**

thereof Unguaranteed/unsecured

0

Shareholders’ equity 125,000

thereof Share capital 35,000

thereof Legal reserves 90,000

thereof Other reserves 0

Total 152,501

* Corporate guaranty from De Raj Group AG in the respective amount of the EXIM Facility granted by

EXIM Bank which amounts to kEUR 27,501 as of 31 August 2017.

** Charge on the Topside Equipment owned by Hummingbird and over the insurance policies on the

Topside Equipment owned by Hummingbird.

- 138 -

9.2 Liquidity and Net Financial Liabilities

The following table provides an overview of the indebtedness of De Raj Group on a consolidated basis

as per 31 August 2017, taken or derived from De Raj Group’s internal accounting records.

As of 31 August 2017

(unaudited) (in EUR thousand)

A. Cash 131

B. Cash equivalents 0

C. Trading securities 0

D. Liquidity( (A)+(B)+(C) 131

E. Current financial receivables 3,474

F. Current bank debt 0

G. Current portion of non-current debt 5,602

H. Other current financial debt 0

I. Current financial debt (F)+(G)+(H) 5,602

J. Net current financial indebtedness (I)–(E)-(D) 2,259

K. Non-current bank loans 21.899

L. Bonds and convertible bonds issued 0

M. Other non-current loans 0

N. Non-current financial indebtedness (K)+(L)+(M) 21.899

O. Net financial indebtedness (J)+(N) 24,158

9.3 Contingent Liabilities

9.3.1 Contingent Liabilities

There are no Contingent Liabilities.

9.3.2 Collateralisation

EXIM Bank has a charge on the following assets owned by the shareholders of De Raj Group:

- 139 -

- Third party charge over Jack-up Rigs Boss 1, Boss 6, Boss 7 and Boss 8.

- Charge over the insurance policies of Boss 1, Boss 6, Boss 7 and Boss 8

- Personal Guarantee of Mr. Nagendran Nadarajah

EXIM Bank has a charge on the following assets owned by the De Raj Group:

- Topside equipment owned by Hummingbird Energy (L) Inc

- present and future rights, interest, titles and benefits in and to the insurance policies on the

topside equipment owned by Hummingbird Energy (L) Inc

- all existing, future and floating assets of Hummingbird Energy (L) Inc.

- rights, interest, titles and benefits whatsoever, present and future in and under the debt ser-

vice reserve account and all monies standing to the credit of the debt service reserve account

maintained by Hummingbird Energy (L) Inc.

- rights, interest, titles and benefits whatsoever, present or future in and under the Second

Equipment Lease Agreement (i.e. an agreement dated 19 May 2014 between Hummingbird

Energy (L) Inc and Gryphon Energy Corporation PTE LTD, Singapore whereby Hummingbird

Energy (L) Inc agreed to lease certain equipment to Gryphon Energy Corporation PTE LTD)

- rights, interest, titles and benefits whatsoever, present and future in and under the project

account and all monies standing to the credit of the project account maintained by Gryphon

Energy (SEA) Sdn Bhd

There are corporate guarantees from Gryphon Energy (SEA) Sdn Bhd and an additional guarantee

intended to be placed from De Raj Group AG in the respective amount of the EXIM Facility granted by

EXIM Bank which amounts to EUR kEUR 27,501 as of 31 August 2017.

9.4 Statement on Working Capital

The Company believes that the De Raj Group has sufficient working capital to be able to settle its

liabilities as they fall due at least for the next twelve months.

- 140 -

10. DIVIDEND POLICY AND EARNINGS PER SHARE

Shareholder allotments in the distributable profits of the Company shall be determined by their shares

in the share capital, unless otherwise decided by Shareholders Meeting. For a German stock corpora-

tion (Aktiengesellschaft), resolutions concerning the distribution of dividends and the amount to be

distributed for a given fiscal year are adopted by the Shareholders’ Meeting in the subsequent fiscal

year on the basis of a joint proposal by the Management Board and the Supervisory Board. Dividends

may be distributed only from the net retained earnings of the Company. Net retained earnings are

calculated on the basis of the Company’s annual financial statements prepared in accordance with the

accounting principles of the HGB. Accounting principles under the HGB differ significantly from those

under IFRS.

The net retained earnings available for distribution is calculated by adjusting the net income/net loss

for the fiscal year for retained profits/accumulated losses brought forward from the previous fiscal year

and withdrawals from or appropriations to reserves. Certain reserves must be created by law and re-

spective allocations must be deducted when calculating the net income/net loss for the fiscal year

before profit distributions. Additional limitations apply where internally generated intangible fixed as-

sets, deferred tax assets, or the excess of plan assets over corresponding pension obligations have

been capitalized.

The Shareholders’ Meeting resolves on the appropriation of net retained earnings with a simple ma-jority of votes cast. If the Management Board and the Supervisory Board adopt the annual financial

statements, they may appropriate up to one half of the net income for the fiscal year to other surplus

reserves, after deducting from the net income for the year those amounts which must be appropriated

to the legal reserve and any accumulated losses brought forward. Any dividends resolved by the

Shareholders Meeting are distributed shortly after the Shareholders’ Meeting in accordance with the resolution on the appropriation of profits and the rules of the relevant clearing system. Withholding tax

of 25% of the dividend, plus a solidarity surcharge of 5.5% thereon and any applicable church tax are

generally withheld. To the extent the dividend is disbursed from the contribution account for tax pur-

poses (Section 27 of the German Corporation Tax Act (Körperschaftsteuergesetz - “KStG”)), no with-

holding tax or solidarity surcharge (or church tax) are withheld. For further information on the taxation

of dividends, please refer to Section 19.2 “Taxation of Shareholders”. There are no restrictions on dividend payments or specific procedures for nonresident owners of a security.

Dividend claims are subject to the regular three-year limitation period. Once the limitation period pass-

es, the dividend remains with the Company.

Due to the fact that the Company was a shelf company and its business purpose was restricted to the

administration of its own assets until August 2017, there have been no net retained earnings available

for distribution for the abbreviated financial year 2015 and the full financial year 2016. Corresponding-

ly, there was no distribution of dividends for the abbreviated financial year 2015 and the financial year

2016.

- 141 -

Based on the formation of the De Raj Group by the acquisition of its subsidiaries, the Company has

set the ground to be in a position to distribute dividends in the future. The Company intends to follow a

mixed approach whereby a part of the distributable profits will be paid out to the shareholders and a

part of the distributable profits will be kept with the Company in order to strengthen its financial posi-

tion for its future business. The decision on whether and in what amount dividends are to be distribut-

ed will depend on a series of factors, including the level of distributable profit for the year, market de-

velopments, the investment policy, the Company's rating status, the financing needs of the De Raj

Group at the time as well as the respective resolution to be adopted by the Company's shareholders'

meeting and no assurance can be given that the Company will achieve sufficient distributable profits

for a distribution in the future. As the Company does not conduct any operating business itself its abil-

ity to pay dividends depends substantially on its operating subsidiaries and affiliates making profits

and distributing these to the Company or transferring them to the Company. Furthermore, the De Raj

Group's financing agreements may in the future include financial covenants that may indirectly restrict

the amount of cash available for the distribution of dividends.

The Company can make no predictions as to the size of future profits available for distribution, or

whether distributable profits will be achieved at all. Hence the Company cannot guarantee that divi-

dends will be paid in the future. Moreover, the results of operations as set out in the financial state-

ments may not be necessarily indicative of the results that should be expected in the future or

amounts of future dividend payments.

- 142 -

11. SELECTED FINANCIAL INFORMATION

Investors should read the following selected financial information of the companies of De Raj Group

together with sections “3. Risk Factors”, “8. Business Description” and “12. Management’s Discussion and Analysis of Net Assets, Financial Condition and Results of Operations” and the financial sections of this Prospectus.

This section includes selected financial information for the Company for the fiscal years ended 31

December 2015, 31 December 2016 and selected interim financial information for the first six months

of 2017. Furthermore, this section includes selected financial information for the company Humming-

bird Energy (L) Inc for the fiscal years ended 31 December 2014, 31 December 2015, 31 Decem-

ber 2016 and selected interim financial information for the first six months of 2017 and for the compa-

ny Gryphon Energy (SEA) Sdn Bhd for the fiscal year ended 31 December 2016 and selected interim

financial information for the first six months of 2017 as these companies were the only significant

companies of the De Raj Group as regards turnover, profits and balance sheet equity in the period

from 1 January 2014 until 30 June 2017.

Furthermore, this section includes selected financial information of the pro-forma consolidated ac-

counts for the De Raj Group, which was formed in October 2017, for the fiscal year ended 31 Decem-

ber 2016 and the first six months of 2017. This financial information is based upon the following:

In October 2017, De Raj has acquired shares in the companies Gryphon Energy (SEA), Hummingbird

Energy (L) Inc, De Raj Energy Sdn Bhd, Condor Energy (L) Inc and Gaea Power GmbH whereby the

now existing De Raj Group was formed. Furthermore, in October 2017, i.e. shortly before the afore-

mentioned acquisition of shares, the company De Raj Energy Sdn Bhd acquired patents and the com-

pany Condor Energy (L) Inc acquired five Jack-up Rigs (the aforementioned transactions in the follow-

ing referred to as “Formation of De Raj Group”).

On the basis of the Formation of De Raj Group and the respective acquisitions, De Raj has prepared

pro-forma consolidated profit and loss statements for the period from 1 January 2016 to 31 December

2016 and for the period from 1 January 2017 to 30 June 2017 as well as a pro-forma balance sheet as

of 30 June 2017 and supplemented these with pro-forma notes (hereafter collectively referred to as

the “Pro-Forma Consolidated Financial Information”). The purpose of the Pro-Forma Consolidated

Financial Information is to present the material effects the Formation of De Raj Group would have had

on hypothetical consolidated financial statements of De Raj if the acquisitions which took place in the

context of the Formation of De Raj Group had been a part of the De Raj Group throughout the entire

fiscal year ended 31 December 2016 and the six months period ended 30 June 2017. Thereby, the

reference to De Raj Group in the period from 1 January 2016 until 30 June 2017 has to be understood

as hypothetical as there had been no De Raj Group during that period due to the fact that De Raj

Group only came into existence upon the Formation of De Raj Group.

The pro-forma consolidated profit and loss statements for the period from 1 January 2016 to 31

December 2016 and for the period from 1 January 2017 to 30 June 2017 were prepared based on the

assumption that the acquisitions took place as of 1 January 2016.

- 143 -

The Pro-Forma Consolidated Financial Information has been prepared for illustrative purposes only.

Because of its nature, the Pro-Forma Consolidated Financial Information describes only a hypothetical

situation and since it contains assumptions and uncertainties, the presentation does not reflect the

actual net assets, financial position and results of operations of the De Raj Group as of any historical

date nor does it project the future development of the net assets, financial position and results of

operations of De Raj Group. The Pro-Forma Consolidated Financial Information is only meaningful in

conjunction with the historic information of De Raj, Hummingbird Energy (L) Inc and Gryphon Energy

(SEA) Sdn Bhd contained in the section “Financial Information” in this prospectus.

The Pro-Forma Consolidated Financial Information was prepared in accordance with the rules of the


financial information (IDW Accounting Practice Statement: Preparation of Pro-Forma Financial

Information (IDWAcPS AAB 1.004) (IDW Rechnungslegungshinweis: Erstellung von Pro-Forma-

Finanzinformationen (IDW RH HFA 1.004)).

The selected financial information for Hummingbird Energy (L) Inc for the fiscal years ended 31 De-

cember 2014, 31 December 2015 and 31 December 2016 and the selected financial information for

Gryphon Energy (SEA) Sdn Bhd for the fiscal year ended 31 December 2016 summarised below has

been extracted or derived from the audited financial statements (IFRS) of Hummingbird Energy (L) Inc

and Gryphon Energy (SEA) Sdn Bhd for the respective fiscal years and the internal accounting rec-

ords or management reporting systems of Hummingbird Energy (L) Inc. and Gryphon Energy (SEA)

Sdn Bhd.

The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L) Inc

and Gryphon Energy (SEA) Sdn Bhd are in accordance with the IFRS as adopted by the European

Union.

The selected interim financial information for Hummingbird Energy (L) Inc and Gryphon Energy (SEA)

for the first six months of 2017 summarised below has been extracted or derived from the internal

accounting records or management reporting systems of Hummingbird Energy (L) Inc. and Gryphon

Energy (SEA) Sdn Bhd.

The selected pro-forma consolidated financial information for De Raj Group as of and for the fiscal

year ended 31 December 2016 and the interim period from 1 January 2017 until 30 June 2017 con-

tained in this section has been extracted or derived from the audited financial statements of the com-

panies Hummingbird (L) Inc., De Raj Energy Sdn Bhd, Gryphon SEA Sdn Bhd, Condor Energy (L) Inc

(each according to IFRS) and the audited financial statements of De Raj and Gaea Power GmbH

(each according to HGB) as of 31 December 2017 and the respective internal accounting records or

management reporting systems of the aforementioned companies, unless stated otherwise.

The audited financial statements (IFRS) of Hummingbird Energy (L) Inc and the audited pro-forma

consolidated financial information (IFRS) mentioned above are included in this Prospectus under “Fi-nancial Information”.

- 144 -

Where financial information in the following tables is labelled “audited”, this means that it was extract-ed from the audited consolidated financial statements (IFRS) of Hummingbird Energy (L) Inc as of and

for the fiscal years ended 31 December 2014, 31 December 2015 and 31 December 2016. Where

financial information in the following tables is labelled “unaudited”, this means that it was extracted or derived from the internal accounting records or management reporting systems of companies of De

Raj Group or is based on calculations of financial information from the above mentioned sources.

Where financial information in the following tables is labelled “IFRS”, this means that the IFRS applied in the respective financial statements were applied in accordance with the IFRS as adopted in the

European Union.

Certain financial information (including percentages) in the following tables has been rounded accord-

ing to established commercial standards. As a result, the aggregate amounts (sum totals or sub-totals

or differences or if numbers are put in relation) in the following tables may not correspond in all cases

to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in this Pro-

spectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totals con-

tained in those tables.

11.1 Selected Financial Information for De Raj Group AG

Selected Financial Information from the Profit and Loss Statement

De Raj Group AG, Cologne

Statement of profit or loss and other comprehensive income for the period from 14 January 2015 to 31 December 2015

14.01. - 31.12.2015

(HGB, audited) Profit of the Financial Year EUR

0,00

- 145 -


Statement of profit or loss and other comprehensive income for the period 2016

01.01.2016 - 31.12.2016

(HGB, audited)

2015 (HGB, audited)

Profit of the Finan-cial Year

EUR EUR

0,00 0,00

- 146 -

Selected Financial Information from the Balance Sheet

Balance Sheet as of 31 December 2015


Statement of financial position as at the end of the period 2015

ASSETS 31.12.2015

EUR (HGB,

audited)

EQUITY AND LIABILITIES

31.12.2015 EUR

(HGB, audited)

Current Assets Shareholders’ Equity

Current Finan-cial Assets

Share Capi-tal

50.000,00

Cash and Bank Balanc-es

50.000,00

50.000,00 50.000,00


Statement of profit or loss and other comprehensive income for the period from 01 January to 30 June 2017

01.01.2017 -

30.06.2017 (unaudited)

2016 (HGB, audited)


EUR EUR

0,00 0,00

- 147 -




ASSETS 31.12.2016 EUR

(HGB, audited)

31.12.2015 EUR

(HGB, audited)

EQUITY AND LIABIL-

ITIES

31.12.2016 EUR

(HGB, audited)

31.12.2015 EUR

(HGB, audited)

Current Assets

Share-holders’ Equity

Current Financial Assets

Share Capi-tal

50.000,00 50.000,00

Cash and Bank Ba-lan-ces

50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

Balance Sheet as of 30 June 2017


Statement of financial position as at the end of the period 30 June 2017


(unaudit-ed)

31.12.2016 EUR

(HGB, audited)


30.06.2017 EUR

(unaudit-ed)

31.12.2016 EUR

(HGB, audited)

Current Assets

Sharehold-ers’ Equity


Share Capital 50.000,00 50.000,00

Cash and Bank Ba-lances

50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

- 148 -

Selected Financial Information from the Cash-Flow Statement

Cash Flow Statement for the period 1 January to 30 June 2017


Statement of Cash flows for the period from 01 January 2017 to 30 june 2017

2017

2016 TEUR

(unaudited)

TEUR (HGB, audited)

Cash flows from/ (for) operating activities Profit before taxation + 0 + 0

Operating profit bevor working capital changes

+ 0

+ 0

Cash from/(for) operations

+ 0

+ 0

Net cash from /(for) operating activities

+ 0

+ 0

Cash flows for investing activities Net cash für investing activities

+ 0

+ 0

Cash flows (for)/ from financing activities Payments received from capital increases

+ 0 + 0

Net cash (for)/ from financing activities

+ 0

+ 0

Net increase/ ( decrease) in cash and bank bal-ances

+ 0

+ 0

Cash and cash equivalents at beginning of the financial year

+ 50

+ 50

Cash and cash equivalents at end of the finan-cial year

+ 50

+ 50

Represented by:

Cash on hand + 0 + 0

Cash at banks + 50 + 50

+ 50 + 50

Cash Flow Statement for the period 1 January to 31 December 2016

- 149 -


Statement of Cash flows for the period 2016

2016

2015 TEUR

(HGB, audited)

TEUR (HGB, audited)

Cash flows from/ (for) operating activities

Profit before taxation + 0 + 0


+ 0

+ 0


+ 0

+ 0


+ 0

+ 0


+ 0

+ 0

Cash flows (for)/ from financing activities

Payments received from capital increases

+ 0 + 50


+ 0

+ 50


+ 0

+ 50


+ 50

+ 0


+ 50

+ 50

Represented by:



+ 50 + 50

- 150 -

Consolidated Cash Flow Statement for the period 1 January to 31 December 2015


Statement of Cash flows for the period from 14 January 2015 to 31 December 2015

2015 TEUR

(HGB, audited)


Profit before taxation + 0


+ 0


+ 0


+ 0


+ 0


+ 50


+ 50

Net increase/ ( decrease) in cash and bank balances

+ 50


+ 0

Cash and cash equivalents at end of the financial year

+ 50

Represented by:

Cash on hand + 0

Cash at banks + 50

+ 50

- 151 -

11.2 Selected Financial Information for Hummingbird Energy (L) Inc

Selected Financial Information from the Profit and Loss Statement



STATEMENT OF PROFIT AND LOSS <--------------------Audited Figures---------------------------->

01.01. 01.01. 01.01. - - - 31.12. 31.12. 31.12. 2016 2015 2014 USD USD USD

Revenue 11.885.633 17.702.500 14.602.000 Cost of Sales (4.445.179) (5.424.377) (4.589.095) Net rental income 7.440.454 12.278.123 10.012.905 Administrative Expenses (569.742) (1.880.972) (2.550.229) Other Income - 7 51 Other operating expenses - - - Total other operating income and expenses 7 51 Income from the disposal of Properties - -


- - -

Result from the disposal of properties - - Valuations gains from proper-ties

- - -

Impairment loss from proper-ties

- - -

Valuations results Operation result 6.870.712 10.397.165 7.462.778 Result from at equity-accounted investments

- - -

Interest income - 7 51 Finance Costs (2.309.710) (1.882.630) (635.688) Minority interests - - - Financial result (2.309.710) (1.882.623) (635.637) Net Profits/ (Loss) 4.561.002 8.514.528 6.827.039

- 152 -





Account Account

1 January until

30 June 2017

(Unaudited)

1 January

until

30 June2016

(Unaudited)

EUR EUR

Revenue 4.800.263 5.684.051

Cost of sales (2.226.326) (2.221.171)

Gross profit 2.573.937 3.462.880

Other income - 23.363

Administrative expenses (148.161) (47.228)

Finance costs (748.822) (480.782)

Profit / (Loss) before taxation 1.676.954 2.958.234

Tax expense (3.957) (4.419)

Profit / (Loss) for the year 1.672.997 2.953.815

- 153 -

Selected Financial Information from the Balance Sheet as of 31 December 2014, 2015 and 2016




<-------------------------Audited Figures--------------------> 31.12. 31.12. 31.12. 2016 2015 2014 USD USD USD

Assets Non Curret Assets - - -

Intangible assets - - - Plant and Equipment 57.095.266 61.567.527 70.430.893 Inventories + Investment in an associated company

2.240.012 2.240.012 2.200.000

Total non-current assets 59.335.278 63.807.539 72.630.893 Current assets Trade receivables Income tax receivables Other receivables and de-posits + Amount owed by Holding Company + Amount owing by related companies + Amount owed by related parties

13.064.574 23.370.336 21.690.078

Cash and bank balances 2.811.168 10.023.260 2.283 Total current assets 15.875.742 33.393.596 21.692.361

Total Assets 75.211.020 97.201.135 94.323.254

Equity and liabilities Equity Share capital 3.000.000 3.000.000 1 Share premium Revaluation reserve Retained profits 16.977.241 12.416.239 6.901.710 Treasury Shares Total shareholders' equity 19.977.241 15.416.239 6.901.711

Non current liabilities Minority interests Financial liabilities 31.912.500 34.375.000 11.400.000 Derivative financial instru-ments

Other liabilities Total non-current liabili-ties

31.912.500 34.375.000 11.400.000

Current liabilities Provisions

- 154 -

Term Loan 5.900.000 13.750.000 20.000.000 Trade Payable 350.065 349.729 1.577.729 Accruals + Amount owing to holding company + Amount owing to related companies + Amount owing to related parties + Amount owing to a director + Provision for taxa-tion

17.071.214 33.310.167 54.443.814

Total current liabilities 23.321.279 47.409.896 76.021.543 Total shareholders' equity and liabilities

75.211.020 97.201.135 94.323.254

Balance Sheet as of 30 June 2017 and 31 December 2016 30 June 2017

EUR (unaudited)

31 December 2016 EUR (audited)

Fixed Assets 47,792,583 56,391,635 Current Assets 6,790,557 15,088,141 Current Liabilities 11,434,902 22,164,302 Long Term Liabilities 23,741,794 30,329,310 Retained Earnings / (Losses) 16,780,623 16,134,994

Selected Financial Information from the Cash-Flow Statement



STATEMENT OF CASH FLOWS <------------IFRS, Audited Figures------>

01.01. 01.01. 01.01. - - - 31.12. 31.12. 31.12. 2016 2015 2014 USD USD USD

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

Profit before taxation:

4.565.908

8.519.188

6.832.761 Adjustments for: Depreciation of plant and equipment

4.472.261

4.413.124

3.179.029 Interest expenses

2.309.710

1.882.630

635.688 Unrealised foreign exchnage gain

-

(511.467) -

11.347.879

14.303.475

10.647.478

Operating profit before working capital chang-es

- 155 -

Decrease in inventories -

- 800.000

(Increase)/decrease in other receivables and deposits

(348)

18.572

(114.901)

Increase/(decrease) in trade payables 336

(1.228.000)

1.557.365

Increase/(decrease) in accruals 704.665

(10.475)

771

Decrease in amount owing by holding compa-ny

-

14.602.000

(14.602.000)

Decrease in amount owing to related company (2.752.888)

- (3.546.051)

Decrease/(increase) in amount owing by related com-pany

19.112.200

(18.854.500)

7.765.940

Decrease in amount owing to related parties -

(28.060.214)

-

CASH FROM/(FOR) OPERATIONS

28.411.844

(19.229.142)

2.508.602 Interest paid

(2.309.710)

(1.882.630)

(635.688) Income tax paid

(4.906)

(6.552)

(6.552) NET CASH FROM/(FOR) OPERATING ACTIVITIES

26.097.228

(21.118.324)

1.866.362

CASH FLOWS FOR INVESTING ACTIVITIES Decrease/(Increase) in restricted bank bal-ances

7.515.892

(10.021.684)

-

Investment in associate -

(40.012)

-

Purchase of plant and equipment -

- (44.833.316)


(1.364.387)

2.553.776

-

Advances to related parties (6.944.995)

(106)

-

Adjustment of plant and equipment due to price ad-justment

-

4.450.242

-

NET CASH FOR INVESTING ACTIVITIES (793.490)

(3.057.784)

(44.833.316)

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES Drawdown of term loan

-

85.000.000

40.000.000 Dividends paid

- -

(8.200.000) Repayment of term loans

(10.312.500)

(68.275.000)

(8.600.000) Repayment to holding company

(671.708) -

3.083.536 (Repayments to)/advances from related com-panies

(13.970.671)

21.277.718

6.229.317

Advance from related parties 1.017

40.011

(2.654.028)

Repayment to a director (46.076)

(13.867.328)

13.109.834

NET CASH (FOR)/FROM FINANCING ACTIVITIES

(24.999.938)

24.175.401

42.968.659

NET INCREASE/(DECREASE) IN CASH AND BANK

- 156 -

BALANCES 303.800 (707) 1.705

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR

1.576

2.283

578

CASH AND CASH EQUIVALENTS AT END OF

THE FINANCIAL YEAR 305.376

1.576

2.283

REPRESENTED BY: CASH ON HAND

6

124 -

CASH AT BANKS 305.370

1.452

2.283

305.376

1.576

2.283

11.3 Selected Financial Information for Gryphon Energy (SEA) Sdn Bhd

Selected Financial Information from the Profit and Loss Statement for the Period from 26 No-

vember 2015 until 31 December 2016 RM

(IFRS, audited)


(174,545)

LOSS/TOTAL COMPREHENSIVE EXPENSES FOR THE FINANCIAL PERIOD

ATTRIBUTABLE TO:- Owners of the Company

(174,545)

- 157 -

Selected Financial Information from the Profit and Loss Statement for the Period from 1 Janu-

ary 2017 until 30 June 2017


(Incorporated in Malaysia )




until 2017

(Unaudited)



Revenue 5.488 -


Gross profit 934 -

Other income - -


Finance costs - -


Tax expense - -




Selected Financial Information from the Balance Sheet as of 31 December 2016

RM

(IFRS, audited)

ASSET

- 158 -

CURRENT ASSETS

Prepayments 93,860 Amount owing by related companies 827,418 Bank balances 4,240 TOTAL ASSET 925,518


EQUITY Share Capital 1,000,000 Accumulated loss (174,545) TOTAL EQUITY 825,455 CURRENT LIABILITIES Other payables and accruals 93,656 Amount owing to a director 6,407 TOTAL LIABILITY 100,063 TOTAL EQUITY AND LIABILITY

925,518

Selected Financial Information from the Balance Sheet as of 30 June 2017

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 and 31 December 2016


Account Account 30 June 2017 31 December 2016

kEUR (Unaudited)

kEUR (audited)

Fixed Asset - -





Selected Financial Information from the Cash-Flow Statement for the Period from 26 November

2015 until 31 December 2016

RM

- 159 -

(IFRS, audited)

CASH FLOWS FOR OPERATING ACTIVITIES Loss for the financial period (174,545) Working capital changes:- Increase in prepayments (93,860) Increase in other payables and accruals 93,656 NET CASH FOR OPERATING ACTIVITIES (174,749) NET CASH FOR INVESTING ACTIVITY Advances to a related party (827,418) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares 1,000,000 Advances from a director 6,407 NET CASH FROM FINANCING ACTIVITIES 1,006,407 NET MOVEMENT IN CASH AND BANK BALANCES/CASH AND BANK BALANCES AT END OF THE FINANCIAL PERIOD

4,240

11.4 Selected Financial Information for De Raj Group from the Pro-Forma Consolidated

Financial Statements

In the following, selected financial information from the Pro-Forma Consolidated Financial Information

is reproduced. The Pro-Forma Consolidated Financial Information have been set up in the context of

the Formation of the Group (for details of the background of the Pro-Forma Consolidated Financial

Information cf. the explanatory stetements at the beginning of this Section 11). The Pro-Forma

Consolidated Financial Information has been prepared for illustrative purposes only. Because of its

nature, the Pro-Forma Consolidated Financial Information describes only a hypothetical situation and

since it contains assumptions and uncertainties, the presentation does not reflect the actual net

assets, financial position and results of operations of the De Raj Group as of any historical date nor

does it project the future development of the net assets, financial position and results of operations of

De Raj Group. The Pro-Forma Consolidated Financial Information is only meaningful in conjunction

with the historic information of De Raj, Hummingbird Energy (L) Inc and Gryphon Energy (SEA) Sdn

Bhd contained in the section “Financial Information” in this prospectus.





Finanzinformationen (IDW RH HFA 1.004)).

- 160 -

Selected Financial Information from the Profit and Loss Statement from the Pro-Forma

Consolidated Financial Statements

De Raj Group AG

Cologne , Germany

STATEMENT OF PROFIT AND LOSS (Pro Forma) 1st HY 2017 FY 2016 EUR EUR

Rental Income 7.844.000 12.150.798 Operating Expenses (4.089.654) (5.458.538) Net rental income 3.754.346 6.692.260 General administrative ex-penses

(958.771) (586.714)

Other operating income 86 232.808 Other operating expenses (91.233) (114.318) Total other operating income and ex-penses

2.704.428 6.224.036

Income from the disposal of Properties - -


- -

Result from the disposal of properties - - Valuations gains from properties - -

Impairment loss from properties - -

Valuations results Operation result 2.704.428 6.224.036 Result from at equity-accounted investments

- -

Interest income - - Interest expenses (790.371) (2.086.647) Minority interests - - Financial result (790.371) (2.086.647) Net Profits/ (Loss) 1.914.057 4.137.389

- 161 -

Selected Financial Information from the Balance Sheet from the Pro-Forma Consolidated Fi-

nancial Statements

De Raj Group AG

Cologne, Germany





Total Assets 159.659.817 75.529.812


Non current liabilities Liabilities to banks 29.951.434 30.274.642 Liabilities to shareholders 12 (78.721.608) Total non-current liabilities 29.951.446 (48.446.966) Current liabilities Amount owing to directors or related parties 6.360.608 15.523.539 Liabilities to banks - 5.597.191 Trade payables 636.684 339.112 Accrued expenses and Provisions 715.153 688.302 Other current and financial liabilities 453.356 (23.855.637) Total current liabilities 8.165.801 (1.707.493) Total shareholders' equity and liabilities 159.659.817 75.529.812

- 162 -

12. MANAGEMENT’S DISCUSSION AND ANALYSIS OF NET ASSETS, FINANCIAL CONDI-TION AND RESULTS OF OPERATIONS

Investors should read the following selected financial information of the companies of De Raj Group

together with sections “3. Risk Factors” and “8. Business Description” and the financial sections of this Prospectus.

In the following management’s discussion and analysis, the selected financial information for the Company for the fiscal years ended 31 December 2015, 31 December 2016 and selected interim fi-

nancial information for the first six months of 2017 is discussed and analysed

Furthermore, in the following management’s discussion and analysis, the selected financial infor-

mation for the company Hummingbird Energy (L) Inc as of and for the fiscal years ended 31 Decem-

ber 2014, 31 December 2015 and 31 December 2016 and the selected interim financial information for

the first six months of 2017 and the selected financial information for the company Gryphon Energy

(SEA) Sdn. Bhd for the fiscal year ended 31 December 2016 and the selected interim financial infor-

mation for the first six months of 2017 is discussed and analysed as these companies were the only

significant companies of the De Raj Group as regards turnover, profits and balance sheet equity in the

period from 1 January 2014 until 30 June 2017.

For a discussion and analysis of the financial information of the pro-forma consolidated accounts for

the De Raj Group for the fiscal year ended 31 December 2016 and the first six months of 2017 confer

the following sections 13, “Pro Forma Financial Information of De Raj Group”. and 14, “Explanatory remarks on the Pro Forma Financial Information of De Raj Group”.

The selected financial information for Hummingbird Energy (L) Inc for the fiscal years ended 31 De-

cember 2014, 31 December 2015 and 31 December 2016 and the selected financial information for

Gryphon Energy (SEA) Sdn Bhd for the fiscal year ended 31 December 2016 discussed below has

been extracted or derived from the audited financial statements (IFRS) of Hummingbird Energy (L) Inc

and Gryphon Energy (SEA) Sdn Bhd for the respective fiscal years and the internal accounting rec-

ords or management reporting systems of Hummingbird Energy (L) Inc. and Gryphon Energy (SEA)

Sdn Bhd.

The selected interim financial information for Hummingbird Energy (L) Inc and Gryphon Energy (SEA)

for the first six months of 2017 discussed below has been extracted or derived from the internal ac-

counting records or management reporting systems of Hummingbird Energy (L) Inc. and Gryphon

Energy (SEA) Sdn Bhd.

The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L) Inc

and Gryphon Energy (SEA) Sdn Bhd are in accordance with the IFRS as adopted by the European

Union.

The audited financial statements (IFRS) of Hummingbird Energy (L) Inc and the audited financial in-

formation (IFRS) of Gryphon Energy (SEA) Sdn Bhd mentioned above are included in this Prospectus

under “Financial Information”.

- 163 -

Where financial information in the following tables is labelled “audited”, this means that it was extract-ed from the audited consolidated financial statements (IFRS) of Hummingbird Energy (L) Inc as of and

for the fiscal years ended 31 December 2014, 31 December 2015 and 31 December 2016. Where

financial information in the following tables is labelled “unaudited”, this means that it was extracted or derived from the internal accounting records or management reporting systems of companies of De

Raj Group or is based on calculations of financial information from the above mentioned sources.

Where financial information in the following tables is labelled “IFRS”, this means that the IFRS applied in the respective financial statements were applied in accordance with the IFRS as adopted in the

European Union.

Certain financial information (including percentages) in the following tables has been rounded accord-

ing to established commercial standards. As a result, the aggregate amounts (sum totals or sub-totals

or differences or if numbers are put in relation) in the following tables may not correspond in all cases

to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in this Pro-

spectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totals con-

tained in those tables.

12.1 Business Overview

Revenue

De Raj Group derives its revenue from the following business segments:

(a) Leasing of Marine Offshore Equipment

Over the years, De Raj Group has accumulated an assortment of marine based engineering

equipment which is enhanced and subsequently leased to interested parties over a period of

long lease with a minimum of three (3) years, up to a maximum of fifteen (15) years.

(b) Engineering, Procurement, Construction and Commissioning

De Raj Group designs, engineers, purchases, fabricates, installs and commissions process

modules and equipment on a turnkey project basis (Engineering, Procurement, Construction

and Commissioning, “EPCC”). The process modules and equipment are critical parts of the

production facilities for FPSO vessels, MOPUs, offshore platforms and onshore gas power

plants.

(c) Contract Engineering and Other Services

Since 2014, De Raj Group also customises its services to cater to the needs of its customers,

who do not require fully integrated turnkey services but bespoke engineering and other ser-

- 164 -

vices. Such services include project management, engineering, procurement and/or construc-

tion.

(d) Leasing of CHP Plants

De Raj Group derives its revenues partially from lease rates which are payable under leasing

agreements which De Raj Group enters into as lessor.

Currently, De Raj Group’s main source of revenue is the long term leasing of a Mobile Offshore Pro-

duction Unit off the coast to Surabaya, Indonesia.

Other revenue is mainly derived from contracts relating to EPCC for process modules and equipment.

These contracts are project-based, generally non-recurring in nature and are based on a fixed contract

value which is agreed with the customers prior to the execution of such contracts. These projects

typically take between six months to a year to complete, depending on the complexity and

specifications requested by the customers.

The revenue and cost from EPCC projects are recognised progressively in proportion to the stages of

completion based on milestones agreed with the customers which is reflective of the value of work De

Raj Group has done. When De Raj Group anticipates that total project costs will exceed total project

revenue of an EPCC project, the expected loss is recognised as an expense immediately.

Cost of sales

The major components of cost of sales comprise the following:

(a) Depreciation of the asset leased out and all incidental costs related to the maintenance and

availability of the assets in relation to the operational performance of the assets. These would

include insurances, repairs and maintenance, scheduled overhaul of the operating equipment.

(b) cost of compressors, motors, engines, heaters and coolers and related spare parts;

(c) direct labour costs; and

(d) other costs.

Percentage of cost of compressors, motors, engines, heaters and coolers and related spare parts, that

are procured in each EPCC project and is typically dependent on the technical specification and project

requirements. As such, the cost of compressors, motors, engines, heaters and coolers will make up a

smaller percentage of the total cost of that particular project.

For any EPCC project, De Raj Group’s in-house engineers / skilled workers will work closely with the

customers to design and engineer solutions for their needs which are subsequently fabricated and

- 165 -

integrated in-house and/or by sub-contractors. Commissioning activities are typically conducted on site

by De Raj Group’s of in-house engineers and supervisors.

Direct labour costs comprise mainly wages, overtime and government levies for this team of engineers

as well as skilled workers who carry out the fabrication of these solutions.

Sub-contractors' charges are incurred for fabrication, piping, insulation, painting and blasting, scaffolding,

mechanical and electrical fitting and testing.

Other income

De Raj Group’s other income comprises mainly from the trading of the inventories of equipment from De

Raj Group’s vast list of assets. Gains from the sale of inventories are classified as Other Income.

Administrative expenses

De Raj Group’s major components of administrative expenses comprise the following:

(a) staff cost (including Directors' remuneration);

(b) depreciation expense;

(c) rental expense; and

(d) other expenses.

Other operating expenses / income

De Raj Group’s other operating expenses / income comprise mainly foreign exchange losses / gains

arising from fluctuations in foreign exchange rates between the various foreign currencies and US dollars

as well as other miscellaneous expenses which are not significant in amount for the relevant financial

years.

Finance costs

De Raj Group’s finance costs mainly pertain to interest expenses arising from utilisation of bank facilities

such as bank loans as well as project financing for large scale projects. De Raj Group’s average finance

costs is within the range of 4.5% to 5% for the periods under review.

Income tax expense

Our income tax expenses consist of both current tax as well as deferred income tax. Generally, we are

subjected to the Labuan, Malaysia tax environment. In accordance with the applicable statutory tax rates

in Labuan, we enjoy a relatively low prevailing tax rate of 3% or RM20,000 whichever is lower.

12.2 Significant Factors affecting De Raj’s Net Assets, Financial Condition and Results of

Operations

- 166 -

Oil and Gas Division of De Raj Group

One of the main factors affecting De Raj’s Net Assets, Financial Condition and Results of Operations

in view of the oil and gas sector is the respective oil and gas price. Although De Raj Group does not

sell the oil and gas which is produced under utilisation of De Raj Group’s Assets itself, the oil and gas

price nevertheless has a bearing on the revenues and profits of De Raj Group. Firstly, the oil and gas

price is decisive for the leasing rates which De Raj Group is able to charge for the leasing of the Jack-

up Rigs and the Topside Equipment in view of contracts to be entered into. Furthermore, the fluctua-

tion of the oil and gas price also has a bearing on current contracts of De Raj Group, which have al-

ready been entered into. This is because in the light of a potential decrease in the oil and gas price,

also current contracts may have to be adjusted due to business considerations even if De Raj Group

is legally not obliged to do so under the existing contract with the client.

Another main factor affecting De Raj’s Net Assets, Financial Condition and Results of Operations is

the existence and discovery of sufficient oil and gas fields, which are adequate for the deployment of

De Raj Group’s assets. This is because the demand of the deployment of the Jack-up Rigs and Top-

side Equipment of De Raj Group dependent upon the existence and discovery of oil and gas fields in

which they may be deployed.

Moreover, as De Raj Group’s business is capital intensive, its Net Assets, Financial Condition and

Results of Operations is dependent upon the ability to obtain sufficient financing, in particular bank

financing, at adequate financing costs.

Furthermore, due to the fact that the business of De Raj Group is conducted in various different cur-

rencies, De Raj Group’s business is capital intensive and its Net Assets, Financial Condition and Re-

sults of Operations is dependent upon the development of the currency exchange rates. Hence, De

Raj Group is exposed to foreign exchange risk (cf. the risk factor above under 3., “Risk Factors”, 3.1

“Market and Business Risks”, 3.1.13, “De Raj Group is exposed to foreign exchange risk arising from

changes in the exchange rates between the functional currencies of companies in its Group and other

currencies” for details).

German Power Division of De Raj Group

In view of the German power section, the existence and the amount of feed in tariffs for electricity

generated by biomass fuel is decisive for the Net Assets, Financial Condition and Results of Opera-

tions. Although De Raj Group itself does not operate the CHP plants and thus does not take ad-

vantage of the feed in tariffs but only receives fixed leasing rates as lessor of the CHP plans, De Raj

Group nevertheless is indirectly dependent on the feed in tariffs as its customers as lessees of the

- 167 -

CHP plants are dependent on the feed in tariffs. Hence, a decrease or abolishment of feed in tariffs

would restrict the ability of De Raj Group to create further business in the German power section and

may also endanger the fulfillment of existing contracts due to a potential insolvency of the lessees of

the CHP plants.

Furthermore, the German power section is dependent upon the price of the biomass fuel, in particular

palm oil, which is utilised in the CHP plants as the price is decisive for the profitability of the operation

of the CHP plants. Although De Raj Group does not operate the CHP plants itself, it is nevertheless

dependent upon the fluctuation of the biomass fuel price. This is because the fluctuation of the bio-

mass fuel price may render the operations of the CHP plants economically not viable which will in turn

curtail the demand for the entering into leasing agreements.

12.3 Significant Accounting and Valuation Methods

De Raj Group has prepared the financial information contained in this Prospectus in accordance with

EU International Financial Reporting Standards as applied in the EU. Note 2 of the notes to the

combined financial statements includes a summary of the significant accounting policies and methods

used in preparing these financial statements. Preparation of the financial statements requires the

requested management to make estimates and judgments that affect the reported amount of the

assets, liabilities, revenue and expense. The actual results may differ significantly under different

assumptions or conditions. The accounting policies that De Raj Group believes are the most critical to

a full understanding and evaluation of De Raj Group’s reported financial results are set forth below.

Contract sales

For contract sales, including EPCC projects, De Raj Group progressively recognizes revenue and cost

on contracts in proportion to the completion stage of such contracts based on milestones agreed with the

customers, which are reflective of the stage of the contract. Significant assumptions are required in

estimating the total contract costs which affect the contract cost recognised to-date based on the stage

of completion. Allowances are made for losses anticipated on individual contracts when such losses

become known. In making these estimates, De Raj Group relies on its past experience.

Impairment of property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and any accumulated

impairment losses. Depreciation is charged so as to write off the cost of assets over their estimated

useful lives, using the straight-line method. The estimated useful lives and depreciation method are

reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on

a prospective basis. The gain or loss arising on disposal or retirement of an item of property, plant and

equipment is determined as the difference between the sales proceeds and the carrying amounts of the

asset and is recognised in profit and loss. De Raj Group reviews the carrying amounts of its property,

- 168 -

plant and equipment to determine whether there is any indication that those assets have suffered an

impairment loss.

Allowance for doubtful receivables

Allowance for bad and doubtful receivables is based on the evaluation of collectability and ageing

analysis of receivables and on De Raj Group’s judgment based on past experience. A considerable

amount of judgment is required in assessing the recoverability of these receivables, including the current

credit worthiness and the past collection history of these customers.

Allowance for inventories

De Raj Group reviews the listing of inventories on a regular basis to identify obsolete or slow moving

inventory. Inventories are stated at the lower of cost and net realisable value. Cost comprises direct

materials and, where applicable, direct labour costs and those overheads that have been incurred in

bringing the inventories to their present location and condition. Cost is specifically identified individually.

Net realisable value represents the estimated selling price less all estimated costs of completion and

costs to be incurred in marketing, selling and distribution.

12.4 Management Discussion and Analysis of Hummingbird Energy (L) Inc.

12.4.1 Results of Operation of Hummingbird Energy (L) Inc

The following table shows the Profit and Loss Statement of Hummingbird for the business years end-

ing 31 December 2014, 31 December 2015 and 31 December 2016.




<------------IFRS, Audited Figures-------------->

01.01. 01.01. 01.01.

- - -

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

Revenue 11,885,633 17,702,500 14,602,000

Cost of sales (4,445,179) (5,424,377) (4,589,095)

- 169 -

Gross profit 7,440,454 12,278,123 10,012,905

Other income - 7 51

Administrative expenses (564,836) (1,876,312) (2,544,507)

Finance costs (2,309,710) (1,882,630) (635,688)

Profit / (Loss) before taxation 4,565,908 8,519,188 6,832,761

Tax expense (4,906) (4,660) (5,722)

Profit / (Loss) for the year 4,561,002 8,514,528 6,827,039

- 170 -

Comparison of the profit situation of Hummingbird for the business year ending 31 December

2014 and the business year ending 31 December 2015




<--------IFRS, Audited Figures-------->

01.01. 01.01.

- -

31.12. 31.12.

2015 2014

USD USD

Revenue 17,702,500 14,602,000

Cost of sales (5,424,377) (4,589,095)

Gross profit 12,278,123 10,012,905

Other income 7 51

Administrative expenses (1,876,312) (2,544,507)

Finance costs (1,882,630) (635,688)

Profit / (Loss) before taxation 8,519,188 6,832,761

Tax expense (4,660) (5,722)

Profit / (Loss) for the year 8,514,528 6,827,039

- 171 -

The revenue for the financial year (in the following referred to as “FY”) 2015 of USD 17.7 Million. was 1.2

times higher compared to FY2014 (USD 14.6 Million). The main reason for the substantial increase in

revenue was due to the fact that in FY 2015, 12 Months rental income was recognised during the year as

compared to 7.5 Months in FY 2014. The rental income was USD 48,500 per day and a mobilization

advance of USD 3.5 Million was also recognized as income in FY 2014.

Since the maintenance of the asset was the responsibility of the customer, cost of sales included only

annual certification costs and depreciation. Hence, these costs are incurred proportionally to revenue.

Consequently, in line with the increase of the revenue, the costs increased from USD 4.6 Million in 2014

to USD 5.4 Million in FY2015 by 32.4%.

Administrative Cost for the Group of USD 1.9 Million in FY2015 decreased by 19% from USD 2.5 Million

in FY2014. The company incurred costs of re-structuring of bank facilities from UOB Bank Singapore

(“UOB Bank”) to Exim Bank Malaysia due to high borrowing cost charged by the UOB Bank and the fact

that it was originally intended as an interim facility. The administrative costs included the following

a. Costs incurred on the re-structuring of bank facilities of USD 0.657 Million

b. Penalty on the cancellation of existing facilities of USD 0.55 Million

c. Advisory services for the restructuring exercise of USD 0.55 Million.

Profit after taxation (“PAT”) for FY2015, of USD 8.5 Million was 1.4 times higher than PAT for FY2014,

of USD 6.8 Million. The increase in PAT was mainly based on the the increase in revenues.

- 172 -

Comparison of the profit situation of Hummingbird for the business year ending 31 December

2015 and the business year ending 31 December 2016




<-------IFRS, Audited Figures-------->

01.01. 01.01.

- -

31.12. 31.12.

2016 2015

USD USD

Revenue 11,885,633 17,702,500

Cost of sales (4,445,179) (5,424,377)

Gross profit 7,440,454 12,278,123

Other income - 7

Administrative expenses (564,836) (1,876,312)

Finance costs (2,309,710) (1,882,630)

Profit / (Loss) before taxation 4,565,908 8,519,188

Tax expense (4,906) (4,660)

Profit / (Loss) for the year 4,561,002 8,514,528

- 173 -

The revenue for FY2016, in the amount of USD 11.8 Million decreased by 33.3% compared to FY2015

(USD 17.7 Million) due to a decline in crude oil prices around the world in 2016. As a consequence of

this decline, the main client of Hummingbird reduced the daily rental sum to be paid to Hummingbird

from USD 48,500 in FY 2015 to USD 30,300 per day in FY 2016 to maintain its cost of production in

line with the fluctuations of prices in market. Due to this unexpected decision of the main client, the

total revenue dropped from USD 17.7 Million to USD 11.8 Million.

Cost of sales for the Group in the amount of USD 4.4 Million in FY2016 also decreased by 16% com-

pared to FY2015 (USD 5.4 Million). The main direct cost in 2016 related to depreciation which was

maintained at similar unchanged rates compared to 2015. However, in the absence of initial and setup

costs which were captured in FY2015, the FY2016 recorded a lower cost of sales amount compared

to FY2015.

Administrative Cost for the Group in the amount of USD 0.56 Million in FY2016 decreased by 30.8%

compared to FY2015 (USD 1.9 Million). In 2016, the costs were significantly lower due to the absence

of extraordinary circumstances like the restructuring of the bank facilities which took place in 2015.

The cost in 2015 consisted of insurance premiums of USD 0.241 Million and exchange loss incurred

for operations of USD 0.233 Million in addition to routine expenses of annual renewal of operational

licenses and professional fees.

PAT for FY2016, in the amount of USD 4.5 Million was 55.1% lower compared to FY2015 (USD 8.5

Million) as a result of several factors. The main reason was the fact that there was a drop in revenue

due to the reduction in the daily chartered rate charged by Hummingbird Energy (L) Inc to the main

client due to the decline in crude oil prices and the increase on interest costs on loan repayments to

the company’s financing bank, EXIM Bank Malaysia Berhad. Even though Hummingbird Energy (L)

Inc undertook massive cost reduction programs, it was unable to offset the increase in financial costs

because of the higher rates charged by EXIM Bank.

Comparison of the profit situation of Hummingbird for the first half year 2017 and comparative

figures for the first half year 2016

The following table shows the Profit and Loss Statement of Hummingbird for the first half year 2017

and comparative figures for the first half year 2016.

- 174 -





Account Account

30 June 2017

(Unaudited)

30 June2016

(Unaudited)

EUR EUR

Revenue 4.800.263 5.684.051

Cost of sales (2.226.326) (2.221.171)

Gross profit 2.573.937 3.462.880


Administrative expenses (148.161) (47.228)

Finance costs (748.822) (480.782)


Tax expense (3.957) (4.419)


The revenue for the time period from 1 January to 30 June (“HY”) 2017 was EUR 4.8 Mio. while the

HY 2016, ie of EUR 5.6 mil. This was because the equipment rental rates in 2016 were at USD 36,500

until May 2016 which was then subsequently revised downwards to USD 30,300 per day. As for HY

2017, the day charter rates have been maintained throughout at USD 30,300 per day.

The cost of sales for Hummingbird Energy (L) Inc of EUR 2.21 mil in HY2016 was also almost similar

to HY 2016 recorded at EUR 2.23 mil. The main costs were only depreciation and direct costs, ie.

insurance.

- 175 -

The six (6) months of Administrative Cost for the Company was recorded at only EUR 148k in HY

2017 in comparison to EUR 47k for the HY 2016. Most of the annual recurring fees such as audit and

tax fees are incurred in the second half of the year. There will also be no additional bank restructuring

costs in FY 2017.

The six (6) months of Finance Cost for the Company was captured at kEUR 748 in HY 2017 in com-

parison to kEUR 480 for the HY 2016. The Exim Bank interest cost is approximately slightly higher

than USD500k per quarter. However, for FY 2017, the company only incurred one (1) quarter of inter-

est cost due to some technicalities. In general, the finance costs were flat.

The six (6) months of Profit after taxation (“PAT”) for HY2017, of EUR 1.67 mil was lower than the

PAT for HY 2016 of EUR 2,95 mil. The lower PAT for HY 2017 versus the HY 2016 by 44% is solely

due to the Daily charter rates of USD 36,500 for the first five (5) months in HY 2016 which was subse-

quently reduced to USD 30,300 until now. The cost and expenses structures remained the same, re-

sulting in the lower PAT.

12.4.2 Net Assets and Financial Position of Hummingbird Energy (L) Inc

The following table shows the Balance Sheet of Hummingbird as per 31 December 2014, 31 Decem-

ber 2015 and 31 December 2016:



Balance Sheet

<------------IFRS, Audited Figures---------------------->

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

Fixed Asset 57,095,266 61,567,528 70,430,893

Current Assets 18,115,754 35,633,607 23,892,361

Current Liabilities 17,421,279 47,409,896 76,021,543

Long Term Liabilities 37,812,500 34,375,000 11,400,000

- 176 -

Retained Earnings/ (Losses) 16,977,241 12,416,239 6,901,710

Explanation of the Assets of Hummingbird

Comparison of the asset side of the balance sheet of Hummingbird for the business year

ending 31 December 2014, 31 December 2015 and the business year ending 31 December 2016

For the FY2014, the Fixed Assets as of 31 December at USD 70.4 Million comprised solely of topside

equipment. In the following years, FY2015 and FY2016, the value of these Fixed Assets decreased to

USD 61.6 Million (FY 2015) and USD 57.0 Million (FY 2016) due to depreciation. No further fixed as-

sets were acquired. There was no need for additional fixed assets as the original set of topside

equipment were designed to last ten (10) years with multiple redundancies built in to ensure continu-

ous uninterrupted operations to be maintained.

Current Assets for the FY2014, FY2015 and FY2016 were at USD 23.9 Million, USD 35.6 Million and

USD 18.1 Million respectively. These consisted, mainly, of intercompany loans and an average of two

(2) months of revenue receivables from operations.

Current Assets comprise of Intercompany balances of USD 23 Million in 2014 and 2015, which was

paid down to USD 12.70 Million in 2016. With the inventory being consistent at USD 2.2 Million over

the period of 2014 - 2016, cash balances fluctuated heavily in 2015, due to the requirement of a re-

serve deposit of USD 10 Million by EXIM Bank for the disbursement of the loan facility. This was, later,

drawn down and the cash balance in 2016 was USD 2.8 Million.

Explanation of the Liabilities of Hummingbird

Current Liabilities for the FY2014, FY2015 and FY2016 were at USD 76.0 Million, USD 47.4 Million

and USD 17.4 Million respectively. These also consisted mainly of intercompany loans and, on an

average, four (4) months of loan repayments owed to Exim Bank Malaysia Berhad.

Current Liabilities comprise of intercompany balances of USD 54 Million in 2014, USD 33 Million in

2015 and USD 13 Million in 2016. Additionally, it also comprises the respective loan facilities, due but

not paid as on 31st December of each year, amounting to USD 20 Million in 2014, USD 13.75 Million

in 2015 and USD 5.90 Million in 2016.

The Long Term Liabilities for the FY2014, FY2015 and FY2016 were at USD 11.4 Million, EUR 34.4

Million and EUR 37.8 Million respectively. These were solely made up of the loans payable to UOB in

2014 and Exim Bank Malaysia Berhad in 2015 and 2016. The increase from FY2014 to FY2015 was

due to the fact that Hummingbird entered into a new credit facility agreement with Exim Bank Malaysia

- 177 -

Berhad to replace the UOB facility in 2015 for the refinancing of the topside engineering equipment,

which was originally intended as an interim facility.

Comparison of the Net Assets and Financial Position of Hummingbird as of 30 June 2017 and

as of 31 December 2016

The following table shows the Balance Sheet of Hummingbird as of 30 June 2017 and as of 31 De-

cember 2016.

Balance Sheet as of 30 June 2017 and 31 December 2016

30 June 2017 EUR (unaudited)

31 December 2016 EUR (audited)

Fixed Assets 47,792,583 56,391,635 Current Assets 6,790,557 15,088,141 Current Liabilities 11,434,902 22,164,302 Long Term Liabilities 23,741,794 30,329,310 Retained Earnings / (Losses) 16,780,623 16,134,994

Comparison of the asset side of the balance sheet of Hummingbird

For the FY2016, the Fixed Assets as of 31 December at EUR 56.3 Mio. comprised solely of Topside

Equipment residing on board the rig net of accumulated depreciation. In the following HY2017; the

Fixed Assets is at EUR 47.7 Mio. There was no need for additional fixed assets as the original set of

Topside Equipment were designed to last ten (10) years with multiple contingencies built in. The carry-

ing value of the asset was about USD 60 Million, which converts to EUR 56.3 million at a conversion

rate of approximately 1.06 USD to a Euro as at December 31 2016. The current carrying value is

about USD 54.4 million, which converts to EUR 47.7 million at a conversion rate of approximately 1.14

USD to a Euro as at June 30, 2016.

Current Assets for the HY2017 and FY2016 were at EUR 6.8 million and EUR 15.1 million respective-

ly. As part of an accounting exercise, undertaken in Q1 2017, all the inter-company balances were

reconciled and written off. This, coupled with the fact that we have received all the outstanding receiv-

ables from Pertamina, as on January resulted in a significant drop in current assets. The current as-

sets for June 2017 reflect the outstanding payments from Pertamina for the period from February

2017, which was the start of the new contract, to June 2017. This was due to the fact that we had to

set up new payment systems for the new contract and that took a considerable amount of time. This

has, since, been resolved.

Explanation of the Liabilities of Hummingbird

The current liabilities represent the outstanding dues to the suppliers providing goods and services to

Hummingbird. Current Liabilities for the HY2017 and FY2016 were at EUR 11.4 mil and EUR 22.2 mil

- 178 -

respectively. As part of an accounting exercise, undertaken in Q1 2017, all the inter-company balanc-

es were reconciled and written off. The current liabilities represent the dues to the suppliers for the

period from February 2017 to June 2017, which were not paid, since we had to set up new payment

systems in accordance with the new Pertamina contract, that was signed in February 2017. This has,

since, been resolved.

12.4.3 Liquidity and Capital Resources of Hummingbird Energy (L) Inc

The following table highlights selected data of Hummingbird’s cash flow statement for the periods of

the business years ending on 31 December 2014, 31 December 2015 and 31 December 2016.




<--------------IFRS, Audited Figures--------------->

01.01. 01.01. 01.01.

- - -

31.12. 31.12. 31.12.

2016 2015 2014

USD USD USD

CASH FLOWS FROM/(FOR) OPERATING

ACTIVITIES

CASH FROM/(FOR) OPERATIONS 28,411,844 (19,229,142) 2,508,602

NET CASH FROM/(FOR) OPERATING ACTIVITIES 26,097,228 (21,118,324) 1,866,362

CASH FLOWS FOR INVESTING ACTIVITIES

NET CASH FOR INVESTING ACTIVITIES (793,490) (3,057,784) (44,833,316)

CASH FLOWS (FOR)/FROM FINANCING

ACTIVITIES

NET CASH (FOR)/FROM FINANCING ACTIVITIES (24,999,938) 24,175,401 42,968,659

- 179 -

NET INCREASE/(DECREASE) IN CASH AND

BANK BALANCES

303,800 (707) 1,705


THE FINANCIAL YEAR 1,576 2,283 578

CASH AND CASH EQUIVALENTS AT END OF

THE FINANCIAL YEAR 305,376 1,576 2,283

REPRESENTED BY:

CASH ON HAND 6 124 -

CASH AT BANKS 305,370 1,452 2,283

305,376 1,576 2,283

- - -

The working capital and other capital requirements of Hummingbird Energy (L) Inc have usually been

financed through a combination of cash generated from our operating activities and borrowing from

financial institutions. Our principal uses of cash have been for working capital requirements and capital

expenditure.

With respect to the Cash Position as at FY 2014 and FY 2015, the company has almost no cash as the

major portion of the receipts from the Charter rates had been utilised to pay off the loan repayments due.

Due to the down turn in crude oil prices, the Daily Charter Rates were reduced consequentially. As such,

in FY 2016, the company successfully managed to re-negotiate the repayment schedule to the financing

bank to lower the quarterly payments in line with the lower receipts.

Liquidity and Capital Resources

The following table provides an overview of the long-term and short-term financial liabilities of Hum-

mingbird as per 31 December 2014, 31 December 2015 and 31 December 2016.


(Incorporated in Federal Territory of Labuan, Malaysia)

<-------------------IFRS, Audited Figures------------->

31.12. 31.12. 31.12.

2016 2015 2014

- 180 -

USD USD USD


Financial liabilities 31,912,500 34,375,000 11,400,000

Total non-current liabilities 31,912,500 34,375,000 11,400,000

Current liabilities

Financial libilities 5,900,000 13,750,000 20,000,000

Total current liabilities 5,900,000 13,750,000 20,000,000

A brief description of the Group’s banking facilities is set out below:

Credit Facility with Export-Import Bank of Malaysia Berhad

Hummingbird Energy (L) Inc has entered into a facilities agreement of up to USD 55 Million on 25

March 2015, which is the only bank loan taken up by companies of De Raj Group (cf. also Section

8.6.2, “Investment and Financing Structure”). These facilities were mainly for the refinancing of the

topside engineering equipment based on the MOPU Boss 1 rig. The interest payable is a floating rate

of ECOF plus 2 % per annum. The term of the facility has been restructured to 13 quarterly install-

ments.

Hummingbird Energy (L) Inc had bank borrowings under this credit facility agreement of approximately

USD 33 Million as of 30 June 2017, approximately USD 37 Million as of 31 December 2016 and ap-

proximately USD 48 Million as of 31 December 2015. As at the Latest Practicable Date, the total US

dollar banking facilities available to our Hummingbird Energy (L) Inc. amounted to USD 33 Million, of

which all 100% were fully utilised.

The financing structure of Hummingbird Energy (L) Inc is medium-term oriented. The current average

debt maturity as of 30 June 2017 is around 2.5 years with a homogenous maturity profile and a current

average cost of debt of 4,5% (cf. also Section 8.6.2, “Investment and Financing Structure”) .

These facilities are all jointly and severally guaranteed by the member of the management board, Mr

Nagendran C Nadarajah. Hummingbird Energy (L) Inc. is not in breach of any of the terms and condi-

tions or covenants associated with any of the banking facilities which could materially affect the finan-

cial position and results of business operations of Hummingbird Energy (L) Inc.

Effective interest rate

- 181 -

The borrowings as of 30 June 2017 solely consisted of the EXIM Facility from EXIM Bank Malaysia

Berhad. The loan bears an interest rate of ECOF plus 2%. As the ECOF is a floating reference, our

interest rate is generally in the region of 4.5% to 5%.

Profit participation rights

Hummingbird has not issued profit participation rights.

Mezzanine finance instruments

Hummingbird has not issued mezzanine finance instruments.

Corporate Bonds

Hummingbird has not issued corporate bonds.

Maturity Analysis

The current average debt maturity as of 30 June 2017 is around 2.5 years with a homogenous maturi-

ty profile and a current average cost of debt of 4,5%.

Shareholders’ Equity

In the FY 2014 nominal shareholder’s equity of Hummingbird Energy (L) Inc was USD 1.00. After an increase of the nominal share capital in FY 2015 the nominal shareholder’s equity of Hummingbird Energy (L) Inc amounted to USD 3,000,000 which also remained at this amount in FY 2016 up to date

in the name of the shareholder Gryphon Energy Corporation Pte Ltd.

The balance sheet equity of Hummingbird Energy (L) Inc was USD 6.901.711 at the end of FY 2014,

USD 15.416.239 at the end of FY 2015 and USD 19.977.241 at the end of FY 2016. The increase in

the balance sheet equity is based upon retained profits in the amount of USD 6.9 Million in FY 2014,

USD 12.42 Million in FY 2015 and USD 16.98 million in FY 2016, reflecting a Profit After Taxation

(PAT) of USD 6.82 Million in FY 2014, USD 8.5 Million in FY 2015 and USD 4.5 Million in FY 2016.

Contingent Liabilities and Other Financial Obligations

The company does not have any contingent liabilities presently.

12.5 Management Discussion and Analysis of Gryphon Energy (SEA) Sdn Bhd

12.5.1 Results of Operation of Gryphon Energy (SEA) Sdn Bhd

The following table shows the Profit and Loss Statement of Gryphon Energy (SEA) for the business

period from 26 November 2015 which was the date of incorporation to 31 December 2016.

- 182 -

Gryphon Energy (SEA) Sdn Bhd

(Incorporated in Malaysia) Statement of Profit and Loss

←------------------ Audited Figures --------------------→ 2016

EUR 2015 EUR

Revenue - - Cost of Sales - - ________________________________________ Gross Profit - - Other Income

21,833

-

Administrative Expenses 58,831 - Finance Costs - - ________________________________________ Profit / (Loss) before Taxati-on

(36,998) -

Tax Expense

-

-

________________________________________ Profit / (Loss) for the year (36,998) -

- 183 -

The company was only incorporated on 26 November 2015. The first business year covered the peri-

od from 26 November 2015 until 31 December 2016. Therefore, there are no financial statements as

of 31 December 2014 or of 31 December 2015 and hence there is no comparison to previous busi-

ness years.

Comparison of the profit situation of Gryphon Energy (SEA) Sdn Bhd for the first half year 2017

and comparative figures for the first half year 2016

The following table shows the Profit and Loss Statement of Gryphon Energy (SEA) for the six (6)

month period ending 30 June 2016 and for the six (6) month period ending 30 June 2017.






until 2017

(Unaudited)



Revenue 5.488 -


Gross profit 934 -

Other income - -


Finance costs - -


Tax expense - -


- 184 -



There was no revenue for period ending 31 December 2016 while for the six (6) month period ending

30 June 2017, Gryphon Energy (SEA) recorded a revenue of EUR 5.488 million. The revenue was

solely accrued from the contract with Pertamina signed on 20 February 2017.

There was no cost of sales for period ending 31 December 2016 while for the six (6) month period

ending 30 June 2017, Gryphon Energy (SEA) recorded a cost of sale of EUR 4.544 million. These

costs accrue from the rental of the Boss 1 rig and the rental of the topside equipment from Humming-

bird Energy (L) Inc.

Loss after taxation for the business period ending 31 December 2016 was EUR 0.80K while Profits

after taxes (PAT) for the six (6) month period ending 30 June 2017 was EUR 0.26 Million. The five (5)

months of operations recorded a Gross Profits of EUR 0.934 Million which was sufficient to cover the

additional administrative costs of EUR 0.66 million resulting in positive earnings for the period.

12.5.2 Net Assets and Financial Position of Gryphon Energy (SEA) Sdn Bhd

The following table shows the Balance Sheet of Gryphon Energy (SEA) Sdn Bhd for the business

period from 26 November 2015 which was the date of incorporation to 31 December 2016:

Gryphon Energy (SEA) Sdn Bhd (Incorporated in Malaysia)

Statement of Financial Position

←---------------------- Audited Figures ---------------------------------------→

2016 EUR

2015 EUR

2014 EUR

Fixed Assets - - - Current Assets 196,182 - - Current Liabilities 21,210 - - Long Term Liabilities - - - Retained Earnings / (Losses)

(36,998) - -

- 185 -

As Gryphon Energy (SEA) Sdn Bhd was only incorporated on 26 November 2015 and the first business

year covered the period from 26 November 2015 until 31 December 2016, there are no financial

statements as of 31 December 2015 or 31 December 2014 and hence no figures for comparison.

The assets as of 31 December 2016 was at EUR 196,182.00.

The liabilities as of 31 December 2016 were at EUR 21k. There were no Long Term Liabilities for

Gryphon Energy (SEA) for FY2016.

Comparison of the Net Assets and Financial Position of Gryphon Energy (SEA) Sdn Bhd as of

30 June 2017 and as of 30 June 2016

The following table shows the Balance Sheet of Gryphon Energy (SEA) as of 30 June 2017 and as of

30 June 2016.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 and 30 JUNE 2016


Account Account 30 June 2017 30 June 2016

kEUR (Unaudited)

kEUR (Unaudited)

Fixed Asset - -





Comparison of the asset side of the balance sheet of Gryphon Energy (SEA) for six (6) month

period as at 30 June 2016 and for the six (6) month period as at 30 June 2017

Explanation of the Assets of Gryphon Energy (SEA)

- 186 -

For the FY2016, there were no Fixed Assets and as of 30 June 2017, Gryphon Energy (SEA) recorded

only one (1) unit of computer at EUR 764. There were no other Fixed Assets.

Current Assets for the period ending 30 June 2016 was nil and the period ending 30 June 2017 was

EUR 9.156 million respectively. The current assets comprised of accounts receivable from Operations

for the Pertamina contract signed on 20th February 2017 upto 30 June 2017, as it took some time to set

up the payment systems for this contract. This has, since, been resolved.

Explanation of the Liabilities of Gryphon Energy (SEA)

Current Liabilities for the HY 2016 and HY2017 were at EUR 80k and EUR 8.72 million respectively. The

current liabilities consist of the charter payment dues for the contract period from February 20, 2017 to

June 30, 2017, as it took some time to set up payment systems for the new contract. This has, since,

been resolved.

Gryphon Energy (SEA) did not have any Long Term Liabilities for either FY2016 or HY 2017.

12.5.3 Liquidity and Capital Resources of Gryphon Energy (SEA) Sdn Bhd

The following table highlights selected data of Gryphon Energy (SEA)’s cash flow statement for the

period from 26 November 2015 which was the date of incorporation until 31 December 2016 (i.e. the

period of the first and sole completed business year until the date of this prospectus):

STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD FROM 26 NOVEMBER 2015 (DATE OF INCORPORATION) TO 31 DECEMBER 2016 RM CASH FLOWS FOR OPERATING ACTIVITIES Loss for the financial period (174,545) Working capital changes:- Increase in prepayments (93,860) Increase in other payables and accruals 93,656 NET CASH FOR OPERATING ACTIVITIES (174,749) NET CASH FOR INVESTING ACTIVITY Advances to a related party (827,418) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares 1,000,000 Advances from a director 6,407 NET CASH FROM FINANCING ACTIVITIES 1,006,407

- 187 -

NET MOVEMENT IN CASH AND BANK BALANCES/CASH AND BANK BALANCES AT END OF THE FINANCIAL PERI-OD

4,240

The working capital and other capital requirements of Gryphon Energy (SEA) Sdn Bhd have been

financed through a combination of cash generated from the operating activities without any borrowing

from financial institutions. The principal uses of cash have only been for working capital requirements

without any capital expenditure.

As Gryphon Energy (SEA) Sdn Bhd was only incorporated from 26 November 2015 and the first

business year covered the period from 26 November 2015 until 31 December 2016, there are no

financial statements as of 31 December 2015 or 31 December 2014 and hence no figures for

comparison.

12.6 Management Discussion and Analysis of De Raj Group AG

12.6.1 Results of Operation of De Raj Group AG

The following tables show the Profit and Loss Statement of De Raj Group AG for the business years

ending 31 December 2015, 31 December 2016 and for the six (6) month period ending 30 June 2017.

- 188 -


Statement of profit or loss and other comprehensive income for the period from 14 January 2015 to 31 December 2015

14.01. - 31.12.2015

(HGB, audited) Profit of the Financial Year EUR

0,00

- 189 -

Due to the fact that De Raj was a shelf company with no operational business until July 2017, De Raj

did not make any profits or incur any losses in the business years ending 31 December 2015, 31 De-

cember 2016 and the first half of the business year 2017 ending 31 December 2017.

12.6.2 Net Assets and Financial Position of De Raj




ASSETS 31.12.2015

EUR (HGB,

audited)


31.12.2015 EUR

(HGB, audited)

Current Assets Shareholders’ Equity

Current Finan-cial Assets

Share Capi-tal

50.000,00


50.000,00

50.000,00 50.000,00



01.01.2017 -

30.06.2017 (unaudited)

2016 (HGB, audited)


EUR EUR

0,00 0,00

- 190 -





(HGB, audited)

31.12.2015 EUR

(HGB, audited)

EQUITY AND LIABIL-

ITIES

31.12.2016 EUR

(HGB, audited)

31.12.2015 EUR

(HGB, audited)

Current Assets

Share-holders’ Equity


Share Capi-tal

50.000,00 50.000,00


50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

Balance Sheet as of 30 June 2017




(unaudit-ed)

31.12.2016 EUR

(HGB, audited)


30.06.2017 EUR

(unaudit-ed)

31.12.2016 EUR

(HGB, audited)

Current Assets



Share Capital 50.000,00 50.000,00


50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

Due to the fact that De Raj was a shelf company with no operational business until July 2017, De Raj’s

assets consisted solely of a bank balance in the amount of EUR 50,000.00 (equaling the paid in nomi-

nal share capital of De Raj) and there were no liabilities in the business years ending 31 December

2015, 31 December 2016 and the first half of the business year 2017 ending 31 December 2017.

- 191 -

12.6.3 Liquidity and Capital Resources of De Raj Group AG

Consolidated Cash Flow Statement for the period 1 January to 30 June 2017



2017

2016 TEUR

(unaudited)

TEUR (HGB, audited)

Cash flows from/ (for) operating activities Profit before taxation + 0 + 0


+ 0

+ 0


+ 0

+ 0


+ 0

+ 0


+ 0

+ 0


+ 0 + 0


+ 0

+ 0


+ 0

+ 0


+ 50

+ 50


+ 50

+ 50

Represented by:



+ 50 + 50

- 192 -

Cash Flow Statement for the period 1 January to 31 December 2016



2016

2015 TEUR

(HGB, audited)

TEUR (HGB, audited)




+ 0

+ 0


+ 0

+ 0


+ 0

+ 0


+ 0

+ 0


Payments received from capital increases

+ 0 + 50


+ 0

+ 50


+ 0

+ 50


+ 50

+ 0


+ 50

+ 50

Represented by:



+ 50 + 50

- 193 -

Consolidated Cash Flow Statement for the period 1 January to 31 December 2015



2015 TEUR

(HGB, audited)




+ 0


+ 0


+ 0


+ 0


+ 50


+ 50

Net increase/ ( decrease) in cash and bank balances

+ 50


+ 0

Cash and cash equivalents at end of the financial year

+ 50

Represented by:

Cash on hand + 0

Cash at banks + 50

+ 50

- 194 -

There was a cash inflow in the amount of EUR 50,000.00 in the business years ending 31 December

2015. Apart from that there was no cash inflow or outflow in the business years ending 31 December

2015, 31 December 2016 and the first half of the business year 2017 ending 30 June 2017. Hence,

the position “cash and cash equivalents” in the cash flow statement was EUR 50,000.00 at the end of

each of the aforementioned financial years.

12.7 Further Information on De Raj Group

12.7.1 Liquidity and Capital Resources of De Raj Group

The only bank loan taken up by companies of De Raj Group is the EXIM Facility with EXIM Bank tak-

en up by Hummingbird Energy (L) Inc (cf. also Section 8.6.2, “Investment and Financing Structure”,

and Section 12.4.3 above, “Liquidity and Capital Resources of Hummingbird Energy (L) Inc”)

12.7.2 Profit participation rights, Mezzanine finance instruments and Corporate Bonds of De

Raj Group

There are no profit participation rights granted by companies of De Raj Group. There are no mezza-

nine finance instruments or corporate bonds issued by companies of De Raj Group.

12.7.3 Maturity Analysis of De Raj Group and effective interest rate of De Raj Group

The financing structure of De Raj Group Group is medium-term oriented. The current average debt

maturity as of 30 June 2017 is around 2.5 years with a homogenous maturity profile and a current

average cost of debt of 4,5% (cf. also Section 8.6.2, “Investment and Financing Structure”) .

12.7.4 Shareholders’ Equity of De Raj Group

The shareholders’ equity of De Raj Group amounts to 159.120.538 as of 30 June 2017.

12.7.5 Contingent Liabilities and Other Financial Obligations of De Raj Group

There are no contingent liabilities or other financial obligations of the companies of De Raj Group

12.7.6 Investments of De Raj Group

There have been no investments of the companies of De Raj Group in the business year 2016, in the

first six months 2017 and in the period after 30 June 2017 until the date of this prospectus. Further-

- 195 -

more, at the date of this prospectus there are no pending investments which have have already been

resolved upon.

12.7.7 Pensions and Retirement Payments of De Raj Group

There are no pension and retirement plans or payments.

12.7.8 Qualitative and quantitative information on market risks of De Raj Group

For a description of the quantitative and qualitative disclosure about market risks see the notes to the

financial statements for Hummingbird Energy (L) Inc for the business years ending 31 December 2014

(there Section 24), 31 December 2015 (there Section 26) and 31 December 2016 (there Section 25)

and section 13 of the notes to the financial statements for Gryphon Energy (SEA) Sdn Bhd for the

business year ending 31 December 2016 which are included in the financial section of this Prospec-

tus.

- 196 -

13. PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION OF DE RAJ GROUP

13.1 Introduction

This section includes pro-forma consolidated accounts for the De Raj Group, which was formed in

October 2017, for the fiscal year ended 31 December 2016 and the first six months of 2017. This fi-

nancial information is based upon the following:






ing referred to as “Formation of De Raj Group”). For details of the Formation of De Raj Group confer

Sections 7.4.3, “Formation of De Raj Group” and 8.7.2, “Material Contracts outside the ordinary

course of Buisness”.
























The Pro-Forma Consolidated Financial Information for De Raj Group as of and for the fiscal year end-

ed 31 December 2016 and the interim period from 1 January 2017 until 30 June 2017 contained in this

- 197 -

section has been extracted or derived from the audited financial statements of the companies Hum-

mingbird (L) Inc., De Raj Energy Sdn Bhd, Gryphon SEA Sdn Bhd, Condor Energy (L) Inc (each ac-

cording to IFRS) and the audited financial statements of De Raj and Gaea Power GmbH (each ac-

cording to HGB) as of 31 December 2017 and the respective internal accounting records or manage-

ment reporting systems of the aforementioned companies, unless stated otherwise. The IFRS applied

to the financial statements of the Malaysian companies Hummingbird Energy (L) Inc, Gryphon Energy

(SEA) Sdn Bhd, De Raj Energy Sdn Bhd, and Condor Energy (L) Inc are in accordance with the IFRS

as adopted by the European Union.




mation (IDWAcPS AAB 1.004) (IDW Rechnungslegungshinweis: Erstellung von Pro-Forma-

Finanzinformationen (IDW RH HFA 1.004)) and in accordance with the IFRS as adopted by the Euro-

pean Union.

13.2 Pro-forma consolidated accounts and notes

In the following, the Pro-Forma Consolidated Financial Information is reproduced verbatim:

“De Raj Group AG, Cologne

Pro-forma consolidated statement of financial position as of 30 June 2017 and

Pro-forma consolidated income statement for the year ended 31 December 2016

and for the period from 1 January to 30 June 2017

General information

The following pro forma financial information, compiled in accordance with IDW Accounting Practice

Statement: Preparation of Pro Forma Financial Information (IDW AcPS AAB 1.004) (IDW Rechnungs-

legungshinweis: Erstellung von Pro forma-Finanzinformationen (IDW RH HFA 1.004)), serves illustra-

tive purposes only. By its nature, it describes a purely hypothetical situation, and as such does not

reflect the current situation of De Raj Group AG or its results. As the information is based on assump-

tions and is subject to uncertainties, it is not representative of how the consolidated business would

have performed economically if the acquisitions descripted under section C. II. had already been com-

pleted before 1 July 2017. Neither is it any indication of how the De Raj Group AG group’s business, financial position and results of operations may develop following the completion of the acquisitions.

This document presents the Pro-forma consolidated statement of financial position as of 30 June 2017

and pro-forma consolidated income statement for the financial year ended 31 December 2016 and for

the period from 1 January to 30 June 2017 of De Raj Group AG, hereinafter the “Company” or the “Issuer” and, together with the entities as result of the contribution of the shares into the Issuer (the

“Group”), and the related explanatory notes (the “Pro-Forma Financial Information”).

- 198 -

The Pro-forma statement has been prepared to represent the main effects on the Company’s state-ment of financial position as of 30 June 2017 and income statement for the financial year ended 31

December 2016 and for the period from 1 January to 30 June 2017.

The pro-forma consolidated financial information for De Raj Group as of and for the fiscal year ended

31 December 2016 and the interim period from 1 January 2017 until 30 June 2017 contained in this

Prospectus has been extracted or derived from the audited financial statements of the companies

Hummingbird (L) Inc., De Raj Energy Sdn Bhd, Gryphon SEA Sdn Bhd and Condor Energy (L) Inc

(each according to IFRS) and the audited financial statements of De Raj Group AG and Gaea Power

GmbH (each according to HGB) as of 31 December 2016 and the respective internal accounting rec-

ords or management reporting systems of the aforementioned companies, unless stated otherwise.

The pro-forma consolidated financial information was prepared in accordance with the rules of the



mation (IDWAcPS AAB 1.004) (IDW Rechnungslegungshinweis: Erstellung von Pro-Forma-Finanz-

informationen (IDW RH HFA 1.004)) and in accordance with the IFRS as adopted by the European

Union. The audited pro-forma consolidated financial information (IFRS as adopted by the European

Union) mentioned above were audited by Kleeberg and are included in this Prospectus under “Finan-cial Information”.

The financial information regarding the company Hummingbird Energy (L) Inc were derived from the

annual financial statements (IFRS) as of and for the fiscal years ended 31 December 2016, 31 De-

cember 2015 and 31 December 2014. The financial information regarding the company Gryphon En-

ergy (SEA) Sdn Bhd was derived from the annual financial statements (IFRS) as of and for the fiscal

year ended 31 December 2016. The aforementioned financial statements were audited by Crowe

Horwath (Labuan) LLP, Registered Office, Level 1, Lot 7, Block F, Saguking Commercial Building,

Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia.

The IFRS applied to the financial statements of the Malaysian companies Hummingbird Energy (L)

Inc, Gryphon Energy (SEA) Sdn Bhd, De Raj Energy Sdn Bhd, and Condor Energy (L) Inc are in ac-

cordance with the IFRS as adopted by the European Union.

The Group companies included in the consolidated financial statements are deemed to be foreign

entities in accordance with IAS 21. Accordingly, and in line with the functional currency method and

the income statements of subsidiaries reporting in foreign currencies are translated at the average

rates for the year. Balance sheet items are translated at the prevailing exchange rates as at the bal-

ance sheet date of each year. Currency-related differences in equity are recognised in the translation

reserve that forms a separate item under equity. The Malaysian entity Hummingbird Energy (L) Inc.

used the United States Dollar (USD) as the functional currency for presentation the financial state-

ment, because the USD is the currency of the primary economic environment in which the Company

operates.

The following rates are used in the Pro-Forma consolidated statement:

- 199 -

Statement of profit and loss:

2016

USD/EUR: 1,1069

MYR (Malaysian Ringit)/EUR: 4,5835

IDR (Indonesian Ringit)/EUR: 14.720,83

1st HY 2017

USD/EUR: 1,0825



Balance sheet:

31.12.2016

USD/EUR: 1,0541



30.06.2017

USD/EUR: 1,1412


IDR (Indonesian Ringit)/EUR: 15,209,34

Foreign currency transactions are translated into euros at the exchange rates prevailing on the trans-

action dates. Gains and losses resulting from the settlement of such transactions and from the transla-

tion of monetary assets and liabilities denominated in foreign currencies are recognised in the income

statement. Non-monetary assets that are measured at cost are translated at the euro exchange rate at

the time of their acquisition; non-monetary assets that are measured at fair value are translated at the

current euro exchange rate. Forward currency transactions are measured using the prevailing forward

rates for their respective maturities.

- 200 -

Contents

A. Pro-forma consolidated statement of financial position as of 30 June 2017

B. Pro-forma consolidated income statement for the year ended 31 December 2016 and for the

period from 1 January 2017 to 30 June 2017

C. Notes of Pro-forma consolidated statement of financial position as of 30 June 2017 and Pro-

forma consolidated income statement for the year ended 31 December 2016 and for the pe-

riod from 1 January to 30 June 2017

A. Pro-forma consolidated statement of financial position as of 30 June 2017

- 201 -

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40

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14

Sta

tem

ent

of

Fin

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al P

osi

tion

at

30 J

un

e 20

17

- 202 -

B. Pro-forma consolidated income statement for the year ended 31 December 2016 and

for the period from 1 January 2017 to 30 June 2017

De

Raj

AG

Hum

min

g-bi

rdC

ondo

rD

e R

aj

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on

(Sea

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Pro-

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roup

Pr

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es

kEU

RkE

UR

kEU

RkE

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kEU

RkE

UR

kEU

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kEU

RkE

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No.

1.R

even

ues

010

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00

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413

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5112

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4.01

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1.44

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459

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ross

pro

fit0

6.72

20

00

-30

6.69

26.

692

4.O

ther

inco

me

020

63

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023

323

3

5.Ad

min

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expe

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051

05

127

3858

258

2

6.Fi

nanc

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02.

087

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016

7-1

672.

087

2.08

7

7.O

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4.33

1-8

4-1

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167

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20

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2

9.In

com

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327

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3516

74.

137

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137

11. D

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ence

from

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renc

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nsla

tion

046

54

0-1

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746

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tribu

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ners

of t

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4.79

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167

4.60

50

4.60

5

Stat

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and

Los

s an

d O

ther

Com

preh

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com

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ear

ende

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16

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fina

ncia

l yea

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Tota

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preh

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fina

ncia

l yea

r

Prof

it af

ter t

axat

ion/

Tot

al c

ompr

ehen

sive

Inco

me

- 203 -

De

Ra

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Hu

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De

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pre

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m 0

1 Ja

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2017

to 3

0 Ju

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2017

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fit

for

the

fin

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Oth

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Co

mp

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me

To

tal C

om

pre

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or

the

fin

an

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fit

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/ To

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om

pre

he

ns

ive

Inc

om

e

- 204 -

C. Notes of Pro-forma Consolidated Statement of financial position as of 30 June 2017

and Pro-forma Consolidated Income Statement for the financial year ended

31 December 2016 and for the period from 1 January to 30 June 2017

Introduction

This document presents the Pro-forma consolidated statement of financial position as of 30 June 2017

and pro-forma consolidated income statement for the financial year ended 31 December 2016 and for

the period from 1 January to 30 June 2017 of De Raj Group AG, hereinafter the “Company” or the “Issuer” and, together with the entities as result of the contribution of the shares into the Issuer (the

“Group”), and the related explanatory notes (the “Pro-Forma Financial Information”).

The Pro-forma financial information was prepared for inclusion in the securities’ prospectus relating to

the listing of the share capital of the De Raj Group AG in the Regulated Market of the Frankfurt Stock

Exchange. In particular, the Pro-forma financial information has been prepared to represent the main

effects on the Company’s statement of financial position as of 30 June 2017 and income statement for

the financial year ended 31 December 2016 for the period from 1 January to 30 June 2017 of:

- the transfer of all shares of Gaea Power GmbH (hereafter “Gaea”) - the transfer of all shares of Gryphon Energy (SEA) Sdn. Bhd. (hereafter “Gryphon”) - the transfer of all shares of Condor Energy (L) Inc. (hereafter “Condor”) - the transfer of all shares of Hummingbird Energy (L) Inc. (hereafter “Hummingbird”) - the transfer of all shares of De Raj Energy Sdn. Bhd. (hereafter “De Raj Energy”)

As a result of this transactions there is a statuary obligation to prepare Group financial statements.

The main impacts of consolidation and application of IFRS (as adopted by the European Union) (joint-

ly, the “Transactions”) are described in detail in section C. II. below. The Pro-Forma Financial Infor-

mation has been prepared in accordance with the accounting policies and applicable legislation fol-

lowed by the Company, with the purpose of presenting the main effects of the Transactions on the

Group’s financial position as if it occurred on 30 June 2017 and the economic effects as if the Trans-

actions occurred on 1 January 2016. However, the details contained in the Pro-Forma Financial Infor-

mation represent a simulation prepared solely to illustrate possible effects from the Transactions. In

particular, given that the Pro-Forma Financial Information has been prepared to retrospectively reflect

the effects of subsequent transactions and, despite complying with generally accepted regulations and

using reasonable assumptions, there are limits associated with the real nature of the Pro-Forma Fi-

nancial Information.

Therefore, had the Transactions actually occurred on the dates mentioned above, the effects would

not necessarily have been the same as those presented in the Pro-Forma Financial Information.

Moreover, given the different purpose of the pro-forma data compared to the data in the historical fi-

nancial statements and the different methods of calculating the effects of the Transactions on the pro-

forma consolidated financial position and the pro-forma consolidated income statement, these docu-

ments should be read and interpreted without attempting to reconcile them. Finally, the Pro-Forma

Financial Information is not in any way intended to be a forecast of the Group’s future results and

- 205 -

therefore should not be used for this purpose. The Pro-Forma Financial Information should be read in

conjunction with the historical finance information.

I. Basis of preparation

1. Pro-forma adjustments

As mentioned above, the Pro-Forma Financial Information has been prepared in order to represent the

main effects of the following Transactions on the Company’s statement of financial position as of 30 June 2017 and income statement for the year ended 31 December 2016 for the period from

1 January to 30 June 2017.

1.1 Acquisition of Hummingbird

On 20 October 2017 the De Raj Group AG acquired from Gryphon Energy Corporation PTE. LTD,

Singapore, all shares in Hummingbird in the context of a capital increase against contribution in kind

for an issuance of a total of 34,950,000 shares with a notional nominal value of EUR 1.00 per share,

i.e. for a total notional nominal value of 34,950,000 EUR. The completion of this capital increase was

entered in De Raj Group AG´s commercial register at the district court of Cologne on 20 October

2017.

1.2 Other acquisitions

The following shares have been contributed to the capital reserves of the De Raj Group AG within the

meaning of Section 272 Para. 2. No. 4 HGB (German Commercial Code) on the basis of contribution

agreements entered into by the Company and its shareholder Alexander Arjun de Raj and fulfillment of

the contribution agreements by the shareholders of the following companies on behalf of Alexander

Arjun de Raj:

- all shares of Gaea Power GmbH

- all shares of Gryphon Energy (SEA) Sdn. Bhd.

- all shares of Condor Energy (L) Inc.

- all shares of De Raj Energy Sdn. Bhd.

As result of the above and taking also in consideration the shareholder’s agreement in place, from an accounting stand-point, the Companies controlled by the De Raj Group AG are included in the consol-

idated financial statements as subsidiaries. The inclusion of the subsidiaries in the consolidated finan-

cial statements begins at the point in time at which control is first possible. For the purposes of the

Pro-Forma financial statements the assumption is used, that the control starts on 1 January 2016 or, if

a company is founded later, at the time of foundation.

1.3 Capital increase Gaea

- 206 -

Alexander Arjun de Raj had granted a loan to Gaea Power GmbH in the amount of 3.810 kEUR. Alex-

ander Arjun de Raj assigned the claim to repayment of the loan to De Raj Group AG on the basis of a

voluntary contribution into the capital reserves of De Raj Group AG. Subsequently, De Raj Group AG

decided to waive this shareholder loan in the amount of 3.810 kEUR. For the Pro-Forma financial

statements this conversion is recognized as if the balance sheet equity of the company was higher

since the foundation of the company.

1.4 Capital increase Condor

With shareholder resolution of October 2017, the shareholder of Condor Energy (L) Inc. decided to

convert shareholder liabilities of 89.000 kUSD into equity. Since this liability accrued at 30 June 2017

this conversion is recognized as if the equity of the company was higher at 30 June 2017.

1.5 Capital increase De Raj Energy With shareholder resolution of October 2017, the shareholder of De Raj Energy Sdn. Bhd. decided to convert shareholder liabilities of 98.000 kRM into equity. Since this liability accrued at 30 June 2017 this conversion is recognized as if the equity of the company was higher at 30 June 2017.

2. IFRS adjustments

As mentioned above, the historical financial statement of Gaea has been prepared in accordance with

German GAAP (HGB (German Commercial Code)) as is the case regarding the historical financial

statement of De Raj Group AG. The IFRS (as adopted by the European Union) adjustments identified

for the purpose of the Pro-Forma Financial Information are based on a preliminary analysis which was

not completed at the Date of the Securities’ Prospectus. Further IFRS (as adopted by the European

Union) adjustments may arise after the analysis will be completed. Therefore, the final determination

of IFRS (as adopted by the European Union) adjustments may differ from the amounts shown in this

document.

3. IFRS adjustments not reflected in Pro-forma financial information Certain IFRS (as adopted by the European Union) adjustments have been identified but not reflected in the Pro-forma financial information as the relevant information are not available. This is a brief de-scription of such IFRS (as adopted by the European Union) adjustments identified but not recognized: With regards to the acquisition of Gaea, the measurement at fair value of the acquired assets and liabilities is in progress and the relative information are not available at the date of the Securities’ Pro-spectus. This approach is consistent with the provisions of paragraph 45 of IFRS 3 – Business Com-binations, which governs how to account for business combinations. More specifically, the abovemen-tioned accounting principle call for a “measurement period” during which an entity must carry out an initial accounting of the acquisition and complete the measurement subsequently within up to 12 months from the date of acquisition. During the “measurement period”, the difference between the (i) fair value of the consideration transferred and (ii) fair value of the acquired assets and liabilities, is allocated to goodwill. Therefore, the final determination of the value of the assets and liabilities ac-quired by De Raj Group may differ from the amounts shown in this document. Any changes will be effective retrospectively so as to reflect any information learned about facts and circumstances on the date of acquisition that would have had an impact on the measurement of the amounts recognized at that time.

- 207 -

4. Pro-Forma assumptions The following paragraph presents the pro-forma consolidated statement of financial position as of 30 June 2017 and the pro-forma consolidated income statement for the financial year ended 31 December 2016 and for the period from 1 January to 30 June 2017 of the Group, with the related explanatory notes.

II. Explanatory notes to the Pro-Forma Financial Information The following paragraph presents the Pro-Forma Consolidated Statement of financial position as of 30 June 2017 and the Pro-Forma Consolidated Income Statement for the year ended 31 December 2016 and for the period from 1 January to 30 June 2017 of the Group, with the related explanatory notes.

1. Overall considerations De Raj Group AG with registered office at c/o Heuking Kühn Lüer Wojtek, Magnusstr. 13, 50672 Co-logne is the parent company of the companies of the De Raj Group. The company is entered in the Commercial Register of Local Court (HRB 92007). De Raj Group AG operates in the field of manage-ment of its own assets, the acquisition, management and sale of investments in the business seg-ments biomass heating plants, oil and gas, in particular oil exploration and production units and natu-ral-gas powerplants. The consolidated financial statements of the company include the company and its subsidiaries. In implementing Art. 4 of Regulation (EC) No. 1606/2002 according to section 315a HGB (German Commercial Code), De Raj Group AG has prepared the consolidated financial statements in conformi-ty with the International Financial Reporting Standards (IFRS), as to be applied in the EU, taking into account the interpretations of the International Financial Reporting Interpretations Committee (IFRIC). All pronouncements by the International Accounting Standards Board (IASB), the application of which is mandatory, were considered. De Raj Group AG prepared its IFRS (as adopted by the European Union) consolidated Pro-Forma financial statements for the first time as of 31 December 2016. The consolidated financial statements were prepared in euros. The information in the components of the consolidated financial statements and the information in the notes are reported in thousands of euros (kEUR) unless otherwise stated.

2. Reversed acquisition Since the former shareholder of Hummingbird receive 99,75 % of the share capital of the De Raj Group AG and the relative size of Hummingbird in terms of revenue or equity is significantly higher than the other combining company or entities, Hummingbird is qualified as the accounting acquirer. The De Raj Group AG is qualified as a shell company. Therefore under IFRS 3, this transaction will typically be regarded as a reverse acquisition and Hummingbird is considered the accounting acquirer (and the Company the accounting acquiree) irrespective of the legal form of the transaction. However, the transaction will not constitute a ‘Business Combination’ as defined under IFRS 3 as the Company (the acquiree under IFRS 3) is not considered to be a ‘business’. For the purposes of the Pro-Forma Financial Statement there is the assumption that before the transactions described under Section C.II. the book value of the assets and the liabilities of De Raj Group AG equals the fair value. As a conse-quence of this, there is no difference between the deemed acquisitions costs and the total fair value of the De Raj Group AG.

- 208 -

3. Consolidation principles Based on the assumptions of this Pro-Forma financial statements companies controlled by the De Raj Group AG are included in the consolidated financial statements as subsidiaries. The De Raj Group AG controls a company if it is subject to fluctuating returns from its involvement in the company or has rights to and is capable of influencing such returns through its control over the company. The inclusion of the subsidiaries in the consolidated financial statements begins at the point in time at which control is first possible. It ends when such control is no longer possible. Business combinations are accounted by applying the acquisition method when the De Raj Group AG has gained control. At the time of acquisition, capital is consolidated by offsetting the carrying values of the interests against the revalued pro-rata equity of the subsidiaries. Incidental acquisition cost is not to be included in the carrying value of the interest but as expense in the income statement. The identifiable assets and liabilities acquired (net assets) of the subsidiaries are recognised at their fair values. All hidden reserves and charges of the acquired company are disclosed within the scope of the revaluation. Any remaining positive difference after disclosure of hidden reserves and charges is capitalised in the balance sheet as goodwill. In principle, an indefinite useful life of goodwill is as-sumed here. Any goodwill arising is tested for impairment annually. The financial statements of the domestic subsidiaries included in the consolidation of De Raj Group AG are prepared according to accounting and valuation methods throughout the group. They are pre-pared as of the balance sheet date of the consolidated financial statement. Individual items are combined in the consolidated balance sheet in the interests of clarity. These items are explained in the notes. IAS 1 differentiates between current and non-current debts. The liabilities and reserves which are due within one year are in principle specified here as current debts.

4. Consolidated companies The consolidated companies comprise five foreign and one domestic subsidiaries. The balance sheet date applies to all subsidiaries included in the consolidation for preparation of the financial statements. Based on the assumptions of this Pro-Forma Financial Statements the table below shows the respec-tive percentage in the equity of the companies as of 31 December 2016 and 30 June 2017: Gaea Power GmbH 100,0% Gryphon Energy (SEA) Sdn. Bhd. 100,0% Condor Energy (L) Inc. 100,0% Hummingbird Energy (L) Inc. 100,0% De Raj Energy Sdn. Bhd 100,0% The Group companies included in the consolidated financial statements are deemed to be foreign entities in accordance with IAS 21. Accordingly, and in line with the functional currency method and the income statements of subsidiaries reporting in foreign currencies are translated at the average rates for the year. Balance sheet items are translated at the prevailing exchange rates as at the bal-ance sheet date of each year. Currency-related differences in equity are recognised in the translation reserve that forms a separate item under equity. The Malaysian entity Hummingbird Energy (L) Inc. used the United States Dollar (USD) as the functional currency for presentation the financial state-ment, because the USD is the currency of the primary economic environment in which the Company operates.

- 209 -

Foreign currency transactions are translated into euros at the exchange rates prevailing on the trans-action dates. Gains and losses resulting from the settlement of such transactions and from the transla-tion of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary assets that are measured at cost are translated at the euro exchange rate at the time of their acquisition; non-monetary assets that are measured at fair value are translated at the current euro exchange rate. Forward currency transactions are measured using the prevailing forward rates for their respective maturities.

5. Accounting and valuation methods The Pro-Forma financial statement has been prepared in accordance with the International Financial Reporting Standards (IFRS) endorsed by the European Union, as well as the Interpretations of the IFRS Interpretations Committee (IFRS IC) and Standing Interpretations Committee (SIC) of the Inter-national Accounting Standards Board (IASB), London, in effect at the closing date.

IV. Explanatory notes to the income statement and the balance sheet

1. Revenues Revenue represents rental income earned form charter of production separator and fuel gas equip-ment and block heater. Rental income is accrued on a time basis, by reference to the agreement en-tered into.

2. Operating expenses Operating expenses are recognised in profit or loss on the date of performance or the date on which they are incurred.

3. Plant and equipment All items of plant and equipment are initially measured at cost. Cost includes expenditure that are di-rectly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use. Subsequent to initial recognition, all plant and equip-ment, are stated at cost less accumulated depreciation and any impairment losses. Subsequent costs are included in the assets’ carrying amount or recognized as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associ-ated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognized. The costs of the day-to-day servicing of equipment are recognized in profit or loss as incurred. Depreciation on plant and equipment is charged to profit or loss on a straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are: Offshore drilling and production equipment 6,67% Production operator and fuel gas equipment 6,67% Blockheater 10,00%

- 210 -

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment. Any changes are accounted for as change in estimate. When significant parts of an item of plant and equipment have different useful lives, they are account-ed for as separate items of plant and equipment. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss. The carrying values of assets, other than those to which IAS 36 - Impairment of Assets does not ap-ply, are reviewed at the end of each reporting period for impairment when an annual impairment as-sessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recover-able amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised in profit or loss immediately. When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recog-nised in profit or loss immediately.

4. Classification and subsequent measurement of financial assets and liabilities Financial assets and financial liabilities are recognise in the statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial instruments are classified as financial assets, financial liabilities or equity instruments in ac-cordance with the substance of the contractual arrangement and their definitions in IAS 32. Interest, dividends and gains and losses relating to a financial instrument classified as liability, are reported as expenses or income. Distributions to holders of financial instruments classified as equity are recog-nised directly in equity. Financial instruments are offset when the Company has a legally enforceable right to offset and in-tends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attribut-able to the acquisition or issue of the financial instrument (other than a financial instrument at fair val-ue through profit or loss) are added to/deducted from the fair value on initial recognition, as appropri-ate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

- 211 -

Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item. (a) Financial Assets On initial recognition, financial assets are classified as either financial assets at fair value through prof-it or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. (i) Financial Assets at Fair Value through Profit or Loss As at the end of the reporting period, there were no financial assets classified under this category. (ii) Held-to-maturity Investments As at the end of the reporting period, there were no financial assets classified under this category. (iii) Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impair-ment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Loans and receivables financial assets are classified as current assets, except for those having set-tlement dates later than 12 months after the reporting date which are classified as non-current assets. (iv) Available-for-sale Financial Assets As at the end of reporting period, there were no financial assets classified under this category. (b) Financial Liabilities Financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimat-ed future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. Financial liabilities are classified as current liabilities unless the Company has an un-conditional right to defer settlement of the liability for at least 12 months after the reporting date. (c) Equity Instruments Equity instruments classified as equity are measured at cost and are not remeasured subsequently. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in eq-

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uity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabili-ties when approved for appropriation. (d) Derecognition A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retain-ing control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recog-nised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

5. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. The Inventories consist of spare parts of Hummingbird with the amount of 1.928 kEUR.

6. Liabilities Liabilities are reported at their repayment amount. Long-term liabilities are reported at their present value.

7. Income Taxes Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities. They are measured using tax rates and tax laws that have been enacted or sub-stantively enacted at the end of the reporting period according to current legislation in the respective country and are recognised in profit or loss except to the extent that the tax relates to items recog-nised outside profit or loss (either in other comprehensive income or directly in equity). Deferred tax are recognised using the liability method for all temporary differences other than those that arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred taxes are determined on the basis of the tax rates which apply resp. are anticipated accord-ing to current legislation in the respective countries at the time of realisation. A tax rate of 32,75 % was applied to calculate domestic deferred taxes. In conformity with the regulations of IAS 12 “Income Taxes”, deferred tax assets resp. liabilities are not discounted.

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Changes in other comprehensive income, which are not recognised in profit or loss, are reported in accumulated other equity unless they are based on capital transactions with shareholders (e.g. capital increases or distributions).

8. Equity, reserves and dividend payments Share capital represents the nominal (par) value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. Other components of equity include translation reserve comprises foreign currency translation differ-ences arising from the translation of financial statements of the Group’s foreign entities into Euro (see note C. III. 5) and retained earnings includes all current and prior period retained profits.

9. Accruals Other accruals are set up if there is a legal or factual obligation towards third parties due to a past event, the claim is likely and the anticipated amount of the required accrual can be reliably estimated. Accrued liabilities are discounted if the effect associated therewith is material. Effects of discounting accrued liabilities over time are reported in interest expense. The discount rate corresponds to a pre-tax rate that reflects current market expectations. All standards valid on the balance sheet date and all standards which are mandatory to apply accord-ing to adoption by the EU Commission by the balance sheet date, are applied. The interpretations of the International Financial Reporting Interpretations Committee (IFRIC) are also complied with.

V. Explanatory notes to the pro-forma adjustments

1. Equipment All depreciation are included within depreciation and amortisation of non-financial assets. The equip-ment of the group company Hummingbird has been pledged to financial institutions as security for the companies borrowings.

2. Cash and Cash Equivalents The Cash and Cash Equivalents consist of cash and bank balances of Hummingbird. The amount of 174 kEUR is restricted. The amount is related to banking facilities granted to the Company, where the funds are only available upon approval by the bank for certain expenditure.

3. Trade Payables The carrying values of trade payables are considered to be a reasonable approximation of fair value. The normal trade credit term granted to the Company rages from 30 to 60 days.

4. Tax Expenses The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax rate of Illustrative Corporation at 32:75 % and the reported tax expense in profit or loss are as follows:

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The taxation for Hummingbird is based on the Labuan tax law, which gives exemption from taxes for income from operational lease agreements. Hummingbird uses this exemption and pays the minimum required tax at a flat rate of 20.000 RM (Malaysian Ringgit) per annum, as per Labuan regulations.

5. Non-Current Liabilities Long-term liabilities to banks comprise a bank loan with Export-Import Bank Of Malaysia Berhad, Kua-la Lumpur/Malaysia of 37.813 kEUR. The current liability is 5.900 kEUR. The annuity loan has a term until February 2020 and was obtained at a floating interest rate of COF (Cost of Funds Index) + 2% p.a. It is repaid on a quarterly basis, for the first time as of February 2016. The loan is secured by: - First legal charge over Mobile Offshore Production Unit (“MOPU”) called BOSS 1 inclusive

the topside modules, and the jack up rig called BOSS 7 and BOSS 8; - Second legal charge which is limited to USD 10 million over a jack up rig called BOSS 6; - Personal guarantee by a director of the Company; and - Corporate guarantee by the holding company and a related party.

6. Equity

(a) Share capital The share capital of De Raj Group AG consists only of fully paid ordinary shares with a nominal par value of 1.00 EUR per share. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at shareholders’ meetings of De Raj Group AG. The company was founded with descripted equity of 50.000 EUR. With registration of a capital increase in the commer-cial register on 20 October 2017 the equity increased to 35.000.000 EUR by contribution the shares of Hummingbird in the company.

(kEUR) Q2 2017 2016Profit before tax 2.040 4.166Domestic tax rate 32,75% 32,75%Expected tax expense 668 1.364

Adj. Tax-rate differences in foreign jurisdicti -662 -1.417Adj. for tax-exempt income- relating to equity accounted investments 0 0- Other tax exempt income 0 0

Adj. for non-deductible expenses- relating to goodwill impairment 0 0- Other non-deductible expenses 0 57Actual tax epense 6 4

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(b) Capital Reserve The Capital Reserve results from the contribution of the following shares:

kEUR Gaea Power GmbH 3.904 Gryphon Energy (SEA) Sdn. Bhd. 214 Condor Energy (L) Inc. 77.988 De Raj Energy Sdn. Bhd 20.006 Total 102.112

(c) Reverse Acquisition Reserve For the purposes of the Pro-Forma Financial Statement there is the assumption that the contribution of the shares of Hummingbird into De Raj Group AG is qualified as a reverse acquisition in accordance with IFRS 3. A reverse acquisition means that the legal acquire, the De Raj Group AG, becomes the acquired company. In accounting terms Hummingbird is thereby considered the acquiree while De Raj Group AG is considered to be the acquired company. The purchase price is determined on the basis of the value of the new capital issued by De Raj Group AG with the amount of 35.000 kEUR. Since De Raj Group AG has been issued shares with the fair value of 35.000 kEUR in access of the net assets received of the book value of equity of Hummingbird with 14.160 kEUR, IFRS 2 dictates the difference is recognized in comprehensive loss as a reverse transaction cost in 2016. For the balance sheet 30 June 2017 the amount is transferred in a separated position. (d) Reserve from currency translation There is a translation reserve from the exchange differences on translating foreign operations of -997 kEUR. For further details see the explanations under section C. III. 5.”

13.3 Auditor’s Report to the Pro-forma consolidated financial information

In the following, the Auditor’s Report of Crowe Kleeberg Audit GmbH, Wirtschaftsprüfungsgesellschaft, to the the Pro-Forma Consolidated Financial Information is reproduced verbatim:

“Auditor´s Report

To: De Raj Group AG

We have audited whether the pro forma financial information as of 30. June 2017 of De Raj Group

AG, Cologne, has been properly compiled on the basis stated in the pro forma notes and wheterthis

basis is consistent with the accounting policies of the company. The pro forma financial information

comprises a pro forma income statement for the period from 1. January 2016 to 31. December 2016,

a pro forma income statement for the period from 1. January 2017 to 30. June 2017, a pro forma

balance sheet as of 30. June 2017 as well as pro forma notes.

The purpose of the pro forma financial information is to present the material effects the transactions

described in the pro forma notes would have had on the historical financial consolidated statements if

the group had existed in the structure created by the transactions throughout the entire reporting period of the pro forma income statements and the pro forma balance sheet. As pro forma financial

information reflects a hypothetical situation it is not entirely consistent with the presentation that

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would have resulted had the relevant events actually occurred at the beginning of the reporting period of the pro forma income statements and the pro forma balance sheet. Therefore, we do not express

an opinion on the true impact of the transactions described in the pro forma notes. The compilation of

the pro forma financial information is the responsibility of the company´s management.

Our responsibility is to express an opinion, based on our audit, whether the pro forma financial infor-

mation has been properly compiled on the basis stated in the pro forma notes and whether this basis

is consistent with accounting policies of the company. This includes as well the evaluating of the over-all presentation of the pro forma financial information. The subject matter of this engagement does

neither include an audit of the basic figures including their adjustment to the accounting policies of

the company, nor of the pro forma assumptions stated in the pro forma notes.

We have planned and performed our audit in accordance with the IDW Auditing Practice Statement:

Audit of Pro Forma Financial Information (IDW AuPS 9.960.1), promulgated by the Institut der

Wirtschaftsprüfer in Deutschland e.V. (IDW), in such a way, that material errors in the compilation of the pro forma financial information on the basis stated in the pro forma notes and in the compilation

of this basis consistent with the accounting policies of the company are detected with reasonable as-

surance.

In our opinion, the pro forma financial information has bee properly compiled on the basis stated in

the pro forma notes. This basis is consistent with the accounting policies of the company.

Munich, 10 November 2017

CROWE KLEEBERG AUDIT GMBH

WIRTSCHAFTSPRÜFUNGSGESELLSCHAFT

signed: Petersen signed: Prechtl Wirtschaftsprüfer Wirtschaftsprüfer German Public Auditor German Public Auditor”

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14. EXPLANATORY REMARKS ON THE PRO-FORMA FINANCIAL INFORMATION OF DE

RAJ GROUP

This section includes an explanation and a comparison of the Pro-Forma Consolidated Financial In-formation of De Raj Group, which was set up in view of the formation of De Raj Group (cf. Section 13. “Pro-forma Consolidated financial information of De Raj Group”.)

This financial information is based upon the following:






ing referred to as “Formation of De Raj Group”).




























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Finanzinformationen (IDW RH HFA 1.004)) and in accordance with the IFRS as adopted by the

European Union.

14.1 Explanations and Comparision of the Pro-forma Consolidated Income Statement FY

2016 and HY 2017

The table below shows the Pro-forma consolidated income statement for the year ended 31 December 2016 and for the period from 1 January 2017 to 30 June 2017:

De Raj Group AG

Cologne , Germany

STATEMENT OF PROFIT AND LOSS (Pro Forma) 1st HY 2017 FY 2016 EUR EUR

Rental Income 7.844.000 12.150.798 Operating Expenses (4.089.654) (5.458.538) Net rental income 3.754.346 6.692.260 General administrative ex-penses

(958.771) (586.714)

Other operating income 86 232.808 Other operating expenses (91.233) (114.318) Total other operating income and ex-penses

2.704.428 6.224.036

Income from the disposal of Properties - -


- -

Result from the disposal of properties - - Valuations gains from properties - -

Impairment loss from properties - -

Valuations results Operation result 2.704.428 6.224.036 Result from at equity-accounted investments

- -

Interest income - - Interest expenses (790.371) (2.086.647) Minority interests - - Financial result (790.371) (2.086.647) Net Profits/ (Loss) 1.914.057 4.137.389

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Explanations and comparison of the profit situation of De Raj Group according to the Pro-

forma consolidated financial information for the first six months of the business year 2017 and

the previous business year 2016

Rental Income

The Pro-forma Profit and Loss Statements shows revenues of the De Raj Group AG of kEUR 7.844

for the first half year of 2017. Gryphon Energy (SEA) recorded a revenue of kEUR 9.511. The revenue

was solely accrued from the contract with Pertamina signed on 20 February 2017. The revenue for

Hummingbird for the time period from 1 January to 30 June 2017 was kEUR 5.066. Since there is

intercompany transaction between these two companies after consolidation there are revenues of

kEUR 7.844.

There were not any revenues for the period ending 31 December 2016 for Gryphon Energy (SEA). In

2016 Hummingbird shows revenues of kEUR 10.738 (before consolidation). Compared to the full year

2016 the revenues of Hummingbird declined in 2017 due to lower crude oil prices.

Gaea Power GmbH start their business in 2016, so revenues in 2016 of kEUR 1.413 are lower on a

six month ratio than the revenues of kEUR 919 for the first half year in 2017.

On an annualized basis, the revenues of the consolidated De Raj Group of kEUR 7.844 for HY 2017

would be higher than FY 2016 of kEUR 12.151. This is mainly due to the increase of Daily Chartered

Rates from USD 36,027 to USD 52,000 per day since 20 February 2017. The other contributor to the

increase in revenues by approximately kEUR 400 is Gaea Power which benefitted from better utiliza-

tion of generator uptime.

Operating Expenses

The operating expenses for Hummingbird Energy (L) Inc of kEUR 4.016 in 2016 were also almost

similar to HY 2017 recorded at kEUR 2.350 on a pro-rata temporizes base. The main costs were only

depreciation and direct costs, i.e. insurance.

For Gryphon Energy (SEA) there was no cost of sales for period ending 31 December 2016 while for

the six month period ending 30 June 2017, Gryphon Energy (SEA) recorded costs of sales of

kEUR 8.576. These costs accrue from the rental of the Boss 1 rig and the rental of the topside equip-

ment from Hummingbird Energy (L) Inc. and are consolidated as intercompany transaction.

For Gaea Power GmbH the cost of sales of kEUR 1.443 for 2016 and kEUR 816 for the first half year

of 2017 include mainly the depreciation of the combined heat and power plants.

Net rental income

The Gross Profit of kEUR 3.754 for first six month 2017 is higher on a pro-rata temporis base com-

pared to kEUR 6.692 for 2016.

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General administrative expenses

There are kEUR 955 administrations expenses recorded for the six months-period ending 30 June

2017 and kEUR 582 for 2016. In 2017 there are kEUR 156 in Hummingbird, kEUR 689 in Gryphon

Ernergy (SEA) and kEUR 107 in Gaea Energy GmbH. In 2016 the administration expenses was rec-

orded at kEUR 510 for Hummingbird, kEUR 38 for Gaea Energy GmbH and kEUR 27 for Gryphon

Ernergy (SEA).

With respect to the General administrative expenses on an annualized basis HY 2017 is significantly

higher in comparison to the FY 2016 due to various listing preparation exercises and increase in mar-

keting and tendering costs when it came to several new projects in pursuit. These additional costs

have been very fruitful as De Raj Group has managed to capture several material projects earmarked

to be launched in FY 2018.

In addition, the general administrative expenses contain the income tax expenses. With kEUR 1.679

most of the profit before taxation was achieved by Hummingbird. The taxation for Hummingbird is

based on the Labuan tax law, which gives exemption from taxes for income from operational lease

agreements. Hummingbird uses this exemption and pays the minimum required tax at a flat rate of

RM 20.000 (Malaysian Ringgit) per annum, as per Labuan regulations. The income tax recognized in

2016 and for the six-month-period in 2017 is not material.

Other operating income

For 2016 the other operating income of the De Raj Group of kEUR 233 accounted for Hummingbird

with kEUR 206.

The other income is resulting from foreign currency transactions that are translated into EURO at the

exchange rates prevailing on the transaction date, i.e. gains and losses resulting from the settlement

of such transactions and from the translation of monetary assets and liabilities denominated in foreign

currencies.

Other operating expenses

There are kEUR 91 other operating expenses for the first half year 2017 (thereof KEUR 91 of Hum-

ingbird) and kEUR 114 for the total year 2016.

Interest expenses

The finance cost for the De Raj Group was captured at kEUR 790 in the first half year 2017 in compar-

ison to kEUR 2.087 for 2016. The finance costs in 2017 compared on a pro-rata-temporis base with

2016 are lower as a result of accurals during the period 2017. The Exim Bank interest cost is approxi-

mately slightly higher than kUSD 500 per quarter.

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As there is no interest income, the financial result consists only of the interest expenses.

Net profits

Even though De Raj Group has higher Daily Chartered rates, the group did not manage to display

better annualized Profit after Taxes (PAT) as the De Raj Group followed an active program of busi-

ness development and diversification and invested significant portion of their enhanced revenue into

exploring opportunities for business diversification and market exploration initiatives, although the

base profitability was protected at the same level.

14.2 Explanations of the pro forma consolidated Balance Sheet as of 30 June 2017

The following table shows the pro forma consolidated Balance Sheet of De Raj Group as per 30 June

2017 and 31 December 2016:

De Raj Group AG

Cologne, Germany





Total Assets 159.659.817 75.529.812



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Liabilities to banks 29.951.434 30.274.642 Liabilities to shareholders 12 (78.721.608) Total non-current liabilities 29.951.446 (48.446.966) Current liabilities Amount owing to directors or related parties 6.360.608 15.523.539 Liabilities to banks - 5.597.191 Trade payables 636.684 339.112 Accrued expenses and Provisions 715.153 688.302 Other current and financial liabilities 453.356 (23.855.637) Total current liabilities 8.165.801 (1.707.493) Total shareholders' equity and liabilities 159.659.817 75.529.812

Explanations and comparison of the balance sheet of De Raj Group according to the Pro-forma

consolidated financial information as per 30 June 2017 and 31 Decembre 2016

Non-Current Assets

Property, plant and equipment

The position Property, plant and equipment of kEUR 52.658 as of 30 June 2017 includes the book

value of kEUR 47.847 of the equipment of Hummingbird. Hummingbird is the owner of the production

facilities which are installed on the upper part of the oil rigs (e.g. the oil production plant, the accom-

modation block and the drilling rig, also referred to as “Topside Equipment”, (cf. also section 8, “Busi-

ness Description”).

The equipment of the Gaea Power GmbH are 13 combined heat and power plants („CHP plants“)

spread throughout Viersen, Straelen and Geldern, Germany. Six of these CHP plants are currently in

operation. Further seven units are currently not in operation due to ongoing modification works.

Other receivable and assets

The other receivables and assets as of 31 December 2016 contain an investment of Hummingbird in

Steel Bird Machinery and Equipment Rental LLC, Dubai in the amount of 49 % of its equity.

Current Assets

The current assets as of 30 June of 107.002 kEUR mainly consist of other financial assets of

kEUR 105.074.

Trade receivables

Due to consolidation of intercompany transactions between Hummingbird and Gryphon Energy (SEA)

(kEUR 7.733), the trade receivables are presented in an amount of kEUR 6.253.

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Inventories

The inventories of kEUR 1.928 mainly represent spare parts of Hummingbird.

Other receivables and assets

The other financial assets of kEUR 98.099 consist with the amount of kEUR 55.205 (USD 63 Million)

for book value for the Jack-up Rigs of the De Raj Group which are not in use, presently the Jack-up

Rigs GAEA 3, GAEA 4, POSEIDON, Malaikat and GAEA 200 (cf. also the explanation under section

8, “Business Description”) in the Condor Energy (L) Inc (cf. the information in Section 8, “Business

Description”, 8.1 “Introduction and Overview”). The purchase price of these assets of USD 63 Million is

comprised as follows:

Asset Book Value (USD)

Jack-up Rigs GAEA 3, 4, Poseidon 22 Mio.

Jack-up Rig MALAIKAT 6 Mio.

Jack-up Rig GAEA 200 11 Mio.

Topside Equipment 11 Mio.

Equipment used in Drill Ships 13 Mio.

Further financial assets are presented as a result of the contribution of shares in Gryphon Energy

Corporation Pte Ltd. in Condor in an amount of kEUR 22.783 (USD 26 Million).

There are additional other financial assets of kEUR 20.006 of the De Raj Energy Sdn Bhd for the pa-

tents of the oil and gas division of the De Raj Group purchased in September 2017.

Amount owing by related companies

The amount of kEUR 313 belongs to Hummingbird, kEUR 116 to Gryphon Energy (SEA), kEUR 59 to

Condor and although kEUR 59 to De Raj Energy Sdn Bhd.

Cash and cash equivalents

The cash on hand and bank balance of kEUR 174 shown as liquid funds mainly belongs to the Hum-

mingbird with kEUR 115 and the De Raj Group AG with kEUR 50.

Equity and Liabilities

Equity

Share Capital

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After the foundation of the De Raj Group AG as a shelf company with no operational business the

share capital of kEUR 50 increased by the contribution of shares in Hummingbird Energy (L) Inc to the

Company on the basis of a contribution agreement which was entered into in the context of an in-

crease of the nominal share capital of the Company against contribution in kind. In this capital in-

crease the nominal share capital was increased from then kEUR 50 to kEUR 35.000 by issuing

34.950.000 new bearer shares (Stückaktien), each representing a notional value of EUR 1,00. The

capital increase was resolved upon by the shareholders’ meeting of the Company on 11 October 2017

and became effective with its registration in the commercial register on 20 October 2017. The capital

increase was considered as a proforma adjustment.

Capital Reserve

The Capital Reserve of kEUR 102.245 included pro-forma transaction of establishing the De Raj

Group. The pro-forma adjustments are:

Transaction Value (kEUR)

Debt to Equity Swap Condor 77.988

Debt to Equity Swap De Raj Energy 20.006

Transfer of shares De Raj Energy to Capital Re-

serve

64

Transfer of shares Gaea Power GmbH to Capital

Reserve

3.840

Transfer of shares Condor to Capital Reserve 134

Transfer of shares Gryphon Energy to Capital

Reserve

213

Reverse acquisition reserve

For the purposes of the pro-forma financial statement there is the assumption that the contribution of

the shares of Hummingbird into De Raj Group AG is qualified as a reverse acquisition in accordance

with IFRS 3. A reverse acquisition means that the legal acquire, the De Raj Group AG, becomes the

acquired company. In accounting terms Hummingbird is thereby considered the acquiree while De Raj

Group AG is considered to be the acquired company. The purchase price is determined on the basis

of the value of the new capital issued by De Raj Group AG with the amount of kEUR 35.000. Since De

Raj Group AG has been issued shares with the fair value of kEUR 35.000 in access of the net assets

received of the book value of equity of Hummingbird with kEUR 14.160, IFRS 2 dictates the difference

is recognized in comprehensive loss as a reverse transaction cost in 2016. For the balance sheet as

of 30 June 2017 the amount is transferred in a separated position.

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Reserve from currency translation

The Group companies included in the consolidated financial statements are deemed to be foreign

entities in accordance with IAS 21. Accordingly and in line with the functional currency method the

income statements of subsidiaries reporting in foreign currencies are translated at the average rates

for the year. Balance sheet items are translated at the prevailing exchange rates as at the balance

sheet date of each year. Currency-related differences in equity are recognised in the translation re-

serve that forms a separate item under equity. There is a translation reserve from the exchange differ-

ences on translating foreign operations of kEUR -964.

Retained Earnings

The Retained Earnings of kEUR 4.137 include the earnings of the De Raj Group AG and their subsid-

uardies based on the proforma assumption since 1 January 2016, or if the company was founded

later, at that date.

Profit for the period

The profit for the first six month of 2017 of kEUR 1.914was generated mainly with kEUR 1.675 by

Hummingbird.

Non Current liabilities

Non-current liabilities include kEUR 24.656 non-current liabilities against banks and an amount of

kEUR 12 against shareholder.

Liabilities to banks

Hummingbird entered into a credit facility agreement of USD 55 Million on 30 June 2015. These facili-

ties were solely for the refinancing of the topside engineering equipment based on the MOPU Boss 1

rig. The interest payable is a floating rate of ECOF plus 2 % per annum. The term of the facility has

been restructured to 10 quarters. Hummingbird had bank borrowings under this credit facility agree-

ment of approximately USD 33 Million as of 30 June 2017 representing kEUR 29.087. There are addi-

tional kEUR 865 liabilities against banks of Gaea Power GmbH.

Liabilities to shareholder

There is an amount of EUR 12 shown as liabilities to shareholder. Due to the modification of the as-if

transaction a receivable against shareholder is resulting.

Current financial liabilities

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The current liabilities mainly exist of the amount owing to related companies of kEUR 5.887, accrued

expenses and provisions of kEUR 715 and an amount of trade payables of kEUR 637 after consolida-

tion of intercompany transactions.

Amount owing to directors or related parties

There are liabilities of kEUR 5.887 to related companies which mainly consists of liablities from Hum-

mingbird against Gryphon Energy Corporation Pte Ltd. (kEUR 5.609).

Liabilities to banks

In comparision to the 31 December 2016, there are no current liabilities to banks as of 30 June 2017.

Trade payables

After the consolidation of intercompany transactions between Gryphon Energy (SEA) and Humming-

bird the trade payables represent an amount of kEUR 637 as of 30 June 2017.

Accrued expenses and provisions

The presented amount of kEUR 715 mainly consists of accrued expenses of Hummingbird.

Other current and financial liabilities

There are other current and financial liabilities of kEUR 451 representing with an amount of kEUR 450

to GAEA as of 30 June 2017.

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15. CORPORATE BODIES

The Company’s corporate bodies are the Management Board (Vorstand), the Supervisory Board

(Aufsichtsrat) and the Shareholders’ Meeting (Hauptversammlung). The powers and responsibilities of

these corporate bodies are governed by the German Stock Corporation Act (Aktiengesetz), the Com-

pany’s Articles of Association (Satzung) and, if applicable, the Bylaws (Geschäftsordnungen) of the

Management Board and Supervisory Board.

15.1 Overview

The Management Board conducts the business of the Company in accordance with the law, the Arti-

cles of Association and the Bylaws of the Management Board to the extent Bylaws are issued, taking

into account the resolutions of the Shareholders’ Meeting and any distribution-of-business-plan. The

Management Board represents the Company in its dealings with third parties. The Management Board

is required to introduce and maintain appropriate risk management and risk controlling measures, in

particular setting up a monitoring system, in order to ensure that any developments potentially endan-

gering the continued existence of the Company may be identified early. Furthermore, the Management

Board must report regularly, promptly and in detail to the Supervisory Board about the intended busi-

ness policies and fundamental issues concerning corporate planning, profitability of the Company, the

course of business as well as transactions which may be of significant importance for the profitability

or liquidity of the Company. At the same time, the Management Board shall illustrate any deviations of

the course of business from the established plans and targets, together with the reasons for the de-

velopments. Furthermore, as regards all matters of particular significance to the Company, each

member of the Management Board who becomes aware of such matters must immediately report

these matters to the chairman of the Supervisory Board or to all members of the Supervisory Board. In

addition, the Supervisory Board may at any time require the Management Board to submit a report on

issues affecting the company. In Bylaws (Geschäftsordnung) rules of procedure for the Management

Board may be issued that certain types of transaction shall require the consent of the Supervisory

Board. The Supervisory Board is entitled to extend or reduce the list of transactions requiring its con-

sent at any time.

The Supervisory Board appoints the members of the Management Board and has the right to remove

them for good cause. Simultaneous membership on the Management Board and the Supervisory

Board is prohibited. The Supervisory Board advises the Management Board in the management of the

Company and monitors its management activities. In accordance with the German Stock Corporation

Act (Aktiengesetz), the Supervisory Board is not authorized to exercise management functions.

The members of the Management Board and Supervisory Board owe duties of loyalty and due care to

the Company. In this context, the members of these corporate bodies must take into account a broad

spectrum of interests, in particular, those of the Company, its shareholders, its employees and its

creditors. The Management Board must further take into account the rights of shareholders to equal

treatment and equal information.

- 228 -

Under German law, individual shareholders (as well as any other person) are prohibited from exerting

their influence on the Company and causing a member of the Management Board or Supervisory

Board to take an action detrimental to the Company. Shareholders having a controlling influence may

not use their influence to take any action which is detrimental to the Company’s interests, unless the disadvantages are compensated. Any person who intentionally, exerting its influence on a company,

causes a member of the Management Board or Supervisory Board, a holder of general commercial

power of attorney (Prokurist) or an authorized agent (Handlungsbevollmächtigten) to act in a manner

causing damage to the Company or its shareholders, must compensate the Company and its share-

holders for all damages resulting thereof. In addition, the members of the Management Board and

Supervisory Board are jointly and severally liable if they have acted in breach of their duties.

If the members of the Management Board or Supervisory Board are in breach of their duties, the

members concerned are jointly and severally liable for damages to the Company. De Raj has taken

out a Directors’ and Officers’ (D&O) Liability Insurance policy (Vermögensschadenhaftpflichtversicher-

ung) for members of the Management Board and Supervisory Board.

Shareholders whose joint holdings equal or exceed 1% of the share capital or a proportionate interest

of EUR 100,000.00 at the time the petition is submitted may petition in their own name for a claim for

damages to be heard by the regional court where the Company has its registered office. The Compa-

ny may only waive or settle a claim for damages against board members if at least three years have

elapsed since the vesting of the claim, so long as the shareholders approve the waiver or settlement in

the Shareholders’ Meeting by a simple majority and provided that a minority of shareholders whose aggregate shareholdings amount to at least 10% of the share capital do not record an objection to

such resolution in the minutes of the meeting.

15.2 The Management Board

15.2.1 Composition, Resolutions and Representation

Pursuant to the Company’s Articles of Association, the Company’s Management Board is composed of one or several members. The Supervisory Board determines the exact number of members, their

responsibilities and their term of office. Pursuant to Section 84 paragraph 2 German Stock Corporation

Act (Aktiengesetz) a Management Board member may be appointed chairman of the Management

Board by the Supervisory Board. At present, the Management Board of De Raj consists of three

members. The members of the Management Board are appointed by the Supervisory Board for a

maximum term of five years. The reappointment or extension of the term is permissible, in each case

for a maximum of five years. The Supervisory Board can revoke the appointment of a member of the

Management Board before expiration of the tem of appointment for good cause, e.g. for gross breach

of duties, or if the Shareholders’ Meeting declares it has no confidence in the member of the Man-agement Board, unless the vote of no confidence is based on obviously unobjective grounds.

The Management Board shall adopt its resolutions by simple majority of the votes cast unless other-

wise stipulated by law, the Company’s Articles of Association or the Bylaws.

- 229 -

If only one Management Board member is appointed, then that person represents the Company alone.

If the Management Board is comprised of several members, the Company is legally represented jointly

by two members of the Management Board or by one Management Board member acting jointly with a

holder of a general power of attorney (Prokurist). The Supervisory Board may grant to each member

of the Management Board of the Company sole power of representation. The Supervisory Board may

also relieve individual members or all the members of the Management Board in general or in specific

cases from the prohibition pursuant to Section 181 BGB on undertaking legal transactions in the name

of the company with itself as representative of a third party (Mehrfachvertretung).

Pursuant to Article 9 of the articles of association, the supervisory board shall determine the transac-

tions into which the management board may only enter with the approval of the supervisory board.

The supervisory board may, in advance and revocably, grant an approval for certain transactions in

general, or on the condition that the corresponding transaction meets certain requirements.

On 30 October 2017 the Supervisory Board has issued the Bylaws for the Management Board. Ac-

cording to the bylaws, the management must seek prior approval of the supervisory board for the fol-

lowing transactions or measures:

- all measures which require the consent of the supervisory board according to statutory law;

determining and amending the Company’s fundamental business policy; - determining and amending the annual budget (finance and investment plan) for the current

fiscal year;

- taking over suretyships, guarantees and other liabilities exceeding an amount of

EUR 250,000 in each case as well as entering into loan agreements exceeding an amount of

EUR 1,000,000 in each case;

- acquiring, encumbering and disposing of participations in other companies exceeding an

amount of EUR 250,000 in each case;

- acquiring, encumbering and disposing of real estate properties, rights equivalent to real

property and - property rights exceeding an amount of EUR 2,500,000 in each case;

- granting of individual commercial power of representation (Einzelprokura);

- concluding or amending employment agreements with employees whose annual remunera-

tion including bonus payments exceeds an amount of EUR 100,000.00 p.a. as well as enter-

ing into pension agreements with employees;

- appointing members of the corporate bodies of subsidiaries or entering into employment

agreements with them;

- introducing and setting-up a company pension scheme;

- entering into, amending and terminating affiliation agreements; issuing bonds;

- establishing or shutting-down business premises and branch offices;

- entering into finance lease and lease agreements and other agreements for the Company’s own account with an annual payment obligation exceeding an amount of EUR 100,000 and a

term of more than two years;

- any transactions and measures outside the Company’s ordinary course of business.

- 230 -

Further, the management board has to seek the prior consent of the supervisory board if it intends to

take any of the aforementioned measures relating to any of the Company’s affiliates.

The Supervisory Board may extend the scope of transactions requiring its approval.

The members of the Management Board can be reached at the Company’s business address.

15.2.2 Current Members of the Management Board

At present, the Management Board consists of the following members:

Nagendran C Nadarajah (* 1953)

Mr Nagendran C. Nadarajah has earned a Masters degree of Business Administration in Finance at

City University Business School, renamed in 2002 as CASS Business School, City, University of Lon-

don and was a Fellow of the Chartered Association of Certified Accountants (ceased membership). Mr

Nagendran Nadarajah has a broad experience of over 40 years in the oil & gas industry, commerce

and educational institutions, mostly in the United Kingdom and Malaysia and is very familiar with intel-

lectual property (IP) development and protection. He has held patents for some early oil & gas prod-

ucts and was instrumental in the listing of Perisai Petroleum in 2004. Mr Nadarajah built the company

Corro-Shield (M) Sdn Bhd from ground up to an estimated RM 30 million annual turnover. Corro-

Shield (M) Sdn Bhd was the main company behind the subsequently listed Perisai Petroleum

Teknologi Berhad with a market capitalisation in excess of RM four hundred million when he sold his

shares in 2010 to start Gryphon Energy. In October 2009, Perisai Petroleum Teknologi Berhad was

awarded the "Excellence in Innovation" award by Frost & Sullivan for Perisai's potential contribution to

the development of marginal and uneconomical offshore oil and gas fields using MOPSU™ technolo-

gy. Perisai was the first company in the oil and gas industry in the Asia Pacific region to be awarded

the accolade.

The Supervisory Board appointed Mr Nadarajah as member of the Management Board by resolution

of 24 July 2017. His term of office ends on 23 July 2022. According to the resolution of the manage-

ment board of 3 November 2017, he is also appointed chairman of the management board.

Mr Nadarajah is also managing director of the following other companies of the De Raj Group:

Enterprise Position Duration

Hummingbird Energy (L) Inc,

Labuan

Managing Director Since December 2009 - ongoing


Bhd, Malaysia

Director Since November 2015 - ongoing

De Raj Energy Sdn Bhd, Malay-

sia

Director Since August 2017 – ongoing

- 231 -

In the last five years, Mr Nadarajah had the following position as a partner or member of an adminis-

trative, management or supervisory body or a partner of any enterprise outside De Raj Group:


Kingtime International Ltd, Sin-

gapore

Managing Director Since October 2007 - ongoing

Gryphon Energy Corporation

Pte Ltd, Singapore

Managing Director Since December 2013 – ongoing

Apart from the above, Mr Nadarajah has not had a position in the last five years as a partner or mem-

ber of an administrative, management or supervisory body or a partner of any enterprise inside or

outside the companies of the De Raj Group.

Vaidyanathan Mulandram Nateshan (* 1979)

Mr Nateshan has earned a degree as Bachelor of Arts with specialisation in Economics at the Univer-

sity of Madras, India. His career includes work in both the operational and strategic aspects of a wide

range of industries ranging from oil and gas, Information Technology, business consulting and phar-

maceuticals. He has served in over 30 countries and executed and managed strategic alliances in

over 12 countries, which includes managing a joint venture in China and setting up marketing opera-

tions in the Middle East. He has also managed manufacturing, marketing and financial operations for

companies in India, Asia Pacific and the Middle East. Mr Nateshan has been working for the compa-

nies of the De Raj Group since 1 September 2016. From 1 September 2016 until 31 March 2017 he

worked as vice president for the international operations.

The Supervisory Board appointed Mr Nateshan as member of the Management Board by resolution of

24 July 2017. His term of office ends on 23 July 2022.

Mr Nateshan does not hold a position as a partner or member of an administrative, management or

supervisory body of any other company in the De Raj Group.

In the last five years, Mr Nateshan had the following position as a partner or member of an administra-

tive, management or supervisory body or a partner of any enterprise outside De Raj Group:


Rapid Nutrition Ltd., Australia Executive Director January 2012 until February

2015

Apart from the above, Mr Nateshan has not had a position in the last five years as a partner or mem-

ber of an administrative, management or supervisory body or a partner of any enterprise inside or

outside the companies of the De Raj Group.

- 232 -

Nicholas Arnand De Raj (* 1994)

Mr Nicholas Arnand de Raj earned a BSc (Hons) degree in Economics and Mathematics at Bristol

University in July 2016. He set up the subsidiary Gaea Power GmbH in early 2016, being the Manag-

ing Director of Gaea Power GmbH. After graduation, Nicholas joined a training program at the bank

UOB Kay Hian, Singapore. After completing the training program in early 2017, he joined the compa-

nies of the De Raj Group as a member of management, while still being Managing Director of Gaea

Power GmbH.

In its meeting on 30 October 2017, the Supervisory Board appointed Mr Nicholas Arnand De Raj as

additional member of the Management Board from 1 November 2017 until 31 October 2022.

Mr Nicholas Arnand de Raj is also managing director of the following other companies of the De Raj

Group:


Gaea Power GmbH, Germany Managing Director Since January 2016 - ongoing


sia

Managing Director Since September 2017 - ongoing

Condor Energy (L) Inc, Labuan Managing Director Since September 2017 - ongoing


Labuan

Director Since September 2017 - ongoing

In the last five years, Mr Nicholas Arnand De Raj had the following position as a partner or member of

an administrative, management or supervisory body or a partner of any enterprise outside De Raj

Group:


Global Energy Opportunities,

Luxembourg

Managing Director Since April 2016 - ongoing

Freya Kraft UG (haftungsbe-

schaenkt), Germany

Managing Director Since June 2016 - ongoing

Rocky Kraft UG (haftungsbe-

schaenkt), Germany


Gryphon Infrastructure Sdn

Bhd, Malaysia

Director Since August 2017 - ongoing

Gaea Alencor Sdn Bhd, Malay-

sia


SMART Paving Sdn Bhd, Ma-

laysia


Maya Terang Sdn Bhd, Malay-

sia

Director Since August 2017 - ongoing

- 233 -

Apart from the above, Mr Nicholas Arnand De Raj has not had a position in the last five years as a

partner or member of an administrative, management or supervisory body or a partner of any enter-

prise inside or outside companies of the De Raj Group.

All members of the management board of the Company have power of sole representation and are

exempt from the prohibition of multiple representation (Sec. 181 Alt. 2 German Civil Code (Bürgerlich-

es Gesetzbuch, “BGB”)).

Compensation of the Management Board Members

Mr Nagendran C Nadarajah and Mr Nicholas Arnand De Raj will not receive remuneration for their

services as members of the management board by the Company but only from the subsidiaries of the

Companies in which they hold offices as director.

Mr Vaidyanathan Mulandram Nateshan receives a fixed salary in the amount of EUR 60,000.00 p.a.

according to his employment agreement. Furthermore, according to the employment agreement, Mr

Nateshan receives a variable remuneration in an amount of 0.1% of the total number of shares issued

by the Company multiplied by the prevailing share market price for every EUR 500,000,000.00 of the

market capitalization (market capitalisation being the total number of issued shares by the Company

multiplied by the prevailing share price) (“Capitalisation Bonus”). Thereby, the total Capitalisation

Bonus paid will refer to and will thus be allotted evenly to the time period from the beginning until the

end of his five year service contract. The remuneration has been paid for the time period starting from

24 July 2017.

In the last fiscal years 2015 and 2016 of the Company no remuneration was paid to the current or

former members of the management board due to the fact that the Company was a shelf company

during that time.

Loans, Guarantees or other Warranties

Companies of De Raj Group have not provided Loans to Members of the Management Board or pro-

vided Guarantees or other Warranties in favour of Members of the Management Board.

Other legal Relationships

During the last five years, no member of the Management Board has been convicted of any fraudulent

offense. In addition, no member of the Management Board has been publicly incriminated and/or

sanctioned by statutory or regulatory authorities (including designated professional bodies) or, acting

in the capacity of a member of an administrative, management or supervisory body or as founder,

been associated with any bankruptcies and/or insolvencies, receiverships or liquidations. No member

of the Management Board has ever been disqualified by a court from acting as a member of the ad-

ministrative, management or supervisory bodies or from acting in the management or conduct of the

affairs of any issuer for at least the previous five years.

- 234 -

Apart from the activities described in this section 15.2.2, the members of the Management Board do

not carry out any other activity significant for the Company.

There are the following family relationships between (i) individual members of the Management Board

or (ii) between Management Board members and members of the Supervisory Board:

- The management board member Nagendran C. Nadarajah is the father of the management board

member Nicholas Arnand de Raj

- Furthermore, the management board member Nagendran C. Nadarajah is the husband of the super-

visory board member Renata Anita de Raj and the father of the supervisory board member Alexander

Arjun de Raj (Mr Nagendran C. Nadarajah, Ms Renata Anita de Raj, Mr Nicholas Arnand de Raj and

Mr Alexander Arjun de Raj referred to as “De Raj Family”).

Apart from that, there are no family relationships between (i) individual members of the Management

Board or (ii) between Management Board members and members of the Supervisory Board.

Conflicts of Interest of the Members of the Management Board

Mr Nagendran C Nadarajah and his son Mr Nicholas Arnand de Raj as members of the De Raj Family

have the following potential conflicts of interests in view of De Raj Group:

- Gaea Power GmbH leases its CHP plants as lessor to five companies in the legal form of an

Unternehmergesellschaft (mit breschraenkter Haftung) (in the following referred to as

“UGs”), which operate the plants and pay a monthly rent to Gaea Power GmbH. The UGs are utlimately held by Nicholas Arnand de Raj.

- Furthermore, De Raj Group is party to a contract with an Indonesian National Oil Company

regarding the installation and operation of a Mobile Offshore Productioin Unit (MOPU) at the

PHE-38 field, offshore Madura, Indonesia (the “Pertamina Contract”). The Jack-up Rig de-

ployed for the fulfillment of the Pertamina Contract is the MOPU BOSS 1. The MOPU BOSS

1 Jack-up Rig is leased by De Raj Group as lessee from the Indonesian company PT Nuri-

raja Energy as owner and lessor of MOPU BOSS 1. Mr Nagendran C Nadarajah indirectly

holds a substantial stake of the shares in PT Nuriraja Energy. Although De Raj Group is of

the opnion that the lease rates charged by PT Nuriraja Energy to De Raj Group are at cur-

rent prevailing market prices, there is a risk that future conflicts of interest may arise in the

contractual relationship, e.g. in view of an increase of the lease rates or in view of any obli-

gations to be fulfilled by PT Nuriraja as lessor and/or De Raj Group as lessee. Further, any

potential claims for damages De Raj Group may have against PT Nuriraja bercause of

breach of the contract may prove not to be sufficient to cover the damages incurred or may

practically not be realised due to an insolvency of PT Nuriraja.

- 235 -

- Furthermore, the company Maya Terang Sdn Bhd, which is ultimately held by Mr Nagen-

dran C Nadarajah and his wife Ms Renata Anita de Raj, owns the premises which serve as

office of De Raj Group in Kuala Lumpur, Malaysia.

For details on the risks associated with the aforementioned potential conflicts of inteterests cf. the risk

factor in Section 3.1.28, “De Raj Group’s major shareholders may have interests that may not be

aligned or may conflict with those of its other shareholders”).

Apart from the above, there are no actual or potential conflicts of interest between the responsibilities

of the members of the Management Board vis-à-vis the Company and their private interests or other

responsibilities.

15.3 The Supervisory Board

15.3.1 Composition, Resolutions and Representation

According to the Articles of Association the Supervisory Board of the Company shall consist of four

members all elected by the Shareholders’ Meeting as representatives of the shareholders. Pursuant to the Articles of Association of De Raj the members of the Supervisory Board and, if applicable, their

substitute members are elected for the period up until the end of the Shareholders’ Meeting that de-cides on the formal approval of the actions of the Supervisory Board for the fourth fiscal year after the

term of office commenced. The fiscal year in which the term of office commences shall not be calcu-

lated in this period. On their election the Shareholders’ Meeting may stipulate a shorter period. Reelection, including repeated reelection, is permissible. For each member of the Supervisory Board,

the shareholders may, at the same time the respective member is elected, appoint substitute mem-

bers. These substitute members will replace the elected Supervisory Board member in the event of his

premature departure in an order that was defined at the time of the appointment. The term of office of

the substitute member replacing the departing member terminates, if a successor is elected at the

next Shareholders’ Meeting or the following one, at the close of the Shareholders’ Meeting, otherwise on the expiry of the term of office of the departed member of the Supervisory Board.

Pursuant to Section 100 AktG the following individuals may not become a member of the Supervisory

Board: a person (i) who is already a member of a Supervisory Board in ten commercial companies

which are required by law to have supervisory boards, (ii) who is a statutory representative of an en-

terprise which is controlled by the Company, (iii) who is legal representative of other corporations

whose supervisory board comprises a member of the Management Board of the Company, or (iv) who

in the past two years has served as member of the Management Board of the Company, unless it is

appointed upon a motion presented by shareholders holding more than 25% of the voting rights in the

Company. Members of the Supervisory Board who were elected by the Shareholders’ Meeting may be dismissed at any time during their term of office by a resolution of the Shareholders’ Meeting adopted by 75% of the votes cast. According to the Company’s Articles of Association, any member or substi-tute member of the Supervisory Board may resign at any time, even without providing a reason, by

giving one month’s notice of his resignation to the Chairman of the Supervisory Board or the Managing

- 236 -

Board in writing. This does not affect the right to resign for good cause. In this case any member of the

Supervisory Board may resign without notice.

In its first meeting after its election, the Supervisory Board elects from among its members a Chairman

and a Vice Chairman for the term of their individual office. If the Chairman or Vice Chairman leaves

office before their end of term, the Supervisory Board shall elect a replacement Chairman or Vice

Chairman immediately.

The Supervisory Board must hold two meetings within six months of each calendar year pursuant to

Section 110 AktG. Meetings are called by the Chairman or Vice Chairman. The Supervisory Board has

a quorum if at least three members are present. A member also takes part in the resolution if it ab-

stains from voting. Absent members may participate in the vote on a resolution if they arrange for a

written vote to be submitted by another member. Furthermore, pursuant to the Company’s Articles of Association absent members may cast their votes orally, by telephone, by fax, email or using other

standard means of telecommunication.

As a rule, resolutions of the Supervisory Board shall be passed at physical meetings. Resolutions of

the Supervisory Board may also be passed by votes transmitted orally, by telephone, in writing, by fax,

email or using other standard means of telecommunication.

The resolutions of the Supervisory Board are passed with a simple majority, unless otherwise man-

dated by law or the Articles of Association. An abstention shall not be considered as a vote cast.

According to the Articles of Association the Supervisory Board shall issue its own Bylaws, but it has

not yet exercised this right.

The Supervisory Board has not formed any committees from among its members. Thus, the Company

does not have an audit committee or a remuneration committee.

The members of the Supervisory Board can be reached at the Company’s business address.

15.3.2 Current Members

At present, the Company’s Supervisory Board consists only of 3 members, namely Ms Renata Anita

de Raj, Mr Alexander Arjun de Raj and Mr Carlo Arachi.

Ms Renata Anita de Raj and Mr Alexander Arjun de Raj were elected by the Shareholders’ meeting on 24 July 2017 as members of the supervisory board and their terms last until the end of the Sharehold-

ers’ meeting resolving upon their exoneration for the business year 2017.

Mr Carlo Arachi was elected by the ordinary Shareholders’ Meeting on 11 October 2017 as member of

the supervisory board and his term lasts until the end of the Shareholders’ meeting resolving upon his exoneration for the business year 2017.

- 237 -

The supervisory board has elected Mr Alexander Arjun de Raj as chairman and Ms Renata Anita de

Raj as vice chairman of the supervisory board.

Curricula Vitae

Renata Anita de Raj (* 1955)

Ms Anita de Raj acquired a diploma in languages and business studies at Leeds University, United

Kingdom. Ms de Raj assisted in the building of the company Corro-Shield (M) Sdn Bhd from the

ground up to an estimated RM 30 Million Turnover. The company Corro-Shield (M) Sdn Bhd was the

main company behind the subsequently listed Perisai Petroleum Teknologi Berhad with a market capi-

talisation in excess of RM 400 Million at the point of exit from Perisai.

Ms Anita de Raj does not hold a position as a partner or member of an administrative, management or

supervisory body or a partner of any other company in the De Raj Group.

In the last five years, Ms Anita de Raj had the following positions as a partner or member of an admin-

istrative, management or supervisory body or a partner of any enterprise inside or outside De Raj

Group:


Gryphon Alencor Sdn Bhd, Ma-

laysia

Director Since January 2016 - ongoing

Maya Terang Sdn Bhd, malay-

sia


Apart from the above, Ms Anita de Raj has not had a position in the last five years as a partner or

member of an administrative, management or supervisory body or a partner of any enterprise inside or

outside De Raj Group.

Alexander Arjun de Raj (* 1989)

Mr Alexander Arjun De Raj earned a BSc (Hons) in Mathematics and Philosophy at Royal Holloway

University. Mr Alexander Arjun De Raj started his professional career with the companies of De Raj

Group in 2010, where he assisted with procurement of life extension works for five jack-up rigs, one of

which was reactivated into a drilling unit. ln 2014 Alexander was promoted to senior business officer of

the companies of De Raj Group. He has been in charge of maintaining the patents, licenses and tech-

nologies within the companies of De Raj Group, overviewing the human resources department as well

as minor technical support.

Mr Alexander Arjun De Raj does not hold a position as a partner or member of an administrative,

management or supervisory body of any other company in the De Raj Group.

- 238 -

In the last five years, Mr Alexander Arjun De Raj had the following position as a partner or member of

an administrative, management or supervisory body or a partner of any enterprise inside and outside

the companies of the De Raj Group:


Global Energy Opportunities,

Luxembourg

Managing Director Since April 2016 - ongoing

Gaea Power Sdn Bhd, Malaysia Managing Director Since October 2015 - ongoing

Kilat Kraft UG (haftungsbe-

schränkt), Germany


Sutra Kraft UG (haftungsbe-

schränkt) , Germany


Vision Kraft UG (haftungsbe-

schränkt) , Germany


Gryphon Energy Corporation

Pte Ltd, Singapore


Eagle Energy (L) Inc, Labuan Managing Director Since September 2011 - ongoing

Falcon Energy (L) Inc, Labuan Managing Director Since November 2011 - ongoing

Halcyon Energy (L) Inc, Labuan Managing Director Since February 2012 - ongoing

Hawk Energy (L) Inc, Labuan Managing Director Since October 2012 – ongoing

Trogon Energy (L) Inc, Labuan Managing Director Since October 2012 - ongoing

Titanis Energy (L) Inc, Labuan Managing Director Since March 2012 - ongoing

Poseidon Ventures (L) Inc, La-

buan


Lexanda International Ltd, Brit-

ish Virgin Islands

Managing Director Since August 2007 - ongoing

Kingtime International Ltd, Sin-

gapore


Anugerah Mulia Raya Sdn Bhd,

Malaysia

Managing Director Since May 2015 - ongoing

Gaea Alencor Sdn Bhd, Malay-

sia

Managing Director Since November 2015 - ongoing

SMART Paving Sdn Bhd, Ma-

laysia


Gryphon Alencor Sdn Bhd, Ma-

laysia

Managing Director Since January 2016 - ongoing

Maya Terang Sdn Bhd, Malay-

sia

Director Since June 2003 - ongoing

Gryphon Infrastructure Sdn

Bhd, Malaysia

Managing Director Since May 2015 – ongoing

Terra Pave Distribution Sdn

Bhd, Malaysia

Managing Director Since July 2015 - ongoing

- 239 -


Labuan

Director Since December 2009 – August

2017

Condor Energy (L) Inc, Labuan Director From September 2011 - August

2017


sia

Director From August 2015 - August

2017


Supervisory Board Member From July 2017 – ongoing

Apart from the above, Mr Alexander Arjun De Raj has not had a position in the last five years as a

partner or member of an administrative, management or supervisory body or a partner of any enter-

prise inside or outside De Raj Group.

Carlo Arachi (* 1971)

Mr Arachi studied law at the universities in Marburg and Cologne and did his legal clerkship at the

District Court Moenchengladbach. Mr Arachi has a law firm based in Cologne and Viersen, in coopera-

tion with Tax–Consultants Detlef Tissen, Viersen. He focusses on tax-, commercial- and business law.

Mr Arachi advises medium-sized companies that are active on an international level, not only in legal

matters but also in all fields of development and structure of the business. In addition, he takes over

the legal representation and the entire contracting work for companies. Furthermore, he acts as a

trustee for clients. Mr Arachi is also experienced in reporting according to International Financial Re-

porting Standards.

Mr Arachi does not hold a position as a partner or member of an administrative, management or su-

pervisory body of any other company of the De Raj Group.

Mr Arachi has not had a position in the last five years as a partner or member of an administrative,

management or supervisory body or a partner of any enterprise inside or outside De Raj Group.

Compensation

According to the articles of association of the Company, the members of the supervisory board receive

a remuneration which is resolved upon by the shareholders’ meeting. Should the term of a member of

the supervisory board start and/or end during the fiscal year, the remuneration will be paid pro rata

temporis for the term of his office. Furthermore, according to the articles of association of the Compa-

ny the members of the supervisory board are entitled to reimbursement of their expenses and VAT on

their remuneration to the extent applicable.

As the Company had been a shelf company until July 2017, no remuneration was paid to members of

the supervisory board in the last fiscal year ending 31 December 2016. According to a resolution by

the shareholders’ meeting of the Company of 26 October 2017, from the fiscal year 2017 on the

chairman of the supervisory board receives a remuneration in the amount of EUR 30,000.00 p.a. and

- 240 -

the other members of the supervisory board receive a remuneration in the amount of EUR 18,000.00

p.a.

Provisions for pension funds for former or actual members of the Supervisory Board have not been

made since there are no respective obligations of the De Raj Group. The Supervisory Board members

are further entitled to reimbursement of all expenses. Value added tax shall be borne by the Company.

The Company has taken out a Directors’ & Officers’ (D&O) insurance policy (Ver-

mögensschadenshaftpflichtversicherung) which also covers the members of the Supervisory Board.

There is a service contract entered into between the member of the Supervisory Board Mr Carlo Ara-

chi and Gaea Power GmbH. This contract relates to the provision of ongoing legal advice by Mr Arachi

to Gaea Power GmbH. Mr Arachi receives a remuneration for his services in the amount of EUR

2,500.00 per month (plus VAT, if applicable, and expenses). The members of the supervisory board

have consented to this contract according to § 114 AktG. Apart from this contract, no member of the

Supervisory Board was or is compensated for any consulting services for the Company for the term of

their office and there are no other service contracts between the members of the Supervisory Board

and De Raj Group. Furthermore, no agreements between the Company and the members of the Su-

pervisory Board provide for the payment of any benefits after termination or expiration of the term of

office.

Loans, Guarantees or other Warranties

Companies of De Raj Group have not provided Loans to Members of the Supervisory Board or pro-

vided Guarantees or other Warranties in favour of Members of the Supervisory Board.

Other legal Relationships

During the last five years, no member of the Supervisory Board has been convicted of any fraudulent

offense. In addition, no member of the Supervisory Board has been publicly incriminated and/or sanc-

tioned by statutory or regulatory authorities (including designated professional bodies) or, acting in the

capacity of a member of an administrative, management or supervisory body or as founder of an issu-

er, been associated with any bankruptcies and/or insolvencies, receiverships or liquidations. No mem-

ber of the Supervisory Board has ever been disqualified by a court from acting as a member of the

administrative, management or supervisory bodies of an issuer or from acting in the management or

conduct of the affairs of any issuer for at least the previous five years.

There are the following family relationships between (i) individual members of the Supervisory Board

and (ii) between Supervisory Board members and Management Board members:

- The supervisory board member Renata Anita de Raj is the mother of the supervisory board member

Alexander Arjun de Raj.

- The management board member Nagendran C. Nadarajah is the husband of the supervisory board

member Renata Anita de Raj and the father of the supervisory board member Alexander Arjun de Raj.

- 241 -

Apart from that, there are no family relationships between (i) individual members of the Supervisory

Board or (ii) between Supervisory Board members and Management Board members.

Conflicts of Interest of the Members of the Supervisory Board

Ms Renata Anita de Raj and Mr Alexander Arjun de Raj as members of the De Raj Family have the

following potential conflicts of interests in view of De Raj Group:

- Just like De Raj Group, the company Lexanda International, British Virgin Islands, which is

utlimately held by Alexander Arjun de Raj, also owns two Jack-up Rigs which may be de-

ployed in oil and gas fields, which may constitute a risk that Lexanda International may

make use of corporate opportunities to the detriment of De Raj Group in the future.

- Furthermore, the company Maya Terang Sdn Bhd, which is ultimately held by Mr Nagen-

dran C Nadarajah and his wife Ms Renata Anita de Raj, owns the premises which serve as

office of De Raj Group in Kuala Lumpur, Malaysia.

For details on the risks associated with the aforementioned potential conflicts of inteterests and

measures taken by De Raj Group to avoid these risks cf. the risk factor in Section 3.1.28, “De Raj

Group’s major shareholders may have interests that may not be aligned or may conflict with those of its other shareholders”, and section section 8.7.2, “Material contracts outside the ordinary course of

business”).

Apart from the above, there are no actual or potential conflicts of interest between the responsibilities

of the members of the Supervisory Board vis-à-vis the Company and their private interests or other

responsibilities.

15.4 Shareholders’ Meeting

The Shareholders’ Meeting is the body in which shareholders can exercise their rights within the Company. Pursuant to the Articles of Association the Shareholders’ Meeting must be held at the regis-tered office of the Company, in another German city with a stock exchange or in its vicinity, within a

50km-radius. Each individual share confers one vote in the Shareholders’ Meeting. Limitations on voting rights do not exist. The voting right accrues only upon full payment of the relevant contribution.

Voting rights can be exercised through a proxy. The granting and withdrawal of power of attorney and

the provision of evidence of authorization to the Company shall be in text form. The details for the

granting of the power of attorney, its revocation and the proof of the authorization towards the Compa-

ny will be announced with the notice to the Shareholders’ Meeting. The notice of the meeting can es-

tablish relief from the form requirement; Section 135 of the Stock Corporation Act (Aktiengesetz) is

unaffected. If the shareholder grants the power of attorney to more than one person, the Company

may refuse one or several of them.

- 242 -

Resolutions are adopted by the Shareholders’ Meeting with a simple majority and, if the law so re-quires, with a simple majority of share capital, unless otherwise provided by mandatory applicable law

or the Company’s Articles of Association.

Neither the German Stock Corporation Act nor the Articles of Association require any minimum partic-

ipation for the Shareholder’s Meeting to have quorum.

Under the German Stock Corporation Act (Aktiengesetz), certain resolutions of fundamental im-

portance mandatorily require - in addition to a majority of the votes cast - a majority of at least three-

quarters of the share capital represented at the vote. These resolutions include in particular:

• Capital increases excluding shareholders’ subscription rights, • Capital reductions,

• Creation of authorized or contingent capital,

• Corporate transformation measures, such as mergers, de-mergers and changes in legal

form,

• Execution and amendment of Company agreements (for example, control and profit and

loss transfer),

• Transfer of all the assets of the Company and

• Liquidation of the Company.

The Shareholders’ Meeting of the Company is convened as a rule once a year (annual shareholders’ meeting) and may be convened by the Management Board and/or by the Supervisory Board as pre-

scribed by law. In addition, an extraordinary shareholders’ meeting must be convened by the Man-agement Board or Supervisory Board if the interests of the Company so require. Pursuant to the Ger-

man Stock Corporation Act (Aktiengesetz), shareholders whose shares constitute at least 5% of the

share capital may demand that the Shareholders’ Meeting is to be convened; this demand must be made in writing, stating the purpose of the meeting and be directed to the Management Board.

The ordinary Shareholders’ Meeting must take place within the first eight months of each fiscal year.

Notice of the convening of the Shareholders’ Meeting, accompanied by the agenda, is made through publication in the German Federal Gazette (Bundesanzeiger) and must be issued no later than 30

days before the day on which shareholders must register prior to the meeting. This period does not

include the day on which the convening notice is issued and the day on which the shareholders must

register to participate in the Shareholders’ Meeting. The registration must be received by the company

at least six days prior to the meeting at the address stated for this purpose in the invitation in text form

in German or English. Shareholders wishing to participate in Shareholders’ Meetings or exercise their voting rights must register for the Shareholders’ Meeting and provide proof of their authorization. Writ-ten evidence of the shareholdings in German or English, prepared by the custodian institution, must

be presented to the Company at least six days before the Shareholders’ Meeting not including the day of receipt and the day of the Shareholders’ Meeting. The written evidence of shareholding must relate to the beginning of the twenty-first day prior to the Shareholders’ Meeting.

- 243 -

In general, for periods and deadlines which are calculated backwards from the Shareholders’ Meeting the date of the Shareholders’ Meeting is not to be included in the calculation; if the end of that period is a Sunday, an official holiday at the registered office of the Company or a Saturday, such day will not

be replaced by the preceding or succeeding working day.

Pursuant to the Articles of Association the Management Board is authorized to make provision for

shareholders to participate in the Shareholders’ Meeting without actually attending the venue and

without granting powers of proxy, and to exercise their voting rights in part or in full via electronic

means (online participation). The Management Board may define individual rules concerning the

scope and method of online participation that are published with the notice for the Shareholders’ Meet-ing.

Furthermore, the Management Board is authorized to make provision for shareholders to cast their

votes in writing or via electronic means without attending the Shareholders’ Meeting (postal vote). It

may define individual rules concerning the process of postal voting that are published with the notice

for the Shareholders’ Meeting.

Neither German law nor the Company’s Articles of Association restrict the right of shareholders not resident in Germany or foreign shareholders to hold shares or to exercise the voting rights attached to

such shares.

15.5 Shareholdings

As of the date of this Prospectus, the Members of the Management Board and of the Supervisory

Board hold shares and voting rights in the Company as follows:

Member of the Man-

agement / Superviso-

ry Board

Number of Shares

(and Proportion) of

Voting Rights held

directly

Number of Shares

(and Proportion) of

Voting Rights at-

tributed by other

companies

Total number (and

Proportion) of shares

and voting rights

held directly and at-

tributed by other

companies Alexander Arjun De Raj Kuala Lumpur, Malay-sia

6,125,000

(17.5%)

3,500,000

(10%) attributed by


Singapore

9,625,000

(27.5%)

Nicholas Arnand De Raj Kuala Lumpur, Malay-sia

6,125,000

(17.5%)

None * 6,125,000

(17.5%)

Renata Anita De Raj Kuala Lumpur, Malay-sia

6,125,000

(17.5%)

None * 6,125,000

(17.5%) Nagendran C Nadara-jah Kuala Lumpur, Malay-

6,125,000

(17.5%)

1,750,000

(5 %)

7,875,000

(22.5 %)

- 244 -

sia attributed by Maya Terang Sdn.

Bhd.,Kuala Lumpur, Malaysia

As of the date of the prospectus, neither the members of the Management Board nor the members of

the Supervisory Board hold stock options in view of the stocks of the Company.

15.6 Corporate Governance

The German Corporate Governance Code (the “Code”), which was passed in February 2002 by the Government Commission on the Corporate Governance Code (Regierungskommission Deutscher

Corporate Governance Kodex) and last amended on May 15, 2015, contains recommendations and

suggestions for the management and supervision of German companies listed on the stock exchange.

The Code incorporates nationally and internationally recognized standards of good and responsible

corporate governance. The purpose of the Code is to make the German system of corporate govern-

ance and supervision transparent for investors. The Code includes recommendations and suggestions

for management and supervision with regard to shareholders and Shareholders’ Meetings, Manage-ment and Supervisory Boards, transparency, accounting and auditing.

There is no obligation to comply with the recommendations or suggestions of the Code. However, the

German Stock Corporation Act (Aktiengesetz) requires that the Management Board and Supervisory

Board of a German listed company declare, every year, either that the recommendations have been or

will be applied, or which recommendations have not been or will not be applied and explain why the

Management Board and the Supervisory Board do not/will not apply such recommendations that have

not been or will not be applied. This declaration is to be made permanently accessible to sharehold-

ers. However, deviations from the suggestions contained in the Code need not be disclosed.

Having taken due account of the provisions of the Code, the Management Board and the Supervisory

Board of the Company adopted the following declaration of compliance according to section 161 Ger-

man Stock Corporation Act (Aktiengesetz) on 30 October 2017:

“De Raj Group AG's Management and Supervisory Boards welcome and support the German

Corporate Governance Code (“GCGC”) and the objectives it pursues. De Raj Group AG fol-lows the recommendations of the GCGC in the version dated 7 February 2017 and will contin-

ue to do so in future with the following exceptions:

D&O insurance:

The D&O insurance concluded for the Management and Supervisory Boards does not include

a deductible for members of the Supervisory Board (Item 3.8 GCGC). The Company is of the

opinion that the inclusion of a deductible is not necessary to urge the members of the supervi-

sory board to a responsible behaviour as they are already obliged to a responsible behaviour

in the best interest of the company qua their office and that an inclusion of a deductible may

prevent potential suitable candidates from assuming the office as members of the supervisory

board.

- 245 -

Age limit for members of the Management and Supervisory Boards

There is no age limit for members of the Managing and Supervisory Boards (Items 5.1.2 and

5.4.1 GCGC). The Company is of the opinion that the determination of an age limit is not ap-

propriate as the Company shall also benefit from the knowledge and experience of older per-

sons in the work of the Managing and Supervisory Boards.

Committees:

In view of its low number of members, the Supervisory Board has not formed any committees

(Item 5.3 GCGC).

Constitution of the Supervisory Board:

According to the supervisory board it currently does not contain any independent member

(Item 5.4.2 GCGC) as the supervisory currently only consists of three members. However, the

articles of association of the Company demand a supervisory board with four members. Thus,

an independent member of the supervisory board according to the GCGC shall soon be ap-

pointed by the shareholders‘ meeting of the Company.

Cologne, October 2017

De Raj Group AG

The Management Board The Supervisory Board”

As of the date of this Prospectus, the Company is in compliance with the recommendations of the

Code in the scope declared in the Declaration of Compliance by the Management Board and Supervi-

sory Board of the Company of 30 October 2017.

- 246 -

16. MAJOR SHAREHOLDERS AND LEGAL RELATIONSHIPS WITH RELATED PARTIES

16.1 Shareholder Structure

On the basis of the notifications received by the Company as of the date of this Prospectus in accord-

ance with the German Securities Trading Act (Wertpapierhandelsgesetz) and pursuant to the infor-

mation provided by the respective shareholders therein, the following persons, directly or indirectly,

have a notifiable interest in the Company’s capital and voting rights: Shareholder Number of Shares

(and Proportion) of Voting Rights held directly

Number of Shares (and Proportion) of Voting Rights at-tributed by other companies

Total number (and Proportion) of shares and voting rights held directly and at-tributed by other companies

Alexander Arjun De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

3,500,000

(10%) attributed by


Singapore

9,625,000

(27.5%)

Nicholas Arnand De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

None * 6,125,000

(17.5%)

Renata Anita De Raj Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

None * 6,125,000

(17.5%) Nagendran C Nadara-jah Kuala Lumpur, Ma-laysia

6,125,000

(17.5%)

1,750,000

(5 %) attributed by

Maya Terang Sdn. Bhd.,Kuala Lumpur,

Malaysia

7,875,000

(22.5 %)

Lexanda International Limited Singapore

3,500,000

(10%)

None * 3,500,000

(10 %) Maya Terang Sdn. Bhd. Kuala Lumpur, Ma-laysia

1,750,000

(5%)

None * 1,750,000

(5 %)

Free Float 5,250,000

(15%)

None * 5,250,000

(15%)

Total 35,000,000

(100%)

5,250,000

(15%)

* No attribution of shares by other companies

The background for the current shareholder structure is as follows:

- 247 -

On 20 July 2017, Ms Renata Anita de Raj, Mr Nicholas Arnand de Raj and Mr Alexander de Raj ac-

quired all of the then 50,000 shares in the company (cf. also Section 7.3, “Formation and History of De

Raj”). On 20 October 2017, the company Gryphon Energy Corporation PTE LTD, Singapore acquired

34,950,000 new shares which were issued by the Company in the context of a capital increase against

contribution in kind (cf. also Section 7.4.3 below “Formation of the De Raj Group”). Gryphon Energy Corporation PTE LTD then sold the acquired shares to the current shareholders which lead to the

shareholder structure as shown above.

Information on the number of shares held by the members of the Management Board and the Super-

visory Board can be found in Section 15.5 above. Each share in the Company carries one vote at the

Company’s Sharesholders’ Meeting. There are no different voting rights or restrictions on voting rights.

The members of the De Raj Family hold directly and indirectly 75 % of the shares and voting rights in

the Company in total. However, no individual shareholder holds directly and/or indirectly more than 50

% of the shares or voting rights in the Company. Furthermore, the Company is not aware that mem-

bers of the De Raj Family and/or other direct and/or indirect shareholders of the Company coordinate

their behaviour in view of the Company by way of an agreement or otherwise. Thus, the Company is

not controlled by any of its shareholders.

- 248 -

16.2 Legal Relationships with Related Parties

In the last fiscal year and since the end of the last fiscal year up to the date of this Prospectus, the

following legal relationships existed between the De Raj Group and related parties:

De Raj Group Related party Legal nature of relationship

Gaea Power GmbH Alexander Arjun de Raj Loan granted by Alexander Arjun de Raj

to Gaea Power GmbH in the amount of

EUR 3,810,000.00 at an interest rate of 6

% p.a.

De Raj Group AG

Alexander Arjun de Raj Assignment of the loan loan granted by

Alexander Arjun de Raj to Gaea Power

GmbH in the amount of EUR 3,810,000.00

(cf. above) from Alexander Arjun de Raj to

De Raj Group AG

De Raj Group AG

Gaea Power GmbH Agreement on a waiver of the loan grant-

ed by Alexander Arjun de Raj to Gaea

Power GmbH in the amount of EUR

3,810,000.00 (cf. above).

Gaea Power GmbH Sutra Kraft UG Lease agreements regarding CHP plants

with Gaea Power GmbH as lessor and

monthly lease of EUR 78,000.00

Gaea Power GmbH Kilat Kraft UG Lease agreements regarding CHP plants



Gaea Power GmbH Vision Kraft UG Lease agreements regarding CHP plants



BUT Gryphon Energy

(SEA) Sdn Bhd

BUT Gryphon Energy

(SEA) Sdn Bhd is a repre-

sentative office of Gryphon

Energy (SEA) Sdn Bhd in

Jakarta, Indonesia estab-

lished for the purpose of

participating in the Con-

PT. Nuriraja Energy Bareboat Charter of the MOPU BOSS 1

for the fulfillment of the Pertamina Con-

tract

(cf. also Section 8.7.1, “Material contracts

during the ordinary course of business”)

- 249 -


sortium for the provision of

the MOPU BOSS 1 for the

fulfillment of the Pertamina

Contract.

Gryphon Energy (SEA)

Sdn Bhd

BUT Gryphon Energy (SEA)

Sdn Bhd (Jakarta, Indone-

sia)

Headquarter Agreement in view of the

fulfillment of the Pertamina Contract



Hummingbird Energy (L)

Inc


Bhd

Equipment Lease Agreement

for the fulfillment of the Pertamina Con-

tract



Condor Energy (L) Inc Lexanda International Lim-

ited, Singapore

Contracts on the sale and transfer of

MOPU Jack Up Rigs Gaea 3 and Gaea 4,

Poseidon, Malaikat, Gaea 200 and DP 3

as well as thrusters to Condor Energy (L)

Inc for a total purchase price of USD

52,000,000.00



Condor Energy (L) Inc Titanis Energy (L) Inc, La-

buan

Contracts on the sale and transfer of

MOPU Jack Up Rig EWT Skid and gen

sets and cranes to Condor Energy (L) Inc

for a total purchase price of USD

11,000,000.00



De Raj Energy Sdn Bhd Kingtime International Lim-

ited

Contract on the sale and transfer of from

Kingtime International Limited to De Raj

Energy Sdn Bhd whereby Kingtime Inter-

national Limited sold the patents for a total

purchase price of EUR 20,000,000.00

- 250 -




De Raj Group AG Lexanda International Lim-

ited, British Virgin Islands

Agreement on the utilization of future cor-

porate opportunities in view of the Jack-up

Rigs held by De Raj Group and further

Jack-up rigs held by Lexanda International

Limited, which have not been injected to

De Raj Group whereby Lexanda Interna-

tional is obliged to enter into agreements

on the deployment of its Jack-up rigs only

if De Raj Group AG has been informed

about the intention to do so beforehand

and only if De Raj Group AG has declined

to take the business opportunity itself.



Gryphon Energy (SEA)

Sdn Bhd

Maya Terang Sdn Bhd Tenancy agreement regarding the prem-

ises which serve as office of De Raj Group

in Kuala Lumpur, Malaysia; the monthly

lease rate is RM 27,000.00 (+ 6 % GST

(Goods and Services) Tax)

The Company maintains no agreement or understanding with its major shareholders, customers, sup-

pliers, or other persons, with respect to appointments to the Management Board or Supervisory Board

of the Company.

- 251 -

17. INFORMATION ON THE CAPITAL OF THE COMPANY

17.1 Issued Share Capital and Shares

As of the date of this Prospectus, the Company’s share capital amounts to EUR 35,000,000.00 divided

into 35,000,000.00 ordinary bearer shares with no par value (Stückaktien), each representing a no-

tional value of EUR 1.00. Each share carries one vote at the Shareholders’ Meeting. Each share car-

ries an entitlement for the payment of dividends for the financial year ending 31 December 2017 and

all subsequent financial years. The Articles of Association do not provide for any restrictions on voting

rights. The shares are fully entitled to dividends. If the Company is dissolved, the Company's assets

remaining after the deduction of liabilities will be divided by the percentages shareholders hold in the

share capital of the Company.

Section 7 of the Articles of Association states that shareholders are not entitled to have their shares

evidenced by individual share certificates. As from the date of the listing approval issued by the Frank-

furt Stock Exchange (21 November 2017) the Shares will be deposited with Clearstream Banking Ak-

tiengesellschaft, Mergenthalerallee 61, 65760 Eschborn, Germany, in the form of global share certifi-

cates without dividend coupons. The paying agent (Zahlstelle) for the Shares is Dero Bank AG, Her-

zog-Wilhelm-Str. 26, 80331 Munich, Germany.

Development of the Share Capital

The Company’s share capital as of 6 March 2015 – the beginning of the period the historical financial

information refers to – was EUR 50,000.00 consisting of 50,000 ordinary bearer shares with no par

value (Stückaktien), each representing a notional value of EUR 1.00.

On 11 October 2017, the shareholders’ meeting of the Company resolved upon a capital increase against contribution in kind. In this capital increase, the nominal share capital was incresaed from EUR

50,000.00 to EUR 35,000,000.00 by issuing 34,950,000 new ordinary bearer shares with no par value

(Stückaktien), each representing a notional value of EUR 1.00. The capital increase became effective

with its regsitration in the commercial register on 20 October 2017 (for further details of the capital

increase cf. section 7.4.3 “Formation of De Raj Group”).

All shares were issued in accordance with the terms of German stock corporation law

The Company has not issued any such financial instruments which grant to their holders conversion

and/or subscription rights to shares in the Company.

17.2 Authorized Capital

By resolution of the Shareholders’ Meeting on 30 October 2017, which was entered into the

commercial register on 2 November 2017, the Management Board has been authorized,

subject to the approval of the Supervisory Board, to increase the Company’s share capital by up to a total of EUR 17,500,000.00 by issuing up to 17,500,000 new ordinary bearer shares

- 252 -

with no par value in one or more tranches against contribution in cash or contribution in kind

until and including 10 October 2022 (Authorized Capital 2017).

The Management Board is authorized, subject to the approval of the Supervisory Board, to

completely or partially exclude shareholders’ statutory subscription rights in the following cases:

i. in the case of capital increases against contribution in cash, if shares in the com-

pany are traded on a stock market (regulated market or open market or the suc-

cessors to these segments) the capital increase does not exceed 10% of the share

capital at either the time of coming into effect or the time of this authorization being

exercised and the issue price of the new shares is not significantly lower than the

market price of shares in the company of the same class and features already

traded on the stock market within the meaning of Sections 203 paragraph 1 and 2,

186 paragraph 3 sentence 4 of the German Stock Corporation Act (Aktiengesetz).

The amount of 10% of the share capital must include the amount relating to shares

issued or disposed of on the basis of a different corresponding authorization with

pre-emption rights disapplied under direct or mutatis mutandis application of Sec-

tion 186 paragraph 3 sentence 4 of the German Stock Corporation Act (Aktieng-

esetz), if such inclusion is required by law. For the purposes of this authorization,

the issue price for the purchase of new shares by an intermediary with the simulta-

neous obligation of such intermediary to offer the new shares for purchase to one

or more third parties designated by the company is deemed to be the amount that

must be paid by the third party or parties;

ii. to issue shares against contribution in kind in particular for the purpose of acquisi-

tion of companies, parts thereof, investments in companies, industrial property

rights, such as patents, brands or licenses to these, or other product rights or other

non-cash contributions as well as bonds, convertible bonds or other financial in-

struments;

iii. to the extent required, to grant holders of conversion or option rights or creditors of

convertible bonds with conversion obligations that have been issued by the Com-

pany or a directly or indirectly wholly owned subsidiary a subscription right to new

no par value bearer shares, to the extent that such shareholders would be entitled

to if they were to exercise their option or conversion rights or upon fulfillment of a

conversion obligation;

iv. in order to exclude fractional amounts from the subscription rights.

The Management Board is authorized, with the approval of the Supervisory Board, to deter-

mine the further content of share rights and the other details of the capital increase and its

implementation. The Management Board is authorized to determine that the new shares in

accordance with Section 186 paragraph 5 of the German Stock Corporation Act (Aktieng-

- 253 -

esetz) must be assumed by a bank or a company operating in accordance with Section 53

paragraph 1 sentence 1 or Section 53b paragraph 1 sentence 1 or paragraph 7 of the Ger-

man Banking Act (Kreditwesengesetz), with the obligation of offering them for subscription to

shareholders.

17.3 Contingent Capital

Contingent Capital 2017/I and Convertible Bonds

The share capital is increased on a contingent basis by up to EUR 14,000,000.00 divided in-

to 14,000,000 no par value bearer shares, each representing a notional value of EUR 1.00

(Contingent Capital 2017/I.). The new shares will participate in the profits from the beginning

of the fiscal year in which they are created. The Contingent Capital 2017/I. serves to grant

shares to the holders of convertible and/or option bonds issued by the Company pursuant to

the authorization of 30 October 2017, in the period until 10 October 2022. The contingent

capital increase shall be implemented only to the extent that conversion or option rights are

exercised and to the extent that no other forms of fulfilment are used to service these rights.

The Management Board is authorized to define the further details of the implementation of

the contingent capital increase.

Contingent Capital 2017 and stock option program 2017

The share capital is increased on a contingent basis by up to EUR 3,500,000.00 by issuing

up to 3,500,000 bearer shares for servicing the option rights granted to the parties entitled

under the stock option plan 2017 (Contingent Capital 2017/II.). On the basis of the resolution

of the Shareholders’ Meeting on 30 October 2017, the Management Board and the Supervi-

sory Board are authorized to issue up to 3,500,000 stock options in one or more tranches to

members of the Management Board and employees of the Company as well as directors

and employees of De Raj Group companies. This authorization is valid until to 10 October

2022. The stock options may not be transferred, pledged or otherwise charged. However,

the Management Board, with the approval of the Supervisory Board, can approve such legal

transactions given proof of the justified interest of a person with a subscription entitlement or

the justified interest of the Company. In case the beneficiary is a member of the Manage-

ment Board, the relevant decision will solely be made by the Supervisory Board. The stock

options can be inherited and be subject to a legacy. The contingent capital increase shall be

implemented only to the extent that subscription rights are exercised. The shares issued out

of the contingent capital increase are entitled to dividends from the beginning of the fiscal

year in which they are issued. The strike price is the average of the price of the Company’s shares on the last five trading days before the option is granted. The price of the Company’s share is to be calculated on the basis of the closing price (or a comparable price) of the

Company’s shares in XETRA trading on Frankfurt Stock Exchange (or a functionally compa-

rable successor system which has taken its place).

The conditions for exercising the stock options are:

- 254 -

Stock options can only be exercised within the period between the ninth XETRA trading day

on Frankfurt Stock Exchange (or a functionally comparable successor system which has

taken its place) after the financial results of the first quarter, the half year, the first nine

months or the entire fiscal year have been announced and the last calendar day of the re-

spective quarter the results are announced in.

The stock options issued pursuant to this authorization are allocated to groups of beneficiar-

ies as follows:

current and future members of the Man-

agement Board

2,800,000 options maximum

current and future members of the man-

agement of subsidiaries

350,000 options maximum

current and future employees of the Com-

pany


current and future employees of subsidiar-

ies


Stock options are to be allocated to 80% to current and future members of the Management

Board, 10% to current and future members of the management of subsidiaries, 5% to current

and future employees of the Company and 5% to current and future employees of subsidiar-

ies.

The Management Board and, to the extent that the Management Board itself is affected, the

Supervisory Board determines the beneficiary and the number of issued subscription rights

in each case. Stock options are granted without consideration.

The Supervisory Board has to define a possibility of limitation (cap) for extraordinary, unfore-

seeable developments regarding stock options issued to members of the Management

Board.

Stock options can be exercised 1 : 1 in new ordinary bearer shares with no par value. Upon

exercise of the subscription rights, a subscription price must be paid for each subscription

right exercised. The subscription price is the average closing price (or a comparable price) of

the Company’s shares in XETRA trading on Frankfurt Stock Exchange (or a comparable successor system of the Deutsche Börse AG) on the last five trading days before the stock

options are issued.

Stock option may only be exercised if the average of the price of the Company's shares in

XETRA trading on the Frankfurt Stock Exchange (or a comparable successor system of the

Deutsche Börse AG) over the last five trading days prior to the exercise date must be at least

20% above the subscription price.

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Stock options may be exercised for the first time after a waiting period of four years has

elapsed. The option rights end ten years after the date on which the option rights were

granted unless the Management Board and, to the extent that the Management Board itself

is affected, the Supervisory Board determine a shorter term. Stock options can only be exer-

cised within 15 days beginning on the third XETRA trading day after the financial results of

the first quarter, the half year, the first nine months or the entire fiscal year have been an-

nounced. In case provisional financial results are announced, the day of the announcement

of provisional financial results is deemed as relevant date for calculating the exercise period.

In addition, the restrictions arising from the general statutory regulations, in particular the

Securities Trading Act (Wertpapierhandelsgesetz) must be observed.

Stock options cannot be exercised within defined lock-up periods that are:

(i) the period from the day on which the Company publishes an offer to its sharehold-

ers with respect to the new shares or bonds with conversion or option rights until

the date on which the preferential shares are quoted “ex subscription rights” ;

(ii) the period from the last banking day on which the shareholders may register their

attendance at the Shareholders’ Meeting until the end of the day the Shareholders’ Meeting takes place.

Issued stock options expire without compensation in the event a beneficiary resigns its em-

ployment with the Company or its subsidiaries prior to the expiry of at least two years after the

stock options were issued or the employment is terminated prior to this time without immedi-

ately being given a new employment. The Company is entitled to grant exemptions from these

requirements.

If a change of control (as specified below) occurs after stock options are issued and if the em-

ployment is terminated after a change of control occurs, the waiting period can be completed

after the termination of the employment. In this case, issued stock options expire one year af-

ter the end of the waiting period. Within this period subscription rights may be exercised sub-

ject to the other terms of the stock option plan 2017. In the event the employment is terminat-

ed by the holder himself subscription rights will not expire if the employment is terminated after

the change of control. For the purposes of the stock option plan 2017, a change of control oc-

curs at the time an offerer announces that he has gained indirect or direct control of the Com-

pany (if applicable taking into account voting rights attributed to the respective offeror) pursu-

ant to Section 10 in conjunction with Section 35 of the German Securities Acquisition and

Takeover Act (Wertpapiererwerbs- und Übernahmegesetz). Furthermore, for the purpose of

this resolution on the stock option plan 2017 the reception of a notification stating that one has

reached or exceeded 50% or 75% of the voting rights in the Company is deemed as change of

control if a publishment pursuant to Section 10 in conjunction with Section 35 of the German

Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) does

not precede. The reception of a notification stating that a shareholder has reached or exceed-

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ed 30% of the voting rights in the Company is also deemed as change of control for the pur-

pose of the stock option plan 2017, if a voluntary takeover offer has been made before.

The provisions of the subscription rights might also foresee that the subscription rights may be

exercised before expiry of the waiting period within a reasonable period of notice after there

has been a change of control, provided that in such case performance is provided for through

cash payment. The terms of the subscription rights may further provide that the subscription

rights can, within a reasonable period of time, be terminated unilaterally by the Company fol-

lowing any change of control effected, including during the waiting period, in return for cash

payment in the amount of the difference between the exercise price and the closing price of

the Company’s shares in XETRA trading on the Frankfurt Stock Exchange (or a comparable successor system of the Deutsche Börse AG) on the last stock exchange trading day prior to

the date of termination (date of issuing the declaration of termination).

The provisions of the subscription rights may also provide that the beneficiaries of stock op-

tions are obliged to transfer the subscription rights to an offeror (within the meaning of the

German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz)

who makes a voluntary takeover offer or a compulsory offer for all issued shares of the Com-

pany, provided the price per subscription right offered for the transfer of the subscription right

corresponds at least to the difference between the exercise price and the price offered per

share for the acquisition of the shares issued (included any price increase). Provided these

conditions are met the provisions of the subscription rights may provide that the beneficiaries

of stock options are obliged to waive their subscription rights.

The provisions of the subscription rights are adjusted in the event of any share issues (dilution

protection).

The Management Board and, to the extent that the Management Board itself is affected, the

Supervisory Board is authorized to define the further content of the subscription rights.

17.4 General Provisions on Changes in the Share Capital

According to the German Stock Corporation Act (Aktiengesetz), the share capital of a stock corpora-

tion may be increased by a resolution taken by the Shareholders’ Meeting. The resolution must be adopted by a majority of at least three-quarters of the share capital represented at the meeting, unless

the stock corporation’s Articles of Association specify other requirements with regard to majorities. The Company has exercised its right to stipulate a smaller majority of shares. Pursuant to Section 19 par-

agraph 1 of the Company’s Articles of Association, the Company’s Shareholders’ Meeting adopts its resolutions by a simple majority of the votes cast and, to the extent that a majority vote of shares is

required, by a simple majority of the shares present at the meeting, except as otherwise required by

the law or the Company’s Articles of Association.

The shareholders may also create authorized capital. The creation of authorized capital requires a

resolution adopted by a majority of three-quarters of the share capital represented at the meeting to

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authorize the Management Board to issue shares of up to a specific nominal amount within a period of

no more than five years. The nominal amount of the authorized capital may not exceed half of the

share capital existing at the time of the authorization.

Additionally, shareholders may resolve to create contingent capital to issue shares to holders of con-

vertible bonds or other securities that grant their holders the right to subscribe for shares, to grant

shares as consideration in a merger with another company, or to offer shares to officers and employ-

ees, provided that, in each case, a corresponding resolution is approved by a three-quarters majority

of the share capital represented when the vote is taken. The nominal amount of contingent capital

created for the issuance of shares to officers and employees may not exceed 10% of the share capital

existing at the time of the resolution. In all other cases, it may not exceed half of the share capital ex-

isting at the time of the resolution.

A resolution to decrease the share capital requires approval by a three-quarters majority of the share

capital represented when the vote is taken.

17.5 General Provisions Governing Subscription Rights

The German Stock Corporation Act (Aktiengesetz) grants, in principle, all shareholders the right to

subscribe for new shares to be issued in a capital increase. The same applies to convertible bonds,

bonds with warrants, profit participation rights and participating bonds. Subscription rights are freely

transferable and may be traded on German stock exchanges for a fixed period prior to the com-

mencement of the subscription period. The Shareholders’ Meeting may, subject to a majority of at least 75% of the share capital represented at the meeting, resolve to exclude subscription rights. Ex-

clusion of shareholders’ subscription rights also requires a report from the Management Board, which must justify and demonstrate that the company’s interest in excluding subscription rights outweighs

the interest of the shareholders to be granted subscription rights. Excluding shareholders’ subscription rights when new shares are issued is specifically permissible where (i) the company is increasing

share capital against contribution in cash, (ii) the amount of the capital increase does not exceed 10%

of the share capital in issue and (iii) the price at which the new shares are being issued is not material-

ly lower than the stock exchange price.

Subscription rights enable shareholders to maintain their current percentage of share capital and their

voting rights (“dilution protection”). If the shareholders’ subscription rights are excluded, the provi-sions of Section 255 paragraph 2 of the German Stock Corporation Act (Aktiengesetz) require that the

fixed issue price of the new shares or the minimum price under which the new shares may not be is-

sued may not be “unreasonably low”. By virtue of the nature of a contingent capital increase, a share-holder’s general subscription right is excluded. In order to protect shareholders, the nominal value of

the contingent capital, regardless of its purpose, may not exceed half of the share capital. If the con-

tingent capital grants subscription rights to employees or members of the management of the compa-

ny or a subsidiary, the nominal amount may not exceed 10% of the share capital.

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17.6 Treasury Shares

Currently, De Raj and its subsidiaries do not hold any own shares (treasury shares). By virtue of the

resolution adopted by the Shareholders’ Meeting on 30 October 2017 the Company, in the period until

10 October 2022, is authorized to acquire treasury shares in the amount of up to 10% of the registered

share capital at the time of the resolution on this authorization pursuant to Section 71 paragraph 1

number 8 of the German Stock Corporation Act (Aktiengesetz).

17.7 Shareholding Notification and Disclosure Requirements

Since the Company’s shares are admitted to trading on the regulated market (regulierter Markt) of the Frankfurt Stock Exchange (Prime Standard), the Company, as a publicly traded company, is subject to

the shareholding notification requirements of WpHG.

Section 21 WpHG requires that anyone who acquires, sells or in some other way reaches, exceeds or

falls below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights in an issuer whose

country of origin is the Federal Republic of Germany and whose shares are admitted to trading on an

organised market must immediately but no later than within four trading days notify the issuer and, at

the same time, BaFin. The notice can be drafted in either German or English and either sent in writing

or via telefax (Section 18 of the German Securities Trading Reporting and Insider Register Ordinance

(Wertpapierhandelsanzeige- und Insiderverzeichnisverordnung)). The notice must declare the individ-

ual or entity’s address, the share of voting rights held and the date of reaching, exceeding or falling

below the respective threshold. As a domestic issuer, De Raj must publish such notices immediately,

but no later than within three trading days after receiving them, via media outlets. Media outlets in-

clude any media which one can assume will disseminate the information throughout the European

Union and in the non-E.U. contracting parties to the EEA Agreement. The Company must also trans-

mit the notice to BaFin and to the electronic company register (elektronisches Unternehmensregister)

for archiving. Moreover, under Section 25 WpHG, any person who directly or indirectly holds certain

financial instruments or other instruments is subject to similar notification obligations. “Other instru-ments” include, for instance, re-transfer claims under securities loans or the agreement by a seller to

buy a security back from the respective purchaser at a specified price at a designated future date (re-

po transactions). These financial and other instruments must entitle the holder to unilaterally acquire

existing shares of the Company carrying voting rights by binding legal agreement of an issuer whose

country of origin is the Federal Republic of Germany. These notification obligations apply if the sum of

the shares such holder can acquire, together with any voting right stakes the holder may already hold

in the issuer or which are attributable to him pursuant to Sections 21 and 22 WpHG (voting rights

shares), reaches or exceeds any of the thresholds mentioned, with the exception of the 3% threshold.

Furthermore, pursuant to Section 25a WpHG, any person who directly or indirectly holds financial

instruments or other instruments that are not covered by Section 25 WpHG and that enable the holder

based on their terms to acquire existing shares carrying voting rights of an issuer whose home country

is the Federal Republic of Germany is subject to the aforementioned notification obligations. The noti-

fication obligations apply on financial and other instruments (i) which provide for a cash settlement

only, but not for a right to acquire shares, if the counterparty is in a position to hedge its risks under

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the instruments by holding shares and (ii) under which shares may be acquired directly. The latter

include instruments such as physical call options providing for a condition which is beyond the control

of the holder of the instrument.

In connection with these notice requirements, the WpHG contains various rules on when the voting

rights of shares are deemed to belong to parties required to make a disclosure in cases where they do

not hold the shares directly but nevertheless control the voting rights. For example, shares are

deemed to belong to a party if they belong to a third party controlled by the relevant party; the same

applies where shares are held by a third company for the account of the relevant company.

Breaches of the notification obligation are punishable by a fine. Moreover, shareholders who do not

file a notification cannot exercise the rights attached to their shares (including voting rights and the

right to receive dividends; but with regard to dividends, only in cases where the failure to file was wilful

and has not been remedied) until this failure has been rectified. This period is extended by six months

in case of wilful or grossly negligent violation of the notification obligations if the shareholder omitted or

did not correctly file a notification regarding the number of voting rights attributable to him. However, in

respect of the notification obligations pursuant to the new Section 25a WpHG, breaches of the notifica-

tion obligations can only trigger a fine.

Furthermore, Section 27a WpHG requires any shareholder whose holdings reach or exceed the 10%

threshold or a higher threshold to notify the issuer of the aims being pursued with the acquisition of the

voting rights and the origin of the funds used for the acquisition within 20 trading days of the date on

which the respective threshold is met or exceeded. Once this information is received, and even if no

notification is received, the issuer has to publish it in the form discussed above, or give notice that the

disclosure requirement was not met, within no more than three trading days following the issuer’s ac-cess to the notification. The issuer’s Articles of Association may stipulate that the shareholders are not

subject to notification obligations. The Articles of Association of the Company do not contain such a

provision.

17.8 Duty to Submit a Public Offer

The German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz,

“WpÜG”) provides that any person whose voting rights reach or exceed 30% of the Company’s voting shares must publish this fact and the percentage of voting rights held in at least one national newspa-

per designated for stock exchange notices (Börsenpflichtblatt) or by means of an electronically oper-

ated information dissemination system for financial information within seven calendar days and, unless

released from this obligation, must subsequently submit a mandatory public offer addressed to all of

the Company’s shareholders.

17.9 Exclusion of Minority Shareholders

Under Sections 327a et seq. AktG, which governs the so-called “squeeze-out under stock corporation

law”, upon the request of a shareholder holding 95% of the share capital (“Majority Shareholder”), the shareholders’ meeting of a stock corporation may resolve to transfer the shares of minority share-

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holders to the Majority Shareholder against payment of an adequate compensation in cash. The

amount of the cash payment that must be offered to minority shareholders has to reflect “the circum-stances of the Company” at the time the shareholders’ meeting passes the resolution. The amount of the cash payment is based on the full value of the company, which is generally determined using the

capitalised earnings method. The minority shareholders are entitled to file for a valuation proceeding

(Spruchverfahren), in the course of which the appropriateness of the cash payment is reviewed.

Under Sections 39a and 39b WpÜG, in the case of a so-called “squeeze-out under takeover law”, an offeror holding at least 95% of the voting share capital of a target company (as defined in the WpÜG)

after a takeover bid or mandatory offer, may, within three months of the expiry of the deadline for ac-

ceptances, petition the Regional Court (Landgericht) of Frankfurt am Main for a court order transfer-

ring the remaining voting shares to it against the payment of an adequate compensation. A resolution

passed by the shareholders’ meeting is not required. The consideration paid in connection with a

takeover or a mandatory bid is considered adequate if the offeror has obtained at least 90% of the

share capital that was subject to the offer. The nature of the compensation must be the same as the

consideration paid under the takeover bid or mandatory offer; a cash alternative must always be of-

fered. In addition, after a takeover bid or mandatory offer, shareholders in a target company who have

not accepted the offer may do so up to three months after the deadline for acceptances has expired,

provided the offeror is entitled to petition for the transfer of the outstanding voting shares in accord-

ance with Section 39a WpHG (Section 39c WpHG). The provisions for a squeeze-out under stock

corporation law cease to apply once an offeror has petitioned for a squeeze-out under takeover law,

and only apply again when these proceedings have been definitely completed.

In addition, under the provisions of Section 62 paragraph 5 of the German Reorganisation and Trans-

formation Act (Umwandlungsgesetz, “UmwG”), within three months after the conclusion of a merger agreement, the shareholders’ meeting of a transferring company may pass a resolution according to Section 327a AktG, i.e., a resolution on the transfer of the shares held by the remaining shareholders

(minority interests) to the transferee company (Majority Shareholder) in exchange for an adequate

cash settlement if the Majority Shareholder has at least 90% of the share capital. The result of this

“squeeze-out under reorganisation law” is the exclusion of the minority shareholders in the transferring company. The entitlement to consideration is based on the provisions of Section 327a et seq. AktG.

Under Section 319 et seq. AktG, the shareholders’ meeting of a stock corporation may vote for inte-

gration (Eingliederung) with another stock corporation that has its registered office in Germany, pro-

vided the prospective parent company holds at least 95% of the shares of the company to be integrat-

ed. The former shareholders of the integrated company are entitled to adequate compensation, which

must generally be provided in the form of shares in the parent company. Where the compensation

takes the form of treasury shares in the parent company, it is considered appropriate if the shares are

issued in the same proportion as shares of the parent company would have been issued per share in

the company integrated if a merger had taken place. Fractional amounts may be paid out in cash.

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17.10 Disclosure of Directors’ Dealings

Under the Market Abuse Regulation VO (EU) Nr. 596/2014 (Marktmissbrauchsverordnung, “MAR”), persons holding managerial responsibilities within listed stock corporations (“directors”) are required to notify the stock corporation and the BaFin within five business days of their own transactions involving

shares of the company or related financial instruments, including, in particular, derivatives. This obliga-

tion also applies to directors’ related parties. Domestic issuers must publish this notification immedi-

ately after receiving it, notify the BaFin of its publication and send a copy to the electronic company

register.

Notification is not required if the total sum of all transactions involving a director and his or her related

parties is less than EUR 5,000.00 for the calendar year.

Director for these purposes means any managing partner or member of the company’s management,

administrative or supervisory bodies and any person who has regular access to insider information

and is authorized to make important managerial decisions. Related parties include spouses, registered

civil partners, dependent children and other relatives who have been living in the same household as

the director for at least one year when the relevant transaction is made. Notice is also required for

legal entities in which a director and/or any of the aforementioned parties holds supervisory responsi-

bilities, which are controlled by a director or such parties or which were established for the benefit of a

director or such a party or the economic interests of which are substantially equivalent to those of a

director or such a party.

Negligent non-compliance with these notification requirements may result in the imposition of a statu-

tory fine.

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18. THIRD PARTY INTERESTS

There are no natural or legal persons who have an interest in the admission to trading of the Shares.

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19. TAXATION IN THE FEDERAL REPUBLIC OF GERMANY

The following section outlines certain key German tax principles that may be relevant with respect to

the acquisition, holding, or transfer of shares/subscription rights. This summary does not purport to be

a comprehensive or exhaustive description of all German tax considerations that may be relevant to

shareholders. This presentation is based upon domestic German tax laws (including administrative

guidance) in effect as of the date that stands on this Prospectus and the provisions of double taxation

treaties currently in force between Germany and other countries. It is important to note that the legal

situation may change, possibly with retroactive or retrospective effect. For example, the German gov-

ernment is currently considering introducing a financial transaction tax (Finanztransaktionssteuer)

which, if and when introduced, may also be applicable on sales and/or transfers of shares of the Com-

pany.

The tax information presented in this Prospectus is not a substitute for individual tax advice. There-

fore, it is recommended that any prospective investor consult with a tax advisor concerning the tax

consequences of acquiring, holding, selling and gifting or bequeathing shares and/or subscription

rights. The same applies with respect to the rules governing the refund of any German dividend with-

holding tax (Kapitalertragsteuer) withheld. Only tax advisors can adequately take into account the

specific tax situation of each investor.

The Issuer does not assume any responsibility for the withholding of tax levied on income from

the Shares or Subscription Rights.

19.1 Taxation of the Company

The Company’s taxable income, whether distributed or retained, is generally subject to corporate in-come tax (Körperschaftsteuer) at a uniform rate of 15% plus the solidarity surcharge (Solidar-

itätszuschlag) of 5.5% thereon, resulting in a total tax liability of 15.825%.

Dividends (Gewinnanteile) and other distributions received by the Company from domestic or foreign

corporations are exempt from corporate income tax; however, 5% of such revenue is treated as a non-

deductible business expense and, as such, is subject to corporate income tax plus the solidarity sur-

charge. Ultimately, therefore, 95% of the amount of dividends and other distributions that the Compa-

ny receives from corporations is exempt from corporate income tax. The same applies in general to

profits earned by the Company from the sale of shares in another domestic or foreign corporation.

However, this 95% exemption does not apply where at the beginning of the calendar year the Compa-

ny directly holds less than 10% of the registered share capital of the distributing domestic or foreign

corporation (Streubesitzdividende). In this case those dividends are fully taxable. The acquisition of a

participation during the year is deemed to have taken place at the beginning of the calendar year. If

the provisions of the German Foreign Tax Act (Außensteuergesetz) would apply, such attributed pas-

sive low taxed income would be fully subject to corporate income tax in Germany. Losses incurred

from the sale of such shares are not deductible for tax purposes irrespective of the participation held.

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In addition, the Company is subject to trade tax (Gewerbesteuer) with respect to its taxable trade profit

(Gewerbeertrag) generated from its permanent establishments in Germany (inländische gew-

erbesteuerliche Betriebsstätten) or deemed permanent establishments, e.g. if the provisions of the

Foreign Tax Act are applied. The trade tax rate depends on the local municipalities in which the Com-

pany maintains its permanent establishments (inländische gewerbesteuerliche Betriebsstätten). It

currently amounts between 7% and 18.55% of the taxable trade profit (Gewerbeertrag), depending on

the applicable local trade tax multiplier. The trade tax may not be deducted as a business expense for

corporate income tax purposes. Dividends received from other corporations and capital gains from the

sale of shares in other corporations are treated in principle in the same manner for trade tax purposes

as for corporate income tax purposes. However, dividends received from domestic and foreign corpo-

rations are effectively 95% exempt from trade tax only if the Company held and continues to hold at

least 15% (10% in the case of companies resident for tax purposes in EU member states other than

Germany) of the registered share capital (Grundkapital or Stammkapital) of the distributing corporation

at the beginning or — in the case of foreign corporations — since the beginning of the relevant tax

assessment period. Additional limitations apply with respect to dividends received from foreign non-EU

corporations.

The tax deductibility of interest expenditure might be limited subject to the “interest barrier” rules (Zinsschranke). When the Company calculates its taxable income, the interest barrier rules generally pre-

vent the Company from deducting net interest expense, i.e. the excess of interest expense over interest

income for a given fiscal year, exceeding 30% of its taxable EBITDA (taxable earnings adjusted for interest

expense, interest income and certain depreciation/amortization and other reductions) if its net interest ex-

pense is EUR 3 million (Freigrenze) or greater and no exception to the restriction of the interest deduction

applies. Special rules apply in the case of external financing undertaken by shareholders or related parties.

When determining the amount on which to assess the trade tax, among other things, 25% of the interest

expense on debt, as well as 25% of the interest portion of rent, lease payments and royalties, is added

back into the amount of profits calculated for corporate income tax purposes, to the extent these interest

payments cumulatively exceed EUR 100,000.00. This means that for trade tax purposes only 75% of the

interest payments are tax deductible. Interest expense that is not deductible in a given year may be carried

forward to subsequent fiscal years of the Company (interest carry-forward) and will increase the interest

expense in those subsequent years. EBITDA amounts that could not be utilized may, under certain condi-

tions, be carried forward into future fiscal years. If such EBITDA carry-forward is not used within five fiscal

years it will be forfeited. An EBITDA carry-forward that arose in an earlier year must be used before a car-

ry-forward that arose in a later year is used. The EBITDA carry forward is not available in the case the

interest barrier does not apply due to exemptions.

Tax-loss carry forwards can be used to fully offset taxable income for corporate income tax and trade

tax purposes up to an amount of EUR 1 million. If the taxable profit for the year or taxable profit sub-

ject to trade taxation exceeds this threshold, only up to 60% of the amount exceeding the threshold

may be offset by tax-loss carry-forwards. The remaining 40% is subject to tax, so-called minimum

taxation rules (Mindestbesteuerung). Unused tax-loss carry-forwards can, in principle, be carried for-

ward indefinitely and can be deducted from future taxable income and trade income, in accordance

with the aforementioned rules.

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In the case of a direct or indirect transfer of more than 25% or, respectively, more than 50% of the

share capital or voting rights in the Company within five years to a single acquirer or a group of ac-

quirers or in the case of comparable measures (harmful acquisition), the tax loss carry forwards, inter-

est carry-forwards, non-deductible interest expenses as well as losses of the current business year

that have not been used until the date of such transfer may, however, become unavailable on a pro

rata basis, or, as the case may be, be lost entirely, or it may not be possible to credit them against

future profits (subject to certain exceptions).

19.2 Taxation of Shareholders

Shareholders are taxed particularly in connection with the holding of shares (see below section 19.2.1,

"Taxation of Dividends"), upon the sale of shares and subscription rights (see section 19.3 "Taxation of

Capital Gains") and the gratuitous transfer of shares and subscription rights (see section 19.5 "Inheritance

and Gift tax").

19.2.1 Taxation of Dividends

If the Company pays dividends out of a tax-recognized contribution account (steuerliches Einlagekonto),

as investment income, the dividends are not subject to withholding tax, individual income tax (including

the solidarity surcharge and church tax, if any) or corporate income tax, as the case may be. However,

dividends lower the acquisition costs of the shares, which may result in a greater amount of taxable capi-

tal gain upon the shareholder’s sale of such shares. To the extent that dividends from the tax-recognized

contribution account exceed the then lowered acquisition costs of the shares, a capital gain is recog-

nized by the shareholder, which may be subject to tax in accordance with the provisions outlined below.

19.2.2 Dividend Withholding Tax

The dividends distributed by the Company are subject to a dividend withholding tax at a 25% rate on

dividends plus a solidarity surcharge of 5.5% on the amount of withholding tax (amounting in total to a

rate of 26.375%). The basis of the dividend withholding tax is the dividend approved for distribution by

the Company’s Shareholders’ Meeting. If the shares are admitted to be held in collective deposit with a German collective deposit bank for securities and are deposited with such common depository in

Germany, the Company is, in general, not responsible for withholding the tax at source, but the tax is

withheld for the account of the shareholder and remitted to the competent tax office by the German

bank, German financial services institution, German securities trading enterprise or German securities

trading bank (including branches of foreign institutions) with which the shares are deposited or that

administers the shares and disburses or credits the dividends to the shareholder or disburses the divi-

dends to a foreign institution, or by the collective deposit bank for securities if it disburses the divi-

dends to a foreign institution (“German Disbursing Agent”). If the shares are not held in collective

deposit with a German Disbursing Agent, the Company is responsible for withholding the tax at source

and the Company consequently has to withhold and remit the tax to the competent tax office.

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The withholding tax must generally be deducted regardless of whether and to what extent the dividend

is exempt from taxation at the level of the shareholder and whether the shareholder is a resident of

Germany or of a foreign country.

If the shares are kept in a custodial account with a German Disbursing Agent and the shareholder is

subject to church tax in Germany, the German Disbursing Agent has to withhold church tax (where

applicable) unless the shareholder objects in writing to the Federal Central Tax Office (Bundeszen-

tralamt für Steuern). In case the church tax has not been withheld by the German Disbursing Agent,

the shareholder has to file a tax return including the dividends and the church tax will then be collected

by way of assessment.

Where dividends are distributed to a company resident in another member state of the European Union

within the meaning of Article 2 of the Parent-Subsidiary Directive (EC Directive 90/435/EEC of the

Council of July 23, 1990, as amended), the withholding of the dividend withholding tax may not be re-

quired, or the tax refunded, upon application, provided that additional requirements are met. This also

applies to dividends distributed to a permanent establishment located in another European Union

member state of such a parent company or of a parent company that is tax resident in Germany if the

interest in the dividend-paying subsidiary is part of the respective permanent establishment’s business assets. An important pre-requisite for the exemption from withholding at source under the Parent-

Subsidiary Directive is that the shareholder has directly held at least 10% of the company’s registered capital continuously for one year and that the German tax authorities (Bundeszentralamt für Steuern,

Hauptdienstsitz Bonn-Beuel, An der Küppe 1, D-53225 Bonn) have, based upon an application filed by

the creditor on the officially prescribed form, certified to him that the prerequisites for exemption have

been met.

The dividend withholding tax rate for dividends paid to other shareholders without a tax domicile in Ger-

many will be reduced in accordance with the applicable double taxation treaty, if any, between Germany

and the shareholder’s country of residence, provided that the shares are not held as part of the business assets of a permanent establishment or a fixed base (feste Einrichtung) in Germany or as part of the

business assets for which a permanent representative in Germany has been appointed. The reduction

in the dividend withholding tax is generally obtained by applying to the Federal Central Office of Taxa-

tion (Bundeszentralamt für Steuern), with its registered office (Hauptdienstsitz) in Bonn-Beuel, An der

Küppe 1, D-53225 Bonn, Germany, for a refund of the difference between the dividend withholding tax

withheld, including the solidarity surcharge, and the amount of withholding tax actually owed under the

applicable double taxation treaty, which usually is 15%. Forms for the refund procedure may be ob-

tained from the Federal Central Office of Taxation (Bundeszentralamt für Steuern)

(http://www.bzst.bund.de), as well as German embassies and consulates.

Corporations that are not tax resident in Germany will receive a refund of two-fifths of the dividend

withholding tax that was withheld and remitted to the tax authorities. This is in addition to any further

reduction or exemption provided under the Parent-Subsidiary Directive or a double taxation treaty. But

foreign corporations will generally have to meet certain substance criteria defined by statute in order to

receive an exemption from or (partial) refund of German dividend withholding tax.

- 267 -

19.2.3 Taxation of Dividends of Shareholders with a Tax Domicile in Germany

Individuals who hold the Shares as Private Assets

Dividends paid to shareholders being tax resident in Germany and holding the shares as private (non-

business) assets are subject to a flat income tax rate of 25% plus solidarity surcharge of 5.5% thereon

(combined tax rate of 26.375%), as well as church tax if applicable (“Flat Tax”; Abgeltungsteuer). The

private investor’s income tax liability (plus solidarity surcharge) is in general settled by the withholding

tax, i.e. the withholding tax will generally serve as a final tax irrespective of the individual income tax

rate of the shareholder. In other words, once deducted, the shareholder’s income tax liability on the

dividends will be settled, and he or she will no longer have to declare them on his or her annual tax

return.

The purpose of the Flat Tax is to provide for separate and final taxation of capital investment income

earned; in other words, taxation that is unconnected to the individual’s personal income tax rate. Share-holders may apply to have their capital investment income assessed in accordance with the general rules

and with an individual’s personal income tax rate if this would result in a lower tax burden. In this case, the

base for taxation would be the gross dividend income less the lump-sum allowance of EUR 801.00

(EUR 1,602.00 for married couples filing jointly), with no deduction for costs actually incurred to generate

the capital investment income. Any tax already withheld would be credited against the income tax so de-

termined and any overpayment refunded.

If the individual owns (i) at least 1% of the shares in the Company and through professional work for

the Company are able to exercise significant entrepreneurial influence on the business activities of the

Company or (ii) at least 25% of the shares, the tax authorities may approve upon application that the

dividends are treated under the partial-income method (see below “—Sole Proprietors (Individuals)”).

Upon the application of a shareholder who is subject to church tax and whose shares are held as private

assets – and within the framework of the applicable regional church tax laws (Landeskirchensteuergesetze)

– the church tax on the dividend is withheld and remitted by the German Disbursing agent that pays the

dividend to the shareholder for the Company’s account. An assessment to tax is mandatory, where the tax was not levied by way of withholding, e.g., where the individual shareholder is subject to church tax but

church tax has not been withheld.

Shares Held as Business Assets

If the shares form part of a shareholder’s domestic business assets, taxation of the dividends depends upon whether the shareholder is a corporation, sole proprietor or partnership (Mitunternehmenschaft).

When shares are held as part of a shareholder’s business assets, the dividend withholding tax to be withheld according to the above principles the Flat Tax does not apply. Instead, shareholders are able

to have the dividend withholding tax credited against their individual or corporate income tax liability

plus solidarity surcharge liability and have any overpayment refunded.

According to specific provisions to restrict the withholding tax credit, the credit of withholding tax is

subject to the following three cumulative pre-requisites: (i) the shareholder must qualify as the benefi-

cial owner of the shares in the Company for a minimum holding period of 45 consecutive days occur-

ring within a period of 45 days prior and 45 days after the due date of the dividends, (ii) the sharehold-

- 268 -

er has to bear at least 70% of the change in value risk related to the shares in the Company during the

minimum holding period without being directly or indirectly hedged, and (iii) the shareholder must not

be required to fully or largely compensate directly or indirectly the dividends to third parties. Absent the

fulfillment of all three prerequisites, three fifths of the withholding tax imposed on the dividends must

not be credited against the shareholder's (corporate) income tax liability, but may, upon application, be

deducted from the shareholder's tax base for the relevant assessment period. A shareholder that has

received gross dividends without any deduction of withholding tax due to a tax exemption without qual-

ifying for a full tax credit has to notify the competent tax office accordingly and has to make a payment

in the amount of the omitted withholding tax deduction. The special rules on the restriction of the with-

holding tax credit do not apply to a shareholder whose overall dividend earnings within an assessment

period do not exceed EUR 20,000 or that has been the beneficial owner of the shares in the Company

for at least one uninterrupted year upon receipt of the dividends.

Corporations

Dividend payments received by corporations resident in Germany are fully subject to corporate income

tax and solidarity surcharge, unless the participation is a direct participation of 10% or more in the regis-

tered share capital of the Company. In the latter case the dividends received are generally exempt from

corporate income tax and solidarity surcharge, however, 5% of the tax-exempt dividend income is

treated as a non-deductible business expense (i.e. effectively 95% of the dividend income is exempt)

and, as such, is subject to corporate income tax (plus the solidarity surcharge). Moreover, actual busi-

ness expenses incurred to generate the dividends may be deducted. However, the amount of any divi-

dends after deducting business expenses related to the dividends is also subject to trade tax, unless

the corporation held at least 15% of the Company’s registered share capital at the beginning of the relevant tax assessment period. In the latter case, the aforementioned exemption of 95% of the divi-

dend income applies analogously for trade tax purposes.

Sole Proprietors (Individuals)

If the shares are held as part of the business assets of a sole proprietor (individual), with his tax dom-

icile in Germany, 40% of the dividend is tax exempt (so-called partial-income method — Teilein-

künfteverfahren). Only 60% of the expenses economically related to the dividends are tax-deductible.

The partial-income method will also apply when individuals hold the shares indirectly through a part-

nership (with the exception of personal investors who hold their shares through an asset manage-

ment partnership (vermögensverwaltende Personengesellschaft)). If the shares form part of the busi-

ness assets of a domestic permanent establishment of a trade, the full amount of the dividend in-

come (after deduction of business expenses that are economically related to the dividends) is also

subject to trade tax, unless the taxpayer held at least 15% of the Company’s registered share capital

at the beginning of the relevant tax assessment period. However, trade tax is generally credited –

fully or in part – as a lump sum against the shareholder’s personal income tax liability.

Partnerships

If the shareholder is a trading or deemed to be a trading (gewerblich geprägte) partnership with its tax

domicile in Germany, the personal income tax or corporate income tax, as the case may be, and the

solidarity surcharge, are levied at the level of each partner rather than at the level of the partnership.

The taxation of each partner depends upon whether the partner is a corporation or an individual. If the

- 269 -

partner is a corporation, the dividend income is generally 95% tax-exempt provided the corporations

holds indirectly at least 10% of the registered share capital of the Company (see above “—Corporations”). If the indirect participation of the corporate partner is less than 10% the dividend in-come will be fully subject to corporate income tax. If the partner is an individual, only 60% of the divi-

dend income is subject to income tax (see above “—Sole Proprietors (Individuals)”).

If the shares form part of the business assets of a domestic permanent establishment of a trading or

deemed to be a trading (gewerblich geprägt) partnership, the full amount of the dividend income is

subject to trade tax at the level of the partnership. In the case of partners who are individuals, the

trade tax that the partnership pays on his or her proportion of the partnership’s income is generally credited as a lump sum – fully or in part – against the individual’s personal income tax liability. If the partnership held at least 15% of the Company’s registered share capital at the beginning of the rele-vant tax assessment period, the dividends are, in general, not subject to the trade tax. However, if the

partners are corporations, 5% of the dividend income is treated as non-deductible business expenses

will be subject to trade tax to the extent they are attributed on a look-through basis to corporate part-

ners holding at least 10% of the shares in the Company. The remaining portion of the dividend income

to other than the above specific corporate partners, i.e. corporate partners with an indirect sharehold-

ing of less than 10% and individuals, should under the literal reading of the trade tax law (after the

deduction of business expenses related thereto) not be subject to trade tax. .

Financial and Insurance Sector

Special rules apply to companies active in the financial and insurance sectors (see below “—Special

Treatment of Companies in the Financial and Insurance Sectors and Pension Funds”).

19.2.4 Taxation of Dividends of Shareholders domiciled in Foreign Countries

If shareholders (individual or corporation) who are not tax resident in Germany hold their shares as part

of the business assets through a permanent establishment or fixed place of business in Germany or as

part of the business assets for which a permanent representative in Germany has been appointed, the

same taxation rules that are applicable to resident shareholders apply. The withholding tax (including

solidarity surcharge) withheld and remitted to the German tax authorities is credited against the respec-

tive shareholder’s personal income tax or corporate income tax liability. If the amount withheld exceeds

the personal or corporate income tax liability, any excess amount is refunded. The same applies to the

solidarity surcharge. These shareholders are essentially subject to the same rules applicable to resident

shareholders holding their shares as business assets, as discussed above.

In all other cases, the withholding of the dividend withholding tax discharges any tax liability of the

shareholder in Germany. A refund or exemption is granted only as discussed in the section on divi-

dend withholding tax above (please see “Dividend Withholding Tax”).

19.3 Taxation of Capital Gains

19.3.1 Taxation of Capital Gains of Shareholders with a Tax Domicile in Germany

- 270 -

Shares and Subscription Rights Held as Private Assets

Capital gains from the sale of shares/subscription rights that are held as private assets by sharehold-

ers with a tax domicile in Germany, and which were acquired after December 31, 2008, are generally

taxable as income from capital investment irrespective of any holding period. The tax rate is a special,

flat tax rate of 25% plus the 5.5% solidarity surcharge thereon (as well as any church tax). The same

applies to capital gains from the sale of subscription rights granted for such shares. Losses on the sale

of such shares/subscription rights can only be used to offset gains made on the sale of

shares/subscription rights during the same year or in subsequent years. Losses on the sale of shares

may only be netted against gains on the sale of shares. Losses from the sale of subscription rights can

only be offset against positive private capital investment income.

In the view of tax authorities, the exercise of subscription rights is not considered as a sale of such

subscription rights. Shares acquired as a consequence of the exercise of subscription rights are

deemed to be acquired at a subscription price of EUR 0 at the time of exercise of the subscription

right.

If the shares or subscription rights were acquired and were held in a custodial account or administered

by a German Disbursing Agent, or if a German Disbursing Agent carries out the sale of the shares or

subscription rights and disburses or credits the sales proceeds, the tax on the sale is generally satisfied

by the German Disbursing Agent who withholds taxes in the amount of 25% (plus the 5.5% solidarity

surcharge thereon and any church tax) on the capital gain from the sales proceeds and remits them to

the tax authorities. If the shares were held in safekeeping or administered by the respective German

Disbursing Agent after acquisition, the amount of tax withheld is generally based on the difference be-

tween the proceeds from the sale, after deducting expenses that stand in direct relation to the sale, and

the amount paid to acquire the shares. However, the withholding tax rate of 25% (plus the 5.5% solidar-

ity surcharge thereon and any church tax) will be applied to 30% of the gross sales proceeds if the

shares were not administered by the same custodian bank since acquisition and the original cost of the

shares cannot be verified or such a verification is not valid. In this case, the shareholder is entitled to

verify the original costs of the shares in his annual tax return. In any case, the acquisition costs for sub-

scription rights granted by the Company are valued at EUR 0 for purposes of this calculation.

Upon the application of a shareholder who is subject to church tax, and who is within the framework of

the applicable regional church tax laws, the church tax on the capital gain is withheld by the German

Disbursing Agent, in which case the church tax liability is in general settled. An assessment to tax is

mandatory, where the tax was not levied by way of withholding, e.g., where the individual shareholder

is subject to church tax but church tax has not been withheld. The description on the collection of

church tax on dividends by way of withholding (please see above under Taxation of Dividends) applies

accordingly to church tax on capital gains.

A shareholder may request that all his items of capital investment income, along with his other taxable

income, be subject to the individual progressive income tax rate instead of the flat tax rate for private

capital investment income, if this lowers his tax burden. In this case, the withholding tax will be credit-

ed to the progressive income tax and any excess amount will be refunded. The non-deductibility of

- 271 -

income related expenses and the restrictions on offsetting losses also apply to a tax assessment at

the progressive income tax rate.

Shareholders/subscription rights holders can apply to have capital gains from the sale of their

shares/subscription rights taxed in accordance with the general rules for determining an individual’s tax bracket, rather than the system of final flat taxation if that would result in a lower tax burden. The

base for taxation would be the gross income less a lump-sum allowance of EUR 801.00

(EUR 1,602.00 for married couples filing jointly), with no deduction for costs actually incurred to gen-

erate the income. Any tax already withheld would be credited against the income tax so determined

and any overpayment refunded.

Notwithstanding the foregoing, if a shareholder or, in the case of a gratuitous transfer, any of the share-

holder’s legal predecessors held, directly or indirectly, at least 1% of the Company’s capital at any time

during the five years prior to the sale (a “Qualified Participation”), the capital gains on the sale of shares realized by such shareholder will be subject to the partial-income method and not the final Flat

Tax, with the result that 60% of the capital gains on the sale of shares will be taxable at the individual’s personal income tax rate, and 60% of the expenses economically related to the capital gains will be

deductible. The partial-income method should apply mutatis mutandis to capital gains or losses on

sales of subscription rights. In the case of a Qualified Participation, the “total value method” (Gesamtwertmethode) is used to determine the acquisition costs of the subscription rights. This is

based on the concept that the acquisition of the subscription rights was included in the acquisition of the

old shares. Accordingly, the granting of the subscription rights results in a splitting off part of the original

acquisition costs for the old shares, i.e., the acquisition costs of the old shares are reduced by the por-

tion attributable to the subscription rights split off. In the case of a Qualified Participation, withholding

tax is also withheld by the German Disbursing Agent. However, this does not discharge the share-

holder’s liability for taxes. Hence, the shareholder is obligated to declare the gain on the sale on his

income tax return. The withholding tax withheld and remitted (including solidarity surcharge) is credit-

ed against the shareholder’s income tax liability in the course of the tax assessment and any excess

amount is refunded. In the case of a Qualified Participation, the exercise of subscription rights should

also not be considered as a sale.

Under certain conditions, prior payments from the tax-recognized contribution account (steuerliches

Einlagekonto) may lead to reduced acquisition costs of the shares held as personal assets and, as a

consequence, increase the taxable capital gain.

Shares and Subscription Rights held as Business Assets

Capital gains from the sale of shares held by an individual or corporation as business assets are also

subject to the 25% withholding tax (plus the 5.5% solidarity surcharge thereon and any church tax) if

they are held in a custodial account or administered by a German Disbursing Agent, or if a German

Disbursing Agent carries out their sale. The tax withheld, however, is not treated as a final tax. In this

case, the amount of tax withheld can be also credited against the shareholder’s individual or corporate income tax liability and any overpayment refunded.

- 272 -

If the shares/subscription rights form part of a shareholder’s business assets, taxation of the capital gains realized will then depend upon whether the shareholder is a corporation, sole proprietor or part-

nership.

Corporations

In general, capital gains derived from the sale of shares by corporations domiciled in Germany are

95% exempt from corporate income tax (including the solidarity surcharge) and trade tax, irrespective

of the stake represented by the shares and the length of time the shares are held. However, 5% of the

capital gains is treated as a nondeductible business expense and, as such, is subject to corporate

income tax (plus the solidarity surcharge) and to trade tax. Losses from the sale of shares and any

other reductions in profit do not qualify as tax-deductible business expenses.

Capital gains realized by corporations on the sale of subscription rights are subject in full to corporate

income tax and trade tax. Losses from the sale of subscription rights and other reductions in profit

reduce the taxable income. The exercise of subscription rights should not be treated as a sale of sub-

scription rights.

Sole proprietor (individual)

If the shares/subscription rights are held as business assets of a tax resident sole proprietor (individual)

in Germany, 60% of the capital gains on their sale is subject to the individual’s tax bracket plus the soli-darity surcharge (partial-income method). Similarly, only 60% of losses from such sales and 60% of ex-

penses economically related to such sales are deductible. For church tax, if applicable, the partial-

income method does apply. If the shares/subscription rights are attributable to the permanent establish-

ment maintained in Germany by a trade, 60% of the capital gains are also subject to trade tax. The trade

tax is fully or partially credited as a lump sum against the shareholder’s personal income tax liability.

Partnerships

If the shareholder is a trading or deemed to be a trading (gewerblich geprägte) partnership, personal

income tax or corporate income tax, as the case may be, is assessed at the level of each partner ra-

ther than at the level of the partnership. The taxation of each partner depends upon whether the re-

spective partner is a corporation or an individual. If the partner is a corporation, the tax principles ap-

plying to capital gains which are outlined above apply. If the partner is an individual, the tax principles

applying to capital gains which are set out above apply. Upon application and provided that additional

prerequisites are met, an individual who is a partner can obtain a reduction of his personal income tax

rate for profits not withdrawn from the partnership.

In addition, capital gains from the sale of shares/subscription rights attributable to a permanent estab-

lishment maintained in Germany by a trading partnership are subject to trade tax at the level of the

partnership. As a rule, only 60% of the capital gains in this case are subject to trade tax if the profit-

share is attributed to partners in the partnership who are individuals, while 5% are subject to trade tax if

the profit share is attributed to partners who are corporations and shares are sold. Losses on sales and

other reductions in profit in connection with the shares/subscription rights sold are generally under the

principles discussed above not deductible or only partially deductible or in case of subscription rights

fully deductible, if the partner is a corporation. If the partner is an individual, the trade tax the partner-

- 273 -

ship pays on his or her share of the partnership’s income is generally credited as a lump sum — fully or

in part — against his or her personal income tax liability, depending on the tax rate imposed by the local

municipality and certain individual tax-relevant circumstances of the individual taxpayer.

Special rules apply to capital gains realized by companies active in the financial and insurance sec-

tors, as well as by pension funds, as described below.

When a German Disbursing Agent is involved, gains on the sale of shares or subscription rights held

as business assets are generally subject to withholding tax to the same extent as for a shareholder

whose shares or subscription rights are held as private assets (see the section entitled “—Taxation of

Capital Gains of Shareholders with a Tax Domicile in Germany—Shares and Subscription Rights Held

as Private Assets”). However, the German Disbursing Agent may refrain from withholding the with-holding tax if (i) the shareholder is a corporation, association (Personenvereinigung) or estate (Ver-

mögensmasse) with its tax domicile in Germany, or (ii) the shares form part of the shareholder’s do-mestic business assets, and the shareholder informs the disbursing agent of this on the officially pre-

scribed form and meets certain additional prerequisites. If the German Disbursing Agent nevertheless

withholds taxes, the withholding tax withheld and remitted (including solidarity surcharge) will be cred-

ited against the shareholder’s income tax or corporate income tax liability and any excess amount will

be refunded.

19.3.2 Taxation of Capital Gains of Shareholders domiciled in Foreign Countries

Capital gains realized by a shareholder with no tax domicile in Germany are subject to German in-

come tax only if the selling shareholder holds a Qualified Participation or if the shares form part of the

business assets of a permanent establishment in Germany or of business assets for which a perma-

nent representative is appointed.

Most double taxation treaties provide for an exemption from German taxation of capital gains and as-

sign the right of taxation to the shareholder’s country of domicile. In the opinion of the German tax authorities, in case of a Qualified Participation there is no duty to levy withholding tax.

19.4 Special Treatment of Companies in the Financial and Insurance Sectors and Pension

Funds

If credit institutions (Kreditinstitute) or financial services institutions (Finanzdienstleistungsinstitute) hold or

sell shares that are allocable to their trading book (Handelsbestand) within the meaning of the German

Commercial Code (Handelsgesetzbuch) then neither the 95% exemption from corporate income tax nor

the partial-income method will apply to dividends or capital gains or capital gains, i.e. dividend income and

capital gains are fully subject to corporate income tax. Correspondingly, capital losses can be offset in full

for tax purposes. The same applies to financial company (Finanzunternehmen) within the meaning of the

German Banking Act (Gesetz über das Kreditwesen) if credit institutions (Kreditinstitute) or financial ser-

vices institutions (Finanzdienstleistungsinstitute) directly or indirectly hold a participation of more than 50%

in such financial company and if the shares have to be recorded in the current assets (Umlaufvermögen) of

the financial company at the time of the initial recording. The dividends may be tax exempt from trade tax if

- 274 -

a participation of at least 15% is held in the Company's share capital at the beginning of the relevant tax

assessment period. Further, the tax exemption for corporations for dividend income and capital gains from

the sale of shares, does not apply to shares that qualify as a capital investment in the case of life insurance

and health insurance companies, or those which are held by pension funds. For theses shareholders an

exemption from trade tax in case of a participation of 15% in the Company's share capital is also not avail-

able.

19.5 Inheritance and Gift Tax

The transfer of shares/subscription rights to another person by will or gift is generally subject to Ger-

man inheritance and gift tax only if

(i) the decedent, donor, heir, beneficiary or other transferee maintained his or her domicile or

usual residence in Germany, or had its place of management or registered office in Germany

at the time of the transfer, or is a German citizen who has spent no more than five consecu-

tive years outside Germany without maintaining a residence in Germany (special rules apply

to certain former German citizens who neither maintain their domicile nor have their usual

residence in Germany),

(ii) the shares or subscription rights were held by the decedent or donor as part of business as-

sets for which a permanent establishment was maintained in Germany or for which a perma-

nent representative in Germany had been appointed, or

(iii) the decedent or donor, either individually or collectively with related parties, held, directly or

indirectly, at least 10% of the Company’s registered share capital at the time of the inher-itance or gift.

The few German double taxation treaties relating to inheritance tax and gift tax currently in force usu-

ally provide that the German inheritance tax or gift tax can only be levied in the cases of (i) above, and

also with certain restrictions in case of (ii) above. Special provisions apply to certain German nationals

living outside of Germany and former German nationals.

19.6 Other Taxes

No German transfer tax, value-added tax, stamp duty or similar taxes are assessed on the purchase,

sale or other transfer of shares or subscription rights. Provided that certain requirements are met, an

entrepreneur may, however, opt for the payment of value added tax on transactions that are otherwise

tax-exempt. Net wealth tax (Vermögensteuer) is currently not imposed in Germany.

The European Commission and certain EU Member States (including Germany) intend to introduce a

financial transaction tax (“FTT”) (presumably on secondary market transaction on financial transac-tions involving at least one financial intermediary). It is currently uncertain if and when the proposed

FTT will be enacted by the participating EU Member States.

http://tax-exempt.net/

F-1

FINANCIAL INFORMATION

CONTENT

I. Unaudited Interim Financial Information of De Raj Group AG for the six-months-period ended 30 June 2017 (HGB)

F-4

1. Balance Sheet as of 30 June 2017 F-5

2. Income Statement for the period from 1 January to 30 June 2017 F-6

3. Statement of Changes in Equity for the period 1 January to 30 June 2017

F-7

4. Cash Flow Statement for the period 1 January to 30 June 2017 F-8

5. Notes F-9

II. Audited Financial Statements of De Raj Group AG for the financial year ended 31 December 2016 (HGB)

F-10

1. Balance Sheet as of 31 December 2016 F-11

2. Income Statement for the period from 1 January to 31 December 2016

F-12

3. Statement of Changes in Equity for the period 1 January to 31 December 2016

F-13

4. Cash Flow Statement for the period 1 January to 31 December 2016 F-14

5. Notes F-15

6. Auditor’s Report F-16

III. Audited Financial Statements of De Raj Group AG for the financial year ended 31 December 2015 (HGB)

F-17



F-19


F-20


5. Notes F-22


IV. Unaudited Interim Financial Information of Hummingbird Energy Inc. for the six-month-period ended 30 June 2017 (IFRS)

F-24

1. Abbreviated Balance Sheet as of 30 June 2017 F-25

2. Abbreviated Income Statement for the period from 1 January to 30 June 2017

F-26

3. Selected Notes to the Interim Financial Statements as of 30 June 2017

F-27

F-2

V. Audited Financial Statements of Hummingbird Energy Inc. for the fi-nancial year ended 31 December 2016 (IFRS)

F-40




F-45


F-46


6. Notes F-48

VI. Audited Financial Statements of Hummingbird Energy Inc. for the fi-nancial year ended 31 December 2015 (IFRS)

F-71




F-75


F-76


6. Notes F-78

VII. Audited Financial Statements of Hummingbird Energy Inc. for the fi-nancial year ended 31 December 2014 (IFRS)

F-99




F-103


F-104


6. Notes F-106

VIII. Unaudited Interim Financial Information of Gryphon Energy (SEA) SDN BHD for the six-month-period ended 30June 2017 (IFRS)

F-126

1. Balance Sheet as of 30 June 2017 F-127

2. Income Statement for the period from 1 January to 30 June 2017 F-128


F-129

F-3

IX. Audited Financial Statements of Gryphon Energy (SEA) SDN BHD for the financial year started from 26 November 2015 ended 31 December 2016 (IFRS)

F-131



3. Income Statement for the period from 26 November 2015 to 31 December 2016

F-136

4. Statement of Changes in Equity for the period 26 November 2015 to 31 December 2016

F-137


6. Notes F-139

F-4

I.

Unaudited Interim Financial Information of De Raj Group AG

for the six-months-period ended 30 June 2017 (HGB)

F-5

1. Balance Sheet as of 30 June 2017



ASSETS Notes 30.06.2017 EUR

31.12.2016 EUR


Notes 30.06.2017 EUR

31.12.2016 EUR

Current Assets



Share Capital 50.000,00 50.000,00


50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

F-6

2. Income Statement for the period from 1 January to 30 June 2017



Notes 01.01.2017 -

30.06.2017 2016


EUR EUR

0,00 0,00

F-7

3. Statement of Changes in Equity for the period 1 January to 30 June 2017


Statement of changes in equity for the period from 01 January 2017 to 30 June 2017

Share

Capital Non-

Distributable Distributable Total

Equity Share Capital Retained

Profits

EUR EUR EUR EUR

Balance at 01.01.2016

50.000,00

0,00

0,00

50.000,00

Profit after taxation / Total

comprehensive income for the

financial year

0,00

0,00

0,00

0,00

Balance at 31.12.2016 50.000,00 0,00 0,00 50.000,00


50.000,00

0,00

0,00

50.000,00

Profit or loss after taxation / Total


financial year

0,00

0,00

0,00

0,00

Balance at 30.06.2017 50.000,00 0,00 0,00 50.000,00

F-8

4. Cash Flow Statement for the period 1 January to 30 June 2017



2017 2016

TEUR TEUR



Operating profit bevor working capital changes + 0 + 0

Cash from/(for) operations + 0 + 0

Net cash from /(for) operating activities + 0 + 0

Cash flows for investing activities

Net cash for investing activities + 0 + 0


Payments received from capital increases + 0 + 0

Net cash (for)/ from financing activities + 0 + 0

Net increase/ ( decrease) in cash and bank bal-ances + 0 + 0

Cash and cash equivalents at beginning of the financial year + 50 + 50

Cash and cash equivalents at end of the finan-cial year + 50 + 50

Represented by:



+ 50 + 50

F-9

5. Notes of statement of financial position as of 30 June 2017 and income statement for the period from 1 January to 30 June 2017

I. Introduction

The company was established on 14. January 2015. It has its head office in Berlin, registered with the

commercial register of the local court of Berlin under HRB 165434 B.

The financial statement has been prepared in accordance with the regulations in the German Com-

mercial Code (HGB) in the version contained in Accounting Directives' Transformation Act (BilRuG)

and the German Stock Corporation Act (AktG).

In accordance with section 275 (2) of the HGB, the income statement was prepared using the total

cost method.

The company is a very small private limited company within the meaning of section 267a HGB.

II. Accounting and valuation methods

Bank balances are expressed at their nominal value.

III. Employees

During the reporting period, De Raj Group AG employed 0 persons.

Berlin, 30.06.2017 The Management Board (Der Vorstand)

F-10

II.

Audited Financial Statements of De Raj Group AG

for the financial year ended 31 December 2016 (HGB)

F-11

1. Balance Sheet as of 31 December 2016




31.12.2015 EUR


31.12.2016 EUR

31.12.2015 EUR

Current Assets



Share Capital 50.000,00 50.000,00


50.000,00 50.000,00

50.000,00 50.000,00 50.000,00 50.000,00

F-12



Statement of profit or loss and other comprehensive income for the period 2016

Notes 01.01.2016 - 31.12.2016

2015


EUR EUR

0,00 0,00

F-13



Statement of changes in equity for the period 2016

Share Capital

Non-Distributable Distributable

Total Equity

Share Capital Retained Profits

EUR EUR EUR EUR


12.500,00

0,00

0,00

12.500,00

Capital Increases

37.500,00

0,00

0,00

37.500,00

Profit after taxation / Total


financial year

0,00

0,00

0,00

0,00

Balance at 31.12.2015 50.000,00 0,00 0,00 50.000,00


50.000,00

0,00

0,00

50.000,00

Profit or loss after taxation / Total


financial year

0,00

0,00

0,00

0,00

Balance at 31.12.2016 50.000,00 0,00 0,00 50.000,00

F-14

4. Cash Flow Statement for the period 1 January to 31 December 2016



2016 2015

TEUR TEUR



Operating profit bevor working capital changes + 0 + 0

Cash from/(for) operations + 0 + 0

Net cash from /(for) operating activities + 0 + 0


Net cash für investing activities + 0 + 0


Payments received from capital increases + 0 + 50

Net cash (for)/ from financing activities + 0 + 50

Net increase/ ( decrease) in cash and bank bal-ances + 0 + 50

Cash and cash equivalents at beginning of the financial year + 50 + 0

Cash and cash equivalents at end of the finan-cial year + 50 + 50

Represented by:



+ 50 + 50

F-15

5. Notes of statement of financial position as of 31 December 2016 and income state-ment for the period from 1 January to 31 December 2016

I. Introduction

The company was established on 14. January 2015. It has its head office in Berlin, registered with the

commercial register of the local court of Berlin under HRB 165434 B.


mercial Code (HGB) in the version contained in Accounting Directives' Transformation Act (BilRuG)

and the German Stock Corporation Act (AktG).


cost method.




III. Employees

During the reporting period, De Raj Group AG employed 0 persons.

IV. Final Declaration to the report on relations with affiliated comapnies

In the past financial year, the company has not entered into any legal transactions with the governing

company or with affiliated companies and / or taken or omitted measures. None of the facts mentioned

in § 312 Abs. 1 AktG has been realized. There is no discrimination of the company within the meaning

of § 312 Abs. 3 AktG.

Cologne, 10 November 2017 The Management Board (Der Vorstand)

F-16

AUDITOR´S REPORT To De Raj Group AG, Cologne As a result of our audit for the hereby certified annual financial statements in exhibits 1 to 3 of De Raj Group AG, Cologne, as at 31 December 2016 we issue the following unqualified Auditor´s Report: "We have audited the annual financial statements, comprising the balance sheet, the income state-ment and the notes together with the bookkeeping system of De Raj Group AG, Cologne, for the busi-ness year from 1 January to 31 December 2016. The maintenance of the books and records and the preparation of the annual financial statements in accordance with German commercial law are the responsibility of the Company's management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, based on our audit. We conducted our audit of the annual financial statements in accordance with § 317 HGB ("Han-delsgesetzbuch": "German Commercial Code") and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstate-ments materially affecting the presentation of the net assets, financial position and results of opera-tions in the annual financial statements in accordance with German principles of proper accounting are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, the annual financial statements are examined primarily on a test basis within the framework of the audit. The audit in-cludes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the annual financial statements. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting." Munich, 10 November 2017

CROWE KLEEBERG AUDIT GMBH WIRTSCHAFTSPRÜFUNGSGESELLSCHAFT

signed: Schmidt signed: Prechtl Wirtschaftsprüfer Wirtschaftsprüfer German Public Auditor German Public Auditor

F-17

III.

Audited Financial Statements of De Raj Group AG

for the financial year ended 31 December 2015 (HGB)

F-18

1. Balance Sheet as of 31 December 2015



ASSETS Notes 31.12.2015

EUR EQUITY AND LIABILITIES

Notes 31.12.2015 EUR

Current As-sets

Shareholders’ Equity

Current Fi-nancial Assets

Share Capi-tal

50.000,00


50.000,00

50.000,00 50.000,00

F-19



Statement of profit or loss and other comprehensive income for the period from

14 January 2015 to 31 December 2015

Notes 14.01. - 31.12.2015 Profit of the Financial Year EUR

0,00

F-20



Statement of changes in equity for the from 14. January 2015 to 31 December 2015

Share Capital

Non-Distributable Distributable

Total Equity

Share Capital Retained Profits

EUR EUR EUR EUR


12.500,00

0,00

0,00 12.500,00

Capital Increases

37.500,00

0,00

0,00 37.500,00

Profit after taxation / To-tal


financial year

0,00

0,00

0,00

0,00

Balance at 31.12.2015 50.000,00 0,00 0,00 50.000,00

F-21

4. Cash Flow Statement for the period 14 January to 31 December 2015



2015

TEUR



Operating profit bevor working capital changes + 0

Cash from/(for) operations + 0

Net cash from /(for) operating activities + 0


Net cash für investing activities + 0


Payments received from capital increases + 50

Net cash (for)/ from financing activities + 50

Net increase/ ( decrease) in cash and bank balances + 50

Cash and cash equivalents at beginning of the financial year + 0

Cash and cash equivalents at end of the financial year + 50

Represented by:

Cash on hand + 0

Cash at banks + 50

+ 50

F-22

5. Notes of statement of financial position as of 31 December 2015 and income state-

ment for the period from 14 January to 31 December 2015

I. Introduction

This document presents statement of financial position as of 31 December 2015 and income state-

ment for the period from 14 January to 31 December 2015 of De Raj Group AG, Cologne hereinafter

the “Company”.


mercial Code (HGB) and in accordance with the German Limited Liability Companies Act (GmbHG).


cost method.


The company was established on 14. January 2015.


Outstanding deposits are shown at their nominal value.


III. Additional Informations

Statement to section 160 of German Stock Corporation Act (AktG)

The share capital is conditionally increased by 50,000 Euro, consisting of non-par bearer shares. The

VRB Vorratsgesellschaften GmbH holds an interest of 100 %.

Group affiliation

The company is a subsidiary of the VRB Vorratsgesellschaften GmbH, Berlin, who is the holding com-

pany for the largest group of consolidated entities. The holding company is exempted from the re-

quirement to prepare consolidated financial statements in accordance to section 293 HGB.

Board of directors

Members of the Executive Board of the Company during the reporting year 2015 were:

Anja Schullenberg (née Kolb), Berlin

IV. Final Declaration to the report on relations with affiliated comapnies

In the past financial year, the company has not entered into any legal transactions with the governing

company or with affiliated companies and / or taken or omitted measures. None of the facts mentioned

in § 312 Abs. 1 AktG has been realized. There is no discrimination of the company within the meaning

of § 312 Abs. 3 AktG.

Cologne, 9 November 2017 The Management Board (Der Vorstand)

F-23

AUDITOR´S REPORT To De Raj Group AG, Cologne As a result of our audit for the hereby certified annual financial statements in exhibits 1 to 3 of De Raj Group AG, Cologne, as at 31 December 2015 we issue the following unqualified Auditor´s Report: "We have audited the annual financial statements, comprising the balance sheet, the income state-ment and the notes together with the bookkeeping system of De Raj Group AG, Cologne, for the shortened business year from 14 January to 31 December 2015. The maintenance of the books and records and the preparation of the annual financial statements in accordance with German commercial law are the responsibility of the Company's management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, based on our audit. We conducted our audit of the annual financial statements in accordance with § 317 HGB ("Han-delsgesetzbuch": "German Commercial Code") and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstate-ments materially affecting the presentation of the net assets, financial position and results of opera-tions in the annual financial statements in accordance with German principles of proper accounting are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, the annual financial statements are examined primarily on a test basis within the framework of the audit. The audit in-cludes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the annual financial statements. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting." Munich, 10 November 2017

CROWE KLEEBERG AUDIT GMBH WIRTSCHAFTSPRÜFUNGSGESELLSCHAFT

signed: Schmidt signed: Prechtl Wirtschaftsprüfer Wirtschaftsprüfer German Public Auditor German Public Auditor

F-24

IV.

Unaudited Interim Financial Information of Hummingbird Energy

Inc. for the six-months-period ended 30 June 2017 (IFRS)

- The IFRS applied in the following financial information

were applied in accordance with the IFRS as adopted in the European Union -

F-25

1. Abbreviated Balance Sheet as of 30 June 2017

Company No: LL 07383

2017 2016

EUR EUR

Fixed Asset 47.792.583 56.391.635

Current Assets 6.790.557 15.088.141

Current Liabilities 11.434.902 22.164.302

Long Term Liabilities 23.741.794 30.329.310

Retained Earnings/ (Losses) 16.780.623 16.134.994

-----------------Audited Figures----------

STATEMENT OF FINANCIAL POSITION FOR 2 FINANCIAL YEARS

F-26

2. Abbreviated Income Statement for the period from 1 January to 30 June 2017

Company No: LL 07383



STATEMENT OF PROFIT AND LOSS FOR THE PERIOD END-

ING 30 JUNE


Account Account

30 June 2017

(Unaudited)

30 June2016

(Unaudited)

EUR EUR

Revenue 4.800.263 5.684.051

Cost of sales

(2.226.326) (2.221.171)

Gross profit 2.573.937 3.462.880



(148.161) (47.228)

Finance costs

(748.822) (480.782)


Tax expense

(3.957) (4.419)


F-27


FUNDAMENTAL ACCOUNTING CONCEPT

The financial statements have been prepared under going concern concept as the holding company has agreed not to recall the amount owing to itself until all other liabilities are set-tled and agreed to provide continued financial support to enable the Company to meet its liabilities as and when they fall due.


The Company is a private limited company incorporated under the Labuan Companies Act, 1990 in Malaysia. The domicile of the Company is Federal Territory of Labuan, Malaysia. The registered office is as follows:-

Registered office : Level 1, Lot 7,

Block F, Saguking Commercial Building, Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia.

The financial statements were authorised for issue by the Board of Directors in accord-ance with a resolution of the directors dated 28 June 2017.

3. PRINCIPAL ACTIVITIES

The Company is principally engaged in leasing of production separator and fuel gas equip-ment and sale of drilling rig. There have been no significant changes in these activities during the financial year.

4. HOLDING COMPANY

The holding company is Gryphon Energy Corporate Pte. Ltd., a company incorporated in The Republic of Singapore.

5. BASIS OF PREPARATION

The financial statements of the Company are prepared under the historical cost conven-tion and modified to include other basis of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Labuan Companies Act, 1990 in Malaysia.

During the current financial year, the Company has adopted the following new ac-

counting standard(s) and/or interpretation(s) (indlucing the consequential amend-

ments, if any):-

MFRSs and/or IC Interpretations (Including The Consequential Amend-

ments)

MFRS 14 Regulatory Deferral Accounts

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities – Apply-ing the Consolidation Exception

F-28

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Opera-

tions Amendments to MFRS 101: Disclosure Initiative

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants

Amendments to MFRS 127: Equity Method in Separate Financial State-

ments Annual Improvements to MFRSs 2012 – 2014 Cycle

The adoption of the above accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) did not have any material impact on the Company‟s financial statements.

The Company has not applied in advance the following accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments)

Effective Date

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018

MFRS 15 Revenue from Contracts with Customers 1 January 2018

MFRS 16 Leases 1 January 2019

IC Interpretation 22 Foreign Currency Transactions and Advance Con-sideration

1 January 2018

Amendments to MFRS 2: Classification and Measurement of Share- based Payment Transactions

1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts

1 January 2018*

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of As-sets between an Investor and its Associate or Joint Venture

Deferred until further notice

Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018

Amendments to MFRS 15: Clarifications to MFRS 15 „Revenue from ‟

Amendments to MFRS 107: Disclosure Initiative 1 January 2017

Amendments to MFRS 112: Recognition of Deferred Tax Assets for

Amendments to MFRS 140 – Transfers of Investment Property 1 January 2018

Amendments to MFRS 15: Clarifications to MFRS 15 „Revenue from Contracts 1 January 2018


Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealis- 1 January 2017

Amendments to MFRS 112: Recognition of Deferred Tax Assets for


Annual Improvements to MFRS Standards 2014 – 2016 Cycles:

The adoption of above accounting standards and/or interpretations (including the con-sequential amendments, if any) is expected to have no material impact on the financial statements of the Company upon their initial application.

F-29

6. SIGNIFICANT ACCOUNTING POLICIES

6.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated by the director and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that af-fect the application of the Company's accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and ex-penses are discussed below:- Depreciation of Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors‟ actions in response to the market conditions. The Company anticipates that the residual values of its plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

Impairment of Trade and Other Receivables An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loan and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such differ-ence will impact the carrying value of receivables.

Fair Value Estimates for Certain Financial Assets and Liabilities The Company carries certain financial assets and liabilities at fair value, which requires exten-sive use of accounting estimates and judgement. While significant components of fair value meas-urement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

Functional Currency The functional currency of the Company is the currency of the primary economic environment in which the Company operates. The financial statements of the Company are presented in United States Dollar (USD), which is the Company‟s functional and presentation currency. Foreign Currency Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the exchange rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were deter-mined. All exchange differences are recognised in profit or loss.

6.2 FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the statement of financial position when the Company has become a party to the contractual provisions of the instrument.

F-30

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends and gains and losses relating to a financial instrument classified as liability, are reported as expenses or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Company has a legally enforceable right to offset and in-tends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instru-ment at fair value through profit or loss) are added to/deducted from the fair value on initial recogni-tion, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item. Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. Financial Assets at Fair Value through Profit or Loss As at the end of the reporting period, there were no financial assets classified under this cate-gory. Held-to-maturity Investments As at the end of the reporting period, there were no financial assets classified under this cate-gory. Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the ex-pected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets. Available-for-sale Financial Assets As at the end of reporting period, there were no financial assets classified under this category.

Financial Liabilities Financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

F-31

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liabil-ity, or, where appropriate, a shorter period. Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Equity Instruments Equity instruments classified as equity are measured at cost and are not remeasured subse-quently. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

Derecognition A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (includ-ing any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation speci-fied in the contract is discharged or cancelled or expires. On derecognition of a financial liabil-ity, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabili-ties assumed, is recognised in profit or loss.

6.3 INVESTMENT IN ASSOCIATED COMPANY An associated company is an entity in which the Company has a long-term equity interest and where it exercises significant influence over the financial and operating policies. Investments in associated company are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs.

6.4 PLANT AND EQUIPMENT All items of plant and equipment are initially measured at cost. Cost includes expenditure that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use. Subsequent to initial recognition, all plant and equipment, are stated at cost less accumulated depreciation and any impairment losses. Subsequent costs are included in the asset‟s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of equipment are recognised in profit or loss as incurred. Depreciation on plant and equipment is charged to profit or loss on a straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

F-32

Offshore drilling and production equip-ment 6.67% Production operator and fuel gas equip-ment 6.67% The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment. Any changes are accounted for as change in estimate.

When significant parts of an item of plant and equipment have different useful lives, they are account-ed for as separate items of plant and equipment. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in prof-it or loss.

6.5 IMPAIRMENT

Impairment of Financial Assets All financial assets (other than those categorised at fair value through profit or loss), are as-sessed at the end of each reporting period whether there is any objective evidence of impair-ment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment. An impairment loss in respect of held-to-maturity investments and loans and receivables fi-nancial assets is recognised in profit or loss and is measured as the difference between the asset‟s carrying amount and the present value of estimated future cash flows, discounted at the financial as-set‟s original effective interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recog-nised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Impairment of Non-Financial Assets The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual im-pairment assessment is compulsory or there is an indication that the assets might be im-paired. Impairment is measured by comparing the carrying values of the assets with their recov-erable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised in profit or loss immediately. When there is a change in the estimates used to determine the recoverable amount, a subse-quent increase in the recoverable amount of an asset is treated as a reversal of the previous im-pairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

6.6 INVENTORIES

F-33

Inventories are stated at the lower of cost and net realisable value. Cost is comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs of comple-tion and the estimated costs necessary to make the sale.

6.7 INCOME TAXES Current Tax Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities. Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity).

Deferred Tax Deferred tax are recognised using the liability method for all temporary differences other than those that arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be uti-lised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that the related tax benefits will be real-ised.

Current and deferred tax items are recognised in correlation to the underlying transactions either in profit or loss, other comprehensive income or directly in equity. Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legal-ly enforceable right to set off current tax asset against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority.

6.8 CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

6.9 EMPLOYEE BENEFITS

Short-term Benefits Wages, salaries, paid annual leave and bonuses are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by em-ployees of the Company.

Defined Contribution Plans

F-34

The Company‟s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

6.10 RELATED PARTIES A party is related to an entity (referred to as the “reporting entity”) if:- A person or a close member of that person‟s family is related to a reporting entity if that person:-

has control or joint control over the reporting entity; has significant influence over the reporting entity; or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

Close members of the family of a person are those family members who may be ex-pected to influence, or be influenced by, that person in their dealings with the reporting entity.

An entity is related to a reporting entity if any of the following conditions applies:-

The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). Both entities are joint ventures of the same third party. One entity is a joint venture of a third entity and the other entity is an associate of the third entity. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. The entity is controlled or jointly controlled by a person identified in (a) above. A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the enti-ty). The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including its director (whether executive or otherwise) of that entity.

6.11 FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market participant‟s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market par-ticipant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical

assets or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

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Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

6.12 REVENUE RECOGNITION

Revenue represents rental income earned from charter of production separator and fuel gas equipment. Rental income is accrued on a time basis, by reference to the agreement entered into.

6.13 OPERATING LEASES Leases other than finance leases are classified as operating leases. Lease payments under operating leases are recognised as an expenses in the income statement on a staright line basis over the lease period. Lease income is recognised on a straight line basis over the lease period.

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7. INVESTMENT IN AN ASSOCIATED COMPANY

2017 2016 USD USD

Unquoted shares, at cost 0 40,012

Details of the associated company are as follows:-

Principal Place Effec-tive Principal Name of Associated Compa-ny of Business Equity Inter-est Activities

2017 2016 % %

Steel Bird Machinery & Equipment Rental LLC Du-bai 0 49 Dormant

As permitted by MFRS 10, the Company need not present consolidated financial state-ments as the Company is a wholly-owned subsidiary of Gryphon Energy Corporation Pte. Ltd., a Company incorporated in The Republic of Singapore. The consolidation fi-nancial statements of the holding company, where the financial statements of the Com-pany have been consolidated into are available for public use.

8. PLANT AND EQUIPMENT

At

Depreciation

At

Net Book Value 1.7.2016

USD Charge

USD 30.06.2017

USD

Offshore drilling and produc-tion equipment

59,587,507

(4,728,371)

54,859,136

Accumulated Depreciation Offshore drilling and production equipment 69,159,680 (14,300,544) 54,859,136

The plant and equipment have been pledged to financial institutions as security for banking facilities granted to the Company.

The Deed of charge over Topside dated 23 May 2014 created by the Company has been satisfied during the year.

There are several charges created during the year where the plant and equipment have been pledged to financial institutions as security for banking facilities granted to the Company as listed below:- 1) Charge created on 25 March 2015 for facilities agreement; 2) Charge created on 5 May 2015 for a debenture; 3) Charge created on 15 May 2015 for a specific debenture; and 4) Charge created on 15 May 2015 for an Assignment of Second Equipment Lease Agree-

ment.

9. INVENTORIES

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Inventories of the Company comprise the cost of spare parts and equipment.

10. OTHER RECEIVABLES AND DEPOSITS

2017

2016 USD USD

Other receivables

73,873 Deposits 33,520 33,680

33,520 107,553

11. AMOUNTS OWING BY/(TO) HOLDING COMPANY

The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

12. SHARE CAPITAL

The movements in the paid-up share capital of the Company are as follows:-

2017 2016 Number Of Shares

2017 USD

2016 USD

Ordinary Shares

Issued And Fully Paid-Up

At 1 January

3,000,000

1

3,000,000

1 Bonus issue - 2,999,999 - 2,999,999

At 31 December 3,000,000 3,000,000 3,000,000 3,000,000

13. RETAINED PROFITS

As at 30 June 2017, the entire retained profits of the Company is available to be distributed to the shareholder as dividend.

14. TERM LOAN

The term loan is secured by:- (a) First legal charge over Mobile Offshore Production Unit (“MOPU”) called BOSS 1 inclusive

the topside modules, and the jack up rig called BOSS 7 and BOSS 8; (b) Second legal charge which is limited to USD 10 million over a jack up rig called BOSS 6; (c) Personal guarantee by a director of the Company; and (d) Corporate guarantee by the holding company and a related party.

The term loan has an effective interest rate of 4.26% (2016 - 4.26%) per annum.

15. TRADE PAYABLES

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The normal trade credit term granted to the Company ranges from 30 to 60 days (2015 - 30 to 60 days).

16. AMOUNT OWING TO A DIRECTOR

The amount owing is unsecured, interest-free and repayable on demand. The amount ow-ing is to be settled in cash.

17. REVENUE

This represents the invoiced value of the offshore drilling and production equipment chartering services rendered during the financial year.

18. PROFIT BEFORE TAXATION

2017 2016

USD USD

Profit before taxation is arrived at after charging/(crediting):-

Audit fees

Depreciation of plant and equipment 2,236,130 2,492,241 Interest expense on term loan 847,349 533,023 Staff costs: - defined contribution plans - - - salaries and other benefits 14,936 3,262 Realised gain / (loss) on foreign exchange (127,925) 25,938 Unrealised gain on foreign exchange - - Interest income - -

19. INCOME TAX EXPENSE

This relates to the tax payable under the Labuan Business Activity Tax Act, 1990 (LBATA) and is computed based on RM 20,000 upon election made under Section 7(1) of the said Act.

20. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:-

2017 USD

2016 USD

Cash and bank balances

131,739

10,445,248 Less: Restricted bank balances (2,505,792)

131,739 7,937,456

The restricted bank balances relate to banking facilities granted to the Company, where the funds are only available upon approval by the bank for certain expenditure.

21. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identities of related parties

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The Company has controlling related party relationship with:-

(i) its holding company and related companies;

(ii) entities controlled by substantial shareholders; and

(iii) key management personnel.

22. FOREIGN EXCHANGE RATES

The applicable closing foreign exchange rate used (expressed on the basis of one unit of foreign currency to United States Dollar equivalent) for the translation of foreign currency bal-ances at the end of the reporting period are as follows:-

2017 USD

2016 USD

Singapore dollar

0.75

0.74 Ringgit Malaysia 0.24 0.25 Indonesia Rupiah (100000) 7.50 7.59 Euro 1.14 1.11 British Pound Indian Rupee (100)

1.30 1.55

1.33 1.48

23. PRESENTATION CURRENCY

The financial statements comply with Malaysian Financial Reporting Standards, Except for MFRS 121 The Effects of Changes in Foreign Exchange Rates which requires the presenta-tion currency for the financial statements presented in Malaysia to be in Ringgit Malaysia. This requirement was for the purpose of harmonisation with local law. As the Labuan Companies Act, 1990 does not require or specify any particular currency for the prepara-tion of financial statements, the requirement for the presentation currency to be in Ringgit Malaysia would not serve any regulatory purpose. In this respect, the presentation curren-cy of these financial statements is in United States Dollar.

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V.

Audited Financial Statements of Hummingbird Energy Inc.

for the financial year ended 31 December 2016 (IFRS)

- The IFRS applied in the following financial statements


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1. Auditor’s Report Directors Nagendran A/L C. Nadarajah Alexander Arjun De Raj Corporate Secretary Noblehouse Corporate Services Ltd. Auditors Crowe Horwath (Labuan) LLP Registered Office Level 1, Lot 7, Block F, Saguking Commercial Building, Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia. Principal Bankers HSBC Bank Malaysia Berhad, Damansara United Overseas Bank, Singapore Export – Import Bank Malaysia Berhad Place Of Incorporation And Domicile Federal Territory of Labuan, Malaysia Statement by Directors I, Nagendran A/L C. Nadarajah, being one of the directors of Hummingbird Energy (L) Inc, state that, in the opinion of the directors, except for the comments made by the auditors’ in the audit report, the financial statements set out on pages 7 to 41 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia so as to give a true and fair view of the financial position of the Company as of 31 December 2016 and of its financial performance and cash flows for the financial year ended on that date. Signed in accordance with a resolution of the directors dated Nagendran A/L C. Nadarajah INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF HUMMINGBIRD ENERGY (L) INC (Incorporated in Federal Territory of Labuan, Malaysia) Company No.: LL 07383 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Hummingbird Energy (L) Inc, which comprise the statement of financial position as at 31 December 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 7 to 41. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2016, and of its financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia.

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Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By- Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Responsibilities of Directors for the Financial Statements The directors of the Company are responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Company, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:- • Identify and assess the risks of material misstatement of the financial statements of the

Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of ac-

counting estimates and related disclosures made by the directors. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also (Cont’d):-

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• Conclude on the appropriateness of the directors’ use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the

Company, including the disclosures, and whether the financial statements of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 117(1) of the Labuan Companies Act, 1990 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath (Labuan) LLP Chieng You Lang Firm No: AAL 0056 Approval No: 01781/07/2018J Chartered Accountants Chartered Accountant Federal Territory of Labuan Date : 28 June 2017

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2. Balance Sheet as of 31 December 2016 2016 2015 Note USD USD ASSETS NON-CURRENT ASSETS Investment in an associated company 7 40,012 40,012 Plant and equipment 8 57,095,266 61,567,527 57,135,278 61,607,539 CURRENT ASSETS Inventories 9 2,200,000 2,200,000 Other receivables and deposits 10 108,573 108,225 Amount owing by holding company 11 496,708 - Amount owing by related companies 12 5,098,962 19,846,775 Amount owing by related parties 13 7,360,331 3,415,336 Cash and bank balances 2,811,168 10,023,260 18,075,742 35,593,596 TOTAL ASSETS 75,211,020 97,201,135 EQUITY AND LIABILITIES EQUITY Share capital 14 3,000,000 3,000,000 Retained profits 15 16,977,241 12,416,239 TOTAL EQUITY 19,977,241 15,416,239 NON-CURRENT LIABILITY Term loan 16 31,912,500 34,375,000

CURRENT LIABILITIES Trade payables 17 350,065 349,729 Accruals 707,165 2,500 Amount owing to holding company 11 2,908,536 3,083,536 Amount owing to related companies 12 10,272,009 26,995,568 Amount owing to related parties 13 225,751 224,734 Amount owing to a director 18 2,953,923 2,999,999 Term loan 16 5,900,000 13,750,000 Provision for taxation 3,830 3,830 23,321,279 47,409,896 TOTAL LIABILITIES 55,233,779 81,784,896 TOTAL EQUITY AND LIABILITIES 75,211,020 97,201,135

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3. Income Statement for the period from 1 January to 31 December 2016 2016 2015 Note USD USD REVENUE 19 11,885,633 17,702,500 COST OF SALES (4,445,179) (5,424,377) GROSS PROFIT 7,440,454 12,278,123 OTHER INCOME - 7 7,440,454 12,278,130 ADMINISTRATIVE EXPENSES (564,836) (1,876,312) FINANCE COSTS (2,309,710) (1,882,630) PROFIT BEFORE TAXATION 20 4,565,908 8,519,188 INCOME TAX EXPENSE 21 (4,906) (4,660) PROFIT AFTER TAXATION/ TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR

4,561,002

8,514,528

PROFIT AFTER TAXATION/ TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:-

Owners of the Company 4,561,002 8,514,528

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4. Statement of Changes in Equity for the period 1 January to 31 December 2016 Non-

Distributable Distributable

Retained

Total Share Capital Profits Equity Note USD USD USD Balance at 1.1.2015 1 6,901,710 6,901,711 Profit after taxation/ Total comprehensive

income for the financial year

-

8,514,528

8,514,528 Bonus issue 14 2,999,999 (2,999,999) -

Balance at 31.12.2015/1.1.2016 3,000,000 12,416,239 15,416,239 Profit after taxation/Total comprehensive


-

4,561,002

4,561,002

Balance at 31.12.2016 3,000,000 16,977,241 19,977,241

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5. Cash Flow Statement for the period 1 January to 31 December 2016 Note 2016 2015 USD USD CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profit before taxation 4,565,908 8,519,188 Adjustments for:- Depreciation of plant and equipment 4,472,261 4,413,124Interest expense 2,309,710 1,882,630Unrealised foreign exchange gain - (511,467)

Operating profit before working capital changes 11,347,879 14,303,475(Increase)/decrease in other receivables and deposits (348) 18,572Increase/(decrease) in trade payables 336 (1,228,000)Increase/(decrease) in accruals 704,665 (10,475)Decrease in amount owing by holding company - 14,602,000Decrease in amount owing to related company (2,752,888) - Decrease/(increase) in amount owing by related company 19,112,200 (18,854,500)Decrease in amount owing to related parties - (28,060,214)

CASH FROM/(FOR) OPERATIONS 28,411,844 (19,229,142)Interest paid (2,309,710) (1,882,630)Income tax paid (4,906) (6,552)

NET CASH FROM/(FOR) OPERATING ACTIVITIES 26,097,228 (21,118,324)

CASH FLOWS FOR INVESTING ACTIVITIES Decrease/(Increase) in restricted bank balances 7,515,892 (10,021,684)Investment in associate - (40,012)(Advances to)/ Repayments from related companies (1,364,387) 2,553,776Advances to related parties (6,944,995) (106) Adjustment of plant and equipment due to price adjustment - 4,450,242

NET CASH FOR INVESTING ACTIVITIES (793,490) (3,057,784)

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES Drawdown of term loan - 85,000,000Repayment of term loans (10,312,500) (68,275,000)Repayment to holding company (671,708) - (Repayments to)/advances from related companies (13,970,671) 21,277,718Advance from related parties 1,017 40,011Repayment to a director (46,076) (13,867,328)

NET CASH (FOR)/FROM FINANCING ACTIVITIES (24,999,938) 24,175,401

NET INCREASE/(DECREASE) IN CASH AND BANK BAL-ANCES

303,800 (707)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 1,576 2,283

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 22 305,376 1,576

REPRESENTED BY:

CASH ON HAND 6 124 CASH AT BANKS 305,370 1,452

305,376 1,576

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6. Notes 1. FUNDAMENTAL ACCOUNTING CONCEPT

The financial statements have been prepared under going concern concept as the holding company has agreed not to recall the amount owing to itself until all other liabilities are settled and agreed to provide continued financial support to enable the Company to meet its liabilities as and when they fall due.





The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 June 2017.



4. HOLDING COMPANY

The holding company is Gryphon Energy Corporate Pte. Ltd., a company incorporated in The Republic of Singapore.


The financial statements of the Company are prepared under the historical cost convention and modified to include other basis of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Labuan Companies Act, 1990 in Malaysia.

5.1 During the current financial year, the Company has adopted the following new ac-

counting standard(s) and/or interpretation(s) (indlucing the consequential amend-ments, if any):-


MFRS 14 Regulatory Deferral Accounts

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities – Applying the Consolidation Exception

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations

Amendments to MFRS 101: Disclosure Initiative


Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants

Amendments to MFRS 127: Equity Method in Separate Financial Statements

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Annual Improvements to MFRSs 2012 – 2014 Cycle

The adoption of the above accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) did not have any material impact on the Company’s financial statements.

5.2 The Company has not applied in advance the following accounting standard(s) and/or

interpretation(s) (including the consequential amendments, if any) that have been is-sued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date




IC Interpretation 22 Foreign Currency Transactions and Advance Con-sideration 1 January 2018

Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018*

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture



5. BASIS OF PREPARATION (CONT’D)

5.2 The Company has not applied in advance the following accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) that have been is-sued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year (Cont’d):-


Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018


Amendments to MFRS 112: Recognition of Deferred Tax Assets for Un-realised Losses 1 January 2017



Amendments to MFRS 12: Clarification of the Scope of Standard 1 January 2017


Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time Adopters

Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value 1 January 2018

* Entities that meet the specific criteria in MFRS 4.20B may choose to defer the appli-

cation of MFRS 9 until the earlier of the application of the forthcoming insurance con-tracts standard or annual periods beginning before 1 January 2021.

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The adoption of above accounting standards and/or interpretations (including the con-sequential amendments, if any) is expected to have no material impact on the finan-cial statements of the Company upon their initial application.


6.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the director and management and are based on historical experience and other factors, including expectations of fu-ture events that are believed to be reasonable under the circumstances. The esti-mates and judgements that affect the application of the Company's accounting poli-cies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed be-low:-

(a) Depreciation of Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Company anticipates that the residual values of its plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a fi-nancial asset is impaired. Management specifically reviews its loan and re-ceivables financial assets and analyses historical bad debts, customer con-centrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the ade-quacy of the allowance for impairment losses. Where there is objective evi-dence of impairment, the amount and timing of future cash flows are estimat-ed based on historical loss experience for assets with similar credit risk char-acteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(c) Fair Value Estimates for Certain Financial Assets and Liabilities

The Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While signifi-cant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

6.2 FUNCTIONAL AND FOREIGN CURRENCY

(a) Functional and Presentation Currency

The functional currency of the Company is the currency of the primary economic environment in which the Company operates.

The financial statements of the Company are presented in United States Dollar (USD), which is the Company’s functional and presentation currency.

(b) Foreign Currency Transactions and Balances

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Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the exchange rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

6.3 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the statement of financial position when the Company has become a party to the contractual provisions of the instrument.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends and gains and losses relating to a financial instrument classified as liability, are reported as expenses or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Company has a legally enforceable right to off-set and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial in-strument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item.

(a) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and re-ceivables financial assets, or available-for-sale financial assets, as appropri-ate. (i) Financial Assets at Fair Value through Profit or Loss

As at the end of the reporting period, there were no financial assets classified under this category.

(ii) Held-to-maturity Investments


(iii) Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determi-nable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables fi-nancial assets are measured at amortised cost using the effective in-terest method, less any impairment loss. Interest income is recog-nised by applying the effective interest rate, except for short-term re-ceivables when the recognition of interest would be immaterial.

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The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the rele-vant period. The effective interest rate is the rate that discounts estimat-ed future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the finan-cial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Loans and receivables financial assets are classified as current as-sets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets As at the end of reporting period, there were no financial assets clas-sified under this category.

(b) Financial Liabilities

Financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effec-tive interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropri-ate, a shorter period. Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(c) Equity Instruments

Equity instruments classified as equity are measured at cost and are not re-measured subsequently. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the con-tractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration re-ceived (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

(d) Derecognition (Cont’d)

A financial liability or a part of it is derecognised when, and only when, the ob-ligation specified in the contract is discharged or cancelled or expires. On de-recognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the

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consideration paid, including any non-cash assets transferred or liabilities as-sumed, is recognised in profit or loss.

6.4 INVESTMENT IN ASSOCIATED COMPANY

An associated company is an entity in which the Company has a long-term equity in-terest and where it exercises significant influence over the financial and operating pol-icies. Investments in associated company are stated at cost in the statement of financial po-sition of the Company, and are reviewed for impairment at the end of the reporting pe-riod if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs.

6.5 PLANT AND EQUIPMENT All items of plant and equipment are initially measured at cost. Cost includes

expenditure that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use.

Subsequent to initial recognition, all plant and equipment, are stated at cost less

accumulated depreciation and any impairment losses. Subsequent costs are included in the asset’s carrying amount or recognised as a

separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of equipment are recognised in profit or loss as incurred.

Depreciation on plant and equipment is charged to profit or loss on a straight-line

method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Offshore drilling and production equipment 6.67%

Production operator and fuel gas equipment 6.67%

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment. Any changes are accounted for as change in estimate. When significant parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss.

6.6 IMPAIRMENT

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instru-ment, a significant or prolonged decline in the fair value below its cost is consid-ered to be an objective evidence of impairment.

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An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effec-tive interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the im-pairment was recognised, the previously recognised impairment loss is re-versed through profit or loss to the extent that the carrying amount of the fi-nancial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(b) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impair-ment of Assets does not apply, are reviewed at the end of each reporting pe-riod for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is meas-ured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impair-ment loss shall be recognised. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax dis-count rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the re-coverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised in profit or loss immediately. When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

6.7 INVENTORIES Inventories are stated at the lower of cost and net realisable value. Cost is comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

6.8 INCOME TAXES

(a) Current Tax

Current tax assets and liabilities are expected amount of income tax recover-able or payable to the taxation authorities.

Current taxes are measured using tax rates and tax laws that have been en-acted or substantively enacted at the end of the reporting period and are rec-ognised in profit or loss except to the extent that the tax relates to items rec-ognised outside profit or loss (either in other comprehensive income or directly in equity).

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(b) Deferred Tax

Deferred tax are recognised using the liability method for all temporary differ-ences other than those that arise from the initial recognition of an asset or lia-bility in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

(a) Deferred tax assets and liabilities are measured at the tax rates that are ex-pected to apply in the period when the asset is realised or the liability is set-tled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differ-ences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting pe-riod and reduced to the extent that it is no longer probable that the related tax benefits will be realised.

(i)

Current and deferred tax items are recognised in correlation to the underlying transac-tions either in profit or loss, other comprehensive income or directly in equity.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax asset against current tax liabili-ties and when the deferred taxes relate to the same taxable entity and the same taxa-tion authority.

6.9 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

6.10 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and bonuses are measured on an undis-counted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Company.

(b) Defined Contribution Plans

The Company’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribu-tion plans.

6.11 RELATED PARTIES

A party is related to an entity (referred to as the “reporting entity”) if:-

(a) A person or a close member of that person’s family is related to a reporting entity if

that person:-

(i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or

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(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies:-

(i) The entity and the reporting entity are members of the same group (which

means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an

associate of the third entity. (v) The entity is a post-employment benefit plan for the benefit of employees of

either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a) above. (vii) A person identified in (a)(i) above has significant influence over the entity or is

a member of the key management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including its director (whether execu-tive or otherwise) of that entity.


Fair value is the price that would be received to sell an asset or paid to transfer a lia-bility in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a mar-ket participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level

1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are

observable for the asset or liability, either directly or indirectly; and



6.13 REVENUE RECOGNITION

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6.14 OPERATING LEASES

Leases other than finance leases are classified as operating leases. Lease payments under operating leases are recognised as an expenses in the income statement on a staright line basis over the lease period. Lease income is recognised on a straight line basis over the lease period.

7. INVESTMENT IN AN ASSOCIATED COMPANY

2016 2015 USD USD Unquoted shares, at cost 40,012 40,012


As permitted by MFRS 10, the Company need not present consolidated financial statements as the Company is a wholly-owned subsidiary of Gryphon Energy Corporation Pte. Ltd., a Com-pany incorporated in The Republic of Singapore. The consolidation financial statements of the holding company, where the financial statements of the Company have been consolidated into are available for public use.


At Cost Adjustment Accumulated Depreciation

Net Book Value

2016 USD USD USD USD Offshore drilling and production equipment 69,159,680 - (12,064,414) 57,095,266

2015 Offshore drilling and production equipment 73,609,922 (4,450,242) (7,592,153) 61,567,527

Principal Place Effective Principal Name of Associated Company of Business Equity Interest Activities

2016 2015 % % Steel Bird Machinery & Equipment Rental LLC Dubai 49 49 Dormant

At 1.1.2016

Depreciation Charge

At 31.12.2016

Net Book Value USD USD USD

Offshore drilling and production equipment 61,567,527 (4,472,261) 57,095,266

At 1.1.2015 Adjustment

Depreciation Charge

At 31.12.2015

Net Book Value USD USD USD USD

Offshore drilling and production equipment 70,430,893 (4,450,242)

(4,413,124) 61,567,527

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The Deed of charge over Topside dated 23 May 2014 created by the Company has been sat-isfied during the year. There are several charges created during the year where the plant and equipment have been pledged to financial institutions as security for banking facilities granted to the Company as listed below:- 1) Charge created on 25 March 2015 for facilities agreement; 2) Charge created on 5 May 2015 for a debenture; 3) Charge created on 15 May 2015 for a specific debenture; and 4) Charge created on 15 May 2015 for an Assignment of Second Equipment Lease Agree-ment.

9. INVENTORIES

Inventories of the Company comprise the cost of spare parts and equipments.

10. OTHER RECEIVABLES AND DEPOSITS

2016 2015 USD USD

Other receivables 74,621 74,545 Deposits 33,952 33,680 108,573 108,225


2016 2015 USD USD

Amount owing by:- Non-trade balances: - Ringgit Malaysia 49 - - Singapore Dollar 496,659 - 496,708 -

Amount owing to:- Non-trade balances: - United States Dollar (2,908,536) (3,064,658) - Singapore Dollar - (18,878) (2,908,536) (3,083,536)

The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

12. AMOUNTS OWING BY/(TO) RELATED COMPANIES

2016 2015 USD USD

Amount owing by:-

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Trade balances 2,742,300 18,854,500

Non-trade balances: - United States Dollar 1,304,589 984,706 - Singapore Dollar 409,362 3,154 - Ringgit Malaysia 460,111 - - Indonesia Rupiah 179,753 4,415 - Indian Rupee 2,847 -

2,356,662 992,275

5,098,962 19,846,775

Amount owing to:-

2016 USD

2015 USD

Trade balances (248,350) (3,001,238) Non-trade balances: - United States Dollar (9,625,475) (17,315,896) - Singapore Dollar (237,552) (5,499,095) - Ringgit Malaysia (160,632) (928,893) - Indonesia Rupiah - (245,059) - Euro - (4,717) - British Pound - (670)

(10,023,659) (23,994,330)

(10,272,009) (26,995,568)

(a) The trade balances normal trade credit term is 30 days (2015 - 30 days). The

amounts owing are to be settled in cash.

(b) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

13. AMOUNTS OWING BY/(TO) RELATED PARTIES

2016 2015 USD USD

Amount owing by:- Trade balances - 3,000,000

Non-trade balances: - United States Dollar 7,298,744 351,746 - Singapore Dollar 10,538 35,484 - Ringgit Malaysia 51,049 28,000 - Indonesia Rupiah - 106

7,360,331 415,336

7,360,331 3,415,336

Amount owing to:-

2016 USD

2015 USD

Trade balances: - United States Dollar (184,722) (184,722)

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Non-trade balances: - Singapore Dollar (40,012) (40,012) - Ringgit Malaysia (1,017) -

(41,029) (40,012)

(225,751) (224,734)

(a) The Company’s normal trade credit term is 30 days (2015 - 30 days). The amounts

owing are to be settled in cash.


(c) Related parties refer to companies in which a close member of the family of a director

has substantial financial interests. (d) In assessing the recoverability of these debts, the directors have given due considera-

tion to all pertinent factors relating to the ability of the debtors to settle the debts and are of the opinion that these amounts are fully recoverable. Accordingly, no allowance for impairment losses has been made in respect of these amounts.

14. SHARE CAPITAL The movements in the paid-up share capital of the Company are as follows:-

2016 2015 2016 2015 Number Of Shares USD USD Ordinary Shares Issued And Fully Paid-Up At 1 January 3,000,000 1 3,000,000 1 Bonus issue - 2,999,999 - 2,999,999

At 31 December 3,000,000 3,000,000 3,000,000 3,000,000

15. RETAINED PROFITS As at 31 December 2016, the entire retained profits of the Company is available to be distributed

to the shareholder as dividend. 16. TERM LOAN

2016 2015 USD USD Current portion: - repayable within one year 5,900,000 13,750,000 Non-current portion: - repayable between two to five years 31,912,500 34,375,000

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37,812,500 48,125,000

The term loan is secured by:-

(a) First legal charge over Mobile Offshore Production Unit (“MOPU”) called BOSS 1 inclusive the topside modules, and the jack up rig called BOSS 7 and BOSS 8;

(b) Second legal charge which is limited to USD 10 million over a jack up rig called BOSS 6;

(c) Personal guarantee by a director of the Company; and

(d) Corporate guarantee by the holding company and a related party.

The term loan has an effective interest rate of 4.26% (2015 - 4.26%) per annum. 17. TRADE PAYABLES

The normal trade credit term granted to the Company ranges from 30 to 60 days (2015 - 30 to 60 days).


The amount owing is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

19. REVENUE



2016 2015 USD USD Profit before taxation is arrived at after charg-ing/(crediting):-

Audit fees 4,500 4,500 Depreciation of plant and equipment 4,472,261 4,413,124 Interest expense on term loan 2,309,710 1,882,630 Staff costs: - defined contribution plans - 6,359 - salaries and other benefits 1,306 73,896 Realised loss on foreign exchange 233,436 120,806 Unrealised gain on foreign exchange - (511,467) Interest income - (7)



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22. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise the fol-lowing:-

2016 2015 USD USD Cash and bank balances 2,811,168 10,023,260 Less: Restricted bank balances (2,505,792) (10,021,684) 305,376 1,576

The restricted bank balances relate to banking facilities granted to the Company, where the funds are only available upon approval by the bank for certain expenditure.


(b) Identities of related parties





(b) In addition to the information detailed elsewhere in the financial statements, the Com-pany carried out the following transactions with its related parties during the financial year:-

2016 2015 USD USD Rental income 11,885,633 17,702,500

24. FOREIGN EXCHANGE RATES The applicable closing foreign exchange rate used (expressed on the basis of one unit of foreign

currency to United States Dollar equivalent) for the translation of foreign currency balances at the end of the reporting period are as follows:-

2016 2015 USD USD Singapore dollar 0.70 0.71 Ringgit Malaysia 0.22 0.23 Indonesia Rupiah (100000) 7.44 7.24 Euro - 1.09 British Pound - 1.48 Indian Rupee 0.01 -

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25. FINANCIAL INSTRUMENTS

The Company’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Company’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.

25.1 FINANCIAL RISK MANAGEMENT POLICIES

The Company’s policies in respect of the major areas of treasury activity are as fol-lows:

(a) Market Risk

(i) Foreign Currency Risk

The Company is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than then respec-tive functional currencies of entities within the Company. The curren-cies giving rise to this risk is primarily Singapore Dollar, Ringgit Ma-laysia, Indonesia Rupiah, Euro and British Pound. Foreign currency risk is monitored closely on an ongoing basis to ensure net exposure is at an acceptable level.

Foreign Currency Exposure

Singapore Ringgit Indonesia Indian Dollar Malaysia Rupiah Rupee Total USD USD USD USD USD 2016 Financial Assets Amount owing by holding company

496,659

49

-

-

496,708 Amount owing by related companies

409,362

460,111

179,753

2,847

1,052,073 Amount owing by related parties

10,538

51,049

-

-

61,587 916,559 511,209 179,753 2,847 1,610,368

Singapore Ringgit Indonesia Indian Dollar Malaysia Rupiah Rupee Total USD USD USD USD USD

2016

Financial Liabilities

Trade payables (201,777)

(1,334)

(390)

-

(203,501)

Amount owing to related companies

(237,552)

(160,632)

-

-

(398,184)

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Amount owing to related parties

(40,012)

(1,017)

-

-

(41,029) (479,341) (162,983) (390) - (642,714)

Currency exposure

437,218

348,226

179,363

2,847

967,654

Singapore

Ringgit

Indonesia

British

Dollar Malaysia Rupiah Euro Pound Total USD USD USD USD USD USD 2015 Financial Assets


3,154

-

4,415

-

-

7,569

Amount owing by related parties

35,484

28,000

106

-

-

63,590

38,638 28,000 4,521 - - 71,159

Singapore

Ringgit

Indonesia

British

Dollar Malaysia Rupiah Euro Pound Total USD USD USD USD USD USD

2015

Financial Liabilities

Trade payables

(94,108)

(19,678)

(18,826)

-

-

(132,612)

Amount owing to holding company

(18,878)

-

-

-

-

(18,878)

Amount owing to related

(5,499,095)

(928,893)

(245,059)

(4,717)

(670)

(6,678,434)

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Foreign Currency Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:-

2016 2015 Increase/

(Decrease) Increase/

(Decrease) USD USD

Effects On Profit After Taxation/Equity Singapore Dollar: - strengthened by 10% 43,721 (561,346) - weakened by 10% (43,721) 561,346 Ringgit Malaysia: - strengthened by 10% 34,822 (92,057) - weakened by 10% (34,822) 92,057 Indonesia Rupiah: - strengthened by 10% 17,936 (25,936) - weakened by 10% (17,936) 25,936 Indian Rupee: - strengthened by 10% 285 - - weakened by 10% (285) - Euro: - strengthened by 10% - (472) - weakened by 10% - 472 British Pound: - strengthened by 10% - (67) - weakened by 10% - 67

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market inter-est rates. The Company's exposure to interest rate risk arises mainly

companies Amount owing to related parties

(40,012)

-

-

-

-

(40,012)

(5,652,093) (948,571) (263,885) (4,717) (670) (6,869,936) Currency exposure

(5,613,455)

(920,571)

(259,364)

(4,717)

(670)

(6,798,777)

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from interest-bearing financial assets and liabilities. The Company's policy is to obtain the most favourable interest rates available.

The interest rate risk sensitivity analysis on the fixed rate instrument is not disclosed as this financial instrument is measured at amortised cost.

Interest Rate Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting peri-od, with all other variables held constant:-

2016 2015 Increase/(Decrease) Increase/(Decrease) USD USD

Effects On Profit After Taxation/Equity Increase of 100 basis points (378,125) (481,250) Decrease of 100 basis points 378,125 481,250

(iii) Equity Price Risk

The Company does not have any quoted investments and hence is not exposed to equity price risk.

(b) Credit Risk

The Company’s exposure to credit risk, or the risk of counterparties default-ing, arises mainly from related company. The Company manages its expo-sure to credit risk by the application of credit approvals, credit limits and moni-toring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Company minimises credit risk by dealing ex-clusively with high credit rating counterparties. (i) Credit Risk Concentration Profile

The Company’s major concentration of credit risk relates to the amount owing by related company which constituted approximately 100% of total receivables as at the end of the reporting period.

(ii) Exposure to Credit Risk

As the Company does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period.

(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Company practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facili-ties.

Maturity Analysis

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The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed using contractual rates or, if floating, based on the rate at the end of the reporting period:-

Weighted Average Contractual Over Effective Carrying Undiscounted Within 1 - 5 5 Rate Amount Cash Flows 1 Year Years Year

s % USD USD USD USD USD

2016 Trade paya-bles - 350,066 350,066 350,066 - Accruals - 707,165 707,165 707,165 - Amount owing to holding company - 2,908,536 2,908,536 2,908,536 - Amount owing to related companies - 10,272,009 10,272,009 10,272,009 - Amount owing to related par-ties - 225,751 225,751 225,751 - Amount owing to a director - 2,953,923 2,953,923 2,953,923 - Term loan 4.26 37,812,500 40,234,131 7,573,134 32,660,997 55,229,950 57,651,581 24,990,584 32,660,997

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed using contractual rates or, if floating, based on the rate at the end of the reporting period (cont’d):-

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Weighted Average Contractual Over Effective Carrying Undis-

counted Within 1 - 5 5

Rate Amount Cash Flows 1 Year Years Years % USD USD USD USD USD 2015 Trade paya-bles - 349,729 349,729 349,729 - - Accruals - 2,500 2,500 2,500 - - Amount owing to holding company - 3,083,536 3,083,536 3,083,536 - - Amount owing to related companies - 26,995,568 26,995,568 26,995,568 - - Amount owing to related par-ties - 224,734 224,734 224,734 - - Amount owing to a director - 2,999,999 2,999,999 2,999,999 - - Term loan 4.26 48,125,000 51,995,623 15,610,665 36,384,958 - 81,781,066 85,651,689 49,266,731 36,384,958 -

25. FINANCIAL INSTRUMENTS (CONT’D)

25.2 CAPITAL RISK MANAGEMENT

The Company manages its capital to ensure that entities within the Company will be able to maintain an optimal capital structure so as to support its businesses and max-imise shareholders value. To achieve this objective, the Company may make adjust-ments to the capital structure in view of changes in economic conditions, such as ad-justing the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Company manages its capital based on debt-to-equity ratio. The Company's strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as total external interest-bearing borrowings (excluding inter-company and director advances) less cash and cash equivalents divided by total equity.

The debt-to-equity ratio of the Company at the end of the reporting period was as follows: 2016 2015 USD USD Term loan 37,812,500 48,125,000 Less: Cash and cash equivalents (2,811,168) (10,023,260) Total debt 35,001,332 38,101,740

Total equity 20,681,906 15,416,239

Debt-to-equity ratio 1.69 2.47

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25.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS 2016 2015 USD USD Financial Assets Loans and Receivables Financial Assets Other receivables and deposits 108,573 108,225 Amount owing by holding company 496,708 - Amount owing by related companies 5,098,962 19,846,775 Amount owing by related parties 7,360,331 3,415,336 Cash and bank balances 2,811,168 10,023,260 15,875,742 33,393,596 2016 2015 USD USD Financial Liabilities Other Financial Liabilities Trade payables 350,065 349,729 Accruals 707,165 2,500 Amount owing to holding company 2,908,536 3,083,536 Amount owing to related companies 10,272,009 26,995,568 Amount owing to related parties 225,751 224,734 Amount owing to a director 2,953,923 2,999,999 Term loan 37,812,500 48,125,000 55,229,949 81,781,066

25.4 FAIR VALUE INFORMATIONS

At the end of the reporting period, there were no financial instruments carried at fair values. The fair values of the financial assets and financial liabilities approximated their carrying amounts due to relatively short-term maturity of the financial instruments (maturing within the next 12 months). The fair values are determined by discounting the relevant cash flows at rates equal to the current market interest rate plus appropriate credit rating, where necessary. The fair values are included in level 2 of the fair value hierarchy. The fair values of the non-current portion of term loan equal their carrying amount as the impact of discounting is not material. The fair values are determined on cash flows discounted using the current market interest rate plus appropriate credit rating and are within level 2 of the fair value hierarchy.

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26. PRESENTATION CURRENCY

The financial statements comply with Malaysian Financial Reporting Standards, Except for MFRS 121 The Effects of Changes in Foreign Exchange Rates which requires the presentation currency for the financial statements presented in Malaysia to be in Ringgit Malaysia. This requirement was for the purpose of harmonisation with local law. As the Labuan Companies Act, 1990 does not require or specify any particular currency for the preparation of financial statements, the requirement for the presentation currency to be in Ringgit Malaysia would not serve any regulatory purpose. In this respect, the presentation currency of these financial statements is in United States Dollar.

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VI.

Audited Financial Statements of Hummingbird Energy Inc.

for the financial year ended 31 December 2015 (IFRS)



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1. Auditor’s Report DIRECTORS Nagendran A/L C. Nadarajah Alexander Arjun De Raj CORPORATE SECRETARY Noblehouse Corporate Services Ltd. AUDITORS Crowe Horwath (Labuan) LLP REGISTERED OFFICE Level 1, Lot 7, Block F, Saguking Commercial Building, Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia. PRINCIPAL BANKERS HSBC Bank Malaysia Berhad, Damansara United Overseas Bank, Singapore Export – Import Bank Malaysia Berhad PLACE OF INCORPORATION AND DOMICILE Federal Territory of Labuan, Malaysia STATEMENT BY DIRECTORS I, Nagendran A/L C. Nadarajah, being one of the directors of Hummingbird Energy (L) Inc, state that, in the opinion of the directors, except for the comments made by the auditors in the auditors’ report, the financial statements set out on pages 5 to 37 are drawn up in accordance with the Malaysian Fi-nancial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia so as to give a true and fair view of the financial position of the Company as of 31 December 2015 and of their financial performance and cash flows for the finan-cial year ended on that date. Signed in accordance with a resolution of the directors dated Nagendran A/L C. Nadarajah

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INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF HUMMINGBIRD ENERGY (L) INC (Incorporated in Federal Territory of Labuan, Malaysia) Company No.: LL 07383 Report on the Financial Statements We have audited the financial statements of Hummingbird Energy (L) Inc, which comprise the state-ment of financial position as at 31 December 2015, and the statement of profit or loss and other com-prehensive income, statement of changes in equity and statement of cash flows for the year then end-ed, and a summary of significant accounting policies and other explanatory information, as set out on pages 5 to 37. Directors' Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia. The directors are also responsible for such internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We con-ducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assess-ment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’s preparation of financial statements that give a true and fair view in order to design audit procedures that are ap-propriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls. An audit also includes evaluating the appropriateness of account-ing policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Compa-ny as of 31 December 2015 and of its financial performance and cash flows for the financial year then ended in accordance with the Malaysian Financial Reporting Standards, International Financial Re-porting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 117(1) of the Labuan Companies Act, 1990 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath (Labuan) LLP Chieng You Lang Firm No: AAL 0056 Approval No: 01781/07/2018J Chartered Accountants Chartered Accountant Date 23 September 2016 Federal Territory of Labuan

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2. Balance Sheet as of 31 December 2015 2015 2014 Note USD USD ASSETS NON-CURRENT ASSETS Investment in an associated company 7 40,012 - Plant and equipment 8 61,567,527 70,430,893 61,607,539 70,430,893 CURRENT ASSETS Inventories 9 2,200,000 2,200,000 Other receivables, deposits and prepayments 10 108,225 126,797 Amount owing by holding company 11 - 14,602,000 Amount owing by related companies 12 19,846,775 3,546,051 Amount owing by related parties 13 3,415,336 3,415,230 Cash and bank balances 23 10,023,260 2,283 35,593,596 23,892,361 TOTAL ASSETS 97,201,135 94,323,254 EQUITY AND LIABILITIES EQUITY Share capital 14 3,000,000 1 Retained profits 15 12,416,239 6,901,710 TOTAL EQUITY 15,416,239 6,901,711 NON-CURRENT LIABILITY Term loan 16 34,375,000 11,400,000

CURRENT LIABILITIES Trade payables 17 349,729 1,577,729 Other payables and accruals 2,500 12,975 Amount owing to holding company 11 3,083,536 3,083,536 Amount owing to related companies 12 26,995,568 6,229,317 Amount owing to related parties 13 224,734 28,244,937 Amount owing to a director 18 2,999,999 16,867,327 Term loan 16 13,750,000 20,000,000 Provision for taxation 3,830 5,722 47,409,896 76,021,543 TOTAL LIABILITIES 81,784,896 87,421,543 TOTAL EQUITY AND LIABILITIES 97,201,135 94,323,254

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3. Income Statement for the period from 1 January to 31 December 2015 2015 2014 Note USD USD REVENUE 19 17,702,500 14,602,000 COST OF SALES (5,424,377) (4,589,095) GROSS PROFIT 12,278,123 10,012,905 OTHER INCOME 7 51 12,278,130 10,012,956 ADMINISTRATIVE EXPENSES (1,876,312) (2,544,507) FINANCE COSTS (1,882,630) (635,688) PROFIT BEFORE TAXATION 20 8,519,188 6,832,761 INCOME TAX EXPENSE 21 (4,660) (5,722) PROFIT AFTER TAXATION/ TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR

8,514,528

6,827,039



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distributable Distributable

Retained



-

6,827,039

6,827,039 Distributions to owners of the Company: - Dividends paid 22 - (8,200,000) (8,200,000)

Balance at 31.12.2014/1.1.2015 1 6,901,710 6,901,711 Profit after taxation/Total comprehensive


-

8,514,528

8,514,528 Bonus issue 14 2,999,999 (2,999,999) -

Balance at 31.12.2015 3,000,000 12,416,239 15,416,239

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5. Cash Flow Statement for the period 1 January to 31 December 2015 Note 2015 2014 USD USD CASH FLOWS FOR OPERATING ACTIVITIES Profit before taxation 8,519,188 6,832,761 Adjustments for:- Depreciation of plant and equipment 4,413,124 3,179,029Interest expense 1,882,630 635,688Unrealised foreign exchange gain (511,467) -

Operating profit before working capital changes 14,303,475 10,647,478Decrease in inventories - 800,000Decrease/(Increase) in other receivables, deposits and prepayments

18,572 (114,901)

(Decrease)/Increase in trade payables (1,228,000) 1,557,365(Decrease)/Increase in other payables (10,475) 771Decrease/(Increase) in amount owing by a holding company

14,602,000 (14,602,000)

Increase in amount owing (by)/to related compa-nies

(18,854,500) (3,546,051)

Increase in amount owing by related parties - 7,765,940Increase in amount owing to related parties (28,060,214) -

CASH FOR OPERATIONS (19,229,142) 2,508,602Interest paid (1,882,630) (635,688)Income tax paid (6,552) (6,552)

NET CASH FOR OPERATING ACTIVITIES (21,118,324) 1,866,362

CASH FLOWS FROM/(FOR) INVESTING ACTIVI-TIES

Increase in restricted bank balances (10,021,684) -Investment in associate 7 (40,012) -Purchase of property, plant and equipment 8 - (44,833,316)Repayments from related companies 2,553,776 -Advances to related parties (106) -Adjustment of plant and equipment due to price adjustment

4,450,242 -

NET CASH FROM/(FOR) INVESTING ACTIVITIES (3,057,784) (44,833,316)

CASH FLOWS FROM FINANCING ACTIVITIES Drawdown of term loan 85,000,000 40,000,000Dividend paid - (8,200,000)Repayment of term loans (68,275,000) (8,600,000)Advances from holding company - 3,083,536Advances from related companies 21,277,718 6,229,317Advances/(Repayment to) from related parties 40,011 (2,654,028)(Repayment to)/Advances from a director (13,867,328) 13,109,834

NET CASH FROM FINANCING ACTIVITIES 24,175,401 42,968,659

NET (DECREASE)/INCREASE IN CASH AND BANK BALANCES

(707) 1,705

CASH AND BANK BALANCES AT BEGINNING OF

THE FINANCIAL YEAR 2,283 578

CASH AND BANK BALANCES AT END OF THE FINANCIAL YEAR 23 1,576 2,283

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6. Notes 1. FUNDAMENTAL ACCOUNTING CONCEPT The financial statements have been prepared under going concern concept as the holding company has agreed not to recall the amount owing to itself until all other liabilities are settled and agreed to provide continued financial support to enable the Company to meet its liabilities as and when they fall due. 2. GENERAL INFORMATION The Company is a private limited company incorporated under the Labuan Companies Act, 1990 in Malaysia. The domicile of the Company is Federal Territory of Labuan, Malaysia. The registered of-fice is as follows:- Registered office : Level 1, Lot 7, Block F, Saguking Commercial Building, Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 3. PRINCIPAL ACTIVITIES The Company is principally engaged in leasing of production separator and fuel gas equipment and sale of drilling rig. There have been no significant changes in these activities during the financial year. 4. HOLDING COMPANY The holding company is Gryphon Energy Corporate Pte. Ltd., a company incorporated in The Repub-lic of Singapore. 5. Basis Of Preparation The financial statements of the Company are prepared under the historical cost convention and modi-fied to include other basis of valuation as disclosed in other sections under significant accounting poli-cies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Finan-cial Reporting Standards and the requirements of the Labuan Companies Act, 1990 in Malaysia. 5.1 During the current financial year, the Company has adopted the following new accounting standard(s) and/or interpretation(s) (indlucing the consequential amendments, if any):-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Amendments to MFRS 119: Defined Benefit Plans – Employee Contributions Annual Improvements to MFRSs 2010 – 2012 Cycle Annual Improvements to MFRSs 2011 – 2013 Cycle

The adoption of the above accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) did not have any material impact on the Company’s financial statements. 5.2 The Company has not applied in advance the following accounting standard(s) and/or inter-pretation(s) (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-



MFRS 14 Regulatory Deferral Accounts 1 January 2016

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Amendments to MFRS 10 and MFRS 128 (2011): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture


Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations

1 January 2016

Amendments to MFRS 10, MFRS 12 and MFRS 128 (2011): Investment Entities – Applying the Consolidation Exception

1 January 2016


Amendments to MFRS 101: Presentation of Financial Statements – Dis-closure Initiative

1 January 2016


Amendments to MFRS 112: Recognition of Deferred Tax Assets for Un-realised Losses

1 January 2017


1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants 1 January 2016

5.2 The Company has not applied in advance the following accounting standard(s) and/or inter-pretation(s) (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date Amendments to MFRS 127 (2011): Equity Method in Separate Financial Statements

1 January 2016

Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

The above accounting standards and interpretations (including the consequential amendments) are not relevant to the Company’s operations. 6. SIGNIFICANT ACCOUNTING POLICIES 6.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated by the director and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Company's accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:- (a) Depreciation of Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Company anticipates that the residual values of its plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the ex-pected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (b) Write-down of Inventories

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Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. (c) Impairment of Trade and Other Receivables An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loan and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk charac-teristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables. (d) Fair Value Estimates for Certain Financial Assets and Liabilities The Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabili-ties would affect profit and/or equity. 6.2 FUNCTIONAL AND FOREIGN CURRENCY

(c) Functional and Presentation Currency The functional currency of the Company is the currency of the primary economic environment in which the Company operates. The financial statements of the Company are presented in United States Dollar (USD), which is the functional and presentation currency.

(d) Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss. 6.3 FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial instruments are classified as financial assets, financial liabilities or equity instruments in ac-cordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as liability, are reported as expenses or income. Distribu-tions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Company has a legally enforceable right to offset and in-tends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attribut-able to the acquisition or issue of the financial instrument (other than a financial instrument at fair val-ue through profit or loss) are added to/deducted from the fair value on initial recognition, as appropri-ate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item.

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(a) Financial Assets On initial recognition, financial assets are classified as either financial assets at fair value through prof-it or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. (i) Financial Assets at Fair Value through Profit or Loss As at the end of the reporting period, there were no financial assets classified under this category. (ii) Held-to-maturity Investments As at the end of the reporting period, there were no financial assets classified under this category. (iii) Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impair-ment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Loans and receivables financial assets are classified as current assets except for those having settle-ment dates later than 12 months after the reporting date which are classified as non-current assets. (iv) Available-for-sale Financial Assets As at the end of reporting period, there were no financial assets classified under this category. (b) Financial Liabilities All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those catego-rised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. (c) Equity Instruments Equity instruments classified as equity are measured at cost and are not remeasured subsequently. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in eq-uity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation. (d) Derecognition A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retain-ing control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recog-nised in equity is recognised in profit or loss.

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A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 6.4 INVESTMENT IN ASSOCIATED COMPANY An associated company is an entity in which the Company has a long-term equity interest and where it exercises significant influence over the financial and operating policies. Investments in associated company are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs. 6.5 PLANT AND EQUIPMENT Plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is charged to profit or loss on the straight-line method to write off the depreciable amount of these assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:- Offshore drilling and production equipment 6.67% Production operator and fuel gas equipment 6.67% The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associ-ated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dis-mantling and removing the asset and restoring the site on which it is located for which the Company is obligated to incur when the asset is acquired, if applicable. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in statement of profit or loss and other comprehensive income. 6.6 IMPAIRMENT (a) Impairment of Financial Assets All financial assets (other than those categorised at fair value through profit or loss and investments in associates), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. An impairment loss in respect of held-to-maturity investments and loans and receivables financial as-sets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s origi-nal effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recog-

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nised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial assets at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. (b) Impairment of Non-Financial Assets The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow. An impairment loss is recognised in profit or loss immediately. When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recog-nised in profit or loss immediately. 6.7 INVENTORIES Inventories are stated at the lower of cost and net realisable value. Cost is comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. 6.8 INCOME TAX Income tax on the profit for the financial year comprises current income tax. Current income tax liabili-ties is the expected amount of the income taxes payable in respect of the taxable profit for the finan-cial year and is measured using the rates that have been enacted at the end of the reporting period. 6.9 CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdraft. 6.10 EMPLOYEE BENEFITS Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits are meas-ured on an undiscounted basis and are recognised in profit or loss in the period in which the associat-ed services are rendered by employees of the Company. 6.11 RELATED PARTIES A party is related to an entity (referred to as the “reporting entity”) if:- (a) A person or a close member of that person’s family is related to a reporting entity if that per-

son:-

(ii) has control or joint control over the reporting entity; (iii) has significant influence over the reporting entity; or (iv) is a member of the key management personnel of the reporting entity or

of a parent of the reporting entity.

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Close members of the family of a person are those family members who may be expected to influ-ence, or be influenced by, that person in their dealings with the entity. (b) An entity is related to a reporting entity if any of the following conditions applies:-

(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is re-lated to the others).

(ii) one entity is an associate or joint venture of the other entity (or an as-sociate or joint venture of a member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party. (iv) one entity is a joint venture of a third entity and the other entity is an as-

sociate of the third entity. (v) the entity is a post-employment benefit plan for the benefit of employ-

ees of either the reporting entity or an entity related to the reporting en-tity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) the entity is controlled or jointly controlled by a person identified in (a) above.

(vii) a person identified in (a)(i) above has significant influence over the enti-ty or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either di-rectly or indirectly, including any director (whether executive or otherwise) of that entity. 6.12 FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date; Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3: Inputs are unobservable inputs for the asset or liability. The transfer of fair value between levels is determined as of the date of the event or change in cir-cumstances that caused the transfer. 6.13 REVENUE RECOGNITION Revenue represents rental income earned from charter of production separator and fuel gas equip-ment. Rental income is accrued on a time basis, by reference to the agreement entered into. 6.14 OPERATING LEASES

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Leases other than finance leases are classified as operating leases. Lease payments under operating leases are recognised as an expenses in the income statement on a staright line basis over the lease period. Lease income is recognised on a staright line basis over the lease period. 7. INVESTMENT IN AN ASSOCIATED COMPANY

2015 2014 USD USD Unquoted shares, at cost 40,012 -



At Cost Accumulated Depreciation

Net Book Value

2015 USD USD USD Offshore drilling and production equipment 69,159,680 (7,592,153) 61,567,527

2014 Offshore drilling and production equipment 73,609,922 (3,179,029) 70,430,893

Principal Place Effective Principal Name of Associated Company of Business Equity Interest Activities 2015 2014 % % Steel Bird Machinery & Equipment Rental LLC Dubai 49 - Dormant

At 1.1.2015

Depreciation Charge

At 31.12.2015

Net Book Value USD USD USD (Restated)

Offshore drilling and production equipment 65,980,651 (4,413,124) 61,567,527

At 1.1.2014 Reclassification

Addition

Depreciation Charge

At 31.12.2014

Net Book Value USD USD USD USD USD

Offshore drilling and production equipment - 28,776,606 44,833,316 (3,179,029) 70,430,893

Offshore drilling and pro-duction equipment

under construction 28,776,606 (28,776,606) - - -

28,776,606 - 44,833,316 (3,179,029) 70,430,893

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The plant and equipment have been pledged to financial institutions as security for banking facilities granted to the Company. The Deed of charge over Topside dated 23 May 2014 created by the Company has been satisfied during the year. There are several charges created during the year where the plant and equipment have been pledged to financial institutions as security for banking facilities granted to the Company as listed below:- 1) Charge created on 25 March 2015 for facilities agreement; 2) Charge created on 5 May 2015 for a debenture; 3) Charge created on 15 May 2015 for a specific debenture; and 4) Charge created on 15 May 2015 for an Assignment of Second Equipment Lease Agreement. 9. INVENTORIES Inventories of the Company comprise the cost of spare parts and equipments. 10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

2015 2014 USD USD Other receivables 74,565 76,315 Deposits 33,680 33,680 Prepayments - 16,802

108,225 126,797


2015 2014 USD USD Amount owing by:- Trade balances - 14,602,000

Amount owing to:- Non-trade balances: - United States Dollar (3,064,658) (3,064,658) - Singapore Dollar (18,878) (18,878)

(3,083,536) (3,083,536)

(a) The trade balance normal trade credit term is 30 days. The amount owing is to be set-

tled in cash.


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12. AMOUNTS OWING BY/(TO) RELATED COMPANIES

2015 2014 USD USD Amount owing by:- Trade balances 18,854,500 -

Non-trade balances: - United States Dollar 984,706 (1,554,352) - Singapore Dollar 3,154 5,086,903 - Ringgit Malaysia - - - Indonesia Rupiah 4,415 13,500

992,275 3,546,051

19,846,775 3,546,051

Amount owing to:-

2015 USD

2014 USD

Trade balances (3,001,238) (3,001,238)

Non-trade balances: - United States Dollar (17,315,896) (2,648,877) - Singapore Dollar (5,499,095) (490,581) - Ringgit Malaysia (928,893) 37,005 - Indonesia Rupiah (245,059) (114,428) - Euro (4,717) (11,198) - British Pound (670) -

(23,994,330) (3,228,079)

(26,995,568) (6,229,317)

(c) The trade balances normal trade credit term is 30 days (2014 - 30 days). The amounts

owing are to be settled in cash.

(d) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

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13. AMOUNTS OWING BY/(TO) RELATED PARTIES

2015 2014 USD USD Amount owing by:- Trade balances 3,000,000 3,000,000

Non-trade balances: - United States Dollar 351,746 351,746 - Singapore Dollar 35,484 35,484 - Ringgit Malaysia 28,000 28,000 - Indonesia Rupiah 106 -

415,336 415,230

3,415,336 3,415,230

Amount owing to:-

2015 USD

2014 USD

Trade balances: - United States Dollar (2,200,000) (25,370,000) - Singapore Dollar - (4,890,214)

(2,200,000) (30,260,214)

Non-trade balances: - United States Dollar 2,015,278 2,015,277 - Singapore Dollar (40,012) -

1,975,266 2,015,277

(224,734) (28,244,937)

(e) The Company’s normal trade credit term is 30 days (2014 - 30 days). The amounts owing

are to be settled in cash.

(f) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

(g) Related parties refer to companies in which a close member of the family of a director has

substantial financial interests.

(h) In assessing the recoverability of these debts, the directors have given due consideration to all pertinent factors relating to the ability of the debtors to settle the debts and are of the opinion that these amounts are fully recoverable. Accordingly, no allowance for impair-ment losses has been made in respect of these amounts.

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14. SHARE CAPITAL The movements in the paid-up share capital of the Company are as follows:-

2015 2014 2015 2014 Number Of Shares USD USD Ordinary Shares Issued And Fully Paid-Up At 1 January 1 1 1 1 Bonus issue 2,999,999 - 2,999,999 -

At 31 December 3,000,000 1 3,000,000 1

During the financial year, the Company increased its issued and fully paid-up share capital from USD1 to USD 3,000,000 by way of bonus issue out of its retained profits.

15. RETAINED PROFITS

As at 31 December 2015, the entired retained profits of the Company is available to be distrib-uted to the shareholder as dividend.

16. TERM LOAN

2015 2014 USD USD Current portion: - repayable within one year 13,750,000 20,000,000 Non-current portion: - repayable between two to five years 34,375,000 11,400,000 48,125,000 31,400,000

The term loan is secured by:-

(e) First legal charge over Mobile Offshore Production Unit (“MOPU”) called BOSS 1 inclusive the topside modules, and the jack up rig called BOSS 7 and BOSS 8;

(f) Second legal charge which is limited to USD 10 million over a jack up rig called BOSS 6;

(g) Personal guarantee by a director of the Company; and

(h) Corporate guarantee by the holding company and a related party.

17. TRADE PAYABLES The normal trade credit term granted to the Company ranges from 30 to 60 days (2014 - 30 to 60 days). 18. AMOUNT OWING TO A DIRECTOR The amount owing is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

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19. REVENUE This represents the invoiced value of the offshore drilling and production equipment chartering ser-vices rendered during the financial year. 20. PROFIT BEFORE TAXATION


Audit fees 4,500 4,461 Depreciation of plant and equipment 4,413,124 3,179,029 Interest expense on term loan 1,882,630 635,688 Staff costs: - defined contribution plans 6,359 38,569 - salaries and other benefits 73,896 373,706 Realised loss on foreign exchange 120,806 3,703 Unrealised gain on foreign exchange (511,467) - Interest income (7) (51)

21. INCOME TAX EXPENSE This relates to the tax payable under the Labuan Business Activity Tax Act, 1990 (LBATA) and is computed based on RM 20,000 upon election made under Section 7(1) of the said Act. 22. DIVIDENDS PAID

2015 2014 USD USD Interim tax exempt dividends paid - 8,200,000

23. CASH AND CASH EQUIVALENTS For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-

2015 2014 USD USD Cash and bank balances 10,023,260 2,283 Less: Restricted bank balances (10,021,684) - 1,576 2,283

The restricted bank balances relate to banking facilities granted to the Company, where the funds are only available upon approval by the bank for certain expenditure. 24. SIGNIFICANT RELATED PARTY DISCLOSURES

(c) Identities of related parties

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(iii) key management personnel. (b) In addition to the information detailed elsewhere in the financial statements, the Company carried out the following transactions with its related parties during the financial year:-

2015 2014 USD USD Rental income 17,702,500 14,602,000 Sales to a related party - 3,000,000 Purchase from a related party - 40,269,000 Purchases of plant and equipment - 2,200,000

25. FOREIGN EXCHANGE RATES The applicable closing foreign exchange rate used (expressed on the basis of one unit of foreign cur-rency to United States Dollar equivalent) for the translation of foreign currency balances at the end of the reporting period are as follows:-

2015 2014 USD USD Singapore dollar 0.71 0.76 Ringgit Malaysia 0.23 0.29 Indonesia Rupiah (100000) 7.24 8.04 Euro 1.09 1.22 British Pound 1.48 -

26. FINANCIAL INSTRUMENTS The Company's activities are exposed to a variety of market risk (including foreign currency risk, inter-est rate risk and equity price risk), credit risk and liquidity risk. The Company's overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise poten-tial effects on the Company's financial performance. 26.1 FINANCIAL RISK MANAGEMENT POLICIES The Company’s policies in respect of the major areas of treasury activity are as follows: (a) Market Risk (i) Foreign Currency Risk The Company is exposed to foreign currency risk on transactions and balances that are denominated in foreign currencies. The currencies giving rise to this risk is primarily Singapore Dollar, Ringgit Ma-laysia, Indonesia Rupiah, Euro and British Pound. Foreign currency risk is monitored closely on an ongoing basis to ensure net exposure is at an acceptable level.

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Foreign Currency Exposure

Singapore Ringgit Indone-sia

Brit-ish

Dollar Malaysia Rupiah Euro Pound

Total

USD USD USD USD USD USD 2015 Financial Assets Amount owing by related compa-nies

3,154

-

4,415

-

-

7,569


35,484

28,000

106

-

-

63,590

38,638 28,000 4,521 - - 71,159

Singapore Ringgit Indonesia British

Dollar Malaysia Rupiah Euro Pound Total USD USD USD USD USD USD 2015 Financial Lia-bilities

Trade paya-bles

(94,108)

(19,678)

(18,826)

-

-

(132,612)


(18,878)

-

-

-

-

(18,878)

Amount owing to related companies

(5,499,095)

(928,893)

(245,059)

(4,717)

(670)

(6,678,434)


(40,012)

-

-

-

-

(40,012)

(5,652,093) (948,571) (263,885) (4,717) (670) (6,869,936)

Currency ex-posure

(5,613,455)

(920,571)

(259,364)

(4,717)

(670)

(6,798,777)

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Foreign Currency Exposure (Cont’d)

Singapore Ringgit Indone-sia

Dollar Malaysia Rupiah Euro Total USD USD USD USD USD 2014 Financial As-sets


5,086,903

-

13,500

-

5,100,403


35,484

28,000

-

-

63,484

Cash and bank balanc-es

-

5

-

-

5

5,122,387 28,005 13,500 - 5,163,892

Singapore Ringgit Indonesia Dollar Malaysia Rupiah Euro Total USD USD USD USD USD 2014 Financial Lia-bilities

Trade paya-bles

(263,525) (83,185) (13,701) - (360,411)

Other paya-bles and ac-cruals

-

(9,316)

-

-

(9,316)


(18,878)

-

-

-

(18,878) Amount owing to related companies

(490,581)

37,005

(114,428)

(11,198)

(579,202) Amount owing to related par-ties

(4,890,214)

-

-

-

(4,890,214)

(5,663,198) (55,496) (128,129) (11,198) (5,858,021)

Currency ex-posure

(540,811)

(27,491)

(114,629)

(11,198)

(694,129)

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Foreign Currency Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign cur-rencies at the end of the reporting period, with all other variables held constant:- 2015 2014 Increase/

(Decrease) Increase/ (Decrease)

USD USD Effects On Profit After Taxation/Equity Singapore Dollar: - strengthened by 10% (561,346) (34,859) - weakened by 10% 561,346 34,859 Ringgit Malaysia: - strengthened by 10% (92,057) (39,445) - weakened by 10% 92,057 39,445 Indonesia Rupiah: - strengthened by 10% (25,936) (8,597) - weakened by 10% 25,936 8,597 Euro: - strengthened by 10% (472) (840) - weakened by 10% 472 840 British Pound: - strengthened by 10% (67) - - weakened by 10% 67 -

(ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Company's policy is to obtain the most favourable interest rates available. The interest rate risk sensitivity analysis on the fixed rate instrument is not disclosed as this financial instrument is measured at amortised cost. Interest Rate Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant:- 2015 2014 Increase/(Decrease) Increase/ (Decrease) USD USD Effects On Profit After Taxation/Equity Increase of 100 basis points (481,250) (235,500) Decrease of 100 basis points 481,250 235,500


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The Company does not have any quoted investments and hence is not exposed to equity price risk. (b) Credit Risk The Company’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from other receivables. The Company manages its exposure to credit risk by the application of credit ap-provals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (in-cluding quoted investments, cash and bank balances and derivatives), the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

(iii) Credit Risk Concentration Profile The Company’s major concentration of credit risk relates to the amount owing by holding company, related companies and related parties which constituted approximately 100% of total receivables as at the end of the reporting period.

(iv) Exposure to Credit Risk As the Company does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period. (c) Liquidity Risk Liquidity risk arises mainly from general funding and business activities. The Company practises pru-dent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities. Maturity Analysis The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed using contractual rates or, if floating, based on the rate at the end of the reporting period:- Weighted Average Contractual Over Effective Carrying Undis-

counted Within 1 - 5 5

Rate Amount Cash Flows 1 Year Years Years % USD USD USD USD USD 2015 Trade payables - 349,729 349,729 349,729 - - Other payables and accruals - 2,500 2,500 2,500 - - Amount owing to holding company - 3,083,536 3,083,536 3,083,536 - - Amount owing to related compa-nies - 26,995,568 26,995,568 26,995,568 - - Amount owing to related parties - 224,734 224,734 224,734 -

-

Amount owing to a director 2,999,999 2,999,999 2,999,999 - - Term loan 4.26 48,125,000 51,995,623 15,610,665 36,384,958 - 81,781,066 85,651,689 49,266,731 36,384,958 -

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed using contractual rates or, if floating, based on the rate at the end of the reporting period (cont’d):-

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Weighted Average Contractual Over Effective Carrying Undiscount-

ed Within 1 - 5 5

Rate Amount Cash Flows 1 Year Years Years % USD USD USD USD USD 2014 Trade payables - 1,577,729 1,577,729 1,577,729 - - Other payables and accruals - 12,975 12,975 12,975 - - Amount owing to holding company - 3,083,536 3,083,536 3,083,536 - - Amount owing to related companies - 6,229,317 6,229,317 6,229,317 - -

Amount owing to related parties - 28,244,937 28,244,937 28,244,937 -

-

Amount owing to a director - 16,867,327 16,867,327 16,867,327 -

-

Term loan 3.56 31,400,000 32,517,840 20,712,000 11,805,840 - 87,415,821 88,533,661 76,727,821 11,805,840 -

26.2 CAPITAL RISK MANAGEMENT The Company manages its capital to ensure that entities within the Company will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Company may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. The Company manages its capital based on debt-to-equity ratio. The Company's strategies were un-changed from the previous financial year. The debt-to-equity ratio is calculated as total external inter-est-bearing borrowings (excluding inter-company and director advances) less cash and cash equiva-lents divided by total equity. The debt-to-equity ratio of the Company at the end of the reporting period was as follows:

2015 2014 USD USD Term loan 48,125,000 31,400,000 Less: Cash and cash equivalents (10,023,260) (2,283)

Total debt 38,101,740 31,397,717

Total equity 15,416,239 6,901,711

Debt-to-equity ratio 2.47 4.55

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26.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS

2015 2014 USD USD Financial Assets Loans and Receivables Financial Assets Other receivables and deposits 108,225 109,995 Amount owing by holding company - 14,602,000 Amount owing by related companies 19,846,775 3,546,051 Amount owing by related parties 3,415,336 3,415,230 Cash and bank balances 10,023,260 2,283

33,393,596 21,675,559

2015 2014 USD USD Financial Liabilities Other Financial Liabilities Trade payables 349,729 1,577,729 Other payables and accruals 2,500 12,975 Amount owing to holding company 3,083,536 3,083,536 Amount owing to related companies 26,995,568 6,229,317 Amount owing to related parties 224,734 28,244,937 Amount owing to a director 2,999,999 16,867,327 Term loan 48,125,000 31,400,000

81,781,066 87,415,821

26.4 FAIR VALUE INFORMATIONS At the end of the reporting period, there were no financial instruments carried at fair values. The fair values of the financial assets and financial liabilities approximated their carrying amounts due to relatively short-term maturity of the financial instruments (maturing within the next 12 months). The fair values are determined by discounting the relevant cash flows at rates equal to the current market interest rate plus appropriate credit rating, where necessary. The fair values are included in level 2 of the fair value hierarchy. The fair values of the non-current portion of term loan equal their carrying amount as the impact of discounting is not material. The fair values are determined on cash flows discounted using the current market interest rate plus appropriate credit rating and are within level 2 of the fair value hierarchy. 27. PRESENTATION CURRENCY The financial statements comply with Malaysian Financial Reporting Standards, Except for MFRS 121 The Effects of Changes in Foreign Exchange Rates which requires the presentation currency for the financial statements presented in Malaysia to be in Ringgit Malaysia. This requirement was for the purpose of harmonisation with local law. As the Labuan Companies Act, 1990 does not require or specify any particular currency for the preparation of financial statements, the requirement for the

F-98

presentation currency to be in Ringgit Malaysia would not serve any regulatory purpose. In this re-spect, the presentation currency of this financial statements is in United States Dollar.

2015 2014

USD USD

LEASE RENTAL INCOME 17.702.500 14.602.000

DIRECT OPERATING EXPENSES

Cost of maintainance and operations (1.011.253) (1.410.066)

Depreciation of plant and equipment (4.413.124) (3.179.029)

12.278.123 10.012.905

OTHER INCOME

Interest income 7 51

12.278.130 10.012.956

UNREALISED FOREIGN EXCHANGE GAIN 511.467 -

REALISED FOREIGN EXCHANGE LOSS (120.806) (3.703)

FINANCE COSTS (1.882.630) (635.688)

ADMINISTRATIVE EXPENSES (2.266.973) (2.540.804)

PROFIT BEFORE TAXATION 8.519.188 6.832.761

2015 2014

USD USD

Auditors' remuneration - 4.461

Bank charges 3.644 411

Claims 2.160 -

Consultant fees - 36.052

Courier and postage 312 1.014

Entertainment expenses 4.011 3.142

Gifts 37 -

Insurance 262.361 965.231

Legal and professional fees 1.126.577 157.540

Licence fees 17.233 34.718

Penalty 3.272 269.323

Printing and stationaries 3.275 6.793

Promotion materials - 746

Rental 16.469 78.310

Secretarial fees 2.307 15.100

Service tax 44.534 46.528

Staff costs 80.255 412.275

Sundry expenses 14.133 2.730

Tax agent fees 360 444

Telephone and fax charges 2.189 3.941

Term loan processing fees 657.805 409.000

Travelling expenses 24.653 78.929

Upkeep of motor vehicles 158 -

Upkeep of office equipments 781 1.150

Upkeep of premises 184 312

Utilities 263 12.654

2.266.973 2.540.804

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VII.

Audited Financial Statements of Hummingbird Energy Inc. for the

financial year ended 31 December 2014 (IFRS)



F-100

1. Auditor’s Report

DIRECTORS Nagendran A/L C. Nadarajah Alexander Arjun De Raj (Appointed on 23.3.2015)

CORPORATE SECRETARY Noblehouse Corporate Services Ltd.

AUDITORS Crowe Horwath (Labuan) LLP

REGISTERED OFFICE Level 1, Lot 7, Block F, Saguking Commercial Building, Jalan Patau-Patau, 87000 Federal Territory of Labuan, Malaysia.

PRINCIPAL BANKERS HSBC Bank Malaysia Berhad, Damansara United Overseas Bank, Singapore

PLACE OF INCORPORATION AND DOMICILE Federal Territory of Labuan, Malaysia

STATEMENT BY DIRECTOR I, Nagendran A/L C. Nadarajah, being one of the Directors of Hummingbird Energy (L) Inc, do hereby state that in the opinion of the Directors, the financial statements set out on pages 5 to 36 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2014 and of its financial perfor-mance and cash flows for the year then ended.

Signed in accordance with a resolution of the directors Dated Nagendran A/L C. Nadarajah

INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF HUMMINGBIRD ENERGY (L) INC (Incorporated in Federal Territory of Labuan, Malaysia) Company No.: LL 07383

Report on the Financial Statements We have audited the financial statements of Hummingbird Energy (L) Inc, which comprise the state-ment of financial position as at 31 December 2014, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 5 to 36.

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Directors' Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia. The directors are also responsible for such internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We con-ducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assess-ment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’s preparation of financial statements that give a true and fair view in order to design audit procedures that are ap-propriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls. An audit also includes evaluating the appropriateness of account-ing policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Compa-ny as of 31 December 2014 and of its financial performance and cash flows for the financial year then ended in accordance with the Malaysian Financial Reporting Standards, International Financial Re-porting Standards and the requirements of Labuan Companies Act, 1990 in Malaysia.

Other Matters This report is made solely to the member of the Company, as a body, in accordance with Section 117(1) of the Labuan Companies Act, 1990 and for no other purpose. We do not assume responsibility to any other person for the content of this report. The financial statements of the Company for the preceding financial year ended 31 December 2013 were audited by another firm of auditors whose report thereon dated 30 September 2014 expressed an unmodified opinion on those financial state-ments. Crowe Horwath (Labuan) LLP Chieng You Lang Firm No: AAL 0056 Approval No: 1781/07/16 (J/PH) Chartered Accountants Chartered Accountant Dated: 24 August 2015 Federal Territory of Labuan

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2. Balance Sheet as of 31 December 2014 2014 2013 Note USD USD

(Restated) ASSET NON-CURRENT ASSET Plant and equipment 6 70,430,893 28,776,606

CURRENT ASSETS Inventories 7 - 3,000,000 Other receivables, deposits and prepayments 8 126,797 11,896 Amount owing by holding company 9 14,602,000 - Amount owing by related companies 10 9,211,328 - Amount owing by related parties 11 3,415,230 11,181,170 Cash and bank balances 2,283 578 27,357,638 14,193,644 TOTAL ASSETS 97,788,531 42,970,250

EQUITY AND LIABILITIES EQUITY Share capital 12 1 1 Retained profits 13 7,087,514 8,274,671 TOTAL EQUITY 7,087,515 8,274,672

NON-CURRENT LIABILITY Term loan 14 11,400,000 -

CURRENT LIABILITIES Trade payables 15 1,577,729 20,364 Other payables and accruals 12,975 12,204 Amount owing to holding company 9 3,083,536 - Amount owing to related companies 10 9,693,513 - Amount owing to related parties 11 28,060,214 30,898,965 Amount owing to a director 16 16,867,327 3,757,493 Term loan 14 20,000,000 - Provision for taxation 5,722 6,552 79,301,016 34,695,578 TOTAL LIABILITIES 90,701,016 34,695,578 TOTAL EQUITY AND LIABILITIES 97,788,531 42,970,250

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3. Income Statement for the period from 1 January to 31 Decem-ber 2014 2014 2013 Note USD USD (Restated) REVENUE 17 14,602,000 2,948,400 COST OF SALES (4,589,095) (139,665) GROSS PROFIT 10,012,905 2,808,735 OTHER INCOME 51 2,587,456 10,012,956 5,396,191 ADMINISTRATIVE EXPENSES (2,358,703) (59,338) FINANCE COSTS (635,688) - PROFIT BEFORE TAXATION 18 7,018,565 5,336,853 INCOME TAX EXPENSE 19 (5,722) (6,713) PROFIT AFTER TAXATION/ TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR

7,012,843

5,330,140



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distributable Distributable

Retained



-

5,330,140

5,330,140

Balance at 31.12.2013/1.1.2014 1 8,274,671 8,274,672

Profit after taxation/Total comprehensive income for the financial year

-

7,012,843

7,012,843

Distributions to owners of the Company: - Dividends paid 20 - (8,200,000) (8,200,000)

Balance at 31.12.2014 1 7,087,514 7,087,515

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5. Cash Flow Statement for the period 1 January to 31 December 2014 Note 2014 2013 USD USD CASH FLOWS (FOR)/FROM OPERATING ACTIV-ITIES

Profit before taxation 8,782,625 5,336,853 Adjustments for:- Gain on disposal of plant and equipment - (2,587,456)Depreciation of plant and equipment 2,782,663 23,814Interest expense 635,688 -Unrealised foreign exchange loss - 27,729

Operating profit before working capital changes 12,200,976 2,800,940Decrease in inventories 3,000,000 -(Increase)/decrease in other receivables, deposits and prepayments

(114,901) 18,312

Increase in trade payables 1,557,365 13,170Increase in other payables 771 4,020Increase in amount owing by a holding company (14,602,000) -Increase in amount owing by related companies (2,991,600) -Increase in amount owing to related companies 3,001,238 -Increase in amount owing by related parties (8,400) -(Decrease)/increase in amount owing to related parties

(13,728,833) 30,761,318

CASH (FOR)/FROM OPERATIONS (11,685,284) 33,597,760Interest paid (635,688) -Income tax paid (6,522) (6,713)

NET CASH (FOR)/FROM OPERATING ACTIVI-TIES

(12,327,624) 33,591,047

CASH FLOWS FOR INVESTING ACTIVITIES Proceed of disposal of plant and equipment - 3,000,000Purchase of property, plant and equipment 6 (33,833,316) (28,776,606)Advances to related companies (6,685,615) -Repayment from/(advances to) related parties 7,774,340 (7,830,198)

NET CASH FOR INVESTING ACTIVITIES (32,744,591) (33,606,804)

CASH FLOWS FROM/(FOR) FINANCING ACTIV-ITIES

Drawdown of term loan 40,000,000 -Repayment of term loans (8,600,000) -Advances from holding company 83,536 -Advances from/(repayment to) related companies 5,790,468 (110,540)(Repayment to)/advances from related parties (109,918) -Advances from a director 7,909,834 47,123

NET CASH FROM/(FOR) FINANCING ACTIVI-TIES

45,073,920 (63,417)

NET MOVEMENT IN CASH AND BANK BALANC-ES

1,705 (79,174)

CASH AND BANK BALANCES AT BEGINNING OF THE FINANCIAL YEAR

578 79,752

CASH AND BANK BALANCES AT END OF THE FINANCIAL YEAR 2,283 578

F-106

6. Notes





The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated



3. HOLDING COMPANY

The holding company is Gryphon Energy Corporate Pte Ltd, a company incorporated in The Republic of Singapore.


The financial statements of the Company are prepared under the historical cost convention and modified to include other basis of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Labuan Companies Act, 1990 in Malaysia.

4.1 During the current financial year, the Company has adopted the following new ac-counting standards and interpretations (including the consequential amendments, if any):-

MFRSs and IC Interpretations (Including The Consequential Amendments)

Amendments to MFRS 10, MFRS 12 and MFRS 127 (2011): Investment Entities

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-financial Assets

Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting

IC Interpretation 21 Levies

The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Company’s fi-nancial statements.

4.2 The Company has not applied in advance the following accounting standards and in-terpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

F-107


Effective Date



Amendments to MFRS 10 and MFRS 128 (2011): Sale or Contribution

of Assets between an Investor and its Associate or Joint Venture 1 January 2016

Amendments to MFRS 11: Accounting for Acquisitions of Interests in

Joint Operations 1 January 2016

Amendments to MFRS 10, MFRS 12 and MFRS 128 (2011): Invest

ment Entities – Applying the Consolidation Exception 1 January 2016

Amendments to MFRS 101: Presentation of Financial Statements –

Disclosure Initiative 1 January 2016

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable

Methods of Depreciation and Amortisation 1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants 1 January 2016

Amendments to MFRS 119: Defined Benefit Plans – Employee Contri

butions 1 July 2014

4.2 The Company has not applied in advance the following accounting standards and in-

terpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year (Cont’d):-


Effective Date

Amendments to MFRS 127 (2011): Equity Method in Separate Financial

Statements 1 January 2016

Annual Improvements to MFRSs 2010 – 2012 Cycle 1 July 2014

Annual Improvements to MFRSs 2011 – 2013 Cycle 1 July 2014

Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

The above accounting standards and interpretations (including the consequential amendments) are not relevant to the Company’s operations.


5.1 Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated by the director and management and are based on historical experience and other factors, including expectations of fu-ture events that are believed to be reasonable under the circumstances. The esti-mates and judgements that affect the application of the Company's accounting poli-cies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed be-low:-

(a) Depreciation of Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions.

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The Company anticipates that the residual values of its plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

(c) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a fi-nancial asset is impaired. Management specifically reviews its loan and re-ceivables financial assets and analyses historical bad debts, customer con-centrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the ade-quacy of the allowance for impairment losses. Where there is objective evi-dence of impairment, the amount and timing of future cash flows are estimat-ed based on historical loss experience for assets with similar credit risk char-acteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(d) Fair Value Estimates for Certain Financial Assets and Liabilities

The Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While signifi-cant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

5.2 Functional and Foreign Currency

(e) Functional and Presentation Currency


The financial statements of the Company are presented in United States Dollar (USD), which is the functional and presentation currency.

(f) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

5.3 Financial Instruments

Financial instruments are recognised in the statement of financial position when the Company has become a party to the contractual provisions of the instrument.

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Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as liability, are reported as expenses or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Company has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial in-strument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item.


On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and re-ceivables financial assets, or available-for-sale financial assets, as appropri-ate. (i) Financial Assets at Fair Value through Profit or Loss





Trade receivables and other receivables that have fixed or determi-nable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables fi-nancial assets are measured at amortised cost using the effective in-terest method, less any impairment loss. Interest income is recog-nised by applying the effective interest rate, except for short-term re-ceivables when the recognition of interest would be immaterial. Loans and receivables financial assets are classified as current as-sets except for those having settlement dates later than 12 months af-ter the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets As at the end of reporting period, there were no financial assets clas-sified under this category.

(b) Financial Liabilities All financial liabilities are initially measured at fair value plus directly attributa-ble transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

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Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Deriva-tives are also classified as held for trading unless they are designated as hedges.

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.


Instruments classified as equity are measured at cost and are not remeasured subsequently. Incremental costs directly attributable to the issue of new ordi-nary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the con-tractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration re-ceived (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the ob-ligation specified in the contract is discharged or cancelled or expires. On de-recognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities as-sumed, is recognised in profit or loss.

5.4 Plant and Equipment Plant and equipment are stated at cost less accumulated depreciation and impairment

losses, if any. Depreciation is charged to profit or loss on the straight-line method to write off the

depreciable amount of these assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired

from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

% Offshore drilling and production equipment 6.67

Production operator and fuel gas equipment 6.67

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the

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future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Company is obligated to incur when the asset is acquired, if applicable.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in statement of comprehensive income.

5.5 Impairment


All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effec-tive interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the im-pairment was recognised, the previously recognised impairment loss is re-versed through profit or loss to the extent that the carrying amount of the fi-nancial assets at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.


The carrying values of assets, other than those to which MFRS 136 - Impair-ment of Assets does not apply, are reviewed at the end of each reporting pe-riod for impairment when there is an indication that the assets might be im-paired. Impairment is measured by comparing the carrying values of the as-sets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow. An impairment loss is recognised in profit or loss immediately. When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recog-nised. The reversal is recognised in profit or loss immediately.

5.6 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

5.7 Income Tax

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Income tax on the profit for the financial year comprises current income tax. Current income tax liabilities is the expected amount of the income taxes payable in respect of the taxable profit for the financial year and is measured using the rates that have been enacted at the end of the reporting period.

5.8 Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less.

5.9 Employee Benefits

Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary bene-fits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Company.

5.10 Related Parties


(a) A person or a close member of that person’s family is related to a reporting entity if that person:-

(v) has control or joint control over the reporting entity; (vi) has significant influence over the reporting entity; or (vii) is a member of the key management personnel of the reporting entity or of a

parent of the reporting entity.


(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of (iii) both entities are joint ventures of the same third party. (iv) one entity is a joint venture of a third entity and the other entity is an

associate of the third entity. (v) the entity is a post-employment benefit plan for the benefit of employees of

either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) the entity is controlled or jointly controlled by a person identified in (a) above. (vii) a person identified in (a)(i) above has significant influence over the entity or is

a member of the key management personnel of the entity (or of a parent of the entity).

Close members of the family of a person are those family members who may be

expected to influence, or be influenced by, that person in their dealings with the entity.

5.11 Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a

liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the

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asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level

1 to level 3 as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are

observable for the asset or liability, either directly or indirectly; and Level 3: Inputs are unobservable inputs for the asset or liability. The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

5.12 Revenue Recognition




Net Book Value

2014 USD USD USD Offshore drilling and production equipment 73,609,922 (3,179,029) 70,430,893


Net Book Value

2013 USD USD USD

Offshore drilling and production equipment under construction 28,776,606 - 28,776,606

At 1.1.2014 Reclassification

Addition

Depreciation Charge

At 31.12.2014


Offshore drilling and production equipment - 28,776,606 44,833,316 (3,179,029) 70,430,893

Offshore drilling and pro-duction equipment

under construction 28,776,606 (28,776,606) - - -

28,776,606 - 44,833,316 (3,179,029) 70,430,893

At 1.1.2013 Addition Disposal

Depreciation Charge

At 31.12.2013


Offshore drilling and pro-duction equipment under construction - 28,776,606 - - 28,776,606

Production separator and fuel gas equipment 436,358 - (412,544) (23,814) -

436,358 28,776,606 (412,544) (23,814) 28,776,606

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7. INVENTORIES

Inventories of the Company comprise the cost of drilling rig under development.

8. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

2014 2013 USD USD

Other receivables 76,315 - Deposits 33,680 - Prepayments 16,802 11,896 126,797 11,896


2014 2013 USD USD

Amount owing by:- Trade balances 14,602,000 -

Amount owing to:- Non-trade balances: - United Stated Dollar (3,064,658) - - Singapore Dollar (18,878) -

(3,083,536) -

(c) The trade balance is subjected to the normal trade credit term is 30 days. The amount

owing is to be settled in cash.

(d) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

10. AMOUNT OWING BY/(TO) RELATED COMPANIES

2014 2013 USD USD

Amount owing by:- Trade balances 2,991,600 -

Non-trade balances: - United Stated Dollar 1,299,497 - - Singapore Dollar 5,162,924 - - Ringgit Malaysia (256,193) - - Indonesia Rupiah 13,500 -

6,219,728 -

9,211,328 -

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Amount owing to:- Trade balances (3,001,238) -

Non-trade balances: - United Stated Dollar (5,870,825) - - Singapore Dollar (490,581) - - Ringgit Malaysia (205,243) - - Indonesia Rupiah (114,428) - - Euro (11,198) -

(6,692,275) -

(9,693,513) -

(e) The trade balance is subjected to the normal trade credit term is 30 days (2013 - 30

days). The amount owing is to be settled in cash.

(f) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

11. AMOUNT OWING BY/(TO) RELATED PARTIES

2014 2013 Amount owing by:- USD USD Trade balances 3,000,000 2,991,600

Non-trade balances: - United Stated Dollar 351,746 2,473,260 - Singapore Dollar 35,484 5,197,089 - Ringgit Malaysia 28,000 505,721 - Indonesia Rupiah - 13,500

415,230 8,189,570

3,415,230 11,181,170

Amount owing to:- Trade balances: - United Stated Dollar (23,170,000) (25,898,833) - Singapore Dollar (4,890,214) (4,890,214) Non-trade balances - (109,918)

(28,060,214) (30,898,965)

(i) The Company’s normal trade limit credit term is 30 days (2013 - 30 days). The

amounts owing are to be settled in cash.

(j) The non-trade balances are unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

(k) Related parties refer to companies in which a close member of the family of a director

has substantial financial interests. The amounts owing are to be settled in cash. (l) In assessing the recoverability of these debts, the directors have given due considera-

tion to all pertinent factors relating to the ability of the debtors to settle the debts and are of the opinion that these amounts are fully recoverable. Accordingly, no allowance for impairment losses has been made in respect of these amounts.

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12. SHARE CAPITAL

2014 2013 2014 2013 Number Of Shares USD USD Ordinary shares

Issued And Fully Paid-Up 1 1 1 1

13. RETAINED PROFITS As at 31 December 2014, the Company has, subject to approval by the tax authority, tax exempt

income amounting of USD 7,087,514, which is available to be distributed to the shareholder as dividend.

14. TERM LOAN

2014 2013 USD USD Current portion: - repayable within one year 20,000,000 - Non-current portion: - repayable between one to two years 11,400,000 -

31,400,000 -

Details of the repayment terms are as follows:- Number of Quarterly Date Of Quarterly Instalment Commencement Amount Outstanding Instalments Amount of Repayment 2014 2013 USD USD USD Term loan 8 5,000,000 1 June 2014 31,400,000 -

15. TRADE PAYABLES The normal trade credit term granted to the Company is 30 to 60 days (2013 - 30 to 60 days).


The amount owing is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

17. REVENUE




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Audit fee: 4,461 6,410 Depreciation of plant and equipment 3,179,029 23,814 Interest expense on term loan 635,688 - Staff costs - defined contribution plans 25,314 - - salaries and other benefits 265,833 - Realised loss on foreign exchange 3,703 323 Unrealised loss on foreign exchange - 27,729 Interest income (51) - Gain on disposal of plant and equipment - (2,587,456)



20. DIVIDENDS

2014 2013 USD USD An interim dividend paid 8,200,000 -


(d) Identities of related parties





(b) In addition to the information detailed elsewhere in the financial statements, the Com-pany carried out the following transactions with its related parties during the financial year:-

2014 2013 USD USD Rental income 14,602,000 2,948,400 Sales to a related party 3,000,000 - Purchase from a related party 40,269,000 28,736,577 Purchases of plant and equipment - 3,001,238

22. CAPITAL COMMITMENT

2014 2013 USD USD Approved and Contracted For Development of drilling rig - 29,221,813

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23. FOREIGN EXCHANGE RATES The applicable closing foreign exchange rate used (expressed on the basis of one unit of foreign

currency to United States Dollar equivalent) for the translation of foreign currency balances at the end of the reporting period are as follows:-

2014 2013 USD USD Singapore dollar 0.76 0.79 Ringgit Malaysia 0.29 0.30 Indonesia Rupiah (100000) 8.04 8.20 Euro 1.22 1.37

24. FINANCIAL INSTRUMENTS

The Company's activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Company's overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential effects on the Company's financial performance. 24.1 Financial Risk Management Policies

The Company’s policies in respect of the major areas of treasury activity are as fol-lows:

(a) Market Risk (i) Foreign Currency Risk

The Company is exposed to foreign currency risk on transactions and balances that are denominated in foreign currencies. The currencies giving rise to this risk is primarily Singapore Dollar, Ringgit Malaysia, Indonesia Rupiah and Euro. Foreign currency risk is monitored close-ly on an ongoing basis to ensure net exposure is at an acceptable level.

Foreign currency explosure

Singapore Ringgit Indonesia Dollar Malaysia Rupiah Euro Total USD USD USD USD USD 2014 Financial Assets Amount owing by related companies

5,162,924

(256,193)

13,500

-

4,920,231 Amount owing by related parties

35,484

28,000

-

-

63,484 Cash and bank balances

-

5

-

-

5

5,198,408 (228,188) 13,500 - 4,983,720

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Foreign currency risk sensitivity analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:-

Singapore Ringgit Indonesia Dollar Malaysia Rupiah Euro Total USD USD USD USD USD 2014 Financial Liabilities

Trade payables (263,525) (83,185) (13,701) - (360,411) Other payables and accruals

-

(9,316)

-

-

(9,316)


(18,878)

-

-

-

(18,878) Amount owing to related companies

(490,581)

(205,243)

(114,428)

(11,198)

(821,450) Amount owing to related parties

(4,890,214)

-

-

-

(4,890,214)

(5,663,198) (297,744) (128,129) (11,198) (6,100,269)

Currency exposure

(464,790)

(525,932)

(114,629)

(11,198)

(1,116,549)

Singapore Ringgit Indonesia Dollar Malaysia Rupiah Total USD USD USD USD 2013 Financial Assets Amount owing by related parties

5,197,089

505,721

13,500

5,716,310

Cash and bank balances

-

101

-

101

5,197,089 505,822 13,500 5,716,411

Financial Liabilities Trade payables - (20,364) - (20,364) Other payables and accruals

-

(4,839)

-

(4,839)


(4,890,214)

-

-

(4,890,214)

(4,890,214) (25,193) - (4,915,417)

Net exposure 306,875 480,629 13,500 800,994

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2014 2013 Increase/

(Decrease) Increase/

(Decrease) USD USD

Effects On Profit After Taxation/Equity Singapore Dollar: - strengthened by 10% (34,859) 23,016 - weakened by 10% 34,859 (23,016) Ringgit Malaysia: - strengthened by 10% (39,445) 36,047 - weakened by 10% 39,445 (36,047) Indonesia Rupiah: - strengthened by 10% (8,597) 1,012 - weakened by 10% 8,597 (1,012) Euro: - strengthened by 10% (840) - - weakened by 10% 840 -


Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market inter-est rates. The Company's exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Company's policy is to obtain the most favourable interest rates available. Information relating to the Company's exposure to the interest rate risk of the financial liabilities is disclosed in Note 24.1(c) to the finan-cial statements. The interest rate risk sensitivity analysis on the fixed rate instrument is not disclosed as this financial instrument is measured at amortised cost.

Sensitivity analysis for interest rate risk The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting peri-od, with all other variables held constant:-

2014 2013 Increase/(Decrease) Increase/(Decrease) USD USD

Effects On Profit After Taxation/Equity Increase of 100 basis points (bp) (235,500) - Decrease of 100 bp 235,500 -


The Company does not have any quoted investments and hence is not exposed to equity price risk.

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(b) Credit Risk

The Company’s exposure to credit risk, or the risk of counterparties default-ing, arises mainly from other receivables. The Company manages its expo-sure to credit risk by the application of credit approvals, credit limits and moni-toring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances and derivatives), the Company minimises credit risk by dealing exclusively with high credit rating counterpar-ties. Credit risk concentration profile The Company’s major concentration of credit risk relates to the amount owing by holding company, related companies and related parties which constituted approximately 100% of total receivables as at the end of the reporting period.

Exposure to credit risk As the Company does not hold any collateral, the maximum exposure to cred-it risk is represented by the carrying amount of the financial assets as at the end of the reporting period.

(c) Liquidity Risks

Liquidity risk arises mainly from general funding and business activities. The Company practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facili-ties. The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed using contractual rates or, if floating, based on the rate at the end of the reporting period:-

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Weighted Average Contractual Over Effective Carrying Undiscounted Within 1 - 5 5 Rate Amount Cash Flows 1 Year Years Years % USD USD USD USD USD

2014 Trade payables - 1,577,729 1,577,729 1,577,729 - - Other payables and accruals - 12,975 12,975 12,975 - -

Amount owing to holding company - 3,083,536 3,083,536 3,083,536 - -

Amount owing to related com-panies - 9,693,513 9,693,513 9,693,513 - -

Amount owing to related par-ties - 28,060,214 28,060,214 28,060,214 -

- Amount owing to a director - 16,867,327 16,867,327 16,867,327 -

-

Term loan 3.56 31,400,000 32,517,840 20,712,000 11,805,840 - 90,695,294 91,813,134 80,007,294 11,805,840 -

Weighted Average Contractual Over Effective Carrying Undiscounted Within 1 - 5 5 Rate Amount Cash Flows 1 Year Years Years % USD USD USD USD USD

2013 Trade payables - 20,364 20,364 20,364 - - Other payables and accruals - 12,204 12,204 12,204 - -

Amount owing to related par-ties - 30,898,965 30,898,965 30,898,965 -

- Amount owing to a director - 3,757,493 3,757,493 3,757,493 -

-

34,689,026 34,689,026 34,689,026 - -

24.2 Capital Risk Management

The Company manages its capital to ensure that entities within the Company will be able to maintain an optimal capital structure so as to support its businesses and max-imise shareholders value. To achieve this objective, the Company may make adjust-ments to the capital structure in view of changes in economic conditions, such as ad-justing the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Company manages its capital based on debt-to-equity ratio. The Company's strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as total external interest-bearing borrowings (excluding inter-company and director advances) less cash and cash equivalents divided by total equity.

The debt-to-equity ratio of the Company at the end of the reporting period was as follows:

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2014 2013 USD USD

Term loan 31,400,000 - Less: Cash and cash equivalents (2,283) (578) Total debt 31,397,717 (578)

Total equity 7,087,515 8,274,672

Debt-to-equity ratio 4.43 -

24.3 Classification of Financial Instruments

2014 2013 USD USD Financial Assets Loans and receivables financial assets Other receivables and deposits 109,995 - Amount owing by holding company 14,602,000 - Amount owing by related companies 9,211,328 - Amount owing by related parties 3,415,230 11,181,170 Cash and bank balances 2,283 578 27,340,836 11,181,748 2014 2013 USD USD Financial Liabilities Other financial liabilities Trade payables 1,577,729 20,264 Other payables and accruals 12,975 12,204 Amount owing to holding company 3,083,536 - Amount owing to related companies 9,693,513 - Amount owing to related parties 28,060,214 30,898,965 Amount owing to a director 16,867,327 3,757,493 Term loan 31,400,000 - 90,695,294 34,688,926

. 24.4 Fair Values Information

At the end of the reporting period, there were no financial instruments carried at fair values. The fair values of the financial assets and financial liabilities approximated their carrying amounts due to relatively short-term maturity of the financial instruments (maturing within the next 12 months). The fair values are determined by discounting the relevant cash flows at rates equal to the current market interest rate plus appropriate credit rating, where necessary. The fair values are included in level 2 of the fair value hierarchy. The fair values of the non-current portion of term loan equal their carrying amount as the impact of discounting is not material. The fair values are determined on cash flows

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discounted using the current market interest rate plus appropriate credit rating and are within level 2 of the fair value hierarchy.

25. COMPARATIVE FIGURES The following figures have been reclassified to conform with the presentation of the current

financial year:-

As As Previously Restated Reported USD USD STATEMENT OF FINANCIAL POSITION (EXTRACT):-

Current Assets Amount owing by related parties 11,181,170 10,723,980 Current Liabilities Trade payables 20,364 27,817,877 Other payables and accruals 12,204 2,500 Amount owing to related parties 3,757,493 2,653,966 STATEMENT OF COMPREHENSIVE INCOME (EXTRACT):-

Other income 2,587,456 2,587,133 Administrative expenses (59,338) (59,015) STATEMENT OF CASH FLOWS (EXTRACT):-

CASH FLOWS (FOR)/FROM OPERATING ACTIVITIES (EXTRACT):

Increase in trade payables 13,170 27,810,683 Increase in other payables 4,020 (5,684) Increase in amount owing by related parties - (7,400,898) (Decrease)/Increase in amount owing to related parties 30,761,318 - CASH (FOR)/FROM OPERATIONS 33,597,760 23,223,353 Income tax paid (6,713) (6,552) NET CASH (FOR)/FROM OPERATING ACTIVITIES 33,591,047 23,216,801 CASH FLOWS FOR INVESTING ACTIVITIES (EXTRACT): Repayment from/(Advances to) related parties (7,830,198) - NET CASH FOR INVESTING ACTIVITIES (33,606,804) (25,776,606) CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES (EXTRACT):

Advances from/(Repayment to) related companies (110,540) 2,433,508 NET CASH FROM (FOR) FINANCING ACTIVITIES (63,417) 2,480,631

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2014 2013

USD USD

LEASE RENTAL INCOME 14,602,000 2,948,400

DIRECT OPERATING EXPENSES

Cost of maintenance and operations (1,410,066) (115,851)

Depreciation of plant and equipment (3,179,029) (23,814)

OPERATING PROFIT 10,012,905 2,808,735

OTHER INCOME

Interest income 51 -

Gain on disposal on plant and equipment - 2,587,456

10,012,956 5,396,191

FINANCE COSTS (635,688) -

ADMINISTRATIVE EXPENSES

Auditors' remuneration 4,461 6,410

Bank charges 411 771

Consultant fees 36,052 -

Courier and postage 247 -

Entertainment expenses 1,064 -

Insurance 965,231 -

Legal and professional fees 157,540 2,305

Licence fees 34,718 19,339

Penalty 269,323 -

Printing and stationaries 4,889 273

Promotion materials 746 -

Realised foreign exchange loss 3,703 323

Rental 60,944 -

Secretarial fees 15,100 -

Service tax 46,528 -

Staff costs 291,147 -

Sundry expenses 2,382 -

Tax agent fees 444 -

Telephone and fax charges 95 -

Term loan processing fees 409,000 -

Travelling expenses 41,966 2,188

Unrealised foreign exchange loss - 27,729

Upkeep of office equipments 92 -

Water and electricity charges 12,620 -

(2,358,703) (59,338)

PROFIT BEFORE TAXATION 7,018,565 5,336,853

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VIII.

Unaudited Interim Financial Information of Gryphon Energy (SEA)

SDN BHD for the six-months-period ended 30 June 2017 (IFRS)

- The IFRS applied in the following financial information


F-127

1. Abbreviated Balance Sheet as of 30 June 2017

STATEMENT OF FINANCIAL POSITION FOR FOR THE PERIOD AS AT

30 JUNE


Account Account

2017 2016

kEUR RM

Fixed Asset - -

Current Assets 9.156 2

Current Liabilities 8.719 4.356


Retained Earnings/ (Losses) 224 (4.356)

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2. Abbreviated Income Statement for the period from 1 January 2017 until 30 June 2017

Company No: 1167327 - X



STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDING 30

JUNE


Account Account

2017 2016

kEUR RM

Revenue 5.488 -

Cost of sales

(4.554) -

Gross profit 934 -

Other income - -


(666) (4.356)

Finance costs - -


Tax expense - -


Difference from Currency translation

(8)

Total comprehensive income

for the financial year 261

F-129

3. Selected Notes to the Interim Financial Statement as of 30 June 2017

1. GENERAL INFORMATION The Company is a private company limited by shares and is incorporated under the Compa-nies Act 1965 in Malaysia . The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:- Registered office: Suite 2 Penthouse Lobby A, Wisma Leopad No.9 Jalan Tun Sam-banthan 50470 Kuala Lumpur. Principal place of business : C4-3-10 , Solaris Dutamas, No.1, Jalan Dutamas 1, 50480 Kuala Lumpur. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 June 2017. 2. PRINCIPAL ACTIVITIES The Company is principally engaged in the business of licensing, research and development relating to oil and gas industry, marketing and leasing bareboats of the Mobile Offshore Pro-duction Storage Unit ("MOPSU) and project management of the MOPSU, engineering and gas development industry. There have been no significant change in the nature of these ac-tivities during the financial period. 3. HOLDING COMPANY The holding company is Gryphon Energy Corporation Pte. Ltd., a company incorporated in The Republic of Singapore . 4. BASIS OF PREPARATION These are the Company's first set of financial statements since its date of incorporation . The financial statements of the Company are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies , and in compliance with Malaysian Financial Reporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") and the requirements of the Companies Act 1965 in Malaysia. 4. BASIS OF PREPARATION (CONT'D) 4.1 During the current financial period, the Company has adopted all the MFRSs that become effective on or after the date of incorporation . 4.2 The Company has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board ("MASB") but are not yet effective for the cur-rent financial period :-

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The adoption of the above accounting standards and/or interpretations (including the conse-quential amendments, if any) is expected to have no material impact on the financial state-ments of the Company upon their initial application.

F-131

IX.

Audited Financial Statements of Gryphon Energy (SEA) SDN BHD

for the financial year started from 26 November 2015 ended 31 De-

cember 2016 (IFRS)



F-132

1. Auditor’s Report

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Gryphon Energy (SEA) Sdn. Bhd., which comprise the statement of financial position as at 31 December 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the financial period then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 11 to 31. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2016, and of its financial performance and its cash flows for the financial period then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information Other than the Financial Statements and Auditors’ Report Thereon The directors of the Company are responsible for the other information. The other information comprises the Directors’ Report, but does not include the financial statements of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Company does not cover the Directors’ Report and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Company, our responsibility is to read the Directors’ Report and, in doing so, consider whether the Directors’ Report is materially inconsistent with the financial statements of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the Directors’ Report, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Directors for the Financial Statements The directors of the Company are responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Company that are free from material misstatement, whether due to fraud or error.

F-133

In preparing the financial statements of the Company, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:- • Identify and assess the risks of material misstatement of the financial statements of the

Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the

Company, including the disclosures, and whether the financial statements of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

F-134

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act 1965 in Malaysia (“Act”), we also report that in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath Lee Kok Wai Firm No: AF 1018 Approval No: 02760/06/2018 J Chartered Accountants Chartered Accountant Dated: 28 June 2017 Kuala Lumpur

F-135

2. Balance Sheet as of 31 December 2016 Note RM

ASSET

CURRENT ASSETS

Prepayments

93,860


6 827,418

Bank balances

4,240 TOTAL ASSET 925,518


EQUITY Share Capital 7 1,000,000 Accumulated loss (174,545) TOTAL EQUITY 825,455

CURRENT LIABILITIES Other payables and accruals 8 93,656 Amount owing to a director 9 6,407 TOTAL LIABILITY 100,063 TOTAL EQUITY AND LIABILITY

925,518

F-136

3. Income Statement for the period from 26 November 2015 to 31 December 2016 Note RM


10

(174,545)

LOSS/TOTAL COMPREHENSIVE EXPENSES FOR THE FINANCIAL PERIOD

ATTRIBUTABLE TO:- Owners of the Company

(174,545)

F-137

4. Statement of Changes in Equity for the period 26 November 2015 to 31 December 2016

Share Capital

Distributable Accumulated

Loss Total

RM RM RM

At 26.11.2015 (date of incorporation) 2 - 2

Issuance of shares 999,998 - 999,998

Loss/Total comprehensive expenses for the financial period - (174,545) (174,545)

Balance at 31.12.2016 1,000,000 (174,545) 825,455

F-138

5. Cash Flow Statement for the period 26 November 2015 to 31 December 2016 RM CASH FLOWS FOR OPERATING ACTIVITIES Loss for the financial period (174,545) Working capital changes:- Increase in prepayments (93,860) Increase in other payables and accruals 93,656 NET CASH FOR OPERATING ACTIVITIES (174,749) NET CASH FOR INVESTING ACTIVITY Advances to a related party (827,418) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares 1,000,000 Advances from a director 6,407 NET CASH FROM FINANCING ACTIVITIES 1,006,407 NET MOVEMENT IN CASH AND BANK BALANCES/CASH AND BANK BALANCES AT END OF THE FINANCIAL PERIOD

4,240

F-139

6. Notes


The Company is a private company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:- Registered office: Suite 2 Penthouse Lobby A, Wisma Leopad No.9 Jalan Tun Sambanthan 50470 Kuala Lumpur.

Principal place of business : C4-3-10, Solaris Dutamas, No.1, Jalan Dutamas 1, 50480 Kuala Lumpur. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated


The Company is principally engaged in the business of licensing, research and development relating to oil and gas industry, marketing and leasing bareboats of the Mobile Offshore Production Storage Unit (“MOPSU) and project management of the MOPSU, engineering and gas development industry. There have been no significant change in the nature of these activities during the financial period.

3. HOLDING COMPANY

The holding company is Gryphon Energy Corporation Pte. Ltd., a company incorporated in The Republic of Singapore.

4. BASIS OF PREPARATION These are the Company’s first set of financial statements since its date of incorporation. The fi-nancial statements of the Company are prepared under the historical cost convention and mod-ified to include other bases of valuation as disclosed in other sections under significant ac-counting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act 1965 in Malaysia.

4.1 During the current financial period, the Company has adopted all the MFRSs that be-

come effective on or after the date of incorporation.

4.2 The Company has not applied in advance the following accounting standards and in-terpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial period:-

F-140


Effective Date




IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018

Amendments to MFRS 2: Classification and Measurement of Share- based Payment Transactions 1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018

Amendments to MFRS 10 and MFRS 128 (2011): Sale or Contribu tion of Assets between an Investor and its Associate or Joint Venture



Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018


Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses

1 January 2017



Amendments to MFRS 12: Clarification of the Scope of Standard

1 January 2017


Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time Adopters

Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value

1 January 2018

The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the fi-nancial statements of the Company upon their initial application.


5.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and management

and are based on historical experience and other factors, including expectations of

future events that are believed to be reasonable under the circumstances. The

estimates and judgements that affect the application of the Company’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to

the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(a) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Company recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determination is made.

F-141

(b) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(c) Fair Value Estimates for Certain Financial Assets and Liabilities

The Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

5.2 FUNCTIONAL AND PRESENTATION CURRENCY


The financial statements of the Company are presented in United States Dollar (USD), which is the functional and presentation currency.

5.3 FINANCIAL INSTRUMENTS

Financial instruments are recognised in the statement of financial position when the Company has become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Company has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item.


On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and re-ceivables financial assets, or available-for-sale financial assets, as appropri-ate.

(i) Financial Assets at Fair Value through Profit or Loss

F-142





Trade receivables and other receivables that have fixed or determi-nable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables fi-nancial assets are measured at amortised cost using the effective in-terest method, less any impairment loss. Interest income is recog-nised by applying the effective interest rate, except for short-term re-ceivables when the recognition of interest would be immaterial. Loans and receivables financial assets are classified as current as-sets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets


(b) Financial Liabilities

(i) Financial Liabilities at Fair Value through Profit or Loss Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or signifi-cantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading un-less they are designated as hedges.

(ii) Other Financial Liabilities

Other financial liabilities are initially measured at fair value plus direct-ly attributable transaction costs and subsequently measured at amor-tised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly dis-counts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.


Equity instruments classified as equity are measured at cost and are not re-measured subsequently. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from pro-ceeds.

F-143

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

5.4 IMPAIRMENT


All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.


The carrying values of assets, other than those to which MFRS 136 - Impair-ment of Assets does not apply, are reviewed at the end of each reporting pe-riod for impairment when there is an indication that the assets might be im-paired. Impairment is measured by comparing the carrying values of the as-sets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value in use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recov-erable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately.

F-144

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recog-nised. The reversal is recognised in profit or loss immediately.

5.5 INCOME TAX

(a) Current Tax Current tax assets and liabilities are expected amount of income tax recover-able or payable to the taxation authorities. Current taxes are measured using tax rates and tax laws that have been en-acted or substantively enacted at the end of the reporting period and are rec-ognised in profit or loss except to the extent that the tax relates to items rec-ognised outside profit or loss (either in other comprehensive income or direct-ly in equity).

(b) Deferred Tax

Deferred tax are recognised using the liability method for all temporary differ-ences other than those that arise from the initial recongnition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets and liabilities are measured at the tax rates that are ex-pected to apply in the period when the asset is realised or the liability is set-tled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary difference,

unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each re-porting period and reduced to the extent that it is no longer probable that the related tax benefits will be realised.

Current and deferred tax items are recognised in correlation to the underlying transac-tions either in profit or loss, other comprehensive income or directly in equity.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis) and the same taxation authority.

5.6 RELATED PARTIES


(a) A person or a close member of that person’s family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or

of a parent of the reporting entity.

F-145

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the reporting entity.


(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party. (iv) one entity is a joint venture of a third entity and the other entity is an

associate of the third entity. (v) the entity is a post-employment benefit plan for the benefit of employees

of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) the entity is controlled or jointly controlled by a person identified in (a) above.

(vii) a person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.


Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets

or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and



F-146

6. AMOUNT OWING BY RELATED COMPANIES

The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

7. SHARE CAPITAL

Number Of

Shares RM

Authorised Ordinary Shares of RM1 At 26.11.2015 (date of incorporation)

400,000

400,000

Creation of shares 600,000 600,000

At 31.12.2016 1,000,000 1,000,000

Issued And Fully Paid-Up Ordinary Shares of RM1 At 26.11.2015 (date of incorporation)

2

2

Issuance of new ordinary shares for cash 999,998 999,998

At 31.12.2016 1,000,000 1,000,000

(a) The Company was incorporated with an authorised share capital of RM400,000 comprising

400,000 ordinary shares of RM1 each, of which 2 ordinary shares of RM1 each were subscribed for on the date of incorporation.

(b) The Company increased its issued and paid-up share capital from RM2 to RM1,000,000 by allotment of new ordinary shares of RM1 each at par. The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the Company.

8. OTHER PAYABLES AND ACCRUALS

RM Other payables 83,856 Accruals 9,800 93,656


The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

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10. LOSS FOR THE FINANCIAL PERIOD

RM

Loss for the financial period is arrived after charging:-

Audit fee 9,800 Rental of equipment 1,600 Unrealised loss on foreign exchange 152,371


The Company is not subject to tax as there is no taxable income for the reporting period.

A reconciliation of income tax expense applicable to the loss for the financial period at the statutory tax rate to income tax expense at the effective tax rate of the Company is as follows:-

RM

Loss for the financial period (174,545)

Tax at the statutory tax rate of 24% (41,891)

Tax effects of:- Non-deductible expenses 26,187 Deferred tax assets not recognised during the financial period 15,704

Income tax expense for the financial period -

Income tax is calculated at the Malaysian statutory tax rate of 24% of the estimated assessable loss for the financial period.

Subject to agreement with the tax authorities, at the end of the reporting period, the Company has unutilised tax losses of RM65,434 available to be carried forward for offset against future taxable business income. Deferred tax asset has not been recognised in respect of this item.

12. RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

Parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control.

In addition to the information detailed elsewhere in the financial statements, the Company has related party relationships with its directors and entities within the same group of companies.

(b) Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Company also carried out the following transactions with the related parties during the financial period:-

RM

Payments on behalf to related companies 827,418

F-148

The outstanding balances of the related parties together with their terms and conditions are disclosed in the respective notes to the financial statements.

13. FINANCIAL INSTRUMENTS The Company’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Company’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.

13.1 FINANCIAL RISK MANAGEMENT POLICIES

The Company’s policies in respect of the major areas of treasury activity are as fol-lows:-

(a) Market Risk

(i) Foreign Currency Risk

The Company does not have any transactions or balances denomi-nated in foreign currencies and hence is not exposed to foreign cur-rency risk.


The Company does not have any interest-bearing borrowing and

hence is not exposed to interest rate risk.


The Company does not have any quoted investment and hence is not

exposed to price equity price risk.

(b) Credit Risk

The Company does not have any major concentration of credit risk related to any individual customer or counterparty.

(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Company practices prudent risk management by maintaining sufficient cash balances.

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

F-149

Carrying Amount

RM

Contractual

Undiscounted Cash Flows

RM

Within 1 Year RM

31.12.2016

Other payables and accruals 93,656 93,656 93,656

Amount owing to a director 6,407 6,407 6,407

100,063 100,063 100,063

13.2 CAPITAL RISK MANAGEMENT

The Company manages its capital to ensure that entities within the Company will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders’ value. To achieve this objective, the Company may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. The Company manages its capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as total net borrowings from financial institutions divided by total equity. As the Company has no external bank borrowings as at the end of the reporting period, the debt-to-equity ratio is not presented.

13.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS

RM Financial Asset Loans and Receivables Financial Assets Bank balance 4,240 Amount owing by related companies 827,418 831,658

Financial Liability Other Financial Liabilities Other payables and accruals 93,656 Amount owing to a director 6,407

100,063

13.4 FAIR VALUE INFORMATION

At the end of the reporting period, there were no financial instruments carried at fair values in the statement of financial position.

The fair values of the financial assets and financial liabilities of the Company which are maturing within the next 12 month approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.

F-150

14. COMPARATIVE FIGURES

No comparative figures are available as this is the first set of financial statements prepared by the Company since incorporation.

15. SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD The Companies Act 2016 came into effect on 31 January 2017 (except for Section 241 and

Division 8 of Part III of the said Act) and replaces the existing Companies Act 1965.

Amongst the key changes introduced under the Companies Act 2016 that will affect the financial

statements of the Company upon its initial adoption are:-

(i) Removal of the authorised share capital; and (ii) Ordinary shares will cease to have par value.

The adoption of the Companies Act 2016 is to be applied prospectively. Therefore, the changes in

the accounting policies and the possible impacts on the financial statements upon its initial adoption will be disclosed in the financial statements of the Company for the financial year ending 31 December 2017.

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RECENT DEVELOPMENTS AND OUTLOOK

Recent Developments

General Economic Developments

The core activities of the Group are significantly influenced by the relative strengths of the local

economies, in which the group operates. For companies like the companies of De Raj Group that

relate to basic utilities like Power and Infrastructure to internationally significant commodity driven

industries, it is very pertinent to understand the global economic climate, with significant emphasis on

the local economies of interest areas.

Since 31 December 2016, the effective date of the latest audited annual financial statement, the

overall global economic outlook remains strong and the cyclical recovery continues. Growth outturns

in the first quarter of 2017 were higher than the April World Economic Outlook (WEO) published by

the International Monetary Fund (IMF) forecasts in large emerging and developing economies such as

Brazil, China, and Mexico, and in several advanced economies including Canada, France, Germany,

Italy, and Spain. High-frequency indicators for the second quarter provide signs of continued

strengthening of global activity. Specifically, growth in global trade and industrial production remained

well above 2015–16 rates despite retreating from the very strong pace registered in late 2016 and

early 2017. Purchasing managers’ indices (PMIs) signal sustained strength ahead in manufacturing

and services.

Emerging and developing economies are projected to see a sustained pickup in activity, with growth

rising from 4.3 percent in 2016 to 4.6 percent in 2017 and 4.8 percent in 2018. These forecasts reflect

upward revisions, relative to April, of 0.2 percentage point for 2016, and 0.1 percentage point for

2017. As in the most recent WEO forecast vintages, growth is primarily driven by commodity

importers, but its pickup reflects to an important extent gradually improving conditions in large

commodity exporters that experienced recessions in 2015–16, in many cases caused or exacerbated

by declining commodity prices.1

A more complete set of data revealed that the economy of the Association of Southeast Asian Nations

(ASEAN) picked up pace in the second quarter (Q2) 2017, recording the best performance since Q3

2013. According to an estimate of regional gross domestic product (GDP) compiled by

FocusEconomics, growth came in at 5.0% annually in Q2, above Q1’s 4.8% expansion and better than last month’s preliminary estimate of a 4.8% increase. The result comes as good news for the

region, which had seen healthy but lackluster growth in recent years, and is largely due to a

resurgence in global trade along with robust domestic demand.

The regional acceleration was driven by better-than-expected performance in Malaysia, which grew at

the fastest rate since Q2 2014. An upturn in Malaysia’s external sector as a slowdown in import growth outpaced that of exports drove the result, while private consumption was also robust.

Elsewhere in the region, growth stalled in major-player Indonesia and was steady at Q1’s 5.0% annually. A sharp drop in public spending and subdued export performance dampened the economy’s momentum.2

1 Source IMF, available at http://www.imf.org/en/Publications/WEO/Issues/2017/07/07/world-economic-

outlook-update-july-2017 2 Source: Focus Economics, available at https://www.focus-economics.com/regions/ASEAN/news/asean-

economic-outlook-sep-2017

https://www.focus-economics.com/regions/asean/news/ASEAN-economic-outlook-AUG-2017

http://www.focus-economics.com/countries/malaysia

http://www.focus-economics.com/countries/indonesia

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Commodities and Inflation

Oil prices have receded, reflecting strong inventory levels in the United States and a pickup in supply.

Headline inflation also generally softened as the impact of the commodity price rebound of the second

half of 2016 faded, and remains at levels well below central bank targets in most advanced

economies. Core inflation has remained broadly stable. It has largely been stable in emerging

economies as well, with a few, such as Brazil and Russia, witnessing strong declines.

Brent Crude Oil prices rose in recent weeks due to developments related to Hurricanes Harvey and

Irma, as well as higher refinery demand in Europe and Asia. On 8 September, Brent Crude Oil prices

traded at USD 54.6 per barrel, which was up 4.5% from the same day in August and the highest level

since April 2017. While the benchmark price for global crude oil markets was 1.2% lower on a year-to-

date basis, it was up 10.3% from the same day last year. Oil prices were mostly affected by

developments related to Hurricane Harvey and signs that the global oil glut is slowly receding.

Hurricane Harvey and the subsequent flooding knocked out more than 20% of the U.S. refining

sector, reducing demand for crude oil and sending oil prices lower in the last week of August. Oil

prices, however, faced upward pressure again in September as some refineries resumed their

activities in the United States. Moreover, refineries in Europe and Asia sought more crude oil in order

to compensate for the partial shutdown in the U.S., thereby supporting prices for the global

benchmark. Overall, there are signs that oversupply is easing. Global growth remains strong, adding

upward pressure from the demand side. Russia and Saudi Arabia boosted market confidence as both

key oil producers are pushing to extend the OPEC oil cut deal by three months, to June 2018.3

Oil markets look set to tighten further in the coming quarters as better than expected compliance from

OPEC ensures drawdowns in oil inventories. JP Morgan continues to expect prompt prices to rally

over the first half of the year and Brent could average USD 62/bbl4 during Q3 2017 if price tailwinds

persist. However, the decisions taken by producers in 2016 now look set to forestall a price recovery

in 2018. The supply rebound in the second half year 2017 keeps pace with forecast demand growth.

Consequently JP Morgan retains a 2017 Brent price forecast of USD 58.25/bbl and introduce a 2018

price forecast of USD 60/bbl. WTI prices are USD2/bbl below this at USD 56.25/bbl and USD 58/bbl

for 2017 and 2018 respectively.5

Important Occurrences for the Company and the other Companies of De Raj Group

Since 31 December 2016, the following circumstances have occurred, which were of major relevance

for the Company and De Raj Group:

In February and June 2017, the companies of the oil and gas division of the De Raj Group entered

into agreements for the deployment of an oil rig offshore Indonesia which constitute the main sources

of revenue for De Raj Group at the moment.

In April 2017, the loan facility granted for the financing of the business activities of the oil and gas

division of De Raj Group was successfully restructured by way of a restructuring agreement with the

bank granting the facility.

3 Source: Focus Economics, available at https://www.focus-economics.com/commodities/energy/brent-crude-

oil 4 bbl = American barrel equalling 159.987 liter 5 Source: JP Morgan, available at https://www.jpmorgan.com/global/2017-global-outlook

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In July 2017, the German power division of De Raj Group entered into several lease agreements on

its combined heat and power plants.

In October 2017, Alexander Arjun de Raj assigned a loan in the amount of EUR 3,810,000.00, which

was granted to Gaea Power GmbH, to De Raj Group AG which was subsequently waived by De Raj

Group AG.

Finally, in October 2017 the shares in the other companies of the De Raj Group were contributed to

the Company, partly by way of a capital increase against contribution in kind and partly by way of a

contribution into the capital reserves of the Company, whereby the De Raj Group was formed.

Furthermore, it is to be noted that some of the companies of De Raj Group acquired assets, i,e. Jack-

up Rigs for oil rigs and patents, shortly before the contribution of their shares into the Company.

For details of the aforementioned occurrences, please confer Section 7.4 (“De Raj Group – Structure,

Companies and Formation”), and Section 8 (“Business Description”), in particular Section 8.7 (“Material Contracts”).

Development of the Operations of the Companies of the De Raj Group

One of the most significant developments for the De Raj Group since 31 December 2016, is the

increase in the day-rates for the BOSS-1 oil rig, deployed in Indonesia and operated by De Raj Group

from around USD 36,027 per day to USD 52,000 per day from 20 February 2017 on. This reflects the

positive mood of the Oil & Gas industry in general and South East Asian prospects in particular.

The Group had also undertaken significant cost saving measures, especially in the area of Operations

and Maintenance of the assets, to cope with the negative price cycle, which are resulting in enhanced

profitability now.

Outlook

Oil & Gas Sector:

At the core of De Raj Group’s oil and gas services are a family of in-house developed patented

Intellectual Properties (IP), filed in most of the oil and gas producing countries. This IP design is a

cost effective enabler for economically challenged marginal fields and reserves. It achieves this by

providing flexible, versatile solutions and early monetisation of reserves in comparison with

conventional designs.

The distinct and patented design advantages allow for crucial cost savings for offshore operations at a

time where hydrocarbon prices (oil & gas) are high enough again to justify operations (i.e. above US -

Dollar 35/barrel crude oil, a barrel equalling approximately 159 liter) , yet also low enough (below US -

Dollar 65/barrel) that cost savings as such matter. In an environment where oil and gas prices are at

inflated prices i.e. above US - Dollar 100/barrel, these cost efficiencies are insignificant and do not

allow the advantages of the technology to be considered seriously. However, with the discovery of

shale gas technology and its supply, which has been the main contributor to the drop in oil and price

prices, the only oil and gas suppliers likely to survive in the long term are the ones with the ability to

produce at low cost. This scenario provides a unique value proposition for De Raj Group to offer its

cost effective solutions to the industry.

De Raj Group is of the opinions that it has proven itself in the South East Asia region to be a cost

effective and an expedient contract partner. The next plan of action is to market these technologies to

a wider global market.

In 2017, De Raj Group has and will continue to market its unique solutions coupled with readily

available assets to the significant and growing Persian Gulf offshore exploration & production sector

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as well as for selected Mexican Gulf and Caribbean marginal field potentials where production cost

threaten project viabilities even at today’s middling market prices for oil. De Raj Group expects a

serious upturn and to have at least four rigs in operations by year 2019 whereby the time gap is

caused by the current requirement for customisation and refurbishment of the oil rigs at qualified

shipyards.

German Power Sector:

The volatility of the Oil and Gas prices and the cyclical nature of the oil and gas industry over previous

decades has led management to diversify into the more stable and predictable earning patterns of

power generation and its related services. Starting with renewable energy biomass projects in

Germany’s North Rhine Westfalia province in 2016, the growing familiarity with market dynamics and

market participants, such as grid operator clients, city utilities and virtual next generation utilities, will

allow Gaea Power and German Power to expand rapidly its generation portfolio in Germany, based

on a proven and cash flow positive business model by 2018.

The German Power division will also opportunistically expand horizontally and vertically in Germany,

i.e. into grid supportive and utility bankrolled large energy storage facilities and technologies.

De Raj Group’s aim is to substantially expand the revenues and profits of the German power sector

and to increase its share of the overall revenues and profits of the De Raj Group in the future.

Validation of Further Business Opportunities:

Besides expanding its existing business, De Raj Group generally also observes the markets to

validate potential further business opportunities and worthwhile chances to extend its business to

further business sectors in the future.

In this respect, De Raj Group is examining potential business opportunities regarding investments in

conventionally generated power in the Middle East markets. Furthermore De Raj Group intends to

also validate potential business opportunities in view of establishing a third business leg, namely

supportive infrastructure, in particular for feed stock logistics, balance of plant investments and grid

connectivity to pipeline networks and electric grids – all in need to supportive road networks and also

railway cargo capacities.

Since 31 December 2016, the effective date of the latest audited annual financial statement, there

have been no material adverse changes in the business prospects of De Raj Group beyond the facts

and circumstances described in this section “Recent Developments and Outlook“. From 31 December 2016 to the date of this Prospectus, there have been no significant changes to the financial condition

or the trade position of De Raj Group Group beyond the facts and circumstances described in this

section “Recent Developments and Outlook“.

The Company is not aware of any other trends, uncertainties, obligations or events that might be

expected to have a material effect on De Raj Group’s prospects, at least during the current financial year, beyond the facts and circumstances described in this section “Recent Developments and Outlook“.