Velesto Energy Berhad : 12th Velesto Energy Berhad Annual General Meeting Minutes

CONFIDENTIAL

VELESTO ENERGY BERHAD

Registration No. 200901035667 (878786-H)

TWELVETH (12TH) ANNUAL GENERAL MEETING

OF VELESTO ENERGY BERHAD ("VELESTO" OR "COMPANY")

MINUTES OF THE TWELVETH (12TH) ANNUAL GENERAL MEETING OF THE COMPANY HELD ON TUESDAY, 28 JUNE 2022 AT 2:00 P.M. CONDUCTED LIVE VIRTUALLY AT THE BROADCAST VENUE AT

KRISTAL HALL 1, TM CONVENTION CENTRE, MENARA TM, JALAN PANTAI BAHARU, 50672 KUALA

LUMPUR

PRESENT	: Encik Mohd Rashid bin Mohd Yusof	Chairman / Non-Independent Non-
		Executive Director
	Ir. Dr. Mohd Shahreen Zainooreen	Senior Independent Non-Executive
	bin Madros	Director
	Puan Rowina binti Ghazali Seth	Independent Non-Executive
		Director
	Datuk Tong Poh Keow	Independent Non-Executive
		Director
	Puan Haida Shenny binti Hazri	Non-IndependentNon-Executive
		Director
	Encik Mohd Irwan bin Ahmad	Non-IndependentNon-Executive
	Mustafa	Director
	Datuk George Ling Kien Sing	Independent Non-Executive
		Director
	Encik Megat Zariman bin Abdul Rahim	President / Non-Independent
		Executive Director
IN ATTENDANCE	: Encik Abdul Hadi bin Abdul Bari	Chief Commercial Officer
	Puan Sazlyna binti Sapiee	Chief Financial Officer
	Mr. Chong Eu Jin	Head, Strategic Planning
	Ms. Lee Mi Ryoung	Head, Legal & Secretarial and
		Company Secretary
	Puan Noor Ashiah binti Yang	Head, Human Resources
	Ms. Ng Yee Yee	Messrs Ernst & Young PLT
	SS E Solutions Sdn Bhd	Poll Administrator
	Commercial Quest Sdn Bhd	Scrutineer
	Shareholders present	490 representing 8,598,231
		ordinary shares
	Corporate Representatives / Proxies	129 representing 5,242,319,761
	present	ordinary shares including the
		Chairman who has been nominated
		as a proxy in respect of
		779,025,366 ordinary shares
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Twelveth (12th) Annual General Meeting of Velesto Energy Berhad held on 28 June 2022

CHAIRMAN

Encik Mohd Rashid bin Mohd Yusof ("Chairman"), Chairman of the Board of Directors ("Board"), took the Chair and called the Meeting to order.

On behalf of the Board and Management, Chairman welcomed all the shareholders, proxies, corporate representatives and invitees to the Company's 12th Annual General Meeting ("AGM"), held live virtually from the broadcast venue at Kristal Hall 1, TM Convention Centre, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur, Malaysia ("Broadcast Venue").

With the 12th AGM conducted virtually, only essential individuals (including the auditor, scrutineer, share registrar, AV crew and working committee) were physically present to conduct the general meeting.

Chairman proceeded to introduce the following present at the Broadcast Venue:-

• Datuk Tong Poh Keow, Independent Non-Executive Director and Chairperson of Board Audit Committee;
• Encik Megat Zariman Abdul Rahim, President and Non-Independent Executive Director;
• Encik Mohd Irwan Ahmad Mustafa, Non-IndependentNon-Executive Director;
• Puan Rowina Ghazali Seth, Independent Non-Executive Director and Chairperson of Board Risk Management Committee;
• Ms. Lee Mi Ryoung, the Company Secretary;
• Puan Sazlyna Sapiee, Chief Financial Officer; and
• Ms. Ng Yee Yee, the Partner from Messrs. Ernst & Young PLT.

The following members of the Board who joined virtually:-

• Ir. Dr. Mohd Shahreen Zainooreen bin Madros, Senior Independent Non-Executive Director and Chairman of Board Nomination & Remuneration Committee;
• Puan Haida Shenny Hazri, Non-IndependentNon-Executive Director; and
• Datuk George Ling Kien Sing, Independent Non-Executive Director and Chairman of Board Whistle- Blowing Committee.

In his opening remarks, Chairman highlighted that after the initial shocks in 2020, most countries and economies, including Malaysia adjusted to the new normal in 2021, and continued to adapt despite the dynamic challenges brought by the pandemic. By emphasising on vaccination and stringent Standard Operating Procedure compliance in most countries were able to reopen their economies and borders to varying degrees thus, enabling economic recovery.

Amidst a turbulent and challenging operational backdrop in 2021, VELESTO focused on its core strategies. These were on sustaining cashflow, continued pursuit of cost reductions and increased operational efficiencies, and ensuring a high level of productivity and uptime through stringent adherence to COVID- 19 Standard Operating Procedure whilst maintaining safety.

With the suite of 6 jack-up rigs after the NAGA 7 incident, the Group has sufficient assets to meet all contractual obligations and in a strong position to acquire additional assets if required, in the event of sustained industry recovery and significant increase in secured contracts.

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Twelveth (12th) Annual General Meeting of Velesto Energy Berhad held on 28 June 2022

The Group's priority is to increase utilisation rates for both rigs and workover units, by securing more contracts, including overseas contracts, participate in Integrated Rig Drilling Services & Completion and to enhance the capability of the Group's assets via offline capabilities.

During second half of FY2021 up to the 1st Quarter of 2022, there were changes to the composition of Board of Directors of Company.

• On behalf of the Board, Chairman extended gratitude to Encik Rohaizad Darus, who had retired after many years of dedicated service with VELESTO as its President.
• In 2nd half of FY2021, the Company welcomed Ir. Dr. Mohd Shahreen Zainooreen Madros, Encik Mohd Irwan Ahmad Mustafa and Datuk George Ling Kien Sing to the Board.
• Further, extended gratitude to the former directors who stepped down from the Board, Dato' Ibrahim Marsidi and Dato' Dayang Fatimah Johari and Encik Rizal Rickman Ramli, in FY2021; and Encik Razalee Amin, after 9 years of service in FY2022.

Earlier in 1st Quarter this year, Velesto welcomed a new President, Encik Megat Zariman Abdul Rahim, who brings over 32 years of extensive oilfield business experience, including international industry experience. His comprehensive expertise and proven leadership skills is an asset in steering VELESTO to continued progress and success.

He continued to extend appreciation to the Management and staff of VELESTO who have again delivered their best during the most difficult of times; and expressed gratitude to the Board members, the regulatory authorities, the Group's clients, business partners and suppliers for their support throughout FY2021.

Chairman shared that the future is brighter, though uncertainties remain. Risks persists but so do potentials and opportunities and that the Group remains optimistic in sustaining value creation for all stakeholders in FY2022.

PRESENTATION BY THE PRESIDENT

The Chairman then invited Encik Megat Zariman Abdul Rahim ("Encik Megat"), the President of the Company to present an overview of VELESTO Group's operations and its performance.

Encik Megat, upon thanking the shareholders, expressed his excitement in addressing the shareholders for the first time. He then proceeded with his presentation which included the overview of Velesto Group, industry update, financial and operational highlights of the year, sustainability, current status and future prospect of the Group as well as the outlook for the FY2022. In tandem with the theme "Forward Focus", the Group continues to remain resilient despite the unprecedented pandemic. The Group saw the following achievements in 2021:

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Twelveth (12th) Annual General Meeting of Velesto Energy Berhad held on 28 June 2022

Thereafter, the Chairman invited the Company Secretary to share the issues raised by the Minority Shareholders' Watch Group ("MSWG") in their letter dated 17 June 2022 and the Company's written responses which are detailed as follows:

NO.	QUESTIONS	ANSWERS
1.	The Company is currently upgrading
	another four jack-up rigs ("JU") with Offline
	capabilities. (Page 43 of AR).
(a)	What are the benefits of upgrading JUs with	It will reduce the period required to complete a well due
	Offshore capabilities?	to the capability to carry out simultaneous operations.
		For VELESTO, it will result in higher Daily Charter Rates
		("DCR") if offline activities scope is required by clients.
		This is provided for in our call-out contract with PCSB.
		We also see a trend of higher DCR for rigs with Offline
		capabilities in the region.
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Twelveth (12th) Annual General Meeting of Velesto Energy Berhad held on 28 June 2022

NO.	QUESTIONS				ANSWERS
(b)	What is the expected CAPEX required for	To upgrade all four (4) rigs, we are expecting the total
	upgrading all the four (4) JUs with offshore	CAPEX spending of USD23.4 million.
	capabilities?
(c)	When will the four JUs be fully equipped	NAGA 5 and 6 are currently being upgraded at Keppel
	with Offshore capabilities?			Fels shipyard, and should be completed by 2Q22 and
					3Q22, respectively. The other two (2) candidate rigs will
					be upgraded once contracts requiring offline capabilities
					have been secured.
					As of to-date highly likely we are going to proceed with
					NAGA 4's upgrade right after completion of the current
					contract with Shell in preparation for the new drilling
					programme.
(d)	Are these four JUs fully chartered out or	NAGA 5 and NAGA 6 that are currently being upgraded,
	have secured chartering contracts?		have secured contracts that will commence in 3Q2022.
					NAGA 4, which will be upgraded in early 1Q2023 has
					recently received Notice of Assignment for 2023
					programme. However, for NAGA 3 we are still in
					discussion with potential client(s) for 2023 programme
					which will determine whether the upgrade needs to be
					done before or after the programme(s).
(e)	Will the upgrading of the four JUs with	Yes, in general rig with offline capabilities will have
	offshore	capabilities	enhance	the	better offerings and be more attractive to clients as
	Company's chances in securing more	compared to other rigs especially in Malaysia and
	contracts? If yes, what is the value of	Thailand.
	contracts secured.
					Clients prefer rig with offline capabilities as it could
					increase the overall drilling operation efficiency and
					subsequently will translate into cost savings to
					Petroleum Arrangement Contractors ("PAC") on the
					total cost of their drilling campaign.
					Most of the PACs in Malaysia and Thailand have set
					offline capabilities requirement as their minimum
					technical requirement especially for the development
					and production wells programme. Therefore, will give
					higher chance for the Group in securing more contracts.
					The value of the contracts will be based on the type of
					the scope of works i.e. rig stand alone contract or
					Integrated Rig Drilling and Completion ("iRDC").
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