1. INTRODUCTION

Further to the announcement made by SILK Holdings Berhad (“SHB” or “Company”) dated 15 May 2014 with regards to the award of contract to Jasa Merin (Malaysia) Sdn Bhd (“JMSB”) for the provision of one (1) unit of Straight Supply Vessel (“SSV”), by Carigali Hess Operating Company Sdn Bhd (“Carigali Hess”), the Company is pleased to announce that the contract has been extended for a further one (1) year period.

2. DURATION OF EXTENSION

The contract extension is for a period of one (1) year beginning 12 May 2016 up to 11 May 2017. Carigali Hess has the option of a further one (1) plus one (1) year extension, beyond this current extension.

3. RISK FACTORS

Risk factors affecting the contract extension is mainly operational risks such as accidents and unexpected breakdown of vessels. Notwithstanding this, the Company shall always ensure strict compliance to the safety and operational procedures in the execution of contract requirements and has developed a programmed maintenance schedule which stringently adheres to the International Safety Management (ISM) Standards in maintaining performance and seaworthiness of all vessels.

4. FINANCIAL EFFECTS

The contract extension, valued at approximately RM 8.8 Million, is expected to contribute positively to the earnings of the Group for the financial year ending 31 December 2016 and beyond. The contract is not expected to have any effect on the share capital and shareholding structure of SILK. There are no significant risks involved in JMSB fulfilling the obligations under the contract.

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors or major shareholders or persons connected to the Directors or major shareholders has any direct or indirect interest in the contract awarded.

6. DIRECTORS’ STATEMENT

The Board of SHB is of the opinion the acceptance of the financing facilities and the provision of the Corporate Guarantee is in the best interest of SHB Group.

This announcement is dated 27 May 2016.