INTRODUCTION

The Board of Directors of MRB wishes to announce that Konsep Khas Sdn Bhd [Registration No. 201701013925 (1228090-M)] (“KKSB”), an associate company of MRB has on 18 February 2020 entered into a Distributor Agreement (“Agreement”) with Krohne (M) Sdn Bhd [Registration No. 200601024941 (744695-P)] (“Krohne”) of Axis Business Campus, Unit G.01, Block B, No. 13A & 13B, Jalan 225 Seksyen 51A, 46100 Petaling Jaya, Selangor Darul Ehsan to be appointed as a distributor and service partner of the following Krohne’s products and spare parts (“Products”) to the general industry in East Malaysia:-

1. Krohne Flow Products
2. Krohne Level Products
3. Krohne Temperature Products
4. Krohne Pressure Products
5. Krohne Analytical Products
6. Krohne Oil & Gas Products

INFORMATION ON THE AGREEMENT

The Agreement will become effective on 18 February 2020 and it shall have an initial term of one (1) year unless terminated earlier in accordance with the Agreement. At the end of the Agreement, KKSB and Krohne may consider entering into negotiation regarding possible extension of the Agreement.

During the term of the Agreement, KKSB shall not be authorised to distribute Products outside East Malaysia and shall refer all inquiries, orders, requests for proposal or the like with respect to Products from locations outside East Malaysia to Krohne. Krohne will not appoint any other distributor for the Products in the East Malaysia, but, however, reserves the right to sell the Products directly to any customer within East Malaysia.

INFORMATION ON KKSB

KKSB is a company incorporated in Malaysia with its domicile at D-G-5, Block D, Parklane Commercial Hub, No. 21, Jalan SS7/26, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan. As at the date of this announcement, the total issued share capital of KKSB is RM400,000.00 comprising of 400,000 ordinary shares. KKSB is principally engaged in the following:-

1. Wholesale of a variety of goods without any particular specialisation
2. Trading in all ancillary and related equipment for oil and gas work
3. Advertising contractors or agents, publicity and marketing specialist

The Directors of KKSB are Mr Chin Leong Choy, Mr Yee Kon Sin and Mr Jeremy Kho Boon Seng while the shareholders of KKSB and their respective shareholdings are as follows:

RATIONALE/ PURPOSE OF THE AGREEMENT

The Agreement provides opportunity for the MRB Group to expand its revenue sources. The Agreement is expected to contribute positively to the future financial position of the MRB Group.

FINANCIAL EFFECTS OF THE AGREEMENT

(i) Share Capital and Substantial Shareholders’ shareholdings

The Agreement will not have any effect on the issued and paid-up share capital and the substantial shareholders’ shareholdings of MRB Group as it does not involve any issuance of new shares by MRB Group. 

(ii) Earnings Per Share

The Agreement is not expected to have any material effect on the earnings per share of MRB Group for the financial year ending 31 March 2020.

(iii) Net Assets Per Share and Gearing

The Agreement will not have any material effect on the net assets per share and gearing of the MRB Group.

APPROVALS REQUIRED

The Agreement is not subject to the approval of the Company’s shareholders.

RISK FACTORS

The Company does not expect any material risk arising from the Agreement other than the normal operational risk associated with the Agreement, which the Company would take appropriate measures to minimise it.

DIRECTORS’ AND/OR MAJOR SHAREHOLDERS’ INTEREST

None of the Directors and/or Major Shareholders of MRB and/or persons connected to them has any interest, direct or indirect, in the Agreement.

DIRECTORS’ STATEMENT 

The Board of Directors of MRB, after having considered the terms and conditions of the Agreement and all the relevant aspects including the rationale, prospects and financial effects of the Agreement, is of the opinion that the Agreement is in the best interest of the MRB Group.

This announcement is dated 18 February 2020.