1. Introduction

The Board of Directors of NI HSIN is pleased to announce that IRSB, a wholly-owned subsidiary of the Company, had on 23 January 2017 entered into an Exclusive Distributorship Agreement (“EDA”) with GMSB for the distribution of GMSB’s starch reducing rice cooker (“the Product”).

GMSB is the inventor and patent right holder and trademark owner of the trademark of the patented “Grayns” brand starch reducing rice cooker.

2. Information on GMSB

GMSB was incorporated on 22 November 2012 in Malaysia under the Companies Act, 1965.

The authorised share capital of GMSB is RM10,000,000.00 divided into 10,000,000 ordinary shares of RM1.00 each and the issued and paid-up share capital is RM7,000,000.00 divided into 7,000,000 ordinary shares of RM1.00 each.

The principal activity of GMSB is the manufacturing, designing, exporting, supplying and selling of all kinds of electrical goods and equipment.

The Directors of GMSB are Zeeshan Talat Khan, Faizan Talat Khan and Mohd Dzulqhifly Bin Mohd.

The shareholders of GMSB together with their respective shareholdings are as follows:-

3. Information on IRSB

IRSB was incorporated on 12 November 2014 in Malaysia under the Companies Act, 1965.

The authorised share capital of IRSB is RM400,000.00 divided into 400,000 ordinary shares of RM1.00 each and the issued and paid-up share capital is RM2.00 divided into 2 ordinary shares of RM1.00 each.

The principal activity of IRSB is general merchants, traders and distributors of general merchandise.

The Directors of IRSB are Chen Shien Yee, Datin Ida Suzaini Binti Abdullah and Khoo Chee Kong.

4. Salient contents of the EDA

The salient contents of the EDA are as follows:-

i) GMSB is desirous of appointing and IRSB is desirous of accepting the rights to act as the exclusive distributor for the Product in the territory of Malaysia, Singapore, Hong Kong and China (“the Territories”) subject to the terms and conditions as stated in the EDA.

ii) Trial period:-

• IRSB is granted a trial period of three (3) months from the commencement of the EDA (“the Trial Period”) to assess the marketability of the Product.
• The Trial Period shall be extended for another three (3) months at the request of IRSB which shall not be unreasonably refused by GMSB (“the Extended Trial Period”).
• At the expiry of the Extended Trial Period, IRSB shall decide whether to continue with the business of distributing the Product in the Territories or to terminate the EDA. In the event IRSB decides to terminate the EDA, the following terms shall apply:-

a) GMSB shall be under no obligation to serve any orders immediately after such a notice of termination is served by either party.

b) IRSB has to fulfil and take delivery of its outstanding purchase orders and comply with the agreed payment terms.

c) IRSB shall at its own expense within fourteen (14) days send to GMSB or otherwise dispose of in accordance with the directions of GMSB for all samples of the Product and any advertising, promotional or sales material relating to the Product then in the possession of IRSB.

d) IRSB shall immediately cease to distribute, promote, market or advertise the Product or to make any use of any trademarks of GMSB other than for the purpose of selling the remaining stocks held prior to the termination of the EDA.

e) IRSB shall have no claim against GMSB for compensation for loss of distribution rights, loss of goodwill or any similar loss.

f) Any provision of the EDA that expressly or by implication is intended to come into or continue in force on or after termination or expiry of this agreement shall remain in full force and effect.

g) Termination or expiry of the EDA shall not affect any rights, remedies, obligations or liabilities of the GMSB and IRSB that have accrued up to the date of termination or expiry, including the right to claim damages in respect of any breach of the EDA which existed at or before the date of termination or expiry.

• During the Trial Period GMSB shall be entitled to continue to sell the products through its existing channels of sales.

iii) The EDA shall commence on 18 February 2017 and shall remain in force and valid for a period of five (5) years after which time the EDA shall be extended by mutual agreement on terms and conditions to be agreed upon by both parties unless terminated by either party. The EDA may be terminated by either Party giving to the other not less than six (6) months’ written notice or terminated by GMSB in the event of non-fulfilment of the minimum order quantity or terminated by IRSB at the expiry of the Trial Period or Extended Trial Period.

5. Directors’ and Major Shareholders’ Interests

Chen Shien Yee and Datin Ida Suzaini Binti Abdullah are both directors of NI HSIN and IRSB.

Save as disclosed above, none of the Directors and/or major shareholders of NI HSIN and/or persons connected with them have any interests, direct or indirect, in the EDA.

6. Rationale

The EDA will enable NI HSIN to further expand its product range for local and export markets. NI HSIN will be able to leverage on its existing customers to expand the market for GMSB’s starch reducing rice cooker.

7. Risks

Risk factors affecting the EDA include but are not limited to changes in the laws and regulations applicable to the cookware business and other ordinary business risks. NI HSIN will undertake the necessary efforts to mitigate the risks identified.

8. Financial effects

8.1 Share Capital and Substantial Shareholders’ Shareholdings

The EDA is not expected to have any material effect on the share capital and shareholdings of the substantial shareholders of NI HSIN.

8.2 Net assets and Earnings

The EDA is not expected to have any material effect on the net assets and earnings per share of the Company for the financial year ending 31 December 2017. However, it is expected to contribute positively to the earnings per share of NI HSIN in the future.

8.3 Gearing

The EDA is not expected to have any material effect on the gearing of NI HSIN.

9. Approvals Required

The EDA is not subject to approval of the shareholders of NI HSIN and any relevant   government authorities.

10. Directors’ Statement

Having considered the rationale and the effects of the EDA, the Board of Directors of NI HSIN is of the opinion that the EDA is in the best interests of NI HSIN.

11. Documents available for inspection

The EDA is available for inspection at the registered office of NI HSIN at Lot 6.05, Level 6 KPMG Tower, 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia, during normal business hours from Mondays to Fridays (except for public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 23 January 2017.