– LICENCE AGREEMENT ENTERED INTO BETWEEN MIROZA LEATHER (M) SDN. BHD. AND CROCODILE INTERNATIONAL SDN. BHD.

The Board of Directors (“Board”) of MESB wishes to announce that Miroza Leather (M) Sdn. Bhd. (“Miroza”), a wholly-owned subsidiary of MESB, had on 8 January 2018 entered into a Licence Agreement with Crocodile International Sdn. Bhd. (Company No. 3530-P) (“CISB”) (“Agreement”), under which CISB grants to Miroza an exclusive licence to use the Trade Marks including but not limited to the mark “CROCODILE” (“Trade Marks”) in Malaysia (“the Territories”) solely on, in relation to or in connection with, the design, manufacture, advertisement, distribution, sale and promotion of the following ‘Crocodile’ Men’s Apparel and Innerwear products:-

1.  All types of men’s apparel including T-shirts, polo shirts, shirts, pullovers, cardigans, sweaters, jackets, overcoats, suits, bermudas, shorts, pants, trousers, jeans, singlets, briefs and neckties; and

2.  Men’s Handkerchiefs.

(“collectively, referred as “Licensed Products”)

SALIENT TERMS OF THE AGREEMENT

The salient terms of the Agreement are as follows:-

i.  The Licence is for a period of 2 years and 11 months commencing from 1 February 2018 to 31 December 2020 (“Licence Period”), until terminated earlier in accordance with the terms and conditions of the Agreement. CISB and Miroza have agreed to renew the Agreement for another two (2) years, commencing on 1 January 2021 upon the same terms and conditions of the Agreement and subject to the additional terms and conditions pursuant to CISB’s letter dated 8 January 2018.

ii.  The Licence is subject to Miroza continually using the Trade Marks for all the Licensed Products within the Territories during the Licence Period.

iii.  Miroza shall pay royalty to CISB based on the net sales or at a fixed amount, whichever is higher, as per the Agreement.

iv.   Miroza undertakes and guarantees that the total net sales originating from the Territories in respect of each of the 12 consecutive calendar months during the Licence Period shall not be less than the minimum sales target as set out in the Agreement.

FINANCIAL EFFECTS

Barring unforeseen circumstances, the Agreement will have material effect on the earnings and net assets of the Company and its group of companies (“Group”) for the financial year ending 31 March 2018 onward, during the Licence Period.

RISKS

The Group does not foresee any exceptional risks other than the normal operational risks associated with the Agreement. The Group of management will take the necessary steps to mitigate the risks as and when they occur.

DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Directors and/or major shareholders of the Company and/or persons connected with a Director or major shareholder has any interest, direct or indirect, in the Agreement.