General Announcement

Reference No CC-140618-64733

Company Name

:

IRE-TEX CORPORATION BERHAD

Stock Name

:

IRETEX

Date Announced

:

18/06/2014

 
OTHERS ZOOMIC AUTOMATION (M) SDN. BHD, A WHOLLY OWNED SUBSIDIARY OF IRE-TEX CORPORATION BERHAD, ENTERED INTO AN AGREEMENT TO MANUFACTURE AND SUPPLY ENERGY SAVING LED LIGHTING PRODUCTS FOR A LOCAL COMPANY.
 

IRE-TEX CORPORATION BERHAD
 

Type

:

Announcement
 

Subject

:

OTHERS
 

Description

:

ZOOMIC AUTOMATION (M) SDN. BHD, A WHOLLY OWNED SUBSIDIARY OF IRE-TEX CORPORATION BERHAD, ENTERED INTO AN AGREEMENT TO MANUFACTURE AND SUPPLY ENERGY SAVING LED LIGHTING PRODUCTS FOR A LOCAL COMPANY.

This announcement is dated 18 June 2014.
 
1.     Introduction
The Board of Directors of Ire-Tex Corporation Berhad ("ITCB" or "the Company") is pleased to announce that Zoomic Automation (M) Sdn. Bhd. (“ZASB”), a wholly owned subsidiary of the Company, has on 18 June 2014 entered into a Business Engagement Agreement with a local private limited company (the "Customer") to manufacture and supply energy saving LED lighting products (the “Contract”).

2.     Salient terms
Under the terms of the Contract, the Customer appointed ZASB as the exclusive manufacturer for certain of the Customer’s energy saving LED lighting products (the “Products”) specified in the Contract for which the Customer will provide the design, development, specification, enhancement, logo and branding.

The Contract commences from 18 June 2014 and shall terminate on 17 June 2017 (the “First Term”) and shall be renewed automatically upon expiry. Each renewal shall be for a period of three (3) years, unless otherwise notified by either party in writing to the other ninety (90) days prior to the renewal date. Either party may terminate the Contract upon thirty (30) days prior written notice. Pursuant to this clause, the Customer guarantees a minimum order value of RM2.5 million to ZASB in manufacturing the Products to the Customer for the First Term and RM3 million for the Second Term.

ZASB agrees to manufacture certain quantities of the Products at agreed prices for the Customer (the “Orders”) during the tenure of the Contract. Pursuant to this clause, the value of the Orders may be up to RM4,250,000 per month. Price adjustments will be made in accordance with market demand, economic and technology advancement conditions. ZASB and the Customer shall collectively decide the price revision and determine the appropriate pricing structure for the Products from time to time.

3.     Financial Effects of the Contract
The Contract will not have any effect on the issued and paid up share capital and substantial shareholder’s shareholding of the ITCB Group. The Contract is also not expected to have any material effect on the gearing of ITCB Group. Barring unforeseen circumstances, the Board of Directors of ITCB is of the opinion that the Contract will contribute positively to the earnings per share and net assets per share of ITCB Group for the financial years ending 31 December 2014, 31 December 2015 and 31 December 2016.

4.     Risk factors
ZASB and the Company does not envisage any risk factor arising from the Contract other than normal business risk. However, ZASB and the Company will take appropriate measures to manage and mitigate any potential risks

5.     Approvals Required
No approval from any authorities or shareholders of the Company is required for the Contract.

6.     Directors' and Major Shareholders' Interests
None of the Directors and/or major shareholders and/or persons connected with a Director or major shareholder of the Company has any interest, direct or indirect, in the Contract.

7.     Directors' Statement
The Board of Directors of ITCB, after considering all aspects of the Contract, is of the opinion that the Contract entered into is in the best interest of the Company.