FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 295 46 PROVISIONS 2013 Group Provision Provision for asset for termination retirement costs Total RM’000 RM’000 RM’000 At 1 January 4,806 106 4,912 Acquisition of subsidiary 27,000 - 27,000 Unwinding of discount 261 - 261 Payment made during the financial year (43) (105) (148) Currency translation differences 349 (1) 348 At 31 December 32,373 - 32,373 Less: payable within 12 months (82) - (82) Non-current 32,291 - 32,291 2012 At 1 January 4,744 1,421 6,165 Unwinding of discount 258 - 258 Payment made during the financial year (29) (1,309) (1,338) Currency translation differences (167) (6) (173) At 31 December 4,806 106 4,912 Less: payable within 12 months (306) (106) (412) Non-current 4,500 - 4,500 Provision for asset retirement relates to the Group’s fatty acids manufacturing facility in USA and mills in Malaysia. The asset retirement obligation was based on detailed estimates, adjusted for inflation, escalated to the estimated spending dates, and then discounted using an average credit adjusted risk-free interest rate of which represents management’s best estimate of the liability. Actual costs to be incurred in future periods may vary from estimates, given the inherent uncertainties in evaluating certain exposures subject to the imprecision in estimating the asset retirement obligation. In 2011, a subsidiary of the Group, TRT ETGO, recorded a restructuring provision of RM1,421,000. The provision relates principally to the down- sizing of the finance and commercial departments following the TRT ETGO’s investment in a joint venture. The restructuring plan was drawn up and announced to the employees and the provision was recognised in 2011. Payments in 2012 were RM1,309,000 and the final payments of RM105,000 were made in 2013. .