FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 311 55 CONTINGENT LIABILITIES (CONT’D.) (iv) On 20 September 2011, FPISB and FELDA were sued by 550 settlers of Gugusan Bera for alleged fraud and manipulation of the extraction rate of palm oil. The plaintiffs are claiming for a share from the sale of kernel, burn ash and sludge oil which was derived from their FFB consignments sold to FPISB’s mills. The claim amounted to RM19.2 million for the year 2008 only. FPISB has filed Memorandum of Appearance in High Court on 15 November, a Statement of Defence on 3 January 2012 and have also filed an application to Strike-Out Ground on Plaintiffs’ claims on 25 January 2012. The matter is now fixed for trial on 28 to 30 April 2014. (v) On 10 May 2012, FPISB and FELDA were sued by 770 settlers of Rancangan Felda Chini 1 to 5 and Rancangan Felda Chini Timur 1 to 3 in Pahang for alleged fraud and manipulation of the extraction rate of palm oil. The claim amounted to RM24.8 million for the year 2008 only. FPISB has to file a Memorandum of Appearance in High Court on 16 May 2012 and the court fixed 2 to 6 June 2014 for case management to fix trial dates. (vi) On 5 June 2012, FPISB and FELDA were sued by 956 settlers of Rancangan Felda Keratong 1 to 10 for alleged fraud and manipulation of the extraction rate of palm oil. The claim amounted to RM30.9 million for the year 2008 only. FPISB has filed a Memorandum of Appearance in High Court on 26 June 2012 and the matter is now fixed for trial on 2 to 13 June 2014. (vii) On 25 January 2013, FPISB and FELDA were sued by 351 settlers of Rancangan Felda Mempaga for alleged fraud and manipulation of the extraction of palm oil. The claim amounted to RM11.3 million for the year 2008 only. The High Court of Temerloh fixed the matter for trial on 22 to 26 September 2014. Based on available information and on legal advices received, the Directors are of the view that there is a reasonable chance of defending all the above claims and therefore, no provision has been made in the financial statements. 56 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (a) On 29 January 2013, the Company announced its acceptance of the Voluntary General Offer (“VGO”) for Tradewinds (M) Berhad (“Tradewinds”) for a cash offer price of RM9.30 per offer share. On 28 February 2013, the disposal of 20% equity interest in Tradewinds was completed for a total consideration of RM551.43 million, which resulted in a gain on disposal of RM26.67 million for the Group and RM343.82 million for the Company. (b) On 17 April 2013, Felda Global Ventures Downstream Sdn. Bhd. (“FGVD”), a wholly-owned subsidiary of the Company, signed an Asset Purchase Agreement with Mission Biotechnologies Sdn. Bhd. to acquire its assets including a biodiesel refinery at Kuantan Port for USD11.5 million (RM36.9 million). The acquisition was completed on 9 October 2013. (c) On 28 June 2013, Twin Rivers Technologies Enterprises De Transformation De Graines Oleagineuses Due Quebec Inc. (“TRT ETGO”), a wholly-owned subsidiary of Twin Rivers Technologies Enterprises Holdings De Transformation De Graines Oleagineuses Du Quebec Inc. (“TRTH ETGO”), which in turn is a wholly-owned subsidiary of the Company through FGVD and Felda Global Ventures North America Sdn. Bhd. (“FGVNA”) terminated its joint venture with Bunge Ventures Canada L.P. (“Bunge”), comprising the business of the joint venture and dissolving the joint venture entity and terminating the various agreements and arrangements among the parties related to the joint venture including the tolling agreement entered into between Bunge ETGO L.P. and TRT ETGO. The parties entered into a Termination Agreement setting out the manner in which the joint venture and partnership will be wound down and dissolved. The business of the joint venture terminated on 31 August 2013 and the entity was dissolved on 30 November 2013. (d) On 9 July 2013, Felda Global Ventures Kalimantan Sdn. Bhd. (“FGVK”), a wholly owned subsidiary of the Group had entered into a Shares Purchase Agreement to acquire 1,187 shares of Rp1,000,000 each in the share capital of PT Temila Agro Abadi (“PT TAA”), representing 95% of the total issued and fully paid-up share capital of PT TAA from the existing shareholders of PT TAA namely Paul Sugandi, Janti Susanto, Evelyn Suwandi and Yenny Suwandi, all of whom are Indonesian citizens, for a total purchase consideration of US$8,075,000 (RM25,916,713). Upon completion of the proposed PT TAA acquisition, PT TAA will become a 95% owned subsidiary of FGVK. Paul Sugandi will hold 5% equity interest in PT TAA after the proposed PT TAA acquisition is completed. As at 31 December 2013, FGVK has paid a deposit of RM9.06 million. (e) On 9 July 2013, FGVK had entered into a Conditional Sale and Purchase of Shares Agreement to acquire 285 shares of Rp1,000,000 each in the share capital of PT. Landak Bhakti Palma (“PT LBP”), representing 95% of the total issued and fully paid-up share capital of PT LBP, from the existing shareholders of PT LBP namely Lidya, Timotius Sintrajaya and Joko Sintra Jaya, all of whom are Indonesian citizens, for a total purchase consideration of RM18,302,700. Upon completion of the proposed PT LBP acquisition, PT LBP will become a 95% owned subsidiary of FGVK. Joko Sintra Jaya will hold 5% equity interest in PT LBP after the proposed PT LBP acquisition is completed. As at 31 December 2013, FGVK has paid a deposit of RM3.66 million.