FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 FINANCIAL STATEMENTS 297 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 51 PROVISION FOR LITIGATION LOSS Group 2017 RM’000 2016 RM’000 At 1 January - - Provision during the financial year 32,841 - At 31 December 32,841 - Provision for litigation loss relates to amount provided for legal suit by a vessel owner, against FGV Trading Sdn. Bhd. (“FGVT”), a wholly-owned subsidiary of the Company. The claims are for the loss and damages caused by an alleged breach of the terms of a Letter of Indemnity (“LOI”) issued by FGVT in relation to the release of goods by the vessel owner for CPO sold by FGVT to end customer, which had defaulted payments to the financial institution. 52 LONG TERM INCENTIVE PLAN The Company had established a long term incentive plan (“LTIP”) in the form of employee share grant scheme which is governed by the By-Laws which was approved on 3 February 2016. Pursuant to the LTIP, the Company shall award the grant of up to 10% of the issued and paid-up ordinary share capital of the Company (excluding treasury shares, if any) at any point of time during the duration of the LTIP, to the employees of the Company and its subsidiaries (“Group”) and Executive Directors of the Company who fulfil the eligibility criteria as eligible employees and is administered by the LTIP Committee. The LTIP comprises a restricted share (“RS”) grant and a performance share (“PS”) grant which shall be in force for a period of 10 years commencing from 3 February 2016, being the effective date of the implementation of the LTIP. The details of the Grant are as follows: (a) RS Grant The RSGrant is restricted share grant for the eligible employees selected on a basis designated by the LTIPCommittee. The RS Grant will be awarded on a need basis to the selected employees to be vested over a period of up to 3 years and after fulfilment of individual performance targets and certain performance conditions as determined by the LTIP Committee from time to time at its absolute discretion in accordance with the terms and conditions of the LTIP. (b) PS Grant The PS Grant is a performance share grant for senior management of the Group and Executive Director of the Company as well as key employees of the Group selected on a basis designated by the LTIP Committee. PS Grant will be awarded annually to the selected employees to be vested at the end of the 3 year period and after fulfilment of certain performance targets and/or conditions at the time of grant and vesting. The salient features of the LTIP are as follows: (a) The maximum number of new shares which may be made available under the LTIP shall not be more than 10% of the issued and paid-up ordinary share capital of the Company (excluding treasury shares, if any) at any point in time during the duration of the LTIP;