FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 319 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 54 PROVISION FOR LITIGATION LOSS Group 31.12.2018 RM’000 31.12.2017 RM’000 1.1.2017 RM’000 At 1 January 32,841 - - Provision during the financial year 2,700 32,841 - At 31 December 35,541 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. During the financial year, FGVT provided an additional provision of RM2,700,000 as letter of demand has been issued to FGVT for the claims demanded by a vessel owner. 55 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 Director 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 RS Grant is restricted share grant for the eligible employees selected on a basis designated by the LTIP Committee. 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.