FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 333 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 58 COMMITMENTS (CONTINUED) (a) Operating lease arrangements (continued) (ii) The Group as lessor: (continued) Rental income recognised in profit or loss during the financial year amounted to RM1,955,000 (2017: RM2,201,000). (b) Capital commitments Group 2018 RM’000 2017 RM’000 Capital expenditure approved and contracted for: - Property, plant and equipment 404,636 514,209 - Intangible asset 2,941 - 407,577 514,209 59 CONTINGENT LIABILITIES On 21 September 2017, Delima Oil Products Sdn. Bhd. ( “ DOP ” ), an indirect subsidiary of the Company, was sued by a company in China known as Chengdu Azonda International Trading Co., Ltd. ( “ Azonda ” ). The Plaintiff claims that they have incurred damages due to the alleged shipment issues in 2016 and 2017 amounting to RM7.0 million as well as loss of future profits approximately RM46.0 million. On 3 November 2017, DOP filed its Statement of Defence and Counterclaim and Azonda filed its Reply to Defence and Defence to Counterclaimon 15 November 2017. The Court had heard part trial thematter on 15 January 2019 and continued another part heard on 4 March 2019 to 6 March 2019. The matter now is fixed for continued trial on 12 April 2019. Based on available information and on legal advice received, the Directors are of the view that there is a good chance of defending the above claim and therefore, no provision has been made in the financial statements. The remaining claims are not material to be disclosed in the financial statements and deemed remote by the Directors.