FGV Audited Financial Statements 2020

57 CAPITAL COMMITMENTS Group 2020 RM’000 2019 RM’000 Capital expenditure approved and contracted for: - Property, plant and equipment 201,853 207,874 201,853 207,874 58 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 Counterclaim on 15 November 2017. The Court had heard part of the trial on the matter on 15 January 2019 and continued another part heard on 4 March 2019 to 6 March 2019. The matter was fixed for decision (after full trial) on 1 August 2019 whereby the High Court dismissed the plaintiff claim against DOP and allowed the counter claim made by DOP with cost of RM80,000. On 10 September 2019, the Solicitor informed that the Plaintiff Solicitor did not serve any notice of appeal. Solicitors have advised that DOP will not be able to enforce a Malaysian Judgment in China as China is not listed as reciprocal part under Malaysian Reciprocal Enforcement of Judgment Act 1958 (“REJA”). As at 30 September 2020, DOP has agreed not to proceed with enforcement of judgement in China. The remaining claims are not material to be disclosed in the financial statements and deemed remote by the Directors. 59 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (i) On 13 February 2020, the Board of Directors’ announced that MEO Trading Sdn. Bhd., an indirect joint venture of the Company has been placed under Members’ voluntary winding up pursuant to Section 439(1)(b) of the Companies Act 2016. The liquidator has been appointed for the company on the same day. The voluntary winding up of the company is not expected to have any material impact on the earnings and net assets of the Group for the financial year ended 31 December 2020. (ii) On 9 April 2020, the MSMH issued a letter to F&N to exercise its rights to rescind the sale and purchase agreement in respect of the disposal of its leasehold agriculture land located at Chuping, Perlis, entered on 8 October 2019. Based on the assessment performed during the financial year, the criteria required for the plantation land to be continued to be classified as assets held for sale has not met. Consequently, the assets were reclassified to non-current assets. (iii) On 8 May 2020, the Board of Directors of the Company announced that FGV Trading Sdn. Bhd. (“FGVT”), a subsidiary of FGV Plantations Sdn. Bhd. which in turn is a wholly-owned subsidiary of the Company, had entered into an agreement with Pre Unique Pvt Ltd (“PREU”) to establish an operation in India. The company has been incorporated in India on 29 July 2020 to carry out the intended business. (iv) On 24 July 2020, the Board of Directors of the Company announced that the Minister of Finance (Incorporated), being the Special Shareholder of the Company, has extended Datuk Wira Azhar Abdul Hamid’s tenure as Government Appointed Director and Chairman of the Board of Directors of FGV effective 8 September 2020. 187 Notes to the Financial Statements For The Financial Year Ended 31 December 2020 Audited Financial Statements 2020