ENRA Group Berhad Annual Report 2018

129 A N N U A L R E P O R T 2 0 1 8 NOTES TO THE FINANCIAL STATEMENTS 31 March 2018 cont’d 43. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (Cont’d) (c) On 29 March 2018, ENRA Engineering And Fabrication Sdn. Bhd. (“EEFAB”), a wholly-owned indirect subsidiary of the Company, had served a payment claim under Section 5 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) against Gemula Sdn. Bhd. (“Gemula”) for a total amount of RM10,574,663 (“CIPAA Payment Claim”). Gemula had, via its solicitors, responded with a payment response dated 30 March 2018 disputing the CIPAA Payment Claim by EEFAB. Gemula appointed EEFAB as a subcontractor for the project known as “Pembinaan Garaj Utama Kenderaan 8 x 8 Dan Kenderaan Pasukan Serta Infrastruktur Di Kem Batu Sepuluh (10) Kuantan, Pahang” (“the Project”). Gemula subcontracted the following works for the Project to EEFAB by way of these respective documents: (a) Letter of Award dated 15 January 2016 (“LOA 1”) whereby Gemula appointed EEFAB to undertake the ‘Struktur Besi’ works for the Project; and (b) Letter of Award dated 9 May 2016 (“LOA 2”) whereby Gemula appointed EEFAB to undertake the scope described as “membekal bahan binaan dan menyiapkan segala kerja berbaki” for the Project. The CIPAA Payment Claim is in relation to outstanding amounts due and payable by Gemula for works completed pursuant to LOA 1 and LOA 2 including additional/variation works ancillary to the said subcontracts. On 16 April 2018, EEFAB served a Notice of Adjudication to Gemula in accordance with Sections 7 and 8 of CIPAA to refer the CIPAA Payment Claim to adjudication. Pursuant to the Notice of Adjudication, EEFAB is seeking the following reliefs and/or remedies from Gemula:- (a) Payment by Gemula of the total sum of approximately RM10.22 million due to EEFAB; (b) Interests; (c) Costs; and (d) Any other further reliefs that the Learned Adjudicator deems fits and proper. On 11 June 2018, EEFAB served an Adjudication Claim to Gemula in accordance with Section 9 of CIPAA. Gemula is given until 29 June 2018 to revert with its response to EEFAB’s Adjudication Claim, after which EEFAB has five (5) working days to serve a written reply to Gemula solicitors. The Adjudicator will then revert with his decision within forty-five (45) working days from the date of EEFAB’s written reply.