Notes To The Financial Statements (Cont’d) 31 March 2026 SECTION 05 : FINANCIAL STATEMENTS & OTHERS 146 Registration No: 68 199201005296 (236800 - T) 15. TRADE AND OTHER PAYABLES (continued) (d) (continued) Land entitlement payments represent consideration payable to landowners through the transfer of a specified number of property units upon completion of the respective development projects. The liability is initially recognised at fair value upon acquisition of the land. Subsequent to initial recognition, the liability is not remeasured for changes in the market value of the underlying properties in accordance with its contractual terms. The liability is derecognised upon transfer of the specified property units to the landowners in settlement of the obligation. Land entitlement payment amounting to RM8,000,000, which was previously classified as liabilities directly associated with the disposal group held for sale, was reclassified to other payables during the financial year following the cancellation of the proposed disposal, as disclosed in Note 6(e) to the financial statements. (e) In the previous financial year, amount due to a related party represented advances received from a non-controlling interest of a subsidiary amounting to RM2,720,000 which were unsecured, non-interest bearing and payable on demand in cash and cash equivalents. (f) Provision for an onerous contract arises from cost overruns in respect of an affordable housing project in Dengkil, Selangor, as the estimated costs required to fulfil the contractual obligations, including costs to complete the project and undertake rectification works, exceed the expected contract revenue. The provision reflects management's best estimate of the excess costs expected to be incurred and arose primarily from increases in construction and rectification costs beyond the original contract values. The provision is expected to be substantially utilised within the next twelve (12) months. The movements of the provision for onerous contract are as follows: Group 2026 2025 RM’000 RM’000 At beginning of the financial year - - Recognised in profit or loss 73 - At end of the financial year 73 - (g) Included in non-current other payables of the Group is a provision for deferred consideration amounted to RM21,600,000 (2025: Nil) arising from a land acquisition arrangement entered into during the financial year. The deferred consideration comprises fixed consideration of RM21.6 million and additional consideration equivalent to 50% of the net distributable profit generated from the development project. The liability was initially recognised at its present value upon acquisition of the land. The provision is included in Level 3 of the fair value hierarchy. The fair value is measured based on management's best estimate of the expenditure required to settle the obligation, using a probability-weighted expected value approach. The estimated future cash outflows are discounted to present value using a discount rate of 7.02% (2025: Nil) per annum. The obligation is expected to be settled progressively throughout the development period and upon completion of the project within the next five (5) years.
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