NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025 30. PROVISIONS (CONT'D) (c) Liquidated ascertained damages (Cont'd) On 11 January 2019, the recipient of KTM Komuter Station, Perbadanan Aset Keretapi (“PAK”) issued a certificate of non-completion (“CNC”) to Srijang Kemajuan Sdn. Bhd. (“SKSB”), a 99.99% owned subsidiary of the Company, and stating that SKSB has failed to complete the construction of KTM Komuter Station (“Construction Works”) by 10 December 2016 and therefore PAK is entitled to impose liquidated ascertained damages (“LAD”) pursuant to the Development cum Lease Agreement (“DCLA”) dated 12 October 2012 entered into between PAK and SKSB. The LAD will be calculated daily at a rate of RM4,438 from the revised completion date on 10 December 2016 (extension of time number 1) until the completion of the Construction Works. On 28 February 2019, SKSB wrote to dispute the validity of the CNC on the grounds that SKSB had on 10 January 2017 submitted extension of time (“EOT”) number 2 of which PAK has yet to assess SKSB’s application for EOT number 2 and on the same day, SKSB submitted EOT number 3 in view of the delay by relevant authorities in approving the change of building design and use of building materials. On 19 August 2019, PAK granted SKSB’s EOT number 2, for a period of up to 8 January 2017 (“EOT 2”). On 13 January 2020, SKSB wrote to appeal for the EOT 2 to be extended to 30 December 2017 instead of 8 January 2017. On 15 June 2020, SKSB submitted EOT number 4 (“EOT 4”), for period from 11 April 2020 to 1 July 2020 together with the above mentioned EOT 2 (period from 11 December 2016 to 30 December 2017) and EOT number 3 (“EOT 3”) (period from 31 December 2017 to 10 April 2020). On 23 November 2021, SKSB submitted EOT number 5 (“EOT 5”), for period from 10 June 2020 to 17 October 2021 together with the above mentioned EOT 2, EOT 3 and EOT 4. On 13 March 2023, SKSB handed over vacant possession of the KTM Komuter Station to PAK. On 10 November 2023, SKSB submitted EOT number 6 (“EOT 6”) to apply extension of time until 13 March 2023. During the financial year, PAK has assessed all the EOT submitted by SKSB, and in total PAK has granted EOT up to 7 November 2018 instead of the submitted EOT as of 13 March 2023, i.e., completion date of the Construction Works. This gives rise to LAD sum of approximately RM7.0 million. However, SKSB is not agreeable to the granted EOT and is in the midst of liaising with PAK to review and reassess the LAD sum, together with variation order claims for Construction Works certified by external consultants of approximately RM6.8 million. Nevertheless, in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, the Group has recognised a provision amounting to RM7,043,677, which is calculated daily at a rate of RM4,438. Subsequent to financial year end, SKSB received an approved variation order claims from PAK amounting to RM4,989,593 and a letter on LAD claimed by PAK amounting to RM7,039,239. This results in a net payable amount of RM2,049,646 to PAK, and SKSB has intention to appeal for further waiver of the said amount. PG | 266 ANNUAL REPORT 2025 MKH BERHAD
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