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Notes To The
Financial Statements
As at 31 March 2019
36. Financial risk management objectives and policies (cont’d.)
(d) Credit risk
Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals,
limits and monitoring procedures. Credit risk is minimised and monitored via strictly limiting the Group’s
associations to business partners with high creditworthiness. Trade receivables are monitored on an
ongoing basis via Group management reporting procedures.
The Group has no significant concentration of credit risk that may arise from exposures to a single
debtor or to groups of debtors except for a balance of RM41,827,000 (2018: RM55,319,000) due from the
Government of Malaysia.
37. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains an optimal capital
structure in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders. The
Group’s approach in managing capital based on defined guidelines that are approved by the Board.
There were no changes in the Group’s approach to capital management during the year.
38. Material litigation
(a) Hak Guna Usaha No. 01/Nunukan Utara
On 23 August 2016, the Company’s subsidiary, PTNJL, received an order (“Ministerial Order”) issued by the
Menteri Agraria dan Tata Ruang/Kepala Badan Pertanahan Nasional (“Defendant”) dated 25 July 2016 to
revoke PTNJL’s land title Hak Guna Usaha (“HGU”) for the cultivation of oil palm in Kalimantan Utara with
immediate effect.
The Ministerial Order was on the basis that the HGU was improperly issued due to administrative
irregularities performed by certain officers of the Badan Pertanahan Nasional Provinsi Kalimantan Timur
at the time of the issuance of the HGU in 2003, resulting in parts of the area within the HGU to overlap
with forestry areas.
On 21 October 2016, PTNJL filed an application in the Pengadilan Tata Usaha (“PTUN”) in Jakarta, Indonesia
seeking an order to annul the Ministerial Order. Simultaneously, in the said application, PTNJL has also
sought an order from PTUN to postpone the enforcement of the Ministerial Order pending full and final
determination of the matter by the Indonesian courts.
financial
statements
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