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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
176
33. Provisions
Group
Company
2020
2019
2020
2019
RM’000
RM’000
RM’000
RM’000
Provision for warranty
8,078
9,192
-
-
Provision for compensation claim
-
2,120
-
2,120
8,078
11,312
-
2,120
(a) Provision for warranty is based on current volumes of products sold still under warranty and on historic quality rates as well as
estimates and assumptions regarding future quality rates for new products.
(b) Provision for compensation claim is for a tenant’s renovation costs and general damages arising from an early termination of
a tenancy agreement by the Company. On 27 September 2011, the Court of Appeal had allowed the Company’s appeal against
the decision handed down by the High Court in favour of the tenant and directed that the matter be remitted back to the High
Court for a full trial.
During the case management held on 30 June 2020, the Court has directed that the matter to be struck out by virtue of Order
34 Rule 6 of Rules of Court 2012 with no order as to costs and no liberty to file afresh, resulting a reversal of RM2,120,000 which
has been reflected in Note 7.
The movement of the provisions are as follows:
Group
Company
2020
2019
2020
2019
RM’000
RM’000
RM’000
RM’000
Provision for warranty:
At 1 April 2019/2018
9,192
9,961
-
-
Reversal of provision (Note 7)
(2,897)
(2,558)
-
-
Charge for the year (Note 7)
1,783
1,789
-
-
At 31 March
8,078
9,192
-
-
Provision for compensation claim:
At 1 April 2019/2018
2,120
2,120
2,120
2,120
Reversal of provision (Note 7)
(2,120)
-
(2,120)
-
At 31 March
-
2,120
-
2,120