notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
47 COMMITMENTS (CONTINUED)
(b)
Operating lease commitments - The Group as lessee (continued)
Future minimum rental payable under non-cancellable operating leases (excluding prepaid lease payments) at the reporting date are as follows:
Group
2014
2013
RM'000
RM'000
Payable not later than one year
2,326
2,163
Payable later than one year but not later than five years
673
1,854
(c)
Operating lease commitments - The Group as lessor
The Group leases out equipment to non-related parties under non-cancellable operating leases.
Total future minimum lease receivables under non-cancellable operating leases contracted for at the reporting date but not recognised as receivables, are as
follows:
Group
2014
2013
RM'000
RM'000
Not later than one year
12,978
18,481
More than one year but not later than five years
7,769
2,232
48 CONTINGENT LIABILITIES
On 17 December 2008, Socotherm S.p.A. (“Socotherm”) commenced a Request for Arbitration against the Company and its indirect wholly-owned subsidiary, Wasco
Coatings Limited (“WCL”).
At the relevant time, Socotherm and WCL were shareholders of PPSC Industrial Holdings Sdn. Bhd. (“PPSCIH”), an investment holding company where Socotherm
held 32.52% and WCL held 67.48% in the total paid-up capital of PPSCIH. PPSCIH in turn held 78.00% of the paid-up capital of Wasco Coatings Malaysia Sdn. Bhd.
(“WCM”), a company principally involved in the coating of pipes for the oil and gas industry. In October 2009, WCL acquired Socotherm’s 32.52% interest in PPSCIH and
currently, PPSCIH holds 70% of the paid-up capital of WCM.
Socotherm alleged that the transfer of 25,508,858 shares in PPSCIH (“PPSCIH Shares”) from the Company to WCL, as part of an internal restructuring, is in breach of the
Joint Venture Agreement dated 16 December 1991 (“JVA”) and Supplemental Agreement dated 14 July 1997 (“SA”) (collectively known as the “said Agreements”) and
that the Company and WCL have breached certain territorial limit provisions under the said Agreements. Socotherm is seeking for an order for damages to be assessed
by the Arbitral Tribunal for the breach of the territorial limits provisions and the transfer of shares.
On 24 February 2009, WCM commenced a Request for Arbitration against Socotherm, which is consolidated as a counter-claim in the above-mentioned arbitration.
WCM alleged that the Respondent has also breached certain territorial limit provisions under the said Agreements arising from its activities in the extended territories
as defined in the SA which directly competes with WCM’s activities in those territories, in particular Vietnam, India, Australia, Indonesia and China.
155
Wah Seong Corporation Berhad • Annual Report 2014
