B9. MATERIAL LITIGATION On 30 October 2019, the High Court Judge dismissed GOM's application to convert PSKIN’s OS to a Writ action and awarded costs to Prestariang SKIN Sdn. Bhd (“PSKIN”). In dismissing GOM’s application, the Judge held, among others, that the termination of the Concession Agreement by expropriation is not in dispute. The only issue for the determination of the Court is the amount to be paid by GOM as a consequence of the expropriation. The Concession Agreement provides for a contractual formula to determine the amount to be paid. As such, there are no disputes of fact to warrant a trial. The Judge further directed that the hearing of PSKIN's OS and cross-examination of the deponents of affidavits (if necessary) be fixed for 1 July 2020, 2 July 2020 and 3 July 2020. Meanwhile, GOM has filed for an appeal on the High Court Judge’s dismissal of its application to convert PSKIN’s OS to a Writ action. The hearing for the appeal which was fixed for 14 April 2020 was postponed to 10 June 2020. TOMORROW !!!!!!!!! The Group has filed and served its Originating Summons (“OS”) dated 15 April 2019 against the Government of Malaysia (“GOM”) as Defendant claiming the amount of RM733 million in relation to the termination of the Sistem Kawalan Imigresen Nasional (SKIN) by expropriation. The Group remains positive on the compensation amount based on the formula stipulated under the Concession Agreement. Based on the above, the management is confident that there is no impairment necessary for the period under review.
The Board of Directors of Edaran Berhad ("EDARAN") is pleased to announce that Jabatan Kastam Diraja Malaysia (“JKDM”) has accepted the proposal by EDARAN's wholly owned subsidiary, Edaran IT Services Sdn Bhd (“Edaran IT”) to undertake the service continuity project of "Sistem Maklumat Kastam" (“SMK”) / SMK enhancement for a period of 24 months at a total contract value of RM149.97 million (“Contract”).
The commencement date for the Contract is 1 September 2017 and will expire on 31 August 2019.
This Contract has significant effect on the earnings per share of the Company for the financial year ending 30 June 2018. The EPS is estimated to increase by 16.00 sen. Proceeds from the Contract shall contribute towards the earnings of EDARAN Group for the financial year ending 30 June 2018.
FORWARD-LOOKING STATEMENT Logistics Segment In conjunction with the recent completion of our 70,000 square feet warehouse at Pulau Indah and 155,000 square feet warehouse at Port Klang Free Zone, we are optimistic and confident to expect a positive growth and contribution by the warehousing sector to our Group in the next financial year since both warehouses are already occupied by new customers. Along with these new customers, we are expecting additional support to our haulage and forwarding services and thus are optimistic that these sectors are able to maintain a stable growth in the next financial year. At present, we have planned and executed an additional 110,000 square feet of warehouse space through two new warehouses measuring 41,000 and 70,000 square feet each, positioned within the Port Klang Free Zone and Pulau Indah area respectively, and targeted to be completed within the next financial year. As for the lorry transportation sector, we remained optimistic while getting prepared to weather a tough year ahead due to the uncertainty of the current market condition resulted by the suspension of various mega projects by the government. Strategically, we have begun to downsize our fleet through disposing older and less efficient lorries while continuing to upgrade and maintain the existing fleet. As business grows over time, we will then purchase new lorries to replace the disposed units.
Commentary On Prospects In view of the market volatility after the Malaysian general election as well as the impact from the increasing fuel costs, the Board foresees the overall financial performance of the Group to be challenging. As such, the Group will maintain the current fleet of operating equipments for the land logistics and shipping businesses while continuing to focus on the expansion of its warehousing business. Two warehouses were completed during the final quarter of the financial year and are expected to contribute positively to the results of the Group in the next financial year. The Group is planning to construct another warehouse in Pulau Indah, Selangor Darul Ehsan, in the next financial year.