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46. CONTINGENT LIABILITIES cont’d
WCT Berhad (66538-K)
annual report 2011
Group Company
2011 2010 2011 2010
RM'000 RM'000 RM'000 RM'000
(b) Performance, advance payment and tender
guarantee granted to:
- clients 606,301 731,255 606,301 656,236
- clients of subsidiaries
- clients of unincorporated jointly controlled
150,852 26,566 17,484 26,566
entities 159,469 267,392 159,469 267,392
- others 6,884 5,715 - -
923,506 1,030,928 783,254 950,194
As at reporting date, no values are ascribed on these guarantees provided by the Company for the purpose described
above as the directors regard the value of the credit enhancement provided by these guarantees as minimal and the
probability of default, based on historical track records of the parties receiving the guarantees are remote.
(c) Letters of credit utilised by
- subsidiaries - 1,020 - -
(d) Tax matters under appeal by
- a subsidiary 3,509 2,940 - -
- an associate - 2,775 - -
3,509 5,715 - -
(e) On 4 March 2010, Bahrain Asphalt Establishment B.S.C. (Closed) (known hereinafter as BAE) served a Request for
Arbitration against Gamuda Berhad ("Gamuda") (as the 1st Respondent), WCT Berhad (as the 2nd Respondent)
and Gamuda-WCT Joint Venture, Qatar (the "Gamuda-WCT JV") (as the 3rd Respondent) to refer certain alleged
disputes to arbitration. The Gamuda-WCT JV entered into a subcontract with BAE on 21 February 2006 (the "subcontractors")
whereby BAE was appointed as the sub-contractor for works known as the granular sub-base and
flexible pavement works (“Subcontract Works”) for the JV’s project known as “Dukhan Highway From Shahaniya
to Zekreet" which involved the construction of a 43km new highway from Shahaniya to Zekreet, in Qatar, the
construction of which has already been completed.
By its Statement of Claim, BAE is claiming from the Respondents jointly and severally, a total quantified sum of
approximately QAR144.7 million (or approximately RM122.5 million) in respect of alleged prolongation, escalation
and delays to the Subcontract Works, compensation for additional costs in respect of the prohibition of use of
materials, damages in alleged non-compliant materials supplied as well as further unquantified sums including
for legal costs, arbitration costs and interests (collectively referred to as “Claims”).
On 5 February 2012, the respective parties claims were amended, total quantified sum of BAE claims increased
to QAR148 million (or approximately RM125.8 million) and the respondents counterclaim were revised to QAR63
million (or approximately RM53.6 million).
179
NOTES TO THE FINANCIAL STATEMENTS
31 December 2011
cont’d