Axiata Group Berhad - Annual Report 2016

Axiata Group Berhad | Annual Report 2016

FINANCIAL STATEMENTS

228

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

36. CONTINGENCIES AND COMMITMENTS (CONTINUED)

(d) List of contingent liabilities of subsidiaries of the Group as at 31 December are as follows: (continued)

Description

Potential exposure

2016

RM’million

2015

RM’million

Celcom & Celcom Resources vs TSDTR & 8 others (Indemnity Suit)

In 2006, Celcom and Celcom Resources initiated a claim against nine of its former directors

(“Defendants”) seeking inter alia, for indemnity in respect of the sums paid out to DeteAsia

under the Award dated 2 August 2005 handed down by the Tribunal of the International Court of

Arbitration of the International Chamber of Commerce in Paris and damages for breach of their

fiduciary duties.

Two of the Defendants, TSDTR and DBR filed a counterclaim against Celcom and Celcom

Resources for damages for breach of an alleged global settlement involving, inter alia, the

present action, and also for conspiracy and misrepresentation in inducing TSDTR to withdraw a

counterclaim in another suit.

The Directors, based on legal advice received, are of the view that it has good prospects of

successfully defending the counterclaim.

7,215.0

Claim on Robi by National Board of Revenue of Bangladesh (“NBR”)

The Large Tax Unit of NBR issued a show case letter dated 23 February 2012 to Robi demanding

payment of supplementary duty and VAT levied on the issuance of a certain number of SIM

cards to new customers of Robi on the pretext that the issuance was replacement purposes with

regards to Robi’s existing customers. The total demand amounted to BDT4,150.6 million.

The Board of Directors, based on legal advice received, are of the view that it has good prospects

of succeeding on the claim.

236.7

226.9

Robi’s tax position

Robi has claimed for SIM tax subsidy as a deductible expense in its tax provision computations

for FY 2005 to 2016 (2015: FY 2005 to 2015). The National Board of Revenue has challenged this

claim and regarded the SIM tax subsidy as non-deductible, on grounds that the subsidies are

collectible from the customers and hence is not a ‘business expense’. The case has been taken to

the local court whereby the proceeding is still ongoing with no decision reached to-date.

Based on legal opinion received, the Board of Directors are of the view that Robi has good

prospects of succeeding on the claim.

358.5

339.5