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24. OpERATING lEASES<br />
Leases as lessee<br />
operating lease rentals are repayable as follows:<br />
Masterskill Education Group Berhad / Annual Report 2012<br />
105<br />
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)<br />
Group<br />
31.12.2012 31.12.2011 1.1.2011<br />
Rm’000 Rm’000 Rm’000<br />
Less than one year 667 1,144 2,148<br />
Between one and five years 29 486 431<br />
696 1,630 2,579<br />
The Group leases computer equipment and advertisement board under operating leases. The leases run for a period of 1 to 3<br />
years with an option to renew the lease after that date. Lease payments are increased every 3 years to reflect market rentals.<br />
None of the lease includes contingent rentals.<br />
25. COmmITmENTS<br />
31.12.2012<br />
Group<br />
31.12.2011 1.1.2011<br />
Rm’000 Rm’000 Rm’000<br />
Capital commitments:<br />
Property, plant and equipment<br />
Contracted but not provided for 11,534 54,091 56,622<br />
26. CONTINGENCIES<br />
The Directors are of the opinion that provisions are not required in respect of the following matters, as it is not probable that a<br />
future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.<br />
In October 2006, a subsidiary, Masterskill (M) Sdn. Bhd. (“Masterskill”) entered into a sale and purchase agreement (the “SPA”)<br />
with Kemacahaya Development Sdn. Bhd. (“KDSB”) and Syarikat Kemacahaya Sdn. Bhd. (“SKSB”), pursuant to which SKSB and<br />
KDSB agreed to sell six (6) property units at Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor (the “Six<br />
Properties”) to Masterskill for RM2,000,000. The Six Properties are part of Masterskill’s current Cheras university college campus<br />
and KDSB and SKSB were the original developer and proprietor of the Six Properties.<br />
Upon the advice of Masterskill’s lawyers, Masterskill withheld payment of the balance purchase price for the Six Properties<br />
under the SPA due to a dispute with KDSB and SKSB. In November 2006, after Masterskill had lodged a caveat over the Six<br />
Properties, KDSB sought to terminate the SPA and repossess the Six Properties. They subsequently entered into a sale and<br />
purchase agreement to sell the Six Properties to Pasupathy a/l Kanagasaby (“K. Pasupathy”), who then sought possession of the<br />
Six Properties.<br />
At the same time, two individuals, Chin Yam Meng (“CYM”) and Leng Kok Onn (“LKO”), attempted to enter the premises of<br />
the Masterskill’s Cheras university college campus, claiming to be the lawful owners of the Six Properties due to arrangements<br />
that they had made with Megatalent Sdn. Bhd. (“Megatalent”) in 2004, pursuant to which Megatalent had purportedly assigned<br />
its rights to the Six Properties to CYM and LKO. By way of background, prior to the execution of the SPA, Megatalent had been<br />
KDSB’s and SKSB’s marketing agent for a number of properties, including the Six Properties. In connection with this marketing<br />
relationship and to facilitate the marketing of these properties, KDSB and SKSB had assigned or sold the properties, including the<br />
Six Properties, to Megatalent. However, the agreements pursuant to which these properties were assigned or sold to Megatalent<br />
were subsequently rescinded and the caveats which CYM and LKO had lodged over the Six Properties were removed in July<br />
2006 prior to Masterskill entering the SPA.