Dagang NeXchange Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DAGANG NeXCHANGE BERHAD 182 33. CONTINGENT LIABILITY On 10 July 2018, the Malaysia Competition Commission (“MyCC”) issued a notice of proposed decision (“Proposed Decision”) pursuant to Section 36 of the Competition Act 2010 (“the Act”) against a subsidiary of the Company, Dagang Net Technologies Sdn. Bhd. (“Dagang Net”). The Proposed Decision is pursuant to the investigation on alleged infringement for engaging in conduct which amounts to an abuse of its dominant position in breach of Section 10(1) of the Act read with Section 10(2)(c) and Section 10(3) of the Act. In the Proposed Decision, the MyCC proposed to impose a financial penalty of RM17,397,695, being the maximum allowable penalty pursuant to Section 40(4) of the Act. The Directors of the Company believe, based on legal advice, that the Proposed Decision can be successfully defended and therefore no provision is required to be made in the financial statements. 34. RELATED PARTIES Identities of related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the parties are subject to common control. Related parties may be individuals or other entities. Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group. The significant related party transactions of the Group and of the Company are as follows: Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Subsidiary companies Management fee income - - 15,687 15,283 Dividend income - - 6,078 11,542 Purchase of IT products and services - - (32) (29) Purchase of other products - - (813) (217) Other related parties* Secondment of manpower (164) (727) - - Training contract charged (41) (385) - - Advisory fee (240) (194) - - Payroll processing fee - (95) - - Purchase of IT products and services (823) - - - Management fee income - 145 - - Sales of IT products - 13 - - * The related parties and the Group are subject to common significant influence.