153 ANNUAL REPORT 2024 Notes to The Financial Statements 31 December 2024 30. Contingent liabilities The Company has provided an undertaking to provide continuing financial support to the subsidiaries, Megachem Australia Pty Ltd and Megachem Specialty Chemicals (I) Private Limited, to enable the subsidiaries to meet their obligations as and when they fall due. As at 31 December 2024, the net liabilities of Megachem Australia Pty Ltd and Megachem Specialty Chemicals (I) Private Limited amounted to $1,481,000 (2023: $2,392,000) and $812,000 (2023: $1,080,000) respectively. The net liabilities of these two subsidiaries are mainly made up of their payables owed to the Company. The Company has also provided corporate guarantees to banks for subsidiaries’ loans. The corporate guarantees are as follows: Company 2024 2023 $’000 $’000 Corporate guarantees provided to subsidiaries’ bank loans 5,890 4,919 Fair value of the corporate guarantee was not recognised by the Company. 31. Capital commitments Group Company 2024 2023 2024 2023 $ $ $ $ Purchase of property, plant and equipment 15,138,501 1,404,282 14,932,789 1,404,282 32. Financial information by operating segments Disclosure of information about operating segments, products and services, the geographical areas, and the major customers are made as required by SFRS (I) 8 Operating Segments. This disclosure standard has no impact on the reported results or financial position of the Group. Management has determined the operating segments based on the reports reviewed by the Executive Committee (“Exco”) that are used to make strategic decisions. The Exco comprises the Managing Director, the Chief Financial Officer and the Group Finance Manager. The Exco considers the business from geographic segment perspective. The Group operates in five main geographical segments (Singapore, Malaysia, United Kingdom, China and Middle East) by location of revenue and assets. Other geographical areas mainly comprise the Philippines, Vietnam, India, Australia and Indonesia, none of which constitute a separately, reportable segment. All geographic locations are engaged in the trading in chemical and chemical-related products. In addition, the segment in Singapore also derives revenue from blending. As the revenue and assets for blending becomes a significant portion of the Singapore segment, the Exco considers it beneficial to review it as a separate business segment from the distribution activities of the Group. The Exco assesses the performance of the operating segments based on net profit before tax. Inter-segment sales are measured on the basis that the entity actually used to price the transfers. Internal transfer pricing policies of the Group are as far as practicable based on market prices. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
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