notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
48 CONTINGENT LIABILITIES (CONTINUED)
A partial award was received from the Arbitral Tribunal concerning only the issue of liability of the parties to the two arbitral proceedings to each other under the various
claims and counterclaims. The Arbitral Tribunal inter alios held that:
a)
The Company and WCL were in breach of certain provisions on transfer of PPSCIH shares. However, Socotherm’s claim for a re-transfer of the PPSCIH Shares
for breach is dismissed.
b)
The Company and WCL are liable to Socotherm for breach of certain provisions in the JVA and the SA respectively that placed certain territorial limits under the
JVA and the SA on the pipe coating services that could be provided and on the sale of pipe-coating plants.
c)
WCM is liable to pay Socotherm a fee of 5% on the net profit on projects procured within the countries defined in the SA.
d)
Socotherm is liable to WCM for the breach of the territorial restrictions in the SA in respect of certain projects undertaken by Socotherm in Vietnam and China.
e)
WCM’s claims against Socotherm for breach of the territorial restrictions in the SA in respect of certain projects undertaken by Socotherm in India, Indonesia
and Australia were dismissed.
f)
Costs of the proceedings are reserved.
The consolidated arbitral proceedings have concluded and the Group is still awaiting the Arbitral Tribunals decision.
The Directors are unable to ascertain the impact of the award at this point, pending the Arbitral Tribunals decision for the determination of the compensation payable
by each party.
49 SEGMENTAL ANALYSIS
For management purposes, the Group is organised into business units based on their products and services. The Group’s operating segments have been realigned to
reflect the new organisation structure adopted in the preceding financial year.
.
The Group’s operating segments comprise:
(a)
Oil & gas division: Pipe coating, pipe manufacturing for the oil and gas industry, building and operating offshore/onshore field development facilities and the
provision of highly specialised equipment and services to the power generation, oleochemical and petrochemical industries.
(b)
Renewable energy division: Supplier and manufacturer of specialised equipment for biomass power plants; such as industrial fans, boilers and turbines that
run primarily on biomass fuels.
(c)
Industrial trading & services division: Trading and distribution of building materials and the manufacturing and trading of industrial pipes for the construction
industry.
(d)
Plantation division: Agricultural development, cultivation of oil palm and other crops and trading of oil palm products and agriculture based products.
(e)
Others: All other units within the group that do not constitute a separately reportable segment.
Management monitors the operating results of its divisions separately for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on revenue and profitability measures as shown in the table below.
Transactions between segments were entered into in the normal course of business and were established on agreed terms. The effects of such inter-segmental
transactions are eliminated on consolidation.
The assets are allocated based on the operations of the respective segments. The amounts provided to the Group Chief Executive Officer with respect to total assets
are measured in a manner consistent with the disclosure of segment assets below.
156
Wah Seong Corporation Berhad • Annual Report 2014
