Sunny Tew

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2007 (Continued)27. Commitments and contingent liabilities (Continued)The GroupThe Company2007 2006 2007 2006$ $ $ $Letter of credit 42,789,099 14,168,256 37,714,571 13,235,279Credit facilities for subsidiaries 13,708,000 13,556,230 13,708,000 13,556,23056,497,099 27,724,486 51,422,571 26,791,509The amount of credit facilities utilised by the subsidiary company as at the balance sheet date amounted to $5,099,851 (2006: $10,890,416).In the opinion of the Directors, no loss is anticipated from these contingent liabilities.28. Segment reportingA segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or serviceswithin a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments, is based on the Group’smanagement and internal reporting structure.Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.Segment capital expenditure is the total costs incurred during the financial year to acquire segment assets that are expected to be used for more than one financial year.Business segmentsThe Group is organised into two main business segments. Segment assets consist primarily of property, plant and equipment, inventories, receivables, fixed deposits withbanks and cash and bank balances. Segment liabilities comprise operating liabilities. Capital expenditure comprises additions to property, plant and equipment.94 HG METAL MANUFACTURING LIMITED ANNUAL REPORT 2007