2. MATERIAL ACCOUNTING POLICY INFORMATION (continued) 2.21 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Manager who is responsible for allocating resources and assessing performance of the operating segments. 2.22 Distribution policy With effect from 1 January 2018, ECW’s distribution policy is to distribute at least 90% of its distributable income on a semi-annual basis. The actual level of distribution will be determined at the Manager’s discretion. Since ECW’s first distribution on 28 November 2016 up to the period ending 31 December 2022, ECW had been making distributions on a quarterly basis. On 27 December 2022, the Manager had announced that ECW will make distributions on a half-yearly basis, in respect of the periods commencing on or after 1 January 2023. In addition, the Manager also has the discretion to distribute any additional amounts (including capital). In determining whether to distribute additional amounts, the Manager will consider a range of factors including but not limited to ECW’s funding requirements, financial position, growth strategy, compliance with relevant laws, regulations and covenants, other capital management considerations, the overall suitability of distributions and prevailing industry practice. 3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates and assumptions that are material or significant to the financial statements are applied to the following area: (a) Fair value estimation of investment properties (Note 14) (b) Assessment of impairment allowance of trade and other receivables (Note 11) (c) Assessment of impairment allowance of investments in subsidiaries (Note 15) (d) Validity of unauthorised mortgages imposed by the Sponsor (Note 24) (e) Adequacy of income tax (Note 8) 4. GROSS REVENUE Group 2024 2023 S$’000 S$’000 Rental income* 92,068 107,648 Other operating income 140 122 92,208 107,770 * The rental income of Stage 1 Properties of Bei Gang Logistics (“BGWL”), Chongxian Port Investment (“CXPI”), Chongxian Port Logistics (“CXPL”), Fuzhou E-commerce (“FZDS”) and Fu Heng Warehouse (“FHCC”), which totalled S$75,286,000 are subject to assumptions regarding the outcome of the Master Offset Agreement including the termination of master leases and related party leases with the Sponsor Group and certain replacement lease agreements with the Sponsor Group. The Manager assumed that the master leases for BGWL, FZDS and FHCC were terminated on 31 July 2024. The negotiations of the Master Offset Agreement with the Sponsor Group is still ongoing. ANNUAL REPORT 2024 93 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024
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