CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 FINANCIALS 156 157 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021 YEAR ENDED 31 DECEMBER 2021 4 PROPERTY, PLANT AND EQUIPMENT (CONT’D) The key assumptions used in estimating the recoverable amounts are set out below: US Europe Asia Occupancy rate 2021 45.0% to 95.0% 54.0% to 84.0% 36.4% to 73.0% 2020 37.0% to 96.0% 37.0% to 86.0% 20.0% to 70.0% Average room rate growth 2021 1.4% to 56.4% 1.1% to 12.2% 2.0% to 8.2% 2020 1.7% to 19.0% 1.1% to 12.7% 2.0% to 16.5% Discount rate 2021 7.5% to 11.8% 6.6% to 8.3% 11.8% to 12.0% 2020 7.5% to 12.8% 7.0% to 11.3% 6.5% to 12.0% Terminal rates 2021 5.5% to 9.8% 4.0% to 6.3% 9.0% to 10.0% 2020 5.5% to 11.0% 4.0% to 6.5% 4.5% to 9.0% Capitalisation rates 2021 N/A N/A 8.8% 2020 N/A N/A N/A The cash flow forecasts under the discounted cash flowmethod cover a five to ten years period, and cash flows beyond this period are extrapolated using a growth rate ranging between 1.5% and 3.1% (2020: 1.1% and 5.0%), which is based upon the expected trading growth for each hotel and inflation in the country in which the hotel is located. Sensitivity analysis The Group’s impairment review is sensitive to changes in the key assumptions used. An increase in occupancy rate and/or average room rate growth in isolation would result in a higher recoverable amount. An increase in discount rate, terminal rate or capitalisation rate in isolation would result in a lower recoverable amount. 5. INVESTMENT PROPERTIES Group Company $’000 $’000 Cost At 1 January 2020 5,518,112 600,422 Loss of control in subsidiaries (64,926) – Additions 194,854 3,226 Disposal/Written off (21,692) – Transfers from development properties 57,000 – Translation differences on consolidation 77,610 – At 31 December 2020 5,760,958 603,648 At 1 January 2021 5,760,958 603,648 Acquisition of subsidiaries 39 341,753 – Additions 279,723 3,099 Disposal/Written off (59,630) (797) Transfers to property, plant and equipment 4 (60,402) – Transfers to non-current assets held for sale (1,107,138) – Translation differences on consolidation 23,673 – At 31 December 2021 5,178,937 605,950 Accumulated depreciation and impairment losses At 1 January 2020 1,107,851 163,912 Charge for the year 107,541 14,781 Loss of control in subsidiaries (15,160) – Disposal/Written off (21,596) – Impairment loss 12,035 – Translation differences on consolidation 1,590 – At 31 December 2020 1,192,261 178,693 At 1 January 2021 1,192,261 178,693 Charge for the year 99,993 14,886 Disposal/Written off (51,403) (781) Transfers to property, plant and equipment 4 (12,755) – Transfers to non-current assets held for sale (40,216) – Impairment loss reversed (3,416) – Translation differences on consolidation (2,696) – At 31 December 2021 1,181,768 192,798 Carrying amounts At 1 January 2020 4,410,261 436,510 At 31 December 2020 4,568,697 424,955 At 31 December 2021 3,997,169 413,152 Fair value At 1 January 2020 8,780,086 1,115,949 At 31 December 2020 8,901,489 1,114,435 At 31 December 2021 9,945,537 1,662,892
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