CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 FINANCIALS 162 163 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021 YEAR ENDED 31 DECEMBER 2021 7 INVESTMENTS IN AND BALANCES WITH SUBSIDIARIES (CONT’D) Impairment losses The movements in impairment losses in respect of investments in subsidiaries and amounts owing by subsidiaries during the year are as follows: Investments in subsidiaries Amounts owing by subsidiaries Lifetime ECL – not credit impaired 2021 2020 2021 2020 $’000 $’000 $’000 $’000 At 1 January 33,663 31,936 125,600 104,804 Impairment loss made 17,270 1,727 57,963 20,796 Amount utilised (18,646) – – – At 31 December 32,287 33,663 183,563 125,600 The increase in loss allowance on amounts owing by subsidiaries was due to a decline in the financial positions of the subsidiaries. Further details regarding the Group’s subsidiaries are set out in note 43. 8 INVESTMENTS IN AND BALANCES WITH ASSOCIATES Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000 Investments in associates Investments in associates 832,378 710,699 – – Impairment loss (15,399) (3,000) – – 816,979 707,699 – – Balances with associates Amounts owing by associates: – trade 22 28 3 7 – non-trade, interest-bearing 1,120 1,057 – – – non-trade, interest free – 6,525 – – 1,142 7,610 3 7 Receivable: – Within 1 year 15 1,142 7,610 3 7 Amount owing to an associate payable within 1 year: – non-trade, interest-free 30 2 887 – – The non-trade amounts owing by associates are unsecured and repayble on demand. In respect of interest-bearing amounts owing by associates, interest of 6.00% (2020: 6.00%) per annum was charged by the Group. The non-trade amount owing to an associate is unsecured and repayable on demand. 8 INVESTMENTS IN AND BALANCES WITH ASSOCIATES (CONT’D) Included in the Group’s investments in associates are investments in two associates (2020: two) which are listed on the Mainboard of Singapore Exchange Securities Trading Limited (SGX-ST). As at the reporting date, the aggregate carrying amount of these investments were $764.5 million (2020: $690.7 million) and the fair values based on the published price quotation (Level 1 in the fair value hierarchy) was $612.7 million (2020: $554.9 million). In respect of one associate whose carrying and fair values were $632.0 million (2020: $575.0 million) and $456.7 million (2020: $427.4 million) respectively, management had assessed the recoverable amount of the investment and determined that as its net asset value based on the latest available audited financial statements of the associate is higher than the carrying amount as at the reporting date, no impairment loss for this investment is considered necessary. During the year, the Group assessed the carrying amount of its investments in associates for indicators of impairment. Based on the assessment, the Group recognised an impairment loss of $12,125,000 (2020: $Nil) on its investments in certain associates as a result of their weak financial performance. The recoverable amount was estimated taking into account the fair values of the underlying assets and the liabilities of the associates. The fair value measurement was categorised as a Level 3 in the fair value hierarchy as it is derived from unobservable inputs. The movements in impairment losses in respect of investments in associates are as follows: Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000 At 1 January 3,000 3,000 – – Impairment loss recognised 12,125 – – – Translation difference 274 – – – At 31 December 15,399 3,000 – – Impairment loss recognised was included in “Share of after-tax profit of associates” in the consolidated statement of profit or loss. Immaterial associates The Group has interests in a number of individually immaterial associates. The following table summarises, in aggregate, the Group’s share of profit and other comprehensive income of these immaterial associates that are accounted for using the equity method: Group 2021 2020 $’000 $’000 Carrying amount of interests in individually immaterial associates 816,979 707,699 Group’s share of: – profit from continuing operations 30,713 37,976 – other comprehensive income 25,570 13,192 – total comprehensive income 56,283 51,168 Financial guarantee A wholly-owned subsidiary of the Group had entered into a deed of guarantee in favour of Sunbright Holdings Limited (Sunbright), an associate of the Group, in relation to the residential properties owned by Sunbright. The maximum exposure of the Group under the deed of guarantee at the reporting date is approximately $20.2 million (2020: $24.2 million). Management do not consider it probable that a claim will be made against the Group under the financial guarantee.
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