CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 FINANCIALS 172 173 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021 YEAR ENDED 31 DECEMBER 2021 9 INVESTMENTS IN AND BALANCES WITH JOINT VENTURES (CONT’D) (v) Financial guarantee issued 2021 During 2021, the Group fully settled the obligation to the financial institution in connection with the financial guarantee in connection with a loan taken by the HCP Group (see below) for an aggregate sum of $286.1 million (USD213.1 million), and the provision previously made was fully utilised during the year (note 28). The second mortgage on the investment property of the Group that was previously secured for this loan (see below) was released by the financial institution during the year. 2020 During 2020, the Group had issued a financial guarantee of approximately $283.0 million to a financial institution in connection to loan taken by the HCP Group. Furthermore, the Group had pledged an investment property with a carrying value of $359.8 million under a second mortgage to the bank. As at 31 December 2020, the Group had considered that the probability that the financial guarantee would be invoked and recognised a provision for the full amount of the guarantee (note 28), taking into consideration the available financial information of HCP Group, Sincere Property Group not repaying the principal amounts of certain bonds on their maturities post 31 December 2020, the liquidity challenges faced by Sincere Property Group and legal advice received. Immaterial joint ventures The Group has interests in a number of individually immaterial joint ventures. The following table summarises, in aggregate, the share of profit and other comprehensive income of these immaterial joint ventures that are accounted for using the equity method: Group 2021 2020 $’000 $’000 Carrying amount of interests in individually immaterial joint ventures 1,037,046 1,085,288 Group’s share of: – profit/(loss) from continuing operations 76,779 (1,611) – other comprehensive income 4,637 – – total comprehensive income 81,416 (1,611) The Group’s share of the joint ventures’ commitments and contingent liabilities is as follows: Group 2021 2020* $’000 $’000 Commitments Development expenditure contracted but not provided for in the financial statements 514,917 325,766 Capital expenditure contracted but not provided for in the financial statements 59,367 42,884 Non-cancellable operating lease receivable 71,620 84,422 * Excluding HCP 10 FINANCIAL ASSETS Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000 Non-current investments Unquoted debt investments mandatorily at FVTPL – non-related companies (a), (b) 175,409 181,202 – – Unquoted debt investment at amortised cost – a joint venture (c) – 305,394 – – Impairment loss – (288,000) – – – 17,394 – – Unquoted equity investments at FVOCI – fellow subsidiaries 327,577 324,877 327,577 324,877 – non-related companies 30,293 31,852 – – 357,870 356,729 327,577 324,877 Unquoted equity investments mandatorily at FVTPL – other related parties 57,307 47,407 – – – non-related companies 73,158 42,666 – – 130,465 90,073 – – Quoted equity investments at FVOCI – fellow subsidiaries 26,006 25,897 21,868 21,777 – non-related companies 11,174 9,006 – – 37,180 34,903 21,868 21,777 Quoted equity investments mandatorily at FVTPL – an associate 32,857 33,848 – – – non-related companies 6,905 21,970 1,993 1,856 39,762 55,818 1,993 1,856 Total non-current financial assets 740,686 736,119 351,438 348,510 Current investments Quoted equity investments mandatorily at FVTPL – non-related companies 9,105 9,324 – – Unquoted debt investments mandatorily at FVTPL – a joint venture (b) – 10,724 – – Unquoted debt investment at amortised cost – a non-related company (c) 311,512 – – – – impairment loss (293,769) – – – 17,743 – – – Total current financial assets 26,848 20,048 – – Total financial assets 767,534 756,167 351,438 348,510 (a) Unquoteddebt investmentsmandatorilyat FVTPLwith total carryingamount of $142,486,000 (2020: $157,536,000) bear interest at 2.46% (2020: 2.46% to 8.00%) per annum and mature within 1 to 2 (2020: 1 to 3) years.
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