CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 FINANCIALS 176 177 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021 YEAR ENDED 31 DECEMBER 2021 10 FINANCIAL ASSETS (CONT’D) Changes to circumstances and estimates may impact the expected credit losses on the investment in the bond recognised. The expected credit losses on the investment in the bond can be sensitive to the assumptions used. An increase in the discount adjustment on the properties held by Sincere Property Group and the carrying value of investments in associates and joint ventures and additional costs including potential penalty interest on borrowings in isolation would result in a lower recoverable amount. A lower discount adjustment on the properties held by Sincere Property Group and the carrying value of investments in associates and joint ventures and lower additional costs including potential penalty interest on borrowings in isolation would result in a higher recoverable amount. Further details regarding the Group’s debt investments are set out in note 41. (d) Equity investments designated at FVOCI The Group designated the equity investments shown below as equity investments at FVOCI because these equity investments represent investments that the Group intends to hold for the long-term for strategic purposes. Group Company Fair value at 31 December 2021 Dividend income recognised during the year Fair value at 31 December 2021 Dividend income recognised during the year $’000 $’000 $’000 $’000 2021 Unquoted investment in a fellow subsidiary: – Hong Leong Holdings Limited 327,577 1,890 327,577 1,890 Unquoted investment in a non-related company: – Singapore-Suzhou Township Development Pte. Ltd. 30,293 880 – – Quoted investment in a fellow subsidiary: – Hong Leong Finance Limited 26,006 1,387 21,868 1,167 2020 Unquoted investment in a fellow subsidiary: – Hong Leong Holdings Limited 324,877 1,688 324,877 1,688 Unquoted investment in a non-related company: – Singapore-Suzhou Township Development Pte. Ltd. 31,852 830 – – Quoted investment in a fellow subsidiary: – Hong Leong Finance Limited 25,897 1,088 21,777 915 Other equity investments designated at FVOCI not included in the table above are insignificant to the Group and the Company. No strategic investments were disposed of during 2021 and 2020, and there were no transfers of any cumulative gain or loss within equity relating to these investments. Information about the Group’s and the Company’s exposures to credit and market risks, and fair value measurement, is included in note 41. 11 OTHER NON-CURRENT ASSETS Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000 Amounts owing by subsidiaries 7 – – 6,205,239 6,517,837 Amount owing by a joint venture 9 – 95,336 – – Deposits 3,395 5,196 – – Other receivables 13,307 7,873 – – Derivative financial assets 41 4,762 451 – 451 Restricted bank deposits 17 89,630 110,620 – – 111,094 219,476 6,205,239 6,518,288 Prepayments 282 336 – – Intangible assets 1,879 1,556 – – Deferred tax assets 29 69,302 19,818 – – 182,557 241,186 6,205,239 6,518,288 12 DEVELOPMENT PROPERTIES Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000 Properties under development, for which revenue is to be recognised over time 1,649,627 2,198,310 – – Properties under development, for which revenue is to be recognised at a point in time 2,518,357 1,999,105 – – Completed units 1,739,574 1,255,737 175,792 180,247 5,907,558 5,453,152 175,792 180,247 Allowance for foreseeable losses (68,087) (62,097) – – 5,839,471 5,391,055 175,792 180,247 Total development properties 5,839,471 5,391,055 175,792 180,247 (i) Allowance for foreseeable losses Movements in allowance for foreseeable losses are as follows: Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000 At 1 January 62,097 26,512 – – Allowance made 32 5,641 35,014 – – Translation differences on consolidation 349 571 – – At 31 December 68,087 62,097 – – The allowance for foreseeable losses is determined by the management after taking into account estimated selling prices and estimated total construction costs. The estimated selling prices are based on recent selling prices for the development project or comparable projects and prevailing property market conditions. The estimated total construction costs are based on contracted amounts and, in respect of amounts not contracted for, management’s estimates of the amounts to be incurred taking into consideration historical trends of the amounts incurred. The allowance made/(reversed) for foreseeable losses is included in “cost of sales”.
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