CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 FINANCIALS 268 269 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021 YEAR ENDED 31 DECEMBER 2021 44 ASSOCIATES AND JOINT VENTURES (CONT’D) Principal activity Principal place of business/ Country of incorporation Ownership interest 2021 2020 % % Joint Ventures of the Company (cont’d) ^ Macaulay North Melbourne Pty Ltd Trustee Australia 50 50 ***** OOO “Soft-Project” Hotel and property owner and developer Russia 50 50 * Richmond Hotel Pte Ltd Property owner, developer and investment holding Singapore 33 33 ** ** ** Shanghai Distrii Technology Development Co., Ltd. Operator of co-working spaces People’s Republic of China – 24 ** ** ** * Shanghai CF Enterprise Group Co., Ltd Operator of online apartment rental platform People’s Republic of China 21 21 * South Beach Consortium Pte. Ltd. (e) Property owner, developer and investment holding Singapore 50.1 50.1 * Siena Residential Development Pte. Ltd. Property owner and developer Singapore 50 50 * Siena Commercial Trust Property owner and developer Singapore 50 50 ^ Spencer West Melbourne Pty Ltd Trustee Australia 50 50 * Tomlinson Hotel Pte. Ltd. Hotel owner Singapore 33 33 * Tripartite Developers Pte. Limited Property developer Singapore 33 33 Joint Venture of Millennium & Copthorne Hotels Limited ^ New Unity Holdings Ltd. Investment holding company British Virgin Islands 50 50 44 ASSOCIATES AND JOINT VENTURES (CONT’D) * Audited by KPMG LLP Singapore ** Audited by other member firms of KPMG International *** Audited by Deloitte & Touche LLP **** Audited by Ernst & Young LLP ***** Audited by BDO Unicorn Inc ****** Audited by WUYIGE Certified Public Accountants LLP ******* Audited by BDO China Shu Lun Pan Certified Public Accountants LLP ^ Not subject to audit by law of country of incorporation (a) Although the Group is the legal owner of the entire equity interests in Cityview Place Holdings Pte. Ltd. (Cityview), the Group has determined that it does not have control over Cityview upon the sale of cash flows in Cityview in 2014 as described below. The Group has significant influence in Cityview through Sunbright Holdings Limited (Sunbright). Accordingly, Cityview is classified as an associate of the Group. i. Sale and purchase agreement On 15 December 2014, Baynes Investment Pte. Ltd. (Baynes), a wholly-owned subsidiary of the Group, sold the Dividends (as defined in the sale and purchase agreement) in its wholly-owned subsidiary, Cityview, to Sunbright. ii. Profit participation securities On 22 December 2014, the Group through its wholly-owned subsidiary, Astoria Holdings Limited (Astoria), subscribed for 37.5% interest in a capital instrument called profit participation securities (PPS) issued by Sunbright. The PPS has a tenor of 5 years and will expire upon final payment of the cash flows arising from the Dividends. The PPS carries a fixed payout amount (the Fixed Payout) at the rate of 5% per annum, which is payable on a semi-annual basis or, at the election of the PPS holders, payable upfront in one lump sum on the date of issue of the PPS. Astoria, together with other investors (the Third Party Investors), (collectively, the PPS Holders), elected to receive the Fixed Payout upfront and the total Fixed Payout of $187.5 million was offset against the consideration payable by the PPS holders for the subscription of the PPS. The Group will receive from Sunbright the cash flows purchased from Baynes (after satisfying certain senior ranking liabilities, including capital contributions from the Third Party Investors) in accordance with a pre-agreed order of priority as set out under the terms of the PPS. In addition, shares of Baynes with a carrying value of $1,502,000 (2020: $1,502,000) was pledged to Sunbright. iii. Investment Committees On 22 December 2014, the Group entered into an Investors’ Agreement with the Third Party Investors and Sunbright. Under the Investors’ Agreement, the management of the affairs of Sunbright and its subsidiaries are delegated to the Investment Committees where the Group has the right to appoint 5 out of 12 members. Taken as a whole, the Group does not have power over the relevant activities of Cityview. The Group has determined that it has significant influence over Sunbright because of its representation on the Investment Committees. Accordingly, Sunbright is considered an associate of the Group. In April 2019, the Group, through its indirect wholly-owned subsidiary, Astoria, acquired the remaining PPS units in the nonresidential component of Sunbright, which holds WHotel and Quayside Isle (Non-Residential Component) (note 39). Following the acquisition, the Group has power over the relevant activities of the Non-Residential Component, which became a wholly-owned subsidiary of the Group. (b) Although the Group holds more than 50% ownership interest in Emerging Markets Affordable Housing Fund Pte. Ltd. (the Fund), pursuant to a contractual agreement between the Group and its joint venture partner in the Fund, joint control is exercised by both parties over the relevant activities of the Fund. Accordingly, the Fund is accounted for as a joint venture of the Group. (c) In 2020, the Group through its wholly-owned subsidiary, Sonic Investments Pte. Ltd., acquired a 63.75% equity interest in HCP Chongqing Property Development Co., Ltd (HCP), which owns 80.01% equity interest in Sincere Property Group. Although the Group held more than 50% ownership interest in HCP, pursuant to a contractual agreement between the Group and its joint venture partner in HCP, joint control was exercised by both parties over the relevant activities of HCP. Accordingly, HCP was accounted for as a joint venture of the Group. During 2021, the Group disposed of its entire 63.75% equity interest in HCP (note 9). (d) Although the Group holds less than 50% voting interest in the IREIT Manager, pursuant to a contractual agreement between the Group and its joint venture partner in the IREIT Manager, joint control is exercised by both parties over the relevant activities of the IREIT Manager. Accordingly, the IREIT Manager is accounted for as a joint venture of the Group. (e) Although the Group holds more than 50% ownership interest in South Beach Consortium Pte. Ltd. (South Beach), pursuant to a contractual agreement between the Group and its joint venture partner in South Beach, joint control is exercised by both parties over the relevant activities of South Beach. Accordingly, South Beach is accounted for as a joint venture of the Group. Except as disclosed in note 9, the Group does not consider the above associates and joint ventures to be individually material to the Group under the context of SFRS(I) 12 Disclosure of Interests in Other Entities.
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