NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 7 INVESTMENTS IN AND BALANCES WITH SUBSIDIARIES (CONT’D) Company Note 2022 2021 $’000 $’000 Receivable: – Within 1 year 16 6,228,009 5,985,134 – After 1 year 12 6,428,732 6,205,239 12,656,741 12,190,373 Amounts owing to subsidiaries: – trade 1,927 968 – non-trade, interest-free 1,578,494 2,006,511 – non-trade, interest-bearing 1,288,837 490,579 2,869,258 2,498,058 Repayable: – Within 1 year 31 2,119,114 2,498,058 – After 1 year 28 750,144 – 2,869,258 2,498,058 The Company assessed the carrying amount of its investments in subsidiaries for indicators of impairment. Based on the assessment, the Company recognised a net impairment loss of $10,277,000 (2021: $17,270,000) on its investments in four (2021: three) wholly-owned subsidiaries, following a decline in their financial position. The recoverable amounts of the subsidiaries were estimated taking into consideration the fair values of the underlying assets and the liabilities of the companies. The fair value measurement was categorised as a Level 3 in the fair value hierarchy based on the inputs in the valuation techniques used. The non-trade amounts owing by and to subsidiaries are unsecured. In respect of interest-bearing amounts owing by and to subsidiaries, interest was charged at 1.00% to 4.98% (2021: 0.39% to 4.18%) per annum and at 1.00% to 3.00% (2021: 1.00% to 3.00%) per annum respectively, as at 31 December 2022. The non-trade balances with subsidiaries that are presented as receivable or repayable within one year are receivable or repayable on demand. The non-trade amounts owing by subsidiaries receivable after one year are loans to subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future. These amounts are, in substance, a part of the Company’s net investments in subsidiaries. Information about the Company’s exposure to credit risk on the amounts owing by subsidiaries is included in note 42. 6 ASSETS HELD FOR SALE (CONT’D) At 31 December 2021, assets held for sale and liabilities directly associated with the assets held for sale relate to the following proposed divestments: (a) The above-mentioned proposed disposal of Millennium Harvest House Boulder by M&C. (b) M&C had entered into a sale and purchase agreement to sell a hotel, Copthorne Orchid Penang (which was in the hotel operations segment), to a third party. The agreement was terminated in December 2021 and the Group continued to explore the sale of the property with other prospective buyers. During 2022, the Group ceased to explore further sale opportunities and the property was reclassified to property, plant and equipment. Accordingly, a depreciation expense of $318,000 was recognised at the date of the reclassification. (c) A wholly-owned subsidiary of the Group, Singapura Developments (Private) Limited, had entered into a share sale agreement to sell its interest in an industrial warehouse in Singapore (which was in the investment properties segment) for a sale consideration of $82 million. The sale was completed on 7 March 2022 and the Group recognised a gain of $27.3 million on the sale. (d) M&C entered into a sale and purchase agreement to sell a hotel, Millennium Hilton Seoul (which was in the hotel operations segment), for a sale consideration of KRW1.1 trillion (S$1.25 billion). The sale was completed on 24 February 2022 and the Group recognised a gain on disposal of $489.2 million, net of taxes and related transaction costs. 7 INVESTMENTS IN AND BALANCES WITH SUBSIDIARIES Company 2022 2021 $’000 $’000 Investments in subsidiaries Unquoted shares, at cost 1,989,926 2,028,374 Impairment losses (40,837) (32,287) 1,949,089 1,996,087 Balances with subsidiaries Amounts owing by subsidiaries: – trade 17,241 16,481 – non-trade, interest-free 6,666,056 6,489,376 – non-trade, interest-bearing 6,230,689 5,868,079 12,913,986 12,373,936 Impairment losses (257,245) (183,563) 12,656,741 12,190,373 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 164 165
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