NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 8 INVESTMENTS IN AND BALANCES WITH ASSOCIATES (CONT’D) 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 2022 2021 $’000 $’000 Carrying amount of interests in individually immaterial associates 1,263,713 816,979 Group’s share of: – profit from continuing operations 86,832 30,713 – other comprehensive income (55,147) 25,570 – total comprehensive income 31,685 56,283 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 $42.6 million (2021: $20.2 million). Management do not consider it probable that a claim will be made against the Group under the financial guarantee. 9 INVESTMENTS IN AND BALANCES WITH JOINT VENTURES Group Company Note 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Investments in joint ventures Investments in joint ventures 1,083,024 1,037,046 37,360 37,360 Balances with joint ventures Amounts owing by joint ventures: – trade 10,317 2,714 46 35 – non-trade, interest-bearing 880,031 831,736 – – – non-trade, interest-free 475,220 458,736 237,614 236,614 1,365,568 1,293,186 237,660 236,649 Impairment losses (4,431) (4,431) (5,246) (5,050) 1,361,137 1,288,755 232,414 231,599 Receivable: – Within 1 year 16 1,086,805 1,288,755 232,414 231,599 – After 1 year 12 274,332 – – – 1,361,137 1,288,755 232,414 231,599 Amounts owing to joint ventures payable within 1 year: – trade 428 332 – – – non-trade, interest-free 90,705 97,570 22,727 22,727 31 91,133 97,902 22,727 22,727 8 INVESTMENTS IN AND BALANCES WITH ASSOCIATES (CONT’D) Accounting for investment in CDLHT (cont’d) The valuations of the property, plant and equipment and investment properties involve judgement in determining both the valuation methods to be used and the key assumptions to be applied. The valuations are sensitive to the key assumptions applied and a change in assumptions may have a significant impact on the valuations. Measurement of fair values The valuation techniques used in measuring the fair values of the underlying significant assets and liabilities were as follows: Assets acquired and liabilities assumed Valuation technique Property, plant and equipment and investment properties Discounted cash flow, income capitalisation, and residual methods: The discounted cash flow method involved forecasting the properties’ income stream and discounting the income stream at the market rate of interest at the acquisition date. The income capitalisation method capitalised an income stream into a present value using revenue multipliers or single-year capitalisation rates. The residual method involved deducting the estimated costs to complete as of valuation date and other relevant costs from gross development value of a proposed development assuming satisfactory completion and accounting for developer profit. Interest-bearing borrowings The fair value was estimated as the present value of future principal and interest cash flows, discounted at the market rates of interest at the acquisition date. In relying on the valuation reports for the property, plant and equipment and investment properties, the Group had exercised its judgement and was satisfied that the valuation methods and estimates were reflective of prevailing market conditions. The fair value measurements were categorised as Level 3 in the fair value hierarchy based on the inputs in the valuation techniques used. The PPA exercise resulted in a negative goodwill of $18,003,000, which has been recognised as part of the Group’s share of after-tax profit of associates in the consolidated statement of profit or loss. CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 168 169
RkJQdWJsaXNoZXIy ODIwNTc=