NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 10 FINANCIAL ASSETS (CONT’D) (a) Unquoted debt investments mandatorily at FVTPL with total carrying amount of $142,486,000 as at 31 December 2021 bore interest at 2.46% per annum and mature within 1 to 2 years. (b) Included in the unquoted debt investments mandatorily at FVTPL were $20,011,000 (2021: $32,923,000) relating to the Group’s investment in property-linked notes issued for the development of a luxury retirement village in New South Wales, Australia. In addition, included in the unquoted debt investments mandatorily at FVTPL as at 31 December 2021 were $142,486,000 relating to the Group’s investment in a note due 2023 issued by Summervale Properties Pte. Ltd. (Summervale) for Nouvel 18, a 156-unit luxury freehold residential development on Anderson Road, Singapore. In October 2016, the Group established its third Profit Participation Securities (PPS) by entering into an investment agreement, and an asset management and marketing agreement with an unrelated party, Green 18 Pte. Ltd. (Green 18), to exit its entire interest in Summervale. As part of the investment agreement, the Group subscribed for a note of $140 million issued by Summervale. According to the asset management and marketing agreement, Summervale appointed Trentwell Management Pte. Ltd. (Trentwell), a wholly-owned subsidiary of the Group, as the asset manager and marketing agent of Summervale to manage and lease out Nouvel 18, as well as to market and divest units in Nouvel 18 for a period of five years (with an option to extend to seven years). The option for extension of the duration of the asset management and marketing agreement for a further 2-year period has been exercised with effect from 20 October 2021. The note was fully redeemed during the current year. (c) Unquoted debt investment at amortised cost with gross carrying amount of $309,488,000 (US$230 million) (2021: $311,512,000 (US$230 million)) relates to the Group’s investment in a US$ bond issued by Sincere Property Group. The bond bore interest at 10% (2021: 10%) per annum up till the effective date of commencement of Sincere Property’s bankruptcy reorganisation on 14 October 2021. The bond which has a maturity date on 27 June 2022, may be redeemed by the holder on or before 27 June 2021. During 2021, the Group exercised its put option and issued a put notice to the issuer for full repayment. As at 31 December 2022, the bond remained unpaid. As at 31 December 2022, the bond has been fully impaired. As at 31 December 2021, an impairment loss of $293,769,000 was recognised on the bond. The Group has no collateral in respect of this investment. The movement in the allowance for impairment for debt investments at amortised cost during the year was as follows: Lifetime ECL credit-impaired Lifetime ECL credit-impaired 2022 2021 $’000 $’000 Balance as at 1 January 293,769 288,000 Impairment loss recognised 18,015 – Translation differences on consolidation (2,296) 5,769 Balance as at 31 December 309,488 293,769 The impairment loss recognised was included on the face of the consolidated statement of profit or loss. The Group undertook an impairment assessment of the investment in the bond. 10 FINANCIAL ASSETS Group Company Note 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Non-current investments Unquoted debt investments mandatorily at FVTPL – non-related companies (a), (b) 20,011 175,409 – – Unquoted equity investments at FVOCI – fellow subsidiaries 407,903 327,577 407,903 327,577 – non-related companies 24,261 30,293 – – 432,164 357,870 407,903 327,577 Unquoted equity investments mandatorily at FVTPL – other related parties 61,175 57,307 – – – non-related companies 75,538 73,158 – – 136,713 130,465 – – Quoted equity investments at FVOCI – fellow subsidiaries 26,006 26,006 21,868 21,868 – non-related companies – 11,174 – – 26,006 37,180 21,868 21,868 Quoted equity investments mandatorily at FVTPL – an associate 18,910 32,857 – – – non-related companies 3,626 6,905 1,828 1,993 22,536 39,762 1,828 1,993 Total non-current financial assets 637,430 740,686 431,599 351,438 Current investments Quoted equity investments mandatorily at FVTPL – an associate 135 – 135 – – non-related companies 6,969 9,105 – – 7,104 9,105 135 – Unquoted debt investment at amortised cost – a non-related company (c) 309,488 311,512 – – Impairment loss (309,488) (293,769) – – – 17,743 – – Total current financial assets 7,104 26,848 135 – Total financial assets 644,534 767,534 431,734 351,438 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 172 173
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