INDEPENDENT AUDITORS’ REPORT Members of the Company City Developments Limited Our response Our procedures included challenging the Group’s assessment of properties at risk of being impaired or impairment reversal. These include comparing actual asset performance to previous forecasts and market data, and assessing the quantum of available headroom from previous valuations. We selected a sample of properties for detailed impairment review and considered the valuation methods used against those applied by valuers for similar property types. We evaluated key assumptions applied in the valuations, particularly those assumptions relating to occupancy rates, average room rate growth, discount rates and terminal rates, by comparing them to available industry data, taking into consideration comparability and market factors. Our findings The Group has a structured process in identifying hotel assets with impairment indicators. We found that the valuation method used to be in line with generally accepted market practices and key assumptions applied were generally comparable to currently observable market data. Valuation of development properties (Refer to note 13 to the financial statements) Risk The Group has significant residential development properties held for sale in Singapore, China and the United Kingdom (UK). Development properties held for sale are stated at the lower of cost and net realisable value. The determination of the estimated net realisable value is highly dependent on the Group’s expectations of future selling prices of unsold development properties. In estimating the future selling prices of unsold development properties, the Group has taken into account real estate price trends, local market conditions, its development plans and sale strategies for the properties and selling prices estimated by external valuers when necessary. Our response We focused our work on development properties with low margins. In assessing the reasonableness of the Group’s estimated future selling prices for its development projects, we considered recently transacted prices of units under development sold and/or prices of comparable properties located in the vicinity of these development projects. We also took into account prevailing market trends and the Group’s development and selling plans for the properties. Where applicable, we made enquiries of external valuers to understand the approach adopted in estimating future selling prices of these development properties and performed sensitivity analysis. Our findings We found the Group’s estimated future selling prices, which are used in determining net realisable values and resultant allowance for foreseeable losses on its development projects, to be comparable to currently available market data and have taken into consideration prevailing market conditions. Other information Management is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors’ report thereon. We have obtained all other information prior to the date of this auditors’ report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ANNUAL REPORT 2025 | 109
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