NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2025 28 PROVISIONS (CONT’D) The provision for Beijing indemnity relates to tax indemnity provided to the former shareholders of Grand Millennium Beijing in which the Group acquired an additional 40% interest in 2010. The provision was reversed in 2024 as the obligation was assessed to be remote with no claims. The provision for capital expenditure relates to the Group’s obligations to incur capital expenditure under the terms of certain hotel operating agreements. The legal provisions relate mainly to provisions made in relation to disputes in several hotels. The provision for profit payment relates to the Group’s obligation under a building agreement with the seller of a leasehold site acquired, whereby the Group is obligated to make a profit payment to the seller, subject to the development costs not exceeding a specified threshold, on practical completion of the development of the property. As at 31 December 2024, the total development costs were only an estimate and can only be established upon the practical completion of the property. The property achieved practical completion in August 2025. Accordingly, $10,756,000 (£6,250,000) was paid in September 2025, and the remaining $1,299,000 (£750,000) will be due in 2027 in accordance with the terms of the agreement. 29 DEFERRED TAX LIABILITIES Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances) during the year are as follows: At 1 January 2024 Recognised in profit or loss (note 33) Recognised in the statement of comprehensive income (note 33) Translation differences on consolidation At 31 December 2024 $’000 $’000 $’000 $’000 $’000 Group Deferred tax liabilities Property, plant and equipment (including right-of-use assets) 299,782 37,901 – 1,567 339,250 Investment properties 54,475 (5,073) – (2,936) 46,466 Development properties 24,014 (8,349) – 1,713 17,378 Employee benefits 5,088 332 128 298 5,846 Unremitted earnings 173,996 4,364 – 3,553 181,913 Others 19,759 9,109 – (1,555) 27,313 577,114 38,284 128 2,640 618,166 Deferred tax assets Tax losses (107,943) 4,336 – (2,438) (106,045) Lease liabilities (125,909) 2,137 – 60 (123,712) Trade and other payables (3,556) (2,642) – (2,586) (8,784) (237,408) 3,831 – (4,964) (238,541) Total 339,706 42,115 128 (2,324) 379,625 176 | CITY DEVELOPMENTS LIMITED
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