NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 37 LEASES Leases as lessee The Group leases hotel properties and office facilities. The leases of hotel properties and office facilities run for periods ranging from 1 to 116 years, with options to renew after lease expiry dates. Some leases provide for additional rent payments that are based on changes in local price indices. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The leases for hotel properties were entered into many years ago as combined leases of land and buildings. The Group also leases IT equipment and motor vehicles under a number of leases. Amounts recognised in profit or loss 2022 2021 $’000 $’000 Interest on lease liabilities 20,127 10,240 Income from sub-leasing right-of-use assets presented in ‘revenue’ 4,015 3,250 Expenses relating to short-term leases 5,305 2,992 Expenses relating to variable leases payments 23,976 – Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets 181 138 Amounts recognised in statement of cash flows 2022 2021 $’000 $’000 Payment of lease liabilities 26,032 21,087 Interest expense 20,127 10,240 Total cash outflow for leases 46,159 31,327 Extension options Some property leases contain extension options up to 30 years (2021: 30 years) exercisable by the Group before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. The Group has estimated that the potential future lease payments, should it exercise the extension option, would result in an increase in lease liability of $32.5 million (2021: $43.6 million). Leases as lessor The Group leases out its investment properties consisting of its owned properties as well as leased properties (see note 5). All leases are classified as operating leases from a lessor perspective. 36 DIVIDENDS Company 2022 2021 $’000 $’000 Final tax exempt (one-tier) ordinary dividend paid of 8.0 cents (2021: 8.0 cents) per ordinary share in respect of the previous financial year 72,552 72,552 Special final tax exempt (one-tier) ordinary dividend paid of 1.0 cents (2021: 4.0 cents) per ordinary share in respect of the previous financial year 9,069 36,276 Special interim tax exempt (one-tier) ordinary dividend paid of 12.0 cents (2021: 3.0 cents) per ordinary share in respect of the current financial year 108,828 27,207 Non-cumulative tax exempt (one-tier) preference dividend paid of 1.93 cents (2021: 1.93 cents) per preference share 6,399 6,399 Non-cumulative tax exempt (one-tier) preference dividend paid of 1.97 cents (2021: 1.97 cents) per preference share 6,505 6,505 203,353 148,939 Distribution in specie of 20.19 cents (2021: Nil) per ordinary share* 183,124 – 386,477 148,939 After the respective reporting dates, the directors proposed the following ordinary dividends, which have not been provided for: Company 2022 2021 $’000 $’000 Final tax exempt (one-tier) ordinary dividend of 8.0 cents (2021: 8.0 cents) per ordinary share 72,552 72,552 Special final tax exempt (one-tier) ordinary dividend of 8.0 cents (2021: 1.0 cents) per ordinary share 72,552 9,069 145,104 81,621 * In respect of the year ended 31 December 2021, in addition to the proposed ordinary dividends above, the directors had also proposed a distribution in specie of the units in CDLHT that the Group holds on the basis of 0.159 unit per ordinary share (“Proposed Distribution”). The Proposed Distribution was subject to and conditional upon, inter alia, the following: • the completion of the Restructuring Exercise (as defined in paragraph 4.1 of the announcement issued by the Company on 25 February 2022); • Approval of shareholders of the Proposed Distribution at the annual general meeting; and • All necessary waivers, consents and approvals from, inter alia, the SGX-ST and other third parties in connection with the Proposed Distribution being obtained. The distribution in specie was completed on 26 May 2022. The Company distributed 144,191,823 CDLHT units that it held to its ordinary shareholders at 0.159 CDLHT Unit per ordinary share through a distribution in specie. The distribution in specie, based on $1.27 per CDLHT Unit, amounted to $183,124,000. CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 204 205
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