NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 38 COMMITMENTS AND CONTINGENT LIABILITIES (I) Commitments The Group and the Company have the following commitments as at the reporting date: Group Company 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Development expenditure contracted but not provided for in the financial statements 578,002 1,221,021 – – Capital expenditure contracted but not provided for in the financial statements 59,860 192,097 – – Commitments in respect of purchase of properties for which deposits have been paid 3,401 286,475 – – Commitments in respect of investments in a joint venture and associates 114,881 70,956 – – Commitments in respect of capital contribution to investments in financial assets in: – related parties 88,799 36,118 – – – third parties 19,969 14,362 – – (II) Contingent liabilities A subsidiary of the Group in China, whose principal activities are the trading of development properties and leasing activities, would in the ordinary course of business act as guarantors for the bank loans taken by the buyers to finance the purchase of properties developed by this subsidiary, covering the period from loan contract date to the property delivery date. As at 31 December 2022, the outstanding notional amount of the guarantees amounted to $8.5 million (2021: $21.3 million). The Group has claims arising in the ordinary course of business which are being contested, the outcome of which are not presently determinable. At the reporting date, the Group has considered the probability of outflows of economic benefits pertaining to these claims to be remote. The Group continues to monitor the status of the claims. 37 LEASES (CONT’D) Operating lease The Group and the Company lease out some of their investment properties and development properties. The Group has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Note 5 sets out information about the operating leases of investment properties. Rental income from investment properties and property subleases recognised by the Group during 2022 was $328,830,000 (2021: $329,454,000). Contingent rents generally determined based on a percentage of tenants’ revenue, of $2,533,000 (2021: $6,851,000) has been recognised as revenue by the Group, in profit or loss during the year. The following table sets out a maturity analysis of lease rental receivables, showing the undiscounted lease payments to be received after the reporting date. Group Company 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Less than one year 253,196 280,299 52,908 49,726 One to two years 189,243 204,207 35,071 33,138 Two to three years 125,151 147,205 14,159 17,158 Three to four years 79,738 104,056 2,171 3,489 Four to five years 55,657 79,376 499 681 More than five years 117,699 272,436 – – Total 820,684 1,087,579 104,808 104,192 Included in the non-cancellable operating lease rental receivables above are commitments with related parties which are set out below. Group Company 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Non-cancellable operating lease rentals receivable from: – associates 27,309 30,752 333 – – joint ventures 259 134 – – – a fellow subsidiary 625 967 625 966 – subsidiaries – – 1,294 3,117 28,193 31,853 2,252 4,083 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 206 207
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