NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 43 OPERATING SEGMENTS Information reported to the Board of Directors for the purposes of resource allocation and assessment of segment performances is specifically focused on the functionality of services provided. The following summary describes the operations in each of the Group’s reportable segments: • Property development – develops and purchases properties for sale • Hotel operations – owns and manages hotels • Investment properties – develops and purchases investment properties for lease Others comprises mainly investment in shares, management and consultancy services, and provision of laundry services. None of these segments meet any of the quantitative thresholds for determining reportable segments in 2022 and 2021. Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Board of Directors. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Information about reportable segments Property development Hotel operations Investment properties Total Others Total $’000 $’000 $’000 $’000 $’000 $’000 2022 Total revenue (including inter-segment revenue) 1,382,322 1,394,936 375,991 3,153,249 221,788 3,375,037 Inter-segment revenue – (14,272) (34,828) (49,100) (32,524) (81,624) External revenue 1,382,322 1,380,664^ 341,163 3,104,149 189,264 3,293,413 Profit from operating activities 119,685 1,406,099 430,354 1,956,138 (76,409) 1,879,729 Share of after-tax profit/ (loss) of associates and joint ventures 121,132 (1,340) 20,235 140,027 30,137 170,164 Finance income 19,636 61,434 2,869 83,939 7,615 91,554 Finance costs (99,154) (82,972) (69,908) (252,034) (32,646) (284,680) Net finance costs (79,518) (21,538) (67,039) (168,095) (25,031) (193,126) Reportable segment profit/(loss) before tax 161,299 1,383,221 383,550 1,928,070 (71,303) 1,856,767 Depreciation and amortisation 3,551 120,598 125,218 249,367 27,059 276,426 ^ Hotel operations for 2022 comprise revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) attributable to hotel rooms owned by the Group of $960.9 million and $165.6 million respectively. 42 FINANCIAL INSTRUMENTS (CONT’D) (v) Accounting classifications and fair values (cont’d) Measurement of fair values (cont’d) Level 3 fair values The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy: Group Company Unquoted debt investments mandatorily at FVTPL Unquoted equity investments at FVOCI Unquoted equity investments mandatorily at FVTPL Unquoted equity investments at FVOCI $’000 $’000 $’000 $’000 At 1 January 2022 32,923 357,870 130,465 327,577 Additions – – 30,867 – Distribution of income and return of capital – – (21,960) – Total loss recognised in profit or loss – finance costs (11,119) – (1,769) – Total gain for the period included in other comprehensive income – net change in fair value of equity investments at FVOCI – 74,294 – 80,326 Translation differences on consolidation (1,793) – (890) – At 31 December 2022 20,011 432,164 136,713 407,903 At 1 January 2021 45,115 356,729 90,073 324,877 Additions – – 31,652 – Redemption on maturity (10,395) – – – Distribution of income and return of capital (419) – (9,914) – Reclass to investment in an associate – – (436) – Reclassification from interest receivable (1,311) – – – Total gain recognised in profit or loss – finance costs 720 – 17,313 – Total gain for the period included in other comprehensive income – net change in fair value of equity investments at FVOCI – 1,141 – 2,700 Translation differences on consolidation (787) – 1,777 – At 31 December 2021 32,923 357,870 130,465 327,577 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 252 253
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