ESR Group Limited Annual Report 2022 Notes to the Consolidated Financial Statements 31 December 2022 189 21. OTHER NON-CURRENT ASSETS (continued) Notes: (i) The Group subscribed to the Compulsorily Convertible Debentures (“CCD”) issued by the Group’s joint ventures. The CCD shall be fully convertible into equity shares at or anytime before completion of 19 years and 364 days from the allotment date of the CCD. The conversion ratio of the CCD into equity shares would be 1:1 (i.e. one equity shares for each CCD allotted). The fair value measurement for the CCD has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used (see note 47). (ii) The Group subscribed to the Optionally Convertible Debentures (“OCD”) issued by the Group’s joint ventures. The OCD, at the request of the lender and consent of the borrower, shall be convertible into equity shares at any time before 3 years from the drawdown date, but before the date of completion of 6 years from the drawdown date. The OCD may be converted into equity shares in one or more tranches. The OCD shall convert into equity shares at the fair market value of the equity shares on the date of conversion of OCD into equity shares. The outstanding OCD that are neither converted nor redeemed, shall be compulsorily redeemed on the date of completion of 6 years from the drawdown date. The fair value measurement for the OCD has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used (see note 47). The balances due from non-controlling interests of subsidiaries are non-trade in nature and unsecured. As at 31 December 2022, the balance of US$22,277,000 (2021: US$7,504,000) bears interest of 4.00% to 5.50% (2021: 4%) per annum. The remaining balance is non-interest bearing. The balance due from joint ventures are non-trade in nature and unsecured. As at 31 December 2022, the balance of US$7,569,000 (2021: Nil) bears interest of 6% per annum. The remaining balance is non-interest bearing. As at 31 December 2022 and 2021, other non-current assets of the Group were considered to be of low credit risk and thus the Group has assessed that the ECL for deposits was immaterial under the 12-month expected credit loss method. 22. TRADE RECEIVABLES As at 31 December 2022 As at 31 December 2021 US$’000 US$’000 Rental income receivables 6,414 6,567 Management fees due from the joint ventures and associates of the Group 109,757 15,945 Management fees due from funds and REITs managed by the Group 248,573 74,342 Management fees due from minority shareholders of subsidiaries 875 — Construction income receivables 2,247 28,308 Solar energy income receivables 661 806 368,527 125,968 Impairment (15,039) — 353,488 125,968 The Group’s trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. The Group seeks to maintain strict control over its outstanding receivables to minimize credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade receivables related to various diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. The balances of trade receivables are non-interest-bearing. STRATEGIC REPORT FINANCIAL STATEMENT CORPORATE GOVERNANCE
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