FORWARD TOGETHER Group Financial Summary 242 EXPLANATION OF ADJUSTING ITEMS (a) EBITDA is calculated as profit before tax, adding back depreciation and amortisation and finance costs (net). EBITDA is presented because the Group believes this is a useful measure to determine the Group’s financial condition and historical ability to provide investment returns. (b) Fair value gain on financial derivative assets relates to a gain arising from change in fair value of a put option agreement entered into by the Group’s subsidiaries with an agreed floor price to sell its investment in an associate. The fair value is capital in nature and non-operational item, which is not directly related to the Group’s operating activities. (c) Share of certain associate’s fair value losses on investment properties and financial assets at fair value through profit or loss represents the Group’s share of unrealised changes in fair value recognised by the associate due to the fall in valuations affected by macroeconomic environment which are non-cash in nature and occur infrequently. Accordingly, it is adjusted out to better reflect the underlying operating activities. (d) Share-based compensation expense represents share-based incentives which are primarily non-cash in nature. (e) On 20 January 2022, the Company completed the acquisition of ARA Asset Management Limited (“ARA”, together with its subsidiaries, the “ARA Group”). In connection with the acquisition, the Group adjusted the following items which are not directly related to the operating activities: (i) share-based compensation expenses relating to ARA which represents share-based incentive granted pursuant to the Company’s Long-term Incentive Scheme which were incurred as part of the acquisition; (ii) transaction costs related to ARA acquisition which are recorded within “Administrative expenses” are one-off non-recurring which are not directly related to operating performance of the Group during the period; and (iii) amortisation relating to intangible assets arising from acquisition of ARA, net of tax, recorded within “Administrative expenses” represent management rights recognised that are non-cash and non-operational in nature. Accordingly, it is not directly correlated to the Group’s business performance in a given period. (f) Fair value changes on investment properties represents the changes in fair value which are non-cash in nature. Accordingly, it is adjusted from EBITDA. (g) One-off non-recurring in nature which are not directly related to operating performance of the Group.
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