108 Non-IFRS Measures STRENGTH IN UNITY EXPLANATION OF ADJUSTING ITEMS (a) EBITDA is calculated as (loss)/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) Changes in fair value of financial derivative assets relates to gain/loss 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 is a non-operational item, which is not directly related to the Group’s operating activities. (c) Impairment on goodwill and other intangible assets recorded within "Administrative expenses" represent impairment on goodwill and trust management rights of non-core business. (d) Impairment of assets held for sale recorded within “Administrative expenses” represents write-down of non-core divestments relating to ARA US Hospitality Trust. (e) Share of certain associate’s fair value losses on investment properties and financial assets at fair value through profit or loss which is non-cash in nature and divestment of non-core assets. Accordingly, it is adjusted out to better reflect the underlying operating activities. (f) Share-based compensation expense represents share-based incentives which are primarily non-cash in nature. (g) On 20 January 2022, the Company completed the acquisition of ESR Asset Management Limited (formerly known as 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) amortisation relating to intangible assets arising from acquisition of ARA, net of tax, recorded within “Administrative expenses” represents management rights recognised that are non-cash and nonoperational in nature. Accordingly, it is not directly correlated to the Group’s business performance in a given period; and (iii) transaction costs related to ARA acquisition which are recorded within "Administrative expenses" were one-off non-recurring which were not directly related to operating performance of the Group during the year. (h) As announced on 13 May 2024, the Company received a non-binding and conditional proposal from a consortium of investors for a possible privatisation of the Company which, if proceeded with, could result in a delisting of the Company from the Stock Exchange (the “Indicative Proposal”). During the period ended 30 June 2024, the Company has incurred transaction costs in relation to the Indicative Proposal. The transaction costs is a nonoperational item, which is not directly related to the Group’s operating activities. (i) Fair value changes on investment properties represents the changes in fair value which are non-cash in nature. Accordingly, it is adjusted from EBITDA.
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