Cover Photos:
1. JEN Shenzhen Qianhai by Shangri-La
2. Kerry Hotel, Hong Kong
3. Island Shangri-La, Hong Kong
4. Shangri-La The Shard, London
5. Shangri-La Le Touessrok, Mauritius
6. Shangri-La Shougang Park, Beijing
1
2
3
4
5 6
Contents
Overview 2
The Group’s Business Presence 2
Financial Highlights 3
Corporate Information 5
Year in Review 6
Awards of the Year 9
Chairman’s Statement 10
Board of Directors, Company Secretary and
Senior Management
12
Directors’ Report 56
General Disclosure Items 57
Directors 58
Significant Shareholders’ Interests 59
Directors’ Interests 60
Share Option Scheme 61
Share Award Scheme 64
Connected Transactions 67
Continuing Connected Transactions 67
Corporate Governance Report 76
Directors Handbook and Corporate Governance
Functions
77
Board 79
Executive Committee 81
Nomination Committee 82
Remuneration & Human Capital Committee 85
Audit & Risk Committee 88
Management Committees 90
Risk Management and Internal Control Systems 90
External Auditors 95
General Meetings 96
General Mandates Granted to Directors 97
Dividend Policy 97
Investor Relations 98
Public Float 100
Financial Report 101
Independent Auditor’s Report 101
Consolidated Statement of Financial Position 107
Consolidated Statement of Profit or Loss 109
Consolidated Statement of Comprehensive
Income
110
Consolidated Statement of Changes in Equity 111
Consolidated Cash Flow Statement 113
Notes to the Consolidated Financial Statements 114
Five-Year Summary 228
Properties Under Development 51
Abbreviations 229
Discussion and Analysis 20
Consolidated Statement of Profit or Loss 23
Summary of Net Asset Value 24
Results of Operations 26
Corporate Debt and Financial Condition 40
Treasury Policies 43
Investment Properties Valuation 44
Impairment Provision
45
Financial Assets – Trading Securities 45
Development Programmes 46
Disposal 47
Management Contracts for
Hotels Owned by Third Parties
47
Human Resources 47
Prospects 49
The Group’s Listed Members 232
Overview
2
Shangri-La Asia Limited Annual Report 2022
The Group’s Business Presence
Oman
Saudi Arabia
United Arab
Emirates
Sri Lanka
India
Mainland China
Myanmar
Thailand
Mongolia
Malaysia
Singapore
Indonesia
Cambodia
Philippines
Japan
Taiwan
Hong Kong SAR
As at 31 December 2022
Business in operation
Projects under development
Asia
Cambodia
Phnom Penh
Hong Kong SAR
India
Bengaluru
New Delhi
Indonesia
Jakarta
Surabaya
Japan
Tokyo
Kyoto
Mainland China
Baotou
Beihai
Beijing
Changchun
Changzhou
Chengdu
Dalian
Fuzhou
Guangzhou
Guilin
Haikou
Hangzhou
Harbin
Hefei
Huhhot
Jinan
Kunming
Lhasa
Manzhouli
Nanchang
Nanjing
Nanning
Ningbo
Putian
Qingdao
Qinhuangdao
Qufu
Sanya
Shanghai
Shangri-La
Shenyang
Shenzhen
Suzhou
Tangshan
Tianjin
Wenzhou
Wuhan
Xiamen
Xian
Malaysia
Johor
Kota Kinabalu
Penang
Kuala Lumpur
Maldives
Male
Villingili
Mongolia
Ulaanbaatar
Myanmar
Yangon
Oman
Muscat
Philippines
Boracay
Cebu
Manila
Saudi Arabia
Jeddah
Singapore
Sri Lanka
Colombo
Hambantota
Taiwan
Tainan
Taipei
Thailand
Bangkok
Chiang Mai
United Arab
Emirates
Abu Dhabi
Dubai
Yangzhou
Yiwu
Zhengzhou
Zhoushan
Australia
Cairns
Sydney
Melbourne
Oceania
Fiji
Yanuca
France
Paris
Turkey
Istanbul
Europe
United
Kingdom
London
Mauritius
Africa
Canada
Toronto
Vancouver
North America
Australia
Fiji
Turkey
France
United
Kingdom
Mauritius
Canada
Maldives
Financial Highlights
Overview
3
Shangri-La Asia Limited Annual Report 2022
The following table summarises the highlights of our financial results:
2022 2021 2022/21
USD Million USD Million % Change
Consolidated Revenue 1,462.1 1,241.0 17.8%
EBITDA of the Company and its subsidiaries 174.4 132.8 31.3%
Effective share of EBITDA of the Company, subsidiaries and associates 441.6 418.0 5.6%
Profit/(loss) attributable to owners of the Company
– Operating items (161.6) (193.2) 16.4%
– Non-operating items 3.1 (97.4) N/M
Total (158.5) (290.6) 45.5%
Loss per share (US cents per share) (4.44) (8.13) 45.4%
Net assets attributable to owners of the Company 5,254.0 5,864.3 –10.4%
Net assets per share attributable to owners of the Company (USD) 1.47 1.64 –10.4%
(N/M: Not meaningful)
Notes:
1. EBITDA, which is a non-HKFRS financial measure used to measure the Group’s operating profitability, is defined as the earnings before finance
costs, tax, depreciation and amortisation, gains/losses on disposal of fixed assets and non-operating items such as gains/losses on disposal of
interest in investee companies; fair value gains/losses on investment properties and financial assets; and impairment losses on fixed assets.
2. Effective share of EBITDA is the aggregate total of the Company’s EBITDA and the Group’s share of EBITDA of subsidiaries and associates
based on percentage of equity interests.
Segment Revenue by Category
(USD Million)
Effective Share of EBITDA by Category
(USD Million)
1,241
1,033
22
1,462
1,241
100
1,340
26
94
1,121
Property Development
for Sale & Other Business
Investment Properties
Hotel Operation
2022 2021
33
42
275
150
289
418
442
113
-17
-25
Property Development
for Sale & Other Business
Corporate &
Project Expenses
Investment Properties
Hotel Operation
2022 2021
Financial Highlights
Overview
4
Shangri-La Asia Limited Annual Report 2022
Movement of Cash Flow
(Note)
(USD Million)
784.9
140.9
130.9
(44.5)
(14.0)
(180.1)
(146.4)
83.0
3.6
766.0
22.9
(45.6)
30.4
Cash at
1 January
2022
Net Cash
from
Operating
Activities
Lease
Related
Payments
Net Cash
from
Associates
CAPEX*Tax PaidNet Interest
Paid
Net Change
in Bank
Loans
Net Cash
from
Non-controlling
Shareholder
Divestment Cash at
31 December
2022
Capital
Reduction of
an Associate
Others
Operating Cash Flow**
(USD33.2m)
Utilisation
of Cash
Source of Cash
* Capital expenditure (“CAPEX”) includes fund injection to associates for their CAPEX
** Operating cash flow includes operating cash flow from the Group’s subsidiaries as well as interest income and certain cash received from
associates by way of loan repayments, interest and dividend payments
Note: Movement of cash flow is presented from management’s perspective which may be different from the cash flow presented in accordance
with HKFRS disclosure requirements
Debt refinancing schedule chart including undrawn facilities
(USD Million)
Weighted Average Term: 3.53 years
973
5,612
952
960
1,069
959
1,250
911
13
21
305
83
TotalUndrawn
Facilities
2023 2024 2025 2026 2027 2028 2029 2030 2031+
Corporate Information
Overview
5
Shangri-La Asia Limited Annual Report 2022
As at 24 March 2023
BOARD OF DIRECTORS
Executive Directors
Ms KUOK Hui Kwong (Chairman)
Mr CHUA Chee Wui (Group CFO and Group CIO)
(appointed as ED on 1 September 2022)
Non-executive Director
Mr LIM Beng Chee (re-designated from ED to NED on 1 January 2023)
Independent Non-executive Directors
Professor LI Kwok Cheung Arthur
Mr YAP Chee Keong
Mr LI Xiaodong Forrest
Mr ZHUANG Chenchao
Ms KHOO Shulamite N K
EXECUTIVE COMMITTEE
Ms KUOK Hui Kwong (chairman)
Mr CHUA Chee Wui (from 1 September 2022)
NOMINATION COMMITTEE
Ms KUOK Hui Kwong (chairman)
Professor LI Kwok Cheung Arthur
Mr LI Xiaodong Forrest
Ms KHOO Shulamite N K
REMUNERATION & HUMAN CAPITAL COMMITTEE
Ms KHOO Shulamite N K (chairman)
Ms KUOK Hui Kwong
Professor LI Kwok Cheung Arthur
Mr YAP Chee Keong
AUDIT & RISK COMMITTEE
Mr YAP Chee Keong (chairman)
Professor LI Kwok Cheung Arthur
Ms KHOO Shulamite N K
COMPANY SECRETARY
Mr SEOW Chow Loong Iain
AUDITOR
PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity Auditor
22/F Prince’s Building
Central
Hong Kong SAR
HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS
28/F Kerry Centre
683 King’s Road
Quarry Bay
Hong Kong SAR
REGISTERED ADDRESS
Victoria Place
5/F, 31 Victoria Street
Hamilton HM10
Bermuda
PRINCIPAL SHARE REGISTRAR IN BERMUDA
MUFG Fund Services (Bermuda) Limited
4/F North
Cedar House
41 Cedar Avenue
Hamilton HM12
Bermuda
BRANCH SHARE REGISTRAR IN HONG KONG
Tricor Abacus Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong SAR
STOCK CODES
HKSE – 00069
Singapore stock exchange – S07
American Depositary Receipt – SHALY
WEBSITES
Corporate – www.ir.shangri-la.com
Business – www.shangri-la.com/group
INVESTOR RELATIONS CONTACT
28/F Kerry Centre
683 King’s Road
Quarry Bay
Hong Kong SAR
KEY DATES
Closure of registers of members for
Annual General Meeting
29 May 2023 to 1 June 2023, both dates inclusive
Annual General Meeting
1 June 2023
Announcement of 2023 interim results
August 2023
Overview
6
Shangri-La Asia Limited Annual Report 2022
Year in Review
January
A new digital platform, Shangri-La Boutique, was launched to
offer customers a convenient way to shop for the brand’s retail
merchandise and exclusive experiences.
January
Shangri-La Circle’s new membership tier, Polaris, was launched.
The brand’s first invitation-only tier provides select members
with the most exclusive privileges, experiences, and benefits that
Shangri-La has to offer.
February
Shangri-La Beijing and Shangri-La Shougang Park, Beijing, were
Official Hotels for the 2022 Beijing Winter Olympics, providing
our signature Asian hospitality to Olympic officials, athletes, and
visitors. As the event took place during the Covid-19 pandemic, the
hotels prepared for their role as hosts by aligning the “Shangri-La
Cares” hygiene and safety commitment with the guidelines set by
the Beijing Olympic Committee.
February
Shangri-La Jeddah opened in the exclusive Burj Assila tower on
the Jeddah waterfront, becoming the Group’s first hotel in Saudi
Arabia. With a commitment to supporting Saudi Arabia’s Vision
2030 programme and the local community, nearly half of the
colleagues at the hotel are Saudi nationals.
March
As Hong Kong battled its unprecedented fifth wave of Covid-19
during the first months of 2022, Shangri-La upheld its promise
to Do Good in the local communities. The Group worked with
local NGOs to provide test kits and masks to the most vulnerable
members of the communities, and distributed over 240,000 hot
meals to those most in need between March and May 2022.
Overview
7
Shangri-La Asia Limited Annual Report 2022
Year in Review
March
Shangri-La Nanning opened in the exclusive China Resources
Tower, blending Shangri-La’s heartfelt hospitality with the culture
and art of the Zhuang community that is indigenous to China’s
Guangxi’s region.
April
Taking a forward-looking approach as it marked another year of
bringing its heartfelt Asian hospitality to the world and evolving
to meet the needs of today’s travellers, Shangri-La Group officially
launched an aspirational travel and lifestyle platform, Shangri-La
Circle, a transformation of the brand’s award-winning Golden
Circle loyalty programme.
June
Shangri-La and Kerry Group participated in their home city’s
“Art@Harbour” project, which marked the 25th anniversary of the
establishment of the Hong Kong Special Administrative Region.
The two companies jointly created the “Blossoming Hong Kong”
artwork which portrayed Hong Kong’s harmony in nature and
beauty in bloom.
June
Shangri-La Circle celebrated its inaugural Members Day. Beginning
on 6 June 2022, the new monthly initiative gives members 48
hours to access exclusive Shangri-La deals and receive bonus
points.
Overview
8
Shangri-La Asia Limited Annual Report 2022
Year in Review
July
Shangri-La Sanya piloted a summer campaign to grow the Group’s
family experience offerings with curated products and experiences.
This repositioning initiative was part of Shangri-La’s commitment
to evolve with its customers’ needs and drive growth in new
business segments by creating strategic family destinations.
August
Jiangnan Wok, the award-winning Chinese restaurant at Shangri-La
Nanjing, expanded its concept with the opening of Jiangnan Wok Yun.
Situated on the hotel’s 42nd floor, the restaurant’s most exclusive
space offers an elevated experience where guests can enjoy Chef Hou
Xinquing’s signature Huaiyang cuisine in private dining rooms that
pair Shangri-La’s renowned gastronomic innovation with interiors that
reflect Chinese aesthetics.
November
To operate as sustainably as possible, Shangri-La began phasing
out the use of plastic at meetings and events across the Group’s
hotels. As part of the Group’s aim to reduce by 50% the hotels’ use
of single-use plastics per occupied room by 2026, using the 2019
level as a baseline, the hotels began offering filtered water in glass
bottles and mobile water dispensers. This aims to inspire guests
to do their part in lowering carbon emissions and protecting the
environment.
November
Kerry Group, Kuok Foundation, and Shangri-La Group joined forces
on a community initiative to support 600 underprivileged families
in Suichuan and Xiushui, two underdeveloped regions in China’s
Jiangxi Province. A team of over 20 volunteers from Shangri-La
Nanchang delivered essentials such as food packs, blankets, and
first-aid kits to the families in the area.
December
To share the colourful joys of the Christmas season with its
communities, Shangri-La launched a Global Hashtag Campaign,
turning the LED façade of Kowloon Shangri-La, Hong Kong, into
a giant message board so people could share messages with
loved ones across the iconic skyline of Victoria Harbour over the
holidays.
Overview
9
Shangri-La Asia Limited Annual Report 2022
Business Traveller Asia-Pacific Awards 2022
Best Business Hotel Brand in the World
Business Traveller Asia-Pacific Awards 2022
Best Business Hotel Brand in Asia-Pacific
Business Traveller Asia-Pacific Awards 2022
Best Luxury Hotel Brand in Asia-Pacific
CNBC Awards 2022
Best Hotels for Business Travellers
Condé Nast Traveler China Gold List 2022
Responsible Travel Award (#I’mIn)
Freddie Awards 2022
The Best-Scoring Hotel Loyalty Programme
Travel + Leisure World’s Best Awards 2022
The 25 Best Hotel Brands
TTG China Travel Awards 2022
Best Luxury Hotel Brand in Greater China
TTG Travel Awards 2022
Best Luxury Hotel Brand
Awards of the Year
Chairman’s Statement
Overview
10
Shangri-La Asia Limited Annual Report 2022
Dear Shareholders,
Introduction and 2022 Key Financial Highlights
On behalf of the Board, I am pleased to present the annual results of Shangri-La Asia Limited (“Shangri-La”) for the
financial year ended 31 December 2022.
In 2022, Revenue grew 18% from USD1.24Bn to USD1.46Bn. RevPAR (“Revenue per Available Room”) from owned
hotels grew 25% from USD51 to USD64. This growth came despite a RevPAR decline in our Chinese mainland hotels
from USD56 to USD37, as RevPAR of hotels outside of Chinese mainland improved by about 130% to USD100 from
USD44. Specifically, our London and Paris hotel RevPARs reached record highs, while Singapore also saw strong
growth. Overall Room Rate grew about 20% year on year from USD130 to USD155, while the Group’s Operating Cash
Flow and Operating Profit After Tax from operating properties turned positive for the first time since the Covid-19
outbreak.
It has been a challenging three years for Shangri-La as we faced the most difficult operating environment in our
history due to the Covid pandemic. The impact on our business was magnified by the simultaneous and extended
closure of travel, dining and physical venues. However, I believe the worst of the pandemic is behind us and we are
now on the path to recovery, with travel resuming in all the markets where we operate. Indeed, we saw an immediate
surge in demand once Covid restrictions were relaxed.
For any company to navigate through something as unpredictable and damaging as Covid is an extraordinary
achievement and should not be taken for granted. I am extremely proud of our colleagues, who played no small role in
seeing us through this challenging period and helped us emerge as a stronger and more resilient organisation.
Beyond Covid: Recovery and Growth Initiatives
Even as we grappled with the challenges posed by Covid, we never lost sight of the future. We continued to work on
the strategic initiatives required for us to achieve our 2030 vision to be the best-loved hospitality group.
In the past three years, we have redefined how Shangri-La should evolve to better engage with customers, both old
and new. Our strong customer franchise is one of the hallmarks of our leadership position, and we have developed a
multi-year roadmap to meet existing and future customer needs.
Our long-term success depends on the relationships we have built with our customers. As an owner-operator of
hotels, and with a customer franchise synonymous with luxury Asian hospitality and service excellence, we are well
positioned to serve existing and future customer needs through the holistic, multi-year roadmap we are developing.
We have already made good progress in this direction, with initiatives such as our revamped loyalty programme
— Shangri-La Circle — launched in April 2022. This programme is not only more intuitive but also offers a more
immersive experience, with rich content and personalised recommendations.
We also transformed our online customer experience by introducing attribute-booking, which displays clear product
information and personalised choices when customers book with us.
Chairman’s Statement
Overview
11
Shangri-La Asia Limited Annual Report 2022
Sustainability
Sustainability is one of Shangri-La’s core pillars. Our sustainability strategy is driven by our Environmental, Social and
Governance (“ESG”) framework, which we have continuously enhanced, and will feature strongly in all our business
operations going forward.
One example of our commitment to sustainability, our Single-Use Plastic (“SUP”) reduction programme, achieved a
13% reduction of SUP per room night in 2022. We are currently well on track to achieve our target of a 50% reduction
in SUP by the end of 2026.
In our community engagement programmes during Covid, we created long-lasting positive impact by having our
teams deliver groceries, hot meals, and care packages directly to vulnerable families, benefiting around 200,000
people. We will do even more for communities in more diverse ways in the future.
Financial Discipline and Execution
Building sustainable growth requires meticulous execution and disciplined capital allocation. In 2022, we continued to
strengthen our business, transforming Shangri-La into a simpler, leaner and more effective organisation.
Our strong Governance Framework ensures that financial discipline and appropriate governance principles are in place
to guide our businesses so that we can expand and operate in a sustainable manner and deliver long term stakeholder
value.
In the meantime, even as we reduced cost in our business operations, we continue to invest in our people. To that
end, we have established programmes to identify and develop leaders by providing them with opportunities and
customised individual development plans to enhance their commercial, functional and leadership capabilities.
Closing and Acknowledgements
I would like to take this opportunity to thank Mr LIM Beng Chee, who retired from his role as Group Chief Executive
Officer in December 2022, for his contributions to the Group since joining us in 2017. We are grateful for the many
initiatives he spearheaded and his unwavering leadership in helping the Group navigate through the challenges of
Covid.
Barring unforeseen circumstances, we are cautiously optimistic about the trajectory of the recovery and turnaround
of our business. We are prepared to welcome back our guests with our heartfelt Asian hospitality. We will also remain
vigilant about managing our costs to ensure our prospects for a brighter future translate into stronger bottom lines
and cash generation.
I would also like to take this opportunity to thank all our customers, business partners, colleagues and shareholders
for their unfailing support and trust through the years and look forward to welcoming you again at one of our
properties.
KUOK Hui Kwong
Chairman
Board of Directors, Company Secretary
and Senior Management
Overview
12
Shangri-La Asia Limited Annual Report 2022
EXECUTIVE DIRECTORS
KUOK Hui Kwong
Aged 45, Malaysian
Executive Director
Chairman
Period of service with the Group
• Non-executive Director from October 2014 to June
2016
• Executive Director and Deputy Chairman from June
2016 to December 2016
• Executive Director and Chairman since January
2017
Other current major positions held within the Group
• Executive Committee – chairman
• Nomination Committee – chairman
• Remuneration & Human Capital Committee –
member
Directorship of listed companies in the past three years
• China World Trade Center Company Limited (listed
on the Shanghai stock exchange), an associate of
the Company – director since April 2015; executive
director since April 2018
Other current major appointments
• Kerry Group Kuok Foundation (Hong Kong) Limited
(charitable organisation) – governor
Other previous experience and major appointments
• SCMP Group Limited (currently known as Great
Wall Pan Asia Holdings Limited) (listed on HKSE
with stock code 00583) – joined in October 2003;
executive director from February 2004 to June 2016
(managing director and chief executive officer from
January 2009 to June 2012)
• The Post Publishing Public Company Limited (listed
on the Thailand stock exchange) – director from
November 2012 to June 2016
Academic/professional qualifications
• Bachelor’s degree in East Asian Studies – Harvard
University, United States
Relationship with significant shareholders
• Shareholding interest
– KGL (Substantial Shareholder) – deemed interest
of more than 5%
– Kuok Brothers Sdn Berhad (Other Major
Shareholder) – deemed interest of less than 5%
– Kuok (Singapore) Limited (Other Major
Shareholder) – deemed interest of less than 5%
• Directorship/office/employment
– KGL (Substantial Shareholder) – director
– KHL (Substantial Shareholder) – director
Board of Directors, Company Secretary
and Senior Management
Overview
13
Shangri-La Asia Limited Annual Report 2022
CHUA Chee Wui
Aged 56, Singaporean
Executive Director (from 1
September 2022)
Group CFO (from 31 August
2022) and Group CIO
Period of service with the Group
• Executive Vice President of Special Projects from
February 2018 to December 2018
• Head of Investment and Asset Management from
January 2019 to August 2019
• Group CIO since September 2019
• Group CTO from April 2020 to April 2021
• Group CFO since August 2022
• Executive Director since September 2022
Other current major positions held within the Group
• Executive Committee – member (from 1 September
2022)
Other previous experience and major appointments
• Keppel Corporation Limited – general manager
(Strategic Development) from 2000 to 2010; chief
executive officer (Integrated Engineering) from
2004 to 2010
• Singbridge International Singapore Pte Limited
(subsidiary of Temasek Holdings (Private) Limited)
– executive vice president from January 2010 to
February 2013
Academic/professional qualifications
• Bachelor’s degree in Engineering Science –
University of Oxford, United Kingdom
• Charterholder – Chartered Financial Analyst
Period of service with the Group
• Non-executive Director from September 2016 to
December 2016
• Executive Director and Group CEO from January
2017 to December 2022
• Non-executive Director since January 2023
Directorship of listed companies in the past three
years
• China World Trade Center Company Limited (listed
on the Shanghai stock exchange), an associate of
the Company – chairman and executive director
since April 2018
Other previous experience and major appointments
• CapitaMalls Asia Limited (currently known as
CapitaLand Mall Asia Limited) (listed on the
Singapore stock exchange, delisted in July 2014) –
director and chief executive officer from November
2008 to September 2014
• Changi Airports International Pte Limited –
non-executive director and audit committee
member from May 2015 to June 2017
• Raffles Medical Group Limited (listed on the
Singapore stock exchange) – independent director
from July 2015 to April 2019
Academic/professional qualifications
• Bachelor’s degree in Physics – University of Oxford,
United Kingdom
• MBA (Accountancy) – Nanyang Technological
University, Singapore
LIM Beng Chee
Aged 55, Singaporean
Non-executive Director
(from 1 January 2023)
NON-EXECUTIVE DIRECTOR
Board of Directors, Company Secretary
and Senior Management
Overview
14
Shangri-La Asia Limited Annual Report 2022
Period of service with the Group
• Independent Non-executive Director since March
2011
Other current major positions held within the Group
• Nomination Committee – member
• Remuneration & Human Capital Committee –
member
• Audit & Risk Committee – member
Directorship of listed companies in the past three
years
• The Bank of East Asia, Limited (listed on HKSE with
stock code 00023) – non-executive director since
January 2008; non-executive deputy chairman since
April 2009
• Nature Home Holding Company Limited (listed on
HKSE with stock code 02083, delisted in October
2021) – independent non-executive director from
May 2011 to October 2021
Other current major appointments
• The Government of the Hong Kong Special
Administrative Region, Executive Council – member
since July 2002
• The Chinese University of Hong Kong, Department
of Surgery – emeritus professor since 2005
• Greater Bay Airlines Company Limited –
non-executive director since December 2020
• The Committee for the Basic Law of the Hong Kong
Special Administrative Region under the Standing
Committee of the National People’s Congress –
member since August 2021
INDEPENDENT NON-EXECUTIVE DIRECTORS
Other previous experience and major appointments
• The Chinese University of Hong Kong – dean of
Faculty of Medicine from 1992 to 1996; vice-chancellor
(president) from August 1996 to July 2002
• The National Committee of the Chinese People’s
Political Consultative Conference – member from
1998 to March 2018
• Hong Kong Applied Science and Technology
Research Institute Company Limited – director from
May 2000 to July 2002
• Hong Kong Science and Technology Parks Corporation
– director from March 2001 to July 2002
• The Government of the Hong Kong Special
Administrative Region, Education and Manpower
Bureau – secretary from August 2002 to June 2007
• The Government of the Hong Kong Special
Administrative Region, Council for Sustainable
Development – chairman from March 2015 to
February 2021
• The University of Hong Kong – council chairman
from January 2016 to December 2021
• Glaxo Wellcome Plc (currently known as
GlaxoSmithKline Plc after merger) (listed on the
London and the New York stock exchanges) –
non-executive director from January 1997 to July 2002
• China Mobile (Hong Kong) Limited (currently known
as China Mobile Limited) (listed on HKSE with stock
code 00941) – independent non-executive director
from September 1997 to July 2002
• The Wharf (Holdings) Limited (listed on HKSE with
stock code 00004) – independent non-executive
director from October 2001 to July 2002 and from
July 2012 to August 2013
Academic/professional qualifications
• Medical degree – University of Cambridge, United
Kingdom
LI Kwok Cheung Arthur
Aged 77, Chinese
Independent Non-executive Director
Board of Directors, Company Secretary
and Senior Management
Overview
15
Shangri-La Asia Limited Annual Report 2022
YAP Chee Keong
Aged 62, Singaporean
Independent Non-executive Director
Period of service with the Group
• Independent Non-executive Director since
December 2017
Other current major positions held within the Group
• Remuneration & Human Capital Committee – member
• Audit & Risk Committee – chairman
Directorship of listed companies in the past three years
• Olam International Limited (listed on the Singapore
stock exchange, delisted in March 2022) –
independent non-executive director from December
2015 to March 2022
• Sembcorp Industries Limited (listed on the
Singapore stock exchange) – independent
non-executive director since October 2016
• Maxeon Solar Technologies, Limited (listed on the
Nasdaq) – independent non-executive director from
August 2020 to June 2021
• Sembcorp Marine Limited (listed on the Singapore
stock exchange) – deputy chairman and independent
non-executive director since December 2021
• Olam Group Limited (listed on the Singapore stock
exchange) – independent non-executive director
since March 2022
Other current major appointments
• MediaCorp Pte Limited – independent
non-executive director since November 2015
• Ensign Infosecurity Pte Limited – independent
non-executive director since September 2019
• Pacific International Lines (Pte) Limited – independent
non-executive director since March 2021
• Singapore Life Holdings Pte Limited (formerly known
as Aviva Singlife Holdings Pte Limited) – independent
non-executive director since August 2021
Other previous experience and major appointments
• Singapore Power Limited – chief financial officer
from September 2002 to January 2009
• CapitaMalls Asia Limited (currently known as
CapitaLand Mall Asia Limited) (listed on the
Singapore stock exchange, delisted in July 2014) –
independent non-executive director from October
2009 to April 2013
• Tiger Airways Holdings Limited (listed on the
Singapore stock exchange, delisted in May 2016) –
independent non-executive director from December
2009 to May 2016
• Hup Soon Global Corporation Limited (listed on the
Singapore stock exchange, delisted in April 2013) –
independent non-executive director from April 2010
to April 2013
• Citibank Singapore Limited – independent non-executive
director from December 2011 to June 2020
• The Straits Trading Company Limited (listed on the
Singapore Stock Exchange) – executive director from
January 2013 to August 2014; director from May
2009 to April 2018
• ARA Asset Management Limited (listed on the Singapore
stock exchange, delisted in April 2017) – non-executive
director from January 2014 to April 2017
• Certis CISCO Security Pte Limited – independent
non-executive director from December 2014 to
November 2020
• InterOil Corporation (listed on the New York stock
exchange, delisted in February 2017) – independent
non-executive director from March 2015 to February
2017
• Malaysia Smelting Corporation Berhad (listed
on both the Malaysia and the Singapore stock
exchanges) – non-executive director from May 2016
to May 2018
Academic/professional qualifications
• Bachelor’s degree in Accountancy – National
University of Singapore
• Fellow – CPA, Australia
• Fellow – Institute of Singapore Chartered
Accountants
• Fellow – Singapore Institute of Directors
Board of Directors, Company Secretary
and Senior Management
Overview
16
Shangri-La Asia Limited Annual Report 2022
ZHUANG Chenchao
Aged 46, Singaporean
Independent Non-executive
Director
Period of service with the Group
• Independent Non-executive Director since May
2019
Other current major positions held within the Group
• Nomination Committee – member
Directorship of listed companies in the past three
years
• Sea Limited (listed on the New York stock
exchange) – chairman and group chief executive
officer since May 2009
Other current major appointments
• Singapore Economic Development Board – board
member since February 2020
• Advisory Council of Stanford University’s Graduate
School of Business – member since September 2020
• Board of Trustees for the National University of
Singapore – member since April 2021
Other previous experience and major appointments
• Singapore’s Committee on the Future Economy –
member from January 2016 to February 2017
Academic/professional qualifications
• Bachelor’s degree in Engineering – Shanghai Jiao
Tong University, Mainland China
• MBA – Stanford Graduate School of Business,
Stanford University, United States
Period of service with the Group
• Independent Non-executive Director since
December 2019
Directorship of listed companies in the past three
years
• Jianpu Technology Inc (listed on the New York stock
exchange) – director since February 2014
Other current major appointments
• Zebra Global Capital – partner since March 2016
Other previous experience and major appointments
• Shawei.com – chief technology officer from April
1999 to June 2001
• World Bank – system architect from September
2001 to January 2005
• Qunar.com – president from February 2005 to
June 2011; chief executive officer from July 2011 to
January 2016
Academic/professional qualifications
• Bachelor’s degree in Electrical Engineering – Peking
University, Mainland China
LI Xiaodong Forrest
Aged 45, Singaporean
Independent Non-executive
Director
Board of Directors, Company Secretary
and Senior Management
Overview
17
Shangri-La Asia Limited Annual Report 2022
KHOO Shulamite N K
Aged 61, Singaporean
Independent Non-executive Director
Period of service with the Group
• Independent Non-executive Director since
November 2020
Other current major positions held within the Group
• Nomination Committee – member
• Remuneration & Human Capital Committee –
chairman
• Audit & Risk Committee – member
Directorship of listed companies in the past three
years
• Kerry Logistics Network Limited (listed on HKSE with
stock code 00636) – independent non-executive
director from July 2017 to October 2021
• CIMB Group Holdings Berhad (listed on the
Malaysia stock exchange) – independent director
since May 2020
Other current major appointments
• AIA Company Limited – independent non-executive
director since October 2022
Other previous experience and major appointments
• Prudential plc – different frontline businesses, client
services and operational roles in Singapore and
Hong Kong from 1984 to December 2004
• AXA Group SA – regional head, human resources &
internal communications from 2005 to 2008; group
executive vice president and global head of human
resources from 2008 to 2010
• International Advisory Panel of Singapore Public
Service Division – member from 2011 to 2017
• AIA Group Limited – group chief human resources
officer from January 2011 to February 2018;
executive committee member from January 2011 to
June 2017
Academic/professional qualifications
• Bachelor’s degree in Science – University of Toronto,
Canada
• Fellow – Chartered Institute of Personnel and
Development
Board of Directors, Company Secretary
and Senior Management
Overview
18
Shangri-La Asia Limited Annual Report 2022
SEOW Chow Loong Iain
Aged 57, Singaporean
Company Secretary
Period of service with the Group
• joined the Group in November 2011 as Senior Legal
Counsel
• General Counsel since June 2017
• Company Secretary since January 2019
Directorship of listed companies in the past three years
• CMON Limited (listed on HKSE with stock code
01792) – independent non-executive director from
November 2016 to April 2020
Other previous experience and major appointments
• Jones Day – partner
Academic/professional qualifications
• Bachelor’s degree in Laws – King’s College London,
United Kingdom
• Solicitor – Hong Kong, England and Wales
• Advocate & Solicitor (non-practising) – Supreme
Court of Singapore
COMPANY SECRETARY
KUOK Hui Kwong
Aged 45, Malaysian
Chairman
• The biography is set out in the previous subsection.
LIM Beng Chee
Aged 55, Singaporean
Group CEO (until 31 December 2022)
• The biography is set out in the previous subsection.
CHUA Chee Wui
Aged 56, Singaporean
Group CFO (from 31 August 2022) and Group CIO
• The biography is set out in the previous subsection.
TAN Chen Kiong George
Aged 56, Singaporean
CHRO
Period of service with the Group
• joined the Group in February 2020 as CHRO
Other previous experience and major appointments
• AIA group – regional director (group human
resources)
Academic/professional qualifications
• Bachelor’s degree in Behavioural Science – La Trobe
University, Australia
• Master of Philosophy in Industrial and
Organisational Psychology – The University of Hong
Kong
SENIOR MANAGEMENT
Board of Directors, Company Secretary
and Senior Management
Overview
19
Shangri-La Asia Limited Annual Report 2022
CHAN Kong Leong
Aged 50, Singaporean
Regional CEO (Hong Kong, Southeast Asia & Australasia,
Japan and Middle East, Europe, Indian Ocean &
the Americas)
Period of service with the Group
• joined the Group in January 2019 as Regional CEO
Directorship of listed companies in the past three years
• Shangri-La Hotel Public Company Limited (listed on
the Thailand stock exchange), a subsidiary of the
Company – director since May 2019
• Shangri-La Hotels (Malaysia) Berhad (listed on
the Malaysia stock exchange), a subsidiary of the
Company – non-executive director from May 2022 to
June 2022; executive director and managing director
since June 2022
Other previous experience and major appointments
• Suntec Real Estate Investment Trust (Suntec REIT,
listed on the Singapore stock exchange and its
manager was ARA Trust Management (Suntec)
Limited) – executive director and chief executive
officer of the manager from January 2017 to December
2018
• CapitaLand Limited – senior vice president, head of
regional investment, assets and fund management and
regional general manager, West China
• over 20 years of private and public sector experience
in managing investment, project development, asset
management, operations, strategic planning and
different corporate functions
Academic/professional qualifications
• Bachelor’s degree in Building – National University of
Singapore
• Charterholder – Chartered Financial Analyst
SENIOR MANAGEMENT (CONTINUED)
LAM Kwok Fung Spencer
Aged 49, Chinese
CTO
Period of service with the Group
• joined the Group in April 2021 as CTO
Other previous experience and major appointments
• Vanke Service Group – chief information officer
• over 15 years with Oracle Systems in the United States
and Mainland China with experience in software
product development and IT consulting service
management
Academic/professional qualifications
• Bachelor’s degree in Information Systems &
Management – The Hong Kong University of Science
and Technology
• MBA (Finance) – The Chinese University of Hong Kong
PAW Chuen Kee
Aged 65, Singaporean
Group COO, Deputy CEO (China) and Executive Vice
President, Operations (China)
Period of service with the Group
• joined the Group in March 1994 as Hotel Manager of
Traders Hotel, Beijing
• General Manager of several Shangri-La and Traders
hotels in Mainland China from October 1995 to
November 1999 and October 2008 to December 2011
• Vice President, Sales & Marketing in Mainland China
from November 1999 to October 2008
• Executive Vice President, Operations (North China)
from December 2011 to October 2019
• Deputy Regional CEO (North China) from November
2019 to November 2020
• Deputy CEO (China) and Executive Vice President,
Operations (China) since November 2020
• Group COO since October 2021
Other previous experience and major appointments
• over 35 years of experience in hospitality industry and
held management posts in Mainland China, the United
States and Singapore
Academic/professional qualifications
• Bachelor’s degree in Hotel Management, Computer
Science and Psychology – Brigham Young University,
Hawaii, United States
Discussion and Analysis
DISCUSSION AND ANALYSIS
21
Shangri-La Asia Limited Annual Report 2022
The principal activities of the Group remained the same as in 2021. The Group’s business is organised into four
main segments:
• Hotel Properties – development, ownership and operation of hotel properties (including hotels under
leases)
• Hotel Management and Related Services for Group-owned hotels and for hotels owned by third parties
• Investment Properties – development, ownership and operation of office properties, commercial properties
and serviced apartments/residences for rental purposes
• Property Development for Sale – development and sale of real estate properties
The Group continues to develop hotel properties, investment properties for rental purposes and properties for sale
for the above-mentioned business segments.
The Group currently owns and/or manages hotels under the following brands:
• Shangri-La Hotels and Resorts
• Kerry Hotels
• JEN by Shangri-La
• Traders Hotels
The following table summarises the hotels and rooms of the Group as at 31 December 2022:
Owned/Leased Managed
Total
Operating Hotels Hotels Under Development
Hotels Rooms Hotels Rooms Hotels Rooms
Owned/
Leased
Hotels
Hotels Under
Management
Contracts
in ’000 in ’000 in ’000
73 30.7 19 6.1 92 36.8 3 3
3 1.6 — — 3 1.6 — —
7 2.8 1 0.3 8 3.1 1 2
— — 2 0.9 2 0.9 1 —
Total
83 35.1 22 7.3 105 42.4 5 5
Notes:
(1) Two hotels under management contracts owned by third parties, namely Shangri-La Jeddah in Saudi Arabia and Shangri-La Nanning in
Mainland China, opened for business in February 2022 and March 2022, respectively.
(2) The management agreement for JEN Manila by Shangri-La was terminated in September 2022.
(3) JEN Shenzhen Qianhai by Shangri-La (a management hotel owned by a third party) in Mainland China opened for business in February
2023.
Discussion and Analysis
22
Shangri-La Asia Limited Annual Report 2022
The following table summarises the total Gross Floor Area (“GFA”) of the operating investment properties for
rental owned by subsidiaries and associates:
Total GFA of the operating
investment properties
as at 31 December 2022
(in square metres)
Group’s equity
interest
Office
spaces
Commercial
spaces
Serviced
apartments/
residential
Mainland China China World Trade Center
– Phase I
40.32%-50% 87,828 91,898 80,124
– Phase II
43.23% 76,536 26,267 —
– Phase IIIA
40.32% 143,088 45,851 —
– Phase IIIB
40.32% 83,743 62,892 —
391,195 226,908 80,124
Century Tower, Beijing
50% — — 43,445
Beijing Kerry Centre
23.75% 92,723 12,831 36,161
Jing An Kerry Centre – Phase I
24.75% 38,611 13,009 17,812
Jing An Kerry Centre – Phase II
49% 117,823 80,967 —
Kerry Parkside Shanghai Pudong
23.2% 94,995 49,319 34,907
Shangri-La Centre, Chengdu
80% 41,519 4,097 —
Shangri-La Residences, Dalian
100% — — 54,004
Shangri-La Centre, Qingdao
100% 31,911 8,029 —
Tianjin Kerry Centre
20% — 85,907 —
Hangzhou Kerry Centre
25% 12,583 98,886 —
Jinan Enterprise Square
45% 32,944 5,681 —
Shenyang Kerry Centre – Phase II
25% 54,753 75,260 —
Shangri-La Centre, Wuhan
92% 41,519 2,369 —
950,576 663,263 266,453
Malaysia UBN Apartments, Malaysia
52.78% — — 17,356
UBN Tower, Malaysia
52.78% 45,175 8,530 —
45,175 8,530 17,356
Singapore Shangri-La Apartments, Singapore
100% — — 13,794
Shangri-La Residences, Singapore
100% — — 10,941
Tanglin Mall, Singapore
44.6% — 21,267 —
Tanglin Place, Singapore
44.6% 3,291 1,666 —
3,291 22,933 24,735
Australia The Pier Retail Complex, Cairns
100% 515 11,370 —
Mongolia Central Tower, Ulaanbaatar
51% 29,487 8,480 —
Shangri-La Centre, Ulaanbaatar
51% 28,500 31,130 30,012
57,987 39,610 30,012
Myanmar Shangri-La Residences, Yangon
55.86% — — 56,834
Sule Square, Yangon
59.28% 37,635 11,807 —
37,635 11,807 56,834
Sri Lanka One Galle Face, Colombo
90% 59,866 79,518 3,733
TOTAL
1,155,045 837,031 399,123
Discussion and Analysis
23
Shangri-La Asia Limited Annual Report 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
The following table shows the Group’s profit or loss for the year ended 31 December 2022 and 2021 presented in
the conventional financial statement format and the effective share format, respectively. Amounts presented in the
conventional financial statement format refer to the aggregate total of the Company and its subsidiaries at 100%
basis less non-controlling interests and add share of profit of associates to come up with the Group’s final reported
profit or loss attributable to owners of the Company. The alternative presentation of the Group’s profit or loss at
effective share is a non-HKFRS financial presentation format and the amounts presented at effective share are the
aggregate total of the Company and the Group’s share of subsidiaries and associates based on the percentage of
equity interests.
Profit or loss for
the year ended
31 December 2022
Profit or loss for
the year ended
31 December 2021
2022/21
% change
(USD million)
Financial
statement
format
Effective
share
Financial
statement
format
Effective
share
Financial
statement
format
Effective
share
Revenue
1,462.1 1,915.4 1,241.0 1,749.3 17.8% 9.5%
Cost of sales
(775.6) (926.3) (696.5) (853.1) -11.4% -8.6%
Gross profit
686.5 989.1 544.5 896.2 26.1% 10.4%
Operating expenses
(527.1) (561.1) (451.9) (525.2) -16.6% -6.8%
Other gains — operating items
15.0 13.6 40.2 47.0 -62.7% -71.1%
EBITDA
174.4 441.6 132.8 418.0 31.3% 5.6%
Depreciation and amortisation
(278.7) (305.7) (318.7) (346.3) 12.6% 11.7%
(Loss)/gain on disposal of fixed assets and
intangible assets (0.3) 0.3 (1.6) (1.4) 81.3% N/M
Interest income
11.1 20.1 10.1 18.5 9.9% 8.6%
Other expenses — non-operating items
6.3 5.5 (122.9) (108.6) N/M N/M
Other gains/(losses) — non-operating items
82.9 117.7 (53.7) 26.2 N/M 349.2%
Operating (loss)/profit
(4.3) 279.5 (354.0) 6.4 98.8% N/M
Finance cost
— Operating items
(238.6) (239.4) (212.7) (210.5) -12.2% -13.7%
— Non-operating items
(122.3) (110.1) 0.1 0.1 N/M N/M
Share of profit of associates
190.8 — 209.6 — -9.0% N/M
Loss before income tax
(174.4) (70.0) (357.0) (204.0) 51.1% 65.7%
Income tax (expense)/credit
— Operating items
(10.6) (78.5) 5.8 (71.5) N/M -9.8%
— Non-operating items
(2.4) (10.0) 6.8 (15.1) N/M 33.8%
Loss for the year
(187.4) (158.5) (344.4) (290.6) 45.6% 45.5%
Add: Loss attributable to non-controlling interests
28.9 — 53.8 — -46.3% N/M
Loss attributable to owners of the Company
(158.5) (158.5) (290.6) (290.6) 45.5% 45.5%
N/M: not meaningful
Discussion and Analysis
24
Shangri-La Asia Limited Annual Report 2022
SUMMARY OF NET ASSET VALUE
(Note 1)
According to the Group’s accounting policies, investment properties are stated at fair value by external valuers
while hotel properties are stated at historical cost less depreciation and impairment losses. As a result, the
carrying values of the Group’s hotel properties do not capture revaluation gains which would otherwise be
included in their fair values.
The Group has carried out internal valuations for the hotel properties owned by the Group’s subsidiaries and
associates based on discounted 10-year cash flow projections to assess the potential fair values of the hotel
properties and the resulting adjusted net asset value of the Group if the Group’s hotel properties were to be
stated at fair values. To verify the valuations of the hotel properties, external valuations have been performed
by independent professional valuers to determine the fair value of a portfolio of hotel properties owned by the
Group’s subsidiaries, whose aggregate effective share of the valuation surplus (being the surplus by which its
valuation exceeds its carrying value) constitutes at least 50% of the total valuation surplus of all the hotel
properties.
As at 31 December 2022, based on external valuations of such portfolio of identified hotel properties and internal
valuations of the Group’s remaining hotel properties, the effective share of the valuations of all the Group’s
hotel properties was USD11,950.6 million, of which USD4,914.2 million was derived from external valuations
and USD7,036.4 million was derived from internal valuations. When compared to the effective share of the
carrying value of the hotel properties, the effective share of the valuation surplus attributable to the owners of
the Company after deferred tax was USD5,541.1 million, of which USD3,537.5 million was derived from external
valuations and USD2,003.6 million was derived from internal valuations. Such valuation surplus attributable to
non-controlling interests after deferred tax was USD429.8 million, of which USD289.3 million was derived from
external valuations and USD140.5 million was derived from internal valuations.
If all the hotel properties were to be stated at fair values, the Group’s net asset value attributable to the owners
of the Company (“NAV”) would therefore be increased from the reported balance of USD5,254.0 million to the
adjusted balance of USD10,795.1 million while total equity would be increased from the reported balance of
USD5,424.5 million to the adjusted balance of USD11,395.4 million.
Discussion and Analysis
25
Shangri-La Asia Limited Annual Report 2022
(USD Million)
Carrying
value of hotel
properties at
effective share
(Note 2)
Valuation of
hotel properties
at effective
share
(Note 2)
Valuation
surplus at
effective
share after
deferred tax
(Note 2)
The People’s Republic of China
Hong Kong
753.6 2,575.5 1,753.8
Mainland China
2,480.3 5,029.5 1,911.9
Singapore
510.7 1,773.5 1,173.3
Malaysia
118.0 295.7 135.0
The Philippines
287.3 550.2 197.2
Thailand
90.0 224.6 107.7
Australia
272.9 384.4 78.1
Others
(Note 3)
862.5 1,117.2 184.1
Total
5,375.3 11,950.6 5,541.1
NAV Non-controlling
interests
Total equity
Reported balance based on carrying
value of hotel properties
5,254.0 170.5 5,424.5
Add: Valuation surplus of hotel properties
after deferred tax
5,541.1 429.8 5,970.9
Adjusted balance based on valuation of
hotel properties
10,795.1 600.3 11,395.4
Reported NAV per share
(Note 4)
USD1.47 (equivalent to HKD11.39)
Adjusted NAV per share
(Note 4)
USD3.03 (equivalent to HKD23.48)
Notes:
(1) Net asset value refers to the Group’s total assets less total liabilities (i.e. equity) attributable to the owners of the Company.
(2) The effective share refers to the Group’s share of subsidiaries’ and associates’ carrying value and valuation of hotel properties based on
the percentage of equity interests.
(3) Others include France, Maldives, Turkey, Fiji, Myanmar, Indonesia, Mongolia, Mauritius, Sri Lanka, Japan and United Kingdom.
(4) NAV per share is computed based on 3,565,890,000 shares in issue after adjusting for shares held by the Group.
Discussion and Analysis
26
Shangri-La Asia Limited Annual Report 2022
RESULTS OF OPERATIONS
Consolidated Revenue
Consolidated revenue consisted of the following:
Year ended 31 December
2022/21
(USD million) 2022
2021
% change
Hotel Properties
Revenue from rooms
622.9 452.5 37.7%
Food and beverage sales
559.9 509.7 9.8%
Rendering of ancillary services
79.1 87.2 -9.3%
Sub-total of hotel properties
1,261.9 1,049.4 20.2%
Hotel Management and Related Services
Gross revenue (including revenue earned from subsidiaries)
165.6 148.0 11.9%
Less: Inter-segment sales elimination with subsidiaries
(86.9) (76.6) -13.4%
Net amount after elimination
78.7 71.4 10.2%
Sub-total Hotel Operations
1,340.6 1,120.8 19.6%
Investment Properties
99.7 93.8 6.3%
Property Development for Sale
14.9 21.6 -31.0%
Other Business
6.9 4.8 43.8%
Consolidated Revenue
1,462.1 1,241.0 17.8%
Consolidated revenue was USD1,462.1 million for the year ended 31 December 2022, an increase of 17.8% (or
USD221.1 million), compared to USD1,241.0 million for the year ended 31 December 2021. The increase was mainly
driven by:
– USD219.8 million increase in our Hotel Operations (net of inter-segment revenue) mainly supported by the
continued momentum and improvement of the hotel business environment in most regions we operate in
as travel and gathering restrictions in such regions gradually loosened in early 2022. This was, however,
partially offset by the decline in revenue from our hotels in Mainland China due to sporadic restrictions
related to local Covid-19 outbreaks throughout 2022.
– USD5.9 million increase in Investment Properties, mainly driven by investment properties owned by our
subsidiaries located in Mongolia, Singapore and Mainland China.
– Property Development for Sale decreased by USD6.7 million due to fewer units handed over at Shangri-La’s
One Galle Face development in Colombo, Sri Lanka compared to last year.
Discussion and Analysis
27
Shangri-La Asia Limited Annual Report 2022
(i) Hotel Properties
At 31 December 2022, the Group had equity interest in 80 operating hotels (2021: 80) and 3 hotels under
operating lease (2021: 3), representing a room inventory of 35,144 (2021: 35,154) across Asia Pacific, Europe and
Africa.
Details of these 83 hotels are as follows:
Group’s equity
interest
Available
rooms
(A) Hotels owned by the Group
Hong Kong
Kowloon Shangri-La, Hong Kong
100% 679
Island Shangri-La, Hong Kong
80% 557
JEN Hong Kong by Shangri-La
30% 283
Kerry Hotel, Hong Kong
100% 546
Sub-total Hong Kong
2,065
Mainland China
Shangri-La Beijing
38% 670
China World Hotel, Beijing
50% 584
China World Summit Wing, Beijing
40.32% 278
JEN Beijing by Shangri-La
40.32% 450
Kerry Hotel, Beijing
23.75% 486
Pudong Shangri-La, Shanghai
100% 950
Jing An Shangri-La, Shanghai
49% 508
Kerry Hotel Pudong, Shanghai
23.2% 574
Shangri-La Shenzhen
72% 522
Futian Shangri-La, Shenzhen
100% 528
Shangri-La Xian
100% 393
Shangri-La Hangzhou
45% 198
Shangri-La Beihai
100% 362
Shangri-La Changchun
100% 382
JEN Shenyang by Shangri-La
100% 407
Shangri-La Shenyang
25% 383
Shangri-La Qingdao
100% 702
Shangri-La Dalian
100% 560
Shangri-La Wuhan
92% 408
Shangri-La Harbin
100% 396
Shangri-La Fuzhou
100% 414
Shangri-La Guangzhou
80% 690
Shangri-La Chengdu
80% 593
Shangri-La Wenzhou
100% 409
Shangri-La Ningbo
95% 562
Shangri-La Guilin
100% 439
Shangri-La Baotou
100% 360
Shangri-La Huhhot
100% 365
Shangri-La Manzhouli
100% 235
Shangri-La Yangzhou
100% 360
Shangri-La Qufu
100% 322
Discussion and Analysis
28
Shangri-La Asia Limited Annual Report 2022
Group’s equity
interest
Available
rooms
Shangri-La Lhasa
100% 289
Shangri-La Sanya
100% 496
Shangri-La Nanjing
55% 450
Shangri-La Qinhuangdao
100% 323
Shangri-La Hefei
100% 400
Shangri-La Resort, Shangri-La
100% 228
Shangri-La Tianjin
20% 304
Shangri-La Nanchang
20% 473
Shangri-La Tangshan
35% 301
Midtown Shangri-La, Hangzhou
25% 414
Shangri-La Songbei, Harbin
100% 344
Shangri-La Xiamen
100% 325
Shangri-La Jinan
45% 364
Shangri-La Zhoushan
100% 28
Shangri-La Putian
40% 125
Sub-total Mainland China
19,354
Singapore
Shangri-La Singapore
100% 792
Shangri-La Rasa Sentosa, Singapore
100% 454
JEN Singapore Tanglin by Shangri-La
44.6% 565
Sub-total Singapore
1,811
Malaysia
Shangri-La Kuala Lumpur
52.78% 655
Shangri-La Rasa Sayang, Penang
52.78% 303
Shangri-La Golden Sands, Penang
52.78% 387
JEN Penang Georgetown by Shangri-La
31.67% 443
Shangri-La Rasa Ria, Kota Kinabalu
64.59% 499
Shangri-La Tanjung Aru, Kota Kinabalu
40% 498
Sub-total Malaysia
2,785
The Philippines
Makati Shangri-La, Manila
100% 696
Edsa Shangri-La, Manila
100% 628
Shangri-La Mactan, Cebu
93.95% 530
Shangri-La Boracay
100% 219
Shangri-La The Fort, Manila
40% 576
Sub-total The Philippines
2,649
Thailand
Shangri-La Bangkok
73.61% 802
Shangri-La Chiang Mai
73.61% 277
Sub-total Thailand
1,079
Australia
Shangri-La Sydney
100% 564
Shangri-La The Marina, Cairns
100% 255
Sub-total Australia
819
Discussion and Analysis
29
Shangri-La Asia Limited Annual Report 2022
Group’s equity
interest
Available
rooms
Other areas
Shangri-La Paris
100% 101
Shangri-La’s Villingili Resort & Spa, Maldives
70% 132
JEN Maldives Malé by Shangri-La
100% 114
Shangri-La Bosphorus, Istanbul
50% 186
Shangri-La Yanuca Island, Fiji
71.80% 443
Sule Shangri-La, Yangon
59.16% 462
Shangri-La Jakarta
25% 619
Shangri-La Surabaya
11.34% 365
Shangri-La Ulaanbaatar
51% 290
Shangri-La Le Touessrok, Mauritius
26% 195
Shangri-La Hambantota
90% 274
Shangri-La Colombo
90% 500
Sub-total other areas
3,681
Total of 80 owned hotels
34,243
(B) Hotels under operating lease agreements
Shangri-La Tokyo
200
Shangri-La The Shard, London
202
JEN Singapore Orchardgateway by Shangri-La
499
Total of 3 leased hotels
901
Grand total
35,144
Revenue from our consolidated hotel properties business for the year ended 31 December 2022 was USD1,261.9
million, an increase of 20.2% (or USD212.5 million), compared to USD1,049.4 million for the year ended 31
December 2021.
Year ended 31 December
2022/21
(USD million) 2022
2021
% change
The People’s Republic of China
Hong Kong
156.7 137.3 14.1%
Mainland China
429.5 588.1 -27.0%
Singapore
197.4 104.2 89.4%
Malaysia
77.1 25.9 197.7%
The Philippines
79.6 26.1 205.0%
Japan
32.7 30.8 6.2%
Thailand
33.4 10.4 221.2%
France
50.8 23.7 114.3%
Australia
76.9 37.3 106.2%
United Kingdom
55.9 38.3 46.0%
Mongolia
13.5 6.1 121.3%
Sri Lanka
20.3 12.3 65.0%
Other countries
38.1 8.9 328.1%
Consolidated revenue from Hotel Properties business
1,261.9 1,049.4 20.2%
Discussion and Analysis
30
Shangri-La Asia Limited Annual Report 2022
The key performance indicators of the Group-owned hotels (including hotels under lease) on an unconsolidated
basis (including both subsidiaries and associates) for the years ended 31 December 2022 and 2021 are as follows:
2022 Weighted Average
2021 Weighted Average
Country Occupancy Room Rate RevPAR Occupancy Room Rate RevPAR
(%) (USD) (USD) (%) (USD) (USD)
The People’s Republic of China
Hong Kong
38 197 75 38 146 56
Mainland China
38 97 37 49 114 56
Tier 1 Cities
38 120 45 52 152 79
Tier 2 Cities
41 86 35 51 94 48
Tier 3+4 Cities
32 87 28 41 97 40
Singapore
61 246 150 37 147 54
Malaysia
47 111 52 17 98 16
The Philippines
45 195 89 21 105 22
Japan
54 427 232 33 395 129
Thailand
37 120 44 10 77
8
France
50 1,843 930 49 1,380 672
Australia
69 255 176 36 229 81
United Kingdom
62 781 483 37 886 331
Mongolia
26 203 53 24 112 26
Sri Lanka
22 132 29 12 122 14
Other countries
43 201 87 28 157 43
Non-Mainland China
Weighted Average
46 216 100 26 168 44
Total Weighted Average
42 155 64 39 130 51
The weighted average occupancy of our hotels was 42% for the year ended 31 December 2022, an increase of
3 percentage points, compared to 39% for the year ended 31 December 2021. The revenue per available room
(“RevPAR”) was USD64 for the year ended 31 December 2022, an increase of 25%, compared to USD51 for the
year ended 31 December 2021.
If we exclude Mainland China, the weighted average occupancy was 46% for the year ended 31 December 2022,
an increase of 20 percentage points, compared to 26% for the year ended 31 December 2021. The RevPAR was
USD100 for the year ended 31 December 2022, an increase of 127%, compared to USD44 for the year ended 31
December 2021.
Discussion and Analysis
31
Shangri-La Asia Limited Annual Report 2022
Below are comments on hotel performances on selected geographies:
The People’s Republic of China
Hong Kong
For Hong Kong, the occupancy was 38% for the year ended 31 December 2022, flat compared to 38% for the year
ended 31 December 2021. The RevPAR was USD75 for the year ended 31 December 2022, an increase of 34%,
compared to USD56 for the year ended 31 December 2021. The increase was mainly driven by quarantine business
for two of our four hotels, while the other two hotels were supported by a gradual recovery of food and beverage
business as well as staycation business. Total revenue from Hong Kong hotel properties for the year ended 31
December 2022 increased by 14.1% to USD156.7 million.
Mainland China
The Group had equity interest in 46 operating hotels in Mainland China as at 31 December 2022.
For Mainland China, the occupancy was 38% for the year ended 31 December 2022, a decrease of 11 percentage
points, compared to 49% for the year ended 31 December 2021. The RevPAR was USD37 for the year ended 31
December 2022, a decrease of 34%, compared to USD56 for the year ended 31 December 2021. For most of the
period in 2022, our businesses in various cities in Mainland China had been disrupted by lockdowns and travel
restrictions due to the sporadic outbreak of Covid-19.
Below is the performance of our hotels in different tiered cities:
• In Tier 1 cities, the occupancy was 38% for the year ended 31 December 2022, a decrease of 14 percentage
points, compared to 52% for the year ended 31 December 2021. The RevPAR was USD45 for the year ended
31 December 2022, a decrease of 43%, compared to USD79 for the year ended 31 December 2021. All Tier
1 cities had been impacted by various Covid-19 restrictions during the year. In particular, Shanghai was in
a strict two-month lockdown during early 2022, with restrictions only gradually easing over the next few
months.
• In Tier 2 cities, the occupancy was 41% for the year ended 31 December 2022, a decrease of 10 percentage
points, compared to 51% for the year ended 31 December 2021. The RevPAR was USD35 for the year ended
31 December 2022, a decrease of 27%, compared to USD48 for the year ended 31 December 2021. Our
hotels in Tier 2 cities were impacted by various Covid-19 related restrictions throughout the year, as well as
reduced demand from Tier 1 cities that are important feeder markets.
• In Tier 3 and Tier 4 cities, the occupancy was 32% for the year ended 31 December 2022, a decrease of 9
percentage points, compared to 41% for the year ended 31 December 2021. The RevPAR was USD28 for the
year ended 31 December 2022, a decrease of 30%, compared to USD40 for the year ended 31 December
2021. Similar to hotels in Tier 2 cities, our hotels in Tier 3 and Tier 4 cities were also impacted by various
Covid-19 related restrictions throughout the year, as well as reduced demand from feeder markets.
Total revenue from Mainland China hotel properties for the year ended 31 December 2022 decreased by 27.0% to
USD429.5 million.
Discussion and Analysis
32
Shangri-La Asia Limited Annual Report 2022
Singapore
For Singapore, the occupancy was 61% for the year ended 31 December 2022, an increase of 24 percentage points,
compared to 37% for the year ended 31 December 2021. The RevPAR was USD150 for the year ended 31 December
2022, an increase of 178%, compared to USD54 for the year ended 31 December 2021. The growth of RevPAR was
mainly driven by the relaxation of Covid-19 related restrictions since early 2022, as well as large scale events being
held such as the Grand Prix in October 2022. Total revenue from Singapore hotel properties for the year ended 31
December 2022 increased by 89.4% to USD197.4 million.
Malaysia
For Malaysia, the occupancy was 47% for the year ended 31 December 2022, an increase of 30 percentage points,
compared to 17% for the year ended 31 December 2021. The RevPAR was USD52 for the year ended 31 December
2022, an increase of 225%, compared to USD16 for the year ended 31 December 2021. This was driven by the
momentum of domestic staycation demand after the resumption of inter-state travelling since mid-October 2021,
as well as the reopening of its borders on 1 April 2022. Total revenue from Malaysia hotel properties for the year
ended 31 December 2022 increased by 197.7% to USD77.1 million.
The Philippines
For the Philippines, the occupancy was 45% for the year ended 31 December 2022, an increase of 24 percentage
points, compared to 21% for the year ended 31 December 2021. The RevPAR was USD89 for the year ended 31
December 2022, an increase of 305%, compared to USD22 for the year ended 31 December 2021. The recovery
was mainly supported by the gradual loosening of entry requirements into the country. Total revenue from the
Philippines hotel properties for the year ended 31 December 2022 increased by 205.0% to USD79.6 million.
Australia
For Australia, the occupancy was 69% for the year ended 31 December 2022, an increase of 33 percentage points,
compared to 36% for the year ended 31 December 2021. The RevPAR was USD176 for the year ended 31 December
2022, an increase of 117%, compared to USD81 for the year ended 31 December 2021. Recovery of our hotels in
Australia continued to be largely driven by strong domestic demand as Covid-19 related restrictions were gradually
relaxed during the year. Total revenue from Australia hotel properties for the year ended 31 December 2022
increased by 106.2% to USD76.9 million.
Japan
For Japan, the occupancy was 54% for the year ended 31 December 2022, an increase of 21 percentage points,
compared to 33% for the year ended 31 December 2021. The RevPAR was USD232 for the year ended 31
December 2022, an increase of 80%, compared to USD129 for the year ended 31 December 2021. Japan continued
to post growth in 2022, despite a strong 2021 that was helped by the Olympic Games. Total revenue from our
Japan hotel property for the year ended 31 December 2022 increased by 6.2% to USD32.7 million.
United Kingdom
For United Kingdom, the occupancy was 62% for the year ended 31 December 2022, an increase of 25 percentage
points, compared to 37% for the year ended 31 December 2021. The RevPAR was USD483 for the year ended
31 December 2022, an increase of 46%, compared to USD331 for the year ended 31 December 2021. The hotel
continued to see growth momentum from the resumption of post-Covid travelling, although it was impacted by
strikes in various sectors towards the end of the year. Total revenue from our United Kingdom hotel property for
the year ended 31 December 2022 increased by 46.0% to USD55.9 million.
Discussion and Analysis
33
Shangri-La Asia Limited Annual Report 2022
(ii) Hotel Management & Related Services
During the year, two hotels under management agreements owned by third parties, namely Shangri-La Jeddah
in Saudi Arabia and Shangri-La Nanning in Mainland China, opened for operation while the hotel management
agreement for a hotel in the Philippines was terminated in September 2022. As at 31 December 2022, the Group
managed a total of 105 hotels and resorts as follows:
– 80 Group-owned hotels
– 3 hotels under lease agreements
– 22 hotels owned by third parties
The 22 operating hotels (7,221 available rooms) owned by third parties are located in the following destinations:
– Canada: Toronto and Vancouver
– Oman: Muscat (2 hotels)
– UAE: Abu Dhabi (2 hotels) and Dubai
– Saudi Arabia: Jeddah
– Malaysia: Johor and Kuala Lumpur
– India: New Delhi and Bengaluru
– Taiwan: Taipei and Tainan
– Mainland China: Changzhou, Haikou, Suzhou (2 hotels), Yiwu, Nanning, Shanghai and Beijing
Discussion and Analysis
34
Shangri-La Asia Limited Annual Report 2022
The key performance indicators of the hotels under third-party hotel management agreements for the years ended
31 December 2022 and 2021 are as follows:
2022 Weighted Average
2021 Weighted Average
Destinations Occupancy Room Rate RevPAR Occupancy Room Rate RevPAR
(%) (USD) (USD) (%) (USD) (USD)
Canada
60 390 233 28 334 94
Oman
24 290 69 12 161 20
UAE
67 173 115 58 146 85
Saudi Arabia
46 879 408
— — —
Malaysia
45 89 40 27 58 15
India
57 124 71 37 92 34
Taiwan
51 148 75 35 149 52
Mainland China
38 91 35 48 83 39
Weighted Average
45 164 74 38 115 44
For the year ended 31 December 2022, the overall weighted average occupancy of the hotels under third-party
hotel management agreements was 45%, an increase of 7 percentage points, compared to 38% for the year ended
31 December 2021. The RevPAR was USD74 for the year ended 31 December 2022, an increase of 68%, compared
to USD44 for the year ended 31 December 2021.
Gross revenue for hotel management and related services was USD165.6 million for the year ended 31 December
2022, an increase of 11.9% compared to USD148.0 million for the year ended 31 December 2021.
After eliminating inter-segment sales with subsidiaries, the net revenue for hotel management and related services
was USD78.7 million for the year ended 31 December 2022, an increase of 10.2% compared to USD71.4 million
for the year ended 31 December 2021. The increase in revenue was mainly due to the overall improvement of hotel
operations and the corresponding increase in fees received.
Discussion and Analysis
35
Shangri-La Asia Limited Annual Report 2022
(iii) Investment Properties
Consolidated revenue from our investment properties for the year ended 31 December 2022 stood at USD99.7
million, an increase of 6.3% or USD5.9 million, compared to USD93.8 million for the year ended 31 December
2021.
Year ended 31 December 2022/21
(USD million) 2022
2021
% change
Mainland China
27.7 25.5 8.6%
Singapore
12.1 9.3 30.1%
Malaysia
4.7 5.0
-6.0%
Mongolia
27.1 23.9 13.4%
Sri Lanka
12.2 11.0 10.9%
Other countries
15.9 19.1
-16.8%
Consolidated revenue from Investment Properties business
99.7 93.8 6.3%
Comments on selected investment properties owned by subsidiaries by geography:
Mainland China
Revenue generated from our investment properties owned by subsidiaries in Mainland China for the year ended 31
December 2022 increased by 8.6% to USD27.7 million. This was mainly driven by the continued improvement in
occupancy rates of our offices in Shangri-La Centre, Wuhan, which opened in November 2020.
Singapore
Revenue generated from our investment properties owned by subsidiaries in Singapore for the year ended 31
December 2022 increased by 30.1% to USD12.1 million. This was mainly driven by the improvement in the overall
occupancies and rental rates for our serviced apartments.
Mongolia
Revenue generated from our investment properties owned by subsidiaries in Mongolia for the year ended 31
December 2022 increased by 13.4% to USD27.1 million. This was mainly driven by an improvement in occupancies
for both our investment properties Shangri-La Centre and Central Tower.
Sri Lanka
Revenue generated from our investment properties owned by subsidiaries in Sri Lanka for the year ended 31
December 2022 increased by 10.9% to USD12.2 million. The increase was due to the general improvement in
occupancies of the One Galle Face offices and shopping mall.
(iv) Property Development for Sale
Revenue from property development for sale by subsidiaries for the year ended 31 December 2022 was USD14.9
million, a decrease of 31.0%, compared to USD21.6 million for the year ended 31 December 2021. The decrease
was mainly a result of having fewer residential units to hand over at our residential project One Galle Face in
Colombo, Sri Lanka.
In 2022, 2 units at the residential tower of Shangri-La, Dalian Phase II project (Yavis) were sold and have been
handed over to the buyers. As at 31 December 2022, Yavis had sold an accumulated total of 88 units (62% of
total) and had a remaining unsold inventory of 54 units.
Discussion and Analysis
36
Shangri-La Asia Limited Annual Report 2022
One Galle Face, Colombo, Sri Lanka comprises 390 apartments (372 for sale and 18 for rental) with a total gross
floor area of approximately 93,500 square metres. During the year, 19 apartments were handed over to the buyers
and were recognised as revenue. At 31 December 2022, an accumulated total of 300 apartments (81% of total)
have been sold, of which 295 apartments (98% of sold) have been handed over to the buyers.
EBITDA and Aggregate Effective Share of EBITDA
The following table summarises information related to the EBITDA of the Company and its subsidiaries and the
aggregate effective share of EBITDA of the Company, subsidiaries and associates for the year ended 31 December
2022 and 2021 by geographical areas and by business segments.
EBITDA of
subsidiaries
Effective share
of EBITDA of
subsidiaries
Effective share
of EBITDA of
associates
Aggregate
Effective share
of EBITDA
(USD million) 2022
2021
2022
2021
2022
2021
2022
2021
Hotel Properties The People’s Republic
of China
Hong Kong
(12.0) (28.4) (9.3) (24.4) 0.7 (0.1) (8.6) (24.5)
Mainland China
12.8 87.9 9.8 81.1 3.0 30.2 12.8 111.3
Singapore
42.1 8.6 42.1 8.6 3.8 1.7 45.9 10.3
Malaysia
6.5 (14.4) 3.2 (7.7) 1.8 1.2 5.0 (6.5)
The Philippines
8.9 (10.8) 8.7 (10.5) 7.9 (0.1) 16.6 (10.6)
Japan
3.1 8.6 3.1 8.6
— —
3.1 8.6
Thailand
6.4 (6.8) 4.7 (5.0)
— —
4.7 (5.0)
France
7.8 3.6 7.8 3.6
— —
7.8 3.6
Australia
16.5 1.0 16.5 1.0
— —
16.5 1.0
United Kingdom
11.1 21.1 11.1 21.1
— —
11.1 21.1
Mongolia
3.5 6.9 1.8 3.5
— —
1.8 3.5
Sri Lanka
2.5 (3.1) 2.3 (2.8)
— —
2.3 (2.8)
Other countries
2.8 (8.2) 2.8 (5.1) 10.3 4.6 13.1 (0.5)
112.0 66.0 104.6 72.0 27.5 37.5 132.1 109.5
Hotel Management and Related Services
17.4 2.9 17.4 2.9
— —
17.4 2.9
Sub-total Hotel Operations
129.4 68.9 122.0 74.9 27.5 37.5 149.5 112.4
Investment Properties Mainland China
17.0 16.0 15.4 14.5 229.4 242.6 244.8 257.1
Singapore
7.1 5.0 7.1 5.0 2.9 2.9 10.0 7.9
Malaysia
2.4 2.7 1.3 1.4
— —
1.3 1.4
Mongolia
17.4 24.4 8.9 12.5
— —
8.9 12.5
Sri Lanka
6.0 4.3 5.4 3.9
— —
5.4 3.9
Other countries
7.0 10.3 4.3 6.1
— —
4.3 6.1
Sub-total Investment Properties
56.9 62.7 42.4 43.4 232.3 245.5 274.7 288.9
Property Development for Sale & Other Business
10.2 12.7 8.5 11.5 33.5 21.9 42.0 33.4
Sub-total
196.5 144.3 172.9 129.8 293.3 304.9 466.2 434.7
Corporate and Project Expenses
(22.1) (11.5) (22.0) (11.6) (2.6) (5.1) (24.6) (16.7)
Grand Total
174.4 132.8 150.9 118.2 290.7 299.8 441.6 418.0
Discussion and Analysis
37
Shangri-La Asia Limited Annual Report 2022
Aggregate effective share of EBITDA was USD441.6 million for the year ended 31 December 2022, an increase of
5.6%, compared to USD418.0 million for the year ended 31 December 2021.
Commentaries of results by business segments are as follows:
Hotel Properties
Effective share of EBITDA from Hotel Properties business for the year ended 31 December 2022 was USD132.1
million, an increase of 20.6%, compared to USD109.5 million for the year ended 31 December 2021. The
improvement was mainly due to the recovery in the overall environment in various destinations, partially offset by
challenges in Mainland China, as explained in the revenue discussion. For United Kingdom, despite higher revenue
was recognised in 2022, its effective share of EBITDA declined on the contrary as various one-off government
subsidies and grants were recognised in 2021 but not in 2022.
Hotel Management and Related Services
Effective share of EBITDA from Hotel Management and Related Services business for the year ended 31 December
2022 was USD17.4 million, an increase of 500.0%, compared to USD2.9 million for the year ended 31 December
2021. This increment was mainly due to the overall improvement of the Hotel Properties business in most of the
destinations we operate during the year with corresponding increase in the fees received.
Investment Properties
Effective share of EBITDA from Investment Properties business for the year ended 31 December 2022 was
USD274.7 million, a decrease of 4.9%, compared to USD288.9 million for the year ended 31 December 2021. This
was mainly due to the lower effective share of EBITDA from the investment properties held by our associates in
Mainland China as rental concessions were given to tenants in the course of lockdowns during the year. General
weakening of the Asian currencies against US dollars during the year has also lowered the effective share of
EBITDA presented in US dollars terms.
Property Development for Sale & Other Business
Effective share of EBITDA from Property Development for Sale & Other Business for the year ended 31 December
2022 was USD42.0 million, an increase of 25.7%, compared to USD33.4 million for the year ended 31 December
2021. The increase mainly came from our residential projects held by our associate in Shenyang, Mainland China.
Corporate and Project Expenses
Corporate and Project Expenses, that offset the above effective share of EBITDA from business segments, were
USD24.6 million for the year ended 31 December 2022, an increase of 47.3%, compared to USD16.7 million for the
year ended 31 December 2021. The increase in expenses was mainly due to increase of share awards expenses and
expenses incurred by ongoing projects compared to last year.
Discussion and Analysis
38
Shangri-La Asia Limited Annual Report 2022
Consolidated Profit or Loss Attributable to Owners of the Company
The following table summarises information related to the consolidated profit or loss attributable to owners of the
Company before and after non-operating items by geographical areas and by business segments:
For the year ended
31 December
(USD million) 2022 2021
2022/21
% change
Hotel Properties The People’s
Republic of China
Hong Kong
(35.5) (47.9) 25.9%
Mainland China
(145.0) (82.0) -76.8%
Singapore
18.6 (10.8)
N/M
Malaysia
(3.3) (12.9) 74.4%
The Philippines
(7.3) (27.0) 73.0%
Japan
(4.0) (0.9) -344.4%
Thailand
1.9 (5.6) N/M
France
(1.6) (5.8) 72.4%
Australia
(1.2) (13.0) 90.8%
United Kingdom
(10.2) (1.9) -436.8%
Mongolia
(4.7) (2.5) -88.0%
Sri Lanka
(6.9) (21.0) 67.1%
Other countries
0.8 (15.0)
N/M
(198.4) (246.3) 19.4%
Hotel Management and Related Services
(5.7) (18.5) 69.2%
Sub-total Hotel Operations
(204.1) (264.8) 22.9%
Investment Properties Mainland China
167.8 172.4 -2.7%
Singapore
8.7 7.4 17.6%
Malaysia
0.9 1.0 -10.0%
Mongolia
4.5 9.2 -51.1%
Sri Lanka
(2.3) (13.4) 82.8%
Other countries
2.4 4.0 -40.0%
Sub-total Investment Properties
182.0 180.6 0.8%
Property Development for Sale & Other Business
28.2 12.9 118.6%
Consolidated profit/(loss) from operating properties
6.1 (71.3)
N/M
Net corporate finance costs (including foreign exchange gains
and losses)
(145.6) (103.4) -40.8%
Corporate and Project Expenses
(22.1) (18.5) -19.5%
Consolidated loss attributable to owners of the
Company before non-operating items
(161.6) (193.2) 16.4%
Non-operating items
3.1 (97.4)
N/M
Consolidated loss attributable to owners of the
Company after non-operating items
(158.5) (290.6) 45.5%
(N/M: Not meaningful)
Discussion and Analysis
39
Shangri-La Asia Limited Annual Report 2022
Consolidated loss attributable to owners of the Company after non-operating items was USD158.5 million for the
year ended 31 December 2022, an improvement of USD132.1 million, compared to a loss of USD290.6 million for
the year ended 31 December 2021.
Commentaries of results by business segments are as follows:
Hotel Properties
Hotel Properties loss for the year ended 31 December 2022 was USD198.4 million, an improvement of USD47.9
million, compared to a loss of USD246.3 million for the year ended 31 December 2021. The improvement was
mainly due to a recovery in the overall business operating environment, as explained in the revenue and EBITDA
discussions.
Hotel Management and Related Services
Hotel Management and Related Services loss for the year ended 31 December 2022 was USD5.7 million,
an improvement of USD12.8 million, compared to a loss of USD18.5 million for the year ended 31 December
2021. This improvement was mainly due to the overall improvement of the Hotel Properties business and the
corresponding increase in the fees received.
Investment Properties
Investment Properties profit was USD182.0 million for the year ended 31 December 2022, a marginal increase
of 0.8%, compared to USD180.6 million for the year ended 31 December 2021. The improvement was mainly
attributed to the reclassification of the exceptional foreign exchange loss arising from the Sri Lankan rupee
depreciation incurred by our Sri Lanka investment properties, which in 2021 was regarded as part of the properties’
operating expenses, while in 2022 was regarded as an exceptional expense due to the drastic 45% depreciation
of Sri Lankan rupee during the year. Please refer to the later part of this section where we discuss the Group’s
non-operating items.
Property Development for Sale & Other Business
Property Development for Sale & Other Business profit for the year ended 31 December 2022 was USD28.2
million, an increase of 118.6%, compared to USD12.9 million for the year ended 31 December 2021. The increase
mainly came from our residential projects held by our associate in Shenyang, Mainland China.
Discussion and Analysis
40
Shangri-La Asia Limited Annual Report 2022
Others
Non-operating items for the year ended 31 December 2022 totalled a net gain of USD3.1 million, compared to a net
charge of USD97.4 million for the year ended 31 December 2021. Major components included:
(i) Effective share of net fair value gain on investment properties was USD89.9 million for the year ended 31
December 2022, compared to net fair value gain of USD60.0 million for the year ended 31 December 2021.
(ii) An exceptional foreign exchange loss of USD110.3 million arising from the significant depreciation of Sri
Lankan rupee that impacted the foreign currency bank loans borrowed by our Sri Lanka entities.
(iii) Disposal gains totalled USD16.0 million recognised from the completion of disposal of 80% interest of our
project in Kyoto and disposal of the laundry plant held by a subsidiary during the year.
Details of all the non-operating items are disclosed in the segment profit or loss of Note 5 to the consolidated
financial statements included in this report.
CORPORATE DEBT AND FINANCIAL CONDITION
As at 31 December 2022, the Group’s net borrowings (total bank loans, bank overdrafts and fixed rate bonds
less cash and bank balances and short-term fund placements) was USD4,846.4 million, an increase of USD43.4
million, compared to USD4,803.0 million as at 31 December 2021. As at 31 December 2022, the aggregate
effective share of net borrowings of subsidiaries and associates based on percentage of equity interests was
USD4,407.9 million, an increase of USD137.4 million, compared to USD4,270.5 million as at 31 December 2021.
The Group’s net borrowings to total equity ratio, i.e. the gearing ratio, increased to 89.3% as at 31 December 2022
from 79.4% as at 31 December 2021. The increase was mainly driven by the significant decrease of total equity
due to the weakening of global currencies against US dollars during the year which shrank the Group’s net assets
presented in US dollars terms.
At the corporate level, the Group executed a 5-year bank loan agreement of USD100 million during the year for
financing maturing loans as well as for working capital and project financing use.
Discussion and Analysis
41
Shangri-La Asia Limited Annual Report 2022
At the subsidiary level, the Group also executed the following bank loan agreements in 2022:
– Three 3-year bank loan agreements totalling RMB617.2 million (equivalent to USD88.6 million) for financing
maturing loans
– One 3-year bank loan agreement of SGD55 million (equivalent to USD41.0 million) for financing a project
development
– Increasing a bank loan facility by HKD300 million (equivalent to USD38.7 million) for 3 years to finance the
renovation of a hotel and for its working capital use
During the year, the Group converted a number of existing loan facilities to sustainability-linked bank loans and/
or green loans totalling approximately USD1.6 billion. Such sustainability-linked bank loan agreements are linked
to the Group’s various sustainability performances, and support the Group’s dedication in achieving certain long
term sustainability goals. Upon reaching certain predetermined performance targets as agreed with the banks, the
Group will also benefit from paying lower interest rates.
The Group has not encountered any difficulty when drawing loans from committed banking facilities. None of
the banking facilities were cancelled by the banks during the year or after 31 December 2022 and the Group has
satisfactorily complied with all covenants under its borrowing agreements.
The analysis of borrowings outstanding as at 31 December 2022 is as follows:
Maturities of Borrowings Contracted as at 31 December 2022
Repayment
(USD million)
Within
1 year
In the
2nd year
In the
3rd to
5th year
After
5 years Total
Borrowings
Corporate borrowings
– unsecured bank loans
548.4 643.1 1,752.9 35.6 2,980.0
– fixed rate bonds —
100.7 772.0 260.1 1,132.8
Bank loans of subsidiaries
– unsecured
404.0 215.9 753.1 126.6 1,499.6
Total outstanding balance
952.4 959.7 3,278.0 422.3 5,612.4
% of total outstanding balance
17.0% 17.1% 58.4% 7.5% 100.0%
Undrawn but committed facilities
Bank loans
236.4 123.2 532.6 80.9 973.1
Discussion and Analysis
42
Shangri-La Asia Limited Annual Report 2022
The currency mix of borrowings and cash and bank balances as at 31 December 2022 is as follows:
(USD million) Borrowings
Cash and
Bank Balances
(Note)
In United States dollars
2,100.5 100.0
In Hong Kong dollars
1,579.5 40.0
In Singapore dollars
1,114.7 134.4
In Renminbi
560.9 274.6
In Euros
80.1 20.8
In Australian dollars
53.7 22.4
In Japanese yen
110.3 5.9
In Fijian dollars
12.7 1.5
In Philippine pesos
— 33.7
In Thai baht
— 45.1
In Malaysian ringgit
— 25.8
In British pounds
— 4.0
In Mongolian tugrik
— 19.5
In Sri Lankan rupee
— 34.9
In Myanmar kyat
— 1.4
In Maldivian rufiyaa
— 0.6
In other currencies
— 1.4
Total
5,612.4 766.0
Note: Cash and bank balances as stated included short-term fund placements.
Except for the fixed rate bonds, all borrowings are generally at floating interest rates. However, the Group has
entered into interest-rate swap contracts on certain floating interest rate borrowings to hedge its medium term
interest rate risk. Please see the next section for further details.
Details of financial guarantees, contingencies and charges over assets as at 31 December 2022 are disclosed in
Note 39 to the consolidated financial statements included in this report.
Discussion and Analysis
43
Shangri-La Asia Limited Annual Report 2022
TREASURY POLICIES
The Group’s treasury policies are aimed at minimising interest and currency risks. The Group assesses the market
environment and its financial position and adjusts its tactics from time to time.
(A) Minimising Interest Risks
The majority of the Group’s borrowings are in US dollars, HK dollars and Singapore dollars and arranged at the
corporate level. The corporate bonds were issued at fixed rates. The Group has closely monitored the cash flow
forecasts of all its subsidiaries and arranged to transfer any surplus cash to the corporate to reduce corporate
debts. In order to minimise the overall interest cost, the Group also arranged intra-group loans and implemented
RMB cash pooling in Mainland China to utilise the surplus cash of certain subsidiaries to meet the funding
requirements of other group companies. The Group reviews the intra-group financing arrangements from time to
time in response to changes in currency exchange rates and bank loan interest rates.
The Group has endeavoured to hedge its medium term interest rate risks arising from the Group’s bank loans by
entering into fixed HIBOR and LIBOR interest-rate swap contracts. During the year, interest-rate swap contracts
totalling USD600 million were matured and the Group had executed a new LIBOR 5-year term interest-rate swap
contract amounting to USD600 million at fixed rate of 1.46% per annum to replace the matured contracts so as
to fix the interest rates of the corporate bank loan of the same amount. As at 31 December 2022, the outstanding
interest-rate swap contracts are:
– USD1,265.0 million at fixed rates ranging between 1.365% and 3.045% per annum maturing between
November 2023 and March 2027
– HKD6,170.0 million at fixed rates ranging between 1.505% and 1.855% per annum maturing between July
2023 and August 2026
Taking into account the fixed rate bonds, fixed rate bank loans and the interest-rate swap contracts (including the
cross-currency swap contracts that also fix the interest rates of certain bank borrowings), the Group has fixed
its interest liability on 60.6% of its outstanding borrowings as at 31 December 2022, compared to 61.7% as at 31
December 2021.
All these interest-rate swap contracts qualify for hedge accounting.
Discussion and Analysis
44
Shangri-La Asia Limited Annual Report 2022
(B) Minimising Currency Risks
The Group aims at using bank borrowings in local currency to finance the capital expenditure and operational
funding requirements of the properties and/or development projects in the corresponding country to achieve
natural hedging of its assets. The Group would also execute cross-currency swap contracts to hedge the currency
risks arising from foreign currency borrowings.
As at 31 December 2022, the Group has the following cross-currency swap contracts:
– 7-year term USD35 million between US dollar and Singapore dollar to hedge the US dollar fixed rate bonds
at fixed interest rate of 4.25% per annum maturing November 2025
– 7-year term JPY8,000 million between Japanese yen and HK dollar to hedge the Japanese yen bank
borrowings at fixed interest rate of 3.345% per annum maturing July 2026
– 3-year term EUR100 million between HK dollar and Euro to swap bank borrowings from HK dollar at floating
interest rates to Euro at fixed interest rates ranging between 0.39% and 0.395% per annum maturing
August 2023
It is also the Group’s practice, wherever and to the extent possible, to quote tariffs in the stronger currency and
maintain bank balances in that currency, if legally permitted.
INVESTMENT PROPERTIES VALUATION
Investment properties of subsidiaries and associates continue to be stated at fair value and are reviewed
semi-annually (including those properties being constructed for future use as investment properties for which
fair value becomes reliably determinable). The fair values of investment properties are based on opinions from
independent professional valuers as obtained by the Group and the relevant associates which own the investment
properties. All changes in the fair values of investment properties (including those under construction) are
recorded in the statement of profit or loss. For the year ended 31 December 2022, the Group recorded an overall
effective share of net fair value gains of USD89.9 million for its investment properties.
The following table shows the fair value gains of the investment properties held by the Group’s subsidiaries and
associates for the year ended 31 December 2022:
Subsidiaries Associates Total
(USD million) 100%
Effective
Share 100%
Effective
Share 100%
Effective
Share
Gains
64.7 65.9 89.9 33.9 154.6 99.8
Deferred tax
(2.4) (1.7) (21.9) (8.2) (24.3) (9.9)
Net gains
62.3 64.2 68.0 25.7 130.3 89.9
Discussion and Analysis
45
Shangri-La Asia Limited Annual Report 2022
Investment properties are stated at professional valuations carried out by the following independent firms of
professional valuers engaged by the Group or the relevant associates as at 31 December 2022:
Crowe Horwath First Trust Appraisals Pte Ltd, Jones Lang
LaSalle Ltd, Cushman &
Wakefield Limited and Savills Valuation and
Professional Services Limited
: For properties in Mainland China
Crowe Horwath First Trust Appraisals Pte Ltd : For properties in Mongolia
Colliers International Consultancy
& Valuation (Singapore) Pte Ltd
: For properties in Singapore
W. M. Malik & Kamaruzaman Sdn. Bhd. : For properties in Malaysia
Jones Lang LaSalle Advisory Services Pty Ltd : For properties in Australia
Knight Frank Chartered (Thailand)
Company Limited
: For properties in Myanmar
Sunil Fernando & Associates (Pvt) Ltd. : For properties in Sri Lanka
IMPAIRMENT PROVISION
The Group assesses the carrying value of a group-owned property during the year when there is any indication that
the asset may be impaired. Indicative criteria include continuing adverse changes in the local market conditions
in which the property operates or will operate, or when the property continues to operate at a loss position or
materially behind budget. At year end, the Group assesses the carrying value of all group-owned operating hotels
and properties under development. Professional valuations have been carried out by independent professional
firms for those properties for which the internal assessment results need independent confirmation.
Based on the Group’s internal assessment and/or professional valuations at 31 December 2022, no new provision
or reversal of provision made in prior years was considered necessary for the hotel properties held by the Group’s
subsidiaries and associates in the current year.
FINANCIAL ASSETS – TRADING SECURITIES
As at 31 December 2022, the market value of the Group’s investment portfolio was USD15.0 million, which mainly
included 4,483,451 ordinary shares in Kerry Properties Limited amounting to USD9.8 million; 2,241,725 ordinary
shares in Kerry Logistics Network Limited amounting to USD4.1 million; and 3,411,200 ordinary shares in Don
Muang Tollway PCL amounting to USD1.1 million. The Group recorded effective share of losses of USD3.4 million
and USD0.1 million through profit or loss and other comprehensive income, respectively, for the year ended 31
December 2022. Effective share of dividend income of USD1.1 million was recognised during the year.
Discussion and Analysis
46
Shangri-La Asia Limited Annual Report 2022
DEVELOPMENT PROGRAMMES
Construction work on the following projects is ongoing:
(A) Hotel Developments
Group’s Equity
Interest
Hotel
Rooms
Projected
Opening
In Mainland China
JEN Kunming by Shangri-La (part of
a composite development project in Kunming City)
45% 274 2024
Shangri-La Zhengzhou
45% 314 2025
In Japan
Shangri-La Kyoto
20% 77 2025
The Shangri-La and Traders Hongqiao Airport with 611 rooms, which will be operated under operating lease, will
open for business in 2024.
(B) Composite Developments and Investment Property Developments
Group’s
Equity
Interest
Total gross floor area upon completion
(excluding hotel component)
(approximate in square metres)
Scheduled
Completion
Residential Office Commercial
In Mainland China
Shenyang Kerry Centre — Phase III
25% 256,567 70,010 93,204 2024 onwards*
Kunming City Project
45% 20,917
— —
2024
Phase II of Shangri-La Fuzhou
100%
—
36,965 49,392 2023
Composite development project in
Zhengzhou
45% 94,025 58,946 3,932 2023 onwards*
Nanchang City Project — Phase II
20%
—
57,630 2,100 2023
Tianjin Kerry Centre — Phase II
20% 27,817 92,651 17,490 2025
TOTAL
399,326 316,202 166,118
* Being developed in phases
The Group is currently reviewing the development plans of the following projects:
Hotel development
– Shangri-La Kunming, Mainland China (45% equity interest owned by the Group)
– Rome, Italy (wholly owned by the Group)
– Lakeside Shangri-La, Yangon, Myanmar (55.86% equity interest owned by the Group)
– Bangkok, Thailand (73.61% equity interest owned by the Group)
Discussion and Analysis
47
Shangri-La Asia Limited Annual Report 2022
Composite development
– Accra, the Republic of Ghana (45% equity interest owned by the Group)
The Group continues to review its asset portfolio and may sell assets it considers non-core at an acceptable price
and introduce strategic investors for some of its operating assets/development projects. The Group adjusts its
development plans and investment strategy from time to time in response to changing market conditions and to
improve the financial position of the Group.
DISPOSAL
In April 2022, the Group completed a sale and purchase transaction with an independent third party to dispose of
its 80% equity interest in a project company which owns a parcel of land in Kyoto, Japan for the development of a
luxury hotel at a cash consideration of USD64.3 million. A disposal gain of USD10.5 million was recognised during
the year. The Group’s equity interest in the project has been reduced from 100% to 20% after the completion of
the transaction.
MANAGEMENT CONTRACTS FOR HOTELS OWNED BY THIRD PARTIES
In 2022, two hotels under management agreements owned by third parties, namely Shangri-La Jeddah in Saudi
Arabia and Shangri-La Nanning in Mainland China, opened for operation while the management agreement with
JEN Manila by Shangri-La in the Philippines was terminated. In February 2023, the new JEN Shenzhen Qianhai by
Shangri-La in Mainland China also opened for business. As at the date of this report, the Group has management
agreements for 23 operating hotels owned by third parties. In addition, the Group also has agreements on hand
for the development of 4 new hotels currently under development and owned by third parties. The development
projects are located in Shenzhen and Hangzhou (Mainland China), Phnom Penh (Cambodia) and Melbourne
(Australia).
The Group continues to review proposals it receives for management opportunities and intends to secure
management agreements for third-party owned hotels that do not require capital commitment in locations/cities
which it considers to be of long-term strategic interest.
HUMAN RESOURCES
In the pursuit of our Vision to become the best-loved hospitality group globally by 2030, nothing is more important
than our people.
The professionalism, commitment and resilience of the 40,700 people employed at Shangri-La (including all
operating hotels) are critical to the Company’s continued success.
Throughout 2022, we continued to improve how we engaged and developed our people, with a particular focus on
building future leaders, and recognising and rewarding our colleagues.
Discussion and Analysis
48
Shangri-La Asia Limited Annual Report 2022
Building future leaders
At Shangri-La, we are dedicated to leadership excellence in our current and future leaders. Exclusive focus has
been put on developing future Hotel General Managers, Resident Managers and Mid-level Managers through our
flagship leadership programmes; Business Leaders Programme, Operational Leaders Programme and Emerging
Leaders Programme respectively. More than 500 Leaders at various levels have participated and benefited from
these programmes in 2022.
As part of our commitment to provide career development opportunities for all employees and support our next
generation of leaders, we offer a range of learning and development programmes tailored to various stages of
the career journey. In 2022 we introduced the STAR (Shangri-La’s Training for Aggressive Revenues) programme.
Designed to support the development of our commercial teams, STAR is made up of 12 courses that focus on
foundational learning and building expertise in each commercial segment.
Our digital learning platform has been updated to provide more virtual interactive learning opportunities, enabling
our people to participate at their own time and place. The new platform offers personalised recommendations
based on each colleague’s role, gamification elements such as leader boards, and a social learning environment
that encourages collaboration and connection among peers.
Recruiting and developing young talent with a passion for hospitality and the potential to become key management
staff is critical to the future success of our organisation. Another new programme for 2022, the “Shangri-La Plus”
Management Trainee (MT) Programme recruited its first cohort of 30 high-potential individuals to undergo an
accelerated career development journey, with ongoing development opportunities, stretch assignments and job
rotations for enhanced exposure and experience.
Governance has always been a foundational component of our learning. In 2022, our colleagues completed
updated courses on Cyber Security, Phishing E-mails, Fire Life Safety, Global Security Orientation and Food Safety.
Recognising and rewarding colleagues
The Company’s remuneration philosophy is to competitively reward the capabilities of our people, to incentivise
and recognise the achievement of short and long-term business goals, and to attract, retain and motivate the very
best talent in the industry.
Our core remuneration programmes are tied to our performance development review programme, which is
designed to assess the contributions, impact and development areas of colleagues throughout the performance
review cycle. The Group’s 2022 Balanced Scorecard measured the performance of business units in the areas
of financial performance, guest satisfaction, people development, initiatives, community responsibility and
compliance. The financial and non-financial measures are carefully considered in the reward programmes to
ensure alignment between remuneration and our business strategy. Our remuneration programmes are governed
by the Group’s remuneration policies, guidelines and processes.
Salaries and benefits, including provident fund contributions, insurance and medical coverage, and share award
scheme, were maintained at competitive levels in 2022.
Discussion and Analysis
49
Shangri-La Asia Limited Annual Report 2022
Details of the share option scheme and share award scheme adopted by the shareholders on 28 May 2012 are
provided in the section headed “Share Option Scheme” and “Share Award Scheme” of the Directors’ Report,
respectively. The Group has granted shares under the share award scheme to attract, retain and motivate key
talent to achieve long term growth and to align management with shareholders’ value creation. In 2022, a total of
12.5 million awards were granted. The details of shares granted under the share award scheme in 2022 is provided
in the Directors’ Report.
As at 31 December 2022, the Group had approximately 23,900 employees and the Group’s total employee
benefit expenses net of wage subsidy received from government (excluding directors’ emoluments) amounted to
USD630.6 million.
Fostering Shangri-La Culture
The 2022 culture pulse survey was conducted to capture the voice of our people, allowing us to understand their
opinions and to learn how we can improve key programmes and initiatives. With a 90% response rate, we were
proud to receive an overall score of 3.7 out of 4 from our people.
We also introduced a new gamified programme “Shangri-La Culture Experience” aimed to enhance our colleagues’
understanding of our Vision, Purpose, Business & Shared Values at Shangri-La.
Average voluntary turnover in 2022 was 22%. This is consistently reflective of the challenges faced by the
hospitality industry as a whole. Concerted efforts have been focused on attracting, retaining, developing and
engaging the workforce; as well as succession planning for critical roles.
Supporting our people and communities
As we continued to navigate the Covid-19 pandemic in 2022, we maintained our commitment to the health and
wellbeing of our employees. Rapid Antigen Test (RAT) kits and masks were provided to colleagues, while fruit
baskets, health supplements and meals were sent to the homes of colleagues infected with the virus in different
regions.
Through volunteering in a range of community activities, such as providing amenities and food supplies to families
in need, our colleagues have proudly come together in unity to make a positive impact to the communities that we
live and operate in.
PROSPECTS
The past 3 years were the most challenging of Shangri-La’s 52-year history, as Covid-19 restrictions disrupted
normal movement in many countries and consequently travel, dining and events were shut down for extended
periods. Sporadic outbreaks and resurgences of the pandemic negated recovery efforts and negatively impacted
our business severely.
During this time, we took the opportunity to reassess our priorities, restructure and streamline our operations, and
right size our workforce. We also embarked on initiatives to build our future, as we expand to the leisure segment
to complement our strong base in serving corporate customers.
Discussion and Analysis
50
Shangri-La Asia Limited Annual Report 2022
Today, travel, leisure and business activities have resumed in all the markets we operate in. China is the last of our
major markets to reopen, and we have seen an immediate surge in demand, as RevPAR in many of our Mainland
China hotels during the 2023 Chinese New Year Festive period were higher than those of 2019. With the lifting of
PCR test requirements between the borders of the Hong Kong and Mainland China, Hong Kong has seen an influx
of Chinese visitors and our Hong Kong hotels have seen a surge in demand from both Chinese and international
travelers. With China outbound travel picking up again, we are optimistic that the worst is behind us and better
days are ahead.
The seeds planted during the pandemic are also starting to bear fruit. Initiatives such as our revamped loyalty
programme — Shangri-La Circle (SLC), which launched in April 2022, is starting to gain traction amongst our
loyal guests. We are starting to see a higher proportion of direct bookings through our SLC platform. Our in-house
developed personalised booking features which allows for easy upgrades and selection of enhance services, have
also added to higher per head spend by our guests. Going forward, we will roll out more content and personalised
recommendations and enhance our offerings as we continue to build up our in-house developed customer
management databases and features.
We continue to revamp our existing properties to better serve our guests’ and customers’ needs especially in the
leisure segment, a fast-growing segment whose prominence was amplified during the pandemic. In Hong Kong,
we upgraded our rooms and function spaces at Island Shangri-La to include facilities to better serve non-business
guests. By the end of 2023, we would have launched our revamped wellness offerings and family floors in
collaboration with various partners, which will serve as a blueprint for other properties. In Fuzhou, we will open
Phase 2 of the project featuring a new shopping mall and office tower that we expect will set new benchmarks
for retail and leisure operations in an integrated property in that city. Meanwhile, we will be rolling out our family
programmes and packages groupwide.
Looking ahead, we continue to remain vigilant and closely monitor the potential adverse effects from inflation, and
continued rate hikes. The Group has always maintained a robust and prudent capital management approach: 1)
about 60% of our total debt is hedged against rising interest rates; 2) as at 31 December 2022, the Group also had
cash and cash equivalent of USD766.0 million and committed undrawn facilities of USD973.1 million, 3) as of the
reporting date, the refinancing arrangements for 67% of our refinancing needs for 2023 have been completed, and
(4) to preserve cash, the Board opted not to declare any Final Dividend for 2022.
All in all, China’s accelerated reopening is likely to be a significant tailwind to the Group, given most of our
pre-pandemic effective share of EBITDA come from Mainland China, Hong Kong and Singapore. Barring
unforeseen circumstances and assuming the current positive momentum continues, we are cautiously optimistic
about the recovery of our business and turnaround of profitability. We are prepared to once again welcome
back our guests with our well-known Asian hospitality. We shall also stay vigilant on our costs control efforts to
ensure that the prospects of a brighter outlook translate into stronger bottom lines and more importantly, cash
generation.
Properties Under Development
52
Shangri-La Asia Limited Annual Report 2022
(A) HOTELS OWNED/LEASED AND MANAGED BY THE GROUP
Location Properties
Group’s equity
interest as at
Year End
Approximate
total site
area
Approximate
total gross
floor area
Number of
projected
rooms Stage of completion Projected opening Address
(m
2
) (m
2
)
Hotels in Mainland China
1 Kunming, China JEN by Shangri-La
(part of composite development)
45% N/A 33,975 274
Landscape and inspection
work in progress
2024
88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province,
China
2 Zhengzhou, China Shangri-La Hotel
(part of composite development)
45% N/A 38,235 314
Superstructure completed
2025
East of Huayuan Road, South of Weier Road, Zhengzhou, Henan
Province, China
3 Shanghai Hongqiao, China Shangri-La Hotel and Traders Hotel
Operating
lease
N/A 57,035 611
Superstructure completed
2024
II-H5 Land Lot, North of ShanghaiHongqiao International Airport T2,
Shanghai, China
Hotel in Japan
4 Kyoto, Japan Shangri-La Hotel
20% 5,830 11,760 77
Main contract negotiation in
progress
2025
536-71, Maruta-machidori Kuromon Higashiiru Waraya-cho,Kamigyo-ku
Kyoto, Japan
Total
1,276
(B) OTHER PROPERTIES OWNED BY THE GROUP
Location Properties/Purpose
Group’s equity
interest as at
Year End
Approximate
total site area
Approximate
total gross
floor area Stage of completion Projected opening Address
(m
2
) (m
2
)
In Mainland China
1 Shenyang, China Shenyang Kerry Centre (Phase III)
25% 59,122
Residential:
Tower 1 - Interior structure
and mechanical work in
progress
Other residential buildings -
Construction planning
permit was issued in
December 2022
Retail and office:
Construction planning
permit was issued in
December 2022
In phases from
2024 onwards
Lot No. 2007-053, No. 8 Golden Corridor, 113 Qingnian Da Street,
Shenhe District, Shenyang, Liaoning Province, China- Residential
256,567
- Office
70,010
- Commercial
93,204
2 Kunming, China Composite development Landscape and inspection
work in progress
2024
88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province,
China- Residential
45% 15,446 20,917
3 Fuzhou, China Composite development
100% 36,714
Superstructure completed
2023
9 Xinquan Nan Road, Fuzhou, Fujian Province, China
- Office
36,965
- Commercial
49,392
4 Zhengzhou, China Composite development
45% 44,574
Residential: Interior
decoration, external
decoration and mechanical
landscape work in progress
Office: Superstructure work
in progress
In phases from
2023 onwards
East of Huayuan Road, South of Weier Road, Zhengzhou, Henan
Province, China- Residential
94,025
- Office
58,946
- Commercial
3,932
5 Nanchang, China Composite development (Phase II)
20% 6,568
Internal design work,
external decoration and
mechanical work in progress
2023
667 Cui Lin Road, Honggutan New District, Nanchang, Jiangxi Province,
China- Office
57,630
- Commercial
2,100
6 Tianjin, China Composite development (Phase II)
20% 20,392
Basement structural work in
progress
2025
Junction of Liuwei Road and Liujin Road, Hedong District, Tianjin, China
- Residential
27,817
- Office
92,651
- Commercial
17,490
Properties Under Development
53
Shangri-La Asia Limited Annual Report 2022
(A) HOTELS OWNED/LEASED AND MANAGED BY THE GROUP
Location Properties
Group’s equity
interest as at
Year End
Approximate
total site
area
Approximate
total gross
floor area
Number of
projected
rooms Stage of completion Projected opening Address
(m
2
) (m
2
)
Hotels in Mainland China
1 Kunming, China JEN by Shangri-La
(part of composite development)
45% N/A 33,975 274
Landscape and inspection
work in progress
2024
88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province,
China
2 Zhengzhou, China Shangri-La Hotel
(part of composite development)
45% N/A 38,235 314
Superstructure completed
2025
East of Huayuan Road, South of Weier Road, Zhengzhou, Henan
Province, China
3 Shanghai Hongqiao, China Shangri-La Hotel and Traders Hotel
Operating
lease
N/A 57,035 611
Superstructure completed
2024
II-H5 Land Lot, North of ShanghaiHongqiao International Airport T2,
Shanghai, China
Hotel in Japan
4 Kyoto, Japan Shangri-La Hotel
20% 5,830 11,760 77
Main contract negotiation in
progress
2025
536-71, Maruta-machidori Kuromon Higashiiru Waraya-cho,Kamigyo-ku
Kyoto, Japan
Total
1,276
(B) OTHER PROPERTIES OWNED BY THE GROUP
Location Properties/Purpose
Group’s equity
interest as at
Year End
Approximate
total site area
Approximate
total gross
floor area Stage of completion Projected opening Address
(m
2
) (m
2
)
In Mainland China
1 Shenyang, China Shenyang Kerry Centre (Phase III)
25% 59,122
Residential:
Tower 1 - Interior structure
and mechanical work in
progress
Other residential buildings -
Construction planning
permit was issued in
December 2022
Retail and office:
Construction planning
permit was issued in
December 2022
In phases from
2024 onwards
Lot No. 2007-053, No. 8 Golden Corridor, 113 Qingnian Da Street,
Shenhe District, Shenyang, Liaoning Province, China- Residential
256,567
- Office
70,010
- Commercial
93,204
2 Kunming, China Composite development Landscape and inspection
work in progress
2024
88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province,
China- Residential
45% 15,446 20,917
3 Fuzhou, China Composite development
100% 36,714
Superstructure completed
2023
9 Xinquan Nan Road, Fuzhou, Fujian Province, China
- Office
36,965
- Commercial
49,392
4 Zhengzhou, China Composite development
45% 44,574
Residential: Interior
decoration, external
decoration and mechanical
landscape work in progress
Office: Superstructure work
in progress
In phases from
2023 onwards
East of Huayuan Road, South of Weier Road, Zhengzhou, Henan
Province, China- Residential
94,025
- Office
58,946
- Commercial
3,932
5 Nanchang, China Composite development (Phase II)
20% 6,568
Internal design work,
external decoration and
mechanical work in progress
2023
667 Cui Lin Road, Honggutan New District, Nanchang, Jiangxi Province,
China- Office
57,630
- Commercial
2,100
6 Tianjin, China Composite development (Phase II)
20% 20,392
Basement structural work in
progress
2025
Junction of Liuwei Road and Liujin Road, Hedong District, Tianjin, China
- Residential
27,817
- Office
92,651
- Commercial
17,490
Properties Under Development
54
Shangri-La Asia Limited Annual Report 2022
(C) PROPERTIES UNDER CONCEPT PLANNING
Location Purpose
Group’s equity
interest as at
Year End
Approximate
total site area
Approximate
total gross
floor area
Number of
Room Address
(m
2
) (m
2
)
In Mainland China
1 Kunming, China Hotel
(part of composite development)
45% N/A 9,565
75 88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province, China
In other countries
2 Accra, The Republic
of Ghana
Composite development
45% 49,874 35,545
Airport North on Spintex Road, City of Accra, The Republic of Ghana
3 Rome, Italy Hotel
100% 1,489 8,840
Roma via Vittorio Veneto 90, 92, 94, 96, 98, 98A, 100, 102 and Roma via Lombardia 4, 6, 8, Rome, Italy
4 Yangon, Myanmar Hotel
55.86% 36,038 75,035
No. 150/150 (A), Kan Yeik Thar Road, Between Upper Pansodan Road and Thein Phyu Road, Mingalar Tuang
Nyunt Township, Yangon, Myanmar
5 Bangkok, Thailand Hotel
73.61% 2,820 27,000
Soi Sukhumvit 55 (Thonglor) Sukhumvit Road , Klongton Nua, Vadhana, Bangkok, Thailand
Properties Under Development
55
Shangri-La Asia Limited Annual Report 2022
(C) PROPERTIES UNDER CONCEPT PLANNING
Location Purpose
Group’s equity
interest as at
Year End
Approximate
total site area
Approximate
total gross
floor area
Number of
Room Address
(m
2
) (m
2
)
In Mainland China
1 Kunming, China Hotel
(part of composite development)
45% N/A 9,565
75 88-96 Dong Feng Road, Panlong District, Kunming, Yunnan Province, China
In other countries
2 Accra, The Republic
of Ghana
Composite development
45% 49,874 35,545
Airport North on Spintex Road, City of Accra, The Republic of Ghana
3 Rome, Italy Hotel
100% 1,489 8,840
Roma via Vittorio Veneto 90, 92, 94, 96, 98, 98A, 100, 102 and Roma via Lombardia 4, 6, 8, Rome, Italy
4 Yangon, Myanmar Hotel
55.86% 36,038 75,035
No. 150/150 (A), Kan Yeik Thar Road, Between Upper Pansodan Road and Thein Phyu Road, Mingalar Tuang
Nyunt Township, Yangon, Myanmar
5 Bangkok, Thailand Hotel
73.61% 2,820 27,000
Soi Sukhumvit 55 (Thonglor) Sukhumvit Road , Klongton Nua, Vadhana, Bangkok, Thailand
Directors’ Report
57
Shangri-La Asia Limited Annual Report 2022
The Directors submit this Directors’ Report together with the Financial Statements for the Financial Year.
GENERAL DISCLOSURE ITEMS
Principal Activities and Geographical Analysis of Operations
The principal activity of the Company is investment holding.
The principal activities of the Group are the development, ownership and operation of hotel properties, the
provision of hotel management and related services, the development, ownership and operation of investment
properties, and property development for sale. The Group operates its business under various brand names
including “Shangri-La”, “Kerry Hotel”, “JEN by Shangri-La”, “Traders Hotel”, “Rasa”, “Summer Palace”, “Shang
Palace” and “CHI, The Spa at Shangri-La”.
The principal activities of the Group’s associates are the development, ownership and operation of hotel
properties, the development, ownership and operation of investment properties as well as property development
for sale.
An analysis of the performance of the Group for the Financial Year by geographical and business segments is set
out in Note 5 to the Financial Statements.
Business Review
Business and financial performances
A review of the Company’s business and financial performances is set out in the section entitled “Discussion and
Analysis” in the Annual Report.
Compliance with laws
The Company has complied with relevant laws and regulations that have a significant impact on the Company
throughout the Financial Year. Management committees have been set up to oversee the implementation of
corporate governance in the Company’s daily business. Details are set out in the section entitled “Corporate
Governance Report” in the Annual Report.
Environment policies and performance
The Company’s sustainability framework is built on four pillars: Our Environment, Our People, Our Community
and Our Business. Each pillar is populated by ESG topics that are determined to be material for the Company’s
business and stakeholders.
The Company implements green building standards in the design and construction of the Company’s new
properties and renovation projects, and strives to reduce the environmental footprint of the Company’s property
portfolio over time by achieving continuous improvement in operational efficiencies and avoiding waste.
During the Financial Year, the Company achieved its intensity reduction targets for carbon emission, energy and
single-use plastics. Performance highlights are appended as follows and the details are set out in the Sustainability
Report:
– 39 green building certifications
– 44 properties with Environment Management Systems certified to ISO 14001
– 100% hotels eliminate full plastic takeaway containers, cutleries, and bags
– Scope 3 carbon emissions disclosed for the first time
– 74% diversion rate for food waste
Stakeholders engagement
The Company’s sustainability framework is continually adapting to reflect the evolving needs and expectations
of key stakeholder groups. The Company seeks to engage with and gather feedback from stakeholders through
various channels to understand stakeholders’ thoughts and to collect their input relating to ESG matters. The
details are set out in the Sustainability Report.
Dividends
The Board did not recommend the payment of any interim and final dividend for the Financial Year.
Reserves
The details of movements in reserves during the Financial Year are set out in Notes 18 and 20 to the Financial
Statements.
Directors’ Report
58
Shangri-La Asia Limited Annual Report 2022
Donations
Charitable donations and other donations made by the Group during the Financial Year amounted to USD80,160.
Pre-emptive Rights
There is no provision for pre-emptive rights under the Bye-Laws or the laws of Bermuda.
Share Capital
The details of the Company’s share capital are set out in Note 18 to the Financial Statements.
Management Contracts
No contract with any person or entity concerning the management and administration of the whole or any
substantial part of the business of the Group (other than contract of service with any Director or employee of the
Group) was entered into or existed during the Financial Year.
Directors and Officers Liability Insurance
An insurance policy with permitted indemnity provision insuring claims made against, amongst others, the
directors and the management officers of the Group members and the persons representing the Group as directors
or management officers in the Group’s associates was in effect throughout the Financial Year and remained in
effect up to the date of the Annual Report.
Major Customers and Suppliers
The percentages of the five largest customers combined and the five largest suppliers combined are less than 10%
of the Group’s total revenue and purchases, respectively.
DIRECTORS
The Directors who held office during the Financial Year and the period thereafter up to the date of this Directors’
Report were:
Executive Directors
Ms KUOK Hui Kwong (Chairman)
Mr CHUA Chee Wui (Group CFO and Group CIO) (appointed as ED on 1 September 2022)
Non-executive Director
Mr LIM Beng Chee (Group CEO until 31 December 2022) (re-designated from ED to NED on 1 January 2023)
Independent Non-executive Directors
Professor LI Kwok Cheung Arthur
Mr YAP Chee Keong
Mr LI Xiaodong Forrest
Mr ZHUANG Chenchao
Ms KHOO Shulamite N K
At the Annual General Meeting, Ms KUOK Hui Kwong, Mr CHUA Chee Wui, Mr LIM Beng Chee and Mr ZHUANG
Chenchao will retire in accordance with the Bye-Laws. All retiring Directors, being eligible, have offered themselves
for re-election.
Independence of Independent Non-executive Directors
The Board has received from each Independent Non-executive Director confirmation of his independence
according to the guidelines set out in Rule 3.13 of the Listing Rules. The Nomination Committee, on behalf of the
Board, has assessed the independence of each of the existing Independent Non-executive Directors and considers
all the Independent Non-executive Directors independent.
Directors’ Report
59
Shangri-La Asia Limited Annual Report 2022
Changes in Directors’ Information
There have been changes in the information of some of the Directors since the date of the Company’s last interim
report. Details of the changes required to be disclosed under Rule 13.51B(1) of the Listing Rules are as follows:
(1) Mr CHUA Chee Wui was appointed an Executive Director and a member of the Executive Committee on 1
September 2022.
(2) Ms KHOO Shulamite N K was appointed an independent non-executive director of AIA Company Limited on
14 October 2022.
(3) Mr LIM Beng Chee stepped down as Executive Director, Group CEO and member of the Executive
Committee and was re-designated as Non-executive Director on 1 January 2023.
(4) As part of the regular annual salary review, the Remuneration & Human Capital Committee has reviewed
and approved the proposed monthly base salary of the Executive Directors for 2023. Changes in monthly
base salary were in the range of 12.0% to 33.9% and effective 1 January 2023.
SIGNIFICANT SHAREHOLDERS’ INTERESTS
As at Year End, the interests and short positions of those persons (other than the Directors) in Shares and
underlying Shares as recorded in the register that is required to be kept by the Company under Section 336 of the
SFO or as ascertained by the Company after reasonable enquiry were as follows:
Name Capacity
Number of
Shares held
Approximate % of
total issued Shares
Substantial Shareholders
KGL (Note 1) Interest of controlled corporations
1,799,537,010 50.189
KHL (Notes 1 and 2) Beneficial owner
Interest of controlled corporations
87,237,052
1,538,441,491
2.433
42.907
Caninco Investments Limited
(“Caninco”) (Note 2)
Beneficial owner
Interest of controlled corporations
568,568,684
157,280,233
15.857
4.387
Paruni Limited (“Paruni”) (Note 2) Beneficial owner
Interest of controlled corporations
382,904,547
36,667,449
10.679
1.023
Other Major Shareholders
Darmex Holdings Limited
(“Darmex”) (Note 2)
Beneficial owner
267,068,070 7.449
Kuok Brothers Sdn Berhad Beneficial owner
Interest of controlled corporations
84,441,251
227,043,761
2.355
6.332
Kuok (Singapore) Limited (“KSL”)
(Note 3)
Interest of controlled corporations
220,444,907 6.148
Baylite Company Limited
(“Baylite”) (Note 3)
Beneficial owner
220,444,907 6.148
Notes:
1. KHL is a wholly owned subsidiary of KGL and accordingly, the Shares in which KHL is shown as interested are also included in the
Shares in which KGL is shown as interested. The number of Shares shown were the holdings as at Year End and might be different from
the latest public record filed by the relevant Shareholders before Year End as required under SFO.
2. Caninco, Paruni and Darmex are wholly owned subsidiaries of KHL and accordingly, the Shares in which Caninco, Paruni and Darmex
are shown as interested are also included in the Shares in which KHL is shown as interested. The number of Shares shown were the
holdings as at Year End and might be different from the latest public record filed by the relevant Shareholders before Year End as
required under SFO.
3. Baylite is a wholly owned subsidiary of KSL and accordingly, the Shares in which Baylite is shown as interested are also included in the
Shares in which KSL is shown as interested.
Directors’ Report
60
Shangri-La Asia Limited Annual Report 2022
>50%
2.548% 49.892% 0.297% 14.835%
Directors
Substantial Shareholder
Kerry Group Limited
Subsidiaries Associates
Other Major Shareholders
Kuok Brothers Sdn Berhad (8.687%)
Kuok (Singapore) Limited (6.148%)
Company
Deemed interests of Directors, Substantial Shareholder and Other Major Shareholders
(as at Year End)
>1/3 & <50%
DIRECTORS’ INTERESTS
Director’s Interest in Securities of the Company and its Associated Corporations
As at Year End, the interests and short positions of the Directors in shares, underlying shares and debentures
in/of the Company and its associated corporations (within the meaning of Part XV of the SFO) (“Associated
Corporations”) as recorded in the register required to be kept by the Company under Section 352 of the SFO or as
otherwise notified to the Company and HKSE pursuant to the Securities Model Code were as follows:
(A) Long positions in shares in the Company and Associated Corporations
Number of shares held Approximate
% of total
issued shares
in the relevant
company
Name of company Name of Director
Class of
shares
Personal
interests
Family
interests
Corporate
interests
Other
interests
Total
The Company KUOK Hui Kwong Ordinary
(1)
930,833
(2)
1,038,000
(3)
2,000,000
(4)
86,251,718 90,220,551 2.516
CHUA Chee Wui Ordinary
68,000 – – – 68,000 0.002
LIM Beng Chee Ordinary
1,058,000 – – – 1,058,000 0.030
Total
2,056,833 1,038,000 2,000,000 86,251,718 91,346,551 2.548
Notes:
1. 32,000 shares were held jointly by Ms KUOK Hui Kwong and her spouse.
2. These shares were the deemed interest of Ms KUOK Hui Kwong’s spouse.
3. These shares were held through a company owned by Ms KUOK Hui Kwong.
4. These shares were held through discretionary trusts of which Ms KUOK Hui Kwong is a discretionary beneficiary.
Directors’ Report
61
Shangri-La Asia Limited Annual Report 2022
(B) Long positions in underlying shares in the Company and Associated Corporations
As at Year End, there were share options and/or share awards held by Directors with rights to Shares. Details of
such underlying shares are set out in the sections entitled “Share Option Scheme” and “Share Award Scheme” of
this Directors’ Report.
Directors’ Dealings
During the Financial Year, the particulars of the deemed dealings in Shares by the Directors (other than exercise/
acceptance of share options and share awards, if any) as notified to the Company are set out below:
Director
Dealing entity/
Capacity Date of dealing
Number of Shares
bought/(sold)
Average
dealing price
per Share (HKD)
KUOK Hui Kwong Discretionary Trusts 6 January 2022
15,000,000 6.310
Directors’ Interests in Contracts
Save as disclosed, if any, in the section entitled “Connected Transaction” and “Continuing Connected Transactions”
of this Directors’ Report, no contract of significance in relation to the Group’s business to which any member of the
Group was a party and in which any Director had a material interest subsisted at Year End or at any time during
the Financial Year.
Directors’ Service Contracts
No Director proposed for re-election at the Annual General Meeting has entered into a service contract with
any member of the Group which is not determinable by the Company within one year without payment of
compensation (other than statutory compensation).
Directors’ Interests in Competing Business
Pursuant to Rule 8.10(2) of the Listing Rules, none of the Directors during the Financial Year and up to the date
of this Directors’ Report (for the period the respective Directors acted as Directors) have notified the Company
of interests (other than as directors representing the Group’s interest) in businesses that compete or are likely to
compete, either directly or indirectly, with the businesses of the Group.
SHARE OPTION SCHEME
A share option scheme of the Company was adopted by Shareholders on 28 May 2012 (“Option Scheme”). As
the term of the Option Scheme expired on 28 May 2022, no further options may be granted, but options granted
before 28 May 2022 may still be exercised during the relevant exercise period.
The major terms of the Option Scheme are as follows:
(1) Purpose of the Option Scheme
The purpose of the Option Scheme is to motivate eligible participants of the Option Scheme to optimise
their future contributions to the Company and its subsidiaries and associates, and the entities in which any
of the aforesaid companies holds an interest (collectively referred to as “Enlarged Group”); and/or to reward
them for their past contributions; and to attract and retain or otherwise maintain ongoing relationships with
such eligible participants who are significant to and/or whose contributions are or will be beneficial to the
performance, growth or success of the Enlarged Group.
Directors’ Report
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Shangri-La Asia Limited Annual Report 2022
(2) Eligible participants of the Option Scheme
The eligible participants of the Option Scheme include:
(a) an employee or proposed employee of any member of the Enlarged Group or a person seconded to
work for any member of the Enlarged Group;
(b) a director or proposed director of any member of the Enlarged Group;
(c) an officer or proposed officer of any member of the Enlarged Group;
(d) a direct or indirect shareholder of any member of the Enlarged Group;
(e) a supplier of goods or services to any member of the Enlarged Group;
(f) a customer, consultant, business or joint venture partner, franchisee, contractor, agent or
representative of any member of the Enlarged Group;
(g) a person or entity that provides research, development or other technological support or any
advisory, consultancy, professional or other services to any member of the Enlarged Group;
(h) a landlord or tenant (including a sub-tenant) of any member of the Enlarged Group;
(i) any person approved by Shareholders; and
(j) an associate of any of the foregoing persons.
(3) Life of the Option Scheme
The term of the Option Scheme expired on 28 May 2022, following which no further options may be
granted. Options granted before this date may still be exercised during the relevant exercise period.
(4) Maximum number of Shares available to be granted under the Option Scheme
The maximum number of Shares in respect of which options may be granted under the Option Scheme
(and under any other share option scheme) shall not, in aggregate, exceed 10% of the Shares in issue as
at the adoption date of the Option Scheme. The Company may from time to time as the Board may think
fit seek approval from Shareholders to refresh this limit, save that the maximum number of Shares that
may be issued upon exercise of all options to be granted under the Option Scheme (and under any other
share option scheme) shall not exceed 10% of the Shares in issue as at the date of Shareholders’ resolution
refreshing the limit. Notwithstanding the above, the maximum number of Shares that may be issued upon
exercise of all outstanding options granted and yet to be exercised under the Option Scheme (and under any
other share option scheme) shall not exceed 30% of the Shares in issue from time to time.
(5) Maximum number of Shares allowed to be granted to any one grantee under the Option Scheme
The maximum number of Shares issued and issuable upon full exercise of the options granted to any one
grantee (including exercised, lapsed, cancelled and outstanding options) in any 12-month period shall not
exceed 1% of the Shares in issue from time to time.
Directors’ Report
63
Shangri-La Asia Limited Annual Report 2022
(6) Exercise period
The period within which an option may be exercised shall be such period as the Board may, in its absolute
discretion, determine at the time of grant, save that the period shall not be beyond 10 years commencing
on the date of grant of an option. The minimum period for which an option must be held (if any) or the
fulfilment of any condition (if any) before it can be exercised shall be determined by the Board upon the
grant of an option. The full amount of the exercise price for the subscription of Shares must be paid upon
exercise of an option.
(7) Exercise price for Shares under the Option Scheme
The exercise price for any particular option shall be such price as the Board may, in its absolute discretion,
determine at the time of grant of the relevant option, but the exercise price shall not be less than the highest
of:
(a) the nominal value of a Share;
(b) the closing price of the Shares as stated in HKSE’s daily quotation sheets on the date of the resolution
of the Board approving the grant of options which must be a day on which HKSE is open for the
business of dealing in securities; and
(c) the average of the closing price of the Shares as stated in HKSE’s daily quotation sheets for the five
trading days immediately preceding the date of grant.
Details and movements of option shares that were granted under the Option Scheme and remained outstanding
during the Financial Year are as follows:
Number of option shares
Grantees Date of grant
Balance
as at 1 Jan
2022
Granted
during the
period
Transferred
from other
category
during the
period
Transferred
to other
category
during the
period
Exercised
during the
period
Lapsed
during the
period
Balance as
at 31 Dec
2022
Exercise
price per
option
share
(HKD)
Exercise period
1. Director
LI Kwok Cheung Arthur 23 Aug 2013
100,000 – – – – – 100,000 12.11
23 Aug 2013 – 22 Aug 2023
2. Employees 23 Aug 2013
3,138,000 – – – – – 3,138,000 12.11
23 Aug 2013 – 22 Aug 2023
3. Other participants 23 Aug 2013
3,270,000 – – – – – 3,270,000 12.11
23 Aug 2013 – 22 Aug 2023
Total
6,508,000 – – – – – 6,508,000
Notes:
1. No options were cancelled during the Financial Year.
2. As at 1 January 2022 and 27 May 2022 (the day before the Option Scheme’s expiry), the right to subscribe for a total of 301,024,679
Shares (representing about 8.40% of the issued Shares thereby) was available for grant under the Option Scheme. The Option Scheme
expired during the Financial Year and there were no grantable options under the Option Scheme as at 31 December 2022.
3. No share options were granted during the Financial Year.
Directors’ Report
64
Shangri-La Asia Limited Annual Report 2022
SHARE AWARD SCHEME
A share award scheme of the Company was adopted by Shareholders on 28 May 2012 and was revised on 10 August
2012, 31 May 2018 and 29 December 2022 with further restraints/limits/changes imposed (“Award Scheme”).
The major terms of the Award Scheme (as amended) are as follows:
(1) Purpose of the Award Scheme
The purpose of the Award Scheme is to support the long-term growth of the Group and enhance its
reputation as an employer-of-choice in the industry. In particular, the Award Scheme is intended to attract
suitable personnel for the further development of the Group, to recognise contributions by qualified
participants and incentivise them to continue making contributions to the Group and to retain talent. The
Award Scheme will also help to align the interests of Directors and senior management of the Group with
the Group’s long-term performance.
(2) Qualified participants of the Award Scheme
The qualified participants of the Award Scheme include:
(a) a director;
(b) an employee; or
(c) an officer,
of any member of the Group other than those who reside in jurisdictions where the grant of Shares or
the transfer of Shares to such persons under the Award Scheme will not be permitted under the laws and
regulations of such jurisdictions, or will be subject to requirements with which compliance will, at the
Board’s sole discretion, be unduly burdensome or impractical.
(3) Life of the Award Scheme
The Award Scheme shall remain valid and effective for an initial term of 10 years from its date of adoption
(“Initial Term”) which shall be automatically extended by 7 successive extended terms of 10 years each
(“Subsequent Term”) unless (a) the Board decides not to continue with any new Subsequent Term; or (b)
the Award Scheme is terminated early by a resolution of the Board or the Shareholders, provided that the
duration of the Award Scheme shall not exceed 80 years.
Directors’ Report
65
Shangri-La Asia Limited Annual Report 2022
(4) Maximum number of Shares available to be granted under the Award Scheme
The total number of the Shares, excluding those that would not be vested or have been forfeited (“Lapsed
Shares”), granted and to be granted to qualified participants under the Award Scheme shall not exceed 10%
of the Shares in issue from time to time. Subject to the aforesaid limit, in addition, no further grant may
be made under the Award Scheme if (i) in the Initial Term, the total number of Shares (excluding Lapsed
Shares) granted and to be granted pursuant to the Award Scheme exceed 3% of the Shares in issue at the
time of the relevant grant; and (ii) in each Subsequent Term, the total number of Shares (excluding Lapsed
Shares) granted and to be granted pursuant to the Award Scheme exceed such limit as determined by the
Board from time to time for each such Subsequent Term. No further grant may be made under the Award
Scheme if this will result in any of the aforesaid limits being exceeded.
As at the date of this Directors’ Report, a maximum of 86,540,751 Shares (representing 2.41% of the issued
Shares thereby) were available for grant under the Award Scheme.
(5) Maximum number of Shares allowed to be granted to any one grantee under the Award Scheme
The maximum number of Shares granted and to be granted to any one grantee (including Shares that have
been vested and/or accepted and Lapsed Shares) in any 12-month period shall not exceed 0.1% of the
Shares in issue from time to time.
(6) Vesting
The vesting conditions (if any) of Shares granted under the Award Scheme shall be determined by the Board
in its absolute discretion at the time of grant, provided that the grantee shall accept the Shares within 6
months from the Shares becoming vested. If no acceptance is received within the stipulated period, such
unaccepted vested Shares shall be forfeited.
(7) Consideration for Shares granted under the Award Scheme
The price/consideration (if any) per Share to be granted under the Award Scheme shall be determined by
the Board in its absolute discretion at the time of grant and shall be payable by the grantee upon the grantee
accepting the vested Shares.
(8) Operation and administration of the Award Scheme
The Board may select and grant to any qualified participant Shares under the Award Scheme for free or at
a price/consideration per Share. A trust has been set up for the operation of the Award Scheme. The Board
may from time to time pay to the trustee monies to enable the trustee to purchase Shares on HKSE such
Shares that will be held upon trust pending the making of grants to or acceptance by qualified participants
under the Award Scheme. A trustee has been appointed for the purpose of the trust and the trustee will hold
and deal with the assets of the trust for the benefit of the qualified participants.
Directors’ Report
66
Shangri-La Asia Limited Annual Report 2022
Details and movements of award shares that were granted under the Award Scheme and remained outstanding
during the Financial Year are as follows:
Number of award shares
Grantees Date of grant
Balance as at 1
Jan 2022
Granted during
the period
Transferred
from other
category
during the
period
Transferred to
other category
during the
period
Lapsed/
Adjustment
during the
period
Vested during
the period
Balance as at
31 Dec 2022
Consideration
per award share
(HK$)
Vesting date/period
1. Directors
KUOK Hui Kwong 15 Jun 2019
24,000 – – – 44,000 (68,000) –
Nil 1 Apr 2022
7 Jun 2021
182,000 – – – – (60,000) 122,000
Nil 7 Jun 2022 - 7 Jun 2024
6 May 2022
– 636,000 – – – – 636,000
Nil 6 May 2023 - 6 May 2025
CHUA Chee Wui 7 Jun 2021
– – 108,000 – – – 108,000
Nil 7 Jun 2023 - 7 Jun 2024
6 May 2022
– – 370,000 – – – 370,000
Nil 6 May 2023 - 6 May 2025
LIM Beng Chee 15 Jun 2019
32,000 – – – 58,000 (90,000) –
Nil 1 Apr 2022
7 Jun 2021
210,000 – – – – (70,000) 140,000
Nil 7 Jun 2022 - 7 Jun 2024
6 May 2022
– 548,000 – – – – 548,000
Nil 6 May 2023 - 6 May 2025
2. Employees
1 Apr 2019
196,000 – – – (4,000) (192,000) –
Nil 1 Apr 2022
30 Jun 2019
394,000 – – – (358,000) (36,000) –
Nil 1 Apr 2022
1 Nov 2019
68,000 – – – (8,000) (60,000) –
Nil 1 Apr 2022
7 Jun 2021
5,236,000 – – (108,000) (582,000) (1,610,000) 2,936,000
Nil 7 Jun 2022 - 7 Jun 2024
15 Oct 2021
268,000 – – – – (88,000) 180,000
Nil 15 Oct 2022 - 15 Oct 2024
6 May 2022
– 11,274,000 – (370,000) (718,000) – 10,186,000
Nil 6 May 2023 - 6 May 2025
Total
6,610,000 12,458,000 478,000 (478,000) (1,568,000) (2,274,000) 15,226,000
The five individuals whose emoluments were the highest in the Group for the Financial Year include two Directors.
Among the above granted award shares, those that were granted to such remaining three highest paid individuals
(other than Directors) are extracted and summarized as follows:
Number of award shares
Grantees Date of grant
Balance as at
1 Jan 2022
Granted during
the period
Transferred
from other
category during
the period
Transferred to
other category
during the
period
Lapsed/
Adjustment
during the
period
Vested during
the period
Balance as at
31 Dec 2022
Consideration
per award share
(HK$)
Vesting date/period
Remaining three highest
paid individuals
1 Apr 2019
26,520 – – – (18,520) (8,000) –
Nil 1 Apr 2022
30 Jun 2019
241,175 – – – (205,175) (36,000) –
Nil 1 Apr 2022
1 Nov 2019
– – – – – – –
Nil 1 Apr 2022
7 Jun 2021
382,000 – – – – (126,000) 256,000
Nil 7 Jun 2022 - 7 Jun 2024
15 Oct 2021
– – – – – – –
Nil 15 Oct 2022 - 15 Oct 2024
6 May 2022
– 944,000 – – – – 944,000
Nil 6 May 2023 - 6 May 2025
Total
649,695 944,000 – – (223,695) (170,000) 1,200,000
Notes:
1. During the Financial Year, there were no new Shares allotted or planned for allotment under any special/general mandate for the
purpose of the Award Scheme.
2. As at 1 January 2022 and 31 December 2022, a maximum of respectively 96,742,751 and 85,834,751 Shares (representing 2.70% and
2.39% of the issued Shares thereby) were available for grant under the Award Scheme.
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CONNECTED TRANSACTIONS
During the Financial Year, the Group entered into a connected transaction that is subject to the reporting
requirements under Chapter 14A of the Listing Rules. Details of the transaction are as follows:
• On 17 November 2022, SLIM-HK and Ubagan Limited (“Ubagan”), a subsidiary of KHL (Substantial
Shareholder) entered into a tenancy offer letter to renew the tenancy of various levels of office premises
at Kerry Centre for a term of three years commencing on 19 November 2022 (“Renewal”) and continue the
licences of the car parking spaces at Kerry Centre.
The monthly rental for (a) the tenancy of the office premises is HKD3,072,582 (excluding the management
fee and air-conditioning charge of HKD469,965.60, subject to revision); and (b) each floating car parking
space and each fixed car parking space are HKD3,350 and HKD4,200, respectively, subject to revision.
The Renewal is regarded as an acquisition of right-of-use assets of the Group. The value of the right-of-use
assets amounted to HKD100,605,000.
Ubagan is a subsidiary of KHL (Substantial Shareholder). Accordingly, Ubagan is a connected person of the
Company at holding level, and the Renewal constitutes a connected transaction for the Company.
CONTINUING CONNECTED TRANSACTIONS
During the Financial Year, there were also continuing connected transactions for the Company in effect that are
subject to the reporting requirements under Chapter 14A of the Listing Rules. Details of these transactions are as
follows:
(1) On 28 January 1995, the Company entered into a disclosable and connected transaction to acquire various
hotel interests from certain parties, including connected persons of the Company. Included in these hotel
interests was Edsa Shangri-La, Manila (“Edsa Hotel”) which was built on land leased from Shang Properties,
Inc (“SPI”) under a 25-year lease commencing in 1992, with an option to renew the lease for a further term
of 25 years (“Renewal Term”). SPI agreed that, upon expiration of the Renewal Term, it would grant to Edsa
Shangri-La Hotel & Resort, Inc (“Edsa Co”, the owner of Edsa Hotel) a new lease term of 25 years subject to
the prevailing Philippines laws.
On 28 August 2017, the Company announced that the lease had been renewed for another three-year term
that would expire on 27 August 2020. Upon expiry of the initial three-year term and thereafter, Edsa Co has
the right to decide whether the term shall be renewed for successive terms of three years each provided that
the entirety of the Renewal Term shall not be longer than 25 years from 28 August 2017.
On 27 August 2020, the Company announced that the said lease had been further renewed for another
three-year term that would expire on 27 August 2023.
SPI is an associate of KPL which in turn is a subsidiary of KHL (Substantial Shareholder). Accordingly, SPI
is a connected person of the Company at holding level, and the lease as described above constitutes a
continuing connected transaction for the Company.
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Based on the terms of the said lease and the expected occupancy of the hotel, taking into account possible
inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set an annual cap for each of the following financial years:
Financial year Annual cap (USD)
2022
2,300,000
2023 (for the entire year assuming the lease will be renewed upon expiry in the
year)
2,800,000
For the Financial Year, the actual aggregate transaction amount with SPI under the said lease was
USD1,246,000 (2021: USD373,000).
(2) On 2 June 2010, SLIM-HK and Shanghai Pudong Kerry City Properties Co, Limited (“Pudong Kerry Co”,
a company owned as to 23.2% by the Company, 40.8% by KPL, 16% by Allgreen Properties Limited
(“Allgreen”) and 20% by a third party) entered into a hotel management agreement pursuant to which
SLIM-HK was appointed as manager to provide Hotel Management Services to Kerry Hotel Pudong,
Shanghai, a hotel owned by Pudong Kerry Co. The agreement has a three-year term commencing on the date
of approval of the said agreement by the Mainland China government. Upon expiry of the initial three-year
term and thereafter, SLIM-HK has the right to decide whether the term shall be renewed for successive
terms of three years each provided that the entire term of the agreement as renewed shall not be longer
than 20 years. The said agreement was renewed on 11 June 2013, on 26 January 2017 and on 23 December
2019 as previously announced by the Company.
On 28 December 2022, the Company announced that the said agreement had been further renewed for
another consecutive three-year term that would expire on 5 January 2026.
Pudong Kerry Co is an associate of KPL which in turn is a subsidiary of KHL (Substantial Shareholder).
Accordingly, Pudong Kerry Co is a connected person of the Company at holding level, and the agreement as
described above constitutes a continuing connected transaction for the Company.
Based on the terms of the said agreement and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set an annual cap for each of the following financial years:
Financial year Annual cap (USD)
2022
6,200,000
2023
3,800,000
2024
4,200,000
2025
4,600,000
For the Financial Year, the actual aggregate transaction amount with Pudong Kerry Co was USD1,873,000
(2021: USD2,765,000). The transaction also constitutes a related party transaction in accordance
with HKFRS and the amount of the transaction for the Financial Year is included in the receipt of hotel
management, consultancy and related services and royalty fees under Note 41(b) to the Financial
Statements.
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(3) On 17 October 2012, SLIM-HK and Shanghai Ji Xiang Properties Co, Limited (“Jing An Co”, a company
owned as to 49% by the Company and 51% by KPL) entered into a hotel management agreement pursuant
to which SLIM-HK would provide Hotel Management Services to Jing An Shangri-La, Shanghai (“Jing An
Hotel”), a hotel owned by Jing An Co. The agreement has a 20-year term commencing on the opening date
of Jing An Hotel. The Company obtained an independent financial adviser’s opinion confirming that it is
normal business practice for the agreement to be of such duration.
Jing An Co is a subsidiary of KPL which in turn is a subsidiary of KHL (Substantial Shareholder). Accordingly,
Jing An Co is a connected person of the Company at holding level, and the agreement as described above
constitutes a continuing connected transaction for the Company.
Based on the terms of the said agreement and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the annual cap set for each financial year throughout the duration of the said
agreement ending 31 December 2033 is USD14,000,000.
For the Financial Year, the actual aggregate transaction amount with Jing An Co was USD2,758,000 (2021:
USD5,058,000). The transaction also constitutes a related party transaction in accordance with HKFRS
and the amount of the transaction for the Financial Year is included in the receipt of hotel management,
consultancy and related services and royalty fees under Note 41(a) to the Financial Statements.
(4) On 26 June 2014, SLIM-HK and Shangri-La Hotel (Nanjing) Co, Limited (previously known as Ji Xiang
Real Estate (Nanjing) Co, Limited) (“Nanjing Co”, a company owned as to 55% by the Company and 45%
by KPL) entered into a hotel management agreement pursuant to which SLIM-HK would provide Hotel
Management Services to Shangri-La Nanjing (“Nanjing Hotel”) which is owned by Nanjing Co. The said
agreement has a three-year term commencing on the opening date of Nanjing Hotel. Upon expiry of the
initial three-year term and thereafter, SLIM-HK has the right to decide whether the term shall be renewed
for successive terms of three years each provided that the entire term of the said agreement shall not be
longer than 20 years. The said agreement was renewed on 23 October 2017 as previously announced by the
Company.
On 23 October 2020, the Company announced that the said agreement had been further renewed for
another consecutive three-year term that would expire on 25 October 2023.
Nanjing Co is an associate of KPL which in turn is a subsidiary of KHL (Substantial Shareholder).
Accordingly, Nanjing Co is a connected person of the Company at holding level, and the agreement as
described above constitutes a continuing connected transaction for the Company.
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Based on the terms of the said agreement and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set annual cap for each of the following financial years:
Financial year Annual cap (USD)
2022
3,400,000
2023 (for the entire year assuming the relevant agreement will be renewed upon
expiry in the year)
4,000,000
For the Financial Year, the actual aggregate transaction amount with Nanjing Co was USD1,910,000 (2021:
USD1,871,000).
(5) On 17 July 2015, SLIM-HK and Ruihe Real Estate (Tangshan) Co, Limited (“Tangshan Co”, a company owned
as to 35% by the Company, 40% by KPL and 25% by Allgreen) entered into a hotel management agreement
pursuant to which SLIM-HK would provide Hotel Management Services to Shangri-La Tangshan (“Tangshan
Hotel”), a hotel owned by Tangshan Co. The agreement has a 20-year term commencing on the opening
date of Tangshan Hotel. The Company obtained an independent financial adviser’s opinion confirming that it
is normal business practice for the agreement to be of such duration.
Tangshan Co is an associate of KPL which in turn is a subsidiary of KHL (Substantial Shareholder).
Accordingly, Tangshan Co is a connected person of the Company at holding level, and the agreement as
described above constitutes a continuing connected transaction for the Company.
Based on the terms of the said agreement and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the annual cap set for each financial year throughout the duration of the said
agreement ending 31 December 2035 is RMB39,000,000.
For the Financial Year, the actual aggregate transaction amount with Tangshan Co was USD693,000
(equivalent to RMB4,683,000) (2021: USD832,000 (equivalent to RMB5,366,000)). The transaction also
constitutes a related party transaction in accordance with HKFRS and the amount of the transaction for the
Financial Year is included in the receipt of hotel management, consultancy and related services and royalty
fees under Note 41(b) to the Financial Statements.
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Shangri-La Asia Limited Annual Report 2022
(6) On 4 March 2016, SLIM-HK and SLIM-PRC entered into a hotel management agreement and a marketing
services agreement, respectively, with Kerry Real Estate (Hangzhou) Co, Limited (“Hangzhou Co”, a
company owned as to 25% by the Company and 75% by KPL), pursuant to which SLIM-HK and SLIM-PRC
would provide Hotel Management Services to Midtown Shangri-La, Hangzhou (“Hangzhou Midtown
Hotel”) which is owned by Hangzhou Co. Each of the said agreements has a 20-year term commencing on
the opening date of Hangzhou Midtown Hotel. The Company obtained an independent financial adviser’s
opinion confirming that it is normal business practice for the agreements to be of such duration.
Hangzhou Co is a subsidiary of KPL which in turn is a subsidiary of KHL (Substantial Shareholder).
Accordingly, Hangzhou Co is a connected person of the Company at holding level, and the agreements as
described above constitute continuing connected transactions for the Company.
Based on the terms of the said agreements and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the annual cap set for each financial year throughout the duration of the said
agreements ending 31 December 2036 is RMB93,000,000.
For the Financial Year, the actual aggregate transaction amount with Hangzhou Co was USD1,894,000
(equivalent to RMB12,798,000) (2021: USD2,182,000 (equivalent to RMB14,066,000)). The transactions
also constitute related party transactions in accordance with HKFRS and the amount of the transactions
for the Financial Year is included in the receipt of hotel management, consultancy and related services and
royalty fees under Note 41(a) to the Financial Statements.
(7) On 24 January 2018, the Company announced that Shang Global City Properties, Inc (“Fort Manila Co”, a
company owned as to 40% by the Company and 60% by SPI) entered into hotel agreements, being (a) the
marketing and reservations agreement dated 10 December 2014 (as varied) with SLIM-HK, (b) the licence
agreement dated 10 December 2014 (as varied) with Shangri-La International Hotel Management Limited,
incorporated in the British Virgin Islands, (“SLIM-BVI”, a wholly owned subsidiary of the Company and the
head-licensor of the intellectual property in relation to the brand of Shangri-La (“IP”)) and (c) the licence
agreement dated 10 December 2014 (as varied) with Shangri-La International Hotel Management Pte
Limited (“SLIM-SG”, a wholly owned subsidiary of the Company and the current IP sub-licensor) in relation
to the provision of (i) the Hotel Management Services for Shangri-La The Fort, Manila (“Fort Manila Hotel”,
a hotel owned by Fort Manila Co), and (ii) the licence of the IP to Fort Manila Co enabling it to operate its
hotel bearing the name of Shangri-La for a term which would expire on 31 December 2020.
Each of the said agreements lists the operating term which commenced on the opening date of Fort Manila
Hotel (being 1 March 2016) and ended on 31 December of the first anniversary of such opening date (ie, 31
December 2017). Each of SLIM-HK, SLIM-BVI and SLIM-SG under its respective agreement has the right
to decide whether the term shall be renewed for another successive three-year term (or part thereof of the
remaining term) provided that the entire initial term of each agreement shall not be longer than 10 years
from the opening date of the said hotel. Upon expiry of the said initial term of 10 years, the relevant parties
may elect to extend the term for successive three-year terms (or part thereof) provided that the aggregate
term of the renewal period shall not exceed a further 10 years.
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Shangri-La Asia Limited Annual Report 2022
On 31 December 2020, the Company announced that the said agreements had been renewed for another
consecutive three-year term that would expire on 31 December 2023.
Fort Manila Co is a subsidiary of SPI, an associate of KPL which in turn is a subsidiary of KHL (Substantial
Shareholder). Accordingly, Fort Manila Co is a connected person of the Company at holding level, and the
agreements as described above constitute continuing connected transactions for the Company.
Based on the terms of the said agreements and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set an annual cap for each of the following financial years:
Financial year Annual cap (USD)
2022
4,100,000
2023
5,200,000
For the Financial Year, the actual aggregate transaction amount with Fort Manila Co was USD4,086,000
(2021: USD1,142,000). The transactions also constitute related party transactions in accordance with
HKFRS and the amounts of the transactions for the Financial Year are included in the receipt of hotel
management, consultancy and related services and royalty fees under Note 41(b) to the Financial
Statements.
(8) On 24 April 2019, SLIM-HK and SLIM-PRC entered into a hotel management agreement and a sales and
marketing services agreement, respectively, with Million Fortune Development (Shenzhen) Co, Limited
(“Qianhai Co”, a company owned as to 50% by KHL, 25% by KPL and 25% by The Bank of East Asia,
Limited), pursuant to which SLIM-HK and SLIM-PRC would provide Hotel Management Services to JEN
Shenzhen Qianhai by Shangri-La (“Qianhai Hotel”) which is owned by Qianhai Co. Each of the said
agreements lists the initial term which commenced from the date of the agreements and ended on 31
December 2021. Thereafter, save where SLIM-HK and SLIM-PRC determine that it is not able to comply
with the applicable requirements under the Listing Rules, the term of each agreement shall be renewed
for successive terms of three years each provided that the entire term of the said agreements shall not be
longer than 20 years.
On 28 December 2021, the Company announced that the said agreements had been renewed for another
consecutive three-year term that would expire on 31 December 2024.
Qianhai Co is an associate of KHL (Substantial Shareholder). Accordingly, Qianhai Co is a connected person
of the Company at holding level, and the agreements as described above constitute continuing connected
transactions for the Company.
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Shangri-La Asia Limited Annual Report 2022
Based on the terms of the said agreements and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set annual cap for each of the following financial years:
Financial year Annual cap (RMB)
2022
3,000,000
2023
20,000,000
2024
27,800,000
As the Qianhai Hotel had yet to commence business in 2022, no fees are payable under the agreements
during the Financial Year.
(9) SLIM-HK and Beijing Kerry Hotel Co, Limited (“Beijing Co”, a company owned as to 23.75% by the
Company, 71.25% by KPL and 5% by Beijing Beiao Group Corp, Limited) had entered into a management
and marketing services agreement, pursuant to which SLIM-HK managed and operated Kerry Hotel, Beijing
(“Beijing Kerry Hotel”) which is owned by Beijing Co. Such agreement expired on 27 August 2019.
On 26 August 2019, SLIM-HK and SLIM-PRC entered into a hotel management agreement and a marketing
and training services agreement, respectively, with Beijing Co, pursuant to which SLIM-HK and SLIM-PRC
would continue to provide Hotel Management Services to Beijing Kerry Hotel. Each of the said agreements
has a 20-year term commencing on 28 August 2019. The Company obtained an independent financial
adviser’s opinion confirming that it is normal business practice for the agreements to be of such duration.
Beijing Co is an associate of KPL which in turn is a subsidiary of KHL (Substantial Shareholder). Accordingly,
Beijing Co is a connected person of the Company at holding level, and the agreements as described above
constitute continuing connected transactions for the Company.
Based on the terms of the said agreements and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the annual cap set for each financial year up to expiry is RMB110,000,000.
For the Financial Year, the actual aggregate transaction amount with Beijing Co was USD1,364,000
(equivalent to RMB9,217,000) (2021: USD2,582,000 (equivalent to RMB16,649,000)). The transactions
also constitute related party transactions in accordance with HKFRS and the amount of the transactions
for the Financial Year is included in the receipt of hotel management, consultancy and related services and
royalty fees under Note 41(a) to the Financial Statements.
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Shangri-La Asia Limited Annual Report 2022
(10) Shangri-La International Hotel Management Pte Limited (“SLIM-SG”, a wholly owned subsidiary of the
Company) and Cuscaden Properties Pte Limited (“Cuscaden Co”, a company owned as to 44.6% by the
Company and 55.4% by Allgreen) had entered into the management agreement and the marketing and
reservations agreement, pursuant to which SLIM-SG managed and operated JEN Singapore Tanglin by
Shangri-La (“Singapore Tanglin Hotel”) which is owned by Cuscaden Co. Such agreements expired on 31
March 2021.
On 8 March 2021, SLIM-SG and Cuscaden Co entered into a hotel management agreement, pursuant to
which SLIM-SG would continue to provide Hotel Management Services to Singapore Tanglin Hotel. The
agreement has a three-year term which commenced on 1 April 2021. Upon expiry of the initial three-year
term and thereafter, save where SLIM-SG determines that it is not able to comply with the applicable
requirements under the Listing Rules, the term shall be renewed for successive terms of three-year periods
each provided that the entire term of the said agreement shall not be longer than 9 years.
Cuscaden Co is a subsidiary of Allgreen which in turn is an associate of KHL (Substantial Shareholder).
Accordingly, Cuscaden Co is a connected person of the Company at holding level, and the agreement as
described above constitutes a continuing connected transaction for the Company.
Based on the terms of the said agreement and the expected occupancy of the hotel, taking into account
possible inflation and fluctuation in currency exchange rates, as well as a buffer for reasonable increases in
occupancy and room rates, the Company has set an annual cap for each of the following financial years:
Financial year Annual cap (USD)
2022
4,300,000
2023
4,400,000
2024 (for the entire year assuming the relevant agreement will be renewed upon
expiry in the year)
4,500,000
For the Financial Year, the actual aggregate transaction amount with Singapore Tanglin Hotel was
USD1,866,000 (2021: USD1,022,000). The transaction also constitutes a related party transaction in
accordance with HKFRS and the amount of the transaction for the Financial Year is included in the receipt
of hotel management, consultancy and related services and royalty fees under Note 41(b) to the Financial
Statements.
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Shangri-La Asia Limited Annual Report 2022
The continuing connected transactions mentioned in (1) to (10) above have been reviewed by the Independent
Non-executive Directors. The Independent Non-executive Directors have confirmed that the transactions have
been entered into:
1. in the ordinary and usual course of business of the Group;
2. either on normal commercial terms or, if there are not sufficient comparable transactions to judge whether
they are on normal commercial terms, on terms no less favourable to the Group than terms available to or
from (as appropriate) independent third parties; and
3. in accordance with the relevant agreements governing such transactions and on terms that are fair and
reasonable and in the interests of the Shareholders as a whole.
The Auditor was engaged to report on the Group’s continuing connected transactions in accordance with
Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits
or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on
Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of
Certified Public Accountants. The Auditor has issued its unqualified letter containing its findings and conclusions
in respect of the continuing connected transactions disclosed by the Group in the Annual Report in accordance
with Rule 14A.56 of the Listing Rules. A copy of the Auditor’s letter has been provided by the Company to HKSE.
On behalf of the Board
KUOK Hui Kwong
Chairman
Hong Kong, 24 March 2023
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Shangri-La Asia Limited Annual Report 2022
The Company recognises the importance of transparency in governance and accountability to Shareholders and
that Shareholders benefit from good corporate governance. The Company reviews its corporate governance
framework on an ongoing basis to ensure compliance with best practices.
DIRECTORS HANDBOOK AND CORPORATE GOVERNANCE FUNCTIONS
Directors Handbook
The Board has adopted a composite handbook (“Directors Handbook”) comprising the Securities Principles and
the CG Principles, whose terms align with or are stricter than the requirements set out in the Securities Model
Code and the CG Model Code, save for the provision in the Directors Handbook that the positions of the Chairman
and the CEO may be served by the same person. The Directors Handbook serves as a comprehensive guidebook
for all Directors.
The Directors Handbook incorporates (amongst other things):
(1) Securities Principles
(a) restrictions on Directors’ dealings in relation to the Company’s securities;
(b) the Directors’ obligations and the board procedures for mandatory notification to and
acknowledgement from the Company prior to any deemed dealings of Directors and required
notification to the Company subsequent to such dealings;
(c) the requirements of the Directors’ mandatory filing with relevant regulatory bodies of their deemed
dealings; and
(d) extended application of the Securities Principles to non-Directors.
(2) CG Principles
(a) the terms of the operation of the Board including the obligations of each Director;
(b) the establishment of each Board committee, including the terms of reference of and/or the policy for
each such committee;
(c) the terms of the corporate governance functions;
(d) the rights of each Director (including members of any Board committee) for and/or the procedures
for independent access to the Group’s information and professional advice;
(e) the written procedures resolved by the Board for Shareholders to exercise certain rights in the
Company; and
(f) the references to and/or the summary of various important regulatory rules and the Company’s
corporate policies that the Directors are obliged to strictly observe.
The Directors Handbook is updated and revised from time to time where necessary to, amongst other things, (a)
align with relevant mandatory requirements under the Listing Rules and/or any other governing rules, and (b)
incorporate any corporate governance terms that the Board considers necessary for better corporate governance
of the Company. Any change to the terms of the Securities Principles and the CG Principles shall be determined
and approved by the Board.
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Shangri-La Asia Limited Annual Report 2022
Code on Securities Transactions
The Company has made specific enquiry of each of the Directors, and all the Directors have confirmed compliance
with the Securities Principles throughout the Financial Year.
The Securities Principles also apply to certain employees (“Relevant Employees”) in respect of their dealings in
the securities of the Company for the Financial Year. The code with which the Relevant Employees are obliged to
comply is similar to that with which the Directors are obliged to comply except that the Relevant Employees are
not required to fulfil the public filing requirement.
Code on Corporate Governance
The Company has complied with the CG Model Code throughout the Financial Year.
Corporate Governance Functions
Under the CG Principles, the Audit & Risk Committee has the delegated responsibility to oversee, monitor and
observe the terms of the Company’s corporate governance functions which include the following major duties:
(1) to review the Company’s policies and practices on corporate governance and to make recommendations to
the Board;
(2) to review and monitor the training and continuous professional development of Directors and senior
management;
(3) to review and monitor the Company’s policies and practices on compliance with legal and regulatory
requirements;
(4) to review and monitor the code of conduct and compliance manual (if any) applicable to employees and
directors of the members of the Group;
(5) to review the Company’s compliance with the relevant code and disclosure requirements in relation to
corporate governance in accordance with the Listing Rules;
(6) to review the Directors Handbook from time to time to ensure the Directors Handbook has sufficiently
covered the corporate governance matters that the Board and the Company are required to observe under
the Listing Rules; and
(7) to monitor whether the terms set out in the Directors Handbook are duly observed and complied with.
The Audit & Risk Committee has duly performed its duties relating to the corporate governance functions and it is
not aware of any terms of corporate governance being violated during the Financial Year.
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Shangri-La Asia Limited Annual Report 2022
BOARD
The Board is accountable to Shareholders for leading the Group in a responsible and effective manner.
The list of the members of the Board and their designations during the Financial Year and up to the date of the
Annual Report has been set out in the Directors’ Report.
Members, Meetings Held and Attendance
During the Financial Year, the Board held four board meetings. The Directors during the Financial Year, along with
the attendance of each of them at the meetings, are as follows:
Name of Director
Meetings attended/
eligible to attend
Executive Directors
KUOK Hui Kwong
4/4
LIM Beng Chee (was re-designated from ED to NED on 1 January 2023)
4/4
CHUA Chee Wui (was appointed on 1 September 2022)
1/1
Independent Non-executive Directors
LI Kwok Cheung Arthur
4/4
YAP Chee Keong
4/4
LI Xiaodong Forrest
3/4
ZHUANG Chenchao
4/4
KHOO Shulamite N K
4/4
Other than the above full Board meetings, the Chairman also held three meetings in 2022 with the Independent
Non-executive Directors without the presence of the other Directors. The attendance of the Directors at the
meeting was as follows:
Name of Director Attendance
Chairman
KUOK Hui Kwong
3/3
Independent Non-executive Directors
LI Kwok Cheung Arthur
3/3
YAP Chee Keong
3/3
LI Xiaodong Forrest
3/3
ZHUANG Chenchao
3/3
KHOO Shulamite N K
3/3
The relationship between members of the Board, if any, is set out in the section entitled “Board of Directors,
Company Secretary and Senior Management” in the Annual Report.
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Shangri-La Asia Limited Annual Report 2022
Term of Appointment of Directors
Each Director shall be subject to terms of retirement, but shall be eligible for re-election, in accordance with the
Bye-Laws, the Listing Rules and the Company’s nomination policy, in particular:
(1) any Director who was newly appointed by the Board or by the Shareholders in a general meeting to fill a
casual vacancy, or as an addition to the Board, shall retire from office at the next general meeting of the
Company;
(2) every Director shall retire from office by rotation no later than the third annual general meeting after he was
last elected or re-elected; and
(3) at each annual general meeting, not less than one-third (or otherwise the number nearest one-third) of the
Directors for the time being shall retire from office by rotation.
Accordingly, the term of appointment of each Director is effectively not more than approximately three years.
Directors’ Training
The Directors participate in continuous professional development to enhance and refresh their skills and
knowledge for their role as Directors. The Company also organises presentations and training sessions and
circulates reading materials that help update Directors on the latest corporate governance and regulatory/legal
issues as well as other current topics (including the Group’s business developments/operations). In addition to
these activities, some Directors also attend external training sessions and presentations.
A summary of each current Director’s professional development initiatives during the Financial Year is set out below:
Category of training topics
Risk Management,
Regulatory
and Corporate
Governance Others
Executive Directors
KUOK Hui Kwong
✓
–
LIM Beng Chee (was re-designated from ED to NED on 1 January 2023)
✓
–
CHUA Chee Wui (was appointed on 1 September 2022)
✓
–
Independent Non-executive Directors
LI Kwok Cheung Arthur
✓
–
YAP Chee Keong
✓
–
LI Xiaodong Forrest
✓
–
ZHUANG Chenchao
✓
–
KHOO Shulamite N K
✓ ✓
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Shangri-La Asia Limited Annual Report 2022
Independent Views and Input to the Board
During the Financial Year, five of the members of the Board (representing 62.5%) were Independent Non-executive
Directors. The strong independent element on the Board supports effective exercise of independent judgement.
Initiatives have been introduced by Chairman to facilitate effective contribution of Directors. In addition to the
four regular board meetings during the Financial Year, Chairman also held three meetings with the Independent
Non-executive Directors (without the presence of Executive Directors and Senior Management) whereby they
could have sufficient time to share their constructive and independent views and raise any concerns.
The Directors Handbook incorporates the terms and guidelines for Directors or members of Board Committees to
seek independent professional advice whenever necessary for the purposes of fulfilling their duties.
Mechanisms are therefore in place to ensure independent views and input are available to the Board.
EXECUTIVE COMMITTEE
The Executive Committee was established by the Board on 21 June 1993. The Executive Committee is delegated
with the power and authority to oversee the Group’s ordinary business, transactions and development. The
Executive Committee’s written terms of reference include its defined powers and duties, except that the following
matters are explicitly reserved for the Board for decision:
(1) constitution and share capital;
(2) corporate objectives and strategy;
(3) corporate policies relating to securities transactions by Directors and senior management;
(4) interim and annual results;
(5) significant investments;
(6) major financings, borrowings and guarantees other than those of ordinary terms and for the ordinary
operations or for general working capital requirements of the Group;
(7) corporate governance and internal controls;
(8) risk management;
(9) major acquisitions and disposals;
(10) material contracts;
(11) Board members and Auditor; and
(12) any other significant matters that will affect the operations of the Group as a whole.
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Members, Meetings Held and Attendance
During the Financial Year, the majority of the Executive Committee’s material decisions were recorded by written
resolutions. The members of the Executive Committee during the Financial Year and up to the date of the Annual
Report were as follows:
Member
Board capacity
during committee
membership
KUOK Hui Kwong (chairman) ED & Chairman
LIM Beng Chee (member until 31 December 2022) ED & Group CEO
CHUA Chee Wui (member since 1 September 2022) ED, Group CFO &
Group CIO
NOMINATION COMMITTEE
The Nomination Committee was established by the Board on 19 March 2012. The Nomination Committee,
amongst other things, considers any proposed change to members or composition of the Board and/or evaluates
the performance of Directors in accordance with the Company’s nomination policy. The written terms of reference
of the Nomination Committee include the following major duties:
(1) to review the structure, size and composition (including the skills, knowledge and experience) of the Board
at least annually and to make recommendations on any proposed changes to the Board to complement the
Company’s corporate strategy;
(2) to identify individuals suitably qualified to become members of the Board and to select or make
recommendations to the Board on the selection of individuals nominated for directorships;
(3) to assess the independence of each newly proposed Independent Non-executive Director and the existing
Independent Non-executive Director on an annual basis or as and when the Nomination Committee
considers necessary;
(4) to evaluate/assess the performance and/or contribution of each Director who is considered or proposed to
be elected or re-elected as a Director;
(5) to make recommendations to the Board on the proposed appointment, designation, election or re-election of
Directors and succession planning for Directors, in particular the Chairman and the CEO;
(6) to make recommendations to the Board on any proposed removal of Directors;
(7) to provide opinions on any proposed election or re-election of persons as Independent Non-executive
Directors at general meetings of the Company and to provide reasons why they consider the nominated
persons to be independent;
(8) if a Director has been serving the Board as an Independent Non-executive Director for more than nine years
and will make himself available for re-election at a general meeting of the Company, to consider if such
Director remains independent and suitable to continue to act as an Independent Non-executive Director and
to make recommendations to the Board accordingly; and
(9) to observe the terms of the Company’s nomination policy and to make recommendations to the Board on
the nomination policy.
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The latest full version of the terms of reference of the Nomination Committee has been posted on the Company’s
corporate website.
Members, Meetings Held and Attendance
During the Financial Year, the majority of the Nomination Committee’s material decisions were recorded by written
resolutions. The members of the Nomination Committee during the Financial Year and up to the date of the Annual
Report were as follows:
Member
Board capacity
during committee
membership
KUOK Hui Kwong (chairman) ED & Chairman
LI Kwok Cheung Arthur INED
LI Xiaodong Forrest INED
KHOO Shulamite N K INED
During the Financial Year, the work performed by the Nomination Committee included:
(i) For the purpose of re-election of the retiring Directors at the 2022 annual general meeting of the Company,
the Nomination Committee:
• assessed and confirmed the independence of all Independent Non-executive Directors;
• evaluated and confirmed the contribution of each of the retiring Directors who offered themselves for
re-election; and
• recommended to the Board to propose the re-election of each of the retiring Directors who offered
themselves for re-election at the 2022 annual general meeting of the Company.
(ii) The Nomination Committee has, on an annual and regular basis, assessed the Board’s composition and
the Directors’ particulars against the parameters set in the nomination policy (including board size, board
diversity policy, skills/knowledge/experience, Directors’ performance review) and recommended that the
structure, size, diversity, and composition of the Board was satisfactory.
(iii) In relation to the proposed new appointment to the Board, the Nomination Committee:
• assessed the record and personal particulars of Mr CHUA Chee Wui; and
• considered the structure, size, diversity, and composition of the Board assuming the appointment was
effected.
(iv) In relation to the changes and/or re-designations of the Board members proposed during the Financial Year,
the Nomination Committee, after due assessment and/or consideration, recommended to the Board the
approval/acceptance of:
• Mr LIM Beng Chee’s relinquishment of the position of Group CEO and his re-designation from ED to
NED on 1 January 2023.
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Nomination Policy
The terms of the nomination policy of the Company in effect during the Financial Year were as follows:
(1) the total number of Directors (excluding their alternates) shall not exceed 20, with at least three
Independent Non-executive Directors and at least one-third of the Board members being Independent
Non-executive Directors;
(2) the Board shall be composed of members with mixed skills and experience, with appropriate qualifications
necessary to accomplish the Group’s business development, strategies, operation, challenges and
opportunities;
(3) each new Director shall complement the existing Board composition to ensure that there is an appropriate
mix of Directors with different abilities and experiences; shall have the required skills, knowledge and
expertise to add value to the Board; and shall be able to commit the necessary time to the position;
(4) each Independent Non-executive Director shall meet the mandatory qualification requirements as set out in
the Listing Rules from time to time;
(5) the Board shall observe the board diversity policy and shall, subject to merit and suitability, continue in its
endeavours to introduce more diversity into the Board, including diversity of age, culture, gender, expertise,
professional background and geographical experience;
(6) the Board shall have the primary responsibility for identifying appropriate candidates to act as new
members of the Board;
(7) Shareholders may also propose candidates for election as a Director provided that the proposal follows the
procedures posted on the Company’s corporate website;
(8) each proposed new appointment, election or re-election of a Director shall be evaluated, assessed and/
or considered against the criteria and qualifications set out in the Company’s nomination policy by
the Nomination Committee which shall recommend its views to the Board and/or the Shareholders for
consideration and determination; and
(9) each removal of a Director shall also be considered by the Nomination Committee which shall recommend
its views to the Board and/or the Shareholders for consideration and determination.
Board Diversity Policy
The Board recognises and believes in the value of diversity across the Group, both at employee level as well as at
the board level, but always underpinned by meritocracy. At board level, the Board continues to bear in mind these
aspirational values in considering the composition of the Board and, subject to merit and suitability, continues in
its endeavours to introduce more diversity into the Board, including diversity of age, culture, gender, expertise,
professional background, and geographical experience.
In respect of gender diversity, the Board comprises 2 female directors (representing 25% of the Board members)
and 6 male directors (representing 75% of the Board members) which exceeds the requirements of HKSE to
appoint at least one director of a different gender on the board.
With delegation by the Board, the Nomination Committee has reviewed and was satisfied with the diversity of the
Board.
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REMUNERATION & HUMAN CAPITAL COMMITTEE
The Remuneration Committee was established by the Board on 17 October 1997 and was re-designated as
the Remuneration & Human Capital Committee with effect from 28 May 2021. The Remuneration & Human
Capital Committee is, amongst other things, delegated with responsibility to review, endorse and/or approve the
remuneration of each Director and the Senior Management in accordance with the Company’s remuneration policy
for Directors and Senior Management. The written terms of reference of the Remuneration & Human Capital
Committee include the following major duties:
(1) to make recommendations to the Board on the Company’s policy and structure for the remuneration of
all Directors and Senior Management and on the establishment of a formal and transparent procedure for
developing remuneration policy;
(2) to determine the remuneration packages of individual Executive Directors and Senior Management,
including benefits in kind, pension rights and compensation payments, including any compensation payable
for loss or termination of their office or appointment, taking into consideration factors such as salaries paid
by comparable companies, time commitment and responsibilities, and employment conditions elsewhere in
the Group;
(3) to make recommendations to the Board on the Directors’ fees and the fees for members of each committee
of the Board;
(4) to review and approve the management’s remuneration proposals with reference to the Board’s corporate
goals and objectives;
(5) to review and approve compensation payable to Executive Directors and Senior Management for any loss or
termination of office or appointment to ensure that it is consistent with contractual terms and is otherwise
fair and not excessive;
(6) to review and approve compensation arrangements relating to dismissal or removal of Directors for
misconduct to ensure that they are consistent with contractual terms and are reasonable and appropriate;
(7) to advise on and review the development and implementation of the Company’s human capital and
resources strategy and policies relating (but not limited) to recruitment, retention, promotion, termination,
training, talent development and building a pipeline of future leaders; and
(8) to review and recommend diversity policies and strategy to the Company to achieve an inclusive and diverse
workforce as appropriate for the business strategy.
The latest full version of the Remuneration & Human Capital Committee’s terms of reference has been posted on
the Company’s corporate website.
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Members, Meetings Held and Attendance
During the Financial Year, the Remuneration & Human Capital Committee held four meetings. The members of the
Remuneration & Human Capital Committee during the Financial Year and up to the date of the Annual Report and
the attendance of each of them at the meetings held during the Financial Year are as follows:
Member
Board capacity
during committee
membership
Meetings
attended/eligible
to attend
KHOO Shulamite N K (chairman) INED
4/4
KUOK Hui Kwong ED & Chairman
4/4
LI Kwok Cheung Arthur INED
4/4
YAP Chee Keong INED
4/4
During the Financial Year, the work performed by the Remuneration & Human Capital Committee included:
(i) assessing the performance of the Executive Directors and Senior Management in the context of the financial
and non-financial performance of the individuals and the Group and its development strategy in the medium
to long term;
(ii) approving the terms of remuneration and/or bonus of the Executive Directors and Senior Management
(including the annual salary review), having considered the financial results of the Group, its growth plans,
the competitive environment among relevant comparator companies for obtaining competent management
talents, and the need to adequately reward outstanding performances;
(iii) recommending to the Board the fees payable to the Non-executive Directors and the members of the Board
committees;
(iv) considering and approving grants of share awards under the Company’s share award scheme to qualified
participants;
(v) reviewing the Group’s human capital initiatives, leadership development programmes and succession
planning; and
(vi) reviewing the Group’s organisation structure.
Remuneration Policy for Executive Directors and Senior Management
The Remuneration & Human Capital Committee has the delegated responsibility to determine the remuneration
packages of the individual Executive Directors and the Senior Management.
The remuneration for the Executive Directors and Senior Management comprises salary, discretionary bonus,
short-term and long-term incentives, and benefits such as medical and life insurance, pensions and/or housing,
and home leave airtickets for expatriate Executive Directors and expatriate Senior Management.
Salaries are reviewed annually. Salary increases of Executive Directors and Senior Management are made where
the Remuneration & Human Capital Committee believes that adjustments are appropriate to reflect performance,
contribution, increased responsibilities and/or by reference to market/sector trends.
In addition to salary, Executive Directors and Senior Management are eligible to receive a discretionary bonus the
amount of which shall be reviewed and approved by the Remuneration & Human Capital Committee which shall
take into consideration factors such as market conditions as well as corporate and individual performances.
In order to attract, retain and motivate executives and key employees serving any member of the Group, Directors
and Senior Management are also eligible to participate in the Company’s share option scheme and share award
scheme. The grant of share options and share awards to Directors and/or Senior Management and the terms
thereto shall be approved by the Remuneration & Human Capital Committee.
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Remuneration of Directors and Senior Management
The Non-executive Directors (including Independent Non-executive Directors) and the members of the Board
committees (other than Executive Directors) were entitled to annual fees that were approved by Shareholders at
the annual general meeting prior to payment. Such annual fees are determined with reference to the level of fees
payable by listed companies in Hong Kong, Singapore or other relevant and comparable markets where applicable,
and the respective level of responsibilities, skills and commitments required of the Non-executive Directors. The
amount of annual fees for the Financial Year and the previous year are as follows:
Annual fee Amount (HKD)
2022 2021
As NED/INED
280,000 196,000
per year of directorship
As Nomination Committee
member
60,000 42,000
per year of membership
As Remuneration & Human
Capital Committee member
60,000 42,000
per year of membership
As Audit & Risk Committee
chairman/member
230,000/200,000 161,000/140,000
per year of chairmanship/
membership
The above change of annual fees reflects the discontinuation of a 30% voluntary fee reduction introduced in 2020
due to Covid-19.
Details of the remuneration paid to each of the Directors for the Financial Year and the previous year are set out in
Note 32 to the Financial Statements.
The remuneration (including bonus, allowances and other benefits) paid to Senior Management (which included
certain Executive Directors) for the Financial Year are set out below (by band):
Range of remuneration (HKD) Number of members of Senior Management
4,000,001 to 6,000,000 1
6,000,001 to 8,000,000 1
8,000,001 to 10,000,000 3
12,000,001 to 14,000,000 1
16,000,001 to 18,000,000 1
7
Diversity and Inclusion in Workforce
The Company strives to ensure that our workplaces are free from discrimination with respect to gender, race,
religion, disability, marital or family status, sexual orientation, or any other personal characteristics. In accordance
with the Company’s policy on Equal Opportunity and Respect, employment decisions are made based on merit
and all colleagues are expected to treat each other with courtesy, consideration, and respect. The Company is also
committed to making reasonable accommodations in the workplace for religious observances.
Gender ratio of the workforce (including Senior Management) as at Year End are set out below and details of the
Company’s diversity across the workforce are set out in the Sustainability Report.
Gender ratio of the workforce (including Senior Management) as at Year End
17,401
43%
23,345
57%
Gender
MaleFemale
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AUDIT & RISK COMMITTEE
The Audit & Risk Committee was established by the Board on 25 August 1998. The Audit & Risk Committee shall,
amongst other things, supervise the financial reporting and the internal controls within the Group. The written
terms of reference of the Audit & Risk Committee include the following major duties:
(1) to make recommendations to the Board on the appointment, re-appointment and removal of the Auditor,
to approve the remuneration and terms of engagement of the Auditor, and to consider any questions of its
resignation or dismissal;
(2) to review and monitor the Auditor’s independence and objectivity and the effectiveness of the audit process
in accordance with applicable standards;
(3) to review and monitor the integrity of the Company’s interim and annual financial statements, reports and
accounts, and to review significant financial reporting judgements contained therein, before submission to
the Board;
(4) to review the Company’s financial controls, risk management and internal control systems;
(5) to discuss the risk management and internal control systems with management to ensure that management
has performed its duty to have effective systems;
(6) to consider major investigation findings on risk management and internal control matters as delegated by
the Board or on its own initiative and management’s response to these findings;
(7) to review the internal audit programme to ensure co-ordination between the internal and the external
auditors, and to review and monitor its effectiveness;
(8) to review the Group’s financial and accounting policies and practices;
(9) to report to the Board on the matters set out in the terms of reference and, in particular, the matters
required to be performed by the Audit & Risk Committee under the Listing Rules;
(10) to review whistleblowing policies or arrangements established for employees of and/or those who deal
with the Group who may, in confidence, raise concerns about possible improprieties in financial reporting,
internal controls or other matters; and
(11) to oversee, monitor and observe the Company’s corporate governance matters.
The latest full version of the terms of reference of the Audit & Risk Committee has been posted on the Company’s
corporate website.
The whistleblowing and whistleblower protection policy (for external users) has also been posted on the
Company’s corporate website for external users’ use.
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Members, Meetings Held and Attendance
During the Financial Year, the Audit & Risk Committee held four meetings. The members of the Audit & Risk
Committee during the Financial Year and up to the date of the Annual Report and the attendance of each of them
at the meetings held during the Financial Year are as follows:
Member
Board capacity
during committee
membership
Meetings attended/
eligible to attend
YAP Chee Keong (chairman) INED
4/4
LI Kwok Cheung Arthur INED
3/4
KHOO Shulamite N K INED
4/4
During the Financial Year, the work performed by the Audit & Risk Committee included:
(i) reviewing the Group’s financial controls, internal controls and risk management systems;
(ii) overseeing and supervising the internal audit functions and programmes of the Group;
(iii) reviewing the financial and accounting policies and practices of the Group;
(iv) verifying and confirming the Auditor’s independence and objectivity;
(v) making recommendations on the remuneration payable to the Auditor for the Financial Year and the
re-appointment of the Auditor;
(vi) reviewing financial and audit issues with the Auditor;
(vii) reviewing interim and annual financial statements for approval by the Board;
(viii) reviewing the reports issued by the Group’s internal audit and risk management teams and discussing the
same with the Group’s management;
(ix) reviewing significant legal matters and litigation cases of the Group;
(x) reviewing connected transactions and continuing connected transactions involving the Group; and
(xi) overseeing the Company’s corporate governance functions with reference to the Company’s terms of
reference for such corporate governance functions.
The Audit & Risk Committee was satisfied with its review for the Financial Year and concluded that no material
issues were identified that needed to be brought to the particular attention of the Board or the Shareholders.
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MANAGEMENT COMMITTEES
Management committees have been set up to oversee the implementation of corporate governance in our
daily business. There are three management committees in our Group, namely the Environmental, Social and
Governance Committee, the Risk Management Committee and the Compliance Committee. Each committee
oversees a crucial area in corporate governance and has its own charter or terms of reference. The conclusions
from these committees are regularly reported to the Board via the Audit & Risk Committee, and they assist the
Board to evaluate the effectiveness of systems in place in each respective area of governance.
Corporate Governance
Board of Directors (Highest Governance Body)
Audit & Risk Committee (Board Oversight)
Integrated Assurance Framework
Guided by
Lines of Defence
Management Oversight
Environmental, Social
and Governance
Committee
Risk Management
Committee
Compliance Committee
Line 1 :
Hotels &
Properties
Line 2 :
Regions &
Corporate HQ
Line 3 :
Group Internal
Audit
Line 4 :
External
Auditors
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Risk Management
A high standard of corporate governance is vital in safeguarding long-term shareholder value. The Board is
committed to maintaining a sound and effective risk management and internal control system as the cornerstone
for good corporate governance.
The Board has overall responsibility for risk governance and the effectiveness of internal controls in the Group’s
business. The ARC assists the Board in overseeing the Group’s audit and risk management processes and
assessing the adequacy and effectiveness of the Group’s risk management system including the underlying
framework and processes for identification and management of material risks.
The ARC reports to the Board on material matters, findings and recommendations pertaining to risk management.
In addition, the ARC reviews the effectiveness of the Group’s internal control and compliance systems on an
ongoing basis as required by the Corporate Governance Code released by the HKSE and in accordance with the
risk appetite defined by the Board. The review covers all material controls, including financial, operational and
compliance controls.
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Shangri-La Asia Limited Annual Report 2022
Management is responsible for the effective execution of the risk management strategy as endorsed by the Board,
by implementing policies and processes to facilitate the achievement of business plans and goals. Management
also ensures that key risks are proactively identified, addressed by taking appropriate actions and monitored on
an ongoing basis. The Risk Management Committee, attended by executives from key functions, meets quarterly
to review the Group’s risk profile, to ensure risk mitigation plans are in place and appropriate, and to monitor their
effectiveness.
Shangri-La’s Integrated Assurance Framework (“IAF”)
Since 2018, we have progressively implemented an integrated assurance framework to provide a more holistic and
robust basis of assurance on the adequacy and effectiveness of our risk management and internal control systems.
The framework identifies risks from two perspectives: a top-down view on our strategic and group-wide risks, and
a bottom-up approach to recognize and aggregate risks at each region, property and business unit.
A 5-step approach is embedded within the IAF to establish a structured risk management process throughout the
organization. It is important to note that the IAF is designed to manage rather than eliminate all potential risks
of failure in achieving business objectives, and is aimed at providing reasonable, instead of absolute, assurance
against material risks.
2. Risk Assessment / Prioritisation
• Analyse and prioritise risks
based on their likelihood of
occurrence and potential
consequences
1. Risk Identification
• Identify risks that may
hinder the achievement
of business objectives
5. Reporting
• Report and review
trends and residual risks
through analysis of
management reports,
incident reporting and
IAF dashboards
4. Monitoring
• Perform assurance activities including:
-Management self-assessments
-Audits conducted by Group Internal Audit
3. Risk Treatments
• Consider and determine risk treatments including:
-Mitigation (Internal controls)
-Transfer (Insurance)
-Acceptance (Do nothing)
-Avoidance (Terminate)
Enterprise
Risk
Management
First
Accountability
& Ownership
Integrated
Audit
External
Audit
Independent
Assurance
Second
Board of Directors
Audit & Risk Committee
Third Fourth
Standardisation,
Consistency &
Monitoring
Lines of Defence
Regions, Business Lines,
Subject Matter Experts
& Corporate Functions
Hotels, Investment
Properties &
Functions
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Adopting the key concept of IAF, the Group has structured its risk management governance into four lines of
defence with the following roles and responsibilities:
• The first line of defence is where the hotels and properties are empowered to manage day-to-day
operational risks of their businesses. Hotel and property general managers, together with their executive
committees, are collectively responsible to regional leaders in the management of risks at the local level
and the compliance with Group-wide policies and procedures. They are required to report to their respective
regional headquarters and corporate headquarters on material changes in risk exposure and deviations from
existing controls, if any, on an ongoing basis.
• The second line of defence comprises the regional and corporate headquarters divisions and functions. Their
primary responsibility is to formulate policies and procedures which are in line with the Group’s strategy.
Corporate headquarter divisions ensure the standardisation and consistency of policies and procedures
and the effective monitoring of their compliance across the regions, hotels and properties. Regional
headquarters assist corporate headquarters in ensuring that hotels and properties implement and comply
with the Group’s global strategies, policies, programmes and initiatives. The respective heads of corporate
functions are appointed as risk owners of the Group’s key risks. These risk owners are responsible for
ensuring that the key risks identified by the Group are being managed and monitored effectively.
• The third line of defence is formed by the Group Internal Audit Department (“GIA”). GIA carries out
independent integrated audits and reports the results to the ARC. GIA is responsible for assessing
the robustness of the controls maintained by the first and second lines of defence, as well as making
recommendations to Senior Management and the ARC to improve the overall effectiveness of internal
controls. In addition, GIA also administers the enterprise risk management function by facilitating the
progressive implementation of the IAF and the 5-step risk management methodology across the Group.
• The fourth line of defence is the Group’s external auditors. The Group’s external auditor reports the results
of the statutory audit and provides an independent view on the status of the internal controls of the Group
to the ARC. From time to time, external professionals are engaged to perform system penetration tests, food
safety audits, and other assurance and advisory services.
• Beyond the four lines of defence, the Board remains ultimately responsible for the adequacy and
effectiveness of risk management and internal control systems. The Board, through the ARC provides
guidance to management to define the risk appetite and tolerance of the Group and to ensure that the
Group’s risk management and internal controls are aligned with its strategy. The Board considers the work,
findings and advice of the ARC in forming its own view on the effectiveness of the respective systems. The
ARC members report to the Board of Directors in the quarterly Board meetings.
• The CFO has also been appointed as the Company’s chief risk officer. In that role, he oversees the risk
management and governance process, reviews regularly the risk profile of the Group and ensures that all
risks faced by the Company are properly identified.
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Policies and Guidelines
Throughout 2022, key corporate policies, manuals, procedural guidelines and delegation of authority have been
periodically reviewed to ensure the relevance, adequacy and effectiveness of controls deployed throughout the
Group, including our Headquarters, regional offices, hotels and properties that are owned and/or managed.
These policies and guidelines are communicated to relevant parties via electronic circulars and are accessible
via the Group’s Intranet. In addition, the respective HQ divisions and functions conduct periodic audits to ensure
compliance at the region and hotel levels. Audit findings and best practices identified are shared as lessons learnt
and for performance management.
Code of Conduct and Ethics
• The Group maintains a Code of Conduct and Ethics (“Code”) which underpins the values and principles with
which the Company conducts its business. The Code sets high standards of integrity and ethical behaviour
required of all officers, employees and directors of the Group, its subsidiaries, business units and controlled
affiliates, as well as employees of properties managed by the Group. Key areas covered by the Code include
Protection of Group Assets, Conflict of Interest, Preventing of Bribery and Corruption, Privacy and Data
Protection, etc. All employees have been provided with a copy of the Code during onboarding and are
required to confirm compliance with the Code.
• In particular, the section “Protecting Confidential Information” requires that employees maintain and protect
the confidentiality of all non-public information relating to the Group’s affairs (“Confidential Information”).
Employees must not disclose Confidential Information to outside parties unless authorised to do so by the
Group or unless such disclosure is required by law. Employees should not use Confidential Information for
any other purpose other than work-related matters. Employees must at all times take reasonable precaution
to safeguard inadvertent disclosure of Confidential Information.
• The Compliance Committee, chaired by CFO, oversees the implementation of the Group’s Code of Conduct
& Ethics and other relevant policies. Members of the Committee include senior management and leadership
of related functions. The Committee meets on a monthly basis covering potential compliance matters
related to four workstreams – whistleblowing, grievances, fraud and litigation. These workstreams have been
set up to handle compliance cases based on their nature. Material matters arising are reported regularly to
the ARC.
Handling and Dissemination of Inside Information
• In addition to the aforementioned “Protecting Confidential Information” section in the Code of Conduct and
Ethics, the Group has standard procedures to handle the reporting of financial and operating performance to
its shareholders, the issuing of public announcements and addressing the inquiries of its Shareholders and
investors. These procedures are detailed under the heading “Shareholder and Investor Communications” in
this report.
• Moreover, Directors and relevant executives of the Group are required to observe the Securities Principles.
The Board has adopted a Directors Handbook which contains key responsibilities and legal obligations
under the Listing Rules and the SFO. Directors are reminded to take reasonable measures to ensure that
proper safeguards exist to prevent any breach of applicable rules.
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Whistleblowing Policy
The Whistleblowing Policy is administered by GIA. The Group has posted on the Group’s corporate website a
Whistleblowing and Whistleblower Protection Policy which aims to:
• encourage business associates and employees to report suspected wrongdoings as soon as possible with
the confidence that their concerns will be taken seriously and investigated as appropriate, and that their
confidentially will be respected;
• provide avenues for business associates and employees to raise concerns and define a way to handle these
concerns;
• enable the Group’s management to be informed at an early stage about alleged acts of misconduct;
• reassure business associates and employees that they can raise genuine concerns in good faith without fear
of reprisals, even if they turn out to be mistaken;
• help develop a culture of openness, accountability and integrity;
• ensure all reported cases will be properly documented. The documentation includes results of the initial
assessment, details and procedures of the investigation undertaken (if any) and the conclusion as well as
the final actions taken; and
• ensure all reported cases will be forwarded to the Chief Auditor who is also the Head of GIA for
investigation. A working committee comprising CEO, Regional CEOs, CFO, CIO, COO, CHRO, General
Counsel and the Chief Auditor will review the investigation process and outcome. The working committee
will provide a quarterly summary of all reported cases and their investigation results to the ARC.
Key Risks & Focus Areas
The Group has revisited its risk landscape and identified the following key risks under the Integrated Assurance
Framework:
Safety & Security
Legal, Regulatory &
Compliance Human Capital Supply Chain Systems & Technology
• Food safety
• Fire life safety
• Physical security
• Natural disasters
• Personal data
privacy
• Fraud and corruption
• Land titles and
operating licenses
• Succession
• Capability
development
• Disruption of key
supply chains
• Over-reliance
on single source
suppliers
• Supplier fraud
• Cybersecurity
• Disruptive technology
or innovation
Commercial &
Economics Reputation Concentration Investments Finance
• Sales & distribution
channels
• Revenue
optimization
• Customer
experience and
expectations
• Brand management
• Crisis management
• Business
dependency on
certain markets
• Investment risks &
rewards
• Geopolitical factors
• Macroeconomic
factors
• Interest and foreign
exchange rate
fluctuations
• Credit and liquidity
• Financial reporting
and controllership
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Shangri-La Asia Limited Annual Report 2022
Group Internal Audit
The Group Internal Audit Department enhances and protects organizational value through the provision of
independent, objective assurance on the adequacy and effectiveness of the internal control systems throughout
the Group.
GIA performs reviews of key operational and financial systems on a continuous basis and aims to cover all major
hotels and properties within every division on a rotational basis. This is documented in the annual audit plan which
is approved by the ARC. The Chief Auditor reports functionally to the ARC and periodically communicates the
scope of work performed and its results to the ARC.
Board Confirmation of the Effectiveness of Risk Management and Internal Control Systems
Internal controls, which are documented in policies and procedures, are designed to identify and manage risks that the
Group may be exposed to, thereby providing reasonable assurance regarding the achievement of corporate objectives.
Internal financial systems also allow the Board to monitor the Group’s overall financial position, to protect the Group’s
assets and to mitigate against material financial misstatement or loss. Through the ARC, the Board has conducted
reviews of the effectiveness of the systems of internal control of the Group. The reviews cover all material controls,
including financial, operational and compliance controls and risk management functions.
The ARC has received management’s annual confirmation that the Company’s risk management and internal
control systems are effective and adequate for the Financial Year. The annual review conducted by the ARC has not
identified any significant control failings or weaknesses, and it concurred with the management’s confirmation.
The ARC has also reviewed the adequacy of resources, staff qualifications and experience of the Company’s
accounting, internal audit and financial reporting functions. Based on the duties performed by the ARC and its
recommendation, the Board confirmed that the Company’s risk and management and internal control systems
were effective and adequate for the Financial Year; and the Group’s processes for financial reporting and its
compliance with the Listing Rules were effective.
EXTERNAL AUDITORS
The Company’s Auditor is PricewaterhouseCoopers, Hong Kong.
For the Financial Year, the external auditors (including their other member firms) that provided audit and non-audit
services to the Group are as follows:
Services
Fees charged
(USD’000)
PricewaterhouseCoopers
Audit services (including interim review)
1,674
Non-audit services
(a) tax services
136
(b) other advisory services
5
Total
1,815
Other auditors
Audit services
470
Non-audit services
(a) tax services
27
(b) other advisory services
37
Total
534
Auditor
The Financial Statements have been audited by PricewaterhouseCoopers who will retire and, being eligible, offer
themselves for re-appointment as the Auditor at the Annual General Meeting.
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Shangri-La Asia Limited Annual Report 2022
Responsibility for Financial Statements
The Directors acknowledge their responsibility for the preparation of the Financial Statements. In preparing the
Financial Statements, the generally accepted accounting standards in Hong Kong have been adopted, appropriate
accounting policies have been used and applied consistently, and reasonable and prudent judgements and
estimates have been made.
The Board is not aware of any material uncertainties relating to events or conditions that may cast significant
doubt over the Group’s ability to continue as a going concern. Accordingly, the Board has continued to adopt the
going concern basis in preparing the Financial Statements.
The statement of the Auditor in regard to its reporting responsibilities on the Financial Statements is set out in the
section entitled “Independent Auditor’s Report” in the Annual Report.
GENERAL MEETINGS
During the Financial Year, the following general meeting of Shareholders was/were held:
• annual general meeting (virtual meeting) held on 27 May 2022 at 10:30 am in Hong Kong
All proposed Shareholders’ resolutions put to the above general meeting were resolved by poll vote and were duly
passed. The vote tally of each such resolution was set out in the Company’s announcement released on the day of
the general meeting.
The Auditor attended the general meeting. The attendance of the members of the Board and/or each Board
committee at the general meeting is as follows:
Attended in the capacity of a member of
Meeting date: 27 May 2022 Board
Designation on
meeting date
Nomination
Committee
Remuneration
& Human
Capital
Committee
Audit & Risk
Committee
KUOK Hui Kwong
✓
ED & Chairman
✓ ✓
LIM Beng Chee (re-designated from ED to NED
on 1 January 2023)
✓
ED & Group CEO
CHUA Chee Wui (appointed as ED on 1
September 2022)
N /A N /A
LI Kwok Cheung Arthur
✓
INED
✓ ✓ ✓
YAP Chee Keong
✓
INED
✓ ✓
LI Xiaodong Forrest
✓
INED
✓
ZHUANG Chenchao
✓
INED
KHOO Shulamite N K
✓
INED
✓ ✓ ✓
Total attendance 7/ 7 4/4 4/4 3/3
Note: Mr CHUA Chee Wui attended the 2022 annual general meeting in the capacity of a member of Senior Management.
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Shangri-La Asia Limited Annual Report 2022
GENERAL MANDATES GRANTED TO DIRECTORS
New Issue Mandate
At the Company’s annual general meeting in 2022, Shareholders granted to the Directors a general mandate to
issue new Shares (subject to the requirements of the Listing Rules) representing not more than 20% of the issued
Shares as at the date of the annual general meeting.
Up to the date of the Annual Report, the general mandate has not been exercised. The general mandate will expire
not later than the conclusion of the Annual General Meeting.
The approval of a similar and refreshed general mandate will be sought from Shareholders at the Annual General
Meeting. Details of the mandate have been set out in the notice convening the Annual General Meeting which is
issued simultaneously with the Annual Report.
Share Repurchase Mandate
At the Company’s annual general meeting in 2022, Shareholders granted to the Directors a general mandate to
repurchase Shares (subject to the requirements of the Listing Rules) representing not more than 10% of the issued
Shares as at the date of the annual general meeting.
Up to the date of the Annual Report, the general mandate has not been exercised. The general mandate will expire
not later than the conclusion of the Annual General Meeting.
The approval of a similar and refreshed general mandate will be sought from Shareholders at the Annual General
Meeting. Details of the mandate have been set out in the notice convening the Annual General Meeting and a
separate circular of the Company, both of which are issued simultaneously with the Annual Report.
Repurchase, Sale or Redemption of the Company’s Listed Securities
During the Financial Year, save for the purchase of shares in the Company for the purpose of the Company’s share
award scheme as disclosed in Note 18 to the Financial Statements, neither the Company nor any of its subsidiaries
has repurchased, sold or redeemed any of the listed securities of the Company.
DIVIDEND POLICY
The Board considers that the Company’s dividend policy should be based on the profits of the Group that were
not affected by exceptional items (ie, based on operating/recurring profits). Given the capital expenditure
requirements to support the Group’s expansion plans, the Board was of the view that 50% to 55% of operating/
recurring profits could be a general yet non-mandatory yardstick/benchmark for the Board’s consideration as
payment of dividends to Shareholders.
The Company did not pay/propose dividend for the Financial Year.
The Board reviews the Company’s dividend policy regularly to ensure that the policy is in line with market practice
and is appropriate considering the Group’s ongoing development plans.
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Shangri-La Asia Limited Annual Report 2022
INVESTOR RELATIONS
Shareholders’ Right to Propose a Person for Election as a Director
Shareholders have the right to propose a person for election as a Director at the Company’s general meeting.
Detailed procedures for this right have been posted on the Company’s corporate website, under the heading
“Procedures for Shareholders to Propose a Person for Election as a Director” in the corporate governance section.
Shareholders’ Right to Request to Convene a General Meeting
Shareholders also have the right to request the Board to convene a general meeting of the Company. Detailed
procedures for this right have been posted on the Company’s corporate website under the heading “Procedures
for Shareholders’ Requests to Convene a General Meeting” (“Procedures to Convene General Meeting”) in the
corporate governance section. The major terms of the Procedures to Convene General Meeting are summarised as
follows:
(1) Holder(s) of Shares who are registered in the Company’s registers of members as registered Shareholder(s)
(“Requisitionist(s)”) may submit a written request (“Requisition”) to convene a special general meeting
provided that the Requisitionist(s) is/are holding not less than one-tenth of the paid-up capital of the
Company as at the date of the request.
(2) The Requisition must:
(a) state the purpose(s) of the special general meeting, including any resolutions proposed to be passed
at such meeting and, where appropriate, be accompanied by all necessary materials and information
for the purposes of the subject matter of the special general meeting;
(b) state the full name of each Requisitionist;
(c) state the number of the Shares held by each Requisitionist as at the date of the Requisition;
(d) state the valid contact details of each Requisitionist, including phone number and email address;
(e) be signed by each Requisitionist;
(f) be accompanied with a sum reasonably sufficient to meet the Company’s expenses in giving any
notice or statement to Shareholders; and
(g) be delivered to the Company at its registered office in Bermuda as well as its principal place of
business in Hong Kong and shall be addressed to the attention of the Company’s company secretary.
(3) If the Board receives a due Requisition:
(a) the Board shall convene a special general meeting within 21 calendar days immediately after the
Requisition is duly lodged with the Company in accordance with the Procedures to Convene General
Meeting; and
(b) the Board shall simultaneously issue notice and information of the special general meeting
(specifying the place, date and hour of the meeting and the general nature of the business to be
considered) to all Shareholders subject to and in accordance with the Bye-Laws, the Listing Rules and
the Bermuda Companies Act to convene the meeting which shall be held at least 14 clear calendar
days (excluding the day of notice and the day it is deemed to have been served as well as the day of
the meeting) after the notice.
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Shangri-La Asia Limited Annual Report 2022
(4) If the Board fails to convene a special general meeting in accordance with (3)(a) hereinabove, the
Requisitionist(s) or any of them may convene a special general meeting on the subject matter of the
Requisition provided that:
(a) the aggregate voting rights of the Shares registered in the name of such Requisitionist(s) convening
the special general meeting represent more than one half of the total voting rights of the Shares
registered in the name of all the Requisitionist(s); and
(b) such Requisitionist(s) shall issue proper notice of the special general meeting to all Shareholders in a
similar manner to that set out in (3)(b) hereinabove to convene a special general meeting, and such
meeting shall be held within three calendar months immediately after the Requisition is duly lodged
with the Company in accordance with the Procedures to Convene General Meeting.
(5) The Board shall have the absolute right to request the Requisitionist(s) to provide further materials or
information in relation to the Requisition that the Board considers necessary to facilitate the convening, if
appropriate, of the special general meeting as requested. The Requisitionist(s) shall provide such further
materials and information that the Company may request in a timely fashion. The Board may reject a
Requisition that does not fulfil any conditions as set out in the Procedures to Convene General Meeting, or if
a special general meeting is, in the Board’s reasonable and absolute discretion, not appropriately requested
to be convened, and the Board shall inform the Requisitionists within 21 calendar days therefrom that the
request under the Requisition will not be progressed.
Shareholder and Investor Communications
The Company recognises the importance of upholding and maintaining transparency of information for the
Shareholders and the investor community and is committed to enhancing long-term shareholder value through
regular communication and meaningful engagement with the Shareholders. The Company maintains a shareholder
communication policy which sets out (a) the framework in place to ensure that Shareholders are provided with
ready, equal and timely access to balanced and comprehensible information, and (b) the communication channels
available for Shareholders to express views and engage actively with the Board. The policy has been posted on the
Company’s corporate website.
During the Financial Year, the Company reported on its financial and operating performance to Shareholders
through interim and annual reports and also published a sustainability report. The 2022 annual general meeting
was held on 27 May 2022 and served as a primary forum for Shareholders to communicate with the Board and for
the Board to solicit and understand the views of Shareholders. Directors and Senior Management were available at
the meeting to answer questions from Shareholders relating to the affairs and operations of the Group.
In addition, eight analyst briefings in total were held subsequent to the interim and the final results
announcements at which appropriate Executive Directors, members of Senior Management and the investor
relations officer were available to answer queries on the Group’s results and business update. Materials presented
by the Company in the form of presentation slides at such briefings were made available on the Company’s
corporate website. The Company also issued press releases on news and business initiatives considered to be of
interest to Shareholders and the investor community and copies were made available on the Company’s corporate
website.
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Shangri-La Asia Limited Annual Report 2022
The Company makes available a wide range of information in relation to the Group to the Shareholders and the
investor community via the Company’s corporate website, including:
(1) interim and final results presentation materials;
(2) periodic business updates presentation materials;
(3) press releases;
(4) corporate governance policies;
(5) sustainability reports and other community and social impact reporting; and
(6) enquiry channels through which Shareholders can connect with the Company.
The Board is therefore of the view that the implementation and effectiveness of the shareholders communication
policy during the Financial Year was satisfactory.
Key Dates for Shareholders in 2023
The key dates are set out in the section entitled “Corporate Information” in the Annual Report.
Constitutional Documents
There was no change in the Company’s constitutional documents during the Financial Year.
PUBLIC FLOAT
Based on the information recorded in the registers required to be kept by the Company under Sections 336 and
352 of the SFO or otherwise notified to the Company and within the knowledge of the Directors:
(1) as at Year End, the public float of the Shares made up 47.01% or a capitalisation of approximately HKD10.79
billion based on the closing price of the Shares as at Year End; and
(2) a sufficient public float of the Shares as required by the Listing Rules has been maintained during the
Financial Year and the period thereafter up to the date of the Annual Report.
Financial Report
INDEPENDENT AUDITOR’S REPORT
101
Shangri-La Asia Limited Annual Report 2022
To the Shareholders of Shangri-La Asia Limited
(incorporated in Bermuda with limited liability)
OPINION
What we have audited
The consolidated financial statements of Shangri-La Asia Limited (the “Company”) and its subsidiaries (the
“Group”), which are set out on pages 107 to 227, comprise:
• the consolidated statement of financial position as at 31 December 2022;
• the consolidated statement of profit or loss for the year then ended;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated cash flow statement for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information.
Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position
of the Group as at 31 December 2022, and of its consolidated financial performance and its consolidated cash flows
for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the
Hong Kong Institute of Certified Public Accountants (“HKICPA”) and have been properly prepared in compliance
with the disclosure requirements of the Hong Kong Companies Ordinance.
BASIS FOR OPINION
We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the HKICPA’s Code of Ethics for Professional Accountants
(“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.
Financial Report
INDEPENDENT AUDITOR’S REPORT
102
Shangri-La Asia Limited Annual Report 2022
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matters identified in our audit are summarised as follows:
• Impairment assessment of hotels
• Valuation of investment properties
Key Audit Matter How our audit addressed the Key Audit Matter
Impairment assessment of hotels
Refer to note 2.9 (Summary of significant accounting
policies), note 4(a) (Critical accounting estimates and
assumptions), note 7 (Property, plant and equipment),
note 9 (Leases), and note 29 (Expenses by nature) to
the consolidated financial statements.
The Group holds equity interests in a number of hotel
properties around the world. The carrying values of the
Group’s hotel properties were included in the property,
plant and equipment and rights of use assets in the
consolidated statement of financial position as at
31 December 2022.
Management considers each hotel as a separate
cash-generating unit (“CGU”) and has carried out
assessments on each of the hotels’ carrying amounts
to identify whether there are indicators for impairment
or reversal of impairment. The recoverable amount is
determined as the higher of the CGU’s value-in-use
and fair value less costs of disposal. External valuations
on hotels by independent professional valuers are
obtained when the internal assessments using
value-in-use indicate potential impairment, if any.
Based on the impairment assessments carried out
by management during the year ended 31 December
2022, no impairment provision was charged against
the consolidated statement of profit or loss during the
year ended 31 December 2022.
We focused on this area as the impairment assessment
involves significant judgements and estimation
uncertainty about future business performance.
Our audit procedures in relation to management’s
impairment assessment included:
– Understood management’s controls and processes
for impairment assessment of hotels and assessed
the inherent risk of material misstatement by
considering the degree of estimation uncertainty
and other inherent risk factors;
– Evaluated management’s future cash flow
forecasts and the processes by which they were
drawn up, including assessment of the revenue
growth rate and occupancy rate assumptions
applied in the forecasts and testing the underlying
calculations and comparing them to the latest
Board approved budgets, the actual results of the
prior period and economic and industry forecasts
on a sample basis;
– Assessed the country-specific discount rates with
reference to market data or our in-house valuation
experts;
– Considered the potential impact of reasonably
possible downside changes of the key
assumptions on management’s impairment
assessment on a sample basis;
– Assessed the adequacy of the disclosures related
to the impairment assessment of hotels in the
context of HKFRS disclosure requirements.
Based on our work and the evidence obtained, we found
the significant judgements and estimates applied by
management in the impairment assessment of hotels
were supportable by evidence obtained and procedures
performed.
Financial Report
103
Shangri-La Asia Limited Annual Report 2022
Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of investment properties
Refer to note 2.6 (Summary of significant accounting
policies), note 4(b) (Critical accounting estimates and
assumptions), note 8 (Investment properties) and
note 12 (Interest in associates and amounts due from
associates) to the consolidated financial statements.
The Group holds equity interests in a number of
investment properties around the world. The fair
values of investment properties at 31 December 2022
were supported by property valuations carried out by
independent firms of professional valuers engaged by
the Group or the relevant associates. For completed
properties, the valuation methods were based on the
income capitalisation approach and direct comparison
approach, which required judgement and estimates on
open market rents, capitalisation rates and occupancy
rates. For properties under construction, the residual
approach was used and significant judgement and
estimates applied in the valuations also included the
estimated costs to completion and allowance for
contingencies.
The existence of significant judgement and estimates
in the property valuations, and the size of the Group’s
investment property portfolio warrant specific audit
attention to this area.
Our audit procedures in relation to valuation of
investment properties held by the Group’s subsidiaries
and associates included:
– Understood management’s controls and processes
for determining the valuation of investment
properties and assessed the inherent risk of
material misstatement by considering the degree
of estimation uncertainty and other inherent risk
factors;
– Evaluated the independent professional valuers’
competence, capabilities and objectivity;
– Considered the appropriateness and consistency
of methodologies used in the property valuations
based on our knowledge of the industry and
market practice;
– Assessed the reasonableness of the key
assumptions adopted in the property valuations by
comparing them to recent lettings of the Group’s
investment properties, actual occupancy rates
achieved, recent market transactions, industry
reports, the Group’s budgets and actual costs
incurred for properties under construction, key
assumptions used in the prior year and with
involvement of our in-house valuation experts on
a sample basis;
– Checked, on a sample basis, the accuracy and
relevance of the valuation input data on existing
leases by agreeing the rental income and lease
terms to the signed lease agreements.
– Assessed the adequacy of the disclosures related
to the valuation of investment properties in the
context of HKFRS disclosure requirements.
Based on our work and the evidence obtained, we found
the methodologies used and key assumptions adopted in
the valuation of investment properties were supportable
by evidence obtained and procedures performed.
Financial Report
INDEPENDENT AUDITOR’S REPORT
104
Shangri-La Asia Limited Annual Report 2022
OTHER INFORMATION
The directors of the Company are responsible for the other information. The other information comprises all of the
information included in the annual report other than the consolidated financial statements and our auditor’s report
thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF DIRECTORS AND THE AUDIT & RISK COMMITTEE FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
The directors of the Company are responsible for the preparation of the consolidated financial statements that give
a true and fair view in accordance with HKFRSs issued by the HKICPA and the disclosure requirements of the Hong
Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
The Audit & Risk Committee is responsible for overseeing the Group’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. We report our opinion solely to you, as a body, in accordance with Section 90 of the Companies Act
1981 of Bermuda and for no other purpose. We do not assume responsibility towards or accept liability to any other
person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
Financial Report
105
Shangri-La Asia Limited Annual Report 2022
As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with the Audit & Risk Committee regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Audit & Risk Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
Financial Report
INDEPENDENT AUDITOR’S REPORT
106
Shangri-La Asia Limited Annual Report 2022
From the matters communicated with the Audit & Risk Committee, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Chan Chiu Kong, Edmond.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 24 March 2023
Financial Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
107
Shangri-La Asia Limited Annual Report 2022
As at 31 December
2022 2021
Note USD’000 USD’000
ASSETS
Non-current assets
Property, plant and equipment
7 4,171,457 4,634,879
Investment properties
8 1,724,867 1,758,979
Right-of-use assets
9 1,074,681 1,174,309
Intangible assets
10 108,804 110,024
Interest in associates
12 4,124,967 4,341,708
Deferred income tax assets
25 86,534 73,484
Financial assets at fair value through
other comprehensive income
13 3,177 7,364
Financial assets at fair value through profit or loss
13 12,902 12,626
Derivative financial instruments
23 74,975 1,949
Other receivables
14 13,488 14,882
11,395,852 12,130,204
Current assets
Inventories
31,378 28,956
Properties for sale
16 51,177 74,976
Accounts receivable, prepayments and deposits
15 209,026 200,803
Amounts due from associates
12 107,942 147,987
Derivative financial instruments
23 58,253 2,793
Financial assets at fair value through profit or loss
13 13,884 17,251
Short-term deposits with original maturities over 3 months
17 12,992 39,326
Cash and cash equivalents
17 753,002 745,540
1,237,654 1,257,632
Assets of disposal group classified as held for sale
– 86,431
1,237,654 1,344,063
Total assets
12,633,506 13,474,267
EQUITY
Capital and reserves attributable to owners of the Company
Share capital and premium
18 3,201,995 3,201,995
Shares held for share award scheme
18 (6,111) (2,858)
Other reserves
20 568,847 1,073,259
Retained earnings
1,489,310 1,591,897
5,254,041 5,864,293
Non-controlling interests
24 170,474 185,571
Total equity
5,424,515 6,049,864
Financial Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
108
Shangri-La Asia Limited Annual Report 2022
As at 31 December
2022 2021
Note USD’000 USD’000
LIABILITIES
Non-current liabilities
Bank loans
21 3,527,212 3,400,972
Fixed rate bonds
22 1,132,761 1,124,794
Derivative financial instruments
23 7,700 25,507
Amounts due to non-controlling shareholders
24 – 46,550
Long term lease liabilities 9
518,960 570,726
Deferred income tax liabilities
25 295,490 303,768
5,482,123 5,472,317
Current liabilities
Accounts payable and accruals
26 579,222 614,869
Contract liabilities
27 89,412 140,823
Short term lease liabilities 9
44,729 48,072
Amounts due to non-controlling shareholders
24 51,779 50,018
Current income tax liabilities
6,113 4,205
Bank loans
21 952,444 1,062,086
Derivative financial instruments
23 3,169 19,622
1,726,868 1,939,695
Liabilities of disposal group classified as held for sale
– 12,391
1,726,868 1,952,086
Total liabilities
7,208,991 7,424,403
Total equity and liabilities
12,633,506 13,474,267
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
The financial statements on pages 107 to 227 were approved by the Board of Directors on 24 March 2023 and were
signed on its behalf.
KUOK Hui Kwong CHUA Chee Wui
Director Director
Financial Report
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
109
Shangri-La Asia Limited Annual Report 2022
Year ended 31 December
2022 2021
Note USD’000 USD’000
Revenue
5 1,462,145 1,241,049
Cost of sales
29 (775,627) (696,527)
Gross profit
686,518 544,522
Other gains/(losses) – net
30 108,913 (3,435)
Marketing costs
29 (64,947) (57,415)
Administrative expenses
29 (195,389) (193,424)
Other operating expenses
29 (539,378) (644,244)
Operating loss
(4,283) (353,996)
Finance costs – net
33 (360,932) (212,594)
Share of profit of associates
34 190,772 209,644
Loss before income tax
(174,443) (356,946)
Income tax (expense)/credit
35 (13,009) 12,527
Loss for the year
(187,452) (344,419)
Loss attributable to:
Owners of the Company
(158,519) (290,575)
Non-controlling interests
(28,933) (53,844)
(187,452) (344,419)
Loss per share for loss attributable to the owners of the
Company during the year
(expressed in US cents per share)
– basic
36 (4.44) (8.13)
– diluted
36 (4.44) (8.13)
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
Financial Report
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
110
Shangri-La Asia Limited Annual Report 2022
Year ended 31 December
2022 2021
USD’000 USD’000
Loss for the year
(187,452) (344,419)
Other comprehensive (loss)/income:
Items that will not be reclassified subsequently to profit or loss
Fair value changes of financial assets at fair value through other
comprehensive income
(296) 4,955
Remeasurements of post-employment benefit obligations
467 2,878
Effect of hyperinflation
53,713 –
Items that may be reclassified subsequently to profit or loss
Fair value changes of interest-rate swap and cross-currency
swap contracts – hedging
155,457 55,823
Currency translation differences – subsidiaries
(331,806) (49,146)
Currency translation differences – associates
(359,059) 64,994
Other comprehensive (loss)/income for the year
(481,524) 79,504
Total comprehensive loss for the year
(668,976) (264,915)
Total comprehensive loss attributable to:
Owners of the Company
(609,354) (201,815)
Non-controlling interests
(59,622) (63,100)
(668,976) (264,915)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
notes.
Shangri-La Asia Limited Annual Report 2022
Financial Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
111
Attributable to owners of the Company
Share
capital and
premium
Shares held
for share
award scheme
Other
reserves
Retained
earnings Total
Non–
controlling
interests
Total
equity
Note USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Balance at 1 January 2022
3,201,995 (2,858) 1,073,259 1,591,897 5,864,293 185,571 6,049,864
Fair value changes of financial
assets at fair value through other
comprehensive income
20 – – (125) – (125) (171) (296)
Remeasurements of post-employment
benefit obligations
– – – 474 474 (7) 467
Effect of hyperinflation
– – – 53,713 53,713 – 53,713
Fair value changes of interest-rate
swap and cross-currency swap
contracts – hedging
20 – – 145,939 – 145,939 9,518 155,457
Currency translation differences
20 – – (650,836) – (650,836) (40,029) (690,865)
Other comprehensive (loss)/income for
the year recognised directly in equity
– – (505,022) 54,187 (450,835) (30,689) (481,524)
Loss for the year
– – – (158,519) (158,519) (28,933) (187,452)
Total comprehensive loss for the year
ended 31 December 2022
– – (505,022) (104,332) (609,354) (59,622) (668,976)
Share purchase for share award scheme
18 – (6,139) – – (6,139) – (6,139)
Share-based compensation under
share award scheme
20 – – 5,241 – 5,241 – 5,241
Vesting of shares under share
award scheme
18,20 – 2,886 (2,294) (592) – – –
Transfer gain on change in fair value
of equity instruments sold
to retained earnings
– – (2,337) 2,337 – – –
Dividend paid and payable to
non-controlling shareholders
– – – – – (2,025) (2,025)
Net change in equity loans due to
non-controlling shareholders
– – – – – 46,550 46,550
– (3,253) 610 1,745 (898) 44,525 43,627
Balance at 31 December 2022
3,201,995 (6,111) 568,847 1,489,310 5,254,041 170,474 5,424,515
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Shangri-La Asia Limited Annual Report 2022
Financial Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
112
Attributable to owners of the Company
Share
capital and
premium
Shares held
for share
award scheme
Other
reserves
Retained
earnings Total
Non–
controlling
interests
Total
equity
Note USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Balance at 1 January 2021
3,201,995 (4,265) 985,882 1,877,977 6,061,589 253,158 6,314,747
Fair value changes of financial
assets at fair value through other
comprehensive income
20 – – 2,653 – 2,653 2,302 4,955
Remeasurements of post-employment
benefit obligations
– – – 2,498 2,498 380 2,878
Fair value changes of interest-rate
swap and cross-currency swap
contracts – hedging
20 – – 52,519 – 52,519 3,304 55,823
Currency translation differences
20 – – 31,090 – 31,090 (15,242) 15,848
Other comprehensive income/(loss) for
the year recognised directly in equity
– – 86,262 2,498 88,760 (9,256) 79,504
Loss for the year
– – – (290,575) (290,575) (53,844) (344,419)
Total comprehensive income/(loss) for
the year ended 31 December 2021
– – 86,262 (288,077) (201,815) (63,100) (264,915)
Share-based compensation under
share award scheme
20 – – 2,337 – 2,337 – 2,337
Vesting of shares under share
award scheme
18,20 – 1,407 (1,222) (185) – – –
Dividend paid and payable to
non-controlling shareholders
– – – – – (4,487) (4,487)
Adjustment on the difference between
the consideration and the portion
of the non-controlling interests
arising from acquisition of partial
equity interest in a subsidiary from a
non-controlling shareholder
– – – 2,182 2,182 – 2,182
– 1,407 1,115 1,997 4,519 (4,487) 32
Balance at 31 December 2021
3,201,995 (2,858) 1,073,259 1,591,897 5,864,293 185,571 6,049,864
Included in the retained earnings are statutory funds of approximately USD92,040,000 (2021: USD97,305,000).
These funds are set up by way of appropriation from the profit after taxation of the respective companies,
established and operating in Mainland China, in accordance with the relevant laws and regulations.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Shangri-La Asia Limited Annual Report 2022
Financial Report
CONSOLIDATED CASH FLOW STATEMENT
113
Year ended 31 December
2022 2021
Note USD’000 USD’000
Cash flows from operating activities
Net cash generated from operations
38(a) 140,885 84,188
Interest paid for loans and fixed rate bonds
(189,849) (169,819)
Interest paid for lease liabilities
(28,120) (30,697)
Hong Kong profits tax paid
(190) (134)
Overseas tax paid
(13,764) (27,970)
Net cash used in operating activities
(91,038) (144,432)
Cash flows from investing activities
Purchase of property, plant and equipment
(25,713) (44,211)
Capital expenditure on properties under development
(46,707) (27,043)
Payments for right-of-use assets
– (2,313)
Capital expenditure on investment properties
(65,499) (41,256)
Capital expenditure on intangible assets
(6,986) (5,054)
Proceeds from disposal of property, plant and equipment;
and investment properties
9,510 4,775
Capital injection to an associate
– (10,800)
Cash received from capital reduction of an associate
30,360 19,500
Net (increase)/decrease in loans to associates
(1,529) 41,786
Interest received from associates
635 15,744
Other interest received
9,855 8,887
Dividends received from associates
130,325 43,676
Dividends received from listed securities
1,185 4,712
Sale proceeds from disposal of listed securities
3,546 2,833
Sale proceeds received for disposal of
controlling interest in a subsidiary
22,850 41,452
Decrease in short-term bank deposits with
original maturities over 3 months
26,334 27,068
Net cash generated from investing activities
88,166 79,756
Cash flows from financing activities
Dividends paid to non-controlling shareholders
(1,995) (5,301)
Purchase of shares under share award scheme
(6,139) –
Net increase in loans from
non-controlling shareholders
5,549 1,666
Principal elements of lease payments
(16,379) (16,897)
Net proceeds from issuance of fixed rate bonds
– 75,604
Repayment of bank loans
(304,476) (762,149)
Bank loans drawn down
387,482 598,829
Net cash generated from/(used in) financing activities
64,042 (108,248)
Net increase/(decrease) in cash and cash equivalents
61,170 (172,924)
Cash and cash equivalents at beginning of the year
745,540 924,457
Exchange (losses)/gains on cash and cash equivalents
(53,708) 2,592
Less: Cash and cash equivalents of disposal group classified
as held for sale
– (8,585)
Cash and cash equivalents at end of the year
17 753,002 745,540
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
114
1 GENERAL INFORMATION
The principal activities of Shangri-La Asia Limited (“Company”) and its subsidiaries (together, “Group”)
are the development, ownership and operation of hotel properties, the provision of hotel management
and related services, the development, ownership and operation of investment properties, and property
development for sale.
The Company is a limited liability company incorporated in Bermuda. The address of its registered office is
Victoria Place, 5/F, 31 Victoria Street, Hamilton HM10, Bermuda.
The Company has its primary listing on the Main Board of The Stock Exchange of Hong Kong Limited
(“HKSE”) with secondary listing on the Singapore Exchange Securities Trading Limited.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
2.1 Basis of preparation and accounting policies
The consolidated financial statements of the Group have been prepared in accordance with
all applicable Hong Kong Financial Reporting Standards (“HKFRS”). The consolidated financial
statements have been prepared under the historical cost convention except that certain financial
assets, financial liabilities (including derivative financial instruments) and investment properties are
stated at fair value.
The preparation of financial statements in conformity with HKFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 4.
2.1.1 Going concern
The consolidated financial statements as at 31 December 2022 have been prepared on
a going-concern basis, although the Group’s consolidated current liabilities exceeded its
consolidated current assets by USD489,214,000 and the Group was running at a loss from its
operation due to the impact of Covid-19 pandemic during the current year. The future funding
requirements can be met through the committed and available undrawn bank loan facilities
of USD736,628,000 which are maturing after 31 December 2023. The Group has adequate
resources to continue its operation for the foreseeable future. The Group therefore continues
to adopt the going concern basis in preparing its consolidated financial statements. Further
information on the Group’s borrowings is given in Note 21 and 22.
Shangri-La Asia Limited Annual Report 2022
Financial Report
115
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis of preparation and accounting policies (continued)
2.1.2 New accounting standards, amendments and interpretations to accounting standards adopted by
the Group
The Group has applied the following amendments to accounting standards for the first time for
the financial year beginning on 1 January 2022:
Amendments to HKAS 16 Property, Plant and Equipment: Proceeds before
intended use
Amendments to HKAS 37 Provisions, Contingent Liabilities and Contingent
Assets: Onerous contracts – cost of fulfilling a
contract
Amendments to HKFRS 3 Business Combinations: Reference to the Conceptual
Framework
Annual Improvements to HKFRSs
2018-2020 Cycle
The adoption of these amendments to accounting standards has no material impact on the
Group’s financial statements.
2.1.3 New standards, amendments and interpretations to existing standards not yet adopted by the
Group
Certain new accounting standards, amendments and interpretations to existing standards have
been published that are not mandatory for the year 2022 and have not been early adopted by
the Group. These standards are not expected to have a material impact to the Group in the
current or future reporting periods and on foreseeable future transactions.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
116
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Consolidation
The consolidated financial statements included the financial statements of the Company and all its
subsidiaries made up to 31 December.
(a) Subsidiaries
A subsidiary is an entity (including a structured entity) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to obtain, variable returns
from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Subsidiaries are consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the
Group. The consideration transferred for the acquisition of a subsidiary is the fair values of
the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date.
Non-controlling interests represent the equity in a subsidiary not attributable directly or
indirectly to the Group. For each business combination, the Group can elect to measure any
non-controlling interests either at fair value or at the non-controlling interests’ proportionate
share of the subsidiary’s identifiable net assets.
The excess of the consideration transferred over the fair value of the Group’s share of the
identifiable net assets acquired is recorded as goodwill. If the consideration is less than the
fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the
difference is recognised directly in the consolidated statement of profit or loss as negative
goodwill.
Intra-group transactions, balances and unrealised gains on transactions between group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the transferred assets. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
In the Company’s statement of financial position, the investments in subsidiaries are stated at
cost less provision for impairment losses, if any. The results of subsidiaries are accounted for by
the Company on the basis of dividend received and receivable.
(b) Transactions with non-controlling interests
The Group treats transactions with non-controlling interests as transactions with equity owners
of the Group. For purchases of additional interest in subsidiaries from non-controlling interests,
the difference between fair value of any consideration paid and the relevant share acquired
of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on
disposals of partial interest in subsidiaries to non-controlling interests are also recorded in
equity.
Shangri-La Asia Limited Annual Report 2022
Financial Report
117
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Consolidation (continued)
(c) Disposal of subsidiaries
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are
accounted for as equity transactions, whereby adjustments are made to the amounts of
controlling and non-controlling interests within consolidated equity to reflect the change in
relative interests and no gain or loss is recognised.
When the Group ceases to have control, any retained interest in the entity is re-measured to
its fair value at the date when control is lost, with the change in carrying amount recognised
in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition,
any amounts previously recognised in other comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive income are reclassified to
profit or loss.
(d) Associates
Associates are all entities over which the Group has significant influence but not control,
generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting and are
initially recognised at cost, and the carrying amount is increased or decreased to recognise the
investor’s share of profit or loss and other comprehensive income of the investee after the date
of acquisition. The Group’s investment in associates includes goodwill (net of any accumulated
impairment losses) identified on acquisition (see Note 2.7).
If the ownership interest in an associate is reduced but significant influence is retained, only the
proportionate share of the amounts previously recognised in other comprehensive income is
reclassified to profit or loss where appropriate.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the
statement of profit or loss, and its share of post-acquisition movements in reserves is
recognised in reserves. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group’s share of losses in an associate equals
or exceeds its interest in the associate (including any other unsecured receivables), the Group
does not recognise further losses unless it has incurred legal or constructive obligations or
made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
118
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating
resources and assessing performances of the operating segments, has been identified as the executive
directors of the Company.
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s principal subsidiaries are
measured using the currency of the primary economic environment in which the entity operates
(“the functional currency”). The consolidated financial statements are presented in United
States dollars (USD), which is the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
statement of profit or loss, except those arising from qualifying cash flow hedges and qualifying
net investment hedges or are attributable to part of the net investment in a foreign operation
which would be recognised in other comprehensive income.
Foreign exchange gains and losses including those relate to borrowings and cash and bank
balances are presented in the consolidated statement of profit or loss within “Finance costs –
net”.
Translation differences on monetary items, such as financial assets at fair value through profit or
loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary
items are included in equity.
Shangri-La Asia Limited Annual Report 2022
Financial Report
119
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Foreign currency translation (continued)
(c) Group companies
The results and financial position of all the Group entities that have a functional currency
different from the presentation currency are translated into the presentation currency as
follows:
(i) assets and liabilities for each statement of financial position presented are translated at the
closing rate at the date of that statement of financial position;
(ii) income and expenses for each statement of profit or loss are translated at average
exchange rates (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
(iii) all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in
foreign entities, and of borrowings, are taken to shareholders’ equity. When a foreign operation
is sold, such exchange differences are recognised in the statement of profit or loss as part of the
gain or loss on sale.
Goodwill and fair value adjustments on assets and liabilities arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity and translated at the
closing rate at the date of the statement of financial position.
2.5 Property, plant and equipment
Buildings comprise mainly hotel properties. Property, plant and equipment are stated at historical cost
less depreciation and impairment losses, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
expensed in the statement of profit or loss during the financial period in which they are incurred.
Depreciation is calculated to write off the cost to their residual value on a straight-line basis over the
expected useful lives. The useful lives or principal annual rates used are:
Hotel properties and other buildings Lower of underlying land lease term or 50 years
Plant and machinery 5% to 10%
Furniture, fixtures and equipment 10% to 33
1
/
3
%
Motor vehicles 20% to 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each date of
the statement of financial position.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
120
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Property, plant and equipment (continued)
Properties under development and freehold land for hotel properties are not subject to depreciation
and are stated at cost less accumulated impairment, if any.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount
and are recognised within other operating expenses in the statement of profit or loss if the disposal is
arising from normal operation of the business.
2.6 Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, and that is not
occupied by the Group, is classified as investment property. Property that is being constructed or
developed for future use as investment property is also classified as investment property before
construction or development is completed.
Investment property comprises land held under operating lease or freehold and buildings. Land held
under operating leases is classified and accounted for as investment property without amortisation
when the rest of the definition of investment property is met.
Investment property is measured initially at cost, including related transaction costs and where
applicable borrowing costs. After initial recognition, investment property is carried at fair value,
representing open market value determined by external professional valuers. Property under
construction that is being classified as investment property is revalued to fair value when it becomes
reliably determinable on a continuing basis. The valuations performed by the independent valuers
for financial reporting purposes would be reviewed by the Group’s management and discussions of
valuation processes and results are held with the valuers at least once every six months to be in line
with the Group’s interim and annual reporting requirements. Changes in fair values are recognised in
the statement of profit or loss.
Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance costs are expensed in the statement of profit or
loss during the financial period in which they are incurred.
Shangri-La Asia Limited Annual Report 2022
Financial Report
121
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.7 Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s
share of the net identifiable assets of the acquired subsidiary/associate at the date of
acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill
on acquisitions of associates is included in interest in associates. Goodwill on acquisitions is
tested for impairment at least annually or more frequently if events or changes in circumstances
indicate a potential impairment. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business
combination is allocated to cash-generating units (“CGUs”), or groups of CGUs, that is
expected to benefit from the synergies of the combination for the purpose of impairment
testing.
The carrying value of the CGU containing the goodwill is compared to the recoverable amount,
which is the higher of value-in-use and the fair value less costs of disposal. Any impairment is
recognised immediately as an expense and is not subsequently reversed.
(b) Trademarks and licences
Trademarks and licences are shown at historical cost. Trademarks and licences with finite useful
life are carried at cost less accumulated amortisation and impairment, if any. Amortisation is
calculated using the straight-line method to allocate the cost of trademarks and licences over
their estimated useful lives of 20 to 50 years.
(c) Website and system development costs
Website and system development costs that are directly associated with the development
of identifiable and unique products controlled by the Group, and that will probably generate
economic benefits exceeding costs beyond one year, are recognised as intangible assets.
Such development costs are carried at cost less accumulated amortisation and impairment, if
any. Amortisation is calculated using the straight-line method to allocate the cost over their
estimated useful lives of 3 years upon commencement of operation.
2.8 Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the statement of financial
position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the company or the
counterparty.
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2.9 Impairment of investments in subsidiaries, associates and non-financial assets
Intangible assets that have an indefinite useful life, for example goodwill, or intangible assets not
ready for use are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. For the impairment assessment for hotel
properties, these indications include continuing adverse changes in the local market conditions in
which the hotel operates or will operate, or when the hotel continues to operate at a loss position and
its financial performance is worse than expected. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value-in-use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment
are reviewed for possible reversal of the impairment at each reporting date.
Impairment testing of the investments in subsidiaries or associates in the separate financial
statements is required upon receiving a dividend from the investment if the dividend exceeds the total
comprehensive income of the subsidiaries or associates in the period the dividend is declared or if
the carrying amount of the net investment exceeds the carrying amount in the consolidated financial
statements of the investee’s net assets including goodwill.
2.10 Financial assets
The Group classifies its investments in the following categories: financial assets at amortised
cost, fair value through profit or loss (“FVPL”) and fair value through other comprehensive income
(“FVOCI”). The classification depends on the Group’s business model for managing the investments.
Management determines the classification of its investments at initial recognition.
(a) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on
which the Group commits to purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the financial assets have expired or have been transferred
and the Group has transferred substantially all the risks and rewards of ownership.
(b) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or
loss. Financial assets are classified as current assets if expected to be settled within 12 months
or in the normal operating cycle of the business, otherwise, they are classified as non-current.
Subsequent to initial recognition, debt instruments financial assets are measured as follows.
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2.10 Financial assets (continued)
(b) Measurement (continued)
Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective interest rate method.
Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains/(losses) – net together with foreign exchange gains and losses. Impairment losses
which are significant are presented as separate line item in the statement of profit or loss.
FVOCI
Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are taken through other comprehensive income
(“OCI”), except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/(losses) – net. Interest income from
these financial assets is included in other gains/(losses) – net using the effective interest rate
method. Foreign exchange gains and losses are presented in other gains/(losses) – net and
impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain
or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or
loss and presented net within other gains/(losses) – net in the period in which it arises.
For equity instruments, the Group subsequently measures all equity investments at fair value.
Where the Group’s management has elected to present fair value gains and losses on equity
investments in OCI, there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment. Dividends from such investments
continue to be recognised in profit or loss as other gains when the Group’s right to receive
payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) – net
in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value.
(c) Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. Refer to Note 3.1(b) for
the detailed impairment for trade receivables at simplified approach and other debt instruments
at general model.
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2.11 Derivative financial instruments (hedging and non-hedging)
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is
entered into and are subsequently re-measured at their fair values.
In order to determine whether the instruments qualify for hedge accounting or not, the Group
performs an analysis to assess whether changes in the cash flows of the instruments are deemed
highly effective in offsetting changes in the cash flows of the hedged items.
(a) Hedging
Hedging instruments are initially recognised at fair value on the date of the contract entered
into and are re-measured to their fair value at subsequent reporting dates. The effective portion
of the change in the fair value of the contracts is recognised in “Hedging reserve” in equity.
The gain or loss relating to the ineffective portion is recognised immediately in the “Other
gains/(losses) – net” of statement of profit or loss.
The fair values of derivative financial instruments designated in hedge relationships are
disclosed in Note 23. The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining maturity of the hedged item is more than 12 months; it is
classified as a current asset or liability when the remaining maturity of the hedged item is less
than 12 months.
For interest-rate swap contracts used for hedging bank loan interest payment under bank
loan agreements in order to swap the floating interest rate borrowings to fixed interest rate
borrowings, the related cash flows in the same period of the hedged transaction are classified as
interest expenses in the statement of profit or loss.
For currency forward contracts used to hedge the currency risk associated with the forecast
foreign currency payment obligation under certain sale and purchase agreements for capital
expenditure investment executed, the amounts accumulated in the “Hedging reserve” were
transferred out and were included in the initial investment cost of the net asset acquired when
the payment was made.
For currency forward contracts used to hedge the currency risk associated with the forecast
foreign currency receipt during the year, the difference between the net cash received and the
then book value of the receivable are classified as finance cost.
If at any time the hedging instruments are no longer highly effective as a hedge, the Group
discontinues hedge accounting for those hedging instruments and all subsequent changes in
fair value are recorded in “Other gains/(losses) – net”.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was
recognised in equity is immediately transferred to the statement of profit or loss within “Other
gains/(losses) – net”.
(b) Non-hedging
Derivative financial instruments, including cross-currency swap contracts that do not qualify for
hedge accounting, are categorised as derivatives at fair value through profit or loss and changes
in the fair value of these derivative instruments are recognised immediately in the consolidated
statement of profit or loss within “Other gains/(losses) – net”.
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2.12 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost, being cost of purchase, is determined on a weighted average basis. Net realisable value is the
estimated selling price in the ordinary course of business, less applicable variable selling expense.
2.13 Properties for sale
Properties for sale are initially recognised at the carrying amount of the property at the date of
reclassification from properties under development. Subsequently, the properties are carried at the
lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business less selling expenses.
2.14 Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within a short period of time and
therefore are all classified as current.
A receivable is recognised when the Group has an unconditional right to receive consideration. A right
to receive consideration is unconditional if only the passage of time is required before payment of that
consideration is due. Receivables are stated at amortised cost using the effective interest method less
allowance for credit losses. The Group’s policies on the recognition of credit losses are set out in Note
3.1(b) to this consolidated financial statements.
2.15 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts, if any, are shown within bank loans in current liabilities on the statement of financial
position.
2.16 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company’s equity share capital, the consideration paid,
including any directly attributable incremental costs (net of income taxes) is deducted from the
consolidated equity attributable to the owners of the Company until the shares are resold. Where
such shares are subsequently resold, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, will increase the consolidated equity
attributable to the owners of the Company. The dividends on these own shares held are excluded
from the dividend distribution to the owners of the Company recognised in the consolidated financial
statements.
2.17 Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method. Trade payables are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current liabilities.
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2.18 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. The difference
between the proceeds received and fair value at inception (fair value gain/loss) is recognised in the
statement of profit or loss. Transaction costs are incremental costs that are directly attributable to the
acquisition, issue or disposal of a financial asset or financial liability, including fees and commissions
paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges,
and transfer taxes and duties. Borrowings are subsequently stated at amortised cost; any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in the
statement of profit or loss over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the date of the statement of financial position.
2.19 Pre-operating expenditure
Pre-operating expenditure is charged to the statement of profit or loss in the year in which it is
incurred.
2.20 Income tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in the
consolidated statement of profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted for the year, and any adjustment to tax payable in respect of previous years in the countries
where the Group’s subsidiaries and associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, if the deferred income tax arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss, it is not accounted for. Deferred income tax is determined using
tax rates (and laws) that have been enacted or substantially enacted by the date of the statement of
financial position and are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax liabilities are provided on temporary differences arising from investments in
subsidiaries and associates, except where the timing of the reversal of the temporary difference
is controlled by the Group and it is probable that the temporary difference will not reverse in the
foreseeable future. Generally the Group is unable to control the reversal of the temporary difference
for associates. Only when there is an agreement in place that gives the Group ability to control the
reversal of the temporary difference in the foreseeable future, deferred tax liability in relation to
taxable temporary differences arising from the associate’s undistributed profit is not recognised.
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2.20 Income tax (continued)
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the taxable entity or different
taxable entities when there is an intention to settle the balances on a net basis.
2.21 Employee benefits
(a) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of services rendered by
employees up to the date of the statement of financial position.
Employee entitlements to sick leave and maternity leave are not recognised until the time of
leave.
(b) Pension obligations
The Group operates a number of defined benefit and defined contribution plans, most of the
assets of which are generally held in separate trustee-administered funds. The pension plans
are generally funded by payments from employees and by the relevant Group companies,
taking account of the applicable laws and regulations at different jurisdictions and the
recommendations of independent qualified actuaries for defined benefit plans.
For the Group’s defined contribution plans, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Group has no legal or constructive obligations once the contributions have been paid. The
contributions are recognised as employee benefit expense when they are due and are reduced
by contributions forfeited by those employees who leave the scheme prior to vesting fully in the
contributions, where applicable. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments is available.
For defined benefit plans, pension costs are assessed using the projected unit credit method:
the cost of providing pensions is charged to the statement of profit or loss so as to spread the
regular cost over the service lives of employees in accordance with the advice of the actuaries
who carry out a full valuation of the plans at least every 3 years. The pension obligation is
measured as the present value of the estimated future cash outflows less the fair value of plan
assets. Actuarial gains and losses are recognised in full in the period in which they occur, in
other comprehensive income.
The Group’s defined benefit plans are funded by the relevant Group companies taking into
account the recommendations of independent qualified actuaries.
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2.21 Employee benefits (continued)
(c) Bonus plans
The Group recognises a provision where contractually obliged or when it has a present or
constructive obligation as a result of services rendered by employees and a reliable estimate of
such obligation can be made.
(d) Termination benefits
Termination benefits are recognised at the earlier of when the Group can no longer withdraw
the offer of those benefits or when it recognises restructuring costs involving the payment of
termination benefits.
2.22 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources will be required to settle the obligation, and a
reliable estimate of an amount can be made. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used
to determine the present value is a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as interest expense.
2.23 Revenue recognition
Revenue comprises the fair value for the sales of goods and services, net of value-added tax, rebates
and discounts and after eliminating revenue within the Group. Revenue/income is recognised as
follows:
(i) Hotel revenue from room rental is recognised over time during the period of stay for the hotel
guests. Revenue from food and beverage sales and other ancillary services is generally recognised
at the point in time when the services are rendered.
(ii) The Group operates a loyalty programme where customers mainly accumulate points from hotel
stays and dinning at the Group’s hotels. A contract liability for the award points expected to be
redeemed is recognised at the time of sales. Revenue is subsequently recognised when the points
are redeemed or when they are expired.
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2.23 Revenue recognition (continued)
(iii) Revenue in respect of hotel management and related services is recognised over time during the
period when management services are delivered to the hotels.
(iv) Rental revenue from investment properties is recognised on a straight-line basis over the periods
of the respective leases.
(v) Revenue from sales of properties is recognised when control over the properties are transferred
to the purchasers. An enforceable right to payment does not arise until legal title has passed to
the purchasers and revenue is recognised at a point in time when the legal title has passed to
the purchasers. Payments received from purchasers prior to this stage are recorded as deposits
received on sales of properties, which are included in contract liabilities.
(vi) Interest income on financial assets at amortised cost and financial assets at FVOCI is recognised
using the effective interest method as part of other gains. Interest income is presented as finance
income where it is earned from financial assets that are held for cash management purposes.
Interest income is calculated by applying the effective interest rate to the gross carrying amount
of a financial asset except for financial assets that subsequently become credit impaired. For credit
impaired financial assets, the effective interest rate is applied to the net carrying amount of the
financial asset (after deduction of the loss allowance).
(vii) Dividends are received from financial assets measured at FVPL and at FVOCI. Dividends are
recognised as other income in profit or loss when the right to receive payment is established. This
applies even if they are paid out of pre-acquisition profits, unless the dividend clearly represents
a recovery of part of the cost of an investment. Dividend is recognised in other comprehensive
income if it relates to an investment measured at FVOCI.
2.24 Leases
(a) As the lessor
Assets leased out under operating leases are included in either property, plant and equipment
or investment properties in the statement of financial position. In case of property, plant and
equipment, they are depreciated over their expected useful lives on a basis consistent with
other similar property, plant and equipment owned by the Group. Rental income (net of any
incentives given to lessees) is recognised on a straight-line basis over the lease term.
(b) As the lessee
Leases are recognised as right-of-use assets and corresponding lease liabilities at the date
at which the leased asset is available for use by the Group. Each lease payment is allocated
between the lease liability and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of
the lease liability for each period. The right-of-use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis.
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2.24 Leases (continued)
(b) As the lessee (continued)
The right-of-use assets and lease liabilities arising from a lease are initially measured on
a present value basis. Lease liabilities include the net present value of the following lease
payments:
– fixed payments (including in-substance fixed payments), less any lease incentives
receivable
– variable lease payment that are based on an index or a rate
– amounts expected to be payable by the lessee under residual value guarantees
– the exercise price of a purchase option if the lessee is reasonably certain to exercise that
option, and
– payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The lease payments are discounted using the interest rate implicit in the lease to come up with
the lease liabilities. If that rate cannot be determined, the lessee’s incremental borrowing rate is
used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
Lease payments are allocated between principal and finance cost. The finance cost is charged to
profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
– the amount of the initial measurement of lease liability
– any lease payments made at or before the commencement date less any lease incentives
received
– any initial direct costs, and
– restoration costs
Leases in the form of leasehold land and land use rights are also included in right-of-use assets.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases with a lease term of 12 months or less are
recognised on a straight-line basis as an expense in profit or loss.
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2.25 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders or
directors, where appropriate.
2.26 Share-based compensation
The Group operates two equity-settled, share-based compensation plans.
(a) Share option scheme
The fair value of the employee services received in exchange for the grant of the share options
is recognised as an expense. The total amount to be expensed over the vesting period is
determined by reference to the fair value of the share options granted, excluding the impact
of any non-market vesting conditions (for example, profitability and sales growth targets) and
performance vesting conditions. Non-market vesting conditions are included in assumptions
about the number of options that are expected to become exercisable. At each date of the
statement of financial position, the entity revises its estimates of the number of options that are
expected to become exercisable. It recognises the impact of the revision of original estimates,
if any, in the statement of profit or loss, and a corresponding adjustment to equity over the
remaining vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share
capital (nominal value) and share premium when the options are exercised. The related balance
previously recognised in the option reserve is also credited to the share premium.
(b) Share award scheme
The Group operates the share award scheme under which awarded shares of the Company
can be granted to the employees of the Group and the Company’s directors as part of their
remuneration package.
When shares are acquired for the share award scheme from the market, the total consideration
of shares acquired is deducted from the share capital and share premium.
Upon granting of shares, share-based compensation expenses is charged to the statement
of profit or loss and the amount of which is determined by reference to the fair value of the
awarded shares granted, taking into account all non-vesting conditions associated with the
grants on grant date. The total expense is recognised on a straight-line basis over the relevant
vesting periods (or on the grant date if the shares vest immediately), with a corresponding
credit to the share award reserve under equity. For those awarded shares which are amortised
over the vesting period, the Group revises its estimates of the number of awarded shares that
are expected to ultimately vest based on the vesting conditions at the end of each reporting
period. Any resulting adjustment to the cumulative fair value recognised in prior years is
charged/credited to employee share-based compensation expense in the current period, with a
corresponding adjustment to the share award reserve.
Upon vesting of shares, the related total consideration of the vested awarded shares when
acquired are credited to the share capital and share premium, with a corresponding decrease in
share award reserve for awarded shares.
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2.27 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or sale
are capitalised as part of the cost of that asset until such time as the assets are substantially ready
for their intended use or sale. Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalisation. All other borrowing costs are charged to the statement of profit or loss in the
year in which they are incurred.
2.28 Government grants
Government grants are assistance by government in the form of transfers of resources to an entity
in return for past or future compliance with certain conditions relating to the operating activities of
the entity. They exclude those forms of government assistance which cannot reasonably have a value
placed upon them and transactions with government which cannot be distinguished from the normal
trading transactions of the entity. A government grant is recognised only when there is reasonable
assurance that (a) the entity will comply with any conditions attached to the grant and (b) the grant
will be received. A grant relating to income is recognised in profit or loss and presented in “Other
gains/(losses) – net” over the period necessary to match them with the related costs, for which they
are intended to compensate, on a systematic basis.
2.29 Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when
due, in accordance with the terms of a debt instrument. Such financial guarantees are given to
banks, financial institutions and other bodies on behalf of subsidiaries or associates to secure loans,
overdrafts and other banking facilities.
After initial recognition, an issuer of financial guarantee contracts shall subsequently measure it at the
higher of the amount determined in accordance with the expected credit loss model under HKFRS 9
and the amount initially recognised, less the cumulative amount of income recognised in accordance
with the principles of HKFRS 15.
2.30 Non-current assets (or disposal groups) held for sale
Non-current assets or disposal groups are classified as held for sale if their carrying amount will
be recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their carrying amount and fair value
less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits,
financial assets and investment property that are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from this requirement.
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2.30 Non-current assets (or disposal groups) held for sale (continued)
An impairment loss is recognised for any initial or subsequent write-down of the asset or disposal
group to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value
less costs to sell of an asset or disposal group, but not in excess of any cumulative impairment
loss previously recognised. A gain or loss not previously recognised by the date of the sale of the
non-current asset or disposal group is recognised at the date of derecognition.
Non-current assets including those that are part of a disposal group are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal
group classified as held for sale are presented separately from other liabilities in the balance sheet.
2.31 Financial reporting in hyperinflationary economies
For entities whose functional currency is the currency of a hyperinflationary economy, the historical
cost of the non-monetary assets and liabilities and equity items of the entity from their date of
acquisition or inclusion in the statement of financial position would be adjusted to reflect the changes
in the purchasing power of the currency resulting from inflation by applying the changes in the general
price index of the hyperinflationary economy. Monetary items are not restated as they are already
expressed in terms of the measuring unit current at the date of the statement of financial position. All
items of the statement of profit or loss would be restated into the measuring unit current at the date
of the statement of financial position by applying the general price index of the economy. Gain or loss
on net monetary position is included in the statement of profit or loss.
During the year ended 31 December 2022, Turkey was deemed as a hyperinflationary economy for
accounting purposes as its cumulative inflation rate for the past three years has exceeded 100%. The
financial information of an owned hotel in Turkey which is using Turkish Lira as its functional currency
has therefore been prepared in accordance with this policy. The financial information of this hotel in
Turkey for the year ended 31 December 2022 are stated in terms of current purchasing power using
the Turkey consumer price index at 31 December 2022.
The financial results of the hotel in Turkey have been translated and presented in US dollars at the
prevailing exchange rate on 31 December 2022. The Group’s comparative information presented in US
dollars with respect to the year ended 31 December 2021 has not been restated.
After applying this accounting policy in the current year, the Group’s “Interest in associates” in
respect of the hotel in Turkey has been increased by USD53,713,000 with corresponding adjustment
presented in other comprehensive income. There is only negligible impact to the profit or loss for the
current year.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
134
3 FINANCIAL RISK MANAGEMENT
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange
risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance. The Group uses derivative financial instruments
to hedge certain risk exposures.
Risk management is carried out by the Group Treasury under guidance of the Board of Directors.
Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s
operating units. The Board provides principles for overall risk management and covering specific areas,
such as foreign exchange risk, interest-rate risk, credit risk, use of derivative financial instruments and
investing excess liquidity.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising
from various currency exposures. Foreign exchange risk arises from future commercial
transactions, recognised assets and liabilities and net investments in foreign operations.
The Group has investments in different foreign operations, whose net assets are exposed
to foreign currency translation risk.
There is a natural economic hedge to the extent that all the Group’s business units
in Hong Kong, Mainland China, the Philippines, Singapore, Malaysia, Thailand, Japan,
France, United Kingdom, Sri Lanka, Turkey, Australia, Indonesia and Mauritius derive
their revenues (and most of the expenses associated therewith) in local currencies.
Most of the Group’s hotels are quoting room tariffs in the local currency. It is the Group’s
endeavour, wherever and to the extent possible, to quote tariffs in the stronger currency
and maintain bank balances in that currency, if legally permitted.
The Group has not felt it appropriate to substantially hedge against currency risks
through forward exchange contracts upon consideration of the currency risk involved and
the cost of obtaining such cover.
The Group analyses its exchange exposure based on the financial position at year end.
The Group’s exchange risk mainly arises from long-term bank loans and shareholders’
loans and the Group calculates such impact on the statement of profit or loss. The Group
also calculates the impact on the exchange fluctuation reserve of the exchange risk on
consolidation arising from the translation of the net investment in foreign entities. At
31 December 2022, if US dollar has weakened/strengthened by 5% (2021: 5%) against
all other currencies (except Hong Kong dollar) with all other variables held constant,
the Group’s profit attributable to the owners of the Company and exchange fluctuation
reserve would have increased/decreased by USD14,158,000 (2021: USD15,824,000) and
USD335,669,000 (2021: USD375,540,000), respectively. The exchange rate between
US dollar and Hong Kong dollar is only allowed to fluctuate in a narrow range under the
Hong Kong’s linked exchange rate system.
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3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(a) Market risk (continued)
(ii) Equity securities price risk
The Group is exposed to equity securities price risk arising from the listed equity
investments held by the Group. Financial assets at FVOCI are mainly investments
in unquoted shares which are not subject to price risk. The Group is not exposed to
commodity price risk.
Equity securities price risk is the risk that the fair values of the trading securities decrease
as a result of changes in the value of individual securities which are also affected by the
change in the level of equity indices.
For every 5% increase/decrease in the fair value of the trading securities classified under
financial assets at FVPL, the carrying value of the trading securities will increase/decrease
by USD694,000 (2021: USD863,000) while the Group’s profit attributable to the owners
of the Company will increase/decrease by USD694,000 (2021: USD863,000).
(iii) Cash flow and fair value interest-rate risk
As the Group has no significant interest-bearing assets, the Group’s income and
operating cash inflows are substantially independent of changes in market interest rates.
The Group’s interest-rate risk mainly arises from long-term bank loans under floating
rates.
Bank loans issued at variable rates expose the Group to cash flow interest-rate risk.
Group policy is to maintain an optimal portion of its borrowings at fixed rate, considering
fixed rate bonds are fixed rate in nature and taking into account the principal amount of
all interest-rate swap contracts as well as the cross-currency swap contracts executed.
As at 31 December 2022, 61% (31 December 2021: 62%) of borrowings were at fixed
rates on that basis.
The Group manages its cash flow interest-rate risk by using floating-to-fixed interest-rate
swap contracts which qualify for hedge accounting. Such interest-rate swap contracts
have the economic effect of converting borrowings from floating rates to fixed rates.
Generally, the Group raises long-term bank loans at floating rates. The Group closely
monitors the movement of interest rates from time to time and enters into interest-rate
swap contracts. Under the interest-rate swap contracts, the Group agrees with other
parties to exchange the difference between fixed contract rates and floating-rate interest
amounts calculated by reference to the agreed notional principal amounts.
The Group analyses its interest rate exposure on bank loans not hedged by interest-rate
swap contracts based on the assumption that the loan position at year end could be
wholly refinanced and/or renewed. The Group calculates the impact on statement of
profit or loss of a defined interest rate shift. The same interest rate shift is used for
all currencies. The sensitivity test is running only for all bank loans not hedged by
interest-rate swap contracts that present the major interest-bearing portion. Based on
the simulation performed, the impact on statement of profit or loss of one percentage
point increase would be a decrease of the Group’s profit attributable to the owners of
the Company of USD16,881,000 (2021: USD20,184,000) after interest capitalisation for
properties under development.
Shangri-La Asia Limited Annual Report 2022
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136
3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(a) Market risk (continued)
(iii) Cash flow and fair value interest-rate risk (continued)
Effects of hedge accounting on the financial position and performance
The effects of the interest rate swaps on the Group’s financial position and performance
are as follows:
2022 2021
Interest rate swaps USD’000 USD’000
Carrying amount (net current and
non-current (assets)/liabilities)
(120,087) 40,220
Notional amount
2,061,129 2,117,468
Maturity date
2023 to 2027 2022 to 2026
Hedge ratio
1:1 1:1
Change in fair value of outstanding hedging
instruments since 1 January
(160,307) (57,115)
Change in value of hedged item used to
determine hedge effectiveness
160,307 57,115
(b) Credit risk
Credit risk arises from cash and cash equivalents, contractual cash flows of debt instruments
carried at amortised cost, at FVOCI and FVPL, favourable derivative financial instruments
and deposits with banks and financial institutions, as well as credit exposures to customers,
including outstanding receivables.
The Group assesses on a forward-looking basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. The Group applies
the HKFRS 9 simplified approach to measure the expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. For other receivables, the Group measured the
loss allowance at an amount equal to the lifetime expected credit losses. Credit losses for trade
receivables are assessed on both individual and collective basis. Lifetime expected credit loss
is calculated based on historical loss patterns and customer bases which are then adjusted to
reflect current and forward-looking information on macroeconomic factors affecting the ability
of the customers to settle the receivables. The Group has identified the GDP and the future
economic outlook of the countries in which it operates to be the most relevant factors, and
accordingly adjusts the historical loss patterns based on expected changes in these factors.
The Group has no significant concentrations of credit risk. It has policies in place to ensure that
sales of rooms to wholesalers are made to customers with an appropriate credit history. Sales to
retail customers are made via credit cards to a significant extent. Sales to corporate customers
are made to customers with good credit history. The Group has policies that limit the amount
of global credit exposure to any customer. The Group manages its deposits with banks and
financial institutions by monitoring credit ratings and places deposits with banks and financial
institutions with no recent history of default. The management also considers the credit risk
of other receivables and amounts due from associates is low, as counterparties are expected
to be capable of meeting their contractual cash flows obligation in the near term. Since the
Group’s historical credit loss experience for these receivable balances were minimal, the loss
allowance for these receivable balances as a result of applying the expected credit loss model
was therefore immaterial.
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3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities, the availability of funding through an adequate amount of committed credit facilities
and the ability to close out market positions. Due to the dynamic nature of the underlying
businesses, the Group Treasury aims to maintain flexibility in funding by keeping committed
credit lines available.
The analysis of the Group’s non-derivative financial liabilities and net-settled derivative
financial liabilities into relevant maturity groupings based on the remaining period at the
date of the statement of financial position to the contractual maturity date is as follows. The
Group’s estimated and actual financial liabilities are included in the analysis if their contractual
maturities are essential for an understanding of the timing of the cash flows.
Less than
3 months
Between
3 months
and 1 year
Between
1 and 2 years
Over
2 years
USD’000 USD’000 USD’000 USD’000
At 31 December 2022
Bank loans
30,011 922,433 859,014 2,668,198
Fixed rate bonds
– – 100,694 1,034,478
Interest payable for bank loans
53,727 147,853 154,780 254,954
Interest payable for fixed rate bonds
4,569 42,861 45,567 92,390
Derivative financial instruments
792 2,377 3,169 4,531
Lease liabilities
11,405 34,215 44,403 1,348,022
Amounts due to non-controlling
shareholders
51,779 – – –
Accounts payable and accruals
71,072 501,548 – –
Financial guarantee contracts for
bank loans granted to associates
1,359 6,965 13,131 130,116
At 31 December 2021
Bank loans
20,537 1,041,549 889,368 2,511,604
Fixed rate bonds
– – – 1,127,835
Interest payable for bank loans
20,151 54,096 61,827 113,705
Interest payable for fixed rate bonds
4,538 42,588 47,126 137,060
Derivative financial instruments
6,344 13,278 14,350 11,157
Lease liabilities
12,582 37,747 43,116 1,501,229
Amounts due to non-controlling
shareholders
50,018 – – –
Loan from non-controlling shareholders
– – – 46,550
Accounts payable and accruals
62,246 546,503 – –
Financial guarantee contracts for
bank loans granted to associates
6,323 33,041 10,787 135,428
The amounts disclosed in the table are the contractual undiscounted cash flows. The estimated
amount of interest payable for bank loans and fixed rate bonds are arrived at based on the
principal loan balance and prevailing interest rates at year end date up to the final maturity date
of the loan agreements.
Shangri-La Asia Limited Annual Report 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
138
3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.2 Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt
divided by total capital. Net debt is calculated as total borrowings (including current and non-current
bank loans and fixed rate bonds as shown in the consolidated statement of financial position) less
cash and bank balances and short-term fund placements. Total capital is calculated as “equity”, as
shown in the consolidated statement of financial position.
The gearing ratios at 31 December 2022 and 2021 were as follows:
2022 2021
USD’000 USD’000
Total borrowings
5,612,417 5,587,852
Less: Cash and bank balances and short-term fund
placements (Note 17)
(765,994) (784,866)
Net debt
4,846,423 4,802,986
Total equity
5,424,515 6,049,864
Gearing ratio (net debt over total equity)
89.3% 79.4%
The Group’s bank loan facilities require it to meet certain ratios based on adjusted consolidated capital
and reserves attributable to the owners of the Company and adjusted consolidated total equity.
The Group monitors compliance with these ratios on a monthly basis. The Group has satisfactorily
complied with all covenants under its borrowing agreements.
3.3 Accounting for interest-rate swap contracts
Interest-rate swap contracts, a kind of derivative financial instruments, are set up for the purpose
of managing risk (since the Group’s policy does not permit speculative transactions). Interest-rate
swap contracts are initially recognised at fair value on the date a contract is entered into and are
subsequently re-measured at their fair value.
As at 31 December 2022, the Group had interest-rate swap contracts with a total principal amount of
USD2,061,129,000 (2021: USD2,117,468,000), all these contracts qualify for hedge accounting. Under
the accounting treatment of interest-rate swap contracts, the effective portion of the change in the
fair value of the contracts is recognised in “Hedging reserve” in equity while the gain or loss relating to
the ineffective portion is recognised immediately in “Other gains/(losses) – net” of statement of profit
or loss and the related cash flows arising from these interest-rate swap contracts in the period are
classified as interest expenses in the statement of profit or loss.
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3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.4 Fair value estimation of financial instruments
The Group measures fair values using the following fair value hierarchy that reflects the significance of
the inputs used in making the measurements:
Level 1 – Quoted market prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 – Fair value measured using significant unobservable inputs
The fair value of financial instruments traded in active markets (such as publicly traded equity
securities) is based on quoted market prices at the date of the statement of financial position.
The quoted market price used for financial assets held by the Group is the current bid price; the
appropriate quoted market price for financial liabilities is the current ask price.
(a) Financial instruments in Level 1
The fair value of financial instruments traded in active markets is based on quoted market prices
at the date of statement of financial position. A market is regarded as active if quoted prices
are readily and regularly available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and regularly occurring market
transactions on an arm’s length basis. The quoted market price used for financial assets held by
the Group is the current bid price. These instruments are included in Level 1.
(b) Financial instruments in Level 2
The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined by using valuation techniques. These valuation
techniques maximise the use of observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required to arrive at the fair value of
an instrument are observable, the instrument is included in Level 2.
Specific valuation techniques used to value financial instruments include:
• Dealer quotes for similar instruments.
• The fair value of interest-rate swap contracts is calculated as the present value of the
estimated future cash flows based on observable yield curves.
• The fair value of forward foreign exchange contracts is determined using forward
exchange rates at the date of statement of financial position, with the resulting value
discounted back to present value.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
140
3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.4 Fair value estimation of financial instruments (continued)
(c) Financial instruments in Level 3
Fair value is determined by using valuation techniques principally based on discounted cash
flow analysis with reference to inputs of cash flow payback and other specific input relevant
to the financial assets. Changing unobservable inputs used in Level 3 valuation to reasonable
alternate assumptions would not have significant impact on the Group’s profit or loss.
The Group uses widely recognised valuation models for determining the fair value of common
and simple financial instruments, like interest-rate swap contracts, that use only observable
market data and require little management judgement and estimation.
The following tables present the Group’s assets and liabilities that are measured at fair value at 31
December 2022 and 31 December 2021. See Note 8 for disclosures of the investment properties that
are measured at fair value.
Level 1 Level 2 Level 3 Total
USD’000 USD’000 USD’000 USD’000
At 31 December 2022
Assets
Financial assets at fair value through profit
or loss (Note 13)
– Club debentures
12,902 – – 12,902
– Listed shares
13,884 – – 13,884
Financial assets at fair value through other
comprehensive income (Note 13)
– Equity and loan instruments
– – 2,101 2,101
– Listed shares
1,076 – – 1,076
Derivative financial instruments (Note 23)
– Interest-rate swap contracts
– 120,087 – 120,087
– Cross-currency swap contracts
– 13,141 – 13,141
Total assets
27,862 133,228 2,101 163,191
Liabilities
Derivative financial instruments (Note 23)
– Cross-currency swap contracts
– 10,869 – 10,869
Shangri-La Asia Limited Annual Report 2022
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3 FINANCIAL RISK MANAGEMENT (CONTINUED)
3.4 Fair value estimation of financial instruments (continued)
Level 1 Level 2 Level 3 Total
USD’000 USD’000 USD’000 USD’000
At 31 December 2021
Assets
Financial assets at fair value through
profit or loss (Note 13)
– Club debentures
12,626 – – 12,626
– Listed shares
17,251 – – 17,251
Financial assets at fair value through other
comprehensive income (Note 13)
– Equity and loan instruments
– – 2,101 2,101
– Listed shares
5,263 – – 5,263
Derivative financial instruments (Note 23)
– Cross-currency swap contracts
– 4,742 – 4,742
Total assets
35,140 4,742 2,101 41,983
Liabilities
Derivative financial instruments (Note 23)
– Interest-rate swap contracts
– 40,220 – 40,220
– Cross-currency swap contracts
– 4,909 – 4,909
Total liabilities
– 45,129 – 45,129
There was no transfer between the levels of the fair value hierarchy of the Group’s financial assets and
liabilities during the year.
The nominal value less estimated credit adjustments of receivables are assumed to approximate their
fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting
the future contractual cash flows at the current market interest rate that is available to the Group for
similar financial instruments.
Shangri-La Asia Limited Annual Report 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
142
4 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Estimates and assumptions are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below.
(a) Impairment assessment of goodwill, property, plant and equipment and right-of-use assets
The Group tests whether goodwill, property, plant and equipment and right-of-use assets have
suffered any impairment in accordance with the accounting policies stated in Note 2.5, Note 2.7
and Note 2.9. An impairment loss, if any, is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amounts of cash-generating units are the
higher of the asset’s fair value less costs of disposal and value-in-use. These calculations require the
use of estimates. Value-in-use calculations uses cash flow projections as at year end. The cash flow
projections are derived from the approved business plan and/or updated projections. Projection for a
period of greater than five years and not more than ten years in general may be used on the basis that
a longer projection period represents the long-dated nature of the Group’s hotel properties and is a
more appropriate reflection of the future cash flows generated from the hotel operations. The Group
assesses the fair value of some of its property, plant and equipment and right-of-use assets based on
valuations determined by independent professional firms and qualified valuers on an open market for
existing use basis or sales basis.
(b) Estimate of fair value of investment properties
The Group assesses the fair value of its investment properties based on valuations determined by
independent professional qualified valuers. The fair values of investment properties are determined by
independent valuers on an open market for existing use basis. In making the judgement, consideration
is given to assumptions that are mainly based on market conditions existing at the date of the
statement of financial position, expected rental from future leases in the light of current market
conditions and appropriate capitalisation rates. These estimates are regularly compared to actual
market data and actual transactions entered into by the Group. For investment properties under
construction, the estimated costs to completion and allowances for contingencies would be taken into
account.
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4 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS (CONTINUED)
(c) Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in
determining the worldwide provision for income taxes. There are certain transactions and calculations
for which the ultimate tax determination is uncertain during the ordinary course of business. The
Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional
taxes will be due in accordance with local tax practice and professional advice. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences
will impact the income tax and deferred tax provisions in the period in which such determination is
made.
(d) Estimate of future redemption rate of loyalty points
The Group operates the Shangri-La Circle (formerly “Golden Circle”), a loyalty programme where
customers mainly accumulate points from hotel stays and dinning at the Group’s hotels. A contract
liability for the award points expected to be redeemed is recognised at the time of sales. Revenue is
subsequently recognised when the points are redeemed or when they are expired. The determination
of the Shangri-La Circle revenue and the fair value of outstanding Shangri-La Circle points involves
judgement and estimation of the future redemption pattern.
Shangri-La Asia Limited Annual Report 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
144
5 REVENUE AND SEGMENT INFORMATION
The Group owns/leases and operates hotels and associated properties; and provides hotel management and
related services. The Group also owns investment properties for property rentals and engages in property
sales business. Most of the associates are engaged in hotel ownership, property rentals and property sales
businesses and these revenues of the associates are not included in the consolidated revenue of the Group.
Revenue recognised in the consolidated financial statements during the year are as follows:
2022 2021
USD’000 USD’000
Revenue
Hotel properties
Revenue from rooms
622,975 452,407
Food and beverage sales
559,903 509,663
Rendering of ancillary services
79,143 87,244
Hotel management and related services
78,680 71,470
Property development for sale
14,865 21,607
Other business
6,878 4,816
Revenue from contracts with customers
1,362,444 1,147,207
Investment properties
99,701 93,842
Total consolidated revenue
1,462,145 1,241,049
The Group is domiciled in Hong Kong. The revenue from external customers attributed to Hong Kong
and other countries are USD204,463,000 (2021: USD184,349,000) and USD1,257,682,000 (2021:
USD1,056,700,000), respectively.
The total of non-current assets other than financial assets at FVOCI and FVPL, derivative financial
instruments, deferred income tax assets and interest in associates, located in Hong Kong and other countries
are USD876,510,000 (2021: USD871,398,000) and USD6,216,787,000 (2021: USD6,821,675,000),
respectively.
In accordance with HKFRS 8 “Operating Segments”, segment information disclosed in the financial
statements has been prepared in a manner consistent with the reports reviewed by the chief operating
decision-maker that are used to make strategic decisions.
The Group’s revenue is derived from various external customers in which there is no significant sales revenue
derived from a single external customer of the Group. The Group’s management considers the business from
both a geographic and business perspective.
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5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
The Group is managed on a worldwide basis in the following main segments:
i. Hotel properties – development, ownership and operation of hotel properties (including hotels under
leases)
– The People’s Republic of China
– Hong Kong
– Mainland China
– Singapore
– Malaysia
– The Philippines
– Japan
– Thailand
– France
– Australia
– United Kingdom
– Mongolia
– Sri Lanka
– Other countries (including Fiji, Myanmar, Maldives, Indonesia, Turkey and Mauritius)
ii. Hotel management and related services for Group-owned hotels and for hotels owned by third
parties
iii. Investment properties – development, ownership and operation of office properties, commercial
properties and serviced apartments/residences for rental purpose
– Mainland China
– Singapore
– Malaysia
– Mongolia
– Sri Lanka
– Other countries (including Australia and Myanmar)
iv. Property development for sale – development and sale of real estate properties
The Group is also engaged in other business including wine trading, amusement park, retail business and
restaurant operation outside hotels. These other business did not have a material impact on the Group’s
results.
The chief operating decision-maker assesses the performance of the operating segments based on a measure
of the share of profit after tax and non-controlling interests. This measurement basis excludes the effects
of project expenses, corporate expenses and other non-operating items such as fair value gains or losses
on investment properties, fair value adjustments on monetary items and impairments for any isolated
non-recurring event.
Shangri-La Asia Limited Annual Report 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
146
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segment profit or loss
For the year ended 31 December 2022 and 2021 (USD million)
2022 2021
Revenue
Profit/(Loss)
after tax Revenue
Profit/(Loss)
after tax
(Note b) (Note a) (Note b) (Note a)
Hotel properties
The People’s Republic of China
Hong Kong
156.7 (35.5) 137.3 (47.9)
Mainland China
429.5 (145.0) 588.1 (82.0)
Singapore
197.4 18.6 104.2 (10.8)
Malaysia
77.1 (3.3) 25.9 (12.9)
The Philippines
79.6 (7.3) 26.1 (27.0)
Japan
32.7 (4.0) 30.8 (0.9)
Thailand
33.4 1.9 10.4 (5.6)
France
50.8 (1.6) 23.7 (5.8)
Australia
76.9 (1.2) 37.3 (13.0)
United Kingdom
55.9 (10.2) 38.3 (1.9)
Mongolia
13.5 (4.7) 6.1 (2.5)
Sri Lanka
20.3 (6.9) 12.3 (21.0)
Other countries
38.1 0.8 8.9 (15.0)
1,261.9 (198.4) 1,049.4 (246.3)
Hotel management and related services
165.6 (5.7) 148.0 (18.5)
Sub-total hotel operation
1,427.5 (204.1) 1,197.4 (264.8)
Investment properties
Mainland China
27.7 167.8 25.5 172.4
Singapore
12.1 8.7 9.3 7.4
Malaysia
4.7 0.9 5.0 1.0
Mongolia
27.1 4.5 23.9 9.2
Sri Lanka
12.2 (2.3) 11.0 (13.4)
Other countries
15.9 2.4 19.1 4.0
99.7 182.0 93.8 180.6
Property development for sale
14.9 31.0 21.6 14.2
Other business
6.9 (2.8) 4.8 (1.3)
Total
1,549.0 6.1 1,317.6 (71.3)
Less: Hotel management – Inter-segment revenue
(86.9) (76.6)
Total external revenue
1,462.1 1,241.0
Corporate finance costs (net)
(130.7) (117.6)
Land cost amortisation and project expenses
(3.4) (4.0)
Corporate expenses
(18.7) (14.5)
Exchange (losses)/gains of corporate
investment holding companies
(14.9) 14.2
Loss before non-operating items
(161.6) (193.2)
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5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segment profit or loss (continued)
For year ended 31 December 2022 and 2021 (USD million)
2022 2021
Profit/(Loss)
after tax
Profit/(Loss)
after tax
(Note a) (Note a)
Loss before non-operating items
(161.6) (193.2)
Non-operating items
Share of net fair value gains on investment properties
89.9 60.0
Net unrealised (losses)/gains on financial assets
at fair value through profit or loss
(3.1) 3.6
Fair value adjustments on security deposit on leased premises
0.3 0.1
Provision for impairment losses on properties, plant and equipment
– (108.5)
Provision for impairment losses on right-of use-assets
– (49.2)
Write-off of miscellaneous assets and liabilities
for a terminated development project
– (12.5)
Provision for impairment losses on intangible assets
– (2.5)
Insurance claim recovered from a bombing incident
occurred in 2019
3.0 0.9
Fair value changes on cross-currency swap contracts – non-hedging
7.3 10.7
Foreign exchange loss due to depreciation of Sri Lankan rupee
(110.3) –
Gain on partial disposal of interests in a subsidiary
10.5 –
Gain on disposal of fixed assets of laundry business
5.5 –
Total non-operating items
3.1 (97.4)
Consolidated loss attributable to owners of the Company
(158.5) (290.6)
Notes:
a. Profit/(Loss) after tax includes net of tax results from both associates and subsidiaries after share of non-controlling interests.
b. Revenue excludes revenue of associates.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
148
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segment profit or loss (continued)
For year ended 31 December 2022 and 2021 (USD million)
The Group’s share of profit/(loss) of associates (excluding projects under development) by operating
segments included in loss before non-operating items in the segment profit or loss is analysed as follows:
2022 2021
Share of
profit/(loss)
of associates
Share of
profit/(loss)
of associates
Hotel properties
The People’s Republic of China
Hong Kong
(0.2) (0.6)
Mainland China
(35.0) (14.2)
Singapore
(1.1) (1.2)
Malaysia
0.3 (1.8)
The Philippines
3.7 (7.2)
Other countries
5.2 (2.3)
(27.1) (27.3)
Investment properties
Mainland China
167.0 175.7
Singapore
1.8 2.5
168.8 178.2
Property development for sale
22.8 2.8
Other business
(0.1) 0.2
Total
164.4 153.9
Shangri-La Asia Limited Annual Report 2022
Financial Report
149
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segment profit or loss (continued)
For year ended 31 December 2022 and 2021 (USD million)
The amount of depreciation and amortisation and income tax expense/(credit) before share of
non-controlling interests included in the results of operating segments from subsidiaries (excluding projects
under development) are analysed as follows:
2022 2021
Depreciation
and
amortisation
Income tax
expense/
(credit)
Depreciation
and
amortisation
Income tax
expense/
(credit)
Hotel properties
The People’s Republic of China
Hong Kong
35.1 (10.2) 34.6 (10.5)
Mainland China
111.9 (3.9) 126.4 14.3
Singapore
17.4 4.7 18.9 (0.4)
Malaysia
11.3 0.7 13.3 (6.4)
The Philippines
21.2 (6.5) 23.6 (19.5)
Japan
5.1 – 6.3 –
Thailand
4.9 (0.2) 6.3 (5.5)
France
7.1 – 8.2 –
Australia
12.0 0.2 13.6 (4.6)
United Kingdom
8.3 – 9.2 –
Mongolia
7.3 0.1 9.1 0.1
Sri Lanka
7.9 0.8 14.7 1.2
Other countries
9.2 0.1 11.0 0.8
258.7 (14.2) 295.2 (30.5)
Hotel management and related services
17.4 3.1 20.1 0.2
Sub-total hotel operations
276.1 (11.1) 315.3 (30.3)
Investment properties
Mainland China
– 10.2 – 16.3
Malaysia
– 0.7 – 0.7
Mongolia
– 5.3 – 5.7
Sri Lanka
0.2 3.3 0.3 1.2
Other countries
0.1 1.5 0.1 1.6
0.3 21.0 0.4 25.5
Property development for sale
– 0.8 – (0.8)
Other business
1.7 – 1.7 –
Total
278.1 10.7 317.4 (5.6)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
150
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segment assets
As at 31 December 2022 and 2021 (USD million)
As at 31 December
2022 2021
Hotel properties
The People’s Republic of China
Hong Kong
820.5 813.1
Mainland China
2,288.3 2,615.9
Singapore
528.4 515.1
Malaysia
237.8 251.1
The Philippines
283.9 296.2
Japan
61.6 71.2
Thailand
204.7 193.1
France
254.7 273.6
Australia
293.7 319.7
United Kingdom
239.2 279.0
Mongolia
112.0 122.5
Sri Lanka
100.5 184.4
Other countries
172.9 182.2
5,598.2 6,117.1
Investment properties
Mainland China
608.2 593.0
Singapore
518.2 429.8
Malaysia
69.7 73.1
Mongolia
301.7 319.1
Sri Lanka
171.1 272.6
Other countries
233.0 247.3
1,901.9 1,934.9
Property development for sale
Mainland China
34.6 38.3
Sri Lanka
16.6 36.7
51.2 75.0
Hotel management and related services
274.6 324.0
Elimination
(60.3) (52.5)
Total segment assets
7,765.6 8,398.5
Assets allocated to projects and other business
278.2 291.0
Unallocated assets
355.9 246.7
Intangible assets
108.8 110.0
Assets of disposal group classified as held for sale
– 86.4
Total assets of the Company and its subsidiaries
8,508.5 9,132.6
Interest in associates
4,125.0 4,341.7
Total assets
12,633.5 13,474.3
Unallocated assets mainly comprise other assets of the Company and non-properties holding companies of
the Group as well as the financial assets at FVOCI and FVPL, derivative financial instruments and deferred
income tax assets.
Shangri-La Asia Limited Annual Report 2022
Financial Report
151
6 FINANCIAL INSTRUMENTS BY CATEGORY
As at 31 December
2022 2021
Note USD’000 USD’000
Financial assets
Financial assets at amortised cost
– Other receivables
14 13,488 14,882
– Accounts receivable
15 131,351 119,140
– Amounts due from associates
12 163,394 210,817
– Short-term fund placements
17 18,721 13,599
– Cash and bank balances
17 747,273 771,267
Financial assets at fair value through profit and loss
– Listed security
13 13,884 17,251
– Club debentures
13 12,902 12,626
Financial assets at fair value through
other comprehensive income
– Equity and loan instruments
13 2,101 2,101
– Listed security
13 1,076 5,263
Derivate financial instruments
– Interest-rate swap contracts
23 120,087 –
– Cross-currency swap contracts
23 13,141 4,742
Total
1,237,418 1,171,688
Financial liabilities
Financial liabilities at amortised cost
– Bank loans
21 4,479,656 4,463,058
– Fixed rate bonds
22 1,132,761 1,124,794
– Amounts due to non-controlling shareholders
24 51,779 50,018
– Loan from non-controlling shareholders
24 – 46,550
– Accounts payable and accruals
26 572,620 608,749
– Lease liabilities 9
563,689 618,798
Derivate financial instruments
– Interest-rate swap contracts
23 – 40,220
– Cross-currency swap contracts
23 10,869 4,909
Total
6,811,374 6,957,096
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
152
7 PROPERTY, PLANT AND EQUIPMENT
Land and
buildings
Vehicles and
machinery
Furniture,
fixtures and
equipment
Properties
under
development Total
USD’000 USD’000 USD’000 USD’000 USD’000
At 1 January 2021
Cost
7,189,641 865,079 1,528,793 65,245 9,648,758
Accumulated depreciation and
impairment provision
(2,632,998) (641,990) (1,279,787) – (4,554,775)
Net book amount
4,556,643 223,089 249,006 65,245 5,093,983
Year ended 31 December 2021
Balance at 1 January 2021
4,556,643 223,089 249,006 65,245 5,093,983
Exchange differences
(62,460) (42) (7,975) (2,192) (72,669)
Additions
26,881 3,062 14,268 28,836 73,047
Classified as held for sale
(71,461) – – (4,651) (76,112)
Disposals
(917) (330) (624) – (1,871)
Impairments (Note 29 & 30)
(112,880) (3,959) (1,974) (4,042) (122,855)
Transfer
29,225 6,532 (30,565) (5,192) –
Depreciation
(155,029) (45,070) (58,545) – (258,644)
Closing net book amount
4,210,002 183,282 163,591 78,004 4,634,879
At 31 December 2021
Cost
7,132,569 899,450 1,465,494 93,271 9,590,784
Accumulated depreciation and
impairment provision
(2,922,567) (716,168) (1,301,903) (15,267) (4,955,905)
Net book amount
4,210,002 183,282 163,591 78,004 4,634,879
Year ended 31 December 2022
Balance at 1 January 2022
4,210,002 183,282 163,591 78,004 4,634,879
Exchange differences
(271,997) (18,933) (15,548) (2,537) (309,015)
Additions 4
3,605 22,104 47,063 72,776
Disposals
(1,182) (440) (923) – (2,545)
Transfer
40,470 (8,267) 13,894 (46,097) –
Depreciation
(143,226) (37,957) (43,455) – (224,638)
Closing net book amount
3,834,071 121,290 139,663 76,433 4,171,457
At 31 December 2022
Cost
6,754,790 784,869 1,388,460 90,922 9,019,041
Accumulated depreciation and
impairment provision
(2,920,719) (663,579) (1,248,797) (14,489) (4,847,584)
Net book amount
3,834,071 121,290 139,663 76,433 4,171,457
(a) All depreciation expenses (net of amount capitalised of USD2,000 in 2022 (2021: USD3,000)) have been included as part of the other
operating expenses.
(b) As at 31 December 2022, no bank loan (2021: USD3,555,000) was secured by certain fixed assets as disclosed under Note 39(c).
(c) Buildings comprise mainly hotel properties. Details of the hotel properties of the Company’s subsidiaries are summarised in
Note 43(a)
(d) Properties under development include construction work in progress in respect of the renovation of certain hotel properties.
Shangri-La Asia Limited Annual Report 2022
Financial Report
153
8 INVESTMENT PROPERTIES
2022 2021
USD’000 USD’000
At 1 January
1,758,979 1,748,296
Exchange differences
(164,503) (20,456)
Additions
68,164 41,878
Disposals
(2,471) (1,840)
Fair value gains/(losses) (Note 30)
64,698 (8,899)
At 31 December
1,724,867 1,758,979
(a) As at 31 December 2022, all investment properties are recorded at fair value which were revalued by
independent professionally qualified valuers on the basis of their market value as fully operational entities
for existing use which equates to the highest and best use of the assets. For the year ended 31 December
2022, fair value gains on revaluation amounted to USD64,698,000 (2021: loss on USD8,899,000) are
included in “Other gains/(losses) – net” in the consolidated statement of profit or loss (Note 30).
(b) The carrying values of investment properties comprised:
2022 2021
USD’000 USD’000
Outside Hong Kong, held on:
Freehold
676,948 717,424
Leases of between 10 and 50 years
1,047,919 1,041,555
1,724,867 1,758,979
(c) Details of investment properties of the Company’s subsidiaries are summarised in Note 44(a).
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
154
8 INVESTMENT PROPERTIES (CONTINUED)
The following table presents the investment properties of the Company’s subsidiaries that are measured at
fair value at 31 December 2022.
Fair value measurements at
31 December 2022 using
Quoted prices
in active
markets for
identical assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
USD’000 USD’000 USD’000
Recurring fair value measurements
Investment properties:
– Office, serviced apartments, commercial
complex and investment property under
development in Mainland China
– – 570,170
– Serviced apartments in Singapore
– – 474,603
– Office, serviced apartments and commercial
complex in Mongolia
– – 267,984
– Office, serviced apartments and commercial
complex in Sri Lanka
– – 137,017
– Office, serviced apartments and commercial
complex in other regions
– – 275,093
– – 1,724,867
Fair value measurements at
31 December 2021 using
Quoted prices
in active
markets for
identical assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
USD’000 USD’000 USD’000
Recurring fair value measurements
Investment properties:
– Office, serviced apartments, commercial
complex and investment property under
development in Mainland China
– – 544,051
– Serviced apartments in Singapore
– – 411,128
– Office, serviced apartments and commercial
complex in Mongolia
– – 281,791
– Office, serviced apartments and commercial
complex in Sri Lanka
– – 237,017
– Office, serviced apartments and commercial
complex in other regions
– – 284,992
– – 1,758,979
The fair value of an asset to be transferred between the levels is determined as of the date of the event or
change in circumstances that caused the transfer. There were no transfers between Level 1, 2 and 3 during
the year.
Shangri-La Asia Limited Annual Report 2022
Financial Report
155
8 INVESTMENT PROPERTIES (CONTINUED)
The following table shows a reconciliation of Level 3 fair values using significant unobservable inputs.
Office,
serviced
apartments,
commercial
complex and
investment
property under
development
in Mainland
China
Serviced
apartments
in Singapore
Office,
serviced
apartments
and
commercial
complex
in Mongolia
Office,
serviced
apartments
and
commercial
complex in
Sri Lanka
Office,
serviced
apartments
and
commercial
complex in
other regions Total
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
At 1 January 2021
484,912 410,821 272,742 256,990 322,831 1,748,296
Additions
41,324 202 295 – 57 41,878
Disposals
(40) (117) (1,683) – – (1,840)
Changes in fair value
6,266 8,852 10,445 745 (35,207) (8,899)
Exchange differences
11,589 (8,630) (8) (20,718) (2,689) (20,456)
At 31 December 2021 and
1 January 2022
544,051 411,128 281,791 237,017 284,992 1,758,979
Additions
70,335 533 (2,941) – 237 68,164
Disposals
(10) (187) (2,098) – (176) (2,471)
Changes in fair value
2,232 58,661 2,979 6,234 (5,408) 64,698
Exchange differences
(46,438) 4,468 (11,747) (106,234) (4,552) (164,503)
At 31 December 2022
570,170 474,603 267,984 137,017 275,093 1,724,867
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
156
8 INVESTMENT PROPERTIES (CONTINUED)
The following table shows the valuation techniques used by the valuers in the determination of Level 3 fair
values. There were no significant changes to the valuation techniques during the year.
Description
Fair value at
31 December 2022
Valuation technique Unobservable inputs
USD’000
Mainland China
– Office, serviced
apartments,
commercial complex
and investment
property under
development
570,170
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD11 to USD39
per sq.m per month
and occupancy from
88% to 95%
Capitalisation rate
in the range of
4% to 9%
Singapore
– Serviced apartments
474,603
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD267 to USD321
per room per day
and occupancy from
77% to 84%
Capitalisation rate
of 3%
Mongolia
– Office, serviced
apartments and
commercial complex
267,984
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD19 to USD32
per sq.m. per month
and occupancy
from 83% to 98%
Capitalisation rate
in the range of
5.75% to 9.25%
Sri Lanka
– Office, serviced
apartments and
commercial complex
137,017
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD13 to USD17
per sq.m. per month
and occupancy 85%
Capitalisation rate
in the range of
7.5% to 8.5%
Other regions
– Office, serviced
apartments and
commercial complex
275,093
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD13 to USD29
per sq.m. per month
and occupancy
from 52% to 90%
Capitalisation rate
in the range of
4% to 8.15%
Shangri-La Asia Limited Annual Report 2022
Financial Report
157
8 INVESTMENT PROPERTIES (CONTINUED)
Description
Fair value at
31 December 2021
Valuation technique Unobservable inputs
USD’000
Mainland China
– Office, serviced
apartments,
commercial complex
and investment
property under
development
544,051
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD14 to USD40
per sq.m. per month
and occupancy from
88% to 95%
Capitalisation rate
in the range of
4% to 9%
Singapore
– Serviced apartments
411,128
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD255 to USD306
per room per day
and occupancy
from 74% to 84%
Capitalisation rate
of 3.3%
Mongolia
– Office, serviced
apartments and
commercial complex
281,791
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD19 to USD30 per
sq.m. per month
and occupancy
from 90% to 98%
Capitalisation rate
in the range of
5.5% to 9.0%
Sri Lanka
– Office, serviced
apartments and
commercial complex
237,017
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD16 to USD35 per
sq.m. per month
and occupancy
from 75% to 85%
Capitalisation rate
in the range of
4.5% to 8.5%
Other regions
– Office, serviced
apartments and
commercial complex
284,992
Direct comparison
approach and income
capitalisation approach
Rental rate from
USD13 to USD30
per sq.m. per month
Capitalisation rate
in the range of
5.5% to 8.25%
Under the income capitalisation approach, fair value is determined by discounting the projected cash flow
streams with the properties using risk-adjusted discount rate. An exit or terminal value projected based on
capitalisation rate is also included in the projection. The valuation takes into account expected market rental
rate and occupancy rate of the respective properties. The capitalisation rates used are based on the quality
and location of the properties and taking into account market data at the valuation date. The fair value
measurement is positively correlated to the rental rate and occupancy rate, and negatively correlated to the
capitalisation rate and discount rate.
Under the direct comparison approach, fair value is determined with reference to recent sales price of
comparable properties in nearby locations and adjusting a premium or a discount specific to the quality of
the respective properties compared to the recent sales. Higher premium for higher quality properties will
result in a higher fair value measurement.
For valuation of investment properties under development, estimated cost to completion together
with developer’s profit and risk margins are deducted from the estimated capital value of the proposed
development by reference to its development potential assuming completed as at the date of valuation.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
158
9 LEASES
This note provides information for leases where the Group is a lessee.
(a) Amounts recognised in the consolidated statement of financial position
The consolidated statement of financial position shows the following carrying amounts relating to leases:
31 December
2022
31 December
2021
USD’000 USD’000
Right-of-use assets
Leasehold land and land use rights
807,014 871,666
Buildings
264,411 295,805
Motor vehicles
497 202
Others
2,759 6,636
1,074,681 1,174,309
Lease liabilities
Current
44,729 48,072
Non-current
518,960 570,726
563,689 618,798
Additions to the right-of-use assets during the year ended 31 December 2022 were USD18,978,000
(2021: USD23,204,000).
The Group assesses the carrying value of property, plant and equipment; and right-of-use asset as
per accounting policies. Professional valuations were carried out by independent professional firms
during the year for those properties for which the internal assessment results needed independent
confirmation. The Group has performed an impairment assessment on the right-of-use assets where
impairment indicators exist.
During the year ended 31 December 2021, the Group has recorded a total impairment loss of
USD49,167,000 for the right-of-use assets under “Other gains/(losses) – net” in the consolidated
statement of profit or loss and out of which, USD47,726,000 is for the entire impairment of land use rights
of a development project in Mainland China as the Group has decided not to proceed with the project
development while USD1,441,000 is for the impairment of right-of-use assets of a restaurant business. No
impairment provision has been provided for current year.
(b) Amounts recognised in the consolidated statement of profit or loss
The consolidated statement of profit or loss shows the following expenses relating to leases:
2022 2021
USD’000 USD’000
Depreciation charge of right-of-use assets
Leasehold land and land use rights
24,816 27,328
Buildings
18,712 22,103
Motor vehicles
130 315
Others
2,564 3,200
46,222 52,946
Interest expenses on lease liability (included in finance cost)
28,120 30,697
Expense relating to short-term leases and variable lease
payments not included in lease liabilities
19,658 6,954
Total cash outflow for leases in respect of lease liability in 2022 was USD44,499,000 (2021:
USD47,594,000) and the total cash outflow for leases including short-term leases and variable lease
payment was USD64,157,000 (2021: USD54,548,000).
Shangri-La Asia Limited Annual Report 2022
Financial Report
159
10 INTANGIBLE ASSETS
Goodwill
Trademark
and licences
Website
and system
development Total
USD’000 USD’000 USD’000 USD’000
At 1 January 2021
Cost
89,170 11,958 32,375 133,503
Accumulated amortisation
– (8,516) (9,587) (18,103)
Net book amount
89,170 3,442 22,788 115,400
Year ended 31 December 2021
Opening net book amount
89,170 3,442 22,788 115,400
Exchange difference
(764) – (50) (814)
Additions
– – 5,054 5,054
Impairment (Note 29)
– – (2,467) (2,467)
Amortisation expenses
– (568) (6,581) (7,149)
Closing net book amount
88,406 2,874 18,744 110,024
At 31 December 2021
Cost
88,406 11,958 32,883 133,247
Accumulated amortisation
– (9,084) (14,139) (23,223)
Net book amount
88,406 2,874 18,744 110,024
Year ended 31 December 2022
Opening net book amount
88,406 2,874 18,744 110,024
Exchange difference
(394) – – (394)
Additions
– – 6,986 6,986
Amortisation expenses
– (568) (7,244) (7,812)
Closing net book amount
88,012 2,306 18,486 108,804
At 31 December 2022
Cost
88,012 11,958 39,840 139,810
Accumulated amortisation
– (9,652) (21,354) (31,006)
Net book amount
88,012 2,306 18,486 108,804
During the last year ended 31 December 2021, the Group has impaired intangible assets for website and
system development amounted to USD2,467,000 due to the obsolescence of the intangible assets. No
impairment provision has been provided for current year.
The principal component of goodwill represented the excess of cost of acquisition of the hotel management
group over the fair value of the identified net assets acquired. Due to the synergies of the combination of
the hotel operation and hotel management sub-groups, the goodwill impairment assessment is based on
the future cash flow generated from the hotel management group using a value-in-use model. The cash
flow uses a terminal growth rate of 4% per annum (2021: 5% per annum) and a discount rate of 8% per
annum (2021: 7% per annum). The future cash flow is based on the recent forecasts taking into account the
terms and final maturities of all existing management agreements, the past performance of the hotels and
the prevailing market conditions. In view of the cash flow projection, no provision for impairment losses is
considered necessary after reviewing the impairment assessment. Reasonably possible changes for other key
assumptions have been considered and assessed and no instances have been identified that could cause the
carrying amount of the goodwill to exceed its recoverable amount.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
160
11 SUBSIDIARIES
(a) Details of principal subsidiaries are set out in Note 42(a).
(b) Material non-controlling interests
The total non-controlling interests as at 31 December 2022 is USD170,474,000 (2021:
USD185,571,000), of which USD145,758,000 (2021: USD158,311,000) is attributable to Shangri-La
Hotels (Malaysia) Berhad Group (which is the Malaysia listed Group), and USD-5,265,000 (2021:
USD-1,259,000) is attributable to Shangri-La International Hotels (Pacific Place) Limited (which
owns Island Shangri-La in Hong Kong). The remaining non-controlling interests in respect of other
subsidiaries are not material in terms of profit contribution.
Summarised financial information of subsidiaries with material non-controlling interests
Set out below are the summarised financial information for each subsidiary that has non-controlling
interests that are material to the Group. These summarised financial information are based on the
local statutory financial statements of the relevant subsidiaries after adjustments for compliance with
the Group’s accounting policies.
Summarised statement of financial position as at 31 December
Shangri-La Hotels
(Malaysia) Berhad
Shangri-La
International Hotels
(Pacific Place) Limited
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Current
Assets
31,904 23,454 15,200 24,372
Liabilities
(72,198) (66,780) (22,120) (23,253)
Total net current (liabilities)/assets
(40,294) (43,326) (6,920) 1,119
Non-current
Assets
326,250 353,286 153,598 123,029
Liabilities
(8,697) (9,278) (173,001) (130,442)
Total net non-current assets/(liabilities)
317,553 344,008 (19,403) (7,413)
Net assets/(liabilities)
277,259 300,682 (26,323) (6,294)
Attributable to:
Owners of the Company
131,501 142,371 (21,058) (5,035)
Non-controlling interests
145,758 158,311 (5,265) (1,259)
277,259 300,682 (26,323) (6,294)
Shangri-La Asia Limited Annual Report 2022
Financial Report
161
11 SUBSIDIARIES (CONTINUED)
(b) Material non-controlling interests (continued)
Summarised statement of comprehensive income for the year ended 31 December
Shangri-La Hotels
(Malaysia) Berhad
Shangri-La
International Hotels
(Pacific Place) Limited
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Revenue
82,364 31,057 54,411 48,328
Loss before income tax
(4,721) (30,382) (24,766) (28,688)
Income tax (expense)/credit
(1,368) 5,691 4,737 4,587
Other comprehensive loss
(17,334) (9,815) – –
Total comprehensive loss
(23,423) (34,506) (20,029) (24,101)
Attributable to:
Owners of the Company
(10,870) (16,119) (16,023) (19,281)
Non-controlling interests
(12,553) (18,387) (4,006) (4,820)
(23,423) (34,506) (20,029) (24,101)
Dividends paid to non-controlling interests
– – – –
Summarised cash flow statement for the year ended 31 December
Shangri-La Hotels
(Malaysia) Berhad
Shangri-La
International Hotels
(Pacific Place) Limited
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Net cash generated from/(used in)
operating activities
11,667 (12,441) (17,578) (13,917)
Net cash used in investing activities
(3,124) (996) (33,687) (35,135)
Net cash (used in)/generated from
financing activities
(1,331) 998 42,582 51,507
Net increase/(decrease) in cash and
cash equivalents
7,212 (12,439) (8,683) 2,455
Cash and cash equivalents
at beginning of the year
18,823 32,267 16,323 13,868
Exchange losses on
cash and cash equivalents
(1,060) (1,005) – –
Cash and cash equivalents
at end of the year
24,975 18,823 7,640 16,323
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
162
12 INTEREST IN ASSOCIATES AND AMOUNTS DUE FROM ASSOCIATES
2022 2021
USD’000 USD’000
Interest in associates
Balance at 1 January
4,180,067 4,028,739
Share of profit of associates (Note 34)
– profit before taxation
270,214 307,308
– taxation
(79,442) (97,664)
190,772 209,644
Exchange difference
(353,386) 63,804
Effect of hyperinflation
53,713 –
Dividends declared by associates
(115,490) (83,060)
Equity injection to an associate
– 10,800
Capital reduction from associates
– (49,860)
Recognition of interest in an associate arising
from partial disposal of a subsidiary
15,028 –
Investment in associates under equity method
3,970,704 4,180,067
Equity loans (Note (a))
98,811 98,811
Other long term shareholder loans (Note (b))
55,452 62,830
4,124,967 4,341,708
Amounts due from associates (Note (c))
107,942 147,987
Notes:
(a) Equity loans are unsecured, interest-free and with no fixed repayment terms.
(b) Other long term shareholder loans are interest bearing at:
2022 2021
USD’000 USD’000
– HIBOR plus 1% per annum and wholly repayable on 17 July 2023
(in Hong Kong dollars)
– 23,613
– HIBOR plus 1.5% per annum and wholly repayable on 15 May 2024
(in Hong Kong dollars)
3,250 3,250
– HIBOR plus 1.5% per annum and wholly repayable on 15 May 2026
(in Hong Kong dollars)
36,982 –
– Fixed rate at 1% per annum and wholly repayable on 21 April 2026
(in Renminbi)
10,769 11,763
– PBOC rate per annum and wholly repayable on 31 December 2023
(in Renminbi)
– 23,292
– Fixed rate at 2.025% per annum and wholly repayable on 16 November
2024 (in Renminbi)
2,010 –
– Fixed rate at 2.1465% per annum and wholly repayable on 8 December
2027 (in Renminbi)
2,441 –
– Fixed rate at 3% per annum and no fixed repayment terms
(in United States dollars)
– 912
55,452 62,830
Other long term shareholder loans are unsecured and not repayable within the next twelve months from the end of the reporting
period. The fair values of other long term shareholder loans are not materially different from their carrying amounts.
Shangri-La Asia Limited Annual Report 2022
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163
12 INTEREST IN ASSOCIATES AND AMOUNTS DUE FROM ASSOCIATES (CONTINUED)
Notes: (continued)
(c) Amounts due from associates are unsecured and with the following terms:
2022 2021
USD’000 USD’000
– HIBOR plus 1% per annum and wholly repayable on 17 July 2023
(in Hong Kong dollars)
23,613 –
– Fixed rate at 3% per annum and wholly repayable on 17 February 2022
(in Renminbi)
– 423
– Fixed rate at 2.025% per annum and wholly repayable on 31 December
2023 (in Renminbi)
388 –
– PBOC rate per annum and wholly repayable on 31 December 2023
(in Renminbi)
21,322 –
– HIBOR plus 1.5% per annum and wholly repayable on demand
(in Hong Kong dollars)
– 36,982
– Fixed rate at 3.3% per annum and wholly repayable on demand
(in Renminbi)
– 2,196
– interest-free and repayable within one year
62,619 108,386
107,942 147,987
(d) The maximum exposure to credit risk at the reporting date is the fair value of the long term shareholder loans of USD55,452,000
(2021: USD62,830,000) and amounts due from associates of USD107,942,000 (2021: USD147,987,000).
(e) The Group’s proportionate share of the carrying value of properties, plant and equipment and right-of-use assets owned by the
Group’s associates amounted to USD1,001,278,000 and USD17,935,000 respectively (2021: USD1,037,342,000 and USD21,399,000
respectively). The Group’s proportionate share of the fair value of investment properties owned by the Group’s associates amounted
to USD4,067,156,000 (2021: USD4,371,590,000).
(f ) Set out below are the associates of the Group as at 31 December 2022, which, in the opinion of the directors, are material to
the Group. The associates as listed below are held directly by the Group. The country of incorporation or registration is also their
principal place of business.
Nature of investment in the associates as at 31 December 2022 and 2021:
Name of entity
Place of business/
country of incorporation
% of ownership
interest
Nature of the
business
Measurement
method
China World Trade Center Limited The People’s Republic of China 50 Note (i) Note (ii) Equity
Shanghai Ji Xiang Properties Co, Limited The People’s Republic of China 49 Note (ii) Equity
Notes:
(i) China World Trade Center Limited is considered as an associate instead of a joint venture as the Group only has significant
influence over China World Trade Center Limited due to its board composition, even though the Group holds 50% equity
interest.
(ii) China World Trade Center Limited owns the complex of China World Trade Center in Beijing and Shanghai Ji Xiang
Properties Co, Limited owns the Jing An Shangri-La, Shanghai and Jing An Kerry Centre – Phase II in Shanghai and both of
them operate hotels and investment properties in Mainland China.
Summarised financial information for associates
Set out below are the summarised financial information for China World Trade Center Limited and Shanghai Ji Xiang Properties
Co, Limited which are accounted for using the equity method. These summarised financial information are based on the local
financial statements of the relevant associates after adjustments for compliance with the Group’s accounting policies.
China World Trade
Center Limited
Shanghai Ji Xiang
Properties Co, Limited
As at 31 December As at 31 December
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Current
Assets
629,807 595,198 123,118 153,693
Liabilities
(282,696) (304,724) (177,043) (184,941)
Net current assets/(liabilities)
347,111 290,474 (53,925) (31,248)
Non-current
Assets
5,705,545 6,252,216 1,956,438 2,098,295
Liabilities
(2,207,439) (2,459,006) (441,053) (524,127)
Net non-current assets
3,498,106 3,793,210 1,515,385 1,574,168
Net assets
3,845,217 4,083,684 1,461,460 1,542,920
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
164
12 INTEREST IN ASSOCIATES AND AMOUNTS DUE FROM ASSOCIATES (CONTINUED)
Notes: (continued)
(f) (continued)
Summarised statement of comprehensive income
China World Trade
Center Limited
Shanghai Ji Xiang
Properties Co, Limited
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Revenue
588,609 656,861 156,549 214,342
Profit before tax (including fair value gains on
investment properties)
247,244 275,109 128,553 236,414
Income tax expense
(62,072) (68,227) (33,154) (54,980)
Other comprehensive (loss)/income
(333,849) 88,104 (134,234) 36,708
Total comprehensive (loss)/income
(148,677) 294,986 (38,835) 218,142
Dividends received from associates (net of tax)
40,149 25,635 19,965 –
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of its interest in the associates.
China World Trade
Center Limited
Shanghai Ji Xiang
Properties Co, Limited
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
Closing net assets
3,845,217 4,083,684 1,461,460 1,542,920
Respective equity interest
50% 50% 49% 49%
Interest in associates
1,922,609 2,041,842 716,115 756,031
Goodwill
– – 290 290
Carrying amount
1,922,609 2,041,842 716,405 756,321
(g) The Group has interests in a number of individually immaterial associates that are accounted for using the equity method. The
aggregated financial information on these associates are as follows:
2022 2021
USD’000 USD’000
Aggregate carrying amount of individually immaterial associates
1,485,953 1,543,545
Aggregate amounts of the Group’s share of
Profit after tax
51,440 17,320
Other comprehensive (loss)/income
(123,650) 2,035
Total comprehensive (loss)/income
(72,210) 19,355
There were no contingent liabilities relating to the Group’s interest in associates as at 31 December 2022 and 2021.
Shangri-La Asia Limited Annual Report 2022
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165
13 FINANCIAL ASSETS
2022 2021
USD’000 USD’000
Non-current
Financial assets at fair value through other comprehensive income
– Equity and loan instruments
2,101 2,101
– Shares listed outside Hong Kong
1,076 5,263
3,177 7,364
Financial assets at fair value through profit and loss
– Club debentures
12,902 12,626
Total
16,079 19,990
Current
Financial assets at fair value through profit and loss
– Shares listed in Hong Kong
13,884 17,251
Total
13,884 17,251
During the year ended 31 December 2022 and 2021, there were no additions of financial assets.
During the year ended 31 December 2022, financial assets at fair value through other comprehensive income
amounting to USD4,082,000 (2021: USD688,000) were disposed at sale proceeds of USD3,546,000 (2021:
USD2,833,000). The maximum exposure to credit risk at the reporting date is the fair value of the financial
assets mentioned above.
14 OTHER RECEIVABLES
2022 2021
USD’000 USD’000
Security deposit on leased premises
13,488 14,882
The following interest-free security deposits were paid to the lessors of the leased premises and will only be
recoverable after expiry of the lease.
– JPY1,751,000,000 (equivalent to USD13,277,000) (31 December 2021: JPY1,751,000,000 (equivalent
to USD15,212,000))
– RMB10,000,000 (equivalent to USD1,436,000) (31 December 2021: RMB10,000,000 (equivalent to
USD1,568,000))
The effective interest rate applied to calculate the fair value upon initial recognition of the deposit is 0.556%
and 4.15% per annum, respectively.
The fair values of these other receivables are not materially different from their carrying values.
The maximum exposure to credit risk at the reporting date is the fair value of other receivables mentioned
above.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
166
15 ACCOUNTS RECEIVABLE, PREPAYMENTS AND DEPOSITS
2022 2021
USD’000 USD’000
Trade receivables
90,031 63,496
Less: Provision for impairment of receivables
(13,588) (13,810)
Trade receivables – net (note (b))
76,443 49,686
Other receivables
54,908 69,454
Prepayments and other deposits
77,675 81,663
209,026 200,803
There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of
customers, internationally dispersed.
(a) The fair values of the trade and other receivables are not materially different from their carrying values.
(b) A significant part of the Group’s sales are by credit cards or against payment of deposits. The remaining
amounts are with general credit term of 30 days. The Group has a defined credit policy. The ageing
analysis of the trade receivables based on invoice date after provision for impairment is as follows:
2022 2021
USD’000 USD’000
0 – 3 months 64,258 47,742
4 – 6 months 7,991 1,809
Over 6 months
4,194 135
76,443 49,686
Shangri-La Asia Limited Annual Report 2022
Financial Report
167
15 ACCOUNTS RECEIVABLE, PREPAYMENTS AND DEPOSITS (CONTINUED)
(b) (continued)
The carrying amounts of the Group’s trade and other receivables are denominated in the following
currencies:
2022 2021
USD’000 USD’000
Hong Kong dollars
14,492 4,723
United States dollars
7,111 2,704
Renminbi
45,084 58,711
Singapore dollars
20,507 13,029
Malaysian ringgit
4,473 2,346
Thai baht
3,162 1,010
Philippine pesos
8,559 7,276
Japanese yen
4,516 2,479
Euros
5,664 5,874
Australian dollars
2,341 2,521
British pounds
2,560 4,599
Mongolian tugrik
661 1,642
Sri Lankan rupee
6,530 7,523
Other currencies
5,691 4,703
131,351 119,140
Movements on the Group’s provision for impairment of trade receivables are as follows:
2022 2021
USD’000 USD’000
At 1 January
13,810 9,663
Exchange differences
(22) (148)
Provision for receivables impairment
1,320 6,155
Receivables written off during the year as uncollectible
(766) (1,619)
Unused amounts reversed
(754) (241)
At 31 December
13,588 13,810
The creation and release of provision for impaired receivables have been included in “administrative
expenses” in the consolidated statement of profit or loss. Amounts charged to the allowance account
are generally written off when there is no expectation of recovering additional cash.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivables mentioned above.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
168
16 PROPERTIES FOR SALE
2022 2021
USD’000 USD’000
Located in
– Mainland China
34,606 38,303
– Sri Lanka
16,571 36,673
51,177 74,976
These properties held for sale include the cost of the underlying land on which the properties are developed.
17 CASH, BANK BALANCES AND OTHER LIQUID FUNDS
2022 2021
USD’000 USD’000
Cash at bank and in hand
401,552 394,051
Short-term bank deposits
345,721 377,216
Cash and bank balances
747,273 771,267
Short-term fund placements (note)
18,721 13,599
Cash and bank balances and short-term fund placements
765,994 784,866
Maximum exposure to credit risk for all balances at bank and
short-term fund placements
762,768 781,964
Note: Short-term fund placements represent investment in highly liquid money market instruments. This investment is readily
convertible to cash within 3 months and has insignificant risk of changes in value.
The effective interest rate on short-term bank deposits was 0.68% per annum (2021: 1.45% per annum);
these deposits have an average maturity of 0.8 months (2021: 0.5 months).
Cash and cash equivalents include the following for the purposes of the consolidated cash flow statement:
2022 2021
USD’000 USD’000
Cash and bank balances and short-term fund placements (as above)
765,994 784,866
Less: Short-term bank deposits with original
maturities over 3 months
(12,992) (39,326)
Cash and cash equivalents
753,002 745,540
Shangri-La Asia Limited Annual Report 2022
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169
18 SHARE CAPITAL AND PREMIUM AND SHARES HELD FOR SHARE AWARD SCHEME
Amount
Number of
shares
Ordinary
shares
Share
premium Total
’000 USD’000 USD’000 USD’000
Share capital and premium
Authorised – Ordinary shares of HKD1 each
At 31 December 2021 and 31 December 2022
5,000,000 646,496 – 646,496
Issued and fully paid
– Ordinary shares of HKD1 each
At 1 January 2021
3,585,525 462,904 2,739,091 3,201,995
Exercise of share options
– allotment of shares
– – – –
– transfer from share option reserve
– – – –
At 31 December 2021 and 1 January 2022
3,585,525 462,904 2,739,091 3,201,995
Exercise of share options
– allotment of shares
– – – –
– transfer from share option reserve
– – – –
At 31 December 2022
3,585,525 462,904 2,739,091 3,201,995
Shares held for share award scheme
At 1 January 2021
(3,413) (440) (3,825) (4,265)
Share purchase for share award scheme
– – – –
Vesting of shares under share award scheme
936 121 1,286 1,407
At 31 December 2021 and 1 January 2022
(2,477) (319) (2,539) (2,858)
Share purchase for share award scheme
(8,931) (1,152) (4,987) (6,139)
Vesting of shares under share award scheme
2,274 293 2,593 2,886
At 31 December 2022
(9,134) (1,178) (4,933) (6,111)
As at 31 December 2022, except for shares held for share award scheme as shown above, 10,501,055 (2021:
10,501,055) ordinary shares in the Company were held by a subsidiary which was acquired in late 1999. The
cost of these shares was recognised in equity in prior years.
Share awards
During the year ended 31 December 2022, the share award scheme of the Group acquired 8,931,000
ordinary shares in the Company through purchases on the open market and 2,274,000 shares were
transferred to the awardees upon vesting of the awarded shares. The remaining 9,134,000 shares were held
in trust under the share award scheme as at 31 December 2022. Details of the share award scheme were
disclosed in Note 19 to this consolidated financial statements.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
170
18 SHARE CAPITAL AND PREMIUM AND SHARES HELD FOR SHARE AWARD SCHEME
(CONTINUED)
Share options
The shareholders of the Company approved the adoption of a share option scheme on 28 May 2012 (“Share
Option Scheme”). The options granted on 23 August 2013 under the Share Option Scheme are immediately
exercisable on the grant date and have a contractual option term of ten years with 22 August 2023 being the
last exercisable date. The Group has no legal or constructive obligation to repurchase or settle the options in
cash.
No share option was exercised during the year ended 31 December 2022 (2021: Nil).
Movements in the number of outstanding option shares with exercise price of HKD 12.11 per option share and
their related weighted average exercise prices are as follows:
For the year ended
31 December 2022
For the year ended
31 December 2021
Weighted
average
exercise price
in HKD
per option
share
Number of
outstanding
option
Shares
Weighted
average
exercise price
in HKD
per option
share
Number of
outstanding
option
shares
At 1 January
12.11 6,508,000 12.11 6,928,000
Exercised
– – – –
Lapsed
– – 12.11 (420,000)
At 31 December
12.11 6,508,000 12.11 6,508,000
The term of the Share Option Scheme already expired on 28 May 2022 and no new option was granted
during the year ended 31 December 2022 and 2021.
No option was exercised subsequent to 31 December 2022 and up to the approval date of the financial
statements.
19 SHARE AWARD SCHEME
The Group operates the share award scheme as part of the benefits for its employees and the Company’s
directors which allows shares of the Company to be granted to the awardees. The awarded shares can either
be purchased on the open market or newly issued by the Company.
Most of the awarded shares vest progressively over the vesting period after the awards are granted and the
ultimate number of shares being vested is conditional on the satisfaction of performance conditions set by
the management of the Group.
For the year ended 31 December 2022, a total of 12,458,000 shares and 2,274,000 shares were granted
and vested to the qualified awardees, respectively. A total of 9,134,000 shares were held in trust under
the share award scheme as at 31 December 2022. During the year, an expense of USD5,241,000 (2021:
USD2,337,000) for the award shares granted was charged to the consolidated statement of profit or loss.
Shangri-La Asia Limited Annual Report 2022
Financial Report
171
19 SHARE AWARD SCHEME (CONTINUED)
Details of the awarded shares granted and vested during 2022 and 2021 are as follows:
Grant date
Fair value
per share
Number of
awarded
shares
granted
Maximum
deliverable
awarded
shares on
grant date
subject to
adjustment
Number of awarded
shares vested Vesting period
Before 2021 2021 2022
In year 2018
11 Apr 2018
HKD15.82
1,418,000 1,418,000 1,418,000 – –
Nil
20 Jul 2018
HKD13.00
707,678 1,228,000 226,000 52,000 – 20 Jul 2018 to 1 Apr 2021
30 Aug 2018
HKD11.78
975,893 1,736,000 392,000 200,000 – 30 Aug 2018 to 1 Apr 2021
Total for 2018
3,101,571 4,382,000
In year 2019
1 Apr 2019
HKD11.56
1,477,169 2,338,000 649,000 274,000 192,000 1 Apr 2019 to 1 Apr 2022
15 Jun 2019
HKD9.45
1,547,200 2,754,000 56,000 56,000 158,000 15 Jun 2019 to 1 Apr 2022
30 Jun 2019
HKD9.85
751,515 1,292,000 84,000 24,000 36,000 30 Jun 2019 to 1 Apr 2022
1 Nov 2019
HKD8.41
494,000 494,000 238,000 134,000 60,000 1 Nov 2019 to 1 Apr 2022
Total for 2019
4,269,884 6,878,000
In year 2020
30 Sep 2020
HKD6.34
214,000 214,000 214,000 – –
Nil
Total for 2020
214,000 214,000
In year 2021
1 Apr 2021
HKD7.86
52,000 52,000 52,000 –
Nil
7 Jun 2021
HKD7.27
5,986,000 5,986,000 64,000 1,740,000 7 Jun 2021 to 7 Jun 2024
15 Oct 2021
HKD6.35
80,000 80,000 80,000 –
Nil
15 Oct 2021
HKD6.35
268,000 268,000 – 88,000 15 Oct 2021 to 15 Oct 2024
Total for 2021
6,386,000 6,386,000
In year 2022
6 May 2022
HKD5.85
12,458,000 12,458,000 – 6 May 2022 to 6 May 2025
Total for 2022
12,458,000 12,458,000
Grand Total
26,429,455 30,318,000 3,277,000 936,000 2,274,000
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
172
20 OTHER RESERVES
Share
option
reserve
Share
award
reserve
Hedging
reserve
Investment
reserve
Capital
redemption
reserve
Exchange
fluctuation
reserve
Capital
reserve
Asset
revaluation
reserve
Other
reserve
Contributed
surplus Total
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
(Note (a)) (Note (b))
Balance at 31 December 2020 and 1 January 2021
6,216 1,335 (90,220) – 10,666 44,463 601,490 20,823 1,368 389,741 985,882
Currency translation differences
– – – – – 31,090 – – – – 31,090
Fair value changes of interest-rate swap and cross-currency swap contracts – hedging
– – 52,519 – – – – – – – 52,519
Fair value changes of financial assets at fair value through other comprehensive income
– – – 2,653 – – – – – – 2,653
Share-based compensation under share award scheme
– 2,337 – – – – – – – – 2,337
Vesting of shares under share award scheme
– (1,222) – – – – – – – – (1,222)
Balance at 31 December 2021 and 1 January 2022
6,216 2,450
(37,701) 2,653 10,666 75,553 601,490 20,823 1,368 389,741 1,073,259
Currency translation differences
– –
– – – (650,836) – – – – (650,836)
Fair value changes of interest-rate swap and cross-currency swap contracts – hedging
– – 145,939 – – – – – – – 145,939
Fair value changes of financial assets at fair value through other comprehensive income
– – – (125) – – – – – – (125)
Transfer gain on change in fair value of equity instruments sold to retained earnings
– – – (2,337) – – – – – – (2,337)
Share-based compensation under share award scheme
– 5,241 – – – – – – – – 5,241
Vesting of shares under share award scheme
– (2,294) – – – – – – – – (2,294)
Balance at 31 December 2022
6,216 5,397
108,238 191 10,666 (575,283) 601,490 20,823 1,368 389,741 568,847
Notes:
(a) A subsidiary in Thailand is required by local law to appropriate certain percentage of its annual net profits as other reserve until the
reserve reaches 10 percent of its registered share capital. This reserve is not available for dividend distribution.
(b) The contributed surplus of the Group arose when the Group issued shares in exchange for the shares of companies being
acquired, and represented the difference between the nominal value of the Company’s issued shares and the value of net assets
of the companies acquired. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus is distributable
to the shareholders. At the Group level, the contributed surplus is reclassified into its components of reserves of the underlying
subsidiaries, whenever appropriate.
Shangri-La Asia Limited Annual Report 2022
Financial Report
173
20 OTHER RESERVES
Share
option
reserve
Share
award
reserve
Hedging
reserve
Investment
reserve
Capital
redemption
reserve
Exchange
fluctuation
reserve
Capital
reserve
Asset
revaluation
reserve
Other
reserve
Contributed
surplus Total
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
(Note (a)) (Note (b))
Balance at 31 December 2020 and 1 January 2021
6,216 1,335 (90,220) – 10,666 44,463 601,490 20,823 1,368 389,741 985,882
Currency translation differences
– – – – – 31,090 – – – – 31,090
Fair value changes of interest-rate swap and cross-currency swap contracts – hedging
– – 52,519 – – – – – – – 52,519
Fair value changes of financial assets at fair value through other comprehensive income
– – – 2,653 – – – – – – 2,653
Share-based compensation under share award scheme
– 2,337 – – – – – – – – 2,337
Vesting of shares under share award scheme
– (1,222) – – – – – – – – (1,222)
Balance at 31 December 2021 and 1 January 2022
6,216 2,450
(37,701) 2,653 10,666 75,553 601,490 20,823 1,368 389,741 1,073,259
Currency translation differences
– –
– – – (650,836) – – – – (650,836)
Fair value changes of interest-rate swap and cross-currency swap contracts – hedging
– – 145,939 – – – – – – – 145,939
Fair value changes of financial assets at fair value through other comprehensive income
– – – (125) – – – – – – (125)
Transfer gain on change in fair value of equity instruments sold to retained earnings
– – – (2,337) – – – – – – (2,337)
Share-based compensation under share award scheme
– 5,241 – – – – – – – – 5,241
Vesting of shares under share award scheme
– (2,294) – – – – – – – – (2,294)
Balance at 31 December 2022
6,216 5,397
108,238 191 10,666 (575,283) 601,490 20,823 1,368 389,741 568,847
Notes:
(a) A subsidiary in Thailand is required by local law to appropriate certain percentage of its annual net profits as other reserve until the
reserve reaches 10 percent of its registered share capital. This reserve is not available for dividend distribution.
(b) The contributed surplus of the Group arose when the Group issued shares in exchange for the shares of companies being
acquired, and represented the difference between the nominal value of the Company’s issued shares and the value of net assets
of the companies acquired. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus is distributable
to the shareholders. At the Group level, the contributed surplus is reclassified into its components of reserves of the underlying
subsidiaries, whenever appropriate.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
174
21 BANK LOANS
2022 2021
USD’000 USD’000
Bank loans – secured (Note 39(c))
– 3,555
Bank loans – unsecured
4,479,656 4,459,503
Total
4,479,656 4,463,058
Less: Non-current portion
(3,527,212) (3,400,972)
Current portion
952,444 1,062,086
The maturity of bank loans is as follows:
2022 2021
USD’000 USD’000
Within 1 year
952,444 1,062,086
Between 1 and 2 years
859,014 889,368
Between 2 and 5 years
2,506,006 2,112,637
Repayable within 5 years
4,317,464 4,064,091
Over 5 years
162,192 398,967
4,479,656 4,463,058
The effective interest rates at the date of the statement of financial position were as follows:
31 December 2022
HKD RMB USD EUR JPY AUD FJD SGD MYR
1
Bank loans
5.36% 4.78% 4.98% 1.30% 0.77% 2.19% 4.25% 3.59% –
31 December 2021
HKD RMB USD EUR JPY AUD FJD SGD MYR
1
Bank loans
1.17% 4.85% 1.48% 1.31% 0.84% 2.19% 4.25% 1.19% 2.60%
Shangri-La Asia Limited Annual Report 2022
Financial Report
175
21 BANK LOANS (CONTINUED)
The carrying amounts of the bank loans approximate their fair values and are denominated in the following
currencies:
2022 2021
USD’000 USD’000
Hong Kong dollars (HKD)
1,579,537 1,458,246
Renminbi (RMB)
560,865 599,384
United States dollars (USD)
2,065,572 2,122,710
Euros (EUR)
80,111 88,416
Japanese yen (JPY)
110,316 121,155
Australian dollars (AUD)
53,735 58,106
Fijian dollars (FJD)
12,738 10,132
Singapore dollars (SGD)
16,782 3,705
Malaysian ringgit (MYR)
– 1,204
Malaysian ringgit (MYR) 1,204 –
4,479,656 4,463,058
The Group has the following undrawn borrowing facilities:
2022 2021
USD’000 USD’000
Floating rate
– expiring within one year
236,425 176,085
– expiring beyond one year
736,628 1,735,505
Fixed rate
– expiring within one year
– –
– expiring beyond one year
– 4,721
973,053 1,916,311
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
176
22 FIXED RATE BONDS
In February 2021, a wholly owned subsidiary of the Company issued 9-year fixed rate bonds in an aggregated
amount of SGD100,000,000 (equivalent to USD75,919,000) at 100% of the face value with a coupon rate of
3.50% per annum. In 2022, no new fixed rate bonds is issued.
The fixed rate bonds recognised in the consolidated statement of financial position are as follows:
Coupon rate
per annum Maturity
Balance as at
31 December
2021
New
issuance
during
the year
Exchange
differences
Balance as at
31 December
2022
USD’000 USD’000 USD’000 USD’000
Bonds issued in 2018
SGD825,000,000
4.50%
November 2025
611,247 – 4,103 615,350
USD35,000,000
5.23%
November 2025
35,000 – – 35,000
Bonds issued in 2019
SGD135,000,000
3.70%
June 2024
100,022 – 672 100,694
SGD165,000,000
4.10%
June 2027
122,249 – 821 123,070
Bonds issued in 2020
SGD250,000,000
3.50%
January 2030
185,226 – 1,244 186,470
Bonds issued in 2021
SGD100,000,000
3.50%
January 2030
74,091 – 497 74,588
Face value
1,127,835 7,337 1,135,172
Unamortised discount and
issuing expenses
(3,041) (2,411)
Carrying amount
1,124,794 1,132,761
Shangri-La Asia Limited Annual Report 2022
Financial Report
177
23 DERIVATIVE FINANCIAL INSTRUMENTS
2022 2021
USD’000 USD’000
Non-current assets
Interest-rate swap contracts
74,975 –
Cross-currency swap contracts
– 1,949
74,975 1,949
Current assets
Interest-rate swap contracts
45,112 –
Cross-currency swap contracts
13,141 2,793
58,253 2,793
Total assets
133,228 4,742
Non-current liabilities
Interest-rate swap contracts
– 21,669
Cross-currency swap contracts
7,700 3,838
7,700 25,507
Current liabilities
Interest-rate swap contracts
– 18,551
Cross-currency swap contracts
3,169 1,071
3,169 19,622
Total liabilities
10,869 45,129
Interest-rate swap contracts
The Group has endeavoured to hedge its medium term interest rate risk by entering into fixed HIBOR and
LIBOR interest-rate swap contracts, and all interest-rate swap contracts qualify for hedge accounting.
All the interest-rate swap contracts were initially recognised at fair value on the dates the contracts were
entered and are subsequently re-measured at fair value at each date of the statement of financial position.
The recorded fair value could be an asset or liability depending on the prevailing financial market conditions
and the anticipated interest rate environment.
During the year ended 31 December 2022, a 5-year term interest rate swap contract of USD600,000,000
with a fixed interest rate of 1.46% per annum to hedge against 1-month LIBOR was executed to replace old
contracts of the same amount matured during the year.
The notional principal amounts of the outstanding HIBOR and LIBOR interest-rate swap contracts at 31
December 2022 are as follows:
– USD1,265,000,000 (2021: USD1,265,000,000) with fixed interest rates vary from 1.365% to 3.045%
per annum (2021: 1.365% to 3.045% per annum) maturing between November 2023 and March
2027.
– HKD6,170,000,000 (equivalent to USD796,129,000 (2021: HKD6,170,000,000 (equivalent to
USD796,129,000)) with fixed interest rates vary from 1.505% to 1.855% per annum (2021: 1.505% to
1.855% per annum) maturing between July 2023 and August 2026.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
178
23 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Interest-rate swap contracts (continued)
The SHIBOR interest-rate swap contracts with notional principal amounts totalling RMB359,200,000
(equivalent to USD56,339,000) as at 31 December 2021 with fixed interest rates vary from 3.370% to
3.550% per annum were matured during the year.
Cross-currency swap contracts
During the year ended 31 December 2020, a wholly-owned subsidiary of the Company entered into two
3-year term cross-currency swap contracts totalling EUR100,000,000 in order to swap bank borrowings
from Hong Kong dollar to Euro to hedge the Euro investment for hotels in Europe, under which the principal
amount was exchanged at inception to Euro at exchange rates of HKD9.1972 and HKD9.175 to EUR1 and
will be re-exchanged on expiry date in August 2023 at the same exchange rate. Under the contracts, fixed
interest rates of 0.390% and 0.395% per annum on the exchanged Euro principal amounts would be paid
and a floating interest rate of HIBOR+0.79% and HIBOR+0.84% per annum on the HKD principal amounts
would be received, respectively. The cross-currency swap contracts do not qualify for hedge accounting.
During the year ended 31 December 2019, a wholly-owned subsidiary of the Company entered into a
cross-currency swap contract amounting to JPY8,000,000,000 to hedge the JPY bank borrowings of the
same amount, under which the principal amount was exchanged at inception to HKD578,754,000 at an
exchange rate of JPY 13.8228 to HKD 1 and will be re-exchanged on expiry date in July 2026 at the same
exchange rate. Under the contract, a fixed interest rate of 3.345% per annum on the exchanged Hong Kong
dollar principal amounts would be paid and a floating interest rate of JPY LIBOR+0.675% per annum on the
JPY principal amount would be received. The cross-currency swap contract qualifies for hedge accounting.
During the year ended 31 December 2018, a wholly-owned subsidiary of the Company entered into a
cross-currency contract amounting to USD35,000,000, under which the principal amount was exchanged
at inception to SGD48,377,000 at an exchange rate of USD1 to SGD1.3822 and will be re-exchanged on
expiry date in November 2025 at the same exchange rate. Under the contract, a fixed interest rate of 4.25%
per annum on the exchanged Singapore dollar principal amounts would be paid and a fixed interest rate of
5.23% per annum on the United States dollar principal amount would be received. The cross-currency swap
contract does not qualify for hedge accounting.
Shangri-La Asia Limited Annual Report 2022
Financial Report
179
24 NON-CONTROLLING INTERESTS AND BALANCES WITH NON-CONTROLLING
SHAREHOLDERS
2022 2021
USD’000 USD’000
Non-controlling interests
Share of equity
36,280 96,416
Equity loans (Note (a))
134,194 89,155
170,474 185,571
Notes:
(a) Equity loans are unsecured, with no fixed repayment terms and bearing interest at:
2022 2021
USD’000 USD’000
– LIBOR per annum
8,724 8,724
– LIBOR plus 1% per annum
53,875 53,875
– LIBOR plus 3% per annum
46,550 –
– fixed rate of 2.5% per annum
15,776 17,287
– interest-free
9,269 9,269
134,194 89,155
(b) Amounts due to non-controlling shareholders (current portion) are unsecured and with the following terms:
2022 2021
USD’000 USD’000
– interest-free with no fixed repayment terms
51,779 50,018
(c) Loan from non-controlling shareholders (non-current portion) are unsecured and with the following terms:
2022 2021
USD’000 USD’000
– LIBOR plus 5% per annum
– 46,550
The fair values of the amounts due to non-controlling shareholders and loan from non-controlling
shareholders are not materially different from their carrying values.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
180
25 DEFERRED INCOME TAX
Deferred income tax assets and liabilities are calculated in full on temporary differences under the liability
method using a principal taxation rate of 16.5% (2021: 16.5%) for subsidiaries operating in Hong Kong.
Deferred income tax assets and liabilities of overseas subsidiaries are calculated at the rates of taxation
prevailing in the countries in which the respective subsidiaries operate.
The movement on the deferred income tax account is as follows:
2022 2021
USD’000 USD’000
At 1 January
230,284 278,012
Exchange differences
(10,194) (993)
Deferred taxation credited to consolidated statement
of profit or loss (Note 35)
(11,097) (47,826)
Deferred taxation (credited)/charged to
other comprehensive income
(37) 1,091
At 31 December
208,956 230,284
The following amounts which are expected only to be substantially recovered/settled after more than twelve
months from the date of the statement of financial position, determined after appropriate offsetting, are
shown in the consolidated statement of financial position. Deferred income tax assets and liabilities are
offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and
when the deferred income taxes relate to the same fiscal authority.
2022 2021
USD’000 USD’000
Deferred income tax assets
(86,534) (73,484)
Deferred income tax liabilities
295,490 303,768
208,956 230,284
Deferred income tax assets are recognised for tax loss carry forwards to the extent that realisation of the
related tax benefit through the future taxable profits is probable. As at 31 December 2022, the Group has the
following unrecognised tax losses to carry forward against future taxable income.
2022 2021
USD’000 USD’000
With no expiry date
259,105 250,485
Lapsing within the next five years
648,300 805,147
Lapsing within the next ten years
119,852 138,329
1,027,257 1,193,961
Shangri-La Asia Limited Annual Report 2022
Financial Report
181
25 DEFERRED INCOME TAX (CONTINUED)
The movement in deferred income tax assets and liabilities (prior to offsetting of balances within the same
taxation jurisdiction) during the year is as follows:
Deferred income tax liabilities
Accelerated tax
depreciation
Properties valuation
surplus
Dividend
withholding tax Others Total
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
At 1 January
227,932 236,780 40,216 41,698 79,181 87,773 600 564 347,929 366,815
Charged/(credited) to statement
of profit or loss
11,932 (3,493) 2,328 (2,145) (7,636) (8,236) 219 59 6,843 (13,815)
Charged to other comprehensive income
– – – – – – –
1
–
1
Exchange differences
(9,878) (5,355) (3,878) 663 (1,875) (356) (83) (24) (15,714) (5,072)
At 31 December
229,986 227,932 38,666 40,216 69,670 79,181 736 600 339,058 347,929
Deferred income tax assets Provision of assets Tax losses Others Total
2022 2021 2022 2021 2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
At 1 January
(4,304) (4,008) (79,802) (39,873) (33,539) (44,922) (117,645) (88,803)
Charged/(credited) to statement
of profit or loss
158 (502) (9,867) (41,403) (8,231) 7,894 (17,940) (34,011)
(Credited)/charged to other
comprehensive income
– – – – (37) 1,090 (37) 1,090
Exchange differences
160 206 3,272 1,474 2,088 2,399 5,520 4,079
At 31 December
(3,986) (4,304) (86,397) (79,802) (39,719) (33,539) (130,102) (117,645)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
182
26 ACCOUNTS PAYABLE AND ACCRUALS
2022 2021
USD’000 USD’000
Trade payables
77,770 68,293
Other payables and accrued expenses
501,452 546,576
579,222 614,869
The ageing analysis of the trade payables based on invoice date is as follows:
2022 2021
USD’000 USD’000
0 – 3 months 71,072 62,246
4 – 6 months 3,327 3,116
Over 6 months
3,371 2,931
77,770 68,293
27 CONTRACT LIABILITIES
2022 2021
USD’000 USD’000
Guest loyalty programme
26,927 66,085
Hotel operation
62,146 68,014
Property sale
339 6,724
89,412 140,823
2022 2021
USD’000 USD’000
Balance at 1 January
140,823 170,867
Recognised as revenue during the current year
(73,411) (40,287)
Cancellation for prior years’ balance during the current year
(6,208) (30,565)
Net increase for new transactions during the current year
34,371 42,756
Exchange differences
(6,163) (1,948)
Balance at 31 December
89,412 140,823
Contract liabilities for guest loyalty programme refer to unredeemed loyalty points liabilities for hotel guests
while those for hotel operation mainly comprise deposit receipts in advance from customers and those for
property sale refer to the deposits received from the properties buyers.
Shangri-La Asia Limited Annual Report 2022
Financial Report
183
28 GAIN ON PARTIAL DISPOSAL OF INTERESTS IN A SUBSIDIARY
In April 2022, the Group completed a sale and purchase transaction with an independent third party to
dispose of its 80% equity interest in a project company which owns a parcel of land in Kyoto, Japan for the
development of a luxury hotel at a cash consideration of JPY7,623,748,000 (equivalent to USD64,302,000).
A disposal gain of USD10,586,000 was recognised during the year. The Group’s equity interest in the project
has been reduced from 100% to 20% after the completion of the transaction. The financial effects of the
disposal transaction are as follows:
USD’000
Total assets
77,335
Total liabilities
(11,080)
Remaining interests after disposal as interest in associate
(15,028)
Net assets attributable to the Group disposed of 51,227
Total consideration
64,302
Less: Net assets disposed of
(51,227)
Less: Cumulative exchange differences in respect of the net assets
of the subsidiary released from exchange fluctuation reserve to profit or loss
(2,489)
Gain on disposal recognised 10,586
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
184
29 EXPENSES BY NATURE
Expenses included in cost of sales, marketing costs, administrative expenses and other operating expenses
are analysed as follows:
2022 2021
USD’000 USD’000
Depreciation of property, plant and equipment (net of amount
capitalised of USD2,000 (2021: USD3,000)) (Note 7)
224,636 258,641
Amortisation of trademark, and website and system
development (Note 10)
7,812 7,149
Depreciation of right-of-use assets (Note 9)
46,222 52,946
Provision for impairment losses on hotels and other properties
(Note 7)
– 118,813
Provision for impairment losses on right-of-use assets
for other business (Note 9)
– 1,441
Employee benefit expenses excluding directors’
emoluments and wage subsidy received from government
(net of amount capitalised and amount grouped under
pre-opening expenses) (Note 31)
641,146 604,218
Cost of sales of properties
4,550 8,133
Cost of inventories sold or consumed in operation
210,828 194,512
(Gain)/Loss on disposal of property, plant and equipment;
and partial replacement of investment properties
(3,065) 1,643
Gain on derecognition of right-of-use assets and lease liabilities
(3,015) –
Impairment of intangible assets (Note 10)
– 2,467
Operating lease expenses
19,658 6,954
Pre-opening expenses
687 136
Auditors’ remuneration for audit services
2,144 1,986
Shangri-La Asia Limited Annual Report 2022
Financial Report
185
30 OTHER GAINS/(LOSSES) – NET
2022 2021
USD’000 USD’000
Provision for impairment losses on properties
under development for a development project (Note 7)
– (4,042)
Fair value gains/(losses) on investment properties (Note 8)
64,698 (8,899)
Provision for impairment losses on right-of-use assets for a
development project (Note 9)
– (47,726)
Write-off of miscellaneous assets and liabilities
for a terminated development project
– (16,491)
Net unrealised (losses)/gains on listed securities
(3,367) 978
Fair value gains of club debentures
277 2,653
Fair value changes of cross-currency swap contracts
7,291 10,698
Gain on sale of investment properties
1,441 2,707
Gain on partial disposal of interests in a subsidiary (Note 28)
10,586 –
Insurance claim recovered from a bombing incident occurred
in 2019
3,398 1,000
Government grants due to Covid-19 pandemic (Note 31)
10,885 21,837
Rent concessions provided by lessors
1,453 19,000
96,662 (18,285)
Interest income
11,066 10,138
Dividend income
1,185 4,712
108,913 (3,435)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
186
31 EMPLOYEE BENEFIT EXPENSES
(excluding Directors’ emoluments and share options granted to Directors and employees)
2022 2021
USD’000 USD’000
Wages and salaries (including unutilised annual leave)
439,609 428,614
Pension costs – defined contribution plans
39,549 39,328
Pension costs – defined benefit plans
2,599 1,804
Other welfare
159,679 133,064
Employee termination benefits
– 1,510
641,436 604,320
Less: Amount included in pre-opening expenses
(290) (102)
641,146 604,218
Less: Wage subsidy from government (Note 30)
(10,885) (21,837)
630,261 582,381
Total pension cost including charges for Directors charged to the statement of profit or loss for the year
under all pension schemes was USD42,184,000 (2021: USD41,163,000).
Shangri-La Asia Limited Annual Report 2022
Financial Report
187
31 EMPLOYEE BENEFIT EXPENSES (CONTINUED)
Pension scheme arrangement
The Group operates and participates in a number of pension and retirement schemes of both the defined
contribution and defined benefit types. Principal schemes are described below:
(a) Defined contribution retirement plan
The Company and subsidiaries in Hong Kong participate in a mandatory provident fund scheme
(“MPF”) which requires both the employers and employees in Hong Kong to contribute 5% of their
monthly gross earnings with a ceiling of HKD1,500 (equivalent to USD194). Normally, the employees
can only take all the benefits when reaching the statutory retirement age. These companies also
participate in other defined contribution schemes which only require the employers to make monthly
contribution of the net difference between 10% of the employees’ monthly basic salaries (subject
to a ceiling of HKD10,000) and the amount already contributed by the employers to the MPF for
the relevant employees. Under such schemes, any unvested benefits of employees terminating
employment can be utilised by the employers to reduce their future contributions. The assets of
these schemes are held separately in independently administrated funds. Contributions made by the
employers were charged to statement of profit or loss as incurred.
The Group’s subsidiaries in Mainland China, Singapore and Malaysia participate in defined
contribution schemes managed by the respective local governments in these countries. The Group’s
subsidiaries in Australia participate in the government-supported superannuation fund scheme (a
defined contribution scheme). Contributions are made based on a percentage, ranging from 9.5% to
20%, of the employee’s salaries and bonuses, as applicable, and are charged to the statement of profit
or loss as incurred. The maximum contributions by the subsidiaries for each employee for the Group’s
subsidiaries in Singapore are fixed by the government at SGD1,020 (equivalent to USD772) per month
for monthly salaries and bonus payment. The employees of the Group’s subsidiaries in Singapore and
Malaysia are also required to contribute 20% and 12%, respectively of their gross salaries and bonus,
if applicable, to the respective local fund.
The Group also operates a global defined contribution scheme for senior expatriates employed by
the Group which requires the employers to contribute 6% to 10% (varying with staff grading) of the
employees’ basic salaries. Employees can contribute to the scheme on a voluntary basis. Under such
scheme, the unvested benefits of employees terminating employment can be utilised by the employers
to reduce their future contributions. The assets of the scheme are held separately in independently
administered funds. Contributions made by the employers were charged to statement of profit or loss
as incurred.
(b) Defined benefit retirement plan
The hotels in the Philippines and Malaysia have adopted funded non-contributory defined benefit
pension plans covering their regular employees. The benefits are based on years of service and the
employees’ final covered compensation. The plans require periodic contributions by the participating
subsidiaries as determined by periodic actuarial reviews. For the hotels in the Philippines and
Malaysia, actuarial valuations were performed by qualified actuaries at 31 December 2022 using the
Projected Unit Credit Actuarial Cost Method.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
188
31 EMPLOYEE BENEFIT EXPENSES (CONTINUED)
Pension scheme arrangement (continued)
(b) Defined benefit retirement plan (continued)
Movements in the present value of the defined benefit obligations:
Defined benefit
obligations
Fair value of
plan assets
Net defined
benefit liability
2022 2021 2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Balance at 1 January
12,833 22,661 (6,555) (12,423) 6,278 10,238
Exchange difference
(985) (903) 590 560 (395) (343)
Included in statement of profit or loss
Current service cost
1,238 1,430 – – 1,238 1,430
Past service cost
117 (42) – – 117 (42)
Interest cost/(interest income)
1,556 619 (312) (203) 1,244 416
2,911 2,007 (312) (203) 2,599 1,804
Included in other comprehensive income
Actuarial gain
(983) (2,774) – – (983) (2,774)
Loss/(gain) on assets excluding amount
included in net interest cost
– – 551 (1,194) 551 (1,194)
(983) (2,774) 551 (1,194) (432) (3,968)
Other
Contributions
– – (334) (904) (334) (904)
Benefits paid
(1,580) (8,158) 506 7,609 (1,074) (549)
(1,580) (8,158) 172 6,705 (1,408) (1,453)
Balance at 31 December
12,196 12,833 (5,554) (6,555) 6,642 6,278
Net defined benefit liability of USD6,642,000 (2021: USD6,278,000) was recorded as accounts
payable and accruals under current liabilities.
Shangri-La Asia Limited Annual Report 2022
Financial Report
189
32 BENEFITS AND INTERESTS OF DIRECTORS
The remuneration received from the Group by every Director of the Company for the year ended 31
December 2022 is set out below:
Name of Director Fees Salary
Discretionary
bonuses
Inducement
fees
Allowances
and benefits
in kind
(2)
Employer’s
contribution
to retirement
benefit
schemes
Remunerations
paid or
receivable
in respect of
accepting office
as director
Compensation
paid or
receivable
in respect of
loss office as
director
Emoluments
paid or
receivable
in respect of
director other
service in
connection
with the
management
of the affairs
of the
Company or
its subsidiary
undertaking
Total cash
remuneration
received and
attributable to
the year ended
31 December
2022
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
KUOK Hui Kwong
(4)
– 743 743 – 65 16 – – – 1,567
LIM Beng Chee
(4)(7)
– 853 – – 137 15 – 1,146 – 2,151
CHUA Chee Wui
(4)(6)
– 160 134 –
9 5
– – – 308
LI Kwok Cheung Arthur
77 – – – – – – – – 77
YAP Chee Keong
74 – – – – – – – – 74
LI Xiaodong Forrest
44 – – – – – – – – 44
ZHUANG Chenchao
36 – – – – – – – – 36
KHOO Shulamite N K
77 – – – – – – – – 77
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
190
32 BENEFITS AND INTERESTS OF DIRECTORS (CONTINUED)
The remuneration received from the Group by every Director of the Company for the year ended 31
December 2021 is set out below:
Name of Director Fees Salary
Discretionary
bonuses
Inducement
fees
Allowances
and benefits
in kind
(2)
Employer’s
contribution
to retirement
benefit
schemes
Remunerations
paid or
receivable
in respect of
accepting office
as director
Compensation
paid or
receivable
in respect of
loss office as
director
Emoluments
paid or
receivable
in respect of
director other
service in
connection
with the
management
of the affairs of
the Company
or its subsidiary
undertaking
Total cash
remuneration
received and
attributable to
the year ended
31 December
2021
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
KUOK Hui Kwong
(3)(5)
– 539 – – 61 15 – – – 615
LIM Beng Chee
(3)(5)(7)
– 617 426 – 171 16 – – – 1,230
HO Kian Guan
(1)
18 – – – – – – – – 18
LI Kwok Cheung Arthur
54 – – – – – – – – 54
YAP Chee Keong
51 – – – – – – – – 51
LI Xiaodong Forrest
31 – – – – – – – – 31
ZHUANG Chenchao
25 – – – – – – – – 25
KHOO Shulamite N K
44 – – – – – – – – 44
HO Chung Tao
(1)
– – – – – – – – – –
Shangri-La Asia Limited Annual Report 2022
Financial Report
191
32 BENEFITS AND INTERESTS OF DIRECTORS (CONTINUED)
Notes:
(1) Mr HO Kian Guan retired as Director on 28 May 2021 and his alternate, Mr HO Chung Tao, ceased to be an Alternate Director of the
Company at the same time.
(2) Other benefits include housing, holiday warrant, medical expenses and insurance premium. Pursuant to the existing option scheme
of the Company (Note 18), the Company granted to the Directors options to subscribe for shares in the Company subject to terms
and conditions stipulated therein. The fair values of option shares granted to the Directors in the past years were included in the
total expenses on share options granted in the same year.
(3) For the year ended 31 December 2021, award shares were granted and vested to certain Executive Directors under the share award
scheme. Award shares of 112,000 shares (amounting to USD114,000 based on the market price of the vesting date) and 144,000
shares (amounting to USD146,000 based on the market price of the vesting date) were vested to Ms KUOK Hui Kwong and Mr LIM
Beng Chee on 1 April 2021, respectively. Ms KUOK Hui Kwong was granted 182,000 award shares being vested in the years from
2022 to 2024. Mr LIM Beng Chee was granted 210,000 award shares being vested in the years from 2022 to 2024. The remuneration
on the awarded shares will be included in the disclosure when the vesting condition has been met.
(4) For the year ended 31 December 2022, awarded shares were granted and vested to certain Executive Directors under the share
award scheme. On 1 April 2022 and 7 June 2022, total awarded shares of 128,000 shares, 160,000 shares and 56,000 shares
(amounting to USD101,000, USD126,000 and USD44,000 based on the market price of the vesting date) were vested to Ms KUOK
Hui Kwong, Mr LIM Beng Chee and Mr CHUA Chee Wui respectively. Awarded shares of 636,000 shares, 548,000 shares and 370,000
shares being vested in the years from 2023 to 2025 were granted to Ms KUOK Hui Kwong, Mr LIM Beng Chee and Mr CHUA Chee
Wui, respectively. The remuneration on the awarded shares will be included in the disclosure when the vesting condition has been
met.
(5) For the year ended 31 December 2021, due to the difficult business environment caused by the Covid-19 pandemic, Ms KUOK Hui
Kwong and Mr LIM Beng Chee have voluntarily offered waiver of their remunerations amounting to USD204,000 and USD234,000,
respectively.
(6) Mr CHUA Chee Wui was appointed as an Executive Director of the Company with effect from 1 September 2022 and his
remuneration as stated is for the period from 1 September 2022 to 31 December 2022.
(7) Mr LIM Beng Chee had stepped down from his roles as Executive Director and Chief Executive Officer of the Company and was
re-designated as a Non-executive Director of the Company with effect from 1 January 2023. All the unvested awarded shares
of 688,000 shares granted to Mr LIM in prior periods would be lapsed following his retirement as Executive Director and Chief
Executive Officer of the Company.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
192
32 BENEFITS AND INTERESTS OF DIRECTORS (CONTINUED)
Movement of option shares granted to the Directors for the year ended 31 December 2022 are as follows:
Grantees Date of grant Tranche
Closing price
per share
on the
business day
immediately
before date
of grant
No. of
option shares
held as at
1 January
2022
No. of
option
shares
granted
during the
year
Transfer
from other
category
during the
year
Transfer
to other
category
during the
year
No. of
option
shares
exercised
during the
year
No. of
option
shares
lapsed
during
the year
No. of
option shares
held as at
31 December
2022
Exercise price
per option
share
Excess of
weighted
average
closing price
per share on
exercise date
over exercise
price Exercise period
HKD HKD HKD
LI Kwok Cheung Arthur
23 Aug 2013 – 11.92 100,000 – – – – – 100,000 12.11 – 23 Aug 2013 –
22 Aug 2023
Movement of option shares granted to the Directors for the year ended 31 December 2021 are as follows:
Grantees Date of grant Tranche
Closing price
per share
on the
business day
immediately
before date
of grant
No. of
option shares
held as at
1 January
2021
No. of
option
shares
granted
during the
year
Transfer
from other
category
during the
year
Transfer
to other
category
during the
year
No. of
option
shares
exercised
during the
year
No. of
option
shares
lapsed
during
the year
No. of
option shares
held as at
31 December
2021
Exercise price
per option
share
Excess of
weighted
average
closing price
per share on
exercise date
over exercise
price Exercise period
HKD HKD HKD
LI Kwok Cheung Arthur
23 Aug 2013 – 11.92 100,000 – – – – – 100,000 12.11 – 23 Aug 2013 –
22 Aug 2023
Shangri-La Asia Limited Annual Report 2022
Financial Report
193
32 BENEFITS AND INTERESTS OF DIRECTORS (CONTINUED)
Movement of option shares granted to the Directors for the year ended 31 December 2022 are as follows:
Grantees Date of grant Tranche
Closing price
per share
on the
business day
immediately
before date
of grant
No. of
option shares
held as at
1 January
2022
No. of
option
shares
granted
during the
year
Transfer
from other
category
during the
year
Transfer
to other
category
during the
year
No. of
option
shares
exercised
during the
year
No. of
option
shares
lapsed
during
the year
No. of
option shares
held as at
31 December
2022
Exercise price
per option
share
Excess of
weighted
average
closing price
per share on
exercise date
over exercise
price Exercise period
HKD HKD HKD
LI Kwok Cheung Arthur
23 Aug 2013 – 11.92 100,000 – – – – – 100,000 12.11 – 23 Aug 2013 –
22 Aug 2023
Movement of option shares granted to the Directors for the year ended 31 December 2021 are as follows:
Grantees Date of grant Tranche
Closing price
per share
on the
business day
immediately
before date
of grant
No. of
option shares
held as at
1 January
2021
No. of
option
shares
granted
during the
year
Transfer
from other
category
during the
year
Transfer
to other
category
during the
year
No. of
option
shares
exercised
during the
year
No. of
option
shares
lapsed
during
the year
No. of
option shares
held as at
31 December
2021
Exercise price
per option
share
Excess of
weighted
average
closing price
per share on
exercise date
over exercise
price Exercise period
HKD HKD HKD
LI Kwok Cheung Arthur
23 Aug 2013 – 11.92 100,000 – – – – – 100,000 12.11 – 23 Aug 2013 –
22 Aug 2023
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
194
32 BENEFITS AND INTERESTS OF DIRECTORS (CONTINUED)
Five highest paid individuals
The five individuals whose emoluments were the highest in the Group for the year include two (2021: two)
directors whose emoluments are reflected in the analysis presented above. The emoluments payable to the
remaining three individuals in 2022 are as follows:
2022
USD’000
Basic salaries, housing allowances, other allowances and benefits in kind
2,165
Employer’s contribution to pension scheme
62
Discretionary bonuses
902
Inducement fee to join the Group
–
Compensation for loss of office:
– contractual payments
–
– other payment
–
3,129
During the year ended 31 December 2022, total of 170,000 (2021: 18,000) awarded shares (amounting to
USD134,000 (2021: USD18,000) based on the market price of the vesting date) were also vested to the
above three (2021: three) individuals.
The emoluments of the five highest paid individuals fell within the following bands:
Number of individuals
Emolument bands (in HK dollar) 2022 2021
HKD5,000,001 – HKD5,500,000 –
1
HKD5,500,001 – HKD6,000,000 –
1
HKD6,500,001 – HKD7,000,000 –
1
HKD8,000,001 – HKD8,500,000
2
–
HKD8,500,001 – HKD9,000,000
1
–
HKD9,000,001 – HKD9,500,000 –
1
HKD10,500,001 – HKD11,000,000 –
1
HKD12,500,001 – HKD13,000,000
1
–
HKD17,500,001 – HKD18,000,000
1
–
Shangri-La Asia Limited Annual Report 2022
Financial Report
195
33 FINANCE COSTS – NET
2022 2021
USD’000 USD’000
Interest expense
– bank loans
144,293 123,504
– fixed rate bonds
46,806 47,789
– other loans
(175) 4,384
– interest on lease liability
28,120 30,697
219,044 206,374
Less: Amount capitalised
(3,021) (2,412)
216,023 203,962
Net foreign exchange losses
144,909 8,632
360,932 212,594
The effective capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is
3.4% per annum (2021: 3.1%).
34 SHARE OF PROFIT OF ASSOCIATES
2022 2021
USD’000 USD’000
Share of profit before tax of associates before share
of net fair value changes of investment properties
236,264 228,838
Share of net fair value changes of investment properties
33,950 78,470
Share of profit before tax of associates
270,214 307,308
Share of tax before provision for deferred tax
on net fair value changes of investment properties
(71,209) (77,669)
Share of provision for deferred tax on net fair value changes of
investment properties
(8,233) (19,995)
Share of associates’ taxation
(79,442) (97,664)
Share of profit of associates
190,772 209,644
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
196
35 INCOME TAX EXPENSE/(CREDIT)
2022 2021
USD’000 USD’000
Current income tax
– Hong Kong profits tax
20 160
– overseas taxation
24,086 35,139
Deferred income tax (Note 25)
(11,097) (47,826)
13,009 (12,527)
Share of associates’ taxation for the year ended 31 December 2022 of USD79,442,000 (2021:
USD97,664,000) is included in the consolidated statement of profit or loss as share of profit of associates.
The taxation on the Group’s loss before taxation differs from the theoretical amount that would arise using
the taxation rate of the home country of the Company as follows:
2022 2021
USD’000 USD’000
Loss before income tax
(174,443) (356,946)
Calculated at a taxation rate of 16.5% (2021: 16.5%)
(28,783) (58,896)
Effect of different taxation rates of subsidiaries
operating in other countries
879 (4,927)
Income not subject to taxation
(71,277) (66,512)
Tax effect on unrecognised tax losses
37,177 40,791
Expenses not deductible for taxation purposes
60,668 58,011
Utilisation of previously unrecognised tax losses
(1,052) (160)
Under provision in prior year
1,145 1,009
Withholding tax
14,332 18,263
Tax incentive
(80) (106)
Income tax expense/(credit)
13,009 (12,527)
(a) Hong Kong profits tax is provided at a rate of 16.5% (2021: 16.5%) on the estimated assessable profits of
group companies operating in Hong Kong.
(b) Taxation outside Hong Kong includes withholding tax paid and payable on dividends from subsidiaries
and tax provided at the prevailing rates on the estimated assessable profits of group companies
operating outside Hong Kong.
Shangri-La Asia Limited Annual Report 2022
Financial Report
197
36 LOSS PER SHARE
Basic
Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted
average number of ordinary shares in issue during the year after adjustment of those issued ordinary shares
of the Company held by a subsidiary and the share award scheme.
2022 2021
Loss attributable to owners of the Company (USD’000)
(158,519) (290,575)
Weighted average number of ordinary shares in issue (thousands)
3,572,687 3,572,233
Basic loss per share (US cents per share)
(4.44) (8.13)
Diluted
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding
to assume conversion of all dilutive potential ordinary shares. The Company has the potential dilutive
effect of the outstanding share options and non-vested awarded shares under the share award scheme for
the year ended 31 December 2022 and 2021. For the share options, a calculation is done to determine the
number of shares that would be issued at fair value (determined as the average annual market share price
of the Company’s shares for the year) based on the monetary value of the subscription rights attached to
outstanding share options. The number of shares calculated as above is increased by the number of shares
that would have been issued assuming the exercise of the share options and vesting of awarded shares.
As the Group incurred losses for the year ended 31 December 2022 and 31 December 2021, the potential
dilutive ordinary shares were not included in the calculation of the dilutive loss per share as their inclusion
would be anti-dilutive and the diluted loss per share is the same as the basic loss per share.
2022 2021
Loss attributable to owners of the Company (USD’000)
(158,519) (290,575)
Weighted average number of ordinary shares in issue (thousands)
3,572,687 3,572,233
Adjustments (thousands)
– –
Weighted average number of ordinary shares for diluted
loss per share (thousands)
3,572,687 3,572,233
Diluted loss per share (US cents per share)
(4.44) (8.13)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
198
37 DIVIDENDS
Group Company
2022 2021 2022 2021
USD’000 USD’000 USD’000 USD’000
No interim dividend has been proposed
(2021: Nil)
– – – –
No final dividend has been proposed
(2021: Nil)
– – – –
– – – –
At a meeting held on 24 March 2023, the Board proposed no final dividend for the year ended 31 December 2022.
38 NOTE TO THE CONSOLIDATED CASH FLOW STATEMENT
(a) Cash generated from operations
2022 2021
USD’000 USD’000
Loss before income tax
(174,443) (356,946)
Share of profit of associates
(190,772) (209,644)
Fair value (gains)/losses on investment properties
(64,698) 8,899
Provision for impairment losses on property,
plant and equipment
– 122,855
Provision for impairment losses on right-of-use assets
– 49,167
Impairment of intangible assets
– 2,467
Write-off of miscellaneous assets and liabilities
for a terminated development project
– 16,491
Rent concessions provided by lessors
(1,453) (19,000)
Depreciation of property, plant and equipment
224,636 258,641
Depreciation of right-of-use assets
46,222 52,946
Amortisation of trademark, and website
and system development
7,812 7,149
Interest on fixed rate bonds, lease liabilities,
bank loans and other loans
216,023 203,962
Interest income
(11,066) (10,138)
Dividend income
(1,185) (4,712)
(Gain)/Loss on disposal of fixed assets, and
partial replacement of investment properties (3,065) 1,643
Gain on derecognition of right-of-use assets
and lease liabilities
(3,015) –
Gain on sale of investment properties
(1,441) (2,707)
Net unrealised losses/(gains) on financial assets
at fair value through profit or loss
3,090 (3,631)
Gain on partial disposal of interests in a subsidiary
(10,586) –
Share award scheme expenses
5,241 2,337
Fair value gains of cross-currency swap contracts
(7,291) (10,698)
Net foreign exchange losses
144,909 8,632
Operating profit before working capital changes
178,918 117,713
(Increase)/Decrease in inventories (2,422) 1,634
(Increase)/Decrease in accounts receivable,
prepayments and deposits
(18,909) 20,874
(Increase)/Decrease in amounts due from associates (9,177) 785
Increase/(Decrease) in accounts payable and accruals
33,173 (36,855)
Decrease in contract liabilities
(45,248) (28,096)
Decrease in properties for sale
4,550 8,133
Net cash generated from operations
140,885 84,188
Shangri-La Asia Limited Annual Report 2022
Financial Report
199
38 NOTE TO THE CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
(b) Reconciliation of liabilities arising from financing activities
Bank loans Fixed rate bonds
Loan and
amounts due to
non-controlling
shareholders
Lease
liabilities
USD’000 USD’000 USD’000 USD’000
Balance as at 1 January 2021
4,646,879 1,072,033 91,916 667,530
Cash flows
(163,320) 75,604 (4,152) (47,594)
Foreign exchange movement
(8,339) (23,496) 79 (21,504)
Finance cost charged (note)
– 653 4,238 30,697
Net additions of lease liabilities
– – – 5,004
Remeasurement of lease liabilities
– – – (15,335)
Dividends declared to non-controlling shareholders
– – 4,487 –
Classified as liabilities held for sale
(12,162) – – –
Balance as at 31 December 2021 and 1 January 2022
4,463,058 1,124,794 96,568 618,798
Cash flows
83,006 – 3,305 (44,499)
Foreign exchange movement
(66,408) 7,334 (3,644) (53,030)
Finance cost charged (note)
– 633 75 28,120
Net additions of lease liabilities
– – – 14,300
Dividends declared to non-controlling shareholders
– – 2,025 –
Capitalisation of loans due to a
non-controlling shareholder
– – (46,550) –
Balance as at 31 December 2022
4,479,656 1,132,761 51,779 563,689
Note: Finance cost charged will be presented as operating cash flows in the consolidated cash flow statement when paid.
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
200
39 FINANCIAL GUARANTEES, CONTINGENCIES AND CHARGES OVER ASSETS
(a) Financial guarantees
As at 31 December 2022, financial guarantees of the Company and the Group were as follows:
(i) The Company executed proportionate guarantees in favour of banks for securing banking
facilities granted to certain subsidiaries and associates. The utilised amount of such facilities
covered by the Company’s guarantees and which also represented the financial exposure of the
Company at the date of the statement of financial position amounted to USD3,811,480,000 (2021:
USD3,780,381,000) for the subsidiaries and USD151,571,000 (2021: USD185,579,000) for associates.
(ii) The Company executed guarantees in favour of banks for securing certain banking facilities
granted to three (2021: four) non-wholly owned subsidiaries. The non-controlling shareholders
of three (2021: four) non-wholly owned subsidiaries provided proportionate counter guarantees
to the Company under the joint venture agreements. The utilised amount of these facilities
covered by the Company’s guarantees after setting off the amount of counter guarantees from
the non-controlling shareholders and which also represented the net financial exposure of the
Company at the date of the statement of financial position amounted to USD371,295,000 (2021:
USD380,588,000).
(iii) The Group executed proportionate guarantees in favour of banks for securing banking facilities
granted to certain associates. The utilised amount of such facilities covered by the Group’s
guarantees for these associates amounted to USD151,571,000 (2021: USD185,579,000).
Guarantees are stated at their respective contracted amounts. The Board is of the opinion that it is not
probable that the above guarantees will be called upon.
(b) Contingent liabilities
As at 31 December 2022, there were no material contingent liabilities (2021: Nil).
(c) Charges over assets
As at 31 December 2022, no bank loan was secured. As at 31 December 2021, bank loan of a
subsidiary amounting to USD3,555,000 was secured by legal mortgage over the property owned by
the subsidiary with a net book value of USD95,610,000.
Shangri-La Asia Limited Annual Report 2022
Financial Report
201
40 COMMITMENTS
(a) The Group’s commitment for capital expenditure at the date of the consolidated statement of financial
position but not yet incurred is as follows:
2022 2021
USD’000 USD’000
Existing properties – property, plant and equipment and
investment properties
– contracted but not provided for
33,798 32,491
– authorised but not contracted for
41,486 63,955
Development projects
– contracted but not provided for
129,262 204,101
– authorised but not contracted for
69,234 84,575
273,780 385,122
(b) The Group had future aggregate minimum lease rental receivable under non-cancellable operating leases
in respect of land and buildings as follows:
2022 2021
USD’000 USD’000
Not later than one year
61,381 82,485
Later than one year and not later than five years
95,009 117,734
Later than five years
34,472 9,862
190,862 210,081
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
202
41 RELATED PARTY TRANSACTIONS
Kerry Holdings Limited (“KHL”), a substantial shareholder and a related party of the Company, has
significant influence over the Company.
The following transactions were carried out with related parties in the ordinary course of the Group’s
business:
2022 2021
USD’000 USD’000
(a) Transactions with subsidiaries of KHL during the year
(other than subsidiaries of the Company)
Receipt of hotel management, consultancy and related
services and royalty fees
(Note ii)
10,524 15,107
Reimbursement of office expenses and payment of
administration and related expenses
126 162
Reimbursement of office rental, management fees and rates
62 112
Payment of office rental, management fees and rates
6,198 6,678
Purchase of wine
915 1,454
(b) Transactions with associates of the Group during the year
(other than the subsidiaries of KHL included under item (a)
above)
Receipt of hotel management, consultancy and related
services and royalty fees
19,343 15,388
Receipt for laundry services
(Note i)
376 80
(c) Financial assistance provided to subsidiaries of KHL as at 31
December (other than subsidiaries of the Company)
Balance of loan to associates of the Group
96,947 97,506
Balance of guarantees executed in favour of banks for
securing bank loans/facilities granted to associates
of the Group
143,020 164,913
(d) Financial assistance provided to associates of the Group as at
31 December (excluding item (c) above)
Balance of loan to associates of the Group
49,324 50,422
Balance of guarantees executed in favour of banks for
securing bank loans/facilities granted to associates
of the Group
8,551 20,666
There are no material changes to the terms of the above transactions during the year.
(e) Key management compensation
Fees, salaries and other short-term employee
benefits of executive directors
3,990 1,814
Post-employment benefits of executive directors
36 31
Shangri-La Asia Limited Annual Report 2022
Financial Report
203
41 RELATED PARTY TRANSACTIONS (CONTINUED)
Notes:
(i) These transactions constitute connected transactions or continuing connected transactions as defined in Chapter 14A of
The Rules Governing the Listing of Securities on HKSE (“Listing Rules”) and are exempted from reporting, annual review,
announcement and independent shareholders’ approval requirement under Chapter 14A of Listing Rules.
(ii) These transactions include continuing connected transactions as defined in Chapter 14A of Listing Rules of USD4,508,000 which are
exempted from reporting, annual review, announcement and independent shareholders’ approval requirement under Chapter 14A
of Listing Rules.
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries:
Name
Place of establishment/
operation
Paid up/
issued capital
Percentage holding
in the voting shares
Nature of business Notes
Direct Indirect
Seanoble Assets Limited The British Virgin Islands
HKD578,083,745 100 –
Investment holding
Shangri-La Asia Treasury Limited The British Virgin Islands
HKD8,530 100 –
Group financing
Shangri-La China Limited Hong Kong
HKD1,162,500,000 – 100
Investment holding
Shangri-La Hotels (Europe) Luxembourg
EUR206,600,000 100 –
Investment holding
Kerry Industrial Company Limited Hong Kong
HKD10,000,002 – 100
Investment holding
Shangri-La Hotel (Kowloon) Limited Hong Kong
HKD10,000,002 – 100
Hotel ownership and
operation
Shangri-La International Hotels
(Pacific Place) Limited
Hong Kong
HKD10,005,000 – 80
Hotel ownership and
operation
Shenzhen Shangri-La Hotel Limited The People’s Republic of
China
USD32,000,000 – 72
Hotel ownership and
operation
4,6
Beihai Shangri-La Hotel Limited The People’s Republic of
China
USD16,000,000 – 100
Hotel ownership and
operation
5,6
Shanghai Pudong New Area Shangri-La
Hotel Co, Limited
The People’s Republic of
China
USD47,000,000 – 100
Hotel ownership and
operation
3,6
Shenyang Hotel Jen Limited The People’s Republic of
China
USD39,040,470 – 100
Hotel ownership and
operation
5,6
Changchun Shangri-La Hotel Co, Limited The People’s Republic of
China
RMB167,000,000 – 100
Hotel ownership and
operation and real
estate operation
5,6
Jilin Province Kerry Real Estate Development
Limited
The People’s Republic of
China
RMB25,000,000 – 100
Real estate
development and
operation
5,6
Qingdao Shangri-La Hotel Co, Limited The People’s Republic of
China
USD79,000,000 – 100
Hotel ownership and
operation and real
estate development
and operation
5,6
Dalian Shangri-La Hotel Co, Limited The People’s Republic of
China
USD149,000,000 – 100
Hotel ownership and
operation and real
estate development
and operation
5,6
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
204
Name
Place of establishment/
operation
Paid up/
issued capital
Percentage holding
in the voting shares
Nature of business Notes
Direct Indirect
Harbin Shangri-La Hotel Co, Limited The People’s Republic of
China
USD20,767,000 – 100
Hotel ownership and
operation
5,6
Wuhan Shangri-La Hotel Co, Limited The People’s Republic of
China
USD48,333,333 – 92
Hotel ownership and
operation and real
estate development
and operation
4,6
Fujian Kerry World Trade Centre
Co, Limited
The People’s Republic of
China
HKD954,844,824 – 100
Real estate
development
1,5,6
Fuzhou Shangri-La Hotel Co, Limited The People’s Republic of
China
USD22,200,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Chengdu) Co, Limited The People’s Republic of
China
USD53,340,000 – 80
Hotel ownership and
operation and real
estate development
and operation
5,6
Shangri-La Hotel (Guangzhou Pazhou)
Co, Limited
The People’s Republic of
China
USD60,340,000 – 80
Hotel ownership and
operation
5,6
Shangri-La Hotel (Shenzhen Futian) Co,
Limited
The People’s Republic of
China
USD71,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Ningbo) Co, Limited The People’s Republic of
China
USD83,000,000 – 95
Hotel ownership and
operation
5,6
Shangri-La Hotel (Wenzhou) Co, Limited The People’s Republic of
China
USD46,250,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Xian) Co, Limited The People’s Republic of
China
USD42,800,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Guilin) Co, Limited The People’s Republic of
China
USD70,150,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Baotou) Co, Limited The People’s Republic of
China
USD24,400,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Huhhot) Co, Limited The People’s Republic of
China
USD43,670,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Manzhouli) Co, Limited The People’s Republic of
China
USD84,615,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Zhoushan) Co, Limited The People’s Republic of
China
RMB120,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Hefei) Co, Limited The People’s Republic of
China
USD90,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Qinhuangdao) Co,
Limited
The People’s Republic of
China
RMB880,000,000 – 100
Hotel ownership and
operation
5,6
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries: (continued)
Shangri-La Asia Limited Annual Report 2022
Financial Report
205
Name
Place of establishment/
operation
Paid up/
issued capital
Percentage holding
in the voting shares
Nature of business Notes
Direct Indirect
Sanya Shangri-La Hotel Co, Limited The People’s Republic of
China
RMB1,775,614,140 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Lhasa) Co, Limited The People’s Republic of
China
USD132,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Qufu) Co, Limited The People’s Republic of
China
RMB844,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Nanjing) Co, Limited The People’s Republic of
China
RMB750,000,000 – 55
Hotel ownership and
operation
5,6
Shangri-La Hotel (Diqing) Co, Limited The People’s Republic of
China
RMB610,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Hotel (Xiamen) Co, Limited The People’s Republic of
China
RMB640,000,000 – 100
Hotel ownership and
operation
5,6
Dalian Wolong Bay Shangri-La Hotel Co,
Limited
The People’s Republic of
China
RMB430,000,000 – 100
Hotel ownership and
operation and real
estate development
and operation
1,5,6
Kerry Real Estate (Yangzhou) Co, Limited The People’s Republic of
China
USD102,600,000 – 100
Hotel ownership and
operation and real
estate development
5,6
Harbin Songbei Shangri-La Hotel
Co, Limited
The People’s Republic of
China
RMB658,000,000 – 100
Hotel ownership and
operation
5,6
Shangri-La Ulaanbaatar LLC Mongolia
USD5,000,000 – 51
Office ownership and
operation
Shangri-La Ulaanbaatar Hotel LLC Mongolia
Common
USD20,000,000
Preferred
USD194,973,254
– 51
Hotel, serviced
apartments and
office ownership
and operation
Makati Shangri-La Hotel & Resort, Inc The Philippines
Peso1,100,000,000 – 100
Hotel ownership and
operation
Edsa Shangri-La Hotel & Resort, Inc The Philippines
Peso792,128,700 – 100
Hotel ownership and
operation
Mactan Shangri-La Hotel & Resort, Inc The Philippines
Common
Peso272,630,000
Preferred
Peso170,741,500
Redeemable Common
Peso285,513,000
– 93.95
Hotel ownership and
operation
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries: (continued)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
206
Name
Place of establishment/
operation
Paid up/
issued capital
Percentage holding
in the voting shares
Nature of business Notes
Direct Indirect
Addu Investments Private Limited Republic of Maldives
Rufiyaa 640,000,000 – 70
Hotel ownership and
operation
Traders Hotel Malé Private Limited Republic of Maldives
Rufiyaa 64,000,000 – 100
Hotel ownership and
operation
Yanuca Island Pte Limited Fiji
FJD1,262,196 – 71.80
Hotel ownership and
operation
Shangri-La Hotel Limited Singapore
SGD165,433,560 – 100
Investment holding,
hotel ownership
and operation and
leasing of residential
and serviced
apartments
Sentosa Beach Resort Pte Limited Singapore
SGD30,000,000 – 100
Hotel ownership and
operation
Traders Hotel Management Pte Limited Singapore
SGD1 – 100
Hotel operation
Shangri-La Hotels (Malaysia) Berhad Malaysia
RM544,501,853 – 52.78
Investment holding
and hotel ownership
and operation
Shangri-La Hotel (KL) Sdn Berhad Malaysia
RM150,000,000 – 52.78
Hotel ownership and
operation
Golden Sands Beach Resort Sdn Berhad Malaysia
RM6,000,000 – 52.78
Hotel ownership and
operation
Pantai Dalit Beach Resort Sdn Berhad Malaysia
RM135,000,000 – 64.59
Hotel and golf club
ownership and
operation
Komtar Hotel Sdn Berhad Malaysia
RM6,000,000 – 31.67
Hotel ownership and
operation
UBN Tower Sdn Berhad Malaysia
RM500,000 – 52.78
Property investment
and office
management
UBN Holdings Sdn Berhad Malaysia
RM45,186,400 – 52.78
Investment holding
and property
investment
Seanoble Malaysia Sdn Berhad Malaysia
RM2,590,479,405 – 100
Group financing
Traders Yangon Company Limited Myanmar
Kyat 21,600,000 – 59.16
Hotel ownership and
operation
Shangri-La Yangon Company Limited Myanmar
Kyat 11,880,000 – 55.86
Serviced apartments
and hotel ownership
and operation
2
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries: (continued)
Shangri-La Asia Limited Annual Report 2022
Financial Report
207
Name
Place of establishment/
operation
Paid up/
issued capital
Percentage holding
in the voting shares
Nature of business Notes
Direct Indirect
Traders Square Company Limited Myanmar
Kyat522,000 – 59.28
Real estate
development and
operation
Shangri-La Hotel Public Company Limited Thailand
Baht1,300,000,000 – 73.61
Hotel, serviced
apartments and
office ownership
and operation
Shangri-La Hotels (Paris) France
EUR13,772,210 – 100
Hotel ownership and
operation
Shangri-La Hotels Japan KK Japan
YEN100,000,000 – 100
Hotel operation
Shangri-La Hotels Pte Limited United Kingdom
GBP81,000,000 – 100
Hotel operation
Shangri-La Hotel (Cairns) Pty Limited Australia
AUD8,250,000 – 100
Investment holding
and hotel operation
7
Lilyvale Hotel Pty Limited Australia
AUD140,000,004 – 100
Hotel ownership and
operation
7
Shangri-La Hotels Lanka (Private) Limited Sri Lanka
LKR2,219,000,000 – 90
Hotel ownership and
operation and real
estate development
and operation
Shangri-La Investments Lanka (Private)
Limited
Sri Lanka
LKR1,214,245,300 – 90
Hotel ownership and
operation
Turati Properties Srl Italy
EUR10,000 – 100
Hotel ownership and
operation
1
Shangri-La International Hotel Management
Limited
Hong Kong
HKD31,712,478 100 –
Hotel management,
marketing,
consultancy and
reservation services
Shangri-La Hotel Management (Shanghai)
Co, Limited
The People’s Republic of
China
USD7,340,000 – 100
Hotel management,
marketing and
consultancy services
5,6
Shangri-La International Hotel Management
Pte Limited
Singapore
SGD2,000,000 – 100
Hotel management,
marketing and
consultancy services
Shangri-La International Hotel Management
Limited
The British Virgin Islands
USD10,104,099 100 –
Ownership of
intellectual property
rights
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries: (continued)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
208
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) At 31 December 2022, the Company held interests in the following principal subsidiaries: (continued)
Notes:
(1) Subsidiaries which are under various stages of real estate and hotel development and have not yet commenced business
operations as at the date of the statement of financial position.
(2) Subsidiaries which are under various stages of real estate and hotel development and have partially commenced
business operations as at the date of the statement of financial position.
(3) Co-operative Joint Venture.
(4) Equity Joint Venture.
(5) Wholly Foreign Owned Enterprise.
(6) The amount of paid up/issued capital for subsidiaries incorporated in The People’s Republic of China represented the
amount of paid in registered capital.
(7) A Deed of Cross Guarantee was entered on 24 December 2015 between Shangri-La Asia Limited and its wholly owned
Australian subsidiaries for the purpose of obtaining the benefit of the Class Order to relieve the entities from the
requirement to lodge reports with ASIC (Australian Securities and Investments Commission). Apart from the stated
principal subsidiaries, this deed also includes Shangri-La Investments (Australian) Pty Ltd (Australian parent company),
Shangri-La Hotels Pty Ltd (hotel management company), Langley Terrace Hotel Pty Ltd (dormant), Traders Hotel Pty
Ltd (dormant), Abelian Pty Ltd (dormant), Roma Hotel Pty Ltd (dormant) and The Pier Cairns Management Services Pty
Ltd (dormant). All of these entities form a Closed Group. There are no other Extended Closed Group Entities involved.
A Revocation Deed was entered in October 2017 between Shangri-La Asia Limited and its wholly owned Australian
subsidiaries for the purpose of removing Langley Terrace Hotel Pty Limited from the Deed of Cross Guarantee.
Shangri-La Asia Limited Annual Report 2022
Financial Report
209
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) At 31 December 2022, the Group held interests in the following principal associates:
Name
Place of establishment/
operation
Percentage holding
in the registered
capital by the Group
Nature of
business Notes
China World Trade Center Limited The People’s Republic of China
50
Hotel ownership and operation
and property investment
Beijing Shangri-La Hotel Co, Limited The People’s Republic of China
38
Hotel ownership and operation
Hangzhou Shangri-La Hotel Limited The People’s Republic of China
45
Hotel ownership and operation
Beijing Jia Ao Real Estate Development Co, Limited The People’s Republic of China
23.75
Real estate development and
operation
Beijing Kerry Hotel Co, Limited The People’s Republic of China
23.75
Hotel ownership and operation
Shanghai Xin Ci Hou Properties Co, Limited The People’s Republic of China
24.75
Real estate development and
operation
Shanghai Ji Xiang Properties Co, Limited The People’s Republic of China
49
Hotel ownership and operation
and property investment
Shanghai Pudong Kerry City Properties Co, Limited The People’s Republic of China
23.20
Hotel ownership and operation
and property investment
Tianjin Kerry Real Estate Development Co, Limited The People’s Republic of China
20
Hotel ownership and operation
and property investment
2
Kerry Real Estate (Nanchang) Co, Limited The People’s Republic of China
20
Hotel ownership and operation
and property investment
2
Hengyun Real Estate (Tangshan) Co, Limited The People’s Republic of China
35
Property investment
Ruihe Real Estate (Tangshan) Co, Limited The People’s Republic of China
35
Hotel ownership and operation
Xiang Heng Real Estate (Jinan) Co, Limited The People’s Republic of China
45
Hotel ownership and operation
and property investment
Kerry (Shenyang) Real Estate Development Co, Limited The People’s Republic of China
25
Property investment 2
Shangri-La Hotel (Shenyang) Co, Limited The People’s Republic of China
25
Hotel ownership and operation
Kerry Real Estate (Hangzhou) Co Limited The People’s Republic of China
25
Hotel ownership and operation
and property investment
Full Fortune Real Estate (Putian) Co, Limited The People’s Republic of China
40
Property investment
Well Fortune Real Estate (Putian) Co, Limited The People’s Republic of China
40
Hotel ownership and operation
Zhengzhou Yuheng Real Estate Co, Limited The People’s Republic of China
45
Hotel ownership and operation
and property investment
1
Jian’an Real Estate (Kunming) Co, Limited The People’s Republic of China
45
Hotel ownership and operation 1
Cuscaden Properties Pte Limited Singapore
44.60
Hotel ownership and operation
and property investment
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
210
Name
Place of establishment/
operation
Percentage holding
in the registered
capital by the Group
Nature of
business Notes
Tanjong Aru Hotel Sdn Berhad Malaysia
40
Hotel ownership and operation
PT Swadharma Kerry Satya Indonesia
25
Hotel ownership and operation
Fine Winner Holdings Limited Hong Kong
30
Hotel ownership and operation
Shang Global City Properties, Inc The Philippines
40
Hotel ownership and operation
and property investment
SRL Touessrok Hotel Limited Mauritius
26
Hotel ownership and operation
Besiktas Emlak Yatirim ve Turizm Anonim Sirketi Turkey
50
Hotel ownership and operation
Kerry Wines Limited Hong Kong
20
Wines trading
Perennial Ghana Development Limited The Republic of Ghana
45
Hotel ownership and operation 1
Shangri-La Kyoto Nijojo TMK Japan
20
Hotel ownership and operation 1
Notes:
(1) Associates which are under various stages of real estate and hotel development and have not yet commenced business
operations as at the date of the statement of financial position.
(2) Associates which are under various stages of real estate and hotel development and have partially commenced
business operations as at the date of the statement of financial position.
(c) The above tables list out the subsidiaries and associates of the Company as at 31 December 2022
which, in the opinion of the Directors, principally affected the results for the year or form a substantial
portion of the net assets of the Group. To give details of other subsidiaries and associates would, in
the opinion of the Directors, result in particulars of excessive length.
42 GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) At 31 December 2022, the Group held interests in the following principal associates: (continued)
Shangri-La Asia Limited Annual Report 2022
Financial Report
211
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES
(a) Details of hotel properties of the Company’s subsidiaries are as follows:
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Address Existing use Lease term
Kowloon Shangri-La, Hong Kong
64 Mody Road, Tsim Sha Tsui East,
Kowloon,
Hong Kong
Hotel operation Medium lease
Island Shangri-La, Hong Kong
Pacific Place, Supreme Court Road,
Central,
Hong Kong
Hotel operation Medium lease
Kerry Hotel, Hong Kong
38 Hung Luen Road, Hung Hom Bay,
Kowloon,
Hong Kong
Hotel operation Medium lease
Shangri-La Shenzhen
East Side, Railway Station,
1002 Jianshe Road, Shenzhen 518001,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Beihai
33 Chating Road, Beihai, Guangxi 536007,
The People’s Republic of China
Hotel operation Medium lease
Pudong Shangri-La, Shanghai
33 Fu Cheng Road,
Pudong, Shanghai 200120,
The People’s Republic of China
Hotel operation Medium lease
JEN Shenyang by Shangri-La
68 Zhong Hua Road, He Ping District,
Shenyang 110001,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Changchun
569 Xian Road, Changchun 130061,
The People’s Republic of China
Hotel operation and
commercial and
residential rental
Medium lease
Shangri-La Qingdao
9 Xianggang Middle Road,
Qingdao 266071,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
212
Address Existing use Lease term
Shangri-La Dalian
66 Renmin Road, Dalian 116001,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Harbin
555 You Yi Road,
Harbin 150018,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Wuhan
700 Jianshe Avenue, Hankou,
Wuhan 430015,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Fuzhou
9 Xin Quan Nan Road,
Fuzhou, Fujian 350005,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Guangzhou
1 Hui Zhan Dong Road,
Hai Zhu District,
Guangzhou 510308,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Chengdu
9 Binjiang Dong Road,
Chengdu, Sichuan 610021,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Xian
38B Keji Road,
Xian 710075,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Baotou
66 Min Zu East Road,
Qing Shan District,
Baotou, Inner Mongolia 014030,
The People’s Republic of China
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
213
Address Existing use Lease term
Shangri-La Yangzhou
472 Wen Chang Xi Lu,
Yangzhou, Hanjiang District,
Jiangsu Province 225009,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Huhhot
5 Xi Lin Guo Le South Road,
Huhhot, Inner Mongolia 010020,
The People’s Republic of China
Hotel operation Medium lease
Futian Shangri-La, Shenzhen
4088 Yi Tian Road,
Futian District,
Shenzhen 518048,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Wenzhou
1 Xiangyuan Road,
Wenzhou, Zhejiang Province 325000,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Ningbo
88 Yuyuan Road,
Ningbo, Zhejiang 315040,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Guilin
111 Huan Cheng Bei Er Lu,
Guilin, Guangxi 541004,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Manzhouli
99 Liudao Street, Manzhouli,
Inner Mongolia 021400,
The People’s Republic of China
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
214
Address Existing use Lease term
Shangri-La Qufu
3 Chunqiu Road, Qufu,
Shandong 273100,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Sanya
No.88 North Hai Tang Road, Sanya,
Hainan 572000,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Lhasa
19 Norbulingka Road, Lhasa,
Tibet Autonomous Region 850000,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Nanjing
329 Zhongyang Road, Gulou District,
Nanjing, Jiangsu Province 210037,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Qinhuangdao
123 Hebin Road, Haigang District,
Qinhuangdao, Hebei 066000,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Hefei
No.256 Suixi Road, Luyang District,
Hefei, Anhui Province 230041,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Resort, Shangri-La
No.1, Chicika Street, Jiantang Town, Shangri-La,
Diqing Tibetan Autonomous Prefecture,
Yunnan Province 674499,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Songbei, Harbin
No. 1 Songbei Avenue, Songbei District,
Harbin 150028,
The People’s Republic of China
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
215
Address Existing use Lease term
Shangri-La Xiamen
Guanyinshan International Business Centre,
No. 168 Taidong Road,
Siming District, Fujian,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Zhoushan
No. 18 Qiandao Road, Dinghai District,
Zhoushan, Zhejiang Province 316000,
The People’s Republic of China
Hotel operation Medium lease
Makati Shangri-La, Manila
Ayala Avenue corner Makati Avenue,
Makati City 1200,
The Philippines
Hotel operation Medium lease
Edsa Shangri-La, Manila
1 Garden Way, Ortigas Centre,
Mandaluyong City 1650,
The Philippines
Hotel operation Medium lease
Shangri-La Mactan, Cebu
Punta Engano Road, Lapu-Lapu,
Cebu 6015,
The Philippines
Hotel operation Medium lease
Shangri-La Boracay
Barangay Yapak, Boracay Island,
Malay, Aklan 5608,
The Philippines
Hotel operation Freehold
Shangri-La Yanuca Island, Fiji
Yanuca Island, Coral Coast, Fiji Islands,
Fiji
Hotel operation Medium lease
Shangri-La Singapore
22 Orange Grove Road, 258350,
Singapore
Hotel operation Freehold
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
216
Address Existing use Lease term
Shangri-La Rasa Sentosa, Singapore
101 Siloso Road, Sentosa 098970,
Singapore
Hotel operation Long lease
JEN Singapore Orchardgateway by Shangri-La
277 Orchard Road, 238858,
Singapore
Hotel operation Short lease for building
Shangri-La Kuala Lumpur
11 Jalan Sultan Ismail,
Kuala Lumpur 50250,
Malaysia
Hotel operation Freehold
Shangri-La Rasa Sayang, Penang
Batu Feringgi Beach, Penang 11100,
Malaysia
Hotel operation Freehold
JEN Penang Georgetown by Shangri-La
Magazine Road, George Town,
Penang 10300,
Malaysia
Hotel operation Long lease
Shangri-La Golden Sands, Penang
Batu Feringgi Beach,
Penang 11100,
Malaysia
Hotel operation Freehold
Shangri-La Rasa Ria, Kota Kinabalu
Pantai Dalit, PO Box 600,
Tuaran, Kota Kinabalu, Sabah 89208,
Malaysia
Hotel and golf club
operation
Long lease
Sule Shangri-La, Yangon
223 Sule Pagoda Road, Yangon,
G.P.O Box 888,
Myanmar
Hotel operation Medium lease
Shangri-La Bangkok
89 Soi Wat Suan Plu New Road, Bangrak,
Bangkok 10500,
Thailand
Hotel operation,
residential and office
rental
Freehold
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
217
Address Existing use Lease term
Shangri-La Chiang Mai
89/8 Chang Klan Road, Muang,
Chiang Mai 50100,
Thailand
Hotel operation Freehold
Shangri-La’s Villingili Resort & Spa, Maldives
Villingili Island, Addu Atoll,
Republic of Maldives
Hotel operation Long lease
JEN Maldives Malé by Shangri-La
Ameer Ahmed Magu, Malé 20096,
Republic of Maldives
Hotel operation Medium lease
Shangri-La Tokyo
Marunouchi Trust Tower Main,
1-8-3 Marunouchi, Chiyoda-ku,
Tokyo 100-8283,
Japan
Hotel operation Medium lease for
building
Shangri-La The Shard, London
31 St Thomas Street,
London SE1 9QU,
United Kingdom
Hotel operation Medium lease for
building
Shangri-La Paris
10 Avenue d’Iena,
Paris 75116,
France
Hotel operation Freehold
Shangri-La The Marina, Cairns
Pierpoint Road, Cairns,
Queensland 4870,
Australia
Hotel operation Medium lease
Shangri-La Sydney
176 Cumberland Street,
The Rocks,
Sydney NSW 2000,
Australia
Hotel operation Long lease
Shangri-La Ulaanbaatar
19 Olympic Street, Sukhbaatar District-1,
Ulaanbaatar 14241,
Mongolia
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
218
Address Existing use Lease term
Shangri-La Hambantota
Sittrakala Estate, Chithragala,
Ambalantota, Sri Lanka
Hotel operation Medium lease
Shangri-La Colombo
1 Galle Face, Colombo 2,
Sri Lanka
Hotel operation Freehold
(b) Details of hotel properties of the operating associates are as follows:
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Address Existing use Lease term
China World Hotel, Beijing
1 Jian Guo Men Wai Avenue,
Beijing 100004,
The People’s Republic of China
Hotel operation Medium lease
JEN Beijing by Shangri-La
1 Jian Guo Men Wai Avenue,
Beijing 100004,
The People’s Republic of China
Hotel operation Medium lease
China World Summit Wing, Beijing
1 Jian Guo Men Wai Avenue,
Beijing 100004,
The People’s Republic of China
Hotel operation Medium lease
Kerry Hotel, Beijing
1 Guanghua Road,
Beijing 100020,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Beijing
29 Zizhuyuan Road,
Beijing 100089,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Hangzhou
78 Beishan Road,
Hangzhou 310007,
The People’s Republic of China
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of hotel properties of the Company’s subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
219
Address Existing use Lease term
Kerry Hotel Pudong, Shanghai
No. 1388 Hua Mu Road, Pudong,
Shanghai 201204,
The People’s Republic of China
Hotel operation Medium lease
Jing An Shangri-La, Shanghai
1218 Middle Yan’an Road,
Jing An Kerry Centre, West Nanjing Road,
Shanghai 200040,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Shenyang
115 Qingnian Avenue,
Shenhe District, Shenyang,
Liaoning 110016,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Tianjin
No. 328 Haihe East Road,
Hedong District, Tianjin 300019,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Jinan
No. 106 Luoyuan Street,
Lixia District, Jinan,
Shandong Province 250011,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Nanchang
No. 669 Cui Lin Road,
Honggutan New District, Nanchang,
Jiangxi Province 330038,
The People’s Republic of China
Hotel operation Medium lease
Shangri-La Tangshan
887, 889, Changhong West Road,
Lubei District, Tangshan, Hebei 063000,
The People’s Republic of China
Hotel operation Medium lease
Midtown Shangri-La, Hangzhou
6 Changshou Road, Kerry Centre,
Yan’an Road, Hangzhou 310006,
The People’s Republic of China
Hotel operation Medium lease
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) Details of hotel properties of the operating associates are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
220
Address Existing use Lease term
Shangri-La Putian
88 Jiuhua Xi Road, Longqiao Street,
Chengxiang District, Putian, Fujian 351100,
The People’s Republic of China
Hotel operation Medium lease
JEN Singapore Tanglin by Shangri-La
1A Cuscaden Road 249716,
Singapore
Hotel operation Long lease
Shangri-La Tanjung Aru,Kota Kinabalu
20 Jalan Aru, Tanjung Aru, Kota Kinabalu,
Sabah 88100,
Malaysia
Hotel operation Long lease
Shangri-La Jakarta
Kota BNI Jalan Jend. Sudirman Kav. 1,
Jakarta 10220,
Indonesia
Hotel operation Medium lease
JEN Hong Kong by Shangri-La
508 Queen’s Road West,
Hong Kong
Hotel operation Long lease
Shangri-La Bosphorus, Istanbul
Sinanpasa Mah, Hayrettin Iskelesi Sok, No.1,
Besiktas, Istanbul 34353,
Turkey
Hotel operation Freehold
Shangri-La Le Touessrok, Mauritius
Coastal Road, Trou d’Eau Douce 42212,
Mauritius
Hotel operation Freehold/Long lease
Shangri-La The Fort, Manila
30th Street corner 5th Avenue,
Bonifacio Global City, Taguig City,
The Philippines
Hotel operation Freehold
43 HOTEL PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) Details of hotel properties of the operating associates are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
221
44 INVESTMENT PROPERTIES OF SUBSIDIARIES AND ASSOCIATES
(a) Details of principal investment properties of the subsidiaries are as follows:
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Address Existing use Lease term
Shangri-La Residences, Dalian
66 Renmin Road, Zhongshan District,
Dalian 116001,
The People’s Republic of China
Residential rental Medium lease
Shangri-La Centre, Chengdu
9 Binjiang Dong Road, Jinjiang District,
Chengdu 610021,
The People’s Republic of China
Office and commercial
rental
Medium lease
Shangri-La Centre, Qingdao
9 Xianggang Middle Road,
Qingdao 266071, Shandong,
The People’s Republic of China
Office and commercial
rental
Medium lease
Shangri-La Centre, Wuhan
700 Jianshe Avenue, Hankou,
Wuhan 430015,
The People’s Republic of China
Office and commercial
rental
Medium lease
Central Tower, Ulaanbaatar
Sukhbaatar Square 2, Sukhbaatar -8,
Ulaanbaatar 14200,
Mongolia
Office and commercial
rental
Medium lease
Shangri-La Centre, Ulaanbaatar
19A-C Olympic Street,
Sukhbaatar District 1,
Ulaanbaatar 14241,
Mongolia
Office, commercial and
residential rental
Medium lease
Shangri-La Apartments, Singapore
1 Anderson Road 259983,
Singapore
Residential rental Freehold
Shangri-La Residences, Singapore
1A Ladyhill Road 258685,
Singapore
Residential rental Freehold
UBN Tower, Kuala Lumpur
UBN Complex, 10 Jalan P. Ramlee,
Kuala Lumpur 50250,
Malaysia
Office and commercial
rental
Freehold
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
222
44 INVESTMENT PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(a) Details of principal investment properties of the subsidiaries are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Address Existing use Lease term
UBN Apartments, Kuala Lumpur
UBN Complex, 10 Jalan P. Ramlee,
Kuala Lumpur 50250,
Malaysia
Residential rental Freehold
Sule Square, Yangon
221, Sule Pagoda Road,
Yangon,
Myanmar
Office and commercial
rental
Medium lease
Shangri-La Serviced Apartments, Yangon
150/150(A), Kan Yeik Thar Road,
Mingalar Taung Nyunt Township
Yangon,
Myanmar
Residential rental Medium lease
The Pier Retail Complex, Cairns
Pierpoint Road, Cairns,
Queensland 4870,
Australia
Office and commercial
rental
Medium lease
One Galle Face, Colombo
1A Centre Road, Galle Face, Colombo 02,
Sri Lanka
Office, commercial and
residential rental
Freehold
Shangri-La Asia Limited Annual Report 2022
Financial Report
223
44 INVESTMENT PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) Details of investment properties of the operating associates are as follows:
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Address Existing use Lease term
China World Trade Center
1 Jian Guo Men Wai Avenue,
Beijing 100004,
The People’s Republic of China
Office, commercial and
residential rental
Medium lease
Century Towers, Beijing
18 Guang Qu Men Wai Avenue,
Beijing 100022,
The People’s Republic of China
Residential rental Medium lease
Beijing Kerry Centre
1 Guanghua Road,
Chaoyang District,
Beijing 100020,
The People’s Republic of China
Office, commercial and
residential rental
Medium lease
Jing An Kerry Centre
1218, 1228 and 1238 Yanan Zhong Road,
1539, 1551 and 1563,
Nanjing Road West,
Jing An District,
Shanghai 200040,
The People’s Republic of China
Office, commercial and
residential rental
Medium lease
Kerry Parkside Shanghai Pudong
1378 Hua Mu Road, Pudong,
Shanghai 201204,
The People’s Republic of China
Office, commercial and
residential rental
Medium lease
Tianjin Kerry Centre
283 Liuwei Road, Hedong District,
Tianjin 300171,
The People’s Republic of China
Office, commercial and
residential rental
Medium lease
Hangzhou Kerry Centre
385 Yan’an Road, Xiacheng District,
Hangzhou 310006,
The People’s Republic of China
Office and commercial
rental
Medium lease
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
224
Address Existing use Lease term
Jinan Enterprise Square
102 Luoyuan Street,
Lixia District, Jinan 250000,
The People’s Republic of China
Office and commercial
rental
Medium lease
Shenyang Kerry Centre
123, 125 and 125-1 Qingnian Avenue,
Shenhe District, Shenyang 110200,
The People’s Republic of China
Office and commercial
rental
Medium lease
Tanglin Mall, Singapore
163 Tanglin Road 247933,
Singapore
Commercial rental Long lease
Tanglin Place, Singapore
91 Tanglin Road 247918,
Singapore
Office and commercial
rental
Freehold
44 INVESTMENT PROPERTIES OF SUBSIDIARIES AND ASSOCIATES (CONTINUED)
(b) Details of investment properties of the operating associates are as follows: (continued)
(lease term represents unexpired lease term of land use rights unless otherwise stated)
Shangri-La Asia Limited Annual Report 2022
Financial Report
225
45 STATEMENT OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
2022 2021
USD’000 USD’000
ASSETS
Non-current assets
Property, plant and equipment
4,057 4,394
Investments in subsidiaries
4,031,939 4,116,000
Financial assets at FVPL – Club debentures
3,073 3,003
4,039,069 4,123,397
Current assets
Amounts due from subsidiaries
707,952 646,337
Dividends receivable, prepayments and deposits
583,163 581,727
Cash and cash equivalents
7,330 1,305
1,298,445 1,229,369
Total assets
5,337,514 5,352,766
EQUITY
Capital and reserves attributable to owners of the Company
Share capital and premium
3,201,995 3,201,995
Shares held for share award scheme
(6,111) (2,858)
Other reserves
1,546,510 1,543,563
Retained earnings
441,582 480,776
Total equity
5,183,976 5,223,476
LIABILITIES
Current liabilities
Accounts payable and accruals
3,198 3,718
Amounts due to subsidiaries
150,340 125,572
153,538 129,290
Total liabilities
153,538 129,290
Total equity and liabilities
5,337,514 5,352,766
Net current assets
1,144,907 1,100,079
Total assets less current liabilities
5,183,976 5,223,476
The statement of financial position of the Company was approved by the Board of Directors on 24 March
2023 and was signed on its behalf.
KUOK Hui Kwong CHUA Chee Wui
Director Director
Shangri-La Asia Limited Annual Report 2022
Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
226
45 STATEMENT OF FINANCIAL POSITION OF THE COMPANY (CONTINUED)
Movement of other reserves of the Company:
Share
option
reserve
Share award
reserve
Capital
redemption
reserve
Contributed
surplus Total
USD’000 USD’000 USD’000 USD’000 USD’000
(Note)
Balance at 1 January 2021
6,216 1,335 10,666 1,524,231 1,542,448
Share-based compensation under share award
scheme
– 2,337 – – 2,337
Vesting of shares under share award scheme
– (1,222) – – (1,222)
Balance at 31 December 2021 and 1 January 2022
6,216 2,450 10,666 1,524,231 1,543,563
Share-based compensation under share award
scheme
– 5,241 – – 5,241
Vesting of shares under share award scheme
– (2,294) – – (2,294)
Balance at 31 December 2022
6,216 5,397 10,666 1,524,231 1,546,510
Note:
The contributed surplus of the Company arose when the Company issued shares in exchange for the shares of companies being
acquired, and represented the difference between the nominal value of the Company’s issued shares and the value of net assets of
the companies acquired. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus is distributable to the
shareholders.
Shangri-La Asia Limited Annual Report 2022
Financial Report
227
45 STATEMENT OF FINANCIAL POSITION OF THE COMPANY (CONTINUED)
Movement of retained earnings of the Company:
2022 2021
USD’000 USD’000
Balance at 1 January
480,776 498,936
Vesting of shares under share award scheme
(592) (185)
Loss for the year
(38,602) (17,975)
Balance at 31 December
441,582 480,776
46 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the Board of Directors on 24 March 2023.
Shangri-La Asia Limited Annual Report 2022
Financial Report
FIVE YEAR SUMMARY
228
The financial summary of the Group for the last five years is as follows:
Year ended 31 December
2022 2021 2020 2019 2018
Results USD’000 USD’000 USD’000 USD’000 USD’000
(Loss)/Profit attributable to:
Owners of the Company
(158,519) (290,575) (460,161) 152,485 192,905
Non-controlling interests
(28,933) (53,844) (50,423) 17,235 (9,167)
As at 31 December
2022 2021 2020 2019 2018
Assets and liabilities USD’000 USD’000 USD’000 USD’000 USD’000
Total assets
12,633,506 13,474,267 14,008,158 13,722,073 13,170,648
Total liabilities
7,208,991 7,424,403 7,693,411 7,218,040 6,493,760
Total equity
5,424,515 6,049,864 6,314,747 6,504,033 6,676,888
Abbreviations
ABBREVIATIONS
229
Shangri-La Asia Limited Annual Report 2022
In this Annual Report (except for the independent Auditor’s report and the Financial Statements), the following
expressions have the following meanings:
“Annual General Meeting” forthcoming 2023 annual general meeting of the Company
“Annual Report” this 2022 annual report of the Company
“Audit & Risk Committee” or “ARC” audit & risk committee of the Company
“Auditor” statutory auditor of the Company, currently being PricewaterhouseCoopers,
Hong Kong
“Board” board of Directors
“Bye-Laws” bye-laws of the Company
“CEO”, “CFO”, “CHRO”, “CIO”,
“COO” and “CTO”
chief executive officer, chief financial officer, chief human resources officer,
chief investment officer, chief operating officer and chief technology officer,
respectively, of the Company/Group
“CG Model Code” code provisions as set out in the Corporate Governance Code as contained
in Appendix 14 to the Listing Rules
“CG Principles” corporate governance principles of the Company adopted by the Board on
19 March 2012 and as revised from time to time, and such principles align
with and/or incorporate terms that are stricter than the CG Model Code,
save for that disclosed (if any) in the corporate governance report in this
Annual Report
“Chairman” or “Deputy Chairman” chairman and deputy chairman (if any), respectively, of the Board
“China” or “Mainland China” The People’s Republic of China, excluding Hong Kong and Macau
“Company” Shangri-La Asia Limited
“Director(s)” director(s) of the Company
“Directors’ Report” the Directors’ report as set out in this Annual Report
“EBITDA” earnings before finance costs, tax, depreciation and amortisation, gains/
losses on disposal of fixed assets and non-operating items such as gains/
losses on disposal of interest in investee companies; fair value gains/losses
on investment properties and financial assets; and impairment losses on
fixed assets which is a non-HKFRS financial measure used to measure the
Group’s operating profitability
“ESG” environmental, social and governance
“Executive Committee” executive committee of the Company
Abbreviations
ABBREVIATIONS
230
Shangri-La Asia Limited Annual Report 2022
“Executive Director(s)” or “ED(s)” executive Director(s)
“Financial Statements” consolidated financial statements of the Group for the Financial Year as set
out on pages 107 to 227 of this Annual Report
“Financial Year” financial year ended 31 December 2022
“Group” Company and its subsidiaries
“HKFRS” Hong Kong Financial Reporting Standards issued by the Hong Kong
Institute of Certified Public Accountants
“HKSE” The Stock Exchange of Hong Kong Limited
“Hotel Management Services” hotel management, marketing, communication, training, and/or reservation
services, and/or any hotel related services
“Independent Non-executive
Director(s)” or “INED(s)”
independent non-executive Director(s)
“KGL” Kerry Group Limited, a Substantial Shareholder, and a connected person of
the Company
“KHL” Kerry Holdings Limited, a Substantial Shareholder and a subsidiary of KGL,
and a connected person of the Company
“KPL” Kerry Properties Limited, whose controlling shareholders include KHL and
KGL, and thus is an associate of each of them, and accordingly a connected
person of the Company
“Listing Rules” Rules Governing the Listing of Securities on HKSE
“Nomination Committee” nomination committee of the Company
“Non-executive Director(s)” or
“NED(s)”
non-executive Director(s)
“Other Major Shareholder(s)” Shareholder(s) (other than Substantial Shareholder(s)) whose interests and
short positions in Shares and underlying Shares are recorded in the register
required to be kept by the Company under Section 336 of the SFO, and in
general, being Shareholder(s) deemed to have interest of 5% or more but
less than 10% in the Company
“Remuneration & Human Capital
Committee”
remuneration & human capital committee of the Company
“RevPAR” revenue per available room which is a key hotel performance indicator used
to measure the average room revenue generated by each available hotel
room on a daily basis
Abbreviations
231
Shangri-La Asia Limited Annual Report 2022
“Securities Model Code” code set out in the Model Code for Securities Transactions by Directors of
Listed Issuers as contained in Appendix 10 to the Listing Rules
“Securities Principles” principles for securities transactions by Directors or any non-Directors of
the Company adopted by the Board on 19 March 2012 and as revised from
time to time, whose terms align with and/or incorporate terms that are
stricter than the Securities Model Code
“Senior Management” member(s) of the senior management of the Group as indicated in the
section entitled “Board of Directors, Company Secretary and Senior
Management” in this Annual Report
“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) of HKD1.00 each in the Company
“Shareholder(s)” shareholder(s) of the Company
“SLIM-HK” Shangri-La International Hotel Management Limited, a wholly owned
subsidiary of the Company incorporated in Hong Kong, and whose principal
business is the provision of Hotel Management Services
“SLIM-PRC” Shangri-La Hotel Management (Shanghai) Co, Limited, a wholly owned
subsidiary of the Company incorporated in Mainland China, and whose
principal business is the provision of Hotel Management Services
“substantial shareholder(s)” as defined in the Listing Rules and in general, being shareholder(s)
deemed to have interest of 10% or more in a company, and “Substantial
Shareholder(s)” shall mean substantial shareholder(s) of the Company
“Sustainability Report” the 2022 sustainability report to be published simultaneously with the
Annual Report
“Year End” 31 December 2022
The Group’s Listed Members
THE GROUP’S LISTED MEMBERS
232
Shangri-La Asia Limited Annual Report 2022
Shangri-La Hotels (Malaysia)
Berhad
(stock exchange - Malaysia)
(stock code - 5517)
Shangri-La Hotel Public
Company Limited
(stock exchange - Thailand)
(stock code - SHANG)
China World Trade Center
Company Limited
(stock exchange - Shanghai, China)
(stock code - 600007)
Shangri-La Asia
Limited
(stock exchange - Hong Kong)
(stock code - 69)
(subsidiary) (subsidiary) (associate)
