3. How many real estate financing projects does the Group have currently?

Currently the Group has debt investments mostly in major cities in the Jiangsu province. In terms of lending to real estate developers, the Group does not lend via corporate bonds. Instead, it typically lends via a closed loop system, whereby a joint venture would be set up to manage cash flow and the land title is held as collateral by the Group. In addition, a corporate guarantee is obtained from the parent company of the debtor. The goal is to ensure multiple layers of security in order to better secure the financial position of the Group. As such, the risk on the loan is segregated from other projects or external risks associated with the Group&rsquo s clients in the property development sector. 

28/04/2023

https://links.sgx.com/FileOpen/YZJ%20SIAS%20FINAL.ashx?App=Announcement& FileID=756921

RESPONSE TO QUESTIONS FROM SECURITIES INVESTORS ASSOCIATION (SINGAPORE) ON THE COMPANY&rsquo S ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
 

Q2. &ldquo Debt investments at amortised cost&rdquo is a key audit matter (KAM) highlighted by the independent auditors in their report on the audit of the financial statements. Key audit matters are those matters that, in the professional judgment of the Independent Auditor, were of most significance in the audit of the financial statements of the current period.

As noted in the KAM, as of 31 December 2022, the carrying amount of the group&rsquo s debt investments at amortised cost was $2.67 billion, representing 64% of the group&rsquo s total assets. This is net of allowance for impairment loss of $255.1 million at that date.


(i) What are the reasons for the $503 million increase in the gross carrying amount of non-performing debt investments to $1.14 billion?

(i) As highlighted in our financial statements, the increase of non-performing loans during 2H2022 was mainly a result of deteriorating China real estate market.

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