Notes to the Financial Statements For the financial year ended 31 December 2025 Notes to the Financial Statements For the financial year ended 31 December 2025 21. TAX (CREDIT)/EXPENSE Group 2025 2024 $’000 $’000 Current tax expense Current year 10,337 6,892 Changes in estimates related to prior years 281 (111) Withholding taxes 505 1,040 11,123 7,821 Deferred tax expense/(credit) Origination and reversal of temporary differences 89 (16,856) Total tax expense/(credit) 11,212 (9,035) Reconciliation of effective tax rate (Loss)/Profit before tax (149,934) 11,469 Less: Share of results of associates and joint ventures, net of tax 7,476 (67,312) (142,458) (55,843) Tax using Singapore tax rate of 17% (2024: 17%) (24,218) (9,493) Effect of tax rates in foreign jurisdictions (3,112) 180 Non-deductible expenses 78,169 69,891 Tax exempt income (48,401) (74,773) Current year losses for which no deferred tax asset was recognised 9,191 4,446 Utilisation of previously unrecognised tax losses (2,821) (842) Changes in estimates related to prior years 281 (111) Withholding taxes 505 1,040 Others 1,618 627 11,212 (9,035) 22. (LOSS)/PROFIT FOR THE YEAR The following items have been included in arriving at (loss)/profit for the year: Group 2025 2024 $’000 $’000 Direct operating expenses arising from rental of investment properties 31,287 33,472 Depreciation and amortisation expense 25,556 6,633 Employee benefits expense (see below) 56,010 32,315 Employee benefits expense Salaries, bonuses and other costs 49,386 31,810 Contributions to defined contribution plans 6,624 3,575 Reversal of long-term incentive plan – (3,070) 56,010 32,315 23. FINANCIAL INSTRUMENTS Financial risk management Overview The Group has exposure to the following risks arising from financial instruments: • credit risk • liquidity risk • market risk This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risks, and the Group’s management of capital. Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risks limits and controls, and to monitor risks and adherence to limits. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on the Group’s financial performance. Risk management policies and procedures are reviewed regularly to reflect changes in market conditions and the Group’s activities. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the Group’s receivables from tenants of its operating assets and balances with related parties. The carrying amounts of financial assets represent the Group and the Company’s maximum exposures to credit risk, before taking into account any collateral held. The Group and the Company do not hold any collateral in respect of their financial assets, except for balances with tenants where security deposits are obtained. Risk management policy The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. It is the Group’s policy that all tenants are subject to credit verification procedure. Credit evaluations are performed by management before lease agreements are entered into with tenants. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 221 220 PERENNIAL HOLDINGS PRIVATE LIMITED ANNUAL REPORT 2025
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