CITIC Limited Half-Year Report 2020

22 Half-Year Report 2020 CITIC Limited Risk Management CITIC Limited has established a risk management and internal control system covering all business segments to identify, assess and manage various risks in the Group’s business activities. The business, operating results, financial position and profitability of CITIC Limited may be subject to a number of risk factors and uncertainties, directly or indirectly, relating to the Group. The risk factors set out below are not exhaustive and CITIC Limited, in addition to these risk factors, may also be exposed to other unknown risks or risks that may not be material at present but may become material in future. Financial Risk As a sub-committee of the Executive Committee, the Asset and Liability Management Committee (“ALCO”) has been established to monitor financial risks of the Group in accordance with the relevant treasury and financial risk management policies. Asset and liability management CITIC Limited’s sources of funds for different businesses include long-term and short-term debt and equity, of which ordinary shares, preferred shares and perpetual securities are the alternative forms of equity financing instruments. CITIC Limited manages its capital structure to finance its overall operations and growth by using different sources of funds. The type of funding is targeted to match the characteristics of our underlying business. 1. Debt ALCO centrally manages and regularly monitors the existing and projected debt levels of CITIC Limited and its major non-financial subsidiaries to ensure that the Group’s debt size, structure and cost are at reasonable levels. As at 30 June 2020, consolidated debt of CITIC Limited (1) was HK$952,584 million, including loans of HK$151,762 million and debt instruments issued (2) of HK$800,822 million. Debt of CITIC Bank (3) accounted for HK$665,535 million. CITIC Limited attaches importance to cash flow management, the head office of CITIC Limited had cash and deposits of HK$11,690 million and available committed facilities of HK$26,600 million. The details of debt are as follows: As at 30 June 2020 HK$ million Consolidated debt of CITIC Limited 952,584 Among which: Debt of CITIC Bank 665,535 Note: (1) Consolidated debt of CITIC Limited is the sum of “bank and other loans” and “debt instruments issued” in the Consolidated Balance Sheet of CITIC Limited excluding interest accrued; (2) Debt instruments issued include corporate bonds, notes, subordinated bonds, certificates of deposit, certificates of interbank deposit issued and convertible corporate bonds excluding interest accrued; (3) Debt of CITIC Bank refers to CITIC Bank’s consolidated debt securities issued, including long-term debt securities, subordinated bonds, certificates of deposit, certificates of interbank deposit issued and convertible corporate bonds excluding interest accrued and convertible corporate bonds that has been subscribed by another subsidiary of the group.