CITIC Limited Half-Year Report 2020

24 Half-Year Report 2020 CITIC Limited CITIC Limited’s liquidity management involves the regular cash flow forecast for the next three years and the consideration of its liquid assets level and new financings necessary to meet future cash flow requirements. CITIC Limited centrally manages its own liquidity and that of its major non-financial subsidiaries and improves the efficiency of fund utilisation. With flexible access to domestic and overseas markets, CITIC Limited seeks to diversify sources of funding through different financing instruments, in order to raise low- cost funding of medium and long terms, maintain a mix of staggered maturities and minimise refinancing risk. Details of liquidity risk management are set out in Note 29(b) to the consolidated financial statements. 3. Contingent liabilities and commitments Details of contingent liabilities and commitments of CITIC Limited as at 30 June 2020 are set out in Note 28 to the consolidated financial statements. 4. Pledged loan Details of cash and deposits, inventories, trade and other receivables, fixed assets, intangible assets, right- of-use assets and the interests in associates pledged as security for CITIC Limited’s loan as at 30 June 2020 are set out in Note 25(d) to the consolidated financial statements. 5. Credit ratings Standard & Poor’s Moody’s 30 June 2020 BBB+/Stable A3/Stable Treasury risk management Treasury risk management essentially covers the following financial risks inherent in CITIC Limited’s businesses: • Interest rate risk • Currency risk • Counterparty risk for financial products • Commodity risk • Market price risk CITIC Limited manages the above risks by using appropriate financial derivatives or other means, and priority will be given to simple, cost-efficient and effective hedge instruments which meet the HKFRS 9 in performing treasury risk management responsibilities. To the extent possible, gains and losses of the derivatives offset the losses and gains of the assets, liabilities or transactions being hedged. CITIC Limited is committed to establishing a comprehensive and uniform treasury risk management system. Within the group-wide treasury risk management framework, member companies are required to, according to their respective business characteristics and regulatory requirements, implement suitable treasury risk management strategies and procedures and submit reports on a regular and ad hoc basis.