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3.
Contingent liabilities and commitments
Details of contingent liabilities and commitments of CITIC limited as at 30 June 2016 are set out in Note 31
to the consolidated financial statements.
4.
Pledged loan
Details of cash and deposits, fixed assets and intangible assets pledged as security for CITIC Limited’s loan as
at 30 June 2016 are set out in 28(d) to the consolidated financial statements.
5.
Credit ratings
Standard &
Poor’s
Moody’s
30 June 2016
A–/Negative A3/Negative
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 HKAS 39 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.
1.
Interest rate risk
CITIC Limited regularly monitors current and projected interest rate changes, with each of the operating
entities of the Group implementing its own interest rate risk management system covering identification,
measurement, monitoring and control of market risks. Interest rate risk is managed by taking into account
market conditions and controlled at a reasonable level.
For our financial subsidiaries, repricing risk and benchmark risk are the main sources of interest rate risk.
Observing the principle of prudent risk appetite, they closely track changes in the macroeconomic situation
and internal business structure, continue to optimise the maturity structure of deposits, make timely
adjustments to the loan repricing lifecycle, and take the initiative to manage sensitive gaps in interest rates
for the overall objective of achieving steady growth both in net interest income and economic value within
a tolerable level of interest rate risk.