NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 40 RECONCILIATION OF MOVEMENTS OF LIABILITIES TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES Liabilities Interestbearing borrowings (note 21)* Interest payable^ Non-trade amounts owing to noncontrolling interests^ Non-trade amounts owing to fellow subsidiaries (note 17) Non-trade amounts owing to associates (note 8) Non-trade amounts owing to joint ventures (note 9) Lease liabilities (note 26) $’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance at 1 January 2022 11,139,993 35,026 143,389 248,560 2 97,570 265,327 Financing cash flows 82,195 (239,803) (14,878) 42,410 2,734 – (46,159) Non-cash changes Changes arising from acquisition/ deconsolidation of subsidiaries (1,107,754) (3,272) – – – – (91,271) Effect of changes in foreign exchange rates (452,642) (7,860) (12,854) – (131) (6,865) (11,733) Liability-related New leases – – – – – – 561,148 Interest expense/capitalised – 257,453 10,384 2,947 – – 20,127 Others 7,630 (745) (775) – – – – Total other changes (1,552,766) 245,576 (3,245) 2,947 (131) (6,865) 478,271 Balance at 31 December 2022 9,669,422 40,799 125,266 293,917 2,605 90,705 697,439 Balance at 1 January 2023 9,669,422 40,799 125,266 293,917 2,605 90,705 697,439 Financing cash flows 1,626,284 (422,351) – (175,849) (270) 758 (50,021) Non-cash changes Changes arising from acquisition/ deconsolidation of subsidiaries 6,713 – – – – – – Effect of changes in foreign exchange rates (9,567) 70 (5,275) – 84 (2,798) (1,030) Liability-related New leases – – – – – – 13,763 Termination of leases – – – – – – (14,531) Interest expense/capitalised – 453,221 6,477 802 – 12 25,320 Others 7,451 (7,595) 10,671 – – – – Total other changes 4,597 445,696 11,873 802 84 (2,786) 23,522 Balance at 31 December 2023 11,300,303 64,144 137,139 118,870 2,419 88,677 670,940 ^ Included in “trade and other payables” * Excluding bank overdrafts 41 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 risk. Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. Management is responsible for developing and monitoring the Group’s risk management policies. Management reports regularly to the Board of Directors on its activities. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. The Group has a system of controls in place to maintain an acceptable balance between the cost of risks occurring and the cost of managing the risks. Management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Audit & Risk Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. It is, and has been throughout the current and previous financial years, the Group’s policy that no derivatives shall be undertaken for speculative purposes except for its use as hedging instruments where appropriate and cost efficient. (i) 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 principally from the Group’s receivables from customers, amounts owing by associates and joint ventures, other receivables and debt investments. As at 31 December 2023, the Group had gross amounts owing by HCP Group of $374.0 million (2022: $382.7 million) (note 16) and subscribed for a bond of $304.4 million (2022: $309.5 million) (note 10) issued by Sincere Property Group. As at 31 December 2023 and 31 December 2022, the amounts owing by HCP Group and the investment in bond were fully impaired. In addition, the amounts owing by subsidiaries and joint ventures represent 93% (2022: 92%) of the Company’s financial assets. Except as disclosed, there is no significant concentration of credit risk for the Group and the Company. The carrying amounts of financial assets and contract assets represent the Group’s and the Company’s maximum exposures to credit risk, before taking into account any collateral held. FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 217 216
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