Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HKAS 16.77(f)
HKAS 1.134 &
135
(e)
HK Listco Ltd
Financial statements for the year ended 31 December 2023
(iii) Property revaluation reserve
The property revaluation reserve has been set up and is dealt with in accordance with the accounting
policies adopted for land and buildings held for own use in note 1(k).
The property revaluation reserve of the company is distributable to the extent of $567,000 (2022:
$250,000) 261
(iv) Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of
hedging instruments used in cash flow hedges pending subsequent recognition of the hedged cash
flow in accordance with the accounting policy adopted for cash flow hedges in note 1(i)(i).
(v) Fair value reserve (non-recycling)
The fair value reserve (non-recycling) comprises the cumulative net change in the fair value of equity
investments designated at FVOCI under HKFRS 9 that are held at the end of the reporting period (see
note 1(g)).
Capital management262
The group's primary objectives when managing capital are to safeguard the group's ability to continue
as a going concern, so that it can continue to provide returns for shareholders and benefits for other
stakeholders, by pricing products and services commensurately with the level of risk and by securing
access to finance at a reasonable cost.
The group actively and regularly reviews and manages its capital structure to maintain a balance
between the higher shareholder returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position, and makes adjustments to the capital
structure in light of changes in economic conditions.
The group monitors its capital structure on the basis of an adjusted net debt-to-capital ratio. For this
purpose, adjusted net debt is defined as total debt (which includes interest-bearing loans and
borrowings, and lease liabilities but excludes redeemable preference shares) plus unaccrued proposed
dividends, less cash and cash equivalents. Adjusted capital comprises all components of equity and
redeemable preference shares, other than amounts recognised in equity relating to cash flow hedges,
less unaccrued proposed dividends.
During 2023, the group's strategy, which was unchanged from 2022, was to maintain the adjusted net
debt-to-capital ratio at the lower end of the range 1% to ]%. In order to maintain or adjust the
ratio, the group may adjust the amount of dividends paid to shareholders, issue new shares, return
capital to shareholders, raise new debt financing or sell assets to reduce debt.
HKAS 1.134 & 135
261
As discussed in footnote 15, Part 6 of the CO "Distribution of profits and assets" contains provisions that deal with distribution of
profits and assets by a company incorporated under the CO to its members. The provisions of Part 6 are closely based on the
equivalent requirements of the predecessor Companies Ordinance (Cap. 32). For example, under section 292(5) of the CO, property
revaluation reserve can be treated as realised to the extent that depreciation charged to the statement of profit or loss/the
statement of profit or loss and other comprehensive income on revalued assets exceeds the amount that would have been charged
based on the historical cost of those assets. This is consistent with the previous requirements in section 79K(2) of the predecessor
Companies Ordinance.
262 Paragraphs 134 and 135 of HKAS 1 require an entity to disclose information that enables users of its financial statements to evaluate
an entity's objectives, policies and processes for managing "capital", based on the information provided internally to the entity's key
management personnel. Because of this "management focus", the extent and level of disclosures will vary from one entity to another.
As acknowledged in paragraph 135(b) of HKAS 1, the "capital" that an entity manages may not necessarily be equal to equity as
defined in HKFRSS and might also include or exclude some other components. For example, it might include some financial
instruments, such as preference shares, which are presented as liabilities in the financial statements, and exclude some items, such as
components of equity arising from cash flow hedges. To facilitate comparison across different entities, paragraph 135(a)(i) of HKAS 1
requires an entity to provide a description of what it manages as "capital".
Paragraphs 134 and 135 of HKAS 1 do not prescribe the format of the information required to be disclosed and entities should
exercise judgement in deciding the appropriate way to satisfy these requirements. In this regard, paragraphs IG10 to IG11 of HKAS 1
provide two examples, one for an entity that is not a regulated financial institution and the other for an entity that is subject to
externally imposed capital requirements (see footnote 263). These examples serve as a starting point for entities to consider what
information to disclose to reflect their individual circumstances.
165
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