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Investor Presentaiton

HKAS 1.51(a) HKAS 1.49 HK Listco Ltd Financial statements for the year ended 31 December 2023 The group's exposure to these risks and the financial risk management policies and practices used by the group to manage these risks are described below. 266 HKFRS 7.31-35 (a) Credit risk 266, 267, 268 HKFRS 7.31 & 33 HKFRS 7.32-33 Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the group. The group's credit risk is primarily attributable to trade receivables and contract assets. The group's exposure to credit risk arising from cash and cash equivalents, bills receivable and derivative financial assets is limited because the counterparties are banks and financial institutions with a minimum credit rating of [●] assigned by [rating agency X], which the group considers to represent low credit risk. The group's exposure to credit risk arising from refundable rental deposits is considered to be low, taking into account (i) the landlords' credit rating and (ii) the remaining lease term and the period covered by the rental deposits. 266 HKFRS 7 requires disclosure of qualitative information concerning risks arising from financial instruments and how the entity manages the risks. In particular, HKFRS 7 requires the following to be disclosed for each type of risk arising from financial instruments: . the exposures to risk and how they arise; . • the entity's objectives, policies and processes for managing the risk and the methods used to measure the risk; and any changes in either of the above from the previous period. HKFRS 7.34-42 & B6- B28 HKFRS 7.35B-35D 267 268 Risks that typically arise from financial instruments are identified in paragraph 32 of HKFRS 7 as including, but not being limited to, credit risk, liquidity risk and market risk (which in turn comprises currency risk, interest rate risk and other price risk). Paragraphs IG15 tolG16 of HKFRS 7 list examples of information that an entity might consider disclosing in this regard. Paragraph 34 of HKFRS 7 requires disclosure of summary quantitative data about an entity's exposure to each type of risk arising from financial instruments at the end of the reporting period. This disclosure should be given based on the information provided internally to key management personnel of the entity, for example, the board of directors or chief executive officer, and is therefore expected to vary from one entity to another. It should, however, be noted that certain minimum disclosures (as set out in paragraphs 35A to 42 of HKFRS 7) are also required to the extent that they are not covered by the disclosures made under the above management approach, and if the risk concerned is material. These include sensitivity analyses, as required by paragraph 40, as discussed further in footnote 278. In addition, concentrations of risk that arise from financial instruments having similar characteristics (for example, counterparty, geographical area, currency or market) are also required to be disclosed if such concentrations are not apparent from the above information. If the above quantitative disclosures of exposures at the end of the reporting period are unrepresentative of an entity's exposure to risk during the period, the entity should provide additional information that is representative. For example, paragraph IG20 of HKFRS 7 indicates that if the entity typically has a large exposure to a particular currency, but at year-end unwinds the position, the entity might disclose the highest, lowest and average amount of risk to which it was exposed during the year. HKFRS 7 as amended by HKFRS 9 requires more granular credit risk disclosures. Specifically, HKFRS 7 requires an entity to disclose: • • • information about the entity's credit risk management practices and how they relate to the recognition and measurement of ECL (paragraphs 35F and 35G); quantitative and qualitative information that allows users of financial statements to evaluate the amount in the financial statements arising from ECL (paragraphs 35H to 35L); and information about the entity's exposure to credit risk, including significant concentrations of credit risk (paragraphs 35M and 35N). Entities do not need to duplicate information that is already presented elsewhere, provided that the information is incorporated by cross-reference from the financial statements to other statements where the information is disclosed, and those statements are available to the financial statement users on the same terms as the financial statements and at the same time. Entities should consider the level of detail that is necessary to meet the disclosure objectives. 168 © 2023 KPMG, a Hong Kong partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited ("KPMG International"), a private English company limited by guarantee. All rights reserved.
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