Back to top
For the year ended 31 December 2024
(Expressed in millions of Renminbi, unless otherwise stated)
CITIC Limited (the “Company”) was incorporated in Hong Kong, the shares of which are listed on the Main Board of the Stock Exchange of Hong Kong Limited. The address of its registered office is 32nd Floor, CITIC Tower, 1 Tim Mei Avenue, Central Hong Kong.

The Company and its subsidiaries (collectively referred to as the “Group”) are principally engaged in comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption, new-type urbanisation, etc.

The parent and the ultimate holding company of the Company is CITIC Group Corporation (“CITIC Group”). As at 31 December 2024, the equity interests held by CITIC Group in the Company through its overseas wholly-owned subsidiaries was 53.12% (31 December 2023: 53.12%).
(a)

Basis of preparation

These financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRS”), which in collective term includes all applicable individual HKFRS, Hong Kong Accounting Standards (“HKAS”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and the requirements of the Hong Kong Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Material accounting policies adopted by the Group are disclosed below.

The HKICPA has issued certain amendments or interpretations to HKFRSs. The Group has adopted those amendments or interpretations to the HKFRSs issued by the HKICPA that are first effective for the year ended 31 December 2024 (see Note 2(b)(i)).

(b)

Changes in material accounting policies

(i)

New and amended HKFRSs

  • Amendments to HKAS 1, Presentation of financial statements – Classification of liabilities as current or non-current (“2020 amendments”) and amendments to HKAS 1, Presentation of financial statements – Non-current liabilities with covenants (“2022 amendments”) (collectively referred to as “HKAS 1 amendments”)
  • Amendments to HKFRS 16, Leases – Lease liability in a sale and leaseback
  • Amendments to HKAS 7, Statement of cash flows and HKFRS 7, Financial instruments: Disclosures Supplier finance arrangements
The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Impacts of the adoption of the amended HKFRSs are discussed below:

HKAS 1 amendments

The HKAS 1 amendments impact the classification of a liability as current or non-current, and have been applied retrospectively as a package.

The 2020 amendments primarily clarify the classification of a liability that can be settled in its own equity instruments. If the terms of a liability could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instruments and that conversion option is accounted for as an equity instrument, these terms do not affect the classification of the liability as current or non-current. Otherwise, the transfer of equity instruments would constitute settlement of the liability and impact classification.

The 2022 amendments specify that conditions with which an entity must comply after the reporting date do not affect the classification of a liability as current or non-current. However, the entity is required to disclose information about non-current liabilities subject to such conditions.

The amendments do not have a material impact on the Group’s consolidated financial statements.

Amendments to HKFRS 16, Leases – Lease liability in a sale and leaseback

The amendments clarify how an entity accounts for a sale and leaseback after the date of the transaction. The amendments require the seller-lessee to apply the general requirements for subsequent accounting of the lease liability in such a way that it does not recognise any gain or loss relating to the right of use it retains. A seller-lessee is required to apply the amendments retrospectively to sale and leaseback transactions entered into after the date of initial application.

The amendments do not have a material impact on the Group’s consolidated financial statements.

Amendments to HKAS 7, Statement of cash flows and HKFRS 7, Financial instruments: Disclosures – Supplier finance arrangements

The amendments introduce new disclosure requirements to enhance transparency of supplier finance arrangements and their effects on an entity’s liabilities, cash flows and exposure to liquidity risk. The Group has provided the new disclosures in Note 53(b).

(c)

Functional currency and presentation currency

The functional currency of the Company is HK$. The functional currencies of subsidiaries are determined in accordance with the primary economic environment in which they operate, and are translated into RMB for the preparation of the consolidated financial statements (see Note 2(i)). The financial statements of the Group are presented in RMB and, unless otherwise stated, expressed in million of RMB.

(d)

Basis of measurement

The consolidated financial statements for the year ended 31 December 2024 comprise the Company and its subsidiaries and the Group’s interest in associates and joint ventures.

The measurement basis used in the preparation of the consolidated financial statements is the historical cost basis except that the following assets and liabilities are stated at their fair values as explained in the accounting policies set out below:
  • investment properties (see Note 2(n));
  • financial assets and liabilities at fair value through profit or loss (see Note 2(j));
  • financial assets at fair value through other comprehensive income (see Note 2(j)); and
  • fair value hedged items (see Note 2(k)(i)).

(e)

Use of estimates and judgement

The preparation of these consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management that have significant effect on the consolidated financial statements and major sources of estimation uncertainty are discussed in Note 3.

(f)

Subsidiaries and non-controlling interests

(i)

Business combinations involving entities under common control

A business combination involving entities under common control is a business combination in which all of the combining entities are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of the net assets acquired and the consideration paid for the combination (or the total face value of shares issued) is adjusted against the capital reserve. Any cost directly attributable to the combination is recognised in profit or loss when incurred. The combination date is the date on which one combining entity obtains control of other combining entities.

(ii)

Business combinations not involving entities under common control

A business combination not involving entities under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1) the aggregate of the acquisition date fair value of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the acquisition date fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill. If (1) is less than (2), the difference is recognised in profit or loss for the current period. The costs of equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts of these equity or debt securities upon initial recognition. Other acquisition-related costs are expensed when incurred. Any difference between the fair value and the carrying amount of the assets or liabilities transferred as consideration is recognised in profit or loss. The acquiree’s identifiable assets, liabilities and contingent liabilities, if the recognition criteria are met, are recognised by the Group at their acquisition date fair value. The acquisition date is the date on which the acquirer obtains control of the acquiree.

The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis. Non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are measured at either fair value or the present ownership interests’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other components of non-controlling interests are measured at their acquisition date fair value, unless another measurement basis is required by HKFRS.

For a business combination not involving entities under common control and achieved in stages, the Group remeasures its previously-held equity interest in the acquiree to its fair value at the acquisition date. The difference between the fair value and the carrying amount is recognised in profit or loss for the current period; the amount recognised in other comprehensive income relating to the previously-held equity interest in the acquiree are transferred to profit or loss in the period in which the acquisition occurs.

(iii)

Consolidated financial statements

The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries which includes structured entities controlled by the Group.

Subsidiaries are entities over which the Group has control. The Group controls an entity when it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

When assessing whether the Group has power, only substantive rights are considered including the substantive rights held by the Group and other parties.

An investment in a subsidiary is consolidated into the consolidated financial statements of the Group from the date that control commences until the date that control ceases.

Where a subsidiary was acquired during the reporting period, through a business combination involving entities under common control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at the date the ultimate controlling party first obtained control. Therefore, the opening balances and the comparative figures of the consolidated financial statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s assets, liabilities and results of operations are included in the consolidated statement of financial position and the consolidated statement of comprehensive income, respectively, based on their carrying amounts, from the date that common control was established.

Where a subsidiary was acquired during the reporting period, through a business combination involving entities not under common control, the identifiable assets, liabilities and results of operations of the subsidiaries are consolidated into the consolidated financial statements from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date.

Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from equity attributable to the ordinary shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling interests and the ordinary shareholders of the Company. Loans from holders of non-controlling interests and other contractual obligations towards these holders are presented as financial liabilities in the consolidated statement of financial position in accordance with Note 2(j).

When the amount of loss for the current period attributable to the non-controlling interest of a subsidiary exceeds the non-controlling interest’s portion of the opening balance of shareholders’ equity of the subsidiary, the excess is allocated against the non-controlling interests.

When the accounting period or accounting policies of a subsidiary are different from those of the Group, the Group makes necessary adjustments to the financial statements of the subsidiary based on the Group’s own accounting period or accounting policies. Intra-group balances, transactions and cash flows, and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are recognised fully in profit or loss when evidence of impairment of assets being provided.

If there is a difference between the accounting entity of the Group and the accounting entity of the Company or a subsidiary on measuring the same transaction, the transaction will be adjusted from the perspective of the Group.

Where the Group acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of a portion of an interest in a subsidiary without a change in control, the difference between the share of identifiable net assets of the subsidiary calculated using the additional share or the disposed share and the amount of the consideration paid or received is adjusted to the reserve (capital reserve) in the consolidated statement of financial position.

When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss, and the Group derecognises assets, liabilities, non-controlling interests and other related items in shareholders’ equity in relation to that subsidiary. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see Note 2(j)) or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture (see Note 2(g)).

(iv)

Investment in subsidiaries

In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment losses (see Note 2(u)).

The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable.

(g)

Associates and joint ventures

An associate is an entity in which the Group or the Company has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group or the Company has joint control, whereby the Group or the Company has the rights to its net assets and obligations for its liabilities.

In the consolidated financial statements, an interest in an associate or a joint venture is accounted for using the equity method. They are initially recognised at cost, which includes transaction costs, adjusted for any excess of the Group’s share of the acquisition-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post acquisition change in the Group’s share of the investee’s net assets and any impairment loss relating to the investment (see Note 2(u)). Any acquisition-date excess of the Group’s share of the fair value of the investee’s identifiable net assets over cost, the Group’s share of the post-acquisition, post-tax results of the investees and any impairment losses for the year are recognised in profit or loss, whereas the Group’s share of the post-acquisition, net share of the investees’ other comprehensive income is recognised in other comprehensive income of the Group. The Group’s interest in associate or joint venture is included in the consolidated financial statements from the date that significant influence or joint control commences until the date that significant influence or joint control ends.

When the Group’s share of losses exceeds its interest in the associate or the joint venture, the Group’s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associates and joint ventures. For this purpose, the Group’s interest is the carrying amount of the investment under the equity method together with the Group’s long-term interests that in substance form part of the Group’s net investment in the associate or the joint venture.

Unrealised profits and losses resulting from transactions between the Group and its associate and joint venture are eliminated to the extent of the Group’s interest in the investee, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are recognised immediately in profit or loss. If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured. Instead, the investment continues to be accounted for under the equity method.

When the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the cost on initial recognition of a financial asset (see Note 2(j)).

In the Company’s statement of financial position, an investment in an associate or joint venture is stated at cost less impairment losses (see Note 2(u)).

(h)

Goodwill

Goodwill represents the excess of the consideration transferred, including the amount of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and the equity securities issued by the acquirer at the date of acquisition, over the fair value of the Group’s share of the identifiable net assets acquired, when the excess is positive, otherwise it’s recognised directly in profit or loss.

Impairment losses on goodwill cannot be reversed in the future.

(i)

Translation of foreign currencies

Foreign currency transactions of the Group are, on initial recognition, translated by applying the foreign exchange rates ruling at the transaction dates. Monetary items denominated in foreign currencies are translated at the foreign exchange rates ruling at the reporting date, the resulting exchange differences are recognised in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates ruling at the transaction dates. Non-monetary items that are measured at fair value in a foreign currency are translated using the foreign exchange rates ruling at the dates the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as fair value through other comprehensive income are recognised in other comprehensive income.

The financial statements of the Group’s subsidiaries with a foreign functional currency are translated into RMB for the preparation of the Group’s consolidated financial statements. The assets and liabilities in these financial statements are translated into RMB at the foreign exchange rates ruling at the reporting date. The equity items, except for “retained earnings”, are translated to RMB at the foreign exchange rates at the dates on which such items arose.

Income and expenses in the profit or loss are translated into RMB at the foreign exchange rates at the transaction dates or the rates approximate to. The resulting exchange differences are presented as “Reserves” (exchange reserve) in the consolidated statement of financial position within the shareholder’s equity. The effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency are reported in the statement of cash flows.

Upon disposal of a foreign operation, the cumulative amount of the translation differences recognised in shareholders’ equity which relates to that foreign operation is transferred to profit or loss in the period in which the disposal occurs.

(j)

Financial instruments

Financial instruments refer to a contract that forms one party’s financial assets and another party’s liabilities or equities. Financial assets and financial liabilities are recognised when the Group becomes a party of the financial instrument contracts.

(i)

Financial assets

(1)

Classification and Measurement

The Group classifies its financial assets into the following categories based on their business model and the contractual cash flow characteristics:
  • Financial assets at amortised cost;
  • Financial assets at fair value through other comprehensive income (“FVOCI”);
  • Financial assets at fair value through profit or loss (“FVPL”).
At initial recognition, the Group measures a financial asset at its fair value. For financial assets that are at FVPL, the transaction costs are expensed in profit or loss; for financial assets with other categories, the transaction costs are recognised in the initial carrying amounts. For trade and other receivables arising from rendering of goods or services with no significant financing component, the Group measures their initial carrying amount as the cash flows that the Group is entitled and expected to receive.

Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, and are measured at the following three categories:

-  

Amortised cost:

The business model the Group manages these financial assets is to collect the contractual cash flows where those cash flows’ characteristics are consistent with those of the basic loans arrangement, i.e, the contractual cash flows of these financial assets at certain date represent solely payments of principal and interest based on the principal amount (“SPPI”), and that are not designated at FVPL. Interest income from these financial assets is recognised using the effective interest rate method.

-  

FVOCI:

The business model the Group manages these financial assets is to collect contractual cash flows and to sell the assets, and those cash flows’ characteristics are consistent with those of the basic loans arrangements, i.e, the contractual cash flows of these financial assets at certain date represent solely payments of principal and interest based on the principal amount, and that are not designated at FVPL. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, foreign exchange gains and losses and interest income on the instrument’s amortised cost which are recognised in profit or loss.

-  

FVPL:

Assets that do not meet the criteria for amortised cost or FVOCI are at FVPL. The Group may also irrevocably designate financial assets at fair value through profit or loss if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being measured on different bases.


Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting the liabilities. A financial instrument is an equity instrument if, and only if, both conditions (i) and (ii) below are met: (i) The financial instrument includes no contractual obligation to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Group; (ii) If the financial instrument will or may be settled in the Group’s own equity instruments, it is a non-derivative instrument that includes no contractual obligations for the Group to deliver a variable number of its own equity instruments; or a derivative that will be settled only by the Group exchanging a fixed amount of cash or another financial asset for a fixed number of its own equity instruments.

The Group subsequently measures all equity investments at FVPL, except where the Group has elected, at initial recognition, to irrevocably designate an equity investment at FVOCI. When this election is made, fair value gains and losses are recognised in other comprehensive income (“OCI”) and are not subsequently reclassified to profit or loss, including on disposal. Dividends, when representing a return on such investments, are recognised in profit or loss when the Group’s right to receive payments is established.

(2)

Impairment

The Group assesses on a forward-looking basis the expected credit losses (“ECL”) associated with its financial assets at amortised cost, debt instrument at FVOCI, lease receivables and contract assets, loan commitments and financial guarantee contracts for the issuer which are not measured at fair value through profit or loss.

When calculating the probability-weighted present value of the difference between the contractual and forecasted cash flows to be received, the Group takes reasonable and supportable information such as the past events, current conditions and forecasts of future economic conditions into consideration and uses probabilities of default as the weightings. The difference is recognised as the ECL.

At each financial position date, the Group calculates the ECL of financial instruments in different stages. Stage 1 refers to financial instruments that have not had a significant increase in credit risk since initial recognition; Stage 2 refers to financial instruments that have had a significant increase in credit risk since initial recognition but that do not have objective evidence of impairment; Stage 3 refers to financial assets for which there are objective evidence of impairment at the reporting date since initial recognition. For these assets at Stage 1, 12-month ECL are recognised and for assets at stage 2 and 3, life-time ECL are recognised. For financial assets with low credit risks as at the financial position date, the Group recognises 12-month ECL based on the assumption that the credit risks have not significantly increased after initial recognition.

For financial assets in stage 1 and stage 2, interest income is calculated based on the gross carrying amount of the asset, that is, without deduction for credit loss, and the effective interest rates. For financial assets in stage 3, interest income is calculated on the net carry amount, that is, net of credit losses, and the effective interest rates.

The Group recognises the provision and reversal of ECL in profit or loss. For debt instrument at FVOCI, the Group makes relevant adjustments to other comprehensive income at the same time as recognising ECL in profit and loss.

For account and bills receivables and contract assets, whether there is significant financing component or not, the Group recognises life-time ECL.

(3)

Derecognition

The Group derecognises a financial asset if one of the following conditions is met:
  • The contractual rights to receive the cash flows from the financial asset expire;
  • The financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of such financial asset;
  • The financial asset has been transferred, the Group has not retained any control over the financial asset, even if the Group neither transfers nor retains substantially all the risks and rewards of ownerships of the financial asset.
For the Group’s equity instruments not held for trading purposes and designated at FVOCI, when they are derecognised, the difference between the carrying amount and the consideration is recognised in retained earnings, also, the cumulative gains or losses previously recognised in other comprehensive income are recycled to the retained earnings; for other financial assets measured at FVOCI, the difference between the carrying amount and the consideration is recognised in profit and loss, also, the cumulative gains or losses previously recognised in other comprehensive income are recycled to profit and loss.

As part of its operations, the Group securitises financial assets, generally through the sale of these assets to structured entities which issue securities to investors. When the securitisation of financial assets qualifies for de-recognition, the relevant financial assets are de-recognised in their entirety and a new financial asset or liabilities is recognised regarding the interest in the unconsolidated securitisation vehicles that the Group acquired. When the securitisation of financial assets does not qualify for de-recognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are recorded as a financial liability. When the securitisation of financial assets partially qualifies for de-recognition, where the Group has not retained control, it derecognises these financial assets. Otherwise, the Group continues to recognise these financial assets to the extent of its continuing involvement and recognises an associated liability.

The de-recognition of financial assets sold on condition of repurchase is determined by the economic substance of the transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells such financial asset), the Group will derecognise the financial assets.

(4)

Modification of investment in financial assets

The Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new terms are substantially different to the original terms. The Group does this by considering, among others, the following factors:
  • If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay.
  • Whether any substantial new terms are introduced, such as a profit share/equity-based return that substantially affects the risk profile of the loan.
  • Significant extension of the loan term when the borrower is not in financial difficulty.
  • Significant change in the interest rate.
  • Change in the currency the loan is denominated in.
  • Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.
If the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new effective interest rate for the asset. The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a significant increase in credit risk has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.

If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group recalculates the gross carrying amount based on the revised cash flows of the financial assets and recognises the gain or loss on changes in profit or loss. The Group recognises a modified cash flows at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets).


(ii)

Financial liabilities

The financial liabilities are classified into those measured at amortised cost and those at fair value through profit or loss at initial recognition. Financial liabilities at FVPL is applied to derivatives, financial liabilities held for trading and financial liabilities designated as such at initial recognition.

The Group’s major financial liabilities are those measured at amortised cost which are measured initially at fair value less transaction costs and are measured subsequently using the effective interest method.

Financial liabilities or a portion thereof, are derecognised when their current obligation are fully or partially expired. The difference between the carrying amount of the derecognised portion and the consideration is recognised in profit or loss.

(iii)

Financial guarantee contracts

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of:
  • the amount determined in accordance with the expected credit loss model under HKFRS 9 Financial Instruments (“HKFRS 9”) with Note 3(b); and
  • the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of HKFRS 15 Revenue from Contracts with Customers (“HKFRS 15”) (if applicable).
The fair value of financial guarantees is determined based on the present value of the difference in cash flows between the contractual payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.

Where guarantees in relation to loans or other payables of associates and joint ventures are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

(iv)

Fair value measurement principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.

If there is no publicly available latest traded price nor a quoted market price on a recognised stock exchange or a price from a broker/dealer for non-exchange-traded financial instruments, or if the market for it is not active, the fair value of the instrument is estimated using valuation techniques that provide a reliable estimate of prices which could be obtained in actual market transactions.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is based on the relevant government yield curve as at the financial position date plus an adequate constant credit spread. Where other pricing models are used, inputs are based on market data at the financial position date.

(v)

Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

(vi)

Derivatives

Derivatives are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently remeasured at fair value. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.

Certain derivatives are embedded in hybrid contracts, such as the conversion option in a convertible bond. If the hybrid contract contains a host that is a financial asset, then the Group assesses the entire contract as described in the financial assets section above for classification and measurement purposes. Otherwise, the embedded derivatives are treated as separate derivatives when:
  • Their economic characteristics and risks are not closely related to those of the host contract;
  • A separate instrument with the same terms would meet the definition of a derivative; and
  • The hybrid contract is not measured at fair value through profit or loss.
These embedded derivatives are separately accounted for at fair value, with changes in fair value recognised in the statement of profit or loss unless the Group chooses to designate the hybrid contracts at fair value through profit or loss.

The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated and qualifies as a hedging instrument, and if so, the nature of the item being hedged.

(k)

Hedging

At the inception of the hedging, the Group documents the economic relationship between hedging instruments and hedged items as well as risk management goals and strategies of various hedging transactions. When a hedge no longer meets the criteria for hedge accounting or the Group’s risk management goals, the Group terminates the use of hedge accounting prospectively. Situations for the Group to terminate the use of hedge accounting include hedging instrument expires, or is sold, terminated and settled.

(i)

Fair value hedge

A fair value hedge refers to a hedge of the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment, or a component of any such item. Such changes in fair value are attributable to a particular risk and could affect profit or loss or other comprehensive income. Among them, the circumstances affecting other comprehensive income are limited to the hedge of the exposure to changes in the fair value of equity instruments designated at FVOCI not held for trading.

The gain or loss on the hedging instrument is recognised in profit or loss (or other comprehensive income, if the hedging instrument hedges a non-trading equity instrument at FVOCI or a component thereof). The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the recognised hedged item not measured at fair value and is recognised in profit or loss. However, if the hedged item is a non-trading equity instrument at FVOCI or a component thereof, those amounts remain in other comprehensive income.

(ii)

Cash flow hedge

A cash flow hedge refers to a hedge of the exposure to changes in cash flow. Such changes in cash flow are attributable to a particular risk associated with all, or a component of, a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income as cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised in profit or loss.

If a hedged forecast transaction subsequently results in the recognition of a non-financial item or becomes a firm commitment for which fair value hedge accounting is applied, the amount that has been accumulated in the cash flow hedge reserve is removed and included directly in the initial cost or other carrying amount of the asset or the liability. In other cases, the amount that has been accumulated in the cash flow hedge reserve is reclassified to profit or loss in the same period(s) as the hedged cash flows affect profit or loss.

If the cash flow hedge reserve recognised in other comprehensive income is a loss, and all or part of the loss is not expected to be reversed in the future. The portion that is not expected to be reversed will be transferred from other comprehensive income and recognised in profit or loss.

When an entity discontinues the use of hedge accounting for a cash flow hedge, if the hedged future cash flows are still expected to occur, the amount that has been accumulated in the cash flow hedge reserve remains there until the period that the hedged item has the impact in profit or loss; otherwise, that amount is immediately reclassified to profit or loss.

(iii)

Hedge of a net investment in a foreign operation

A hedge of net investment in a foreign operation refers to hedge of the foreign exchange exposure arising from net investment in a foreign operation. The “net investment in a foreign operation” refers to an enterprise’s equity proportion in the net assets in a foreign operation.

Hedge of a net investment in a foreign operation is accounted for similarly to cash flow hedges. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income; and the ineffective portion is recognised in profit or loss. The cumulative gain or loss on the hedging instrument relating to the effective portion of the hedge is reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

(iv)

Hedge effectiveness testing

In order to qualify for hedge accounting, the Group continuously evaluate whether the hedging relationship is effective from the hedge date and after.

The hedge relationship meets hedging effectiveness requirements if the hedging meets the following conditions:
  • There is an economic relationship between the hedged item and the hedging instrument;
  • The effect of credit risk does not dominate the value changes that result from that economic relationship; and
  • The hedge ratio of the hedging relationship is equal to the ratio between the actual number of hedged items and the actual number of hedging instruments.

(l)

Financial assets held/sold under resale/repurchase agreements

Financial assets held under resale agreements are transactions that the Group acquires financial assets which will be resold at a predetermined price in the future date under resale agreements. Financial assets sold under repurchase agreements are transactions that the Group sells financial assets which will be repurchased at a predetermined price in the future date under repurchase agreements.

The cash advanced or received is recognised as amounts held under the resale and repurchase agreements in the statement of financial position. Assets held under resale agreements are recorded in memorandum accounts as off-balance sheet items. Assets sold under repurchase agreements continue to be recognised in the statement of financial position.

The difference between the resale and repurchase consideration, and that between the purchase and sale consideration, are amortised over the period of the respective transaction using the effective interest method and are included in interest income and interest expense, respectively.

(m)

Margin financing and securities lending services

Margin financing and securities lending services refer to the lending of funds by the Group to customers for purchase of securities, or lending of securities by the Group to customers, for which the customers provide the Group with collateral.

The Group recognises margin accounts at initial recognition, and recognises interest income accordingly. Securities lent are not derecognised, but still accounted for as the original financial assets, and interest income is recognised accordingly.

Securities trading on behalf of margin financing or securities lending customers are accounted for as securities brokerage business.

For impairment of financial assets arising from margin financing and securities lending, refer to Note 2(j).

(n)

Investment properties

Investment properties are interests in land and/or buildings which are held to earn rentals or for capital appreciation or both. Investment properties are initially measured at cost. Land held under operating leases is classified and accounted for as investment property when the rest of the definition of investment property is met.

Subsequent expenditures related to investment properties are recognised in the cost of investment properties provided it is probable that the economic benefits will flow to the Group and the costs can be measured reliably; otherwise, subsequent expenditures are recognised in profit or loss in the period in which they are incurred.

Investment properties transfer to property, plant and equipment or intangible assets at the commencement of owner-occupation. The carrying amount of property, plant and equipment and intangible assets are based on the fair value of investment properties on the day of conversion. The difference between the fair value and the previous carrying amount is recognised in profit or loss for the current period. When owner-occupied properties transfer to investment properties that will be carried at fair value, if the fair value at the date of conversion is less than the previous carrying amount, the difference is recognised in profit or loss for the current period; If the fair value at the date of conversion is greater than the previous carrying amount, the difference is recognised directly in equity, unless there was an impairment loss recognised for the same property in prior years and a portion of the increase is recognised in profit or loss to the extent of that impairment loss.

Investment properties are stated in the statement of financial position at fair values which are reviewed annually. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss.

(o)

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses (Note 2(u)).

Assets in the course of construction for production, rental or administrative purposes are carried at cost, less any impairment losses. Cost includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of overheads and borrowing costs capitalised (see Note 2(cc)).

Construction-in-progress represents property, plant and equipment under construction and is transferred to fixed assets when ready for its intended use.

No depreciation is made on construction-in-progress until it is ready for its intended use. Deprecation policies are set out below.

Property, plant and equipment are depreciated at rates sufficient to write off their cost, less impairment losses, if any, to their estimated residual values, over their estimated useful lives on a straight line basis as follows:
Plant and buildings4 – 50 years
Machinery and equipment2 – 33 years
Office and other equipment, vehicles and vessels and others2 – 33 years
Assets’ useful lives and residual values are reviewed, and adjusted if appropriate, at each financial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

(p)

Land use rights

Land use rights are presented under right-of-use (“ROU”) assets.

Land use rights are stated at cost less accumulated amortisation and accumulated impairment losses (if any). Land use rights are amortised on a straight-line basis over the respective periods of grant, usually within 10 to 50 years.

Impairment losses on land use rights are accounted for in accordance with the accounting policies as set out in Note 2(u).

(q)

Intangible assets (other than goodwill)

Intangible assets acquired by the Group are stated at cost less accumulated amortisation (where the estimated useful life is finite) and if any, impairment losses (see Note 2(u)).

Amortisation of intangible assets with finite useful lives is charged to profit or loss over the assets’ estimated useful lives. The following intangible assets are amortised from the date they are available for use as follows:
Mining assets Over the estimated useful lives using the unit-of-production method
Franchise rights Over the estimated useful lives of the franchise right
Software and others Over the estimated useful lives
Both the period and method of amortisation of intangible assets are reviewed annually.

An intangible asset with an indefinite useful life shall not be amortised. Any conclusion that the useful life of an intangible asset is indefinite is reviewed annually to determine whether events and circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from the date of change and in accordance with the policy for amortisation of intangible assets with finite lives as set out above.

(r)

Inventories

(i)

Advanced intelligent manufacturing, advanced materials

Inventories of the advanced intelligent manufacturing and advanced materials segments are carried at the lower of cost and net realisable value.

Cost is calculated using the first-in first-out, specific identification or weighted average cost formula as appropriate, and comprises all costs of purchase, costs of conversion (including systematically allocated production overhead based on normal capacity) and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognised in profit or loss in the period in which the reversal occurs.

(ii)

New-type urbanisation

Inventories in respect of property development activities under the new-type urbanisation segment are carried at the lower of cost and net realisable value. Cost and net realisable values are determined as follows:

-  

Property under development

The cost of properties under development, including the acquisition cost of land, aggregate cost of development, materials and supplies, wages and other direct expenses, an appropriate proportion of overheads and borrowing costs capitalised (see Note 2(cc)). Net realisable value represents the estimated selling price less estimated costs of completion and costs to be incurred in selling the property.

-  

Completed property held for sale

In the case of completed properties developed by the Group, cost is determined by apportionment of the total development costs for that development project, attributable to the unsold properties. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

(s)

Leases

Leases are recognised as a ROU asset and a corresponding liability by the lessee at the commencement date.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

(i)

Lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
  • fixed payments (including in-substance fixed payments), less any lease incentives receivable;
  • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
  • amounts expected to be payable by the Group under residual value guarantees;
  • the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
  • payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the ROU asset in a similar economic environment with similar terms and collateral conditions.

To determine the incremental borrowing rate, the Group:
  • where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;
  • uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases, which does not have recent third party financing; and
  • makes adjustments specific to the lease, e.g. term, country, currency and collateral.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and the ROU asset is adjusted accordingly.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

(ii)

ROU assets

ROU assets are measured at cost comprising the following:
  • the amount of the initial measurement of lease liability;
  • any lease payments made at or before the commencement date less any lease incentives received;
  • any initial direct costs; and
  • restoration costs.
ROU assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the ROU asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment.

Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial position based on their nature. As lessor, the Group recognises finance leases as finance lease receivables, which are measured at amortised cost. The Group did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

(t)

Repossessed assets

In the recovery of impaired loans and advances, the Group may take possession of assets held as collateral through court proceedings or voluntary delivery of possession by the borrowers. Where it is intended to achieve an orderly realisation of the impaired assets and the Group is no longer seeking repayment from the borrower, repossessed assets are reported in “other assets”.

When the Group seizes assets to compensate for the losses of loans and advances and interest receivables, the repossessed assets are initially recognised at fair value and any taxes that are directly attributable to the assets, and other expenses incurred for collecting the repossessed assets.

When the fair value less costs to sell is lower than a repossessed asset’s carrying amount, an impairment loss is recognised in the consolidated income statement. Repossessed assets are recognised at the carrying value, net of allowance for impairment losses.

The repossessed assets are disposed after acquisition and cannot be used without authorisation. The repossessed assets that are transferred to own use are treated as newly purchased property, plant and equipment. Any gain or loss arising from the disposal of the repossessed assets is included in the consolidated income statement in the period in which the item is disposed.

(u)

Impairment of non-financial assets

Internal and external sources of information are reviewed at financial position date to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased:
  • property, plant and equipment (other than properties carried at revalued amounts);
  • ROU assets;
  • investments in subsidiaries, associates and joint ventures;
  • goodwill; and
  • intangible assets
If any such indication exists, the asset’s recoverable amount is estimated.

In addition, for goodwill and intangible assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication of impairment.

Calculation of recoverable amount

The recoverable amount of an asset is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

Recognition of impairment losses

An impairment loss is recognised in profit or loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill (if any) allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable).

Reversals of impairment losses

If, in a subsequent period, the amount of impairment loss of the non-financial asset except for goodwill decreases and the decrease can be linked objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the profit or loss. A reversal of impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior periods.

An impairment loss in respect of goodwill is not reversable.

(v)

Employee benefits

Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include shortterm employee benefits, post-employment benefits, termination benefits and other long-term employee benefits, etc.

(i)

Short-term employee benefits

During the accounting period when an employee has rendered service to the Group, the Group recognises the undiscounted amount of short-term employee benefits as a liability and as an expense, unless another HKFRS requires or permits the inclusion of the benefits in the cost of an asset. Short-term employee benefits include wages, bonuses and social security contributions such as medical insurance, work-related injury insurance and maternity insurance, housing provident funds, labour union fee and staff and workers’ education fee, which are all calculated based on the regulated benchmark and ratio.

(ii)

Defined contribution retirement schemes

Employees of the Group’s subsidiaries in Hong Kong are offered the option to enroll in one of the Mandatory Provident Fund (“MPF”) Master Trust Schemes under the CITIC Group MPF Scheme. The MPF Master Trust Schemes are defined contribution schemes and are administered in accordance with the terms and provisions of the respective trust deeds and are subject to the Mandatory Provident Fund Schemes Ordinance.

Employees of the Group’s subsidiaries in Chinese mainland are required to participate in defined contribution retirement schemes and make contributions according to the respective regulations. Employees of the Group’s subsidiaries in Chinese mainland are also eligible to participate in the enterprise annuity plan established by the Group according to the relevant requirements.

Employees of the Group’s overseas subsidiaries are required to make contributions subject to the relevant regulations in the countries/jurisdiction in which the overseas subsidiaries operate.

The contributions are charged to profit and loss for the current period on an accrual basis.

(iii)

Defined benefit plan obligations

The defined benefit plans of the Group are supplementary retirement benefits provided to eligible employees in Chinese mainland and Hong Kong.

(iv)

Termination benefits

When the Group terminates the employment with employees before the employment contracts expire, or provides compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognised with a corresponding expense in profit or loss at the earlier of the following dates:
  • When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan or a curtailment proposal;
  • When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.

(w)

Provisions and contingent liabilities

(i)

Contingent liabilities assumed in business combinations

Contingent liabilities assumed in a business combination which are present obligations at the date of acquisition are initially recognised at fair value, provided the fair value can be reliably measured. After their initial recognition at fair value, such contingent liabilities are measured at the higher of the amount initially recognised, less accumulated amount of income recognised in accordance with the Group’s principles of revenue recognition where appropriate, and the amount that would be determined in accordance with Note 2(w)(ii).

(ii)

Other provisions and contingent liabilities

Provisions are recognised for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(x)

Revenue recognition

The revenue of the Group mainly consists of income from customers, interest income, fee and commission income, etc.

(i)

Income from customers

The Group recognises revenue when it satisfies a performance obligation by transferring a promised good to a customer, which is when the customer obtains control of a good, has the ability to direct the use of, and obtain substantially all of the remaining benefits from that good. If the control of the goods and services is transferred over a period of time, the Group recognises revenue by reference to the extent of progress toward completion in fulfilling its performance obligations during the entire contract period.

For the amounts of revenue recognised for goods transferred and services provided, the Group recognises any unconditional rights to consideration separately as a receivable and the rest as a contract asset, and recognises provisions for loss allowance of the receivable and the contract asset using ECL model; if the consideration received or receivable exceeds the obligation performed by the Group, a contract liability is recognised. The Group presents a net contract asset or a net contract liability under each contract.

Contract costs include costs to fulfill a contract and of obtaining a contract. The cost incurred for providing services by the Group is recognised as the costs to fulfill a contract, and is amortised based on the progress towards completion of the service provided when recognising revenue. The incremental cost incurred by the Group to obtain contract is recognised as the costs of obtaining a contract. For costs of obtaining a contract that will be amortised within one year, the Group recognises it in profit and loss when incurred. For the costs of obtaining a contract that will be amortised for more than one year period, it is amortised in profit and loss based on same progress towards completion as recognising revenue. The Group recognises the excess of the carrying amounts of contract costs over the expected remaining consideration less any costs not yet recognised as an impairment loss. As at the financial position date, the Group presents the costs to fulfill and of obtaining a contract, in the net amount after deducting relevant asset impairment provisions, as inventories.

Specific accounting policies are as follows:

(a)

Sales of goods

Revenue from the sale of goods is recognised when the goods are transferred to and accepted by a customer.

When volume discounts are provided to customers, the Group, based on historical experiences, estimates the volume discounts using the expected value method, and recognises revenue net of the estimated volume discounts.

When the customer has a right to return the product within a given period, the Group recognises provisions for returns using the expected value method based on historical experience, as a deduction of the revenue. The Group recognises provisions for the expected refunds to customers; meanwhile, other assets are recognised according to the carry amount of the goods expected to be returned, deducting the expected cost for taking the related goods back.

The Group offers warranties for specific products. If the duration and terms of the warranties are offered in accordance with the requirements of laws and regulations and the Group does not provide any additional services or warranties, such warranties are not recognised as separate performance obligation.

(b)

Services rendered to customers

Revenue for construction services of the Group is recognised over the period of the contract by reference to the progress towards completion. Progress towards completion is calculated based on actual costs incurred as to the end of each period as a proportion to the total forecasted costs of the contract. As at each financial position date, the Group reassesses the progress towards completion to reflect the changes in obligation performed.

Revenue for other services provided by the Group is recognised based on the pattern of performance obligation of specific services, either over the period in which the services are rendered or at the point of service completion. For revenue recognised over the period by reference to the progress towards completion, progress towards completion is calculated based on actual costs incurred as to the end of each period as a proportion to the total forecasted costs of the contract. As at each financial position date, the Group reassesses the estimate of the progress towards completion to reflect the changes in obligation performed.

(ii)

Interest income

Interest income is recognised according to HKFRS 9, refer to Note 2(j) for details.

The effective interest method is a method of calculating the amortised cost of financial assets and liabilities and of allocating the interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial instrument. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, call and similar options, etc.) but does not consider future credit losses. The calculation includes all fees and interests paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

(iii)

Fee and commission income

Fee and commission income is recognised when the Group fulfills its performance obligation, either over time or at a point in time when a customer obtains control of the service according to HKFRS 15, refer to Note 2(x)(i)(b). Origination or commitment fees received by the Group which result in the creation or acquisition of a financial asset are deferred and recognised as an adjustment to the effective interest rate according to HKFRS 9, refer to Note 2(j). If the commitment expires without the Group making a loan or anticipating will not, the fee is recognised as revenue on expiry.

(y)

Income tax

Income tax for the year comprises current tax and deferred tax.

The balance sheet liability method is adopted whereby deferred tax is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts. However, deferred tax is not recognised for:
  • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
  • taxable temporary differences arising on the initial recognition of goodwill;
  • temporary differences related to investment in subsidiaries, associates and joint venture to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future and
  • those related to the income taxes arising from tax laws enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development.
Provision for withholding tax that will arise on the remittance of retained earnings is only made where there is a current intention to remit such earnings.

Deferred tax assets are recognised to the extent that their future utilisation is probable. Deferred tax arising from revaluation of investment properties is recognised on the rebuttable presumption that the recovery of the carrying amount of the properties would be through sale and calculated at the applicable tax rates.

Current tax assets and liabilities are offset, and deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

(z)

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are also included as a component of cash and cash equivalents for the purpose of the cash flow statement.

The Group includes deposit held at call with banks with contractual obligation to use for specified purposes as a component of cash and cash equivalents.

(aa)

Related parties

(a)
A person, or a close member of that person’s family, is related to the Group if that person:

(i)
has control or joint control over the Group;

(ii)
has significant influence over the Group; or

(iii)
is a member of the key management personnel of the Group or the Group’s parent.

(b)
An entity is related to the Group if any of the following conditions applies:

(i)
The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii)
One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii)
Both entities are joint ventures of the same third party;

(iv)
One entity is a joint venture of a third entity and the other entity is an associate of the third entity (one entity is an associate of a third entity and the Group is a joint venture of the third party);

(v)
The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;

(vi)
The entity is controlled or jointly controlled by a person identified in (a);

(vii)
A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity);

(viii)
The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

(bb)

Segment reporting

Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organisation, management requirements and internal reporting system. An operating segment is a component of the Group that meets the following respective conditions:
  • engages in business activities from which it may earn revenues and incur expenses;
  • whose operating results are regularly reviewed by the Group’s management to make decisions about resource to be allocated to the segment and assess its performance; and
  • for which financial information regarding financial position, results of operations and cash flows are available.
Business segments are identified based on the Group’s internal management requirements as well as following aspects. Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of:
  • the nature of products and services;
  • the nature of production processes;
  • the type or class of customers;
  • the methods used to distribute the products or provide the services; and
  • the nature of the regulatory environment.
Inter-segment revenues are measured on the basis of actual transaction price for such transactions for segment reporting, and segment accounting policies are consistent with those for the consolidated financial statements.

(cc)

Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(dd)

Disposal groups held for sale and discontinued operations

Disposal groups are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. Disposal groups (except for certain assets as explained below) are stated at the lower of carrying amount and fair value less costs to sell. Deferred tax assets, financial assets (other than investments in subsidiaries and associates) and investment properties, which are classified as held for sale, would continue to be measured in accordance with the policies set out else in Note 2.

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which represents a separate major line of business or geographic area of operations, or is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale.

When an operation is classified as discontinued, a single amount is presented in the income statement comprising the total of: (1) the post-tax profit or loss of the discontinued operation and; (2) the posttax gain or loss recognised on the measurement to fair value less costs to sell, or on the disposal, of the assets or disposal group(s) constituting the discontinued operation.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and associated key assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

(a)

Classification of financial assets

The critical judgments the Group has in determining the classification of financial assets include analysis of business models and characteristics of contractual cash flows.

The Group determines the business model for managing financial assets at the level of financial asset portfolio. The factors considered include evaluation and reporting of financial asset performance to key management personnel, risks affecting the performance of financial assets and their management methods, and the way related business management personnel receive payments.

When assessing whether the contractual cash flow of financial assets is consistent with the basic lending arrangement, the Group has the following main judgments: whether the principal may be subject to change in the duration or amount of money due to prepayments during the duration; whether interests only include time value of money, credit risk, other basic borrowing risks, and considerations for costs and profits. For example, whether the amount paid in advance reflect only the outstanding principal and interest on the outstanding principal, as well as reasonable compensation for early termination of the contract.

(b)

Measurement of ECL

Measurement of ECL for financial assets at amortised cost and FVOCI is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers defaulting and the resulting losses). Explanation of the inputs, assumptions and estimation techniques used in measuring ECL is further detailed in Note 50(a).

A number of significant judgements are also required in applying the accounting requirements for measuring ECL, such as:
  • Determining criteria for significant increase in credit risk;
  • Choosing appropriate models and assumptions for the measurement of ECL;
  • Establishing the number and relative weightings of forward-looking scenarios for each type of product and the associated ECL; and
  • Establishing groups of similar financial assets for the purposes of measuring ECL.
Detailed information about the judgements and estimates made by the Group in the above areas is set out in Note 50(a).

(c)

Provision for inventories

The Group reviews the carrying amounts of inventories at each financial position date to determine whether the inventories are carried at lower of cost and net realisable value. The Group estimates the net realisable value, based on the current market situation and historical experience on similar inventories. Any change in the assumptions would increase or decrease the amount of inventories write-down or the related reversals of write-down. The change in the write-down would affect the Group’s profit or loss during the year.

(d)

Impairment of non-financial assets

As described in Note 2(u), assets such as fixed assets, intangible assets, goodwill, ROU assets and interests in associates and joint ventures are reviewed at each financial position date to determine whether the carrying amount exceeds the recoverable amount of the assets. If any such indication exists, an impairment loss is recognised.

The recoverable amount of an asset (asset group) is the greater of its fair value less costs to sell and its present value of expected future cash flows. Since a market price of the asset (the asset group) cannot be obtained reliably, the fair value of the asset cannot be estimated reliably. In assessing value in use, significant judgements are exercised over the asset’s production, selling price, related operating expenses and discount rate to calculate the present value. All relevant materials which can be obtained are used for estimation of the recoverable amount, including the estimation of the production, selling price and related operating expenses based on reasonable and supportable assumptions.

(e)

Fair value of financial instruments

For financial instruments without active market, the Group determines fair values using valuation techniques which include discounted cash flow models, as well as other types of valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads, foreign currency exchange rates, etc. Where discounted cash flow techniques are used, estimated cash flows are based on management’s best estimates and the discount rate used is a market rate at the end of each reporting period applicable for an instrument with similar terms and conditions. Where other pricing models are used, inputs are based on observable market data at the end of each reporting period. Where market data are not available, management need to make estimates on such unobservable market inputs based on assumptions. Changes in assumptions about these factors could affect the estimated fair value of financial instruments.

(f)

Depreciation

Depreciation of operating assets constitutes a substantial operating cost for the Group. The cost of fixed assets is charged as depreciation expense over the estimated useful life of the respective assets using the straight-line method. The cost of ROU assets is charged as depreciation expense generally over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Management periodically review changes in technology and industry conditions, asset retirement activity, residual values to determine adjustments to estimated remaining useful lives and depreciation rates. In determining the lease term of ROU assets, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

(g)

Income taxes

Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets, which principally relate to tax losses and deductible temporary differences, are recognised when the future taxable profit will be available against such deferred tax assets. Hence, it requires formal assessment by management regarding the future profitability to utilise the deferred tax assets. The outcome of their actual utilisation may be different.

(h)

Assets acquired/liabilities assumed in business combination

Assets acquired/liabilities assumed in business combination are recognised at fair value in connection with the Group’s acquisition of an entity. The fair values of the acquired assets/assumed liabilities are determined based on valuation methodologies and techniques that involved the use of a third-party valuation firm’s expertise. The judgements and assumptions used in that valuation of assets and liabilities along with the assumptions on the useful lives of acquired assets have an effect on the consolidated financial statements.

(i)

De-recognition of financial assets

In its normal course of business, the Group transfers financial assets through various types of transactions including regular way sales and transfers, securitisation, financial assets sold under repurchase agreements and etc. The Group applies significant judgement in assessing whether it has transferred these financial assets which qualify for a full or partial de-recognition.

Where the Group enters into structured transactions by which it transferred financial asset to structured entities, the Group analyses whether the substance of the relationship between the Group and these structured entities indicates that it controls these structured entities to determine whether the Group needs to consolidate these structured entities. This will determine whether the following de-recognition analysis should be conducted at the consolidated level or at the entity level from which the financial assets was transferred.

The Group analyses the contractual rights and obligations in connection with such transfers to determine whether the de-recognition criteria are met based on the following considerations:
  • whether it has transferred the rights to receive contractual cash flows from the financial assets or the transfer qualified for the “pass through” of those cash flows to independent third parties;
  • the extent to which the associated risks and rewards of ownership of the financial assets are transferred by using appropriate models. Significant judgement is applied in the Group’s assessment with regard to the parameters and assumptions applied in the models, estimated cash flows before and after the transfers, the discount rates used based on current market interest rates, variability factors considered and the allocation of weightings in different scenarios;
  • where the Group neither retained nor transferred substantially all of the risks and rewards associated with their ownership, the Group analyses whether the Group has relinquished its controls over these financial assets, and if the Group has continuing involvement in these transferred financial assets.

(j)

Control and consolidation

The Group makes significant judgement to assess whether or not to consolidate structured entities. When performing this assessment, the Group:
  • assesses its contractual rights and obligations in light of the transaction structures, and evaluates the Group’s power over the structured entities;
  • performs independent analyses and tests on the variable returns from the structured entities, including but not limited to commission income and asset management fees earned, retention of residual income, and, if any, liquidity and other support provided to the structured entities; and
  • assesses its ability to exercise its power to influence the variable returns assessed whether the Group acts as a principal or an agent through analysis of the scope of the Group’s decision-making authority, remuneration entitled, other interests the Group holds, and the rights held by other parties.
The Group holds less than 50% shares and voting rights in certain subsidiaries. When assessing whether it has substantive control over these investees, the Group has taken certain factors into account including the size of the Group’s shareholding relative to other shareholders, dispersion of the voting rights of the other shareholders, the Group’s relationship with other investors, any history of any other shareholders collaborating to exercise their votes collectively or to out vote the Group; the group’s relationship with the key management personnel of the investees, whether the Group has the right to appoint or approve the majority of the board seats and other key management personnel of the investees, whether the Group controls certain assets such as licences or trademarks that are critical to the operations of the investees, whether the Group and other shareholders’ rights over the investees are substantive, and any other contractual arrangements. The Group considers factors that are applicable to a specific individual investee on an ongoing basis when determining whether it has substantive rights over the investees.

(k)

Mineralogy/Mr. Palmer proceedings

Each of Sino Iron Pty Ltd. (“Sino Iron”), Korean Steel Pty Ltd. (“Korean Steel”) and Balmoral Iron Pty Ltd. (“Balmoral Iron”), subsidiary companies of the Company, has entered into a Mining Right and Site Lease Agreement (“MRSLA”) with Mineralogy Pty Ltd. (“Mineralogy”). Among other things, those agreements, together with other project agreements, provide Sino Iron, Korean Steel and Balmoral Iron the right to develop and operate the Group’s Sino Iron project in Western Australia (“Sino Iron Project”) and to take and process one billion tonne each of magnetite ore for that purpose. Before Balmoral Iron can exercise its one billion tonne mining right, it will need to submit and have approved by the State of Western Australia project proposals for its project, among other things.

There are a number of ongoing disputes between the Company, Sino Iron and Korean Steel (“CITIC Parties”) on the one hand, and Mineralogy and Mr. Clive Palmer, the ultimate beneficial holder of shares in Mineralogy (“Mr. Palmer”), on the other hand, arising from the MRSLAs and other project agreements. Set out below are the details of those disputes considered to be material.

FCD Indemnity Disputes
Mineralogy and Mr. Palmer have commenced proceedings to pursue claims pursuant to an indemnity given by the Company under the Fortescue Coordination Deed (“FCD”). Mineralogy and Mr. Palmer allege that the CITIC Parties’ failure to make certain royalty payments caused Mr. Palmer loss for which he is indemnified pursuant to the indemnity contained in the FCD.

(i)

Queensland Nickel FCD Indemnity Claim

On 29 June 2017, Mr. Palmer commenced a proceeding against the Company in the Supreme Court of Western Australia (“Proceeding CIV 2072/2017”) claiming damages in the sum of AUD2,324,000,000 (now reduced by an amended statement of claim to AUD1,800,438,000). The amount claimed relates to losses allegedly suffered by Mr. Palmer in relation to the nickel and cobalt refinery business located at Yabulu in North Queensland (“Yabulu Refinery”), which was carried on by the Queensland Nickel group of companies controlled by Mr. Palmer.

After commencing this proceeding, Mr. Palmer joined Mineralogy as a second plaintiff and Sino Iron and Korean Steel as second and third defendants.

On 23 April 2024, Mineralogy and Mr. Palmer filed their seventh amended statement of claim. That statement of claim alleges that as the CITIC Parties did not pay to Mineralogy royalty on products produced by Sino Iron and Korean Steel (“Royalty Component B”) when it was due for payment under the MRSLAs, Mineralogy did not provide funds to the manager of the Yabulu Refinery, Queensland Nickel Pty Ltd. (“QNI”), to enable it to continue managing and operating the Yabulu Refinery, and consequently, QNI was placed into administration in January 2016 and liquidation in April 2016.

Mineralogy and Mr. Palmer allege that if the CITIC Parties had paid Royalty Component B on time, Mineralogy would have provided the funds required to meet QNI’s cashflow deficits at the times necessary to enable QNI to continue to manage and operate the Yabulu Refinery.

Mineralogy and Mr. Palmer claim that the liquidation of QNI led to the diminution in value of the Yabulu Refinery, and a consequential diminution in value of the shares of its joint venture owners, QNI Metals Pty Ltd. and QNI Resources Pty Ltd.. The shares in those companies are ultimately beneficially owned by Mr. Palmer. Alternatively, Mineralogy and Mr. Palmer claim that Mr. Palmer lost the opportunity to sell his shareholding in QNI, QNI Metals Pty Ltd., QNI Resources Pty Ltd. and Queensland Nickel Sales Pty Ltd. for market value in early 2016, when the Yabulu Refinery was a going concern. Mineralogy and Mr. Palmer claim that the Company is liable for those losses pursuant to an indemnity provision in the FCD.

On 17 May 2024, the CITIC Parties filed their amended substituted defence. It pleads a number of defences, including construction arguments, as well as arguments based on causation, mitigation, quantification of loss, Anshun estoppel and abuse of process.

Mineralogy and Mr. Palmer’s amended reply, filed on 3 June 2024, contains allegations that certain conduct of the CITIC Parties, specifically alleged activities of the Fulcrum Group, has the effect of disentitling the CITIC Parties from relying on their defences of Anshun estoppel or abuse of process (“Fulcrum Allegations”).

On 12 April 2024, Mineralogy and Mr. Palmer filed an application regarding the sequencing of this and other proceedings. This application was amended on 19 July 2024 and sought orders that this proceeding:
  • be heard after the final determination, including any appeals, of Proceeding CIV 2425/2023 as described below;
  • alternatively, be heard concurrently with Proceeding CIV 2425/2023; or
  • alternatively, be heard concurrently with Proceeding CIV 2425/2023 and Proceeding CIV 2336/2023 as described below.
The CITIC Parties opposed the amended application and the amended application was heard on 5 August 2024.

On 10 September 2024, Justice Lundberg determined that this proceeding and Proceeding CIV 2336/2023 would be actively case managed together to be ready for trial by April 2025, but otherwise adjourned the sequencing application.

On 26 September 2024, Justice Lundberg made programming orders and listed the trial of this proceeding to begin on 28 May 2025. The trial is listed for eight weeks and will deal with all issues other than those issues which overlap with Proceeding CIV 2336/2023, as described below. On 20 December 2024, Justice Lundberg made orders for a hearing to be listed for some time after 28 May 2025 for five days to deal with the “Fulcrum Allegations” raised in this proceeding and in Proceeding CIV 2336/2023, as well as the CITIC Parties’ Anshun and abuse of process defences in this proceeding.

(ii)

Palmer Petroleum FCD Indemnity Claim

On 16 February 2018, Mineralogy commenced a proceeding against the CITIC Parties in the Supreme Court of Western Australia (“Proceeding CIV 1267/2018”) in which it claimed damages in the sum of AUD2,675,400,000. That amount was alleged to represent the diminution in the value of Mineralogy’s shares in Palmer Petroleum Pty Ltd. (now Aspenglow Pty Ltd.) (“Palmer Petroleum”) or Blaxcell Limited stemming from the inability of those companies to develop certain petroleum prospecting licences in Papua New Guinea. Mineralogy is the holder and beneficial owner of all of the shares in both Palmer Petroleum and Blaxcell Limited.

On 19 November 2024, Proceeding CIV 1267/2018 was dismissed by consent, with no order as to costs.

Mine Continuation Proposals Disputes

(i)

2017 Mine Continuation Proposals Proceedings

The continued operation of the Sino Iron Project requires it to extend beyond the footprint it currently occupies. The 2017 mine continuation proposals address that need, and include proposals to extend the constrained mine pit, and increase the storage capacity for waste rock and tailings, which are necessary by-products of the mining process. The mining tenements upon which the Sino Iron Project is currently conducted, and those into which the CITIC Parties wish to extend in order to continue operation, are all held by Mineralogy.

The CITIC Parties commenced a proceeding against Mineralogy and Mr. Palmer in the Federal Court of Australia, which was transferred to the Supreme Court of Western Australia on 10 June 2019 (“Proceeding CIV 1915/2019”). The proceeding related to the failure and refusal of Mineralogy to:
  • submit the 2017 mine continuation proposals for the Sino Iron Project to the State of Western Australia under the State Agreement;
  • grant further tenure which is reasonably required for the Sino Iron Project;
  • take steps to secure the re-purposing of general-purpose leases for the Sino Iron Project; and
  • submit a Programme of Works for the Sino Iron Project to the State of Western Australia.
The CITIC Parties brought claims for breach of contract, of unconscionable conduct under the Australian Consumer Law, and in estoppel. Mr. Palmer was sued as an accessory to the unconscionable conduct claim. The CITIC Parties sought orders requiring Mineralogy to take the four steps set out above, and to pay the CITIC Parties damages for its failure and refusal to do those things. Damages were also sought from Mr. Palmer. The State of Western Australia was joined to the proceeding as a necessary party, because it is a party to the State Agreement, but no relief was sought against it.

The CITIC Parties commenced a new proceeding (“Proceeding CIV 2326/2021”) on 8 December 2021, in which they sought orders for specific performance in relation to a refined tenure request addressed to Mineralogy on 29 November 2021. That tenure request was in the alternative to the tenure in respect of which relief was sought in Proceeding CIV 1915/2019. On 29 December 2021, Justice K Martin ordered that Proceeding CIV 1915/2019 and Proceeding CIV 2326/2021 be consolidated and proceed as one action (“Consolidated 2017 MCPs Proceedings”).

The primary trial in the Consolidated 2017 MCPs Proceedings occurred before Justice K Martin from 21 February 2022 to 29 April 2022. The primary trial was to determine all issues in the Consolidated 2017 MCPs Proceedings other than the quantification of any loss or damage suffered by the CITIC Parties.

On 7 March 2023, Justice K Martin delivered his reasons in the Consolidated 2017 MCPs Proceedings and on 10 March 2023 made orders consequent upon his reasons. His Honour dismissed most of the CITIC Parties’ claims. However, Justice K Martin made the following key findings relevant to mine continuation:
  • Mineralogy is obliged to either submit, or consent to the CITIC Parties submitting, the Programme of Works;
  • Mineralogy is contractually obliged to assist, and cooperate with, the CITIC Parties, including in relation to the submission of project proposals under the State Agreement. However, the Court declined to require Mineralogy to submit the 2017 mine continuation proposals in the form before the Court, for reasons including that those proposals presumed the use of tenure outside areas which Mineralogy had previously agreed to provide;
  • Mineralogy is required to honestly consider, and not unreasonably refuse, requests for additional tenure that is reasonably requested and reasonably required. His Honour found that the CITIC Parties’ most recent tenure request lacked certain features required to meet that test, and so declined to order Mineralogy to grant the tenure the subject of that request. However, his Honour confirmed that an area outside the site lease areas, to the south of the current tailings storage facility, and that is held by Mineralogy, is necessary for future tailings and waste storage for the Sino Iron Project; and
  • Mineralogy is not required to take steps to re-purpose the general purpose leases, for reasons including because Mineralogy had not granted the CITIC Parties tenure over all of those general purpose leases.
On 9 June 2023, after two unsuccessful applications for a stay of the relevant order made by Justice K Martin, Mineralogy submitted the Programme of Works to the State. The Programme of Works was approved on 28 July 2023. That approval allows the CITIC Parties to undertake investigative works necessary for the extension of the mine pit and the establishment of a new tailings storage facility.

At a hearing on 21 April 2023, Justice K Martin made orders deferring the CITIC Parties’ Programme of Works damages claim until after the determination of the appeals referred to below. His Honour also ordered the CITIC Parties to pay Mineralogy’s and Mr. Palmer’s costs of the Consolidated 2017 MCPs Proceedings up to and including the 21 April 2023 hearing, except in relation to Mr. Palmer’s unsuccessful application to stay the trial, for which Mr. Palmer must pay the CITIC Parties’ costs.

Unless approval can be obtained to allow extension of the mine pit and establishment of additional storage areas for waste rock and tailings, constraints on pit size and waste and tailings storage capacity will ultimately force the suspension of operations. In the short term, these constraints are reflected in reduced concentrate production commencing from calendar year 2024.

(ii)

2017 Mine Continuation Proposals Appeals

On 31 March 2023, the CITIC Parties appealed Justice K Martin’s decision in the Consolidated 2017 MCPs Proceedings (“Proceeding CACV 35/2023”). The CITIC Parties’ grounds of appeal include that Justice K Martin erred for reasons including that:
  • there is no requirement in the State Agreement or the project agreements for the CITIC Parties to pay additional monetary consideration for areas reasonably required for the Sino Iron Project, including because Mineralogy has been paid for those areas;
  • Mineralogy’s failure to submit the 2017 mine continuation proposals was a breach of its obligations under the State Agreement and certain project agreements;
  • his Honour applied the wrong contractual standard when evaluating the CITIC Parties’ tenure request, as the standard was whether the tenure was 'reasonably required’, and not a higher standard;
  • the 2017 mine continuation proposals and the CITIC Parties’ tenure request were divisible, and not holistic global packages, and their licence request was accompanied by the required level of detail;
  • Mineralogy had sufficient technical information and time to consider the CITIC Parties’ tenure request, and Mineralogy’s refusal to agree to the tenure request constituted a breach of the State Agreement and certain project agreements; and
  • injunctive relief compelling Mineralogy to conditionally surrender and apply for the re-grant of certain general purpose leases should have been ordered.
Also on 31 March 2023, Mineralogy separately appealed Justice K Martin’s decision (“Proceeding CACV 37/2023”) in relation to the order that it must submit the Programme of Works. Mineralogy’s grounds of appeal include that his Honour erred in failing to hold that, before Mineralogy had an obligation to submit a proposal, the CITIC Parties had to demonstrate a need to submit the proposal for the purposes of performing the MRSLAs, so that Mineralogy could make an informed assessment of whether to do so having regard to its own commercial interests.

On 1 May 2023, the Court of Appeal ordered that Proceeding CACV 35/2023 and Proceeding CACV 37/2023 be consolidated (“Consolidated 2017 MCPs Appeals”).

The appeals were heard before the Court of Appeal from 12 to 15 August 2024 and 19 to 21 August 2024. The Court of Appeal reserved its decision.

(iii)

2023 Mine Continuation Proposals Proceedings

On 27 November 2023, the CITIC Parties commenced a proceeding in the Supreme Court of Western Australia seeking to compel Mineralogy to submit the 2023 mine continuation proposals for the Sino Iron Project to the State of Western Australia under the State Agreement (“Proceeding CIV 2336/2023”). The activities the subject of the 2023 mine continuation proposals are a subset of the activities the subject of the 2017 mine continuation proposals, and are confined to areas over which Mineralogy has already provided access and use rights to Sino Iron and Korean Steel. The proceeding alleges that Mineralogy was obliged to consider and approve the 2023 mine continuation proposals. Approval of the 2023 mine continuation proposals will support the continued operation of the Sino Iron Project for an interim period by addressing constraints to the project’s mine pit and waste and tailings storage capacity.

In this proceeding, the CITIC Parties seek relief including:
  • declarations that Mineralogy’s failure and refusal to consider, approve and submit the 2023 mine continuation proposals is in breach of the State Agreement and certain project agreements;
  • orders for specific performance or injunctions requiring Mineralogy to join them in submitting the 2023 mine continuation proposals to the State; and
  • damages for breach of contract.
The State of Western Australia is a party to the proceeding because it is a party to the State Agreement, but no relief is sought against it.

Mineralogy’s further amended defence includes a pleading that, because Mineralogy asserts the CITIC Parties have breached certain project agreements, they are not entitled to the relief claimed. The alleged breaches include that:
  • the conduct of the CITIC Parties as alleged by Mineralogy in Proceeding CIV 2072/2017 (i.e. the “Fulcrum Allegations” referred to above) constituted acts or the contemplation of acts that adversely affected the interests of Mineralogy in the project area and represented a failure to act in good faith towards Mineralogy in relation to the performance of the MRSLAs;
  • the CITIC Parties have not paid Mineralogy the amounts claimed in Proceeding CIV 2072/2017 (referred to above); and
  • the CITIC Parties have allegedly failed to permit Mineralogy to observe all measurement, sampling and assaying procedures under the MRSLAs.
On 23 January 2024, Mineralogy applied for a stay of this proceeding pending the outcome of the Consolidated 2017 MCPs Appeals referred to above.

On 14 February 2024, the CITIC Parties applied for orders striking out certain paragraphs of Mineralogy’s defence (which was then current but has since been replaced by the further amended defence) and on 15 February 2024, applied for orders expediting the hearing of this proceeding.

Mineralogy’s stay application and the CITIC Parties’ strike out and expedition applications were heard on 20 and 21 March 2024. On 3 July 2024, Justice Cobby delivered his decision:
  • dismissing Mineralogy’s stay application;
  • dismissing the CITIC Parties’ expedition application on the basis that it is unnecessary as the matter is already being actively managed by the Court. His Honour accepted the proceeding should be determined with reasonable urgency and accepted the CITIC Parties’ evidence concerning constraints on future mining operations; and
  • dismissing the CITIC Parties’ strike out application.
His Honour indicated the proceeding should proceed to a hearing as soon as can be accommodated by the Court and said he considered it should be heard concurrently with, or immediately after, the trials in Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (the latter of which has since been dismissed as described above). On 13 April 2024, Mineralogy filed an application regarding the sequencing of this and other proceedings. This application was amended on 19 July 2024 and sought orders that this proceeding:
  • be heard after the final determination, including any appeals, of Proceeding CIV 2425/2023 as described below, Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (now dismissed); or
  • alternatively, be heard concurrently with Proceeding CIV 2425/2023, Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (now dismissed).
The CITIC Parties opposed the amended application and the amended application was heard on 5 August 2024. On 10 September 2024, Justice Lundberg determined that this proceeding and Proceeding CIV 2072/2017 would be actively case managed together to be ready for trial by April 2025, but otherwise adjourned the sequencing application.

On 11 September 2024, Justice Lundberg made programming orders and listed the trial of this proceeding to begin on 28 April 2025. The trial is listed for at least 13 days and will deal with all issues other than those issues which overlap with Proceeding CIV 2072/2017. On 20 December 2024, Justice Lundberg made orders for a hearing to be listed for some time after 28 May 2025 for five days to deal with the “Fulcrum Allegations” raised in this proceeding and in Proceeding CIV 2072/2017, as well as the CITIC Parties’ Anshun and abuse of process defences in Proceeding CIV 2072/2017.

On 15 October 2024, Mineralogy sought leave to appeal the orders made by Justice Lundberg in relation to the categories of documents to be discovered in this proceeding (Proceeding CACV 64/2024). On 16 December 2024, the Court of Appeal heard the application for leave to appeal, and on 23 December 2024 made orders dismissing the application for leave to appeal and the appeal itself.

On 12 December 2024, Mineralogy filed an application for leave to further amend its defence. The application was heard on 22 January 2025. On 3 February 2025, Justice Lundberg granted Mineralogy leave to file its further amended defence containing certain of its proposed amendments. Mineralogy’s further amended defence was filed on 5 February 2025.

The CITIC Parties filed their reply to Mineralogy’s further amended defence on 14 February 2025.

Fulcrum Conspiracy Claim

On 5 October 2023, Mineralogy and Mr. Palmer commenced a proceeding against Helen Dillon, Chen Zeng, Sino Iron, Korean Steel and the Company (“Proceeding CIV 2137/2023”) claiming that the defendants engaged in conduct for “Fulcrum Purposes”, to apply commercial pressure on Mineralogy and Mr. Palmer to renegotiate certain project agreements, recoup certain additional costs of developing the Sino Iron Project from Mineralogy and seek to sterilise Mineralogy’s other valuable mining tenements. On 28 November 2023, Mineralogy and Mr. Palmer filed a notice of discontinuance in Proceeding CIV 2137/2023.

On 15 December 2023, Mineralogy and Mr. Palmer commenced a proceeding against Helen Dillon, Chen Zeng, Sino Iron, Korean Steel and the Company (together, the “CITIC Defendants”) as well as Allens, a law firm advising the CITIC Defendants, and FBIS International Issues Management Pty Ltd., a service provider to certain of the CITIC Defendants (“Proceeding CIV 2425/2023”). Mineralogy and Mr. Palmer claim that the defendants engaged in the Fulcrum Purposes to apply commercial pressure on Mineralogy and Mr. Palmer to achieve outcomes similar to those pleaded in Proceeding CIV 2137/2023 (see above).

Mineralogy and Mr. Palmer bring claims including for breach of contract, the torts of inducing a breach of contract, collateral abuse of process, conspiracy to injure by unlawful means and conspiracy to injure by lawful means. Unconscionable conduct under the Australian Consumer Law is also pleaded as conduct alleged to give rise to the unlawful means conspiracy. Mineralogy and Mr. Palmer also claim that, pursuant to the FCD, the Company is obliged to indemnify Mr. Palmer for the alleged loss suffered by Mr. Palmer said to be in relation to the CITIC Parties’ failure to perform their obligations under the MRSLAs. Mineralogy and Mr. Palmer claim that as a consequence of the defendants’ conduct, they suffered damages which are said to include costs Mineralogy and Mr. Palmer incurred in prosecuting and defending the legal processes and otherwise taking steps in respect of the Fulcrum Purposes, as well as the inability of Mr. Palmer to devote his attention and resources to “other profitable endeavours” and AUD200,000,000 on account of the inability to pursue the “Minimum Royalty Claim”. Mineralogy and Mr. Palmer allege that they did not pursue the “Minimum Royalty Claim” in a previous proceeding as a consequence of the pressure exerted on them for the Fulcrum Purposes. The plaintiffs also seek exemplary damages of approximately AUD500,000,000, aggravated damages, disgorgement damages and interest on the amounts claimed.

The CITIC Defendants, Allens and FBIS International Issues Management Pty Ltd. have filed applications for summary judgment and to strike out Mineralogy’s and Mr. Palmer’s statement of claim.

On 12 April 2024, Mineralogy and Mr. Palmer filed an application regarding the sequencing of this and other proceedings. This application was amended on 19 July 2024 and sought orders that this proceeding:
  • be heard and finally determined before the hearing of Proceeding CIV 2336/2023 as described above, Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (now dismissed);
  • alternatively be heard concurrently with Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (now dismissed); or
  • alternatively be heard concurrently with Proceeding CIV 2336/2023, Proceeding CIV 2072/2017 and Proceeding CIV 1267/2018 (now dismissed).
The CITIC Parties opposed the amended application and the amended application was heard on 5 August 2024. On 10 September 2024, Justice Lundberg found that this proceeding will require re-assessment by the Court once the outcome of the summary judgment and strike out applications is known to assess when the proceeding will be ready for trial.

The applications for summary judgment and strike out were heard on 15 to 18 October 2024 and 17 December 2024. The Court reserved its decision.

On 16 December 2024, Mineralogy and Mr. Palmer filed an application to reopen the summary judgment and strike out application filed by FBIS International Issues Management Pty Ltd. in order to tender further documents. That application is listed for a special appointment on 9 April 2025.

No trial date has been set for this proceeding.

(l)

Metallurgical Corporation of China (“MCC”) claim

MCC was appointed as the EPC (engineering, procurement and construction) contractor for the processing area and related facilities at the Sino Iron Project in Western Australia. The fixed price contract amount was US$3,407,000,000.

On 30 January 2013, MCC announced that it had incurred costs over the value of the contract and had provided additional funding of US$858,000,000 to MCC Mining (Western Australia) Pty Ltd. (“MCC WA”), its wholly-owned subsidiary company responsible for delivering MCC’s obligations under the contract.

As at the date of issuance of these annual financial statements, MCC has not claimed any additional costs from Sino Iron or its subsidiary companies, other than minor contract variations in the normal course of operations, and the Group believes it has satisfied all of its obligations under the contract.

Under the contract, the Group has a right to claim liquidated damages from MCC WA for certain delays in the completion of their project scope at a daily amount of 0.15% of the value of the main contract (approximately US$5,000,000 per day, with a cap of approximately US$530,000,000 in total). As at 31 December 2024, the cumulative days of delay that has been incurred has resulted in the contractual cap to the liquidated damages being reached.

As set out in the Company’s announcement dated 24 December 2013, Sino Iron and MCC WA entered into a supplemental contract pursuant to which Sino Iron will take over the management of the construction and commissioning of the remaining four production lines of the Sino Iron Project. An independent audit will opine on various matters including the contract price for the hand over pursuant to the supplemental contract and related fees and expenses, the value of the supporting services provided by Sino Iron to MCC WA in carrying out its responsibilities under the contract, the extent of the works completed by MCC WA in respect of the first two production lines, and the liability of MCC WA in respect of the extensive delays on completion of the works under the contract. By reference to such findings of the independent audit, Sino Iron and MCC WA expect to enter into further negotiations to determine the amount of liabilities to be borne between the parties. Outcomes are not yet known as at 31 December 2024.
The statutory income tax rate of the Company and its subsidiaries located in Hong Kong for the year ended 31 December 2024 is 16.5% (2023: 16.5%).

Except for the preferential tax treatments, the statutory income tax rate applicable to the Group’s other subsidiaries in Chinese mainland for the year ended 31 December 2024 is 25% (2023: 25%).

Taxation for other overseas subsidiaries is charged at the rates of taxation prevailing in the countries/ jurisdiction in which the overseas subsidiaries operate.
As a multi-industry conglomerate, the Group is principally engaging in comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption, new-type urbanisation.

For comprehensive financial services segment, revenue mainly comprises net interest income, net fee and commission income, net trading loss and net gain on financial investments (Notes 5(a), 5(b) and 5(d) ). For non-comprehensive financial services segment, revenue mainly comprises income from sales of goods and services rendered to customers (Note 5(c)).

The Group’s customer base is diversified and there is no single customer with which transactions have exceeded 10% of the Group’s revenue.

(a)

Net interest income

For the year ended 31 December
20242023
Interest income arising from (note):
Deposits with central banks, banks and non-bank financial institutions 17,288 16,719
Placements with banks and non-bank financial institutions 10,282 8,089
Financial assets held under resale agreements 3,4882,799
Investments in financial assets
– Financial assets at amortised cost 30,258 36,073
– Debt investments at FVOCI 25,421 22,153
Loans and advances to customers and other parties 235,715 244,128
Margin financing and securities lending 7,141 8,343
Others 271 610
329,864338,914
Interest expenses arising from:
Borrowings from central banks (6,367) (4,282)
Deposits from banks and non-bank financial institutions (18,305) (21,687)
Placements from banks and non-bank financial institutions (3,782) (4,717)
Financial assets sold under repurchase agreements (13,234) (10,625)
Deposits from customers (102,617) (115,452)
Debt instruments issued (33,256) (29,753)
Customer brokerage deposits (1,618) (1,675)
Lease liabilities (561) (553)
Others (1,751) (1,651)
(181,491) (190,395)
Net interest income 148,373 148,519
Notes:

Interest income includes interest income accrued on credit-impaired financial assets of RMB760 million for the year ended 31 December 2024 (2023: RMB715 million).


(b)

Net fee and commission income

For the year ended 31 December
20242023
Bank card fees 15,550 16,799
Trustee commission and fees 10,347 8,857
Agency fees and commission 4,876 5,897
Guarantee and advisory fees 5,482 5,686
Commission on securities brokerage 13,006 12,163
Commission on fund management 8,192 7,642
Commission on investment banking 4,354 6,750
Settlement and clearing fees 2,463 2,251
Commission on asset management 2,492 2,340
Commission on futures brokerage 5,643 3,594
Others 2,016 1,067
74,421 73,046
Fee and commission expenses (15,328) (11,456)
Net fee and commission income 59,093 61,590
(c)

Sales of goods and services

For the year ended 31 December
20242023
Sales of goods 433,301 372,072
Services rendered to customers
– Revenue from construction contracts 15,918 16,356
– Revenue from other services 29,997 29,152
479,216 417,580
(d)

Other revenue

For the year ended 31 December
20242023
Net trading loss under comprehensive financial services segment (note (i)) (23,198) (8,109)
Net gain on financial investments under comprehensive financial services segment 85,370 58,018
Others 4,016 3,234
66,188 53,143
(i)
Net trading loss under comprehensive financial services segment
For the year ended 31 December
20242023
Net trading gain/(loss):
– debt securities and certificates of deposits 104 844
– foreign currencies 4,974 2,981
– derivatives (28,276) (11,934)
(23,198) (8,109)
For the year ended 31 December
20242023
Costs of goods sold 397,554 337,114
Costs of services rendered
– Costs of construction contracts 14,193 13,574
– Costs of other services 18,741 17,764
430,488 368,452
For the year ended 31 December
20242023
Net gain on disposal/deemed disposal of subsidiaries, associates and joint ventures 3,793 74
Net gain on financial investments under non-comprehensive financial services segment 3,262 2,949
Net foreign exchange (loss)/gain (1,033) 535
Others 6,596 5,099
12,618 8,657
For the year ended 31 December
20242023
Deposits and placements with banks and non- bank financial institutions 41 (39)
Receivables (excluding prepayments) and others 3,501 11,324
Loans and advances to customers and other parties 54,828 49,572
Investments in financial assets
• Financial assets at amortised cost 2,418 2,467
• Debt investments at FVOCI 777 1,250
Impairment provision of credit commitments and guarantees provided (2,182) 1,041
59,383 65,615
In 2024, the Group’s expected credit losses were RMB59,383 million, a decrease of 9% compared to last year. China CITIC Bank Corporation Limited (“CITIC Bank”) accounted for RMB61,045 million, mainly from expected credit loss of loans and advances to customers and other parties.
For the year ended 31 December
20242023
Inventories 1,466 3,403
Interests in associates 136 635
Interests in joint ventures 233
Fixed assets (Note) 67 (338)
Prepayments 28 23
Goodwill (Note 35) 17 26
Others 80 846
2,027 4,595
In 2024, the Group’s impairment losses were RMB2,027 million, a decrease of 56% compared to last year.

Notes:

Iron Ore Project

The Group’s Iron Ore Project comprises the Sino Iron Project in Australia and its associated marketing operations in Singapore. Whenever events or circumstances indicate impairment may have occurred, the Group tests whether assets attributable to the Group’s Iron Ore Project have suffered any impairment.

The recoverable amount of the Sino Iron Project is based on the fair value less costs of disposal methodology which is based on cash flow projections that incorporate best estimates of selling prices, ore grades, exchange rates, production rates, future capital expenditure and production costs over the life of the mine. In line with normal practice in the mining industry, the cash flow projections are based on long term mine plans covering the expected life of the operation. Therefore, the projections cover periods well in excess of five years. Assumptions about selling prices, operating and capital costs, exchange rates, quantity of resources and discount rates are particularly important; the determination of the recoverable amount is relatively sensitive to changes in these important assumptions.

In accordance with the Group’s accounting policy, management has identified one CGU, the Sino Iron Project. For the purposes of testing for impairment, the carrying amount of the Sino Iron Project is to be compared with its recoverable amount when indication of impairment exists. Impairment is recognised when the carrying amount of the project exceeds its recoverable amount.

As at 31 December 2024, management performed an impairment indication assessment with the consideration of the production profile of the Sino Iron Project, forecast iron ore prices, exchange rate between Australian dollar and US dollar and risk-free borrowing rates. According to the assessment, no further impairment indication was identified and thus, no impairment test was undertaken for the Sino Iron Project as at 31 December 2024.

When an impairment test is undertaken, the fair value of CGU must be estimated for recognition and measurement or for disclosure purposes.

The disclosure is based on the following fair value measurement hierarchy:
  • Quoted prices (unadjusted) in active markets for identical or similar CGU (level 1);
  • Inputs other than quoted prices included within level that are observable for the CGU, either directly (as prices) or indirectly (derived from prices) (level 2); and
  • Inputs for the CGU that are not based on observable market data (unobservable inputs) (level 3 inputs).
The CGU’s fair value hierarchy is Level 3.
For the year ended 31 December
20242023
Finance costs
– Interest on bank and other loans 10,526 8,969
– Interest on debt instruments issued 3,190 3,570
– Interest on lease liabilities 253 241
13,969 12,780
Less: interest expense capitalised (note) (851) (926)
13,118 11,854
Other finance charges 223 318
13,341 12,172
Finance income (2,235) (1,832)
11,106 10,340
In 2024, the Group’s finance costs were RMB13,341 million, an increase of RMB1,169 million or 9.6% compared to last year, mainly due to the increase in interest on loans. The finance income was RMB2,235 million, an increase of RMB403 million or 22.0% compared to last year, mainly due to the increase in interest from deposits.

Notes:

In 2024, capitalisation rates applied to funds borrowed are 3.64% ~ 4.45% per annum (2023: 4.40% ~ 4.74%).
Profit before taxation is mainly arrived at after charging below costs and expenses in cost of sales and services and other operating expenses:

(a)

Staff costs

For the year ended 31 December
20242023
Salaries and bonuses (note (i)) 66,680 63,770
Contributions to defined contribution retirement schemes (note (ii)) 9,276 8,780
Others 15,422 13,101
91,378 85,651
Notes
(i)
The increase in salaries and bonuses is mainly due to the impact of including Nanjing Steel Group Co., Ltd. (“Nanjing Steel Group”) in the scope of consolidated financial statements.

(ii)
The Group substantially completed the transfer of the management of existing retirees to external organisations in 2011. In accordance with the government requirements, the Group is also obliged to pay for certain of such retirees’ post-retirement benefits in the future. This benefit plan is accounted for as a long-term defined benefits obligation and does not have any planned assets.

The Group’s obligation for this benefit plan is calculated using actuarial method and recognised as a liability. The service cost amounting to RMB112 million was recognised for the year ended 31 December 2024 (2023: RMB44 million). Actuarial assumptions mainly include discount rate and future mortality. Reasonable changes in actuarial assumptions would not have a significant impact on the consolidated financial statements of the Group.

(b)

Other items

For the year ended 31 December
20242023
Amortisation 4,450 4,097
Depreciation 23,110 18,962
Lease charges 1,592 894
Tax and surcharges 3,164 3,481
Property management fees 1,075 1,031
Non-operating expenses 1,409 710
Professional fees (other than auditors’ remuneration) 1,424 1,758
Auditors’ remuneration
– Audit services 212 187
– Non-audit services 70 58
36,506 31,178
(a)

Income tax expense in the income statement

For the year ended 31 December
20242023
Current tax – Chinese mainland
Provision for enterprise income tax 26,765 15,103
Land appreciation tax 338 267
27,103 15,370
Current tax – Hong Kong
Provision for Hong Kong Profits tax 1,350 490
Current tax – Overseas
Provision for the year 814 408
29,267 16,268
Deferred tax
Origination and reversal of temporary differences (4,365) 1,745
24,902 18,013
The particulars of the applicable income tax rates are disclosed in Note 4.

In 2024, the Group’s income tax was RMB24,902 million, an increase of RMB6,889 million or 38.2% compared to last year. In addition to the increase in profit before taxation, it was mainly due to the increase in non-deductible expenses of CITIC Bank compared to last year.

(b)

Reconciliation between tax expense and accounting profit at applicable tax rates

For the year ended 31 December
20242023
Profit before taxation132,657123,287
Less: share of profits of
– Associates(4,138) (5,695)
– Joint ventures(2,492)(3,708)
126,027 113,884
Notional tax on profit before taxation calculated at statutory tax rate of 16.5%20,79418,791
Effect of different tax rates in other jurisdictions13,18810,236
Tax effect of unused tax losses not recognised 1,024 891
Tax effect of non-deductible expenses8,832 4,882
Tax effect of non-taxable income (note)(19,308)(15,911)
Others372(876)
Actual tax expense 24,902 18,013
Notes:

The non-taxable income mainly contains interest income arising from PRC government bonds, local government bonds and dividends from equity investments.

(c)

Pillar Two income taxes

In December 2021, the Organisation for Economic Co-operation and Development published Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (“Pillar Two legislation”). According to the rules of Pillar Two legislation, low-tax jurisdictions with effective tax rate below 15% may have a Top-up Tax impact. Some of jurisdictions where the Group’s overseas operating institutions are located, had implemented Pillar Two legislation during the reporting period. The Group has applied the temporary mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes and accounted for the tax as current tax when incurred.
(a)

Directors’ emoluments

In 2024, emoluments paid or receivable in respect of a person’s services as a director, whether of the Company or its subsidiary undertaking are set out as follows:
For the year ended 31 December 2024
Emoluments paid or receivable in respect of a person's services as a director, whether of the Company or its subsidiary Emoluments paid
or receivable
in respect of
director's other
services in
connection with
the management
of the affairs of
the Company
or its subsidiary
undertaking
Total
Fees Salary Discretionary bonuses Housing allowance Estimated money value of other benefits Social securities in Chinese mainland Employer’s contribution to a retirement benefit scheme Remunerations paid or receivable in respect of accepting office as committee member
Name of Current Directors
Executive Directors:
   Xi Guohua (i) 0.36 0.39 0.16 0.11 1.02
   Zhang Wenwu(i) (ii)0.27 0.29 0.12 0.07 0.75
   Liu Zhengjun (i) 0.32 0.340.16 0.10 0.92
   Wang Guoquan (i) 0.32 0.34 0.16 0.100.92
Non-executive Directors
   Yu Yang
   Zhang Lin
   Li Yi (formerly known as Li Ruyi)
   Yue Xuekun
   Yang Xiaoping 0.35 0.14 0.49
   Li Zimin
Independent Non-executive Directors:
   Francis Siu Wai Keung0.35 0.26 0.61
   Xu Jinwu 0.35 0.23 0.58
   Anthony Francis Neoh0.35 0.23 0.58
   Gregory Lynn Curl 0.35 0.05 0.40
   Toshikazu Tagawa 0.350.35
   Chen Yuyu (ii) 0.12 0.12
Name of Former Directors
   Mu Guoxin (ii)
2.22 1.27 1.360.60 0.38 0.91 6.74
Notes:
(i)
The emoluments for the year ended 31 December 2024 in respect of Mr. Xi Guohua, Mr. Zhang Wenwu, Mr. Liu Zhengjun and Mr. Wang have not been finalised in accordance with the regulations of the relevant local authorities

(ii)
Changes in directors during the year ended 31 December 2024:

(1)
From 28 March 2024, Mr. Zhang Wenwu serves as the executive director of the Company.

(2)
From 29 August 2024, Mr. Chen Yuyu serves as the independent non-executive director of the Company.

(3)
From 27 December 2024, Mr. Mu Guoxin resigned as the non-executive director of the Company.


In 2023, emoluments paid or receivable in respect of a person’s services as a director, whether of the Company or its subsidiary undertaking are set out as follows:
For the year ended 31 December 2023
Emoluments paid or receivable in respect of a person's services as a director, whether of the Company or its subsidiary Emoluments paid
or receivable
in respect of
director's other
services in
connection with
the management
of the affairs of
the Company
or its subsidiary
undertaking
Total
Fees Salary Discretionary bonuses Housing allowance Estimated money value of other benefits Social securities in Chinese mainland Employer’s contribution to a retirement benefit scheme Remunerations paid or receivable in respect of accepting office as committee member
Name of Current Directors
Executive Directors:
Xi Guohua (i) 0.38 1.18 0.15 0.09 1.80
Liu Zhengjun (i) (ii) 0.35 1.050.15 0.091.64
Wang Guoquan (i) (ii) 0.35 1.050.15 0.09 1.64
Non-executive Directors
Yu Yang
Zhang Lin
Li Yi (formerly known as Li Ruyi)
Yue Xuekun (ii)
Yang Xiaoping 0.34 0.14 0.48
Mu Guoxin (ii)
Li Zimin (ii)
Independent Non-executive Directors:
Francis Siu Wai Keung 0.34 0.25 0.59
Xu Jinwu 0.34 0.230.57
Anthony Francis Neoh 0.34 0.23 0.57
Gregory Lynn Curl 0.340.050.39
Toshikazu Tagawa 0.340.34
Name of Former Directors
Zhu Hexin (i) (ii) 0.38 1.18 0.15 0.10 1.81
Tang Jiang (iii)
2.04 1.46 4.460.60 0.37 0.90 9.83
Notes:
(i)
The emoluments for the year ended 31 December 2023 in respect of Mr. Xi Guohua, Mr. Liu Zhengjun, Mr. Wang Guoquan, and Mr. Zhu Hexin are restated based on the final results confirmed by the national authority. The discretionary bonuses include term-based incentive compensation covering the 2021-2023 performance period.

(ii)
Changes in directors during the year ended 31 December 2023:

(1)
From 15 March 2023, Mr. Liu Zhengjun and Mr. Wang Guoquan serve as the executive directors of the Company. From 9 January 2023, Mr. Yue Xuekun serves as the non-executive director of the Company. From 26 October 2023, Mr. Mu Guoxin serves as the non-executive director of the Company. From 29 December 2023, Mr. Li Zimin serves as the non-executive director of the Company.

(2)
From 13 December 2023, Mr. Zhu Hexin resigned as the executive director of the Company.

(iii)
On 26 March 2023, Mr. Tang Jiang passed away.

(b)

Other benefits and interests

In 2024, no retirement benefits, payments or benefits in respect of termination of directors’ services were paid or made, directly or indirectly, to the directors; nor are any payable (2023: None). No consideration was provided to or receivable by third parties for making available directors’ services (2023: None). There are no loans, quasi-loans or other dealings in favour of the directors, their controlled bodies corporate and connected entities (2023: None).

No director of the Company had a material interest, directly or indirectly, in any significant transactions, arrangements and contracts in relation to the Company’s business to which the Company was or is a party that subsisted at the end of the year or at any time during the year ended 31 December 2024 (2023: None).

In 2024, none of the five highest paid individuals are directors (2023: None) whose emoluments are disclosed in Note 13. The aggregate of the emoluments in respect of these 5 individuals (2023: five) are as follows:
For the year ended 31 December
20242023
Salaries and other emoluments 15.98 14.12
Discretionary bonuses 48.52 57.38
Retirement scheme contributions 0.99 1.39
65.49 72.89
The emoluments of the 5 individuals (2023: five) with the highest emoluments are within the following bands:
For the year ended 31 December
2024
Number of
individuals
2023
Number of
individuals
RMB9,500,001- RMB10,000,0001
RMB11,500,001- RMB12,000,000 1
RMB12,000,001 – RMB12,500,000 1
RMB13,000,001- RMB13,500,000 1
RMB14,000,001- RMB14,500,000 1 2
RMB15,000,001- RMB15,500,000 1
RMB15,500,001- RMB16,000,000 1
RMB17,500,001- RMB18,000,000 1
5 5
In 2024, all of the 5 individuals with the highest emoluments are employees of foreign subsidiaries, whose nationalities are not Chinese mainland.
For the year ended 31 December
20242023
2023 Final dividend paid: RMB0.335
      (2022 Final: HK$0.451) per share
9,745 11,608
2024 Interim dividend paid: RMB0.19
      (2023 Interim: RMB0.18) per share
5,527 5,236
2024 Final dividend proposed: RMB0.36
      (2023 Final: RMB0.335) per share
10,473 9,745
Basic earnings per share for the year ended 31 December 2024 is calculated by dividing profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares.

Diluted earnings per share for the year ended 31 December 2024 is calculated by dividing adjusted profit attributable to the ordinary shareholders of the Company based on assuming conversion of all potentially dilutive shares by the adjusted weighted average number of ordinary shares.

In 2019, CITIC Bank, a subsidiary of the Group, issued convertible bonds, the specific terms of which are disclosed in Note 45(a). In 2022, CITIC Pacific Special Steel Group Co., Ltd. (“CITIC Special Steel”), a subsidiary of the Group, issued convertible bonds, the specific terms of which are disclosed in Note 45(a).

The convertible bonds issued by CITIC Bank and CITIC Special Steel have dilutive effects on profit attributable to ordinary shareholders of the Company, the calculation results of which are listed as below:
For the year ended 31 December
20242023
Profit attributable to ordinary shareholders of the Company 58,202 57,594
Less: impact on profit attributable to ordinary shareholders of the Company assuming above convertible bonds converted (984) (95)
Profit attributable to ordinary shareholders of the Company (adjusted) 57,218 57,499
Weighted average number of ordinary shares (in million) 29,090 29,090
Basic earnings per share (RMB) 2.00 1.98
Diluted earnings per share (RMB) 1.97 1.98
Components of other comprehensive income/(loss)
For the year ended 31 December
20242023
Items that may be reclassified subsequently to profit or loss:
Fair value gain on financial assets at FVOCI 22,980 7,203
Less: net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year (8,008) (732)
Tax effect (3,839) (1,328)
11,133 5,143
Change of loss allowance on debt investments at FVOCI 652 (70)
Less: net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year (478)
Tax effect (98) 10
76 (60)
Loss arising from cash flow hedge (21) (194)
Less: net amounts previously recognised in other comprehensive income transferred to profit or loss in the current year (118) (17)
Tax effect 2
(137) (211)
Share of other comprehensive loss of associates and joint ventures (2,572) (2,776)
Exchange differences on translation of financial statements and others 1,565 1,132
Items that will not be reclassified subsequently to profit or loss:
Reclassification of owner-occupied property as investment property: revaluation gain/(loss) 101 (2)
Less: tax effect
101 (2)
Fair value changes on equity investments designated at FVOCI 277 (187)
Less: tax effect (154) 49
123 (138)
Share of other comprehensive income of associates and joint ventures 59
10,348 3,088
The Group has presented five reportable operating segments which are comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption and new-type urbanisation. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose financial performance is regularly reviewed by the board of directors to make decisions about resource to be allocated to the segment and assess its performance, and for which financial information regarding financial position, financial performance and cash flows is available. The details of these five reportable segments are as follows:
  • Comprehensive financial services: this segment includes banking, securities, trust, insurance and asset management services.
  • Advanced intelligent manufacturing: this segment includes manufacturing of heavy machineries, specialised robotics, aluminium wheels, aluminium casting parts and other products.
  • Advanced materials: this segment includes exploration, processing and trading of resources and energy products, including iron ore, copper and crude oil, as well as manufacturing of special steels.
  • New consumption: this segment includes motor, food and consumer products business, telecommunication services, publication services, modern agriculture and others.
  • New-type urbanisation: this segment includes property development, sale and holding of properties, contracting and design services, infrastructure services, environmental services, commercial aviation services and others.

(a)

Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources among segments, the board of directors monitors the results, assets and liabilities, revenue and expenses attributable to each reportable segment on the following bases:

Segment assets are those assets that are attributable to a segment, and segment liabilities are those liabilities that are attributable to a segment.

Revenue and expenses are allocated to the reportable segments with reference to revenue generated by those segments and the expenses incurred by those segments or which otherwise arise from the depreciation of assets attributable to those segments.

The measure used for reporting segment profit is “profit for the year”. To arrive at segment results, the Group’s profit is further adjusted for items not specifically attributed to individual segments, such as share of results of associates and joint ventures.

Inter-segment pricing is based on similar terms as those available to other external parties.

Information regarding the Group’s reportable segments as provided to the board of directors for the purposes of resources allocation and assessment of segment performance for the years ended 31 December 2024 and 2023 is set out below:
For the year ended 31 December 2024
Comprehensive
financial
services
Advanced
intelligent
manufacturing
Advanced
materials
New
consumption
New-type
urbanisation
Operation
management
EliminationTotal
Revenue from external customers 279,469 50,793 325,615 49,872 46,987 134752,870
Inter-segment revenue 1,906 182 292 132 1,424 19 (3,955)
Reportable segment revenue 281,375 50,975 325,907 50,004 48,411 153 (3,955) 752,870
Disaggregation of revenue:
– Net interest income (Note 5(a)) 150,158 85 (1,870) 148,373
– Net fee and commission income (Note 5(b)) 59,173 4 (84) 59,093
– Sales of goods (Note 5(c)) 5,838 50,360 323,795 36,102 17,597 (391) 433,301
– Services rendered to customers-construction contracts (Note 5(c)) 247 6316,221 (613) 15,918
– Services rendered to customers-others (Note 5(c)) 368 2,049 13,902 14,593 64 (979) 29,997
– Other revenue (Note 5(d)) 66,206 (18) 66,188
Share of profits/(losses) of associates, net of tax 1,764 (8) 1,076 (379) 1,685 4,138
Share of profits of joint ventures, net of tax 818 71 1,080 61 447 15 2,492
Finance income (Note 10) 52 2,037 124 935 599 (1,512) 2,235
Finance costs (Note 10) (266) (3,712) (688) (1,761) (9,712) 2,798 (13,341)
Depreciation and amortisation (Note 11(b)) (10,534) (1,573) (11,255) (1,801) (2,183) (250) (27,560)
Expected credit losses (Note 8) (59,319) (147) (219) (82) 362 22 (59,383)
Impairment losses (Note 9) (222) (26) (543) (222) (1,013) (1) (2,027)
Profit/(loss) before taxation 115,805 2,032 15,886 858 7,238 (7,896)(1,266) 132,657
Income tax (Note 12) (18,511) (222) (2,267) (389) (1,868) (1,636) (9) (24,902)
Profit/(loss) for the year 97,294 1,810 13,619 469 5,370 (9,532) (1,275) 107,755
Attributable to:
– Ordinary shareholders of the Company 52,649 86510,310 42 5,135 (9,530) (1,269) 58,202
– Non-controlling interests 44,645 945 3,309 427 235 (2) (6) 49,553
Reportable segment assets 11,369,787 63,576 357,614 56,193 343,031 53,956 (168,732)12,075,425
Including:
Interests in associates (Note 32) 25,868 1,011 22,819 7,571 49,789 675 107,733
Interests in joint ventures (Note 33) 14,766 641 8,117 1,864 40,171 1,396 66,955
Reportable segment liabilities 10,184,323 42,162 175,802 26,067 140,955 232,799 (149,697) 10,652,411
Including:
Bank and other loans (Note 44) (note) 15,277 7,462 90,619 7,740 56,669 125,572 (58,484) 244,855
Debt instruments issued (Note 45) (note) 1,403,167 4,887 3,234 1,000 82,621 (4,807) 1,490,102
Notes:

The amount is the principal excluding interest accrued.

For the year ended 31 December 2023
Comprehensive
financial
services
Advanced
intelligent
manufacturing
Advanced
materials
New
consumption
New-type
urbanisation
Operation
management
EliminationTotal
Revenue from external customers 268,048 50,434 267,513 51,422 43,367 48 680,832
Inter-segment revenue 2,200 218 187 122 914 94 (3,735)
Reportable segment revenue 270,248 50,652 267,700 51,544 44,281 142 (3,735) 680,832
Disaggregation of revenue:
– Net interest income (Note 5(a)) 150,583 91 (2,155) 148,519
– Net fee and commission income (Note 5(b)) 61,700 4 (114) 61,590
– Sales of goods (Note 5(c)) 4,740 49,794 266,087 37,751 14,100 (400) 372,072
– Services rendered to customers-construction contracts (Note 5(c)) 797 16,053 (494) 16,356
– Services rendered to customers-others (Note 5(c)) 61 1,613 13,793 14,128 47 (490) 29,152
– Other revenue (Note 5(d)) 53,225 (82) 53,143
Share of profits/(losses) of associates, net of tax 1,561 61 1,213 368 2,606 (114) 5,695
Share of profits of joint ventures, net of tax 1,372 27 85536 1,377 41 3,708
Finance income (Note 10) 58 1,274 105 1,156 700 (1,461) 1,832
Finance costs (Note 10) (304) (3,198) (636) (1,840) (9,205) 3,011 (12,172)
Depreciation and amortisation (Note 11(b)) (9,900) (1,270) (7,969) (1,931) (1,914) (75) (23,059)
Expected credit losses (Note 8) (61,135) (469) (98) 12 (4,073) 148 (65,615)
Impairment losses (Note 9) (286) (456) 776 (216) (3,803) (610) (4,595)
Profit/(loss) before taxation 108,186 1,903 17,035 2,012 2,471 (7,548) (772) 123,287
Income tax (Note 12) (13,757) (169) (2,163) (374) (451) (1,071) (28) (18,013)
Profit/(loss) for the year 94,429 1,734 14,872 1,638 2,020 (8,619) (800) 105,274
Attributable to:
– Ordinary shareholders of the Company 50,496 827 12,731 1,032 2,163 (8,618) (1,037) 57,594
– Non-controlling interests 43,933 907 2,141 606 (143) (1) 237 47,680
Reportable segment assets 10,609,132 60,415 363,781 58,858 338,424 45,127 (142,817) 11,330,920
Including:
Interests in associates (Note 32) 27,306 1,116 22,950 8,851 47,833 1,735 109,791
Interests in joint ventures (Note 33) 13,412 553 7,732 1,809 31,827 1,454 56,787
Reportable segment liabilities 9,503,628 40,137 187,807 25,452 140,810 222,535 (126,231) 9,994,138
Including:
Bank and other loans (Note 44)(note) 10,344 6,018 90,205 6,608 54,245 125,712 (58,000) 235,132
Debt instruments issued (Note 45) (note) 1,133,946 5,259 3,184 74,009 (2,818) 1,213,580
Notes:

The amount is the principal excluding interest accrued.

(b)

Geographical information

An analysis of the Group’s revenue and total assets by geographical area are as follows:
Revenue from external customers
For the year ended 31 December
Reportable segment assets
As at 31 December
2024202320242023
Chinese mainland 639,198 587,536 10,921,47210,315,696
Hong Kong, Macau and Taiwan 52,069 44,246 737,429 638,695
Overseas 61,60349,050 416,524376,529
752,870 680,832 12,075,425 11,330,920
As at 31 December
20242023
Cash 5,200 4,504
Bank deposits 125,243 114,860
Balances with central banks (note (i)):
– Statutory deposit reserve funds (note (ii)) 323,523 357,686
– Surplus deposit reserve funds (note (iii)) 6,833 52,473
– Fiscal deposits (note (iv)) 3,699 356
– Foreign exchange reserves (note (v)) 4,178 2,926
Deposits with banks and non-bank financial institutions 138,373 90,423
607,049 623,228
Accrued interest 1,498 1,966
608,547 625,194
Less: allowance for impairment losses on deposits with banks and non-bank financial institutions (Note 48) (60) (59)
608,487 625,135
Notes:
(i)
The balances with central banks represent deposits placed with central banks by CITIC Bank and CITIC Finance Company Limited (“CITIC Finance”).

(ii)
CITIC Bank and CITIC Finance place statutory deposit reserve funds with the People’s Bank of China and overseas central banks where they have operations. The statutory deposit reserve funds are not available for use in their daily business.

As at 31 December 2024, the statutory deposit reserve funds placed by CITIC Bank with the People’s Bank of China was calculated at 6% (31 December 2023: 7%) of eligible RMB deposits for domestic branches of CITIC Bank and at 6% (31 December 2023: 7%) of eligible RMB deposits from overseas financial institutions respectively. In addition, CITIC Bank was also required to deposit an amount equivalent to 4% (31 December 2023: 4%) of its foreign currency deposits from domestic branch customers as statutory deposit reserve funds.

As at 31 December 2024, the statutory RMB deposit reserve rate applicable to Zhejiang Lin’an CITIC Rural Bank Corporation Limited in Chinese mainland, a subsidiary of CITIC Bank, according to the corresponding regulations of the People’s Bank of China, was at 5% (31 December 2023: 5%).

The amounts of statutory deposit reserve funds placed with the central banks of overseas countries are determined by respective jurisdictions. The statutory deposit reserve funds are interest bearing except for the foreign currency reserve funds deposits placed with the People’s Bank of China.

As at 31 December 2024, the statutory deposit reserve funds placed by CITIC Finance with the People’s Bank of China was calculated at 5% (31 December 2023: 5%) of eligible RMB deposits from the customers of CITIC Finance. CITIC Finance is also required to deposit an amount equivalent to 4% (31 December 2023: 4%) of its foreign currency deposits from the customers as statutory deposit reserve funds.

(iii)
The surplus deposit reserve funds are maintained with the People’s Bank of China for the purposes of clearing.

(iv)
Fiscal deposits placed with the People’s Bank of China are not available for use in the Group’s daily operations, and are non-interest bearing (unless otherwise stipulated by the local People’s Bank of China).

(v)
The foreign exchange reserve is maintained by CITIC Bank with the People’s Bank of China in accordance with the related notice issued by the People’s Bank of China. The reserve is required to be maintained on a monthly basis at 20% of the total contract amount of customers driven forward transactions in the previous month. Such foreign exchange reserve is non-interest bearing and will be maintained for in 12 months according to the notice.

(vi)
In addition to the statutory deposit reserve funds, fiscal deposits and foreign exchange reserves, RMB13,107 million (31 December 2023: RMB17,357 million) included in cash and deposits as at 31 December 2024 were restricted in use, mainly including guaranteed pledged bank deposits, guaranteed deposits and risk reserve.
CITIC Securities, the Group’s subsidiary, maintains segregated deposit accounts with banks and authorised institutions to hold cash on behalf of customers arising from its normal course of business. The Group has recorded the related amounts as cash held on behalf of customers and the corresponding liabilities as customer brokerage deposits (Note 40). In Chinese mainland, the use of cash held on behalf of customers for security and the settlement of their transactions is restricted and governed by relevant third-party deposit regulations issued by the China Securities Regulatory Commission. In Hong Kong, the “Securities and Futures (Client Money) Rules” together with the related provisions of the Securities and Futures Ordinance impose similar restrictions. In other countries and regions, cash held on behalf of customers is supervised by relevant authorities.
As at 31 December
20242023
Banks (note (a))133,785 88,447
Non-bank financial institutions 269,971 148,150
403,756 236,597
Accrued interest 1,230 1,288
404,986 237,885
Less: allowance for impairment losses (Note 48) (185) (143)
404,801 237,742
Analysed by remaining maturity:
– Within 1 month 93,695 70,820
– Between 1 month and 1 year 251,297 164,277
– Over 1 year 58,764 1,500
403,756 236,597
Accrued interest 1,230 1,288
404,986 237,885
Less: allowance for impairment losses (Note 48) (185) (143)
404,801 237,742
(a)

The leased gold between the Group and financial institutions is included in the placements with banks and non-bank financial institutions, measured at fair value through profit or loss. As at 31 December 2024, the carrying amount of leased gold was RMB22,789 million (as at 31 December 2023: RMB7,320 million).

The Group’s subsidiaries under the comprehensive financial services act as an intermediary to offer derivative products including forwards, swaps and option transactions. These derivative positions are managed through entering back-to-back deals with external parties to ensure the remaining exposures are within acceptable risk levels. Meanwhile, derivatives are also used for proprietary trading purposes to manage its own asset and liability and structural positions. Derivatives, except for those which are designated as hedging instruments, are held for trading. Derivatives classified as held for trading are for trading and customer-initiated transactions purpose, and those for risk management purposes but do not meet the criteria for hedge accounting.

Subsidiaries under non-comprehensive financial services of the Group enter into forward and swap contracts to hedge their exposure to fluctuations in foreign exchange rates, commodity prices and interest rates.

The following tables and notes provide an analysis of the nominal amounts of derivatives and the corresponding fair values as at the financial position date. The nominal amounts of the derivatives provide a basis for comparison with fair values of derivatives recognised on the consolidated statement of financial position but do not necessarily indicate the amounts of future cash flows involved or the current fair values of the derivatives and, therefore, do not indicate the Group’s exposure to credit or market risks.
As at 31 December
2024 2023
Nominal amountAssetsLiabilitiesNominal amountAssetsLiabilities
Hedging instruments
Fair value hedge
– Interest rate derivatives 9,789 398 29 5,216 168
– Commodity derivatives 5,846 142
– Currency derivatives 2,695 31 20 2,001179
Cash flow hedge
– Interest rate derivatives 3,056 38 4,009 141 34
– Currency derivatives 3,454 4 12 112 3 13
– Other derivatives 95 83 12 46 46
Non-hedging instruments
– Interest rate derivatives 7,512,931 39,394 41,274 6,882,563 24,618 24,058
– Currency derivatives 5,160,905 72,936 64,833 3,422,469 31,967 29,095
– Equity derivatives 541,205 17,201 19,954 681,454 18,337 16,413
– Precious metals derivatives 168,706 1,081 4,157 79,567 621 1,279
– Credit derivatives 18,195 22 67 14,167 37 47
– Other derivatives 740,687 3,888 3,973 794,594 1,445 2,816
14,167,564 135,218 134,331 11,886,198 77,56273,755
(a)

Nominal amount analysed by remaining maturity

As at 31 December
20242023
Within 3 months 4,624,972 4,014,043
Between 3 months and 1 year 6,033,749 4,607,586
Between 1 year and 5 years 3,266,288 3,028,705
Over 5 years 242,555 235,864
14,167,564 11,886,198

(b)

Credit risk weighted amounts

The credit risk weighted amounts are solely in connection with the derivatives held by CITIC Bank, and have been computed in accordance with “Regulation Governing Capital of Commercial Banks ” promulgated by the National Financial Regulatory Administration, and depends on the status of the counterparties and the maturity characteristics of the instruments including those customer-driven back-to-back transactions. As at 31 December 2024, the credit risk weighted amount for counterparty was RMB24,307 million (31 December 2023: RMB28,225 million).
As at 31 December
20242023
Account and bills receivables (note (a)) 88,884 92,408
Advanced payments and settlement accounts (note (b)) 43,533 25,743
Accounts due from brokers 28,128 24,488
Prepayments, deposits and other receivables (note (c)) 128,958 130,432
289,503 273,071
Less: allowance for impairment losses (Note 48) (23,116) (18,619)
266,387 254,452
As at 31 December 2024, the amount of the Group’s prepayments, deposits and other receivables expected to be recovered or recognised as expense after more than one year is RMB1,523 million (31 December 2023: RMB2,008 million). The remaining trade and other receivables are expected to be recovered or recognised as expense within one year.

(a)

Account and bills receivables

(i)

Account and bills receivables at amortised cost by overdue analysis

As at 31 December 2024, the analysis of account and bills receivables at amortised cost of the Group based on the days overdue is as follows:
As at 31 December 2024
Expected credit loss rate Gross carrying amount Loss allowance provision
Current 4% 52,834 (2,173)
Up to 3 months overdue 5% 1,940 (96)
3 months to 1 year overdue 8% 4,931 (398)
Over 1 year overdue 43% 19,040 (8,107)
78,745 (10,774)
As at 31 December 2023
Expected credit loss rate Gross carrying amount Loss allowance provision
Current 2% 56,405(1,322)
Up to 3 months overdue 8%4,575 (367)
3 months to 1 year overdue 8% 2,827 (214)
Over 1 year overdue 59% 15,797 (9,275)
79,604 (11,178)
Notes:

Each business unit has its own defined credit policy that is specific to the respective business environment and market practice.

(ii)

Account and bills receivables at amortised cost by ageing analysis

As at 31 December, the ageing analysis of account and bills receivables at amortised cost of the Group based on invoice date is as follows:
As at 31 December
20242023
Within 1 year 52,198 56,085
Over 1 year 26,547 23,519
78,745 79,604
Less: allowance for impairment losses (Note 48) (10,774) (11,178)
67,97168,426

(iii)

As at 31 December 2024, the carrying amount of bills receivables at FVOCI was RMB10,139 million (31 December 2023: RMB12,804 million).


(iv)

The movements in the allowance for impairment losses on trade and other receivables are disclosed in Note 48.



(b)

Advanced payments and settlement accounts

As at 31 December
20242023
Advanced payments and settlement accounts 43,533 25,743
Less: allowance for impairment losses (Note 48) (141) (204)
43,392 25,539

(c)

Prepayments, deposits and other receivables

As at 31 December
20242023
Prepayments, deposits and other receivables 128,958 130,432
Less: allowance for impairment losses (Note 48) (12,201) (7,237)
116,757 123,195

The Group has recognised the following assets and liabilities related to contracts with customers:
As at 31 December
20242023
Contract assets 22,664 24,509
Less: allowance for impairment losses (note(a)) (250) (197)
Total contract assets 22,414 24,312
Advances from contracts with customers 21,099 31,482
Total contract liabilities 21,09931,482
(a)

Assessment of allowance for impairment losses of contract

As at 31 December
20242023
ECL rate (note) 1.10% 0.80%
Gross carrying amount 22,664 24,509
Loss allowance provision (250) (197)
Notes:

The ECL rate here is the average rate of loss allowance provision divided by gross carrying amount.

(b)

Revenue recognised during the year that related to carried-forward contract liabilities

For the year ended 31 December
20242023
Revenue from contracts with customers 21,868 17,444
(c)

Revenue to be recognised in relating to unsatisfied performance obligations

As at 31 December 2024, transaction price allocated to unsatisfied contracts of the Group amounted at RMB60,609 million (31 December 2023: RMB88,129 million), of which RMB29,627 million is expected to be recognised as revenue within one year (31 December 2023: RMB52,685 million) and the remaining RMB30,982 million is expected to be recognised after more than one year (31 December 2023: RMB35,444 million).
As at 31 December
20242023
Raw materials 15,609 16,623
Work-in-progress 10,868 11,855
Finished goods 36,826 37,060
Properties:
– Properties under development 30,146 38,721
– Properties held-for-sale 20,440 21,616
– Others 6,248 5,865
Others 3,500 3,402
123,637 135,142
The analysis of the amount of inventories recognised as an expense and included in profit or loss is as follows:
For the year ended 31 December
20242023
Carrying amount of inventories sold 397,554 337,114
Write-down of inventories (Note 48) 2,463 4,033
Reversal of write-down of inventories (Note 48) (997) (630)
399,020 340,517
As at 31 December 2024, the Group’s inventories included an amount of RMB36,338 million expected to be recovered after more than one year (31 December 2023: RMB35,322 million).
As at 31 December
20242023
Analysed by counterparties:
– Banks 106,026 54,937
– Non-bank financial institutions 65,807 54,644
– Others 12,051 54,481
183,884 164,062
Accrued interest 112 150
183,996 164,212
Less: allowance for impairment losses (Note 48) (4,167) 771
179,829 164,983
Analysed by types of collateral:

As at 31 December 2024, the collateral of the Group’s financial assets held under resale agreements are securities or others (31 December 2023: securities or others).

Analysed by remaining maturity:

As at 31 December 2024, the Group’s financial assets held under resale agreements will expire between 0 year and 5 years (31 December 2023: between 0 year and 5 years).
(a)

Loans and advances to customers and other parties analysed by nature

As at 31 December
20242023
Loans and advances to customers and other parties at amortised cost
Corporate loans
– Loans 2,766,421 2,578,201
– Discounted bills 2,182 1,784
– Finance lease receivables 49,579 46,818
2,818,182 2,626,803
Personal loans
– Residential mortgages 1,067,339 1,003,320
– Credit cards 488,716 521,260
– Business loans 488,898 459,113
– Personal consumption 321,324 309,256
– Finance lease receivables 6,151 1,591
2,372,428 2,294,540
5,190,610 4,921,343
Accrued interest 21,889 20,188
5,212,499 4,941,531
Less: allowance for impairment losses (Note 48) (146,013) (139,679)
Carrying amount of loans and advances to customers and other parties at amortised cost 5,066,486 4,801,852
Loans and advances to customers and other parties at FVPL
Corporate loans:
– Loans 11,243 5,558
Personal loans:
– Finance lease receivables 369
Carrying amount of loans and advances to customers and other parties at FVPL 11,612 5,558
Loans and advances to customers and other parties at FVOCI
– Loans 76,022 58,064
– Discounted bills 446,951 514,666
Carrying amount of loans and advances to customers and other parties at FVOCI 522,973 572,730
Carrying amount of loans and advances 5,601,071 5,380,140
Allowance for impairment losses on loans and advances to customers and other parties at FVOCI (Note 48) (549) (656)

(b)

Assessment method of allowance for impairment losses

As at 31 December 2024
Stage 1 Stage 2 Stage 3 (note) Total
Loans and advances at amortised cost 5,001,735 115,693 73,182 5,190,610
Accrued interest 15,848 5,087 954 21,889
Less: allowance for impairment losses (62,545) (29,547) (53,921) (146,013)
Carrying amount of loans and advances at amortised cost 4,955,038 91,233 20,215 5,066,486
Carrying amount of loans and advances at FVOCI 522,356 460 157 522,973
Total carrying amount of loans and advances for which allowance for impairment losses is recognised 5,477,394 91,693 20,372 5,589,459
Allowance for impairment losses of loans and advances at FVOCI (545) (1) (3) (549)
As at 31 December 2023
Stage 1 Stage 2 Stage 3 (note) Total
Loans and advances at amortised cost 4,753,741 96,222 71,380 4,921,343
Accrued interest 19,120 411 657 20,188
Less: allowance for impairment losses(64,268) (27,217) (48,194) (139,679)
Carrying amount of loans and advances at amortised cost 4,708,593 69,416 23,843 4,801,852
Carrying amount of loans and advances at FVOCI 572,273345 112 572,730
Total carrying amount of loans and advances for which allowance for impairment losses is recognised 5,280,866 69,761 23,955 5,374,582
Allowance for impairment losses of loans and advances at FVOCI (586) (70) (656)
Notes:

Loans and advances at stage 3 are credit-impaired, details are as follows:

As at 31 December
20242023
Secured portion 34,281 34,988
Unsecured portion 39,058 37,161
Total loans and advances that are credit-impaired 73,339 72,149
Allowance for impairment losses (53,924) (48,264)
As at 31 December 2024, the maximum exposure covered by fair value of pledge and collateral held against these loans and advances amounted to RMB33,233 million (31 December 2023: RMB34,094 million).

The fair value of collateral was estimated by management based on the latest revaluation including available external valuation, if any, adjusted by taking into account the current realisation experience as well as market situation.

(c)

Overdue loans by overdue period

As at 31 December 2024
Overdue
within
3 months
Overdue
between
3 months
and 1 year
Overdue
between
1 year and
3 years
Overdue
over
3 years
Total
Unsecured loans29,714 13,407 2,174 3,525 48,820
Guaranteed loans 7,610 3,683 2,899 2,678 16,870
Secured loans
– Loans secured by collateral 12,846 10,965 9,216 2,071 35,098
– Pledged loans 3,220 1,570 1,716 137 6,643
53,390 29,625 16,005 8,411 107,431
As at 31 December 2023
Overdue
within
3 months
Overdue
between
3 months
and 1 year
Overdue
between
1 year and
3 years
Overdue
over
3 years
Total
Unsecured loans20,105 11,922 2,091 246 34,364
Guaranteed loans 1,558 4,243 2,600 1,018 9,419
Secured loans
– Loans secured by collateral 15,564 12,520 10,618 1,053 39,755
– Pledged loans 3,790 1,084 2,387 137 7,398
41,017 29,76917,696 2,454 90,936
Overdue loans represent loans of which the principal or interest are overdue one day or more.
As at 31 December
20242023
Margin accounts 140,626 118,137
Less: allowance for impairment losses (2,294) 609
Total 138,332 118,746
Margin accounts are funds that the Group lends to the customers for margin financing business.

As at 31 December 2024, the Group received collateral with fair value amounted to RMB411,308 million (31 December 2023: RMB395,675 million) in connection with its margin financing business.
(a)

Analysed by types

As at 31 December
20242023
Financial assets at amortised cost
Debt securities 920,106 869,969
Investment management products 20,162 22,908
Trust investment plans 176,543 194,110
Certificates of deposit and certificates of interbank deposit 1,095 1,064
Investments in creditor’s rights on assets 1,900 1,900
Others 3,354 2,087
1,123,160 1,092,038
Accrued interest 12,727 12,623
1,135,887 1,104,661
Less: allowance for impairment losses (Note 48) (27,728) (28,622)
1,108,159 1,076,039
Financial assets at FVPL
Debt securities 493,650 312,247
Investment management products 11,415 12,706
Trust investment plans 10,340 11,432
Certificates of deposit and certificates of interbank deposit 75,593 99,972
Wealth management products 9,114 6,161
Investment funds 519,063 553,540
Equity investments 237,300 258,178
Others 44,638 37,879
1,401,113 1,292,115
Debt investments at FVOCI (note (i))
Debt securities 889,068 934,693
Certificates of deposit and certificates of interbank deposit 29,868 25,872
918,936 960,565
Accrued interest 7,995 7,238
926,931 967,803
Equity investments at FVOCI (note (i)) 102,648 20,410
3,538,851 3,356,367
Allowance for impairment losses on debt investments at FVOCI (Note 48) (3,285) (3,284)
Notes:

(i)
Financial assets measured at FVOCI.
As at 31 December 2024
Equity instrumentsDebt instrumentsTotal
Cost/amortised cost 101,892 904,622 1,006,514
Accumulative fair value change in other comprehensive income 756 14,314 15,070
Accrued interest 7,995 7,995
Carrying amount 102,648 926,931 1,029,579
Allowance for impairment losses (Note 48) Not applicable (3,285) (3,285)
As at 31 December 2023
Equity instrumentsDebt instrumentsTotal
Cost/amortised cost 20,630 960,959 981,589
Accumulative fair value change in other comprehensive income (220) (394) (614)
Accrued interest 7,238 7,238
Carrying amount 20,410 967,803 988,213
Allowance for impairment losses (Note 48) Not applicable (3,284) (3,284)

(b)

Analysed by counterparties

As at 31 December
20242023
Issued by:
– Government 1,587,428 1,526,497
– Policy banks 41,628 75,992
– Banks and non-bank financial institutions 1,457,653 1,351,070
– Corporates 423,230 380,959
– Public entities 8,216 2,064
3,518,155 3,336,582
Accrued interest 20,696 19,785
3,538,851 3,356,367
– Listed in Hong Kong 81,978 91,807
– Listed outside Hong Kong 2,970,179 2,778,478
– Unlisted 465,998 466,297
3,518,155 3,336,582
Accrued interest 20,696 19,785
3,538,851 3,356,367
Bonds traded in China’s inter-bank bond market are “listed outside Hong Kong”.

(c)

Analysed by assessment method of allowance for impairment losses

As at 31 December 2024
Stage 1 Stage 2 Stage 3 Total
Gross carrying amount of investments in financial assets at amortised cost 1,064,868 9,121 49,171 1,123,160
Accrued interest 11,374 1,289 64 12,727
Less: allowance for impairment losses (2,390) (1,088) (24,250) (27,728)
Carrying amount of investments in financial assets at amortised cost 1,073,852 9,322 24,985 1,108,159
Gross carrying amount of debt investments in financial assets at FVOCI 918,145 125 666 918,936
Accrued interest 7,966 5 24 7,995
Carrying amount of debt investments in financial assets at FVOCI 926,111 130 690 926,931
Total carrying amount of investments in financial assets for which allowance for impairment losses is recognised 1,999,963 9,452 25,675 2,035,090
Allowance for impairment losses on debt investments in financial assets at FVOCI (2,051) (24) (1,210) (3,285)
As at 31 December 2023
Stage 1 Stage 2 Stage 3 Total
Gross carrying amount of investments in financial assets at amortised cost 1,036,744 6,081 49,213 1,092,038
Accrued interest 12,061 488 74 12,623
Less: allowance for impairment losses (3,384) (1,405) (23,833) (28,622)
Carrying amount of investments in financial assets at amortised cost 1,045,421 5,164 25,454 1,076,039
Gross carrying amount of debt investments in financial assets at FVOCI 958,971 664 930 960,565
Accrued interest 7,104 4 130 7,238
Carrying amount of debt investments in financial assets at FVOCI 966,075 668 1,060 967,803
Total carrying amount of investments in financial assets for which allowance for impairment losses is recognised 2,011,496 5,832 26,514 2,043,842
Allowance for impairment losses on debt investments in financial assets at FVOCI (2,221) (234) (829) (3,284)

As at 31 December
20242023
Trading deposits 62,418 58,682
Performance deposits 5,625 3,048
Credit deposits 172 452
68,215 62,182
The particulars of the principal subsidiaries are set out in Note 61.

The following table lists out the information relating to CITIC Bank, CITIC Securities, CITIC Heavy Industries Co. Ltd. (“CITIC Heavy Industries”), CITIC Telecom International Holdings Limited (“CITIC Telecom International”) and CITIC Resources Holdings Limited (“CITIC Resources”), which are listed subsidiaries of the Group and have material non-controlling interests. The summarised financial information below is before elimination of inter-group transactions and balances:
As at 31 December
CITIC
Bank
CITIC
Securities
CITIC
Heavy Industries
CITIC
Telecom International
CITIC
Resources
2024202320242023202420232024202320242023
Listed in:Hong Kong and ShanghaiHong Kong and ShanghaiShanghai Hong KongHong Kong
Percentage of non-controlling interests 32.70% 34.07% 80.16% 80.76% 35.62% 32.73% 42.46% 42.45% 40.50% 40.50%
Total assets 9,532,722 9,052,484 1,713,362 1,456,211 19,677 18,351 16,150 15,735 11,736 10,534
Mainly including:
Cash and deposits 469,108 497,517 116,494 109,773 2,061 1,202 1,492 1,564 1,881 1,345
Cash held on behalf of customers 315,761 239,019
Placements with banks and non-bank financial institutions 404,801 237,742
Derivative financial instruments 85,929 44,675 48,997 32,754 4103 66
Financial assets held under resale agreements 136,265 104,773 44,268 62,209
Loans and advances to customers and other parties 5,601,450 5,383,750
Margin accounts138,332 118,746
Investments in financial assets 2,620,870 2,592,906 861,773 715,744 505 505
Fixed assets 46,516 38,309 8,931 9,532 3,907 3,945 1,788 1,802 3,416 3,614
Right-of-use assets 11,035 10,643 2,166 15,699 31 55 427 411 52 44
Total liabilities (8,725,357) (8,317,809) (1,414,713) (1,181,983) (10,439) (10,113) (6,628) (5,890) (4,130) (3,428)
Mainly including:
Borrowings from central banks (124,151) (273,226)
Deposits from banks and non-bank financial institutions (968,492) (927,887)
Placements from banks and non-bank financial institutions (88,550) (86,327) (45,493) (53,623)
Customer brokerage deposits(362,449) (283,821)
Trade and other payables (198,183) (198,061) (2,897) (3,181) (780) (834) (691) (220)
Derivative financial instruments (81,162) (41,850) (53,954) (32,006)(12)
Financial assets sold under repurchase agreements (278,003) (463,018) (390,169) (283,346)
Deposits from customers (5,864,311) (5,467,657)
Bank and other loans (14,232) (7,957) (2,032) (2,266) (320) (319) (1,823) (1,622)
Lease liabilities (10,861) (10,245) (2,262) (2,429) (36) (58) (300)(308) (40) (37)
Net assets 807,365 734,675 298,649 274,228 9,238 8,238 9,522 9,845 7,606 7,106
Equity attributable to
– Ordinary shareholders of subsidiaries 684,316 602,281 292,990 268,867 9,043 8,017 9,924 9,747 7,485 7,034
– Non-controlling interests in subsidiaries 123,049 132,394 5,659 5,361 195 221 (402) 98 121 72
Carrying amount of non-controlling interests 346,820 337,591 246,504 225,723 3,416 2,845 3,530 4,236 3,152 2,921
Revenue 212,223 205,570 63,789 60,068 8,034 9,557 8,725 8,994 8,656 3,445
Profit for the year 69,468 68,062 22,428 20,379 355 394 845 1,127 554 557
Total comprehensive income for the year 82,382 73,637 22,590 21,455 310419 830 1,152 339 493
Profit attributable to non-controlling interests 23,317 23,878 18,572 16,976 114 136 368 489 243 262
Dividends paid to non-controlling interests1,124 10,871 9,887 6,935 52 16 375 354
Net cash (used in)/generated from operating activities (181,032) (918) 95,821 (34,133) 816 1,200 1,422 1,694 803 1,040
Net cash (used in)/generated from investing activities (29,532) 1,887 (74,264) (18,198) (340) (40) (273) (141) (469) 74
Net cash generated from/(used in) financing activities 220,803 (63,102) (15,362) 48,281 391 (1,692) (1,205) (1,711) (77) (1,304)
As at 31 December
20242023
Carrying value 115,759 118,049
Less: allowance for impairment losses (Note 48) (8,026) (8,258)
107,733 109,791
The particulars of the principal associates are set out in Note 61.

Summarised financial information of the material associates are disclosed below:
As at 31 December
China Overseas Land & Investment Limited  
CSC Financial Co., Ltd.
 
Ivanhoe Mines Ltd.
202420232024202320242023
Listed in:Hong KongHong Kong, Shanghai Canada
Gross amount of the associates
Total assets 931,267 945,892 566,418 522,752 50,247 44,285
Total liabilities (506,804) (530,692) (459,899) (425,226) (6,953) (10,538)
Net assets 424,463 415,200 106,519 97,526 43,294 33,747
Equity attributable to:
– Associates’ shareholders 403,244 395,306 106,469 97,478 44,004 34,191
– Non-controlling interests in associates 21,219 19,894 50 48 (710) (444)
424,463 415,200 106,519 97,526 43,294 33,747
For the year ended 31 December
China Overseas Land & Investment Limited  
CSC Financial Co., Ltd.
 
Ivanhoe Mines Ltd.
202420232024202320242023
Revenue 185,154 202,524 32,216 33,979 291
Profit for the year 17,701 26,602 7,236 7,047 1,577 2,247
Other comprehensive (loss)/income for the year (801) (284) 598 271 498 432
Total comprehensive income for the year 16,900 26,318 7,834 7,318 2,075 2,679
Dividends received from associates 749 740 210 196
Reconciled to the Group’s interests in associates
Net assets of associates attributable to the associates’ ordinary shareholders 403,244 395,30676,64372,571 44,004 34,191
The Group’s effective interest 10.01% 10.01% 9.47% 9.47% 22.34% 24.81%
The Group’s share of net assets of associates attributable to the ordinary shareholders 40,365 39,570 7,258 6,872 9,830 8,483
Goodwill and others 1,452 1,266 6,085 6,164 (151) (157)
Impairment of interests in associates (3,669) (3,539)
Carrying amounts in the consolidated statement of financial position 38,148 37,297 13,343 13,036 9,679 8,326
Quoted fair value 14,608 13,661 18,913 11,257 26,965 21,710
Notes:

Aggregate information of associates that are not individually material:


As at 31 December
20242023
Aggregate carrying amount of individually immaterial associates in the consolidated statement of financial position 46,563 51,132
Aggregate amount of the Group’s share of those immaterial associates:
Profit for the year 1,725 2,091
Other comprehensive income/(loss) for the year 126 (32)
Total comprehensive income for the year 1,851 2,059
As at 31 December
20242023
Carrying value 68,738 58,305
Less: allowance for impairment losses (Note 48) (1,783) (1,518)
66,955 56,787
The particulars of the principal joint ventures are set out in Note 61.

Summarised financial information of the material joint ventures are disclosed below:
As at 31 December
CITIC-Prudential Life Insurance Co., Ltd. China Shipbuilding Properties Co., Ltd.Shanghai Ruibo Real Properties Co., Ltd.
202420232024202320242023
Gross amount of the joint ventures
Total assets 264,757 236,287 16,645 16,260 31,420 33,221
Total liabilities (252,250) (225,093) (9,022) (8,819) (22,241) (24,223)
Net assets 12,507 11,194 7,623 7,441 9,179 8,998
Equity attributable to:
– Joint ventures’ shareholders 12,507 10,577 7,623 7,441 9,179 8,998
– Non-controlling interests in joint ventures 617
12,507 11,194 7,623 7,441 9,179 8,998
Revenue 15,345 11,952 281 533 2,362 3,662
Profit for the year 96 1,132 181 168 181 435
Other comprehensive loss for the year (664) (6,238)
Total comprehensive (loss)/income for the year (568) (5,106) 181 168 181 435
Dividends received from joint ventures 626
Reconciled to the Group’s interests in joint ventures
Net assets of joint ventures attributable to joint ventures’ ordinary shareholders 12,507 10,577 7,623 7,441 9,179 8,998
The Group’s effective interest 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
The Group’s share of net assets of joint ventures attributable to the ordinary shareholders 6,254 5,289 3,812 3,721 4,590 4,499
Goodwill and others 1,137 1,156 892 874 298 253
Carrying amount in the consolidated statement of financial position 7,391 6,445 4,704 4,595 4,888 4,752
Aggregate information of joint ventures that are not individually material:
As at 31 December
20242023
Aggregate carrying amount of individually immaterial joint ventures in the consolidated statement of financial position 49,972 40,995
Aggregate amount of the Group’s share of individually immaterial joint ventures
Profit for the year 2,200 2,763
Other comprehensive loss for the year (150) (586)
Total comprehensive income for the year 2,050 2,177
Property, plant and equipment
Plant and
buildings
Machinery
and
equipment
Construction
in progress
Office
and other
equipment
Vehicles and
vessels
Others Total Investment
properties
Cost or valuation:
At 1 January 2024 106,038 192,063 20,046 28,501 14,747 10,849 372,244 38,153
Exchange adjustments 91 1,149 7 94 55 197 1,593 252
Business combinations 4 4
Additions 3,290 2,862 9,848 12,528 651 112 29,291 4,956
Disposals (4,023) (17,954) (439) (2,349) (1,514) (2,592) (28,871) (427)
Transfers 7,198 5,860 (11,801) 202 61 558 2,078 (2,078)
Changes in fair value of investment properties (165)
At 31 December 2024 112,598 183,980 17,661 38,976 14,000 9,124 376,339 40,691
Accumulated depreciation, amortisation and impairment losses:
At 1 January 2024 (30,244) (102,531) (537) (14,422) (6,433) (7,358) (161,525)
Exchange adjustments (108) (249) (41) (20) (103) (521)
Charge for the year (4,157) (10,663) (3,805) (1,042) (524) (20,191)
Disposals 3,576 17,386 6 1,623 804 622 24,017
Impairments (losses)/reversals (Note 48) (37) (144) 22 (22) 114 (67)
At 31 December 2024 (30,970) (96,201) (509) (16,645) (6,713) (7,249) (158,287)
Net book value:
At 31 December 2024 81,628 87,779 17,152 22,331 7,287 1,875 218,052 40,691
Represented by:
Cost 112,598 183,980 17,661 38,976 14,000 9,124 376,339 Not applicable
Valuation 40,691
112,598 183,980 17,661 38,976 14,000 9,124 376,339 40,691
Property, plant and equipment
Plant and
buildings
Machinery
and
equipment
Construction
in progress
Office
and other
equipment
Vehicles and
vessels
Others Total Investment
properties
Cost or valuation:
At 1 January 2023 94,467 149,277 19,662 20,409 13,881 9,584 307,280 35,407
Exchange adjustments 369 1,626 (252) 59 57 121 1,980 185
Business combinations 9,661 30,714 5,870 659 482 5 47,391 220
Additions 563 7,055 7,690 7,846 662 1,049 24,865 693
Disposals (1,676) (1,632) (790) (1,120) (909) (999) (7,126) (341)
Transfers 2,654 5,023 (12,134) 648 574 1,089 (2,146) 2,146
Changes in fair value of investment properties (157)
At 31 December 2023 106,038 192,063 20,046 28,501 14,747 10,849 372,244 38,153
Accumulated depreciation, amortisation and impairment losses:
At 1 January 2023 (27,378) (95,486) (537) (12,248) (6,135) (5,693) (147,477)
Exchange adjustments (197) (1,021) (38) (27)(77) (1,360)
Charge for the year (3,549) (7,695) (2,988) (837) (1,692) (16,761)
Disposals 883 1,239 20 855 629 109 3,735
Impairments (losses)/reversals (Note 48)(3)432(20)(3)(63)(5)338
At 31 December 2023 (30,244) (102,531) (537) (14,422) (6,433) (7,358) (161,525)
Net book value:
At 31 December 202375,79489,53219,50914,0798,3143,491210,71938,153
Represented by:
Cost106,038192,06320,04628,50114,74710,849372,244Not applicable
Valuation38,153
106,038192,06320,04628,50114,74710,849372,24438,153
As at 31 December 2024, the Group was in the process of applying the ownership certificates in respect of certain premises of RMB967 million (31 December 2023: RMB955 million). The Group anticipates that there would be no significant issues and costs in completing such procedures.

(a)

Fair value measurement of investment properties

(i)

Property valuation

Investment properties were revalued by the following independent professionally qualified valuers. Management of the Group had discussions with the valuers on the valuation assumptions and valuation results when the valuation is performed at each financial position date.
 
Properties located in Valuers in 2023
Chinese mainland and Hong KongChina Enterprise Appraisals Consultation Co., Ltd.
Knight Frank Petty Limited
China United Assets Appraisal Group
Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited
Pan-China Assets Appraisal Co.,Ltd.
ZhongHe Appraisal Co., Ltd.
Centaline Surveyors Limited
OverseasJones Lang LaSalle Corporate Appraisal and Advisory Company Limited
Network Real Estate Appraisal Co., Ltd.
 
Properties located in Valuers in 2023
Chinese mainland and Hong KongChina Enterprise Appraisals Consultation Co., Ltd.
Knight Frank Petty Limited
China United Assets Appraisal Group
Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited
Pan-China Assets Appraisal Co.,Ltd.
ZhongHe Appraisal Co., Ltd.
Centaline Surveyors Limited
Prudential Surveyors (Hong Kong) Limited
Martin Reynolds AAPI MRICS
Savills
Overseas Jones Lang LaSalle Corporate Appraisal and Advisory Company Limited

(ii)

Fair value hierarchy

The following table presents the fair value of the Group’s investment properties measured at the financial position dates on a recurring basis, categorised into the three-level hierarchy as defined in HKFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:

Level 1 valuations:

Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 valuations:

Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available;

Level 3 valuations:

Fair value measured using significant unobservable inputs.

Level 3
For the year ended 31 December
20242022
Recurring fair value measurement
Investment properties – Chinese mainland
At 1 January 25,954 23,815
Exchange adjustments (2) 5
Business combinations 219
Additions 4,799 355
Disposals (421) (301)
Transfers (2,031) 2,098
Changes in fair value of investment properties (198) (237)
At 31 December 28,101 25,954
Investment properties – Hong Kong
At 1 January 11,706 11,094
Exchange adjustments 280162
Additions 136 338
Disposals (10)
Transfers (47) 48
Changes in fair value of investment properties 31 74
At 31 December 12,106 11,706
Investment properties – Overseas
At 1 January 493 498
Exchange adjustments (26) 18
Business combinations 1
Additions 21
Disposals (6) (30)
Changes in fair value of investment properties 2 6
At 31 December 484 493
L
)
The Group’s policy is to recognise transfers between levels of fair value hierarchy at the financial position date in which they occur. During the year ended 31 December 2024, there were no Level 1 and Level 2 fair value hierarchy (2023: Nil) and no transfers into or out of Level 3 (2023: Nil).

(iii)

Valuation techniques and inputs used in Level 3 fair value measurements

The fair value of investment properties located in Chinese mainland is determined by using income capitalisation approach and depreciated replacement cost approach under the circumstances.

The income capitalisation approach is the sum of the term value and the reversionary value by discounting the contracted annual rent at the capitalisation rate over the existing lease period; and the sum of average unit market rent at the capitalisation rate after the existing lease period.

Depreciated replacement cost values a property by taking into account of its current cost of replacement or reproduction, less deduction for physical deterioration and all relevant forms of obsolescence and optimisation. The fair value measurement is based on an estimate of the market value for the existing use of the land, plus the depreciated replacement cost.

The fair value of certain investment properties located in Hong Kong is determined using market comparison approach by reference to recent sales price of comparable properties on a price per square foot basis, adjusted for a premium or a discount specific to the quality of the Group’s buildings compared to the recent sales. Higher premium for higher quality buildings will result in a higher fair value measurement.

The fair value of other investment properties located in Hong Kong is determined by using income capitalisation approach and with reference to sales evidence as available in the market.
(a)

Intangible assets

The Group’s intangible assets mainly include computer software and data resources. As at 31 December 2024, in accordance with the Notice on Promulgation of the Interim Provisions on Accounting Treatment for Enterprise Data Resources issued by the Ministry of Finance, the original value of data resources recognised as intangible assets was RMB16.15 million, the accumulated amortisation was RMB0.89 million, and the net carrying amount was RMB15.26 million.

(b)

Goodwill

For the year ended 31 December
20242023
Cost:
At 1 January 32,236 31,757
Additions 282
Disposals
Exchange differences and others 645 197
At 31 December 32,881 32,236
Accumulated impairment losses:
At 1 January (6,160) (6,134)
Additions (Note 48) (17) (26)
Disposals
Exchange differences and others 40
At 31 December (6,137) (6,160)
Net book value:
At 31 December 26,744 26,076
Goodwill is allocated to the Group’s cash-generating units identified in segments as follows:
As at 31 December
20242023
Comprehensive financial services 12,838 12,783
Advanced intelligent manufacturing 975 981
Advanced materials 954 512
New consumption 11,371 11,190
New-type urbanisation 606 610
26,744 26,076
In conducting goodwill impairment test, the carrying value of goodwill is allocated to the cash-generating units or groups of cash-generating units which are expected to benefit from the synergies of the business combination. The recoverable amount of the cash-generating units or groups of cashgenerating units is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. The corresponding impairment loss of the cash-generating units or groups of cash-generating units will not be recognised if either the fair value less costs to sell or the present value of the future cash flows expected to be derived from the asset is higher than the carrying value.

For the comprehensive financial service segment, the Group included CITIC Securities in the consolidation scope, generating goodwill of RMB11,430 million since April 2022. As at 31 December 2024, the Group allocated such goodwill to CITIC Securities for impairment test, and evaluated whether it was impaired based on the present value of the expected future cash flows. The management determined the growth rate based on historical experience and forecasts of market development. The growth rate of the forecast period was determined according to the budget approved by management, and growth rate of 2% for the stable period was used after the forecast period. The Group adopted 13.48%, which could reflect the overall risks of CITIC Securities, as the pre-tax discount rate. As the calculation showed, the goodwill arising from consolidation of CITIC Securities had not been impaired.

Among the total book value of the Group’s goodwill, an amount of RMB8,806 million was generated from acquisition of subsidiaries by CITIC Telecom International. The recoverable amounts of the groups of cash-generating units are determined based on value-in-use calculations which is higher than the carrying amount. The calculations use cash flow projections based on financial budgets approved by management covering a three-year period. For the subsequent two years of the model, data from the financial budgets is extrapolated generally using simplified assumptions such as macro-economic and industry assumptions. Cash flows after the first five-year period are extrapolated generally using expected annual long-term growth rates, in order to calculate the terminal value. Key assumptions used for the value-in-use calculations are as follows:
20242023
Telecom services revenue growth rates 0.1% ~ 2.8% -8.2% ~ 2.4%
Long-term growth rates 3.0% 3.0%
Pre-tax discount rates 9.2% ~ 10.5% 10.7% ~ 12.5%
The average services revenue growth rates and long-term growth rates used for the respective groups of cash-generating units are based on past performance and management’s expectation for market development. The discount rates used are pre-tax and reflect specific risks relating to the respective groups of cash-generating units. Any adverse change in the key assumptions could reduce the recoverable amount below carrying amount.

For the new-type urbanisation segment, RMB4,801 million in the original carrying amount of the Group’s goodwill was generated from acquisition of a subsidiary of CITIC Environment Investment Group Co., Ltd. (“CITIC Environment”), and an impairment loss of RMB4,323 million was provided in 2022. As at 31 December 2024, management evaluated whether the goodwill has been impaired using the present value of the expected future cash flows. After testing, the goodwill is not further impaired in 2024.
(a)

Current income tax in the statement of financial position represents:

As at 31 December
20242023
Income tax payable 12,376 9,234
(b)

Deferred tax assets/(liabilities) recognised:

The components of deferred tax assets recognised in the consolidated statement of financial position and the movements during the years ended 31 December 2024 and 2023, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:
Tax losses Accrued
expenses
Impairment
loss on
assets other
than fixed
assets and
intangible
assets
Fair value
changes of
financial
instruments
Fixed
assets and
intangible
assets
Others Total
Deferred tax assets
At 1 January 2023 12,666 8,915 57,208 4,294 2,589 3,737 89,409
Charged to profit or loss 155 1,940 (166) (2,416) (560) (439) (1,486)
Charged to other comprehensive income 12 (4) 49 7 190 254
Business combinations 637 202 32 600 1,471
Exchange adjustments and others 180 (5) 55 9 10 (16) 233
At 31 December 202313,63811,06457,1251,9362,0464,07289,881
At 1 January 2024 13,638 11,064 57,125 1,936 2,046 4,072 89,881
Charged to profit or loss 35310 4,642 1,585 (1,042) 404 5,934
Charged to other comprehensive income6(112) (73) (11) (58) (248)
Business combinations(1)(1)
Exchange adjustments and others 475 (224) (250) (142) 701 (447) 113
At 31 December 2024 14,147 11,156 61,405 3,306 1,694 3,971 95,679
The components of deferred tax liabilities recognised in the consolidated statement of financial position and the movements during the years ended 31 December 2024 and 2023, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:
Fair value
changes of
financial
instruments
Temporary
differences on
fixed assets
and intangible assets
Revaluation
of investment
properties
Others Total
Deferred tax liabilities
At 1 January 2023 (4,275) (3,465) (3,741) (7,251) (18,732)
Charged to profit or loss (148) (184) 180 (107) (259)
Charged to other comprehensive income (1,833) (5) (1) (316) (2,155)
Business combinations (586) (659) (1,196) (2,441)
Exchange adjustments and others 237 5 (103) 147 286
At 31 December 2023 (6,019) (4,235) (4,324) (8,723) (23,301)
At 1 January 2024 (6,019) (4,235) (4,324) (8,723) (23,301)
Charged to profit or loss (1,106) 917 (48) (1,332) (1,569)
Charged to other comprehensive income (3,736) 7 150 (3,579)
Business combinations 1 1
Exchange adjustments and others 4 456 659 (1,109) 10
At 31 December 2024 (10,857) (2,855) (3,713) (11,013) (28,438)
As at 31 December 2024, the deferred tax assets/liabilities offset by the Group were RMB10,717 million (31 December 2023: RMB6,554 million).

(c)

Deductible temporary difference and tax losses not recognised as deferred tax assets

The Group has not recognised any deferred tax assets in respect of the following items:
As at 31 December
20242023
Deductible temporary differences 13,673 10,683
Tax losses 23,257 28,923
36,930 39,606
It is not probable that future taxable profits against which the above deductible temporary differences and tax losses can be utilised by the Group. As at 31 December 2024, tax losses amounting to RMB14,854 million (31 December 2023: RMB22,239 million) that can be carried forward against future taxable income are expiring within 5 years.
As at 31 December
20242023
Banks349,456 275,313
Non-bank financial institutions 583,403 614,494
932,859 889,807
Accrued interest 2,300 3,758
935,159 893,565
Analysed by remaining maturity:
– On demand 505,262 478,396
– Within 3 months 355,709273,634
– Between 3 months and 1 year 71,888 137,777
932,859 889,807
Accrued interest 2,300 3,758
935,159 893,565
As at 31 December
20242023
Banks 144,748 139,455
Non-bank financial institutions 771 10,650
145,519 150,105
Accrued interest 125 388
145,644 150,493
Analysed by remaining maturity:
– Within 3 months 99,229 99,872
– Between 3 months and 1 year 42,636 47,005
– Over 1 year 3,654 3,228
145,519 150,105
Accrued interest 125 388
145,644 150,493
As at 31 December
20242023
Not designated
Debt instruments 24,253 7,302
Stocks 9,528 10,050
Non-controlling interests in consolidated structured entities and others 463 1,158
34,244 18,510
Financial liabilities designated at fair value through profit or loss
Stocks 47
Beneficiary certificates and structured notes 88,014 64,280
Non-controlling interests in consolidated structured entities and others 4,882 5,715
92,896 70,042
127,140 88,552
In 2024, there were no significant changes in the fair value of financial liabilities designated as at fair value through profit or loss due to the changes in credit risks of the Group (2023: None).
As at 31 December
20242023
Customer brokerage deposits 361,926 282,534
Customer brokerage deposits represent the amount received from and repayable to customers arising from the ordinary course of the Group’s securities brokerage activities.
As at 31 December
20242023
Financial liabilities
Trade and bills payables 106,231 113,124
Settlement accounts 30,860 32,535
Client deposits payable 134,310 134,850
Dividends payable 4,639 1,411
Other payables 101,588 104,119
377,628 386,039
Non-financial liabilities
Advances 264 308
Other taxes payables 8,004 5,601
8,268 5,909
385,896 391,948
At the financial position date, the ageing analysis of the Group’s trade and bills payables based on the invoice date is as follows:
As at 31 December
20242023
Within 1 year 82,196 93,670
Between 1 and 2 years 7,278 4,997
Between 2 and 3 years 2,809 2,629
Over 3 years 13,948 11,828
106,231 113,124
As at 31 December
20242023
By counterparties
The People’s Bank of China 196,732 391,152
Banks 210,420 194,182
Non-bank financial institutions 56,250 37,939
Others 208,451 121,105
671,853 744,378
Accrued interest 234 193
672,087 744,571
By types of collateral
Debt securities 483,566 553,472
Discounted bills 76,732 93,212
Stocks 46,493 31,624
Precious metals 13,524 19,197
Others 51,538 46,873
671,853 744,378
Accrued interest 234 193
672,087 744,571
The Group did not derecognise financial assets transferred as collateral in connection with repurchase agreements. As at 31 December 2024, legal title of these collateral pledged has not been transferred to counterparties (31 December 2023: Not been transferred).
(a)

Types of deposits from customers

As at 31 December
20242023
Demand deposits
Corporate customers 1,965,191 2,149,823
Personal customers 439,965 340,432
2,405,156 2,490,255
Time and call deposits
Corporate customers 2,066,876 1,755,882
Personal customers 1,221,680 1,125,384
3,288,556 2,881,266
Outward remittance and remittance payables 68,167 19,022
Accrued interest 86,060 69,450
5,847,939 5,459,993

(b)

Deposits from customers include pledged deposits for the following items:

As at 31 December
20242023
Bank acceptances 465,680 407,634
Letters of credit 43,450 23,736
Guarantees 21,411 21,005
Others 30,284 38,651
560,825 491,026
(a)

Types of loans

As at 31 December
20242023
Bank loans
Unsecured loans 177,750 153,804
Loan pledged with assets (note (d)) 24,503 42,996
202,253 196,800
Other loans
Unsecured loans 39,352 36,091
Loan pledged with assets (note (d)) 3,250 2,241
42,602 38,332
244,855 235,132
Accrued interest 711 638
245,566 235,770

(b)

Maturity of loans

As at 31 December
20242023
Bank loans
– Within 1 year or on demand 97,500 54,033
– Between 1 and 2 years 45,055 60,670
– Between 2 and 5 years 36,892 49,774
– Over 5 years 22,806 32,323
202,253 196,800
Other loans
– Within 1 year or on demand 1,616 2,803
– Between 1 and 2 years 32,827 1,373
– Between 2 and 5 years 5,546 34,113
– Over 5 years 2,613 43
42,602 38,332
244,855 235,132
Accrued interest 711 638
245,566 235,770

(c)

Bank and other loans are denominated in the following currencies

As at 31 December
20242023
RMB 122,112 88,766
US$ 55,846 55,247
HK$ 65,400 76,150
Other currencies 1,497 14,969
244,855 235,132
Accrued interest 711 638
245,566 235,770

(d)

As at 31 December 2024, the Group’s bank and other loans of RMB27,753 million (31 December 2023: RMB45,236 million) are pledged with cash and deposits, trade and other receivables, inventories, financial assets held for trading, fixed assets, right of use assets and intangible assets with an aggregate carrying amount of RMB83,859 million (31 December 2023: RMB88,451 million).


(e)

The Group’s banking facilities are subject to the fulfilment of covenants relating to balance sheet ratios or ownership of a minimum shareholding in certain entities of the Group, as are commonly found in lending arrangements with financial institutions. If the Group were to breach the covenants, the drawn down facilities would become payable on demand. The Group regularly monitors its compliance with these covenants. Further details of the Group’s management of liquidity risk are set out in Note 50(b). As at 31 December 2024, none of the covenants relating to drawn down facilities have been breached (31 December 2023: Nil).


(f)

The Group has entered into supplier financing arrangements with banks to extend credit for amounts owed to certain suppliers. These banking facilities are secured by a letter of comfort from a subsidiary company, and the banks pay the suppliers immediately upon receipt of the bill of lading. As of 31 December 2024, the balances of the financial liabilities under these arrangements amounted to RMB880 million, and since the payments made by banks to suppliers are classified as non-cash transactions, the Group has not presented them in the consolidated cash flow statement. The carrying amount of the repayments of trade financing loans amounted to RMB6,885 million in 2024.

As at 31 December
20242023
Corporate bonds issued 217,194 233,290
Notes issued 226,962 151,813
Subordinated bonds issued 83,120 82,569
Certificates of deposit issued 1,460 1,418
Certificates of interbank deposit issued 930,954 705,273
Convertible corporate bonds (note (a)) 11,246 17,670
Beneficiary certificates 19,166 21,547
1,490,102 1,213,580
Accrued interest 7,036 7,527
1,497,138 1,221,107
Analysed by remaining maturity:
– Within 1 year or on demand 1,098,235 828,068
– Between 1 and 2 years 99,482 121,781
– Between 2 and 5 years 154,731 136,498
– Over 5 years 137,654 127,233
1,490,102 1,213,580
Accrued interest 7,036 7,527
1,497,138 1,221,107
The Group did not have any defaults of principal, interest or other breaches with respect to its debt instruments issued for the year ended 31 December 2024 (2023: Nil).

(a)

Convertible corporate bonds

As approved by the relevant regulatory authorities in China, CITIC Bank made a public offering of RMB40,000 million A-share convertible corporate bonds (the “convertible bonds”) on 4 March 2019. CITIC Corporation Limited (“CITIC Corporation”), as its parent company, has subscribed RMB26,388 million, 65.97% of the total corporate bonds, which is the same percentage of the Group’s interest in CITIC Bank’s common shares, and it was transferred to CITIC Financial Holdings Co., Ltd. (“CITIC Financial Holdings”) at nil consideration on 22 June 2022. As at 29 March 2024, the convertible bonds held by CITIC Financial Holdings was converted to CITIC Bank’s A-share common stock. The convertible bonds of CITIC Bank have a term of six years from 4 March 2019 to 3 March 2025, at coupon rates of 0.3% for the first year, 0.8% for the second year, 1.5% for the third year, 2.3% for the fourth year, 3.2% for the fifth year and 4.0% for the sixth year. The conversion of these convertible bonds begins on the first trading day (8 March 2019) after six months upon the completion date of the offering until the maturity date (from 11 September 2019 to 3 March 2025). As at 31 December 2024, convertible bonds (including accrued interest) were recorded as debt instruments issued of RMB7,271 million and non-controlling interests of RMB551 million, respectively.

As approved by the relevant regulatory authorities in China, CITIC Pacific Special Steel, the Group’s subsidiary, made a public offering of RMB5,000 million A-share convertible corporate bonds (the “convertible bonds”) on 25 February 2022. The convertible bonds of CITIC Pacific Special Steel have a term of 6 years from 25 February 2022 to 24 February 2028, at coupon rates of 0.2% for the first year, 0.4% for the second year, 0.9% for the third year, 1.3% for the fourth year, 1.6% for the fifth year and 2.0% for the sixth year. The conversion of these convertible bonds begins on the first trading day (3 March 2022) after six months upon the completion date of the offering until the maturity date (from 5 September 2022 to 24 February 2028). As at 31 December 2024, convertible bonds (including accrued interest) were recorded as debt instruments issued of RMB4,178 million and non-controlling interests of RMB693 million, respectively.
Environmental
restoration
expenditures
OthersTotal
Provisions (excluding impairment provision of credit commitments and guarantees provided)
At 1 January 2023 1,695 4,286 5,981
Exchange differences and others 35 (2) 33
Reversal for the year (190) (575) (765)
Payments made during the year (1,615) (1,615)
At 31 December 2023 1,540 2,094 3,634
At 1 January 2024 1,540 2,094 3,634
Exchange differences and others (88) (4) (92)
Charge for the year 72 1,251 1,323
Payments made during the year (1,666) (1,666)
At 31 December 2024 1,524 1,675 3,199
 
Impairment provision of credit commitments and guarantees provided Total
At 1 January 2023 11,429
Exchange differences and others 27
Additions 1,040
At 31 December 2023 12,496
At 1 January 2024 12,496
Exchange differences and others 329
Reversal for the year (2,223)
At 31 December 2024 10,602
Total
At 31 December 2023 16,130
At 31 December 2024 13,801
(a)

Share capital

As at 31 December 2024, the number of ordinary shares in issue of the Company was 29,090,262,630 (31 December 2023: 29,090,262,630).

(b)

Nature and purpose of reserves

(i)

Capital reserve

Considerations paid to acquire subsidiaries under common control, for instance, in 2014, a total consideration of RMB226,996 million paid by the Company to acquire the shares of CITIC Corporation, are debited against the capital reserve in the Group’s consolidated financial statements. In addition, gains or losses from transactions with non-controlling interests are directly debited or credited to the capital reserve in the Group’s consolidated financial statements.

(ii)

Hedging reserve

The hedging reserve comprises the effective portion of the hedging instruments used in cash flow hedging and the accumulated net change in fair value, and the cash flow hedging are measured subsequently in accordance with the relevant accounting policies set out in Note 2(k)(ii).

(iii)

Investment related reserves

The investment related reserves comprise the cumulative net change in the fair value of investments in financial assets at FVOCI until the financial assets are derecognised and share of other comprehensive income of associates and joint ventures, and are dealt with in accordance with the accounting policies set out in Note 2(j)(i) and Note 2(g), respectively.

(iv)

General reserve

Pursuant to the relevant notices issued by regulatory bodies, certain subsidiaries under comprehensive financial services segment in Chinese mainland are required to set aside a general reserve to cover potential losses.

(v)

Exchange reserve

The exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of overseas operations as well as the effective portion of any foreign exchange differences arising from hedges of the net investment in these operations. The reserve is dealt with in accordance with the accounting policies set out in Note 2(i).


(c)

Capital management

The Group’s primary objectives when managing capital are to safeguard the Group’s stability and growth, so that it can continue to provide returns for shareholders.

The Group actively and regularly reviews and manages its capital structure, with reference to such financial ratios like debt (total of debt instruments issued and bank and other loans) to total equity ratio, to maintain a balance between the higher shareholders’ returns that might be possible with of borrowings obtained 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.

Certain subsidiaries under comprehensive financial services segment are subject to capital adequacy requirements imposed by the external regulators. There was no non-compliance of capital requirements as at 31 December 2024 (31 December 2023: Nil).

For the year ended 31 December 2024
At 1 January Charge/
(reversal)
Write-offs/
transfer out
Exchange
differences
and others
(note (i))
At 31
December
Allowances for expected credit losses
Deposits and placements with banks and non-bank financial institutions (Notes 19 and 21) 202 41 2 245
Receivables (excluding prepayments) and others (note (ii)) 27,929 3,501 (6,160) 1,403 26,673
Loans and advances to customers and other parties (Note 27) 139,655 54,828 (61,310) 12,762 145,935
Investments in financial assets (Note 29)
– Financial assets at amortised cost 28,584 2,418 (3,292) (19) 27,691
– Debt investments at FVOCI 3,284 777 (797) 21 3,285
Credit commitments and guarantees provided (Note 46) 12,496 (2,182) (41) 329 10,602
212,150 59,383 (71,600) 14,498 214,431
Allowances for impairment losses
Inventories (Note 25) 10,042 1,466 (546) 28 10,990
Interests in associates (Note 32) 8,258 136 (683) 315 8,026
Interests in joint ventures (Note 33) 1,518 233 32 1,783
Fixed assets (Note 34) 43,048 67 (512) 859 43,462
Intangible assets 15,134 19 316 15,469
Prepayments (Note 23) 100 28 (6) 11 133
Goodwill (Note 35) 6,160 17 (40) 6,137
Other assets 2,341 61 (74) 6 2,334
86,601 2,027 (1,821) 1,527 88,334
298,751 61,410 (73,421) 16,025 302,765
For the year ended 31 December 2023
At 1 January Charge/
(reversal)
Write-offs/
transfer out
Exchange
differences
and others
(note (i))
At 31
December
Allowances for expected credit losses
Deposits and placements with banks and non-bank financial institutions (Notes 19 and 21) 238 (39) 3 202
Receivables (excluding prepayments) and others (note (ii)) 21,093 11,324 (5,143) 655 27,929
Loans and advances to customers and other parties (Note 27) 137,711 49,572 (61,894) 14,266 139,655
Investments in financial assets (Note 29)
– Financial assets at amortised cost 31,532 2,467 (5,501) 86 28,584
– Debt investments at FVOCI 3,069 1,250 (1,488) 4533,284
Credit commitments and guarantees provided (Note 46) 11,429 1,041 (1) 27 12,496
205,072 65,615 (74,027) 15,490 212,150
Allowances for impairment losses
Inventories (Note 25) 6,514 3,403 (214) 339 10,042
Interests in associates (Note 32) 7,923 635 (431) 131 8,258
Interests in joint ventures (Note 33) 1,342 176 1,518
Fixed assets (Note 34) 42,521 (338) (33) 898 43,048
Intangible assets 14,927 (7) 214 15,134
Prepayments (Note 23) 77 23 100
Goodwill (Note 35) 6,134 26 6,160
Other assets 1,933 846 (539) 101 2,341
81,371 4,595 (1,224) 1,859 86,601
286,443 70,210 (75,251) 17,349 298,751
Notes:

(i)
Others include recovery of loans written off.

(ii)
Movement of allowances for impairment losses for accrued interest of loans and advances to customers and other parties, investments in financial assets are included in others.
(a)

Credit commitments

Credit commitments in connection with the Group take the form of loan commitments, credit card commitments, guarantees, letters of credit and acceptances.

Loan commitments and credit card commitments represent the undrawn amount of approved loans with signed contracts and credit card limits. Financial guarantees and letters of credit represent guarantees provided by the Group to guarantee the performance of customers to third parties. Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects the majority acceptances to be settled simultaneously with the reimbursement from the customers.

The contractual amounts of credit commitments by category as at the financial position date are set out below. The amounts disclosed in respect of loan commitments and credit card commitments assume that amounts are fully drawn down. The amounts of guarantees, letters of credit and acceptances represent the maximum potential loss that would be recognised as at the financial position date if counterparties failed to perform as contracted.
As at 31 December
20242023
Contractual amount
Loan commitments
With an original maturity of within 1 year 16,885 13,995
With an original maturity of 1 year or above 37,179 32,773
54,064 46,768
Credit card commitments 812,562 779,947
Acceptances 852,758 866,662
Letters of credit 322,670 256,241
Guarantees 272,468 237,037
2,314,522 2,186,655

(b)

Credit commitments analysed by credit risk weighted amount

As at 31 December
20242023
Credit risk weighted amount on credit commitments 679,525 602,231
Notes:

(i)
The above credit risk weighted amount is solely in connection with the credit commitments held by CITIC Bank under the comprehensive financial services segment of the Group.

(ii)
The credit risk weighted amount refers to the amount as computed in accordance with the rules set out by the NFRA and depends on the status of counterparties and the maturity characteristics. The risk weighting used is ranging from 0% to 150%.

(c)

Redemption commitment for treasury bonds

As an underwriting agent of PRC treasury bonds, CITIC Bank has the responsibility to buy back those bonds sold by it, should the holders decide to early redeem the bonds held. The redemption price for the bonds at any time before their maturity dates is based on the nominal value plus any interest unpaid and accrued up to the redemption date. Accrued interest payables to the treasury bond holders are calculated in accordance with relevant rules of the Ministry of Finance and the People’s Bank of China. The redemption price may be different from the fair value of similar instruments traded at the redemption date.

The redemption obligations below represent the nominal value of treasury bonds underwritten and sold by the Group, but not yet matured at the financial position date:
As at 31 December
20242023
Redemption commitment for treasury bonds 2,615 2,735
The original terms of the above treasury bonds range from one to five years. The Group believes that the amount of treasury bonds accepted in advance before the maturity date is insignificant. The Ministry of Finance will not timely pay the treasury bonds which are accepted in advance, but will pay the principal and interest according to the issuance agreement when the treasury bonds mature.

(d)

Guarantees provided

Except for guarantees that have been recognised as liabilities, the guarantees issued by the Group at the financial position date are as follows:
As at 31 December
20242023
Related parties (note) 6,835 7,344
Third parties 2,153 3,600
8,988 10,944
As at financial position date, the counter guarantees issued to the Group by related parties and third parties mentioned above are as follows:
As at 31 December
20242023
Related parties (note) 1,600 1,114
Third parties 155
1,600 1,269
Note:

As at 31 December 2024, the guarantees provided to related parties by the Group include guarantees provided to former subsidiaries of the Group that were disposed to China Overseas Land & Investment Limited (“China Overseas”) in 2016, amounting to RMB1,000 million (31 December 2023: RMB1,000 million). China Overseas has provided counter guarantees to the Group.

The relationship and transaction with related parties are disclosed in Note 51.

(e)

Outstanding litigation and disputes

The Group is involved in a number of current and pending legal proceedings. The Group provided for liabilities arising from those legal proceedings in which the outflow of economic benefit is probable and can be reliably estimated in the consolidated statement of financial position. The Group believes that these accruals are reasonable and adequate.

(i)
There are a number of disputes with Mineralogy, and their details are disclosed in Note 3(k).

(ii)
There are some issues in dispute with MCC, and their details are disclosed in Note 3(l).

(f)

Capital commitments

As at the financial position date, the Group had the following capital commitments not provided for in these consolidated financial statements:
As at 31 December
20242023
Contracted for 15,110 15,201

Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the business of the Group. The Group has established policies and procedures to identify and analyse these risks, to set appropriate risk limits and controls, and to constantly monitor the risks and limits by means of reliable and up-to-date management information systems. The Group regularly updates and enhances its risk management policies and systems to reflect changes in markets, products and best practice risk management processes. Internal auditors also perform regular audits to ensure compliance with policies and procedures.

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.

(a)

Credit risk

Credit risk management

Credit risk refers to the risk of loss caused by default of debtor or counterparty. Credit risk also occurs when the Group makes unauthorised or inappropriate loans and advances to customers, financial commitments or investments. The credit risk exposures of the Group mainly arise from the Group’s loans and advances to customers, bonds, interbank business, receivables, lease receivables, other debt investments, off-balance sheet items such as credit commitments, financing businesses including margin financing and securities lending, and also stock-pledged repo.

The Group has standardised management on the entire credit business process including loan application, and its investigation approval and granting of loan, and monitoring of non-performing loans. Through strictly standardising the credit business process, strengthening the whole process management of pre-loan investigation, credit rating and credit granting, examination and approval, loan review and post-loan monitoring, improving the risk of slow-release of collateral, accelerating the liquidation and disposal of non-performing loans, and promoting the upgrading and transformation of credit management system, the credit risk management level of the Group has been comprehensively improved.

In addition to the credit risk to the Group caused by credit assets, for treasury business, the Group manages the credit risk for treasury business through prudently selecting peers and other financial institutions with comparable credit levels as counterparties, balancing credit risk with returns on investment, comprehensively considering internal and external credit rating information, granting credit hierarchy, and using credit management system to review and adjust credit commitments on a timely basis, etc. In addition, the Group provides off-balance sheet commitment and guarantee business to customers, so it is possible for the Group to make payment on behalf of the customer in case of customer’s default and bear risks similar to the loan. Therefore, the Group applies similar risk control procedures and policies to such business to reduce the credit risk.

The Group’s credit risk of securities financing transactions mainly arises from the provision of false information provided by customers, failure to repay liabilities at required time limit, violation of contractual agreements on size and structure of positions, violation of regulatory requirements on transactions and involvement of legal disputes on assets provided as collateral. The Company primarily adopts the risk education, credit collection, credit granting, daily marking-to-market, customer risk alert, mandatory liquidation, judicial recourse and other methods to control those credit risks.

The Group may also face credit risk due to the formation of accounts receivable in the process of conducting bulk commodity trading business. For such credit risks, the relevant operating entities of the Group formulate credit policies based on actual situations and conduct credit evaluations on customers to determine credit sales limits. Credit evaluation is mainly based on the customer’s historical credit status, external ratings of the customer, and the customer’s credit record in the bank (if possible).

The Group is also confronted with credit risk resulting from receivables that arising from sale of goods and rendering of services within the non-comprehensive financial services segments. The relevant subsidiaries have established a credit policy under which individual credit evaluations are performed on all customers to determine the credit limit and terms applicable to the customers. These evaluations focus on the customers’ financial position, the external ratings of the customers and their bank credit records where available.

Measurement of expected credit losses

The Group adopts the ECL model on its debt instruments which are classified as financial assets measured at amortised cost and at FVOCI, margin accounts, credit commitments and financial guarantees in accordance with the provisions of HKFRS 9.

The Group mainly applies the HKFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for trade and other receivables and contract assets, regardless of whether there is significant financing component or not. For other financial assets that are included in the measurement of ECL, the Group evaluates whether the credit risks of related financial assets have increased significantly since initial recognition, and uses the impairment model to measure their loss allowances respectively to recognise ECL and their movements:

Stage 1: Financial instruments with no significant increase in credit risk since its initial recognition will be classified as “stage 1” and the Group continuously monitors their credit risk. The loss allowances of financial instruments in stage 1 are measured based on the ECL in the next 12 months, which represents the proportion of the ECL in the lifetime due to possible default events in the next 12 months.

Stage 2: If there is a significant increase in credit risk since initial recognition, the Group transfers the related financial instruments to stage 2, but it will not be considered as credit-impaired instruments. The ECL of financial instruments in stage 2 is measured based on the lifetime ECL.

Stage 3: If a financial asset has shown signs of credit impairment from initial recognition, it will be moved to Stage 3. The expected credit losses of financial assets in Stage 3 are measured based on the lifetime ECL.

Purchased or originated credit-impaired financial assets refers to financial assets that are credit-impaired at the initial recognition. Loss allowances on these assets are the lifetime ECL.

The Group estimates the ECL in accordance with HKFRS 9, and the key judgments and assumptions adopted by the Group are as follows:

(1)

Significant increase in credit risk

On each financial position date, the Group evaluates whether the credit risk of the relevant financial instruments has increased significantly since the initial recognition. When one or more quantitative or qualitative threshold, or upper limit are triggered, the credit risk of financial instruments would be considered as increased significantly.

By setting quantitative and qualitative threshold, and upper limit, the Group determines whether the credit risk of financial instruments has increased significantly since initial recognition. The judgment mainly includes the days past due, the absolute level and relative level of the change of default probability, the change of credit risk classification and other conditions indicating significant changes in credit risk.

(2)

Definition of default and credit-impaired assets

When credit impairment occurred, the Group defines that the financial asset is in default. In general, a financial asset that is overdue for more than 90 days is considered to be in default.

When one or more events that adversely affect the expected future cash flow of a financial asset occurs, the financial asset becomes a credit-impaired financial asset. Evidence of credit-impaired financial assets includes the following observable information:
  • The issuer or borrower/debtor is in significant financial difficulties;
  • The borrower/debtor is in breach of financial covenant(s) such as default or overdue in repayment of interests or principal etc.;
  • The creditor gives the debtor concession that would not be offered otherwise, considering economic or contractual factors relating to the debtor’s financial difficulties;
  • It is becoming probably that the borrower/debtor will enter bankruptcy or other debt restructuring;
  • An active market for that financial asset has disappeared because of financial difficulties from issuer or borrower/debtor;
  • Financing financial assets are subject to mandatory liquidation measures and the collateral value is no longer sufficient for financing amounts;
  • Violation grade for bond issuers or bonds in the latest external rating;
  • Financial assets are purchased or originated at a deep discount that reflects the incurred credit losses.
The Group’s default definition has been consistently applied to the modeling of default probability, default risk exposure and default loss rate in the Group’s expected credit loss calculation process.

(3)

Inputs for measurement of ECL

The ECL is measured on either a 12-month or lifetime basis depending on whether a significant increase in credit risk has occurred or whether an asset is considered to be credit-impaired. Related definitions are as follows:
  • The probability of default (“PD”) represents the likelihood of a borrower/debtor defaulting on its financial obligations, either over the next 12 months or over the remaining lifetime of the obligation.
  • Loss given default (“LGD”) represents the Group’s expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of claim, and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure at the time of default and is calculated on a 12-month or lifetime basis.
  • Exposure at default (“EAD”) is based on the amounts that the Group expects to be owed at the time of default, over the next 12 months or over the remaining lifetime of the obligation.
The Group regularly monitors and reviews the assumptions related to the calculation of expected credit losses, including the PD and the change in the value of collateral over time.

The Group categorises exposures with similar risk characteristics and estimates the PD, LGD, EAD by the exposures respectively. In 2024, based on data accumulation, the Group optimised and updated relevant models and parameters. The Group has acquired sufficient information to assure the reliability of the statistics. The Group makes allowances for its expected credit losses based on on-going assessment of and follow-up on the status of its customers and their financial assets respectively on an individual basis.

(4)

Forward-looking information

The assessment of significant increase in credit risk and the calculation of ECL both incorporate forward-looking information. The Group has performed historical analysis and identified the key economic variables impacting credit risk and ECL for each asset portfolio.

These economic variables have different impacts on the PD and LGD of different risk groups. Expert judgment has also been applied in this process, forecasts of these economic variables are estimated by the experts of the Group on a semi-annual basis, and the impact of these economic variables on the PD and the LGD was determined by the results of expert judgement.

In addition to the base economic scenario, the Group determines the possible scenarios and their weighting by a combination of statistical analysis and expert judgment. The Group measures ECL as either a probability weighted 12 months ECL (stage 1) or a probability weighted lifetime ECL (stage 2 and stage 3). These probability-weighted ECL are determined by running each scenario through the relevant ECL model and multiplying it by the appropriate scenario weighting.

Macroeconomic scenario and weighting information

The Group has performed historical analysis and identified the key economic variables impacting credit risk and ECL for each portfolio, which mainly include GDP, producer price index, the total retail sales of consumer goods, consumer price index, narrow money supply and per capita disposable income of urban residents, etc. Based on comprehensive considerations of internal and external data, expert forecasts, and the best estimate of future outcomes, the Group makes regular forecasts of the macro indicators in three macro-economic scenarios, i. e., the positive, neutral and negative scenarios, to determine the coefficients for forward-looking adjustments. Neutral is defined as the most likely to happen in the future, as compared to other scenarios. Positive scenario and negative scenario represent the likely scenario that is better off or worse off as compared to the neutral scenario.

(i)

Maximum credit risk exposure

The maximum exposure to credit risk as at the financial position date without taking into consideration of any collateral held or other credit enhancement is represented by the net balance of each type of financial assets in the consolidated statement of financial position after deducting any impairment allowance. A summary of the maximum credit risk exposure of financial instruments for which allowance for impairment losses is recognised is as follows:
As at 31 December
20242023
Deposits with central banks, banks and non-bank financial institutions 603,287 620,631
Placements with banks and non-bank financial institutions 382,012 237,742
Trade and other receivables 208,369 231,150
Financial assets held under resale agreements 179,829 164,983
Loans and advances to customers and other parties 5,589,459 5,374,582
Refundable deposits 68,215 62,182
Margin accounts 138,332 118,746
Investments in financial assets
– At amortised cost 1,108,159 1,076,039
– Debt investments at FVOCI 926,931 967,803
Cash held on behalf of customers 315,761 239,019
Contract assets 22,414 24,312
Other financial assets 3,063 5,986
9,545,831 9,123,175
Credit commitments and guarantees provided 2,323,510 2,197,389
Maximum credit risk exposure 11,869,341 11,320,564
The maximum credit risk exposure for debt instruments at the financial position date without taking into consideration of any collateral held or other credit enhancement is represented by the balance of each type of debt instruments in the consolidated statement of financial position. A summary of the maximum credit risk exposure for which allowance for impairment losses is not recognised is as follows:
As at 31 December
20242023
Derivative financial instruments 135,218 77,562
Loans and advances to customers and other parties at FVPL 11,612 5,558
Investments in financial assets
– Financial assets at FVPL (debt instruments) 1,042,778 924,942
Maximum credit risk exposure 1,189,608 1,008,062

(ii)

Expected credit losses

The following table explains the changes in the gross carrying amount for loans and advances to customers and other parties using ECL model to assess allowance for impairment loss for the year:
For the year ended 31 December 2024
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2024 5,345,134 96,978 72,149 5,514,261
Movements:
Net transfers out from stage 1 (121,079) (121,079)
Net transfers into stage 2 42,32142,321
Net transfers into stage 3 78,758 78,758
Net increase/(decrease) during
the year (note (i)) 307,470 (19,096) (15,774) 272,600
Write-offs (61,310) (61,310)
Others (note (ii)) 8,414 1,037 470 9,921
Balance at 31 December 2024 5,539,939 121,240 74,293 5,735,472
For the year ended 31 December 2023
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2023 5,003,058 92,278 81,012 5,176,348
Movements:
Net transfers out from stage 1 (104,736) (104,736)
Net transfers into stage 2 -25,746 -25,746
Net transfers into stage 3 78,990 78,990
Net increase/(decrease) during the year (note (i)) 436,662 (21,286) (26,889)388,487
Write-offs (61,895) (61,895)
Others (note (ii)) 10,150 240 931 11,321
Balance at 31 December 2023 5,345,134 96,978 72,149 5,514,261
The following table explains the changes in the gross carrying amount for investments in financial assets using ECL model to assess allowance for impairment loss for the year:
For the year ended 31 December 2024
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2024 2,014,880 7,237 50,347 2,072,464
Movements:
Net transfers out from stage 1 (4,215)(4,215)
Net transfers into stage 23,7043,704
Net transfers into stage 3 511511
Net increase/(decrease) during the year (note (i)) (13,239) (1,210) 2,822 (11,627)
Write-offs (3,566) (3,566)
Others (note (ii)) 4,927 809 (189) 5,547
Balance at 31 December 2024 2,002,353 10,540 49,925 2,062,818
For the year ended 31 December 2023
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2023 1,965,750 5,433 58,350 2,029,533
Movements:
Business combinations 1,724 1,724
Net transfers out from stage 1 (6,511) (6,511)
Net transfers into stage 2 4,637 4,637
Net transfers into stage 3 1,874 1,874
Net increase/(decrease) during the year (note (i)) 46,792 (2,945) (3,449) 40,398
Write-offs (6,510) (6,510)
Others (note (ii)) 7,125 112 82 7,319
Balance at 31 December 2023 2,014,880 7,237 50,347 2,072,464
Notes:

(i)
Net increase/(decrease) mainly includes changes in carrying amount due to newly purchased or originated credit-impaired financial assets or de-recognition excluding write-offs.

(ii)
Others includes net changes in accrued interest and effect of exchange differences during the year.


Movements of the loss allowances for loans and advances to customers and other parties using ECL model to assess allowance for impairment loss for the year is as follows:
For the year ended 31 December 2024
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2024 64,854 27,217 48,264 140,335
Movements (note (i)):
Net transfers out from stage 1 (3,143) (3,143)
Net transfers into stage 2 6,156 6,156
Net transfers into stage 3 33,564 33,564
Net increase/(decrease) during the year (note (ii)) 6,715 (5,012) (5,077) (3,374)
Write-offs (61,310) (61,310)
Parameters change for the year (note (iii)) (5,303) 131 25,749 20,577
Others (note (iv)) (33) 1,056 12,734 13,757
Balance at 31 December 2024 63,090 29,548 53,924 146,562
For the year ended 31 December 2023
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2023 62,124 22,675 53,325 138,124
Movements (note (i)):
Net transfers out from stage 1 (3,045) (3,045)
Net transfers into stage 2 9,082 9,082
Net transfers into stage 3 34,776 34,776
Net increase/(decrease) during the year (note (ii)) 6,875 (4,027) (7,030) (4,182)
Write-offs (61,895) (61,895)
Parameters change for the year (note (iii)) (1,170) (149) 14,257 12,938
Others (note (iv)) 70 (364) 14,831 14,537
Balance at 31 December 2023 64,854 27,217 48,264 140,335
Movements of the loss allowances for investments in financial assets using ECL model to assess allowance for impairment loss for the year is as follows:
For the year ended 31 December 2024
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2024 5,605 1,639 24,662 31,906
Movements (note (i)):
Net transfers out from stage 1 (121)(121)
Net transfers out from stage 2 (101) (101)
Net transfers into stage 3 222 222
Net increase during the year (note (ii)) (728) (567) 1,349 54
Write-offs (3,566) (3,566)
Parameters change for the year (note (iii)) (309) 138 2,960 2,789
Others (note (iv)) (6) 3 (167) (170)
Balance at 31 December 2024 4,441 1,112 25,460 31,013
For the year ended 31 December 2023
Stage 1 Stage 2 Stage 3 Total
Balance at 1 January 2023 5,072 1,532 28,035 34,639
Movements (note (i)):
Net transfers out from stage 1 (245) (245)
Net transfers into stage 2 717 717
Net transfers into stage 3 893 893
Net increase during the year (note (ii)) 397 63 2,543 3,003
Write-offs (6,510) (6,510)
Parameters change for the year (note (iii)) 6 (676) (351) (1,021)
Others (note (iv)) 375 3 52 430
Balance at 31 December 2023 5,605 1,639 24,662 31,906
Notes:

(i)
Movements mainly includes the impacts on ECL due to changes in stages.

(ii)
Net increase/(decrease) mainly includes changes in allowance for impairment due to newly purchased or originated credit-impaired financial assets or de-recognition excluding write-offs.

(iii)
Parameters change mainly includes the impacts on ECL due to unwinding of discount, regular update on modeling parameters resulting from changes in PD and LGD excluding changes in stages.

(iv)
Others include changes of impairment losses of accrued interest, recovery of loans written off and effect of exchange differences.

(iii)

Loans and advances to customers and other parties analysed by industry sector:

As at 31 December
2024 2023
Gross
balance
% Loans and
advances
secured by
collateral
Gross
balance
% Loans and
advances
secured by
collateral
Corporate loans
– Rental and business services 563,056 9.8% 156,726 532,395 9.6% 148,751
– Manufacturing 556,303 9.7% 197,564 477,610 8.7% 179,327
– Water, environment and public utility management 435,579 7.6% 95,727 432,724 7.8% 104,234
– Real estate 284,749 5.0% 195,332 264,352 4.8% 170,149
– Wholesale and retail 225,211 3.9% 93,242 215,348 3.9% 100,650
– Transportation, storage and postal services 148,943 2.6% 62,888 139,241 2.5% 63,159
– Production and supply of electric power, gas and water 118,007 2.1% 46,539 98,121 1.8% 39,809
– Construction 117,996 2.1% 37,087 123,776 2.2% 45,390
– Financial industry 91,519 1.6% 8,896 78,761 1.4% 4,720
– Others 361,902 6.2% 107,616 326,313 5.9% 103,877
2,903,265 50.6% 1,001,617 2,688,641 48.6% 960,066
Personal loans 2,372,797 41.2% 1,593,382 2,294,540 41.6% 1,510,757
Discounted bills 449,133 7.8% 516,450 9.4%
5,725,195 99.6% 2,594,999 5,499,631 99.6% 2,470,823
Accrued interest 21,889 0.4%161 20,188 0.4%
5,747,084 100% 2,595,160 5,519,819 100% 2,470,823

(iv)

Loans and advances to customers and other parties analysed by geographical sector:

As at 31 December
2024 2023
Gross
balance
% Loans and
advances
secured by
collateral
Gross
balance
% Loans and
advances
secured by
collateral
Chinese mainland 5,507,313 95.8% 2,497,806 5,290,715 95.8% 2,374,969
Excluding Chinese mainland 217,882 3.8% 97,193 208,916 3.8% 95,854
5,725,195 99.6% 2,594,999 5,499,631 99.6% 2,470,823
Accrued interest 21,889 0.4% 161 20,188 0.4%
5,747,084 100% 2,595,160 5,519,819 100% 2,470,823

(v)

Loans and advances to customers and other parties analysed by type of security:

As at 31 December
20242023
Unsecured loans 1,632,232 1,543,908
Guaranteed loans 1,048,643 968,338
Secured loans
– Loans secured by collateral 2,195,865 2,057,745
– Pledged loans 399,322 413,190
5,276,062 4,983,181
Discounted bills 449,133 516,450
5,725,195 5,499,631
Accrued interest 21,889 20,188
Gross loans and advances 5,747,084 5,519,819

(vi)

Rescheduled loans and advances to customers and other parties

Rescheduled loans and advances are those loans and advances which have been restructured or renegotiated because of deterioration in the financial position of the borrower/debtor, or of the inability of the borrower/debtor to meet the original repayment schedule and for which the revised repayment terms are a concession that the Group would not otherwise consider.
As at 31 December
2024 2023
Gross balance % of total loans
and advances
Gross balance % of total loans
and advances
Rescheduled loans and advances 29,866 0.52% 17,742 0.32%
– Rescheduled loans and advances overdue more than 3 months 1,891 0.03% 3,412 0.06%

(vii)

Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

As at 31 December 2024, the Group did not enter into significant enforceable master netting arrangements with counterparties and therefore there were no significant offsettings of any assets and liabilities in the consolidated statement of financial position (31 December 2023: Nil).


(b)

Liquidity risk

Liquidity risk arises when there is mismatch between amounts and maturity dates of financial assets and financial liabilities.

Each of the Group’s operating entity formulates liquidity risk management policies and procedures within the Group’s overall liquidity risk management framework and takes into consideration of the business and regulatory requirements applicable to individual entity.

The Group manages liquidity risk by holding liquid assets (including deposits, other short-term funds and securities) of appropriate quality and quantity to ensure that short-term funding requirements are covered within prudent limits. Adequate standby facilities are maintained to provide strategic liquidity to meet unexpected and material demand for payments in the ordinary course of business.

The following tables indicate the analysis by remaining maturities of the Group’s financial assets and financial liabilities at the financial position date:
As at 31 December 2024
Repayable on
demand
(note (i))
Within
1 year
Between
1 and 5 years
More than
5 years
Undated
(note (ii))
Total
Total financial assets 758,452 3,970,640 2,950,197 2,413,122 1,145,669 11,238,080
Total financial liabilities (3,758,230) (5,028,113) (1,510,662) (167,555) (24,261) (10,488,821)
Financial asset-liability (gap)/surplus (2,999,778) (1,057,473) 1,439,535 2,245,567 1,121,408 749,259
As at 31 December 2023
Repayable on
demand
(note (i))
Within
1 year
Between
1 and 5 years
More than
5 years
Undated
(note (ii))
Total
Total financial assets 633,887 3,787,860 2,683,132 2,218,185 1,175,944 10,499,008
Total financial liabilities (3,757,854) (4,326,465) (1,574,515) (150,666) (20,488) (9,829,988)
Financial asset-liability (gap)/surplus (3,123,967) (538,605) 1,108,617 2,067,519 1,155,456 669,020
The table below presents the undiscounted cash flows of the Group’s financial assets and financial liabilities by remaining maturities at the financial position date:
As at 31 December 2024
Repayable on
demand
(note (i))
Within
1 year
Between
1 and 5 years
More than
5 years
Undated
(note (ii))
Total
Total financial assets 758,452 4,188,413 3,425,226 2,844,049 1,147,411 12,363,551
Total financial liabilities (3,758,230) (5,143,637) (1,663,379) (181,296) (24,268) (10,740,810)
Financial asset-liability (gap)/surplus (2,999,778) (955,224) 1,791,847 2,662,753 1,123,143 1,622,741
As at 31 December 2023
Repayable on
demand
(note (i))
Within
1 year
Between
1 and 5 years
More than
5 years
Undated
(note (ii))
Total
Total financial assets633,8874,012,5273,200,4002,634,8131,178,94311,660,570
Total financial liabilities(3,757,854)(4,474,085)(1,709,326)(178,990)(20,613)(10,140,868)
Financial asset-liability (gap)/surplus(3,123,967)(461,558)1,491,0742,455,8231,158,3301,519,702
Note:

(i)

For loans and advances to customers and other parties which are overdue within one month yet are not impaired, the balances are reported under repayable on demand.

(ii)

For financial assets, the undated period amount represented the balances of loans and advances to customers and other parties being credit-impaired or overdue for more than one month. Equity investments and investment funds were also reported under undated period.


Credit Commitments include bank acceptances, credit card commitments, letters of guarantee issued, loan commitments and letters of credit issued. The tables below summarise the amounts of credit commitments by remaining contractual maturity.
As at 31 December 2024
Within 1 year Between 1 and
5 years
More than
5 years
Total
Loan commitments 8,509 17,002 28,553 54,064
Guarantees 163,334 108,786 348 272,468
Letters of credit 321,577 1,093 322,670
Acceptances 852,758 852,758
Credit card commitments 812,562 812,562
Total 2,158,740 126,881 28,901 2,314,522
As at 31 December 2023
Within 1 year Between 1 and
5 years
More than
5 years
Total
Loan commitments4,28811,88930,59146,768
Guarantees154,76181,650626237,037
Letters of credit255,368873256,241
Acceptances866,662866,662
Credit card commitments779,947779,947
Total2,061,02694,41231,2172,186,655

(c)

Interest rate risk

Each of the Group’s operating entities has formulated its own interest risk management policies and procedures covering identification, measurement, monitoring and control of interest risk. The Group manages interest rate risk to control potential loss from interest rate risk at an acceptable level by taking into account market conditions.

(i)

Financial asset-liability gap

Interest rate risk arises from mismatch between repricing dates of financial assets and financial liabilities affected by market interest rate volatility.
As at 31 December 2024
Non-interest bearing Within
1 year
Between 1
and 5 years
More than
5 years
Total
Total financial assets 1,262,152 7,321,823 1,696,230 957,875 11,238,080
Total financial liabilities (982,543) (7,943,741) (1,385,663) (176,874) (10,488,821)
Financial asset-liability surplus/(gap) 279,609 (621,918) 310,567 781,001 749,259
As at 31 December 2023
Non-interest bearing Within
1 year
Between 1
and 5 years
More than
5 years
Total
Total financial assets 1,090,623 7,076,058 1,543,608 788,719 10,499,008
Total financial liabilities (659,532) (7,604,083) (1,421,357) (145,016) (9,829,988)
Financial asset-liability surplus/(gap) 431,091 (528,025) 122,251 643,703 669,020

(ii)

Effective interest rate

As at 31 December
2024 2023
Effective
interest rate
RMB
million
Effective
interest rate
RMB
million
Assets
Cash and deposits 0.35% ~ 2.22% 603,287 0.35% ~ 2.07% 625,135
Placements with banks and non-bank financial institutions 3.14% 404,801 3.18% 237,742
Financial assets held under resale agreements 1.81% 179,829 1.61% 164,983
Loans and advances to customers and other parties 4.24% 5,601,071 4.56% 5,380,140
Investments in financial assets 2.80% ~ 2.93% 3,538,851 2.73% ~ 3.16% 3,356,367
Others 1,747,586 1,566,553
12,075,425 11,330,920
Liabilities
Borrowings from central banks 2.48% 124,151 2.61% 273,226
Deposits from banks and non-bank financial institutions 2.01% 935,159 2.12% 893,565
Placements from banks and non-bank financial institutions 3.15% 145,644 3.00% 150,493
Financial assets sold under repurchase agreements 2.10% 672,087 2.13% 744,571
Deposits from customers 1.89% 5,847,939 2.12% 5,459,993
Bank and other loans 0.03% ~ 9.80% 245,566 0.13% ~ 10.00% 235,770
Debt instruments issued 0.05% ~ 6.19% 1,497,138 0.88% ~ 6.10% 1,221,107
Others 1,184,727 1,015,413
10,652,411 9,994,138

(iii)

Sensitivity analysis

The Group uses sensitivity analysis to measure the potential effect of changes in interest rates on the Group’s profit before taxation. As at 31 December 2024, it is estimated that a general increase or decrease of 100 basis points in interest rates, with all other variables held constant, the Group’s profit before taxation would decrease or increase by RMB5,930 million (31 December 2023: decrease or increase by RMB6,967 million).

This sensitivity analysis is based on a static interest rate risk profile of the Group’s financial assets and financial liabilities and certain simplified assumptions. The analysis only measures the impact of changes in the interest rates within one year, showing how annualised interest income would have been affected by repricing of the Group’s financial assets and financial liabilities within the one-year period. The analysis is based on the following assumptions: (1) all assets and liabilities that reprice or mature within three months and after three months but within one year reprice or mature at the beginning of the respective periods; (2) there is a parallel shift in the yield curve and in interest rates; and (3) there are no other changes to the portfolio, all positions will be retained and rolled over upon maturity. The analysis does not take into account the effect of risk management measures taken by management. Because of its hypothetical nature with the assumptions adopted, actual changes in the Group’s profit before taxation resulting from increases or decreases in interest rates may differ from the results of this sensitivity analysis.

(d)

Currency risk

Currency risk arises from the changes in exchange rates on the Group’s foreign currency denominated assets and liabilities. The Group measures its currency risk with foreign currency exposures, and manages currency risk by entering into spot foreign exchange transactions, use of derivatives (mainly foreign forwards and swaps), and matching its foreign currency denominated assets with corresponding liabilities in the same currency.

The revenue from the Group’s Sino Iron Project is denominated in US$, which is the functional currency for this entity. A substantial portion of its development and operating expenditure are denominated in Australian Dollars. The Group entered into plain vanilla forward contracts to manage the foreign currency risks.

The Group funded the Sino Iron Project and the acquisition of bulk cargo vessels by borrowing US$ loans to match the future cash outflows of these assets. The Group’s investments in the Sino Iron Project and bulk cargo vessels (whose functional currency is in US$) have been designated as an accounting hedge against other US$ loans.

The exposure to currency risk arising from the financial assets and financial liabilities at the financial position dates is as follows (expressed in equivalent amount of RMB million):
As at 31 December 2024
RMB HK$ US$ Others Total
Total financial assets 10,163,564 267,950 686,466 120,100 11,238,080
Total financial liabilities (9,396,042) (297,955) (712,554) (82,270) (10,488,821)
Financial asset-liability surplus/(gap) 767,522 (30,005) (26,088) 37,830 749,259
As at 31 December 2023
RMB HK$ US$ Others Total
Total financial assets 9,629,011 271,879 521,594 76,524 10,499,008
Total financial liabilities (8,878,778) (281,967) (611,230) (58,013) (9,829,988)
Financial asset-liability surplus/(gap) 750,233 (10,088) (89,636) 18,511 669,020
The Group uses sensitivity analysis to measure the potential effect of changes in foreign currency exchange rates on the Group’s total comprehensive income.

Assuming all other risk variables remained constant, 100 basis points strengthening or weakening of RMB against HK$, US$ and other currencies as at 31 December 2024 would decrease or increase the Group’s total comprehensive income by RMB532 million (31 December 2023: decrease or increase by RMB1,492 million).

This sensitivity analysis is based on a static foreign exchange exposure profile of financial assets and financial liabilities and certain simplified assumptions. The analysis is based on the following assumptions: (i) the foreign exchange sensitivity is the total comprehensive income change recognised as a result of 100 basis points fluctuation in the absolute value of the closing (middle) of each foreign currency against RMB; (ii) the exchange rates against RMB for all foreign currencies change in the same direction simultaneously and do not take into account the correlation effect of changes in different foreign currencies; and (iii) the foreign exchange exposures calculated include both spot foreign exchange exposures, forward foreign exchange exposures and options, and all positions will be retained and rolled over upon maturity. The analysis does not take into account the effect of risk management measures taken by management. Because of its hypothetical nature with the assumptions adopted, actual changes in the Group’s total comprehensive income resulting from increases or decreases in foreign exchange rates may differ from the results of this sensitivity analysis.

(e)

Fair values

(i)

Financial instruments carried at fair value

The following table presents the carrying amounts of financial instruments measured at fair value as at the financial position date across the three levels of the fair value hierarchy defined in HKFRS 13, Fair value measurement, with the fair value of each financial instrument categorised in its entirety based on the lowest level of input that is significant to that fair value measurement. The levels are defined as follows:
  • Level 1: fair values measured using quoted market for similar active markets for identical financial instruments;
  • Level 2: fair values measured using quoted prices in active market for similar financial instruments, or using valuation techniques in which all significant inputs are directly or indirectly based on observable market data;
  • Level 3: fair values measured using valuation techniques in which any significant input is not based on observable market data.
The fair value of the Group’s financial assets and financial liabilities are determined as follows:
  • If traded in active markets, fair values of financial assets and financial liabilities with standard terms and conditions are determined with reference to quoted market bid prices and ask prices, respectively;
  • If not traded in active markets, fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing models or discounted cash flow analysis using prices from observable current market transactions for similar instruments. If there are no available observable current market transactions prices for similar instruments, quoted prices from counterparty is used for the valuation, and management performs analysis on these prices. Discounted cash flow analysis using the applicable yield curve for the duration of the instruments is used for derivatives other than options, and option pricing models are used for option derivatives.
As at 31 December 2024
Level 1 Level 2 Level 3 Total
Assets
Bills receivable at FVOCI 10,13910,139
Loans and advances to customers and other parties at FVOCI 522,973 522,973
Loans and advances to customers and other parties at FVPL 11,612 11,612
Derivative financial assets 1,504 129,743 3,971 135,218
Investments in financial assets 560,233 1,752,375 118,084 2,430,692
561,737 2,415,230 133,667 3,110,634
Liabilities
Financial liabilities at FVPL (10,808) (97,004) (19,328) (127,140)
Derivative financial liabilities (932) (127,596) (5,803) (134,331)
(11,740) (224,600) (25,131) (261,471)
As at 31 December 2023
Level 1 Level 2 Level 3 Total
Assets
Bills receivables at FVOCI 12,804 12,804
Loans and advances to customers and other parties at FVOCI 572,730 572,730
Loans and advances to customers and other parties at FVPL 5,558 5,558
Derivative financial assets 1,464 69,761 6,337 77,562
Investments in financial assets 555,487 1,560,215 164,626 2,280,328
556,951 2,215,510 176,521 2,948,982
Liabilities
Financial liabilities at FVPL (11,616) (56,308) (20,628) (88,552)
Derivative financial liabilities (1,003) (67,524) (5,228) (73,755)
(12,619) (123,832) (25,856) (162,307)
In 2024, there were no significant transfers among instruments in three levels (2023: Nil) and no significant changes in valuation techniques for determining the fair values of the Group’s financial instruments (2023: Nil).

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:
For the year ended 31 December 2023
      AssetsLiabilities
Loans and
advances to
customers and
other parties
at FVPL
Derivatives
financial
assets
Investments
in financial
assets
Total Financial
liabilities at
fair value
through profit
or loss
Derivatives
financial
liabilities
Total
At 1 January 2024 5,558 6,337 164,626 176,521 (20,628) (5,228) (25,856)
Total profit/(losses): 87 (3,497)1,722 (1,688) (268) 2,974 2,706
– in profit or loss 87 (3,497) 2,790 (620) (268) 2,974 2,706
– in other comprehensive income (1,068) (1,068)
Net settlements 5,967 1,131 (48,264) (41,166) 1,568 (3,549) (1,981)
At 31 December 2024 11,612 3,971 118,084 133,667 (19,328) (5,803) (25,131)
For the year ended 31 December 2023
      AssetsLiabilities
Loans and
advances to
customers and
other parties
at FVPL
Derivatives
financial
assets
Investments
in financial
assets
Total Financial
liabilities at
fair value
through profit
or loss
Derivatives
financial
liabilities
Total
At 1 January 20233,8816,541139,023149,445(31,475)(4,414)(35,889)
Total profit/(losses):25(2,607)1,945(637)4,8725,0219,893
– in profit or loss 25(2,607)1,282(1,300)4,8725,0219,893
– in other comprehensive losses663663
Net settlements1,6522,40323,65827,7135,975(5,835)140
At 31 December 20235,5586,337164,626176,521(20,628)(5,228)(25,856)

(ii)

Fair value of other financial instruments carried at other than fair value

The carrying amounts and fair values of the Group’s financial assets and financial liabilities, other than those with carrying amounts that reasonably approximate to their fair values, are as follows:
As at 31 December 2024
Carrying
amount
Fair value Level 1 Level 2 Level 3
Financial assets
Investments in financial assets
– Financial assets at amortised cost 1,108,159 1,124,648 2,374 927,760 194,514
Financial liabilities
Debt instruments issued
– Corporate bonds issued 220,308 220,508 183,670 36,838
– Notes issued 229,820 231,906 4,784 224,345 2,777
– Subordinated bonds issued 83,837 86,670 3,781 82,889
– Certificates of deposit issued (non-trading) 1,470 1,480 1,480
– Certificates of interbank deposit issued 931,004 932,348 29,663 902,685
– Convertible corporate bonds issued 11,448 12,615 12,615
– Beneficiary certificates 19,251 19,251 19,251
1,497,138 1,504,778 221,898 1,246,757 36,123
As at 31 December 2023
Carrying
amount
Fair value Level 1 Level 2 Level 3
Financial assets
Investments in financial assets
– Financial assets at amortised cost 1,076,039 1,082,341 8,885 854,990 218,466
Financial liabilities
Debt instruments issued
– Corporate bonds issued 236,477 237,942 206,139 31,803
– Notes issued 154,307 154,833 4,671 150,162
– Subordinated bonds issued 83,397 84,351 7,255 77,096
– Certificates of deposit issued (non-trading) 1,430 1,430 1,430
– Certificates of interbank deposit issued 705,317 694,130 694,130
– Convertible corporate bonds issued 18,504 22,315 22,315
– Beneficiary certificates 21,675 21,675 21,675
1,221,107 1,216,676 218,065 953,191 45,420

(iii)

Methods and assumptions in estimating fair values

As at the financial position date, the Group adopted the following major methods and assumptions in estimating the fair value of financial instruments.

Investments in financial assets and financial liabilities

Fair value is based on quoted market prices as at the financial position date for trading financial assets and financial liabilities (excluding derivatives), financial assets held for investment if there is an active market. If an active market does not exist for financial assets held for investment, the fair value is determined using valuation techniques.

Derivatives

The fair values of foreign currency and interest rate contracts are either based on their listed market prices or by discount cash flow model at the measurement date.

Financial guarantees

The fair values of financial guarantees are determined by reference to fees charged in an arm’s length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that the lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made.

(a)

Relationship of related parties

(i)
In addition to subsidiaries, related parties include parent company, ultimate controlling shareholder’s fellow entities, associates and joint ventures of the Group.

(ii)
CITIC Group, the parent and the ultimate controlling shareholder of the Group, is a state-owned company established in Beijing in 1979.

(b)

Related party transactions

(i)

Transaction amounts with related parties

For the year ended 31 December 2024
Parent
company
Ultimate
controlling
shareholder’s
fellow entities
Associates and
joint ventures
Total
Sales of goods260 4,119 4,379
Purchase of goods 727 23,193 23,920
Interest income (note (2)) 67 92 1,453 1,612
Interest expenses 63 1,635 582 2,280
Fee and commission income 22 5 58 85
Fee and commission expenses 26 127
Income from other services 6 167 4,025 4,198
Expenses for other services 45 337 382
Interest income from deposits
and receivables 768 768
Other operating expenses1,494 1,082 2,576
For the year ended 31 December 2023
Parent
company
Ultimate
controlling
shareholder’s
fellow entities
Associates and
joint ventures
Total
Sales of goods 164 3,030 3,194
Purchase of goods 1,272 22,970 24,242
Interest income (note (2)) 69 109 1,540 1,718
Interest expenses 84 1,791 714 2,589
Fee and commission income 64 1 15 80
Fee and commission expenses 16 1 17
Income from other services 23 199 4,249 4,471
Expenses for other services 122 133 255
Interest income from deposits and receivables 576 576
Other operating expenses 1,174 851 2,025
Notes:

(1)
These above transactions with related parties were conducted under the normal commercial terms.

(2)
Interest rates of loans and advances to the related parties were determined at rates negotiated between the Group and the corresponding related parties on a case by case basis.

(3)
During the relevant years, CITIC Bank, a subsidiary of the Group, entered into transactions with related parties in the ordinary course of its banking businesses including lending, assets transfer (i.e. issuance of asset-backed securities in the form of public placement), wealth management, investment, deposit, settlement and clearing, off-balance sheet transactions, and purchase, sale and leases of property. These banking transactions were conducted under normal commercial terms and conditions and priced at the relevant market rates prevailing at the time of each transaction.

(ii)

Outstanding balances with related parties

For the year ended 31 December 2024
Parent
company
Ultimate
controlling
shareholder’s
fellow entities
Associates and
joint ventures
Total
Cash and deposits 26,378 26,378
Placements with banks and non-bank financial institutions 3,903 52,647 56,550
Derivative financial instruments 370 370
Trade and other receivables 1,136 27,278 28,414
Contract assets 8 2,382 2,390
Financial assets held under resale agreements1,389 599 1,988
Loans and advances to customers and other parties (note (2)) 2,995 7,984 8,365 19,344
Investments in financial assets
– Financial assets at FVPL 58 3,935 3,993
– Debt investments at FVOCI 1,643 844 2,487
– Equity investments at FVOCI 453 453
– Financial assets at amortised cost 1,041 556 1,597
Right-of-use assets 68 27 95
Deposits from bank and non-bank financial institutions 6 14,224 14,230
Derivative financial instruments 447 447
Trade and other payables 491 11,436 9,803 21,730
Contract liabilities 127 7 787 921
Deposits from customers 4,588 12,399 13,479 30,466
Bank and other loans 1,234 36,060 250 37,544
Debt instruments issued 2,027 204 2,231
Lease liabilities 73 23 96
Off-balance sheet items
Guarantees provided (note (3)) 6,835 6,835
For the year ended 31 December 2023
Parent
company
Ultimate
controlling
shareholder’s
fellow entities
Associates and
joint ventures
Total
Cash and deposits 31,170 31,170
Placements with banks and non-bank financial institutions 33,881 33,881
Derivative financial assets 169 169
Trade and other receivables 64 1,017 10,863 11,944
Contract assets 5 918 923
Financial assets held under resale agreements 1,1821,182
Loans and advances to customers and other parties (note (2)) 5,285 11,443 16,728
Investments in financial assets
– Financial assets at FVPL4,900 4,900
– Debt investments at FVOCI 1,023 1,366 2,389
– Equity investments at FVOCI 460 460
– Financial assets at amortised cost 985985
Right-of-use assets 182 39 221
Other assets 2 9,868 9,870
Deposits from bank and non-bank financial institutions19,31019,310
Derivative financial liabilities 204 204
Trade and other payables 481 11,410 5,953 17,844
Contract liabilities 135 10 1,474 1,619
Deposits from customers 19,139 9,761 19,585 48,485
Bank and other loans 254 33,136 33,390
Debt instruments issued 1,000 24 1,024
Lease liabilities 191 20 211
Other liabilities 6 37 43
Off-balance sheet items
Guarantees provided (note (3)) 7,344 7,344
Notes:

(1)
These above transactions with related parties which were conducted under the normal commercial terms.

(2)
Interest rates of loans and advances to the related parties were determined at rates negotiated among the Group and the corresponding related parties on a case by case basis.

(3)
The guarantees provided by the Group to the related parties were based on the terms agreed among the Group and the related parties on a case by case basis.

(iii)

During the year ended 31 December 2024, the Group transferred loans and other financial assets of book value before impairment of RMB2,920 million to China CITIC Financial Asset Management Co., Ltd. RMB1,400 million of this balance was non-performing loans. RMB1,520 million of this balance was non-performing financial investments. All of the above-mentioned financial assets are qualified for full de-recognition.


(c)

Transactions with other state-owned entities in the PRC

In addition to these related party transactions disclosed in Note 51(b), transactions with other state-owned entities include but are not limited to the following:
  • sales and purchases of goods and provision of services;
  • purchase, sale and leases of property and other assets;
  • lending and deposit taking;
  • taking and placing of inter-bank balances;
  • derivative transactions;
  • entrusted lending and other custody services;
  • insurance and securities agency, and other intermediary services;
  • sale, purchase, underwriting and redemption of bonds issued by other state-owned entities; and
  • rendering and receiving of utilities and other services.

(d)

Key management personnel remuneration

For the year ended 31 December 2024, the aggregate amount of the remuneration before tax paid to directors and executive officers of the Company amounted to RMB6.54 million (2023: RMB6.70 million).
(a)

Structured entities in which the Group holds an interest

The Group holds an interest in some structured entities through investments in debt securities issued by these structured entities. Such structured entities include wealth management products, investment management products, trust plans, asset-backed securities and investment funds and the Group does not consolidate these structured entities.

The following table sets out an analysis of the carrying amounts of interests held by the Group as at the financial position date in the structured entities, as well as an analysis of the line items in the consolidated statement of financial position in which the relevant assets are recognised:
As at 31 December 2024
Investments in financial assets
Gross amount Financial assets at
amortised cost
Financial
assets at FVPL
Debt investments
at FVOCI
Total Maximum loss
exposure
Wealth management products 9,114 9,114 9,114
Investment management products 20,162 11,415 31,577 31,577
Trust plans 176,543 10,340 186,883 186,883
Asset-backed securities 76,613 840 34,056 111,509 111,509
Investment funds 519,063 519,063 519,063
Total 273,318 550,772 34,056 858,146 858,146
As at 31 December 2023
Investments in financial assets
Gross amount Financial assets at
amortised cost
Financial
assets at FVPL
Debt investments
at FVOCI
Total Maximum loss
exposure
Wealth management products 6,161 6,161 6,161
Investment management products 22,908 12,706 35,614 35,614
Trust plans 194,110 11,432 205,542 205,542
Asset-backed securities 123,158 912 19,666 143,736 143,736
Investment funds 553,540 553,540 553,540
Total 340,176 584,751 19,666 944,593 944,593

(b)

Structured entities sponsored by the Group which the Group does not consolidate but holds an interest

The investments issued by unconsolidated structured entities sponsored by the Group are primarily wealth management products, trust plans, investment funds and investment management products. The nature and purpose of these structured entities are for the Group to generate fees from managing assets on behalf of investors. These structured entities are financed through the issuance of products to investors. The interests in unconsolidated structured entities held by the Group mainly include fees charged by providing management services.

Wealth management products, trust plans, investment funds and investment management products

As at 31 December 2024, the aggregate amount of assets held by the unconsolidated wealth management products, trust plans, investment funds and investment management products which are sponsored by the Group was RMB8,291,602 million (31 December 2023: RMB6,859,588 million).

In 2024, the amount of fee and commission income and net interest income recognised from the above-mentioned structured entities sponsored by the Group was RMB15,468 million (2023: RMB12,777 million) and RMB303 million (2023: RMB220 million).

In order to achieve a smooth transition and steady development of the wealth management business, in 2024, in accordance with the requirements of the “Guiding Opinions on Regulating the Asset Management Business of Financial Institutions”, the Group continues to promote net-value-based reporting of its asset management products and dispose of existing portfolios.

(c)

Transfers of financial assets

The Group entered into transactions which involved securitisation transactions and transfers of non-performing financial assets.

These transactions were entered into in the normal course of business by which recognised financial assets were transferred to third parties or structured entities. Transfers of assets may give rise to full or partial de-recognition of the financial assets concerned. On the other hand, where transferred assets do not qualify for de-recognition as the Group has retained substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets.

Details of securitisation transactions and non-performing financial assets transfer transactions conducted by the Group for the year ended 31 December 2024 totaled RMB40,722 million (2023: RMB45,172 million).

Securitisation transactions

In 2024, the original book value of financial assets transferred by the Group through asset securitisation transactions was RMB28,760 million (2023: RMB17,510 million), which qualified for full de-recognition.

Transfer of loans and other financial assets

In 2024, the Group transferred loans and other financial assets by other means with original book value of RMB11,962 million (2023: RMB27,662 million), including RMB8,434 million (2023: RMB19,272 million) of non-performing loans, RMB3,362 million (2023: RMB7,990 million) of non-performing structured investments and RMB64 million (2023: RMB400 million) of other financial assets. The Group carried out assessment based on the transfer of risks and rewards of ownership in accordance with Note 2(j) and Note 3(i), and concluded that these transferred assets qualified for full de-recognition.
(a)

Cash and cash equivalents held by the Group are as follows:

As at 31 December
20242023
Cash 5,200 4,504
Bank deposits on demand 108,456 94,801
Surplus deposit reserve funds 6,833 52,473
Investments in debt securities and others with original maturities of three months or less 61,868 90,389
Deposits with banks and non-bank financial institutions due within three months 103,308 57,509
Placements with banks and non-bank financial institutions due within three months 99,734 59,707
Cash and cash equivalents in the consolidated cash flow statement 385,399 359,383

(b)

Reconciliation of financing liabilities

For the year ended 31 December
Bank and
other loans
Debt
instruments
issued
Interest
expense
Lease
liabilities
Total
At 31 December 2022 156,088 1,175,079 7,682 19,528 1,358,377
Cash flows 34,771 41,614 (43,735) (6,045) 26,605
Business combination 39,246 300 82 39,628
Foreign exchange adjustments 274 685 1,918 41 2,918
Other non-cash movements 4,753 (4,098) 42,3006,742 49,697
At 31 December 2023 235,132 1,213,580 8,165 20,348 1,477,225
Cash flows (15,925) 299,833 (49,169) (6,087) 228,652
Foreign exchange adjustments 4,526 1,108 1,779 28 7,441
Bank loans arising from supplier finance arrangement 6,804 6,804
Other non-cash movements 14,318 (24,419) 46,972 4,760 41,631
At 31 December 2024 244,855 1,490,102 7,747 19,049 1,761,753

(c)

Issue and redemption of other equity instruments by subsidiaries

In 2024, CITIC Bank, a subsidiary of the Group, issued RMB30,000 million of capital debentures without fixed terms, redeemed RMB39,993 million of capital debentures without fixed terms (2023: issued RMB3,516 million of capital debentures without fixed term).

In 2024, CITIC Securities, a subsidiary of the Group, issued RMB14,000 million of capital debentures without fixed terms (2023: issued RMB3,000 million of capital debentures without fixed terms).

(a)

Acquisition of additional interest in an indirectly hold subsidiary

In 2024, CITIC Financial Holding acquired 0.60% of the issued shares of CITIC Securities for a purchase consideration of RMB1,293 million. The Group recognised a decrease in non-controlling interests of RMB1,527 million, and an increase in the equity attributable to shareholders of the Company of RMB234 million. The effect of changes in the ownership interest of CITIC Securities on the equity attributable to shareholders of the Company during the year is summarised as follows:
31 December 2024
RMB million
Carrying amount of non-controlling interests acquired 1,527
Consideration paid to non-controlling interests (1,293)
Excess of consideration paid recognised within equity 234

(b)

Acquisition of additional interest in an indirectly hold subsidiary

In 2024, Hubei Xinyegang Steel Co., Ltd. acquired 3.66% of the issued shares of Nanjing Iron and Steel Co., Ltd. (“Nanjing Iron and Steel”) for a purchase consideration of RMB832 million. The Group recognised a decrease in non-controlling interests of RMB1,036 million, and an increase in the equity attributable to shareholders of the Company of RMB204 million. The effect of changes in the ownership interest of Nanjing Iron and Steel on the equity attributable to shareholders of the Company during the year is summarised as follows:
31 December 2024
RMB million
Carrying amount of non-controlling interests acquired 1,036
Consideration paid to non-controlling interests (832)
Excess of consideration paid recognised within equity 204

As at 31 December
20242023
Non-current assets
Fixed assets 1
Interests in subsidiaries 444,263 429,203
Interests in associates
Interests in joint ventures 32 32
Investments in financial assets
– Financial assets at fair value through profit or loss 3,238 3,226
447,533 432,462
Current assets
Amounts due from subsidiaries 70,537 76,133
Trade and other receivables 155 105
Cash and deposits 1,438 2,137
72,130 78,375
Total assets 519,663 510,837
Current liabilities
Bank and other loans 17,284 15,854
Amounts due to subsidiaries and other related parties 15,514 12,255
Trade and other payables 10 9
Employee benefits payables 227 222
Income tax payable 1,729 2,203
Debt instruments issued 2,191 1,815
36,955 32,358
Non-current liabilities
Long term borrowings 68,775 68,032
Debt instruments issued 40,800 42,061
Derivative financial instruments 34
109,575 110,127
Total liabilities 146,530 142,485
Equity
Share capital 307,576 307,576
Reserves 65,557 60,776
Total ordinary shareholders’ funds 373,133 368,352
Total liabilities and equity 519,663 510,837
The financial position of the Company was approved and authorised for issue by the board of directors on 28 March 2025.

Director: Xi Guohua
Director: Zhang Wenwu


(a)

Reserve movement of the Company

As at 31 December
Share
capital
(Note 47(a))
Capital
reserve
(Note 47(b)(i))
Hedging
reserve
(Note 47(b)(ii))
Retained
earnings
Exchange
reserve
(Note 47(b)(v))
Total
As at 1 January 2024 307,576 505 (11) 21,294 38,988 368,352
Other comprehensive income 34 8,019 8,053
Profit attributable to shareholders of the Company 12,000 12,000
Dividends paid to ordinary shareholders of the Company (15,272)(15,272)
As at 31 December 2024 307,576 505 23 18,022 47,007 373,133
As at 1 January 2023 307,576 505 57 17,001 33,499 358,638
Other comprehensive income (68) 5,489 5,421
Profit attributable to shareholders of the Company 21,517 21,517
Dividends paid to ordinary shareholders of the Company (17,224) (17,224)
As at 31 December 2023 307,576 505 (11) 21,294 38,988 368,352

Combination of Nanjing Steel Group

In 2023, a subsidiary of the Company has completed the acquisition of Nanjing Steel Group by purchasing its additional registered capital. Until 31 December 2023, the valuation process wasn’t done and the respective fair values of the identifiable net assets and goodwill were provisionally measured.

In 2024, the subsidiary of the Company has made several fair value adjustments to the carrying amounts of the identifiable assets and liabilities of Nanjing Steel Group based on the finalised independent valuation result and the initial accounting treatments for the acquisition has been finalised. The adjustments to the fair value of the identifiable net assets were made as if initial accounting treatments had been done at the acquisition date. The above-mentioned adjustments has no significant effect on the consolidated statement of financial position, the consolidated income statement and the consolidated statement of comprehensive income, and therefore, no restatement was carried out.
On 4 March 2025, CITIC Bank redeemed all unconverted convertible bonds from investors at the price of 111% of the par value of the issued convertible bonds (including the annual interest of the last period) totalling RMB56.85 million. On the same day, the convertible bonds was delisted in the Shanghai Stock Exchange.
Restatements have been made on some of the comparative amounts to ensure the comparability with current year’s financial statements.
The consolidated financial statements were approved and authorised for issue by the board of directors on 28 March 2025.
The Group has not applied the following amendments to standards and new standards which are effective for the financial year beginning after 1 January 2024 and which have not been early adopted in these consolidated financial statements:
Effective for accounting periods beginning on or after
Amendments to HKAS 21, The effects of changes in foreign exchange rates
Lack of exchangeability
1 January 2025
Amendments to HKFRS 9, Financial instruments and HKFRS 7, Financial instruments: disclosures – Amendments to the classification and measurement of financial instruments 1 January 2026
Annual improvements to HKFRSs – Volume 11 1 January 2026
HKFRS 18, Presentation and disclosure in financial statements 1 January 2027
HKFRS 19, Subsidiaries without public accountability: disclosures 1 January 2027
The Group is assessing the impact of such new standards and amendments to standards and will adopt the relevant standards and amendments to standards in the subsequent periods as required.
(a)

Principal subsidiaries

Proportion of ownership interest
Name of company Place of incorporation/
Type of legal entity
Principal activity Shares
issued
Attributable to
the Group
Held by the
Company
Held by
subsidiaries
CITIC Corporation Limited
中國中信有限公司
Chinese mainland/
Limited liability
Investment holdingN/A 100% 100% 0%
CITIC Financial Holdings Co.,Ltd.
中國中信金融控股有限公司
Chinese mainland/
Limited liability
Investment holding N/A 100% 0% 100%
CITIC Pacific Limited
中信泰富有限公司
British Virgin IslandsInvestment holding51,097 100% 100% 0%
CITIC Pacific Special Steel Group Co., Ltd.
中信泰富特鋼集團股份有限公司
Chinese mainland/Stock
limited company (listed)
Special steel production 5,047,157,035 83.85% 0% 83.85%
NanJing Iron & Steel Co., Ltd.
南京鋼鐵股份有限公司
Chinese mainland/Stock
limited company (listed)
Production and sales of
steel product
6,165,091,011 62.76% 0% 62.76%
Shanghai Zhongte Pacific Steel Co., Ltd.
上海中特泰富鋼管有限公司
Chinese mainland/
Limited liability
Sale of steel and
consultation on electric
power technology
N/A 100% 0% 100%
Dah Chong Hong Holdings Limited
大昌行集團有限公司
Hong KongConsumer goods 1,891,247,220 100% 0% 100%
CITIC Mining International Ltd.
中信礦業國際有限公司
Cayman Islands Resources and energy 1 100% 100% 0%
CITIC Metal Group Ltd.
中信金屬集團有限公司
Hong KongResources and energy 11,800,000,000 100% 0% 100%
CITIC Telecom International Holdings Limited
中信國際電訊集團有限公司
Hong Kong (listed)Telecom services 3,700,035,382 57.54% 0% 57.54%
CITIC Finance Company International Limited
中信財務(國際)有限公司
Hong KongFinancial services N/A 100% 100% 0%
China CITIC Bank Corporation Limited
中信銀行股份有限公司
Chinese mainland/Stock
limited company (listed)
Banking industry 89,397,013,781 67.30% 0% 67.30%
CITIC Securities Company Limited
中信證券股份有限公司
Chinese mainland/Stock
limited company (listed)
Securities related
services
14,820,546,829 19.84% 0% 19.84%
CITIC International Financial Holdings Limited
中信國際金融控股有限公司
Hong Kong Banking industry 7,502,832,116 100% 0% 100%
CITIC Trust Co., Ltd.
中信信託有限責任公司
Chinese mainland/ Limited liability Trust services N/A 100% 0% 100%
CITIC Finance Company Limited
中信財務有限公司
Chinese mainland/ Limited liability Financial services N/A 98.69% 0% 98.69%
CITIC Consumer Finance Co., Ltd.
中信消費金融有限公司
Chinese mainland/ Limited liability Consumer finance N/A 70% 0% 70%
CITIC Resources Holdings Limited
中信資源控股有限公司
Bermuda (listed) Resources and energy 7,857,727,149 59.50% 0% 59.50%
CITIC Australia Pty Limited
中信澳大利亞有限公司
Australia Resources and energy 85,882,017 100% 0% 100%
CITIC Heavy Industries Co., Ltd.
中信重工機械股份有限公司
Chinese mainland/Stock limited company (listed) Manufacturing 4,579,553,437 64.38% 0% 64.38%
CITIC Construction Company Limited
中信建設有限責任公司
Chinese mainland/ Limited liability Engineering contracting N/A 100% 0% 100%
CITIC Urban Development & Operation Co., Ltd.
中信城市開發運營有限責任公司
Chinese mainland/ Limited liability Real estate development N/A 100% 0% 100%
CITIC Heye Investment Co., Ltd.
中信和業投資有限公司
Chinese mainland/ Limited liability Real estate development N/A 100% 0% 100%
CITIC Capital Mansion Co., Ltd.
中信京城大廈有限責任公司
Chinese mainland/Limited liability Real estate management N/A 100% 0% 100%
CITIC Building Property Management Co., Ltd.
北京中信國際大廈物業管理有限公司
Chinese mainland/ Limited liability Real estate management N/A 100% 0% 100%
CITIC Industrial Investment Group Corp., Ltd.
中信興業投資集團有限公司
Chinese mainland/ Limited liability Infrastructure and elderly services N/A 100% 0% 100%
CITIC Dicastal Company Limited
中信戴卡股份有限公司
Chinese mainland/Stock limited company Manufacturing 1,971,342,713 42.11% 0% 42.11%
CITIC Environment Investment Group Co., Limited
中信環境投資集團有限公司
Chinese mainland/ Limited liability Energy conservation and environmental protectionN/A 100% 0% 100%
China Zhonghaizhi Corporation
中國中海直有限責任公司
Chinese mainland/ Limited liability General aviation N/A 51.03% 0% 51.03%
CITIC Investment Holdings Limited
中信投資控股有限公司
Chinese mainland/ Limited liability Investment holding N/A 100% 0% 100%
CITIC Asia Satellite Holding Company Limited
中信亞洲衛星控股有限公司
British Virgin Islands Information industry 60,524,465 100% 0% 100%
CITIC Press Corporation
中信出版集團股份有限公司
Chinese mainland/Stock limited company (listed) Publishing 190,151,515 73.50% 0% 73.50%
CITIC Holdings Co., Ltd.
中信控股有限責任公司
Chinese mainland/Limited liabilityServiceN/A 100% 0% 100%

(b)

Principal associates

Details of the Group’s interest in principal associates, which are accounted for using the equity method in the consolidated financial statements of the Group are as follows:
Proportion of ownership interest
Name of companyPlace of incorporation Principal activity Shares
issued
Attributable to
the Group
Held by the
Company
Held by
subsidiaries
China Overseas Land & Investment Ltd.
中國海外發展有限公司
Hong Kong (listed) Real estate development 10,944,883,535 10.01% 0% 10.01%
China Securities Co., Ltd.
中信建投證券股份有限公司
Chinese mainland (listed) Securities related services 7,756,694,797 9.47% 0% 9.47%
Ivanhoe Mines Ltd. Canada (listed) Resources and energy1,351,544,340 22.34% 0% 22.34%

(c)

Principal joint ventures

Details of the Group’s interest in principal joint ventures, which are accounted for using the equity method in the consolidated financial statements of the Group are as follows:
Proportion of ownership interest
Name of companyPlace of incorporation Principal activity Shares
issued
Attributable to
the Group
Held by the
Company
Held by
subsidiaries
CITIC Prudential Life Insurance Co., Ltd.
中信保誠人壽保險有限公司
Chinese mainland Insurance and reinsurance N/A 50% 0% 50%
中船置業有限公司Chinese mainland Real estate development N/A 50% 0% 50%
上海瑞博置業有限公司Chinese mainland Real estate development N/A 50% 0% 50%