Construction Industry Council - Annual Report 2024

CONSTRUCTION INDUSTRY COUNCIL 230 For the year ended 31 December 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Interest rate risk The Group is exposed to fair value interest rate risk in relation to debt instruments at amortised cost. The Group currently does not use any derivative contracts to hedge its exposure to interest rate risk. However, the Council members will consider hedging significant interest rate exposure should the need arise. The Group is exposed to cash flow interest rate risk through the impact of rate changes on interest bearing financial assets. Interest bearing financial assets are mainly cash and deposits at banks which are all short term in nature. Therefore, any future variations in interest rates will not have a significant impact on the results of the Group. Equity price risk The Group is exposed to equity price changes arising from equity investments at FVTOCI. All of these investments are listed on the Stock Exchange of Hong Kong. Listed investments held in equity investments at FVTOCI portfolio have been chosen based on their longer term growth potential and are monitored regularly for performance against expectations. Equity price risk sensitivity analysis The sensitivity analysis below has been determined based on the exposure to equity price risk on listed equity interests at the reporting date. If the prices of the equity investments at FVTOCI had been 20% higher/lower, the Group’s investment revaluation reserve would increase/decrease by HK$1,405,113 (2023: HK$1,571,031). Currency risk The Group exposed to currency risk primarily through holding debt instruments at amortised cost in USD. As USD is pegged with HKD, no sensitivity analysis has been disclosed. (c) Fair value measurements of financial instruments (i) Financial instruments measured at fair value The fair values of listed equity investments at FVTOCI which are traded on active markets are determined with reference to quoted market bid prices. The Group holds listed equity investments at FVTOCI amounting to HK$7,025,567 (2023: HK$7,855,154), which are grouped into Level 1 in the fair value hierarchy. During the years ended 31 December 2024 and 2023, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.