Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 9 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) LIQUIDITY, FINANCIAL RESOURCES, GEARING AND COMMITMENTS (CONTINUED) As of 31 December 2020, the Fund had commitments of US$5.01 million (31 December 2019: US$44.56 million) for investments that were approved but not yet provided for in the financial statements—specifically, for future payments related to investments in CASREV Fund III and Huiyou Xingyao Fund. EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES Most of the Fund’s investments are located in China where the official currency is the Renminbi (“ RMB ”). The conversion rate of RMB against the US dollar recorded an increase of 6.47% in 2020, which had a favourable impact on the Fund since it holds a considerable amount of assets denominated in RMB. The Fund currently does not have any foreign currency hedging policy. However, the Fund continues to monitor foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. EMPLOYEES Other than a qualified accountant whose remuneration package is determined and borne by the Investment Manager, the Fund has no employees. The Investment Manager handles the portfolio and day-to-day administration of the Fund. THE PORTFOLIO As of 31 December 2020, the Fund’s total investments amounted to US$909.27 million. The sector distribution of investments was US$692.65 million in financial services (representing 71.30% of the Fund’s total assets), US$61.13 million in culture, media and consumption (6.30%), US$139.29 million in information technology (14.33%), and US$16.20 million in other ventures (including manufacturing, energy and resources, and pharmaceutical, etc.) (1.65%). In addition, cash and cash equivalents were US$60.36 million, representing 6.21% of the Fund’s total assets as of 31 December 2020. TOTAL ASSETS DISTRIBUTION Financial Services Investment 64.93% Culture, Media and Consumption Investment 13.11% Information Technology Investment 8.55% Other Ventures 3.32% Cash 8.08% Others 2.01% Financial Services Investment 71.30% Culture, Media and Consumption Investment 6.30% Information Technology Investment 14.33% Other Ventures 1.65% Cash 6.21% Others 0.21% As of 31 December 2019 As of 31 December 2020