Annual Report 2020

2020 Annual Report Transport International Holdings Limited 99 Net Cash Flow For 2020, there was a net increase of HK$589.3 million (2019: HK$316.9 million) in cash and cash equivalents. The sources are set out below: 2020 2019 HK$ million HK$ million Net cash generated from/(used in): • Operating activities 1,198.4 1,439.7 • Investing activities (827.0) (941.5) • Financing activities 217.9 (181.3) Net cash inflow 589.3 316.9 The main components of the net cash inflow of HK$589.3 million (2019: HK$316.9 million) included: (i) net cash generated from operating activities of the franchised public bus operations of HK$1,006.6 million (2019: HK$1,367.1 million); (ii) payment of capital expenditure of HK$1,648.4 million (2019: HK$1,248.3 million); (iii) increase of HK$43.7 million (2019: decrease of HK$183.0 million) in bank deposits with original maturities of over three months; (iv) proceeds received on the maturity of debt securities of HK$722.8 million (2019: HK$231.1 million); (v) purchase of debt securities of HK$438.3 million (2019: HK$237.1 million); (vi) increase of HK$370.0 million in bank loans (2019: HK$75.0 million); (vii) proceeds received from disposal of a subsidiary of HK$744.7 million (2019: Nil); and (viii) payment of dividends of HK$149.2 million (2019: HK$261.2 million). Details of the Group’s cash flow movement for the year ended 31 December 2020 are set out in the consolidated cash flow statement on page 166 of this Annual Report. Treasury Risk Management The Group’s activities are exposed to various financial risks, including foreign currency, interest rate, fuel price, credit and liquidity risks. The Group’s exposure to these risks as well as its risk management policies and practices are described below: Foreign Currency Risk The Group is exposed to foreign currency risk primarily through purchases of new buses and motor vehicle components from overseas, investments in debt securities and deposits placed at banks that are denominated in a foreign currency. The currencies giving rise to this risk are primarily British Pounds Sterling (GBP) and United States dollars (USD). In respect of its exposure in GBP used for bus purchases, the Group’s treasury team will enter into forward foreign exchange contracts in a strategic manner when appropriate. As at 31 December 2020, the Group had outstanding GBP forward contracts totalling GBP15.2 million (2019: Nil), which had maturities of less than one year after the end of the reporting period. Shareholders’ Fund at 31 December Staff Costs and Staff per Bus (Franchised public bus operations) 16,000 12,000 8,000 4,000 0 5,000 4,000 3,000 2,000 1,000 0 5 4 3 2 1 0 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 HK$ million HK$ million Staff per bus Staff costs Number of staff per bus