Annual Report 2022

231 2022 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 32 Financial risk management and fair values of financial instruments (continued) (b) Liquidity risk The Group closely monitors its liquidity and financial resources to ensure that a healthy financial position is maintained such that cash inflows from operating activities together with undrawn committed banking facilities are sufficient to meet the requirements for loan repayments, daily operational needs and capital expenditure, as well as potential business expansion and development. Major operating companies of the Group arrange for their own financing to meet specific requirements. The Group’s other subsidiaries are mainly financed by the Company’s capital base. The Group reviews its strategy from time to time to ensure that cost-efficient funding is available to cater for the unique operating environment of each subsidiary. The following tables detail the remaining contractual maturities at the end of the reporting period of the Group’s non- derivative financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using interest rates current at the end of the reporting period) and the earliest date the Group can be required to pay: Non-derivative financial liabilities 2022 2021 Contractual undiscounted cash flow Contractual undiscounted cash flow Within 1 year or on demand More than 1 year but less than 2 years More than 2 years but less than 5 years Total Carrying amount at 31 December Within 1 year or on demand More than 1 year but less than 2 years More than 2 years but less than 5 years Total Carrying amount at 31 December $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Bank loans 1,871,779 461,046 3,310,433 5,643,258 4,967,528 1,017,852 1,187,506 984,896 3,190,254 3,132,549 Lease liabilities 4,173 2,747 532 7,452 7,313 3,564 2,227 1,101 6,892 6,819 Accounts payable and accruals 1,531,009 – – 1,531,009 1,531,009 1,665,467 – – 1,665,467 1,665,467 3,406,961 463,793 3,310,965 7,181,719 6,505,850 2,686,883 1,189,733 985,997 4,862,613 4,804,835 (c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. It is the Group’s policy to closely monitor the market conditions and devise suitable strategies against interest rate risk. As at 31 December 2022 and 2021, all the Group’s borrowings were denominated in Hong Kong dollars and on a floating interest rate basis. The Group regularly reviews its strategy on interest rate risk management in the light of prevailing market conditions.