Annual Report 2025

182 Transport International Holdings Limited 2025 Annual Report INDEPENDENT AUDITOR’S REPORT Key audit matters (Continued) Assessing the expected credit loss allowance for credit-impaired debt securities measured at fair value through other comprehensive income Refer to notes 20 and 33(a) to the consolidated financial statements and the accounting policies on pages 200 to 205. The Key Audit Matter How the matter was addressed in our audit At 31 December 2025, the Group’s credit-impaired debt securities measured at fair value through other comprehensive income amounted to HK$11 million. Expected credit losses for these credit-impaired debt securities amounting to HK$87 million were recognised in the consolidated statement of profit or loss for the year ended 31 December 2025. The ECL allowance for the credit-impaired debt securities is measured on a lifetime basis by taking into account of various scenarios in which cash flows are expected to recover and the probabilities assigned to those scenarios. We identified assessing the ECL allowance for the credit- impaired debt securities as a key audit matter because the assessment of ECL allowance involves significant management’s judgements and is subject to a high degree of inherent uncertainty. Our audit procedures to assess the ECL allowance for credit- impaired debt securities measured at fair value through other comprehensive income included the following: – assessing the appropriateness of management’s assessment of whether any of the debt securities are credit-impaired by inspecting their overdue status, credit rating information and researching market information about issuers’ businesses; and – with the assistance of our internal specialist, – assessing the appropriateness of the methodology adopted by management for estimating the ECL allowance with reference to the requirements of the applicable accounting standards; – assessing, on a sample basis, the appropriateness of the input data used by management for estimating the ECL allowance, including evaluating the exposure at default with reference to the underlying offering documents; and assessing the reasonableness of scenarios in which cash flows are expected to recover, the probabilities assigned to those scenarios, and loss given default with reference to market information.