Annual Report 2021

ANNUAL REPORT 2021 181 37. FINANCIAL RISK MANAGEMENT (CONTINUED) 37.1 Financial risk factors (continued) (iii) Liquidity risk Cash flow forecasts are prepared by management. Management monitors rolling forecasts on the Group’s liquidity requirements to ensure the Group maintains sufficient liquidity reserve to support sustainability and growth of the Group’s business. Currently, the Group and the Company finance the working capital requirements through a combination of funds generated from operations and borrowings. The rolling forecasts of the Group’s liquidity reserve comprise undrawn facilities of bank loans and other debt financing instruments (note 32(g)) and cash and bank balances (note 26) on the basis of expected cash flow. The Group aims to maintain flexibility in funding while minimising its overall costs by keeping a mix of committed and uncommitted credit lines available. In preparing the consolidated financial statements of the Group, the directors of the Company has given careful consideration to the future liquidity of the Group in light of the fact that the Group’s current liabilities exceeded its current assets by HK$5,473 million as at 31 December 2021. In the opinion of the directors of the Company, the Group will be able to continue as a going concern at least in the coming twelve months taking into consideration the working capital estimated to be generated from operating activities and the undrawn facilities of bank loans and other debt financing instruments. Based on this, the directors of the Company are satisfied that the Group will have sufficient financial resources to meet in full its financial obligations as and when they fall due for the foreseeable future. Accordingly, the directors of the Company consider that it is appropriate to prepare these consolidated financial statements on a going concern basis. In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management also monitors the utilisation of bank borrowings, ensures compliance with loan covenants and renews bank borrowings, if necessary. The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows including both interest and principal. Within 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Total 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million Interest-bearing debts 15,875 10,394 9,898 9,501 8,246 17,292 6,752 7,063 40,771 44,250 Other financial liabilities 3,626 3,496 167 176 530 555 5,472 6,078 9,795 10,305 19,501 13,890 10,065 9,677 8,776 17,847 12,224 13,141 50,566 54,555 Lease liabilities 88 125 54 54 163 158 1,438 1,485 1,743 1,822 Financial guarantee contracts — — — — — — 305 307 305 307