Annual Report 2023

181 ANNUAL REPORT 2023 35. FINANCIAL RISK MANAGEMENT (CONTINUED) 35.1 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 30(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 have 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$2,658 million as at 31 December 2023. In the opinion of the directors of the Company, the Group will be able to continue as a going concern at least in the coming twelve months taking into consideration the working capital estimated to be generated from operating activities and the undrawn facilities of bank loans and other debt financing instruments. Based on this, the directors of the Company are satisfied that the Group will have sufficient financial resources to meet in full its financial obligations as and when they fall due for the foreseeable future. Accordingly, the directors of the Company consider that it is appropriate to prepare these consolidated financial statements on a going concern basis. In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management also monitors the utilisation of bank borrowings, ensures compliance with loan covenants and renews bank borrowings, if necessary. The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows including both interest and principal. Within 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million HK$’million Interest-bearing debts 17,486 17,690 9,375 1,558 11,257 13,203 1,685 5,582 39,803 38,033 Other financial liabilities 3,299 3,423 204 178 629 569 5,703 5,598 9,835 9,768 Lease liabilities 141 113 97 60 203 167 2,430 1,381 2,871 1,721 Financial guarantee contracts — — — — — — 436 299 436 299