Annual Report 2023

118 2023 Annual Report Transport International Holdings Limited FINANCIAL REVIEW Funding and Financing Financial Liquidity and Resources The Group closely monitors its liquidity requirement and financial resources to ensure that a healthy financial position is maintained such that cash inflows from operating activities together with the Group’s reserves of cash and liquid assets and undrawn 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. The Group’s operations are mainly financed by shareholders’ funds and bank loans. In general, major operating companies of the Group arrange their own financing to meet their operational and specific needs. The Group’s other subsidiaries are mainly financed by the Company’s capital base. The Group reviews its funding policy from time to time to ensure that cost-efficient and flexible funding is available to cater for the unique operating environment of each subsidiary. Net Cash/(Net Borrowing) and Liquidity Ratio As at 31 December 2023, the Group’s net borrowing (i.e. total borrowings less cash and deposits at banks) amounted to HK$2,984.3 million (2022: HK$2,725.0 million) with a liquidity ratio (the ratio of current assets to current liabilities) of 1.04 (2022: 1.07). The details of the Group’s net cash/net borrowing position by currency are set out as follows: Currency Cash and deposits at bank in foreign currency Cash and deposits at bank Bank loans Net cash/ (Net borrowing) million HK$ million HK$ million HK$ million At 31 December 2023 Hong Kong dollars 1,039.2 (4,639.6) (3,600.4) United States dollars 77.6 605.8 – 605.8 Other currencies 10.3 – 10.3 Total 1,655.3 (4,639.6) (2,984.3) At 31 December 2022 Hong Kong dollars 1,693.7 (4,967.5) (3,273.8) United States dollars 69.2 540.4 – 540.4 Other currencies 8.4 – 8.4 Total 2,242.5 (4,967.5) (2,725.0) Finance Costs and Interest Cover The finance costs incurred by the Group for the year ended 31 December 2023 were HK$110.1 million, an increase of HK$72.5 million compared with HK$37.6 million for 2022. The increase was mainly due to the increase in average bank borrowings of the Group and the average interest rate from 1.78% per annum for 2022 to 4.24% per annum for 2023. For the year ended 31 December 2023, the Group’s interest income exceeded its total finance costs by HK$3.3 million (2022: HK$43.3 million).