Annual Report 2022

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2022 132 The United Laboratories International Holdings Limited Annual Report 2022 38. FINANCIAL INSTRUMENTS Categories of financial instruments 2022 2021 RMB’000 RMB’000 Financial assets Financial asset at FVTPL 500 500 Derivative financial instruments 1,841 – Financial assets at amortised cost 9,999,071 7,721,518 Financial liabilities Financial liabilities at amortised cost 6,450,249 5,424,177 Derivative financial instrument 10,087 5,812 The Group’s major financial instruments include trade receivables, banker’s acceptance bills receivables, commercial bills receivables, other receivables, other pledged deposits, pledged bank deposits, cash and cash equivalents, financial asset at FVTPL, trade and other payables, borrowings and derivative financial instruments. Details of the financial instruments are disclosed in respective notes. The risks associated with these financial instruments include market risk (foreign currency risk and interest rate risk), credit risk and liquidity risk. The policies on how to mitigate these risks are set out below. The management of the Group manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Market risk Foreign currency risk The Group has foreign currency sales and purchases, derivative financial instruments, certain bank balances and bank borrowings denominated in USD, Euro and HK$ other than the functional currency of respective group entities, which expose the Group to foreign currency risks. The Group manages its foreign currency risk by closely monitoring the movement of the foreign currency rate and using foreign exchange forward contracts to eliminate the currency exposures.