Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 128 The United Laboratories International Holdings Limited Annual Report 2023 39. FINANCIAL INSTRUMENTS Categories of financial instruments 2023 2022 RMB’000 RMB’000 Financial assets Financial asset at FVTPL 500 500 Derivative financial instruments – 1,841 Financial assets at amortised cost 11,188,261 9,999,071 Financial liabilities Financial liabilities at amortised cost 6,249,313 6,450,249 Derivative financial instrument 44,778 10,087 Financial risk management objectives and policies The Group’s major financial instruments include trade receivables, banker’s acceptance bills receivables, commercial bills receivables, other receivables, 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 and certain bank balances 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 reduce the currency exposures.