Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 130 The United Laboratories International Holdings Limited Annual Report 2023 39. FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) Foreign currency sensitivity analysis (Continued) 2023 2022 RMB’000 RMB’000 USD (68,003) (42,820) Euro (1,876) (1,174) HK$ (4,201) 74,349 Fair value and cash flow interest rate risks The Group has significant borrowings which bear interest rate risk. Floating rate borrowings, bank deposits and bank balances expose the Group to cash flow interest rate risk. Borrowings and leases liabilities at fixed rates expose the Group to fair value interest rate risk. The Group cash flow interest rate risk is mainly concentrated on the fluctuation of interest rates on the Group’s Hong Kong dollar denominated borrowings. During the current year, the Group has not hedged its cash flow and fair value interest rate risk. The Group manages its interest rate exposures by assessing the potential impact arising from any interest rate movements based on interest rate level and outlook. The management will review the proportion of borrowings in fixed and floating rates and ensure they are within reasonable range.