Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 250

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 19
Chunk 250
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 also has exposure on cash flow interest rate risk
which is mainly arising from its deposits with banks.

In respect of the exposure
to cash flow interest rate risk arising from floating rate non-derivative financial instruments held by the Group, such as cash and cash
equivalents, at the end of the reporting period, the Group is not exposed to significant interest rate risk as the interest rates of cash
at bank are not expected to change significantly.

F-16

Foreign currency exchange risk

There is a linked exchange rate system implemented in Hong Kong to
stabilize the exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD). The value of RMB
against the U. S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions
and the foreign exchange policy adopted by the PRC government. It is difficult to predict how market forces or PRC or U. S. government
policy may impact the exchange rate between the RMB and the U. S. dollar in the future. There remains significant international pressure
on the PRC government to adopt a more flexible currency policy, which could result in greater fluctuation of the RMB against the U. S.
dollar. The Company is a holding company and it relies on dividends paid by the Group’s operating subsidiaries in China for its
cash needs. Any significant revaluation of the RMB may materially and impact its liquidity and cash flows. To the extent that the Group
needs to convert U. S. dollars into RMB for its operations, appreciation of the RMB against the U. S. dollar would have an adverse effect
on the RMB amount the Group would receive. Conversely, if the Group decides to convert RMB into U. S. dollars for other business purposes,
appreciation of the U. S. dollar against the RMB would have a negative effect on the U. S. dollar amount the Group would receive.

Liquidity Risk

Liquidity risk is the risk
that we will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering
cash or another financial asset. Our approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to our reputation.

Typically, we ensure that
it has sufficient cash on demand to meet