Annual Report 2021

Operating and Other Expenses Despite the discouraging outlook around the globe, the Group continued to strictly control costs and improve its operating efficiency. On the other hand, in accordance with the Hong Kong Accounting Standards, the Group is required to conduct regular assessments of its leased right-to-use assets, other properties, plant and equipment. Due to the enduring pandemic, the operating income derived from these assets is expected to decline, hence an impairment provision of HK$31.6 million on the aforesaid assets was made during the year. Overall operating costs dropped to HK$163.3 million (2020: HK$165.8 million). Treasury Management and Financial Condition As for the exchange-rate, interest-rate, liquidity and financing risks generated in the course of the daily operations, the Group exercised and managed in accordance with pre-established policies, and closely monitored the Group’s financial condition and capital requirements to ensure solvency and accountability. In terms of foreign- exchange risk, as the Group is mainly based in Hong Kong running its businesses, the related cash flow, assets and liabilities are denominated in Hong Kong dollars. In terms of foreign-exchange risk, the majority of the risk was from assets and business operations in mainland China, and RMB and USD bank deposits. In terms of interest rate risk, as the Group’s capital is mainly denominated in Hong Kong dollars and there is no borrowing, the main interest rate risk of the Group is the interest rate risk of Hong Kong dollar deposits; there is no interest rate risk associated with financing and borrowing. The Group maintained a good liquidity position, with very mild liquidity risk. As of 31 December 2021, the Group’s consolidated net cash was approximately HK$5.2 billion (31 December 2020: HK$5.0 billion), and no bank loan (31 December 2020: HK$2.99 million). In terms of financing risk, as of 31 December 2021, the total banking facilities granted were approximately HK$1.0 billion (31 December 2020: HK$1.0 billion), of which nil was drawn (31 December 2020: 0.30%). Accordingly, the gearing ratio (calculated by dividing the total consolidated borrowings by the total consolidated shareholders’ equity) was nil (31 December 2020: 0.02%). The Group is committed to a stable and healthy financial policy, with more than sufficient funds and credit lines secured, that would enable the Group to cope with any uncertain economic situation forthcoming, and to undertake business development plans of promising prospect. Uphold toDiligence 023 Miramar Hotel and Investment Company, Limited Annual Report 2021 Management Discussion and Analysis