Annual Report 2019

166 Annual Report 2019 Miramar Hotel and Investment Company, Limited Notes to the Financial Statements 23 Total equity (Continued) (d) Capital management The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to meet its financial obligations and continue to provide returns for shareholders and benefits for other stakeholders, by pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable cost. The Group actively and regularly reviews and manages its capital structure to maintain a balance between the higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in the Group’s business portfolio and economic conditions. The Group monitors its capital structure by reviewing its net debt-to-equity ratios and cash flow requirements, taking into account of its future financial obligations and commitments. For this purpose, the Group defines net debt as total debt (which includes interest-bearing loans and borrowings, including interest-bearing amounts due to holders of non-controlling interests of subsidiaries and lease liabilities), less cash and bank balances. Total equity attributable to shareholders of the Company comprises issued share capital and reserves attributable to equity shareholders of the Company. The Group has initially applied HKFRS 16 using the modified retrospective approach. Under this approach, the Group recognises right-of-use assets and corresponding lease liabilities for almost all leases previously accounted for as operating leases as from 1 January 2019. The Group maintains its net cash position as 1 January 2019 after the recognition of corresponding lease liabilities. The adjusted net debt-to-equity ratios at the end of the reporting period and at the date of transfer of HKFRS 16 are as follows: Note 31 December 2019 1 January 2019 31 December 2018 HK$’000 HK$’000 HK$’000 Bank loan 19 2,727 2,848 2,848 Interest-bearing amounts due to holders of non-controlling interests of a subsidiary 21 5,953 12,100 12,100 Lease liabilities 18 149,709 150,435 – Less: cash and bank balances 16(a) (5,252,640) (4,713,351) (4,713,351) Net cash (5,094,251) (4,547,968) (4,698,403) Total equity attributable to shareholders of the Company 19,881,530 19,026,788 19,026,788 Net debt-to-shareholders’ equity ratio N/A N/A N/A Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirement.