Annual Report 2019

Operating and other expenses and other revenue The Group has continued striving for improved operational efficiency with overall operating costs well maintained at HK$211 million (2018: HK$237 million), a drop by 11% in 2019 as compared to the prior year. Due to the depreciation of RMB during the year, an exchange translation loss of HK$4 million (2018: HK$13 million) was recorded. Other revenue comprising mainly bank deposit interests increased by HK$24 million as a result of a moderate uptick in the interest rate levels. Corporate Finance The Group runs its business operations primarily in Hong Kong with related cash flows, assets and liabilities being denominated mainly in Hong Kong dollars. The Group’s primary foreign exchange exposure results from its operations in mainland China and bank deposits denominated in RMB and USD, as well as equity investments denominated in USD and EUR. The Group’s loan arrangement is denominated in EUR. Interests on bank borrowings are chargeable at fixed rates. As of 31 December 2019, total credit facilities granted to the Group amounted to HK$1.3 billion (31 December 2018: HK$1.3 billion), and 0.2% of this amount (31 December 2018: 0.2%) have been utilized. The Group’s gearing ratio (calculated by dividing consolidated total borrowings by the consolidated total shareholders’ equity) as of 31 December 2019 was at only 0.04% (31 December 2018: 0.1%). Consolidated net cash was at approximately HK$5.2 billion (31 December 2018: HK$4.7 billion), of which HK$2.73 million were from secured borrowings (31 December 2018: HK$2.85 million). The Group maintains its conservative and sound financial policy with ample cash and banking facilities, enabling the Group to comfortably deal with the uncertain economic environment in the foreseeable future and to fund opportune business development projects that promise good investment returns. FOCUSING ON INTEGRITY AND STABILITY Management Discussion and Analysis Miramar Hotel and Investment Company, Limited Annual Report 2019 023