ESR AR 2019 EN

Notes to the Consolidated Financial Statements 31 December 2019 230 Focused 45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Equity price risk Equity price risk is the risk that the fair values of equity securities decrease as a result of changes in the levels of equity indices and the value of individual securities. The Group was exposed to equity price risk arising from individual equity investments classified as financial assets at fair value through comprehensive income (note 18) as at 31 December 2019 and 2018. The Group’s listed investments are listed on Hong Kong Exchanges and Clearing Limited, Singapore Exchange Securities Trading Limited, and Australian Securities Exchange and are valued at quoted market prices at the end of each of the years ended 31 December 2019 and 2018. The market equity indices for the following stock exchanges, at the close of business of the nearest trading day in the year to the end of each of the years ended 31 December 2019 and 2018, and their respective highest and lowest points during the year were as follows: 31 December High/Low 31 December High/Low 2019 2019 2018 2018 Australia — AORD Index 6,802 6,996/5,620 5,709 6,481/5,478 Singapore — STI Index 3,223 3,415/2,956 3,069 3,642/2,956 Hong Kong — Hang Seng Index 28,190 30,280/24,897 25,846 33,484/24,541 Capital management The Group adopts a proactive and disciplined capital management approach to maintain a strong and well-capitalised balance sheet, and regularly review its debt maturity profile and liquidity position on an ongoing basis. The Group maintains a strong balance sheet, and actively diversifies its funding sources through a combination of facilities with both local and international banks, and capital market issuances in optimising its costs of debt financing. The Group is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2019 and 2018. The Group monitors capital using net gearing ratio, which is calculated by dividing net debt, defined as total bank and other borrowings less cash and bank balances, by total assets at the end of each year. The gearing ratios as at 31 December 2019 and 2018 were as follows: As at 31 December As at 31 December 2019 2018 USD’000 USD’000 Bank and other borrowings Current 232,209 436,194 Non-current 2,338,708 1,024,279 Bank and other borrowings — Total 2,570,917 1,460,473 Less: Cash and bank balances (884,206) (581,379) Net debt 1,686,711 879,094 Total assets 6,352,198 4,431,600 Gearing ratio 26.6% 19.8%