NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2021 43. 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 17) as at 31 December 2021 and 2020. The Group’s listed investments are listed on Hong Kong Exchanges and Clearing Limited, Singapore Exchange Securities Trading Limited, Australian Securities Exchange, and Korea Exchange and are valued at quoted market prices. The market equity indices for the following stock exchanges, at the close of business from the nearest trading day in the year to the end of each of the years ended 31 December 2021 and 2020, and their respective highest and lowest points during the year were as follows: 31 December High/Low 31 December High/Low 2021 2021 2020 2020 Australia — AORD Index – – 6,851 7,290/4,564 Singapore — STI Index 3,124 3,274/2,832 2,869 3,284/2,208 Hong Kong — Hang Seng Index 23,398 31,183/22,665 27,231 29,175/21,139 Korea — KRX KOSPI Index 2,978 3,316/2,823 2,873 2,878/1,439 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 2021 and 2020. The Group monitors the 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 2021 and 2020 were as follows: As at 31 December As at 31 December 2021 2020 US$’000 US$’000 Bank and other borrowings Current 1,312,883 733,660 Non-current 2,935,012 2,561,618 Bank and other borrowings — Total 4,247,895 3,295,278 Less: Cash and bank balances (1,638,228) (1,515,430) Net debt 2,609,667 1,779,848 Total assets 9,337,618 7,687,441 Gearing ratio (net debt/total assets) 27.9% 23.2% E S R C A Y M A N L I M I T E D A N N U A L R E P O R T 2 0 2 1 231
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