Basic HTML Version
Glorious Property
110
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
3 Financial Risk Management
(Continued)
(a) FINANCIAL RISK FACTORS
(Continued)
(v) Liquidity risk
(Continued)
COMPANY
RMB’000
Less than
1 year
Between 1
and
2 years
Between 2
and
5 years
Over
5 years
Total
At 31 December 2011
Borrowings, including interest payable
245,735 245,735 2,336,821
— 2,828,291
Trade and other payables
6,214
— — — 6,214
Total
251,949 245,735 2,336,821
— 2,834,505
At 31 December 2010
Borrowings, including interest payable
256,051 256,051 2,695,347
— 3,207,449
Trade and other payables
7,133
— — — 7,133
Total
263,184 256,051 2,695,347
— 3,214,582
The table above excludes the amount of guarantees given to banks for mortgage facilities granted to certain
purchasers of the Group’s properties (note 37) as the directors consider the likelihood of default in payments by the
purchasers is minimal.
(b) CAPITAL RISK MANAGEMENT
The Group regards its shareholders’ equity as capital. The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. Gearing ratio is calculated as net debt divided by total
equity attributable to the Company’s equity holders. Net debt is calculated as total borrowings less cash and bank
balances (including cash and cash equivalents and restricted cash). The gearing ratios at 31 December 2011 and
2010 were as follows:
RMB’000
2011
2010
Total borrowings (note 20)
14,886,036
13,786,395
Less: cash and bank balances
(3,166,353)
(5,835,300)
Net debt
11,719,683
7,951,095
Total equity attributable to the Company’s equity holders
17,050,918
14,798,918
Gearing ratio
68.7%
53.7%
The increase in gearing ratio as at 31 December 2011 was mainly resulted from the increase in the Group’s
borrowings and reduction in cash and bank balances in the current year for the payment of land premium and
construction expenditures.