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49
Glorious Property
Annual Report 2011
Financial Review (Continued)
GEARING RATIO
The Group monitors its 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 as at 31 December 2011 and
2010 were as follows:
RMB’000
2011
2010
Total borrowings
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 for 2011 was resulted from the increase in the Group’s borrowings in the current year to
finance the payment of land premium and construction expenditures.
FOREIGN EXCHANGE RISK
The Group’s property development projects are all located in the PRC and substantially all of the related transactions
are settled in RMB. The Company and certain of the investment holding companies within the Group operate in Hong
Kong have recognised assets and liabilities in currencies other than RMB, including the US$300.0 million Senior Notes
due 2015 issued by the Company in October 2010 and the US$295.0 million bank loan obtained in November 2011.
Apart from the Senior Notes due 2015 and the US$295.0 million bank loan that may cause the Group to be exposed
to a higher level of foreign currency exchange risk, the Board considers the exposures to foreign currency exchange
risk in relation to other assets and liabilities to be insignificant. As at 31 December 2011, the Group had cash and bank
balances, borrowings and trade and other payables that were denominated in foreign currencies as shown below:
RMB’000
2011
2010
Cash and bank balances:
US$
21,018
46,681
HK$
6,236
4,483
Total
27,254
51,164
Borrowings:
US$
3,762,474
1,969,617
Total
3,762,474
1,969,617
Trade and other payables:
US$
1,575
1,987
HK$
8,012
8,652
Total
9,587
10,639