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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 FINANCIAL RISK MANAGEMENT AND FAIR VALUE (CONTINUED) (b) Liquidity risk (continued) The Group’s policy is to regularly monitor current and expected liquidity requirements, and to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term. The Group had net current liabilities of RMB5,582 million as at 31 December 2012 (2011: RMB4,107 million). The Group generated net cash from operating activities amounting to RMB5,583 million for the year ended 31 December 2012 (2011: RMB5,764 million), and had RMB2,065 million of unutilised loan facilities available as at 31 December 2012 (2011: RMB3,025 million). In view of the profitability, operating cash flows and availability of loan facilities of the Group, the directors consider the Group will have adequate liquid funds for its working capital and capital expenditure requirements for the foreseeable future. The following are the contractual maturities of the Group’s financial liabilities at each reporting date, which are based on contractual undiscounted cash flows and the earliest date the Group can be required to pay. At 31 December 2012 Contractual undiscounted cash flow Financial Within 1 More than 1 statement year or on year but less More than carrying demand than 5 years 5 years Total amount RMB million RMB million RMB million RMB million RMB million Loans and borrowings 410 – – 410 402 Trade and other payables 26,307 – – 26,307 26,307 Other financial liabilities – – 85 85 85 At 31 December 2012 26,717 – 85 26,802 26,794 At 31 December 2011 Contractual undiscounted cash flow Financial Within 1 More than 1 statement year or on year but less More than carrying demand than 5 years 5 years Total amount RMB million RMB million RMB million RMB million RMB million Loans and borrowings 201 – – 201 199 Trade and other payables 25,162 – – 25,162 25,162 Other financial liabilities – – 85 85 85 At 31 December 2011 25,363 – 85 25,448 25,446 Sun Art Retail Group Limited Annual Report 2012 101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 FINANCIAL RISK MANAGEMENT AND FAIR VALUE (CONTINUED) (c) Interest rate risk (i) Interest rate profile Cash at bank, time deposits, available-for-sale financial assets and interest-bearing borrowings are the major types of the Group’s financial instruments subject to interest rate risk. The Group’s cash at bank, time deposits, available-for-sale financial assets, interestbearing borrowings and interest rates as at 31 December 2012 and 2011 are set out as follows: 2012 2011 Effective Carrying amount Effective Carrying amount interest rate RMB million interest rate RMB million Variable rate instruments: Cash at bank 0%~1.15% 4,407 0%~1.31% 7,100 Other financial assets 1.48%~5.00% 587 – – Available-for-sale financial assets 0%~5.50% 1,965 – – Loans and borrowings 1.55%~2.10% (402) – – 6,557 7,100 Fixed rate instruments: Time deposits within three months of maturity 0.50%~3.23% 270 0.50%~2.85% 1,521 Time deposits over three months of maturity 0.50%~2.80% 105 0.65%~2.25% 67 Loans and borrowings – – 6.10% 199 375 1,787 (ii) Sensitivity analysis A general increase/decrease of 100 basis points in interest rates prevailing at the reporting dates, with all other variables held constant, would increase/decrease the Group’s profit after tax and retained earnings by approximately RMB49 million for the year ended 31 December 2012 (2011: RMB53 million). The sensitivity analysis above has been determined assuming that the change in interest rates had occurred at each reporting date and had been applied to the exposure to interest rate risk for financial instruments in existence at that date. The 100 basis point increase or decrease represents management’s assessment of a reasonably possible change in interest rates over the period until the next annual reporting date. The analysis is performed on the same basis for the years ended 31 December 2012 and 2011. 102 Sun Art Retail Group Limited Annual Report 2012
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Sun Art Retail Group Limited (Incor
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