Sun Art Retail Group Limited - TodayIR.com

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 FINANCIAL RISK MANAGEMENT AND FAIR VALUE (CONTINUED) (d) Foreign currency risk The Group’s businesses are principally conducted in RMB and most of the Group’s monetary assets and liabilities are denominated in RMB. Accordingly, the directors consider the Group’s exposure to foreign currency risk is not significant. The Group does not employ any financial instruments for hedging purposes. On the other hand, RMB is not a freely convertible currency and the PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. Changes in the foreign exchange control system may prevent the Group from satisfying sufficient foreign currency demand and the Group may not be able to pay dividends in foreign currencies to its shareholders. (e) Fair value All financial assets and liabilities are carried at amounts not materially different from their fair values as at 31 December 2012 and 2011, except for the amounts due from/to related parties which have no fixed repayment terms. Given these terms, it is not meaningful to disclose the fair value of such balances. The fair value of available-for-sale financial assets is determined by reference to their quoted market prices at the balance sheet date without any deduction for transaction costs. 24 COMMITMENTS (a) Capital commitments Capital commitments outstanding and not provided for in the financial statements were as follows: The Group At 31 December 2012 2011 RMB million RMB million Contracted for 2,202 859 Authorised but not contracted for 5,989 2,864 8,191 3,723 Sun Art Retail Group Limited Annual Report 2012 103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24 COMMITMENTS (CONTINUED) (b) Operating leases The total future minimum lease payments under non-cancellable operating leases are payable as follows: The Group At 31 December 2012 2011 RMB million RMB million Within 1 year 1,533 1,126 After 1 year but within 5 years 4,719 3,554 After 5 years 9,957 8,472 16,209 13,152 The Group leases certain land and buildings under operating leases. The leases typically run for an initial period of fifteen to twenty years, with an option to renew the lease after that date. The Group has the option to cancel the leases on payment of a penalty at various stages of the initial lease periods depending on the terms of the specific leases concerned. In addition to the minimum rental payments disclosed above, for some of the hypermarkets leased, the Group has commitments to pay additional rent of a proportion of turnover if the turnover generated exceeds the predetermined levels. Contingent rental payables are not included in the above as it is not possible to estimate the amounts which may be payable. 25 CONTINGENCIES (a) Legal claims As at 31 December 2012, legal actions have commenced against the Group by certain customers and certain suppliers in respect of disputes on purchase agreements. The total amount claimed is RMB93 million (2011: RMB49 million). As at 31 December 2012, the legal actions were ongoing, with most of the actions not yet set for trial dates. Provision of RMB12 million (2011: RMB11 million) has been made within Trade and other payables as at 31 December 2012, which the directors believe is adequate to cover the amounts, if any, payable in respect of these claims. 104 Sun Art Retail Group Limited Annual Report 2012
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Sun Art Retail Group Limited (Incor
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CORPORATE INFORMATION DIRECTORS Exe
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CHAIRMAN’S STATEMENT Dear Shareho
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MANAGEMENT DISCUSSION AND ANALYSIS
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