Interim Report 2012 - TodayIR.com

Management Discussion and AnalysisForeign Currency ExposureThe Group’s exposure to the risk of changes in foreign exchange rates relates preliminary to the Group’s operating activities (when revenueor expenses are denominated in a different currency from the functional currency of the relevant subsidiaries of the Group). None ofthe Group’s purchase for the six-month period ended 30 June 2012 (six-month period ended 30 June 2011: 0.8%), are denominated incurrencies other than the functional currency of the relevant business. The Group has minimal exposure of foreign exchange risk.Net Current LiabilitiesThe Group recorded net current liabilities of RMB145.4 million as at 30 June 2012, an increase of RMB5.5 million compared to the netcurrent liabilities recorded as at 31 December 2011, which primarily reflects the increased capital expenditures incurred in relation to theaccelerated pace of expansion in the six months ended 30 June 2012.The Group expects to finance the working capital requirements with the following sources of funding: (i) cash inflows from operatingactivities (ii) proceeds from bank loans (iii) proceeds received by the Group from the Global Offering.Contingent LiabilitiesThere were no significant contingent liabilities for the Group as at 30 June 2012 and 31 December 2011.Operating Lease ArrangementsAs lesseeThe Group leases certain of its office and restaurant properties under operating lease arrangements. Leases for properties are negotiated forterms mainly ranging from 5 to 10 years.At the end of each of the reporting period, the Group had total future minimum lease payments under non-cancellable operating leasesfalling due as follows:30 June 31 December2012 2011RMB’000 RMB’000(audited) (audited)Within one year 183,009 170,609In the second to fifth years, inclusive 706,826 626,669After five years 397,260 447,3121,287,095 1,244,590Capital CommitmentCapital commitments were approximately RMB47.9 million and RMB50.3 million as at 30 June 2012 and 31 December 2011, respectively.INTERIM REPORT 2012 11