124
STAMFORD LAND CORPORATION LTD
Notes to Financial Statements
32
FINANCIAL RISK MANAGEMENT (CONT’D)
(g)
Fair value estimation of financial assets and liabilities
The fair values of financial instruments traded in active markets (such as exchange-traded and
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The fair values of financial instruments that are not traded in an active market are determined
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based on market conditions that are existing at each balance sheet date. Where appropriate,
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such as discounted cash flow analysis, are also used to determine the fair values of the financial
instruments.
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The carrying amounts of financial assets and liabilities with a maturity of less than one year are
assumed to approximate their fair values because of the short period to maturity. The carrying
amounts of bank borrowings approximate their fair values as they are repriced every one to
three months.
(h)
Capital management
The primary objective of the Group’s capital management is to have a strong capital base
and a good rating to maintain investor, creditor and market confidence and to sustain future
development of the business. The management does not set a target level of gearing but uses
capital opportunistically to support its business and to add value for shareholders. The key
discipline adopted is to widen the margin between the return on capital employed and the cost
of that capital. The Group manages its capital to ensure entities in the Group will be able to
continue as going concerns while maximising the return to shareholders through optimisation
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the cost of capital and the risks associated with each class of capital. The Group balances its
overall capital structure through the payment of dividends, share buy-back, new share issues
as well as the issue of new debt or the redemption of existing debt.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
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