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51
Glorious Property
Annual Report 2011
Financial Review (Continued)
FINANCIAL GUARANTEE
The Group has arranged bank financing for certain purchasers of the Group’s property units and provided guarantees to
secure the repayment obligation of such purchasers. Such guarantees terminate upon the earlier of: (i) the issuance of
the real estate ownership certificate which is generally available within an average period of one to two years upon the
completion of the registration of the guarantee; or (ii) the full repayment of the mortgage loan by the purchasers of the
Group’s properties.
Pursuant to the terms of the guarantees, upon a default in mortgage payments by these purchasers, the Group is
responsible for repaying to the banks the outstanding mortgage principal, together with accrued interest and any penalty
owed by the defaulting purchasers, and the Group is entitled to take over the legal title and possession of the related
properties. The guarantee period starts from the date of the grant of the respective mortgage.
As at 31 December 2011, the amount of outstanding guarantees for mortgages was RMB6,148.4 million (2010:
RMB4,389.5 million).
CAPITAL AND OPERATING LEASE COMMITMENTS
As at 31 December 2011, the Group had capital commitments as follows:
RMB’000
2011
2010
Land use rights
1,360,990
2,901,524
Property development expenditures
8,916,932
8,602,617
Construction materials
79,193
44,655
Total
10,357,115
11,548,796
As at 31 December 2011, the future aggregate minimum lease payments of the Group under non-cancellable operating
leases in respect of land and buildings were as follows:
RMB’000
2011
2010
No later than 1 year
37,175
34,861
Later than 1 year and no later than 5 years
24,666
40,242
Later than 5 years
625
309
Total
62,466
75,412
EMPLOYEE AND REMUNERATION POLICY
As at 31 December 2011, the Group had a total of 1,468 employees (2010: 1,192 employees). Total remuneration
expenses and other employees’ benefits costs for the year ended 31 December 2011 amounted to RMB183.0 million
(2010: RMB203.7 million). The Group has adopted a system of determining the remuneration of employees based on
the performance of employees. Apart from a basic salary, outstanding employees may be granted with annual bonus. In
addition, the Group has adopted share option schemes to attract and retain high caliber talents to serve the Group. In
terms of employee training, the Group provides different training programmes for employees to develop their expertise
and knowledge.