Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
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11 Loans receivable<br />
2008 2007<br />
US$m US$m<br />
At 1st January 3.4 12.0<br />
Addition 1.4 3.4<br />
Repayment – (12.0 )<br />
At 31st December 4.8 3.4<br />
The balance as at 31st December 2008 comprised a mezzanine loan of US$3.0 million, bearing interest at<br />
LIBOR+5.6% per annum with repayment on or before 22nd February 2010; and a loan of US$1.8 million, bearing<br />
interest at EURO LIBOR+4% with repayment on or before 12th September 2011. The carrying amount of the loans<br />
receivable approximates its fair value.<br />
The balance as at 31st December 2007 principally consisted of a mezzanine loan which was interest-bearing at<br />
LIBOR+5.6% per annum with repayment on or before 22nd February 2010.<br />
12 Pension plans<br />
The Group has a number of defined benefit pension plans, covering all the main territories in which it operates with<br />
the major plans relating to employees in Hong Kong and South East Asia. Most of the pension plans are final salary<br />
defined benefit plans and are funded. The assets of the funded plans are held independently of the Group’s assets in<br />
separate trustee administered funds. The Group’s major plans are valued by independent actuaries annually using the<br />
projected unit credit method.<br />
The principal actuarial assumptions used for accounting purposes at 31st December are as follows:<br />
2008 2007<br />
Weighted Weighted<br />
average average<br />
% %<br />
Discount rate applied to pension obligations 6.0 4.9<br />
Expected return on plan assets 7.5 7.5<br />
Future salary increases 5.0 5.0<br />
The expected return on plan assets is determined on the basis of long-term average returns on global equities of 6.5%<br />
to 10% per annum and global bonds of 3.5% to 6.0% per annum, and the long-term benchmark allocation of assets<br />
between equities and bonds in each plan.<br />
Annual Report 2008 55