Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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