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Swire Pacific Limited


NOTES TO THE ACCOUNTS
Notes: [21] [22] [23] [24] [25] [26a] [26b] [26c] [26d] [26e] [26f] [26g] [26h] [27]




(a) Distributable reserves of the Company at 31st December 1996 amounted to HK$8,570 million (1995: HK$7,791 million).

(b) As explained in note 15(b), the Group reserves as at 31st December 1996 would have been reduced by HK$352 million had HK SSAP11 been adopted.


22.   Perpetual Capital Securities

The Perpetual Capital Securities, bearing cumulative interest at 9.33% per annum, were issued by a wholly-owned subsidiary (The 'Issuer') on 23rd October 1996. They have no scheduled maturity but are redeemable at the option of the Company or the Issuer either (i) at any time on or after 30th October, 2006 or (ii) at any time upon amendment or imposition of certain taxes, and in any case, become due in the event of the Company's or the Issuer's winding up. The Capital Securities are unconditionally and irrevocably guaranteed, on a subordinated basis, by the Company.




(a) Included in the gross amounts shown above for the Group are other borrowings not wholly repayable within five years amounted to HK$3,450 million (1995: HK$4,706 million).

(b) Borrowings other than bank loans are repayable on various dates up to 2004 at interest rates from 6.0% to 10.5% per annum.





25.   Retirement benefits

The Group operates various retirement benefit schemes providing resignation and retirement benefits to staff upon their cessation of service with the Group. Most schemes for staff employed on expatriate terms are contributory whilst most schemes for locally engaged employees are non- contributory. The assets of the schemes are administered by independent trustees and maintained independent of the Group's finances. The majority of the schemes are of the defined benefit type and contributions to such schemes are made in accordance with the recommendations of the independent actuary of the relevant scheme. The schemes are assessed annually by qualified independent actuaries. Details of the principal Group schemes as at the latest valuation date are listed below:


      The principal assumption used by the actuaries was that the long-term average return on investments would be 1% per annum higher than the average increase in salary. The differences between the market values of the schemes' assets and the present value of the past service liabilities on an on-going basis at the date of the actuarial valuation are taken into consideration when determining future funding rates in order to ensure that the schemes will be able to meet these liabilities as they become due. The current funding rates are those recommended by the actuaries to ensure that the schemes will be able to meet their future liabilities.
      All employees engaged outside Hong Kong are covered by appropriate local arrangements.
      The total retirement benefit costs charged to the profit and loss account in 1996 were HK$420 million (1995: HK$1,022 million).









27.   Comparative amounts

Certain comparative amounts have been reclassified to conform with the current year's presentation.


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