Annual Report 2020

133 Notes to the Financial Statements Miramar Hotel and Investment Company, Limited Annual Report 2020 2 Critical accounting judgements and key sources of estimation uncertainty In the process of applying the Group’s accounting policies, management has made judgements on valuation of investment properties. Investment properties are included in the statement of financial position at their market value, which are assessed annually by external qualified valuers, after taking into consideration the net rental income allowing for reversionary income potential. The fair value of investment properties reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the investment properties. 3 Profit before taxation Profit before taxation is arrived at after charging/(crediting): 2020 2019 HK$’000 HK$’000 (a) Staff costs Contributions to defined contribution retirement plan 17,574 21,939 Salaries, wages and other benefits 365,417 451,330 382,991 473,269 The Group participates in a Mandatory Provident Fund Scheme (the “MPF scheme”) under the Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a defined contribution retirement plan administered by independent trustees. Under the MPF scheme, the employer and its employees are each required to make contributions to the plan at 5% of the employees’ relevant income, subject to a cap of monthly relevant income of HK$30,000. Contributions to the plan vest immediately. Employees of subsidiaries in the People’s Republic of China (the “PRC”) are required to participate in defined contribution retirement schemes which are administered and operated by the local municipal government. Those subsidiaries contribute funds which are calculated on certain percentage of the average employee salary as agreed by the local municipal government to the scheme to fund the retirement benefits of the employees.