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FIMA CORPORATION BERHAD
(21185-P) |
Annual Report
2016
NOTES TO THE FINANCIAL
STATEMENTS 31 MARCH 2016
(contd.)
28. RETIREMENT BENEFIT OBLIGATIONS (CONTD.)
(d) Principal assumptions used by the foreign subsidiary in Indonesia in determining employee benefits
liability as of 31 March 2016 and 2015 are as follows:
Group
2016
2015
RM’000
RM’000
Discount rate
8.7% 8.0%
Annual salary increase
7.5% 8.0%
Retirement age
55
55
The discount rate is determined based on the values of AA rated corporate bond yields with 3 to 15
years of maturity, converted to estimated spot rates.
Significant actuarial assumptions for determination of the defined benefit obligation are discount rate
and expected salary increase. The sensitivity analysis below has been determined based on changes
to individual assumptions, with all other assumptions held constant:
Group
2016
2015
RM’000
RM’000
A 1 per cent decrease/increase in discount rate will increase/
decrease the defined benefit obligation by
121
131
A 1 per cent increase/decrease in expected salary growth will
increase/decrease the defined benefit obligation by
104
131
The sensitivity analysis presented above may not be representative of the actual change in defined
benefit obligation as it is unlikely the change in assumptions would occur in isolation of one another as
some assumptions may be correlated.
The methods and types of assumptions used in preparing the sensitivity analysis did not change
compared to the previous year.