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FIMA CORPORATION BERHAD
(21185-P) |
Annual Report
2016
NOTES TO THE FINANCIAL
STATEMENTS 31 MARCH 2016
(contd.)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
2.3 Summary of Significant Accounting Policies (Contd.)
(t) Employee Benefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense
in the year in which the associated services are rendered by employees of the Group and of
the Company. Short term accumulating compensated absences such as paid annual leave
are recognised when services are rendered by employees that increase their entitlement to
future compensated absences. Short term non-accumulating compensated absences such
as sick leave are recognised when the absences occur.
(ii) Defined contribution plan
As required by law, companies in Malaysia make contributions to the state pension scheme,
the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in
the profit or loss as incurred.
(iii) Defined benefit plan
The foreign subsidiary in Indonesia, operates an unfunded, defined benefit Retirement
Benefit Scheme (“the Scheme”) for its eligible employees. The foreign subsidiary’s obligation
under the Scheme, calculated using the Projected Unit Credit Method, is determined based
on actuarial assumptions by independent actuaries, through which the amount of benefit that
employees have earned in return for their services in the current and prior years is estimated.
That benefit is discounted in order to determine its present value. Actuarial gains and losses
are recognised immediately through other comprehensive income in order for the net pension
assets or liability recognised in the consolidated statement of financial position to reflect the
full value of the plan deficit or surplus. Past service costs are recognised immediately to the
extent that the benefits are already vested, and otherwise are amortised on a straight-line
basis over the average period until the amended benefits become vested.
The amount recognised in the statement of financial position represents the present value
of the defined benefit obligations adjusted for unrecognised past service costs, and reduced
by the fair value of plan assets. Any asset resulting from this calculation is limited to the net
total of any past service costs, and the present value of any economic benefits in the form of
refunds or reductions in future contributions to the plan.
The latest actuarial valuation was carried out using the employee data as at 31 March 2016
by PT Milliman Indonesia, an independent actuary dated 18 April 2016.