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Notes To The
Financial Statements
As at 31 March 2019
28. Retirement benefit obligations (cont’d.)
(d) Principal assumptions used by the foreign subsidiary in Indonesia in determining employee benefits
liability as of 31 March 2019 and 2018 are as follows:
Group
2019
2018
Discount rate
8.00%
7.25%
Annual salary increase
7.00%
7.00%
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
2019
2018
RM’000
RM’000
A 1 per cent decrease/increase in discount rate will increase/decrease
the defined benefit obligation by
146
131
A 1 per cent increase/decrease in expected salary growth will increase/
decrease the defined benefit obligation by
128
127
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.
financial
statements
167