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Kumpulan Fima Berhad
(11817-V)
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Notes to the
financial statements
31 march 2017
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(m) 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, and 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 national 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
Foreign subsidiary in Indonesia
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 2017 by PT Milliman
Indonesia, an independent actuary dated 18 April 2017.