KUMPULAN FIMA ANNUAL REPORT 2019

Notes to the

Financial Statements

As at 31 March 2019

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.

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 2019 by PT