2019 UEM Edgenta Annual Report

222 223 UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Notes to the Financial Statements For the year ended 31 December 2019 Notes to the Financial Statements For the year ended 31 December 2019 UEM Edgenta Berhad Annual Report 2019 27. DEFINED BENEFIT PENSION PLAN Defined benefit pension plan is by a subsidiary, Edgenta UEMS Ltd. (“UEMS Taiwan”). UEMS Taiwan has a retirement plan covering all its regular employees who opted for defined benefits plan. Benefits under the plan are based on the length of service and estimated base pay at the time of retirement. The pension assets and liabilities are valued on annual basis by independent actuary, taking into account gains and losses. The plan assets, comprising cash and cash equivalents, are deposited with the Bank of Taiwan and are managed by the government of Taiwan. The plan assets do not have quoted market prices in active market. Amount recognised in the income statement and statement of comprehensive income: Group 2019 RM’000 2018 RM’000 Interest cost on benefit obligation 20 31 Employer’s contribution (745) (55) Interest income - (5) Total included in employee benefits expense (Note 8) (725) (29) Net actuarial loss/(gain) recognised for the year 64 (104) (661) (133) Amount recognised in statement of financial position: Group 2019 RM’000 2018 RM’000 Present value of defined benefit obligation 1,611 1,797 Fair value of plan assets (495) (38) Defined benefit obligation 1,116 1,759 Changes in present value of defined benefit obligation: Group 2019 RM’000 2018 RM’000 At 1 January 1,797 2,286 Interest cost 20 31 Benefit paid (288) (403) Actuarial loss/(gain) 70 (100) Exchange differences 12 (17) At 31 December 1,611 1,797 27. DEFINED BENEFIT PENSION PLAN (CONT’D.) Changes in fair value of plan assets: Group 2019 RM’000 2018 RM’000 At 1 January (38) (382) Employer’s contribution (745) (55) Benefit paid 288 403 Actuarial gain (6) (4) Interest income - (5) Exchange differences 6 5 At 31 December (495) (38) The principal assumptions used in determining defined benefit obligation of the Group are shown below: Group 2019 2018 Discount rate 0.7% 2.0% Salary escalation 2.0% 1.1% Actual return on plan assets: Group 2019 RM’000 2018 RM’000 Actual return of plan assets, representing actuarial gain recognised in the other comprehensive income (6) (4) A quantitative sensitivity analysis for significant assumptions as at 31 December 2019 and 2018 are as shown below: Sensitivity Level Increase in one percentage Decrease in one percentage 2019 RM’000 2018 RM’000 2019 RM’000 2018 RM’000 Assumptions Discount rate 17 (16) (19) 18 Salary increase 3 4 (3) (3) The sensitivity analysis above has been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The average duration of the defined benefit obligation at the end of the reporting period is 12 years (2018: 12 years).