INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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For the financial year ended 31 December 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.22 Employee benefits
(a)
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has
operations. In particular, the Singapore companies in the Group make contributions to the Central Provident
Fund scheme in Singapore, a defined contribution pension scheme. Contributions to national pension schemes
are recognised as an expense in the period in which the related service is performed.
Certain subsidiaries in the Group have defined contribution retirement plans covering all of its qualified
permanent employees. The Group’s contributions to the funds are computed at 10.0% and 7.0% of the basic
pensionable income for staff and non-staff employees, respectively. The related liability arising from the
difference between the cumulative funding since the establishment of the program and the cumulative pension
costs charged to the profit or loss during the same period is recognised as employee benefits liabilities in the
consolidated balance sheet.
(b)
Defined benefit plans
The Group also provides additional provisions for employee service entitlements in order to meet the minimum
benefits required to be paid to qualified employees, as required under the Indonesian Labour Law No.13/2003
(the “Labour Law”). The said additional provisions, which are unfunded, are estimated by actuarial calculations
using the projected unit credit method.
The estimated liability for employee benefits is the aggregate of the present value of the defined benefit
obligations at the end of the reporting period.
Defined benefit costs comprise the following:
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Service cost
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Net interest on the net defined benefit liability; and
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Remeasurements of the net defined benefit liability
Service costs which include current service costs, past service costs and gains or losses on non-routine
settlements are recognised as expense in profit or loss. Past service costs are recognised when plan amendment
or curtailment occurs.
Net interest on the net defined benefit liability is the change during the period in the net defined benefit liability
that arises from the passage of time which is determined by applying the discount rate to the net defined benefit
liability. Net interest on the net defined benefit liability is recognised as expense or income in profit or loss.
Remeasurements comprising actuarial gains and losses are recognised immediately in other comprehensive
income in the period in which they arise. Remeasurements are recognised in retained earnings within equity and
are not reclassified to profit or loss in subsequent periods.
2.23 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement
at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the
arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
