Fraser & Neave Holdings Bhd Annual Report 2021

18. EMPLOYEE BENEFITS Certain subsidiaries of the Group operate unfunded defined benefit plan for its employees. The plan pays a lump sum amount (instead of a pension) at retirement. The schemes do not hold any physical assets but instead the Group makes provision to cover the estimated retirement benefits liabilities. The provisions are determined and assessed based on actuarial valuations using the Projected Unit Credit Method. The defined benefit plans expose the Group to actuarial risks, such as interest rate risk. MOVEMENT IN THE NET DEFINED BENEFIT LIABILITY The following table shows a reconciliation from the opening balance to the closing balance for net defined benefit liability and its components. Group Note 2021 RM’000 2020 RM’000 Balance at 1 October 2020/2019 51,304 49,511 Included in profit or loss Current service cost 3,479 3,251 Past service credit (237) (17) Gain on settlements (1,838) – Interest cost 1,305 1,505 25 2,709 4,739 Included in other comprehensive income Remeasurement (gain)/loss – Actuarial (gain)/loss arising from: – financial assumptions (2,398) 2,793 – experience adjustments (940) (1,173) E!ect of movements in exchange rates (1,023) (686) (4,361) 934 Others Benefits paid (6,212) (3,880) Balance at 30 September 43,440 51,304 Principal actuarial assumptions used Discount rate (%) 1.34-4.50 1.34-3.50 Rate of increase in salaries (%) 4.00-7.00 4.00-7.00 Mortality rate (%) 0.02-0.44 0.02-0.44 Disability rate (%) 0.00-0.04 0.00-0.04 Retirement age (years) – Malaysia 60 60 – Thailand 60 60 The average duration of the defined benefit plan obligation at the end of the financial year is 10 years (2020: 10 years). Financial Statements 217 Fraser & Neave Holdings Bhd ! Annual Report 2021