FGV Audited Financial Statements 2019

195 01 S E C T I O N NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 AUDITED FINANCIAL STATEMENTS 2019 49 PROVISION FOR ASSET RETIREMENT 2019 RM’000 2018 RM’000 At 1 January 32,472 33,373 Unwinding of discount 459 465 Payment made during the financial year (63) (48) Reversal of provision during the financial year - (1,500) Currency translation differences (89) 182 At 31 December 32,779 32,472 Provision for asset retirement relates to the Group’s fatty acids manufacturing facility in USA and mills in Malaysia. The asset retirement obligation is computed based on detailed estimates, adjusted for inflation, escalated to the estimated spending dates, and then discounted using an average risk-free interest rate of which represents management’s best estimate of the liability. Actual costs to be incurred in future periods may vary from estimates, given the inherent uncertainties in evaluating certain exposures subject to the imprecision in estimating the asset retirement obligation. 2019 RM’000 2018 RM’000 Analysed as: Non-current 32,124 31,810 Current 655 662 32,779 32,472 50 PROVISION FOR DEFINED BENEFIT PLAN The Group operates defined benefit retirement plans in Malaysia, Thailand and Indonesia for all eligible employees. All of the plans are lump sum payments depend on members’ length of service and their salary in the final years leading up to retirement. As the retirement benefit plans are unfunded, the Group meets the defined benefit payment obligations as they falls due. Group Company 2019 RM’000 2018 RM’000 2019 RM’000 2018 RM’000 Non-current - Retirement benefit scheme 58,001 57,445 1,586 1,944 - Housing assistance scheme 23,072 17,697 - - - Long service award 6,728 7,819 120 150 87,801 82,961 1,706 2,094 The retirement benefit scheme is a final salary defined benefit plan with a guaranteed lump sum payment at retirement, which remains open to new entrants. The housing assistance scheme is a final salary defined benefit plan with a guaranteed lump sum payment at retirement or at an earlier exit through ill-health retirement or death-in-service in Malaysia, which remains open to new entrants. The long service award is for eligible employees that have served the Group for 25 years in Malaysia.