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Employee Benefit
12 Months Ended
Dec. 31, 2018
Text Block1 [Abstract]  
Employee Benefit

21.

EMPLOYEE BENEFIT

 

 

As of December 31,

 

 

2018

 

 

2017

 

 

Current

 

Non-current

 

Total

 

 

Current

 

Non-current

 

Total

 

 

US$’000

 

US$’000

 

US$’000

 

 

US$’000

 

US$’000

 

US$’000

 

Employee benefit liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension-Defined benefit plans

 

855

 

 

8,161

 

 

9,016

 

 

 

877

 

 

7,416

 

 

8,293

 

Long service leave

 

427

 

 

112

 

 

539

 

 

 

456

 

 

130

 

 

586

 

Total

 

1,282

 

 

8,273

 

 

9,555

 

 

 

1,333

 

 

7,546

 

 

8,879

 

 

 

21(a)Pension – Defined contribution plans

The Company has several defined contribution plans covering its employees in Australia, PRC, Singapore, Thailand, and Taiwan. Contributions to the plan are made monthly. Total charges for the years ended December 31, 2018, 2017 and 2016, were $1,264, $1,280, and $1,237, respectively. 

 

21.

EMPLOYEE BENEFIT (continued)

21(b)Pension – Defined benefit plans

The defined benefit liability recognized in the consolidated balance sheet in respect to defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period, together with adjustments for past service costs and actuarial gains or losses. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using future actuarial assumptions about demographic and financial variables that affect the determination of the amount of such benefits.

In accordance with the Thailand labor law, Charoong Thai and its subsidiaries are obliged to make payment to retiring employees, at rates of 1 to 13 times of their final month’s salary rate, depending on the length of service.  In addition, Charoong Thai also has the extra benefit plan to make payment to qualified retiring employees, at rates of 1 to 29 times of final month's salary. The plan is not funded. The Company pays to settle the obligations as and when employees retire.

The following tables summaries the components of net benefit expense recognized in the income statement and the funded status and amounts recognized in the consolidated balance sheet for the plan:

 

 

 

For the year ended December 31,

 

Net benefit cost

 

2018

 

2017

 

2016

 

 

 

US$’000

 

US$’000

 

US$’000

 

Current service cost

 

 

419

 

 

360

 

 

410

 

Interest cost on benefit obligation

 

 

202

 

 

210

 

 

180

 

Net benefit cost

 

 

621

 

 

570

 

 

590

 

 

 

 

For the year ended December 31,

 

Other comprehensive income

 

2018

 

2017

 

2016

 

 

 

US$’000

 

US$’000

 

US$’000

 

Actuarial (gain) / loss – experience

 

 

396

 

 

251

 

 

217

 

Actuarial (gain) / loss – demographic assumption

 

 

1

 

 

184

 

 

 

Actuarial (gain) / loss – financial assumption

 

 

13

 

 

337

 

 

(219

)

Actuarial loss

 

 

410

 

 

772

 

 

(2

)

 

 

21.

EMPLOYEE BENEFIT (continued)

21(b)Pension – Defined benefit plans (continued)

 

 

 

For the year ended December 31,

 

Change in the defined obligation

 

2018

 

2017

 

2016

 

 

 

US$’000

 

US$’000

 

US$’000

 

Defined benefit obligation at January 1

 

 

8,293

 

 

6,652

 

 

6,305

 

Current service cost

 

 

419

 

 

360

 

 

410

 

Interest cost on benefit obligation

 

 

202

 

 

210

 

 

180

 

Benefits paid directly by the Company

 

 

(352

)

 

(274

)

 

(269

)

Actuarial loss in other comprehensive income

 

 

410

 

 

772

 

 

(2

)

Exchange differences

 

 

44

 

 

573

 

 

28

 

Defined benefit obligation at December 31

 

 

9,016

 

 

8,293

 

 

6,652

 

 

Actuarial assumptions

The significant assumptions used in determining the actuarial present value of the defined benefit obligations for the year ended December 31, 2018 and 2017 are as follows:

 

 

 

2018

 

2017

 

 

%

 

%

Discount rate

 

2.6 ~ 2.7

 

2.7

Rate of salary increase

 

5.0 ~ 6.0

 

5.0 ~ 6.0

Pre-retirement mortality

 

Thailand TMO17 Tables*

 

Thailand TMO17 Tables*

* TMO represented as Thailand Mortality Ordinary Tables

 

Maturity profile of defined benefit obligation

The following pension benefit payments are expected payments to be made in the future years out of the defined benefit plan obligation:

 

 

 

As of December 31,

 

 

 

2018

 

2017

 

 

 

US$’000

 

US$’000

 

Within the next 12 months (next annual reporting period)

 

 

855

 

 

877

 

Between 2 and 5 years

 

 

2,374

 

 

1,616

 

Between 6 and 10 years

 

 

4,187

 

 

3,183

 

Beyond 10 years

 

 

17,084

 

 

15,392

 

Total expected payments

 

 

24,500

 

 

21,068

 

 

 

 

 

 

 

 

 

Weighted average duration of defined benefit obligation

 

10 - 11 years

 

11 years

 

 


21.

EMPLOYEE BENEFIT (continued)

21(b)Pension – Defined benefit plans (continued)

Sensitivity analysis

A one-percentage point change in the assumed rates would have yielded the following effects:

 

 

 

2018

 

2017

 

 

 

US$’000

 

US$’000

 

Discount rate – 1% increase

 

 

(777

)

 

(721

)

Discount rate – 1% decrease

 

 

908

 

 

844

 

Rate of salary increase – 1% increase

 

 

869

 

 

808

 

Rate of salary increase – 1% decrease

 

 

(762

)

 

(707

)

 

 

The sensitivity result above determines their individual impact on the plan’s year-end defined benefit obligation. In reality, the plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the plan’s sensitivity to such changes can vary over time.

 

21(c)

Long service leave

The liability for long service leave is recognized in the provision for employee benefits and measured as present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departure, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match as closely as possible, the estimated future cash outflows. As of December 31, 2018 and 2017, the amount of long service leave obligation was $539 and $586, respectively.