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Employee Benefit
12 Months Ended
Dec. 31, 2019
Text Block1 [Abstract]  
Employee Benefit

21.

EMPLOYEE BENEFIT

 

 

As of December 31,

 

 

2019

 

2018

 

 

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

 

1,436

 

 

10,306

 

 

11,742

 

 

855

 

 

8,161

 

 

9,016

 

Long service leave

 

452

 

 

128

 

 

580

 

 

427

 

 

112

 

 

539

 

Total

 

1,888

 

 

10,434

 

 

12,322

 

 

1,282

 

 

8,273

 

 

9,555

 

 

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, 2019, 2018 and 2017, were $1,160, $1,264, and $1,280, respectively. 

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 26 times of final month's salary. The plan is not funded. The Company pays to settle the obligations as and when employees retire.

 

21.

EMPLOYEE BENEFIT (continued)

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

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

2019

 

2018

 

2017

 

 

US$’000

 

US$’000

 

US$’000

 

Current service cost

 

546

 

 

419

 

 

360

 

Past service cost

 

121

 

 

 

 

 

Interest cost on benefit obligation

 

254

 

 

202

 

 

210

 

Net benefit cost

 

921

 

 

621

 

 

570

 

 

 

For the year ended December 31,

 

Other comprehensive income

2019

 

2018

 

2017

 

 

US$’000

 

US$’000

 

US$’000

 

Actuarial (gain) / loss – experience

 

494

 

 

396

 

 

251

 

Actuarial (gain) / loss – demographic assumption

 

18

 

 

1

 

 

184

 

Actuarial (gain) / loss – financial assumption

 

1,215

 

 

13

 

 

337

 

Actuarial loss

 

1,727

 

 

410

 

 

772

 

 

 

 

For the year ended December 31,

 

Change in the defined obligation

2019

 

2018

 

2017

 

 

US$’000

 

US$’000

 

US$’000

 

Defined benefit obligation at January 1

 

9,016

 

 

8,293

 

 

6,652

 

Current service cost

 

546

 

 

419

 

 

360

 

Past service cost

 

121

 

 

 

 

 

Interest cost on benefit obligation

 

254

 

 

202

 

 

210

 

Benefits paid directly by the Company

 

(535

)

 

(352

)

 

(274

)

Actuarial loss in other comprehensive income

 

1,727

 

 

410

 

 

772

 

Exchange differences

 

613

 

 

44

 

 

573

 

Defined benefit obligation at December 31

 

11,742

 

 

9,016

 

 

8,293

 

 

Actuarial assumptions

The significant assumptions used in determining the actuarial present value of the defined benefit obligations for the year ended December 31, 2019 and 2018 are as follows:

 

2019

 

 

2018

 

%

 

 

%

Discount rate

 

1.5

 

 

2.6 ~ 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

 

21.

EMPLOYEE BENEFIT (continued)

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

 

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,

 

 

2019

 

2018

 

 

US$’000

 

US$’000

 

Within the next 12 months (next annual reporting period)

 

1,340

 

 

855

 

Between 2 and 5 years

 

2,489

 

 

2,374

 

Between 6 and 10 years

 

4,391

 

 

4,187

 

Beyond 10 years

 

16,917

 

 

17,084

 

Total expected payments

 

25,137

 

 

24,500

 

 

 

 

 

 

 

 

Weighted average duration of defined benefit obligation

9 years

 

10 - 11 years

 

 

Sensitivity analysis

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

 

 

2019

 

2018

 

 

US$’000

 

US$’000

 

Discount rate – 1% increase

 

(1,003

)

 

(777

)

Discount rate – 1% decrease

 

1,178

 

 

908

 

Rate of salary increase – 1% increase

 

1,115

 

 

869

 

Rate of salary increase – 1% decrease

 

(973

)

 

(762

)

 

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 departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bond with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. As of December 31, 2019 and 2018, the amount of long service leave obligation was $580 and $539, respectively.