Download - Siemens Pakistan
Download - Siemens Pakistan
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Notes to the Financial Statements<br />
135<br />
7. STAFF RETIREMENT BENEFITS - Defined benefit plan<br />
7.1 The actuarial valuation of gratuity scheme was carried out at September 30, 2008. The Projected Unit Credit method, using the following<br />
significant financial assumptions respectively for the Company and CTI (which is now a Business Unit of the Company), has been used for the<br />
actuarial valuation:<br />
Discount rate 14.60% per annum compound (2007: 11.00% and 10.00% ).<br />
Expected rate of increase in salaries 12.42% per annum (2007: 8.89% and 9.00%).<br />
Expected rate of return on plan assets 14.60% per annum (2007: 11.00% and 12.00%).<br />
The amounts recognised in the balance sheet are as follows:<br />
2008 2007<br />
(Rupees in ‘000)<br />
Fair value of plan assets 348,671 368,633<br />
Present value of defined benefit obligation (441,555) (377,690)<br />
Deficit (92,884) (9,057)<br />
Unrecognised net loss 130,948 42,973<br />
Surplus carried forward in the balance sheet 38,064 33,916<br />
7.2 Movement in net asset in the balance sheet is as follows:<br />
Opening balance of net asset 33,916 56,352<br />
Expense recognised for the year (29,267) (22,436)<br />
Contributions made by the Company 33,415 - .<br />
Closing balance of net asset 38,064 33,916<br />
7.3 The following amounts have been charged in the profit<br />
and loss account in respect of these benefits:<br />
Current service expense 29,567 27,765<br />
Interest expense 38,863 35,489<br />
Expected return on plan assets (40,244) (42,296)<br />
Settlement cost - . 1,469<br />
Expense for the year 28,186 22,427<br />
Recognition of actuarial loss 1,081 9<br />
Expense recognised in the financial statements 29,267 22,436<br />
7.4 Movement in the present value of defined benefit obligation:<br />
Opening balance 377,690 335,459<br />
Service expense 29,567 27,765<br />
Interest expense 38,863 35,489<br />
Benefits paid (52,821) (63,276)<br />
Benefits due but not paid to outgoing members - . (15,017)<br />
Settlement cost - . 1,469<br />
Actuarial loss 48,256 55,801<br />
Present value of defined benefit obligation at end of the year 441,555 377,690<br />
7.5 Movement in the fair value of plan assets<br />
Opening balance 368,633 405,731<br />
Expected return 40,244 42,296<br />
Contributions made by the Company 33,415 - .<br />
Benefits paid (52,821) (63,276)<br />
Benefits due but not paid to outgoing members - . (15,017)<br />
Actuarial loss (40,800) (1,101)<br />
Fair value of plan assets at end of the year 348,671 368,633