PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2006 and 2005 Expressed in rupiah, unless otherwise stated
41
21. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
a. Retirement Benefit continued The provisions for employee benefits recognized in the consolidated statements of income
consisted of the following:
2006 2005
Current service costs 3,574,615,072
9,225,822,877 Interest costs
8,263,829,500 7,021,131,000
Actuarial loss recognized 50,891,500
- Amortization of past service costs and actuarial gains
3,972,245,500 3,860,697,000
Net employee benefits expense 15,861,581,572
20,107,650,877
A reconciliation of estimated liability for employee benefits is as follows:
2006 2005
Present value of defined benefit obligation 153,684,204,965
160,980,529,901 Unamortized balance of the non-vested past service
costs 90,798,391,500
98,851,817,500 Actuarial loss
13,686,911,688 16,003,221,777
Liability recognized in the consolidated balance sheets 49,198,901,777
46,125,490,624
Movements in the estimated liability for employee benefits are as follows:
2006 2005
Balance at beginning of period 47,867,513,812
33,647,515,723 Provision during the period
15,861,581,572 20,107,650,877
Payments during the period 14,530,193,607
7,629,675,976
Balance at end of period recorded as part of
“Long-term Liabilities - Others” account in the
consolidated balance sheets 49,198,901,777
46,125,490,624
Non-vested past service costs are amortized over the average remaining years of service of active employees, which range from 12.19 - 16.02 years in 2006 and from 13.19 - 16.49 years in 2005.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2006 and 2005 Expressed in rupiah, unless otherwise stated
42
21. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
b. Post-retirement Healthcare Benefit Effective March 2005, the Company started to provide post-retirement healthcare benefits the
“Plan” to all of its qualified permanent employees. The plan is not funded. In December 2005, the Company appointed PT Watson Wyatt Purbajaga WWP to calculate the expected obligations for
the post-retirement healthcare benefit. The actuarial valuation was determined using the “Projected Unit Credit” method which considered
the following assumptions:
Discount rate 11
Claim cost trend 9
Retirement age 55
Mortality rate CSO ‘80
Disability rate 10 of mortality rate
Average employee turnover 1 for employees with ages from 20 years old up to 54 years old
The provision for employee benefits recognized in the consolidated statements of income for the six months ended June 30, 2006 consisted of the following:
Current service cost 453,563,500
Interest cost 854,753,000
Vested past service costs and amortization of non-vested past service costs 388,993,500
Net post-retirement healthcare benefits 1,697,310,000
A reconciliation of estimated liability for post-retirement health care benefits is as follows: Present value of defined benefit obligation
16,877,595,664 Unamortized balance of the non-vested past service costs
10,922,934,500 Actuarial gain
4,176,000 Liability recognized in the 2006 consolidated balance sheet
5,958,837,164
Movements in the estimated liability for post-retirement healthcare benefits are as follows: Balance at beginning of period
4,409,314,000 Provision during the period
1,697,310,000 Payments during the period
147,786,836 Balance at end of period
5,958,837,164
Non-vested past service costs are amortized over the remaining number of years of service of active employees, which is 14.61 years.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2006 and 2005 Expressed in rupiah, unless otherwise stated
43
22. TRANSACTIONS AND ACCOUNTS WITH RELATED PARTIES
