Staatsolie Annual Report 2017

Confidence in Our Own Abilities
30
Report on the Audit of the Consolidated Financial Statements
(Continued)
Key audit matters
(Continued)
Key audit matter
How our audit addressed the key audit matter
Valuation of obligation in respect of defined
benefit plans
We identified the valuation of obligation in
respect of defined benefit plans as a key audit
matter because of the significant management
judgement and actuarial expert involved in
valuation.
As set out in Notes 2.5 and 4.8 to the
consolidated financial statements, in
determining the obligation in respect of defined
benefit plans, the Group engaged an actuarial
expert to perform the actuarial valuation of plan
assets and the present value of the defined
benefit obligations, and the key assumptions
used including discount rates, expected return
on plan assets, expected salary increases and
mortality rates.
As set out in note 4.8 to the consolidated
financial statements, the Group’s obligation
in respect of the defined benefit plans as at
December 31, 2016 and December 31, 2017
amounted to US$65.07 million and US$42.75
million respectively.
Our procedures in relation to the assessing the
valuation of obligation in respect of defined
benefit plans included:
• Understanding the management valuation
process, including the involvement of
actuarial expert in performing the actuarial
valuation of plan assets and the present
value of the defined benefit obligations;
• Evaluating the competence, capabilities
and objectivity of the management
actuarial expert;
• Evaluating the appropriateness of the
valuation method and key assumptions as
disclosed in Note 4.8 used to determine
the valuation of obligation in respect of
defined benefit plans and compliance with
IAS 19: Employee Benefits.;
• Working with EY actuarial expert to evaluate
the reasonableness of the discount rate
used by management;
• Evaluating the reasonableness of the
expected return on plan assets by checking
the historical performance on plan assets
and available market and economic data;
• Assessing whether the relevant disclosures
in the consolidated financial statements
are consistent with the requirements of IAS
19; and
• For pension assets we obtained an
independent report from the plan’s auditors
confirming the reasonableness of the fair
value of the assets used in the computation
of the net pension liability.