Page 173 - A&T BANK ANNUAL REPORT 2012

171 170 A&T BANK 2012 ANNUAL REPORT •
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
CONSOLIDATED FINANCIAL REPORT
AS OF 31 DECEMBER 2012
(Currency: Thousands of Turkish Lira (“TL”) unless otherwise stated)
Convenience Translation of Consolidated Financial
Report Originally Issued in Turkish
See Note on I. in Section Three
XV. Information on provisions and contingent liabilities and contingent assets
Provisions and contingent liabilities are provided for in accordance with the TAS 37-Provisions, Contingent Liabilities and
Contingent Assets, except for the general and specific provisions set aside for the loans and other receivables.
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate of the amount of obligation can be made.
A provision for contingent liabilities arising from past events should be recognized in the same period of occurrence if it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate the amount of the obligation can be made.
XVI. Information on liabilities regarding employee benefits
Reserve for employee termination benefits
In accordance with existing Turkish Labour Law, the Group is required to make lump-sum termination indemnities to each
employee who has completed one year of service with the Group and whose employment is terminated due to retirement
or for reasons other than resignation or misconduct. The computation of the liability is based upon the retirement pay ceiling
announced by the Government. The applicable ceiling amount as at 31 December 2012 is TL 3,034 (full TL) (31 December 2011:
TL 2,732 (full TL)).
The Group reserved for employee severance indemnities in the accompanying consolidated consolidated financial statements
using actuarial method in compliance with the TAS 19 – Employee Benefits.
As at 31 December 2012 and 2011, the major actuarial assumptions used in the calculation of the total liability are as follows:
The Parent Bank Current Period Prior Period
Discount Rate 2.86% 5.38%
Expected Rate of Salary/Limit Increase 5.00% 5.10%
Estimated Employee Turnover Rate 5.42% 4.40%
Subsidiary Current Period Prior Period
Discount Rate 2.38% 4.66%
Expected Rate of Salary/Limit Increase 5.00% 5.10%
Estimated Employee Turnover Rate 0.00% 0.00%
Other benefits to employees
The Group has provided provision for undiscounted short-term employee benefits earned during the financial period as per
services rendered in compliance with the TAS 19– Employee Benefits in the accompanying consolidated financial statements.