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256 A&T BANK ANNUAL REPORT 2015
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2015
(AMOUNTS EXPRESSED IN THOUSANDS OF TURKISH LIRA (“TL”) UNLESS OTHERWISE STATED. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
Reserve for employee termination benefits
The Group reserved for employee severance indemnities in the accompanying consolidated financial statements using
actuarial method in compliance with the updated “TAS 19 - Employee Benefits”. Accumulated all actuarial gains and
losses in equity are recognized in other capital reserves.
As at 31 December 2015 and 31 December 2014, the major actuarial assumptions used in the calculation of the total
liability are as follows:
The Parent Bank
Current Period
Prior Period
Discount Rate
3.12%
2.84%
Expected Rate of Salary/Limit Increase
7.50%
5.00%
Estimated Employee Turnover Rate
5.30%
5.42%
Subsidiary
Current Period
Prior Period
Discount Rate
3.12%
2.84%
Expected Rate of Salary/Limit Increase
7.50%
5.00%
Estimated Employee Turnover Rate
1.70%
0.00%
In accordance with existing Turkish Labor Law, the Parent Bank is required to make lump-sum termination indemnities
to each employee who has completed one year of service with the Parent Bank and whose employment is terminated
due to retirement or for reasons other than resignation or as mentioned in related legislation. The computation of the
liability is based upon the retirement pay ceiling announced. The applicable ceiling amount as at 31 December 2015 is
TL 3,828 (full TL) (31 December 2014: TL 3,438 (full TL)). Reserve for employee termination benefits are calculated via
net present value of estimated provision of probable liabilities will be arised in the future and reflected in the financial
statements.
Movement of employee termination benefits are as follows:
Current Period
Prior Period
Balances at Beginning of period
5,350
4,666
Provision booked in current period
1,270
1,126
Provision paid in current period (-)
155
442
Balances at End of the Period
6,465
5,350
The employee termination benefit liability of the Group is the amount as at 31 December 2015 is TL 6,465 (31 December
2014: TL 5,350). In addition to this, the unused vacation provision and other employee benefits amount as at 31
December 2015 is TL 3,896 (31 December 2014: TL 4,547).
Information on other provisions
Provisions for probable risks
These financial statements include a free provision that is out of reporting standards, amounting to TL 9,000 thousand
which was charged to the income statement in the current period, provided by the Bank management in line with
the conservatism principle considering the circumstances that may arise from any changes in the economy or market
conditions.