|SELECTED ACCOUNTING PRINCIPLES
In accordance with compensation policies, employees of the Group companies are entitled to the following post-employment benefits:
The above provisions are included in the post-employment defined benefit plans.
Jubilee bonuses are paid to employees of Group companies after a specified number of years of service.
The current value of provisions for post-employment benefits and provisions for jubilee bonuses as at each balance sheet date is calculated by an independent actuary using actuarial methods. Provisions are calculated using the individual method for each employee separately. The accrued liabilities are equal to discounted future payments, including employee turnover, and pertain to the time remaining until the end of the reporting period. Demographic and employee turnover data are based on historical information.
Actuarial gains and losses on measurement of liabilities arising from post-employment benefits are fully recognised in other comprehensive income (with the accumulated amount recognised in retained earnings), while actuarial gains and losses on jubilee bonuses are recognised in profit or loss.
Other increases and decreases in provisions are charged to operating expenses in the case of employees, to other operating expenses/ revenue in the case of pensioners and individuals entitled to disability allowances and to finance costs in the portion pertaining to interest that constitutes the unwinding of discount.
In accordance with IAS 19 Employee Benefits, the Group also recognises provisions for termination benefits under the voluntary redundancy schemes. The benefits are measured based on the expected number of employees willing to accept the employment termination offer and the estimated benefit amount.
PROFESSIONAL JUDGEMENT AND ESTIMATES
Provisions for post-employment benefits and for jubilee benefits have been estimated using actuarial methods. Key actuarial assumptions made as at the end of the reporting period for provision calculation purposes:Export to Excel
|31 December 2020||31 December 2019|
|Discount rate (%)||1.20%||2.10%|
|Estimated inflation rate (%)||2.50%||2.50%|
|Employee rotation rate (%)||0.95% – 8.79%||0.93% – 8.98%|
|Estimated salary increase rate (%)||2.50%||2.50%|
|Estimated electricity price increase rate (%)||–||3.50%|
|Estimated increase rate for contribution to the Social Fund (%)||3.50%||3.50%|
|Remaining average employment period||12.06 – 21.62||12.18 – 22.67|
Table 1Export to Excel
31 December 2020
31 December 2019
|Provision for post-employment benefits and jubilee
|Provision for employment termination benefits and other provisions for