Notes to the financial statements
29. Employee Benefits
29.1 Retirement Benefits and Other Post-employment Benefits
In accordance with the Group's remuneration systems, the Group's employees are entitled to severance pays when retiring due to old age or disability. Length-of-service awards are paid out after a specific period of employment. Therefore, based on a valuation prepared by professional actuary firms, the Group creates provisions for the present value of its obligation to provide old-age and disability retirement severance pays and length-of-service awards. The table below provides information on the amount of the provisions and a reconciliation presenting changes in the provisions during the financial period.
|
Year ended Dec 31 2010 |
Year ended Dec 31 2009 |
|
|---|---|---|
| Balance as at beginning of period | 98,694 | 92,092 |
| Provision created, including: | 32,695 | 36,603 |
| - change in Group structure | - | 35 |
| Benefits paid | (10,970) | (10,432) |
| Provision released | (6,332) | (12,993) |
| Provision used | (6,258) | (6,576) |
| Balance as at end of period | 107,829 | 98,694 |
The table below presents the key assumptions adopted by the actuary as at the balance sheet date to calculate the amount of the obligation.
| Dec 31 2010 | Dec 31 2009 | |
|---|---|---|
| Discount rate (%) | 5.8% | 6.2% |
| Expected inflation rate (%) | 2.5% | 2.5% |
| Employee turnover ratio (%) (1) | 2.9%-27% | 5.3%-36.6% |
| Expected growth rate of salaries and wages (%) | 0%-5% | 0%-6.1% |
| Expected growth rate of salaries and wages (%) in the following years | 1.5%-7% | 1.5%-7% |
(1) The probability of employee attrition is based on the historical data on employee turnover at the Group.
29.2 Termination Benefits
In 2010, termination benefits and compensation payable in respect of non-compete obligation totalled PLN 2,236 thousand (2009: PLN 573 thousand).
In 2010, provisions for termination benefits totalled PLN 806 thousand (2009: PLN 830 thousand).
This is a translation of a document originally issued in Polish
The notes to the financial statements, presented on following pages, are their integral part.
