BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 189 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 19. EMPLOYMENT BENEFITS As of 31 December 2021 and 2020, Employment Benefits details are as follows: Liabilities for Employment Benefits 31 December 2021 31 December 2020 Due to Personnel 4.036.151 1.493.433 Social Security Premiums Payable 1.571.641 711.331 Total 5.607.792 2.204.764 Severance Pay Provision Expense Pursuant to the provisions of the Labor Law in force, employees whose employment contracts are terminated to qualify for severance pay are obliged to pay the legal severance pay to which they are entitled. In addition, in accordance with the provision of Article 60 of the Social Security Law No. 506, which is still in effect, with the Law No. 2422 dated March 6, 1981 and numbered 4447 of August 25, 1999, those who receive the severance pay and have the right to leave the job are obliged to pay the legal severance pay. Some transitional provisions related to pre-retirement service conditions were removed from the law with the amendment of the relevant law on 23 May 2002. The severance pay ceiling is revised twice a year, and the maximum amount of 10.848,59 TL effective from 1 January 2022 has been taken into account in the calculation of the severance pay provision (1 January 2021: 7.638,96 TL). Severance pay liability is not legally subject to any funding. The provision for employment termination benefits is calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of its employees. TAS 19 (Employee Benefits) requires the Group’s liabilities to be developed using actuarial valuation methods within the scope of defined benefit plans. Accordingly, the actuarial assumptions used in the calculation of total liabilities are given below. The main assumption is that the maximum liability amount for each year of service will increase in line with inflation. Therefore, the discount rate applied represents the expected real rate after adjusting for the effects of future inflation. Therefore, provisions in the accompanying consolidated financial statements as of 31 December 2021 are calculated by estimating the present value of the future probable obligation arising from the retirement of the employees. Provisions made on two different balance sheet dates have been calculated based on the following actuarial assumptions: 31 December 2021 31 December 2020 Annual Inflation Rate 15,9% 9,00% Interest Rate 21,00% 13,50% Discount Rate 4,4% 4,13% Rate of Employees Entitled to Severance Pay in Past Years to Total Employees 75% 77%