ANNUAL

ENKA İNŞAAT VE SANAYİ A.Ş. AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
(Amounts are expressed as thousands of U.S. Dollars (“USD”) unless otherwise stated. Currencies other than USD are
expressed in thousands unless otherwise indicated.)
19. COMMITMENTS (cont’d)
The breakdown of letters of guarantee, guarantee notes given, mortgage and pledges (together referred to as
Guarantees) by the Group as of 31 December 2016 and 2015 is as follows:
Letters of guarantee, guarantee notes given,
mortgage and pledges
31 December 2016 31 December 2015
USD
Equivalent
Original
Currency
Original
Currency
USD
Equivalent
A. Total amount of guarantees provided by
the Company on behalf of itself 543,737 758,850
-USD 398,701 398,701 653,008 653,008
-EUR 101,035 106,510 85,404 93,334
-TL 53,923 15,323 28,749 9,888
-Others (*) 23,203 2,620
B. Total amount for guarantees provided on behalf of
subsidiaries accounted under full consolidation method 70,033 62,896
-USD 85 85 85 85
-EUR 526 555 3,285 3,591
-TL 957 272 957 329
-Others (*) 69,121 58,891
C. Provided on behalf of third parties in order to
maintain operating activities - -
(to secure third party payables)
D. Other guarantees given - -
i. Total amount of guarantees given on
behalf of the parent company - -
ii. Total amount of guarantees provided on behalf of
the associates which are not in the scope of B and C - -
iii. Total amount of guarantees provided on behalf of
third parties which are not in the scope of C - -
613,770 821,746
(*) U.S Dollar equivalents of letters of guarantee, guarantee notes given, mortgage and pledges other than USD, TL and EUR.
As of 31 December 2016 the portion of other guarantess given to shareholders’ equity is 0% (31 December 2015
- 0%).
ENKA İNŞAAT VE SANAYİ A.Ş. AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
(Amounts are expressed as thousands of U.S. Dollars (“USD”) unless otherwise stated. Currencies other than USD are
expressed in thousands unless otherwise indicated.)
20. PROVISIONS FOR EMPLOYEE BENEFITS
a) Short-term employee benefits
Liabilities with the scope of employee benefits
31 December 31 December
2016 2015
Payroll payable 21,873 13,551
Short-term provisions related to employee benefits
21,873 13,551
31 December 31 December
2016 2015
Bonus accrual 9,402 5,057
Vacation pay liability 8,940 9,626
18,342 14,683
b) Long-term employee benefits
In accordance with existing social legislation, the Company and its subsidiaries incorporated in Turkey are required
to make lump-sum payments to employees whose employment is terminated due to retirement or for reasons other
than resignation or misconduct. Such payments are calculated on the basis of 30 days’ pay limited to a maximum
of full TL 4,297 equivalent to full USD 1,221 (31 December 2015 - full TL 3,828 equivalent to full USD 1,317)
per year of employment at the rate of pay applicable at the date of retirement or termination.
The liability is not funded as there is no funding requirement.
The provision has been calculated by estimating the present value of the future probable obligation of the Company
arising from the retirement of employees. IAS 19 requires actuarial valuation methods to be developed to estimate the
enterprise’s obligation under defined benefit plans. Accordingly, the following actuarial assumptions were used in the
calculation of the total liability:
The principal assumption is that the maximum liability for each year of service will increase parallel with inflation.
Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future
inflation. Consequently, in the accompanying financial statements as at 31 December 2016, the provision has been
calculated by estimating the present value of the future probable obligation of the Company arising from the retirement
of the employees. The provisions at the respective balance sheet dates have been calculated with 3.99% real discount
rate, assuming an annual inflation rate of 6.5% and a discount rate of 10.75% (31 December 2015 – 3.99 %).
Estimated amount of retirement pay not paid due to voluntary leaves is also taken into consideration. Retirement
ceiling pay revised each six month period basis and ceiling amount of full TL 4,426 which is in effect since 1
January 2017 is used in the calculation of Groups’ provision for retirement pay liability (1 January 2016 – full TL
4,093).
Movements of the provision for employee termination benefits during years ended 31 December 2016 and 2015 are
as follows:
1 January - 1 January -
31 December 2016 31 December 2015
Opening balance 16,952 16,294
Service cost 2,606 2,589
Actuarial loss 483 2,005
Retirement benefits paid (1,830) (1,869)
Translation gain (1,921) (2,067)
Closing balance 16,290 16,952
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