11. Employee benefits
in PLN millions, unless otherwise stated
| Accounting policies |
|---|
| The Company is obliged to pay specified benefits following the period of employment (retirement benefits due to one-off retirement-disability rights, post-mortem benefits and the coal equivalent) and other long-term benefits (jubilee bonuses), in accordance with the Collective Labour Agreement. The amount of the liabilities due to both of these benefits is estimated at the end of the reporting period by an independent actuary using the projected unit credit method. The present value of liabilities from these benefits is determined by discounting estimated future cash outflow using the interest rates on treasury bonds expressed in the currency of the future benefits payments, with maturities similar to those of the liabilities due to be paid. Actuarial gains and losses from the measurement of specified benefits following the period of employment are recognised in other comprehensive income in the period in which they arose. Actuarial gains/losses from the measurement of other benefits (for example benefits due to jubilee bonuses) are recognised in profit or loss. |
| Important estimates and assumptions |
|---|
| The carrying amount of the liability due to future employee benefits is equal to the present value of the liabilities due to defined benefits. The amount of the liability depends on many factors, which are used as assumptions in the actuarial method. Any changes to the assumptions may impact the carrying amount of the liability. Interest rates are one of the basic parameters for measuring the liability. At the end of the reporting period, based on the opinion of an independent actuary, an appropriate discount rate for the Company is used for setting the present value of estimated future cash outflow due to these benefits. In setting the discount rate for the reporting period, the actuary extrapolates current interest rates of treasury bonds along the profitability curve expressed in the currency of the future benefits payments, to obtain a discount rate enabling the discounting of payments with maturities which are longer than the maturities of the bonds. Other macroeconomic assumptions used to measure liabilities due to future employee benefits, such as the inflation rate or the minimum salary, are based on current market conditions. The assumptions used to measure liabilities as at 31 December 2018 are presented in Note 11.2. |
Impact of changes in the indicators on the balance of liabilities
| As at 31 December 2018 | As at 31 December 2017 | |
| an increase in the discount rate by 1% | (316) | (252) |
| a decrease in the discount rate by 1% | 421 | 331 |
| an increase in the coal price increase rate and the salary increase rate by 1% | 411 | 347 |
| a decrease in the coal price increase rate and the salary increase rate by 1% | (316) | (255) |
Note 11.1 Employee benefits liabilities
Components of the item: employee benefits liabilities
| As at 31 December 2018 | As at 31 December 2017 | |
|---|---|---|
| Non-current | 2 235 | 1 879 |
| Current | 141 | 111 |
| Liabilities due to future employee benefits programs | 2 376 | 1 990 |
| Employee remuneration liabilities | 193 | 175 |
| Accruals (unused annual leave, bonuses, other) | 277 | 363 |
| Employee liabilities | 470 | 538 |
| Total employee benefits liabilities | 2 846 | 2 528 |
Employee benefits expenses
| from 1 January 2018 to 31 December 2018 | from 1 January 2017 to 31 December 2017 | ||
|---|---|---|---|
| Remuneration | 2 222 | 2 177 | |
| Costs of social security and other benefits | 904 | 876 | |
| Costs of future benefits | 198 | 157 | |
| Note 4.1 | Employee benefits expenses | 3 324 | 3 210 |
Note 11.2 Changes in liabilities related to future employee benefits programs
| | Total liabilities | Jubilee awards | Retirement and disability benefits | Coal equivalent | Other benefits | |
|---|---|---|---|---|---|---|
| As at 1 January 2017 | 1 800 | 273 | 261 | 1 239 | 27 | |
| Note 11.1 | Total costs recognised in profit or loss | 157 | 63 | 24 | 70 | - |
| | Interest costs | 64 | 10 | 9 | 45 | - |
| | Current service costs | 60 | 20 | 15 | 25 | - |
| Actuarial losses recognised in profit or loss | 33 | 33 | - | - | - | |
| Note 8.2.2 | Actuarial (gains)/losses recognised in other comprehensive income | 130 | - | 24 | 125 | (19) |
| Benefits paid | ( 97) | ( 33) | (23) | (40) | (1) | |
| As at 31 December 2017 | 1 990 | 303 | 286 | 1 394 | 7 | |
| Note 11.1 | Total costs recognised in profit or loss | 198 | 99 | 25 | 74 | - |
| Interest costs | 68 | 11 | 10 | 47 | - | |
| Current service costs | 63 | 21 | 15 | 27 | - | |
| Actuarial losses recognised in profit or loss | 67 | 67 | - | - | - | |
| Note 8.2.2 | Actuarial losses recognised in other comprehensive income | 303 | - | 50 | 238 | 15 |
| Benefits paid | (115) | (40) | (28) | (46) | ( 1) | |
| As at 31 December 2018 | 2 376 | 362 | 333 | 1 660 | 21 | |
| As at 31 December | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|
| Present value of liabilities due to employee benefits | 2 376 | 1 990 | 1 800 | 1 905 | 1 956 |
Main actuarial assumptions as at 31 December 2018:
| | 2019 | 2020 | 2021 | 2022 | 2023 and beyond |
|---|---|---|---|---|---|
| - discount rate | 2.82% | 2.82% | 2.82% | 2.82% | 2.82% |
| - coal price increase rate | 8.70% | 3.00% | 3.00% | 3.00% | 3.00% |
| - lowest salary increase rate | 7.14% | 4.89% | 5.08% | 4.00% | 4.00% |
| - expected inflation | 3.20% | 2.90% | 2.50% | 2.50% | 2.50% |
| - future expected increase in salary | 5.60% | 5.00% | 4.80% | 3.90% | 3.90% |
Main actuarial assumptions as at 31 December 2017:
| | 2018 | 2019 | 2020 | 2021 | 2022 and beyond |
|---|---|---|---|---|---|
| - discount rate | 3.35% | 3.35% | 3.35% | 3.35% | 3.35% |
| - coal price increase rate | 5.00% | 3.20% | 3.00% | 3.00% | 3.00% |
| - lowest salary increase rate | 0.00% | 4.20% | 4.00% | 4.00% | 4.00% |
| - expected inflation | 2.30% | 2.70% | 2.50% | 2.50% | 2.50% |
| - future expected increase in salary | 5.10% | 2.70% | 2.50% | 2.50% | 2.50% |
The change in actuarial gains/losses was caused by a change in the assumptions in respect of the decrease of the discount rate, the increase in coal prices and the increase in the lowest salary.
For purposes of reassessment of the liabilities at the end of the current period, the parameters assumed were based on available forecasts of inflation, analysis of coal prices rates and of the lowest salary rates, and also based on the anticipated profitability of non-current treasury bonds.
Actuarial gains/losses as at 31 December 2018 versus assumptions adopted as at 31 December 2017
| Change in financial assumptions | 275 |
| Change in demographic assumptions | (58) |
| Other changes | 153 |
| Total actuarial (gains)/losses | 370 |
Actuarial gains/losses as at 31 December 2017 versus assumptions adopted as at 31 December 2016
| Change in financial assumptions | 49 |
| Change in demographic assumptions | 84 |
| Other changes | 30 |
| Total actuarial (gains)/losses | 163 |
Maturity profile of future employee benefits liabilities
| Year of maturity: | Total liabilities | Jubilee awards | Retirement and disability benefits | Coal equivalent | Other benefits |
|---|---|---|---|---|---|
| 2019 | 140 | 37 | 49 | 53 | 1 |
| 2020 | 150 | 33 | 53 | 63 | 1 |
| 2021 | 97 | 23 | 12 | 61 | 1 |
| 2022 | 94 | 23 | 10 | 60 | 1 |
| 2023 | 95 | 23 | 13 | 58 | 1 |
| Other years | 1 799 | 222 | 196 | 1 364 | 17 |
| Total liabilities in the statement of financial position as at 31 December 2018 | 2 375 | 361 | 333 | 1 659 | 22 |
Maturity profile of future employee benefits liabilities
| Year of maturity: | Total liabilities | Jubilee awards | Retirement and disability benefits | Coal equivalent | Other benefits |
|---|---|---|---|---|---|
| 2018 | 111 | 36 | 29 | 45 | 1 |
| 2019 | 161 | 33 | 76 | 52 | - |
| 2020 | 84 | 22 | 11 | 51 | - |
| 2021 | 81 | 20 | 11 | 50 | - |
| 2022 | 77 | 19 | 9 | 48 | 1 |
| Other years | 1 476 | 173 | 150 | 1 148 | 5 |
| Total liabilities in the statement of financial position as at 31 December 2017 | 1 990 | 303 | 286 | 1 394 | 7 |