245
PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE IN NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND
ITS FINANCIAL SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
XXV. OTHER MATTERS
Earnings per shares
Earnings per share has been calculated by dividing the net profit for the period to weighted average of outstanding shares. In Turkey, the companies
may perform capital increase (“Bonus Shares”) from retained earnings. In earning per share computation bonus shares are treated as issued shares.
As at and for the year ended 31 December 2015, earnings per 100 shares are full TL 0.7496 (31 December 2014: full TL 0.7255).
Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making
financial and operating decisions. Shareholders, top executives and board members are accepted as related party personally, with their families and
companies according to TAS 24 - Related Party Disclosures Standard. Transactions made with related parties are disclosed in Section 5 Note V.
Classifications
None.
Insurance operations
Written Premiums:
Written premiums represent premiums on policies written during the year net of taxes and premiums of the cancelled policies
produced in previous years. Written premiums, net off ceded are recorded under other operating income in the accompanying consolidated statement
of income.
Reserve for unearned premiums:
Reserve for unearned premiums represents the proportions of the premiums written in a period that relate to the
period of risk subsequent to the balance sheet date, without deductions of commission or any other expense. Reserve for unearned premiums is
calculated for all contracts except for the insurance contracts for which the Group provides mathematical reserve. Reserve for unearned premiums is
also calculated for the annual premiums of the annually renewed long-term insurance contracts. Reserve for unearned premiums is presented under
“insurance technical provisions” in the accompanying consolidated financial statements.
Reserve for outstanding claims:
Reserve for outstanding claims is provided for the outstanding claims, which incurred and reported but not yet settled
in current or previous years based on reported balances or estimates when actual balances are not exactly known and incurred but not yet reported
claims (“IBNR”). IBNR and subrogation and salvage reimbursements are recognized as the highest of the amount calculated based on historical data
and results of actuarial chain ladder method. Reserve for outstanding claims is presented under “insurance technical provisions” in the accompanying
consolidated financial statements.
Mathematical provisions:
Mathematical provisions are the provisions recorded against the liabilities of the Group to the beneficiaries of long-term life
and individual accident policies based on actuarial assumptions. Mathematical provisions consist of actuarial mathematical provisions savings and profit
sharing reserves.
Actuarial mathematical provisions are calculated as the difference between the net present values of premiums written in return of the risk covered
by the Group and the liabilities to policyholders for long-term insurance contracts based on the basis of actuarial mortality assumptions as approved by
the Republic of Turkey Prime Ministry Under secretariat of Treasury, which are applicable for Turkish insurance companies. Mathematical provision also
includes the saving portion of the provisions for saving life product.
Profit sharing reserves are the reserves provided against income obtained from asset backing saving life insurance contracts. These contracts entitle
the beneficiaries of those contracts to a minimum guaranteed crediting rate per annum or, when higher, a bonus rate declared by the Group from the
eligible surplus available to date.
