VKF_FRAE_2017

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 EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT 298 VakıfBank Annual Report 2017 XIX. INFORMATION ON CASH AND CASH EQUIVALENT For the purposes of the cash flow statement, cash includes cash effectives, cash in transit, purchased cheques and demand deposits including balances with the Central Bank of the Republic of Turkey (“CBRT”); and “cash equivalents” include interbank money market placements and time deposits at banks with original maturity periods of less than three months. XX. ADDITIONAL INFORMATION ON BORROWINGS The Parent Bank provides funding resources such as syndication and securitization transactions in case of need. In the current period, the Parent Bank has started to obtain funds through domestic and international bonds and bills since August 2011. These transactions are initially recognized at acquisition costs at the transaction date and are subsequently measured at amortized cost using effective interest method. The group is not hedging about debt instruments. XXI. INFORMATION ON ISSUANCE OF EQUITY SECURITIES The shares of the Parent Bank having nominal value of TL 322,000,000 (full TL), representing the 25.18% of the Bank’s outstanding shares, was publicly offered at a price between TL 5.13-5.40 for each share having a nominal value of TL 1 on November 2005, and TL 1,172,347 was recorded as “Share Premiums” in shareholders’ equity. TL 448,429 of this amount has been utilized in capital increase on December 19, 2006. XXII. INFORMATION ON CONFIRMED BILLS OF EXCHANGE AND ACCEPTANCES Confirmed bills of exchange and acceptances are realized simultaneously with the customer payments and recorded in off-balance sheet accounts as possible debt and commitment, if any. As at the balance sheet date, there are no acceptances recorded as liability in return for assets. XXIII. INFORMATION ON GOVERNMENT INCENTIVES As at December 31, 2017, Vakıf Finansal Kiralama AŞ, a consolidated subsidiary of the Group, has unused investment incentives amounting to TL 186,717 (December 31, 2016: TL 199,946). XXIV. INFORMATION ON SEGMENT REPORTING An operating segment is a component of an entity: - That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), - Whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and - For which discrete financial information is available. Segment reporting was selected as a fundamental section reporting method considering Group’s risk and return structure and key sources which is disclosed in Section 4 Note X.