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 382 VakıfBank Annual Report 2017 7. Information on provisions Information on general provisions Current Period Prior Period Provisions for loans and receivables in Group I 1,527,551 1,796,316 -Additional provision for loans with extended payment plans 67,249 50,986 Provisions for loans and receivables in Group II 181,119 222,879 -Additional provision for loans with extended payment plans 32,611 33,725 Provisions for non-cash loans 137,421 124,718 Other 39,402 23,530 Total 1,885,493 2,167,443 Information on employee rights According to the TAS-19- Judgments of benefits that are provided to employees, bank accounts and calculate provision to obligations of severance pay and allowance rights. As of December 31, 2017, TL 413,371 (December 31, 2016: TL 395,650) provision for severance pay and TL 107,986 (December 31, 2016: TL 98,026) provision for unused vacation are stated in financial statements under employee rights provision. Movement of severance pay provision in the period: Current Period Previous Period Opening balance 395,650 369,078 Current service cost 39,480 43,060 Previous service cost 8,866 - Interest cost 40,470 35,121 Paid compensation (42,544) (51,300) Payment/Reduction of benefits/Layoff accordingly composed loss/(gain) (569) 1,637 Actuary loss/(gain) (28,363) (2,107) Net foreign exchange differences from foreign subsidiaries 381 161 Closing balance 413,371 395,650 Information on pension rights The Fund’s technical financial statements are inspected by an actuary who is registered to the actuaries registry, in accordance with the Insurance Law no. 5684, article 21, and the “Actuaries Regulations” published referring to the mentioned article. According to the actuary report dated January 2018, there are no technical or actual deficits that requires making any provision. Transferable retirement and health liabilities Current Period Previous Period Net Present Value of Transferable Retirement Liabilities (5,495,589) (4,843,316) Net Present Value of Transferable Retirement and Health Contributions 4,317,510 3,352,762 General Administration Expenses (99,503) (86,552) Present Value of Pension and Medical Benefits Transferable to SSF (1) (1,277,583) (1,577,107) Fair Value of Plan Assets (2) 5,360,551 4,299,662 Asset Surplus over Transferable Benefits ((2)-(1)=(3)) 4,082,968 2,722,555