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 396 VakıfBank Annual Report 2017 V. INFORMATION AND DISCLOSURES RELATED TO STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 1. Information on increases that occur after revaluation of available-for-sale investments Movement tables related to revaluation differences of available-for-sale investments where valuation differences arising from the fair value measurement of available-for-sale assets, subsidiaries and affiliates are recorded are as follows: Valuation Differences of Marketable Securities Current Period Prior Period Valuation differences at the beginning of the year (195,457) (9,331) Fair value changes in the current year 120,429 (227,237) Valuation differences transferred to the statement of income (34,098) (6,970) Effect of deferred and corporate taxes (15,709) 48,081 Valuation differences at the end of the year (124,835) (195,457) Valuation Difference of the Subsidiaries and Affiliates Current Period Prior Period Valuation differences at the beginning of the year 64,288 39,342 Fair value changes in the current year (2,813) 26,317 Valuation differences transferred to the statement of income - - Effect of deferred and corporate taxes 234 (1,371) Valuation differences at the end of the year 61,709 64,288 2. Information on increases in cash flow hedges None. 3. Reconciliation of the beginning and end of the year balances of foreign exchange differences As of December 31, 2017, foreign currency translation differences of (27,252) TL (December 31, 2016: 59,217 TL), which occurred from converting abroad subsidiaries’ financial statements to TL for consolidation purpose, is accounted under other reserves in the enclosed consolidated financial statements. 4. Information on correction differences of shareholders’ equity accounts due to inflation In compliance with BRSA’s Circular on April 28, 2005 on ceasing the inflation accounting application, the balances resulted from the inflation accounting application as at December 31, 2004 and booked according to the Uniform Chart of Accounts and the related Articles, are transferred to the main accounts that were subject to the inflation accounting adjustments except for “capital reserves from inflation adjustments”. The balance of “capital reserves from inflation adjustments” account is transferred to “other capital reserves” account. In 2006, the Bank has increased its paid in capital through “other capital reserves” by TL 605,763. 5. Information on profit distribution As per the resolution of 63 Annual General Assembly held on June 9, 2017, the net profit of the year 2016 which amounts to TL 2,683,101 after deferred tax income deducted is decided to be distributed as legal reserves amounting to TL 268,310, extraordinary reserves amounting to TL 2,245,347, special funds amounting to TL 49,444 and dividends to equity holders of the Parent Bank amounting to TL 120,000. 6. Information on decreases of revaluation of available-for-sale investments Revaluation differences of available-for-sale investments has resulted with increase in the current year. Detailed information about the increases is explained above in Note 1.