VKF_FRAE_2018_uyg11

156 Part III: Financial Highlights and Assessment of Risk Management CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND ITS FINANCIAL SUBSIDIARIES NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) In terms of the default definition, the bank has set the following criterias; - Over 90 days delayed collection of principal and / or interest amount, - The customer has been bankrupt or has been found to apply for bankruptcy, - The customer’s creditworthiness is impaired, - It is decided that the principal and / or interest payments of the borrower will be delayed by more than 90 days since the collaterals and / or borrower’s own funds are insufficient to cover the payment of the receivables at maturity, - It is decided that the principal and / or interest payments of the customer will be delayed by more than 90 days due to macroeconomic, sector specific or customer specific reasons. Write off Policy According to the Bank’s financial asset is completely write-off from the Bank financial statement. If there is a process that the financial asset has reached its default status and does not have any expectation that it will be recovered. Partial write-off means that its is agreed that a financial asset will be repaid by the debtor at a certain rate and the amount remaining after the payment of such amount is deducted from the financial statements. IX. INFORMATION ON OFFSETTING OF FINANCIAL INSTRUMENTS Financial assets and liabilities are reported in the balance sheet as net amount in the cases of the Bank’s right and right to sanction to finalize and have the intention to receive/pay related financial asset or liability over the recognized amount or have the right to finalize the related asset and liability simultaneously. X. INFORMATION ON SALES AND REPURCHASE AGREEMENTS AND SECURITIES LENDING Securities sold under repurchase agreements (“repo”) are classified under “Financial Assets at Fair Value through Profit or Loss”, “Financial Assets at Fair Value through Other Comprehensive Income” and/or “Financial Assets Measured at Amortised cost” portfolios according to their holding purposes in the Bank’s portfolio, and they are valued based on the revaluation principles of the related portfolios. Funds received through repurchase agreements are classified in balance sheet under “Money Market Funds” and the related interest expenses are accounted on an accrual basis of balance sheet date. Securities purchased under resale agreements (“reverse repo”) are classified in balance sheet under “Receivables from Money Markets”. The income accrual is calculated for the securities purchased under resale agreements via the difference between buying and selling prices on the balance sheet date. XI. INFORMATION ON ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS AND RELATED LIABILITIES As per TFRS 5 - “Non-current Assets Held for Sale and Discontinued Operations”, a fixed asset classified as an asset kept for sales purposes (or a group of fixed assets to be disposed of) is measured with either its book value or fair value less costs to sell (with the lower one). A discontinued operation is a part of the Bank’s business classified as sold or held-for-sale. The operating results of the discontinued operations are disclosed separately in the income statement. The Bank has no discontinued operations. With the decision of the Board of Directors dated December 13, 2018, the Bank decided to sell all its shares with 100% ownership in its subsidiary Vakıf Portföy Yönetimi AŞ with a paid in capital of TL 24,000 to Ziraat Portföy Yönetimi AŞ for TL 52,500. Vakıf Portföy Yönetimi AŞ, which is one of the subsidiaries of the Bank, was removed from Subsidiaries account and started to be tracked under Non-current Assets Held for Sale and Discontinued Operations account. The said transfer of Vakıf Portföy Yönetimi AŞ was concluded on January 2, 2019.