VKF_FRAE_2018_uyg11

302 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.) 2. Information on increases in cash flow hedges None. 3. Reconciliation of the beginning and end of the year balances of foreign exchange differences None. 4. Information on differences in shareholders’ equity accounts due to inflation accounting 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 During the bank’s 64th Shareholder’s General Assembly Meeting on August 13, 2018, the Bank decided to distribute TL 372,338 of the distributable net period profit of 2017 totalling TL 3,723,383 to shareholders as legal reserves, TL 3,196,380 of it as extraordinary reserves, TL 29,665 of it as special fund and TL 125,000 of it as first dividend. The distribution of profits was completed within the year. 6. Information on decreases of revaluation of available-for-sale investments Revaluation differences of available-for-sale investments has resulted with decrease in the current year. Detailed information about the decreases is explained above in Note 1. VI. INFORMATION AND DISCLOSURES ON STATEMENT OF CASH FLOWS 1. Disclosures for “other” items in statement of cash flows and effect of change in foreign currency rates on cash and cash equivalents “Other” item under the “operating profit before changes in operating assets and liabilities” amounting to TL (3,645,155) (December 31, 2017: (2,056,237) TL) is comprised of income from capital market transactions and derivative financial instruments and foreign exchange gains for the year ended. “Net increase/decrease in other liabilities” amounting to TL 7,502,053 (December 31, 2017: 10,851,526 TL) under “changes in operating assets and liabilities” is mainly comprised of cash inflows from miscellaneous payables and rcrepuhase agreements. “Other” item under “net cash flow from investing activities” amounting to TL 16,971 (December 31, 2017: (43,729) TL)is comprised of purchases of intangible assets. When calculating exchange rate effect on cash and cash equivalents, related assests’ high turnover rate are taken into consideration. Each exchange rate’s arithmetic average of the last five days before the report date and provision of average TL that is calculated from the difference from current period’s exchange rate are reflected as an effect of exchange rate change on the cash flow statement. Except for the above-mentioned, banks that have less than three months to maturity are accepted as cash equivalents and average TL provision is calculated by difference between related operation’s per term exchange rate and current period’s exchange rate. As of December 31, 2018 impact of the exchange rate change on cash and cash equivalents is TL 13,365 (December 31, 2017: (91,144) TL).