VKF_FRAE_2018_uyg11

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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) 506 Part III: Financial Highlights and Assessment of Risk Management 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 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 64 Annual General Assembly held on 13 August 2018, the net profit of the year 2017 which amounts to TL 3,723,383 is decided to be distributed as legal reserves amounting to TL 372,338, extraordinary reserves amounting to TL 3,196,380, special funds amounting to TL 29,665 and dividends to equity holders of the Parent Bank amounting to TL 125,000. 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. 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 cash and cash equivalents “Other” item under the “operating profit before changes in operating assets and liabilities” amounting to TL (4,172,145) (December 31, 2017: TL (2,718,309)) is comprised of other operating expense in the balance sheet, fees and commission expense, and cash amount of trading profit/loss. “Net increase/decrease in other liabilities” amounting to TL 7,737,050 (December 31, 2017: TL 11,074,733) under “changes in operating assets and liabilities” is mainly comprised of fınd based cash outflows from repurchase agreements. “Other” balance under “net cash flow from investing activities” amounting to TL (8,333) (December 31, 2017: TL (59,102)) 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 256,824 (December 31, 2017: TL (137,492)).