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SECTION ONE
General Information
Page No
I.
History of the Bank including its incorporation date, initial legal status, amendments to legal status
106
II.
Bank’s shareholder structure, management and internal audit, direct and indirect shareholders, change in shareholder structure
during the year and information on Bank’s risk group
106
III. Information on the Bank’s board of director’s chairman and members, audit committee members, general manager, assistant general managers
and their shares in the Bank
107
IV. Information on individuals and entities who have qualified share in the Bank
109
V.
Information about the services and nature of activities of the Bank
109
SECTION TWO
Financial Statements
I.
Balance sheet – Assets
110
II.
Balance sheet – Liabilities and shareholders’ equity
111
III. Off-balance sheet items
112
IV. Statement of income
113
V.
Statement of gains and losses recognized in shareholders’ equity
114
VI. Statement of changes in shareholder’s equity
115
VII. Statement of cash flows
116
VIII. Statement of profit distribution
117
SECTION THREE
Accounting Policies
I.
Basis of presentation
118
II.
Strategy for the use of financial instruments and foreign currency transactions
118
III. Information on forwards, options and other derivative transactions
119
IV. Information on interest income and expenses
119
V.
Information on fees and commissions
119
VI. Information on financial assets
119
VII. Information on impairment of financial assets
120
VIII. Information on offsetting of financial instruments
120
IX. Information on sale and repurchase agreements and securities lending
121
X. Information on assets held for sale and discontinued operations
121
XI. Information on goodwill and other intangible assets
121
XII. Information on tangible assets
121
XIII. Information on leasing activities
122
XIV. Information on provisions and contingent liabilities
122
XV. Information on obligations of the Bank concerning employee rights
122
XVI. Information on taxation
123
XVII. Additional information on borrowings
124
XVIII. Information on issuance of equity securities
124
XIX. Information on confirmed bills of exchange and acceptances
124
XX. Information on government incentives
124
XXI. Information on segment reporting
124
XXII. Other disclosures
125
SECTION FOUR
Information Related To Financial Position of the Bank
I.
Capital adequacy ratio
125
II.
Credit risk
129
III. Market risk
140
IV. Operational risk
141
V.
Foreign currency exchange risk
141
VI. Interest rate risk
144
VII. Liquidity risk
149
VIII. Fair values of financial assets and liabilities
152
IX. Transactions carried out on behalf of customers, items held in trust
154
X.
Segment reporting
154
SECTION FIVE
Disclosures and Footnotes on Unconsolidated Financial Statements
I.
Information and disclosures related to assets
157
II.
Information and disclosures related to liabilities
174
III. Information and disclosures related to off-balance sheet items
181
IV. Information and disclosures related to income statement
185
V. Information and disclosures related to statement of changes in shareholders’ equity
190
VI. Information and disclosures on statement of cash flows
191
VII. Information and disclosures related to the Bank’s risk group
193
VIII. İnformation on domestic, foreign and off-shore branches or investments and foreign representative offices
194
SECTION SIX
Other Disclosures
I.
Other explanations on the Bank’s operations
195
II.
Information on the Bank’s ratings given by international institutions
195
III. Significant events and matters subsequent to balance sheet date that are not resulted
196
IV. Significant foreign currency exchange rate fluctuations that are subsequent to reporting date
196
SECTION SEVEN
Independent Auditors’ Report
I.
Information on the independent auditors’ report
196
II.
Disclosures and footnotes prepared by the independent auditor
196
VAKIFBANK ANNUAL REPORT 2013
105