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Convenience Translation of the Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Section 3 Note I
SECTION ONE
General Information
Page No:
I.
History of the Parent Bank including its incorporation date, initial legal status, amendments to legal status
202
II.
The Parent Bank’s shareholder structure, management and internal audit, direct and indirect shareholders, change in shareholder structure
202
during the year and information on Bank’s risk group
III.
Information on the Parent Bank’s board of director’s chairman and members, audit committee members, general manager, assistant general
203
managers and their shares in the Bank
IV.
Information on individuals and entities who have qualified share in the Parent Bank
205
V.
Information about the services and nature of activities of the Parent Bank
205
VI.
Differences between the communique on preparation of consolidated financial statements of banks and turkish accounting standards and short explanatıon about
the institutions subject to line-by-line method or proportional consolidation and institutions which are deducted from equity or not included in these three methods
205
VII
The existing or potential, actual or legal obstacles on the transfer of shareholders’ equity between the Parent Bank and its subsidiaries or the reimbursement of liabilities
205
SECTION TWO
Consolidated Financial Statements
I.
Consolidated balance sheet – Assets
206
II.
Consolidated balance sheet – Liabilities and equity
207
III.
Consolidated off-balance sheet items
208
VI.
Consolidated statement of income
209
V.
Consolidated statement of gains and losses recognized in shareholders’ equity
210
VI.
Consolidated statement of changes in shareholder’s equity
211
VII.
Consolidated statement of cash flows
212
VIII.
Consolidated statement of profit distribution
213
SECTION THREE
Accounting Policies
I.
Basis of presentation
214
II.
Strategy for the use of financial instruments and foreign currency transactions
214
III.
Information on companies subject to consolidation
215
IV.
Information on forwards, options and other derivative transactions
216
V.
Information on interest income and expenses
216
VI.
Information on fees and commissions
217
VII.
Information on financial assets
217
VIII.
Information on impairment of financial assets
218
IX.
Information on netting of financial instruments
218
X.
Information on sales and repurchase agreements and securities lending
218
XI.
Information on assets held for sale and discontinued operations
218
XII.
Information on goodwill and other intangible assets
219
XIII.
Information on tangible assets
219
XIV.
Information on investment properties
219
XV.
Information on leasing activities
220
XVI.
Information on provisions and contingent liabilities
220
XVII.
Information on obligations of the Group concerning employee rights
220
XVIII. Information on taxation
221
XIX.
Additional information on borrowings
223
XX.
Information on issuance of equity securities
223
XXI.
Information on confirmed bills of exchange and acceptances
XXII.
Information on government incentives
223
XXIII. Information on segment reporting
223
XXIV. Other disclosures
223
SECTION FOUR
Information Related to the Financial Position of the Group
I.
Consolidated capital adequacy ratio
225
II.
Consolidated credit risk
232
III.
Consolidated market risk
242
IV.
Consolidated operational risk
244
V.
Consolidated foreign currency exchange risk
244
VI.
Consolidated interest rate risk
246
VII.
Consolidated liquidity risk
252
VIII.
Fair values of financial assets and liabilities
255
IX.
Transactions carried out on behalf of customers, items held in trust
257
X.
Consolidated segment reporting
257
SECTION FIVE
Disclosures and Footnotes on the Consolidated Financial Statements
I.
Information and disclosures related to consolidated assets
260
II.
Information and disclosures related to consolidated liabilities
278
III.
Information and disclosures related to consolidated off-balance sheet items
285
IV.
Information and disclosures related to consolidated statement of income
290
V.
Information and disclosures related to consolidated statement of changes in equity
295
VI.
Information and disclosures related on statement of cash flows
296
VII.
Information and disclosures related to the parent Bank’s risk group
297
VIII.
Information on domestic, foreign and off-shore branches or investments and foreign representative offices of the Parent Bank
299
SECTION SIX
Other Disclosures
I.
Other disclosures on the Parent Bank’s activity
300
II.
Information on the parent Bank’s rating given by international institutions
300
III.
Significant events and matters subsequent to balance sheet date that are not resulted
301
IV.
Significant foreign currency exchange rate fluctuations that are subsequent to balance sheet date
301
SECTION SEVEN
Independent Auditors’ Report
I.
Information on the independent auditors’ report
301
VAKIFBANK ANNUAL REPORT 2013
201