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183
Convenience Translation of Publicly Announced Consolidated Fınancial
Statements Originally Issued in Turkish, See Note I of Section Three
Arap Türk Bankası A.Ş.
Notes to Consolidated Financial
Statements at 31 December 2014
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
General Information
Corporate Management
Financial Information
II. INFORMATION ON STRATEGY FOR THE USE OF FINANCIAL INSTRUMENTS AND FOREIGN CURRENCY
TRANSACTIONS
The Bank’s core business operation is banking activities including corporate banking, commercial banking, security transactions
(treasury transactions) together with international banking services. The Parent Bank uses financial instruments intensively because
of the nature of the Parent Bank. The main funding resources are deposits, borrowing and equity and these resources are invested
in qualified financial assets. The Parent Bank follows the utilization of resources and the risk and return for the investments in various
financial assets through an effective asset and liability management strategy.
The transactions in foreign currency are recorded in accordance with TAS 21 – Effects of Exchange Rate Changes. Related gain
and loss occurred due to the changes in exchange rates resulted by the foreign currency transactions are translated into TL over the
effective exchange rate prevailing at the date of the transaction and is recorded accordingly.
At the end of the related periods, foreign currency assets and liability balances outstanding are translated into Turkish Lira over the
Group’s exchange rates prevailing at the balance sheet date in the Parent Bank financial statements, whereas for other associations
over CBRT rates subjected to evaluation.
III. INFORMATION ON CONSOLIDATED ASSOCIATES AND SUBSIDIARIES
The accompanying consolidated financial statements are prepared in accordance with “Communiqué on Preparation of Consolidated
Financial Statements” which is published in the Official Gazette No. 26340 dated November 8, 2006. The Parent Bank directly owns
the shares of A&T Finansal Kiralama A.Ş. and this subsidiary is consolidated accordingly. As at 31 December 2014 and
31 December 2013, the Parent Bank has no associates.
A&T Finansal Kiralama Anonim Şirketi, was founded in 1997 with the aim to provide financial leasing services.
The Parent Bank and its subsidiary A&T Finansal Kiralama A.Ş that is included in consolidation are together referred to as “Group” in
the disclosures and footnotes related to the consolidated financial statements.
“Full Consolidation” method has been applied in consolidating the financial statements of the Bank with the financial statements of its
subsidiary. In accordance with this method, the financial statements of the Parent Bank and its subsidiary are combined on
a line-by-line basis by adding together the all items of assets, liabilities, income, expenses and off-balance sheet items, in preparing
consolidated financial statements. Minority interests are presented separately in the consolidated balance sheet and consolidated
statement of income.
The major principles applied in the consolidation of subsidiaries
The carrying amount of the Parent Bank’s net investment in the subsidiary and the Parent Bank’s portion of equity of the subsidiary are
eliminated.
All intercompany transactions and intercompany balances between the consolidated subsidiary and the Parent Bank are eliminated.
The financial statements which have been used in the consolidation are prepared as of 31 December 2014 and appropriate
adjustments are made to financial statements to use uniform accounting policies for similar transactions and events in similar
circumstances.
IV. INFORMATION ON FORWARD TRANSACTIONS, OPTIONS AND DERIVATIVE INSTRUMENTS
The Group financial derivatives are classified as “Held for Trading” in accordance with TAS-39 Financial Instruments: Recognition and
Measurement.
Derivatives are initially recorded at their purchase costs including the transaction costs. The notional amounts of derivative transactions
are recorded in off-balance sheet accounts based on their contractual amounts.