Türkiye İş Bankası A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2015
105
Financial Information and Risk Management
Kosovo
Corporate earnings are subject to income tax rate of 10% according to the Kosovo legislation. This ratio is applied to the tax base that will be calculated as a result of the
implementation of exemptions, deductions, addition of disallowable expenses, to the income of corporations and that are calculated in accordance with the tax laws. Tax has to
be paid in advance until April, July, October and the 15th day of January of the following year by four installments. If those prepaid taxes are lower than the final corporate tax, the
difference is paid until the beginning of April of the following year, in case of a claimmade by the company, if it is higher, then the difference is returned to the institution by the tax
authorities after the inspection conducted by those institution.
4. Transfer Pricing:
Transfer pricing is regulated through article 13 of Corporate Tax Law titled “Transfer Pricing through camouflage of earnings”. Detailed information for the practice regarding the
subject is found in the “General Communiqué Regarding Camouflage of Earnings through Transfer Pricing”.
According to the aforementioned regulations, in the case of making purchase or sales of goods or services with relevant persons/corporations at a price that is determined against
“arm’s length principle”, the gain is considered to be distributed implicitly through transfer pricing and such distribution of gains is not subject to deductions in means of corporate tax.
XIX. Borrowings
The Bank, whenever required, generates funds from individuals and institutions residing domestically and abroad by approaching the borrowing instruments in the form of
syndication, securitization, collateralized borrowing and issue of bonds/bills. Such transactions are at first carried at acquisition cost, and in the following periods they are valued at
amortized cost measured by using the internal rate of return method.
XX. Equity Shares and Issuance of Equity Securities
Share issuance related to costs is recognized as expenses.
Dividend income related with the equity shares are determined by the General Assembly of the Shareholders.
Weighted average number of shares outstanding is taken into account in the calculation of earnings per share. In case the number of shares increases by way of bonus issues as a
result of the capital increases made by using the internal sources, the calculation of earnings per share is made by adjusting the weighted average number of shares, which were
previously calculated as at the comparable periods. The adjustment means that the number of shares used in calculation is taken into consideration as if the bonus issue occurred at
the beginning of the comparable period. In case such changes in the number of shares occur after the balance sheet date, but before the ratification of the financial statements to
be published, the calculation of earnings per share are based on the number of new shares. The Bank’s earnings per share calculations taking place in the income statement are as
follows:
Current Period
Prior Period
Net Period Profit
3.082.691
3.382.442
Weighted average number of share certificates (‘000)
112.502.250
112.502.250
Earnings per share – (in exact TL)
0,027401150
0,030065550
XXI. Bank Acceptances and Bills of Guarantee
Bill guarantees and acceptances are realized simultaneously with the customer payments and they are presented as possible liabilities and commitments in the off-balance sheet
accounts.
XXII. Government Incentives
There are no government incentives utilized by the Bank, during the current or prior accounting periods.
XXIII. Segment Reporting
Business segment is the part of an enterprise,
- which conducts business operations where it can gain revenues and make expenditures (including the revenues and expenses related to the transactions made with the other parts
of the enterprise),
- whose operating results are regularly monitored by the authorities with the power to make decisions related to the operations of the enterprise in order to make decisions related to
the funds to be allocated to the segment and to evaluate the performance of the segment, and
- which has its separate financial information.
Information on the Bank’s business segmentation and related information is explained in Section Four Note XVI.
XXIV. Other Disclosures
In order to be consistent on the financial statements, reclassifications have been made on statement of income in the interest income items of the comparable financial statements
for the year ending 31 December 2014.
SECTION FOUR: INFORMATION ON THE FINANCIAL POSITION OF THE BANK
I. Explanations on Capital Adequacy Standard Ratio
The Bank’s Common Equity Tier I capital ratio is 13.50%, Tier I capital ratio is 13.42%, capital adequacy standard ratio is 15.65% respectively. Capital adequacy ratios are calculated
within the scope of the “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”, “Regulation on Credit Risk Mitigation Techniques” and “Regulation on Calculation of
Risk Weighted Amounts for Securitizations” published in the Official Gazette no.28337 dated 28 June 2012, effectiveness date is 1 July 2012, and the calculations are made according
to the “Regulation on Equities of Banks” published in the Official Gazette numbered 28756 dated 5 September 2013.
Capital adequacy standard ratio is calculated from obligated required capital of the credit risk, the market risk and the operational risk. The amount subject to credit risk on balance
sheet assets and non-cash loans, commitments and types of derivative financial instruments, risk classes and ratings of risk weights are evaluated by taking into account the relevant
legislation. The amount subject to credit risk for non-cash loans and commitments are considered by using the conversion rates which are defined in the 5th article of “Regulation on
Measurement and Evaluation of Capital Adequacy of Banks” after deducting specific provision amount which is calculated from the article of “Determining the Nature of Loans and
Receivables and Principles and Procedures on the Allocation of Loan and Receivable Provisions” published in the Official Gazette numbered 26333 dated 1 November 2006. The items,
which are considered as deductions from capital amount, are not considered in the calculation of capital requirement of credit risk.
