2011 - Bank Asya
Transkript
2011 - Bank Asya
Presentation Part I: Presentation 006 Bank Asya in Brief 007 Vision, Mission,Strategic Objectives 008 Key Highlights (Indicators) 010 Bank Asya’s Market Position in the Sector 012 Bank Asya’s Strategy of Growth 016Milestones 018 Changes in Capital and Shareholder Structure During the Period 021Awards 022 Message from the Chairman of the Board of Directors 024 Message from the General Manager (CEO) 030 Macroeconomic Overview and the Banking Sector 038 Bank Asya’s Activities in 2011 052 Corporate Social Responsibility 053 Affiliates and Subsidiaries 055 Compliance Opinion for the Annual Report Part II: Management Information and Principles of Corporate Governance Practices 058 Board of Directors 060 Statutory Auditors 062 Senior Management 064 Organization Chart 066Committees 069 Summary Report of the Board of Directors 070 Human Resources 071 Training (Job Training) 072 Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Collected Fund Transactions, and Current Income and Expenses for the Reporting Period 073 (Principals of) Corporate Governance Compliance Report 078 Support Services Benefited by Bank Asya 080 Profit Distribution Policy of Bank Asya 080 Profit Distribution Proposal of Bank Asya for 2011 Profits 081 Considerations Regarding the General Assembly 082 Information on Agenda Items Part III: Financial Information and Risk Management Assessment 086 Summary Report of the Statutory Auditors 087 Summary of Financial Information for Five Years Including the Reporting Period 088 Financial Condition, Profitability and Solvency Assessment 089 Audit Committee Reviews About the Functioning of the Internal Systems 090 Information on Risk Management Policies Implemented for Each Risk Category 092 International Rating Grades Part IV: Non-Consolidated Financial Statements and Related Footnotes 095 Independent Auditors’ Report 098 Information on Financial Statements and Footnotes Part V: Consolidated Financial Statements and Related Footnotes 169 Independent Auditors’ Report 172 Information on Financial Statements and Footnotes Part VI: Contact Information 240Branches 002 Bank Asya 2011 Annual Report Continuing to have healthy growth … Bank Asya, offers interest-free financial system and its associated advantages to the widest possible audience. By increasing operational efficiency, Bank Asya continues to support the real sector. As for production it offers innovative products and services in retail banking. With a customer satisfaction centered approach, advanced technology and its long-term investments abroad, Bank Asya provides service at world-class standards; Bank Asya is a reputable, reliable and effective participation bank, which boasts a healthy and steady growth. 003 A World: Clean and Viable Without compromising the basic founding principles, Bank Asya represents the values of a powerful and reliable financial environment. Presentation Bank Asya In Brief In 1996, Bank Asya, Turkey’s most dynamic participation bank, commenced operations under the name “Asya Finans” as the country’s sixth private finance house. As the sector’s newest participation bank, Bank Asya grew rapidly in a short period of time and achieved a strong and respected position in the market. Turkey’s first participation bank to go public Bank Asya is firmly committed to a strategy tailored towards sound and sustainable growth, which it has carefully integrated into its organizational structure. As the first participation bank in Turkey to go public in order to establish a strong and broad capital base, Bank Asya floated 23% of its shares in 2006. As of year-end 2010, 52.88% of the Bank’s capital was publicly held. By the end 2011, the free float rate reached 52.88%. The Bank’s paid-in capital was TRY 900 million as of the end of 2011. New high-quality products and services in participation banking Bank Asya works proactively to expand its product and service line in order to meet the changing needs and expectations of its customers across all its business sectors. As the first participation bank in Turkey to be awarded the ISO 9001 Quality Management System Certification, Bank Asya seeks to strengthen its position within the market by developing new interest-free banking products, with its innovative approach including derivative products. The Bank also undertakes efforts to adapt widely used banking products and services to the interest-free banking system at the highest level of quality 006 Bank Asya’s strategic goals focus on sustainable profitability, producing more value for all stakeholders. Invest in people, invest in the future Increasing brand value alongside unmatched growth dynamics Bank Asya understands that when it invests in people and technology, it invests in the future. The Bank incorporates advanced technology in order to strengthen its growth momentum and support its dynamic and developmentfocused workforce. This in turn facilitates a workplace that embrace s the Company’s values. Bank Asya is transforming a business model based on supporting the real sector and manufacturing. The Bank integrates the fundamental principles of interest-free banking into an effective paradigm of participation banking through its management competencies, funding practices, risk and quality policies, innovativeness, and unmatched growth dynamics. Advanced technology in banking Bank Asya has expanded the reach of its delivery network through investments in technological infrastructure and alternative distribution channels. Iin addition to its 200 branches, Bank Asya has been particularly successful in gaining recognition during recent years through the innovative payment system products that it has introduced. After the launch of Europe’s most advanced contactless credit card, AsyaCard DIT, and Turkey’s first prepaid contactless debit card, DIT Pratik, Bank Asya demonstrated once again its leading role in banking technology with DIT Mobile, which allows mobile phones to make contactless transactions, and "Cep-T KGS" products. Creating more sustainable value Conducting its operations as a good corporate citizen, Bank Asya aligns its strategic objectives with the principle of “creating more sustainable value” for all of the social and economic stakeholders. To this end, the Bank will continue to enhance the brand value that it has established both domestically and internationally. In 2011, Bank Asya sustained its profitability and growth in line with its performance targets thanks to its solid capital base and healthy balance sheet structure. In 2011, the Bank continued to lead the participation bank market in terms of total assets, loans allocated, non-cash loans, deposits and net profit. Bank Asya 2011 Annual Report Vision, Mission, Strategic Objectives Strategic Objectives • To be one of the world’s leading interest-free banks. • To continue to be the participation bank with the highest brand value in Turkey. • To rank in the forefront of companies where highly qualified professionals would strive to work. • To increase market share. • To be a pioneer in the banking industry with new innovations. • To be the primary bank of its customers. • To sustain and increase support of social responsibility projects including social activities and sports. Vision To be a respected, trusted and effective bank that provides world-class service with the products it develops. Mission To contribute to both shareholder value and the Turkish economy by developing modern banking services within the framework of interestfree banking principles and satisfying customer needs and expectations with a “different solutions for different expectations” approach. 007 Presentation Bank Asya sustained its upward momentum in 2011 and achieved growth of 18% in Total Assets, 22% in Cash Loans and 11% in Deposits. Key Highlights Key Financial Highlights (Million TRY) 2010 2011 Change (%) 17.190 18,4 Total Assets 14.513 Cash Loans (*) 11.06013.452 Deposits 11.16712.397 Shareholders’ Equity 1.942 Paid-In Capital Non-Cash Loans Net Profit for the Period 2.137 21,6 11,0 10,1 900 900 - 9.227 9.349 1,3 260 216 -16,9 (*)Financial Lease (Leasing) is included Branch and Personnel Information (Quantity)2010 2011 Change (%) Number of Branches 175 200 14,3 Number of Personnel 4.266 4.542 6,5 17.190 13.452 14.513 11.060 11.609 8.355 8.109 6.260 2007 008 18 % 2008 2009 2010 2011 Total Assets (Million TRY) 6.381 22 % 4.610 2007 2008 2009 2010 2011 Cash Loans (Million TRY) Bank Asya 2011 Annual Report Key Financial Ratios (%) 2010 Cash Loans/Total Assets (*) 76,6978,63 Deposits / Total Assets 2011 76,94 Cash Loans/Deposits (*)(**) Capital Adequacy Ratio 72,12 101,77110,97 13,33 13,31 (*)Non-performing loans were added to Cash Loans and Total Assets in gross terms. (**)Loan-To-Deposit Ratio is calculated by dividing Cash Loans by Deposits. Bank Asya’s Composition of Assets (%) 2010 2011 Liquid Assets 18 16 Cash Loans 76 78 Fixed Assets 3 3 Other 33 Bank Asya’s Composition of Liabilites (%)2010 Deposits 2011 7772 Loans Received 4 Other 9 67 Total Shareholders' Equity 13 12 Bank Asya Income Distribution (%)2010 2011 Net Profit Income 58 60 Net Commissions 24 24 Other Income 18 16 12.397 2.137 11.167 1.942 9.137 1.708 5.843 11% 4.698 2007 2008 2009 2010 2011 Deposits (Million TRY) 1.404 10% 854 2007 2008 2009 2010 2011 Total Shareholders' Equity (Million TRY) 009 Presentation Bank Asya pioneered as a participation bank in Turkey in 2011 through its competitiveness and innovative strategy. Bank Asya’s Market Position Annual Growth Rates (2010-2011) 30 30 21 Banking Sector Deposit Money Banks Participation Banks Bank Asya 28 20 22 18 Total Assets (%) 19 30 Loans (%) 9 14 13 13 6 12 11 2 Deposits- Funds (%) 4 2 Number of Employees (%) 4 Number of Branches (%) 38 34 13 10 22 8 7 Net Profit (%) 6 1 Non-Cash Loans (%) Shareholders' Equity (%) -10 -11 -17 010 Bank Asya 2011 Annual Report One step ahead of the sector With high competitive power Comparison of Bank Asya with Other Participation banks 0,31 0,69 0,68 0,68 Total Assets (%) Deposits- Funds (%) Loans (%) 0,27 0,35 0,65 0,32 0,32 0,73 In 2011, Bank Asya continued its leadering among participation banks in the total assets, disbursed loans, non-cash loans and deposits. Net Profit / Loss (%) Shareholders' Equity (%) 0,29 0,33 0,67 Number of Employees (%) 0,71 Number of Branches (%) 011 Presentation Identifying strategic priorities and acting according to the principles of sustainable growth Bank Asya has continued to add value to the economy and society in 2011. Bank Asya’s Growth Strategy Effective Resource Management • Solid capital base • Rapid increase in deposits • Longer average terms on deposits and high liquidity • High profitability • Loans from abroad Effective Loan and Risk Management • Deeper customer relationships • More diversified loan portfolio • Increase in retail loans and SME loans Effective Product and Brand Management • Development of innovative products • Increase in brand awareness (sponsorship, effective promotion, advertising) Bank Asya forms its strategies around the overarching goal of being one of the most important brands in the participation banking business line not only in Turkey but also in the entire the world. Conducting its operations in line with the principles of sustainable growth while pursuing this primary objective, the Bank focuses on creating more value not just for the economy but also for the society as a whole. 012 • • • • • Capital adequacy ratio 13,31% (tier 1) 11% increase. in deposits 20% liquidity ratio 10,1% return on equity 134% increase in loans from abroad • 22%. growth in cash loans • Ranked 13th. in cash loans • 75% increase in retail loans • AsyaCard DIT: Market leader in contactless cards • 20% increase in credit card turnover • Ranked 11th. in the sector with 1.9 million credit cards • High profile with Bank Asya.1st League (football league) Bank Asya is commited to being a model bank along all the three axes of quality, productivity and profitability. The Bank invests both in technology and in people in order to make its proactive, customeroriented service philosophy a reality in all aspects. Bank Asya is a transparent institution that continuously improves its business processes and systems and that embodies the very best of corporate governance principles and practices. Bank Asya 2011 Annual Report Financial Operational Excellence Personnel & Progression Stakeholders • Sustainable growth and profitability • Strengthening the financial structure • Targets about subsidiaries and affiliates • Increasing the use of technology • Improving the efficiency of business processes • Increasing the effectiveness of risk management practice • Increasing the knowledge levels of employees • Establishing effective communications and enhancing skills • Disseminating corporate strategy and performanceoriented management philosophy • Maximizing customer satisfaction • Offering diversified solutions capable of addressing different customer expectations • Ensuring sustainable divident payment to shareholders Bank Asya’s Competitive Advantages Bank Asya’s Strategic Orientation (2011-2015) • Leader among participation banks in total assets, deposits, loans, and profitability • Dynamic, growing organization • Well-qualified, young staff • Customers' confidence in the Bank • Experienced in crisis management • Bank employees' sense of ownership • Strong team spirit throughout the Bank • Speed at technology implementation and priority in innovation Trustworthiness, stable growth, risk management, business continuity and productivity are Bank Asya’s top strategic priorities. Having clearly and explicitly defined its objectives in line with its corporate vision, Bank Asya groups its strategies under four main headings in order to achieve effectively its objectives: • • • • Financial Operational excellence Stakeholders Personnel & progression In the same way, Bank Asya has laid out a five-year roadmap whose course is shaped by these strategies 013 Bank Asya finds pleasure of providing its customers gain while the Bank also gains by evaluating deposits into profitable investments to be used in the real economy. Investing in Effort Presentation Achieving many firsts in the past 15 years, Bank Asya moves towards becoming a world bank that thinks both locally and globally. Bank Asya Milestones 1999 Asya Finans is subjected to the Banking Law. The company’s paid-in capital is increased to TRY 10 million. 2000 1997 The number of branches reaches 15. 016 1996 1998 Bank Asya commences operations on 24 October. Began its operations with an initial capital of TRY 2 million. The number of branches reaches 16 Asya Finans launches the Asya Finans credit card. The number of branches reaches 25. The Asya Finans online branch goes into service 2001 The company’s paid-in capital is increased to TRY 20 million. Bank Asya 2011 Annual Report 2006 The number of branches reaches 92. The company’s paid-in capital is increased to TRY 300 million. In an initial public offering, 23% of Bank Asya’s shares are floated; the company’s stock begins trading on the Istanbul Stock Exchange under the ASYAB ticker symbol. 2007 2002 The number of branches reaches 28. The Company’s paid-in capital is increased to TRY 40 million. The ASYA24 ATM network goes live for customer use. 2003 Asya Finans becomes a member of the VISA system. The number of branches reaches 43. The company’s paid-in capital is increased to TRY 60 million. Started a partnership with Isik Sigorta A.S. 2004 The number of branches reaches 62. Alo Asya telephone banking services are launched. The company’s paid-in capital is increased to TRY 120 million 2005 The number of branches reaches 72. The company’s paid-in capital is increased to TRY 240 million Asya Finans is reorganized as a participation bank and its name is changed to “Bank Asya.” The number of branches reaches 118. Bank Asya stock is added to the ISE-30 Index as of January 2007 2008 Bank Asya becomes the name sponsor of the Turkish Football Federation 1st League. Contactless technology products AsyaCard DIT and DIT Pratik are made available for the use of the Bank’s customers. 2009 The number of branches reaches 158. Bank Asya becomes a shareholder in Senegal-based Tamweel Africa Holding SA. AsyaCard DIT receives the “Best Cash Displacement Initiative” and the “Best New Credit Card Product Launch” awards. Bank Asya becomes a partner in Tuna GYO A.Ş. 2010 The number of branches reaches 175. DIT Pratik is named “Best Mastercard Prepaid Product in Turkey.” Bank Asya joins the MoneyGram service network. AsyaAsist, Çobanyıldızı and DIT Mobil were launched for customer use. 2011 Bank Asya received the Business Continuity Management Systems Certificate from the British Standards Instituition Bank Asya has become the first Turkish organization to receive this certificate. Bank Asya has been selected “The Best Commercial Bank of 2011 in Turkey” Award by World Finance. Paksit and DIT Pratik have been released for customer usage. Bank Asya won "The Best Call Center in Turkey" Award in the category of 100-499 seat-capacity call centers. Bank Asya has proved its quality receiving Customer Satisfaction Management (ISO 10002) and Call Center Certificate (EN 15838) at the same time. Bank Asya has become the first bank in Europe to have these two certificates at the same time. The number of branches reaches 200. Started a partnership with Bank Asya Emeklilik A.Ş. With the vision of "to become the leading bank in participation banking in Turkey", Bank Asya achieved its target since 2006, the tenth anniversary of its foundation date. Although it is the newest participation bank in Turkey, Bank Asya has the most competitive products in the market, and, with 200 branches and 492 ATMs, takes its place as a medium-sized bank in the banking sector. 017 Presentation Changes in Capital and Shareholder Structure During the Reporting Period Bank Asya’s shareholder structure as of year-end 2010 and year-end 2011 appears in the table below 31.12.2010% Group A (preference shares) 360.000.000 Group B (not traded on ISE) 40,00 31.12.2011% 360.000.000 40,00 67.124.038 7,46 64.068.038 7,12 Group B (traded on ISE) 472.875.962 52,54 475.931.962 52,88 Total 900.000.000 100 900.000.000 100 Bank Asya has a broad-based, multi-shareholder, domestically-financed capital structure. As of yearend 2011, the Company had 236 partners who were direct owners of preference shares, excluding the publicly-held portion of the share capital. Shareholding interests held by the Chairman and members of the board of Directors, CEO and Executive Vice Presidents Statements concerning the shareholding interests held by the Chairman and members of the Board of Directors, CEO and Executive Vice Presidents as shown in the Bank’s Shareholders’ Register as of 31 December 2011 are presented below. Ownership Title Chairman Board Members CEO Name / Surname Behçet Akyar Salih Sarıgül (1) Ahmet Çelik (1) Tacettin Negiş (2) (3) İsmail Erol İşbilen (3) Hülagü Özcan (3) Abdullah Çelik Ali Akbulut (6) Atif Bilgin Areas of Resposibility Chairman Deputy chairman of the board Board Member Board Member Board member and Member of Statutory Auditors Board member and Member of Statutory Auditors Board Member And CEO Corporate/Commercial Loans, Small Banking, Top Management Office Headquarters, Business and Product development Coordination (4) Information Technologies Commercial Credit Allocation II, Corporate Credit Allocation Credit and Risk Monitoring, Construction and Real Estate Banking Operations Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative Distribution Channels, Resource Development Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications Law, Credit and Risk Monitoring Corporate/Consumer Credit Allocation I, Project Financing Treasury, Financial Institutions, Investor Relations, Human Resources and Education Auditor Auditor İrfan Hacıosmanoğlu Auditor Executive Vice President Ali Tuğlu Ali Fuat Taşkesenlioğlu (5) Erdal Erdem (5) Fahrettin Soylu Ercüment Güler Ahmet Beyaz Zafer Ertan Ahmet Akar Feyzullah Eğriboyun Statutory Auditors (1) Board Members Salih Sarıgül and Ahmet Çelik resigned from their duties as of 26. Jan. 2012; they have been replaced by Ali Çelik and Faruk İlk (2) Board Members Tacettin Negis resigned from his post as of 02. Feb. 2012, he was replaced by Mustafa Talat Katırcıoğlu (3) Not shown because the shareholding interest is less than 1/100,000. (4) Related departments is operatively connected to the General Manager. (5) Executive Vice Presidents Ali Fuat Taşkesenlioğlu and Erdal Erdem resigned from their duties as of 06. Jan. 2012 (6) Bank's Auditor Ali Akbulut resigned from his post as of 23. Feb. 2012, his seat was replaced by Mehmet Gozutok. 018 In the Bank% 0,0003 0,2056 0,4800 - - 0,0004 0,0002 0,2411 0,7093 Bank Asya 2011 Annual Report Names and Shareholding Interests of Shareholders Who Own Qualified Shares Shareholders who were registered in Bank Asya’s Shareholders’ Register as of 31 December 2011 and whose ownership of Group A preference shares entitled them to designate candidates to fill seats on the Board of Directors and Audit Committee as per Articles 32 and 49 of the Articles of Association are presented below. No Name / Surname Group A share in the Bank (%) 1 Ali̇ Akbulut 12,70 2 Abdulkadi̇r Konukoğlu 5,58 3 Hasan Sayın 4,85 4 Tacetti̇n Negiş 4,31 5 Fi̇kri̇ Akbulut 4,06 6 Osman Can Pehli̇van 4,00 7 İbrahi̇m Sayın 3,52 8 Fatma Emi̇ne Berksan 2,50 9 Muammer İhsan Kalkavan 2,36 10 A. Selçuk Berksan 1,82 11 Mehmet Si̇nan Berksan 1,67 12 Aydan Aydın Sağlık 1,65 13 Fehi̇m Arıcı 1,55 14 Yavuz Eroğlu 1,45 15 Bülent Berksan 1,43 16 Mehmet Berksan 1,43 17 Ahmet Levent Berksan 1,14 18 Abdurrahman Kopuz 1,10 19 Hakan Cem Akbulut 1,00 Other (286 people) 37,42 Pending BRSA Approval Total 4,46 100,00 019 Presentation Changes in Capital and Shareholder Structure During the Reporting Period Information on Titles and Shares of Shareholders Holding Preferred Shares No Name / Surname Group A share in the Bank (%) 1 Ortadoğu Tekstil Tic. San. A.Ş. 2 Forum İnşaat Dekorasyon Turizm San. ve Tic. A.Ş. 9,6299 3 BJ Tekstil Tic. ve San. A.Ş. 5,0000 4 Birim Birleşik İnşaatçılık Mümessillik San. ve Tic. A.Ş. 4,9398 5 Serra Turizm Ltd. Şti. 4,1667 6 Negiş Giyim İmalat ve İhracat A.Ş. 3,6506 7 Sürat Basım Yayın Reklamcılık ve Eğitim Araçları San. Tic. A.Ş. 1,8008 8 Galaksi Avrasya Sanayi Ürünleri Dış Tic. A.Ş. 0,5000 9 Asya Katılım Bankası A.Ş. 0,4167 10 Teksen Tekstil End. A.Ş. 0,2676 11 Linateks Tekstil İthalat İhracat San. ve Tic. Ltd. Şti. 0,2500 12 Aydınlı Hazır Giyim San. ve Tic. A.Ş. 0,2423 13 Koçkaya Motorlu Araçlar San. ve Tic. A.Ş. 0,0656 14 Karakaya Yedek Parça ve Otomotiv San. Tic. Ltd. Şti. 0,0449 15 Meltem Turizm İnş. Tic. A.Ş. 0,0210 Changes Made in the Articles of Association No changes were made in the Bank’s Articles of Association during 2011 020 10,9924 Bank Asya 2011 Annual Report In year 2011, Bank Asya had outstanding success, exemplified by the awards and certificates received during the year. Awards The Best Commercial Bank of 2011 in Turkey – World Finance Call Center Certificate (EN 15838) Annual Report of National Banks Silver Award - ARC Awards Bank Asya has been selected as the Best Commercial Bank of 2011 in Turkey by World Finance, one of the most respected monthly business magazines that awards successful companies in finance and business every year. In the fields of Customer Satisfaction, incoming and outgoing calls, performance management, recruitment, careers and the process of education, Bank Asya received EN 15838 Customer Contact Center Quality Management Certificate, an international standard for call centers with special conditions. With the Annual Report prepared in 2010, Bank Asya won the second (silver) prize in International ARC (Annual Report Competition) in the category of the National Bank Annual Report issued in local languages. STP Excellence Award- Citibank The technological equipment and effectiveness of service of Bank Asya is confirmed by one of the world's leading banks. In 2011, Bank Asya awarded by CITIBANK with the STP Excellence Award. BSI Business Continuity Management Certificate Customer Satisfaction Management Certificate (ISO 10002) Timely and adequately responding to customer needs and expectations, Bank Asya received the Customer Satisfaction Management ISO 10002. Bank Asya became the first Turkish organization to receive the Business Continuity Certificate from the British Standards Instituition. Best Call Center in Turkey In October,2011, Bank Asya received “The Best Call Center of Turkey Award” among the call centers with a capacity of 100-499 seats in Istanbul Call Center Awards held by the IMI Conferences. 021 Presentation Message from the Chairman The leading participation bank in Turkey Dear Valued Shareholders Decrease of the effects of the global crisis resulted in an optimistic beginning to the year 2011 in the markets but the developed countries have failed to meet the expected performance during the year.. However, developing countries including Turkey have continued to create value through their well established economies. 022 Bank Asya 2011 Annual Report "In line with new strategies and plans of growth, Bank Asya aims to increase the number of branches to 300, and the number of credit cards to 3 million as well." With a 9% growth in 2010, Turkish economy recovered the majority of the effects of the global crisis and sustained its rapid growth trend during the year 2011. Despite the recession in world economies due to the recession in developed countries and debt crisis in European countrieis, Turkey has grown by over 8% during year 2011and continued to be distinguished with this positive developments. Although the precauitons taken by the Central Bank of Turkey in order to maintain financial stability and to reduce the current account deficit resulted in a decrease in the growthrate, the growth is expected to continue. The European Debt Crisis and recession expectations have affected the profitability of the companies listed in ISE negatively and resulted in loss of market values of these companies. Therefore, the ISE 100 index value decreased by 21% during year 2011. The precauitons taken by regulatory agenciesreduced the profit margins in Turkish banking sectors. However, the sector has continued to increase its asset size, thanks to powerful structure of the sector. Comparing the performance of the participation banks to thetotal of the banking sector, participation banks increased their share in total assets and funds collected. As is the case in the rest of the world, participation banking in Turkey continues to develop and the number of new products, conforming with the interest-free financing standards, increases day by day. I would like to thank to the diligent Bank Asya staff who have contributed highto the Bank’s progress through their dedicated efforts with the team spirit and a “we” sense. In year 2011 during which the bank profits declined, Bank Asya sustained the profitabilty thorugh orienting its strategy to use itscapital more effectively, focusing on collecting participation funds and lengding activitiesas its mainbusiness model. With the mindset of developing new strategies, Bank Asya has underwent a year of high performance. Also, I would like to thank to the former members of the Board of Directors and Audit Committee, who resigned at the beginning of 2012 after serving for many years in various positions in Management and Supervisory Boards of the Bank. Despite its short history of 15 years, Bank Asya has been well known by its high competitive power and innovative aspects, recognized with its new prodcuts and servies in interest free banking area and therefore, it has strengthened its position as the leading participation bank in Turkey. Finally, I would like express my gratitude to our solution partners who had great contribution to Bank Asya, to our valued shareholders who have supported our management and to our customers who always sustain their loyalty to the Bank. I firmly believe that, we will provide Bank Asya toachieve many successful periods all together. Bank Asya aims toincrease the number of the branches to 300, and credit cards to 3 million as well until 2015 in accordance with its new strategies andgrowth plans aiming to provide faster and higher quality services ineverywhere in Turkey with its expanding network. Bank Asya will continue its organic growth during year 2012 in accordance with this goal, will increase its investments in foreign countries and will continue to operate with its vision to be a global model bank. Behçet Akyar Chairman of the Board of Directors 023 Presentation Message from the CEO Time for expansion abroad… Dear Shareholders, We have passed a year experiencing a differentphase of the global economic crisis. The global economic crisis which emerged mainly in the housing loans and banking sector in 2008 turned into apublic finance crisis through increasing public debt. And in year 2011, we have faced political authorities who failed to demonstrate a common will to overcome the crisis. 024 Bank Asya 2011 Annual Report Bank Asya continued to grow in 2011, increasing total assets by 18% to TRY 17,2 billion. Therefore, Bank Asya has maintained its position as the biggest participation bank of the past 6 years. Although structural changes are not expected. Until the elections in USA in November 2012, FED announced that interest rates will not beincreased until the year 2014 and monetary expansion will continue if required. On the other hand, the economic outlook has become more unpredictable in Europe. As political authority had diffculty in demostrating stability in managing public finance, public debt become higher. Today even if the governments demonstrate agreater stability, there is a significant doubt on the settlement of the public debt due to the difficulties in sustaining a sufficient growth. Turkey, started to year 2011 with a strong credit demand, thank to the rapid growth based on private sector investments. Lower Government borrowing requirement resulted in a lower investment in public sector bonds and the banking sector funded private sector more. Hence, the loans as 59% of national income in 2010, increased to 67%of national income in in 2011. These circumstances have led a decrease in capital adequacy ratio from 19% to 16.5%. Additionally, the implementation of the monetary and banking policies to control the foreign risk sand current account deficit have lowered the sector's profitability through increasing the costs reduced return on equity ratio to 15,5% from 20%. The combination of inflation, high interest rates and devaluation of TRY increased the cost offinancing. Also, due to the impact of the global uncertainty, the banking sector experienced an increase in cost of foreign borrowing. Despite the negative outlook summarised above, Bank Asya continued to grow in 2011, increasing total assets by 18% to TRY 17,2 billion. During the past 6 years, the Bank has maintained its position as the biggest participation bank. During this period, Bank Asya has given financial support of TRY 22,8 billion to the real economy through lending activities. With its profitable and consistent growth strategy, Bank Asya's net profit after tax was TRY 216 million by the end of 2011. Since March 2011 as the date of our assignment, in order to use the Bank's capital more efficiently new strategies and policies have been implemented rapidly. In this respect, spread of the credit riskto the base has been targeted and the proportion of the Individual and SME loans in the total loan porftolio has been increased. Individual loans have reached TRY 1.630 million with an increase by 75% andasignificant increase has been achieved in SME loans. As a result, a diversified loan portfolio has been created providing the opportunity to serve much more customers. The average maturity of deposits, which is a major problem ofthe Turkish Banking Sector, was 64 days as of September 2011 in the sector. On the other hand, Bank Asya has extended the maturities of the funding succesfully as one of its main strategiesand increasedthe average maturity of the fundscollected to 132 days. As a resultof the innovative efforts to in order to diversify the financingstructure which is one of the main problems of the participation banks, fundings from abroad increased by approximately134% and reached to TRY 1.458 million through the use of new methods of financing. In addition, the Bank completed the required steps for the first time issueance of Sukuk. As per existence of favorable conditions, Sukuk issuance amounting to USD 300 million is projected within the year 2012. 025 Presentation Message from the CEO A year, structure of fast and quality service to the customers 75% Retail loans increased by 75% and reached to TRY 1.630 million. Bank Asya won awards for many innovative products developed, especially for DIT card and continued to lead the sector with the use of contactless technology, trough the transportation and campus projects invarious cities. With in this context, Karamanas transportation project and and Gediz, Zirve, Suleiman Shah and and Duzce University as campus projects are added to the projects of Bank Asya with in the current year. With a total number of 1.900.000 credit cards, Bank Asya has became one of the majörplayers players in the sector. Continuing contactless technology investments in 2011, Bank Asya has launched “DIT Mobil”which converts the cellular phone into a contactless payment instrument regardless of GSM operator and launched “Cep-T KGS” in cooperation with Turkcell. One of our major investments in the field of technology are implementation of the CRM applications. These applications will strengthen our understanding of customeroriented service, will offer better services to our customers, and contribute to the Bank's profitability and efficiency. 026 Despite the recent economic conjuncture, Bank Asya continued its organic growth with 25 new branches, raising the total number of branches to 200. With more than 500 ATMs in total and with the efforts for serving to a larger customer base, Bank Asya increased the number of individual customers by 16% and reached a total of 3.3 million customers. New gold-based products have been served in order to meet the customer demands especially for gold emerged parallel to the increase in commodity prices and to invest our customers’ savings. New products for the trade of scrap gold and gold in grams have been designed and implemented. Studies on gold based participation accounts have reached to the final stage. As a result of those efforts, gold accounts increased by 470% reaching 10 tonnes of gold reserves. Bank Asya 2011 Annual Report Our Bank’s financial support to the real economy through lending activities has been TRY 22.8 Billion through within the current year. Efficient use of capital and a credit portfolio spread to the base On the other hand, in accodance with our new strategies and in order to be closer to our customers and to provide faster and higher quality services, we have increased the number of our regional offices from 2 to 9 and we have increased our support to our customers in terms of organizational structure. In 2011, our Bank strengthened its outstanding success with many awards and certificates. One of the most respectful economic Magazines World Finance selected Bank Asya as "The Best Commercial Bank of 2011" and Citibank awarded Bank Asya with the STP Excellence Award, which measures efficiency of business flows. Bank Asya became the first Turkish organization to receive the Business Continuity Certificate from the British Standards Instituition. Bank Asya received “The Best Call Center of Turkey Award” and "Customer Satisfaction Management ISO 10002". Bank Asya has become the first bank in Europe to be awarded these two certificates at the same time. Bank Asya orientsabroad in order to operateinterest-free banking activities not only within the country but also in international arena. In 2009, Bank Asya initiated the process of overseas expansion in Africa with Tamweel Holding. and will continue in the next periods. Bank Asya will expand its activities in Africa, and will start its interest-free banking operations in Northern Iraq through opening a branch in Erbil in the near future. As being the first bank obtaining the approval fort he application for a representative office in India, Bank Asya will start its operations in India in the near future. With all these features, Bank Asya has become one of the most attractive banks for foreign investorsand one of the banks with the highest rate of public quotation in Turkey. For this purpose, Bank Asya contributes various sponsorship and social responsibility projects. Bank Asya supports worldwide organizations such as International Turkish Olympics and TUSKON's international meetings, and also sustains its support to The First League of football since year 2008. I would like to thank to my colleagues who contributed to the successful work of Bank Asya and provided a sense of belonging. I also want to thank to our shareholders who always supportour managementand to our customers who accept Bank Asya as their own bank and toall stakeholders who played an important role in the success of Bank Asya. Bank Asya not only present services in banking area in the country, but also feels responsiblity for the improvement of the social community'srelations with the environment, art and sport. Abdullah Çelik Board Member and CEO 027 Embracing the responsibility of being the first participation bank opened to the public, Bank Asya acts with transparency, one of the foundational values of the Bank Clear and Transparent Presentation Altough there was a positive start to the year of 2011, the global economy could not achieve expected stabilization due in part to U.S’s fluctuated employment and growth rate and debt crisis experienced particularly in the Eurozone Macroeconomic Overview and Banking Sector 1,29 The EUR/USD exchange rate, which stood at 1,44 at the first two quarter of 2011, slid below 1,29 as of year-end 2011 due in part to the debt crisis International Developments As a result of diminishing effects of global crisis in 2008, and encouraging forecasts about recovery in housing market and in growth rates in the U.S, performing positive start to the year 2011, the global economy could not achieve the expected stabilization due in part to U.S’s slightly fluctuated employment and growth rates and debt crisis experienced particularly in the Eurozone Greece’s nearing bankruptcy, Germany’s insistence to compensate the entire recovery cost of Greece through tax incomes from the public, and through the banks which played role in borrowing actively, and the lack of a considerable plan by European leaders during this crisis, manipulated financial markets to lose confidence in Europe, inevitably leading to an increase of uncertainity in the economy. Increasing rate of doubts about sustainability of the European Union, also affected borrowing rate of the countries adversely, Italy and Spain werereported to have the highest levels of debt in the financial markets. Besides, disagreements during the budget planning in U.S, led to postponement in rise of the debt ceiling, and resulted in a decline in long term-debt note of the U.S from AAA+ to AA+ as decided by S&P The debt crisis in the Eurozone, began in Greece during the first quarter of 2010, and continued to spread in 2011 with the addition of Italy and Spain. During this period, the CDS (Credit Default Swap) spreads, which are an indicator of riskiness soverign bonds of countries that were impacted by the debt crisis rose continuously and led to a signnificant increase in the borrowing cost of Eurozone The EUR/USD exchange rate, which was at 1,44 during the first two quarters of 2011, slid below 1,29 as of year-end 2011 due in part to the debt crisis. Compared to the year 2010, after implementing austerity policy, especially in the Eurozone, the global economy set forth to monitorize lower growth rate as of year-end 2011 GDP Growth Rate 8 7,3 6 6 4 5 3 2,7 3 6,6 6,4 4,3 4,5 2,6 2,2 2 0,6 0 2008 -2 -4 030 -0,5 2009 2010 2011 (T) 2012 (T) -3,4 Developed Countrie Developing Contries World Bank Asya 2011 Annual Report Developing Countries are on Path Espcially in the latter half of the year, the U.S economy measured higher records and data over forecasted scenario, which was one of the most important development in the year 2011. Country CDS Spreads While S&P 500 Index confined the year with a 0,6% increase, economy registered a decline of -15% in Germany Dax, -17% in Brazil Bovespa, -21% in China Shanghai Comp. and -24% in ISE 100 index. The debt crisis in the Eurozone, inflation rates and a slump in the growth rates in Asia shifted the global capital flow direction to the U.S. On the other side, sustainable policies implemented by the FED, and the trustworthy and appreciated structure of U.S institutions provoked the U.S economy to decouple from other countries. Debates about this favorable decoupling, and the continual uncertainity throughout the year 2011, provided a rise in the price of gold stocks considered the safest haven, alongside U.S stocks and consent stocks. Despite an impressive beginnig, the commodity market ended with a fall as of year-end 2011. After record highs in purchases by funds that chase high returns, the commodity prices began to drop caused by decline in the long term portfolios of speculators and the slowing rate of recovery in the U.S and forecasts for global demand deficit due to the debt crisis in the Eurozone. The price of copper measured with a fall in response to the reduction in Chinese import volumes, whereas cotton and wheat prices started to decrase on account of increase in supply in the agricultural market, though were increasing levels during the beginning of the year. Perceived as a safe haven, gold prices reached USD 1,900 per troy ounce in August 2011, but began to decline during the last quarter of the year. There was a rise in the positioning margins of forward gold sales in addition to the appreciation of the US dolar. Gold finished the year of 2011 at USD 1,550 with a 13% increase. Oil prices started the year at the level of USD 90,00 per gallon and registered at USD 108,00 as of year end 2011 after challenging period which contracted by the Arabian Spring, developments in Europe and crucial conflicts between Iran and the West. Country CDS Spreads 12.000 Turkey Greece Spain 10.000 Portugal Italy 8.000 6.000 4.000 2.000 0 02.09 05.09 08.09 11.09 02.10 05.05 08.10 11.10 02.11 05.11 08.11 11.11 Gold and Oil 2.000 Gold 140 Oil (right axis) 1.900 120 1.800 100 1.700 1.600 80 1.500 60 1.400 1.300 40 1.200 20 1.100 0 1.000 01.10 03.10 05.10 07.10 09.10 10.10 01.11 03.11 05.11 07.11 09.11 10.11 031 Presentation Macroeconomic Overview and Banking Sector Domestic Developments With a growth rate of 9% in 2010, the Turkish economy left behind the negative effects of its past crisis, and also continued its rapid growth path through the year 2011. Besides measured recession, particularly in developed countries, and in contrast with slowing global economy resulting from debt crisis experienced in European countries, Turkey’s economy maintained to decouple favourably by its respective growth rate at 12%, 8,8%, 8,2% in the first three quarters of the 2011. In order to protect stability in financial markets and to decrease budget deficit, the Central Bank of Turkey implemented monetary and fiscal policies especially in the last period of the year. These policies caused growth rates to decelerate, and increased expectations of lose its momentum for upcoming quarter. Looking at the structure of the growth rate, increases in household consumption, which contributed substantially to the growth rate were at highs throughout the year. Growing by 12,2% in the first quarter of 2011, settled households increased their consumption by 8,8% and 7% increase in the second quarter and third quarters respectively. After a rise of 13,1% in 2010, industrial production maintained its rapid growth at begininnig of the year but lost some of that momentum after the second quarter of the year. As a consequence, average growth rate of industrial production stood at 9,4% during the first ten months of 2011. Obtaining sustainable fluctuations throughout the year, the manufacturing industry capacity utilization rate, was revised from a recorded level of 77% on October 2011 to 75,5% as of year-end 2011. On the other hand, foreign trade indicators figured out export volume as USD 122,5 billion. A 20% increase during the January-November period, while import volume reached to USD 220,2 billion a 33,5% increase. Imports volume registered at high levels in response to higher domestic demand and a rise in commodity prices while exports fluctuated within a limited range due to drop in foreign demand. As a result of the increasing trade deficit, the current balance of transactions registered USD 65,1 billion at the end of first ten months of 2011. After declining sharply in 2010, thanks to the impressive growth rate of the economy, the unemployment rate continued to fall and reached to the lowest level of recent years. Industrial Production and Capacity Utilization (%) Capacity utilization Rate Seasonally and Calendar Adjusted Industrial Production (Annual Base) 20 78 77 15 76 75 10 74 73 5 72 71 0 01.11 02.11 03.11 04.11 05.11 06.11 07.11 08.11 09.11 10.11 11.11 12.11 Foreign Trade and Cuurent Deficit (USD Million) 25.000 Export Import 12.000 Current Deficit (right axis) 10.000 20.000 8.000 15.000 6.000 10.000 4.000 5.000 2.000 0 0 01.11 032 02.11 03.11 04.11 05.11 06.11 07.11 08.11 09.11 10.11 11.11 Bank Asya 2011 Annual Report Sustaining a rapid growth rate in 2011, in contrast to the slowing global economy, the Turkish economy maintained to favourable growth. GDP Growth Rate (%) (in constant prices) Central Bank of Turkey Interest Rate 14 Borrowing Lending Weekly Repo 12 10 12 9 8 8,8 8,2 6 4 2 12.11 11.11 10.11 09.11 08.11 07.11 06.11 05.11 04.11 03.11 02.11 01.11 12.10 11.10 10.10 09.10 08.10 07.10 06.10 05.10 0 04.10 2011/3 03.10 2011/2 02.10 2011/1 01.10 -4,9 2010 2009 The unumployment rate fell to 8,8% in October, down from 11,9% in January 2011, while the non-farm unemployment rate fell from 14,7% to 11,3% in the same period. The number of employed individuals rose to 24,7 million up from 22,5 million while the number of unemployed fell from 3 million to 2,4 million. Compared to CPI at 6,40% and PPI at 8,87% in 2010, CPI rose up to 10,45% and PPI stood at 13,33% as or year-end 2011. As a consequence of the overpowering effects of the finalization tax regulations which began to be implemented in 2010, the inflation rate tended to decline at the first quarter of 2011. In contrast to decrease in the first quarter of the year due to fall in food prices, the inflation rate started to move up again as a result of a rise in food prices in the second quarter of the year. Consequently, inflation rate maintained to incraese in the second half of the year in response to depreciation of Turkish liras caused by a drop in global risk appetite. Developments in the exchange rate were influential on basic commodity prices, while service prices kept its steady position during the year. Despite a measured decrease in international commodity prices, producer prices tended upwards especially due to significant effects of the exchange rate. Despite losing some of its momentum towards the end of year, higher domestic demand throughout the year played an important role on the inflation rate which higher than anticipated. Unemployment (%) 15 Unemployment Non-farmed Unemployment 14 13 12 11 10 9 8 01.110 2.11 03.110 4.110 5.11 06.110 7.110 8.11 09.11 Inflation 20 CPI PPI Core Inflation (I) 16 12 8 4 0 01.110 2.11 03.11 04.110 5.11 06.110 7.11 08.11 09.111 0.11 11.11 033 Presentation Macroeconomic Overview and Banking Sector As a part of its monetary policy and to prevent the economy from getting overheated relative to the deepened debt crisis in European countries in 2010 and worsening perceptions for global risk apetite as of August 2011, the Central Bank of Turkey (CBT) expanded the interest gap downwards to decrease short term capital flow while managing obligatory provisions actively. With financial stability as its primary objective, the CBT withdrew capital from markets by increasing the required reserve ratio, to limit decoupling between foreign demand and domestic demand while managing weekly repo to overcome squeezing liqudity in the markets. In this period, as result of regulating foreign exchange purchasing tenders, the CBT strengthened its foreign exchange reserves and provided services to satisfy the needs for the Turkish lira caused by “hot money” flows. Meanwhile, to overcome the negative effects of squeezing liquidity, the CBT declared a decrease in the required reserve ratio. On October, by increasing the borrowing. Interest rate, CBT expanded the interest gap upwards again to limit the inflation rate’s rising trend which was especially caused by depreciation of Turkish liras. As developing countries registered capital outflows in response to deteriorated global economies and shrinking global risk apetite, the Central Bank of Turkey focused to limit domestic demand from sloping downward by a decline in indicator interest rate. ISE-100 75,000 70,000 65,000 60,000 55,000 50,000 Exchange Rate 1,40 DOLLAR/TRY 1,40 1,40 1,40 01.11 034 02.11 03.11 04.11 05.110 6.11 07.11 08.110 9.11 10.111 1.11 12.11 12.11 11.11 10.11 09.11 08.11 07.11 06.11 05.11 04.11 03.11 02.11 01.11 12.10 11.10 10.10 09.10 08.10 07.10 06.10 05.10 04.10 03.10 02.10 01.10 45,000 Bank Asya 2011 Annual Report Performing impressively throughout the year, participation banks increased their market share in total assets and deposits Within 2011, ISE 100 index recorded at the highest 70,335 and at the lowest 48,600 after starting the year at the level of 66,004. With a 21% decrease during whole year, Index completed 2011 at 51,267. Especially in the second half of 2011, as one of examples ISE 100 Index, markets impacted negatively as a result of capital outflows in developing countries which caused by doubts about global growth and worsening risk perception. The debt crisis in Europe and predictions for recession took its toll on ISE companies’ profitability and brought about a depreciation of their stocks value. Begining the year 2011 at level of 1,50 foreign exchange rate, followed moving upwards throughout year, reached an all time high at 1,92 with significiant increase in its momentum after August 2011. Furthermore, negative expectations for global affairs and realizations of the deepening debt crisis in some of European contries, resulted in a depreciation of the Euro and domestic currencies in developing countries against USD. In Turkey, perceived as a safe haven, increasing demand in USD by foreign funds mostly constructed with investment portfolios, caused Turkish Liras to perfom weakly against USD After purchasing regulated foreign exchange tenders from the beginning to the midldle of the year, the CBT ceased purchasing in July 2011 and began in August to regulate foreign exchange sales tenders to provide and expand liquidity in the economy. In addition, the CBT focused to limit increases in the foreign exchange rate by direct interventions at the last term of 2011. According to middle term program between 2012 and 2014, GNP growth rate is expected to be set at 4% in 2012 and at 5% in both 2013 and 2014. Due to forecasts for the employment rate to rise gradually and exports to grow higher than imports, current deficit is anticipated to decrease. As a consequence, the inflation rate is expected to return to single-digit numbers and to be balanced at the level of 5%. Middle Term Program 2011201220132014 GDP (TRY billion, current prices) 1.281 1.426 1.572 1.733 GDP (USD billion, current prices) 766 822 888 952 GDP Growth Unemployment Rate (%) 7,54,05,05,0 10,5 10,4 10,2 9,9 Exports (FOB) (USD billion) 134,8 148,5 165,7 185,1 Imports (CIF) (USD billion) 236,9 248,7 272,5 295,9 56,9 59,7 60,8 62,6 Current Account Balance (USD billion) Exports/Imports (%) -71,7 -65,4 -67,0 -67,1 Current Account Balance / GDP (%) -9,4 -8,0 -7,5 -7,0 % Change in Year-end CPI (forecast) 7,8 5,2 5,0 5,0 035 Presentation Macroeconomic Overview and Banking Sector 1,2 trillion Total assets in the banking sector reached TRY 1,2 trillion while deposits were set at TRY 696 billion as of year end 2011 Developments in theBanking Sector According to analysis completed in December 2011, total assets in the banking sector reached a level of TRY 1,2 trillion while deposits were set at TRY 696 billion. In addition, loans registered TRY 701 billion in the banking industry Looking at improvements of participation banks through 2011, participation bank assets increased to TRY 56,2 billion and deposits reached TRY 39,2 billion as volume of loans was recorded at TRY 41,5 billion. Comparing performance of participation banks to the rest of the banking industry, participation banks increased their share in deposits and total assets in the banking industry. 036 The share of participation bank assets in the banking sector total assets moved upward from 4,31% in 2010 to 4,61% as of year-end 2011. The share of participation bank deposits in the banking industry rose to 5,64% in December 2011, up from 5,36% in 2010 while loans share in the banking industry stepped backward from 6,03% in the previous year to 5,93% in 2011 Bank Asya 2011 Annual Report The share of participation banks total assets increased by 4,6% in 2011, up from 4,3% in 2010. Assets Improvement (TRY million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) 2007 19.445 41,4 543.272 581.606 3,34 2008 25.770 32,5 683.823 732.536 3,52 2009 33.628 30,5 773.357 834.014 4,03 2010 43.339 28,9 932.371 1.006.667 4,31 2011 56.153 29,6 1.119.915 1.217.711 4,61 Deposits Improvement (TRY Million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) 2007 14.834 33,0 342.031 356.865 4,16 2008 19.045 28,4 435.554 454.599 4,19 2009 26.711 40,3 487.909 514.620 5,19 2010 33.089 23,9 583.947 617.037 5,36 2011 39.220 18,5 656.281 695.501 5,64 Loan Improvement (TRY Million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) 2007 15.367 46,3 279.868 304.909 5,04 2008 20.190 31,4 364.592 397.460 5,08 2009 25.372 25,7 382.334 422.270 6,01 2010 32.412 27,7 488.650 537.492 6,03 2011 41.526 28,1 635.523 700.706 5,93 037 Presentation Bank Asya’s Activities in 2011 Increasing its current assets by 50% during the year, Bank Asya ranks first with its rate of current assets in the sector. Accomplished the year with 11% growth in assets... Bank Asya, finished the year 2011 dominated by importance of deposits growing incrementally as a consequence of global economic shrinkage, at the point of TRY 12,4 billion in assets with 11% growth compared to the previous year. Annual collected funds trend (Milion TRY) 9.137 5.843 4.698 2007 Bank Asya ranks first with the rate of increase in current acoounts within the sector Growth of the funds collected on the basis of customer groups As of 2011, Bank Asya, particularly thanks to an upward trend in retail and SME’s customers volume, continued to increase the funds collected on the basis of its customer group, The Bank also focused on taking measures against small slices of sources in line with its target to generate long-term, multi-partnered structure of fund Gold Account Besides economic contraction experienced in Eurozone, and increased demand for gold, Bank Asya’s gold account reserves vaulted 9,948 kg with an impressive increase of 470% up from 1,745 kg at the begining of the year. This took place in response to individual investors headed towards gold. 038 Succeeded in 50% growth to TRY 3,121 million throughout 2011, Bankasya prolonged its leadership in sector with the rate of current assets in total assets while entire banking industry accrued with 23% growth in total current assets. Enhancing total participation accounts at TRY 9,276 million in 2011, Bank Asya, continued its first place in interest-free banking industry. 2008 2009 2010 2011 3.121 Annual total current account trend (Million TRY) 2.081 1.593 888 2007 Continued its first place in annual total participation accounts 12.397 11.167 1.007 2008 2009 Annual Total Participation account trend (Million TRY) 2010 2011 9.086 9.276 2010 2011 7.544 4.836 3.810 2007 2008 2009 Bank Asya 2011 Annual Report Strong and healthy growth in line with strategic targets Corporate Banking Customers as long-term business partners... Main categories of products offered to corporate clients In the constantly changing and fiercely competitive environment of financial markets, Bank Asya strives to meet the needs of its customers that it sees as long-term business partners. The Bank serves each client with multidimensional projectbased solutions in a timely manner. The bank conducts corporate marketing activities in line with its customer-oriented banking principles. • • • • • • • • Bank Asya has six corporate branches (three in Istanbul and one each in Izmir, Antalya, and Ankara) and employs 86 specialist personnel in these branches as well as 11 expert employees in the Headquarters Corporate Marketing Department. The Bank provides more effective and more efficient financing facilities to its clients and supports entrepreneurs with its network of dedicated staff. Bank Asya’s customer-focused marketing policy principles: The marketing network includes the corporate marketing personnel employed in the branches and is also strategically supported by the Headquarters Corporate Marketing Department. This organizational structure allows the Bank to be closer to clients and to review and resolve customer requests in a timely fashion. As the pioneer of many groundbreaking practices in participation banking, Bank Asya operates on the principle of selfimprovement with respect to new customer needs that may arise as a result of an evolving and changing economic environment. The Bank analyzes customer needs appropriately, conducts effective marketing activities, and assesses loan applications in accordance with the principles of security, liquidity and profitability. Current Accounts Participation Accounts Cash Management Cash Loans Non-Cash Loans Foreign Trade Finance Insurance Services AsyaCard Business Bank Asya provides a comprehensive range of services to meet the needs of its corporate banking clients, from lending and cash management to foreign trade and investment products, with its extensive lineup of products, professional asset management teams, advanced technology systems and diverse distribution channels. The Bank plans to develop fast-paced and comprehensive offerings while remaining committed to its corporate values and risk-management policies in accordance with its objective of “supporting the producers.” • Conducts frequent customer visits in order to keep abreast of their current concerns and to respond to their needs with appropriate solutions, while maintaining regular communications, • Takes action in a timely and effective manner when dealing with customer requests, • Responds to customer requests clearly in order to achieve customer satisfaction and reassures clients to ensure the continuity of business relationships, • Develops new products and services in line with customer expectations and serve clients with an extensive product lineup, • Is open to customer suggestions and restructures business processes accordingly in case of need, • Increases its presence within the sector by adding new customers to its portfolio while enhancing relationships with existing customers, • Offers products and services that are efficient, profitable and competitively priced, • Structures its organization in line with corporate objectives and generates results. 039 Presentation Bank Asya’s Activities in 2011 Commercial Banking A master in project finance Institutionalizing sophisticated experiments gained from projects, specializing in project finance, associating with each project closely, Bank Asya, having financed significiant projects since its foundation, aims to enhance its efficiency in its profitability and risk management policies. For this purpose, the Project Finance Department, employing a dedicated expert team in project finance was established within the Headquarters Profit/Loss sharing projects As one fundamental instrument of interest-free banking, profit-loss sharing projects are analysed and prosecuted by the Project Finance Department. Bank Asya has different types of profit-loss sharing projects, of which analysis and meetings still continue. Yet already, one profit-loss sharing project, of which the sale and contsruction processes are expected to be completed within two years, was designed and loaned by the Project Finance Department. Additionally, sectoral reports complied with results of Project Finance Department’s analysis of developments in the sector, were periodically composed and submitted to Bank Asya’s personel. In different periods within 2011, detailed reports about the Housing Sector, the Health Sector and the Tourism Sector were issued and distributed to personnel 040 Remarkable growth in financial leasing... Regional Offices, timely and more efficient banking While providing financial support to its commercial banking customers requsition to increase their investments, production capacity, profitability and employment during 2011, Bank Asya, thanks to its international reputation, also furnishes non-cash services to companies in need of letters of guarantees, counter guarantees, letters of credits, avalization etc. arising from project conditioned with commitment, or foreign trade transactions. Improvements in financial leasing, as one of primary objectives on marketing agenda throughout the year 2011, boosted incomparably to the previous years’ volume and as a consequence Bank introduced with remarkable leasing portfolio. During the year 2011, seven new Regional Marketing/Allocation Offices in additon to the South East Anatolia and Aegean Regional Offices, were established to operate banking activities. Servicing an extensive product line including cheque books, POS, tax, SSI and invoice payments, wage payments, insurance services and internet banking, Bank Asya, with advanced technology and practical solutions, also aims to improve its service network in a pioneering manner to achieve customer satisfaction within pure competitive market. As a result of the increase in the number of regional offices and self-authority for allocation, the Commercial Banking Department was merged out of two different departments in the previous periods. Besides aiming to operate banking services and products in accordance with sound policies and marketing strategies in order to increase profitability and ensure continuity of business relations, Bank Asya contributes to generate and improve commercial portfolios and marketing orginazation. In conjuction with establishment of the Istanbul Europe I, Istanbul Europe II, Istanbul Anatolia, Ankara, Marmara, Konya and Black Sea offices, Regional Offices commenced to conduct all loan and banking transaction processes of SME customers within allocated credit limits. By constructing Regional Coordination and Product Portfolios, the SME Banking Dept was underwent for a change in its organizational structure. Bank Asya 2011 Annual Report Bank Asya increased the number of its active SME customers with a dedicated credit line to 63,000 in 2011, up 40 percent compared to 2010. SME (Small-Medium sized Enterprises) Banking Bank Asya’s “Çobanyıldızı” continues to shine Serving the Microbusiness and SME segments and supporting these clients with loan and cash management products and sercives, Bank Asya continued to surge the share of SME segmented customers in its total customer portfolio during 2011. Bank Asya supports the investments, business growth projects, production expansion initiatives and all foreign trade transactions of its microbusiness and SME clients through lending. Bank Asya also offers its customers cash management services including Direct Debiting System, Commercial Card, AsyaAsist Card, Checkbook, POS devices, Tax and Social Security Payment, Bill Payment, Salary Disbursement, Insurance Services and Online Banking. As a result of sound marketing policies based on innotiative marketing strategies, Bank Asya increased the number of its active SME customers with a dedicated credit line to 63,000 in 2011, up 40 percent compared to 2010. In parallel with its strategic objective to grow in the Small Business Banking segment, Bank Asya unveiled its “Çobanyıldızı Project”, in the last quarter of 2010. The Çobanyıldızı Project, which represents a new generation small business banking concept, proceeded to shine a light on SMEs during 2011. Rolling out eight more financing packages for SMEs, the number of loans provided to SMEs reached TRY 75 million. The primary objectives of Small Business Banking at Bank Asya are to renew existing financing packages, develop new financing packages, and become the solution partner of more SMEs under the Çobanyıldızı brand. "To this end, taking a close interest in SME customers Bank Asya organized “Çobanyıldızı Meetings” participated by regional SME customers in various Anatolian provinces such as Malatya, Adana, Şanlıurfa, Kayseri and Konya in order to better understand the concept of "Çobanyıldızı" and our bank and to promote products. Bank Asya also plans to continue to hold Çobanyıldızı Meetings in different provinces through 2012." "Providing support to businesses in unexpected / emergency situations when users require medical, legal and financial consultancy services, the AsyaAsist Card reached 43,000 active users in 2011, a 16 % increase on the previous year." In 2011, Bank Asya continued to take part in government-supported projects for its Small Business Banking clients. Within the framework of its partnership with the Credit Guarantee Fund (KGF), the Bank continued to extend KGF-underwritten loans to firms that have difficulty posting collateral on their own. Developed by Bank Asya continued to give customers a cost advantage by helping them to lower their operational costs while enhancing their ability to make collections. The Direct Debiting System (DDS) makes it possible for firms to automatically receive payment for goods and services they sell to their dealers and regular customers. An alternative to DDS is a cash management product known as the Virtual Commercial Card, which allows payments and collections between a wholesaler/ franchiser and a retailer/dealer exclusively. As of 2011, Bank Asyasupports its SMEs clients with loan and cash management products under brand of The Çobanyıldızı Project, which represents a new approach to small business banking, Bank Asya aims to be the primary bank in Microbusiness and SME segments and to establish long term relationships with its small business clients, and to become their advisor bank. To this end, by developing new products and projects to add to its existing line up of products and services, Bank Asya, has realized its targets and sound strategies. 041 Presentation Bank Asya’s Activities in 2011 Retail Banking Expected and desired growth in retail banking has been realized... Bank Asya has continued to provide the highest quality service to its customers via 600 retail marketing staff working in 200 branches. The number of Bank Asya’s retail customers jumped to 3.3 million in 2011, a rise of 16 percent from the previous year. 2011 retail finance support was at center stage Improving its competitiveness in housing finance and other supportive products, Bank Asya has focused on new product development in accordance with customer needs and expecations. While housing finances have been related to the construction sector, vehicle financing was increased through a focus on the vehicle dealer network. As a result of all these activities the Bank provided achieved a 75 percent growth over the previous year in financial support activities in 2011. This growth had an impact on the increase of the Bank’s market share in the banking sector. More efficient financial support Thanks to the various campaigns with special rates for civil servants and teachers conducted during the year, the Bank received extremely positive feedback from customers. Growth in payment and collection services... Bank Asya now plays a major role in the cash cycle of companies that receive bill payments from their customers, thanks to the easy bill payment options it provides, through its alternative distribution channels as well as in the form of automatic payment instructions from customer accounts or credit cards. An increase in the number of firms for which bill payments are accepted contributed to the growth in bill payment instructions, which rose by 21 percent to 554,000. The Bank processed a total of TRY 361 million in bill payments made from all channels during the year. After a very successful year in its payment and collections services, Bank Asya provided salary payment services for some 243,000 employees of about 3,600 firms in 2011. In addition, as part of the school and testing center tuition payment services, the Bank processed a total of TRY 399 million in payments for 92,500 students attending 696 schools. In Ongoing International Money transfer services in cooperation with MoneyGram, a pct 90 rise from the last year in outgoing Money transfer transctions and a pct 48 rise in incoming paymenst were realized as well. Bank Asya succeeded to rise commissioning revenues at a rate pct 73. Retail customer gowth trend (quantity) 3.307.000 2.860.000 2.420.000 2.000.000 1.290.000 2007 2008 2009 2010 Retail financial support growth 2011 1.630 (TRY Million) 930 042 358 398 2007 2008 477 2009 2010 2011 Bank Asya 2011 Annual Report With an increase of 16 percent in the number of retail customers and 75 percent in retail financial support, Bank Asya covered a lot of ground in retail banking sector in 2011. Inverstment Products… In 2011, the Bank focused its efforts on marketing invetsmets accounts; thus, a total of 15,000 clients (up 50 percent from 2010) opened brokerage accounts to trade stocks.The Bank recorded a rise of 31 percent from 2010 in commission income owing to the increase in efficiency and in the number of clients and invetsments accounts. Record growth via new insurance products … Card and merchant partner activities 2011 was a year that Bank Asya introduced new incurance products in line with customers needs and expectations. Bank Asya increased the number of its credit cards by 6.6 percent on the previous year, to above 1.9 million in 2011. Credit card turnover consistent with the increasing number of cards also went up by 18.1 percent and reached TRY 5.85 billion. The main products created for retail customers were Bank Asya Evim Güvende Insurance (Home assurance), Bank Asya Continuous Education Plan Insurance,Bank Asya Çocuğum Güvende ınsurance (child safety assurance), and Bank Asya emergency Health Insurance. 1.920.000 680.000 1.300.000 (quantity) 1.500.000 Credit Card Growth 1.800.000 With the contribution of those new insurance products which were developed with subsidiary Işık Sigorta, Bank Asya produced a 55 percent record growth in commission income in 2011. Due in part to a variety of regional and national card marketing campaigns, newly attained vendors and brands as well as efficient cutomer communications throughout the year, installment purchases using AsyaCard at Bank Asya merchant partners surged by 46 percent. As of year end 2011, approximately 200 merchants, became strategic partners. 2009 2011 Bank Asya Retail Loans Distribution 4.022 29% 4% 1% 10% Distribution on quantity base 1.707 3.237 Credit Card Balance Growth (TRY Million) 2010 5.858 2008 4.938 2007 67% Consumer Distribution on amount base 89% Vehicle 2007 2008 2009 2010 2011 Housing 043 Presentation Bank Asya’s Activities in 2011 292 397 595 867 Credit Card (Forwarded) Balance Growth 2008 2009 2010 2011 2007 2008 4.737 2009 2010 2011 In regard to all these effective activities, Bank Asya ranked at 11th in credit cards, 10th in credit card balance, 9th in POS and 10th in POS balance in the Turkish market. 044 Bank Asya, by continuing innovative investments on products and services in 2011, re-demonstrated its market leadership with DIT Mobil and Mobile-T KGS (a card-baded pass system). DIT Mobil using MicroSD based NFC (Near Field Communication) technology and working independent from operators enables customers to pay using their cell phones. Furthermore; “Cep-T KGS”, a product about which studies were completed in 2011 and which was developed with cooperation between Turkcell and Bank Asya, enables customers at Bank Asya to download the bank’s KGS applications through their cellular phones with Turkcell service and pass from bridges and highways without need of a physical toll card by swiping their cell phones at KGS toll booths. Cep-T KGS will be intruduced to customers in the first months of 2012. Bank Asya, with its innovative products utilising the latest technology, aims to sustain its market leadership at contactless payment operations in the periods ahead Smart solutions to customer needs via new products and services 2.827 3.927 5.875 POS Balance Growth (TRY Million) 6.777 Due in part to newly attained brands during the year, the number of merchant partners reached 71,245 while the total merchant partners balance stood at TRY 6.8 billion up 17 percent from 2010. Innovations in technology continue … One of the most substantial products that Bank Asya launched to its customers in 2011 was PAKSİT. Thanks to PAKSİT (Receive at sight, pay forward), Bank Asya customers were given the opportunity to pay in up to 36 installments of their purchases over TRY 50, using their Asyacard domestically or abroad. A solution was created for an important requirement of PAKSİT cumtomers which is valid only for transactions complying with murabaha principles, and which generated a huge transaction volume in a very short time. Contactless cards, transportation and campus projects activities… Continuing to innovate on current transportation and campus projects, Bank Asya maintained its leading position in this field in 2011. Contacless cards offered by Bank Asya, namely AsyaCard DIT and DIT Pratik are being used with seven public, transport projects in the municipalities of Kahramanmaras, Balıkesir, Adıyaman, Karabuk, Safranbolu, Bolu and Karaman, and in TURYOL Marine Transportation in İstanbul. Campus Card application continues at 9 universities (Adıyaman, Osmaniye Korkut Ata, Fırat, Duzce, Fatih, Mevlana, Meliksah, Suleymansah and Zirve Universities) under the scope of Bank Asya Campus Projects as of the end of 2011. AsyaCard DIT grew very rapidly thanks to its prepaid toll card feature at highway and bridge booths as well as its availability for purchase in under 15 minutes at all Bank branches; the number of AsyaCard DIT users jumped by 14 percent in 2011 to reach 876,250 customers. Originally launched in 2008, the prepaid DIT Pratik card has reached 235,684 users to date. Bank Asya ranks first in the sector in terms of the number of contactless card (credit cards and prepaid cards combined) transactions and in turnover. Bank Asya 2011 Annual Report The Bank Asya Call Center, is certified in Customer Communication Centers Quality Management (ECCCO EN 15838:2009) and Customer Satisfaction Quality Management (ISO 10002:2004) in all of Europe The best Call Center award goes to Bank Asya… Effective Management of Alternative Distribution Channels In October 2011 the Bank Asya Call Center was deemed worthy of “The Best Call Center Award” by the industry’s most prestigous institution. Thanks to IVR, Inbound, Delighted Customer Line and Outbound calls, SMS info service and TTS (text to speech) calls, 9.004.474 customers were contacted in 2011 from our call center. 08.11 09.11 10.11 11.11 793.964 680.219 07.11 710.698 666.401 06.11 679.167 05.11 662.660 724.041 04.11 733.683 03.11 771.080 901.869 799.289 02.11 12.11 03.11 07.11 08.11 09.11 80.755 78.010 62.646 06.11 67.522 05.11 60.428 04.11 72.873 02.11 66.360 01.11 67.154 ADC Monthly Product Sale (Quantity) 65.718 The Maraton application enabled daily monitoring of the performances of customer representatives at the Call Center. Customer Complaints Management process improvements were designed and relevant works were initiated. After the completion of this work, it is planned to improve the process of monitoring and managing complaints, measuring them with reporting and using those results as performance inputs. 01.11 75.867 Telemarketing team calls were converted to Automatic Calling System, eleminating some manual work. Online receipt of payment in insurance products was accomplished and Cüzdanım (my pocket), Ailem (my family), İşsizlik (unemployment), Evim Güvencede (home assurance) sales started to be realized via related avenues. 72.838 Bank Asya continued to make technical improvements to its call center in 2011 in order to respond to customer demands with faster and higher quality service. Initiatives on Asya Mobile Branch were undertaken with the intent of offering solid banking services easily to citizens in the regions in which our branches do not exist and/or at any location where banking services were interrupted due to natural disasters. These initiatives were completed and the first mobile branch commenced to render banking services to earthquake victims in Van on 5 December 2011. Call Center Monthly Customer Contact 881.403 Everything is for a more timely and qualified service to customers… As a result of these contacts, 843.356 products were sold to customers and 76.853 insurance policies generated TRY 8.013.640 in premiums throughout the year. 73.185 The call center was also certified in Customer Communication Centers Quality Management (ECCCO EN 15838:2009) and Customer Satisfaction Quality Management (ISO 10002:2004) in June 2011. Bank Asya was the first bank to succeed in receiving these two certficates at the same time in whole Europe. Mobile Branch 10.11 11.11 12.11 045 Presentation Bank Asya’s Activities in 2011 Unconditional customer satisfaction with Delighted Customers’ Line The bank at which internet branch and mobile branch were used at optimum level… During 2011, 36,398 calls were responded to under the Delighted Customers’ Line. The average response duration was 8 seconds and 94,7 percent of calls were serviced. The timeframe to analyse customer demands, desires and complaints was on average one day at the Customer Satisfaction unit. The Number of Internet branch users reached 647,000 clients, up 19 percent from 2010 during which the number, which was 542,000 Whille there were 925 Internet branch membership cancellations in 2010, there were 427 in 2011 a decline of 46 percent Altough Internet branch active usage ratio was pct 41 in sectorwide in the third quarter of 2011, this ratio was pct 50 at Bank Asya. 01.11 02.11 03.11 04.11 06.11 07.11 9.438 Internet Branch User 8.990 10.103 7.486 05.11 450.000 2009 542.612 2010 647.252 2011 2.906 3.670 3.153 4.806 7.417 7.007 6.211 5.666 ADK Monthly Insurance Policy Sale (quantity) The number of customers using “AsyaCep Internet Branch” increased by approximately four times over 2010. While the monthly-entry to internet branch as of November 2010 was 1,11 million, this was realized as 1,25 million in 2011 with pct 13 rise. On the other hand; however, the internet branch financial transactions volume as of November 2010 was an average of TRY 1,39 billion, it rose up TRY 1,83 billion in 2011 - up pct 32 over the previous year. 08.11 09.11 10.11 11.11 12.11 15.961 AsyaCep Branch User 2010 1.040.426 1.249.795 711.659 468.063 350.448 429.564 340.921 564.423 602.080 536.519 449.162 1.270.580 4.020 ADK Monthly Promotion Capacitiy (Quantity) Internet Branch Monthly Entry 1,25 Million 1,11 Million 2010 046 2011 2011 Bank Asya 2011 Annual Report Determined to increase foreign trade transactions, Bank Asya succeeded in increasing its foreign sources by 95% International Banking Solid basis in international banking Bank Asya’s increasing share in foreign trade... While contributing to the national economy through its support for production, Bank Asya has also increased both its effectiveness and its market share in foreign trade finance as a result of its respected position and strong correspondent relationships in international markets. The Bank’s foreign trade transaction volume in 2011 totaled USD 21.10 billion, which includes, USD 4.1 billion in imports, USD 2.9 billion in exports, USD 13.5 billion in other transfers and USD 570 million in guarantees. In conducting foreign trade transactions, Bank Asya delivers service that fully complies with international banking practices and standards and makes use of modern banking instruments in order to provide its customers with superior solutions. Bank Asya completed a transformation process in international transactions in early 2011 and transitioned from a branch-based to a transaction based portfolio structure. Since the completion of this process there have been significant improvements in the speed, reliability, and standard compliance of the Bank’s foreign exchange transactions. The foreign trade team at Bank Asya consists of employees with-proven expertise in foreign trade, seven of whom posess Certified Documentary Credit Specialist – a certificate on Letter of Credits and International Guarantees (CDCS) International award for excellence Bank Asya sustained increase of its share of Turkey’s foreign trade transactions in 2011, achieved a 10 percent increase in import volume and a six percent growth in export volume compared to the previous year. An enduring and trusted presence in international markets Bank Asya continued to provide international services to its customers through an extensive correspondent network of more than 1,400 banks in 110 countries. In April 2011, Bank Asya signed an agreement structured with the participation of 26 banks from 17 countries for a one-year murabaha syndication facility of two tranches, of EUR 99 million and USD 121.5 million (totally equaling USD 300 million), to be used in export financing. As of 2011, funds collected to be used in export financing from abroad reached USD 760 million, a rise of 95 percent. Bank Asya continued to provide its customers with medium- and long-term credit opportunities and funding sources made available under a variety of Export Credit Agency insurance programs; in addition, the Bank offered qualified customers US Department of Agriculture GSM102 loans, which can be used to finance imports of agricultural products from the United States. Bank Asya aims to continue leveraging its extensive know-how and experience in foreign trade finance and its strong international relations network in order to maintain and increase its presence in this business line in 2012. Import Transactions (USD Million Dollar) %10 Export Transactions (USD Million Dollar) 4.092 3.722 %6 2.906 2.729 2010 2011 2010 2011 The effectiveness of Bank Asya’s technological infrastructure and service competencies is demonstrated by the Straight Through Processing (STP) Excellence Awards that it has received from some of the world’s leading banks in 2011. Bank Asya received the STP AWARD 2011 from Citibank. 047 Presentation Bank Asya’s Activities in 2011 Treasury The Treasury Department, trying to minimize the effects of fluctuations in the domestic financial market as a result of the economic crisis in EU and CBT policies, again continued to establish a balanced foreign exchange position during this year. The Department maintained Bank Asya’s presence in the liquidity management segment by offering existing products and developing new products. In the second half of the year the opportunity to access to Open Market Operations based on GES was allowed to participation banks and the Bank was able to provide short term fund sources on easy terms contributing considerably to the Bank’s profitability. "The conractionary pressures on the Banking Industry margins due to tightening precautions taken by CBT in order to minimize the current deficit, continued in 2011 and caused a reduction in the profitability." The Treasury Department continued to make positive contributions to the Bank’s profit in 2011 by earning foreign exchange income in such a period where banking services revenues have an added importance in overall profitability. 048 In an attempt to make the maximum contribution to the Bank’s profitability by way of its liquidity management function, the Treasury Department increased the number of its transaction channels and achieved a more competitive pricing structure, producing about USD 25 billion in trading volume. With regards to demand from investors who started searching for returns in the low interest rate environment in which risk aversion became the norm with the markets fluctuations in 2011, and due to ongoing uncertainty in the global ecomomy, gold has become a widelypreferred investment vehicle. Rapidly increasing its gold deposits and gold transactions in response to surging customer demand, Bank Asya recorded significant income growth from these transactions. Thanks to increasing customer interest during this period, the funds deposited in gold accounts achieved a growth higher than the industry and exceeded 9.9 tons, an increase of 470 percent. Bank Asya 2011 Annual Report In response to increasing demand for gold, Bank Asya gold accounts surged to 9.9 tons, with 470% increase over the sector Quality Management System The implementation of the Quality Management System and persistent improvement in its effectiveness demonstrates Bank Asya’s commitment to development. To this end, the Bank engages in constant review, development and orientation in order to meet customers needs and expectations within the bounds of the law and as per the prescription of the quality management system. Bank Asya’s customer-focused management approach is accepted as a necessary condition of companies striving to subsist in today’s competitive environment. To live up to customers’ needs and expectations, the Bank’s activities are monitored constantly. In accordance with feedback received from the aforementioned monitoring,studies are done to secure product quality from the design to the end of the representation process. Adopting the “ subsequent process is our client” principle, Bank Asya has attempted to maximize the contribution of every unit and every employee within the instittution to the final customer’s satisfaction. Maximum attention is paid to strict compliance with current codes, effectiveness, efficiency, and optimum cost elements in meeting the customers’ needs and expectations. In order to meet Bank Asya’s 2011 quality management system requirements, an organizational change took place with the intent of improving human resouces,system infrastucture, working environment, and enhancing coordination between departments. A single department called “Human Resources and Training Department” was formed, incorporating the “Human Resources “ and “Organization and Quality and Training”. After evaluation of the Bank processes in terms of quality,speed, and cost, “Business and Product Development Coordination“ was established to plan,organize, and conduct studies of improvement and development of those processes with a “Lean Banking” perspective. ISO 9001:2008 Quality Certificate Bank Asya, recognising ISO9001:2008 Quality Management System as a strategic decision, exerted intensive efforts to implement it in all functions of the Bank. Accordingly, the Bank continuously spent great efforts to be a bank in which its employees are proud to be member. Call Center Certificate (EN 15838) Bank Asya qualified for EN 15838 Customer Communication Centers Quality Management Certificate on the basis of customer satisfation, incoming-outgoing calls, performance management system,hiring,and the whole process of career planning and training. As a proof of said effort, ISO 9000:1994 Quality Certificate was granted in 1998 and since then took its place at the banks quality collection counters as ISO 9001:2008 accomplishing the requirements of all revisions. EN 15838 is a an international standard consisting of special reqirements for call centers. The system conditions prescribed with this standard is of quality supplementary to technical qualifications. The general purpose in preparing this standard is to identify the mutual quality and technical specifications for communcation centers. The standard, valid for interior and exterior customer communication centers, was designated both for communication centers and for customers utilizing these centers. Business Continuity Management (BS 25999) Customer Satisfaction Management (ISO 10002) Bank Asya received the “Business Continuity Certification” which was put into practise in 2011 from a reliable organization called “British Standards Institute(BSI)”; thereby, becoming the first Turkish organization to receive the BS 25999 BCSM Business Continuity Management System Certicifate held only by 10 banks and 240 institutions throughout the World. Rendering quality service means replying to customer expectations in a consistent manner. Accordingly, Bank Asya informs, develops and steers its employees constantly in order to reply in the manner stipulated in the ISO 10002 Standard which guides the systematic identification of customer complaints, needs, and expectations. The main purpose of business continuity management policy is to minimize the critical operations identified through business effect analyses and make them functional at the shortest duration customers are willing to accept. 049 Presentation Bank Asya’s Activities in 2011 Information Technologies Bank Asya srenghtened its pioneering and innovative identity in banking information technologies sector through its research and development efforts and projects, and brought its service perminence and operational poductivity through investments on latest technologies and infrastructure. With the aim of achieveing customer satisfaction and competitivie advantage utilising technology in the most efficient manner and producing quick and error- free service supply, Bank Asya focuses its IT investments on infrastructure initiatives, process improvements, alternative distribution channels enhancements, and innovative product launches in card-based payment systems. Major activities and investments carried out in the Information Technologies field by Bank Asya in 2011 include: The Bank began monitoring demand management processin 2011through PMI methodology after acvieveing management of processes via PPM application which was formed using the same methology at previous years. New functions were proceeded to be rolled out for the online branch and a comprehensive work out better to meet teh needs of Small Business Entities (SME) and commercial segment self-banking was brought to end-stage. AsyaCard Branch Renewed “Asyacad Branch” –web site- through which Asyacard owners monitoring their credit card statements and receive information about recent campaigns was completely updated. 050 New functions such as bill payment, credit card provisions tracking were added to Asya Mobile Branch channel which was opened for customers use for allowing them to conduct their banking transactions through mobile phones. Safe Access to Internet Branch via Mobile Signature Mobile Signature application capable of producing entry key to Internet Branch, Mobile Branch and Alo Asya Telephone Banking channels was put our customers disposal. Interactive Voice Response system was throughtly upgraded, and interface structures used by customer agents was optimized to reach the quick service and minimum call duration level. Thus, a new call center interface integrated with the banking system was set up. Bank Asya Mobile Branch ready to service at anytime In order to render customers a quicker and on-site service after natural disasters such as earhquakes or so and at premises in which our branches not available Mobile (travelling) Branch Project was put into practise and made ready to service at anytime via satellite connection and backup links. Technological infrastructure works required were concluded in order to provide sale and purchase transcations to be done both via physical branch and through Internet Branch. At the counters of branches, renewing customer queuing systems a new kiosk-based implementation was commenced recognizing the customers from their debit or credit card number. After consultancy of an international firm within the scope of CRM Project, central CRM application was purchased and faceplates were started to be improved via internal source resulting the start of the pilot implementation of modules such as customer compaign management, sales management, opportunity management. An integrated insurance sub-structure established wih Işık Sigorta and began online to generate various produts as Evim Güvence (House Assurance), Eğitim Güvence (Education Assurance), Kart Koruma Planı (Card Saving Plan). Together with the bill payment of new institutions, hajj registration system and tutition fee collection systems were put into use. It was made possible to allocate limit simultaneously and cedit card prints to parents of students via online access to universities’ systems. A more effective appraisement management Appraisement Management application was purchased and adopted to the Bank so as to make appraisals of real estates which would constitute collteral surety, generate reports and integrate with the banking systems. With the purpose of enhancing the collectibility, Electronic Litigation System was put into effect in order to track cases transferred to lawyer. Collection Application Minimizing Delay Implementation of Collection, producing miscelloneous actions working as per multidimensional criterion, was put into use at the end of a Project conducted with counselling of an international company with the intent of collection of overdue receipts and cretion of early warning signals. Bank Asya 2011 Annual Report With its research-development dynamics, investments on advanced technology and infrastructure, Bank Asya reached to high levels in service sustainability and operational efficiency Suggestion System for Automated Limit Increase A new application was rolled out suggesting amount of limit considering various criterion such as spending habits, of the customers holding credit cards, their solvencies and asstes. System automatically calls customers spotted by this way and increases the limit. Plot scheme was commenced after completion of Management with Targets System integrated with banking application as part of development and renovation of Human Resources implemnetations within the Bank. Account (Pusula) Management System For the sake of enhancement of the business pocesses, in order to measure and track the level of services Account SLA Project was launched out. In this context, all processes witihn the “Pusula” application being a management system developed within the scope of the Bank were reviewed and went on to identify the time periods during which every step must be completed. DIT Mobile brings contactless technology with mobile phone together In order to enable customers to perform all contactless, and other type, transactions, with AsyaCard DIT and Card Pass System (KGS) using their mobile phones, the Bank gave start to realize its plans to further develop the DIT Mobil product with two distinct mobile payment applications, one microSD-based and one SIM-based. R&D initiatives are ongoing to strengthen the Bank’s alternative distribution channels and actively steer customers toward these channels. Bank Asya is currently conducting R&D work to develop new technologies and products for information services on smartphones which became rapidly widespread, mobile banking experiences and loyalty applications. Research and Development R&D initiatives are ongoing to strengthen the Bank’s alternative distribution channels and actively steer customers toward these channels. Bank Asya is currently conducting R&D work to develop new technologies and products for information services on smartphones which became rapidly widespread ,mobile banking experiences and loyalty applications. Payment by installments with PAKSİT for cash spendings Establishment of an installment infrastructure called “PAKSIT” was activated availing cash shoppings payable by installments enabling customers adjusting cash flow without being dependent on the merchant. As a new function to POS application, Pre-Provision System was rolled out to make the interim payment with credit card for cost of goods not received yet and perform final payment after the delivery. IT Infrastructure Investments A private cloud environment covering IT infrastructure systems was formed. By doing so, lunching of infrastructure as service was enabled. Automation systems were utilized aiming the decrease of costs of IT infrastructure operaritonal processes and productivity. It is possible to provide self-service virtual infrastructure supplies for IT departments. The outstanding agreement between IBM Global Services İzmir Extraordinary Situation Center and Bank Asya since 2006 was extended to the end of year 2017. Hyper-V was also added to virtualiation platform used in the Bank’s structure after Vmware. Equipments with which vrtual servers work were renewed and the rate of virual servers in Information Center reached pct 48 of physical servers. Backup of virtual servers and replication to ODM operations were lalso automized. Beginning to use the automation and integration product well-known in its field, implementation of amendments made in masse and simultaneously within the scope of IT operational business processes. Work to be done independently of each other between systems were standardized integrating in a simple but efficient way. As a result of this work, labor-saving was targeted together with the increase of productivity and quality of IT operational processes. System was established enabling video-conference, training and meeting between headquarter and branches. Application Performance management (BSM) l aunched in the last quarter of 2011 monitoring of application peer to peer, evaluation of our customers feelings while they were using our applications and realizing and responding to timely all performance isuues related with applications, and planned to have completef within the first quarter of 2012. 051 Presentation Corporate Social Responsibility Sponsorships Sport sponsorships During the year, Bank Asya sponsored a variety of activities in order to highlight its identity not only as an expert banking institution, but also as a company that cares about society as a whole, the environment, arts and sports. Believing that talented young people need to be supported individually for the sake of the future of sports in Turkey, Bank Asya keeps undertaking the personal sponsorship of Aşkın Karaca, a young track athlete who has racked up numerous achievements in national and international competitions in the triple jump category since 2008. Event sponsorships The Bank continued to sponsor major events such as the INEPO International Environmental Project Olympiad and the Turkish Olympiads, which have come to be equated with the Bank Asya brand name over the years. Bank Asya also sponsored events that focus on trade and financerelated issues including the Turkish Confederation of Businessmen and Industrialists (TUSKON) and the Active Academy Financial Summit. Culture and art sponsorships Continuing to support culture and art, Bank Asya has been a prime sponsor of the Fatih University “Crystal Clapperboard Short Film Competition” for five years. This competition aims to raise Turkish cinema to new heights and encourage youngergeneration filmmakers. Media sponsorships During 2011, Bank Asya sponsored a variety of programs, columns and pages in newspapers, on radio stations and on TV channels that support the Bank’s corporate image. The Bank also sponsored a range of TV, newspaper and radio content that appeared during Ramadan. 052 Not content with its services to the country in the banking sector, Bank Asya conducts its studies on corporate social responsibility with a strong social consciousness. Bank Asya 1st League Aware that investing in Turkish football is in fact investing in the country’s future, Bank Asya extended its name sponsorship of the Turkish Football Federation (TFF) 1st League, which it has undertaken since the beginning of 2008. Seeking to improve both the brand value as well as the quality of play in the 1st League, Bank Asya has also acted as uniform sponsor of some league teams since it became the name sponsor. Bank Asya supported 8 out of 18 1st League teams in the 2011-2012 season through uniform sponsorship agreements. The Bank Asya 1st League continued to appreciate in value as a rising and easily recognized brand; interest by the media in the 1st League increased and television shows dedicated to 1st League coverage began to be aired. Aiming to contribute to sportsmanship and sports culture by recognizing athletic achievements in addition to its support for Turkish football and clubs, the Bank has presented Bank Asya 1st League Awards for three seasons now. The third edition of the Awards ceremony was held in May, and the winners in eleven award categories were announced. Corporate social responsibility projects Bank Asya has considered the Turkish Football Federation 1st League a corporate social responsibility project from the beginning of its name sponsorship of this organization. The Bank sees its support to this league as an investment in Turkish football. Not content simply with its name sponsorship, the Bank has fully embraced the 1st League since its relationship with the organization began in 2008. Projects undertaken by the Bank in support of the 1st League include the Bank Asya 1st League magazine, the bankasyabirincilig.com.tr website, play-off events and the Bank Asya 1st League Awards. Bank Asya offers uniform sponsorship to all 1st League teams at the beginning of each season to further improve the quality of the football play in the league. The Bank provided additional financial support through uniform sponsorship deals with 12 teams in the 2008-2009 season, 14 teams in the 2009-2010 season, and 12 teams in the 2010-2011 season, 8 teams in the 2010-2011 out of the 18 total teams in the 1st League. As a result of all of these activities, the Bank played a major role in the increasing brand value of Bank Asya 1st League. Bank Asya continued to make donations to various educational institutions, associations and foundations during the year out of its commitment to corporate social responsibility and without public notices or announcements. The Bank donated an amount equivalent to TRY 645 thousand of its shareholders’ equity in contributions and assistance to a variety of organizations and entities in 2011. Bank Asya 2011 Annual Report Subsidiaries and Affiliates Address (City / Country) Bank’s Ownership Share (%) Yeni Mağazacılık A.Ş. (*) İstanbul / Turkey 21,84 Landmark Holding A.Ş. (*) İstanbul / Turkey 21,84 Tamweel Holding S.A. (**) Dakar / Senegal 40,00 Kredi Garanti Fonu Ankara / Turkey 1,67 Asyafin Sigorta Ara. Ltd. Şti. İstanbul / Turkey 95,00 Nil Yönetim Hiz. Tur. San ve Tic. A.Ş. Ankara / Turkey 99,93 Işık Sigorta A.Ş. İstanbul / Turkey 65,42 Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul / Turkey 22,94 Asya Kart Teknoloji Hizmetleri A.Ş. İstanbul / Turkey 99,50 Asya Emeklilik ve Hayat A.Ş. İstanbul / Turkey 97,99 Company Name (*) The Bank recorded Yeni Mağazacılık A.Ş. and Landmark Holding A.Ş. as its affiliates in accordance with the joint investments method that is one of the Financing Methods for Participation Banks as stipulated in Article 19 of the ”Regulation on Banks’ Credit Transactions” that was published in the Official Gazette No. 26333 dated 1 November 2006 and that became effective on the same date, and the Uniform Chart of Accounts published in the Official Gazette No. 26415 (Second Issue) and dated 26 January 2007. (**)As of February 4, 2010, the Bank has paid for TRY 21.548.000 and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector (“ICD”) which is a group establishment of the Islamic Development Bank (“IDB”). TRY 9.077.000 and TRY 4.900.000 has paid for capital increase respectively on June 8, 2010 and October 3, 2011. As of the reporting date capital registry process has not been finalized yet. Işık Sigorta Işık Sigorta was established in Istanbul in 1996 with the special mission of raising social awareness about insurance as well as attracting those who are unfamiliar with or had negative attitudes toward insurance services. Işık Sigorta has total paid-in capital of TRY 60 million and Bank Asya holds a 65.42% stake. Işık Sigorta has adopted a customerfocused organizational structure that makes use of an advanced data processing network and an experienced workforce in order to provide better insurance consultancy services to its customers. The Company develops products in line with customer expectations and needs and delivers them with a superior service approach that applies before, during and after sales. This system allows the Company to underwrite transactions, which is a significant competitive advantage in terms of business conduct and service quality. In November 2007, the Company moved its headquarters into a modern, fully automated “smart” building along with Bank Asya, where it has served its agents and customers ever since. Nil Yönetim Hizmetleri Emlak Turizm San. ve Tic. A.Ş. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Nil YÖnetim Hizmetleri Emlak Turizm Sanayi ve Ticaret A.Ş. is a real estate management services company that operates the Asya Termal Holiday Village owned by Tuna GYO. Bank Asya controls a 99.93% stake in the Company. Asya Termal Holiday Village is located in KIzIlcahamam, a thermal spring spa known and used for centuries by many different cultures and civilizations. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. is a real estate investment trust. Formerly a construction company known as Asyafin Turizm Proje Insaat Emlak Sanayi ve Ticaret A.S., the Company was reincorporated as Tuna Gayrimenkul Yatırım Ortakligi after obtaining a license from the Capital Markets Board. Occupying an area of approximately 100,000 square-meters, Asya Termal Holiday Village consists of a 5-star hotel with 94 rooms and a 200 bed capacity, 494 deluxe timeshare houses (held under 11,856 two-week contracts), recreation facilities, indoor and outdoor swimming pools, health units, a shopping center, a cultural center, and a conference center. Tuna GYO commenced operations on 30 September 2009 to invest in real estate properties, real estate-backed securities, real estate development projects, real estatebased warrants, and capital markets instruments. The Company also engages in other activities allowed by the CMB’s Communique on Principles Pertaining to Real Estate Investment Trusts. Bank Asya directly controls a 22.94% stake in Tuna GYO. Asya Termal Holiday Village quickly established a solid reputation as a prestigious venue for holidays and as a health and conference tourism destination. Since its founding, the Village has played host to many wellknown Turkish and international guests and to many largescale meetings and events. The resort plays a major role in promoting Kızılcahamam as a nationally and internationally renowned spa. 053 Presentation Subsidiaries and Affiliates Asya Emeklilik ve Hayat A.Ş. Asya Emeklilik ve Hayat A.Ş.was established on 1 July 2011 with the permissons from Banking Regulation and Supervision Agency dated 16 May 2011 and Undersecretary of Treasury-General Directorate of Inurance dated 8 June 2011 and registerd to trade registry office. Folllowing establisment work, the company applied to the operating licence for pension branch on 16 September 2011 and to life group assuranceslicence on 30 December 2011. Asya Emeklilik targets those who are interest sensitive and desire a pension system operating in conformity with participation bank basis. The portfolio is set with this intent and was planned to comprise only of interest-free instruments issued by the Undersecretariat of Treasury in Turkey, as well as interest-free Sukuk and similar instruments issued in international markets, equity shares in compliance wth participation banking applications,participation accounts, and gold funds. Asya Emeklilik determines all of its processes in accordance with the aforementioned targets. Considering Turkey’s pension market and dynamics with its exprerience in the participation banking, assurance and retirement needs of target groups were analysed in detail. As a result, products will be launched meeting the needs and expectaions of these target groups. 054 Asya Emeklilik is determined to enchance its market share by differentiating in services rendered to customers while prioritizing its service quality. There will be a service concept which is accessed easily by customers, informing them accurately and quickly in a way that matches their expectaions. A profitable portfolio shall be created with a fast and productive distribution channel realizing sale of the products in accordance with the needs of target groups and operatonal infrastructure. Bank Asya has a share of 97.99 percent in the company partnership. Tamweel Africa Holding S.A. Tamweel Africa Holding S.A. was founded on 9 June 2009. Sixty percent of holding shares belong to the Islamic Corporation for the Development of The Private Sector – ICD while 40 percent belong to Bank Asya. Registered in Senegal, the headquarters is located at the address of 66 Rue Carnot, 5 ERNE Etage Residence Diourna Lena Dakar. As of 31 December 2011, 10 person were employed within the holding and there were four branches running in Senegal, Guinea, Niger and Mouritania. Yeni Mağazacılık A.Ş. A101 Yeni Mağazacılık A.Ş. was established on 28 March 2008. Opening the first supermarket with the nameof A101 on 28 April 2008 the company has subsequently succeeded its target by 121 stores. A101 provides low cost quality good and comsumables to customers at low prices in the chain markets operated in “Hard Discount” concept. The Company’s goal is to establish 2000 stores by year 2015. Operations in A101 are being conducted from Antalya,Trakya,Sakarya,İzmir, Tuzla, Ankara,Kıraç,Samsun, Bursa, Kayseri and Adana regions in addition to the warehouse-office and Istanbul Central Office. Bank Asya 2011 Annual Report Independent Auditors Compliance Opinion on the Annual Report To the General Assembly of Shareholders of Asya Katılım Bankası A.Ş.; We have audited the accuracy and compliance of the financial information in the accompanying annual report of Asya Katılım Bankası A.Ş. with the audit report issued as of 31 December 2011. The Board of Directors of the Bank is responsible for the annual report. As independent auditors, our responsibility is to express an opinion on the audited annual report based on the compliance of financial information provided in the annual report with the audited financial statements and explanatory notes. Our audit was performed in accordance with the accounting standards and principles and procedures of preparing and issuing annual reports as set out by the Banking Act No: 5411. Those standards require that we plan and perform our audit to obtain reasonable assurance whether the annual report is free from material misstatement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion, the financial information provided in the accompanying annual report presents fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as of 31 December 2011 in accordance with the prevailing accounting principles and standards set out as per the Article 40 of the Banking Act No: 5411. The financial information provided in the annual report is in compliance with the audited financial statements and explanatory notes, and also includes the summary Management report and our audit opinion on these financial statements. DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin Gürer Responsible Partner Chief Auditor, SMMM (Independent Accountant and Financial Advisor) İstanbul, 9 March 2012 055 Funding the real sector which is of vital importance for the healthy functioning of the economy, Bank Asya takes the side of its customers in every economical circumstances. Tree of Life Governance Informations and Implementations of Corporate Governance Principles Board of Directors Behçet Akyar Abdullah Çelik Ali Çelik Faruk İlk Chairman Board Member and CEO Board Member Board Member Behçet Akyar graduated from the Department of Financeof İstanbul Economics and Administrative Sciences Academy andbegan his professional career as a managing partner of Akerler Kumaş in 1979. He worked as the manager of the various companies ownedby himself. Behçet Akyar is the member of the board of directors and one of the shaeholdersofFeza Gazetecilik since 1992. He is also the chairman of Işık Sigorta, a managing partner of Akerler Tekstil and amember ofboard of directors of Aker Magazacılık ina addition to being chairman of Bank Asya since 2010. Abdullah Çelik graduated from the MiddleEast Technical University – Department of Economicsand completed a marketing and finance based MBA program in Old Dominion University and began his professional career in 1992. After serving as a Certified Bank Auditor, Vice President at the Board of Certified Bank Auditors, and Department Head of the Turkish Banking Regulation and Supervision Agency (BRSA) respectively, he was appointed as the CEO and the chairman of Development Bank of Turkey at the beginning of 2006. After his assignment at Development Bank of Turkey, Abdullah Çelik joined Bank Asya as the CEO and a board member in the March 2011. After beginning his career as a construction contractor in 1980, AliÇelik established Çelikeller Company in 1983, Birim İnşaat Company in 1987 and Yapı Yatırım Company in 2000. He currently serves as the chairman of Çelikeller A.Ş., Samanyolu Yayın Holding, Yapı Yatırım ve Gayrimenkul A.Ş. and Hamle Oto Kiralama A.Ş. and as vice chairman of Sema Sağlık Hizmetleri A.Ş.. Mr Çelik has been assigned as a member of the Board of Directorsof Bank Asya since 2012. After graduating from Egean University Faculty of Business Administration, Faruk İlk began his professional career in 1980. He served as labour inspector in the Ministry of Labour and Social Security since 1996. He worked as executive vice president of Samanyolu TV between 1996-2000 and as a managing partner and CEO of Dünya Grup between 2000 and 2012. Mr İlk serve as a member of oard of directors at Bank Asya since 2012. Members of Board of Directors, on 26.01.2012 Salih Sarıgül and Ahmet Çelik and on 02.02.2012 Tacettin Negiş resigned from their positions and Ali Çelik, Faruk İlk and Mustafa Talat Katırcıoğlu were appointed instead respectively. 058 Bank Asya 2011 Annual Report Board Members and Their Terms of Office Details pertaining to the constitution of the Bank’s Board of Directors and to the terms of Office of its members are stipulated in Article 32 of the Bank’s Articles of Association. Board members serve for three-year terms. A Board Member whose term of office has expired may be reelected. Mustafa Talat Katırcıoğlu Hülagü Özcan İsmail Erol İşbilen Board Member Board Member Board Member Graduating from İstanbul Technical University Faculty of Machine, Mustafa Talat Katırcıoğlu began his professional career in 1993.He serves as a partner and board member in firms operating mainly in real estate and construction sector. Mr Katırcıoğlu holds serves as a member of board of directors at Bank Asya since 2012. Graduating from the Middle East Technical University Facuty of Administrative Sciences, Hülagü Özcan began his professional career in 1983. He worked as manager, auditor, executive vice president and board member in miscelleneous banks and finance corporations both in the country and abroad. Mr Özcan serves as amember of board of directors and a member in the audit committee of Bank Asya since 2010. Graduating from Ankara University Faculty of Political Sciences Department of Economics and Public Finance, İsmail Erol İşbilen began his professional career in 1983. He served as bank examiner and manager at various banks. In 1997 he joined Bank Asya as a branch manager and he worked as the department head of Loans Unit between 2000 and 2004. After serving as the department head of a another bank, Mr İşbilen serves as a member of Board of Directors and theAudit Committee since 2010. Behçet Akyar Chairman - 2010 Abdullah Çelik Board Member and CEO - 2011 Ali Çelik Board Member - 2012 Faruk İlk Board Member - 2012 Mustafa Talat Katırcıoğlu Board Member - 2012 Hülagü Özcan Board Member - 2010 İsmail Erol İşbilen Board Member - 2010 Board of Directors Meetings Under Article 38 of the Bank’s Articles of Assocation, the Board of Directors must convene at least four times during a fiscal year. In addition, the Board of Directors also meets whenever the Company’s business requires a meeting or upon the invitation of its Chairman. The Bank’s board of Directors generally meets four times a month. Meetings are usually attended by all members except in situations where members have a valid excuse for their absence. In accordance with Article 44 of the Bank’s Articles of Association. The members of the Board of Directors are paid a monthly gross salary of TRY 5,000. 059 Governance Informations and Implementations of Corporate Governance Principles Statutory Auditors The Statutory Auditors and Their Terms of Office Details pertaining to the constitution of the Bank’s Board of Statutory is stipulated in Article 49 of the Bank’s Articles of Association. Sattutory auditors serve three-year terms anda are paid as monthly gross salary of TRY 5,000. Atif Bilgin İrfan Hacıosmanoğlu Mehmet Gözütok Statutory Auditor Statutory Auditor Statutory Auditor Statutory Auditor - 2006 Graduating from Gazi University Faculty of Education, Atif Bilgin serves as the statutory auditor since 1996 at Bank Asya. Mr Bilgin, a partner of Tuna Gayrimenkul and Galaksi İnşaat Companies, also serves as statutory auditor of Nil Yönetim Hizmetleri. Beginning his professional career in 1986, İrfan Haciosmanoğlu owns various companies operating in textile industry. He holds the position of statutory auditor of Bank Asya since 2009. Mr Haciosmanoğlu, one of the partners of Vira Denizcilik Companies, also serves as vice chairman at Forum İnşaat and board member at Işık Sigorta. Graduating from İstanbul Atatürk Institute of EducationDepartment of Sciences, Mehmet Gözütok began his career in 1978. Mr Gözütok was a member at Municipality of Maltepe and İstanbul Metropolitan Municipality during 1994 and 1999. He currently serves as the chairman of the Board of Directors at Orman ÜrünleriYapı İnşaat ve Dış Ticaret, and Gözütoklar Group, deputy chairman at Samanyolu Yayın Holding and as a board member at Sema Sağlık Hizmetleri A.Ş.. Mr Gözütok holds the position of statutory auditor at Bank Asya since 2012. İrfan Hacıosmanoğlu Atif Bilgin Statutory Auditor - 2009 Mehmet Gözütok Statutory Auditor - 2012 The Member of Board of Statutory Auditors, Ali Akbulut resigned from his position on 23.02.2012 and Mehmet Gözütok was appointed to fill the seat vacated. 060 Bank Asya 2011 Annual Report Changes in the Membership of the Board of Directors And the Board of Statutory Auditors during 2011 Changes in the Membership of The Board of Directors During 2011 Abdullah Çelik was appointed asamember of the Board of Directors and the CEO after the resignation of Cemil Özdemir on 10.03.2011 Changes in the Membership of The Board of Statutory Auditors During 2011 No changes took place in the membership of the Board of Statutory Auditors during 2011. Changes in the Membership of the Board of Directors and the Board of Statutory Auditors during 2011 Changes in the Membership of The Board of Directors During 2011 On 26.01.2012, Members of Board of Directors, Salih Sarıgül and Ahmet Çelik resigned from their position On 02.02.2012, Tacettin Negiş resigned from his position. Ali Çelik, Faruk İlk and Mustafa Talat Katırcıoğlu were appointed for the vacant positions Changes in the Membership of The Board of Statutory Auditors During 2011 The Member of Board of Statutory Auditors, Ali Akbulut resigned from his position on 23.02.2012 and Mehmet Gözütok was appointed to fill the vacant seat. 061 Governance Informations and Implementations of Corporate Governance Principles Senior Management 062 Abdullah Çelik Dr. Ercüment Güler Ahmet Beyaz Dr. Feyzullah Eğriboyun Board Member and CEO Executive Vice President Executive Vice President Executive Vice President Abdullah Çelik graduated from the MiddleEast Technical University – Department of Economicsand completed a marketing and finance based MBA program in Old Dominion University and began his professional career in 1992. After serving as a Certified Bank Auditor, Vice President at the Board of Certified Bank Auditors, and Department Head of the Turkish Banking Regulation and Supervision Agency (BRSA) respectively, he was appointed as the CEO and the chairman of Development Bank of Turkey at the beginning of 2006. After his assignment at Development Bank of Turkey, Abdullah Çelik joined Bank Asya as the CEO and a board member in the March 2011. Graduating from Ankara University (Faculty of Political Sciences - Department of Public Finance) and doing his master’s degree at İstanbul University (Money and Banking) and studying for doctorate at Marmara University (Banking and Insurance programme), Ercüment Güler began his professional career in 1995. After serving as bank examiner, branch manager and department head, Mr Güler joined Bank Asya in 2011 as the Executive Vice President responsible for Retail Banking. Graduating from Ankara University (Faculty of Political Sciences - Department of Public Finance), receiving his master’s degree from both Yeditepe University (Financial Law) and from University of Illinois (MBA), Ahmet Beyaz began his professional career in 2001. After serving as Certified Bank Auditor, and Certified Bank Chief Auditor, Mr Beyaz joined to Bank Asya in 2011 as the Executive Vice President responsible for Budget and Reporting and Accounting and Subsidiaries. Graduating from Bosphorus University (Department of Electric - Electronic Engineering and Mathematics) and receiving his master degree in Applied Mathematics and doctorate programme at Mathematical Finance from Carnegie Mellon University, Feyzullah Eğriboyun began his professional career in 1997. He served as financial engineer, strategist and trader at various international investment banks in New York City and London between 1997 and 2011. He taught finance at Sabancı University in 2009. Mr Eğriboyun joined Bank Asya in 2011, and currently serves as the Executive Vice President responsible for Treasury, Investor Relations, Financial Institutions, Human Resources and Training Departments. Bank Asya 2011 Annual Report Fahrettin Soylu Ahmet Akar Zafer Ertan Ali Tuğlu Executive Vice President Executive Vice President Executive Vice President Executive Vice President Graduating from Ankara University (Faculty of Political Sciences, Business Administration) and completing MBA program inUniversity of Illinois,Fahrettin Soylu began his professional career in 1994. After serving as Certified Bank Auditor, Certified Bank Chief Auditor, deputy head of Board of Certified Bank Auditors, headof Supervision Group and head of department at the Banking Regulation and Supervision Agency of Turkey (BRSA), member of the Standard Practice Group of Basel Banking Auditing Committee, Mr Soylu joined Bank Asya as Executive Vice President in 2010. He currently holds the position of Executive Vice President. Graduating from Ankara University (Faculty of Political Sciences, Public Administration), Ahmet Akar began his professional career in 1995. After serving as bank examiner, manager and branch manager in the banking industry, he joined Bank Asya as Executive Vice President responsible for Loans Allocation in 2001. Graduating from Dokuz Eylül University (Public Administration) and completing MBA program in Fatih University, Zafer Ertan began his professional career in 1997 at Bank Asya. He held various positions in Loans Allocation and Loans Monitoring Departments. He was appointed to the Non-Performing Loans Department as the manager in 2008 and he currently serves as the Executive Vice President of Risk Monitoring, Non-Performing Loans,Law and Real Estate Departments. Graduating from İstanbul Technical University (Faculty of Computer Engineering) and Virgnia Technical University (Computer Sciences Master’s Degree), Ali Tuğlu began his career as a lecturer at Virginia Tech University in1993. After working as a consultant and manager at various international corporations within the country and abroad, Mr Tuğlu joined Bank Asya as the Executive Vice President of Information Technologies in 2008. 063 Governance Informations and Implementations of Corporate Governance Principles Senior Management Board of Directors Auditing Coordination Ceo Abdullah Çelik Executive Vice President Executive Vice President Ercüment Güler Executive Vice President Ali Tuğlu Executive Vice President Ahmet Beyaz Risk Management Center Head Mehmet Kamil Tümer Corporate Marketing Department Atilla M. Topçu Retail Products and Sales Management Department Gökhan Çeviker Banking Services Department J. Başak Ünal System Development Department Mustafa Saraç Budget and Reporting Department Kamil Yılmaz Board of Inspectors Head Hilali Yıldırım Commercial Marketing Department Ahmet Deniz Card-based Payment Systems Marketing Department Emre Özgür Allocation Department Olcay Çakır International Transactions Department Bülent Güngör Accounting and Subsidiaries Department Fuat Akgün Internal Control Head Mahmut Yalçın SME Marketing Department Murat Demir Alternative Distribution Channels Department Ali Sait Özkan Credit Operations Departmen Adil Z. Şahin System Operations Department Bekir Başkurt Purchasing Department Murat Aydoğan Regional Marketing Offices Resource Development Telat Altun Cash Management Department İsrafil Aydın Administrative Affairs Ömer Fuat Özçelebi Payment Sytems Operations Department Mustafa Ölmez Retail Loans Allocation Department Hasan A. Küçük 064 Executive Vice President Fahrettin Soylu Consultancy to CEO Information Technologies and Project Management Dept. Mehmet Ergün Aydemir Card Technologies Department Sami Özen Corporate Communication Department Ömer F. Gülap Bank Asya 2011 Annual Report Executive Vice President Zafer Ertan Executive Vice President Ahmet Akar Executive Vice President Feyzullah Eğriboyun Non-Performing Loans Department Şeref Bacak Commercial Loans Allocation Department Zihni Zeytun Treasury Department Cenk Yavuz Risk Monitoring Department Kamil Cengiz SME Loans Allocation Department Eken Berber Financial Institutions Department İbrahim Öğüdücü Construction and Facilities Department Hüseyin Sevil Fiscal Analysis and Information Department Cevdet Korkmaz Invertor Relations Department Group Management Department Mehmet Uruç Corporate Loans Allocation Department Özcan Özverim Human Resources and Training Department Erdoğan Kılıç Legal Consultancy Murat Kızgın Project Finance Department Ersagun Şimşek Foreign Business Legal Consultancy Talha Salih Yayla Regional Allocation Offices Job and Product Development Coordination Abdurrahman Köse Board of Directors Secretaria Serhat Keleş Legislation and Compliance Department Nazan Ergün 065 Governance Informations and Implementations of Corporate Governance Principles Committees Audit Committee Position Member Member Name Hülagü Özcan İsmail Erol İşbilen Title Member of the Board of Directors-Audit Coordinator Member of the Board of Directors-Audit Coordinator The Audit Committee periodically prepares an “Audit Committee Activity Report” of its findings on the Bank’s auditing and risk management activities to ensure that there is effective internal control, internal audit and risk management system throughout the Bank; the Activity Report is prepared for the the Board of Directors. The Audit Committee convened 30 times during 2011. The Committee held four meetings with the independent auditors in order to evaluate internal audit activities. Credit Committee Position Member Member Associated Member Name Abdullah Çelik Salih Sarıgül (1) Ahmet Çelik (1) Title Member of the Board of Directors – CEO Vice Chairman of the Board of Directors Member of the Board of Directors (1) Salih Sarıgül and Ahmet Çelik resigned from the membership of theBoard of Directors on 26th of January 2012 and Behçet Akyar and Faruk İlk were appointed in their place The Credit Committee convenes regularly every week to evaluate commercial, corporate, and small business loan proposals. The Committee may also meet upon the invitation of the Chairman when necessary. The Credit Committee has the power to extend or deny credit within the limits of its own authority subject to the requirements of banking laws and regulations. Proposals that exceed those limits are submitted to the Board of Directors for approval. Assets and Liabilities Committee Position Head Vice Head Member Member Member Member Member Member Member Name Abdullah Çelik Ahmet Beyaz Ahmet Akar Ali Tuğlu Dr. Ercüment Güler Fahrettin Soylu Dr. Feyzullah Eğriboyun Zafer Ertan Mehmet Kamil Tümer Title CEO Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Head of Risk Management The Assets and Liabilities Committee convenes every week. Meetings are chaired by the CEO and attended by Executive Vice Presidents and the managers of departments whose activities might have an impact on the Bank’s balance sheet. The meeting agenda consists of determining the strategies for the coming week by assessing the Bank’s balance sheet, business line activities, general economic data, and current political and economic developments Corporate Governance Committee Position Member Member Member Member Member Name Behçet Akyar Salih Sarıgül (1) Fahrettin Soylu Ahmet Beyaz Mehmet Kamil Tümer Title Chairman of the Board of Directors Vice Chaiman of the Bard of Directors Executive Vice President Executive Vice President Head of Risk Management (1) Salih Sarıgül resigned from his membership from the Board of Directors on 26th of January 2012 and Faruk İlk was appointed to the vacated seat. The Corporate Governance Committee convenes at least three times a year in order to oversee the Bank’s compliance with the corporate governance principles, to undertake initiatives to make improvements in this area, and to make recommendations to the Board of Directors. 066 Bank Asya 2011 Annual Report Discipline Committee Position Head Member Member Member Member Associated Member (1) Associated Member (2) Name Abdullah Çelik Dr. Feyzullah Eğriboyun Mehmet Uruç Hilali Yıldırım Erdoğan Kılıç Zafer Ertan Murat Kızgın Title CEO Executive Vice President Chief Legal Counselor Head of Supervisory Board HR and Training Manager Executive Vice President Legal Counselor (1) In case the EVP of HR’s absence, (2) In case of the absence of Chief Legal Counselor. The Discipline Committee’s function is to determine the presence, perpetrators, degrees of culpability, and potential damage of transactions and acts that necessitate disciplinary action pursuant to the Bank’s internal regulations and disciplinary bylaws. The Disciplinary Committee convenes as circumstances warrant in meetings chaired by the CEO and attended by those managers involved in the issueson the agenda. Information Technologies (IT) Strategy and Steering Committee Position Head Member Member Member Member Member Member Name Abdullah Çelik Ali Tuğlu Mustafa Saraç Bülent Güngör Bekir Başkurt Mehmet Ergün Aydemir Sami Özen Title CEO Executive Vice President System Development Manager Software Development Manager System Operations Manager IT Project Manager Card Technologies Manager IT plans its activities and investments prepares its annual budget and presents it to the Board of Directors for their approval. It monitors, controls and steers the general projects requiring IT invesments. The committee audits the aims and annual activity plans of all IT units. IT committee also advises on IT functions, processes, systems and the development of systems, risks, sourcing, organizing, relations with service units and meets the needs of service units and the like to the related IT departments. Information Security Management Committe Position Member Member Member Member Name Dr. Ercüment Güler Ali Tuğlu Ahmet Beyaz Dr. Ender Şahinaslan Title Executive VicePresident Executive VicePresident Executive VicePresident Risk Management, Compliance and Information Security Manager The Information Security Management Committee, working under the Chief Executive Officer, convenes regularly to oversee Information Security initiatives, monitor developments, and make managerial decisions. Information Technologies (IT) Risk Management Committee Position Head Member Member Member Member Member Member Member Name Ali Tuğlu Mehmet Kamil Tümer Mehmet Ergün Aydemir Bekir Başkurt Mustafa Saraç Sami Özen Bülent Güngör Dr. Ender Şahinaslan Title Executive Vice President Head of Risk Management Director of IT Project Management System Operations Manager System Development Manager Card Technologies Manager System Software Manager Risk Management, Compliance and Information Security Manager IT Risk Management Comitte reviews risks related to Information Technologies evaluated as the part of operational risk and makes managerial decisions regarding risks requring manegement approval-opinion. 067 Governance Informations and Implementations of Corporate Governance Principles Committees Project Finance Credit Committee Position Head Vice Head Member Member Member Member Member Name Abdullah Çelik Ahmet Akar Ersagun Şimşek Ahmet Deniz Atilla M. Topçu Zihni Zeytun Özcan Özverim Title CEO Executive Vice President Project Finance Manager Commercial Marketing Manager Corporate Marketing Manager Commercial Loans Allocation Manager Corporate Loans Allocation Manager (*) Concerned Marketing Managers also participate in the committee as a member according to project title. Project Finance Credit Committee serves depending on the Board of Directors makes the evaluation of Project loans. The authority and function of the General Manager Credit Committee(GMCC) operates in lieu of GMCC during the credit allocation process. Pricing Committee Position Member Member Name Behçet Akyar Tacettin Negiş (1) Title Chairman of the Board of Directors Member of the Board of Directors (1) Mustafa Talat Katırcıoğlu was appointed to the vacated seat after the resignation of board member Tacettin Negiş on 2nd February 2012. Acting depending on the Board of Directors, the Pricing Committee was established according to “The Regulations Concerning the Principles of Banks Corparate Governance “ issued by The Banking Regulation and Supervision Agency of Turkey (BRSA) and fulfills the monitoring and supervision tasks of the Bank’s pricing implementations on behalf of the Board of Directors. Cost Management Committee Position Head Member Member Member Member Member Name Ahmet Beyaz Abdurrahman Köse Kamil Yılmaz Fuat Akgün Murat Aydoğan Ümit Eski Title Executive Vice President Business and Product Development Coordinator Budget and Reporting Manager Accounting and Subsidiaries Manager Purchasing Manager Cost Management Department Senior Manager Coordinating the effective management activities of the Bank’s expenditures the Cost Management Committee, fulfills the tasks of taking decisons related to activities, approving purchase of goods and services prior to purchase within the limits of authority, inviting the managers to the committee to achieve the cost-benefit analysis prior to purchase when necessary. 068 Bank Asya 2011 Annual Report Summary Report of Board Director Esteemed Shareholders, Bank Asya maintained its pioneering position in the Turkish banking industry in 2011 with its strong customer relationships, broad deposit base, sound balance sheet, customerfocused and innovative management approach, conservative risk management strategy and transparent corporate governance practices. The low inflation environment, intense competition in the Turkish banking industry, and the rapidly expanding credit as a result of increased liquidity in the system led to lower levels of lending and contracting profit margins. The decline in lending rates also led to an improvement in the key indicators of the banking sector by boosting consumption and growth while fueling credit expansion and reducing both the stock of non-performing loans and the NPL ratio on new loans. The Bank's strategic goals to constitute a lower risk perception and a safer credit portfolio gave its results in 2011. The year of 2011 has been a favorable and successful year for Bank Asya in terms of growth and profitability. A brief review of the its key financial indicators for 2011 show the extent of Bank Asya’s strong performance during the year. The Bank has attained a profit of TRY 216 million for the year. Bank Asya’s total assets at year-end 2011 reached TRY 17.2 billion, up 18% from he previous year. The deposit base expanded and the funds raised were extended to corporate, commercial, small business and retail banking clients as loans. Cash loans, which played a major role in the robust growth of the Bank’s balance sheet, totaled TRY 13,45 billion, up 22% compared to the previous year. Deposits, which make up the largest share of the Bank’s liabilities, grew by 11% to TRY 12.4 billion. Bank Asya also reported a return on assets (ROA) of 1.3% and return on equity (ROE) of 10.1% for 2011. In light of the developments highlighted above, in the year end 31 December 2011, Bank Asya’s: • Total Assets increased by 18%, to TRY 17.190 million • Cash Loans increased by 22%, to TRY 13.452 million • Deposits increased by 11%, to TRY 12.397 million • Shareholders’ Equity increased by 10%, to TRY 2.137 million • Net Profit stood at TRY 216 million • Capital Adequacy Ratio stood at 13.31%. We hereby submit Bank Asya’s annual report and financial statements showing the results of the Bank’s activities for the period 1 January 2011 to 31 December 2011 for your information and consideration. Respectfully yours, Asya Katılım Bankası A.Ş. Board of Directors 069 Governance Informations and Implementations of Corporate Governance Principles Human Resources The core values of Bank Asya’s corporate culture include professionalism, innovation, honesty, confidentiality, compassion, respect, fairness, effectiveness, productivity, quality, teamwork and social responsibility. Bank Asya aims to be one of the world’s leading participation banks and to ranking among the forefront of companies where highly qualified professionals desire towork. To this end, the Bank continually develops and implements new initiatives in order to recruit the most highly qualified personnel and ensure their commitment and loyalty to Bank Asya. Through its evaluation center testing, the Bank identifies the areas needed for further professional development and administers training programs accordingly; helps candidates acquire necessary skills via the management trainee academyprogram; and provides overseas language education opportunities forall employees. Bank Asya keeps constant touch with the students via its “Development Base”… To better acquaint university students with Bank Asya, the Bank is undertaking the Development Base Project. The Project organizes a training camp for students and provides them with internship opportunities at the Bankduring the year. The Development BaseProject ensures that students who are prospective employees will learn more about, and remain in contact with, Bank Asya as they advance toward graduation and enter the business life. The primary goal of Bank Asya’s Human Resources Department is to cultivate a sense of team spirit within the Bank and increase overall productivity by leveraging the staff’s sense of engagement and belonging. The main objective of the Bank’s hiring processes is to recruit highly responsible team players who have strong interpersonal communication skills and a strong understanding of participation banking; in addition, Bank Asya candidates should identify with the Bank’s mission and vision, be open to learning and professional development, and follow new industry trends closely. The most sought afterqualities in the Bank’s applicants are university graduates, who speak at least one foreign language, and, for male candidates, have completed military service. The Bank recruits inexperienced candidates for certain positions including assistant marketing representative, assistant internal auditor, assistant internal controller, assistant financial analysis and information representative, teller representative, and call center customer representative. Inexperienced applicants are evaluated based on the requirements of the position they are applying for. After a recruitment process which identifies candidates who fit with the Bank’s business and corporate culture, prospects are assessed on the merits of their education, training and skills; Bank Asya aims to create a professional environment that provides equal career opportunities and a high level of job satisfaction to its employees. When there is an open position in the Bank, an announcement is made to personnel using internal communications before the job opening is posted externally. The Bank’s current employees are given priority in filling open positions. However, Bank Asya also considers other candidates who are believed to be able to contribute to the Bank based on their experience, skills and abilities. When the Bank is opening a new branch, priority is given to those successful employees who could not otherwise be promoted due to the lack of open positions in the title or career band. All career paths leading to even the highest positions at Bank Asya are open to all employees. The Bank’s primary criteria in promotion decisions are employee performance and contribution to the Bank’s overall performance. For Bank Asya employees to receive a promotion the following must occur: there must be a vacant position to which they may advance; they must be successful in their current position;they must have fulfilled the minimum term of service in their current position;they must have performed at a satisfactory level during their testing period; they must have successfullycompleted training required forpromotion; and they must never have been the target of disciplinary action. As of year-end 2011, Bank Asya had a total of 4,542 employees (1,608 females and 2,934 males). Breakdown of Employees by Educational Background Educational B. Number Ratio (%) Graduate2.951 65,0 Associate 68215,0 High School 603 13,3 Post Graduate 284 6,3 Primary PHD Total 160,3 60,1 4.542100,0 Number of Employees by Educational Background 20104.266 20114.542 Change (%)%6,5 070 Bank Asya 2011 Annual Report Bank Asya targets to be one of world’s foremost pioneering participation banks by continuously increasing its service quality through its qualified human resources and personal improvement programs Bank Asya, taking into consideration its goals and strategies as well as supporting all employees’ personal and professional career developments, carries out activities to contribute to the increase of service quality and productivity. The main objectives of the training program are to educate employees capable of both technical information and self motivation which enable Bank Asya to grow not only within the country but also abroad. The goal is to speed up the compliance and improvement process of employees supporting HR functions such as promoting, managing with targets, and career planning. In accordance with the stipulated targets and findings of education need analysis, the number of trainings which are to given to employees working both at branches and the head office are updated reviewing at the beginning of every fiscal year. Trainings are held in-cooperation with the professional companies specialized in the field of education and experienced in-house trainers. Training Besides in-class trainings depending on the learning objectives, on-the-job trainings, orientation programs, e-learning trainings are also used widely. 35 pieces of e-learning on different topics were completed by 4,900 employees during 2011. 7 hours e-learning per employee. During 2011, 85 trainings on various topics were given including conferences and seminars held outside the Bank. Many studies were carried out to measure the outcomes of those trainings. Bank Asya, with the aim of increasing the number of employees knowing foreign languages, provided 90 of its employees with English course support and also started English language training within the bank in accordance with its misson to be not only one of Turkey’s best but also one of world’s leading participation banks Number of Employees in Terms of Training Total Number of Training Topics Total Number of Training Groups Total Number of Attendance (Person x Days trained) In-Class Training day per employee 85 629 28.547 6,34 E-learning hours per employee 7,5 Number of employees suppoted for MBA 30 071 Governance Informations and Implementations of Corporate Governance Principles Transaction Volumes of the Risk Group Bank Asya included, Outstanding Loans and Funds Collected at the End of Period, Costs and Revenues Regarding the Period Current Period: Risk Group Of The Bank Participations, Subsidiaries And Joint Direct and Indirect Other Entities Included In Ventures Shareholders of the Bank Risk Group Cash Non-cash Cash Non-cash Cash Non-cash Loans And Other Receivables (*) Beginning Balance Endıng Balance Profıt Share And Commıssıon Income 77.494 107.795 8.921 16.806 - - 172.548 206.072 42.782 164.645 15.438 - - - 35.797 - (*) Includes TRY 3.411 thousands Finance Lease Receivables as of 31 December 2011(31 December 2010: TRY 153 thousands) Previous Period Risk Group Of The Bank Participations, Subsidiaries And Joint Direct and Indirect Other Entities Included In Ventures Shareholders of the Bank Risk Group Cash Non-cash Cash Non-cash Cash Non-cash Loans And Other Receivables (*) Beginning Balance Endıng Balance Profıt Share And Commıssıon Income 52.357 77.494 9.225 8.921 - - 220.914 172.548 68.491 42.782 15.164 - - - 23.870 - (*) Includes TRY 153 thousands Finance Lease Receivables as of 31 December 2010(31 December 2009 : TRY 237 thousands) Risk Group Deposits Balance of the Bank Risk Group of the Bank Current and particpation accounts Begınnıng Of Perıod End Of Perıod Profıt Share Expense 072 Participations,Subsidiaries and Joint Ventures Current Period 104.089 113.796 7.585 Direct And Indirect Shareholders Of The Ban Current Period - Other Entities Included In Risk Group Current Period 109.357 127.638 4.950 Bank Asya 2011 Annual Report Report on Compliance with Corporate Governance Principles Statement of Compliance with Governance Principles Asya Katılım Bankası’s corporate governance structures, processes and principles are formulated so as to be in compliance with the requirements of the Banking Law as well as with all other applicable laws, regulations, and administrative provisions. Bank Asya publicly discloses all rules and practices that determine the Bank’s relationships with its Board of Directors, shareholders and other stakeholders in line with its sense of social responsibility, subject always to the requirements of the Banking Law. Shareholders and Investor Relatıons Unit The Bank conducts its investor relations activities within the framework of its public disclosure and corporate governance principles through the Investor Relations Department and the Shareholder Relations Unit of the Accounting and Subsidiaries Department; both departments report directly to the Board of Directors. Investor Relations Department The Investor Relations Department’s primary objective is to contribute to the Bank’s value in all respects by serving as a bridge between the Board of Directors and investors in accordance with the Bank’s public disclosure policy so as to ensure that the Bank’s growth model and future goals are explicitly and clearly understood and to increase the Bank’s visibility and transparency in the financial services industry and banking sector. To this end, Bank Asya’s Investor Relations Department holds meetings with the Bank’s existing and prospective investors by taking part in investor conferences organized in Turkey and abroad and by conducting road shows; holds meetings and communicates with representatives from brokerage houses and bank analysts; prepares investor presentations concerning the Bank’s activities at the end of each quarter and makes these available to investors on the Bank’s website; holds teleconferences; and responds to all verbal and written requests for information about the Company with the exceptions of the Bank’s confidential information, trade secrets and information that is not publicly disclosed. Contact information for Investor Relations Department personnel is presented below. Cengiz Önder Investor Relations / Supervisor Tel : +90 216 633 59 60 E-mail: cengiz@bankasya.com.tr Nevzat Mutlu Investor Relations / Assistant Chief Tel: +90 216 633 59 63 nevzat@bankasya.com.tr Shareholder Relations Unit The principal duties of the Shareholder Relations Unit include: • Ensuring that shareholder records are maintained in a sound, secure, and upto-date manner. • Responding to shareholders’ written requests for information about the Bank with the exceptions of the Bank’s confidential information, trade secrets and information that is not publicly disclosed. • Ensuring that General Assembly meetings are conducted in compliance with current laws and regulations, the Bank’s Articles of Association and other bylaws. • Preparing documents for the use of shareholders at General Assembly meetings. • Recording the results of voting at General Assembly meetings and reporting the results to the shareholders. • Overseeing and monitoring all issues related to public disclosures as required by law and the Bank’s public disclosure policy. • Maintaining a section on the Bank’s website to inform shareholders about issues that may be of close concern to them including, developments that may have a significant impact on the Bank’s financial well-being, the shareholder structure, members of the Board of Directors, annual reports, capital structure, quarterly profit/loss statements, information about branches and key personnel, and General Assembly meeting resolutions. Contact information of Shareholder Relations Unit personnel is presented below. Fuat Akgun Shareholder Relations / Manager Tel : +90 216 633 54 50 E-mail: fuat.akgun@bankasya.com.tr Ozlem Coskun Shareholder Relations / Supervisor Tel : +90 216 633 54 57 E-mail: ozlem.coskun@bankasya. com.tr Alpay Guneralp Shareholder Relations / Chief Tel: +90 216 633 54 58 E-mail: alpay.guneralp@bankasya.com.tr Exercise of Shareholders’ Right to Obtain Information Bank Asya’s website located at www. bankasya.com.tr contains an Investor Relations section both in Turkish and in English where information about the Bank that may be of interest to shareholders and to the public at large is published immediately. This website provides information about the Company in general, Bank Asya shares, regularly issued financial statements and annual/interim reports, presentations, and corporate governance structure. Information stipulated by the provisions of the Banking Law, Turkish Commercial Code, the Capital Markets Law and their related regulations is publicly disclosed in the form of “special circumstance announcements” All questions posed by shareholders that do not fall within the category of the Bank’s trade secrets are responded to by the relevant units in keeping with the principles of fairness and equality. In 2011, the Investor Relations Department took part in an average of 6 one-on-one or group meetings per month to increase the visibility of the Bank with existing or prospective investors and bank analysts who visited the Bank; the Department also participated in 17 foreign investor conferences in Turkey and abroad, and conducted separate meetings with 273 investors during the year. The Shareholder Relations Unit sends reports about its activities to authorities through designated channels during the year. 073 Governance Informations and Implementations of Corporate Governance Principles Report on Compliance with Corporate Governance Principles Information about General Assembly Meetings Announcements concerning General Assembly meetings are published within the legally prescribed time periods in the Trade Registry Gazette and in the press. Such announcements include a copy of the meeting agenda and a proxy form. Invitations are also sent out to shareholders by mail. During the reporting period, Bank Asya held its Ordinary General Assembly Meeting on 26 March 2011. Shareholders exercised their right to ask questions at this meeting and all questions that were raised were answered. No shareholder advanced any motion on any issue that had not been included in the agenda. The Bank’s Articles of Association permits votes to be cast by proxy at General Assembly meetings. Voting Rights and Minority Rights Shareholders are entitled to one vote for each TRY 1 (one Turkish lira) share of stock that they own. Shareholders may cast their votes in person or by proxy. Voting at General Assembly meetings is conducted by an open show of hands. However, voting by secret ballot is conducted upon the demand of shareholders representing at least onetwentieth of the capital that is present at the meeting. Issues pertaining to proxy voting are determined within the framework of related laws and regulations. This matter is set forth in Article 24 of the Bank’s Articles of Association. Profit Distribution Policy and Timing Principles pertaining to profit distribution of Asya Katılım Bankası A.S. are stipulated in detail in the Bank’s Articles of Association, which is available on the Bank’s website. Matters concerning the implementation of the dividend payment policy are conducted in accordance with the Articles of Association. Dividends are paid out within the statutorily prescribed time periods. The Board of Directors’ dividend payment proposal is one of items placed on agenda of the General Assembly meeting. It is presented for the consideration of shareholders and voted on by the General Assembly. This matter is set forth in Article 54 of the Bank’s Articles of Association. 074 Transfer of shares The issue of share transfers is governed by Article 11 of the Bank’s Articles of Association, and is as follows: Transfers of Group A shares, all of which are registered in the name of their owners, are subject to the approval of the Board of Directors. The Board may, entirely at its own discretion and without advancing any reason for doing so, refuse to allow such transfers; similarly, it may approve and allow such transfers under such terms and conditions as it may deem appropriate. Transfer of these shares are legally binding upon the Company only if they have been duly recorded in the Shareholders’ Register. Transfers of B group shares, all of which are registered in the name of their owners, may take place without any need for Board of Directors approval subject to Turkish Commercial Code, Capital Markets Law and the Central Registry Agency regulations. Share transfers for which the Banking Law requires Banking Regulation and Supervision Agency approval may be made only if that Agency’s permission has been obtained. Transfers that do not have this required approval may not be recorded in the Shareholders’ Register. Shareholders who acquire shares for which Banking Regulation and Supervision Agency approval is required but for which permission is not obtained may not exercise any shareholder rights other than receiving dividend payments. Public Disclosures and Transparency Company Disclosure Policy A company disclosure policy was developed by the Board of Directors in line with corporate governance principles with the aim of ensuring that all stakeholders, including shareholders and the public at large, are kept informed in a timely, accurate, complete, comprehensible, and simultaneous manner. This policy was approved at the Bank’s Ordinary General Assembly Meeting held on 31 March 2006. In order to ensure that accurate and timely information is provided in this regard, a presentation for each quarterly financial statement is prepared and shared with investors on the Bank’s website. Information about Bank Asya is provided by the Investor Relations Department through its participation in investor meetings. In addition, the Department responds to questions about these issues from investors and shareholders via telephone and email. Public Disclosures During 2011, Bank Asya issued a total of 45 (forty-five) special circumstance announcements within the framework of Capital Markets Board regulations. Company Website and Its Content The address for the corporate website of Asya Katılım Bankası A.S. is www.bankasya.com.tr. The Bank’s website contains detailed information about the Bank and the products and services offered by the Bank. Banking transactions may be performed through Bank Asya’s online branch. The Investor Relations section, presented in both Turkish and English on the Bank’s website, contains information about the Bank’s management structure; the latest version of the Articles of Association; General Assembly meeting invitations, agendas, and minutes; annual reports; periodical financial statements, reports and presentations; and public disclosures. The Bank pays particular attention to ensure that the information on its website is kept up-to-date. Disclosure of Real Person(s) as Ultimate Controlling Shareholder(s) As of 31 December 2011, the Bank has a multi-partner shareholding structure, with 305 shareholders. No shareholder controls more than a 10 percent stake in the Bank. Information about this matter is publicly disclosed on the Bank’s website. Public Disclosure of Individuals Who Have Access to Insider Information A list of individuals who have access to insider information about the Bank has been published on the Bank’s website since 30 April 2009. The names of members of the Board of Directors and of senior management who may be in such a position are published in annual reports and on the website. Bank Asya 2011 Annual Report Stakeholders Keeping stakeholders Informed Stakeholders are regularly kept informed about matters that are deemed necessary and important. The Bank has made necessary organizational arrangements to meet the information requests of shareholders, employees and customers. Through these arrangements, shareholders, customers, employees and regulatory agencies are kept effectively informed. Stakeholder Participation in Management Bank Asya has always encouraged employees to participate in management. In this regard, employees are able to freely express all of their opinions and suggestions about the Bank’s activities through the Asya Suggestion System the use of which requires no prior approval. These opinions and suggestions are processed by personnel who are charged with this duty; they are then forwarded to relevant members of management for action to be taken as appropriate. All suggestions received from employees are given a response. Every year, the Bank performs an assessment of employee suggestions that are implemented and presents awards based on their success. During 2011, 2.091 suggestions were received from the Bank’s employees. Human Resources Policy The basic principles of Bank Asya’s Human Resources policy are to: • Conduct personnel planning in terms of both quality and quantity, employing personnel who fit the Bank’s business and the country’s culture, • Maintain employee productivity and effectiveness at the highest levels, • Provide all personnel with opportunities for professional, personal, and social development through effective training plans and programs, • Maintain the highest degree of morale and motivation among employees at every level, • Safeguard and improve the employees’ material and moral rights, • Create a workplace environment that will foster the willingness of all employees to work with their managers while also striving to improve relationship skills, • Provide an open and two-way communications environment, • Involve employees in career planning and provide everyone with equal career opportunities. The Bank has adopted a performance management system. Under this system, employees are evaluated at regular intervals in terms of their performance and the results of the evalution are shared with the employees. Every year, an Internal Customer Satisfaction Survey is conducted at the Bank to assess employee and job satisfaction levels. Employee job, social, and psychological satisfaction are also supported through an in-house club for personnel called “Yediveren”.In this regard during 2011, the club conducted a variety of meetings, events, and activities. Work has been completed on a job description and an associated salary scale system in our growing Bank. The new compensation system has been in effect since 2008. Relations with Customers and suppliers Bank Asya employees: • Provide accurate, complete and timely information on all matters during every stage of every relationship involving all the products and services that are offered to the Bank’s customers. • Are obliged to uphold and carefully maintain the confidentiality of all information and documents about customers that they may have access to and not to reveal anything to anyone other than those individuals and entities that have the explicit legal authority to demand such information and documents. • Regard quality as an essential prerequisite for supplying any service that is intended to satisfy customer needs and expectations; make every possible effort to deploy the technological infrastructure and qualified human resources that are the two fundamental elements of this concept in such a way as to achieve continuous improvement in service quality. • Do not discriminate on the basis of nationality, religion, financial or social status, or sex when serving customers. • The existence of an organizational structure and product range that identifies and differentiates among target groups, and approaching customers in different risk groups differently, is not to be interpreted as justification for discriminating among customers or categorizing them. Bank Asya investigates the reasons for any customer complaints that it receives via the systems that it had created, which include, Customer Request Web Module, Alo Asya Call Center, and Happy Customer Hotline. The Bank takes necessary measures to avoid the recurrence of any issues that led to justifiable complaints. Such action includes correcting the practices that provoked the complaint and informing employees in order to prevent any recurrences. Social Responsibility Within the framework of its sense of social responsibility and of the requirements of the laws and regulations which it is subject to, Bank Asya donates to and assists foundations and associations that work for the public good, supports cultural publications and broadcasts, and sponsors congresses and conferences on banking and the economy in general. Bank Asya is respectful of people, individual rights and liberties, and the environment. The Bank takes the requirements thereof into account in all of its business processes, and strives materially and morally to fulfill those requirements at every opportunity. The Bank is not a respondent to any legal action on account of any environmental damage. Penalties Imposed by Public Authorities During the reporting period, the Bank was assessed a total amount equal to 0,08% of its profit in fines by a variety of public authorities on account of conduct in violation of provisions of laws and regulations; Bank Asya paid all of the fines. 075 Governance Informations and Implementations of Corporate Governance Principles Report on Compliance with Corporate Governance Principles BOARD OF DIRECTORS Risk Management and Internal Control Mechanism Structure and Formation of the board of Directors; NonExecutive Members Bank Asya has created an effectve internal control and risk management system within the framework of the requirements of the Banking Law and other applicable laws and regulations. Board of Directors are constituted of chairman and six members. Members of the Bank’s Board of Directors are elected in accordance with Article 32 of the Bank’s Articles of Association and the requirements of the Banking Law. Qualifications of the Members of the board of Directors The qualifications of the members of the Boards of Directors of banks are stipulated in the Banking Law. Bank Asya complies with these requirements in the election of its Board members. Mission, Vision, and Strategic Objectives of the Company The Board of Directors has formulated the Bank’s vision and mission in a clear and comprehensible way; these are published in the annual reports and on the Bank’s website. Bank Asya’s mission and vision are presented below. Mission: To contribute to shareholder value and the Turkish economy by developing modern banking services within the framework of interest-free banking principles and satisfying customer needs and expectations with a “different solutions for different expectations” approach. Vision: To be a respected, trusted and effective bank that provides service at world standards through the products it develops. During the reporting period, the Board of Directors regularly reviewed and monitored the Bank’s performance towards achieving its strategic goals and provided guidance on such issues. 076 This system consists of three separate units: the Internal Control Center, the Risk Management Department and the Internal Audit Department. All three units report directly to the Board of Directors. Duties and Authorities of the Bank’s Board of Directors The duties and authorities of Bank Asya’s Board of Directors are governed by Article 35 of the Bank’s Articles of Association, according to which the Board may decide on any matter that does not require a decision by the General Assembly of shareholders. Specifically, the Board of Directors: • Prepares and approves internal regulations governing which matters pertain to the Company’s internal affairs and may be dealt with by CEO and which matters only may be dealt with by means of Credit Committee or the Board of Directors decisions; • Reviews all matters deemed necessary and continuously oversees day-to-day administrative activities (for which the Board of Directors may assign responsibility to individual members); • Prepares the Bank’s annual balance sheet and profit & loss statement; submits reports that review the Bank’s activities during the year and profit distribution proposals to the General Assembly of shareholders; specifies and makes arrangements for cash positions and guarantees taking the requirements of applicable laws into account; makes the statutory auditors’ reports available for examination 15 days prior to the General Assembly Meeting of Shareholders; • Determines the forms of any and all procedures pertaining to the objectives the Company is founded on; • Determines, stipulates and decides upon matters pertaining to the assignment, promotion, dismissal, annual salaries and expense allowances of those who have signing authority, of the CEO and especially of those who report directly to the CEO, and of other key personnel; • Resolves to open branches, offices, liaison offices and regional offices and decides the authorities to be granted to them within the framework of applicable laws and regulations; • Decides upon the principles pertaining to real estate properties and equity stakes that are to be bought or sold on behalf of the Company; • Performs all the duties stipulated in the Turkish Commercial Code and in other applicable laws, regulations and administrative provisions; deals with all matters other than those assigned to the General Assembly of Shareholders or to the Statutory Auditors by laws or under these Articles of Association. The Board of Directors may, when it deems necessary as stipulated in Article 319 of the Turkish Commercial Code, decide to delegate its powers to represent and administer the Company to one or more of its members, managers or to committees consisting there of for a period of time and under such terms and conditions as it deems appropriate. The authority to extend credit rests with the Board of Directors. The Board of Directors is responsible for formulating policies pertaining to extending and approving credit and to other administrative principles; ensuring that these policies are applied and followed; and taking all necessary measures. The Board of Directors may delegate its authority to extend credit to a credit committee or to a CEO in accordance with the requirements of applicable laws and within the framework of principles and procedures to be determined by the Board. Bank Asya 2011 Annual Report Operating Principles of the board of Directors The Board of Directors convenes when necessary and/or upon an invitation of the Chairman. Any member may submit a written request to the Chairman asking for a meeting to be convened. According to the Bank’s Articles of Association, the Board of Directors must convene at least four times during a fiscal year. However, the tradition at Bank Asya is for Board meetings to be held regularly at weekly or biweekly intervals except under exceptional circumstances. This tradition was upheld during 2011. Board of Directors meetings are held at the Company’s headquarters. However, a Board of Directors meeting may be held at some other location, city and/or country with the approval of a majority of the members. Board of Directors meetings are conducted according to agendas that are provided to members prior to the meetings. Board members and statutory auditors may request that the Chairman add to the agenda any issues that they wish to have discussed. The Board of Directors convenes in the presence of a simple majority of its membership. Resolutions are passed by a simple majority of the members who are present. Decisions about a proposal advanced by any member may be made by obtaining the written consent of other members so long as none of them request that that the matter be discussed in a meeting. However, decisions made in this way without a meeting require an unanimous vote. Every member of the Board of Directors is entitled to one vote. Neither the Chairman nor any other Board member may cast votes on behalf of any member who is absent from a meeting. If the voting on an issue under consideration results in a tie at any meeting, the matter is left to be discussed in the next meeting. If the tie cannot be broken at the next meeting, the proposal is deemed to have been rejected. Decisions made by the Board of Directors are recorded the same day, in a manner indicating the date and sequential order of each resolution, in a register which has been certified in accordance with the requirements of the Turkish Commercial Code and the Banking Law pertaining to books of account and whose pages have been sequentially numbered. Every resolution must be undersigned by the members of the Board of Directors who voted for it. Prohibition on Doing business or Competing with the Company The Chairman and the Members of the Board of Directors are prohibited from engaging in business with the Company and competing with the Company pursuant to Articles 334 and 335 of the Turkish Commercial Code. However, the General Assembly of Shareholders may authorize the Chairman and all or any number of Board members to engage in such business or competition. The committees, which have been set up, are active in compliance with the requirements of law, and on which the Bank’s Board members serve, include the following: • • • • • Corporate Governance Committee Credit Committee Audit Committee Assets and Liabilities Committee Information Technologies (IT) Strategy and Steering Committee • Discipline Committee • Project Finance Credit Committe • Pricing Committe Financial benefits Provided to the board of Directors The Chairman and members of the Board of Directors are paid a fee for each Board meeting that they attend. The amount and type of such payments are determined by the General Assembly. This matter is governed by Article 42 of the Bank’s Articles of Association. Code of Ethics At the Ordinary General Assembly meeting held on 31 March 2006, it was decided that the “Principles of Ethics of Banking” published by the Participation Banks Association of Turkey, of which Bank Asya is a member, shall be adopted in the conduct of the Bank’s activities as well. Number, structure, and Independence of Committees Established by the board of Directors Pursuant to the Board of Directors resolution dated 2 February 2006, the Bank has created an “Audit Committee” and a “Corporate Governance Committee” in accordance with Article 24 of the Banking Law concerning the formation of audit committees and other applicable laws, regulations and administrative provisions. 077 Governance Informations and Implementations of Corporate Governance Principles The Bank’s Distribution Policy Bank Asya is adopting the strategy of procuring higher levels of external support services in order to reduce costs, increase revenues, focus its Human Resources on its core activities, increase the speed and efficiency of operations, and benefit from the technology and expertise that it does not possess in-house. The support services Bank Asya has that fall within the scope of “Regulation on Bank’s Procurement of Support Services and Authorization of Such Service Providers” are as follows. No Outsourcing Service Name of the outsourcing Company 1 Moneygram System Developments Moneygram Payment Systems, Inc 2 Investment Services Bizim Menkul Değerler 3 Debit Card and Credit Card Printing Plastikkart Akıllı Kart İletişim Sistemleri San ve Tic A.Ş. 4 Raw Card Supply Services 5 Card Distribution Services 6 Account Statement Printing and Distribution Services Provena Bilişim ve Ödeme Çözümleri Tic. Ltd. Şti. Mapikart Tanıtım Hizmetleri ve Dış Tic. Ltd. Şti. Kuryenet Motorlu Kuryecilikve Dağıtım Hizmetleri A.Ş. Aktif İleti ve Kurye Hizmetleri A.Ş. Hobim Bilgi İşlem Hizmetleri A.Ş. Cihan Medya Dağıtım A.Ş. Fujitsu Technology Solutions Bilişim Ltd. Şti. Teknoser Bilgisayar Teknik Hizmetler San. ve Dış. Tic. A.Ş. Verifone Elektronik ve Danışmanlık Ltd. Şti. 7 POS Device and Virtual POS Operation Transactions Ingenico Ödeme Sistem Çözümleri A.Ş. Seri Bilgi Teknolojileri Destek Hizmetleri ve Tic. Ltd. Şti. İnnova Bilişim Çözümleri A.Ş. G2 Web Services, Llc Mobilgi Teknolojileri Ltd. Şti. BKM – Bankalararası Kart Merkezi A.Ş. 8 Card Exchange and Calculation Services Visa Mastercard 9 Check Book Printing Services Güzel Sanatlar Çek Basım Ltd. Şti. Oracle Bilgisayar Sistemleri Ltd. Şti. 10 Oracle, Sybase IQ Database and Business Objects Reporting Systems Services Sap Türkiye Yazılım Üretim ve Tic. A.Ş. Sybase Türkiye Yazılım Securverdi Güvenlik Hizmetleri A.Ş. 11 ATM Case Supply & Repair Bantaş Nakit Kıymetli Mal Taşıma ve Güvenlik Hiz. A.Ş. Brink’s Güvenlik Hizmetleri A.Ş. Ncr Bilişim Sistemleri Ltd. Şti. Wincor Nixdorf Bilgisayar Sistemleri A.Ş. 12 ATM Repair & Maintenance 13 A101 Stores Cash Collection Services G4S Güvenlik Hiz. 14 EFT Systems Transcations Global Bilişim A.Ş. Banksoft Bilişim Bilgisayar Hizmetleri Ltd. Şti. Termtech Bilişim Bilgisayar Teknolojileri Tic. Ltd. Şti. 078 Bank Asya 2011 Annual Report No Outsourcing Service Name of the outsourcing Company 15 Check Data Entry Transactions Aton Ltd. Şti. 16 Archieve Services Bonded Kayıt Sistemleri Dağıtım Hizmetleri ve Ticaret A.Ş. Arşiv Kütüphane Belge-Bilgi Yönetimi ve Bilişim Sistemleri Ltd. Şti. Experian Decision Analytics, Emeai 17 Retail Loan & Credit Card Applications and Scoring 18 Asya Exertise Transactions Key İnternet Hizmetleri Ltd. Şti. 19 Validator, EMV Scripting, Card Perso Software and Development Services Smartsoft Information Technologies 20 Overdue Payment Reminder Calls CMC İletişim Bilg. Reklam ve Dan. Hizm. San. Tic. A.Ş. 21 Information and Collection Initiative for Customers Deemed Insolvent Hamzazade Bilişim Yönetim ve Danışmanlık A.Ş. KKB Kredi Kayıt Bürosu A.Ş. Adam Elektronik Ltd. Şti. Turkcell İletişim Hizmetleri A.Ş. 22 SMS, URLand Mobile Signature Services Avea İletişim Hizmetleri A.Ş. Vodafone Telekomünikasyon A.Ş. 23 Password Transactions 24 Call Center Services 25 Mobile Branch 26 SWIFT Smartsoft Information Technologies Kobil Systems Ltd. ITD İletişim Teknoloji Danışmanlık Tic. A.Ş. Infotech Bilişim ve İletişim Teknolojileri A.Ş. Pozitron Yazılım A.Ş. İdeal Bilişim Hiz. San. ve Tic. Ltd. Şti. Orange Business Services S.A. S.W.I.F.T. SCRL 079 Governance Informations and Implementations of Corporate Governance Principles The Bank’s Distribution Policy Principles of the Banks profit distribution policy are governed by Article 54 of the Articles of Association, accordingly: The Companys net profit consists of the amount remaining after all of the Company’s expenses, depreciation and amortization allowances, and various provisions which have been paid or are accrued have been deducted from its income as determined at the end of the fiscal year. Net profit shall, after the deduction of prior-year losses, if any, be apportioned in the order indicated below. 1. 5% of the net profit shall be set aside as a legal reserve as per Turkish Commercial Code Article 466/1. 2. From the amount remaining, a first dividend shall be set aside at a percentage and in an amount determined by the Capital Markets Board. 3. Of the remaining profit: ºA portion of up to 2% shall be set aside for members of the Board of Directors, ºA portion of up to 5% shall be set aside for the Bank’s managers and employees. The General Assembly is authorized to carry forward to the next year or set aside as extraordinary reserve some or all of the net profit remaining after the deduction and allocation of the amounts in paragraphs (1), (2), and (3) above. The Board of Directors may recommend such course of action to the --General Assembly if it deems necessary. (The provisions of Article 466/3 of the Turkish Commercial Code are reserved.) Subject to the provisions of the Capital Markets Law, the General Assembly is authorized to distribute all or some of the remaining profit as dividends to shareholders in the manner indicated below or else to set aside some or all of it as extraordinary reserve. a) Distribute all of it in cash, b) Distribute all of it as shares of stock, c) Distribute a specified percentage as cash and a specified percentage as shares of stock and retain the remainder in the Company, d) Distribute neither cash nor shares of stock and retain the entire amount in the Company. The Board of Directors may make recommendations to the General Assembly on this subject if it deems necessary. Pursuant to the provisions of this article, the Board of Directors shall determine the date(s) on which dividends are to be paid. The Bank’s Profit Distribution Proposal for 2011 At a meeting of the Board of Directors on 23 February 2012, it was resolved that TRY 3.805.418,26 - representing 75 percent of the total sales gain of TRY 5.073.891,01 - of a real estate located in Altunizade/İstanbul shall be deposited in the special found pool as per article 5-1/e of Corporate Tax Law No.5520, and the sum remaining after the amounts that must be set aside as required by law and the Articles of Association have been set aside from the net profit shown in the balance sheet dated 31 December 2011 shall not be distributed but instead shall be retained as extraordinary reserve in order to strengthen the Bank’s equity resources and that this course of action shall be presented for approval at the Ordinary General Assembly meeting. 080 Bank Asya 2011 Annual Report Matters Regarding The Ordinary General Assembly Meeting Agenda of the Asya Katılım Bankası A.S. Ordinary General Assembly Meeting dated 31 March 2012 1- Opening the meeting and forming the presiding committee 2- Authorizing the presiding committee to sign the minutes of the meeting 3- Reading and deliberating the Board of Directors’ annual report, the statutory auditors’ report, and the independent auditor’s report for 2011 4- Examining, deliberating and ratifying the balance sheet and profit & loss statement; reading and deliberating the Board of Directors’ profit distribution proposal; deciding how to distribute profits 5- Submitting for approval the appointment made during the year to fill the vacant seat on the Board of Directors 6- Acquitting the Company’s Board members and statutory auditors of their fiduciary responsibilities 7- Discussion and resolution of the amendment under the title “Formation of Board Of Directors “ of item 32 of the bank’s Articles of Association. 8- Selection of members of the board of directors and the board of statutory auditors, and determination of their terms of office, 9- Deciding the salaries and entitlements of the members of the Board of Directors and statutory auditors 10- Authorizing the Board of Directors to elect the members of the Senior Advisory Committee and to determine their salaries payments 11- Submitting for approval the independent auditors chosen by the Board of Directors for a one-year term for the 2012 fiscal year 12- Providing information about the contributions and donations made during 2011 13- Reading and deliberating changes made in the public disclosure policy principles within the framework of the Bank’s corporate governance principles 14- Authorizing the Company’s Board members to engage in activities governed Articles 334 and 335 of the Turkish Commercial Code 15- Petitions and suggestions. 081 Governance Informations and Implementations of Corporate Governance Principles Detailed Information on Agenda Items 1- Opening the meeting and forming the presiding committee Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Customs and Industry regulations, a president and his/her committee (presiding committee) will be elected to conduct the General Assembly meeting. 2- Authorizing the presiding committee to sign the minutes of the meeting Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Customs and Industry regulations, the General Assembly will authorize the presiding committee to record and sign the decisions made at the meeting. 3- Reading and deliberating the Board of Directors’ annual report, the statutory auditors’ report, and the independent auditor’s report for 2011 Explanation: The Board of Directors’ annual report, the statutory auditors’ report, and the independent auditor’s report for the 1 January 2011 to 31 December 2011 reporting period will be read and deliberated. These reports can be obtained from the Company’s headquarters and from its website (www.bankasya.com.tr/yatirimci_ iliskileri/faaliyet_raporları.jsp, www. bankasya.com.tr/yatirimci_iliskileri/ denetim_raporları.jsp). 4- Examining, deliberating and ratifying the balance sheet and profit & loss statement; reading and deliberating the Board of Directors’ profit distribution proposal; deciding how to distribute profits Explanation: The Board of Directors’ balance sheet and profit & loss statement for 2011 will be read, deliberated and voted on at the General Assembly meeting. The financial statements may be obtained from the Company’s headquarters and from its website (www. bankasya.com.tr/yatirimci_iliskileri/ faaliyet_raporları.jsp). 082 In accordance with the resolution at the meeting of the Board of Directors on 23 February 2012, it shall be poposed that “TRY 3.805.418,26-representing 75 percent of the total sales gain of 5.073.891,01-of a real estate located in Altunizade/İstanbul shall be deposited in the special found pool as per article 5-1/e of Corporate Tax Law No.5520, and the sum remaining after the amounts that must be set aside as required by law and the Articles of Association have been set aside from the net profit shown in the balance sheet dated 31 December 2011 shall not be distributed but instead shall be retained as extraordinary reserve in order to strengthen the Bank’s equity resources” The old text B- FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32: The Board of Directors shall consist of seven members to be elected by the General Meeting among the candidates, who are necessarily shareholders, nominated by the minimum 51% of the total votes of the Group (A) shareholders present at that meeting. General Manager, and in his absence Assistant General Manager are natural members of the Board of Directors. Members of the Board of Directors shall have the conditions and qualifications required by the Banking Law. The Board of Directors elects a chairman and a deputy chairman among its members. The members of the Board of Directors shall have a term of office of three years. Any Director whose term of office ends can be re-elected. In case of any vacancy in the Board of Directors due to any reason, the remaining Directors appoint a member of the Board of Directors among the shareholders for the vacancy. This appointment is submitted to the approval of the following first general meeting of shareholders. General Meeting of Shareholders may dismiss any member of the Board of Directors, without a right of compensation to the dismissed Director. The terms of office of Managers are not dependent on the term of office of the members of the Board of Directors. Managers can be appointed with a longer period than the term of office of the Directors or on contracts with indefinite periods. The powers of the authorized signatories shall remain in force until their powers as authorized signatory are cancelled by the Board of Directors. 5- Submitting for approval the appointment made during the year to fill the vacant seat on the Board of Directors Explanation: The Board of Directors’ resolution to appoint Ali Celik to fill the seat vacated by the resignation of Salih Sarıgül from the Bank’s Board of Directors will be presented for the General Assembly’s approval. 6- Acquitting the Company’s Board members Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce regulations, the General Assembly will vote on acquitting the Compan’s Board members and its statutory auditors of their fiduciary responsibilities for the Company’s activities and transactions in 2011. 7- Discussion and resolution of the amendment under the title “Formation of Board Of Directors “ of item 32 of the bank’s Articles of Association. Explanation: It will be submitted for the approval of the General Assembly that the number of members of the board of directors is increased from 7 to 9, and the term“ vice-chairman” mentioned in article 32 to be altered as “deputy chairman”. Bank Asya 2011 Annual Report The new text: B- FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32: The Board of Directors shall consist of nine members to be elected by the General Meeting among the candidates, who are necessarily shareholders, nominated by the minimum 51% of the total votes of the Group (A) shareholders present at that meeting. General Manager, and in his absence Assistant General Manager are natural members of the Board of Directors. Members of the Board of Directors shall have the conditions and qualifications required by the Banking Law. The Board of Directors elects a chairman and a vice chairman among its members. The members of the Board of Directors shall have a term of office of three years. Any Director whose term of office ends can be re-elected. In case of any vacancy in the Board of Directors due to any reason, the remaining Directors appoint a member of the Board of Directors among the shareholders for the vacancy. This appointment is submitted to the approval of the following first general meeting of shareholders. General Meeting of Shareholders may dismiss any member of the Board of Directors, without a right of compensation to the dismissed Director. The terms of office of Managers are not dependent on the term of office of the members of the Board of Directors. Managers can be appointed with a longer period than the term of office of the Directors or on contracts with indefinite periods. The powers of the authorized signatories shall remain in force until their powers as authorized signatory are cancelled by the Board of Directors. 8- Selection of members of the board of directors and the board of statutory auditors, and determination of their terms of office, Explanation: Three-year term of office of the present members of the board of directors expired. Therefore,selection of members of the board of directors and the board of statutory auditırs and deternination of their terms of office shall be submitted for the approvalof General Assembly. Pursuant to Article 32 of Association, the Board of Directors are elected by of the sharehoders having at least pct 51 of the total votes of group A stockholders’ present at the General Assembly 9- Deciding the salaries and entitlements of the members of the Board of Directors and statutory auditors Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce regulation, the salaries and meeting attendance fees to be paid to the members of the Board of Directors will be determined and presented to the shareholders for approval. 10- Authorizing the Board of Directors to elect the members of the Senior Advisory Committee and to determine their salaries payments Explanation: A proposal authorizing the Board of Directors to choose the members of the Senior Advisory Committee and to determine their salaries payments as per Article 45 of the Bank’s Articles of Association will be presented for the approval of the General Assembly. 11- Submitting for approval the independent auditors chosen by the Board of Directors for a one-year term for the 2011 fiscal year Explanation: Pursuant to its resolution No: 2254 dated 08 March 2012, the Board of Directors resolved to “enter into a one-year contract with “DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Deloitte)”, which had previously conducted the Bank’s independent auditing activities in previous periods, to perform Bank Asya’s independent auditing tasks in 2012 and to present this contract for the General Assembly’s approval at the next Ordinary General Assembly Meeting.” 12- Providing information about the contributions and donations made during 2011 Explanation: Pursuant to Article 7/b of the Capital Markets Board Communique’s Series: IV No: 27, the General Assembly must be informed about any donations made during the reporting year. This item is not presented to the General Assembly for approval; it is included in the agenda for the sole purpose of informing the General Assembly. 13- Reading and deliberating changes made in the public disclosure policy principles within the framework of the Bank’s corporate governance principles Explanation: Amendments made in the public disclosurepolicy principles shall be read and discussed. 14- Authorizing the Company’s Board members to engage in activities governed Articles 334 and 335 of the Turkish Commercial Code Explanation: The issue of authorizing and allowing members of the Board of Directors to conduct business with and compete against the Company as stipulated in Articles 334 and 335 of the Turkish Commercial Code will be presented for approval. Under Articles 334 and 335 of the Turkish Commercial Code, members of the Board of Directors may compete against and conduct business with the Company only with the permission of the General Assembly. The issue of permitting the Members of the Board of Directors to conduct such transactions will be presented for the General Assembly’s approval. 15- Petitions and suggestions. 083 Bank Asya, maintaining its pioneering position in the field of service quality and hightechnology, is determined to maintain its steady and healthy growth. Added Value Financial Informations and Risk Management To the General Assembly of Asya Katılım Bankası A.S. Concise Internal Auditors Report - Company Name - Headquarters - Capital - Principal business activity Asya Katılım Bankası A.Ş. İstanbul 900.000.000.- TRY All activities authorized for participation banks Names, terms of office, and company: Atıf Bilgin, Irfan Hacıosmanoglu. Threeshareholder / employee internal auditors year terms. Company shareholders. Number of Board of Directors meetings: They attended at least two of the Board meetings held attended and number of internal auditors each month. The internal auditors also convened in meetings held committee on the same days. Scope, dates and results of inspections: The books of account were checked and inspected performed on the Company’s accounts, on 18 June 2010 and 12 November 2010. Books and documents It was ascertained that cash items were in accordance with book of account entries. Number and results of inspections conducted: As a result of the inspections conducted as of the in the Company’s Treasury pursuant to end of each month, we observed that all subsection 1/4 of Article 353 of the Turkish deposits and securities were present and in keeping Commercial Code with the records. Charges or complaints of improprieties: No charges or complaints of improprieties were received and the action taken referred to us in 2011. We have examined the accounts and transactions of Asya Katılım Bankası Anonim Sirketi for the period 01/01/2011-31/12/2011 for compliance with the reqirements of the Turkish Commercial Code, the Company’s Articles of Association, other applicable laws and regulations, and generally accepted accounting principles and standards.We determined that the income statement for the period 1 January 2011 to 31 December 2011 accurately and realistically reflects the results of business activities during this period and the proposed distribution of profit is in compliance with the requirements of the laws and the Company’s Articles of Association. In our opinion the enclosed balance sheet drawn up as of 31 December 2011, the contents of which we endorse, accurately reflects the true financial standing of the Company on that date; and we hereby recommend that the balance sheet and income statement be approved and that the members of the Board of Directors be acquitted of their fiduciary responsibilities. THE INTERNAL AUDITORS 086 Atif Bilgin İrfan Hacıosmanoğlu Bank Asya 2011 Annual Report Five-year Summary Financial Information Including The Reporting Period Selected Assets Items (TRY thousand) 2007200820092010 2011 Liquid Assets1.382.7021.247.4862.572.2302.666.154 2.818.654 Loans4.609.6656.381.3228.355.346 11.060.26713.451.522 Fixed Assets112.169250.726319.090359.961 462.416 Total Assets 6.260.048 8.108.82911.608.95514.513.419 17.190.099 Selected Liabilities Items (TRY thousand) 2007200820092010 2011 Deposits4.697.7505.842.8219.136.578 11.166.58212.397.043 Borrowings312.921457.552191.461622.2371.457.830 Shareholders’ Equity 853.8561.403.6921.707.8941.941.667 2.137.432 - Paid-in Capital - Net Period Profit 300.000 900.000 900.000 900.000 900.000 221.337 246.529 301.281 259.962 216.096 Total Liabilities 6.260.048 8.108.82911.608.95514.513.419 17.190.099 Income statement (TRY thousand) 2007200820092010 2011 Profit Share Income 805.275 1.068.206 1.305.652 1.206.930 1.278.154 Profit Share Expenses 388.117 566.816 705.805 613.392 646.930 Income Other than Profit Share 297.671 420.508 616.816 479.817 489.546 Expenses Other than Profit Share 441.928 609.994 838.271 749.057 851.638 Pre-tax Profit 272.901 311.904 378.392 324.298 269.132 Provision for Taxes51.56465.37577.11164.336 53.042 Net Period Profit 221.337 246.529 301.281 259.962 216.090 087 Financial Informations and Risk Management Assessment of Financıal Position, Profitability and Debt Service Ability During 2011, Bank Asya continued to be a leader among participation banks in terms of total assets, cash loans, non-cash loans and deposits. Bank Asya had a successful year thanks to its sound and robust balance sheet that it structured in a timely and appropriate manner, and its solid equity capital. Bank Asya’s total assets increased by 18% on the last year and reached TRY 17.2 billion in 2011. The growth in the Bank’s assets stemmed primarily from its lending. Loans were up 22% compared to the previous year and now constitute 79% of the Bank’s total assets. Deposits continued to be Bank Asya’s major source of funding in 2011. The share of deposits in the Bank’s total liabilities stood at 72% in 2011. This share is significantly higher than the sector average, which was 088 57% as of December 2011. Deposits were up 11% this year to TRY 12.4 billion, from TRY 11,2 billion in 2010. Bank Asya’s broad deposit base is indicative of a favorable position from the standpoint of the Bank’s financing of its assets.Bank Asya’s strong capital structure, with a net profit of TRY 216 million, resulted in a 10% increase in the Banks shareholders’ equity on the previous year to TRY 2.1 billion as end of 2011. The major sources of the Bank’s profitability were profit share income from loans and commission income from non-cash loans, which resulted from channeling funds obtained from the 11% increase in deposits to productive ventures. Ever striving to provide better service, Bank Asya opened 25 branches in 2011; as a result of these investments, the Bank’s service network expanded to 200 branches. Focusing on liquidity due to the lingering effects of the global economic crisis on international markets in 2011, the Bank’s liquid assets constituted 20% of its total assets, which favorably impacted the Bank’s debt service ability. Deposits, which are the Bank’s most important funding source, also have a positive effect on Bank Asya’s short-term debt servicing ability thanks to their broad base, sound composition and longer maturity compared to the sector average. The maturity of deposits were 140 days as of the end of 2011, and this rate is considerably above the industry average. Bank Asya 2011 Annual Report Assessment of the Audit Committee’s Internal systems and Their Operation The Audit Committee reports the results of its audit and risk management activities in order to ensure that an effective internal control, internal audit and risk management system has been established throughout the Bank. To this end, the Committee prepares an “Audit Committee Activity Report” at regular intervals and submits it to the Board of Directors. The Audit Committee convened 40 times during 2011. The Committee held four meetings with the independent auditors in order to evaluate the independent audit activities. During 2011, the Audit Committee regularly met with personnel of the Board of Inspectors, Internal Control Department and Risk Management Department. The Audit Committee closely monitored the activities of these units, all of which report directly to the Committee. The Audit Committee reports the results of its audit and risk management activities in order to ensure that an effective internal control, internal audit and risk management system has been established throughout the Bank. To this end, the Committee prepares an “Audit Committee Activity Report” at regular intervals and submits it to the Board of Directors. The internal audit and risk management findings, which are received from the internal systems units and reported to the Board of Directors by the Committee, were evaluated with the relevant senior executives. Guidance is provided as needed to mitigate risks and improve processes and practices. The Committee also performs the statutorily mandated duties of selecting independent audit, support service, evaluation and rating firms and overseeing their respective relationships with the Bank. Within this scope, the Committee met with officers of the independent audit firm. During these meetings, the independence of the independent audit firm in its relationship with the Bank as well as the adequacy of the resources allocated for the Bank’s independent audit and the auditor’s report were all evaluated. Board of Inspectors The Board of Inspectors conducts risk-focused audits at the Bank’s headquarters units, branches, and consolidated subsidiaries in accordance with international standards. The Board of Inspectors also provides the Board of Directors with the assurances and recommendations as needed on the issues of conducting the Bank’s activities in compliance with the the requirements of applicable laws and regulations as well as with the Bank’s strategy, policies, principles and objectives. Internal audit activities are carried out at all headquarters units, branches, and consolidated subsidiaries in accordance with an annual audit plan that is approved by the Board of Directors. The Board of Inspectors reports the results of its activities on a quarterly basis to the Board of Directors through the Audit Committee. Under the heading of branch audit activities, inspections were conducted at 68 branches from the perspective of credit risk, operational risk and organizational effectiveness; the results of these inspections along with risk-mitigating recommendations were reported to the relevant departments and senior managers. Under the heading of process audits conducted at headquarters units, eight business processes and under the audits conducted at consolidated subsisidaries three subsidiaries were inspected and the results were reported to the relevant units and senior managers. Moreover, in order to underpin for “the Management Declaration” which will be drawn up by the board of directors fort he year 2011, test studies on banking processes and information systems processes were completed. In addition to the activities described above, the Board of Inspectors also engaged in three examinations and investigations as needed at the Bank and among its consolidated subsidiaries. Based on the results of its audit activities, the Board performs risk analyses, makes recommendations and provides advice on administrative, technilogical, fiscal, financial, legal and organizational issues in order to help mitigate the risks within the scope of its inspections. Internal Control Department The Internal Control Department executes the functions of designing the Bank’s internal control systems and activities as well as how these tasks will be performed; ensuring that these control activities are performed; and, based on the results of the controls, taking the necessary measures to improve the control system and to ensure the smooth operation of internal control activities. The internal control system, which encompasses every employee of the Bank at every level, seeks to ensure that the protection of the Bank’s assets, the effectiveness and productivity of its activities, the reliability of its accounting and financial reporting system, and the conduct of all the Bank’s activities are in compliance with internal and external regulatory requirements and with the Bank’s policies. The Internal Control Department reports directly to the Board of Directors and is responsible for the design and management of the Bank’s internal control system and internal control activities in accordance with the requirements of the Banking Law and of the associated Internal Systems Regulations. In order for the Department to fulfill its responsibility more effectively, the outcomes of the “Control Self-Assessment Workshops” that are organized quarterly with the participation of the Bank’s senior managers are given a key role in the design of the internal control systems. At these Workshops, the effectiveness, adequacy and coherence of existing controls performed on business processes are evaluated jointly with the relevant departments; the measures that need to be taken to improve the control system and to ensure the smooth operation of internal control activities are identified. The Internal Control Department oversees the implementation of the measures taken in conjunction with the business unit via action monitoring forms. Under the heading of On-Location Control activities, 296 branch control checks were performed in 2011.Furthermore, under the heading of Remote Control activities, the Department performed credit collateral checks over the system for locations outside of the departments and branches; inspections were also carried out in accordance with scenarios formulated to identify erroneous/non-routine transactions and fraud using computer programs (ACL). As part of the information system controls, a Control Self-Assessment Workshop was conducted for five IT processes and the existing controls were evaluated in light of COBIT requirements. Under the heading of Compliance Control activities, the Department performed compliance checks of 14 new products, services and applications in 2011. Apart from these,59 compliance control actvities on various opics were conducted as well. 089 Financial Informations and Risk Management Risk Management Strategies on the base of Risk Types Risk Management Department The Risk Management Department is responsible for the deployment of the risk management system that the Bank has set up to detect all risks arising from the Bank’s activities and for ensuring that these risks are managed in compliance with the requirements of applicable laws and regulations. The policies and implementation procedures that facilitate the effective execution of this system throughout the Bank have been defined; risks are measured, controlled and reported on an ongoing basis. Bank Asya’s internal control system units are supported with qualified personnel in order to meet the increased need for auditing arising from the rapid change in and growth of its banking activities and to achieve a function-based risk management and internal auditing system. Information about Risk Management Policies Applied According toType of Risks Bank Asya conducts its risk management activities within the framework of credit risk, market risk, liquidity risk, operational risk, reputational risk, and strategy risk management policies that it has established in accordance with the requirements of applicable laws, rules and regulations. These policies facilitate management of the identifying, defining, measuring, monitoring, controlling and reporting phases for the risks that the Bank is exposed to or is likely to be exposed to, as well as the mitigation of risks by a variety of measures and techniques and the re-allocation of resources from low-risk to high-risk areas. Credit Risk Management of credit risk at Bank Asya is fundamentally rooted in assessing all of the credit risk arising from the Bank’s lending activities. The Bank complies with prescribed policies pertaining to “Lending and Credit Risk Management, in determining customer and counterparty limits. In addition, early warning mechanisms that are focused on spotting in advance any credit risks to which the Bank may be exposed make it possible to continuously review the financial circumstances, credit ratings and credit needs of borrowers with heightened credit risk and to reconsider their credit worthiness and limits as appropriate. Bank Asya classifies its loans in two categories, “On-balance sheet” and “Off-balance sheet”, and it determines portfolio particulars, sectoral/ regional/group concentrations, and performance accordingly. On the basis of risk-return balances, collateral worthiness, and bank asset quality, a determination is made as to whether the provisions set aside for loans are adequate or not. Scenario analyses are developed in order to more proactively manage credit risk exposure. Volatilities in credit risk and their impact on the Bank’s financial indicators are regularly reported to relevant senior managers at the Bank. The Bank makes use of an internal rating system for corporate and commercial loans in its lending decision mechanisms. This system is structured so as to facilitate integration with statistical models that allow credit risk to be quantified and managed. The rating system has been made particularly sensitive to existing and potential impairments in a loan’s structure and this is what permits it to fulfill its early warning and risk management functions. Financial situation analyses of borrowers whose loans have become subject to legal action or are placed under close watch are carried out in coordination with all relevant units. The Bank monitors early warning signals and ultimate credit risk limits for its corporate and commercial loan clients daily and actively uses this information in lending decisions. The Bank uses scorecard models developed by an international firm in order to manage the risks arising from the Bank’s retail lending and credit card portfolio. With the beginning of a period of increasing importance of country risk management, the bank adopting the growth in regions and countries in which financial and political stability provided as a goal performs analyses which also includes the consideration of credit and political risk factors periodically and submits for the information of the senior management. Market Risk Market risk is measured and assessed using procedures that comply with applicable laws and with Bank Asya’s “Market Risk Management Policy.” The Bank uses the internationally accepted “Value at Risk” (VaR) method, which conforms well to Bank Asya’s own market activities. VaR is an expression of the likelihood, at a specified confidence interval, of a loss that the Bank’s portfolio in risk factors within a specified period of time. Bank Asya’s VaR model has been developed in-house and is employed simultaneously and in conjunction with the “Standardized Approach”, whose use is prescribed by public authorities. The amount of market risk that the Bank is exposed to based on these calculations is reported daily to the senior management as are the results of back tests that are performed also on a daily basis to assess the model’s reliability. By means of scenario analyses and stress tests that are performed using reverse changes in the Bank’s own portfolio and in the market prices that are taken into account, the value of the Bank’s portfolio is reconsidered under existing and potential market conditions. The effects that the results of the scenario analyses and stress tests may have on Bank Asya’s capital adequacy ratio are also separately analyzed and reported. The Bank has used the VaR methodology to evaluate its market risk since 2007. Market risk information is reported to the Board of Directors in a timely and detailed fashion. In addition, in accordance with the “Historical Precedent Method”, the Bank established early warning and ultimate market risk limits based on VaR calculations assuming a 10-day holding period and a 99% confidence interval; these limits were approved by a resolution of the Board of Directors. Compliance with these commensurate risk limits is monitored daily and any violation of these limits is immediately reported to the Assets and Liabilities Committee, the Audit Committee and the Board of Directors. Information about Internal system Unit Managers: Name 090 Area of Responsibility Educational Background Hilali Yıldırım Length of Service 6 years Board of Inspectors Master’s (Banking)/Bachelor’s (Business Administration) Prof. Experience Mahmut Yalçın 3 years Internal Control Department Master’s Human Resources) / Bachelor’s (Business Administration) 12 years Mehmet K. Tümer 6 years Risk Management Department Bachelor’s (Business Administration) 31 years 17 years Bank Asya 2011 Annual Report Liquidity Risk Operational Risk Other Risks Reports which have been prepared in line with the applicable provisions of the “Regulations on the Measurement and Assessment of the Banks’ Liquidity Adequacy” published by the Banking Regulation and Supervision Agency are examined by the Risk Management Department, the Treasury Department, and senior management. Measures are taken as needed by the Assets and Liabilities Committee to ensure that the ratios which are reported in this way remain within legally prescribed limits. Bank Asya began reporting its operational risk exposure using the “Basic Indicator Approach” as of 1 June 2007. The Bank takes into consideration the impact of operational risk exposure on the Capital Adequacy Standard Ratio by means of scenario analyses that forecast the changes in exposure to operational risk for subsequent years. The amounts exposed to operational risk are also calculated using the Standard and Alternative Standard Approaches stipulated by the Banking Regulation and Supervision Agency; this data is duly reported to senior management. In-house reports are regularly prepared on macroeconomic and financial sector developments and presented to the senior management, which contributes to the management of strategic risk. Maturity mismatches of the Bank’s assets and liabilities items and the percentages based on maturity segments are monitored by means of day-to-day liquidity GAP analyses. As part of the Bank’s evaluation of ways to further enhance its liquidity, the development trend of both participation funds, and loans and syndications from abroad are being monitored on a regular basis especially in terms of maturity and in terms of borrowing. A core deposits study was conducted and early warning and ultimate liquidity risk limits were established based on the results of the gap analyses in order to qualify the loyal participation account holders . Monitoring compliance with those limits that management decisions are taken into account on a daily basis. The Bank has formulated a “Liquidity Emergency Action Plan” whose aim is to resolve liquidity shortages that it may suffer in the face of such potential developments as impairment of asset quality, an increase in non-perfoming loans, or unexpected withdrawals of deposits. It is expected that these methods will also be used in the Bank’s statutorily mandated reports once changes in the regulatory framework have been made. Bank Asya accumulates its potential operational risk losses in a format that complies with a “risk catalogue” that is based on event classifications. Data about actual losses is used as the basis for creating advanced statistical models that are being planned. Action plans are also being formulated to prevent the recurrence of instances of operational risk whose financial impact is extraordinarily severe. Business Continuity Management is an integrated management process that identifies critical situations that the Bank may encounter and their potential impact on business activities should they actually occur. Bank Asya’s Business Continuity and Disaster Plan was put into effect in 2007 as a result of a project undertaken jointly with a consulting that specializes in such matters. The existing plan was revised in 2010 in response to new regulations and evolving needs. In addition to managing its financial risks, Bank Asya also keeps a close watch on the possible effects of political, legislative and global developments which may cause economic and/or financial sector volatilities even though they are not inherently financial themselves. For this purpose, the Bank makes use of external risks reports prepared by the Risk Management Department. Risk Management in Consolidated subsidiaries Bank Asya’s standard calculations of its risk exposures and legal obligations are also made on a consolidated basis. The internal systems-related functions are also performed for the Bank’s subsidiaries. Basel Regulations Compliance Initiatives Taking into consideration the possibility of the implementation of “The Basel II International Convergence of Capital Measurement and Capital Standards” project in the not-too-distant future, the Bank’s efforts to comply with both Basel II and Basel II regulations have reached advanced stages. Bank Asya regards these regulations as the foundation for a comprehensive risk management culture that goes far beyond capital adequacy calculation issues. The studies on “the Management Statement” demonstrating assurance of the board of directors’ on the efficiency and productivity of the Bank’s Internal Inspection and Information Systems have been completed. 091 Financial Informations and Risk Management CREDIT RATINGS AND REPORTS MOODY’S Foreign Currency Deposit Ba3 TRY Deposit Ba2 Long Term National A3 Individual Rating D (*) From Moody’s Investors Service report dated 22 February 2012 FITCH RATINGS Long Term Foreign Currency B+ Long Term Turkish Lira B+ Short Term Foreign Currency B Short Term Turkish Lira B Long Term National Individual Rating (*) From Fitch Ratings report dated 22 November 2011 092 A-(tour) D Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. INDEPENDENT AUDITORS’ REPORT, UNCONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2011 (Translated into English from the Original Turkish Report) 093 Unconsolidated Financial Statements and Accompanying Notes 094 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. INDEPENDENT AUDITORS’ REPORT FOR THE YEAR JANUARY 1, 2011 - DECEMBER 31, 2011 To the Board of Directors of Asya Katılım Bankası A.Ş. İstanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. (the “Bank”) as at December 31, 2011 and the related statements of income, cash flows and changes in shareholders’ equity for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements The Board of Directors of the Bank is responsible for the preparation and fair presentation of the financial statements in accordance with the regulation on “Procedures and Principles Regarding Banks’ Accounting Practices And Maintaining Documents” published in the Official Gazette dated November 1, 2006 and numbered 26333 and Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”) and other regulations, circulars, communiqués and pronouncements in respect of accounting and financial reporting made by Banking Regulation and Supervision Agency (“BRSA”). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the regulation on “Licensing and Operations of Audit Firms in Banking” published in the Official Gazette No: 26333 on November 1, 2006 and the International Standards on Auditing. We planned and performed our audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the consideration of the effectiveness of internal control and appropriateness of accounting policies applied relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independent Auditors’ Opinion In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as at December 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as per Article 37 of the Banking Act No: 5411 and other regulations, circulars and communiqués in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agency (“BRSA”). Additional paragraph for the English translation The effect of the differences between the accounting principles summarized in Section 3 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards (IFRS) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Bank’s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin GÜRER Partner İstanbul, February 23, 2012 095 Unconsolidated Financial Statements and Accompanying Notes THE UNCONSOLIDATED FINANCIAL REPORT OF ASYA KATILIM BANKASI A.Ş. FOR THE YEAR ENDED DECEMBER 31, 2011 Address : Saray Mahallesi Dr. Adnan Büyükdeniz Caddesi No:10 34768 Ümraniye/İSTANBUL Phone and Fax : 0 216 633 50 00 / 0 216 633 69 89 Website : www.bankasya.com.tr E-Mail : raporlama@bankasya.com.tr The year end unconsolidated financial report designed by the Banking Regulation and Supervision Agency in line with Communiqué on Financial Statements to be Publicly Announced and the Related Policies and Disclosures consists of the sections listed below: • GENERAL INFORMATION ABOUT THE BANK • UNCONSOLIDATED FINANCIAL STATEMENTS OF THE BANK • EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED IN THE RELATED PERIOD • INFORMATION ON FINANCIAL STRUCTURE OF THE BANK • EXPLANATORY DISCLOSURES AND FOOTNOTES ON UNCONSOLIDATED FINANCIAL STATEMENTS • OTHER EXPLANATIONS • INDEPENDENT AUDITORS’ REPORT The unconsolidated financial statements and the explanatory footnotes and disclosures, unless otherwise indicated, are prepared in Thousands of Turkish Lira, in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related communiqués and the Banks’ records, have been independently audited and presented as attached. Behçet AKYAR Abdullah ÇELİK Ahmet BEYAZ Kamil YILMAZ Chairman of the Board of Directors Member of the Board of Directors and General Manager Assistant General Manager Responsible of Financial Reporting Manager in Charge of Financial Reporting Hülagü ÖZCAN İsmail Erol İŞBİLEN Member of the Board of Directors and Member of the Audit Committee Member of the Board of Directors and Member of the Audit Committee Responsible personnel for the questions that can be raised on the financial statements: Name-Surname/Title: Merve Yasemin GÜNEŞ / Assistant Manager in Charge of Budgeting and Financial Controlling Telephone Number : 0 216 633 54 82 Fax Number : 0 216 633 69 89 096 Bank Asya 2011 Annual Report SECTION ONE: GENERAL INFORMATION I. II. III. IV. V. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Individuals and Institutions That Have Qualified Shares in the Bank Summary Information on the Bank’s Services and Activity Areas 098 098 098 099 099 SECTION TWO: THE UNCONSOLIDATED FINANCIAL STATEMENTS I. II. III. IV. V. VI. VII. Balance Sheet Statement of Off-Balance Sheet Contingencies and Commitments Statement of Income Statement of Profit and Loss Accounted for under Equity Statement of Changes in Shareholders’ Equity Statement of Cash Flows Statement of Profit Distribution 100-101 102 103 104 105 106 107 SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions III. Explanations on Forward and Option Contracts and Derivative Instruments IV. Explanations on Profit Share Income and Expenses V. Explanations on Fees and Commission Income and Expenses VI. Explanations on Financial Assets VII. Explanations on Impairment of Financial Assets VIII. Explanations on Offsetting Financial Assets and Liabilities IX. Explanations on Sales and Repurchase Agreements and Lending of Securities X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets XI. Explanations on Goodwill and Other Intangible Assets XII. Explanations on Tangible Assets XIII. Explanations on Leasing Transactions XIV. Explanations on Provisions and Contingent Liabilities XV. Explanations on Liabilities for Employee Benefits XVI. Explanations on Taxation XVII. Additional Disclosures on Borrowing XVIII. Explanations on Issuance of Share Certificates XIX. Explanations on Avalized Drafts and Acceptances XX. Explanations on Government Incentives XXI. Explanations on Segment Reporting XXII. Explanations on Other Matters 108 108 108 108 109 109 110 110 111 111 111 112 112 112 112 113 113 113 113 114 114 114 SECTION FOUR: INFORMATION ON FINANCIAL STRUCTURE I. II. III. IV. V. VI. VII. VIII. IX. Explanations on Capital Adequacy Standard Ratio Explanations on Credit Risk Explanations on Market Risk Explanations on Operational Risk Explanations on Currency Risk Explanations on Interest Rate Risk Explanations on Liquidity Risk Explanations on Presentation of Financial Assets and Liabilities at Fair Value Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 115 117 121 122 122 124 124 127 128 SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. II. III. IV. V. VI. VII. VIII. Explanations and Disclosures Related to the Assets Explanations and Disclosures Related to the Liabilities Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments Explanations and Disclosures Related to the Income Statement Explanations and Disclosures Related to the Statements of Changes in Shareholders’ Equity Explanations and Disclosures Related to the Statement of Cash Flows Explanations on the Risk Group of the Bank Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 129 145 152 157 162 163 164 165 SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on the Operations of the Bank 165 SECTION SEVEN: INDEPENDENT AUDITORS’ REPORT I. II. Explanations on the Independent Auditor’s Report Other Footnotes and Explanations Prepared by the Independent Auditors 165 165 097 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION ONE: GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Legal Status and Amendments to the Legal Status Incorporation of Asya Finans Kurumu A.Ş. is permitted with the decision of the Council of Ministers No: 96/8041 on April 11, 1996 as published in the Official Gazette dated April 25, 1996. The Bank was registered on September 20, 1996 and “the Articles of Association” was published in the Trade Registry Gazette on September 25, 1996. The Decision regarding the change in the title of the Bank was settled in the Extraordinary General Board of Directors’ meeting dated December 22, 2005 and the title was changed from Asya Finans Kurumu A.Ş. into Asya Katılım Bankası A.Ş. (“the Bank”) and it was published in the Trade Registry Gazette on December 26, 2005. II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group The Bank has no shareholders having more than 10% shareholding direct or indirect, joint or individual control over the management of the Bank. The Bank is not included in any group. III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Title Chairman of the Board of Directors Member of the Board of Directors Area of Responsibility Behçet AKYAR Chairman of the Board of Directors Salih SARIGÜL (*) Vice Chairman of the Board of Directors 0,2056 Ahmet ÇELİK (*) Tacettin NEGİŞ (**) (***) Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors and the Audit Committees Member of the Board of Directors and the Audit Committees Member of the Board and General Manager Corporate/Commercial Loans, Small Banking, Top Management Office Headquarters, Business and Product development Coordination (****) Information Technologies Corporate Credit Allocation II, Credit and Risk Monitoring, Construction and Real Estate Banking Operations Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative Distribution Channels, Resource Development Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications Law, Credit and Risk Monitoring Corporate/Consumer Credit Allocation I, Project Financing Treasury, Financial Institutions, Investor Relations, Human Resources and Education Auditor Auditor Auditor 0,4800 - İsmail Erol İŞBİLEN (***) Hülagü ÖZCAN (***) General Manager Abdullah ÇELİK Assistant General Managers Ali TUĞLU Ali Fuat TAŞKESENLİOĞLU (*****) Erdal ERDEM (*****) Fahrettin SOYLU Ercüment GÜLER Ahmet BEYAZ Zafer ERTAN Ahmet AKAR Feyzullah EĞRİBOYUN Auditors Ownership Percentage % Name Ali AKBULUT Atıf BİLGİN İrfan HACIOSMANOĞLU 0,0003 0,0004 0,0002 0,2411 0,7093 (*) Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26, 2012 Mr. Ali CELIK and Mr. Faruk ILK were appointed as the board members to fill their vacancies. (**) Bank Asya's Board member Mr. Tacettin NEGİŞ has announced his resignation, effective on February 2, 2012. Mr. Mustafa Talat KATIRCIOĞLU was appointed as the board members to fill his vacancy. (***) Pay rate is not presented due to being below 0,001%. (****) Related departments operate under control of the Headquarter. (*****) Bank Asya's Executive Vice Presidents Mr. Ali Fuat TAŞKESENLİOĞLU and Mr. Erdal ERDEM have resigned as of January 6, 2012. 098 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) IV. Individuals and Institutions That Have Qualified Shares in the Bank The Bank’s capital, amounting to TRY 900.000.000, consists of qualified shares, amounting to TRY 360.000.000 and the holders of the A Group type shares are considered as qualified. The qualified shareholders are listed below: Share Amount Share Amount Paid Shares ORTADOĞU TEKSTİL TİC. SAN. A.Ş. Name / Commercial Name: 39.572 10,99 39.572 Unpaid Shares - FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş. 34.668 9,63 34.668 - ABDULKADİR KONUKOĞLU 20.088 5,58 20.088 - BJ TEKSTİL TİCARET VE SANAYİ A.Ş. 18.000 5,00 18.000 - BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş. 17.783 4,94 17.783 - SERRA TURİZM LTD. ŞTİ. 15.000 4,17 15.000 - OSMAN CAN PEHLİVAN 14.400 4,00 14.400 - NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş. 13.142 3,65 13.142 - HASAN SAYIN 12.723 3,53 12.723 - İBRAHİM SAYIN 12.679 3,52 12.679 - OTHER 161.945 44,99 161.945 - Total 360.000 100,00 360.000 - V. Summary Information on the Bank’s Services and Activity Areas The Bank operates in accordance with the principles of interest-free banking as a participation bank by collecting funds through current accounts and profit sharing accounts, and lending such funds through production support, finance lease and profit/loss sharing partnership and shared investments. The Bank has two ways of collecting funds; current accounts and profit sharing accounts. The Bank classifies current accounts and profit sharing accounts in accordance with their maturities in its accounting system. Profit sharing accounts are classified into five different maturity groups; up to one month, up to three months (three months included), up to six months (six months included), up to one year (one year included) and one year and more than one year (one month, three months, six months and one year profit share payment). The Bank could determine the participation rates on profit/loss sharing accounts with respect to the maturity group of TRY and foreign currency accounts, separately under the limitation that the participation rate on loss shall not be less than 50%, for different currency type, amount and maturity groups specifically. The Bank constitutes specific fund pools allocated to the individually predetermined projects for financing purposes. Profit sharing accounts, which are part of the funds collected for project financing purpose, are distinguished from others with respect to the terms, accounted separately from the others and no transfers can be made from these accounts to any other maturity groups. Specific fund pools are liquidated at the end of the financing period. The Bank has no specific fund pools as of December 31, 2011. In addition to ordinary banking activities, the Bank operates as an agency on behalf of Işık Sigorta A.Ş. and intervenes stock purchase-sell transactions on behalf of Bizim Menkul Değerler A.Ş. through its branches. 099 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note I. II. 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 2.2.1 2.2.2 2.2.3 2.2.4 III. IV. V. 5.1 5.2 5.3 VI. 6.1 6.1.1 6.1.2 6.1.3 6.2 6.3 VII. VIII. 8.1 8.2 8.2.1 8.2.2 IX. 9.1 9.2 X. 10.1 10.2 10.2.1 10.2.2 CASH AND BALANCES WITH THE CENTRAL BANK FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Net) Financial assets held for trading Public sector debt securities Share certificates Derivative financial assets held for trading Other marketable securities Financial assets at fair value through profit or loss Public sector debt securities Share certificates Loans Other marketable securities BANKS MONEY MARKET PLACEMENTS FINANCIAL ASSETS AVAILABLE FOR SALE (Net) Share certificates Public sector debt securities Other marketable securities LOANS AND RECEIVABLES Loans and receivables Loans to Risk Group of the Bank Public sector debt securities Other Non-performing loans Specific provisions (-) HELD TO MATURITY INVESTMENTS (Net) INVESTMENTS IN ASSOCIATES (Net) Accounted for under equity method Unconsolidated associates Financial investments Non-financial investments INVESTMENTS IN SUBSIDIARIES (Net) Unconsolidated financial subsidiaries Unconsolidated non-financial subsidiaries ENTITIES UNDER COMMON CONTROL (JOINT VENT.) (Net) Consolidated under equity method Unconsolidated Financial subsidiaries Non-financial subsidiaries XI. FINANCE LEASE RECEIVABLES 11.1 11.2 11.3 11.4 XII. 12.1 12.2 12.3 XIII. XIV. 14.1 14.2 XV. XVI. 16.1 16.2 Finance lease receivables Operating lease receivables Other Unearned income ( - ) DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES Fair value hedge Cash flow hedge Hedge of net investment risks in foreign operations TANGIBLE ASSETS (Net) INTANGIBLE ASSETS (Net) Goodwill Other INVESTMENT PROPERTIES (Net) TAX ASSET Current tax asset Deferred tax asset XVII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) 17.1 17.2 XVIII. Held for sale Discontinued Operations OTHER ASSETS TOTAL ASSETS (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (31/12/2011) (31/12/2010) TRY FC Total TRY FC 527.427 1.152.225 1.679.652 1.357.173 727.792 1.250 1.250 2.581 1.250 1.250 2.581 1.250 1.250 2.581 15.882 343.483 359.365 36.237 150.375 779.637 779.637 394.577 93 93 93 779.544 779.544 394.484 11.588.089 1.565.682 13.153.771 9.967.521 987.275 11.278.387 1.565.242 12.843.629 9.824.377 986.884 304.173 6.283 310.456 248.182 1.707 10.974.214 1.558.959 12.533.173 9.576.195 985.177 614.033 1.697 615.730 445.673 1.478 (304.331) (1.257) (305.588) (302.529) (1.087) 77.053 77.053 77.032 96.873 96.873 86.606 96.873 96.873 86.606 38.525 38.525 32.625 58.348 58.348 53.981 154.761 154.761 144.963 97.809 97.809 88.011 56.952 56.952 56.952 277.570 20.181 297.751 81.966 23.505 105.471 370.569 (92.999) 453.692 11.012 11.012 19.398 19.398 21.860 (1.679) - 392.429 (94.678) 453.692 11.012 11.012 19.398 19.398 95.514 (13.548) 353.452 10.419 10.419 9.811 9.811 26.200 (2.695) - 121.714 (16.243) 353.452 10.419 10.419 9.811 9.811 8.724 8.724 96.021 1.139 8.724 8.724 97.160 6.509 6.509 94.814 811 6.509 6.509 95.625 14.106.139 3.083.960 17.190.099 12.621.080 1.892.339 14.513.419 The accompanying notes are an integral part of these combined financial statements 100 Total 2.084.965 2.581 2.581 2.581 186.612 394.577 93 394.484 10.954.796 10.811.261 249.889 10.561.372 447.151 (303.616) 77.032 86.606 86.606 32.625 53.981 144.963 88.011 56.952 - Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TURKISH LIRA LIABILITIES AND EQUITY Note I. FUND COLLECTED (1) 1.1 Fund from Risk Group of the Bank 1.2 Other CURRENT PERIOD Audited (31/12/2011) PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total 7.813.463 4.583.580 12.397.043 7.662.288 3.504.294 11.166.582 177.714 63.720 241.434 131.304 82.142 213.446 7.635.749 4.519.860 12.155.609 7.530.984 3.422.152 10.953.136 II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) - 11.715 11.715 - 5.397 5.397 III. FUNDS BORROWED (3) - 1.457.830 1.457.830 - 622.237 622.237 IV. MONEY MARKET BALANCES 279.207 - 279.207 - - - V. MARKETABLE SECURITIES ISSUED (Net) - - - - - - VI. SUNDRY CREDITORS 376.682 2.636 379.318 278.187 2.656 280.843 VII. OTHER LIABILITIES (4) 221.158 62.681 283.839 256.348 14.813 271.161 VIII. FINANCE LEASE PAYABLES (5) - - - - - - 8.1 Finance lease payables - - - - - - 8.2 Operating lease payables - - - - - - 8.3 Other - - - - - - 8.4 Deferred finance lease expenses (-) - - - - - - IX. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES - - - - - - 9.1 Fair value hedge - - - - - - 9.2 Cash flow hedge - - - - - - 9.3 Hedge of net investment in foreign operations - - - - - - X. PROVISIONS 165.608 26.630 192.238 159.391 17.979 177.370 10.1 General loan loss provisions 110.319 20.747 131.066 100.356 16.848 117.204 10.2 Restructuring provisions - - - - - - 10.3 Reserve for employee benefits 28.854 - 28.854 23.058 - 23.058 10.4 Insurance technical reserves (Net) 10.5 Other provisions (6) (7) (8) - - - - - - 26.435 5.883 32.318 35.977 1.131 37.108 51.482 1 51.483 48.161 1 48.162 51.482 1 51.483 48.161 1 48.162 - - - - - - - - - - - - XI. TAX LIABILITY 11.1 Current tax liability 11.2 Deferred tax liability XII. PAYABLES RELATED TO ASSETS HELD FOR SALE ND DISCONTINUED OPERATIONS (Net) 12.1 Held for sale - - - - - 12.2 Discontinued operations - - - - - - XIII. SUBORDINATED LOANS (10) - - - - - - XIV. SHAREHOLDERS' EQUITY (11) 2.137.426 - 2.137.426 1.941.667 - 1.941.667 14.1 Paid-in capital 900.000 - 900.000 900.000 - 900.000 14.2 Supplementary Capital (6.017) - (6.017) 14.314 - 14.314 14.2.1 Share premium 3.307 - 3.307 3.307 - 3.307 14.2.2 Share cancellation profits - - - - - - 14.2.3 Marketable securities valuation differences (13.599) - (13.599) 6.732 - 6.732 (9) 14.2.4 Tangible assets revaluation differences 4.275 - 4.275 4.275 - 4.275 14.2.5 Intangible assets revaluation differences - - - - - - 14.2.6 Investment property revaluation reserve - - - - - - 14.2.7 Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint Vent.) - - - - - - 14.2.8 Hedging funds (Effective portion) - - - - - - 14.2.9 Accumulated valuation differences from assets held for sale and from discontinued operations - - - - - - 14.2.10 Other capital reserves - - - - - - 14.3 Profit reserves 1.027.353 - 1.027.353 767.391 - 767.391 65.948 - 65.948 52.950 - 52.950 - - - - - - 961.405 - 961.405 714.441 - 714.441 14.3.1 Legal reserves 14.3.2 Status reserves 14.3.3 Extraordinary reserves 14.3.4 Other profit reserves 14.4 Profit or loss 14.4.1 Prior year income / (losses) 14.4.2 Current year income / (losses) 14.5 Minority shares TOTAL LIABILITIES AND EQUITY - - - - - - 216.090 - 216.090 259.962 - 259.962 - - - - - - 216.090 - 216.090 259.962 - 259.962 - - - - - - 11.045.026 6.145.073 17.190.099 10.346.042 4.167.377 14.513.419 The accompanying notes are an integral part of these combined financial statements 101 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS Note A. I. 1.1. 1.1.1. 1.1.2. 1.1.3. 1.2. 1.2.1. 1.2.2. 1.3. 1.3.1. 1.3.2. 1.4. 1.5. 1.5.1. 1.5.2. 1.6. 1.7. II. 2.1. 2.1.1. 2.1.2. 2.1.3. 2.1.4. 2.1.5. 2.1.6. 2.1.7. 2.1.8. 2.1.9. 2.1.10. 2.1.11. 2.1.12. 2.2. 2.2.1. 2.2.2. III. 3.1. 3.1.1. 3.1.2. 3.1.3. 3.2. 3.2.1. 3.2.1.1. 3.2.1.2. 3.2.2. 3.3. B. IV. 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. V. 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. VI. OFF BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III) GUARANTEES Letters of guarantees Guarantees subject to State Tender Law Guarantees given for foreign trade operations Other letters of guarantee Bank loans Import letter of acceptance Other bank acceptances Letters of credit Documentary letters of credit Other letters of credit Prefinancing given as guarantee Endorsements Endorsements to the Central Bank of Turkey Other endorsements Other guarantees Other collaterals COMMITMENTS Irrevocable commitments Forward asset purchase commitments Share capital commitment to associates and subsidiaries Loan granting commitments Securities underwriting commitments Commitments for reserve deposit requirements Payment commitment for checks Tax and fund liabilities from export commitments Commitments for credit card expenditure limits Commitments for promotions related with credit cards and banking activities Receivables from short sale commitments Payables for short sale commitments Other irrevocable commitments Revocable commitments Revocable loan granting commitments Other revocable commitments DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments for hedging purposes Fair value hedge Cash flow hedge Hedge of net investment in foreign operations Held for trading transactions Forward foreign currency buy/sell transactions Forward foreign currency transactions-buy Forward foreign currency transactions-sell Other Forward buy/sell transactions Other CUSTODY AND PLEDGED ITEMS (IV+V+VI) ITEMS HELD IN CUSTODY Assets under management Investment securities held in custody Checks received for collection Commercial notes received for collection Other assets received for collection Assets received for public offering Other items under custody Custodians PLEDGED ITEMS Marketable securities Guarantee notes Commodity Warranty Properties Other pledged items Pledged items-depository ACCEPTED AVALIZED DRAFTS AND SURETYSHIPS TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) (1), (2) (1) (4) THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (31/12/2011) (31/12/2010) TRY FC Total TRY FC 7.183.246 14.881.266 7.181.426 5.737.843 12.919.269 4.047.507 3.996.113 3.996.113 27.386 27.386 2.898 2.898 21.110 3.628.894 3.628.894 498.695 10.798 353.633 650.723 1.883 2.066.016 5.301.252 3.560.462 3.560.462 296.584 296.584 1.331.621 1.331.621 112.585 587.140 587.140 587.140 - 9.348.759 7.556.575 7.556.575 323.970 323.970 1.334.519 1.334.519 133.695 4.216.034 4.216.034 1.085.835 10.798 353.633 650.723 1.883 2.066.016 4.226.595 4.195.799 4.195.799 23.000 23.000 642 642 7.154 2.686.588 2.686.588 36.324 2.000 341.648 580.319 1.880 1.661.296 5.000.288 3.742.856 3.742.856 131.318 131.318 996.720 996.720 129.394 79.243 79.243 79.243 - 9.226.883 7.938.655 7.938.655 154.318 154.318 997.362 997.362 136.548 2.765.831 2.765.831 115.567 2.000 341.648 580.319 1.880 1.661.296 7.236 - 7.236 7.257 - 7.257 39.910 21.619 21.619 21.619 144.252.279 996.242 2.885 736.005 257.343 5 4 143.256.037 820.957 49.893.921 2.643.502 18.800.856 71.096.801 - 1.294.854 1.294.854 1.294.854 103.667.485 821.158 316.160 20.756 126.829 357.413 102.846.327 370.522 38.782.884 759.906 2.744.840 60.188.175 - 39.910 1.316.473 1.316.473 1.316.473 247.919.764 1.817.400 2.885 1.052.165 278.099 126.829 5 357.417 246.102.364 1.191.479 88.676.805 3.403.408 21.545.696 131.284.976 - 55.864 268.243 268.243 268.243 114.534.965 737.083 2.885 537.081 197.111 4 2 113.797.882 558.289 38.978.316 2.124.763 15.363.750 56.772.764 - 658.312 658.312 658.312 74.648.884 373.825 193.630 15.177 40.842 124.176 74.275.059 300.630 27.921.735 553.137 1.260.824 44.238.733 - 55.864 926.555 926.555 926.555 189.183.849 1.110.908 2.885 730.711 212.288 40.842 4 124.178 188.072.941 858.919 66.900.051 2.677.900 16.624.574 101.011.497 - 151.950.299 110.850.731 262.801.030 121.716.391 80.386.727 202.103.118 The accompanying notes are an integral part of these combined financial statements 102 Total 7.698.020 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF INCOME THOUSAND TURKISH LIRA STATEMENT OF INCOME Note CURRENT PERIOD Audited (01/01/2011-31/12/2011) I. PROFIT SHARE INCOME (1) 1.278.154 1.206.930 1.1 Profit share on loans 1.201.460 1.126.940 1.2 Profit share from reserve deposits - 13.364 1.3 Profit share from banks 1.892 22.369 1.4 Profit share from money market placements 1.5 Profit share from marketable securities portfolio PRIOR PERIOD Audited (01/01/2010-31/12/2010) - - 58.116 30.884 1.5.1 Held-for-trading financial assets - - 1.5.2 Financial assets at fair value through profit and loss - - 1.5.3 Available-for-sale financial assets 49.234 21.050 1.5.4 Investment-held for maturity 1.6 Finance lease income 1.7 Other profit share income II. PROFIT SHARE EXPENSE 2.1 Expense on profit sharing accounts 2.2 Profit share expense on funds borrowed 2.3 Profit share expense on money market borrowings 2.4 Expense on securities issued 2.5 Other profit share expense III. IV. (2) 8.882 9.834 16.686 13.373 - - (646.930) (613.392) (593.829) (596.677) (38.562) (16.538) (14.340) - - - (199) (177) NET PROFIT SHARE INCOME (I - II) 631.224 593.538 NET FEES AND COMMISSIONS INCOME/EXPENSE 259.808 249.378 4.1 Fees and commisions received 319.881 300.661 4.1.1 Non-cash loans 133.643 151.840 4.1.2 Other 186.238 148.821 4.2 Fees and commisions paid (60.073) (51.283) 4.2.1 Non-cash loans 4.2.2 Other (12) (12) (12) (10) (60.061) (51.273) V. DIVIDEND INCOME (3) - - VI. NET TRADING INCOME (4) 39.120 44.963 6.1 Securities trading gains / (losses) 6.2 Gains /(losses) from derivative financial instruments 6.3 Foreign exchange gains / (losses) VII. OTHER OPERATING INCOME (5) - - 64.210 30.508 (25.090) 14.455 130.545 134.193 VIII. NET OPERATING INCOME (III+IV+V+VI+VII) 1.060.697 1.022.072 IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) (228.198) (167.487) X. OTHER OPERATING EXPENSES (-) (7) (563.367) (530.287) XI. NET OPERATING PROFIT/(LOSS) (VIII-IX-X) 269.132 324.298 XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIII. GAIN/(LOSS) ON EQUITY METHOD - - XIV. GAIN/(LOSS) ON NET MONETARY POSITION - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+…+XIV) (8) 269.132 324.298 XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (53.042) (64.336) 16.1 Current income tax (charge)/benefit (57.546) (70.346) 16.2 Deferred tax (charge)/benefit XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) 4.504 6.010 216.090 259.962 XVIII. INCOME ON DISCONTINUED OPERATIONS - - 18.1 Income on assets held for sale - - 18.2 Income on sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) - - 18.3 Income on other discontinued operations - - XIX. LOSS FROM DISCONTINUED OPERATIONS (-) - 19.1 Loss from assets held for sale - - 19.2 Loss on sale of associates, subsidiaries and jointly controlled entities (Joint vent.) - - 19.3 Loss from other discontinued operations - - XX. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) - 21.1 Current income tax charge - - 21.2 Deferred tax charge/ (benefit) - - XXII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) XXIII. NET PROFIT/LOSS (XVII+XXII) 23.1 Group’s profit/loss 23.2 Minority shares (11) Earnings per share - - 216.090 259.962 216.090 259.962 - - 0,24 0,29 The accompanying notes are an integral part of these combined financial statements 103 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY I. Additions to marketable securities revaluation differences from financial assets available for sale CURRENT PERIOD Audited (01/01/2011-31/12/2011) PRIOR PERIOD Audited (01/01/2010-31/12/2010) (25.414) 4.764 II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions - - V. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) - - VI. Profit/Loss from derivative financial instruments for hedge of net investment in foreign operations (Effective portion of fair value differences) - - VII. The effect of corrections of errors and changes in accounting policies - - VIII. Other profit loss items accounted for under equity due to TAS - - IX. Deferred tax of valuation differences 5.083 (953) X. Total Net Profit/Loss accounted for under equity (I+II+…+IX) (20.331) 3.811 XI. Profit/Loss - - 11.1 Change in fair value of marketable securities (Transfer to Profit/Loss) - - 11.2 Reclassification and transfer of derivatives accounted for cash flow hedge purposes to Income Statement - - 11.3 Transfer of hedge of net investments in foreign operations to Income Statement - - 11.4 Other XII. Total Profit/Loss accounted for the period (X±XI) The accompanying notes are an integral part of these combined financial statements 104 - - (20.331) 3.811 IX. VIII. IX. X. XI. XII. 12.1 12.2 XIII. XIV. XV. XVI. XVII. XVIII. 18.1 18.2 18.3 VII. II. III. IV. 4.1 4.2 V. VI. I. X. XI. XII. XIII. XIV. 14.1 14.2 XV. XVI. XVII. XVIII. XIX. XX. 20.1 20.2 20.3 Prior Period Balance - 31.12.2010 Changes in period Increase/decrease related to merger Marketable securities valuation differences Hedging funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations Tangible assets revaluation differences Intangible assets revaluation differences Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) Foreign exchange differences The disposal of assets The reclassification of assets The effect of change in associate’s equity Capital increase Cash Internal sources Share premium Share cancellation profits Inflation adjustment to paid-in capital Other Period net income/(loss) Profit distribution Dividends distributed Transfers to reserves Other Closing Balance (I+II+III+-…...+XVI+XVII+XVIII) CURRENT PERIOD Audited (01/01-31/12/2011) II. 2.1 2.2. III. IV. V. VI. 6.1 6.2 VII. VIII. Prior Period Balance - 31.12.2009 Corrections according to TAS 8 The effect of corrections of errrors The effects of changes in accounting policy New Balance (I+II) Changes in period Increase/decrease related to merger Marketable securities valuation differences Hedging funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations Tangible assets revaluation differences Intangible assets revaluation differences Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) Foreign exchange differences The disposal of assets The reclassification of assets The effect of change in associate’s equity Capital increase Cash Internal sources Share premium Share cancellation profits Inflation adjustment to paid-in capital Other Period net income/(loss) Profit distribution Dividends distributed Transfers to reserves Other Closing Balance (I+II+III+-…...+XVI+XVII+XVIII) I. PRIOR PERIOD Audited (01/01-31/12/2010) STATEMENT OF CHANGES OF SHAREHOLDER'S EQUITY Note - 3,307 - 3.307 - 3.307 - 3.307 - 3.307 - - - - - - - 12.998 12.998 65,948 - 52.950 - 15.064 15.064 52.950 - 37.886 - 37.886 Share Certificate Legal Cancellation Reserves Profits - - - - - - - 246.964 246.964 961,405 - 714.441 - 256.217 256.217 714.441 - 458.224 - 458.224 - - - - - - - 216.090 216.090 - - 259.962 259.962 - - - (259.962) (259.962) - - 259.962 - (301.281) (30.000) (271.281) - - 301.281 - 301.281 (13,599) - 6.732 (20.331) - 6.732 - 2.921 3.811 - 2.921 4,275 - 4.275 - 4.275 - 4.275 - 4.275 - - - - - - - Current Marketable Tangible and Prior Period Bonus Shares Statutory Extraordinary Other Period Net Securities Intangible Assets Net Income Obtained from Reserves Reserve Reserve Income / Revaluation Revaulation / (Expense) Subsidiaries (Expense) Reserve Differences The accompanying notes are an integral part of these combined financial statements - - 900,000 - 900.000 - - - 900.000 - - Inflation Share Adjustment to Premium Paid-in Capital 900.000 - 900.000 Paid-in Capital - - - - - - - - - - - - - 216.090 2,137,426 - 1.941.667 (20.331) - 259.962 (30.000) (30.000) 1.941.667 - 1.707.894 3.811 - 1.707.894 - 216.090 - 2,137,426 - - 1.941.667 (20.331) - 259.962 (30.000) (30.000) - 1.941.667 - - 1.707.894 3.811 - - 1.707.894 Valuation Diff. from Total Equity NonHedging Assets Held for Excluding controlling Total Equity Funds Sale and from Disc. Non-controlling Interest Interest Op. Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY 105 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF CASH FLOWS THOUSAND TURKISH LIRA Note CURRENT PERIOD Audited (01/01-31/12/2011) PRIOR PERIOD Audited (01/01-31/12/2010) 73.392 347.458 1.193.742 1.126.572 (638.541) (612.566) A. CASH FLOWS FROM BANKING OPERATIONS 1.1 Operating profit before changes in operating assets and liabilities 1.1.1 Profit share income received 1.1.2 Profit share expense paid 1.1.3 Dividend received 1.1.4 Fees and commissions received 1.1.5 1.1.6 1.1.7 Payments to personnel and service suppliers 1.1.8 Taxes paid 1.1.9 Others 1.2 Changes in operating assets and liabilities 1.2.1 1.2.2 1.2.3 Net (increase) decrease in due from banks and other financial institutions 1.2.4 Net (increase) decrease in loans 1.2.5 Net (increase) decrease in other assets 1.2.6 Net increase (decrease) in bank deposits 101.005 10.926 1.2.7 Net increase (decrease) in other deposits 903.693 1.927.951 1.2.8 Net increase (decrease) in funds borrowed 672.030 417.118 1.2.9 Net increase (decrease) in due payables - - 1.2.10 Net increase (decrease) in other liabilities 377.583 164.374 I. Net cash provided from banking operations 486.751 379.128 B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net cash provided from investing activities (375.119) (315.800) 2.1 Cash paid for purchase of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) (20.065) (46.696) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) - - 2.3 Fixed assets purchases (I.12) (31.920) (47.537) 2.4 Fixed assets sales (I.12) 2.5 Cash paid for purchase of financial assets available for sale 2.6 Cash obtained from sale of financial assets available for sale - 50.000 2.7 Cash paid for purchase of investment securities - (50.000) 2.8 Cash obtained from sale of investment securities 2.9 Other C. CASH FLOWS FROM FINANCING ACTIVITIES III. - - 331.526 300.661 Other income 90.226 102.519 Collections from previously written off loans 14.509 20.636 (264.766) (242.029) (81.339) (89.412) (571.965) (258.923) 413.359 31.670 Net (increase) decrease in financial assets - - Net (increase) decrease in financial assets at fair value through profit or loss - - 538.259 378.883 (2.191.597) (2.857.397) 12.386 (10.185) 81.110 81.900 (400.000) (350.000) - 50.000 (4.244) (3.467) Net cash provided from financing activities - (30.000) 3.1 Cash obtained from funds borrowed and securities issued - - 3.2 Cash used for repayment of funds borrowed and securities issued - - 3.3 Capital increase - - 3.4 Dividends paid - (30.000) 3.5 Payments for finance leases - - 3.6 Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents 77.996 8.397 V. Net increase in cash and cash equivalents 189.628 41.725 VI. Cash and cash equivalents at the beginning of the year (1) 420.068 378.343 VII. Cash and cash equivalents at the end of the year (1) 609.696 420.068 (I.13) The accompanying notes are an integral part of these combined financial statements 106 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. PROFIT DISTRIBUTION TABLE THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (01/01/2011-31/12/2011) (01/01/2010-31/12/2010) I. DISTRIBUTION OF CURRENT YEAR PROFIT (**) 1.1 1.2 1.2.1 1.2.2 CURRENT YEAR PROFIT TAXES AND DUTIES PAYABLE (-) Corporate Tax (Income Tax) Income Withholding Tax 1.2.3 Other taxes and duties (*) A. NET INCOME FOR THE YEAR (1.1-1.2) 1.3 1.4 1.5 PRIOR YEAR'S LOSSES (-) FIRST LEGAL RESERVES (-) OTHER STATUTORY RESERVES (-) B. NET INCOME AVAILABLE FOR DISTRIBUTION [(A-(1.3+1.4+1.5)] 1.6 1.6.1 1.6.2 1.6.3 1.6.4 1.6.5 1.7 1.8 1.9 1.9.1 1.9.2 1.9.3 1.9.4 1.9.5 1.10 1.11 1.12 1.13 1.14 FIRST DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit and loss Sharing Certificates DIVIDEND TO PERSONNEL (-) DIVIDEND TO BOARD OF DIRECTORS (-) SECOND DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SECOND LEGAL RESERVE (-) STATUTORY RESERVES (-) EXTRAORDINARY RESERVES OTHER RESERVES SPECIAL FUNDS II. DISTRIBUTION OF RESERVES 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.4 2.5 DISTRIBUTED RESERVES SECOND LEGAL RESERVES (-) DIVIDENDS TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Holders of the profit /loss Sharing Certificates DIVIDENDS TO PERSONNEL (-) DIVIDENDS TO BOARD OF DIRECTORS (-) III. EARNINGS PER SHARE 3.1 3.2 3.3 3.4 TO OWNERS OF ORDINARY SHARES TO OWNERS OF ORDINARY SHARES ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) IV. DIVIDEND PER SHARE 4.1 4.2 4.3 4.4 TO OWNERS OF ORDINARY SHARES TO OWNERS OF ORDINARY SHARES ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) 269.132 (53.042) (57.546) - 324.298 (64.336) (70.346) - 4.504 6.010 216.090 259.962 - 12.998 - 216.090 246.964 - 246.964 - - - 0,24 24 - 0,29 29 - - - (*) Deferred tax benefit is presented in "other tax and duties" line. (**) Profit distribution is agreed on the General Assembly Meeting and as of the reporting date, the General Assembly meeting has not been held, yet. The accompanying notes are an integral part of these combined financial statements 107 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 1. Presentation of Financial Statements The Bank prepares its financial statements and notes in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents, Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), other communiqués, pronouncements and explanations about accounting and financial reporting issued by the Banking Regulation and Supervision Agency (“BRSA”), Turkish Commercial Code and the Tax Legislation. The prior period financial statements are presented in line with the principles of TAS No: 1 “Fundamentals of Preparing and Presenting Financial Statements” published in the Official Gazette on January 16, 2005 with No: 25702, and in accordance with TAS and TFRS and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior year financial statements to comply with the current year presentation. The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss and financial assets available for sale that are presented on fair value basis. 2. Basis of Accounting The accompanying financial statements are based on the Bank’s legal records. The Bank has recorded the adjustments of inflation accounting to its legal records beginning from June 30, 2004 to December 31, 2004 in accordance with Act No: 5024 of the Tax Procedural Code. As of December 31, 2003, the financial statements are prepared in accordance with the legal books and historical cost principle except for the revaluation of fixed assets and includes adjustments and reclassifications, including restatement for the changes in the general purchasing power of the Turkish Lira in accordance with Turkish Accounting Standard for “Financial Reporting in Hyperinflationary Economies” (“TAS 29”) prior to December 31, 2004 for the purpose of fair presentation. II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions The Bank manages its financial instrument strategies depending on the financing sources. The sources mainly constitute of the current and profit sharing accounts. As of the balance sheet date, the Bank’s assets and equity structure are sufficient to cover its liabilities. The Bank allocates 20% of its profit sharing accounts to liquid instruments (December 31, 2010: 23%). The Bank does not carry a significant foreign currency position risk due to the existing floating exchange rate regime. The investment decisions are made by taking into consideration the maturity structure of the balance sheet items. The allocations of asset items are designated, and yield analysis are made based on this designation. In the statutory records of the Bank, the transactions recorded in foreign currencies (all other currencies except Turkish Lira) are translated into the Turkish Lira at the exchange rates prevailing at the transaction dates. Monetary asset and liabilities denominated in foreign currencies are translated into the Turkish Lira at the balance sheet date of the Bank. Foreign exchange gains or losses arising from the translation of monetary items and foreign currency denominated collections or disbursements are recognized in the income statement. III. Explanations on Forward and Option Contracts and Derivative Instruments In determination of fair value of forward and swap transactions, forward rates discounted to the balance sheet date by prevailing are compared with the expected discounted rates at maturity calculated based on the prevailing profit shares as of the balance sheet date and arising foreign exchange differences are recognized in the income statement. Although some of the derivative transactions provide economic hedging in accordance with TAS 39 “Financial Instruments: Recognition and Measurement” since all necessary conditions for hedge accounting have not been met, the bank classifies these transactions as “held for trading” therefore changes in the fair value of derivative financial instruments are recognized in profit or loss as they arise. IV. Explanations on Profit Share Income and Expenses Profit share income and expenses are recognized in the income statement on an accrual basis. Realized and unrealized profit share accruals of the non-performing loans are reversed and profit share income in connection with these loans is recorded as profit share income only when they are collected. 108 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) V. Explanations on Fees and Commission Income and Expenses Banking service revenues are recognized as income only when they are collected while only the current portion of the prepaid commission income obtained from loans is recorded as income based on the periodicity principle. Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are recorded as prepaid expenses and are recognized as expense on the relevant periods. VI. Explanations on Financial Assets Financial instruments comprise of financial assets, financial liabilities and derivative instruments. Financial assets and financial liabilities are recognized on the Bank’s balance sheet when the Bank becomes a party to the contractual provisions of the instrument. Basically, financial assets form majority of the commercial activities and operations of the Bank. Financial instruments expose, change or reduce the liquidity and credit risks of the Bank’s financial statements. Fair value is the amount for which an asset could be exchanged or a liability settled, between knowledgeable willing parties in an arm length transaction. Fair value is best evidenced by a market price, being the amount obtainable from the sale or payable on the acquisition, of a financial instrument in an active market, if one exists. Estimated fair values of financial assets are determined by the Bank by using the market data and relevant valuation methods. However, interpretation of market data is necessary to determine fair value. Therefore, estimated fair values presented in this report may not be necessarily equivalent of the disposal values of such assets derived from current market conditions. Some carrying values of the financial instruments which are same with their cost values are assumed to be equal to their fair values because of their short term nature. The methods and assumptions used in determining the reasonable estimated values of all financial instruments are mentioned below: Cash, Banks, and Other Financial Institutions: Cash and cash equivalents comprise of cash on hand, demand deposits, and highly liquid short-term investments not bearing risk of significant value change, and that are readily convertible to a known amount of cash. The book value of these financial assets approximate to their fair value. Financial Assets at Fair Value through Profit or Loss: Marketable securities at fair value through profit or loss are classified in two categories; i) marketable securities classified as trading securities: acquired or incurred principally for the purpose of selling or repurchasing it in the near term in order to benefit from short-term profit opportunities; ii) marketable securities classified as marketable securities at fair value through profit or loss at initial recognition. The Bank uses the above-mentioned classification when permitted, or for the purposes of providing a more appropriate presentation. In this group, trading securities are initially recognized at cost and measured at fair value on the financial statements. Fair value of debt securities traded in an active market is determined based on the quoted prices or current market prices. The difference between initial cost and fair value of financial assets at fair value through profit or loss is reflected to profit share income or diminution in value of marketable securities accounts. Profit share income from financial assets at fair value through profit or loss is reflected in profit share income. As of December 31, 2011, the Bank has TRY 1.250 Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2010: TRY 2.581 Thousand). Held to Maturity Investments: Held to maturity investments include securities with fixed or determinable payments and fixed maturity when there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention, including the funding ability. This portfolio excludes loans and receivables. Subsequent to initial recognition, held to maturity investments are measured at amortized cost by using the effective interest rate less impairment losses, if any. The Bank has no financial assets acquired and classified as held to maturity investments that cannot be subject to such classification for two years because of the non-performance of tainting rules. The profit share income received from held to maturity investments is recorded as profit share income in the income statement. As of December 31, 2011, the Bank has TRY 77.053 Thousand of held to maturity investments (December 31, 2010: TRY 77.032 Thousand). 109 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Financial Assets Available for Sale: Financial assets available for sale are initially recognized at cost including the transaction costs. After initial recognition, bonds classified available for sale are measured at fair value and unrealized gains/losses originating from the difference between the amortized cost and the fair value are recorded in “Marketable Securities Value Increase Fund” under equity. At the disposal of available for sale financial assets, value increase/decrease recorded in “Marketable Securities Value Increase Fund” under equity is transferred to the income statement. Equity instruments that are classified as available for sale assets are recorded with their value after deduction of any impairment from original cost. As of December 31, 2011, the Bank has TRY 779.637 Thousand of available for sale financial assets (December 31, 2010: TRY 394.577 Thousand). Loans and Receivables: Loans and receivables are recognized at amortized cost. Fees, transaction costs and other similar costs in connection with the guarantees of loans and receivables are not considered as part of the transaction cost and recognized as expense in the income statement. Loans are transferred to the relevant accounts in with their cash amounts and income accruals are calculated by using the internal rate of return method and the related income is recorded in the profit share income item. Foreign currency and foreign currency indexed loans are evaluated and evaluation differences are accounted under “Foreign Exchange Gains” and/or “Foreign Exchange Losses” in the income statement. The classification and provisioning of doubtful loans/receivables are appropriately accounted for in accordance with the prevailing regulations, and specific provisions allocated are recognized in the income statement for the period. Collections made from such loans are recognized under the “Non-performing loans” (including receivables from the doubtful receivables) account and “Profit share income received from uncollectible loans and other receivables” account. Released loan loss provisions are accounted as a reversal from provision expense if realized in the current year, and the remaining amounts are recognized as income in the account of collections from the prior year expenses. In addition to specific loan loss provisions, general loan loss provision are recognized within the framework of the regulation on “Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves” published in the Official Gazette No. 26333 dated 1 November 2006. Except for specific provisions, the Bank allocates general reserve in accordance with Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions” VII. Explanations on Impairment of Financial Assets At each balance sheet date, the Bank evaluates the carrying amounts of its financial asset or a group of financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such an indication exists, the Bank determines the related impairment. A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to the occurrence (loss/ damage event) of one or more than one event (or occurrence) subsequent to initial recognition of that asset; and such loss event causes an impairment loss as a result of the effect on the reliable estimate of the expected future cash flows of the related financial asset and asset group. Any amounts attributable to expected losses arising from any future events is not recognized under no circumstances. Companies that are required to prepare separate financial statements under the statutory requirements in accordance with TAS 27 “Consolidated and Separate Financial Statements” can represent their subsidiaries or associates either at cost or based on requirements set out in TAS 39, “Financial Instruments: Recognition and Measurement”. In this respect, the Bank chooses to use the first method and presents the subsidiaries, jointly controlled entities and associates at cost less impairment loss, if any. VIII.Explanations on Offsetting Financial Assets and Liabilities Financial assets and liabilities are offset when the Bank has a legally enforceable right to set off, and when the Bank has the intention of collecting or paying the net amount of related assets and liabilities. In other circumstances, the Bank does not offset financial asset and liabilities. 110 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) IX. Explanations on Sales and Repurchase Agreements and Lending of Securities The Bank enters into revenue sharing certificates repurchase agreements with the Central Bank of the Republic of Turkey for the money market transactions. X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets The principles on accounting, assessment and disposal of assets held for sale are determined based on the Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the official Gazette numbered 26333. Although the Bank has assets held for sale in the balance sheet, due to the fact that the Bank does not have a formal plan to dispose of these assets in one year subsequent to their classification date, such assets are continued to be depreciated. For this reason, these assets are classified as tangible assets instead of assets held for sale in the accompanying financial statements. Assets held for sale are measured at the lower of the carrying amount of assets and fair value less any cost incurred for disposal. Assets held for sale are not amortized and presented in the financial statements separately. In order to classify an asset as held for sale, only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale. Highly saleable condition requires a plan by the management regarding the sale of the asset to be disposed of (or else the group of assets), together with an active program for the determination of buyers as well as for the completion of the plan. Also the asset (or else the group of assets) shall be actively marketed in conformity with its fair value. On the other hand, the sale is expected to be recognized as a completed sale within one year after the classification date; and the necessary transactions and procedures to complete the plan should demonstrate the fact that there is remote possibility of making any significant changes or cancellation of the plan. Various events and conditions may extend the completion period of the disposal more than a year. If such delay arises from any events and conditions beyond the control of the entity and there is sufficient evidence that the entity has an ongoing disposal plan for these assets, such assets (or else group of assets) are continued to be classified as assets held for sale (or else group of assets). As of December 31, 2011, assets held for sale amounts to TRY 8.724 Thousand (December 31, 2010: TRY 6.509 Thousand). A discontinued operation is a division of a bank that is either disposed of or held for sale. Results of discontinued operations are included in the income statement separately. The Bank’s has not a discontinued operation. XI. Explanations on Goodwill and Other Intangible Assets Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. No goodwill amount is recognized in the unconsolidated financial statements of the Bank as of the balance sheet date. Intangible assets acquired prior to January 1, 2005 are accounted for at restated cost less accumulated depreciation and any impairment loss, and the intangible assets acquired in subsequent periods are accounted for at acquisition cost less accumulated depreciation and any impairment loss if any, for those acquired prior to January 1, 2005. Intangible assets are amortized by using the straight line method considering their useful lives. Amortization method is reviewed at the end of each year periodically. Intangible assets mainly constitute of rights and amortized using the straight line method in 5 years. 111 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) XII.Explanations on Tangible Assets Prior to January 1, 2005, tangible assets are accounted for at acquisition cost plus any other direct costs incurred to bring the asset for ready to use. Tangible assets are measured at their acquisition cost less accumulated depreciation and impairment loss, if any. Depreciation of assets held less than one year as of the balance sheet date is accounted for proportionately. If the fair value of tangible assets is under their carrying value, impairment loss is allocated for exceeding amounts and these amounts are recognized as impairment in the financial statements. Gains or losses resulting from disposals of tangible assets are recognized in the income statement. Maintenance costs of the tangible assets are recognized in the income statement as an expense. There are no pledges, mortgages, or other restrictions on tangible assets. Tangible Asset Useful Life Safety Boxes 5 years Office Equipment 5 years Furniture and Fixtures 5 years Vehicles 5 years Leasehold Improvements Buildings 5 years 50 years XIII. Explanations on Leasing Transactions Bank as a Lessor: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the amount of the Bank’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Bank’s net investment outstanding in respect of the leases. Bank as a Lessee: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognized as assets of the Bank at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Bank’s general policy on borrowing costs. As of December 31, 2011, the Bank as a lessee has operating leases for vehicles, general management and branches in addition to its assets through financial lease. XIV. Explanations on Provisions and Contingent Liabilities Provisions are recognized when there is a present obligation, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are continuously reviewed in order to determine whether there is any possibility of cash flow with regards to the sources having economic benefit for the Bank. XV. Explanations on Liabilities for Employee Benefits Under the existing Turkish law and union agreements, severance indemnity payment is required for employees retired or fired except resignations. The severance indemnity pay provision recognized represents the present value of the defined benefit obligation as adjusted for unrecognized gains and losses in accordance with TAS 19 “Employee Benefits”. The defined obligation is determined by independent actuaries. 112 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows: December 31, 2011 (*) December 31, 2010 Discount Rate 9,2% - 11,55% 10% Inflation Rate 4,5% - 8,75% 5,1% (*) According to employees retirement dates, different rates have been used in the range of rates given in the table above. TRY 2.732 (TRY full amount) salary ceiling, which was effective as of December 31, 2011 was taken into account in the current year calculations. It is assumed that the amount of the salary ceiling will increase each year in line with the inflation rate. The age of retirement is considered as the earliest age possible that an individual can retire and CSO 1980 female/male mortality table is used for the mortality rate. XVI.Explanations on Taxation Tax expense comprises of current tax and deferred tax expenses. Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. According to the Article 32 of the Corporate Tax Law No: 5520 announced in the Official Gazette dated June 21, 2006, the corporate tax rate is 20%. Deferred tax asset or liability is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized and recognized in the income statement. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholder’s equity items. Taxes payables and prepaid taxes are offset since they are levied by the same taxation authority. Deferred tax assets and liabilities are also offset. The Bank has adjusted its statutory financial statements based on inflation accounting as of January 1, 2004 in accordance with Law No: 5024. XVII.Additional Disclosures on Borrowings Borrowings are recognized in accordance with TAS 39 “Financial Instruments: Recognition and Measurement”. No specific hedging technique is applied for borrowings, their accounting and valuation methods excluding some general methods applied for avoiding any liquidity and currency risks. There are no debt securities or convertible bonds issued by the Bank. XVIII. Explanations on Issuance of Share Certificates As of December 31, 2011, there are no exported share certificates of the Bank. XIX. Explanations on Avalized Drafts and Acceptances Avalized drafts and acceptances are realized simultaneously with the payment dates of the customers and they are presented in the off-balance sheet commitment accounts. 113 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) XX. Explanations on Government Incentives As of balance sheet date, there are no government incentives used by the Bank. XXI. Explanations on Segment Reporting The Bank operates in corporate, commercial and retail banking areas in line with its mission by means of profit/loss sharing methodology. Current Period Retail Corporate and Commercial Treasury Undistributed Total Total Assets 2.546.891 10.829.396 1.854.936 1.958.876 17.190.099 Total Liabilities 8.458.383 3.938.660 1.748.752 3.044.304 17.190.099 Net Profit Share Income / (Expense) (*) (289.384) Net Fees and Commissions Income / (Expense) Other Operating Income / (Expense) Profit Before Tax Tax Provision Net Profit for the Period 11.929 911.657 9.187 229.316 (3.324) (236)631.224 21.887 259.808 (7.628) (17.078) - (597.194) (621.900) (285.083) 1.123.895 5.863 (575.543) 269.132 - - - (53.042) (53.042) (285.083) 1.123.895 5.863 (628.585) 216.090 (*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks. Retail Corporate and Commercial Treasury Undistributed Total Total Assets Prior Period 1.660.799 9.357.642 2.212.187 1.282.791 14.513.419 Total Liabilities 7.611.765 3.554.817 627.634 2.719.203 14.513.419 Net Profit Share Income / (Expense) (*) Net Fees and Commissions Income / (Expense) Other Operating Income / (Expense) Profit Before Tax Tax Provision Net Profit for the Period (331.567) 872.795 39.115 13.195593.538 3.953 233.281 (1.408) 13.552 249.378 (7.194) (16.476) - (494.948) (518.618) (334.808) 1.089.600 37.707 (468.201) 324.298 - - - (64.336) (64.336) (334.808) 1.089.600 37.707 (532.537) 259.962 (*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks. XXII.Explanations on Other Matters There are no explanations on other matters. 114 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION FOUR: INFORMATION ON FINANCIAL STRUCTURE I. Explanations on Capital Adequacy Standard Ratio The unconsolidated capital adequacy ratio of the Bank is 13,31% (December 31, 2010: 13,33%). Capital Adequacy Standard Ratio is calculated in accordance with the Communiqué on “Measurement and Assessment of Capital Adequacy of Banks”, which was published on November 1, 2006 in the Official Gazette No: 26333. The calculation of Capital Adequacy Ratio includes the methods used in determining the Capital Adequacy Ratio, determination of risk weighted assets and non-cash credits in line with the relevant banking regulation and measuring the market risk and operational risk ratio in line with the same regulation. Risk Weights Bank Amount Subject to Credit Risk Balance Sheet Items (Net) Cash and Cash Equivalents Matured Marketable Securities 0% 10% 20% 50% 100% 150% 200% 2.732.982 - 353.323 4.401.848 7.107.347 62.207 17.875 319.491 - - - - - - - - - - - - - Due from Central Bank of Turkey Republic 562.382 - - - - - - Due from Domestic Banks, Foreign Banks, Branches and Head Office Abroad - - 348.379 - 10.986 - - Interbank Money Market Placements - - - - - - - Receivables from Reverse Repo Transactions - - - - - - - Reserve Deposits 661.056 - - - - - - Loans 246.274 - 4.820 4.155.335 5.420.347 62.207 17.875 Non-Performing Loans (Net) - - - - 283.452 - - Financial Lease Receivables 4.675 - - 91.816 114.988 - - 771.250 - - - 93 - - 75.000 - - - - - - - - - - - - - Financial Assets Available for Sale Held to Maturity Investments Receivables from Installment Sales of Assets Sundry Debtors Accrued Profit Share and Income Accruals Subsidiaries, Associates and Entities Under Common Control (Joint Vent.) (Net) Tangible Assets - - - - 7.783 - - 14.965 - 124 154.697 525.796 - - - - - - 251.634 - - - - - - 412.847 - - 77.889 - - - 79.421 - - 162.566 - 161.617 1.050.110 4.336.494 - - Guarantees and Commitments 162.566 - 154.152 1.050.110 4.336.494 - - Derivative Financial Instruments - - 7.465 - - - - Other Assets Off-Balance Sheet Items Non Risk Weighted Accounts - - - - - - - Total Risk Weighted Assets 2.895.548 - 514.940 5.451.958 11.443.841 62.207 17.875 115 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Summary of the Capital Adequacy Standard Ratio of the Bank: Bank Total Risk Weighted Assets (TRWA) Current Period Prior Period 14.401.869 12.900.990 62.788 38.438 Amount Subject to Market Risk (ASMR) Amount Subject to Operational Risk (ASOR) (*) 1.683.782 1.480.592 Shareholders’ Equity 2.148.814 1.922.505 13,31 13,33 Shareholders’ Equity / (TRWA + ASMR + ASOR) *100 (*) The amount subject to operational risk is in accordance with the “Regulation Regarding Measurement and Evaluation of the Bank’s Capital Adequacy Ratio” published in the Official Gazette No: 26333 dated 1 November 2006 which is effective from 1 June 2007. Operational risk is calculated by using the Basic Indicator Approach. Components of Shareholders’ Equity: CORE CAPITAL Paid-in Capital (*) Nominal Capital Capital Commitments (-) Paid-in Capital Indexation Difference Share Premium Share Cancellations Profits Legal Reserves First Legal Reserve (Turkish Commercial Code 466/1) Second Legal Reserve (Turkish Commercial Code 466/2) Other Legal Reserve per Special Legislation Statutory Reserves Extraordinary Reserves Reserves Allocated by the General Assembly Retained Earnings Accumulated Losses Foreign Currency Share Capital Exchange Difference Inflationary Adjustment to Legal Reserve, Status Reserves and Extraordinary Reserves Profit Current Year Net Profit Prior Years’ Profits Provision for Possible Losses up to 25% of the Core Capital Gains on Sale of Associates and Subsidiaries and Properties to be added to Capital Primary Subordinated Loans up to 15% of the Core Capital Losses that cannot be Covered by Reserves (-) Net Current Year Loss Prior Years’ Losses Leasehold Improvements (-) Prepaid Expenses (-) (**) Intangible Assets (-) Deferred Tax Asset Exceeding 10% of the Core Capital (-) Excess Amount in the Article 56, Clause 3 of the Banking Law (-) Total Core Capital Current Period 894.525 894.525 3.307 65.948 64.021 1.927 961.405 961.405 216.090 216.090 4.275 48.384 11.012 2.086.154 Prior Period 894.525 894.525 3.307 52.950 51.023 1.927 714.441 714.441 259.962 259.962 4.275 55.453 13.153 10.419 1.850.435 (*) The Bank has purchased 1.500.000 units of its own pledged shares at TRY 5.475 Thousands as a result of sale in accordance with Turkish Commercial Code article 329/2.The effect of purchase has been considered as deduction from the paid-in capital item in the capital adequacy table. (**) Prepaid expenses are not deducted from the core capital according to the Article 1 of the “Regulation for amending the Regulation on Equities of Banks” published in the Official Gazette No: 27870 dated March 10, 2011. 116 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SUPPLEMENTARY CAPITAL General Loan Loss Provision Current Period Prior Period 79.229 70.287 45% of the Revaluation Reserve for Movable Fixed Assets - - 45% of the Revaluation Reserve for Properties - - Bonus Shares Obtained from Associates, Subsidiaries and Entities Under Common Control - - Primary Subordinated Loans Excluded in The Calculation of the Core Capital - - Secondary Subordinated Loans - - (13.599) 3.029 45% of Marketable Securities Valuation Differences Associates and Subsidiaries - - Available for Sale Securities (13.599) 3.029 - - 65.630 73.316 - - 2.151.784 1.923.751 2.970 1.246 Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Ten Percent or More of Capitals - 34 Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Less than Ten Percent of Capitals which Exceed Ten Percent of Bank’s Core And Supplementary Capital - - Secondary Subordinated Loans Granted to Banks and Financial Institutions (Domestic, Foreign) or Qualified Shareholders and Placements That Possess the Nature of Their Primary or Secondary Subordinated Debt - - Loans Granted Being Non-Compliant with the Articles 50 and 51 of the Banking Law - - 1.185 1.212 Indexation Differences for Capital Reserves, Profit Reserves and Retained Earnings (Except Indexation Differences for Legal Reserves, Statutory Reserves and Extraordinary Reserves) Total Supplementary Capital TIER III CAPITAL CAPITAL DEDUCTIONS FROM THE CAPITAL The Net Book Value of Properties Exceeding Fifty Percent of Equity and Properties Held for Sale and Properties and Commodity to be Disposed, Acquired in Exchange of Loans and Receivables according to the Article 57 of the Banking Law and have not been Disposed yet After 5 Years after Foreclosure Other (*) TOTAL SHAREHOLDERS’ EQUITY 1.785 - 2.148.814 1.922.505 (*) In accordance with the principles of the regulations described in “Measurement and Practices of Bank’s Shareholder’s Equity” published in the Official Gazette No: 26333, Article 10/1, clause (e), dated November 1, 2006, BRSA has published the board decision related to consumer loans for the purpose of acquiring housing in the Official Gazette No: 27789 dated December 18, 2010. II. Explanations on Credit Risk Credit worthiness of loan customers are monitored and semiannually and regularly reviewed by the Risk Monitoring Department of the Bank in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”. The account statements are obtained based on the prevailing regulations. Credit limits are determined by the Board of Directors, the Credit Committee of the Bank and the Credit Administration. The Bank obtains sufficient guarantees for its risks, comprising of personal surety, real-estate mortgage, cash blockage, and customer cheques. For the derivative transactions and other similar positions of the Bank, operational limits are set by the Board of Directors and the transactions are performed within these limits. There are no options or any other similar transactions. Indemnified non-cash loans are subject to the same risk weight with the overdue loans. 117 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) The Bank monitors restructured and rescheduled loans in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”. Financial position and business operation of those customers are analyzed systematically and, principal and profit payments based on the restructured payment plan are monitored by the corresponding departments. As of December 31, 2011, the risk of the Bank from its top 100 cash loan customers share in total cash loans ratio is 38,60% (December 31, 2010: 39,32%). As of December 31, 2011, the risk of the Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,01% (December 31, 2010: 47,22%). As of December 31, 2011, the cash and non-cash receivables of the Bank from its top 100 loan customers share in total balance sheet assets and non-cash loan ratio is 35,86% (December 31, 2010: 36,66%). As of December 31, 2011 the Bank’s general loan loss provision amount for its credit risk is TRY 131.066 Thousand (December 31, 2010: TRY 117.204 Thousand). Distribution of Credit Risk by Types of Borrowers and Geographical Concentration: Loans to Individuals and Corporate (**) Loans to Banks and Other Financial Institution Marketable Securities Other Loans (****) (***) Current Period Prior Period Current Period Prior Period Current Period Prior Period Current Period Prior Period Private Sector 10.305.287 9.170.204 256 563 Public Sector 1.183 1.439 - - 1.250 2.581 12.209.133 11.586.101 856.597 471.516 - - - - 366.753 186.612 - - 1.556.767 723.120 2.529.515 1.639.055 - - - - - - - - 166.782 194.113 93 93 251.634 231.569 12.835.985 10.810.698 367.009 187.175 857.940 474.190 14.184.316 12.734.903 12.315.211 10.452.269 277.823 69.247 857.133 471.532 12.633.085 11.898.438 142.942 102.925 24.905 34.515 753 836 1.141.970 344.560 OECD Countries (*) 10.881 Off-Shore Banking Regions 9.740 9.041 7.406 54 1.822 173.063 321.702 175.405 136.804 39 - - - 15.897 18.103 37.183 796 36.866 74.871 - - 4.214 3.973 Borrowers’ Concentration Banks Retail Share Certificates Total Geographical Concentration Domestic European Union Countries USA, Canada Other Countries Total 154.363 108.164 18.335 1.136 - - 216.087 148.127 12.835.985 10.810.698 367.009 187.175 857.940 474.190 14.184.316 12.734.903 (*) OECD countries other than European Union countries, USA and Canada. (**) Non-performing loans are not included. (***) Includes financial assets at fair value through profit or loss, Available for Sale and Held to Maturity (****) Includes transactions defined as loan in Article 48 of Law No: 5411 and not covered in the first three columns of the Uniform Chart of Accounts above. 118 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Information According to Geographical Concentration: Current Period - December 31, 2011 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control (Joint Vent.) Unallocated Assets/Liabilities (**) Unallocated Assets/Liabilities Total Prior Period - December 31, 2010 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total Assets Liabilities Non-Cash Loans Equity Investments Net Income 16.308.637 170.553 19.976 192.542 74.050 172.707 13.351.023 833.082 22.209 126.530 162.387 557.442 8.842.441 162.203 146.443 15.896 4.214 177.562 - 216.090 - - - - 251.634 - 16.938.465 15.052.673 9.348.759 251.634 216.090 13.796.716 138.276 18.968 142.923 75.667 109.300 11.814.522 276.678 61.916 32.959 52.649 333.028 8.923.684 69.318 94.303 18.103 3.973 117.502 - 259.962 - - - - 231.569 - 14.281.850 12.571.752 9.226.883 231.569 259.962 (*) OECD countries other than European Union countries, USA and Canada. (**) Assets and liabilities that cannot be allocated on an coherent basis. 119 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Sector Concentration for Cash Loans: Current Period Agriculture Farming and Raising Livestock Forestry, Wood and Paper TRY (%) FC (%) TRY (%) FC (%) 227.134 2,01 7.834 0,50 270.144 2,75 6.423 0,65 177.436 1,57 4.355 0,28 219.777 2,24 5.252 0,53 40.721 0,36 645 0,04 40.540 0,41 - - Fishery Manufacturing Mining and Quarry Production Electricity, Gas and Water Prior Period 8.977 0,08 2.834 0,18 9.827 0,10 1.171 0,12 4.159.484 36,88 917.144 58,59 3.868.022 39,38 389.656 39,49 186.542 1,65 329.822 21,07 163.782 1,67 65.098 6,60 3.088.879 27,39 345.801 22,09 2.885.961 29,38 211.262 21,41 884.063 7,84 241.521 15,43 818.279 8,33 113.296 11,48 Construction 2.350.846 20,84 128.611 8,22 2.064.055 21,01 166.922 16,91 Services 1.719.671 15,25 508.254 32,47 1.717.887 17,48 420.177 42,57 690.980 6,13 79.161 5,06 603.476 6,14 46.121 4,67 Wholesale and Retail Trade Hotel, Tourism, Food and 230.770 2,05 94.276 6,02 224.160 2,28 99.674 10,10 Beverage Services 262.792 2,33 269.811 17,24 319.317 3,25 257.557 26,10 Transportation and 110.698 0,98 7.388 0,47 89.029 0,91 - - Communication 136.322 1,21 - - 206.592 2,10 - - 15.210 0,13 1.797 0,11 12.746 0,13 2.319 0,23 135.794 1,20 55.821 3,57 93.270 0,95 14.493 1,47 Financial Institutions Real Estate and Renting Services Self-Employment Services 137.105 1,22 - - 169.297 1,72 13 - 2.821.252 25,02 3.399 0,22 1.904.269 19,38 3.706 0,38 11.278.387 100,00 1.565.242 100,00 9.824.377 100,00 986.884 100,00 Education Services Health and Social Services Other Total The table below shows the maximum exposure to credit risk for the components of the financial statements: Central Bank of the Republic of Turkey Due from Banks Derivative Financial Assets Held for Trading Financial Assets Available for Sale Held to Maturity Investments Loans Finance Lease Receivables Prior Period 1.360.161 1.830.902 359.365 186.612 1.250 2.581 779.637 394.577 77.053 77.032 13.153.771 10.954.796 297.751 105.471 16.028.988 13.551.971 Contingent Liabilities 9.348.759 9.226.883 Commitments 4.216.034 2.765.831 Total 13.564.793 11.992.714 Total Credit Risk Exposure 29.593.781 25.544.685 Total 120 Current Period Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Credit Rating System: The credit risk is assessed through the internal rating system of the Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2011 consumer loans are excluded from the internal rating system of the Bank. Additional scoring methodologies are applied for these loans. The risks that are subject to rating models can be allocated as follows: Share in Total (%) Category Description of Category Current Period Above Average Prior Period The borrower has a very strong financial structure 35% 35% Average The borrower has an intermediate level of financial structure 35% 36% Under Average The financial structure of the borrower has to be closely monitored in the medium term 13% 11% Not Graded The borrower is not assessed by the Bank Total III. 17% 18% 100% 100% Explanations on Market Risk The amount subject to market risk is calculated and reported with the Standard Method described in Section 4 of the Communiqué on “Measurement and Assessment of Banks’ Capital Adequacy” published in the Official Gazette No: 26333 dated November 1, 2006. Market risk is measured on a monthly basis. a) Explanations related to market risk: Amount (I) Capital Requirement to be Employed For General Market Risk - Standard Method 1.559 (II) Capital Requirement to be Employed For Specific Risk - Standard Method - (III) Capital Requirement to be Employed For Currency Risk - Standard Method 3.464 (IV) Capital Requirement to be Employed For Commodity Risk - Standard Method - (V) Capital Requirement to be Employed For Settlement Risk - Standard Method - (VI) Total Capital Requirement to be Employed For Market Risk Resulting From Options - Standard Method - (VII) Total Capital Requirement to be Employed For Market Risk in Banks Using Risk Measurement Model - (VIII) Total Capital Requirement to be Employed For Market Risk (I+II+III+IV+V+VI) 5.023 (IX) Amount Subject to Market Risk (12,5 x VIII) or (12,5 x VII) 62.788 b) Average market risk table calculated at the end of each month in the current period: Current Period Prior Period Average Maximum Minimum Average Maximum Minimum 20.919 41.838 - 10.144 20.288 - - - - - - - 63.900 113.938 13.863 14.000 24.075 3.925 Commodity Risk - - - - - - Settlement Risk - - - - - - Option Risk - - - - - - 84.819 155.776 13.863 24.144 44.363 3.925 Interest Rate Risk (*) Common Stock Risk Currency Risk Total Value Subject to Risk (*) The Bank calculates by considering market risk of revenue sharing certificates, forward and swap transactions. 121 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) c) Other price risks: The Bank does not have investments in equity shares; hence it is not subject to share price risk. V. Explanations on Currency Risk Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate changes in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Bank are taken into consideration and value at risk is calculated by using the standard method. Currency risk is managed by considering internal currency limits that are designated as Bank’s risk policies. Within the frame of legal limits defined by FC Net General Position / Equity Ratio and internal currency risk limits determined by Board of Directors , decisions are taken by Asset and Liability Committee meet periodically, take decisions for currency and parity risk hedge and those decisions are implemented strictly. The Bank does not use any derivative instruments for hedging. The Standard Method stated in the statutory reporting is used to measure the currency risk of the Bank. The risk measurements with the context of the Standard Method are performed on a monthly basis. The announced current foreign exchange buying rates of the Bank as of December 31, 2011 and the previous five working days are as follows: December 31, 2011 “FC Evaluation Rate” of the Bank US Dollar Euro Sterling 100 Japanese Yen 1,9065 2,4626 2,9347 2,4475 Previously; 29.12.2011 (Day 1) 1,8897 2,4462 2,9228 2,4203 28.12.2011 (Day 2) 1,8847 2,4626 2,9501 2,4183 27.12.2011 (Day 3) 1,8833 2,4609 2,9444 2,4137 26.12.2011 (Day 4) 1,8809 2,4510 2,9382 2,4029 23.12.2011 (Day 5) 1,8779 2,4497 2,9432 2,4475 The simple arithmetic averages of the major current foreign exchange buying rates of the Bank for the thirty days before the balance sheet date are as follows; TRY 1,8577 per US Dollar, TRY 2,4463 per EUR, TRY 2,8972 per GBP and TRY 2,3823 per 100 JPY. 122 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Information on the Foreign Currency Risk of the Bank: Foreign Currencies (Thousand TRY) EUR USD YEN Other Total Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 180.072 616.682 - 355.471 1.152.225 Due from Banks 120.984 208.973 1.200 12.326 343.483 Current Period - December 31, 2011 Assets Financial Assets at Fair Value Through Profit or Loss (**) - - - - - Money Market Placements - - - - - Financial Assets Available for Sale - - - - - 1.464.200 3.041.048 - - 4.505.248 Subsidiaries, Associates and Entities Under Common Control - - - - - Held to Maturity Investments - - - - - Derivative Financial Assets for Hedging Purposes - - - - - Tangible Assets - - - - - Intangible Assets - - - - - 816 323 - - 1.139 1.766.072 3.867.026 1.200 367.797 6.002.095 Loans (*) Other Assets Total Assets Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Money Market Borrowings Funds Provided from Other Financial Institutions Marketable Securities Issued Sundry Creditors Derivative Financial Liabilities for Hedging Purposes Other Liabilities (**) Total Liabilities Net Balance Sheet Position Net Off-Balance Sheet Position Financial Derivative Assets (***) 49.109 68.242 - 43 117.394 1.266.253 2.232.127 1.089 966.717 4.466.186 - - - - - 517.435 933.116 - 7.279 1.457.830 - - - - - 1.086 1.550 - - 2.636 - - - - - 8.681 65.324 138 58 74.201 1.842.564 3.300.359 1.227 974.097 6.118.247 (76.492) 566.667 (27) (606.300) (116.152) 77.106 (581.698) 38 607.267 102.713 148.988 234.910 38 608.417 992.353 71.882 816.608 - 1.150 889.640 1.535.113 3.567.860 86.954 111.325 5.301.252 Total Assets 1.137.440 3.181.535 5.561 129.542 4.454.078 Total Liabilities 1.324.989 2.672.825 6.457 145.664 4.149.935 (187.549) 508.710 (896) (16.122) 304.143 Net Off-Balance Sheet Position 188.586 (508.585) 907 16.933 (302.159) Financial Derivative Assets 195.760 3.332 907 17.699 217.698 7.174 511.917 - 766 519.857 1.376.636 3.485.728 44.138 93.786 5.000.288 Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period - December 31, 2010 Net Balance Sheet Position Financial Derivative Liabilities Non-Cash Loans (****) (*) TRY 2.919.385 Thousand foreign currency indexed loans are included in loans line (December 31, 2010: TRY 2.564.320 Thousand). (**) In accordance with the principles of the Regulations on the “Measurement and Practices of Bank’s Net Overall FX position Shareholders’ Equity Ratio on a Consolidated and Unconsolidated Basis”, general reserves recorded to expense accounts amounting to TRY 15.111 Thousand (December 31, 2010: TRY 12.045 Thousand) in assets and income accrual from derivative financial instruments amounting to TRY 1.250 Thousand (December 31, 2010 : TRY 2.581 Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY 11.715 Thousand (December 31, 2010: TRY 5.397 Thousand), are not taken into consideration in the currency risk calculation. (***) TRY 350.891 Thousand forward asset purchase commitments are added to derivative financial assets and TRY 236.248 Thousand forward asset sale commitments are added to derivative financial liabilities (December 31, 2010: TRY 22.963 Thousand forward asset purchase commitments, and TRY 56.280 Thousand forward asset sale commitments ). (****) The related balances do not have any effect on off balance sheet position. 123 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Foreign Currency Sensitivity: The Bank is mainly exposed to USD and EUR currency risks. The following table details the Bank’s sensitivity to a 10% increase and decrease in the TRY against USD and EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. A positive number indicates an increase in profit or loss and other equity in the case of short position and a decrease in the case of long position where the TRY strengthens against USD and EUR. Change in Currency Rate in % Effect on Profit or Loss Current Period Prior Period 13 USD 10% increase (1.503) USD 10% decrease 1.503 (13) EUR 10% increase 61 104 EUR 10% decrease (61) (104) VI. Explanations on Interest Rate Risk Since the Bank has interest-free banking operations, it does not have any interest sensitive asset or liability and consequently, it does not have any interest rate risk. VII. Explanations on Liquidity Risk In order to avoid the liquidity risk, the Bank diversifies its funding resources as customer deposits and foreign borrowings, considers the maturity match between assets and liabilities, focuses on strategies especially for the provision of long-term resources and retains its liquid assets in order to provide sufficient liquidity in any market fluctuations. Maturity structure of TRY and FC deposits, cost and change in the total amount are monitored on daily basis by considering the past developments and future expectations. The Bank’s policy is to establish an asset structure that primarily meets all kinds of liabilities by using liquid resources. The Board of Directors of the Bank determines a standard for the liquidity ratios, and applies the standard on a regular basis in order to ensure. The table below gives a summary of the liquidity ratio of the Bank: Current Period 124 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 135,72 110,28 Highest (%) 167,26 121,20 Lowest (%) 112,65 100,63 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Presentation of Assets and Liabilities according to Their Maturities: Current PeriodDecember 31, 2011 Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Total Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 881.872 797.780 - - - - - 1.679.652 Due from Banks Assets 349.592 - 9.773 - - - - 359.365 Financial Assets at Fair Value Through Profit or Loss - 1.250 - - - - - 1.250 Money Market Placements - - - - - - - - 93 - 128.782 254.438 396.324 - - 779.637 Loans (**) - 1.844.532 1.539.782 4.505.279 4.723.556 528.231 - 13.141.380 Held to Maturity Investments - - 77.053 - - - - 77.053 Financial Assets Available for Sale Other Assets - 60.279 - - - - 1.091.483 1.151.762 1.231.557 2.703.841 1.755.390 4.759.717 5.119.880 528.231 1.091.483 17.190.099 41.802 52.433 2.085 21.239 - - - 117.559 3.079.430 4.160.522 933.001 3.606.952 499.579 - - 12.279.484 Funds Provided from Other Financial Instruments - 159.282 66.818 970.477 228.680 32.573 - 1.457.830 Money Market Borrowings - 279.207 - - - - - 279.207 Marketable Securities Issued - - - - - - - - Sundry Creditors 29.581 349.737 - - - - - 379.318 - 169.363 - 51.483 - - 2.455.855 2.676.701 3.150.813 5.170.544 1.001.904 4.650.151 728.259 32.573 2.455.855 17.190.099 (2.069.079) (2.316.880) 753.486 109.566 4.391.621 495.658 (1.364.372) - Total Assets Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Other Liabilities (***) Total Liabilities Net Liquidity Gap Prior Period December 31, 2010 Total Assets 1.701.362 1.820.638 2.110.960 3.491.703 4.357.005 261.732 770.019 14.513.419 Total Liabilities 2.112.022 5.200.415 2.135.824 2.770.754 107.528 1.018 2.185.858 14.513.419 (410.660) (3.379.777) (24.864) 720.949 4.249.477 260.714 (1.415.839) - Net Liquidity Gap (*)Asset items, such as tangible assets, investment in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans which are required for banking operations and which cannot be converted to cash in short-term are included in this column. (**) Loans balance also includes Finance Lease Receivables balance. (***) Equity is presented in the “Undistributed” column under “Other Liabilities”. 125 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Analysis of financial liabilities based on the remaining contractual maturities : The table below is drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. Profit share expenses to be paid on such liabilities are included in this table. “Adjustments” column indicates items that may lead to potential cash flows in the following period. These items are included in maturity analysis, but not included in the balance sheet value of such financial liabilities. December 31, 2011 Funds Collected Funds Borrowed Money Market Borrowings Total December 31, 2010 Funds Collected Funds Borrowed Money Market Borrowings Total Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments Total 3.121.232 - 4.212.955 160.400 935.086 68.475 3.628.191 995.224 499.579 331.087 40.045 (137.401) 12.397.043 1.457.830 - 279.319 - - - - (112) 279.207 3.121.232 4.652.674 1.003.561 4.623.415 830.666 40.045 (137.513) 14.134.080 2.080.702 - 4.668.965 27.026 2.086.494 47.278 2.276.132 513.795 54.289 72.834 1.147 (39.843) 11.166.582 622.237 - - - - - - - - 2.080.702 4.695.991 2.133.772 2.789.927 127.123 1.147 (39.843) 11.788.819 Analysis of contractual expiry by maturity of the Bank’s derivative financial instruments: December 31, 2011 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total December 31, 2010 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total 126 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total 662.842 662.842 662.842 - - - - 662.842 662.842 662.842 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total 254.867 254.867 254.867 208.710 208.710 208.710 - - - 463.577 463.577 463.577 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VIII. Presentation of Financial Assets and Liabilities at Fair Value As the loan portfolio has fixed profit sharing rates, estimated fair value is calculated by using the discounted cash flows. The table below summarizes the book value and fair value of the financial assets and liabilities. Book value is the sum of the acquisition value and accumulated profit share accruals. Financial Assets Banks and Other Financial Institutions (*) Financial Assets Available For Sale Held to Maturity Investments Loans (**) Financial Liabilities Funds Collected From Banks (***) Other Current and Profit Sharing Accounts (***) Funds Provided From Other Financial Institutions Sundry Creditors Money Market Borrowings Book Value Current Period 15.717.596 Fair Value Current Period 15.695.447 Prior Period 13.405.855 Prior Period 14.183.059 1.719.526 2.017.514 1.719.526 2.017.514 779.637 394.577 779.637 394.577 77.053 13.141.380 14.513.398 117.559 77.032 10.916.732 12.069.662 12.916 77.282 13.119.002 14.457.976 117.559 79.962 11.691.006 12.069.758 12.916 12.279.484 11.153.666 12.279.484 11.153.666 1.457.830 622.237 1.402.408 622.333 379.318 279.207 280.843 - 379.318 279.207 280.843 - (*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value. (**) In order to calculate the fair value of loans, current profit sharing rates are used as of the balance sheet date. Loan balance also includes finance lease receivables. Fair values of loans are calculated under the assumption that all installments are distributed equally. (***) Book value of the funds collected approximates to their fair value as it is revalued with the year end unit values. The following table shows an analysis of financial instruments recorded at fair value, between those whose fair value is recorded on quoted market prices, those involving valuation techniques where all model inputs are observable in the market and, those where the valuation techniques involves the use of non observable inputs: December 31, 2011 Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total 1st Level TRY 2nd Level TRY 3rd Level TRY 399.250 399.250 1.250 380.294 381.544 - - 11.715 11.715 - 127 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) December 31, 2010 Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available For Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total 1st Level TRY 2nd Level TRY 3rd Level TRY 103.400 103.400 2.581 291.084 293.665 - - 5.397 5.397 - IX. Explanations Related to Transactions Carried out on Behalf of Other Parties and Fiduciary Assets The Bank does not deal with fiduciary operations or transactions made on behalf of other. 128 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Assets 1. Information on Cash and Balances with Central Bank of the Republic of Turkey 1.1.Information on Cash: Current Period Cash in TRY/ Foreign Currency Central Bank of the Republic of Turkey Other Total TRY 113.521 412.559 1.347 527.427 FC 204.602 947.602 21 1.152.225 Prior Period TRY 87.612 1.261.233 8.328 1.357.173 FC 158.106 569.669 17 727.792 1.2.Information on Central Bank of the Republic of Turkey Accounts: Unrestricted Demand Deposit Unrestricted Time Deposit Restricted Time Deposit Other (*) Total Current Period TRY 412.559 412.559 FC 149.823 797.779 947.602 Prior Period TRY 1.261.233 1.261.233 FC 248.965 320.704 569.669 (*) Stands for the reserve deposit kept in Central Bank of the Republic of Turkey in relation to foreign currency liabilities. According to the communiqué No: 2005/1 on “Reserve Deposits”, the banks operating in Turkey are required to keep reserve deposit at the rates varying from 5% to 11% (December 31, 2010: 6 % for all TRY liabilities) for TRY liabilities and at the rates varying from 6% to 11% (December 31, 2010: 11% for all FC liabilities) for foreign currency liabilities mainly denominated in U.S. Dollar and Euro depending on the maturity of the liabilities. Profit share has not paid for reserve deposits. 2. Information on Financial Assets at Fair Value through Profit or Loss 2.1.Information on Financial Assets at Fair Value through Profit or Loss Blocked/Given as Collateral or Subject to Repurchase Agreements: None. 2.2.Positive Differences related to Derivative Financial Assets Held-for-Trading: Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total Current Period TRY - FC 1.121 129 1.250 Prior Period TRY - FC 67 2.514 2.581 (*) Includes forward asset purchase/sale commitments. 129 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3. Information on Banks 3.1.Information on Banks and Other Financial Institutions: Current Period TRY 15.882 15.882 15.882 Banks Domestic Foreign Branches and Head Office Abroad Total FC 343.483 261.685 81.798 343.483 Prior Period TRY 36.237 36.237 36.237 FC 150.375 32.447 117.928 150.375 3.2. Information on Foreign Bank Accounts: European Union Countries USA, Canada OECD Countries (*) Off-Shore Banking Regions Other Total Unrestricted Amount Current Period Prior Period 24.905 34.515 36.866 74.871 9.041 7.406 39 1.174 1.136 72.025 117.928 Restricted Amount Current Period Prior Period 9.773 9.773 - (*) OECD countries other than European Union countries, USA and Canada. 4. Information on Financial Assets Available for Sale 4.1. Information on Financial Assets Available for Sale Given as Collateral/Blocked or Subject to Repurchase Agreements: 4.1.1 Information on financial assets Available for Sale given as collateral or blocked: None. 4.1.2 Financial assets Available for Sale subject to repurchase agreements: As of December 31, 2011, the Bank has revenue sharing certificates in “Available for Sale Financial Assets” portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY 322.459 Thousand nominal value (December 31, 2010: None) and TRY 325.712 Thousand fair value (December 31, 2010: None). 4.2.Information on Financial Assets Available for Sale: As of December 31, 2011, the Bank has revenue sharing certificates which have TRY 775.000 Thousand nominal value (December 31, 2010: TRY 375.000 Thousand) and TRY 779.544 Thousand fair value at “Available for Sale Financial Assets” portfolio (December 31, 2010: TRY 394.484 Thousand). Debt Securities Quoted on a Stock Exchange Not Quoted (*) Share Certificates Quoted on a Stock Exchange Not Quoted Impairment (-) Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 130 Current Period 783.294 399.250 384.044 93 93 (3.750) 779.637 Prior Period 394.484 103.400 291.084 93 93 394.577 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5. Information on Loans 5.1. Information on All Types of Loans and Advances Given to Shareholders and Employees of the Bank: Current Period Cash Prior Period Non-Cash Direct Loans Granted to Shareholders Corporate Shareholders Real Person Shareholders Indirect Loans Granted to Shareholders Loans Granted to Employees Total 57.567 22.986 34.581 148.505 14.291 220.363 Cash 2.565 1.870 695 162.080 118 164.763 Non-Cash 78.453 33.583 44.870 94.095 9.870 182.418 3.138 2.655 483 39.644 118 42.900 5.2.Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Standard Loans and Other Receivables Cash Loans Loans Discount Notes Export Loans Import Loans Business Loans Consumer Loans Credit Cards Investments on Profit/Loss Partnership Precious Metals Loans Loans Given to Financial Sector International Loans Other Other Receivables Total Closely Monitored Loans and Other Receivables (*) Loans and Other Restructured or Receivables Rescheduled Loans and Other Receivables Restructured or Rescheduled 132.974 171.345 8.505.578 1.615.760 927.066 2.789 92.516 518 2.569 11.641 273.119 12.363 6.690 111.799 379.901 877 1.010 7.623 - - - 256 429.707 35.376 11.825.685 758 1 99.151 27.782 7.198 338.793 69.914 16.499 580.000 (*) In addition to the closely monitored loans, the Bank also has TRY 1.384 Thousand of closely monitored finance lease receivables. (December 31, 2010: TRY 320 Thousand). 5.3.Loan Distribution based on the Maturity Structure: Standard Loans and Other Receivables Short-Term Loans and Other Receivables Loans Other Receivables Medium-Term and Long-Term Loans Loans Other Receivables Closely Monitored Loans and Other Receivables Loans and Other Restructured or Receivables Rescheduled Loans and Other Receivables Restructured or Rescheduled 3.721.056 3.275 82.924 18.031 3.721.056 - 3.275 - 82.924 - 18.031 - 8.104.629 95.876 255.869 561.969 8.104.629 - 95.876 - 255.869 - 561.969 131 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.4.Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel Credit Cards: Consumer Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Retail Credit Cards-TRY With Installments Without Installment Retail Credit Cards-FC With Installments Without Installment Personnel Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Personnel Credit Cards-TRY With Installments Without Installment Personnel Credit Cards-FC With Installments Without Installment Overdraft Account-TRY(Individuals) Overdraft Account-FC (Individuals) Total 132 Short Term 4.725 1.882 1.075 532 1.236 879.849 273.318 606.531 107 5 63 39 6.338 2.614 3.724 891.019 Medium-term and Long-term 1.612.026 1.498.834 105.304 7.888 4.938 4.812 65 61 13.686 13.686 7.715 3.339 4.053 323 7 7 124 124 1.638.496 Total 1.616.751 1.500.716 106.379 8.420 1.236 4.938 4.812 65 61 893.535 287.004 606.531 7.822 3.344 4.116 362 7 7 6.462 2.738 3.724 2.529.515 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.5.Information on Installment Basis Commercial Loans and Corporate Credit Cards: Installment Basis Commercial Loans-TRY Business Loans Vehicle Loans General Purpose Loans Other Installment Basis Commercial Loans-FC Indexed Business Loans Vehicle Loans General Purpose Loans Other Installment Basis Commercial Loans-FC Business Loans Vehicle Loans General Purpose Loans Other Corporate Credit Cards-TRY With Installments Without Installment Corporate Credit Cards-FC With Installments Without Installments Overdraft Account-TRY(Corporate) Overdraft Account- FC (Corporate) Total Short Term 21.663 51 21 21.591 37.267 1.850 35.417 58.930 Medium-term and Long-term 16.429 9.112 7.317 71 71 16.500 Total 38.092 9.163 7.338 21.591 37.338 1.921 35.417 75.430 5.6.Allocation of Loans according to Borrowers: Public Sector Private Sector Total Current Period 1.183 12.842.446 12.843.629 Prior Period 1.439 10.809.822 10.811.261 Current Period 12.315.468 528.161 12.843.629 Prior Period 10.452.831 358.430 10.811.261 Current Period 107.795 107.795 Prior Period 77.494 77.494 5.7. Domestic and Foreign Loans: Domestic Loans Foreign Loans Total 5.8.Loans Granted to Subsidiaries and Associates: Loans Granted to Subsidiaries and Associates Directly Loans Granted to Subsidiaries and Associates Indirectly Total 133 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.9. Specific Provisions Provided against Loans: Current Period 40.541 62.435 202.612 305.588 Loans and Receivables with Limited Collectability Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Total Prior Period 6.737 37.039 259.840 303.616 5.10. Information on Non-Performing Loans (Net): 5.10.1. Information on Loans and Other Receivables included in the Non-Performing Loans which are Restructured or Rescheduled: Current Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Prior Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables III Group Loans and Receivables with Limited Collectability IV Group Loans and Receivables with Doubtful Collectability V Group 10.751 962 9.789 13.290 1.468 11.822 1.700 272 1.428 2.779 2.116 663 4.839 2.344 2.495 7.333 3.966 3.367 IV Group Loans and Receivables with Doubtful Collectability 90.907 10.488 231.489 (133.298) (52.762) 146.824 (62.435) 84.389 V Group Uncollectible Loans and Receivables 5.10.2. Information on Movement of Non-Performing Loans: Ending Balance of Prior Period Additions in the Current Period (+) (*) Transfer from Other NPL Accounts (+) Transfer to Other NPL Accounts (-) Collections in the Current Period (-) (*) Write offs (-) Corporate and Commercial Loans Retail Loans Credit Cards Other Ending Balance of the Current Period Specific Provisions (-) Net Balance at the Balance Sheet III Group Loans and Receivables with Limited Collectability 42.035 504.261 (231.489) (103.531) 211.276 (40.541) 170.735 (*) Movements between loan groups presented double within additions and collections in the interim financial reporting periods are offset by the year end. 134 Uncollectible Loans and Receivables 314.209 45.527 133.298 (68.945) (166.459) (111.642) (1.647) (51.179) (1.991) 257.630 (202.612) 55.018 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.10.3. Information on Foreign Currency Non-Performing Loans and Other Receivables: Group III Loans and Receivables with Limited Collectability Group IV Loans and Receivables with Doubtful Collectability - - 1.697 (1.257) 440 - - 1.478 (1.087) 391 Group III Loans and Receivables with Limited Collectability Group IV Loans and Receivables with Doubtful Collectability Group V Current Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) 211.276 (40.541) 170.735 - 146.824 (62.435) 84.389 - 257.630 (202.612) 55.018 - Prior Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) 42.035 (6.737) 35.298 - 90.907 (37.039) 53.868 - 314.209 (259.840) 54.369 - Current Period Ending Balance Specific Provisions (-) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) Net Balance at the Balance Sheet Group V Uncollectible Loans and Receivables 5.10.4. Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: Uncollectible Loans and Receivables 5.10.5. Non-Performing Loans and Main Guidelines of Liquidation Process for Loans and Receivables: If the Bank has collateral components stated in Article 9 of the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”, such components are immediately liquidated by applying managerial or legal procedures. In the absence of collateral component, even if there is an indication of insolvency, the Bank reviews the financial intelligence of the debtor systematically to determine subsequently acquired property holdings and applies the legal procedures. Prior and subsequent to the legal procedures, as a result of reviews performed regarding the financial information provided, the Bank intends to liquidate its loans and other receivables from the companies that have potential development in the production and consequent contribution to the economy by means of the rescheduled agreements. 135 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.10.6. Explanation on Write–off Policy: Provision allocations arising from during or after the transfer of any loan receivables to “Non-performing loans” are performed by the Bank’s Loan Monitoring Department within the framework of the Banking Regulations and Supervisory Agency. Additionally, loans are written-off of against the assets, at least once a year, by the Credit Monitoring Agency to the extent that at least one of the following below is met and provision is fully made for all non-performing loans in accordance with the decision made by the Board of Directors: - Receivables with the document obtained from Collections Agency stating that the receivable cannot be followed up or; - Receivables assessed as uncollectible within existing conditions by the Law Department although the collection follow up process is going on. 5.11. Other Explanations and Disclosures: The information related to loan quality is stated as below: Current Period – December 31, 2011 Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 5.496.990 3.881.933 1.616.278 929.635 11.924.836 385.712 512.141 13.240 7.700 918.793 287.399 263.544 7.009 57.778 615.730 6.170.101 4.657.618 1.636.527 995.113 13.459.359 (*) The Bank classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated November 18, 2005 and numbered 25997 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”. Prior Period – December 31, 2010 Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 4.797.616 3.468.651 913.669 723.690 9.903.626 541.809 319.019 16.660 30.147 907.635 67.751 275.436 6.790 97.174 447.151 5.407.176 4.063.106 937.119 851.011 11.258.412 (*) The Bank classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated November 18, 2005 and numbered 25997 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”. The details of loan guarantees and leasing portfolio are stated as below: Current Period (*)(**)(***) Residential, Commercial or Industrial Real Estates Financial Assets Other Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 4.812.274 365.376 99.616 5.277.266 516.885 1.392.830 6.721.989 113.870 168.083 647.329 15.500 120.786 235.902 646.255 1.681.699 7.605.220 (*) Individual loan agreements, general loan agreements, foreign currency cheques, suretyships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333. 136 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Prior Period (*)(**)(***) Residential, Commercial or Industrial Real Estates Financial Assets Other Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 2.806.286 338.661 83.668 3.228.615 337.821 1.220.199 4.364.306 112.982 184.860 636.503 25 74.116 157.809 450.828 1.479.175 5.158.618 (*) Individual loan agreements, general loan agreements, foreign currency cheques, surety ships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or in cumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333. Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Current Period – December 31, 2011 Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Less than 30 Days (*) 31-60 Days 61-90 Days More than 90 Days Total 304.216 388.047 2.126 1.730 1.384 697.503 61.091 49.282 6.729 5.970 123.072 20.405 74.812 4.385 99.602 - 385.712 512.141 13.240 7.700 1.384 920.177 (*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY 621.618 Thousand of such amount is not overdue as of December 31, 2010 (Finance Lease Receivable TRY 1.384 Thousand). Prior Period – December 31, 2010 Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Less than 30 Days (*) 31-60 Days 61-90 Days More than 90 Days Total 443.294 175.747 914 405 33 620.393 32.530 43.752 9.352 21.263 2 106.899 65.985 99.520 6.394 8.479 285 180.663 - 541.809 319.019 16.660 30.147 320 907.955 (*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY 608.548 Thousand of such amount is not overdue as of December 31, 2009 (Finance Lease Receivable TRY 39 Thousand). 5.12. Other Explanations and Disclosures: Explanations on the loans and other receivables of the Bank for which the payment schedules are revised as per the agreement: Based on the Article 4 of the Communiqué “Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves”, the number of loans, total amount and extension periods for which the payment schedules are revised after May 28, 2011 are as follows: Loans Quantity Amount Up to 1 Month 1-3 Months - 1 54 Extension Period 3-12 Months 1-5 Years 4 338 9 1.871 Over 5 Years Total 2 22.948 16 25.211 137 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 6. Information on Held to Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: 6.1.1 Information on Held to Maturity Investments Given as Collateral or Blocked: None. 6.1.2 Held to Maturity Investments Subject to Repurchase Agreements: As of December 31, 2011, the Bank has revenue sharing certificates in “Held to Maturity Investments” portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY 42.000 Thousand nominal value (December 31, 2010: None) and TRY 43.269 Thousand fair value (December 31, 2010: None). 6.2. Information on Government Bonds Classified as Held- to-Maturity Investments: The Bank has TRY 77.053 Thousand of revenue sharing certificate as of December 31, 2011. Current Period Government Bonds Treasury Bills Other Public Debt Securities Total TRY 77.053 77.053 Prior Period FC - TRY 77.032 77.032 FC - TRY 77.032 51.435 25.597 77.032 FC - 6.3. Information on Held to Maturity Investments: Current Period Debt Securities Quoted on a Stock Exchange Not Quoted (*) Impairment Provision (-) Total TRY 77.053 51.446 25.607 77.053 Prior Period FC - (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 6.4. Movement of Held to Maturity Investments: Beginning Balance Foreign Currency Differences on Monetary Assets Purchases During Year Disposals through Sales and Redemptions Impairment Provision (-) Valuation Effects Closing Balance 138 Current Period 77.032 21 77.053 Prior Period 76.460 50.000 (50.000) 572 77.032 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Information on Associates 7.1.Information on Associates: Company Name (1) (2) (3) (4) Address (City/Country) İstanbul/Turkey İstanbul/ Turkey Dakar/Senegal Ankara/ Turkey Yeni Mağazacılık A.Ş. (*) Landmark Holding A.Ş. (*) Tamweel Holding S.A. (**) Kredi Garanti Fonu A.Ş. Bank’s Share Percentage, If Different-Voting Percentage (%) 21,84% 21,84% 40,00% 1,67% Bank’s Risk Group Share Percentage (%) 21,84% 21,84% 40,00% 1,67% (*) The Bank participated in Yeni Mağazacılık A.Ş. and Landmark Holding A.Ş. with the Financing Method for Participation Banks explained in the regulation No: 19 regarding “Banks’ Lending Transactions” published and became effective in the Official Gazette numbered 26333, dated November 1, 2006 by means of joint investment method. These are recorded as associates in accordance with the Uniform Chart of Accounts published in the Official Gazette numbered 26415 and dated January 26, 2007. (**) As of February 4, 2010, the Bank has paid for TRY 21.548 Thousand and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector (“ICD”) which is a group establishment of the Islamic Development Bank (“IDB”). TRY 9.077 Thousand and TRY 4.900 Thousand has paid for capital increase respectively on June 8, 2010 and October 3, 2011. As of the reporting date capital registry process has not been finalized yet. 7.2.Information on Associates: (1) (*) (2) (*) (3) (**) (4) (*) Total Assets Equity Total Fixed Assets Profit Share Income 277.131 43.453 706.650 207.899 (116.811) 43.231 104.781 201.048 84.490 43.402 15.707 2.904 6 25.121 3.979 Income from Marketable Securities Portfolio - Current Period Profit/Loss (93.799) (192) 13.158 7.672 Prior Period Profit/Loss (86.383) (1.486) 8.539 7.632 Fair Value (***) 175.277 (****) 56.966 - (*) Financial information is provided from the associate’s unaudited financial statements as of December 31, 2011. (**) Financial information is provided from the associate’s not reviewed financial statements as of September 30, 2011. (***) It is expertise value of the Bank’s associate, Yeni Mağazacılık A.Ş., as of February 4, 2010. (****) It is the expertise value of the Bank’s associate, Landmark Holding A.Ş., as of February 9, 2010. 7.3.Movement of Associates: Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained Dividends from Current Year Income Sales Revaluation Increase Provision for Diminution in Value Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) Current Period 86.606 10.267 10.267 96.873 1.000 1,67%-40,00% Prior Period 45.063 41.543 41.543 86.606 2.000 1,67%-40,00% (*) It consists of capital commitment amounting to TRY 1.000 Thousand to Bank’s associate, Kredi Garanti Fonu A.Ş. (December 31, 2010: TRY 2.000 Thousand). 7.4.Sectoral Information on the Investments in Associates and the Related Carrying Amounts: Banks Insurance Companies Factoring Companies Leasing Companies Finance Companies Other Subsidiaries Current Period 96.873 Prior Period 86.606 139 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 8. Information on Subsidiaries (Net) 8.1.Information on Subsidiaries: Company Name (1) (2) (3) (4) (5) (6) Address (City/ Country Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Asya Kart Teknoloji Hizmetleri A.Ş. Asya Emeklilik ve Hayat A.Ş. (*) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. Işık Sigorta A.Ş. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Ankara/Türkiye İstanbul/Türkiye İstanbul/Türkiye İstanbul/Türkiye İstanbul/Türkiye İstanbul/Türkiye Bank’s Share Percentage, If DifferentVoting Percentage (%) 99,93% 99,50% 97,99% 95,00% 65,42% 22,94% Bank’s Risk Group Share Percentage (%) 99,93% 99,50% 97,99% 95,00% 65,42% 22,94% (*) The Bank has participated to Asya Emeklilik ve Hayat A.Ş. dated on July 1, 2011. 8.2. Information on Subsidiaries: (*) Total Assets Equity Total Fixed Assets (1) (2) (3) (4) (5) (6) 73.218 5 9.002 211 205.787 137.297 64.004 2 8.778 208 74.097 108.661 1.784 472 1.467 34.728 Profit Share Income 91 255 12 9.056 402 Income from Marketable Securities Portfolio (5) 1.236 - Current Period Profit/Loss Prior Period Profit/Loss Fair Value 149 9 (1.221) 1 4.606 (1.903) 414 (9) 5 1.106 842 (**) 190.616 (***) 192.051 (*) Financial information is provided from the unaudited financial statements of subsidiaries as December 31, 2011. (**) It is expertise value of the Bank’s subsidiary, Işık Sigorta A.Ş., as of February 4, 2010. (***)VAT included fair value is TRY 192.051 Thousand, including land, per expertise appraisal dated January 26, 2010. 8.3. Movement of Subsidiaries: Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained Dividends from Current Year Income Sales Revaluation Increase Provision for Diminution in Value Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) Current Period 144.963 9.798 9.798 154.761 9.798 22,94%-99,93% (*) It consists of capital commitment amounting to TRY 9.798 Thousand to the Bank’s subsidary, Asya Emeklilik ve Hayat A.Ş. 140 Prior Period 139.810 5.153 5.153 144.963 22,94%-99,93% Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 8.4.Sectoral Information on the Financial Subsidiaries and the Related Carrying Amounts: Subsidiaries Banks Insurance Companies Factoring Companies Leasing Companies Finance Companies Other Subsidiaries Current Period 50.154 47.655 Prior Period 50.154 37.857 8.5.Subsidiaries Quoted on the Stock Exchange: None. 9. Information on Entities under Common Control None. 10. Information on Finance Lease Receivables (Net) 10.1. Presentation of Finance Lease Receivables According to Their Remaining Maturities: Less than 1 Year 1 to 4 Years More than 4 Years Total Current Period Gross 77.197 183.888 131.344 392.429 Prior Period Gross 5.562 106.620 9.532 121.714 Net 58.572 139.523 99.656 297.751 Net 4.820 92.391 8.260 105.471 10.2. Information on Net Investments in Finance Leases: Gross Finance Lease Receivables Unearned Finance Lease Income (-) Net Receivable from Finance Leases Current Period 392.429 (94.678) 297.751 Prior Period 121.714 (16.243) 105.471 11. Information on Derivative Financial Assets for Hedging Purposes None. 141 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 12. Information on Tangible Assets Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Total Cost Opening Balance - January 1, 2011 Additions Disposals Transfers (**) Impairment Losses /(Reversal) (***) Closing Balance - December 31, 2011 12.454 (8.123) (111) 4.220 36.106 (3.523) 32.583 2.129 803 (714) (283) 1.935 226.189 177.100 (51.161) (2.274) 1.228 351.082 205.116 31.117 (6.902) 229.331 481.994 209.020 (70.423) (2.557) 1.117 619.151 Accumulated Depreciation (-) Opening Balance - January 1, 2011 Depreciation Expense Disposals Transfers (**) Impairment (Losses) /Reversal (***) Closing Balance - December 31, 2011 2.442 282 (1.970) 754 26.667 5.961 (3.387) 29.241 397 312 (134) 575 6.138 5.378 (1.649) (76) 392 10.183 92.898 37.596 (5.788) 124.706 128.542 49.529 (12.928) (76) 392 165.459 Net Book Value - December 31, 2010 10.012 9.439 1.732 220.051 112.218 353.452 Net Book Value - December 31, 2011 3.466 3.342 1.360 340.899 104.625 453.692 (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture, and other fixed assets. (**) TRY 3.117 Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY 5.598 Thousand of assets to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. (***) In the current period, the Bank has provided an additional impairment provision for assets disposed off amounting TRY 1.577 Thousand and reversed TRY 2.413 Thousand impairment due to disposals. In the current period, the Bank has provided an additional provision for buildings amounting TRY 111 Thousand. Cost Opening Balance - January 1, 2010 Additions Disposals Transfers (**) Impairment (Losses) / Reversal (***) Closing Balance - December 31, 2010 Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Total 12.112 342 12.454 38.917 (2.811) 36.106 1.293 1.873 (1.037) 2.129 186.864 104.400 (69.279) (1.234) 5.438 226.189 163.827 45.664 (4.375) 205.116 403.013 151.937 (77.502) (1.234) 5.780 481.994 2.127 309 21.632 7.370 703 338 4.127 3.691 64.530 32.349 93.119 44.057 Accumulated Depreciation(-) Opening Balance - January 1, 2010 Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale Transfers (**) Impairment (Losses) / Reversal (***) Closing Balance - December 31, 2010 - (2.335) (644) (1.875) (3.981) (8.835) 6 2.442 26.667 397 (95) 290 6.138 92.898 (95) 296 128.542 Net Book Value - December 31, 2009 9.985 17.285 590 182.737 99.297 309.894 Net Book Value - December 31, 2010 10.012 9.439 1.732 220.051 112.218 353.452 (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture and other fixed assets. (**) TRY 7.205 Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY 8.344 Thousand of real estate to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. (***) During the period, the Bank has provided an additional impairment of TRY 1.619 Thousand and reversed TRY 7.103 Thousand impairment due to disposals. 142 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 13. Information on Intangible Assets 13.1. Opening and Ending Book Values and Accumulated Depreciation Balances: Book Value Accumulated Depreciation Net Book Value Current Period 24.972 (13.960) 11.012 Prior Period 20.728 (10.309) 10.419 13.2. Intangible Assets Movement Table: Computer Software Cost Opening Balance- January 1, 2011 20.728 Additions Disposals Closing Balance- December 31, 2011 4.244 24.972 Accumulated Amortization (-) Opening Balance- January 1, 2011 Amortization Expense Disposals Closing Balance- December 31, 2011 10.309 3.651 13.960 Net Book Value- December 31, 2010 10.419 Net Book Value- December 31, 2011 11.012 Computer Software Cost Opening Balance- January 1, 2010 17.261 Additions Disposals Closing Balance- December 31, 2010 3.467 20.728 Accumulated Amortization (-) Opening Balance- January 1, 2010 Amortization Expense Disposals Closing Balance- December 31, 2010 7.037 3.272 10.309 Net Book Value- December 31, 2009 10.224 Net Book Value- December 31, 2010 10.419 14. Information on Investment Properties None (December 31, 2010: None). 143 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 15. Information on Deferred Tax Asset As of December 31, 2011, deferred tax asset computed on the temporary differences, except for general loan provision and provision for possible risks, is TRY 19.398 Thousand, and is recorded in the deferred tax asset account. Deferred Commission Income Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Valuation of Financial Assets Tangible Assets Tax Base Differences Deferred Tax Asset (net) Current Period Deferred Tax Base Deferred Tax Asset/(Liability) 60.881 12.176 28.854 5.771 5.726 1.145 16.133 3.227 (14.604) (2.921) 96.990 19.398 Deferred Commission Income Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Tangible Assets Tax Base Differences Valuation of Financial Assets Other Deferred Tax Asset (net) Prior Period Deferred Tax Base Deferred Tax Asset/(Liability) 33.145 6.629 23.058 4.612 21.233 4.247 (23.362) (4.672) (5.038) (1.008) 17 3 49.053 9.811 Movement of the deferred tax asset as of December 31, 2011 and December 31, 2010 is stated as below: Deferred Tax Asset, January 1 Deferred Tax Recognized Directly Under Equity Deferred Tax Benefit /(Charge), December 31 Deferred Tax Asset Current Period 9.811 5.083 4.504 19.398 Prior Period 4.754 (953) 6.010 9.811 16. Information on Assets Held for Sale Assets held for sale consist of tangible assets which are obtained from non-performing loans and they are recognized as required in accordance with the prevailing the Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the Official Gazette numbered 26333 in the unconsolidated financial statements. As of December 31, 2011, assets held for sale amounts to TRY 8.724 Thousand (December 31, 2010: TRY 6.509 Thousand). Opening Balance- January 1 Additions Outflows Transfers (net) (*) Impairment Closing Balance-December 31 Current Period 6.509 3.239 (3.468) 2.481 (37) 8.724 Prior Period 9.196 (3.791) 1.139 (35) 6.509 (*) TRY 3.117 Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY 5.598 Thousand of assets to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. 17. Information on Other Assets Other assets amount to TRY 97.160 Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2010: TRY 95.625 Thousand). 144 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) II. Explanations and Disclosures Related to the Liabilities 1.1.Information on Maturity Structure of Deposits: Current Period I. Real Persons Current Deposits-TRY II. Real Persons Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V. Real Persons Current Deposits-FC VI. Real Persons Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools-TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total(I+II+…..+IX+X+XI) Demand Up to 1 Month Up to 3 Month Up to 6 Month Up to 9 Month Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts Total 560.652 - - - - - - - 560.652 - 121.309 2.314.661 - 4.951.603 951.137 27.575 893.823 28.391 - 1.552.244 - 799.747 163.642 - - - - - - 951.137 27.575 893.823 28.391 1.183 - - - - - - - 1.183 165 165 - 227.521 82 212.946 14.474 272.785 10 266.556 6.139 35.508 81 13.819 21.608 - 18.441 6.071 12.370 795.816 2.590 680.261 112.215 - 165 165 1.350.071 2.763 1.179.653 166.806 - 19 80 - - - 750 - 849 - - - - - - - - - 236.574 - - - - - - - 236.574 - 101.823 - 390.367 386.765 70.884 807.731 - 1.757.570 420.885 - - - - - - - 420.885 350.762 - - - - - - - 350.762 28.486 - - - - - - - 28.486 41.637 15.737 25.900 - 198.825 30 147.610 634 264.490 262.053 342 91.093 12.296 78.772 - 59.129 35.292 - 603.030 46 575.303 23.335 - 41.637 15.737 25.900 1.216.567 76 1.032.554 103.083 - 1.987 10 25 - 1.210 1.865 - 5.097 951.984 48.564 - 2.085 - - - 22.627 - 2.481 - - 75.757 951.984 - - - - - - - - - - - - - - - - - - - - - - - - - - - 3.121.232 2.368.957 1.723.787 361.127 - 300.702 4.521.238 - 12.397.043 145 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Demand Prior Period I. Real Persons Current Deposits-TRY II. Real Persons Profit Sharing Accounts-TRY III. Other Current AccountsTRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing AccountsTRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V. Real Persons Current Deposits-FC VI. Real Persons Profit Sharing Accounts-FC VII. Other Current AccountsFC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII. Profit Sharing AccountsFC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total(I+II+…..+IX+X+XI) 146 Up to 1 Month Up to 3 Month Up to 6 Up to 9 Month Month - Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts - Total 487.918 - - - - - 487.918 - 1.851.180 1.175.698 254.717 - 190.314 1.471.293 - 4.943.202 - 1.851.180 1.175.698 254.717 - 190.314 1.471.293 - 4.943.202 878.481 - - - - - - - 878.481 90.765 771.459 14.455 - - - - - - - 90.765 771.459 14.455 829 - - - - - - - 829 973 973 - - - - - - - - 973 973 - - 466.431 550.401 61.145 - 12.531 262.179 - 1.352.687 - 5 455.276 10.653 64 508.302 41.960 28.153 32.992 - 8.679 3.852 243.774 17.569 - 69 1.244.184 107.026 - 497 75 - - - 836 - 1.408 - - - - - - - - - 261.028 - - - - - - - 261.028 - 523.290 544.120 122.153 - 132.089 474.593 - 1.796.245 329.903 - - - - - - - 329.903 302.274 - - - - - - - 302.274 20.243 - - - - - - - 20.243 7.386 5.172 2.214 - - - - - - - - 7.386 5.172 2.214 - - 252.706 457.861 120.325 - 35.627 127.227 - 993.746 - 52 231.416 588 447.709 5.405 37.631 79.313 - 34.664 - 112.202 11.712 - 52 863.622 97.018 - 20.629 211 3.381 - 963 3.313 - 28.497 123.372 21 - 4.536 - - - - - - 4.557 123.372 - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.080.702 3.093.607 2.728.080 558.340 - 370.561 2.335.292 - 11.166.582 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 1.2.Current and Participation Accounts Attributable to Real Entities/Persons under the Guarantee of Saving Deposit Insurance Fund Exceeding the Limit of the Deposit Insurance Fund: Under the Guarantee of Saving Deposit Insurance Current Period Prior Period Real Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities TRY Accounts FC Accounts Foreign Branches’ Deposits under Foreign Authorities’ Insurance Off-shore Banking Regions’ Deposits under Foreign Authorities’ Insurance Exceeding the Limit of Saving Deposit Insurance Current Period Prior Period 3.825.673 3.503.770 4.577.635 4.036.931 2.775.039 1.050.634 2.854.573 649.197 2.737.187 1.840.448 2.545.285 1.491.646 - - - - - - - - 1.3.Current and Profit Sharing Accounts which are not under the Guarantee of Deposit Insurance Fund: Deposits and Other Accounts held at Foreign Branches Deposits and Other Accounts held by Shareholders and their Relatives Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives Deposits and Other Accounts held as Assets subject to the Crime defined in the Article 282 of the Turkish Criminal Code no. 5237 dated 26 September 2004 Deposits at Depository Banks established for Off-Shore Banking Activities in Turkey Total Current Period 26.121 32.769 58.890 2. Information on Derivative Financial Liabilities Held for Trading As of December 31, 2011, derivative financial liabilities held for trading amounts to TRY 11.715 Thousand (December 31, 2010: TRY 5.397 Thousand). Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total Current Period TRY - FC 2.312 9.403 11.715 Prior Period TRY - FC 176 5.221 5.397 (*) Includes forward asset purchase/sale commitments. 3. Information on Borrowings 3.1. Information on Banks and Other Financial Institutions: Loans from Central Bank of the Republic of Turkey From Domestic Banks and Institutions From Foreign Banks, Institutions and Funds Total Current Period TRY FC 24.821 1.433.009 1.457.830 Prior Period TRY - FC 45.096 577.141 622.237 147 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3.2. Maturity Analysis of Borrowings: Short-Term Medium-Term and Long-Term Total Current Period TRY - FC 938.119 519.711 1.457.830 Prior Period TRY - FC 545.027 77.210 622.237 3.3.Additional Explanation Related to the Concentrations of the Bank’s Major Liabilities: None. 4. Other Liabilities with Exceeding 10% of the Balance Sheet Total (Excluding Off-Balance Sheet Commitments) and the Breakdown of Such Liabilities Constituting at Least 20% of the Grand Total Other liability items amount to TRY 283.839 Thousand and do not exceed 10% of the total balance sheet total (December 31, 2010: TRY 271.161 Thousand). 5. Information on Financial Lease Obligations None. 6. Information on Derivative Financial Liabilities for Hedging Purposes None. 7. Explanations on Provisions 7.1.Information on General Loan Loss Provision: General Loan Loss Provision Provision for First Group Loans and Receivables Profit Sharing Accounts’ Share The Bank’s Share Other Provision for Second Group Loans and Receivables Profit Sharing Accounts’ Share The Bank’s Share Other Provision for Non Cash Loans 148 Current Period 131.066 98.783 47.908 50.875 15.538 3.929 11.609 16.745 Prior Period 117.204 85.241 43.833 41.408 15.711 3.084 12.627 16.252 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7.2.Movement of General Loan Loss Provisions: Current Period Opening Balance - January 1, 2011 Charge for Period Reversal of Prior Period Expenses Profit Sharing Accounts Share Closing Balance- December 31, 2011 Prior Period Opening Balance – January 1, 2010 Charge for Period Reversal of Prior Period Expenses Profit Sharing Accounts Share Closing Balance- December 31, 2010 117.204 9.768 (3.925) 8.019 131.066 89.368 22.088 (1.561) 7.309 117.204 7.3.Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans and Finance Lease Receivables: As of December 31, 2011, the Bank’s provision for foreign currency indexed loans amounts to TRY 2.518 Thousand (December 31, 2010: TRY 9.962 Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements. 7.4.Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans: As of December 31, 2011, the Bank’s specific provision provided for unindemnified non-cash loans amounts to TRY 21.016 Thousand (December 31, 2010: TRY 9.705 Thousand). 7.5.Information on Other Provisions: 7.5.1. Information on Provisions for Potential Risks: None (December 31, 2010: None). 7.5.2. Information on Other Provisions: Other Provisions Provision for Credit Cards Promotion of Banking Services Provision for Unindemnified Non-Cash Loans Provision Amount Allocated for Profit-Share Accounts Payment Commitment for Checks Litigation Provision Other (*) Total Current Period 4.434 21.016 3.616 2.001 1.251 32.318 Prior Period 4.212 9.705 6.170 1.021 16.000 37.108 (*) The balance includes provisions accounted for future losses which may be incurred on loan portfolio. 149 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7.5.3. Movement of the Retirement Pay Provision: Opening Balance - January 1 Current Service Cost Interest Cost Benefits Paid Settlement/Curtailment/Termination Loss/(Gain) Actuarial Loss/(Gain) Closing Balance – December 31 Current Period 11.955 2.166 1.151 (1.188) 336 981 15.401 Prior Period 7.974 1.736 870 (782) 561 1.596 11.955 The Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19. As of December 31, 2011 the Bank provided a provision of TRY 13.453 Thousand for the unused vacation pays (December 31, 2010: TRY 11.103 Thousand). 8. Explanations on Taxes Payable 8.1.Information on Current Tax Liability: As of December 31, 2011, the Bank’s corporate tax payable is TRY 9.011 Thousand after offsetting pre-paid corporate tax (December 31, 2010: TRY 15.726 Thousand). Provision for Corporate Taxes Prepaid Corporate Tax Corporate Tax Payable Current Period 57.546 (48.535) 9.011 Prior Period 70.346 (54.620) 15.726 Current Period 9.011 8.599 638 10.537 415 10.317 39.517 Prior Period 15.726 7.179 471 6.261 1.748 10.175 41.560 8.2.Information on Taxes Payable: Corporate Taxes Payable Taxation of Securities Property Tax Banking Insurance Transaction Tax (BITT) Foreign Exchange Transaction Tax Value Added Tax Payable Other Total 150 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 8.3.Premiums: Social Security Premiums-Employee Social Security Premiums-Employer Bank Social Aid Pension Fund Premium-Employee Bank Social Aid Pension Fund Premium-Employer Pension Fund Membership Fees and Provisions-Employee Pension Fund Membership Fees and Provisions-Employer Unemployment Insurance-Employee Unemployment Insurance-Employer Other Total Current Period 4.574 6.417 325 650 11.966 Prior Period 2.522 3.543 179 358 6.602 8.4.Explanations on Deferred Tax Liabilities: None (December 31, 2010: None). 9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations: None. 10. Information on Subordinated Loans None. 11. Information on Shareholders’ Equity 11.1. Presentation of Paid-in Capital: Common Stock Preferred Stock (*) Current Period 540.000 360.000 Prior Period 540.000 360.000 (*) Preferred stockholders have the right to nominate candidates for the Board of Directors and the Audit Committee. 11.2. Paid-in Capital Amount, Explanation as to whether the Registered Share Capital System is Applicable at Bank if so Amount of the Registered Share Capital Ceiling: Registered capital system is not applied in the Bank. 11.3. Share Capital Increases and Their Sources; Other Information on Increased Capital Shares in the Current Period: None. 11.4. Information on Share Capital Increases from Capital Reserves: None. 11.5. Information on Share Capital Increases from Revaluation Funds: None. 11.6. Capital Commitments in the Last Fiscal Year and at the End of the Following Interim Period, General Purpose of These Commitments and Projected Resources Required to Meet These Commitments: None. 151 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 11.7. Indicators of the Bank’s Income, Profitability and Liquidity for Prior Periods and Possible Effects of These Future Assumptions on the Bank’s Equity due to the Uncertainty of These Indicators: The Bank carries its activities in profitable level and retains the major portion of its net profit within equity by means of transfers to reserve accounts and capital increases. The Bank, also allocates its equity to highly liquid and profit generating assets. 11.8. Summary of Privileges Granted to Preferred Stocks: The holders of the preferred stocks have the right to nominate candidates for the Board of Directors and the Audit Committee. 11.9. Explanations on Marketable Securities Value Increase Fund: From Associates, Subsidiaries, and Entities under Common Control (Joint Vent.) Valuation Difference Foreign Exchange Difference From Financial Assets Available for Sale Valuation Difference Foreign Exchange Difference Total Current Period (13.599) (13.599) (13.599) Prior Period 6.732 6.732 6.732 III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 1. Explanation on Contingent Liabilities 1.1.Nature and Amounts of Irrevocable Loan Commitments: Asset Purchase-Sale Commitments Capital Commitments for Associates And Subsidiaries (*) Loan Granting Commitments Commitments for Credit Card Expenditure Limits Commitments for Credit Card And Retail Banking Promotions Payment Commitments for Checks Tax and Fund Liabilities from Export Commitments Other Irrevocable Commitments Total Current Period 1.085.835 10.798 353.633 2.066.016 7.236 650.723 1.883 39.910 4.216.034 Prior Period 115.567 2.000 341.648 1.661.296 7.257 580.319 1.880 55.864 2.765.831 (*) It consists of capital commitment amounting to TRY 9.798 Thousand to the Bank’s subsidary, Asya Emeklilik ve Hayat A.Ş. and TRY 1.000 Thousand to the Bank’s associates, Kredi Garanti Fonu A.Ş. (December 31, 2010: It consists of capital commitment amounting to TRY 2.000 Thousand to the Bank’s associate, Kredi Garanti Fonu A.Ş.). 1.2.Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: 1.2.1. Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Guarantees Bank Acceptances and Avalized Drafts Letters of Credit Other Guarantees Total 152 Current Period 7.556.575 323.970 1.334.519 133.695 9.348.759 Prior Period 7.938.655 154.318 997.362 136.548 9.226.883 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 1.2.2. Definite Guarantees, Provisional Guarantees, Surety ships, and Similar Transactions: Definite Letters of Guarantee Provisional Letters of Guarantees Suretyships and Similar Transactions Total Current Period 5.222.228 759.066 1.575.281 7.556.575 Prior Period 5.891.224 937.000 1.110.431 7.938.655 Current Period 481.766 6.335 475.431 8.866.993 9.348.759 Prior Period 134.953 5.405 129.548 9.091.930 9.226.883 1.3. Total Amount of Non-Cash Loans: Non-cash loans given against achieving cash loans With maturity of 1 year or less than 1 year With maturity of more than 1 year Other non-cash loans Total 2. Sectoral Risk Concentration of Non-Cash Loans Agricultural Farming and Raising Livestock Forestry Fishery Manufacturing Mining Production Electric, Gas and Water Construction Services Wholesale and Retail Trade Hotel, Food and Beverage Services Transportation and Telecommunication Financial Institutions Real Estate and Renting Services Self-Employment Services Education Services Health and Social Services Other Total TRY 59.359 Current Period (%) FC 1,47 53.049 (%) 1,00 TRY 59.075 Prior Period (%) FC 1,40 21.182 (%) 0,42 46.078 1,14 47.705 0,90 46.038 1,09 21.014 0,42 12.012 1.269 1.215.112 118.431 665.044 431.637 1.847.275 848.606 212.744 0,30 0,03 30,02 2,93 16,43 10,66 45,64 20,97 5,26 492 4.852 2.858.268 236.047 2.084.712 537.509 1.401.148 958.710 173.321 0,01 0,09 53,92 4,45 39,32 10,15 26,43 18,08 3,27 12.080 957 1.285.981 99.866 706.971 479.144 2.006.166 803.842 214.921 0,29 0,02 30,43 2,36 16,73 11,34 47,47 19,01 5,08 13 155 2.841.818 229.697 1.660.230 951.891 1.275.631 821.537 166.733 56,83 4,59 33,20 19,04 25,51 16,42 3,33 69.196 1,71 107.478 2,03 73.912 1,75 58.248 1,16 171.298 4,23 399.846 7,54 143.854 3,40 414.787 8,30 124.597 3,08 221.315 4,17 81.229 1,92 123.979 2,48 38.550 0,95 5.832 0,11 87.120 2,06 18.576 0,37 51.748 30.567 149.906 77.155 4.047.507 1,28 0,76 3,70 1,90 100,00 25.782 7.083 18.053 30.077 5.301.252 0,49 0,13 0,34 0,57 100,00 41.260 24.405 137.141 71.531 4.226.595 0,98 0,58 3,24 1,69 100,00 9.300 4.199 25.715 40.120 5.000.288 0,19 0,08 0,51 0,82 100,00 153 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3. Information on Ist and IInd Group Non-Cash Loans Non-Cash Loans Letters of Guarantee Endorsements and Acceptances Letters of Credit Endorsements Underwriting Commitments Factoring Commitments Other Commitments and Contingencies I st Group TRY 3.939.696 3.892.666 25.244 758 21.028 II nd Group TRY 107.811 103.447 2.142 2.140 82 FC 5.202.176 3.462.721 296.584 1.330.286 112.585 FC 99.076 97.741 1.335 - 4. Derivative Financial Instruments Derivative Transactions according to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period Type of Trading Transactions Foreign Currency Related Derivative Transactions (I): Forward Transactions Swap Transactions Futures Transactions Option Transactions Interest Related Derivative Transactions (II) : Forward Interest Rate Transaction 154 1.316.473 1.316.473 - 926.555 926.555 - - - - - - - Interest Rate Swap Transactions Interest Option Transactions Futures Interest Transactions Marketable Securities Call-Put Options (III) Other Trading Derivative Transactions (IV) A. Total Trading Derivative Transactions (I+II+III+IV) 1.316.473 926.555 - - Types of Hedging Transactions Fair Value Hedges Cash Flow Hedges Net Investment Hedges B. Total Hedging Related Derivatives Total Derivative Transactions (A+B) 1.316.473 926.555 - - Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) As of December 31, 2011, the breakdown of the Bank’s foreign currency forward transactions based on currencies are disclosed below in their TRY equivalents. Current Period TRY USD EUR GOLD Total Forward Buy 12.169 9.533 44.327 587.602 653.631 Forward Sell 9.450 653.392 662.842 Prior Period TRY USD EUR Total Forward Buy 268.243 194.735 462.978 Forward Sell 463.577 463.577 As of December 31, 2011, the Bank does not have any derivative transactions for the purpose of cash flow hedge. 5. Explanations on Contingent Liabilities and Assets As of the balance sheet date, there are 204 ongoing court cases against the Bank amounting to TRY 19.825 Thousand and EUR 946 based on the information provided from the legal department of the Bank. (December 31, 2010: There were 172 ongoing court cases against the Bank amounting to TRY 18.161 Thousand and EUR 946 based on the information provided from the legal department of the Bank). For one of the ongoing court cases mentioned above, provision amounting to TRY 1.251 Thousand has been allocated (December 31, 2010: TRY 1.021 Thousand). Total amount of letters of guarantees, guarantees and commitments submitted by the Bank pursuant to its own internal affairs and guarantees given by other institutions submitted by the Bank pursuant to the third parties benefit of the Bank stands at TRY 32.430 Thousand and is recognized under “Other irrevocable commitments” item of off-balance sheet contingencies and commitments (December 31, 2010: TRY 31.352 Thousand). 6. Explanations on Custodian and Intermediary Services None. 155 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Summary Information on the Bank’s Rating by the International Rating Institutions FITCH RATINGS Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Outlook Individual Rating Support Points B+ B Stable B+ B Stable A-(tour) Stable D 5 The information is obtained from the Fitch Ratings Report as of November 22, 2011. MOODY’S Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Short Term D Stable Ba3 B1 Stable Ba2 Ba1 Stable A3 TR-1 The information is obtained from the Moody’s Investor Service report as of February 10, 2011. SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance rating report for Bank Asya in accordance with the Turkish Capital Markets Board’s communiqué of “Capital Market Rating Operations and Corporate Governance Principles”. Bank Asya’s Corporate Governance rating score previously has been identified as 81,69 on July 1, 2010 and revised to 82,56 as of July 1, 2011. 156 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) IV. Explanations and Disclosures Related to the Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: Profit Share on Loans Short Term Loans Medium and Long Term Loans Profit Share on Non-Performing Loans Premiums Received from Resource Utilization Support Fund I Group TRY 1.070.992 358.215 698.268 14.509 FC 102.071 29.292 72.779 - - - II Group TRY 25.346 3.321 22.025 - FC 3.051 141 2.910 - 1.2.Profit Share from Banks: Current Period TRY Central Bank of the Republic of Turkey (Reserve Deposit) Domestic Banks Foreign Banks (*) Branches and Head Office Abroad Total FC Prior Period TRY FC - - 13.364 - 31 1.289 1.320 572 572 20.394 33.758 1.975 1.975 (*) Foreign banks include profit shares from “murabaha” loans. 1.3. Information on Interest Received from Marketable Securities: Financial Assets Held-for-Trading Financial Assets at Fair Value through Profit or Loss Financial Assets Available for Sale Held to Maturity Investments Total Current Period TRY - FC - Prior Period TRY - FC - - - - - 49.234 8.882 58.116 - 21.050 9.834 30.884 - Current Period 15.438 Prior Period 15.164 1.4. Information on Profit Share Income Received from Associates and Subsidiaries: Profit Share Income Received from Associates and Subsidiaries 157 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 2. Information on Profit Share Expenses 2.1. Information on Interest on Funds Borrowed: Banks Central Bank of the Republic of Turkey Domestic Banks Foreign Banks Foreign Head Office and Branches Other Institutions Total Current Period TRY - FC 38.562 1.036 37.526 38.562 Prior Period TRY - FC 16.538 1.036 15.502 16.538 2.2. Information on Profit Share Expense Given to Associates and Subsidiaries: Profit Share Expenses Given to Associates and Subsidiaries 2.3.Information on Profit Share Expense to Marketable Securities Issued: None. 158 Current Period 7.585 Prior Period 6.133 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 2.4.Distribution of Profit Share Expense on Deposits Based on Maturity of Deposits: Current Period Account Name TRY Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Total FC Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Precious Metal Deposits Total Grand Total Up to 1 Month Up to 3 Month Profit Sharing Accounts Up to 6 Up to 9 Up to 1 More than Month Month Year 1 Year 127.526 4 17.957 915 146.402 70.871 28 22.520 2.150 95.569 14.933 6 1.136 1.026 17.101 - 11.874 1.374 879 14.127 156.517 37 52.461 3.156 212.171 381.721 75 95.448 8.126 485.370 533 16.548 1 5.660 16 22.758 169.160 67 14.974 11.252 166 26.459 122.028 406 3.078 1.307 4.386 9.177 26.278 - 583 5.010 2.099 7.692 21.819 29 23.526 18.210 608 42.373 254.544 1.618 63.136 1 38.528 5.176 108.459 593.829 Up to 1 Month Up to 3 Month Profit Sharing Accounts Up to 6 Up to 9 Up to 1 More than Month Month Year 1 Year 88.688 1 18.799 454 107.942 102.234 2 27.166 790 130.192 27.032 1.531 3.480 32.043 - 20.927 5.130 182 26.239 157.190 20.970 1.831 179.991 396.071 3 73.596 6.737 476.407 812 14.736 1 5.335 14 20.898 128.840 69 20.560 13.712 309 34.650 164.842 7.796 5.215 3.321 16.332 48.375 - 8.360 2.272 10.632 36.871 30.298 6.961 499 37.758 217.749 881 81.750 1 33.495 4.143 120.270 596.677 Prior Period Account Name TRY Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Total FC Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Precious Metal Deposits Total Grand Total Total Total 159 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3. Information on Dividend Income None (December 31, 2010: None). 4. Information on Net Trading Income (Net) Profit Securities Trading Gains Gains on Derivative Financial Instruments Foreign Exchange Gains Loss (-) Securities Trading Losses Losses on Derivative Financial Instruments Foreign Exchange Losses 5. Current Period 6.057.300 225.104 5.832.196 (6.018.180) (160.894) (5.857.286) Prior Period 3.265.633 65.342 3.200.291 (3.220.670) (34.834) (3.185.836) Current Period 1.203 22.619 88.007 18.716 130.545 Prior Period 9.719 19.079 88.478 16.917 134.193 Information on Other Operating Income The detail of other operating income is stated as below: Communication Expense Reversal Gain on Sale of Assets Reversals from Previous Years’ Expenses (*) Other Total (*) Includes TRY 67.242 Thousand reversals from specific provisions for loans, general loan provision, and doubtful fees and other receivables provision and TRY 12.293 Thousand reversals from provisions for cheques. (December 31, 2010: TRY 88.110 Thousand). 6. Provision Expenses of the Bank for Loans and Other Receivables Specific Provisions for Loans and Other Receivables III. Group Loans and Receivables IV. Group Loans and Receivables V. Group Loans and Receivables Doubtful Commission, Fee and Other Receivables General Loan Loss Provision Expenses Provision Expenses for Possible Losses Marketable Securities Impairment Losses Financial Assets at Fair Value through Profit or Loss Financial Assets Available for Sale Impairment Losses on Investment in Associates, Subsidiaries, Entities under Common Control and Held to Maturity Investments Investments in Associates Subsidiaries Entities under Common Control Held to Maturity Investments Other Total 160 Current Period 170.277 30.827 953 127.637 10.860 9.768 - Prior Period 107.508 27.471 14.379 54.915 10.743 22.088 - - - 48.153 228.198 37.891 167.487 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Information on Other Operating Expenses Personnel Expenses Provision for Employee Termination Benefits Bank Social Aid Provision Fund Deficit Provision Impairment Losses on Tangible Assets Depreciation Expenses of Tangible Assets Impairment Losses on Intangible Assets Impairment Losses on Goodwill Amortization Expenses of Intangible Assets Impairment Losses on Investments Accounted for under Equity Method Impairment Losses on Assets to be Disposed off Depreciation Expenses of Assets to be Disposed off Impairment Losses on Assets Held for Sale Other Operating Expenses Operating Lease Expenses Repair and Maintenance Expenses Advertisement Expenses Other Expenses Loss on Sales of Assets Other Total Current Period 264.766 4.634 111 44.151 3.651 1.577 5.378 37 193.721 57.324 3.560 30.015 102.822 2.893 42.448 563.367 Prior Period 242.029 4.763 40.366 3.272 1.619 3.691 244 177.497 44.714 2.681 33.650 96.452 9.637 47.169 530.287 8. Information on Continuing Operations Profit or Loss Before Tax The Bank’s profit before tax is decreased by 17,01% (December 31, 2010: 14,30%) as compared to the prior year figures and total profit before tax amounts to TRY 269.132 Thousand (December 31, 2010: TRY 324.288 Thousand). Profit before tax includes TRY 631.224 Thousand (December 31, 2010: TRY 593.538 Thousand) net profit share income, TRY 259.808 Thousand (December 31, 2010: TRY 249.378 Thousand) net fees and commission income. Total operating expense amount is TRY 563.367 Thousand (December 31, 2010: TRY 530.287 Thousand). 9. Information on Continuing Operations Tax Provision As of December 31, 2011, current tax expense is TRY 57.546 Thousand (December 31, 2010: TRY 70.346 Thousand) and deferred tax income is TRY 4.504 Thousand (December 31, 2010: TRY 6.010 Thousand). 10. Information on Operating Profit/Loss After Taxes The Bank’s net profit for the year ended December 31, 2011 has declined by 16,88% in compare to the prior year’s net profit. 11. Explanations on Net Income / Loss for the Period: The nature and amount of certain income and expense items from ordinary operations is disclosed if the disclosure for nature, amount, and repetition rate of such items is required for the complete understanding of the Bank’s performance for the period: None. Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent periods: None. 161 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 12. The Description and Amounts of Items which Constitute at Least 20% of Other Items in the Income Statement, If These Liabilities Exceed 10% of the Total Income Statement Other fees and commissions income/expense are stated as below: Other Fees and Commission Received Member Firm-POS Fees and Commission Credit Card Fees and Commission Commissions on Collection and Disbursement Expertise Fees Money Transfer Commissions Insurance Underwriting Commissions Other Total Other Fees and Commission Paid Credit Card Fees and Commission Other Total Current Period Prior Period 60.590 51.726 16.379 14.395 8.811 8.285 26.052 186.238 57.234 40.938 9.452 8.530 6.978 5.686 20.003 148.821 Current Period Prior Period 53.573 6.488 60.061 45.550 5.723 51.273 13. Nature and Amount of Changes in Accounting Estimates which Have Material Effects on the Current Period or Expected to Have Material Effects on the Subsequent Periods None. V. Explanations and Disclosures Related to the Statements of Changes in Shareholders’ Equity 1. Increases from Valuation of Financial Assets Available for Sale Increase resulting from revaluation of financial assets available for sale is TRY 13.599 Thousand (December 31, 2010: TRY 6.732 Thousand). 2. Increases Due to Cash Flow Hedges None. 3. Reconciliation of Foreign Exchange Differences at Beginning and End of Current Period None. 4. Dividends Declared Subsequent to the Balance Sheet Date, but Before the Announcement of the Financial Statements None. 5. Dividends per Share Proposed Subsequent to the Balance Sheet Date None. 6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Distribute the Reasons for This The Board of Directors has not decided for profit distribution as of the reporting date. 7. Amounts Transferred to Legal Reserves As of December 31, 2011, amount transferred to legal reserves is TRY 12.998 Thousand (December 31, 2010: TRY 15.064 Thousand). 8. Information on Shares Issued None. 162 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VI. Explanations and Disclosures Related to Statement of Cash Flows 1. Cash and Cash Equivalents 1.1.Components of Cash and Cash Equivalents and Accounting Policies Used to Determine Such Components: “Cash” is defined as cash in TRY and foreign currency, money in transit, cheques purchased and demand deposits in Banks, and “Cash equivalents” is defined as time deposits in Banks having original maturity less than three months and short term “murabaha” (sale at a markup) loans. Deposits held in Central Bank of the Republic of Turkey are not presented as cash equivalents. 1.2.The effects of the other items stated in the cash flow statement and the changes in foreign currency exchange rates on cash and cash equivalents: “Other” item amounting to TRY (571.965) Thousand in “Operating profit before changes in operating assets and liabilities” consists of fees and commission paid, operating lease expenses, repairment and maintenance expenses, advertisement expenses and other operating expenses.(December 31, 2010: TRY (258.923) Thousand “Other Income” amounting to TRY 90.226 Thousand consists of gains on derivative financial transactions, foreign exchange gains and other operating income (December 31, 2010: TRY 102.519 Thousand). “Net increase/decrease in other assets” amounting to TRY 12.386 Thousand in “Changes in operating assets and liabilities” consists of changes in sundry debtors, other assets and intangible asset purchases. (December 31, 2010: TRY (10.185) Thousand) “Net increase/ decrease in other liabilities” with a total amount of TRY 377.577 Thousand consists of changes in sundry creditors and other liabilities. (December 31, 2010: TRY 164.374 Thousand). “Other items” amounting to TRY 4.244 Thousand (31 December 2010: TRY 3.467 Thousand) in “Net cash provided from investing activities” consists of cash paid for purchases of intangible assets. The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2011 is approximately TRY 77.996 Thousand (December 31, 2010: TRY 8.397 Thousand). 1.3.Cash and Cash Equivalents at the Beginning of the Period: Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents Current Period 420.068 233.456 186.612 420.068 Prior Period 268.088 131.325 136.763 110.255 10.255 100.000 378.343 Current Period 599.923 250.331 349.592 9.773 9.773 609.696 Prior Period 420.068 233.456 186.612 420.068 1.4. Cash and Cash Equivalents at the End of the Period: Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents 163 Unconsolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VII. Explanations on the Risk Group of the Bank 1. Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Deposit Balances and Current Income and Expense Amounts 1.1.Current Period: Risk Group of the Bank Subsidiaries and Associates Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income Direct and Indirect Other Entities Included in Shareholders the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash 77.494 107.795 8.921 16.806 - - 172.548 206.072 42.782 164.645 15.438 - - - 35.797 - (*) The risk group balance includes TRY 3.411 Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand). 1.2.Prior Period: Risk Group of the Bank Subsidiaries and Associates Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income Direct and Indirect Other Entities Included in Shareholders the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash 52.357 77.494 9.225 8.921 - - 220.914 172.548 68.491 42.782 15.164 - - - 23.870 - (*) The risk group balance includes TRY 153 Thousand finance lease receivables (December 31, 2009: TRY 237 Thousand). 1.3.Risk Group Deposits Balances of the Bank: Risk Group of the Bank Current and Profit Sharing Accounts Balance at Beginning of Period Balance at End of Period Profit Share Expense Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Current Period Current Period Current Period 104.089 113.796 7.585 - 109.357 127.638 4.950 1.4.Information on Forward and Option Agreements and Other Similar Agreements with Related Parties: None. 1.5.Information on Compensation of Key Management Personnel: During the current period, the total amount of remuneration and benefits provided to the key management personnel of the Bank is TRY 10.297 Thousand (December 31, 2010: TRY 8.642 Thousand). Besides remuneration, the key management personnel also receive some further in kind rights. 164 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VIII.Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 1. Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices Number 200 Employees 4.542 Rep-Offices Abroad (*) - - Country - Branches Abroad - - - Total Assets - Capital - Off-shore Branches - - - - - Domestic Branches (*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India and a branch in Arbil, Iraq. As of the reporting date, opening representative office and branch is still in progress. 2. Explanations on Branch and Agency Openings or Closings of the Bank: The Bank has opened 25 new branches in the period of January 1 - December 31, 2011. SECTION SIX: OTHER EXPLANATIONS I. Other Disclosures: 1. Subsequent Events: Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26th, 2012 and Mr. Tacettin NEGIS has announced his resignation, effective on February 2nd, 2012 then, retrospectively Mr. Ali ÇELİK, Mr. Faruk İLK and Mr. Mustafa Talat KATIRCIOĞLU were appointed as the board members to fill their vacancies. SECTION SEVEN: INDEPENDENT AUDITOR’S REPORT I. Explanations on the Independent Auditor’s Report The financial statements of the Bank for the year January 1 – December 31, 2011 have been audited by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Member of Deloitte Touche Tohmatsu Limited). The independent auditor’s report is presented at the beginning of the financial statements and related notes. II. Other Footnotes and Explanations Prepared by the Independent Auditors There is no significant matter or disclosure which may be in connection with the Bank’s operations but not explained in the above sections. 165 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS’ REPORT, CONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2011 (Translated into English from the Original Turkish Report) 167 Consolidated Financial Statements and Accompanying Notes 168 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS’ REPORT FOR THE YEAR JANUARY 1, 2011 - DECEMBER 31, 2011 To the Board of Directors of Asya Katılım Bankası A.Ş. İstanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. (the “Bank”) and its financial subsidiaries (“the Group”) as at December 31, 2011 and the related consolidated statements of income, cash flows and changes in shareholders’ equity for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements: The Board of Directors of the Bank is responsible for the preparation and fair presentation of the financial statements in accordance with the regulation on “Procedures and Principles Regarding Banks’ Accounting Practices And Maintaining Documents” published in the Official Gazette dated November 1, 2006 and numbered 26333 and Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”) and other regulations, circulars, communiqués and pronouncements in respect of accounting and financial reporting made by Banking Regulation and Supervision Agency (“BRSA”). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the regulation on “Licensing and Operations of Audit Firms in Banking” International Standards published in the Official Gazette No: 26333 on November 1, 2006 and the International Standards on Auditing. We planned and performed our audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the consideration of the effectiveness of internal control and appropriateness of accounting policies applied relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independent Auditors’ Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as at December 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as per Article 37 of the Banking Act No: 5411 and other regulations, circulars and communiqués in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agency (“BRSA”). Additional paragraph for the English translation: The effect of the differences between the accounting principles summarized in Section 3 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Bank’s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin GÜRER Partner İstanbul, April 5, 2012 169 Consolidated Financial Statements and Accompanying Notes THE CONSOLIDATED FINANCIAL REPORT OF ASYA KATILIM BANKASI A.Ş. FOR THE YEAR ENDED DECEMBER 31, 2011 Address of the Headquarter of the Bank : Saray Mahallesi, Dr. Adnan Büyükdeniz Caddesi No:10 34768 Ümraniye/İSTANBUL Phone and Fax Numbers of the Bank : 0 216 633 50 00 / 0 216 633 69 89 Website of the Bank : www.bankasya.com.tr E-Mail : raporlama@bankasya.com.tr The consolidated financial report designed by the Banking Regulation and Supervision Agency in line with Communiqué on “Financial Statements to be Publicly Announced and the Related Policies and Disclosures” consists of the sections listed below: • • • • • • • GENERAL INFORMATION ABOUT THE PARENT BANK CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED IN THE RELATED PERIOD INFORMATION ON CONSOLIDATED FINANCIAL STRUCTURE OF THE GROUP EXPLANATORY DISCLOSURES AND FOOTNOTES ON CONSOLIDATED FINANCIAL STATEMENTS OTHER EXPLANATIONS AND DISCLOSURES INDEPENDENT AUDITORS’ REPORT The subsidiaries and associates consolidated within the framework of the reporting package are as follows: (1) Subsidiaries Associates Işık Sigorta A.Ş. Tamweel Africa Holding S.A. (2) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. - (3) Asya Emeklilik ve Hayat A.Ş. - (4) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. - The consolidated financial statements and the explanatory footnotes and disclosures, unless otherwise indicated, are prepared in Thousands of the Turkish Lira, in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related communiqués and the Banks’ records, have been independently audited and presented as attached. Behçet AKYAR Abdullah ÇELİK Ahmet BEYAZ Kamil YILMAZ Chairman of the Board of Directors Member of the Board of Directors and General Manager Assistant General Manager Responsible of Financial Reporting Manager in Charge of Financial Reporting Dr. Ercüment GÜLER Mehmet URUÇ Member of the Board of Directors and Member of the Audit Committee Member of the Board of Directors and Member of the Audit Committee Responsible personnel for the questions that can be raised on the financial statements: Name-Surname/Title: Merve Yasemin GÜNEŞ / Assistant Manager in Charge of Budgeting and Financial Controlling Telephone Number : 0 216 633 54 82 Fax Number : 0 216 633 69 89 170 Bank Asya 2011 Annual Report SECTION ONE: GENERAL INFORMATION I. II. III. IV. V. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Individuals and Institutions That Have Qualified Shares in the Bank Summary Information on the Bank’s Services and Activity Areas 172 173 173 174 174 SECTION TWO: THE CONSOLIDATED FINANCIAL STATEMENTS I. II. III. IV. V. VI. VII. Consolidated Balance Sheet Consolidated Statement of Off-Balance Sheet Contingencies and Commitments Consolidated Statement of Income Consolidated Statement of Income and Expense Accounted under Equity Consolidated Statement of Changes in Shareholders’ Equity Consolidated Statement of Cash Flows Consolidated Statement of Profit Distribution 176-177 178 179 180 181 182 183 SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions III. Information about the Parent Bank and its Consolidated Subsidiaries IV. Explanations on Forward and Option Contracts and Derivative Instruments V. Explanations on Profit Share Income and Expenses VI. Explanations on Fees and Commission Income and Expenses VII. Explanations on Financial Assets VIII. Explanations on Impairment of Financial Assets IX. Explanations on Offsetting Financial Assets and Liabilities X. Explanations on Sales and Repurchase Agreements and Lending of Securities XI. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets XII. Explanations on Goodwill and Other Intangible Assets XIII. Explanations on Tangible Assets XIV. Explanations on Leasing Transactions XV. Explanations on Provisions and Contingent Liabilities XVI. Explanations on Liabilities for Employee Benefits XVII. Explanations on Taxation XVIII. Additional Disclosures on Borrowing XIX. Explanations on Issuance of Share Certificates XX. Explanations on Avalized Drafts and Acceptances XXI. Explanations on Government Incentives XXII. Explanations on Segment Reporting XXIII. Explanations on Other Matters 184 184 184 185 185 185 185 187 187 187 187 188 188 188 189 189 189 190 190 190 190 190 191 SECTION FOUR: INFORMATION ON THE CONSOLIDATED FINANCIAL STRUCTURE I. II. III. IV. V. VI. VII. VIII. IX. Explanations Related to the Consolidated Capital Adequacy Standard Ratio Explanations Related to the Consolidated Credit Risk Explanations Related to the Consolidated Market Risk Explanations Related to the Consolidated Operational Risk Explanations Related to the Consolidated Currency Risk Explanations Related to the Consolidated Interest Rate Risk Explanations Related to the Consolidated Liquidity Risk Explanations on Presentation of Financial Assets and Liabilities at Fair Value Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 192 195 197 198 198 200 200 203 203 SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE CONSOLIDATED FINANCIAL STATEMENTS I. II. III. IV. V. VI. VII. VIII. Explanations and Disclosures Related to the Consolidated Assets Explanations and Disclosures Related to the Consolidated Liabilities Explanations and Disclosures Related to the Consolidated Off-Balance Sheet Contingencies and Commitments Explanations and Disclosures Related to the Consolidated Income Statement Explanations and Disclosures Related to the Statements of Changes in Shareholders’ Equity Explanations and Disclosures Related to the Statements of Cash Flows Explanations on the Risk Group of the Parent Bank Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 204 221 227 231 236 237 238 239 SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on the Operations of the Parent Bank 239 SECTION SEVEN: INDEPENDENT AUDITORS’ REPORT I. II. Explanations on the Independent Auditors’ Report Other Footnotes and Explanations Prepared by the Independent Auditors 239 239 171 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION ONE: GENERAL INFORMATION I. History of the Parent Bank Including Its Incorporation Date, Initial Legal Status and Amendments to the Initial Legal Status Incorporation of the Parent Bank is permitted with the decision of the Council of Ministers No: 96/8041 on April 11, 1996 as published in the Official Gazette dated April 25, 1996. The Parent Bank was registered on September 20, 1996 and “the Articles of Association” was published in the Trade Registry Gazette on September 25, 1996. The decision regarding the change in the title of the Bank was settled in the Extraordinary General Board of Directors’ meeting dated December 22, 2005 and the title was changed from Asya Finans Kurumu A.Ş. into Asya Katılım Bankası A.Ş. and it was published in the Trade Registry Gazette on December 26, 2005. Information on Consolidated Subsidiaries: Işık Sigorta A.Ş. Işık Sigorta A.Ş. (“the Company”) was established in 1995 in İstanbul and operates in various insurance and reinsurance sectors excluding life insurance. The Company is registered in Turkey, and it’s headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: 10 34768 Ümraniye, İstanbul. The Company currently has 169 personnel as of December 31, 2011. Işık Sigorta A.Ş. currently has 4 regional management offices, 2 regional representation offices and 1.172 (including the Bank branches) agencies. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Based on the announcement of the Capital Market Board dated August 13, 2009, it has been permitted transformation of the subsidiary of the Parent Bank “Asyafin Turizm İnşaat San. A.Ş.” into “Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.” with the decision dated March 27, 2009 and numbered 7/194. The transformation and registration have been completed as of September 30, 2009 and “the Articles of Association’’ has been published in the Trade Registry Gazette on October 8, 2009. The company’s main operations are development of residential and saleable real estate and generation of rental revenue from its own real estate portfolio. The company is registered in Turkey, and its headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: 10 34768 Ümraniye, İstanbul. The company currently has 18 personnel as of December 31, 2011. Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. was established in 1997 in İstanbul and shows a variety of insurance and reinsurance activities. As of reporting date, the Company has no operation. The Company is registered in Turkey, and it’s headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: 10 34768 Ümraniye, İstanbul. Asya Emeklilik ve Hayat A.Ş. Asya Emeklilik ve Hayat A.Ş. was established in 2011 and plans to operate private pension, life and casualty insurance areas. As of reporting date, the Company has not started its operations yet. The Company is registered in Turkey, and its headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: 10 34768 Ümraniye, İstanbul. The company currently has 24 personnel as of December 31, 2011. Information on Consolidated Associate: Tamweel Africa Holding S.A. Tamweel Africa Holding S.A. (the “Holding”) was established in June 9, 2009. 60% of it belongs to ICD, 40% of it belongs to Asya Katılım Bankası A.Ş. The Holding is registered in Senegal, and its headquarter is located in 66 rue Carnot, 5ème Etage Résidence Diouma Léna, Dakar. The Holding currently has 10 personnel as of December 31, 2011 and 4 banks operating in Senegal, Guinea, Niger and Mauritania. 172 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Parent Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group The Parent Bank has no shareholders having more than 10% shareholding or direct or indirect, joint or individual control over the management of the Parent Bank. The Parent Bank is not included in any group. III. Explanations Regarding the Shares of the Parent Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Title Chairman of the Board of Directors Member of the Board of Directors Area of Responsibility Behçet AKYAR Chairman of the Board of Directors 0,0003 Salih SARIGÜL (*) Vice Chairman of the Board of Directors 0,2056 Ahmet ÇELİK (*) Tacettin NEGİŞ (**) (***) Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors and the Audit Committees Member of the Board of Directors and the Audit Committees Member of the Board and General Manager Corporate/Commercial Loans, Small Banking, Top Management Office Headquarters, Business and Product Development Coordination (****) Information Technologies Corporate Credit Allocation II, Credit and Risk Monitoring, Construction and Real Estate Banking Operations Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative Distribution Channels, Resource Development Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications Law, Credit and Risk Monitoring Corporate/Consumer Credit Allocation I, Project Financing Treasury, Financial Institutions, Investor Relations, Human Resources and Education 0,4800 - Ali AKBULUT (******) Auditor 0,0002 Atıf BİLGİN Auditor 0,2411 İrfan HACIOSMANOĞLU Auditor 0,7093 İsmail Erol İŞBİLEN (***)(*******) Hülagü ÖZCAN (***) (*******) General Manager Abdullah ÇELİK Assistant General Managers Ali TUĞLU Ali Fuat TAŞKESENLİOĞLU (*****) Erdal ERDEM (*****) Fahrettin SOYLU Dr. Ercüment GÜLER (*******) Ahmet BEYAZ Zafer ERTAN Ahmet AKAR Feyzullah EĞRİBOYUN Auditors Ownership Percentage Name - - 0,0004 (*) Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations as of January 26, 2012 and Mr. Ali ÇELİK and Mr. Faruk İLK were appointed as the board members to fill their vacancies. (**) Bank Asya's Board member Mr. Tacettin NEGİŞ has announced his resignation as of February 2, 2012 and Mr. Mustafa Talat KATIRCIOĞLU was appointed as the board members to fill his vacancy. (***) Pay rate is not presented due to being below 0,001%. (****) Related departments operate under control of the Headquarter. (*****) Bank Asya's Executive Vice Presidents Mr. Ali Fuat TAŞKESENLİOĞLU and Mr. Erdal ERDEM have resigned as of January 6, 2012. (******)Bank Asya's Auditor Mr. Ali AKBULUT has announced his resignation. Mr. Mehmet GÖZÜTOK was appointed as the auditor. (*******) Bank Asya's Board members Mr. Ismail Erol ISBILEN and Mr. Hülagü ÖZCAN have announced their resignations, effective on March 12th 2012. Mr. Dr. Ercument GULER (Executive Vice President) and Mr. Mehmet URUÇ (Chief Legal Counsel) were appointed as the board members to fill their vacancies. 173 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) IV. Individuals and Institutions That Have Qualified Shares in the Parent Bank The Parent Bank’s capital, amounting to TRY 900.000.000, consists of qualified shares, amounting to TRY 360.000.000 and the holders of the A Group type shares are considered as qualified. The qualified shareholders are listed below. Name & Surname / Commercial Title Share Amount Share Amount Paid Shares Unpaid Shares ORTADOĞU TEKSTİL TİC. SAN. A.Ş. 39.572 10,99 39.572 - FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş. 34.668 9,63 34.668 - ABDULKADİR KONUKOĞLU 20.088 5,58 20.088 - BJ TEKSTİL TİCARET VE SANAYİ A.Ş. 18.000 5,00 18.000 - BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş. 17.783 4,94 17.783 - SERRA TURİZM LTD. ŞTİ. 15.000 4,17 15.000 - OSMAN CAN PEHLİVAN 14.400 4,00 14.400 - NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş. 13.142 3,65 13.142 - HASAN SAYIN 12.723 3,53 12.723 - İBRAHİM SAYIN 12.679 3,52 12.679 - OTHER 161.945 44,99 161.945 - Total 360.000 100,00 360.000 - V. Summary Information on the Bank’s Services and Activity Areas The Parent Bank operates in accordance with the principles of interest-free banking as a participation bank, by collecting funds through current accounts and profit sharing accounts, and lending such funds through production support, finance lease and profit/loss sharing partnership. The Parent Bank has two ways of collecting funds; current accounts and profit sharing accounts. The Parent Bank classifies current accounts and profit sharing accounts in accordance with their maturities in its accounting system. Profit sharing accounts are categorized into five different maturity groups; up to one month, up to three months (three months included), up to six months (six months included), up to one year and one year (one year included) and more than one year (one month, three months, six months and one year profit share payment). The Parent Bank could determine the participation rates on profit/loss sharing accounts with respect to the maturity group of TRY and foreign currency accounts, seperately under the limitation that the participation rate on loss shall not be less than 50%, for different currency type, amount and maturity groups specifically. The Parent Bank constitutes specific fund pools, allocated to the individually predetermined projects for financing purposes. Profit sharing accounts, which are part of the funds collected for project financing purpose, are distinguished from others with respect to the terms, accounted seperately from the others and it is not allowed to make any transfers from these accounts to any other maturity groups. Specific fund pools are clarified at the end of the financing period. The Parent Bank has no specific fund pools as of December 31, 2011. In addition to the regular banking activities, the Parent Bank operates as an agency on behalf of Işık Sigorta A.Ş. and intervenes stock purchase-sell transactions on behalf of Bizim Menkul Değerler A.Ş. through its branches. 174 Bank Asya 2011 Annual Report SECTION TWO THE CONSOLIDATED FINANCIAL STATEMENTS 175 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note I. II. 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 2.2.1 2.2.2 2.2.3 2.2.4 III. IV. V. 5.1 5.2 5.3 VI. 6.1 6.1.1 6.1.2 6.1.3 6.2 6.3 VII. VIII. 8.1 8.2 8.2.1 8.2.2 IX. 9.1 9.2 X. 10.1 10.2 10.2.1 10.2.2 CASH AND BALANCES WITH THE CENTRAL BANK FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) Trading financial assets Public sector debt securities Share certificates Derivative financial assets held for trading Other marketable securities Financial assets at fair value through profit and loss Public sector debt securities Share certificates Loans Other marketable securities BANKS MONEY MARKET PLACEMENTS FINANCIAL ASSETS AVAILABLE FOR SALE (Net) Share certificates Public sector debt securities Other marketable securities LOANS AND RECEIVABLES Loans and receivables Loans to risk group of the Bank Public sector debt securities Other Non-performing loans Specific provisions (-) HELD TO MATURITY INVESTMENTS (Net) INVESTMENTS IN ASSOCIATES (Net) Accounted for under equity method Unconsolidated Financial associates Non-financial associates INVESTMENTS IN SUBSIDIARIES (Net) Unconsolidated financial subsidiaries Unconsolidated non-financial subsidiaries ENTITIES UNDER COMMON CONTROL (Net) Consolidated under equity method Unconsolidated Financial subsidiaries Non-financial subsidiaries XI. FINANCE LEASE RECEIVABLES 11.1 11.2 11.3 11.4 XII. 12.1 12.2 12.3 XIII. XIV. 14.1 14.2 XV. XVI. 16.1 16.2 XVII. 17.1 17.2 XVIII. Finance lease receivables Operating lease receivables Other Unearned income ( - ) DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES Fair value hedge Cash flow hedge Hedge of net investment risks in foreign operations TANGIBLE ASSETS (Net) INTANGIBLE ASSETS (Net) Goodwill Other INVESTMENT PROPERTY (Net) TAX ASSET Current tax asset Deferred tax asset ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) Held for Sale Discontinued Operations OTHER ASSETS TOTAL ASSETS (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (31/12/2011) (31/12/2010) TRY FC Total TRY FC 527.427 1.152.225 1.679.652 1.357.177 727.792 7.611 1.250 8.861 4.897 2.581 7.611 1.250 8.861 4.897 2.581 7.611 7.611 4.897 1.250 1.250 2.581 59.371 343.487 402.858 74.157 150.402 779.763 779.763 394.708 219 219 224 779.544 779.544 394.484 11.588.089 1.565.682 13.153.771 9.967.521 987.275 11.278.387 1.565.242 12.843.629 9.824.377 986.884 304.173 6.283 310.456 248.182 1.707 10.974.214 1.558.959 12.533.173 9.576.195 985.177 614.033 1.697 615.730 445.673 1.478 (304.331) (1.257) (305.588) (302.529) (1.087) 77.053 77.053 77.032 107.248 107.248 87.147 45.900 45.900 31.166 61.348 61.348 55.981 3.000 3.000 2.000 58.348 58.348 53.981 84.014 84.014 83.964 84.014 84.014 83.964 277.570 20.181 297.751 81.966 23.505 105.471 370.569 (92.999) 454.718 16.238 4.111 12.127 35.641 21.955 21.955 8.724 8.724 217.145 21.860 (1.679) 3.103 392.429 (94.678) 454.718 16.238 4.111 12.127 35.641 21.955 21.955 8.724 8.724 220.248 95.514 (13.548) 354.326 14.549 4.111 10.438 36.812 10.754 10.754 6.509 6.509 215.235 26.200 (2.695) 2.686 121.714 (16.243) 354.326 14.549 4.111 10.438 36.812 10.754 10.754 6.509 6.509 217.921 14.262.567 3.085.928 17.348.495 12.766.754 1.894.241 14.660.995 The accompanying notes are an integral part of these combined financial statements 176 Total 2.084.969 7.478 7.478 4.897 2.581 224.559 394.708 224 394.484 10.954.796 10.811.261 249.889 10.561.372 447.151 (303.616) 77.032 87.147 31.166 55.981 2.000 53.981 83.964 83.964 - Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TURKISH LIRA LIABILITIES AND EQUITY Note I. FUND COLLECTED (1) 1.1 Fund from risk group of the Bank 1.2 Other CURRENT PERIOD Audited (31/12/2011) PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total 7.719.000 4.573.921 12.292.921 7.588.685 3.497.810 11.086.495 83.251 54.061 137.312 57.701 75.658 133.359 7.635.749 4.519.860 12.155.609 7.530.984 3.422.152 10.953.136 II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) - 11.715 11.715 - 5.397 5.397 III. FUNDS BORROWED (3) 27.357 1.457.830 1.485.187 28.474 622.237 650.711 IV. MONEY MARKET BALANCES 279.207 - 279.207 - - - V. MARKETABLE SECURITIES ISSUED (NET) - - - - - - VI. SUNDRY CREDITORS 388.746 3.900 392.646 278.850 4.056 282.906 VII. OTHER LIABILITIES (4) 226.983 62.810 289.793 261.131 14.833 275.964 VIII. FINANCE LEASE PAYABLES (5) - - - - - - 8.1 Finance lease payables - - - - - - 8.2 Operating lease payables - - - - - - 8.3 Other - - - - - - 8.4 Deferred finance lease expenses (-) - - - - - - IX. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES - - - - - - 9.1 Fair value hedge - - - - - - 9.2 Cash flow hedge - - - - - - 9.3 Hedge of net investment in foreign operations - - - - - - X. PROVISIONS 267.047 28.103 295.150 251.820 18.787 270.607 10.1 General loan loss provisions 110.319 20.747 131.066 100.356 16.848 117.204 10.2 Restructuring provisions - - - - - - 10.3 Reserve for employee benefits 30.262 - 30.262 24.262 - 24.262 10.4 Insurance technical reserves (Net) 99.556 1.473 101.029 90.938 808 91.746 10.5 Other provisions 26.910 5.883 32.793 36.264 1.131 37.395 XI. TAX LIABILITY 55.106 1 55.107 50.360 1 50.361 11.1 Current tax liability 55.098 1 55.099 50.360 1 50.361 11.2 Deferred tax liability 8 - 8 - - - XII. PAYABLES RELATED TO ASSETS HELD FOR SALE (Net) - - - - - - 12.1 Held for sale - - - - - - 12.2 Discontinued operations - - - - - - XIII. SUBORDINATED LOANS (10) - - - - - - XIV. SHAREHOLDERS' EQUITY (11) 2.246.769 - 2.246.769 2.038.554 - 2.038.554 14.1 Paid-in capital 900.000 - 900.000 900.000 - 900.000 14.2 Capital reserves (6.017) - (6.017) 14.314 - 14.314 14.2.1 Share premium 3.307 - 3.307 3.307 - 3.307 14.2.2 Share cancellation profits - - - - - - 14.2.3 Marketable securities revaluation reserve (13.599) - (13.599) 6.732 - 6.732 (6) (7) (8) (9) 14.2.4 Tangible assets revaluation reserve 4.275 - 4.275 4.275 - 4.275 14.2.5 Intangible assets revaluation reserve - - - - - - 14.2.6 Investment property revaluation reserve - - - - - - 14.2.7 Bonus shares obtained from associates, subsidiaries and jointly controlled entities - - - - - - 14.2.8 Hedging funds (Effective portion) - - - - - - 14.2.9 Value increase on assets held for resale - - - - - - 14.2.10 Other capital reserves - - - - - - 14.3 Profit reserves 1.028.676 - 1.028.676 762.457 - 762.457 66.732 - 66.732 53.679 - 53.679 - - - - - - 956.412 - 956.412 709.448 - 709.448 14.3.1 Legal reserves 14.3.2 Status reserves 14.3.3 Extraordinary reserves 14.3.4 Other profit reserves 14.4 Profit or loss 14.4.1 Prior year income / (losses) 14.4.2 Current year income / (losses) 14.5 Minority shares (12) TOTAL LIABILITIES AND EQUITY 5.532 - 5.532 (670) - (670) 214.334 - 214.334 252.534 - 252.534 (7.483) - (7.483) (9.561) - (9.561) 221.817 - 221.817 262.095 - 262.095 109.776 - 109.776 109.249 - 109.249 11.210.215 6.138.280 17.348.495 10.497.874 4.163.121 14.660.995 The accompanying notes are an integral part of these combined financial statements 177 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS Note A. I. 1.1. 1.1.1. 1.1.2. 1.1.3. 1.2. 1.2.1. 1.2.2. 1.3. 1.3.1. 1.3.2. 1.4. 1.5. 1.5.1. 1.5.2. 1.6. 1.7. II. 2.1. 2.1.1. 2.1.2. 2.1.3. 2.1.4. 2.1.5. 2.1.6. 2.1.7. 2.1.8. 2.1.9. 2.1.10. 2.1.11. 2.1.12. 2.2. 2.2.1. 2.2.2. III. 3.1. 3.1.1. 3.1.2. 3.1.3. 3.2. 3.2.1. 3.2.1.1. 3.2.1.2. 3.2.2. 3.3. B. IV. 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. V. 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. VI. OFF BALANCE SHEET COMMITMENTS AND CONTINGENCIES (I+II+III) GUARANTEES Letters of guarantees Guarantees subject to State Tender Law Guarantees given for foreign trade operations Other letters of guarantee Bank loans Import letter of acceptances Other bank acceptances Letter of credits Documentary letter of credits Other letter of credits Prefinancing given as guarantee Endorsements Endorsements to the Central Bank of Turkey Other endorsements Other guarantees Other collaterals COMMITMENTS Irrevocable commitments Forward asset purchase commitments Share capital commitment to associates and subsidiaries Loan granting commitments Securities underwriting commitments Commitments for reserve deposit requirements Payment commitment for checks Tax and fund liabilities from export commitments Commitments for credit card expenditure limits Commitments for promotions related with credit cards and banking activities Receivables from short sale commitments Payables for short sale commitments Other irrevocable commitments Revocable commitments Revocable loan granting commitments Other revocable commitments DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments for hedging purposes Fair value hedge Cash flow hedge Hedge of net investment in foreign operations Held for trading transactions Forward foreign currency buy/sell transactions Forward foreign currency transactions-buy Forward foreign currency transactions-sell Other Forward buy/sell transactions Other CUSTODY AND PLEDGED ITEMS (IV+V+VI) ITEMS HELD IN CUSTODY Assets under management Investment securities held in custody Checks received for collection Commercial notes received for collection Other assets received for collection Assets received for public offering Other items under custody Custodians PLEDGED ITEMS Marketable securities Guarantee notes Commodity Warranty Properties Other pledged items Pledged items-depository ACCEPTED INDEPENDENT GUARANTEES AND WARRANTIES TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) (1), (2) (1) (4) THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (31/12/2011) (31/12/2010) TP YP Toplam TP YP 7.183.246 14.881.266 7.181.426 5.737.843 12.919.269 4.047.507 3.996.113 3.996.113 27.386 27.386 2.898 2.898 21.110 3.628.894 3.628.894 498.695 10.798 353.633 650.723 1.883 2.066.016 5.301.252 3.560.462 3.560.462 296.584 296.584 1.331.621 1.331.621 112.585 587.140 587.140 587.140 - 9.348.759 7.556.575 7.556.575 323.970 323.970 1.334.519 1.334.519 133.695 4.216.034 4.216.034 1.085.835 10.798 353.633 650.723 1.883 2.066.016 4.226.595 4.195.799 4.195.799 23.000 23.000 642 642 7.154 2.686.588 2.686.588 36.324 2.000 341.648 580.319 1.880 1.661.296 5.000.288 3.742.856 3.742.856 131.318 131.318 996.720 996.720 129.394 79.243 79.243 79.243 - 9.226.883 7.938.655 7.938.655 154.318 154.318 997.362 997.362 136.548 2.765.831 2.765.831 115.567 2.000 341.648 580.319 1.880 1.661.296 7.236 - 7.236 7.257 - 7.257 39.910 21.619 21.619 21.619 144.252.279 996.242 2.885 736.005 257.343 5 4 143.256.037 820.957 49.893.921 2.643.502 18.800.856 71.096.801 - 1.294.854 1.294.854 1.294.854 103.667.485 821.158 316.160 20.756 126.829 357.413 102.846.327 370.522 38.782.884 759.906 2.744.840 60.188.175 - 39.910 1.316.473 1.316.473 1.316.473 247.919.764 1.817.400 2.885 1.052.165 278.099 126.829 5 357.417 246.102.364 1.191.479 88.676.805 3.403.408 21.545.696 131.284.976 - 55.864 268.243 268.243 268.243 114.534.965 737.083 2.885 537.081 197.111 4 2 113.797.882 558.289 38.978.316 2.124.763 15.363.750 56.772.764 - 658.312 658.312 658.312 74.648.884 373.825 193.630 15.177 40.842 124.176 74.275.059 300.630 27.921.735 553.137 1.260.824 44.238.733 - 55.864 926.555 926.555 926.555 189.183.849 1.110.908 2.885 730.711 212.288 40.842 4 124.178 188.072.941 858.919 66.900.051 2.677.900 16.624.574 101.011.497 - 151.950.299 110.850.731 262.801.030 121.716.391 80.386.727 202.103.118 The accompanying notes are an integral part of these combined financial statements 178 Toplam 7.698.020 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. CONSOLIDATED STATEMENT OF INCOME THOUSAND TURKISH LIRA STATEMENT OF INCOME Note CURRENT PERIOD Audited (01/01/2011-31/12/2011) I. PROFIT SHARE INCOME (1) 1.280.858 1.209.222 1.1 Profit share on loans 1.201.460 1.126.940 1.2 Profit share on reserve deposits - 13.364 1.3 Profit share on banks 4.548 24.640 1.4 Profit share on money market placements 1.5 Profit share on marketable securities portfolio PRIOR PERIOD Audited (01/01/2010-31/12/2010) - - 58.116 30.884 1.5.1 Held-for-trading financial assets - - 1.5.2 Financial assets at fair value through profit and loss - - 1.5.3 Available-for-sale financial assets 49.234 21.050 1.5.4 Investment-held for maturity 1.6 Finance lease income 1.7 Other profit share income II. PROFIT SHARE EXPENSE 2.1 Expense on profit sharing accounts 2.2 Profit share expense on funds borrowed 2.3 Profit share expense on money market borrowings 2.4 Expense on securities issued 2.5 Other profit share expense III. IV. (2) 8.882 9.834 16.686 13.373 48 21 (644.482) (608.057) (586.782) (591.143) (43.161) (16.736) (14.340) - - - (199) (178) NET PROFIT SHARE INCOME (I - II) 636.376 601.165 NET FEES AND COMMISSIONS INCOME 241.076 234.907 4.1 Fees and commisions received 320.699 304.371 4.1.1 Non-cash loans 133.643 151.840 4.1.2 Other 187.056 152.531 4.2 Fees and commisions paid (79.623) (69.464) 4.2.1 Non-cash loans 4.2.2 Other V. DIVIDEND INCOME (3) 131 171 VI. NET TRADING INCOME (4) 39.457 48.127 (12) (12) (12) (10) (79.611) (69.454) 6.1 Securities trading gains / (losses) (1.334) 3.281 6.2 Profit on derivative financial instruments gains / (losses) 64.210 30.508 6.3 Foreign exchange gains / (losses) VII. OTHER OPERATING INCOME (5) (23.419) 14.338 230.837 221.097 VIII. NET OPERATING INCOME (III+IV+V+VI+VII) 1.147.877 1.105.467 IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) (228.198) (167.553) X. OTHER OPERATING EXPENSES (-) (7) (646.653) (610.874) XI. NET OPERATING INCOME/(LOSS) (VIII-IX-X) 273.026 327.040 XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER XIII. GAIN / (LOSS) ON EQUITY METHOD - - 3.632 1.211 XIV. GAIN / (LOSS) ON NET MONETARY POSITION - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+…+XIV) (8) 276.658 328.251 (9) (54.515) (65.126) (60.625) (70.887) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) 16.1 Provision for current income taxes 16.2 Provision for deferred taxes XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) 6.110 5.761 222.143 263.125 - XVIII. INCOME ON DISCONTINUED OPERATIONS - 18.1 Income on assets held for sale - - 18.2 Income on sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) - - 18.3 Income on other discontinued operations - - XIX. LOSS FROM DISCONTINUED OPERATIONS (-) - - 19.1 Loss from assets held for sale - 19.2 Loss on sale of associates, subsidiaries and jointly controlled entities (Joint vent.) - - 19.3 Loss from other discontinued operations - - XX. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) - - 21.1 Provision for current income taxes - 21.2 Provision for deferred taxes - - XXII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - XXIII. NET PROFIT/LOSS (XVII+XXII) 23.1 Group’s profit/loss 23.2 (11) 222.143 263.125 221.817 262.095 Minority shares 326 1.030 Earnings per share 0,25 0,29 The accompanying notes are an integral part of these combined financial statements 179 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY CURRENT PERIOD Audited (01/01/2011-31/12/2011)) PRIOR PERIOD Audited (01/01/2010-31/12/2010) (25.414) 4.764 - I. Additions to marketable securities revaluation differences for available for sale financial assets II. Tangible assets revaluation differences - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions 6.202 (670) V. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) - - VI. Profit/Loss from derivative financial instruments for hedge of net investment in foreign operations (Effective portion of fair value differences) - - VII. The effect of corrections of errors and changes in accounting policies - - VIII. Other profit loss items accounted under equity due to TAS - - IX. Deferred tax of valuation differences 5.083 (953) X. Total Net Profit/Loss accounted under equity (I+II+…+IX) (14.129) 3.141 XI. Profit/Loss - - 11.1 Change in fair value of marketable securities (Transfer to Profit/Loss) - - 11.2 Reclassification and transfer of derivatives accounted for cash flow hedge purposes to Income Statement - - 11.3 Transfer of hedge of net investments in foreign operations to Income Statement - - 11.4 Other XII. Total Profit/Loss accounted for the period (X±XI) The accompanying notes are an integral part of these combined financial statements 180 - - (14.129) 3.141 VIII. IX. X. XI. XII. 12.1 12.2 XIII. XIV. XV. XVI. XVII. XVIII. 18.1 18.2 18.3 VII. II. III. IV. 4.1 4.2 V. VI. I. X. XI. XII. XIII. XIV. 14.1 14.2 XV. XVI. XVII. XVIII. XIX. XX. 20.1 20.2 20.3 IX. IV. V. VI. 6.1 6.2 VII. VIII. I. II. 2.1 2.2. III. Prior Period Balance - 31.12.2010 Changes in period Increase/Decrease related to merger Marketable securities revaluation differences Hedging Funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations Tangible assets revaluation differences Intangible assets revaluation differences Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) Foreign exchange differences The disposal of assets The reclassification of assets The effect of change in associate’s equity Capital increase Cash Internal sources Share premium Share cancellation profits Inflation adjustment to paid-in capital Other Period net income/(loss) Profit distribution Dividends distributed Transfers to reserves Other Closing Balance (I+II+III+-…...+XVI+XVII+XVIII) CURRENT PERIOD Audited (01/01-31/12/2011) Prior Period Balance - 31.12.2009 Corrections according to TAS 8 The effect of corrections of errrors The effects of changes in accounting policy New Balance (I+II) Changes in period Increase/Decrease related to merger Marketable securities revaluation differences Hedging Funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations Tangible assets revaluation differences Intangible assets revaluation differences Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) Foreign exchange differences The disposal of assets The reclassification of assets The effect of change in associate’s equity Capital increase Cash Internal sources Share premium Share cancellation profits Inflation adjustment to paid-in capital Other Period net income/(loss) Profit distribution Dividends distributed Transfers to reserves Other Closing Balance (III+-…...+XVI+XVII+XVIII) PRIOR PERIOD Audited (01/01-31/12/2010) STATEMENT OF CHANGES OF SHAREHOLDER'S EQUITY Note - - - 900.000 - 900.000 - - - 900.000 - 3.307 - 3.307 - 3.307 - 3.307 3.307 - - - - - - - 13.053 13.053 66.732 - 53.679 - 5 15.296 15.296 53.679 - 38.378 38.378 - Share Inflation Share Certificate Legal Adjustment to Premium Cancellation Reserves Paid-in Capital Profits 900.000 900.000 - Paid-in Capital - - - - - - Statutory Reserves 246.964 246.964 956.412 - 709.448 - 256.217 256.217 709.448 - 453.231 453.231 - Extraordinary Reserve - - 291.813 291.813 - Current Prior Period Period Net Net Income / Income / (Expense) (Expense) - - 252.534 - 6.202 - 221.817 - (260.017) - (260.017) 5.532 221.817 (7.483) - (670) - (670) 139 - 262.095 - (301.513) - (30.000) - (271.513) (670) 262.095 (9.561) - - Other Reserve (13.599) - 6.732 (20.331) - 6.732 - 2.921 2.921 3.811 - Marketable Securities Revaluation Reserve 4.275 - 4.275 - 4.275 - 4.275 4.275 - Tangible and Intangible Assets Revaulation Differences - - - - - - Bonus Shares Obtained from Subsidiaries - - - - - - Hedging Funds - - - - - - Valuation Diff. from Assets Held for Sale and from Disc. Op. 6.202 221.817 2.136.993 - 1.929.305 (20.331) - (670) 144 262.095 (30.000) (30.000) 1.929.305 - 1.693.925 1.693.925 3.811 - Total Equity Excluding Noncontrolling Interest 201 326 109.776 - 109.249 - 2.715 2.715 13 1.030 109.249 - 105.491 105.491 - Noncontrolling Interest 6.202 201 222.143 2.246.769 - 2.038.554 (20.331) - (670) 2.715 2.715 157 263.125 (30.000) (30.000) 2.038.554 - 1.799.416 1.799.416 3.811 - Total Equity Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY 181 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. CONSOLIDATED STATEMENT OF CASH FLOWS THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01-31/12/2011) Note A. CASH FLOWS FROM BANKING OPERATIONS 1.1 Operating profit before changes in operating assets and liabilities 1.1.1 Profit share income received 1.1.2 Profit share expense paid 1.1.3 Dividend received 1.1.4 PRIOR PERIOD Audited (01/01-31/12/2010) 86.774 361.641 1.196.837 1.129.355 (635.818) (607.311) 131 171 Fees and commissions received 332.344 304.371 1.1.5 Other income 190.470 193.093 1.1.6 Collections from previously written off loans 1.1.7 Payments to personnel and service suppliers 1.1.8 Taxes paid 1.1.9 Others 1.2 Changes in operating assets and liabilities 1.2.1 Net (increase) decrease in financial assets 1.2.2 Net (increase) decrease in financial assets at fair value through profit or loss 1.2.3 Net (increase) decrease in due from banks and other financial institutions 1.2.4 Net (increase) decrease in loans 1.2.5 Net (increase) decrease in other assets 1.2.6 14.509 20.636 (278.459) (253.214) (84.318) (90.912) (648.922) (334.548) 395.935 46.203 (3.588) 13.358 - - 536.720 377.821 (2.191.597) (2.857.397) 13.094 (7.124) Net increase (decrease) in bank deposits 101.005 10.926 1.2.7 Net increase (decrease) in other deposits 879.369 1.899.303 1.2.8 Net increase (decrease) in funds borrowed 670.927 445.578 1.2.9 Net increase (decrease) in due payables - - 1.2.10 Net increase (decrease) in other liabilities 390.005 163.738 I. Net cash provided from banking operations 482.709 407.844 B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net cash provided from investing activities (367.544) (336.591) 2.1 Cash paid for purchase of entities under common control, associates and subsidiaries (I.7-I.8) (10.317) (68.555) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries (I.7-I.8) - - 2.3 Fixed assets purchases (I.12) (32.924) (48.591) 2.4 Fixed assets sales (I.12) 2.5 Cash paid for purchase of financial assets available for sale 2.6 Cash obtained from sale of financial assets available for sale - 50.000 2.7 Cash paid for purchase of investment securities - (50.000) 2.8 Cash obtained from sale of investment securities 2.9 Other C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash provided from financing activities (I.13) 81.094 84.031 (400.000) (350.000) - 50.000 (5.397) (3.476) - (27.285) 3.1 Cash obtained from funds borrowed and securities issued - 2.715 3.2 Cash used for repayment of funds borrowed and securities issued - - 3.3 Capital increase - - 3.4 Dividends paid - (30.000) 3.5 Payments for finance leases - - 3.6 Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents 77.979 8.412 V. Net increase in cash and cash equivalents 193.144 52.380 VI. Cash and cash equivalents at the beginning of the year (1) 442.557 390.177 VII. Cash and cash equivalents at the end of the year (1) 635.701 442.557 The accompanying notes are an integral part of these combined financial statements 182 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. CONSOLİDATED PROFIT DISTRIBUTION TABLE THOUSAND TURKISH LIRA CURRENT PERIOD PRIOR PERIOD Audited Audited (01/01/2011-31/12/2011) (01/01/2010-31/12/2010) I. DISTRIBUTION OF CURRENT PERIOD PROFIT 1.1 1.2 1.2.1 1.2.2 1.2.3 CURRENT PERIOD PROFIT TAXES AND DUES PAYABLE (-) Corporate Tax (Income Tax) Withholding Tax Other taxes and dues - - A. NET PERIOD PROFIT (1.1-1.2) - - 1.3 1.4 1.5 PRIOR YEAR'S LOSSES (-) FIRST LEGAL RESERVES (-) OTHER STATUTORY RESERVES (-) - - B. DISTRIBUTABLE NET PERIOD PROFIT [(A-(1.3+1.4+1.5)] - - 1.6 1.6.1 1.6.2 1.6.3 1.6.4 1.6.5 1.7 1.8 1.9 1.9.1 1.9.2 1.9.3 1.9.4 1.9.5 1.10 1.11 1.12 1.13 1.14 FIRST DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates DIVIDEND TO PERSONNEL (-) DIVIDEND TO BOARD OF DIRECTORS (-) SECOND DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SECOND LEGAL RESERVE (-) STATUS RESERVES (-) EXTRAORDINARY RESERVES OTHER RESERVES SPECIAL FUNDS - - II. DISTRIBUTION FROM RESERVES 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.4 2.5 DISTRIBUTED RESERVES SECOND LEGAL RESERVES (-) SHARE TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SHARE TO PERSONNEL (-) SHARE TO BOARD OF DIRECTORS (-) - - III. EARNINGS PER SHARE 3.1 3.2 3.3 3.4 TO OWNERS OF STOCKS TO OWNERS OF STOCKS ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - IV. DIVIDEND PER SHARE - - 4.1 4.2 4.3 4.4 TO OWNERS OF STOCKS TO OWNERS OF STOCKS ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - (*) Based on the prevailing regulations in Turkey, profit distribution is not made on the consolidated income. The accompanying notes are an integral part of these combined financial statements 183 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 1. Presentation of Financial Statements The Parent Bank prepares its financial statements and notes in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents published in the Official Gazette No: 26333 dated November 1, 2006, Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), other communiqués, pronouncements and explanations about accounting and financial reporting issued by the Banking Regulation and Supervision Agency (“BRSA”), Turkish Commercial Code and the Tax Legislation. The Parent Bank prepares financial statements by applying accounting policies and basis of accounting in accordance with the Turkish Accounting Standards (“TAS”) and related communiqués, pronouncements and explanations issued by the Banking Regulation and Supervision Agency (“BRSA”). The related accounting policies and basis of accounting are explained below. The prior year financial statements are presented in line with the principles of TAS No:1 “Fundamentals of Preparing and Presenting Financial Statements” published in the Official Gazette on January 16, 2005 with No:25702, and in accordance with Turkish Accounting Standards and Turkish Financial Reporting Standards; and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior year financial statements to comply with the current year presentation. The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss and financial assets available for sale that are presented on fair value basis. 2. Basis of Accounting The accompanying consolidated financial statements are based on the Group’s legal records. The Group has recorded the adjustments and reclassifications of inflation accounting to its legal books beginning from June 30, 2004 to December 31, 2004 in accordance with Act No: 5024 of the Tax Procedural Code. As of December 31, 2003 the consolidated financial statements are prepared in accordance with the legal books and historical cost principle except for the revaluation of fixed assets and includes adjustments and reclassifications, including restatement for the changes in the general purchasing power of the Turkish Lira in accordance with International Accounting Standard No: 29 “Financial Reporting in Hyperinflationary Economies” (“TAS 29”) before December 31, 2004 for the purpose of fair presentation. II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions The Group manages its financial instrument strategies depending on the financing sources. The sources mainly constitute of the current and profit sharing accounts. As of the balance sheet date, the Group’s assets and equity structure are sufficient to cover its liabilities. The Group uses 21% of the funds collected in liquid instruments (December 31, 2010: 23%). The Group does not carry a significant foreign currency position risk due to the existing floating exchange rate regime. The investment decisions are made by taking into consideration of the maturity structure of the balance sheet items. The allocation of asset items are designated, and yield analysis are made based on this designation. In the statutory books of the Group, the transactions recorded in foreign currencies (all other currencies except Turkish Lira) are translated into the Turkish Lira at the exchange rates prevailing at the transaction dates. Monetary asset and liabilities denominated in foreign currencies are translated into the Turkish Lira at the year end exchange rates. Foreign exchange gains or losses arising from the translation of monetary items and foreign currency denominated collections or disbursements are recognized in the income statement. III. Information on Consolidated Subsidiaries and Associates Asya Katılım Bankası A.Ş. and its subsidiaries Işık Sigorta A.Ş., Tuna Gayrimenkul Yatırım Ortaklığı A.Ş., Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti and Asya Emeklilik ve Hayat A.Ş. are consolidated by line consolidation method in the accompanying consolidated financial statements and its associate Tamweel Africa Holding S.A. is consolidated by using equity method. Entities that are consolidated are assessed based on the communiqué on “Regulations Regarding Banks’ Consolidated Financial Statements” published on Official Gazette numbered 26340 dated November 8, 2006. The Parent Bank and the consolidated subsidiaries and associate are referred to as “Group”. When there are differences between the accounting policies of the subsidiaries and associate with the Parent Bank, the financial statements are adjusted in accordance with the principle of materiality. 184 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. has consolidated for the first time based on the change of the communiqué on “Regulations Regarding Banks’ Consolidated Financial Statements” published on Official Gazette numbered 27824 dated January 23, 2011. Associate, Tamweel Africa Holding S.A. prepares in accordance with the International Financial Accounting Standards. The Group has used to equity method for the first time in 2010 due to purchase of 40% of Tamweel Africa Holding S.A.’s share. Asya Emeklilik ve Hayat A.Ş. was established in July 01, 2011 and has been consolidated for the first time in September 30, 2011. Based on the announcement of the Capital Market Board dated August 13, 2009, it has been permitted transformation of the subsidiary of the Parent Bank “Asyafin Turizm İnşaat San. A.Ş.” into “Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.” with the decision dated March 27, 2009 and numbered 7/194. The transformation and registration have been completed as of September 30, 2009 and “the Articles of Association” has been published in the Trade Registry Gazette on October 8, 2009. IV. Explanations on Forward and Option Contracts and Derivative Instruments In determination of fair value of forward and swap transactions, forward rates discounted to the balance sheet date by prevailing rates are compared with the expected discounted forward rates at maturity calculated based on the prevailing profit shares as of the balance sheet date and arising foreign exchange differences are recognized in the income statement. Although some of the derivative transactions provide economic hedging in accordance with TAS 39 “Financial Instruments: Recognition and Measurement” since all necessary conditions for hedge accounting have not been met yet, the Parent Bank classifies these transactions as “held for trading” therefore changes in the fair value of derivative financial instruments are recognized in profit or loss as they arise. V. Explanations on Profit Share Income and Expenses Profit share income and expenses are recognized in the income statement on an accrual basis. Realized and unrealized profit share accruals of the non-performing loans are reversed and profit share income in connection with these loans is recorded as profit share income only when they are collected. VI. Explanations on Fees and Commission Income and Expenses Banking service revenues are recognized as income only when they are collected while only the current portion of the prepaid commission income obtained from loans is recorded as income based on the periodicity principle. Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are recorded as prepaid expenses and are recognized as expense on the relevant periods. VII. Explanations on Financial Assets Financial instruments comprise of financial assets, financial liabilities and derivative instruments. Financial assets and financial liabilities are recognized on the Group’s consolidated balance sheet when the Group becomes a party to the contractual provisions of the instrument. Basically, financial assets form majority of the commercial activities and operations of the Group. Financial instruments expose, change or reduce the liquidity and credit risks of the Group’s financial statements. Fair value is the amount for which an asset could be exchanged or a liability settled, between knowledgeable willing parties in an arm’s length transaction. Fair value is best evidenced by a market price, being the amount obtainable from the sale or payable on the acquisition, of a financial instrument in an active market, if one exists. Estimated fair values of financial assets are determined by the Group by using the information about the market and relevant valuation methods. However, interpretation of market information is necessary to determine fair value. Therefore, estimated fair values presented in this report may not be necessarily equivalent of the disposal values of such assets derived from current market conditions. Some carrying values of the financial instruments (which are same with their cost values) are assumed to be equal to their fair values because of their short term nature. The methods and assumptions used in determining the reasonable estimated values of all financial instruments are mentioned below: Cash, Banks, and Other Financial Institutions: Cash and cash equivalents comprise of cash on hand, demand deposits, and highly liquid short-term investments not bearing risk of significant value change, and that are readily convertible to a known amount of cash. The book value of these financial assets approximate to their fair value. 185 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Financial Assets at Fair Value through Profit and Loss: Marketable securities at fair value through profit or loss are classified in two categories; i) marketable securities classified as trading securities: acquired or incurred principally for the purpose of selling or repurchasing it in the near term in order to benefit from short-term profit opportunities; ii) marketable securities classified as marketable securities at fair value through profit or loss at initial recognition. The Parent Bank uses the above-mentioned classification when permitted, or for the purposes of providing a more appropriate presentation. In this group, trading securities are initially recognized at cost and measured at fair value on the financial statements. Fair value of debt securities traded in an active market is determined based on the quoted prices or current market prices. The difference between initial cost and fair value of financial assets at fair value through profit and loss is reflected to profit share income or diminution in value of marketable securities accounts. Profit share income from financial assets at fair value through profit and loss is reflected in profit share income. As of December 31, 2011, the Group has TRY 8.861 Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2010: TRY 7.478 Thousand). Held to Maturity Investments: Investments held to maturity include securities with fixed or determinable payments and fixed maturity when there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention, including the funding ability. This portfolio excludes loans and receivables. Subsequent to initial recognition, held to maturity investments are measured at amortized cost by using the effective interest rate less impairment losses, if any. The Group has no financial assets acquired and classified as held to maturity investments that cannot be subject to such classification for two years because of the nonperformance of tainting rules. The profit share income received from held to maturity investments is recorded as profit share income in the income statement. As of December 31, 2011, the Group has TRY 77.053 Thousand of held to maturity investments (December 31, 2010: TRY 77.032 Thousand). Financial Assets Available for Sale: Financial assets available for sale are initially recognized at cost including the transaction costs. After initial recognition, available for sale securities are measured at fair value and unrealized gains/losses originating from the difference between the amortized cost and the fair value are recorded in “Marketable Securities Value Increase Fund” under equity. At the disposal of available for sale financial assets, value increase/decrease recorded in “Marketable Securities Value Increase Fund” under equity is transferred to the income statement. Equity instruments classified as available for sale are accounted at cost less impairment, if any. As of December 31, 2011, the Group has TRY 779.763 Thousand of financial assets available for sale (December 31, 2010: TRY 394.708 Thousand). Loans and Receivables: Loans and receivables are recognized at amortized cost. Fees, transaction costs and other similar costs in connection with the guarantees of loans and receivables are not considered as part of the transaction cost and recognized in the income statement. Loans are transferred to the relevant accounts in cash amounts and income accruals are calculated by using the internal rate of return method and the related income is recorded in the profit share income item. Foreign currency and foreign currency indexed loans are evaluated and evaluation differences are accounted under “Foreign Exchange Gains” and/or “Foreign Exchange Losses” in the income statement. The classification and provisioning of doubtful loans/receivables are appropriately accounted for in accordance with the prevailing regulations, and specific provisions allocated are recognized in the income statement for the period. Collections made from such loans are recognized under the “Non-performing loans” (including receivables from the doubtful receivables) account and “Profit share income received from Uncollectible Loans and Other Receivables” account. Released provisions are accounted as a cancellation of such provisions if realized in the current year, and the remaining amounts are recognized in the account of collections from the prior year expenses. In addition to specific loan loss provisions, general loan loss provision are recognized within the framework of the regulation on “Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves” published in the Official Gazette No. 26333 dated 1 November 2006. Except for specific provisions, the Bank allocates general reserve in accordance with Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions” 186 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VIII.Explanations on Impairment of Financial Assets At each balance sheet date, the Group evaluates the carrying amounts of its financial asset or a group of financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such an indication exists, the Group determines the related impairment. A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to the occurrence (loss/ damage event) of one or more than one event (or occurrence) subsequent to initial recognition of that asset; and such loss event causes an impairment loss as a result of the effect on the reliable estimate of the expected future cash flows of the related financial asset and asset group. Any amounts attributable to expected losses arising from any future events is not recognized under no circumstances. Companies that are required to prepare separate financial statements under the statutory requirements in accordance with TAS 27 “Consolidated and Separate Financial Statements” can represent their subsidiaries or associates either at cost or the requirements set out in IAS 39, “Financial Instruments: Recognition and Measurement”. In this case, the Parent Bank chooses to use the first method and presents the subsidiaries, jointly controlled entities and associates at cost less impairment loss, if any. IX. Explanations on Offsetting Financial Assets and Liabilities Financial assets and liabilities are offset when the Group has a legally enforceable right to set off, and when the Group has the intention of collecting or paying the net amount of related assets and liabilities or when the Group has the right to offset the assets and liabilities simultaneously. X. Explanations on Sales and Repurchase Agreements and Lending of Securities The Group does not have any repurchase agreements or lending of securities. XI. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets The principles on accounting, assessment and disposal of assets held for sale are determined based on the Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the Official Gazette numbered 26333. Although the Parent Bank has assets held for sale in the balance sheet, due to the fact that the Parent Bank does not have a formal plan to dispose of these assets in one year subsequent to their classification date, such assets are continued to be depreciated. For this reason, these assets are classified as tangible assets instead of assets held for sale in the accompanying financial statements. Assets held for sale are measured at the lower of the carrying amount of assets and fair value less any cost incurred for disposal. Assets held for sale are not amortized and presented in the financial statements separately. An asset is classified as held for sale, only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale. Highly saleable condition requires a plan by the management regarding the sale of the asset to be disposed of (or else the group of assets), together with an active program for the determination of buyers as well as for the completion of the plan. Also the asset (or else the group of assets) shall be actively marketed in conformity with its fair value. On the other hand, the sale is expected to be recognized as a completed sale within one year after the classification date; and the necessary transactions and procedures to complete the plan should demonstrate the fact that there is remote possibility of making any significant changes or cancellation of the plan. Various events and conditions may extend the completion period of the disposal more than a year. If such delay arises from any events and conditions beyond the control of the entity and there is sufficient evidence that the entity has an ongoing disposal plan for these assets, such assets (or else group of assets) are continued to be classified as assets held for sale (or else group of assets). As of December 31, 2011, assets held for sale amounts to TRY 8.724 Thousand (December 31, 2010: TRY 6.509 Thousand). A discontinued operation is a division of a bank that is either disposed of or held for sale. Results of discontinued operations are included in the income statement separately. The Group does not have any discontinued operations. 187 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) XII.Explanations on Goodwill and Other Intangible Assets Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Intangible assets acquired prior to January 1, 2005 are accounted for at restated cost less accumulated depreciation and any impairment loss, and the intangible assets acquired in subsequent periods are accounted for at acquisition cost less accumulated depreciation and any impairment loss if any, for those acquired prior to January 1, 2005. Intangible assets are amortized by using the straight line method considering their useful lives. Amortization method is reviewed at the end of each year periodically. Intangible assets mainly constitute of rights and amortized using the straight line method in 5 years. As of December 31, 2011, goodwill amounts to TRY 4.111 Thousand (December 31, 2010: TRY 4.111 Thousand). XIII.Explanations on Tangible Assets Prior to January 1, 2005, tangible assets are accounted for at acquisition cost plus any other direct costs incurred to bring the asset for ready to use. Tangible assets are measured at their acquisition cost less accumulated depreciation and impairment loss, if any. Depreciation of assets held less than one year as of the balance sheet date is accounted for proportionately. If the fair value of tangible assets under their carrying value, impairment loss is allocated for exceeding amounts and these amounts are recognized as impairment in the financial statements. Gains or losses resulting from disposals of tangible assets are recognized in the income statement. Maintenance costs of the tangible assets are recognized in the income statement as an expense. There are no pledges, mortgages or other restrictions on tangible assets. Tangible Asset Useful Life Safety Boxes 5 years Office Equipment 5 years Furniture and Fixtures 5 years Vehicles 5 years Leasehold Improvements 5 years Buildings 50 years XIV. Explanations on Leasing Transactions Group as a Lessor: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases. 188 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Group as a Lessee: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group’s general policy on borrowing costs. As of December 31, 2011, the Group, as a lessee, has operating leases for vehicles, general management and branches in addition to its assets through financial lease. XV. Explanations on Provisions and Contingent Liabilities Provisions are recognized when there is a present obligation, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; a reliable estimate can be made of the amount of the obligation. Contingent liabilities are continuously reviewed in order to determine whether there is any possibility of cash flow with regards to the sources having economic benefit for the Group. XVI. Explanations on Liabilities for Employee Benefits Under the existing Turkish law and union agreements, severance indemnity payment is required for employees retired or fired except resignations. The severance indemnity pay provision recognized represents the present value of the defined benefit obligation as adjusted for unrecognized gains and losses in accordance with TAS 19 “Employee Benefits”. The defined obligation is determined by independent actuaries. The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows: December 31, 2011 (*) December 31, 2010 Discount Rate 9,2% - 11,55% 10% Inflation Rate 4,5% - 8,75% 5,1% (*) According to employees retirement dates, different rates have been used in the range of rates given in the table above. TRY 2.732 (TRY full amount) salary ceiling, which was effective December 31(December 31, 2010: TRY 2.571 full amount), 2011 was taken into account in the current year calculations. It is assumed that the amount of the salary ceiling will increase each year in line with the inflation rate. The age of retirement is considered as the earliest age possible that an individual can retire and CSO 1980 female/male mortality table is used for the mortality rate. XVII. Explanations on Taxation Tax expense is comprises of current tax and deferred tax expenses. Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. According to the Article 32 of the Corporate Tax Law No: 5520, announced in the Official Gazette dated June 21, 2006, the corporate tax rate is 20%. Deferred tax asset or liability is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized and recognized in the income statement. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholders’ equity items. 189 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Taxes payables and prepaid taxes are offset since they are levied by the same taxation authority. Deferred tax assets and liabilities are also offset. The Group has adjusted its statutory financial statements based on inflation accounting as of January 1, 2004 in accordance with Law No: 5024. The revenue earned from real estate investment activities of the Group’s subsidiary (Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.) which has acquired the status of the real estate investment trust, is exempt from Corporate Tax according to Article 5/(1) (d) (4) of the Corporate Tax Law No: 5520. XVIII.Additional Explanations on Borrowings Borrowings are recognized in accordance with TAS 39 “Financial Instruments: Recognition and Measurement”. No specific hedging technique is applied for borrowings, their accounting and valuation methods excluding some general methods applied for avoiding any liquidity and currency risks. There are no debt securities or convertible bonds issued by the Group. XIX. Explanations on Issuance of Share Certificates As of December 31, 2011 there are no exported share certificates of the Group. XX.Explanations on Acceptances Acceptances are realized simultaneously with the payment dates of the customers and they are presented as probable commitments in the off-balance sheet accounts. XXI. Explanations on Government Incentives As of the balance sheet date, there are no government incentives used by the Group. XXII.Explanations on Segment Reporting The Parent Bank operates in corporate, commercial and retail banking areas in line with its mission by means of profit/loss sharing methodology Retail Corporate and Commercial Treasury Undistributed Elimination Total Total Assets 2.555.931 10.850.898 1.995.939 2.139.274 (193.547) 17.348.495 Total Liabilities 8.468.562 3.960.065 1.748.752 3.364.663 (193.547) 17.348.495 (289.124) 920.713 4.896 (109) - 636.376 Net Fees and Commissions Income/ (Expense) 11.929 229.316 (5.648) 5.479 - 241.076 Other Operating Income / (Expense) (9.101) (17.078) 1.366 (579.613) - (604.426) Gain from Investments in Associates Accounted for under Equity Method - - - - 3.632 3.632 (286.296) 1.132.951 614 (574.243) 3.632 276.658 Current Period Net Profit Share Income / (Expense) (*) Profit Before Tax Tax Provision Net Profit for the Period - - - (54.515) - (54.515) (286.296) 1.132.951 614 (628.758) 3.632 222.143 Minority Share Group Share 326 221.817 (*) The allocation of retail, corporate and commercial banking segments of the Parent Bank above is the result of differentiation in fund collection and allocation procedures of the participation banks. 190 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Retail Corporate and Commercial Treasury Undistributed Elimination Total Total Assets 1.660.820 9.379.383 2.328.509 1.460.526 (168.243) 14.660.995 Total Liabilities 7.611.786 3.563.058 627.634 3.026.760 (168.243) 14.660.995 (331.567) 880.060 39.115 13.557 - 601.165 Net Fees and Commissions Income/ (Expense) 3.953 233.281 (1.408) (919) - 234.907 Other Operating Income / (Expense) (7.194) (16.476) 3.281 (488.643) - (509.032) Gain from Investments in Associates Accounted for under Equity Method - - - - 1.211 1.211 (334.808) 1.096.865 40.988 (476.005) 1.211 328.251 - - - (65.126) - (65.126) (334.808) 1.096.865 40.988 (541.131) 1.211 263.125 Prior Period Net Profit Share Income / (Expense) (*) Profit Before Tax Tax Provision Net Profit for the Period Minority Share Group Share 1.030 262.095 (*) The allocation of retail, corporate and commercial banking segments of the Parent Bank above is the result of differentiation in fund collection and allocation procedures of the participation banks. XXIII.Explanations on Other Matters There are no explanations on other matters. 191 192 Explanations Related to the Consolidated Capital Adequacy Standard Ratio - - Receivables From Installment Sales of Assets Sundry Debtors - - - Derivative Financial Instruments Non Risk Weighted Accounts 2.899.995 162.566 Guarantees and Commitments Total Risk Weighted Assets 162.566 Off-Balance Sheet Items 82.336 Tangible Assets Other Assets - Subsidiaries, Associates and Entities Under Common Control (Net) 14.965 75.000 Held to Maturity Investments Accrued Profit Share and Income Accruals 771.250 Available-for-Sale Financial Assets - 4.675 Financial Lease Receivables 246.274 Non-Performing Loans (Net) 661.056 - Receivables From Reverse Repo Transactions Loans - Interbank Money Market Placements Reserve Deposits - 562.382 Due From Domestic Banks, Foreign Banks, Branches and Head Office Abroad Due From Central Bank of Turkey - 319.491 Cash and Cash Equivalents Matured Marketable Securities 2.737.429 0% Balance Sheet Items (Net) Amount Subject to Credit Risk - - - - - - - - - - - - - - - - - - - - - - - - 10% 558.433 - 7.465 154.152 161.617 - - - 842 - - - - - - 4.820 - - - 391.154 - - - 396.816 20% - - 4.336.494 4.336.494 163.349 449.463 145.362 525.796 46.860 - - 94 114.988 283.452 5.420.347 - - - 10.986 - - - 7.160.697 5.451.958 11.497.191 - - 1.050.110 1.050.110 - - - 154.697 - - - - 91.816 - 4.155.335 - - - - - - - 4.401.848 100% 62.207 - - - - - - - - - - - - - - 62.207 - - - - - - - 62.207 150% 17.875 - - - - - - - - - - - - - - 17.875 - - - - - - - 17.875 200% 2.895.548 - - 162.566 162.566 77.889 - - 14.965 - - 75.000 771.250 4.675 - 246.274 661.056 - - - 562.382 - 319.491 2.732.982 0% - - - - - - - - - - - - - - - - - - - - - - - - 10% 514.940 - 7.465 154.152 161.617 - - - 124 - - - - - - 4.820 - - - 348.379 - - - 353.323 20% 100% - - 4.336.494 4.336.494 79.421 412.847 251.634 525.796 7.783 - - 93 114.988 283.452 5.420.347 - - - 10.986 - - - 7.107.347 5.451.958 11.443.841 - - 1.050.110 1.050.110 - - - 154.697 - - - - 91.816 - 4.155.335 - - - - - - - 4.401.848 50% Parent Bank 50% Risk Weights Risk Weights Consolidated 62.207 - - - - - - - - - - - - - - 62.207 - - - - - - - 62.207 150% 17.875 - - - - - - - - - - - - - - 17.875 - - - - - - - 17.875 200% The capital adequacy ratio of the Group based on the consolidated financial statements is 13,48% (December 31, 2010: 13,46%). Capital Adequacy Standard Ratio is calculated in accordance with the Communiqué on “Measurement and Assessment of Capital Adequacy of Banks”, which was published on November 1, 2006 in the Official Gazette numbered 26333. The calculation of Capital Adequacy Ratio includes the methods used in determining the Capital Adequacy Ratio, determination of risk weighted assets and non-cash loans in line with the relevant banking regulation and measuring the market risk and operational risk ratio in line with the same regulation. I. SECTION FOUR: INFORMATION ON THE CONSOLIDATED FINANCIAL STRUCTURE Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Summary Information Related to Capital Adequacy Standard Ratio: Consolidated Total Risk Weighted Assets (TRWA) Parent Bank Current Period Prior Period Current Period Prior Period 14.463.917 12.962.593 14.401.869 12.900.990 65.450 45.800 62.788 38.438 Amount Subject to Operational Risk (ASOR) (*) Amount Subject to Market Risk (ASMR) 1.840.463 1.627.144 1.683.782 1.480.592 Shareholders’ Equity 2.206.854 1.970.220 2.148.814 1.922.505 13,48 13,46 13,31 13,33 Shareholders’ Equity / (TRWA + ASMR + ASOR) *100 (*) The amount subject to operational risk is in accordance with the “Regulation Regarding Measurement and Evaluation of the Bank’s Capital Adequacy Ratio” published in the Official Gazette No: 26333 dated November 1, 2006 which is effective from June 1, 2007. Operational risk is calculated by using the Basic Indicator Approach. Information Related to Consolidated Components of Shareholders’ Equity: CORE CAPITAL Paid-in Capital (*) Nominal Capital Capital Commitments (-) Paid-in Capital Indexation Difference Share Premium Share Cancellations Profits Legal Reserves First Legal Reserve (Turkish Commercial Code 466/1) Second Legal Reserve (Turkish Commercial Code 466/2) Other Legal Reserve Per Special Legislation Status Reserves Other Profit Reserves Extraordinary Reserves Reserves Allocated by the General Assembly Retained Earnings Accumulated Losses Foreign Currency Share Capital Exchange Difference Inflationary Adjustment to Legal Reserve, Status Reserves and Extraordinary Reserves Profit Net Profit for the Period Prior Years’ Profits Provision for Possible Losses up to 25% of the Core Capital Gains on Sale of Associates and Subsidiaries and Properties to be Added to Capital Primary Subordinated Loans up to 15% of the Core Capital Minority Interest Losses that cannot be Covered by Reserves (-) Net Loss for the Period Prior Years’ Losses Leasehold Improvements (-) Prepaid Expenses (-) (**) Intangible Assets (-) Deferred Tax Asset Exceeding 10% of the Core Capital (-) Excess Amount in Clause 3, Article 56 of the Banking Law (-) Consolidated Goodwill (Net) (-) TOTAL CORE CAPITAL Consolidated Current Period Prior Period 894.525 894.525 894.525 894.525 3.307 3.307 66.732 53.679 64.805 51.752 1.927 1.927 5.532 (670) 956.412 709.448 956.412 709.448 - Parent Bank Current Period Prior Period 894.525 894.525 894.525 894.525 3.307 3.307 65.948 52.950 64.021 51.023 1.927 1.927 961.405 714.441 961.405 714.441 - - - - - 221.817 221.817 - 262.095 262.095 - 216.090 216.090 - 259.962 259.962 - 4.275 4.275 4.275 4.275 109.776 7.483 7.483 48.435 12.127 4.111 2.190.220 109.249 9.561 9.561 55.504 26.881 10.438 4.111 1.929.413 48.384 11.012 2.086.154 55.453 13.153 10.419 1.850.435 (*) The Bank has purchased 1.500.000 units of its own pledged shares at TRY 5.475 Thousand as a result of sale in accordance with Turkish Commercial Code article 329/2.The effect of purchase has been considered as deduction from the paid-in capital item in the capital adequacy table. (**) Prepaid expenses are not deducted from the core capital according to the Article 1 of the “Regulation for amending the Regulation on Equities of Banks” published in the Official Gazette No: 27870 dated March 10, 2011. 193 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SUPPLEMENTARY CAPITAL Consolidated Parent Bank Current Period Prior Period Current Period Prior Period 79.229 70.287 79.229 70.287 45% of The Revaluation Reserve for Movable Fixed Assets - - - - 45% of The of Revaluation Reserve for Properties - - - - Bonus Shares Obtained From Associates, Subsidiaries and Entities Under Common Control - - - - Primary Subordinated Loans Excluded in the Calculation of the Core Capital - - - - Secondary Subordinated Loans - - - - (13.599) 3.029 (13.599) 3.029 - - - - (13.599) 3.029 (13.599) 3.029 Indexation Differences for Capital Reserves, Profit Reserves and Retained Earnings (Except Indexation Differences for Legal Reserves, Statutory Reserves and Extraordinary Reserves) - - - - Minority Interest - - - - 65.630 73.316 65.630 73.316 - - - - 2.255.850 2.002.729 2.151.784 1.923.751 48.996 32.509 2.970 1.246 126 131 - 34 Secondary Subordinated Loans and Primary or Secondary Subordinated Debt Placements Granted to Banks and Financial Institutions (Domestic, Foreign) or Qualified Shareholders - - - - Shareholdings in the Banks and Financial Institutions which are Accounted for Under the Equity Pick up Method but the Assets and Liabilities are not Consolidated 45.900 31.166 - - - - - - The Net Book Value of the Bank’s Real Estates in Excess of 50% of the Equity and in accordance with Article 57 of the Act, Net Book Value of Real Estates and Commodities Acquired in Exchange of Loans and Receivables that should be Disposed of However; have not been Disposed of Although It has been 5 Years since the Beginning of the Acquisition Date 1.185 1.212 1.185 1.212 Other (*) 1.785 - 1.785 - 2.206.854 1.970.220 2.148.814 1.922.505 General Loan Loss Reserves 45% of The Marketable Securities Value Increase Fund Associates and Subsidiaries Available for Sale Financial Assets TOTAL SUPPLEMENTARY CAPITAL TIER III CAPITAL CAPITAL DEDUCTIONS FROM THE CAPITAL Consolidated Investments in Banks and Financial Institutions Loans Granted not in Compliance with Articles 50 and 51 of the Banking Law TOTAL SHAREHOLDERS’ EQUITY (*) In accordance with the principles of the regulations described in “Measurement and Practices of Bank’s Shareholder’s Equity” published in the Official Gazette No: 26333, Article 10/1, clause (e), dated November 1, 2006, BRSA has published the board decision related to consumer loans for the purpose of acquiring housing in the Official Gazette No: 27789 dated December 18, 2010. 194 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) II. Explanations on Credit Risk Credit worthiness of loan customers are monitored and semiannually and regularly reviewed by the Risk Monitoring Department of the Parent Bank in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”. The account statements are obtained based on the prevailing regulations. Credit limits are determined by the Board of Directors, the Credit Committee of the Parent Bank and the Credit Administration. The Parent Bank obtains sufficient guarantees for its risks, comprising of personal surety, real-estate mortgage, cash blockage and customer cheques. For the derivative transactions and other similar positions of the Parent Bank, operational limits are set by the Board of Directors and the transactions are performed within these limits. There are no options or any other similar transactions. Indemnified non-cash loans are subject to the same risk weight with the overdue loans. The Parent Bank monitors restructured and rescheduled loans in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated By Banks and Procedures and Principles of Allocating Provisions”. Financial position and business operation of those customers are analyzed systematically and, principal and profit payments based on the restructured payment plan are monitored by the corresponding departments. As of December 31, 2011, the risk of the Parent Bank from its top 100 cash loan customers share in total cash loans ratio is 38,60% (December 31, 2010: 39,32%). As of December 31, 2011, the risk of the Parent Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,01% (December 31, 2010: 47,22%). As of December 31, 2011, the cash and non-cash receivables of the Parent Bank from its top 100 loan customers share in total balance sheet assets and non-cash loan ratio is 35,86% (December 31, 2010: 36,66%). As of December 31, 2011 the Parent Bank’s general provision amount for its credit risk is TRY 131.066 Thousand (December 31, 2010: TRY 117.204 Thousand). Distribution of Credit Risk by Types of Borrowers and Geographical Concentration: Loans to Individuals and Corporate (**) Borrowers’ Concentration Private Sector Public Sector Banks Retail Share Certificates Total Geographical Concentration Domestic European Union Countries OECD Countries (*) Off-Shore Banking Regions USA, Canada Other Countries Total Loans to Banks and Other Financial Institution Current Prior Period Period Current Period Prior Period 10.305.287 1.183 2.529.515 12.835.985 9.170.204 1.439 1.639.055 10.810.698 255 410.247 410.502 12.315.211 10.452.269 142.942 Marketable Securities Other Loans (****) (***) Current Period Prior Period Current Period Prior Period 563 224.559 225.122 1.250 856.597 7.830 865.677 2.581 471.516 5.121 479.218 12.209.133 1.556.805 166.782 191.262 14.123.982 11.586.101 723.120 194.113 171.111 12.674.445 321.316 107.194 864.870 476.560 12.572.751 11.837.439 102.925 24.905 34.515 753 836 1.141.971 344.560 10.881 9.740 9.041 7.406 54 1.822 173.063 321.702 175.405 136.804 39 - - - 15.896 18.103 37.183 154.363 12.835.985 796 108.164 10.810.698 36.866 18.335 410.502 74.871 1.136 225.122 865.677 479.218 4.214 216.087 14.123.982 3.973 148.668 12.674.445 (*) OECD countries other than European Union countries, USA and Canada. (**) Non-performing loans are not included. (***) Includes financial assets at fair value through profit or loss, available-for-sale and held-to-maturity. (****) Includes transactions defined as loan in Article 48 of Law No: 5411 and not covered in the first three columns of the Uniform Chart of Accounts above. 195 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Information According to Geographical Concentration: Current Period – December 31, 2011 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total Prior Period – December 31, 2010 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total Assets Liabilities Non-Cash Loans Equity Investments Net Income 16.527.405 170.553 19.976 192.542 74.050 172.707 13.400.076 833.082 22.209 126.530 162.387 557.442 8.842.441 162.203 146.443 15.896 4.214 177.562 - 221.817 - - - - 191.262 - 17.157.233 15.101.726 9.348.759 191.262 221.817 14.004.750 138.276 18.968 142.923 75.667 109.300 11.865.211 276.678 61.916 32.959 52.649 333.028 8.923.684 69.318 94.303 18.103 3.973 117.502 - 262.095 - - - - 171.111 - 14.489.884 12.622.441 9.226.883 171.111 262.095 (*) OECD countries other than European Union countries, USA and Canada. (**) Assets and liabilities that cannot be allocated on a coherent basis. Sector Concentration for Cash Loans: Agriculture Farming and Raising Livestock Forestry, Wood and Paper Fishery Manufacturing Mining and Quarry Production Electricity, Gas and Water Construction Services Wholesale and Retail Trade Hotel, Tourism, Food and Beverage Services Transportation and Communication Financial Institutions Real Estate and Renting Services Self-Employment Services Education Services Health and Social Services Other Total 196 TRY 227.134 177.436 40.721 8.977 4.159.484 186.542 3.088.879 884.063 2.350.846 1.719.671 690.980 Current Period (%) FC 2,01 7.834 1,57 4.355 0,36 645 0,08 2.834 36,88 917.144 1,65 329.822 27,39 345.801 7,84 241.521 20,84 128.611 15,25 508.254 6,13 79.161 (%) 0,50 0,28 0,04 0,18 58,59 21,07 22,09 15,43 8,22 32,47 5,06 TRY 270.144 219.777 40.540 9.827 3.868.022 163.782 2.885.961 818.279 2.064.055 1.717.887 603.476 Prior Period (%) FC 2,75 6.423 2,24 5.252 0,41 0,10 1.171 39,38 389.656 1,67 65.098 29,38 211.262 8,33 113.296 21,01 166.922 17,48 420.177 6,14 46.121 (%) 0,65 0,53 0,12 39,49 6,60 21,41 11,48 16,91 42,57 4,67 230.770 2,05 94.276 6,02 224.160 2,28 99.674 10,10 262.792 2,33 269.811 17,24 319.317 3,25 257.557 26,10 110.698 0,98 7.388 0,47 89.029 0,91 - - 136.322 1,21 - - 206.592 2,10 - - 15.210 135.794 137.105 2.821.252 11.278.387 0,13 1,20 1,22 25,02 100,00 1.797 55.821 3.399 1.565.242 0,11 3,57 0,22 100,00 12.746 93.270 169.297 1.904.269 9.824.377 0,13 0,95 1,72 19,38 100,00 2.319 14.493 13 3.706 986.884 0,23 1,47 0,38 100,00 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) The table below shows the maximum exposure to credit risk for the components of the financial statements: Central Bank of the Republic of Turkey Due from Banks Derivative Financial Assets Held for Trading Available-for-Sale Financial Assets Held to Maturity Investments Loans Finance Lease Receivables Current Period Prior Period 1.360.161 1.830.902 402.858 224.559 8.861 7.478 779.763 394.708 77.053 77.032 13.153.771 10.954.796 297.751 105.471 16.080.218 13.594.946 Contingent Liabilities 9.348.759 9.226.883 Commitments 4.216.034 2.765.831 Total 13.564.793 11.992.714 Total Credit Risk Exposure 29.645.011 25.587.660 Total Credit Rating System: The credit risk is assessed through the internal rating system of the Parent Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2011 consumer loans are excluded from the internal rating system of the Parent Bank. Additional scoring methodologies are applied for these loans. The risks that are subject to rating models can be allocated as follows: The Share in Total (%) Category Description of Category Current Period Above Average Prior Period The borrower has a very strong financial structure 35% 35% Average The borrower has an intermediate level of financial structure 35% 36% Under Average The financial structure of the borrower has to be closely monitored in the medium term 13% 11% Not Graded The borrower is not assessed by the Parent Bank Total 17% 18% 100% 100% III. Explanations Related to the Consolidated Market Risk The amount subject to market risk is calculated and reported with the Standard Method described in Section 4 of the Communiqué on “Measurement and Assessment of Banks’ Capital Adequacy” published in the Official Gazette No: 26333 dated November 1, 2006. Market risk is measured on a monthly basis. a) Explanations related to market risk: Amount (I) Capital Requirement to be Employed for General Market Risk - Standard Method (II) Capital Requirement to be Employed for Specific Risk - Standard Method (III) Capital Requirement to be Employed for Currency Risk - Standard Method 2.168 304 2.764 (IV) Capital Requirement to be Employed for Commodity Risk - Standard Method - (V) Capital Requirement to be Employed for Settlement Risk - Standard Method - (VI) Total Capital Requirement to be Employed for Market Risk Resulting From Options – Standard Method (VII) Total Capital Requirement to be Employed for Market Risk in Banks Using Risk Measurement Model (VIII) Total Capital Requirement to be Employed for Market Risk (I+II+III+IV+V+VI) (IX) Amount Subject to Market Risk (12,5 x VIII) or (12,5 x VII) 5.236 65.450 197 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) b) Average market risk table calculated at the end of each month in the current period: Current Period Prior Period Average Maximum Minimum Average Maximum Minimum Interest Rate Risk (*) 30.278 41.838 13.838 12.284 20.288 3.288 Common Stock Risk 7.722 10.675 3.800 10.694 15.338 6.150 34.122 45.850 24.512 17.563 19.238 16.275 Commodity Risk - - - - - - Settlement Risk - - - - - - Option Risk - - - - - - 72.122 98.363 42.150 40.541 54.864 25.713 Currency Risk Total Value Subject to Risk (*) The Parent Bank calculates by considering market risk of revenue sharing bonds, forward and swap transactions . c) Other price risks: The Group is exposed to stock price risk as a consequence of investing in publicly traded companies in İstanbul Stock Exchange. As of reporting date, assuming that all other variables have fixed and 10% higher/lower change in revaluation method parameters (stock prices and funds prices) is appeared, income before tax in statement of income will be anticipated TRY 628 Thousand and TRY 94 Thousand increase/decrease, respectively (December 31, 2010: TRY 490 Thousand and None). IV. Explanations on Operational Risk The Group calculates the amount subject to operational risk based on “Basic Indicator Method” by using 2010, 2009 and 2008 year end gross income balances of the Group, in accordance with the Section 4 of the “Regulation Regarding Measurement and Evaluation of Banks’ Capital Adequacy Ratio” published in the Official Gazette No: 26333 dated November 1, 2006, namely “The Calculation of the Amount Subject to Operational Risk”. V. Explanations Related to Consolidated Currency Risk Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate changes in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Parent Bank are taken into consideration and value at risk is calculated by using the standard method. Currency risk is managed by considering internal currency limits that are designated as Bank’s risk policies. Within the frame of legal limits defined by FC Net General Position / Equity Ratio and internal currency risk limits determined by Board of Directors , decisions are taken by Asset and Liability Committee meet periodically, take decisions for currency and parity risk hedge and those decisions are implemented strictly. The Parent Bank does not use any derivative instruments for hedging. The Standard Method stated in the statutory reporting is used to measure the currency risk of the Parent Bank. The risk measurements are performed on a monthly basis. The announced current foreign exchange buying rates of the Parent Bank as of December 31, 2011 and the previous five working days are as follows: “FC Evaluation Rate” Previously; 29.12.2011 (Day 1) 28.12.2011 (Day 2) 27.12.2011 (Day 3) 26.12.2011 (Day 4) 23.12.2011 (Day 5) US Dollar 1,9065 1,8897 1,8847 1,8833 1,8809 1,8779 December 31, 2011 Euro 2,4626 2,4462 2,4626 2,4609 2,4510 2,4497 Sterling 2,9347 100 Japanese Yen 2,4475 2,9228 2,9501 2,9444 2,9382 2,9432 2,4203 2,4183 2,4137 2,4029 2,4475 The simple arithmetic averages of the major current foreign exchange buying rates of the Parent Bank for the thirty days before December 31, 2011 are as follows; TRY 1,8577 per US Dollar, TRY 2,4463 per EURO, TRY 2,8972 per GBP and TRY 2,3823 per 100 JPY. 198 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Information on the Foreign Currency Risk of the Group: Foreign Currencies (Thousand TRY) EUR USD YEN Other Total Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 180.072 616.682 - 355.471 1.152.225 Due from Banks Current Period - December 31, 2011 Assets 120.987 208.973 1.200 12.327 343.487 Financial Assets at Fair Value through Profit and Loss (**) - - - - - Money Market Placements - - - - - Financial Assets Available-for-Sale - - - - - 1.464.200 3.041.048 - - 4.505.248 Subsidiaries, Associates and Entities under Common Control - - - - - Held-to-Maturity Investments - - - - - Derivative Financial Assets for Hedging Purposes - - - - - Tangible Assets - - - - - Loans (*) Intangible Assets Other Assets Total Assets - - - - - 1.265 1.838 - - 3.103 1.766.524 3.868.541 1.200 367.798 6.004.063 49.109 68.242 - 43 117.394 1.264.585 2.224.175 1.089 966.678 4.456.527 - - - - - 517.435 933.116 - 7.279 1.457.830 - - - - - 1.279 2.609 - 12 3.900 Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Money Market Borrowings Funds Provided from Other Financial Institutions Marketable Securities Issued Sundry Creditors Derivative Financial Liabilities for Hedging Purposes - - - - - 9.241 66.366 138 58 75.803 1.841.649 3.294.508 1.227 974.070 6.111.454 (75.125) 574.033 (27) (606.272) (107.391) 77.107 (581.698) 38 607.267 102.714 148.989 234.910 38 608.417 992.354 71.882 816.608 - 1.150 889.640 1.535.113 3.567.860 86.954 111.325 5.301.252 Total Assets 1.137.690 3.183.187 5.561 129.542 4.455.980 Total Liabilities 1.323.332 2.670.207 6.457 145.683 4.145.679 (185.642) 512.980 (896) (16.141) 310.301 188.586 (508.585) 907 16.933 (302.159) 195.760 3.332 907 17.699 217.698 7.174 511.917 - 766 519.857 1.376.636 3.485.728 44.138 93.786 5.000.288 Other Liabilities (**) Total Liabilities Net Balance Sheet Position Net Off-Balance Sheet Position Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period - December 31, 2010 Net Balance Sheet Position Net Off-Balance Sheet Position Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) (*) TRY 2.919.385 Thousand of foreign currency indexed loan is also shown under loans line (December 31, 2010: TRY 2.564.320 Thousand). (**) In accordance with the principles of the Regulations on the “Measurement and Practices of Bank’s Net Overall FX position Shareholders’ Equity Ratio on a Consolidated and Unconsolidated Basis”, income accrual from derivative financial instruments amounting to TRY 1.250 Thousand (December 31, 2010 : TRY 2.581 Thousand) in assets and general reserves recorded to expense accounts amounting to TRY 15.111 Thousand (December 31, 2010: TRY 12.045 Thousand) and expense accrual from derivate financial instruments amounting to TRY 11.715 Thousand (December 31, 2010: TRY 5.397 Thousand) in liabilities, are not taken into consideration in the currency risk calculation. (***) Forward asset purchase-sale commitments of TRY 350.892 Thousand are added to derivative financial assets and TRY 236.248 Thousand is added to derivative financial liabilities (December 31, 2010: TRY 22.963 Thousand is added to derivative financial assets and TRY 56.280 Thousand is added to derivative financial liabilities). (****) The related balances do not have any effect on off balance sheet position. 199 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Foreign Currency Sensitivity: The Group is mainly exposed to USD and EUR currency risks. The following table details the Bank’s sensitivity to a 10% increase and decrease in the TRY against USD and EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. A positive number indicates an increase in profit or loss and other equity in the case of short position and a decrease in the case of long position where the TRY strengthens against USD and EUR. Change in Currency Rate in % Effect on Profit or Loss Current Period Prior Period USD 10 % increase (767) 440 USD 10 % decrease 767 (440) EUR 10 % increase 198 294 EUR 10 % decrease (198) (294) VI. Explanations on Interest Rate Risk Since the Group has interest-free banking operations, it does not have any interest sensitive asset or liability and consequently, it does not have any interest rate risk. VII. Explanations on Liquidity Risk In order to avoid the liquidity risk, the Parent Bank diversifies its funding resources as customer deposits and foreign borrowings, considers the maturity match between assets and liabilities, focuses on strategies especially for the provision of long-term resources and retains its liquid assets in order to provide sufficient liquidity in any market fluctuations. Maturity structure of the TRY and FC deposits, cost and change in the total amount are monitored on daily basis by considering the past developments and future expectations. The Parent Bank’s policy is to establish an asset structure that primarily meets all kinds of liabilities by using liquid resources. The Board of Directors of the Parent Bank determines a standard for the liquidity ratios, and applies the standard on a regular basis in order to ensure. The table below gives a summary of the liquidity ratio of the Parent Bank: Current Period 200 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 135,72 110,28 Highest (%) 167,26 121,20 Lowest (%) 112,65 100,63 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Presentation of Assets and Liabilities According to Their Maturities: Current Period – December 31, 2011 Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey Due from Banks Financial Assets at Fair Value through Profit and Loss Money Market Placements Available-for-Sale Financial Assets Loans (**) Held-To-Maturity Investments Other Assets Total Assets Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Total 881.872 797.780 - - - - - 1.679.652 350.496 34.801 15.876 1.683 2 - - 402.858 7.611 1.250 - - - - - 8.861 - - - - - - - - 219 - 128.782 254.438 396.324 - - 779.763 - 1.844.532 1.539.782 4.505.279 4.723.556 528.231 - 13.141.380 - - 77.053 - - - - 77.053 13.219 1.253.417 71.612 2.749.975 11.651 1.773.144 14.891 4.776.291 12 5.119.894 528.231 1.147.543 1.147.543 1.258.928 17.348.495 41.802 52.433 2.085 21.239 - - - 117.559 3.078.507 4.138.206 913.761 3.551.409 493.479 - - 12.175.362 - 160.135 68.559 977.405 246.515 32.573 - 1.485.187 - 279.207 - - - - - 279.207 Liabilities Current and Profit Sharing Accounts of Banks Other Current and Profit Sharing Accounts Funds Provided from Other Financial Instruments Money Market Borrowings Marketable Securities Issued Sundry Creditors Other Liabilities (***) Total Liabilities Net Liquidity Gap - - - - - - - - 32.336 9.467 3.162.112 (1.908.695) 348.495 171.455 5.149.931 (2.399.956) 2.895 1.547 988.847 784.297 3.711 52.920 4.606.684 169.607 4.493 744.487 4.375.407 32.573 495.658 716 2.663.145 2.663.861 (1.516.318) 392.646 2.898.534 17.348.495 - Prior Period – December 31, 2010 Total Assets Total Liabilities Net Liquidity Gap 1.719.318 2.110.538 (391.220) 1.865.913 5.151.527 (3.285.614) 2.123.035 2.122.186 849 3.503.712 2.775.218 728.494 4.357.094 119.400 4.237.694 261.732 1.018 260.714 830.191 2.381.108 (1.550.917) 14.660.995 14.660.995 - (*)Asset items, such as tangible assets, investment in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans which are required for banking operations and which cannot be converted to cash in short-term are included in this column.. (**) Loans balance also includes Finance Lease Receivable balance. (***) Equity is presented in the “Undistributed” column under “Other Liabilities”. 201 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Analysis of Financial Liabilities Based on the Remaining Contractual Maturities: The table below is drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. Profit share expenses to be paid on such liabilities are included in this table. “Adjustments” column indicates items that may lead to potential cash flows in the following period. These items are included in maturity analysis, but not included in the balance sheet value of such financial liabilities. December 31, 2011 Funds Collected Funds Borrowed Money Market Borrowings Total December 31, 2010 Funds Collected Funds Borrowed Money Market Borrowings Total Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments Total 3.120.309 - 4.190.639 161.258 915.846 70.225 3.572.648 1.002.191 493.479 349.273 40.045 (137.805) 12.292.921 1.485.187 - 279.319 - - - - (112) 279.207 3.120.309 4.631.216 986.071 4.574.839 842.752 40.045 (137.917) 14.057.315 2.079.169 - 4.619.951 27.346 2.069.954 47.910 2.276.132 516.549 41.289 97.772 1.147 (40.013) 11.086.495 650.711 - - - - - - - - 2.079.169 4.647.297 2.117.864 2.792.681 139.061 1.147 (40.013) 11.737.206 Analysis of Contractual Expiry by Maturity of the Group’s Derivative Financial Instruments: December 31, 2011 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total December 31, 2010 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total 202 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total 662.842 662.842 662.842 - - - - 662.842 662.842 662.842 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total 254.867 254.867 254.867 208.710 208.710 208.710 - - - 463.577 463.577 463.577 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VIII. Presentation of Financial Assets and Liabilities at Fair Value As the loan portfolio has fixed profit sharing rates, estimated fair value is calculated by using the discounted cash flows. The table below summarizes the book value and fair value of the financial assets and liabilities. Book value is the sum of the acquisition value and accumulated profit share accruals. Financial Assets Banks and Other Financial Institutions (*) Financial Assets Available For Sale Held to Maturity Investments Loans (**) Financial Liabilities Funds Collected From Banks (***) Other Current and Profit Sharing Accounts (***) Funds Provided From Other Financial Institutions Sundry Creditors Money Market Borrowings Book Value Current Period 15.761.215 Fair Value Current Period 15.739.066 Prior Period 13.443.933 Prior Period 14.221.137 1.763.019 2.055.461 1.763.019 2.055.461 779.763 77.053 13.141.380 14.449.961 117.559 394.708 77.032 10.916.732 12.020.112 12.916 779.763 77.282 13.119.002 14.393.631 117.559 394.708 79.962 11.691.006 12.020.378 12.916 12.175.362 11.073.579 12.175.362 11.073.579 1.485.187 650.711 1.428.857 650.977 392.646 279.207 282.906 - 392.646 279.207 282.906 - (*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value. (**)In order to calculate the fair value of loans, current profit sharing rates are used as of the balance sheet date. Loan balance also includes finance lease receivables. Fair values of loans are calculated under the assumption that all installments are distributed equally. (***) Book value of the funds collected approximates to their fair value as it is revalued with the year end unit value. The following table shows an analysis of financial instruments recorded at fair value, between those whose fair value is recorded on quoted market prices, those involving valuation techniques where all model inputs are observable in the market and, those where the valuation techniques involves the use of non observable inputs: December 31, 2011 Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total 1st Level TRY 2nd Level TRY 3rd Level TRY 7.611 399.250 406.861 1.250 380.294 381.544 - - 11.715 11.715 - December 31, 2010 Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available For Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total 1st Level TRY 2nd Level TRY 3rd Level TRY 4.897 103.400 108.297 2.581 291.084 293.665 - - 5.397 5.397 - IX. Explanations Related to Transactions Carried out on Behalf of Other Parties and Fiduciary Assets The Group does not deal with fiduciary operations or transactions made on behalf of others. 203 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE CONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Consolidated Assets 1. Information on Cash and Balances with the Central Bank of Turkish Republic 1.1.Information on Cash: Current Period Cash in TRY/ Foreign Currency Central Bank of the Republic of Turkey Other Total TRY 113.521 412.559 1.347 527.427 FC 204.602 947.602 21 1.152.225 Prior Period TRY 87.616 1.261.233 8.328 1.357.177 FC 158.106 569.669 17 727.792 1.2.Information on the Central Bank of Turkish Republic Accounts: Current Period Unrestricted Demand Deposit Unrestricted Time Deposit Restricted Time Deposit Other (*) Total TRY 412.559 412.559 FC 149.823 797.779 947.602 Prior Period TRY 1.261.233 1.261.233 FC 248.965 320.704 569.669 (*) Stands for the reserve deposit kept in Central Bank of the Republic of Turkey in relation to foreign currency liabilities. According to the communiqué No: 2005/1 on “Reserve Deposits”, the banks operating in Turkey are required to keep reserve deposit at the rates varying from 5% to 11% (December 31, 2010: 6 % for all TRY liabilities) for TRY liabilities and at the rates varying from 6% to 11% (December 31, 2010: 11% for all FC liabilities) for foreign currency liabilities mainly denominated in U.S. Dollar and Euro depending on the maturity of the liabilities. Profit share has not paid for reserve deposits. 2. Information on Financial Assets at Fair Value through Profit and Loss 2.1. Information on Financial Assets at Fair Value through Profit and Loss Blocked/Given as Collateral or Subject to Repurchase Agreements: None. 2.2.Positive Differences Related to Derivative Financial Assets Held for Trading: Current Period Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Includes forward asset purchase/sale commitments. 204 TP - Prior Period YP 1.121 129 1.250 TP - YP 67 2.514 2.581 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3. Information on Banks 3.1.Information on Banks and Other Financial Institution: Current Period Banks Domestic (*) Foreign Branches and Head Office Abroad Total Prior Period TRY 59.371 59.371 - FC 343.487 261.689 81.798 TRY 74.157 74.157 - FC 150.402 32.474 117.928 - - - - 59.371 343.487 74.157 150.402 (*) It also contains TRY 17.487 Thousand blocked accounts (December 31, 2010: TRY 15.231 Thousand) which is deposited by Işık Sigorta A.Ş. as elementary branches insurance warranty in favor of Turkish Treasury. 3.2. Information on Foreign Bank Accounts: European Union Countries USA, Canada OECD Countries (*) Off-Shore Banking Regions Other Total Unrestricted Amount Current Period Prior Period 24.905 34.515 36.866 74.871 9.041 7.406 39 1.174 1.136 72.025 117.928 Restricted Amount Current Period 9.773 9.773 Prior Period - (*) OECD countries other than European Union countries, USA and Canada. 4. Information on Financial Assets Available for Sale 4.1. Information on Available for Sale Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: 4.1.1 Information on Financial Assets Available For Sale Given as Collateral or Blocked: None. 4.1.2 Information on Financial Assets Available for Sale Subject to Repurchase Agreements: As of December 31, 2011, the Group has revenue sharing certificates in “Available for Sale Financial Assets” portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY 322.459 Thousand nominal value (December 31, 2010: None.) and TRY 325.712 Thousand fair value (December 31, 2010: None). 4.2. Information on Financial Assets Available for Sale As of December 31, 2011, the Parent Bank has revenue sharing certificate which has TRY 775.000 Thousand nominal value (December 31, 2010: TRY 375.000 Thousand) and TRY 779.544 Thousand fair value at “Available for Sale Financial Assets” portfolio (December 31, 2010: TRY 394.484 Thousand), as of 4,35% and TRY 125 Thousand of Tarsim Tarım Sigortaları Havuz İşletmesi A.Ş.’s shares and TRY 94 Thousand other share certificates as of December 31, 2011. Debt Securities Quoted on a Stock Exchange Not Quoted (*) Share Certificates Quoted on a Stock Exchange Not Quoted Impairment Provision (-) Total Current Period 783.294 399.250 384.044 219 219 (3.750) 779.763 Prior Period 394.484 103.400 291.084 224 224 394.708 (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 205 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5. Information on Loans 5.1. Information on All Types of Loans or Advances Given to Shareholders and Employees of the Parent Bank: Cash 57.567 22.986 34.581 148.505 14.291 220.363 Direct Loans Granted to Shareholders Corporate Shareholders Real Person Shareholders Indirect Loans Granted to Shareholders Loans Granted to Employees Total Current Period Non-Cash 2.565 1.870 695 162.080 118 164.763 Cash 78.453 33.583 44.870 94.095 9.870 182.418 Prior Period Non-Cash 3.138 2.655 483 39.644 118 42.900 5.2.Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Standard Loans and Other Receivables Cash Loans Discount Notes Export Loans Import Loans Business Loans Consumer Loans Credit Cards Investments on Profit/Loss Partnership Precious Metal Loans Loans Given to Financial Sector International Loans Other Other Receivables Total Closely Monitored Loans and Other Receivables (*) Loans and Other Restructured or Receivables Rescheduled Loans and Other Receivables Restructured or Rescheduled 132.974 171.345 8.505.578 1.615.760 927.066 2.789 92.516 518 2.569 11.641 273.119 12.363 6.690 111.799 379.901 877 1.010 7.623 - - - 256 429.707 35.376 11.825.685 758 1 99.151 27.782 7.198 338.793 69.914 16.499 580.000 (*) In addition to the closely monitored loans, the Bank also has TRY 1.384 Thousand of closely monitored finance lease receivables. (December 31, 2010: TRY 320 Thousand). 5.3.Loan Distribution Based by Maturity Structure: Standard Loans and Other Receivables Short-Term Loans and Other Receivables Loans Other Receivables Medium-Term and Long-Term Loans Loans Other Receivables 206 Closely Monitored Loans and Other Receivables Loans and Other Restructured or Receivables Rescheduled Loans and Other Receivables Restructured or Rescheduled 3.721.056 3.275 82.924 18.031 3.721.056 - 3.275 - 82.924 - 18.031 - 8.104.629 95.876 255.869 561.969 8.104.629 - 95.876 - 255.869 - 561.969 - Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.4.Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel Credit Cards: Consumer Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Retail Credit Cards-TRY With Installments Without Installment Retail Credit Cards-FC With Installments Without Installment Personnel Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Personnel Credit Cards-TRY With Installments Without Installment Personnel Credit Cards-FC With Installments Without Installment Overdraft Account-TRY(Individuals) Overdraft Account-FC (Individuals) Total Short Term 4.725 1.882 1.075 532 1.236 879.849 273.318 606.531 107 5 63 39 6.338 2.614 3.724 891.019 Medium-term and Long-Term 1.612.026 1.498.834 105.304 7.888 4.938 4.812 65 61 13.686 13.686 7.715 3.339 4.053 323 7 7 124 124 1.638.496 Total 1.616.751 1.500.716 106.379 8.420 1.236 4.938 4.812 65 61 893.535 287.004 606.531 7.822 3.344 4.116 362 7 7 6.462 2.738 3.724 2.529.515 207 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.5.Information on Installment Basis Commercial Loans and Corporate Credit Cards: Installment Commercial Loans-TRY Business Loans Vehicle Loans Consumer Loans Other Installment Commercial Loans-FC Indexed Business Loans Vehicle Loans Consumer Loans Other Installment Commercial Loans-FC Business Loans Vehicle Loans Consumer Loans Other Corporate Credit Cards-TRY With Installments Without Installments Corporate Credit Cards-FC With Installments Without Installments Overdraft Account-TRY(Corporate) Overdraft Account- FC (Corporate) Total Short Term 21.663 51 21 21.591 37.267 1.850 35.417 58.930 Medium and Long Term 16.429 9.112 7.317 71 71 16.500 Total 38.092 9.163 7.338 21.591 37.338 1.921 35.417 75.430 Current Period 1.183 12.842.446 12.843.629 Prior Period 1.439 10.809.822 10.811.261 Current Period 12.315.468 528.161 12.843.629 Prior Period 10.452.831 358.430 10.811.261 Current Period 107.795 107.795 Prior Period 77.494 77.494 5.6.Allocation of Loans according to Borrowers: Public Sector Private Sector Total 5.7. Domestic and Foreign Loans: Domestic Loans Foreign Loans Total 5.8.Loans Granted to Subsidiaries and Associates: Loans Granted to Subsidiaries and Associates Directly Loans Granted to Subsidiaries and Associates Indirectly Total 208 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.9.Specific Provisions Provided Against Loans: Current Period 40.541 62.435 202.612 305.588 Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Total Prior Period 6.737 37.039 259.840 303.616 5.10. Information on Non-Performing Loans (Net): 5.10.1. Information on Loans and Other Receivables Included in the Non-Performing Loans which are Restructured or Rescheduled: III Group Loans and Receivables with Limited Collectibility Current Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Prior Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables IV Group Loans and Receivables with Doubtful Collectability V Group Uncollectible Loans and Receivables 10.751 962 9.789 13.290 1.468 11.822 1.700 272 1.428 2.779 2.116 663 4.839 2.344 2.495 7.333 3.966 3.367 III Group IV Group Loans and Receivables with Doubtful Collectability 90.907 10.488 231.489 (133.298) (52.762) 146.824 (62.435) 84.389 V Group 5.10.2. Information on Movement of Non-Performing Loans: Loans and Receivables with Limited Collectibility Ending Balance of Prior Period Additions in the Current Period (+) (*) Transfer from Other NPL Accounts (+) Transfer to Other NPL Accounts (-) Collections in the Current Period (-) (*) Write offs (-) Corporate and Commercial Loans Retail Loans Credit Cards Other Ending Balance of the Current Period Specific Provisions (-) Net Balance at the Balance Sheet 42.035 504.261 (231.489) (103.531) 211.276 (40.541) 170.735 Uncollectible Loans and Receivables 314.209 45.527 133.298 (68.945) (166.459) (111.642) (1.647) (51.179) (1.991) 257.630 (202.612) 55.018 (*) Movements between loan groups presented double within additions and collections in the interim financial reporting periods are offset by the year end. 209 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.10.3. Information on Foreign Currency Non-Performing Loans and Other Receivables: III Group Loans and Receivables with Limited Collectibility Current Period Ending Balance Specific Provisions (-) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) Net Balance at the Balance Sheet IV Group Loans and Receivables with Doubtful Collectability V Group Uncollectible Loans and Receivables - - 1.697 (1.257) 440 - - 1.478 (1.087) 391 IV Group Loans and Receivables with Doubtful Collectability V Group 5.10.4. Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: III Group Loans and Receivables with Limited Collectability Current Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) Loans to Real Persons and Legal Entities (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) Prior Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) 210 Uncollectible Loans and Receivables 211.276 (40.541) 170.735 - 146.824 (62.435) 84.389 - 257.630 (202.612) 55.018 - 42.035 (6.737) 35.298 - 90.907 (37.039) 53.868 - 314.209 (259.840) 54.369 - Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.10.5. Non-Performing Loans and Main Guidelines of Liquidation Process for Loans and Receivables: If the Parent Bank has collateral components stated in Article 9 of the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”, such components are immediately liquidated by applying managerial or legal procedures. In the absence of collateral component, even if there is an indication of insolvency, the Parent Bank reviews the financial intelligence of the debtor systematically to determine subsequently acquired property holdings and applies the legal procedures. Prior and subsequent to the legal procedures, as a result of reviews performed regarding the financial information provided, the Parent Bank intends to liquidate its loans and other receivables from the companies that have potential development in the production and consequent contribution to the economy by means of the rescheduled agreements. 5.10.6. Explanation on Write–off Policy: Provision allocations arising from during or after the transfer of any loan receivables to “Non-performing loans” are performed by the Parent Bank’s Loan Monitoring Department within the framework of the Banking Regulations and Supervisory Agency. Additionally, loans are written-off against the assets, at least once a year, by the Credit Monitoring Agency to the extent that at least one of the following below is met and provision is fully made for all non-performing loans in accordance with the decision made by the Board of Directors: - Receivables with the document obtained from Collections Agency stating that the receivable cannot be followed up or; - Receivables assessed as uncollectible within existing conditions by the Law Department although the collection follow up process is going on. 5.11. Other Explanations and Disclosures: The information related to loan quality is stated as below: Current Period – December 31, 2011 Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 5.496.990 3.881.933 1.616.278 929.635 11.924.836 385.712 512.141 13.240 7.700 918.793 287.399 263.544 7.009 57.778 615.730 6.170.101 4.657.618 1.636.527 995.113 13.459.359 (*) The Group classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated November 18, 2005 and numbered 25997 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”. Prior Period – December 31, 2010 Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 4.797.616 3.468.651 913.669 723.690 9.903.626 541.809 319.019 16.660 30.147 907.635 67.751 275.436 6.790 97.174 447.151 5.407.176 4.063.106 937.119 851.011 11.258.412 (*) The Group classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated November 18, 2005 and numbered 25997 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”. 211 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) The details of loan guarantees and leasing portfolio are stated as below: Current Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 4.812.274 365.376 99.616 5.277.266 516.885 1.392.830 6.721.989 113.870 168.083 647.329 15.500 120.786 235.902 646.255 1.681.699 7.605.220 Residential, Commercial or Industrial Real Estates Financial Assets Other Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, suretyships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333. Prior Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Total 2.806.286 338.661 83.668 3.228.615 337.821 1.220.199 4.364.306 112.982 184.860 636.503 25 74.116 157.809 450.828 1.479.175 5.158.618 Residential, Commercial or Industrial Real Estates Financial Assets Other Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, surety ships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or in cumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333. Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Current Period – December 31, 2011 Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Less than 30 Days (*) 31-60 Days 61-90 Days More than 91 Days Total 304.216 388.047 2.126 1.730 1.384 697.503 61.091 49.282 6.729 5.970 123.072 20.405 74.812 4.385 99.602 - 385.712 512.141 13.240 7.700 1.384 920.177 (*) The Parent Bank follows up the entire loan balance having less than 30 days overdue in the watch list based on conservatism principal and TRY 621.618 Thousand of such amount does not have payment overdue as of December 31, 2011 (Finance Lease Receivables: TRY 1.384 Thousand) Prior Period – December 31, 2010 Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Less than 30 Days (*) 31-60 Days 61-90 Days More than 91 Days Total 443.294 175.747 914 405 33 620.393 32.530 43.752 9.352 21.263 2 106.899 65.985 99.520 6.394 8.479 285 180.663 - 541.809 319.019 16.660 30.147 320 907.955 (*) The Parent Bank follows up the entire loan balance having less than 30 days overdue in the watch list based on conservatism principal and TRY 608.548 Thousand of such amount does not have payment overdue as of December 31, 2010 (Finance Lease Receivables: TRY 39 Thousand). 212 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 5.12. Other Explanations and Disclosures: Explanations on the loans and other receivables of the Parent Bank for which the payment schedules are revised as per the agreement: Based on the Article 4 of the Communiqué “Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves”, the number of loans, total amount and extension periods for which the payment schedules are revised after May 28, 2011 are as follows: Extension Period Loans Quantity Amount Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total - 1 54 4 338 9 1.871 2 22.948 16 25.211 6. Information on Held-to-Maturity Investments (Net) 6.1.Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: 6.1.1. Information on Held to Maturity Investments Given as Collateral or Blocked: None. 6.1.2. Held to Maturity Investments Subject to Repurchase Agreements: As of December 31, 2011, the Bank has revenue sharing certificates in “Held to Maturity Investments” portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY 42.000 Thousand nominal value (December 31, 2010: None) and TRY 43.269 Thousand fair value (December 31, 2010: None). 6.2.Information on Government Bonds Classified as Held to Maturity Investments: The Group has TRY 77.053 Thousand of revenue sharing certificate as of December 31, 2011 (December 31, 2010: TRY 77.032 Thousand). Current Period Government Bonds Treasury Bill Other Total TRY 77.053 77.053 Prior Period FC - TRY 77.032 77.032 FC - TRY 77.032 51.435 25.597 77.032 FC - 6.3.Information on Investments Held-to-Maturity: Current Period Debt Securities Quoted on a Stock Exchange Not Quoted (*) Impairment Provision (-) Total TRY 77.053 51.446 25.607 77.053 Prior Period FC - (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 6.4.Movement of Held-to-Maturity Investments: Beginning Balance Foreign Currency Differences on Monetary Assets Purchases During Year Disposals through Sales and Redemptions Impairment Provision (-) Valuation Effects Closing Balance Current Period 77.032 21 77.053 Prior Period 76.460 50.000 (50.000) 572 77.032 213 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Information on Associates 7.1.Information on the Consolidated Associates: Company Name (1) (2) (3) Address (City/ Country) İstanbul/Turkey İstanbul/Turkey Ankara/Turkey Yeni Mağazacılık A.Ş. (*) Landmark Holding A.Ş. (*) Kredi Garanti Fonu A.Ş. The Parent Bank’s Share Percentage, if Different-Voting Percentage (%) 21,84% 21,84% 1,67% The Parent Bank’s Risk Group Share Percentage (%) 21,84% 21,84% 1,67% (*) The Parent Bank participated in Yeni Mağazacılık A.Ş. and in Landmark Holding A.Ş. with the Financing Method for Participation Banks explained in the regulation No: 19 regarding “Banks’ Lending Transactions” published and became effective in the Official Gazette numbered 26333, dated November 1, 2006 by means of joint investment method. These are recorded as associates in accordance with the Uniform Chart of Accounts published in the Official Gazette numbered 26415 and dated January 26, 2007. (1) (*) (2) (*) (3) (*) Total Assets Equity Total Fixed Assets 277.131 43.453 207.899 (116.811) 43.231 201.048 84.490 43.402 2.904 Profit Share Income 6 3.979 Income from Marketable Securities Portfolio - Current Period Profit/Loss Prior Period Profit/Loss (93.799) (192) 7.672 (86.383) (1.486) 7.632 Fair Value (**) 175.277 (***) 56.966 - (*) Financial information is provided from the associate’s unaudited financial statements as of December 31, 2011. (***) It is expertise value of the Bank’s associate, Yeni Mağazacılık A.Ş., as of February 4, 2010. (****) It is the expertise value of the Bank’s associate, Landmark Holding A.Ş., as of February 9, 2010. 7.2.Information on Associates: Company Name (1) Address (City/ Country) Dakar/Senegal Tamweel Africa Holding S.A. (*) The Parent Bank’s Share Percentage, if Different-Voting Percentage (%) 40,00% The Parent Bank’s Risk Group Share Percentage (%) 40,00% (*) As of February 4, 2010, the Bank has paid for TRY 21.548 Thousand and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector (“ICD”) which is a group establishment of the Islamic Development Bank (“IDB”). TRY 9.077 Thousand and TRY 4.900 Thousand has paid for capital increase respectively on June 8, 2010 and October 3, 2011. As of the reporting date capital registry process has not been finalized yet. (*) Total Assets Equity Total Fixed Assets (1) 843.063 112.165 19.622 Profit Share Income 35.127 Income from Marketable Securities Portfolio - Current Period Profit/Loss Prior Period Profit/Loss Fair Value 8.625 6.117 - (*) Financial information is provided from the associate’s audited financial statements as of December 31, 2011. 7.3. Movement of the Consolidated Associates: Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained Dividends from Current Year Income Sales Revaluation Increase Provision for Diminution in Value Balance at the End of the Period Capital Commitments Share Percentage at the End of the Period (%) Current Period 30.625 4.900 4.900 35.525 40,00% Prior Period 30.625 30.625 30.625 40,00% (*)Tamweel Africa Holding S.A., of which acquisition cost is TRY 35.525 Thousand, has been accounted for under equity method and recognized at TRY 45.900 Thousand in the accompanying consolidated financial statements (December 31, 2010: TRY 31.166 Thousand). 214 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7.4. Sectoral Information on the Financial Associates and the Related Carrying Amounts: Current Period 35.525 Banks Insurance Companies Factoring Companies Leasing Companies Finance Companies Other Subsidiaries Prior Period 30.625 7.5.Quoted on the Stock Exchange: None. 8. Information on Subsidiaries (Net) 8.1.Information on Unconsolidated Subsidiaries: Address (City/ Country) Company Name (1) (2) (3) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Asya Kart Teknoloji Hizmetleri A.Ş. GH Sultanbeyli Gayrimenkul ve Proje Geliştirme A.Ş. (*) Total Assets Equity Total Fixed Assets (1) (2) (3) 73.218 5 30.661 64.004 2 27.050 1.784 24.710 Ankara/Turkey İstanbul/Turkey İstanbul/Türkiye Profit Share Income 91 - The Parent Bank’s share percentage, if differentvoting percentage (%) 99,93% 99,50% - Income from Marketable Securities Portfolio - The Parent Bank’s risk group share percentage (%) 99,93% 99,50% 99,92% Current Period Profit/Loss Prior Period Profit/Loss 149 9 (492) 414 (9) (3.819) Fair Value - 27.564 (*) Financial information is provided from the unaudited financial statements of subsidiaries as of December 31, 2011. 8.2. Information on Consolidated Subsidiaries: (1) (2) (3) (4) Company Name Address (City/ Country) Asya Emeklilk ve Hayat A.Ş. (*) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. Işık Sigorta A.Ş. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul\Turkey İstanbul\Turkey İstanbul\Turkey İstanbul\Turkey Bank’s share percentage, if different-voting percentage (%) 97,99% 95,00% 65,42% 22,94% The Parent Bank’s risk group share percentage (%) 97,99% 95,00% 65,42% 69,39% (*) The Parent Bank has become the shareholder of Asya Emeklilik ve Hayat A.Ş. established on July 1, 2011. (*) Total Assets (1) (2) (3) (4) 9.002 211 205.491 137.239 Equity Total Fixed Assets Profit Share Income 8.770 208 75.258 108.422 472 1.468 34.728 255 12 9.056 375 Income from Marketable Securities Portfolio (5) 1.236 - Current Period Profit/Loss Prior Period Profit/Loss (1.221) 1 5.786 (2.054) 5 1.106 842 Fair Value (**) 190.616 (***) 192.051 (*) Financial information is provided from the audited financial statements of subsidiaries as December 31, 2011. (**) It is expertise value of the Bank’s subsidiary, Işık Sigorta A.Ş., as of February 4, 2010. (***)VAT included fair value is TRY 192.051 Thousand, including land, per expertise appraisal dated January 26, 2010. 215 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 8.3. Movement of the Consolidated Subsidiaries: Current Period 88.011 9.798 9.798 97.809 9.798 22,94%-97,99% Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained Dividends from Current Year Income Sales Revaluation Increase Provision for Impairment Addition / (Reversal) Effect of Change at Consolidation Scope Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) Prior Period 82.824 5.153 5.153 34 88.011 22,94%-95,00% (*) It consists of TRY 9.798 Thousand capital commitment to the Bank’s subsidary, Asya Emeklilik ve Hayat A.Ş.. 8.4.Sectoral Information on the Consolidated Financial Subsidiaries and the Related Carrying Amounts: Subsidiaries Banks Insurance Companies Factoring Companies Leasing Companies Finance Companies Other Subsidiaries Current Period 50.154 47.655 Prior Period 50.154 37.857 8.5.Subsidiaries Quoted on the Stock Exchange: None. 9. Information on Entities under Common Control None. 10. Information on Finance Lease Receivables (Net) 10.1 Presentation of Finance Lease Receivables According to Their Remaining Maturities: Current Period Less than 1 Year 1 to 4 Years More than 4 Years Total Gross 77.197 183.888 131.344 392.429 Prior Period Net 58.572 139.523 99.656 297.751 Gross 5.562 106.620 9.532 121.714 Net 4.820 92.391 8.260 105.471 10.2. Information on Net Investments in Finance Leases: Gross Receivable from Finance Leases Unearned Finance Lease Income (-) Net Receivable from Finance Leases 11. Derivative Financial Assets for Hedging Purposes None. 216 Current Period 392.429 (94.678) 297.751 Prior Period 121.714 (16.243) 105.471 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 12. Information on Tangible Assets Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Total Cost Opening Balance - January 1, 2011 Additions Disposals Transfers (**) Impairment (Losses) / Reversal (***) Closing Balance - December 31, 2011 12.454 (8.123) (111) 4.220 36.146 (3.523) 32.623 2.492 815 (734) (232) 2.341 226.189 177.100 (51.161) (2.274) 1.228 351.082 209.093 31.731 (6.907) (408) 233.509 486.374 209.646 (70.448) (2.914) 1.117 623.775 Accumulated Depreciation (-) Opening Balance - January 1, 2011 Depreciation Expense Accumulated Depreciation of Disposals Transfers (**) Impairment (Losses) / Reversal (***) Closing Balance - December 31, 2011 2.442 282 (1.970) 754 26.698 5.970 (3.387) 29.281 557 393 (144) 4 810 6.138 5.378 (1.649) (76) 392 10.183 96.213 37.864 (5.792) (256) 128.029 132.048 49.887 (12.942) (328) 392 169.057 Net Book Value - December 31, 2010 10.012 9.448 1.935 220.051 112.880 354.326 Net Book Value - December 31, 2011 3.466 3.342 1.531 340.899 105.480 454.718 (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture and other fixed assets. (**) TRY 3.117 Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year; TRY 5.598 Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. In the current period, tangible assets amounting to TRY 172 Thousand have been transferred to intangible assets and investment properties amounting to TRY 67 Thousand have been transferred to tangible assets. (***) In the current period, TRY 1.577 Thousand additional impairment has been provided for assets to be disposed off and TRY 2.413 Thousand impairment has been reversed due to disposals. In the current period, TRY 111 Thousand additional impairment has been recognized for buildings. Buildings Leased Tangible Assets Vehicles Assets Held for Resale Other Tangible Assets (*) Total Cost Opening Balance - January 1, 2010 Additions Disposals Transfers (**) Impairment (Losses) / Reversal Closing Balance - December 31, 2010 12.112 342 12.454 38.957 (2.811) 36.146 1.760 1.873 (1.141) 2.492 186.864 104.400 (69.279) (1.234) 5.438 226.189 167.563 45.905 (4.375) 209.093 407.256 152.178 (77.606) (1.234) 5.780 486.374 Accumulated Depreciation (-) Opening Balance - January 1, 2010 Depreciation Expense Accumulated Depreciation of Disposals Transfers Impairment (Losses) / Reversal Closing Balance - December 31, 2010 2.127 309 6 2.442 21.653 7.380 (2.335) 26.698 845 416 (704) 557 4.127 3.691 (1.875) (95) 290 6.138 67.511 32.683 (3.981) 96.213 96.263 44.479 (8.895) (95) 296 132.048 Net Book Value - December 31, 2009 9.985 17.304 914 182.737 100.054 310.994 Net Book Value - December 31, 2010 10.012 9.448 1.935 220.051 112.880 354.326 (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipments, furniture and other fixed assets. (**) TRY 7.205 Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year, TRY 8.344 Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. (***)During the period, TRY 1.619 Thousand additional impairment has been provided for assets to be disposed off and TRY 7.103 Thousand impairment has been reversed due to disposals. 217 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 13. Information on Intangible Assets 13.1. Opening and Ending Book Values and Accumulated Depreciation Balances: Current Period 26.716 (14.589) 12.127 Book Value Accumulated Depreciation Net Book Value Prior Period 20.889 (10.451) 10.438 13.2. Intangible Assets Movement Table: Rights Other Intangible Assets Total 144 1.148 430 1.722 20.745 4.249 24.994 20.889 5.397 430 26.716 137 225 258 620 10.314 3.655 13.969 10.451 3.880 258 14.589 Net Book Value- December 31, 2010 7 10.431 10.438 Net Book Value- December 31, 2011 1.102 11.025 12.127 Rights Other Intangible Assets Total Cost Opening Balance- January 1, 2011 Additions Transfers (*) Disposals Closing Balance- December 31, 2011 Accumulated Amortization (-) Opening Balance- January 1, 2011 Amortization Expense Transfers (*) Disposals Closing Balance- December 31, 2011 (*) In the current period, TRY 172 Thousand of the balance from tangible assets is transferred to intangible assets. Cost Opening Balance- January 1, 2010 Additions Disposals Closing Balance- December 31, 2010 Accumulated Amortization (-) Opening Balance- January 1, 2010 Amortization Expense Disposals Closing Balance- December 31, 2010 143 1 144 17.347 3.475 (77) 20.745 17.490 3.476 (77) 20.889 132 5 137 7.105 3.276 (67) 10.314 7.237 3.281 (67) 10.451 Net Book Value- December 31, 2009 11 10.242 10.253 Net Book Value- December 31, 2010 7 10.431 10.438 13.3. Information on Goodwill: As of December 31, 2011, goodwill amounts to TRY 4.111 Thousand (December 31, 2010: TRY 4.111 Thousand). 218 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 14. Explanations on Investment Properties Buildings Lands Leased Tangible Assets Vehicles Other Tangible Assets Total Cost Opening Balance - January 1, 2011 Additions Disposals Transfers (*) Impairment Expense Closing Balance - December 31, 2011 33.960 184 (281) (75) 33.788 4.948 4.948 2.139 2.139 51 (51) - 8.906 194 (22) 9.078 50.004 378 (281) (73) (75) 49.953 Accumulated Depreciation (-) Opening Balance - January 1, 2011 Depreciation Expense Disposals Transfers (*) Closing Balance - December 31, 2011 3.469 681 (10) 4.140 - 2.139 2.139 4 (4) - 7.580 455 (2) 8.033 13.192 1.136 (10) (6) 14.312 Net Book Value - December 31, 2010 30.491 4.948 - 47 1.326 36.812 Net Book Value - December 31, 2011 29.648 4.948 - - 1.045 35.641 (*) In the current period, TRY 67 Thousand of the balance from investment properties is transferred to tangible assets. As of December 31, 2011, fair value of investment properties amounts to TRY 52.915 Thousand (December 31, 2010: TRY 50.199 Thousand). Buildings Lands Leased Tangible Assets Vehicles Other Tangible Assets Total 33.779 241 (60) 33.960 4.948 4.948 2.139 2.139 51 51 11.597 521 (3.212) 8.906 52.463 813 (3.212) (60) 50.004 Accumulated Depreciation (-) Opening Balance - January 1, 2010 Depreciation Expense Disposals Closing Balance - December 31, 2010 2.786 683 3.469 - 2.139 2.139 4 4 9.565 601 (2.586) 7.580 14.490 1.288 (2.586) 13.192 Net Book Value - December 31, 2009 30.993 4.948 - - 2.032 37.973 Net Book Value - December 31, 2010 30.491 4.948 - 47 1.326 36.812 Cost Opening Balance - January 1, 2010 Additions Disposals Impairment Expense Closing Balance - December 31, 2010 219 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 15. Explanations on Deferred Tax Asset As of December 31, 2011, deferred tax asset calculated as the net amount according to the temporary differences, except for general loan loss provision and provision for possible risks is TRY 21.947 Thousand. As noted in disclosure 8.4 of section V.II, for purpose of consolidated financial statements deferred taxes arising from different consolidated subsidiaries are presented separately in assets and liabilities. Therefore, TRY 21.955 Thousand deferred tax assets and TRY 8 Thousand deferred tax liabilities are presented separately in the accompanying consolidated financial statements (December 31, 2010: TRY 10.754 Thousand deferred tax assets). Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences Valuation of Financial Assets Other Deferred Tax Asset/(Liability), net Current Period Deferred Tax Base Deferred Tax Asset/(Liability) 29.909 5.982 15.835 3.167 60.881 12.176 (14.064) (2.813) 16.133 3.227 1.042 208 109.736 21.947 Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences Valuation of Financial Assets Other Deferred Tax Asset/(Liability), net Prior Period Deferred Tax Base Deferred Tax Asset/(Liability) 23.898 4.780 24.769 4.954 33.145 6.629 (22.911) (4.582) (5.038) (1.008) (94) (19) 53.769 10.754 Movement of the net deferred tax asset/ (liability) as of December 31, 2011 and December 31, 2010 is stated as below: Deferred Tax Asset, January 1 Deferred Tax Recognized Directly Under Equity Deferred Tax Benefit /(Charge) Deferred Tax Asset/(Liability), net Current Period 10.754 5.083 6.110 21.947 Prior Period 5.946 (953) 5.761 10.754 16. Information on Assets Held for Sale Assets held for sale consist of tangible assets which are obtained from non-performing loans and they are recognized as required in accordance with the prevailing Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the Official Gazette numbered 26333 in the consolidated financial statements. As of December 31, 2011, assets held for sale amounts to TRY 8.724 Thousand (December 31, 2010: TRY 6.509 Thousand). Opening Balance- January 1 Additions Disposals Transfers (Net) (*) Impairment (**) Closing Balance, 31 December Current Period 6.509 3.239 (3.468) 2.481 (37) 8.724 Prior Period 9.196 (3.791) 1.139 (35) 6.509 (*)TRY 3.117 Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year; TRY 5.598 Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. (**)TRY 244 Thousand additional impairment has been recognized and TRY 209 Thousand impairment has been reversed due to disposals in the prior. 17. Information on Other Assets As of December 31, 2011, other assets amount to TRY 220.248 Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2010: TRY 217.921 Thousand). 220 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) II. Explanations and Disclosures Related to the Consolidated Liabilities 1.1.Information on Maturity Structure of Deposits: Current Period I. Real Person Current Deposits-TRY II. Real Person Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V.Real Person Current Deposits-FC VI. Real Person Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total (I+II+…..+IX+X+XI) Demand Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts Total 560.652 - - - - - - - 560.652 - 1.552.244 799.747 163.642 - 121.309 2.314.661 - 4.951.603 950.762 27.575 893.448 28.391 - - - - - - - 950.762 27.575 893.448 28.391 1.183 - - - - - - - 1.183 165 165 - 223.983 82 209.408 14.474 265.225 10 258.996 6.139 35.508 81 13.819 21.608 - 17.430 5.060 12.370 713.837 2.590 598.282 112.215 - 165 165 1.255.983 2.763 1.085.565 166.806 - 19 80 - - - 750 - 849 - - - - - - - - - 236.574 - - - - - - - 236.574 - 101.823 - 390.367 386.765 70.884 807.731 - 1.757.570 420.337 - - - - - - - 420.337 350.214 - - - - - - - 350.214 28.486 - - - - - - - 28.486 41.637 15.737 25.900 - 198.675 30 147.460 634 264.490 262.053 342 91.093 12.296 78.772 - 59.129 35.292 - 594.069 46 566.342 23.335 - 41.637 15.737 25.900 1.207.456 76 1.023.443 103.083 - 1.987 10 25 - 1.210 1.865 - 5.097 951.984 48.564 - 2.085 - - - 22.627 - 2.481 - - 75.757 951.984 - - - - - - - - - - - - - - - - - - - - - - - - - - - 3.120.309 2.365.269 1.716.227 361.127 - 299.691 4.430.298 - 12.292.921 221 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) Prior Period I. Real Person Current Deposits-TRY II. Real Person Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V.Real Person Current Deposits-FC VI. Real Person Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total (I+II+…..+IX+X+XI) 222 Demand Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts Total 487.918 - - - - - - - 487.918 - 1.851.180 1.175.698 254.717 - - 4.943.202 876.977 90.765 769.955 14.455 - - - - 190.314 1.471.293 - - - 876.977 90.765 769.955 14.455 829 - - - - - - - 829 973 973 - 459.845 5 448.690 10.653 500.418 64 458.319 41.960 58.618 25.626 32.992 - 12.531 8.679 3.852 249.176 230.771 17.569 - 973 973 1.280.588 69 1.172.085 107.026 - 497 75 - - - 836 - 1.408 - - - - - - - - - 261.028 - - - - - - - 261.028 - 523.290 544.120 122.153 - 132.089 474.593 - 1.796.245 329.874 - - - - - - - 329.874 302.245 - - - - - - - 302.245 20.243 - - - - - - - 20.243 7.386 5.172 2.214 - 252.706 52 231.416 588 451.406 441.254 5.405 120.325 37.631 79.313 - 35.627 34.664 - 127.227 112.202 11.712 - 7.386 5.172 2.214 987.291 52 857.167 97.018 - 20.629 211 3.381 - 963 3.313 - 28.497 123.372 21 - 4.536 - - - - - - 4.557 123.372 - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.079.169 3.087.021 2.671.642 555.813 - 370.561 2.322.289 - 11.086.495 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 1.2.Current and Participation Accounts Attributable to Real Entities/Persons Under the Guarantee of Saving Deposit Insurance Fund Exceeding the Limit of the Deposit Insurance Fund: Under the Guarantee of Saving Deposit Insurance Exceeding the Limit of Saving Deposit Insurance Current Period Prior Period Current Period Prior Period 3.825.673 3.503.770 4.577.635 4.036.931 TRY Accounts 2.775.039 2.854.573 2.737.187 2.545.285 FC Accounts 1.050.634 649.197 1.840.448 1.491.646 Foreign Branches’ Deposits Under Foreign Authorities’ Insurance - - - - Off-shore Banking Regions’ Deposits Under Foreign Authorities’ Insurance - - - - Real Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities 1.3.Current and Profit Sharing Accounts which are not under the Guarantee of Deposit Insurance Fund: Current Period Deposits and Other Accounts held at Foreign Branches - Deposits and Other Accounts held by Shareholders and their Relatives Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives Deposits and Other Accounts held as Assets subject to the Crime defined in the Article 282 of the Turkish Criminal Code no. 5237 dated 26 September 2004 Deposits at Depository Banks established for Off-Shore Banking Activities in Turkey Total 26.121 32.769 58.890 2. Information on Derivative Financial Liabilities Held for Trading As of December 31, 2011, derivative financial liabilities held for trading amounts to TRY 11.715 Thousand (December 31, 2010: TRY 5.397 Thousand). Current Period Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total TRY - FC 2.312 9.403 11.715 Önceki Dönem TRY - FC 176 5.221 5.397 (*) Includes forward asset purchase/sale commitments. 3. Information on Borrowings 3.1.Information on Banks and Other Financial Institutions: Loans from Central Bank of the Republic of Turkey From Domestic Banks and Institutions From Foreign Banks, Institutions and Funds Total TRY 27.357 27.357 Current Period FC 24.821 1.433.009 1.457.830 TRY 28.474 28.474 Prior Period FC 45.096 577.141 622.237 3.2. Maturity Analysis of Borrowings: Current Period Short-Term Medium-Term and Long-Term Total TRY 9.522 17.835 27.357 FC 938.119 519.711 1.457.830 Önceki Dönem TRY 1.272 27.202 28.474 FC 545.027 77.210 622.237 3.3. Additional Explanation related to the Concentrations of the Parent Bank’s Major Liabilities: None. 223 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 4. Other Liabilities Exceeding 10% of the Balance Sheet Total Excluding Off-Balance Sheet Commitments and the Breakdown of Such Liabilities Constituting at Least 20% of the Grand Total Other liability items amount to TRY 289.793 Thousand and do not exceed 10% of the balance sheet total (December 31, 2010: TRY 275.964 Thousand). 5. Information on Finance Lease Obligations None. 6. Information on Derivative Financial Liabilities for Hedging Purposes None. 7. Explanations on Provisions 7.1. Information on General Loan Loss Provision: General Provisions Provisions for First Group Loans and Receivables Profit Sharing Accounts’ Share The Bank’s Share Other Provisions for Second Group Loans and Receivables Profit Sharing Accounts’ Share The Bank’s Share Other Provisions for Non Cash Loans Current Period 131.066 98.783 47.908 50.875 15.538 3.929 11.609 16.745 Prior Period 117.204 85.241 43.833 41.408 15.711 3.084 12.627 16.252 7.2. Movement of General Loan Loss Provisions Current Period Opening Balance - January 1, 2011 Charge for Period Reversal of Prior Period Expenses Profit Sharing Accounts Share Closing Balance- December 31, 2011 Prior Period Opening Balance – January 1, 2010 Charge for Period Reversal of Prior Period Expenses Profit Sharing Accounts Share Closing Balance- December 31, 2010 117.204 9.768 (3.925) 8.019 131.066 89.368 22.088 (1.561) 7.309 117.204 7.3.Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans and Finance Lease Receivables: As of December 31, 2011, the Group’s provision for foreign currency indexed loans amounts to TRY 2.518 Thousand (December 31, 2010: TRY 9.962 Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements. 7.4.Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans: As of December 31, 2011, the Group’s specific provision for unindemnified non-cash loans amounts to TRY 21.016 Thousand (December 31, 2010: TRY 9.705 Thousand). 7.5.Explanations on Other Provisions: 7.5.1. Information on Provisions for Potential Risks: one (December 31, 2010: None). 224 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7.5.2. Information on Other Provisions: Other Provisions Provision for Unindemnified Non-Cash Loans Provision for Credit Cards and Promotion of Banking Services Provision Amount Allocated for Profit-Share Accounts Payment Commitment for Checks Litigation Provision Other (*) Total Current Period 21.016 4.434 3.616 2.001 1.704 22 32.793 Prior Period 9.705 4.212 6.170 1.308 16.000 37.395 (*) Other provisions, provisions for loan portfolio allocated to cover future potential losses include. 7.5.3. Movement of the Retirement Pay Provision: Opening Balance- January 1 Current Service Cost Discount Cost Benefits Paid Settlement/Curtailment/Termination Loss/(Gain) Actuarial Loss/(Gain) Closing Balance Current Period 12.697 2.570 1.193 (1.547) 336 981 16.230 Prior Period 8.572 2.016 906 (954) 561 1.596 12.697 The Parent Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19. As of December 31, 2011, the Group provided a provision of TRY 14.032 Thousand for the unused vacation pay (December 31, 2010: TRY 11.566 Thousand). 8. Explanations on Taxes Payable 8.1.Information on Current Tax Liability: As of December 31, 2011, the Group’s corporate tax payable is TRY 10.068 Thousand offsetting the prepaid corporate tax (December 31, 2010: TRY 15.726 Thousand). Current Period Prior Period Provision for Corporate Taxes 60.625 70.887 Prepaid Corporate Tax (50.557) (55.161) Corporate Tax Payable 10.068 15.726 (*) In current period income statement, tax expense for prior period amounts to TRY 215 Thousand is presented in the provision for income tax and other dues account (December 31, 2010: None). 8.2.Information on Taxes Payable: Corporate Taxes Payable Taxation of Securities Property Tax Banking Insurance Transaction Tax (BITT) Foreign Exchange Transaction Tax Value Added Tax Payable Other Total Current Period 10.068 8.599 638 11.398 448 11.550 42.701 Prior Period 15.726 7.179 471 7.089 1.779 11.271 43.515 225 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 8.3.Premiums: Social Security Premiums-Employee Social Security Premiums-Employer Bank Social Aid Pension Fund Premium-Employee Bank Social Aid Pension Fund Premium-Employer Pension Fund Membership Fees and Provisions-Employee Pension Fund Membership Fees and Provisions-Employer Unemployment Insurance-Employee Unemployment Insurance-Employer Other Total Current Period 4.748 6.614 338 681 17 12.398 Prior Period 2.628 3.654 186 372 6 6.846 8.4.Explanations on Deferred Tax Liabilities: As of December 31, 2011, deferred tax liability amounts to TRY 8 Thousand (December 31, 2010: None). Movement of deferred tax liability and temporary differences are disclosed in Note 15 of section V.I. 9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations None. 10. Information on Subordinated Loans None. 11. Information on Shareholders’ Equity 11.1. Presentation of Paid-in Capital: Common Stock Preferred Stock (*) Current Period 540.000 360.000 Prior Period 540.000 360.000 (*) Preferred stockholders have the right to nominate candidates for the Board of Directors and the Audit Committee. 11.2. Paid-in Capital Amount, Explanation as on whether the Registered Share Capital System is Applicable at the Parent Bank, if so, Amount of the Registered Share Capital Ceiling: Registered capital system is not applied in the Parent Bank. 11.3. Share Capital Increases and Their Sources; Other Information on Increased Capital Shares in the Current Period: None. 11.4. Information on Share Capital Increases from Capital Reserves: None. 11.5. Information on Share Capital Increases from Revaluation Funds: None. 11.6. Capital Commitments in the Last Fiscal Year and at the End of the Following Interim Period, General Purpose of These Commitments and Projected Resources Required to Meet These Commitments: None. 226 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 11.7. Indicators of the Parent Bank’s Income, Profitability and Liquidity for Prior Periods and Possible Effects of These Future Assumptions on the Equity due to the Uncertainty of These Indicators: The Parent Bank carries its activities in a high profitable level and retains the major portion of its net profit within equity by means of transfers to reserve accounts and capital increases. Also, the Parent Bank allocates its equity to highly liquid and profit generating assets. 11.8. Summary Information of Privileges Granted To Preferred Stocks: The holders of the preferred stocks have the right to nominate candidates for the Board of Directors and the Audit Committee. 11.9. Explanations on Marketable Securities Value Increase Fund: From Associates, Subsidiaries, and Entities under Common Control (Joint Vent.) Valuation Difference Foreign Exchange Difference Financial Assets Available for Sale Valuation Difference Foreign Exchange Difference Total Current Period (13.599) (13.599) (13.599) Prior Period 6.732 6.732 6.732 Current Period 98.711 18.383 412 (8.056) 326 109.776 Prior Period 98.510 18.383 383 (9.057) 1.030 109.249 12. Explanations on Minority Shares Paid in Capital Share Premium Legal Reserve Prior Year Profit or Loss Net Profit/(Loss) for the Period Total III. Explanations and Disclosures Related to the Consolidated Off-Balance Sheet Contingencies and Commitments 1. Explanation on Contingent Liabilities 1.1.Nature and Amounts of Irrevocable Loan Commitments: Asset Purchase-Sale Commitments Capital Commitments for Associates and Subsidiaries (*) Loan Granting Commitments Commitments for Credit Card Expenditure Limits Commitments for Credit Card and Retail Banking Promotions Payment Commitments for Checks Tax and Fund Liabilities from Export Commitments Other Irrevocable Commitments Total Current Period 1.085.835 10.798 353.633 2.066.016 7.236 650.723 1.883 39.910 4.216.034 Prior Period 115.567 2.000 341.648 1.661.296 7.257 580.319 1.880 55.864 2.765.831 (*) It consists of capital commitment amounting to TRY 9.798 Thousand to the Bank’s subsidary, Asya Emeklilik ve Hayat A.Ş. and TRY 1.000 Thousand to the Bank’s associates, Kredi Garanti Fonu A.Ş. (December 31, 2010: It consists of capital commitment amounting to TRY 2.000 Thousand to the Bank’s associate, Kredi Garanti Fonu A.Ş.). 227 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 1.2.Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: 1.2.1. Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Current Period 7.556.575 323.970 1.334.519 133.695 9.348.759 Guarantees Bank Acceptances and Avalized Drafts Letter of Credits Other Guarantees Total Prior Period 7.938.655 154.318 997.362 136.548 9.226.883 1.2.2. Long Standing Guarantees, Temporary Guarantees, Sureties and Similar Transactions: Definite Letters of Guarantee Provisional Letters of Guarantees Suretyships and Similar Transactions Total Current Period 5.222.228 759.066 1.575.281 7.556.575 Prior Period 5.891.224 937.000 1.110.431 7.938.655 Current Period 481.766 6.335 475.431 8.866.993 9.348.759 Prior Period 134.953 5.405 129.548 9.091.930 9.226.883 1.3. Total Amount of Non-Cash Loans: Non-cash loans given against achieving cash loans With maturity of 1 year or less than 1 year With maturity of more than 1 year Other non-cash loans Total 2. Sectoral Risk Concentration of Non-Cash Loans Agricultural Farming and Raising Livestock Forestry Fishery Manufacturing Mining Production Electric, Gas and Water Construction Services Wholesale and Retail Trade Hotel, Food and Beverage Services Transportation and Telecommunication Financial Institutions Real Estate and Renting Services Self-Employment Services Education Services Health and Social Services Other Total 228 TRY 59.359 46.078 12.012 1.269 1.215.112 118.431 665.044 431.637 1.847.275 848.606 212.744 Current Period (%) FC 1,47 53.049 1,14 47.705 0,30 492 0,03 4.852 30,02 2.858.268 2,93 236.047 16,43 2.084.712 10,66 537.509 45,64 1.401.148 20,97 958.710 5,26 173.321 (%) 1,00 0,90 0,01 0,09 53,92 4,45 39,32 10,14 26,43 18,08 3,27 TRY 59.075 46.038 12.080 957 1.285.981 99.866 706.971 479.144 2.006.166 803.842 214.921 Prior Period (%) FC 1,40 21.182 1,09 21.014 0,29 13 0,02 155 30,43 2.841.818 2,36 229.697 16,73 1.660.230 11,34 951.891 47,47 1.275.631 19,01 821.537 5,08 166.733 (%) 0,42 0,42 0,00 0,00 56,83 4,59 33,20 19,04 25,51 16,42 3,33 69.196 1,71 107.478 2,03 73.912 1,75 58.248 1,16 171.298 4,23 399.846 7,54 143.854 3,40 414.787 8,30 124.597 3,08 221.315 4,17 81.229 1,92 123.979 2,48 38.550 0,95 5.832 0,11 87.120 2,06 18.576 0,37 51.748 30.567 149.906 77.155 4.047.507 1,28 0,76 3,70 1,90 100,00 25.782 7.083 18.053 30.077 5.301.252 0,49 0,13 0,34 0,57 100,00 41.260 24.405 137.141 71.531 4.226.595 0,98 0,58 3,24 1,69 100,00 9.300 4.199 25.715 40.120 5.000.288 0,19 0,08 0,51 0,82 100,00 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 3. Information on Ist and IInd Group Non-Cash Loans I st Group Non-Cash Loans Letters of Guarantee Endorsements and Acceptances Letters of Credit Endorsements Underwriting Commitments Factoring Commitments Other Commitments and Contingencies TRY 3.939.696 3.892.666 25.244 758 21.028 II nd Group FC 5.202.176 3.462.721 296.584 1.330.286 112.585 TRY 107.811 103.447 2.142 2.140 82 FC 99.076 97.741 1.335 - 4. Information on Derivative Financial Instruments Derivative Transactions According to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period Type of Trading Transactions Foreign Currency Related Derivative Transactions (I) Forward Transactions Swap Transactions Futures Transactions Option Transactions Interest Related Derivative Transactions (II) Forward Rate Transactions Interest Rate Swap Transactions Interest Option Transactions Futures Interest Transactions Marketable Securities Call-Put Options (III) Other Trading Derivative Transactions (IV) A. Total Trading Derivative Transactions (I+II+III+IV) Types of Hedging Transactions Fair Value Hedges Cash Flow Hedges Net Investment Hedges B. Total Hedging Related Derivatives Total Derivative Transactions (A+B) 1.316.473 1.316.473 - 926.555 926.555 - - - - - - - 1.316.473 926.555 - - 1.316.473 926.555 - - 229 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) As of December 31, 2011 and December 31, 2010, the breakdown of the Group’s foreign currency forward transactions based on currencies are disclosed below in their TRY equivalents. Current Period TRY USD EUR GOLD Total Forward Buy 12.169 9.533 44.327 587.602 653.631 Forward Sell 9.450 653.392 662.842 Prior Period TRY USD EUR Total Forward Buy 268.243 194.735 462.978 Forward Sell 463.577 463.577 As of December 31, 2011, the Group does not have any derivative transactions for the purpose of cash flow hedge. 5. Explanations on Contingent Liabilities and Assets As of the balance sheet date, there are 1.344 ongoing court cases against the Group amounting to TRY 46.092 Thousand and EUR 946 based on the information provided from the legal department of the Group for one of the ongoing court cases mentioned above (December 31, 2010: There were 1.074 ongoing court cases against the Group amounting to TRY 18.583 Thousand, 2.319 USD and EUR 946), provision amounting to TRY 1.704 Thousand has been allocated (December 31, 2010: TRY 1.308 Thousand). In addition to the aforementioned lawsuits, the amount of the loss claim lawsuits from insurance operation is TRY 25.930 Thousand (December 31, 2010: TRY 16.819 Thousand), and provision for the whole amount has been recognized in the “Insurance technical reserves” item of balance sheet. Total amount of letters of guarantees, guarantees and commitments submitted by the Group pursuant to its own internal affairs and guarantees given by other institutions submitted by the Group pursuant to the third parties benefit of the Group stands at TRY 34.501 Thousand (December 31, 2010: TRY 32.454 Thousand) and is recognized under “Other irrevocable commitments” item of off-balance sheet contingencies and commitments. 6. Explanations related to Custodian and Intermediary Services None. 7. Summary Information on the Parent Bank’s Rating by the International Rating Institutions FITCH RATINGS Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Outlook Individual Rating Support Points B+ B Stable B+ B Stable A-(tour) Stable D 5 The information is obtained from the Fitch Ratings Report as of November 22, 2011. 230 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) MOODY’S Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Short Term D Stable Ba3 B1 Stable Ba2 Ba1 Stable A3 TR-1 The information is obtained from the Moody’s Investor Service report as of February 22, 2012. SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance rating report for Bank Asya in accordance with the Turkish Capital Markets Board’s communiqué of “Capital Market Rating Operations and Corporate Governance Principles”. Bank Asya’s Corporate Governance rating score previously has been identified as 81,69 on July 1, 2010 and revised to 82,56 as of July 1, 2011. IV. Explanations and Disclosures Related to the Consolidated Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: I st Group Profit Share on Loans Short Term Loans Medium and Long Term Loans Profit Share on Non-Performing Loans Premiums Received from Resource Utilization Support Fund II nd Group TRY 1.070.992 358.215 698.268 14.509 FC 102.071 29.292 72.779 - TRY 25.346 3.321 22.025 - FC 3.051 141 2.910 - - - - - TP YP TP YP - - 13.364 - 2.616 1.289 3.905 71 572 643 2.271 20.394 36.029 1.975 1.975 1.2. Profit Share from Banks: Current Period Central Bank of the Republic of Turkey (Reserve Deposit) Domestic Banks Foreign Banks (*) Foreign Head Office and Branches Total Prior Period (*) Foreign banks include profit shares from “murabaha” loans. 231 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 1.3. Information on Interest Received from Marketable Securities: Current Period Held-for-Trading Financial Assets Financial Assets at Fair Value through Profit and Loss Available for Sale Financial Assets Held to Maturity Investments Total Prior Period TP - YP - TP - YP - - - - - 49.234 8.882 58.116 - 21.050 9.834 30.884 - Current Period 15.438 Prior Period 15.164 1.4. Information on Profit Share Income Received from Associates and Subsidiaries: Profit Share Income Received from Associates and Subsidiaries 2. Information on Profit Share Expenses 2.1. Information on Interest on Funds Borrowed: Current Period Banks Central Bank of the Republic of Turkey Domestic Banks Foreign Banks Branches and Foreign Head Office Abroad Other Institutions Total TRY 4.599 4.599 4.599 FC 38.562 1.036 37.526 38.562 Prior Period TRY 198 198 198 FC 16.538 1.036 15.502 16.538 Current Period 7.585 Prior Period 599 2.2. Information on Profit Share Expense Given to Associates and Subsidiaries: Profit Share Expenses Given to Associates and Subsidiaries 2.3. Information on Profit Share Expense to Marketable Securities Issued: None. 232 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 2.4. Distribution of Profit Share Expense on Deposits Based on Maturity of Deposits: Current Period Account Name TRY Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Total FC Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Precious Metal Deposits Total Grand Total Toplam Genel Toplam Up to 3 Months - - - - - - - 127.526 4 17.620 915 146.065 70.871 28 18.585 2.150 91.634 14.933 6 1.088 1.026 17.053 - 11.874 1.363 879 14.116 156.517 37 49.981 3.156 209.691 381.721 75 88.637 8.126 478.559 533 67 406 - 583 29 1.618 16.548 1 5.660 16 22.758 168.823 14.974 11.097 166 26.304 117.938 3.078 1.307 4.386 9.177 26.230 - 5.010 2.099 7.692 21.808 23.526 18.129 608 42.292 251.983 63.136 1 38.292 5.176 108.223 586.782 Up to 1 Month Up to 3 Months 88.688 1 18.240 454 107.383 102.234 2 23.906 790 126.932 27.032 1.441 3.480 31.953 - 20.927 3.831 182 24.940 157.190 20.967 1.831 179.988 396.071 3 68.385 6.737 471.196 812 14.736 1 5.335 14 20.898 128.281 69 20.560 13.461 309 34.399 161.331 7.796 5.215 3.321 16.332 48.285 - 8.360 2.272 10.632 35.572 30.298 6.889 499 37.686 217.674 881 81.750 1 33.172 4.143 119.947 591.143 Prior Period Account Name TRY Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Total FC Banks and Finance Houses Real Person’s Profit Sharing Acc. Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc. Other Institutions Profit Sharing Acc. Precious Metal Deposits Total Grand Total Profit Sharing Accounts Up to 6 Up to 9 Up to 1 More than Months Months Year 1 Year Up to 1 Month Profit Sharing Accounts Up to 6 Up to 9 Up to 1 More than Months Months Year 1 Year Total Total 3. Explanations on Dividend Income The Group has TRY 131 Thousand of dividend income (December 31, 2010: TRY 171 Thousand). 233 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 4. Information on Net Trading Income Income Securities Trading Gains Gains on Derivative Financial Instruments Foreign Exchange Gains Losses (-) Securities Trading Losses Losses on Derivative Financial Instruments Foreign Exchange Losses Current Period 6.061.423 1.236 225.104 5.835.083 (6.021.966) (2.570) (160.894) (5.858.502) Prior Period 3.271.750 4.527 65.342 3.201.881 (3.223.623) (1.246) (34.834) (3.187.543) Current Period 1.203 22.742 88.007 87.362 13.975 17.548 230.837 Prior Period 9.719 20.540 88.478 82.786 3.154 16.420 221.097 5. Explanations on Other Operating Income The detail of other operating income is stated as below: Communication Expense Reversal Gain on Sale of Assets Adjustments to Previous Years’ Expenses (*) Insurance Technical Reserves Gain on Timeshare Sales Other Total (*) Adjustments to previous years’ expenses consists of amounting to TRY 67.242 Thousand special provision, general loan provision and provision reversal related to receivables and fees from the doubtful receivables and TRY 12.293 Thousand provision reversal related to cheques (December 31, 2010: TRY 88.110 Thousand). 6. Provision Expenses of the Bank for Loans and Other Receivables Specific Provisions for Loans and Other Receivables III. Group Loans and Receivables IV. Group Loans and Receivables V. Group Loans and Receivables Doubtful Commission, Fee and Other Receivables General Provision Expenses Provision Expenses for Possible Losses Marketable Securities Impairment Losses Financial Assets at Fair Value through Profit and Loss Investment Securities Available for Sale Impairment Provision Expense Associates Subsidiaries Entities under Common Control Investments Held to Maturity Other Total 234 Current Period 170.277 30.827 953 127.637 10.860 9.768 48.153 228.198 Prior Period 107.508 27.471 14.379 54.915 10.743 22.088 66 66 37.891 167.553 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Information on Other Operating Expenses Personnel Expenses Provision for Employee Termination Benefits Bank Social Aid Provision Fund Deficit Provision Impairment Expenses of Fixed Assets Depreciation Expenses of Fixed Assets Impairment Expenses of Intangible Assets Impairment Expense of Goodwill Amortization Expenses of Intangible Assets Impairment Provision for Investments Accounted for under Equity Method Impairment Expenses of Assets to be Disposed off Depreciation Expenses of Assets to be Disposed off Impairment Expenses of Assets Held for Sale Other Operating Expenses Rent Expenses Maintenance Expenses Advertisement Expenses Other Expenses Loss on Sales of Assets Other (*) Total Current Period 278.459 5.080 186 45.645 3.880 1.577 5.378 37 198.476 57.753 3.677 30.406 106.640 2.893 105.042 646.653 Prior Period 253.214 5.079 60 42.076 3.281 1.619 3.691 244 182.016 45.193 2.779 34.259 99.785 9.637 109.957 610.874 (*) Other expenses consist of TRY 52.907 Thousand insurance technical expenses (December 31, 2010: TRY 61.111 Thousand). 8. Explanation on Continuing Operations and Discontinued Operations Profit or Loss before Tax The Group’s profit before tax is decreased by 15,72% (December 31, 2010: 15%) as compared to the prior year figures and total profit before tax amounts to TRY 276.658 Thousand (December 31, 2010: TRY 328.251 Thousand ). Profit before tax includes TRY 636.376 Thousand (December 31, 2010: TRY 601.165 Thousand) net profit share income, TRY 241.076 Thousand (December 31, 2010: TRY 234.907 Thousand) net fees and commission income. Total operating expense amount is TRY 646.653 Thousand (December 31, 2010: TRY 610.874 Thousand). 9. Explanation on Continuing Operations and Discontinued Operations Tax Provision As of December 31, 2011, current tax expense is TRY 60.625 Thousand (December 31, 2010: TRY 70.887 Thousand) and deferred tax income is TRY 6.110 Thousand (December 31, 2010: TRY 5.761 Thousand deferred tax income). 10. Information on Operating Profit/Loss After Taxes Net profit of the Group is decreased by 15,58% as of December 31, 2011 as compared to the prior year’s net profit. 11. Explanations on Net Income / Loss for the Period The nature and amount of certain income and expense items from ordinary operations is disclosed if the disclosure for nature, amount and repetition rate of such items is required for the complete understanding of the Group’s performance for the period: None. Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent periods: None. 235 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 12. The Description and Amounts of Items which Constitute at Least 20% of Other Items in the Income Statement, if These Liabilities Exceed 10% of the Total Income Statement Other fees and commissions received/given are stated as below: Other Fees and Commission Received Member Firm-POS Fees and Commission Credit Card Fees and Commission Commissions on Collection and Disbursement Expertise Fees Money Transfer Commissions Insurance Underwriting Commissions Other Total Other Fees and Commissions Given Credit Cards Commissions and Fees Other Total Current Period Prior Period 60.590 51.726 16.379 14.395 8.811 8.285 26.870 187.056 57.234 40.938 9.452 8.530 6.978 5.686 23.713 152.531 Current Period Prior Period 53.573 26.038 79.611 45.550 23.904 69.454 13. Nature and Amount of Changes in Accounting Estimates which have Material Effects on The Current Period or Expected to have Material Effects on the Subsequent Periods None. V. Explanations and Disclosures Related to the Statements of Shareholders’ Equity 1. Increases from Valuation of Financial Assets Available for Sale Decrease resulting from revaluation of financial assets available for sale is TRY 13.599 Thousand (December 31, 2010: TRY 6.732 Thousand increase). 2. Increases Due to Cash Flow Hedges None. 3. Reconciliation of Foreign Exchange Differences at Beginning and End of Current Period In the current period, the change in other reserves item is a result of the conversion losses of financial institutions. 4. Dividends Declared Subsequent to the Balance Sheet Date, but before the Announcement of the Financial Statements None. 5. Dividends per Share Proposed Subsequent to the Balance Sheet Date None. 6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Appropriated the Reasons for This The Board of Directors has not decided for profit distribution as of the reporting date. 236 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) 7. Amounts Transferred to Legal Reserves As of December 31, 2011, amount transferred to legal reserves is TRY 13.053 Thousand (December 31, 2010: TRY 15.296 Thousand). 8. Information on Shares Issued None. 9. Other Information Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. has consolidated for the first time based on the change of the communiqué on “Regulations Regarding Banks’ Consolidated Financial Statements” published on Official Gazette numbered 27824 dated January 23, 2011 and the effects of the scope of consolidation are shown on other line at consolidated statements of shareholders’ equity movement. VI. Explanations and Disclosures Related to Statement of Cash Flows 1. Cash and Cash Equivalents 1.1.Components of Cash and Cash Equivalents and Accounting Policies Used to Determine Such Components: “Cash” is defined as cash in TRY and foreign currency, money in transit, cheques purchased and demand deposits in Banks, and “Cash equivalents” is defined as time deposits in Banks having original maturity less than three months and short term “murabaha” (sale at a markup) loans. Deposits held in Central Bank of the Republic of Turkey are not presented as cash equivalents. 1.2.Cash and Cash Equivalents at the Beginning of the Period: “Other” item amounting to TRY (648.922) Thousand in “Operating profit before changes in operating assets and liabilities” consists of fees and commission paid, operating lease expenses, repairment and maintenance expenses, advertisement expenses and other operating expenses (December 31, 2010: TRY (334.548) Thousand). “Other Income” amounting to TRY 190.470 Thousand consists of gains on derivative financial transactions, insurance operation income foreign exchange gains and other operating income (December 31, 2010: TRY 193.093 Thousand). “Net increase/decrease in other assets” amounting to TRY 13.094 Thousand in “Changes in operating assets and liabilities” consists of changes in sundry debtors, insurance operation receivables, other assets and intangible asset purchases (December 31, 2010: TRY (7.124) Thousand). “Net increase/decrease in other liabilities” with a total amount of TRY 390.005 Thousand consists of changes in sundry creditors and other liabilities (December 31, 2010: TRY 163.738 Thousand). “Other items” amounting to TRY 5.397 Thousand (31 December 2010: TRY 3.476 Thousand) in “Net cash provided from investing activities” consists of cash paid for purchases of intangible assets. The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2011 is approximately TRY 77.979 Thousand (December 31, 2010: TRY 8.412 Thousand). 1.3.Cash and Cash Equivalents at the Beginning of the Period: Current Period Prior Period 404.984 255.679 Cash in TRY/Foreign Currency 233.460 131.327 Banks-Demand Deposit 171.524 124.352 37.573 134.498 Cash Cash Equivalents Banks-Time Deposit 37.573 34.498 - 100.000 442.557 390.177 Current Period Prior Period 608.441 404.984 Cash in TRY/Foreign Currency 260.104 233.460 Banks-Demand Deposit 348.337 171.524 27.260 37.573 27.260 37.573 Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents 1.4. Cash and Cash Equivalents at the End of the Period: Cash Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents - - 635.701 442.557 237 Consolidated Financial Statements and Accompanying Notes ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VII. Explanations on the Risk Group of the Parent Bank 1. Transaction Volume of the Risk Group of the Parent Bank, Outstanding Loan and Deposit Balances and Current Income and Expense Amounts 1.1.Current Period: Risk Group of the Parent Bank Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income Subsidiaries and Associates Direct and Indirect Other Entities Included in Shareholders of the the Risk Group Group Cash Non-Cash Cash Non-Cash Cash Non-Cash 77.494 107.795 8.921 16.806 - - 172.548 206.072 42.782 164.645 15.438 - - - 35.797 - (*) The risk group balance includes TRY 3.411 Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand). 1.2.Prior Period: Risk Group of the Parent Bank Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income Subsidiaries and Associates Direct and Indirect Other Entities Included in Shareholders of the the Risk Group Group Nakdi G.Nakdi Nakdi G.Nakdi Nakdi G.Nakdi 52.357 77.494 9.225 8.921 - - 220.914 172.548 68.491 42.782 15.164 - - - 23.870 - (*) The risk group balance includes TRY 153 Thousand finance lease receivables (December 31, 2009: TRY 237 Thousand). 1.3.Risk Group Deposits Balances of the Parent Bank: Risk Group of the Parent Bank Current and Profit Sharing Accounts Balance at the Beginning of Period Balance at the End of Period Profit Share Expense Subsidiaries and Associates Direct and Indirect Shareholders of the Group Other Entities Included in the Risk Group Current Period Current Period Current Period 24.002 9.674 7.585 - 109.357 127.638 4.950 1.4.Information on Forward and Option Agreements and Other Similar Agreements with Related Parties: None. 1.5.Information on Compensation of Key Management Personnel: During the current period, the total amount of remuneration and benefits provided to the key management personnel of the Group is TRY 11.665 Thousand (December 31, 2010: TRY 10.142 Thousand). Besides remuneration, the key management personnel also receive some further tangible rights. 238 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.) VIII.Explanations on the Parent Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 1. Explanations on the Parent Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices Number 200 Employees 4.542 Rep-Offices Abroad (*) - - Country - Branches Abroad - - - Total Assets - Capital - Off-shore Branches - - - - - Domestic Branches (*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India and a branch in Arbil, Iraq. As of the reporting date, opening representative office and branch is still in progress. Işık Sigorta A.Ş. from the consolidated subsidiaries operates domestically and currently has 4 regional management offices, 2 regional representation offices and 1.172 (including the Bank branches) agencies and 169 personnel as of 31 December 2011. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. operates domestically and currently has 18 personnel as of December 31, 2011. Tamweel Africa Holding S.A., which operates abroad, has currently 4 banks and 10 personnel. Asya Emeklilik ve Hayat A.Ş. operates domestically and currently has 24 personnel. 2. Explanations on Branch and Agency Openings or Closings of the Parent Bank: The Parent Bank has opened 25 new branches in the period of January 1– December 31, 2011. SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on Operations of the Group 1. Subsequent Events Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26th, 2012, Mr. Tacettin NEGİŞ has announced his resignation, effective on February 2nd, 2012, Mr. İsmail Erol İŞBİLEN and Hülagü ÖZCAN have announced their resignations, effective on March 12th, 2012 then, retrospectively Mr. Ali ÇELİK, Mr. Faruk İLK and Mr. Mustafa Talat KATIRCIOĞLU, Dr. Ercüment GÜLER, Mehmet URUÇ were appointed as the board members to fill their vacancies. In general meeting on March 31, 2012, the number of Parent Bank’s board members determined as 9 and Mehmet GÖZÜTOK and Recep KOÇAK were appointed as the board members, Erhan BİRGİLİ was appointed as the auditor. On March 8, 2012, it has been decided to increase the capital of Tamweel Africa Holding S.A. by EUR 11.639.788 which has been accounted for under the equity method by the Parent Bank. The Parent Bank has paid EUR 4.655.915 for the capital increase on March 8, 2012. Capital registry process has not been finalized yet. SECTION SEVEN: INDEPENDENT AUDITORS’ REPORT I. Explanations on the Independent Auditors’ Report The financial statements of the Parent Bank for the year January 1 – December 31, 2011 have been audited by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Member of Deloitte Touche Tohmatsu Limited). The independent auditor’s report is presented at the beginning of the financial statements and related notes. II. Other Footnotes and Explanations Prepared by the Independent Auditors There is no significant matter or disclosure which may be in connection with the Group’s operations but not explained in the above sections. 239 Contact Information Bank Asya Branches Head Office Akdeniz Corporate Branch Amasya Branch Saray Mah. Dr. Adnan Büyükdeniz Cad. No:10 Ümraniye 34768 İstanbul Phone: (0216) 633 50 00 Fax: (0216) 633 50 50 Tarım Mah. Aspendos Bulvarı Olimpos Erüst İş Mrk. B Blok No:4 Antalya Phone: (0242) 313 18 18 Fax: (0242) 311 77 80 Yüzevler Mah. Danişment Cad. No:14/A Amasya Phone: (0358) 213 11 70 Fax: (0358) 213 10 60 BANK ASYA Regional Offices Başkent Corporate Branch Ankara Regional Office Armada İş Mrk. Eskişehir Yolu No:6 Kat:20/34 06520 Söğütözü / Ankara Phone: (0312) 219 18 38 Fax: (0312) 219 18 40 Ehlibeyt Mah. Ceyhun Atuf Kansu Cad. 1271 Sk. Sümer İş Merkezi Kat:3 No:15/11 Balgat / Ankara Phone: (0312) 472 81 91 Fax: (0312) 472 74 70 Ege Regional Office Akdeniz Cad. No:1 Reyent İş Hanı Kat:6 Pasaport Konak İzmir Phone: (0232) 441 15 51 Fax: (0232) 441 15 15 İstanbul Anatolia Regional Office Yenişehir Mah. Mevlana Sok. No:31 Ataşehir / İstanbul Phone: (0216) 580 96 96 Fax: (0216) 580 97 27 İstanbul European Regional Office I Esentepe Mah. Büyükdere Cad. No:102 Maya Center B Blok K:22 Şişli / İstanbul Phone: (0212) 272 53 00 Fax: (0212) 272 50 60 İstanbul European Regional Office II Evren Mah. Koçman Cad. No:40 Güneşli Bağcılar / İstanbul Phone: (0212) 630 12 00 Fax: (0212) 630 20 41 Karadeniz Regional Office Çömlekci Mah. Sanayi Cad. Yaren Sok. No:2 Değirmendere / Trabzon Phone: (0462) 325 8700 Fax: (0462) 325 8701 Konya Regional Office Musalla Bağları Mah. Belh Cad. No:10 Selçuklu / Konya Phone: (0332) 237 13 13 Fax: (0332) 236 10 39 Marmara Regional Office Ahmet Paşa Mah. Fomara İş Mrk. No:73 Kat:5 Osmangazi / Bursa Phone: (0224) 272 02 02 Fax: (0224) 272 10 40 Southeastern Anatolia Regional Office Mücahitler Mah. Gazimuhtarpaşa Bulvarı No:65 Şehitkamil / Gaziantep Phone: (0342) 323 53 12 Fax: (0342) 323 51 61 240 Boğaziçi Corporate Branch Esentepe Mah. Büyükdere Cad. No:102 Maya Center B Blok K:22 Şişli / İstanbul Phone: (0212) 272 50 04 Fax: (0212) 272 60 69 Ege Corporate Branch Şehit Fethi Bey Cad. No:55 Heris Tower İş Mrk. K:16 D:23-24 Pasaport Alsancak / İzmir Phone: (0232) 441 47 40 Fax: (0232) 441 52 04 Trakya Corporate Branch Çobançeşme Mah. Sanayi Cad. No:44/A 121-122 Nish İstanbul Yenibosna Bahçelievler / İstanbul Phone: (0212) 603 61 88 Fax: (0212) 603 61 89 Ankara Ankara Branch Anafartalar Cad. No:63 Anafartalar Altındağ 06060 Ankara Phone: (0312) 310 47 47 Fax: (0312) 310 47 57 Balgat Branch Ehlibeyt Mah. Ceyhun Atuf Kansu Cad. No:100/T (B Blok No: 20) Balgat / Ankara Phone: (0312) 473 54 20 Fax: (0312) 473 54 30 Çankaya Branch Güzeltepe Mah. Hoşdere Cad. No:222 Çankaya 06550 Ankara Phone: (0312) 439 52 50 Fax: (0312) 439 52 55 Etlik Branch İncirli Mah. Yunus Emre Cad. No:5 Etlik Keçiören 06010 Ankara Phone: (0312) 321 86 31 Fax: (0312) 322 61 45 BANK ASYA's Branchs İvedik Organize Sanayi Branch Adana Ostim Mah. 23. Cad. Tuğcular İş Mrk. No:18/10 Yenimahalle / Ankara Phone: (0312) 394 70 95 Fax: (0312) 394 70 98 Adana Branch Çınarlı Mah. Atatürk Cad. Kemal Özülkü İş Merkezi No:23 Zeminkat Seyhan 01060 Adana Phone: (0322) 457 67 00 Fax: (0322) 457 52 53 Çukurova Branch Turgut Özal Bulvarı Dosteller Apt. No:176 Seyhan / Adana Phone: (0322) 233 09 81 Fax: (0322) 233 09 31 Adapazarı Branch Atatürk Bulvarı No:75 Adapazarı Phone: (0264) 281 39 10 Fax: (0264) 281 39 01 Adıyaman Branch Atatürk Cad. Ulu Cami Yanı 444 Sok. No:10 Adıyaman Phone: (0416) 216 60 50 Fax: (0416) 216 66 90 Afyon Branch BANK ASYA Corporate Branches Dumlupınar Mah. Yüzbaşı Agâh Cad. No:1 03200 Afyon Phone: (0272) 214 50 00 Fax: (0272) 214 33 33 Anadolu Corporate Branch Aksaray Branch Değirmen Sok. Nidakule İş Mrk. No:18 Kat:19 Kozyatağı Kadıköy / İstanbul Phone: (0216) 372 13 00 Fax: (0216) 372 15 50 Minarecik Mah. Ankara Cad. No:14/A Aksaray Phone: (0382) 212 74 36 Fax: (0382) 213 15 70 Keçiören Branch Güçlükaya Mah. Cumhuriyet Cad. No:11/B Keçiören / Ankara Phone: (0312) 360 65 10 Fax: (0312) 360 65 50 Kızılay Branch Meşrutiyet Cad. No:16/A Kızılay 06640 Ankara Phone: (0312) 419 37 00 Fax: (0312) 417 29 00 Kızılcahamam Branch Yenice Mah. Cengiz Topel Cad. No:5/17 Kızılcahamam 06890 Ankara Phone: (0312) 736 05 90 Fax: (0312) 736 09 30 Ostim Branch Yenimahalle Yüzüncü Yıl Bulvarı No:74 06370 Ostim / Ankara Phone: (0312) 354 84 74 Fax: (0312) 354 40 05 Polatlı Branch Ankara Cad. No:36 Polatlı / Ankara Phone: (0312) 621 33 58 Fax: (0312) 621 26 49 Pursaklar Branch Merkez Mah. Belediye Cad. No:17/A-B Pursaklar / Ankara Phone: (0312) 527 50 51 Fax: (0312) 527 50 88 Bank Asya 2011 Annual Report Sincan Branch Balıkesir Çorum Branch Atatürk Mah. Onur Sok. No:16/A Sincan / Ankara Phone: (0312) 276 81 10 Fax: (0312) 276 81 15 Balıkesir Branch İnönü Cad. No:51 19100 Çorum Phone: (0364) 224 11 60 Fax: (0364) 224 24 36 Siteler Branch Demirhendek Cad. No:68 Siteler 06160 Ankara Phone: (0312) 353 42 00 Fax: (0312) 353 57 00 Yenimahalle Branch Ragıp Tüzün Cad. No:167 Yenimahalle / Ankara Phone: (0312) 315 34 43 Fax: (0312) 315 53 80 Antalya Alanya Branch Şekerhane Mah. Şevket Tokuş Cad. Kerim Çağırıcı Sok. No:35/A Alanya Phone: (0242) 519 07 02 Fax: (0242) 519 05 84 Altıeylül Mah. Kızılay Cad. No:6 10100 Balıkesir Phone: (0266) 239 66 13 Fax: (0266) 239 68 40 Bandırma Branch İsmet İnönü Cad. No:68/A Bandırma / Balıkesir Phone: (0266) 718 15 15 Fax: (0266) 718 15 30 Batman Branch Bahçelievler Mah. Turgut Özal Bulvarı No:237 Batman Phone: (0488) 212 07 95 Fax: (0488) 212 07 22 Gazi Cad. No:18 Diyarbakır Phone: (0412) 224 39 39 Fax: (0412) 223 25 50 Şanlıurfa Yolu Bulvarı Serin Apt. No:57/C Diyarbakır Phone: (0412) 251 62 61 Fax: (0412) 251 98 08 Bursa Branch Yükseliş Mah. Mithat Paşa Cad. Görkem Apt. No:22/1 07020 Antalya Phone: (0242) 345 94 45 Fax: (0242) 345 95 59 Dağkapı Branch İzzet Baysal Cad. Güney Kaya Pasajı No:77 Bolu Phone: (0374) 212 15 15 Fax: (0374) 212 35 07 Bursa Kepez Branch Diyarbakır Diyarbakır Branch Adnan Menderes Bulvarı Has İş Merkezi No:9 07040 Antalya Phone: (0242) 248 00 71 Fax: (0242) 242 43 45 Tarım Mah. Aspendos Bulvarı Olimpos Erüst İş Merkezi B Blok No:4 Antalya Phone: (0242) 313 18 18 Fax: (0242) 311 77 80 Saraylar Mah. Saltak Cad. No:6/C Merkez / Denizli Phone: (0258) 241 87 88 Fax: (0258) 241 35 70 Bolu Branch Antalya Branch Aspendos Bulvarı Branch Denizli Branch Haşim İşçan Cad. No:2 Osmangazi 16220 Bursa Phone: (0224) 225 14 80 Fax: (0224) 225 14 89 Demirtaş Branch Panayır Mah. Yeni Yalova Cad. No:455/H Özyıldırım Plaza Osmangazi / Bursa Phone: (0224) 211 19 09 Fax: (0224) 211 19 08 İnegöl Branch Nuri Doğrul Cad. No:29 İnegöl / Bursa Phone: (0224) 715 17 55 Fax: (0224) 715 72 75 Düzce Branch Burhaniye Mah. İstanbul Cad. No:3/B Düzce Phone: (0380) 523 57 80 Fax: (0380) 524 94 24 Edirne Branch Çavuşbey Mah. Hükümet Cad. No:3 Edirne Phone: (0284) 212 10 01 Fax :(0284) 212 10 03 Elazığ Branch Rızaiye Mah. Gazi Cad. No:2 Zemin Kat: 4 Elazığ Phone: (0424) 237 37 00 Fax: (0424) 237 53 53 Ereğli Branch Konyaaltı Branch Nilüfer Branch Arapsuyu Mah. Atatürk Bulvarı Altınay Plaza No:127/B-2 Konyaaltı / Antalya Phone: (0242) 228 45 10 Fax: (0242) 228 40 35 İhsani Mah. İzmir Yolu Bankalar Cad. Çilek Sok. Atalay 9 Sitesi A Blok No:22 Nilüfer / Bursa Phone: (0224) 249 49 09 Fax: (0224) 249 45 99 Manavgat Branch Ulucami Branch Bahçelievler Mah. Demokrasi Bulvarı No:50 Manavgat / Antalya Phone: (0242) 746 98 98 Fax: (0242 746 90 28 Atatürk Caddesi No:94 Osmangazi / Bursa Phone: (0224) 225 20 55 Fax: (0224) 225 20 66 Karaağaç Mah. Fevzi Paşa Cad. No:26/B Erzincan Phone: (0446) 214 14 24 Fax: (0446) 214 15 35 Uludağ Branch Erzurum Branch Muratpaşa Branch Ulu Mah. Kıbrıs Şehitleri Cad. No:48/A-B Osmangazi / Bursa Phone: (0224) 256 72 72 Fax: (0224) 256 20 29 Gez Mah. Orhan Şerifsoy Cad. No:15 Erzurum Phone: (0442) 235 76 00 Fax: (0442) 235 76 08 Balbey Mah. İsmetpaşa Cad. İkizhan İş Hanı 12/A Antalya Phone: (0242) 242 16 80 Fax: (0242) 242 16 24 Aydın Aydın Branch Hükümet Bulvarı Hasan Efendi Mah. No:19/A Aydın Phone: (0256) 213 03 90 Fax: (0256) 225 22 26 Nazilli Branch Yıldırım Branch Duaçınarı Mah. Ankara Yolu Cad. No:237 Yıldırım / Bursa Phone: (0224) 367 78 00 Fax: (0224) 367 77 61 Çanakkale Branch Çarşı Cad. No:131 Çanakkale Phone: (0286) 212 05 00 Fax: (0286) 214 12 09 Müftü Mah. Erdemir Caddesi No:60/B Kdz. Ereğli / Zonguldak Phone: (0372) 322 06 00 Fax: (0372) 322 18 78 Erzincan Branch Eskişehir Branch İstiklal Mah. Şair Fuzuli Cad. No:24 Odunpazarı / Eskişehir Phone: (0222) 230 82 00 Fax: (0222) 230 55 47 Fethiye Branch Cumhuriyet Mah. Hükümet Cad. No:5 Fethiye / Muğla Phone: (0252) 612 10 40 Fax: (0252) 612 10 80 Altıntaş Mah. İstasyon Bulvarı No:23 Nazilli / Aydın Phone: (0256) 314 10 70 Fax: (0256) 314 15 88 241 Contact Information Bank Asya Branches Gaziantep Altunizade Branch Beykoz Branch Gatem Branch Kısıklı Cad. No:7 Altunizade / İstanbul Phone: (0216) 474 42 11 Fax: (0216) 474 41 48 Fevzi Paşa Mah. No:78 Beykoz / İstanbul Phone: (0216) 323 91 06 Fax: (0216) 323 91 05 Arnavutköy Branch Beylikdüzü Branch İslambey Mah. Fatih Cad. No:24 Arnavutköy / İstanbul Phone: (0212) 597 08 28 Fax: (0212) 597 70 44 Gürpınar Kavşağı E5 Yolu Üzeri Deko İş Merkezi Beylikdüzü - Büyükçekmece / İstanbul Phone: (0212) 872 68 48 Fax: (0212) 873 13 16 Ataşehir Branch Büyükçekmece Branch Yenişehir Mah. Mevlana Sok. No:31 Ataşehir / İstanbul Phone: (0216) 580 98 98 Fax: (0216) 580 97 37 Fatih Mah. Cengiz Topel Cad. No:4/A Büyükçekmece / İstanbul Phone: (0212) 881 24 54 Fax: (0212) 881 24 20 Avcılar Branch Cennet Mahallesi Branch E-5 Yolu Üzeri Merkez Mah. Engin Sok. No:1 Avcılar 34310 İstanbul Phone: (0212) 694 80 00 Fax: (0212) 694 78 78 Cennet Mah. Barboros Cad. No:69/B Küçükçekmece / İstanbul Phone: (0212) 579 20 85 Fax: (0212) 579 20 91 Bağcılar Branch Çağlayan Branch Hatay Merkez Mah. 1. Sok. No:9 Bağcılar / İstanbul Phone: (0212) 435 78 00 Fax: (0212) 435 75 57 Antakya Branch Bahçelievler Branch Çağlayan Vatan Cad. Avrasya İş Merkezi No: 6/A Çağlayan - Kağıthane 34403 İstanbul Phone: (0212) 291 80 08 Fax: (0212) 291 66 64 Yavuz Selim Cad. Zühtiye Ökten İşhanı No:6 Antakya / Hatay Phone: (0326) 225 13 83 Fax: (0326) 225 26 42 İzzettin Çalışlar Cad. No: 23/B Bahçelievler / İstanbul Phone: (0212) 502 81 00 Fax: (0212) 502 80 88 İskenderun Branch Bakırköy Branch Savaş Mah. Mareşal Fevzi Çakmak Cad. No:10 Modern İş Hanı İskenderun / Hatay Phone: (0326) 617 93 10 Fax: (0326) 613 70 86 İncirli Cad. No: 113 Bakırköy 34740 İstanbul Phone: (0212) 466 05 06 Fax: (0212) 466 37 00 Muammer Aksoy Bulvarı Prestij İş Merkezi No:8-9 Şehit Kamil 27020 Gaziantep Phone: (0342) 238 37 37 Fax: (0342) 238 37 77 Gaziantep Branch İncilipınar Mah. Muammer Aksoy Bulvarı Prestij İş Merkezi No:9-10 Şehit Kamil 27020 Gaziantep Phone: (0342) 215 17 79 Fax: (0342) 215 17 93 Suburcu Branch Karagöz Mah. Karagöz Cad. No: 2/A Şahinbey / Gaziantep Phone: (0342) 232 65 10 Fax: (0342) 232 66 72 Giresun Branch Hacımiktat Mah. Fatih Cad. No:18 Merkez / Giresun Phone: (0454) 214 10 90 Fax: (0454) 214 10 09 Isparta Branch Pirimehmet Mah. 118 Cad. Koca Mustafa Pasajı No:16 Isparta Phone: (0246) 223 11 19 Fax: (0246) 223 20 75 İstanbul Acıbadem Branch Acıbadem Cad. Kazaca Apt. A Blok No:97/B Kadıköy / İstanbul Phone: (0216) 545 07 85 Fax: (0216) 327 54 22 Aksaray Branch Mustafa Kemal Paşa Cad. No:86 Aksaray Fatih / İstanbul Phone: (0212) 458 77 77 Fax: (0212) 458 78 58 Altıntepe Branch Altıntepe Mah. Bağdat Cad. No:71/B Maltepe / İstanbul Phone: (0216) 417 80 66 Fax: (0216) 417 86 06 Altıyol Branch Osmanağa Mah. Söğütlüçeşme Cad. No:29 Kadıköy / İstanbul Phone: (0216) 330 71 21 Fax: (0216) 330 72 85 242 Bakırköy Çarşı Branch Cevizlik Mah. İstanbul Cad. No:35/A Bakırköy / İstanbul Phone: (0212) 542 77 09 Fax: (0212) 542 51 46 Başakşehir Branch Ziya Gökalp Mah. İkitelli OSB S.S Tümsan 1.Kısım Sanayi Sitesi 3.Blok No:5 Başakşehir / İstanbul Phone: (0212) 486 19 24 Fax: (0212) 485 35 68 Bayrampaşa Branch Yenidoğan Mah. Abdi İpekçi Cad. Parkhan No:8/B Bayrampaşa / İstanbul Phone: (0212) 493 13 00 Fax: (0212) 493 16 16 Beşiktaş Branch Sinanpaşa Mah. Beşiktaş Cad. No:1/A Beşiktaş / İstanbul Phone: (0212) 227 95 00 Fax: (0212) 227 22 40 Beşyüzevler Branch Yıldırım Mah. Eski Edirne Asfaltı Cad. No: 213/A Bayrampaşa / İstanbul Phone: (0212) 618 80 35 Fax: (0212) 618 70 65 Çapa Branch Şehremini Mah. Turgut Özal Cad. No:145/A Fatih / İstanbul Phone: (0212) 589 01 09 Fax: (0212 589 01 69 Çekmeköy Branch Meclis Mah. Teraziler Cad. Aşkın Sok. No:19/B Sancaktepe/İstanbul Phone: (0216) 466 13 53 Fax: (0216) 466 13 43 Çeliktepe Branch Emniyet Evleri Mah. İsmet İnönü Cad. No:12/A Çeliktepe / İstanbul Phone: (0212) 282 40 10 Fax: (0212) 282 40 70 Dikilitaş Branch Dikilitaş Mah. Emirhan Cad. No:85/A Beşiktaş / İstanbul Phone: (0212) 236 81 81 Fax: (0212) 236 30 15 Dolayoba Branch Çınardere Mah. E-5 Yanyolu Cad. No: 63/1 Pendik / İstanbul Phone: (0216) 379 74 84 Fax: (0216) 379 96 60 Dudullu Branch Yukarı Dudullu Mah. Alemdağ Cad. No:449-457/D Ümraniye / İstanbul Phone: (0216) 612 10 11 Fax: (0216) 612 10 33 Erenköy Branch Şemsettin Günaltay Cad. Çiğdem Apt. No: 238 Erenköy / İstanbul Phone: (0216) 467 16 06 Fax: (0216) 467 00 76 Bank Asya 2011 Annual Report Esenler Branch İmes Sanayi Branch Levent Sanayi Branch Atışalanı Cad. No:21 Esenler 34230 İstanbul Phone: (0212) 611 00 15 Fax: (0212) 611 00 98 İmes Sanayi Sitesi C Blok 301 Sok. No:3/A Yukarı Dudullu 34775 İstanbul Phone: (0216) 540 24 24 Fax: (0216) 540 51 70 Sanayi Mah. Sultan Selim Cad. No:1/C Kağıthane / İstanbul Phone: (0212) 283 34 20 Fax: (0212) 269 67 69 İmsan Branch Libadiye Branch Atatürk Mah. İmsan Sanayi Sitesi 1. Sok. No:42 Küçükçekmece / İstanbul Phone: (0212) 471 23 24 Fax: (0212) 471 23 34 Bulgurlu Mah. Libadiye Cad. No:60 Üsküdar / İstanbul Phone: (0216) 545 30 90 Fax: (0216) 545 08 11 İstoç Branch Maltepe Branch İstoç E-1 Blok Öksüzoğulları Plaza No:5/3 Bağcılar / İstanbul Phone: (0212) 659 60 00 Fax: (0212) 659 33 11 Bağlarbaşı Mah. Bağdat Cad. No:485/B Maltepe / İstanbul Phone: (0216) 305 00 50 Fax: (0216) 305 00 40 Kadıköy Branch Maslak Branch Tuğlacıbaşı Mah. Poyraz Sok. Sadıkoğlu 1 İş Merkezi No:16 Ziverbey Kadıköy 34710 İstanbul Phone: (0216) 449 27 10 Fax: (0216) 449 27 09 Ayazağa Mah. Büyükdere Cad. No:71 Maslak - Şişli / İstanbul Phone: (0212) 286 09 32 Fax: (0212) 328 16 68 Kağıthane Branch Mecidiyeköy Branch Mezbaha Sok. No: 1 Kağıthane / İstanbul Phone: (0212) 295 81 33 Fax: (0212) 294 98 64 Mecidiyeköy Yolu Cad. No:6/A Mecidiyeköy Şişli / İstanbul Phone: (0212) 356 37 00 Fax: (0212) 356 17 17 Esenyurt Branch İnönü Mah. Doğan Araslı Bulvarı No:124/B Esenyurt 34517 İstanbul Phone: (0212) 450 00 66 Fax: (0212) 450 04 33 Fatih Branch Akşemsettin Mah. Akdeniz Cad. No:10 Fatih 34260 İstanbul Phone: (0212) 531 88 87 Fax: (0212) 531 80 87 Eyüp Branch Merkez Mah. Fahri Korutürk Cad. No:46-A Eyüp / İstanbul Phone: (0212) 417 10 35 Fax: (0212) 417 10 33 Fevzipaşa Branch İskenderpaşa Mah. Macar Kardeşler Cad. No:59 Fatih / İstanbul Phone: (0212) 521 10 70 Fax: (0212) 521 10 75 Fındıkzade Branch Karaköy Branch Şehremini Mah. Kızıl Elma Cad. No:12/A Fatih / İstanbul Phone: (0212) 632 10 11 Fax: (0212) 632 10 45 Müeyyedzade Mah. Kemeraltı Cad. No:6/A Karaköy / İstanbul Phone: (0212) 243 85 40 Fax: (0212) 243 85 41 Florya Branch Kartal Branch Merkez Şube Şenlikköy Mah. Florya Asfaltı No:76/3 Florya Bakırköy 34153 İstanbul Phone: (0212) 573 48 28 Fax: (0212) 573 40 39 Ankara Cad. No:96 Kartal / İstanbul Phone: (0216) 389 99 96 Fax: (0216) 389 55 66 Saray Mah. Dr. Adnan Büyükdeniz Cad. No:10 Ümraniye 34768 İstanbul Phone: (0216) 633 69 43 Fax: (0216) 632 13 50 Gaziosmanpaşa Branch Salihpaşa Cad. Şirinler Sok. No:1 Gaziosmanpaşa 34130 İstanbul Phone: (0212) 418 49 99 Fax: (0212) 418 47 70 Güneşli Branch Evren Mah. Koçman Cad. No: 40 Güneşli - Bağcılar / İstanbul Phone: (0212) 630 93 93 Fax: (0212) 630 36 20 Güngören Branch Güven Mah. İnönü Cad. No:42/B Güngören / İstanbul Phone: (0212) 504 20 90 Fax: (0212) 504 20 45 Hadımköy Branch Akçaburgaz Mah. Hadımköy Yolu No:148 Esenyurt/İstanbul Phone: (0212) 886 26 10 Fax: (0212) 886 26 25 İkitelli Branch Turgut Özal Cad. İkitelli Organize Sanayi Bölgesi İkitelli - Küçükçekmece / İstanbul Phone: (0212) 549 81 41 Fax: (0212) 549 81 40 Kavacık Branch Orhan Veli Kanık Cad. Martı İş Merkezi No:72 Kavacık 34810 İstanbul Phone: (0216) 537 19 70 Fax: (0216) 425 02 77 Kozyatağı Branch Şaşmaz Plaza Saniye Ermutlu Sok. No:4 Kozyatağı 34742 İstanbul Phone: (0216) 445 36 26 Fax: (0216) 445 33 62 Kurtköy Branch Kurtköy Mah. Üstün Cad. No:2 Kurtköy - Pendik / İstanbul Phone: (0216) 378 34 31 Fax: (0216) 595 28 10 Küçükbakkalköy Branch Kayışdağı Cad. No:105/A Ataşehir / İstanbul Phone: (0216) 575 81 88 Fax: (0216) 575 81 08 Küçükköy Branch Yeni Mah. İstanbul Cad. No:1-3A Gaziosmanpaşa / İstanbul Phone: (0212) 649 50 30 Fax: (0212) 649 50 35 Mercan Branch Prof. Cemil Birsel Cad. No:25 Eminönü / İstanbul Phone: (0212) 526 64 04 Fax: (0212) 526 64 15 Merter Branch Mehmet Nezihi Özmen Mah. Fatih Cad. No:24 Merter / İstanbul Phone: (0212) 637 69 00 Fax: (0212) 637 69 10 Natoyolu Branch Güzeltepe Mah. Bosna Bulvarı (Nato Yolu) No:143/B Üsküdar / İstanbul Phone: (0216) 332 41 00 Fax: (0216) 332 45 75 Pendik Branch Doğu Mah. 23 Nisan Cad. No:59 Pendik 34895 İstanbul Phone: (0216) 491 69 42 Fax: (0216) 491 69 46 Sancaktepe Branch Meclis Mah. Eski Ankara Cad. No.34 Sancaktepe Sarıgazi / İstanbul Phone: (0216 620 95 00 Fax: (0216) 620 99 10 Sarıyer Branch Şehit Midhat Cad. No:27 Sarıyer/İstanbul Phone: (0212) 271 50 65 Fax: (0212) 271 55 88 243 Contact Information Bank Asya Branches Sefaköy Branch Topkapı Branch Karabağlar Branch Fevzi Çakmak Mah. Ahmet Kocabıyık Sok. No:12/C Sefaköy / İstanbul Phone: (0212) 541 68 08 Fax: (0212) 541 78 44 Merkezefendi Mah. Davutpaşa Cad. No:119 Zeytinburnu 34010 İstanbul Phone: (0212) 482 51 65 Fax: (0212) 483 20 33 Yeşillik Cad. No:417 Karabağlar 35400 İzmir Phone: (0232) 254 79 79 Fax: (0232) 254 11 61 Silivri Branch Tuzla Branch Alibey Mah. Aziz Sok. A.Kadir Yılmaz İş Mrk. No:3/2 Silivri / İstanbul Phone: (0212) 728 46 00 Fax: (0212) 728 95 15 Aydıntepe Mah. Irmak Sok. No:1 Tuzla 34947 İstanbul Phone: (0216) 392 93 89 Fax: (0216) 392 30 37 Soğanlık Branch Tuzla Serbest Bölge Branch Soğanlık Yenimahalle Atatürk Caddesi No:60/B Kartal / İstanbul Phone: (0216) 451 20 50 Fax: (0216) 451 20 45 İstanbul Deri Serbest Bölgesi Hakkı Matraş Cad. No:11 Tuzla 34950 İstanbul Phone: (0216) 394 07 81 Fax: (0216) 394 07 87 Sultanbeyli Branch Ümraniye Branch Fatih Bulvarı No:193 Sultanbeyli 34920 İstanbul Phone: (0216) 419 90 00 Fax: (0216) 419 21 10 Namık Kemal Mah. Sütçü Cad. No:2 Ümraniye 34762 İstanbul Phone: (0216) 523 04 50 Fax: (0216) 523 04 56 Sultançiftliği Branch Cebeci Mah. Eski Edirne Asfaltı No:702A Sultançiftliği-Sultangazi 34270 İstanbul Phone: (0212) 667 34 34 Fax: (0212) 667 53 53 Sultanhamam Branch Rüstempaşa Mah. Vasıfçınar Cad. No:49 Fatih / İstanbul Phone: (0212) 522 22 85 Fax: (0212) 522 53 00 İstiklal Mah. Alemdağ Cad. No:174/A Ümraniye / İstanbul Phone: (0216) 328 50 30 Fax: (0216) 328 40 99 Üsküdar Branch Atlas Çıkmazı No:5/40 Üsküdar 34672 İstanbul Phone: (0216) 532 55 55 Fax: (0216) 532 90 90 Girne Bulvarı No: 152-154/A Karşıyaka / İzmir Phone: (0232) 372 77 20 Fax: (0232) 372 86 70 Kemalpaşa Branch Mehmet Akif Ersoy Mah. Atatürk Bulvarı No:51/1 Kemalpaşa / İzmir Phone: (0232) 878 15 00 Fax: (0232) 878 15 01 Şirinyer Branch Güven Mah. Menderes Cad. No:318/A Buca / İzmir Phone: (0232) 448 28 28 Fax: (0232) 448 40 28 Yenişehir Branch Ege Ticaret İş Merkezi Gıda Çarşısı 1203-1 Sok. No:25/E İzmir Phone: (0232) 457 93 83 Fax: (0232) 457 97 96 Kahramanmaraş Branch İsmetpaşa Mah. Hükümet Bulvarı Beyzade İşhanı No:8/A Kahramanmaraş Phone: (0344) 221 59 00 Fax: (0344) 221 59 60 Kastamonu Branch Şirinevler Branch Yenibosna Radar Branch Hürriyet Mah. Mahmutbey Cad. No:3/B Bahçelievler / İstanbul Phone: (0212) 639 18 19 Fax: (0212) 639 18 29 Merkez Mah. Atatürk Cad. No:1/A Yenibosna Bahçelievler / İstanbul Phone: (0212) 474 63 63 Fax: (0212) 474 63 43 Şişli Branch Zeytinburnu Branch Meşrutiyet Mah. Halaskargazi Cad. No:98/A Şişli / İstanbul Phone: (0212) 296 70 05 Fax: (0212) 296 70 06 Prof. Muammer Aksoy Cad. No:41 Zeytinburnu 34020 İstanbul Phone: (0212) 546 42 42 Fax: (0212) 546 45 60 Taksim Branch İzmir Kayseri Branch İnönü Mah. Cumhuriyet Cad. Şakirpaşa İşhanı No.89 Şişli / İstanbul Phone: (0212) 240 22 95 Fax: (0212) 240 64 13 Aliağa Branch Cumhuriyet Mah. Nazmi Toker Cad. No:9 38020 Kayseri Phone: (0352) 221 00 69 Fax: (0352) 221 29 88 Telsiz Mahallesi Branch 244 Ümraniye Çarşı Branch Karşıyaka Branch Kazımdırık Mah. İstiklal Cad. No:49 Aliağa / İzmir Phone: (0232) 617 23 00 Fax: (0232) 617 23 09 Bornova Branch Hepkebirler Mah. Cumhuriyet Cad. No:46/A Kastamonu Phone: (0366) 212 65 10 Fax: (0366) 212 65 20 Karabük Branch Bayır Mah. Hürriyet Cad. No:116 78100 Karabük Phone: (0370) 412 66 06 Fax: (0370) 413 14 74 Kayseri Sanayi Branch Telsiz Mah. Seyit Nizam Cad. No:176/A Zeytinburnu / İstanbul Phone: (0212) 665 40 33 Fax: (0212) 665 40 36 Fevzi Çakmak Cad. No:15/A Bornova / İzmir Phone: (0232) 343 16 16 Fax: (0232) 343 71 20 Sanayi Mah.Osman Kavuncu Bulvarı No:120 Kocasinan / Kayseri Phone: (0352) 320 11 40 Fax: (0352) 320 12 80 Tepeüstü Branch Gazi Bulvarı Branch Kocaeli Alemdağ Cad. No:572/A Ümraniye 34776 İstanbul Phone: (0216) 466 43 50 Fax: (0216) 466 43 65 İsmet Kaptan Mah. Gaziosmanpaşa Bulvarı No:15/A Çankaya / İzmir Phone: (0232) 484 12 50 Fax: (0232) 484 12 61 Gebze Branch Topçular Branch İzmir Branch Kışla Cad. Kurtoğlu İş Merkezi No:21/7 Eyüp / İstanbul Phone: (0212) 674 66 43 Fax: (0212) 674 81 55 Gaziosmanpaşa Bulvarı No:58/1 Çankaya / İzmir Phone: (0232) 445 37 10 Fax: (0232) 445 62 21 Hacı Halil Mah. Zübeyde Hanım Cad. Tekhan No:37 Gebze 41400 Kocaeli Phone: (0262) 644 07 07 Fax: (0262) 644 15 05 Gebze Çarşı Branch Zübeyde Hanım Cad. No:37 Gebze 41400 Kocaeli Phone: (0262) 645 02 80 Fax: (0262) 645 02 93 Bank Asya 2011 Annual Report İzmit Branch Manisa Sivas Branch Karabaş Mah. Cengiz Topel Cad. No:12 İzmit / Kocaeli Phone: (0262) 323 09 00 Fax: (0262) 323 09 08 Akhisar Branch Eskikale Mah. Bankalar Cad. 13-2 Sok. No:4 Sivas Phone: (0346) 225 56 96 Fax: (0346) 224 25 34 Körfez Branch Kuzey Mah. Cahit Zarifoğlu Cad. No:53/D Körfez / Kocaeli Phone: (0262) 526 20 00 Fax: (0262) 526 20 03 Paşa Mah. Haşim Haşimoğlu Cad. 50. Sok. No:23 Akhisar / Manisa Phone: (0236) 412 11 58 Fax: (0236) 412 11 28 Manisa Branch Şanlıurfa Branch Yusufpaşa Mah. Asfaltyol Cad. No:4 63100 Şanlıurfa Phone: (0414) 216 80 80 Fax: (0414) 216 49 49 Konya 1. Anafartalar Mah. Gaziosmanpaşa Cad. No:36 45010 Manisa Phone: (0236) 231 21 00 Fax: (0236) 232 42 31 Büsan Branch Turgutlu Branch Fevzi Çakmak Mah. Kosgeb Cad. Büsan San. Sitesi No:19 Karatay 42040 Konya Phone: (0332) 345 46 46 Fax: (0332) 345 46 55 Turan Mah. Atatürk Bulvarı No:174 Turgutlu / Manisa Phone: (0236) 313 20 23 Fax: (0236) 313 20 85 Konya Branch Mardin Branch Çerkezköy Branch Musalla Bağları Mah. Belh Cad. No:10 Selçuklu 42060 Konya Phone: (0332) 238 95 05 Fax: (0332) 238 95 13 Çankaya Mah. İstiklal Cad. No:59/A Mersin Phone: (0324) 238 77 10 Fax: (0324) 238 81 66 Gaziosmanpaşa Mah. Atatürk Cad. No:39 Çerkezköy / Tekirdağ Phone: (0282) 725 37 05 Fax: (0282) 725 32 26 Karatay Sanayi Branch Fatih Mah. Köprü Sok. No:29/1 Selçuklu / Konya Phone: (0332) 236 20 55 Fax: (0332) 236 20 15 Konya Ereğli Branch Pirömer Mah. İnönü Cad. Çimenlik Sok. No:2/A Ereğli / Konya Phone: (0332) 712 40 40 Fax: (0332) 712 42 32 Mevlana Branch Pürçüklü Mah. Aziziye Cad. No:24 Karatay / Konya Phone: (0332) 350 08 80 Fax: (0332) 353 30 80 Karaman Branch Fenari Mah. 9. Sok. Şimşek İş Merkezi No:4/A Karaman Phone: (0338) 214 30 15 Fax: (0338) 214 30 65 Kırıkkale Branch Mersin Branch Cami Şerif Mah. Uray Cad. No:58 33060 Mersin Phone: (0324) 238 77 10 Fax: (0324) 238 81 66 Nevşehir Branch Aksaray Cad. No:19 50100 Nevşehir Phone: (0384) 213 05 55 Fax: (0384) 213 07 35 Niğde Branch Esenbey Mah. Ayhan Şahenk Bulvarı No:18/C Merkez / Niğde Phone: (0388 213 10 60 Fax: (0388) 213 10 12 Ordu Branch Şarkiye Mah. Kazım Karabekir Cad. No:7 Ordu Phone: (0452) 223 30 50 Fax: (0452) 223 30 65 Osmaniye Branch İstiklal Mah. Atatürk Cad. No:150 Osmaniye Phone: (0328) 812 00 66 Fax: (0328) 814 86 66 Tatvan Branch Aydınlar Mah. Abdullah Kocakaplan Cad. No:31 A Blok Tatvan / Bitlis Phone: (0434) 828 04 20 Fax: (0434) 828 04 30 Tekirdağ Çorlu Branch Cemaliye Mah. Omurtak Cad. No:236/1 Çorlu 59860 Tekirdağ Phone: (0282) 653 22 40 Fax: (0282) 653 31 80 Tekirdağ Branch Hükümet Cad. No:142 Tekirdağ Phone: (0282) 260 64 90 Fax: (0282) 260 59 04 Tokat Branch Gaziosmanpaşa Bulvarı Yar Ahmet Mah. No:185/A Tokat Phone: (0356) 214 07 07 Fax: (0356) 213 11 50 Trabzon Branch Kemerkaya Mah. Kahramanmaraş Cad. No:37/A Trabzon Phone: (0462) 321 93 00 Fax: (0462) 321 94 70 Uşak Branch Yenidoğan Mah. Barbaros Hayrettin Cad. No:24/A Kırıkkale Phone: (0318) 225 20 00 Fax: (0318) 225 26 17 Rize Branch Tevfik İleri Cad. No:1 Rize Phone: (0464) 217 09 82 Fax: (0464) 217 09 77 Kurtuluş Mah. İsmetpaşa Cad. Mavi Plaza İş Merkezi No:45/B Uşak Phone: (0276) 224 54 56 Fax: (0276) 224 61 30 Kütahya Branch Samsun Branch Van Branch Cumhuriyet Cad. Karakol Sok. Acar Apt. No: 1/2 43030 Kütahya Phone: (0274) 216 85 85 Fax: (0274) 216 74 74 Kale Mah. Cumhuriyet Cad. No:14 55030 Samsun Phone: (0362) 432 51 52 Fax: (0362) 435 57 07 Çarşı Mah. Cumhuriyet Cad. Vali Konağı Karşısı No:118/A-B 65100 Van Phone: (0432) 210 23 40 Fax: (0432) 214 02 90 Malatya Branch Siirt Branch Yalova Branch Hüseyin Bey Mah. Atatürk Cad. No: 26 44100 Malatya Phone: (0422) 323 31 31 Fax: (0422) 323 47 77 Bahçelievler Mah. Hazreti Fakirullah Cad. No:115/A Siirt Phone: (0484) 223 10 51 Fax: (0484) 223 10 61 Yalı Cad. Gürer İş Merkezi No:11 Merkez/Yalova Phone: (0226) 813 15 00 Fax: (0226) 811 59 43 245