I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION:
A. Notes and Explanations relating to the
Current Period:
(1) The financial statements of The Central Bank
of the Republic of Turkey (“the Bank”) as of 31 December 2003 have not yet been
approved by the Board as of the report date.
(2)
a-Detailed
explanations of all basic accounting policies applied by the bank
The
basis of presentation of the financial statements and the significant
accounting policies applied are as follows:
i. Basis for Presentation of the Financial Statements
The Bank maintains its
books of account and prepares its statutory financial statements in accordance
with Turkish Commercial Practice and Tax Legislation and Law No:1211 of the
Central Bank of the Republic of Turkey ( the “Central Bank Law”). According to the 57th and 58th
articles of the Central Bank Law, the accounting period of the Bank is the
calendar year. At the end of each calendar year, The Bank submits its balance
sheet and income statement to the Prime Ministry along with the annual report
prior to the General Assembly meeting and publishes the balance sheet in the
Official Gazette.
ii.
Applied
Accounting Principles
Apart
from the policies listed above, significant accounting policies applied in the
preparation of the financial statements are as follows:
a. Accounting Principles
The statutory
records are maintained in accordance with the present Turkish legislation under
the historical cost basis of accounting, except for the periodic revaluation of
property, plant and equipment.
b. Recording of income and expense
Interest and other income and expenses are recognized on
an accruals basis.
According
to a change made in the 61st article of the Central Bank Law number 4651 on 25
April 2001, in the event of a change in the value of the Turkish currency,
unrealized gains and losses arising from the revaluation of gold, foreign
exchange and foreign currency indexed assets and liabilities of the Bank are
classified into a special account named Valuation Differences, not comprising
part of the annual income statement.
Realized differences are reflected in the income statement as at the
transaction date.
I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d):
A.
Notes
and Explanations relating to the Current Period (cont’d):
(2) a-
Detailed explanations of all basic accounting policies applied by the Bank
(cont’d)
c. Provisions
According
to the 59th article of the Central Bank Law, provisions in amounts deemed
appropriate by the Board may be reserved from the gross annual profit of the
Bank in order to meet losses which may arise in future years. Provisions also
include retirement pay provision, tax provision and insurance provision for
money in transit.
d. Foreign Currency Transactions
Foreign
currency transactions are recorded at the foreign currency exchange rate
applicable on the date of the transactions.
Gold is valued at the
average of the gold prices quoted on the London exchange at 11:00 a.m. as of 31
December 2003 and on the basis of the
equality of 1 ounce = 31.1035 grams.
Assets
and liabilities denominated in foreign currency are valued at the foreign
currency purchase rate as at the balance sheet date. Differences arising from
the currency revaluation are recorded in a special account separate from the
income statement, as stated in paragraph “b” above.
e. Retirement Pay Provision
According to Turkish Legislation and
Labor Union agreements Retirement Payments
are made at the retirement of employees or in the case of layoff. In the
Bank, the amount payable depends on the rank and years of service, as defined
in T.C. Emekli Sandığı and Social Security Insurance Institution rules. The
Bank is building up, over five years starting from 2001, a provision for the
total accrued retirement pay liability. The amount presented in the financial
statements as at 31 December 2003 is three fifths of the total liability as at
31 December 2001 plus the total difference between the calculated retirement
provision as at the 2003 and 2001 year ends.
f.
Taxation
The
Bank is subject to corporation tax in accordance with Turkish legislation. In addition to that, the bank is liable for
Income Withholding tax for third parties.
g. Securities
The securities
portfolio consists of government bonds purchased for the Bank’s account based
on the 52nd article of the Central Bank Law related with open market operations
to regulate the money supply and liquidity in the economy, and securities
purchased with agreements to resell.
I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d):
A. Notes and Explanations relating to the Current Period
(cont’d):
(2) a- Detailed explanations of all
basic accounting policies applied by the Bank (cont’d)
Securities purchased for the Bank’s own account are valued
at market value as determined on a stock exchange and presented in the
securities accounts at their revalued amount. Securities which are not traded
on a stock exchange are valued at prices declared by the Bank and published in
the Official Gazette. Positive differences between cost and revalued amount are
included in the Securities portfolio in the balance sheet and as Positive
Valuation Differences Account in the income statement. Whenever the difference
is negative, it is recorded in Marketable Securities in the balance sheet and
the Negative Valuation Differences Account in the income statement.
Securities
purchased with agreements to resell are valued on an accruals basis using the
interest rate implied in the agreement.
h. Equity
Participations
The bank records its foreign equity
shares at acquisition cost and revalues them at the Bank foreign currency
purchase rate at the balance sheet date.
b- Changes in
accounting policies in the current period and their financial effects:
No
changes in accounting policies in the current period has been noted.
(3) Compliance with the fundamental accounting concepts
of going concern, accruals and consistency
The
attached financial statements have been prepared based on the going concern
principle which represents one of the basic principles of accounting, assuming
that the Bank will continue its operations without interruption.
(4) The effect of any modification which has
been made in valuation methods affecting the period results:
No change in valuation methods has been noted.
I- NOTES
AND EXPLANATIONS RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A. Notes and Explanations
relating to the Current Period (cont’d):
(5) Detailed
explanation of the valuation methods used for securities (Including Equity Participations,
Subsidiaries, and Long term securities) in the order given below (*):
A.Securities Portfolio :
Securities in Turkish Lira
1- Equity Shares -
None
2- Other Securities:
a) Securities
indexed to inflation and foreign currency - Securities acquired for the Bank’s
accounts are revalued marked to market or, for those which do not have stock
exchange prices, at prices declared by the Bank and published in the Official
Gazette. Variable interest foreign currency indexed securities are valued at
the current exchange rate with interest accrued on a straight line basis.
b) Fixed
Income Securities – None
c) Securities
having variable interest rate – None
Foreign Currency Securities
1- Equity Shares -
None
2- Other Securities
a) Securities indexed
to inflation and foreign currency - None
b) Fixed Income Securities – Foreign currency
securities are valued marked to market as determined in the foreign stock
markets in which they are traded.(*)
c) Securities having variable
interest rate - interest rate.
3-
Gold (**)– Gold is valued according to the gold price quoted on the London
exchange at 11:00 a.m. as of 31
December 2003 and on the basis of the equality of 1 ounce = 31.1035
grams.
(*) Foreign currency securities are recorded in
the Correspondent Accounts in the balance sheet.
(**) Gold is recorded in the balance sheet in a
separate account rather than under marketable securities.
B. Equity Participations
Securities in Turkish Lira – None
Securities
indexed to foreign currency – valued at the Bank purchase
price at the balance sheet date.
I- NOTES
AND EXPLANATIONS RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A. Notes and Explanations
relating to the Current Period (cont’d):
(5) Detailed
explanation of the valuation methods used for securities (Including Equity
Participations, Subsidiaries, and Long term securities) in the order given
below (cont’d):
C. Subsidiaries
Securities in Turkish Lira – None
Securities in terms of foreign currency – None
D. Marketable Securities
Securities in Turkish Lira
1-
Equity Shares
a)
Long term investments - None
b)
Equity Shares given as a collateral and pledged shares - None
c)
Equity shares subject to long term transactions - None
2-
Other Securities
a)
Long term investments - None
b)
Equity Shares given as a collateral and pledged shares - None
c)
Equity shares subject to long term transactions - None
Securities in Foreign Currency
1-
Equity Shares
a)
Long term investments - None
b)
Equity Shares given as a collateral and pledged shares - None
c)
Equity shares subject to long term transactions - None
2-
Other Securities
a)
Long term investments - None
b)
Equity Shares given as a collateral and pledged shares - None
c)
Equity shares subject to long term transactions - None
(6)
Method
of depreciation, any changes in methodology during the current period and
financial effects of such changes
Depreciation has been
calculated on a straight line basis and there has been no change in
depreciation methods during the current year. The annual depreciation rates
applied are as follows:
Buildings (acquisition cost) 2%
Vehicles, Furniture and Fixtures 20%
Leasehold Improvements 20% or over the lease
period
I- NOTES
AND EXPLANATIONS RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A.
Notes
and Explanations relating to the Current Period (cont’d):
(6)
Method
of depreciation, any changes in methodology during the current period and
financial effects of such changes (cont’d)
All tangible fixed assets have been
depreciated taking their estimated economic life into consideration. The bank
revalues its buildings with the coefficients announced by the Ministry of
Finance (including the related depreciation). The difference arising from revaluation has been credited to
Revaluation Surplus Account which may later be added to capital. Land is
neither depreciated nor revalued. Immovables have not been revalued at year
ends. They are revalued at the time of sale. Revaluation coefficients have
been for the year 2003 28.5%, 59.0% and 53.2%
for the years 2002 and 2001 respectively.
(7) The
exchange rate used for the revaluation of foreign currency items during the
preparation of the balance sheet and the Bank’s published US dollar currency
purchase rate for the last five working days of the period are as follows:
|
|
|
31 December
2003
|
|
|
|
|
A. The Bank’s
“Exchange Rate for the Evaluation of Foreign Currency Items” (1 US dollar
$=........ TL) |
|
1,395,835 TL |
|
|
|
|
|
|
|
|
|
|
|
B. US dollar
purchase rates at the date of balance sheet date are as follows: |
|
|
|
|
|
|
US dollar purchase
rate at the date of balance sheet |
|
1,395,835 TL |
|
|
|
|
|
|
|
|
||
|
US
dollar purchase rates for the 5 working days before balance sheet date |
|
|
|||
|
Purchase rate of
the 1st Day |
|
1,407,678 TL |
|
|
|
|
Purchase rate of
the 2nd Day |
|
1,407,555 TL |
|
|
|
|
Purchase rate of
the 3rd Day |
|
1,412,533 TL |
|
|
|
|
Purchase rate of
the 4th Day |
|
1,420,989 TL |
|
|
|
|
Purchase rate of
the 5th Day |
|
1,424,043 TL |
|
|
|
|
|
|
|
|
|
|
I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A.
Notes
and Explanations relating to the Current Period (cont’d):
(8) Information on assets and liabilities
denominated in foreign currencies, their US dollar equivalents and the foreign
currency open position is as follows:
|
|
|
31 December 2003 |
|
31 December 2002 |
|||||
|
I-foreıgn
currency assets |
|
TL Billion
|
Million $
|
|
TL Billion
|
|
Million $
|
|
|
|
1) GOLD |
|
2,234,170 |
1,600 |
|
2,149,367 |
|
1,315 |
|
|
|
2) FOREIGN EXCHANGE |
|
46,922,503 |
33,616 |
|
43,816,006 |
|
26,806 |
|
|
|
3) COINS |
|
- |
- |
|
- |
|
- |
|
|
|
4) DOMESTIC CORRESPONDENTS |
|
1,758,775 |
1,260 |
|
2,689,095 |
|
1,645 |
|
|
|
5) SECURITIES PORTFOLIO |
|
8,516,521 |
6,101 |
|
9,741,491 |
|
5,960 |
|
|
|
6) DOMESTIC CREDITS |
|
6,556 |
5 |
|
12,804 |
|
8 |
|
|
|
7) OPEN MARKET OPERATIONS |
|
- |
- |
|
- |
|
- |
|
|
|
8) FOREIGN CREDITS |
|
166,347 |
119 |
|
251,626 |
|
154 |
|
|
|
9) SHARE PARTICIPATIONS |
|
20,787 |
15 |
|
7,819 |
|
5 |
|
|
|
10) FIXED ASSETS |
|
- |
- |
|
- |
|
- |
|
|
|
11) CLAIMS UNDER LEGAL PROCEEDINGS (NET) |
|
- |
- |
|
- |
|
- |
|
|
|
12) TREASURY LIABILITY FROM SDR ALLOCATIONS |
|
233,218 |
167 |
|
249,887 |
|
153 |
|
|
|
13) FX REVALUATION DIFFERENCES |
|
- |
- |
|
- |
|
- |
|
|
|
14) ACCRUED INTEREST AND INCOME |
|
6,164 |
5 |
|
26,418 |
|
16 |
|
|
|
15) MISCELLANEOUS RECEIVABLES |
|
10,298 |
7 |
|
9,131 |
|
6 |
|
|
|
16) OTHER ASSETS |
|
4,000 |
3 |
|
18,070 |
|
11 |
|
|
|
OFF BALANCE SHEET
ITEMS(15) |
|
|
|
|
|
|
|
|
|
|
17) FORWARD TRANSACTIONS |
|
|
|
|
- |
|
- |
|
|
|
TOTAL FOREIGN
CURRENCY ASSETS(1-15) |
|
59,879,339 |
42,898 |
|
58,971,714 |
|
36,079 |
|
|
II-FOREIGN
CURRENCY LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
1) MONEY IN CIRCULATION |
|
- |
- |
|
- |
|
- |
|
|
|
2) LIABILITIES TO TREASURY |
|
234,355 |
168 |
|
250,953 |
|
154 |
|
|
|
3) FOREIGN CORRESPONDENTS |
|
85,412 |
61 |
|
106,881 |
|
65 |
|
|
|
4) DEPOSITS |
|
|
|
|
|
|
|
|
|
|
a) PUBLIC SECTOR |
|
4,577,974 |
3,280 |
|
3,893,761 |
|
2,382 |
|
|
|
b)
BANKING SECTOR |
|
10,196,374 |
7,304 |
|
10,719,475 |
|
6,558 |
|
|
|
c)
MISCELLANEOUS |
|
24,257,671 |
17,379 |
|
23,259,403 |
|
14,231 |
|
|
|
d) INTERNATIONAL
INSTITUTIONS |
|
10,199,972 |
7,307 |
|
13,186,412 |
|
8,067 |
|
|
|
e) FUNDS |
|
1,829,907 |
1,311 |
|
1,349,921 |
|
826 |
|
|
|
5) OPEN MARKET OPERATIONS |
|
- |
- |
|
- |
|
- |
|
|
|
6) FOREIGN CREDITS |
|
12,094 |
9 |
|
13,089 |
|
8 |
|
|
|
7) ADVANCES, COLLATERALS AND DEPOSITS COLLECTED
AGAINST LETTERS OF CREDIT AND
IMPORT |
|
837,444 |
600 |
|
653,213 |
|
400 |
|
|
|
8) NOTES AND REMITTANCES PAYABLE |
|
12,819 |
9 |
|
9,865 |
|
6 |
|
|
|
9) SDR ALLOCATION |
|
233,218 |
167 |
|
249,887 |
|
153 |
|
|
|
10) PROVISIONS |
|
- |
- |
|
- |
|
- |
|
|
|
11) FX REVALUATION DIFFERENCES |
|
- |
- |
|
- |
|
- |
|
|
|
12) ACCRUED INTEREST AND EXPENSE |
|
2,191,408 |
1,570 |
|
2,424,498 |
|
1,483 |
|
|
|
13) MISCELLANEOUS PAYABLES |
|
77,629 |
56 |
|
76,372 |
|
47 |
|
|
|
14) OTHER LIABILITIES |
|
40,954 |
29 |
|
31,733 |
|
19 |
|
|
|
OFF BALANCE SHEET
ITEMS(12) |
|
|
|
|
|
|
|
|
|
|
15) FORWARD TRANSACTIONS |
|
- |
- |
|
- |
|
- |
|
|
|
TOTAL FOREIGN
CURRENCY LIABILITIES(1+15) |
|
54,787,230 |
39,250 |
|
56,225,463 |
|
34,399 |
|
|
|
FOREIGN CURRENCY NET
GENERAL POSITION (I-II) |
|
5,092,109 |
3,648 |
|
2,746,251 |
|
1,680 |
|
|
I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A.
Notes
and Explanations relating to the Current Period (cont’d):
(9)
Book value of movable and immovable assets, the depreciation allocated and
their insurance coverage:
|
|
|
31 December
2003 |
||||
|
|
|
Book Value (*) |
|
Accumulated
Depreciation |
|
Insurance
Coverage |
|
Movables |
|
31,898 |
|
23,087 |
|
21,576 |
|
Immovables |
|
203,699 |
|
14,750 |
|
144,713 |
|
1-Assets in use for banking
activities |
|
203,699 |
|
14,750 |
|
144,713 |
|
2-Other |
|
- |
|
- |
|
- |
|
Assets held under financial leases (as a lessee) |
|
- |
|
- |
|
- |
|
|
|
31 December
2002 |
||||
|
|
|
Book Value (*) |
|
Accumulated
Depreciation |
|
Insurance
Coverage |
|
Movables |
|
28,787 |
|
18,234 |
|
17,991 |
|
Immovables |
|
156,530 |
|
11,451 |
|
90,991 |
|
1-Assets in use for banking
activities |
|
156,530 |
|
11,451 |
|
90,991 |
|
2-Other |
|
- |
|
- |
|
- |
|
Assets held under financial leases (as a lessee) |
|
- |
|
- |
|
- |
(*) Gross amount before accumulated
depreciation
Immovables are subject to revaluation, except that
land is not subject to depreciation or revaluation. Movables are not revalued
unless they are sold.
The difference arising from revaluation is
credited to Revaluation Fund which can be later added to capital.
(10) Information on contingent losses and gains,
which are significant but cannot be quantified
There
are no contingent losses or gains as of 31 December 2003.
I- NOTES AND EXPLANATIONS
RELATING TO THE BANK AND ITS FINANCIAL POSITION (cont’d)
A.
Notes
and Explanations relating to the Current Period (cont’d):
(11) Other issues which significantly affect the
balance sheet or which cannot be quantified:
The
foreign exchange differences account represents the unrealized foreign exchange
gains, not included in the income statement but presented in the balance sheet
as foreign exchange revaluation differences account according to the 61st
article of the Central Bank Law.
Realized differences are reflected in the income statement as at the
transaction date.
B. Other Notes and
Explanation:
(12) Information on events occurring after the
balance sheet date, which affect the financial activities and/or financial
structure significantly and therefore require explanation:
None.
(13) Information on the Bank’s Foreign Branches:
There are no foreign branches. The Bank has
Frankfurt, London, New York and Tokyo representatives and a liaison office in
Berlin.
C. The Qualification
of the independent audit firm auditing the financial statements (Under the
format presented in the legislation):
The Financial Statements as of and for the year ended
31 December 2003 are audited by DRT Denetim Revizyon Tasdik Yeminli Mali
Müşavirlik A.Ş. (member firm of Deloitte Touche Tohmatsu).
The independent audit opinion is presented at the
front of the financial statements.
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS
(1)
Information about the Gold account
According to the 53rd Article of the
Central Bank Law, the Bank may buy and sell gold coins and bullion, may import
and export gold and may also receive and grant advances against gold. As of the
balance sheet date, the Bank has 116,103,753 net grams of gold in international
standards and 3,211,296 net grams of gold not in international standards.
82,433,108 grams of the gold in international standards is kept at foreign
banks, mainly the Federal Reserve Bank of New York. 33,670,645 grams are kept
at the Headquarters of the Bank. The non-international standard gold is kept at
the Headquarters of the Bank. 345,575 grams of non-international standard gold
belongs to the Treasury and the related liability is presented in the Balance
Sheet in the Liabilities to Treasury Account.
Gold
is valued at the average of the gold prices quoted on the London exchange at
11:00 a.m. as of 31 December 2003 and on the basis of the equality of 1 ounce =
31.1035 grams.
(2)
Information about the Foreign Exchange account
a-Deposits at
Foreign Banks:
|
|
31
December 2003
|
|
31
December 2002
|
|||
|
|
Billion TL
Amount
|
USD Amount
(in Millions) |
|
Billion TL Amount
|
|
USD Amount
(in Millions) |
Free Deposits
|
1,652,914 |
1,184 |
|
2,126,616 |
|
1,302 |
|
Marketable
Securities Portfolio |
44,052,337 |
31,560 |
|
40,381,071 |
|
24,705 |
|
|
|
|
|
|
|
|
|
Total |
45,705,251 |
32,744 |
|
42,507,687 |
|
26,007 |
Deposits at Foreign Banks consist of the current
accounts and investment accounts held as reserve in Foreign Correspondents. The
Marketable Securities Portfolio consists of foreign currency Government Bonds
and Treasury Bills issued by international financial institutions and kept in
foreign banks.
The portfolio account is valued marked to
market as determined in the foreign stock exchanges in which they are traded
and accounted as TL 43,457,595 Billion. These securities
can be liquidated when needed. (31 December 2002: 39,684,637 Billion TL)
In addition, balances with Foreign Banks
include TL 4,063 Billion as deposit and TL 590,679 Billion as investment account belonging to the
Turkish Defense Fund. (31 December 2002: TL 95,082 Billion and , TL 601,352
Billion)
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(3) Domestic Correspondents
Foreign currency
interbank transactions in which the Bank acts as intermediary are accounted in
the domestic correspondents account in assets and bank deposits accounts in
liabilities. This account amounting to TL 1,758,775
Billion as of the balance sheet date consists of EURO 84,000,000 and
USD 1,155,000,000. The Bank is liable to the
counterparties. (31 December 2002: TL 2,689,095 Billion equivalent to EURO
313,000,000 and USD 1,319,000,000)
TL 629 Billion interest accrual related to Foreign Currency
Interbank Money Market Transactions, in which the Bank acts as an intermediary,
is recorded in the balance sheet as Other Liabilities and Other Assets; and in
the income statement as Other Interest Income and Other Interest Expense (31
December 2002: TL 2,008 Billion).
The Bank did not take
place in the TL Interbank Money Market Transactions in the current period. In
the prior period, TL 1,100 Billion of interbank money market deposits supplied
by the Bank as principal to the market have been accounted as Open Market Other
Operations in the asset accounts. TL 2 Billion accrued interest gain has been
recorded in the Accrued Interest and Income account.
Apart from the
interbank transactions in which the Bank acts as an intermediary, the bank acts
as a party in TL interbank transactions where the purchase amount is TL 7,826,450 Billion, which
is recorded in the Open Market Operations as “Other” in liabilities. (31
December 2002: TL 7,503,900 Billion). The interest expense accrual amounting to
TL 32,498 Billion
related to this transaction is recorded in Other Liabilities Account.
(31 December 2002: TL 37,678 Billion).
(4) Marketable Securities Portfolio – Open
Market Operations
a- Information
about the Marketable Securities Portfolio
The Marketable
Securities Portfolio consists of securities purchased for the Bank’s account
which represent an amount of TL 27,645,063 Billion, together with an interest
income accrual of TL 743 Billion computed on securities sold under
agreements to repurchase, based on their valuation at official gazette prices.
The marketable
securities portfolio consists of securities for the Bank’s account amounting to
TL 28,842,559 Billion and an interest income accrual due
to the valuation at official gazette prices of the securities sold under
repurchase agreement and the interest expense accrual calculated for these
securities amounting to 6,350 TL Billion.
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(4) Marketable Securities Portfolio – Open
Market Operations (cont’d)
In the year 2001, TL
13,876,893 Billion of securities indexed to foreign currencies, included
in the securities acquired for the
Bank’s account, represented Treasury Bills issued by the Turkish Treasury that
are indexed to SDR (Special Drawing Rights).
The authority of the Bank to give the Treasury short term advances was removed
by an amendment made in Law No:4651 on 25 April 2001. Under Temporary Article
number 2 of the same law, the Bank had the authority to acquire securities
issued by the Treasury from the primary markets starting from the validity date
of the act for a temporary period of six months. With respect to this
authority, the Bank bought SDR 7,584,579,154 of securities at cost between May
2001 and November 2001 from the primary markets. These securities are issued
with the aim of usage of the loan given by the IMF for budget financing. The
coupon rates on the securities are indexed to the rate applicable on
liabilities to the IMF. SDR 59,837,060 of the periodic payments accrual relates
to securities with acquisition cost of SDR 7,584,579,154, which are valued at
the SDR currency exchange rate and accounted as TL 13,876,894 Billion in the
Securities Portfolio as at 31 December 2001.
The Treasury has made
payment on Government Bonds in a total amount of 2,959,919,154 SDR in the
February 2002 period and 272,135,000 SDR in the May 2002 period. As of 31 December
2002, the balance on this account is 4,352,525,000 SDR. The 4,352,525,000 SDR
cost and the 25,602,197 SDR accrual of the periodic payments have together been
valued at TL 9,741,491 Billion at the SDR foreign currency rate applicable at
the balance sheet date, and have been included in the Marketable Securities
Portfolio account.
In the current
period, Treasury has made payment on Government Bonds in a total amount of 77,882,500 SDR in the October 2003
period and 194,252,500 SDR
in the November 2003 period. As of 31 December 2003, the balance on this
account is 4,080,390,000
SDR. The 4,080,390,000 SDR
cost and the 20,769,000 SDR
accrual of the periodic payments have together been valued at TL 8,516,521
Billion at the SDR foreign currency rate applicable at the balance sheet date,
and have been included in the Marketable Securities Portfolio account.
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(4) Securities Portfolio – Open Market Operations
(cont’d)
Breakdown of securities portfolio as at 31
December 2003;
|
|
31 December 2003 Acquisition Cost |
31 December 2003 Accrual (net) |
31 December 2003
Balance Sheet Value
|
31 December 2003 Market Value (**) |
31 December 2003 Official Gazette Value |
|
Purchases
under Agreements to Resell |
|
|
|
|
|
|
Treasury Bills and government Bonds |
- |
- |
- |
- |
- |
|
1. Fixed Income |
- |
- |
- |
- |
- |
|
2. Indexed to Inflation |
- |
- |
- |
- |
- |
|
3. Indexed to Foreign Currency |
- |
- |
- |
- |
- |
|
4.Securities in Foreign Currency |
- |
- |
- |
- |
- |
|
5. Floating Rated |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Outright Purchases |
|
|
|
|
|
|
Treasury Bills and government Bonds |
264,310 |
27,645,063 |
|
19,128,542 |
|
|
1. Fixed Income |
- |
- |
- |
- |
|
|
2. Indexed to Inflation |
221,180 |
19,128,542 |
- |
19,128,542 |
|
|
3. Indexed to Foreign Currency |
43,130 |
8,516,521 |
- |
- |
|
|
4. Securities in Foreign Currency |
- |
- |
- |
- |
|
|
5. Floating Rated |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Income Sharing Bonds Mutual Funds Participation Certificates |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Marketable Securities |
- |
743 |
743 |
- |
- |
|
Accrued
Income from securities sold under agreements to repurchase |
|
743 |
743 |
|
|
|
|
|
|
|
|
|
|
TOTAL |
27,380,753 |
265,053 |
27,645,806 |
|
|
The nominal values of the above listed marketable
securities total TL 18,023,159 Billion .
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(4) Marketable Securities Portfolio – Open
Market Operations (cont’d)
b- Explanations
related to Open Market Operations
Open
Market Operations presented in the asset side of the balance sheet amounting to
TL 433,000 Billion represent the sales amount
of the securities sold under agreements to repurchase;
In
the prior period, Open Market Operations presented in the asset side of the
balance sheet amounting to TL 2,070,500 Billion represent the sales amount of
the securities sold under agreements to repurchase, TL 1,100 Billion is
receivables from TL Interbank transactions.
In
the liability side of the balance sheet, the open market operations balance TL 433,645 Billion represents the amount payable for securities
sold under agreements to repurchase, TL 7,826,450
Billion represents the money borrowed by the Bank from banks through the
Interbank Money Market.
In
the prior period, in the liability side of the balance sheet, the open market
operations balance TL 2,075,937
Billion represents the amount payable for securities sold under agreements to
repurchase, TL 7,503,900
Billion represents the money borrowed by the Bank from banks through the
Interbank Money Market.
The
interest amounting to TL 645 Billion which
will be paid at the repurchase of securities is presented in the Other Assets
account. (31 December 2002: TL 5,437 Billion)
As
at 31 December 2003, the breakdown of open market operations is:
|
Assets |
31 December
2003 TL Billion |
|
Liabilities |
31 December 2003 TL Billion |
|
Open Market Operations |
433,000 |
|
Open Market Operations |
8,260,095 |
|
A.Repurchase Agreemets |
433,000 |
|
A.Repurchase Agreemets |
433,645 |
|
a) Cash |
- |
|
a) Cash |
433,645 |
|
i)
Foreign Exchange |
- |
|
i)
Foreign Exchange |
- |
|
ii)
Securities |
- |
|
ii) Securities |
433,645 |
|
b)
Securities |
433,000 |
|
b)
Securities |
- |
|
B. Other |
- |
|
B. Other |
7,826,450 |
|
|
|
|
|
|
|
Other Assets |
645 |
|
Other Liabilities |
- |
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(5) Loans
a- Information related to domestic credits
As of 31 December
2003, TL 6,556 Billion represents the
loans given to Eximbank.
As of 31 December 2002,
TL 250,000 Billion of the total domestic loans was an advance loan issued to
the Saving Deposit Insurance Fund against a collateral of Government Bonds with
November 2005 maturity date. The income accrual computed on the advance loan is
TL 17,028 Billion and has been recorded in the Accrued Interest and Income
account. As of 31 December 2002, TL 176,594 Billion is recorded in Other Assets
in the assets, and in the Valuation Differences account in the liability side
of the balance sheet, as a consequence of revaluation of the foreign currency
indexed loan mentioned above.
b-
Explanation of loans and advances granted to the Bank’s shareholders or
personnel as at 31 December 2003
The authority of the Bank to give the Treasury
short term advances was removed by an amendment made in Law number 4651 on 25 April 2001. By the
same act’s Temporary Article number 2, the Bank had the authority to acquire
securities issued by the Treasury from the primary markets starting from the
validity date of the law for a period of six months. Within this authority, the
Bank bought SDR 7,584,579,154 of securities at cost from the primary markets in
the period May 2001 to November 2001. These securities were issued with the aim
of usage of the loan given by the IMF for budget financing. The coupon rates of
the securities are indexed to the rate on the periodic payments that are made
to the IMF. The Treasury has made payment on Government Bonds in a total amount
of 2,959,919,154 SDR in the February 2002 period, 272,135,000 SDR in the May
2002 period, 77,882,500 SDR in
October 2003 period and 194,252,500 SDR in November 2003 period. As
of 31 December 2003, the balance on the account is 4,080,390,000 SDR. The 4,080,390,000 SDR cost and the 20,769,000 SDR accrual of the periodic
payments have together been valued at TL 8,516,521 Billion at the SDR foreign currency rate applicable
at the balance sheet date, and have been included in the Marketable Securities
Portfolio account.
c- Information
related to the Foreign Loans Account
Foreign loans are receivables which converted to
loans, arising from the accounts used to follow commercial transactions under
treaties arranged with the relevant countries’ central banks.
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(5) Loans
(cont’d)
d-
Explanation related to claims under legal proceedings (net)
The total balance consists of uncollectible
receivables from Iraq as a result of the Gulf Crisis and from receivables
related with trade affairs with Iraq. A full provision for these receivables
has been allocated and accounted in the provisions account in liabilities.
Movements in provision for loans and
receivables under follow – up:
|
|
|
Billion
TL |
|
USD |
|
Opening Balance |
|
2,054,167 |
|
1,256,754,525 |
|
|
22,507 |
|
14,866,143 |
|
|
- Transfers from other
follow-up accounts (+) |
|
- |
|
- |
|
- Transfers to other
follow-up accounts (-) |
|
- |
|
- |
|
- Collections during the
period ( - ) |
|
- |
|
- |
|
- Write-offs ( - ) |
|
- |
|
- |
|
- FX rate difference |
|
(301,701) |
|
- |
|
CLOSING BALANCE |
|
1,774,973 |
|
1,271,620,668 |
|
|
1,774,973 |
|
1,271,620,668 |
|
|
Net balance after
provisions |
|
- |
|
- |
According to the 61st article of the Central
Bank Law, foreign currency denominated loans under follow-up are revalued at the
period ends and unrealized gains and losses arising from the revaluation are
classified into a special account named “Valuation Differences”. Provisions,
including foreign currency rate differences, for the related receivables are
accounted in the income statement according to the 59th article of the Central
Bank Law.
II- NOTES
AND EXPLANATIONS ON THE BALANCE SHEET AND MEMORANDUM ACCOUNTS (cont’d)
(6) Equity
Participations
Equity Participations are stated at acquisition
cost and valued with the Bank’s foreign currency purchase rate at the period
end.
The Bank’s equity participations can be
analyzed as follows:
|
|
|