From the Banking Regulation and Supervision Agency:

Regulation on Accounting Principles1

(Published in the Official Gazette dated 22.06.2002, No: 24793(Repeated))

SECTION ONE
Scope and Purpose, Legal Basis, Abbreviations

Scope and purpose

Article 1- The purpose of this regulation is to determine the bases, principles and
procedures regarding providing transparency and uniformity in accounting and record order
of banks, preventing their transactions not to be booked, booking their activities in a sound
and reliable manner in compliance with their real natures, preparing their financial
statements including the information regarding their financial status on a consolidated and
non-consolidated basis, financial performances and management efficiency in time and in a
correct manner, reporting and publishing thereof.

In cases where there is not clarity in this Regulation and in communiqués to enter
into force regarding accounting standards pursuant to this Regulation, principles adopted on
national and international accounting standards, the norms brought by the European Union
regulations, principles widely used in financial markets in case they are not contradictory to
the legislation are applied respectively.

Legal basis
Article 2- This Regulation has been enacted pursuant to the provisions of Article 3,
paragraph (11) and Article 13 of the Banks Act No: 4389.

Abbreviations
Article 3- In this Regulation;

“Act” means the Banks Act No: 4389,

“Board” means the Banking Regulation and Supervision Board,

“Agency” means the Banking Regulation and Supervision Agency,

“Bank” means the definition in Article 2 of the Banks Act No: 4389.

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As amended by the Regulation published in the Official Gazette No. 24915 and dated 23.10.2002
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 SECTION TWO
Basic Accounting Principles

Accounting principles, basic assumptions and accounting standards

Article 4- Accounting principles define the bases to be applied in order to provide
the usage of basic accounting principles on financial statements and accounting transactions.
In case there is more than one option for a specific transaction, the appropriate one of those
principles is chosen and applied in a consistent manner.

Accounting principles are generally applied by means of accounting standards.

Accounting standards are the regulations that minimize the differences between accounting
principles obligatory to be taken as a basis in accounting transactions as well as in the
preparation of financial statements and the practice area.

Going concern, matching, consistency, social responsibility, accounting entity,

measurement, cost essence, neutrality and reliable document, prudence, substance over form
principles are accepted as the basic principles of bank accounting. Basic principles of bank
accounting are obligatory to be used in the selection and practice of accounting policies.

Going concern, matching and consistency principles are also accepted as the basic
assumptions of accounting. In case any of these assumptions become invalid, this shall be
presented in the explanations and footnotes of the financial statements.

The significant ones of accounting policies applied are to be shown on financial

statements through footnotes and annexes in a clear and comprehensible manner. The
explanations regarding accounting policies are inseparable parts of the financial statements.

Accounting standards to be applied in the regulation of financial instruments,

tangible and intangible assets, leases, transactions with the related parties, bank
combinations and acquisitions as well as subsidiaries acquired by banks, impairment of
assets, provisions, contingent liabilities and contingent assets , government grants and
assistance, banks’ employee benefits, the effects of changes in foreign exchange rates, net
profit/loss for the period, fundamental errors and changes in accounting policies, events
after the balance sheet date, consolidated financial statements, accounting of subsidiaries,
joint ventures and associates financial statements to be presented to the public and
explanations and footnotes thereof, preparing of financial statements in hyperinflationary
periods and to be applied where necessary thereof shall be regulated by the Board.

Going concern
Article 5- Going concern principle means that the activities are to be carried out
without any time limit and there is no tendency or need to finalize the activities or limiting
the scale.

In case the activities are finalized or the tendency or need for the limitation of the
scale engenders or uncertainties that could affect the going concern are determined, these
points must be explained in the footnotes of the financial statements. If the determinations
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made necessitate a change in the accounting policy, the changes made in the accounting
policy are shown in the explanations and footnotes of the financial statement together with
its possible effects.
In the periods when the financial statements are prepared, regarding the going
concern of the activities, it is required to make future-oriented assessments, under objective
criterion and reasonable assumptions through taking into consideration all existing
information as not being less than one year as of the balance sheet date. In case the
existence of activity profitability occurring from previous years and opportunity to access
easily to the financial resources, going concern assumption is adopted without making a
detailed evaluation. In other cases, points such as existing and expected profitability,
liquidity, debt payment plan and power as well as prospective resources of renewal
financing are taken into consideration.

Matching principle and accrual basis

Article 6- Matching principle means that the division of activity life, which is
accepted as unlimited under the assumption of going concern, to specific periods and the
requirement of determination of each period’s activity results separate from other periods.

Financial statements other than cash flow statement are prepared according to
accrual basis. According to this base, when the transactions and economic events realized,
they are taken into accounting records together with being a party of the rights and
obligations engendered from these without taking into consideration whether or not
collection or payment is realized and they are reflected to the financial statements of the
related period. Cash flow statement is prepared on a basis of collection or payment of cash
or cash equivalents.

Recognition of income and expenses according to accrual basis, directly association

of transactions bearing income and profits with costs, expenses and losses belonging to the
same period is the requirement of this principle. Nevertheless, this matching does not mean
to display the items that do not cover asset or liability definition on the balance sheet.

After the annulment of interest and income accrual and rediscounts which are
engendered from loans and other receivables classified as non-performing receivables
within the framework of provisions of the legislation regarding the classification of loans
and other receivables and setting aside provisions for them, but not collected in cash, the
requirement of making transaction on a cash basis regarding the afore-mentioned issues is
the exemption of accrual basis.

Consistency
Article 7- Consistency principle means the requirement to apply the accounting
policies chosen for accounting practices without changing them in order to provide the
comparability of the financial status, activity results and interpretations thereof in the
consecutive periods.

Consistency principle foresees the constancy of record orders and measurement

modules in similar events and transactions and the uniformity on financial statements from
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the point of view of format and content. Accounting policies applied can be changed when
there are sound reasons. However, these changes and their monetary effects must be
explained on the financial statement footnotes.
Reporting system must be consistent, comparable, appropriate with bank’s features
and cover the bank’s needs and shouldn’t be changed unless it is obligatory.

Social responsibility
Article 8- Social responsibility principle means that the executives must carry out
their duties in an honest, fair and impartial manner while carrying out the accounting
practices and preparation and presentation of the financial statements, regarding the benefits
of all the public through informing them and in order for the accounting fulfill its activity.

During the record and presentation process, the responsibility for the related groups
must be considered in a wider meaning than the legal responsibility and the first auditor of
this responsibility must be the accounting unit itself. The chosen accounting principles must
be appropriately applied during the execution of accounting transactions and preparation of
financial statements.

Being able to come to a true judgment and providing to make a rationalistic decision
based on the information engendered due to the information got from the accounting is the
fundamental criterion of social responsibility principle.

Accounting entity
Article 9- Accounting entity principle means that the bank has a separate entity from
its partners, executives, personnel and other related persons and that the accounting
transactions must be carried out only on behalf of this entity.

Each unit having a separate accounting in bank’s structure is considered as an

accounting entity although it does not have a legal entity. Accordingly, the assets and
resources allocated to such entities, primarily to the branches, must be taken into
consideration as if they are the assets and resources of that accounting entity. An accounting
entity must be considered separate from the bank’s legal entity in its relationships with other
internal bank accounting entities and head office.

As a result of the entity principle, assets, debts, rights and liabilities of each
accounting entity should be separately monitored, income and expenses thereof should be
appropriated to themselves. Especially while determining the cost of resource and usage
such as branches current interest and commission to be taken between branches, a pricing
policy that shall ensure to reflect working results of related units correctly should be
applied.

Measurement
Article 10- Measurement principle means the reflection of economic events and
transactions, which are material, to accounting by a common criterion.

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 Accounting transactions are recorded according to national currency unit except FX
transactions. Although FX transactions are recorded over related currency unit, they are
measured by taking into account it’s equivalence in national currency unit as of reporting
periods.

Cost essence
Article 11- Cost essence principle means the requirement to record an asset except
cash and receivables, over its cost value engendered in the phase of its acquirement in
exchange of a cost. This principle aims at not making correction records continuously due to
changing market prices and grounding the movements regarding the assets on reliable
documents.

Provisions regarding the measurement of financial assets and liabilities and

revaluation are the exemptions of this principle.

Neutrality and reliability

Article 12- Principle of neutrality and reliability means that accounting records
shall be based on reliable documents prepared in compliance with procedures reflects actual
conditions and indicates the necessity of neutral and unprejudiced treatment in determining
the methods to be taken as basis for accounting records.

Accounting records shall be based on reliable documents. In case a transaction,

which is subject to recording is based on a remark, maintenance of the remark in question is
required with a view to ensuring constitution of the basis of accounting transaction as a
written copy and ensuring auditing and confirmation of the transaction.

Prudence
Article 13- Principle of prudence means that being in a deliberate and prudent
manner under uncertainty for foreseeing in decision making and practicing. Accounting
policies should be grounded on a basis which takes into consideration the risks and
uncertainties to be encountered and ensures recognition thereof in a prudent manner
according to their structures and scopes. According to these, while necessary provisions are
set aside for possible expenditures, losses and debts any accounting record isn’t required for
possible revenues and profits.

It is possible to set aside hidden reserves or additional provision through an

evaluation to be made in accordance with principle of prudence. However, this will lead to
the fact that the assets or revenues will appear to be less and liabilities or expenditures will
appear to be more. Thus, it shall be further assessed within the framework of the principle of
neutrality. Although the required provisions means to the minimum amount to be set aside
pursuant to the provisions of the related legislation, only the principle of prudence does not
form the ground for setting aside in an amount exceeding the appropriate level.

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 Substance over form
Article 14- Principle of substance over form means the fact that not only the legal
framework but also the actual content in terms of economical value should be taken as basis
in recognition of transactions along with the economical activities and evaluations to be
made regarding them. Generally forms of the transactions are in compliance with their
substances but in case a difference occurs between them substance over form is accepted.
In recognition of the transactions, financial status thereof and their significance for
banks shall be taken into consideration before their legal characteristics. In case to represent
faithfully the transaction differs from tax legislation, recognition shall be carried out in
accordance with actual characteristic of the transaction and the difference shall be removed
from financial statements to be prepared with the aim of tax calculation.

SECTION THREE
Main Principles for Financial Statements

General provisions
Article 15- Main principles for financial statements means the principles to be
applied along with the accounting principles in preparation of financial statements.

Financial statements define actual content of transactions and economical activities

as well as financial status and outcomes of their activity results in a way that meets need of
financial information in an accurate, neutral and complete manner. Financial statements are
prepared including the information on financial effects of the past activities and
transactions to be used by depositors, partners, investors, management, supervision and
surveillance units, customers, creditors, public opinion and other related persons in making
decisions.

Financial statements, under exceptional circumstances, shall indicate notional

amounts of the significant financial activities results of which can be closely estimated
under consistent assumptions and in a reasonable manner through objective observations.
Explanations regarding the afore-mentioned amounts specified in the financial statements
shall be presented under explanations and footnotes of the financial statements.

Financial statements shall present any information convenient to financial analysis.

Solvency and liquidity of banks and risks over off-balance sheet items along with the risks
over asset and liability items are all presented in the financial statements.

Financial statements shall include assets, liabilities and own funds of the bank along
with the changes thereof in term and information on the term-performance of the bank.

An appropriate equilibrium should be set among the principles for the financial
statements with a view to ensuring the preparation and reporting of the financial statements
in compliance with the purpose thereof. Relative significances of the principles under
different circumstances are assessed in accordance with the provisions of this Regulation
and within the framework of banking principles and practices as well.
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 The information presented in the financial statements shall be comprehensible,
convenient to needs, reliable and comparable. Besides, accounting policies used in
preparation of these statements shall be determined and used in compliance with the
Regulation. In case footnotes and explanations are inadequate in the assessment of the
effects of a specific activity over financial status of the bank and transactions thereof,
additional explanations shall be defined.

Financial statements which are prepared regardless of main principles for financial
statements, accounting principles and measurement rules or financial statements which are
found to be not reflecting the facts due to the mistakes made in recording and measurement
methods along with the reports prepared based on these statements and related accounts
shall be re-prepared and reported soon in a manner that proves the truth. Those, which are
disclosed to the public, shall be re-published thereby making correction records on them.

Understandability
Article 16- Information presented in the financial statements should be explicit,
comprehensible and complete. Besides, information necessary shall be presented in
footnotes and annexes. In preparation of financial statements, it is assumed that those
persons concerned have a specific level of banking and economy knowledge and have the
ability to analyze the information presented. However, explanation of the specific
information and its reflection to financial statements cannot be avoided grounding on the
difficulty in understanding thereof due to its complexity.

Relevance, materiality
Article 17- The information presented in the financial statements shall have the
qualities necessary that may be used by the readers of the financial statements in making
decisions and it shall be in compliance with its purpose. Compliance of the information with
needs refers to assessment of events in the past, present and future and shall affect
economical decisions of users thereby ensuring confirmation or correction of past
assessments..

Information placed in the financial statements shall be presented timely and in a

manner that enables constitution, confirmation and changing of the expectations on future
events and their results provided that its up-to-dateness is kept.

Main indicator of the materiality level of information regarding the financial

statements is the level of the effects on economical decisions made by the users thereby
using the information in question in case it is not included in financial statements or it is
represented inaccurately in the financial statements. In determining the materiality of an
item or aggregated items, qualities and sizes thereof are assessed together. Depending on the
circumstances, quality or size of the transaction can be taken as determining element. The
items qualities and functions of which are same, can be disclosed as aggregated whether
their amounts are very large. However, significant items with different structures can be
disclosed separately. Financial statements shall indicate each important issue separately.

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Immaterial amounts can be disclosed together with other immaterial amounts having same
qualities or functions. It is not obligatory to disclose these amounts separately.

Financial statements are prepared by classification through aggregating transactions

according to their types and functions. Final stage in aggregation and classification process
is the presentation of summarized and classified information that constitutes financial
statements items on the financial statements or footnotes. Items, which are not significant
alone, are combined with other items having same types and qualities in financial
statements or explanations. However, a declaration is made considering that an item that is
not important to be disclosed separately in the financial statements may be so important that
required to be disclosed separately

Reliability
Article 18- Information presented in financial statements shall be reliable. The
provable information which is presented in a neutral manner and disclosed completely and
which accurately discloses transactions and events is deemed reliable.

Accuracy refers to the fact that transactions and events are disclosed accurately in
the financial statements. Information disclosed in the financial statements shall accurately
disclose assets and liabilities of the bank along with its own funds as well as the transactions
and events that change them. Compliance with the principle of substance over form shall be
ensured in recognizing of the transactions and events.

Provability refers to the fact that mainly same results can be obtained from the
information presented in financial statements by different persons who made use of same
measurement methods. Provable information ensures that transactions and events are
reflected to the financial statements accurately and in a neutral manner.

Neutrality requires that accounting data should be disclosed in a manner that enables
economic activities be reflected as accurately as possible and regardless of a purpose aims at
affecting decision-making mechanism. Neutrality requires complying with prudence
principle providing that making decisions and practice thereof under uncertainty.

Accounting information cannot be prepared and presented for the needs of only
some of those, who benefit from the financial statements.. Regarding the way of selection
and presentation or regarding the content, reporting information in financial statements in a
way that adversely affects those persons concerned to make a decision is the violation of the
principle of neutrality.

Within the framework of completeness, regarding the reliability, the information

presented in financial statements shall be adequate, explicit and complete within the
framework of materiality and cost. Due to the fact that negligence will lead to deceptive or
incorrect information as well as damage to the reliability and lack of relevance, information
necessary shall be provided as far as possible from accounting records and shall be reported
as well so as to ensure completeness. Otherwise off-record information shall be indicated in
footnotes and explanations of the financial statements. Besides disclosing completely of
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financial information, events probable to occur in future shall be also presented in footnotes
of the financial statements..

Comparability
Article 19- With a view to ensuring assessment of the financial status and
operations, financial statements of a bank for different periods and financial statements of
different banks shall be comparable. So as to observe changes in financial status and
operations within time, financial statements shall include the information regarding previous
terms and selected accounting policies shall apply in following periods without any change,
in compliance with consistency concept.

Comparability principle stipulates accounting policies used in preparation of

financial statements and changes in these policies as well as the information on the effects
of these changes and determination of changes in accounting policies of a bank in a period
along with variations in accounting policies of different banks.

Comparability is related with the preparation and reporting of the financial

statements in conformity with the principles and standards on accounting and principles on
financial statements. However, this principle does not foresee the absolute stability of the
financial statement and accounting policy. In cases where the adopted accounting policy is
insufficient from the viewpoint of relevance and reliability or the alternative accounting
policies answer more efficiently to the relevance and reliability, the practiced accounting
policy shall be changed.

Values on the financial statements and their explanations and footnotes shall be
given in coherence with the previous year’s values concerning the same period in a way to
allow annual comparison. Issues taking place in previous periods’ financial statements,
effects of which continue on the current financial statements shall be included in
disclosures after being determined in a comparative manner.

In case, presentation or classification of the items on financial statements are

changed on condition that it is conform with the form and contents of financial statements
determined in the communiqués related to the Regulation hereof, the comparative financial
statements shall be re-prepared by stating the content and reasons of the changes made and
the amount..

SECTION FOUR
Financial Statements and Reports

Financial statements
Article 20- Financial statements consist of the balance sheet (with the regulatory
accounts), the income statement (profit-loss statement), the statement of changes on equity,
the cash flow statement and dividend distribution statement. The explanations and footnotes
on financial statements and the explanatory report and statements are a sine qua non part of
the financial statements. The balance sheet and the income statement form the basis of
financial statements together with the footnotes, explanations and annexes.
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 Balance sheet
Article 21- The balance sheet is the statement that reflects the economic and
financial status of a bank at a given date, that shows the assets, liabilities and own funds
under the form of asset and liability items in a truthful and correct manner. The asset part of
the balance sheet is arranged according to liquidity, and the liabilities part according to
solvability.

The balance sheet is prepared according to the principle of net value. Thus, the
accounts arranging the asset/liability structure are shown as a sub-item under related items.
Accounts reflecting the asset/liability structure of the balance sheet cannot be off-setted
with each other. Accounts having a debt balance shall be stated at the asset side of the
balance sheet, and accounts having a credit remainder, to the liability side.

Assets are shown at the balance sheet if the utilization rights of the future economic
benefits attached belong to the bank and have a value or cost measurable by reliable
methods. For assets, values of which cannot be determined precisely, no accrual
transactions are done. These kinds of assets are shown at the footnotes and explanations
concerning asset items.

Liabilities are shown at the balance sheet if there is an obligation leading its
resources including the economic benefits to get out of the bank’s property and the value to
realize this obligation is measurable by reliable methods.

All known and appropriately valuable foreign resources of the bank, including
those, values of which can not be definitely determined or subject to conflict, shall be
shown in the balance sheet upon being determined and registered.

Regulatory accounts are off-balance sheet accounts utilized with the aim of
monitoring non-cash credits extended to customers that do not concern the bank’s assets
and liabilities at first degree and rights and obligations which will generate a liability or
receivable in the future, and values under possession and information wished to be traced
within the scope of the accounting discipline.

As the remainders of regulatory accounts bear no real asset or liability

characteristic, the accounts in this group are not compared with balance sheet and income
statement accounts.

Income statement (Profit-loss statement)

Article 22- The income statement is the table that shows all revenues and income a
bank generated and all costs and expenses it beard in a classified format and summarizes
the operation results of the period as profit or loss.

All incomes and expenses are taken into account according with their date of
accrual and shown at the income statement of the period within which they accrued.

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 All incomes and expenses are classified according to their resource, each income
group is compared with the related expense group and shown by their gross values. An
income item cannot be excluded from the scope of the income statement by totally or partly
netting with an expense item.

Incomes are accounted within the income statement if an increase measurable at a

reliable manner of the obtainable economic benefits has occurred related to the increase in
assets and decrease in liabilities. Registering incomes is realized simultaneously with the
increase in assets and decrease in liabilities.

Expenses are accounted within the income statement if a decrease measurable at a

reliable manner of the obtainable economic benefits has occurred related to the decrease in
assets and increase in liabilities. Registering the incomes is realized simultaneously with
the decrease in assets and increase in liabilities.

Unrealized incomes and profits cannot be shown as realized or realized incomes and
profits cannot be shown more or less than the value realized. In order to show the realistic
operation results concerning a determined period/s a correction and agreement shall be
made on the closing of accounts at the beginning or end of related periods.

In case making a correction registry concerning income, expense, profit and loss
registries arises and if these registries’ importance and characteristics don’t necessitate the
correction of the previous year’s financial statements, the corrections made shall be shown
in the income statement of the period.

Cash flow statement

Article 23- Cash flow statement is the table that shows cash flows which means
changes in banks’ cash and cash equivalent assets (cash collections and payments) in
particular accounting period by classifying as banking activities, investment activities,
financing activities according to their resource and usage

The principles and procedures related to the preparation of cash flow statement,
which coherent with balance sheet and income statement and the format and contents of the
statement are determined by a communiqué that will be published by the Board.

Statement of changes in shareholders’ equity

Article 24- The statement of changes in shareholders’ equity is prepared in such a
way to show the balance of both, Tier I and Tier II capital items at the beginning of the
period, the increases or decreases that occurred for these items within the period and the
end-period remainder separately. In order to ensure the comparability, the past-period
movements are also shown in a separate part in addition to the current period movements.

The principles and procedures of the statement of changes in shareholders’ equity

that will be prepared by making use of information appearing on the balance sheet and the

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income statement and the format and contents of the statement are determined by the
Board.

Explanations and footnotes concerning financial statements

Article 25- The principles and procedures on explanations and footnotes for stating
additional and detailed information on items that appear on financial statements and
providing the explanation on obligatory issues are regulated by a communiqué that will be
published by the Board.

In explanations and footnotes, giving place to the accounting policies taken as basis
for the preparation and presentation of the financial statements, which means principles,
procedures, practices, rules and applications, is obligatory.

Consolidating financial statements of branches abroad

Article 26- It is obligatory for banks incorporated in Turkey, to consolidate the
financial statements of the branches abroad with the financial statements concerning the
domestic operations.

If the financial statements of the branches abroad have not been prepared in
compliance with the procedures stated in this Regulation hereof, the necessary corrections
are made during the preparation of consolidated financial statements and the compliance
with this Regulation hereof is ensured.

If the financial statements of the branches abroad have been prepared by taking
different accounting policies as basis, the differences generated by the accounting policies
shall be corrected when preparing consolidated financial statements by applying common
accounting policies along the lines determined within this Regulation hereof. If the
differences generated by accounting policies are uncorrectable, the correction shall be made
according to a determined assumption and estimations, which shall be disclosed in the
footnotes part.

The financial statements of branches abroad are consolidated by taking the date of
preparation of the bank headquarter as basis.

The asset and liability items of branches abroad are included in the consolidated
balance sheet by using the “complete consolidation” method. It is ensured that a hundred
percent of the assets, resources, income, expense and regulatory accounts of the branches
abroad are consolidated with the assets, resources, income, expense and regulatory accounts
of the headquarter. The assets and liabilities of the bank’s domestic units and branches
abroad are summed up. The receivables and debts between headquarter and branches
abroad to each other are mutually decreased.

Incomes and expenses of the branches abroad are completely included in the
consolidated income statement. The incomes and expenses that generate from the
transactions between the consolidated domestic units and units abroad are mutually
removed.
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 The important practices between the headquarter and units abroad are stated in the
consolidated financial statement footnotes and the important effects of these practices to the
assets, resources, financial status, profit/loss are explained. The cities and countries in
which branches abroad operate, asset and deposit sizes and evaluation methods utilized in
different items of the consolidated financial statements and methods utilized in value
corrections shall be stated in the footnotes of the balance sheet and profit/loss statement.

Responsibility of the management

Article 27- The preparation of the registration and account order in accordance with
the accounting principles stated in this Regulation hereof, the preparation, confirmation,
audit, presentation to the authorities and publishing of the financial statements in
compliance with this Regulation hereof is the responsibility of the Board of Directors.
Related with this responsibility, the management is liable to take the necessary measures on
issues concerning the account and registration order as; the determination of basic policies,
the work definition, task, authority and responsibilities to be prepared transparently and in
compliance with the workflow scheme, the internal and external information flow system to
be sufficient, the clear determination of the authorities and responsibilities and the
concerning practice to be monitored. .

Activity report
Article 28- Banks may prepare annual activity report including information related
their status, management and organization structures and human resources, independent
audit report, the qualifications of main points composing the bank’s financial status and
financial performance, assessments and future expectations of the management together
with the financial statements prepared according to the provisions of this Regulation related
with their activities.

Signing of financial statement by authorized persons

Article 29- Financial statements prepared by the banks established in Turkey shall
be signed by the member of board of directors of bank who is responsible for the bank’s
internal audit, general manager, related vice-general manager and accounting manager.
Names, surnames and titles of the afore-mentioned persons have to be stated as well as the
compliance of financial statements with the provisions of this Regulation and bank records.

The members of board of managers shall sign financial statements prepared by

banks operating in Turkey through opening branches. Names, surnames and titles of the
afore-mentioned persons have to be stated as well as the compliance of financial statements
with the provisions of this Regulation and bank records.

Sending to the related authorities and publishing the consolidated and non –
consolidated financial statements
Article 30- Banks are required to deliver to the Agency and Banks Association of
Turkey and publish in the Official Gazette, within five months following the accounting
period, a copy each of the year end balance sheet, annual income statement, cash flow
statement, statement of changes in shareholders’ equity and profit distribution statement to
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be drawn up in the format of a table as set out in this Regulation and related Communiqués
including the footnotes of these statements, together with auditor’s reports and reports of
the board of directors. Banks Association of Turkey shall publish the financial statements
delivered to it in accordance with the procedure to be determined by the Banks Association
of Turkey’s Board of Directors. A copy each of these financial statements is published in a
newspaper published nationwide, together with auditor’s reports and reports of the board of
directors, without footnotes.

Banks operating by opening a branch in Turkey shall publish and deliver to the
Agency pursuant to the provisions of first paragraph of this article the year end balance
sheets and income statements relating to their operations in Turkey, drawn up by the
management centers in Turkey together with the balance sheets and income statements of
their head office.

Banks are required to include in the year end balance sheets and income statements
to be published according to first and second paragraphs herein, the explanations and
approval of an independent auditor about whether these comply with regulation related with
registration and account order, in a manner conforming to the procedures set out in the
Regulation put into effect as per Article 13, paragraph (2) of the Act.

Banks are required to deliver, within 30 days following the respective period, to the
Agency a copy each of the balance sheets, income statements to be issued as of the end of
each month and other additional information and explanations that demanded by the
Agency.

Banks are required to deliver a copy of interim period balance sheets and income
statements they will draw up as of end March, June and September as well as cash flow and
change in own fund statements drawn up as of end June, together with their footnotes the
Banks Association of Turkey’s. Banks Association of Turkey’s will publish the financial
statements submitted within sixty days following the related period, in accordance with the
procedure to be determined by the Banks Association of Turkey’s Board of Directors.

It is required that including view of independent audit institutions in publishing

interim period financial statements drawn up as of end March, June and September by the
Banks Association of Turkey’s, comply with the procedures set out in the regulations put
into effect as per Article 13, paragraph (2) of the Act.

Uniform chart of account and explanation thereof

Article 31-
Uniform Chart of Account and Explanation thereof to be used by banks are prepared
by the Board.

Competent authority
Article 32- The Agency is authorized to make explanations about the principles and
procedures for the enforcement of this Regulation and the Board is authorized to issue
additional regulations.
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 Regulations which became null and void
Article 33- In accordance with the repealed Banks Act No.3182 which is still in
force pursuant to Provisional Article No:2 of the Act, “Accounting Standards to be applied
by Banks, Uniform Chart of Account and Explanation thereof” which is prepared by the
Banks Association of Turkey and enters into force by the approval of the Undersecretariat
of the Treasury, shall be null and void as of the effective date of this Regulation.

Provisional article 1- Enforcement of the provisions, which became null and void
in accordance with this Regulation, applies until the communiqués to be issued pursuant to
this Regulation enters into force.

Effective date
Article 34- This Regulation shall be in effect on 01/07/2002.

Execution
Article 35- Banking Regulation and Supervision Agency shall execute the
provisions of this Regulation.

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