annual report 2010

Transcription

annual report 2010

ANNUAL REPORT 2010
GÜNEŞ SİGORTA ANNUAL REPORT 2010
Contents
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2
Message from the Chairman of the BoD,
Message from CEO,
Güneş Sigorta’s Mission, Vision and Values
Capital and Shareholding Structure
Subsidiaries
Insurance in the World
Insurance in Turkey
Primary Financial Indicators
Financial Analysis Ratios
2010 in Güneş Sigorta
Technical Evaluation
Corporate Social Responsibility
Board of Directors
Senior Management
Organization Chart
Headquaters and Regional Office Managers
Human Resources Policy
Corporate Governance Principles Compliance Report
Financial Information and Assessment on Risk Management
The Agenda of General Assembly Meeting
Message from the Board of Directors to the Partners
Annual Report Compliance Statement
Summary of Statutory Auritor’s Report
The Independent Auditor’s Report
Financial Statements
Notes to Financial Statements for The Period 1 January - 31 December 2010
Assessment of financial state, profitability and indemnity solvency
Risk Management Policies
Information for Shareholders
Addresses
Contributing to the development of the sector with its inspiring
activities in the area, Güneş Sigorta, a well-established insurance
company with 54-year-experience, is offering original, fast and
reliable service to its customers at every needed point.
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4
Dear Shareholders,
Established in 1957, Güneş Sigorta has always been a leader of the insurance sector through
its 54-year-long expertise and played a key role with its modern style and its innovative
products and services. With the help and support of the sizable financial power of VakıfBank,
one of its parent companies, and especially with its quality and standardized service, Güneş
Sigorta has always maintained its strong position within the sector and performed remarkably
in an environment of intense competition.
Always having met the ever-evolving and fast-changing needs and demands of its corporate
and private customers with its solution-oriented products and services, Güneş Sigorta has
sustained and improved its success each year.
By boosting its positive values through the course of the years, Güneş Sigorta fortified
its image as a “strong” and “trustworthy” company in the eyes of its customers. In 2010,
“Pusula Project”, which we regard as an innovative and inspiring contribution to the sector
has been put into effect. Pusula Project is basically a user-friendly software program which
enables Güneş Sigorta team members, agents and customers handle almost any insurance
transaction and access required data as quickly and accurately as possible. The project,
entirely designed by using the company assets only, is a vital step towards the improvement
of the sector. With its flexible reporting system and parametric structure, the Pusula software,
which is going to strengthen Güneş Sigorta’s position against the intensifying competition,
has brought a new standard to the customer-oriented approach of the insurance world.
In the meantime, among all the developed economies, Turkey, which no longer has a fragile
and vulnerable economy when facing global economic crises, is now stands as one of the few
countries to have weathered the financial crisis with minimum loss and to have achieved the
fastest growth. Even though the real sector acted as the actual locomotive of the economic
growth, financial institutions clearly played a supportive role in this achievement. In line
with the economic growth, the Turkish insurance sector continued to grow with double digit
numbers every year. Obviously, the engine of this growth has been well-established and
strong companies of the sector, such as Güneş Sigorta. The impressive performance of the
sector is attracting the attention of certain global insurance companies. Thus, the growth of
the sector is gaining speed through new acquisitions and mergers.
Güneş Sigorta, which demonstrates a development quite similar to that of the sector, attaches
great importance on the strength of its agents. Our wide agent network, operational efficacy
and strong potential play a key role in the Güneş Sigorta’s development, which outperforms
the sector averages.
As repeated every year, in 2011, Güneş Sigorta will continue to improve its skills in offering
the best solutions to its customers and maintain its financial performance, enthusiasm to
grow and innovative approach.
We are determined to create value for our shareholders and stakeholders, who have always
been supporting us.
Süleyman Kalkan
Chairman of the Board of Directors
Güneş Sigorta, which demonstrates a development quite similar to that of
the sector, attaches great importance on the strength of its agents. Our wide
agent network, operational efficacy and strong potential play a key role in
the Güneş Sigorta’s development, which outperforms the sector averages.
5
Message from CEO
6
Message from the General Manager,
Dear Partners,
Even though 2010 has been a very tough year for the world economy in general, Turkey
drew significant attention with its growth rate approximating 9% and accomplished a
remarkable performance. As known by all, insurance was among the sectors, which were
severely affected by the global financial crisis. Despite this fact, 2010 has not been a year
of regression for Güneş Sigorta. On the contrary, Güneş Sigorta made a notable leap in
this year. Having focused on Customer Relations Management and agent activities, Güneş
Sigorta has sustained its position among the sector’s key players.
Clearly, Turkey is an advantageous country with vast potentials with regard to the insurance
sector. By making correct decisions, designing new services to meet the changing needs
and demands of the society and realizing updated projects in line with the latest technologic
developments, the insurance sector in Turkey will surely advance. Güneş Sigorta also is
continuing to work hard with these objectives in mind.
As known, in 2010, Güneş Sigorta has drafted its first insurance policy with Pusula software,
which is one of the most up-to-date technologic applications and programs of the insurance
world. In addition to enabling our agents and clients quickly access the most accurate data
the software facilitates the operational workflow of our team members.
Being an agent- and customer-oriented company, Güneş Sigorta today supports a
widespread organization, covering 11 regional offices, 7 rep offices and approximately 2500
sales points throughout Turkey, with a data processing system nurtured by cutting-edge
technology and achieves to maintain the desired customer satisfaction with its efficient
operational strength. With our rich product range, strong corporate structure and more
than 50-year-long experience, we are continuing to be a dependable company for both our
customers and other sector members.
I am confident that we are going to achieve all the targets we projected for 2011 and
accomplish even further success.
Respectfully yours,
Serhat S. Çetin
Chief Executive Officer
Güneş Sigorta için 2010 yılı bir durgunluk yılı değil, aksine bir atılım
yılı olmuştur. Müşteri İlişkileri Yönetimi ve acente faaliyetlerine
ağırlık veren Güneş Sigorta, sektörün lokomotif kuruluşları arasındaki
konumunu pekiştirmiştir.
Entirely designed by using the company assets, Pusula software provides
a data processing application enabling our agents and clients quickly
access the most accurate data the software facilitates the operational
workflow of our team members.
7
Güneş Sigorta’s Mission, Vision and Values
Our Mission
To contribute to development of standards in the sector, making insurance a widespread
practice by increasing awareness within the population and increasing corporate value by
providing customer-focused services.
Our Vision
To produce value as a pioneering and innovative company that is a leader in Turkey, a
corporation that is everywhere wherever need be, the most preferred enterprise which
operates in the region.
Elements of Our Vision
Güneş Sigorta’s vision is structured around seven elements.
A leader
An approach focused on growth and increasing market share.
Presence wherever needed
An outlook that emphasizes widespread distribution channel throughout Turkey; an
organization that provides the customer with service at the closest accessible point;
a focus on managing corporate operations more effectively and efficiently through
regional offices.
The company of choice
A company that has developed a customer-focused system that provides maximum
customer satisfaction, responding to customer needs and expectations in its operational
processes, achieving improvement promptly and in a manner that will have a positive
effect on corporate performance.
A pioneer
A corporation that is recognized for its pioneering efforts in the sector in terms of the
products and services it has developed and for its effectiveness in regulations in the
sector.
Innovation
A corporation that is organized in its implementation of newly developed products
and services, in structuring its business processes, promoting competence in human
resources and initiating new applications.
Operating in the geographical region
Be a company that is active in EU member Balkan countries and in the Central Asian and
Gulf countries that fall within its region of operation.
Creating value
Raising corporate value through a strategic outlook on management supported by
employees who are focused on the vision of the Company.
8
Mission, Vision and Values
Our Values
Deep Rooted
• A stable structural capacity to carry a half-century experience to the future
• Powerful capital and shareholding structure
• Vakıflar Bank’s long lasting experince of hundred years
• The synergy raised by Vakıflar Bank partnership
Reliability
• We work with the objectives in carrying out our activities.
• Being aware of our responsibilities, we exhibit coherent behaviors and we undertake
our commitments completely on time.
Transparency
Güneş Sigorta managers adopt a shared and transparent management philosophy.
They respect corporate governance principles.
Pioneering
Güneş Sigorta promotes for developing products and services as well as being
innovative in the sector.
Involvement
All of our business partners and employees feel confidence and pride in being under the
framework of Güneş Sigorta.
Solution Focusedness
• Güneş Sigorta employees adopt to serve an effective and fast service in a
professional manner within a team spirit.
• Employees behave with their common senses when decisions are made.
• Employees’ perspectives are flexible enough for resolutions of problems.
Development
• The importance which we attach on the professional and personal development
of all of our business partners and employees pose a strategic importance for our
organization to make contribution to the development of the professional standards
in the sector
• Being pioneer in technological applications and their pursuits for enhancing our
service quality is one of our fundamental principles.
• Technological developments are tracked and used in processes in order to provide
effective and influential communication.
Accessibility
• Depending on the demand and needs of all our business partners and customers,
they reach direcly, in a shorter time to the right and responsible employees.
9
Shareholder
Shareholding (%)
Share (TL)
Türkiye Vakıflar Bankası T.A.O.
34,22
51.336.301
Groupama S.A.
30,00
45.000.000
Türkiye Vakıflar Bankası VakıfBank Personeli
Özel Sosyal Güvenlik Hizmetleri Vakfı
10,00
15.000.000
5,01
7.515.000
20,77
31.148.699
100,00
150.000.000
Türkiye Vakıflar Bankası Memur ve Hizmetlileri
Emekli ve Sağlık Yardım Sandığı Vakfı
Publicly Traded
TOTAL
(%) 20,77
(%) 34,22
Groupama S.A.
Türkiye Vakıflar Bankası VakıfBank
Personeli Özel Sosyal Güvenlik
Hizmetleri Vakfı
(%) 5,01
Türkiye Vakıflar Bankası Memur
ve Hizmetlileri Emekli ve Sağlık
Yardım Sandığı Vakfı
(%) 10,00
Publicly Traded
(%) 30,00
Güneş Sigorta’s principal shareholder is Türkiye Vakıflar Bankası T.A.O., which controls a 34% stake in the company.
Its second biggest (30%) shareholder is Groupama S.A., one of the world’s leading insurers. Güneş Sigorta shares
are traded on the İstanbul Stock Exchange’s national market under the GUSGR symbol. As of 31 December 2010, the
company’s market value amounted to TL 315,000,000.
10
Subsidiaries
Subsidiaries
Güneş Sigorta’s Stake
(TL)
Güneş Sigorta’s Stake
Share (%)
Capital
(TL)
Vakıf Emeklilik A.Ş.
9.805.000
37,00
26.500.000
Vakıf Finansal Kiralama A.Ş.
3.912.247
15,65
25.000.000
Vakıf Finans Factoring Hizmetleri A.Ş.
3.070.000
13,71
22.400.000
Vakıf Pazarlama ve Ticaret A.Ş.
2.422.662
9,71
24.950.000
Vakıf Enerji ve Madencilik A.Ş.
1.503.860
1,77
85.000.223
Taksim Otelcilik A.Ş.
1.392.160
1,43
97.150.000
Vakıf İnşaat Restorasyon ve Ticaret A.Ş.
1.000.320
10,00
10.000.000
Vakıf Menkul Kıymetler Yatırım Ort. A.Ş.
825.000
11,00
7.500.000
Vakıf Gayrimenkul Yatırım Ort. A.Ş.
346.667
1,67
20.800.000
Vakıf Sistem Pazarlama Yazılım Servis. A.Ş.
300.000
10,00
3.000.000
Tarım Sigortaları Havuz İşlet. A.Ş.
130.631
4,35
3.003.000
Vakıf Yatırım Menkul Değerler A.Ş.
87.500
0,25
35.000.000
Güneş Turizm Otomotiv End. ve Tic. A.Ş.
79.992
99,99
80.000
TOTAL
24.876.038
These are the values of subsidiaries as of 31st December 2010.
11
A General Outlook
As a result of the financial crisis which broke out in the financial sector in the second half of
2008 and soon severely affected the real economy, the world economy shrunk by %0.6 in
2009. With wide-scale public interventions partial recovery was observed through 2010. The
high growth rates of countries like China, India and Brazil have been the engine of the world
economy through this rough patch. However, many countries, especially from Eurozone,
who had to deal with sizable public sector deficits, severely suffered the consequences of
the crisis despite the immediate measures taken by their governments.
IMF data show that in 2010 the world economy grew 5%, which is mostly owed to the
emerging markets, presenting a growth of 7.3% for the same period. However, the growth
of the developed countries remained around 3% levels. For 2011, the world economy
growth is estimated to drop to 4.4%. Correspondingly, the estimated growth rate is 6.5%
for the emerging markets and 2.4% for the developed economies. Similarly, in line with
these growth rates, the world trade volume, which expanded by 12.4% in 2010, is expected
to increase only 7.4% in 2011.
Several negative impacts such as the regressed production and demand, shrinkage in the
international trade volumes and increased unemployment, all caused by the global financial
crisis, have been substantially compensated in 2010. Despite the palpable recovery in the
main economic indicators, certain factors brought along inflationist risks and fluctuations
in the international capital flows and exchange rates. Among these factors are the delay
in the re-establishment of an environment of confidence and the uncertainties about the
strategies in abandoning the loose monetary policies once followed to back the growth.
With the effect of the substantial shrinkage of the world trade volume created by the crisis,
the fall of the oil and commodity prices also started to be compensated through 2010. With
an increase of approximately 26%, the prices re-reached the early 2008 levels.
World Real GNP (Annual, %)
Developing
countries
World
Developed
countries
Source: IMF
2006
2007
12
2008
2009
2010
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
World trade volume growth
Non-oil commodity price increase
(Annual, %)
(Annual, %)
-10,9
12,4
-15,8
26,3
2009
2010
2009
2010
Insurance sector in the world
After two years of a great global regression, the insurance sector once more showed
an uptrend in 2010. The sector especially made a leap in real terms in emerging market
countries. Compared to the previous year, in 2010 non-life premium production of the
world grew 1.3% in real terms. In addition, life and health premium revenues increased
4.4%. Many insurance companies, who reached the pre-crisis levels by end-2009, continued
to grow through 2010 and fortified their financial structures.
However, the risks and threats endangering the insurance sector have not been completely
eliminated yet. Among these risks is the low interest rates caused by expansionary
monetary policies.
The decreased financial investment revenues, one of the main revenue sources of the
insurance companies, pulled the sector’s return on equity in especially non-life segments
down to 6-8% from 12% levels of 2003-07 period. As it was in the past, the negative effect
of the continued use of the conventional low-risk investment tools on profitability kept the
insurance sector under pressure also in 2010.
Another risk threatening the insurance sector is overregulation. Solvency II initiative, aiming
at strengthening the insurance sector to enable it offer service under better conditions, has
deeply affects the way the sector performs and its standards of doing business. On the
other hand, as long as the high capital and reserved ratio requirements imposed to elevate
the liquidity adequacies of the insurance companies are not harmonized with the general
economic circumstances, they are likely to squeeze the sector under overpressure.
Effects of natural disasters on the insurance sector
The total damage cost burden generated by the natural disasters of 2010 is approximately
32 billion dollars. 8 substantial natural disasters, each of which created a damage over 1
billion dollars, took place during this year. Most important of these disasters is the Chile
earthquake, with 8 billion dollar insured damage. The earthquake is followed by the Xynthia
storm in Europe, with a total cost of 2.8 billion dollars. Plus, the New Zealand earthquake
generated a damage cost of 2.7 billion dollars. The oil leak in the Mexican Gulf and the
floods in France created a total cost of 1 billion dollars.
2010 has been a year, which once more showed what an important role the insurance sector
is playing in compensating the economic losses and reimbursing the damages in countries
with developed insurance systems. While a substantial percentage of the losses in New
Zealand, the US and France were reimbursed by the insurance system, the insured damage
created by the catastrophes in countries like Haiti and Pakistan remained at minimal levels.
World non-life premium
production real increase
World life & health premium revenue real increase
Insured damage created by natural disasters
(1970-2010)
(Annual, %)
(Annual, %)
(Billion USD)
140
120
-1.4
0.2
1.3
-7.3
-0.1
100
4.4
80
60
40
20
2008
2009
2010
2008
2009
2010
0
1970 1975 1980 1985 1990 1995 2000 2005 2010
13
Source: Swiss Re
Insurance sector in Turkey
General economic outlook
2010 has been a year, through which the effects of the economic recession were severely felt
and especially the Mediterranean zone European countries struggled with severe financial
problems. During this year, Turkey, on the other hand, speedily restored the damages
created by the crisis and drew the attention of the entire world with an outstanding growth
performance of 8.9%, which turned the country into the fastest growing economy of Europe.
Thus, Turkey stood out among the most successful countries of 2010. In line with the pickup
in the local and foreign trade, this positive outlook was reinforced by the increased exports
and imports volumes (11.5% and 31.6%, respectively), decreased unemployment rates and
re-ascended foreign capital inflow. In the post-crisis term, while some European countries
were downgraded by credit rating agencies, the fact that Turkey achieved to ameliorate its
rate proves the solid improvement of the country’s economy.
This fast recovery was especially owed to the strong and solid structure of the Turkish
banking sector. Strengthened by the stabilization program and the structural reformation
put into effect after the crisis of 2001, the financial system played a role in weathering the
negative effects of the global crisis and put the country in an advantageous position during
the recovery stage. Following the gradual amelioration observed towards the end of 2009,
the effects of the crisis were almost completely evaded in 2010.
In this frame, in 2010 the GNP at current prices has been 1105 billion TL. The national income
per capita increased 17.5%, while the growth of certain sectors reached double-digit levels
(17.1% in construction, 13.6% in manufacturing, 13.3% in wholesale-retail commerce etc.)
GNP growth (at constant prices, TL)
GNP growth per capita (USD)
(Annual, %)
(Annual, %)
0.7
-4.8
8.9
13.1
-17.8
17.5
2008
2009
2010
2008
2009
2010
Source: TUIK – Turkish Statistical Institute
14
In 2010, during which the effects of the global economic crisis were substantially relieved,
a significant growth was observed in the insurance sector like in many other business
lines and an uptrend was caught in all the branches. Compared to the previous year, total
premium production reached 14.1 billion TL, presenting an increase of 15%. 11.5 billion
TL of this increase was obtained from non-life (elementary) branches, while 2.6 billion TL
was generated by life insurance policies. While a growth of 15% was achieved in non-life
branches, the growth rate of life insurances reached 18%. 40.1 million insurance policies
were issued in all branches throughout the year.
Turkish insurance sector, which shrunk in real terms, despite the increased premium
production in 2008-09 period, presented a growth of 8.1% in real terms in 2010, with a
premium production above the CPI (6.4%). This improvement, recorded for the first time
in the post-crisis period, demonstrates that the sector has left the negative effects of the
crisis behind. Another attention-drawing point is that the premium production of 9.4 billion
USD in 2010 has reached the volume level of 2007. In other words, the insurance sector
managed to compensate all the production loss of the crisis term in 2010 and re-reached
its 2007 size.
In 2010, 85% of the sector’s premium production was generated by non-life branches and
15% was obtained from life policies. Branches with highest premium production were motor
and miscellaneous accident/casualty insurances (4.27 billion TL), followed by motor third
party liability insurances (2.54 billion TL). The automotive sector, which clearly experienced
one of its most successful years in 2010, with a new vehicle sale volume of 799.880 items,
has been the most important driving force of this development.
Following the land transportation vehicles, with 1.71 billion TL the largest share in premium
production belongs to the fire branch. Among all branches, with 26.4% the highest growth
was recorded by the health branch, which produced a premium volume of 1.37 billion TL in
2010. Similarly, in 2010 the growth rates in loan, marine and accident insurances have been
14.7%, 14.3% and 10.7, respectively.
Premium Production (TL)
Elementary Sector
Life Sector
Total (Insurance Sector)
2010
2009
11.528.123.146
10.067.358.481
2.602.153.036
2.214.029.988
14.130.276.182
12.281.388.469
Exports volume change (USD)
Imports volume change (USD)
(Annual, %)
(Annual, %)
23.1
-22.8
11.8
18.8
-30.2
31.7
2008
2009
2010
2008
2009
2010
15
The profitability loss, which has become a chronic problem of the insurance sector despite
the successful growth rates, continued also in 2010. Through this year, the sector recorded
losses in many branches even though a significant premium production increase was
observed compared to the 2009 figures and a remarkable uptrend was caught in line with
the Turkish economy. Likewise, the consolidated technical profit and consolidated financial
statement profit figures dropped considerably.
Acquisitions and mergers
Due to its high growth rates and potentials, the insurance sector has always been one of the
major business lines foreign investors are eager to invest in Turkey. The sector, which was
shown deep interest by the foreign investors until 2008, once more drew the attention of
international investors in 2010, through which the effects of the global financial crisis were
progressively overcome. In this year, a contract was signed between Fiba Holding and
Sompo Japan Insurance Inc. regarding the Fiba Sigorta’s share transfer.
Along with the ameliorating economic environment, the high growth potential of the
insurance sector once more started to receive the attention of foreign investors. The local
investors’ eagerness in forming partnerships with foreign companies to achieve faster
growth creates an ideal environment for new acquisitions and mergers.
Elementary premium production
Life premium production
(million TL)
(million TL)
Total premium production
(million TL)
10.067
11.528
2.214
2.602
12.281
2009
2010
2009
2010
2009
16
14.130
2010
Legal regulations
Legal regulations, which were being put into effect since 2007 with the aim of strengthening
the insurance sector and harmonizing with the EU criteria, were continued to be
implemented also in 2010. Among the important legal regulations realized in 2010 in this
context are “Circular on Actuarial Chain Ladder Method” and “Circular on the Recourse
and Salvage Income”.
These legal regulations imposed by the Undersecretary of Treasury with its objective of
“raising the regulation and control over the insurance sector to the level of best international
practices” have necessitated a structural reformation not only on the insurance companies
but also on the agents, which stand as the sector’s the most important sales channel. New
laws and circulars, which impose many arrangements -covering matters such as the terms
of being an agent and the standards of doing business-are aiming at designing a sector
with a stronger financial structure and corporate agent network.
New legal regulations are expected to be issued in 2011. The New Trade Act, the law
proposal on transferring the treatment premiums on the traffic insurance policies to the
Social Security Institution, and the Solvency II adaptation circulars are among the the basic
subject matters expected to be brought on the agenda in 2011.
In 2010, during which the effects of the global economic crisis were
substantially relieved, a significant growth was observed in the insurance
sector like in many other business lines and an uptrend was caught in all
branches.
17
Financial Indicators (TL)
2010
2009
Asset Size
782.726.891
736.680.417
Total Liabilities
540.410.334
500.093.027
Capital (Issued)
150.000.000
150.000.000
Equity
242.316.557
236.587.390
Premium Production
737.368.263
727.094.668
Gross Claims Paid
(439.169.040)
(438.878.201)
General Expenses
(70.115.644)
(62.389.606)
Investment Income
Investment Costs*
Investment Profit
Gross Technical Profit
50.465.615
22.968.036
(11.000.129)
(4.883.809)
39.465.486
18.084.227
19.335.478
34.177.927
Pretax Profit
(32.445.443)
(15.138.120)
Net Profit
(32.445.443)
(15.138.120)
* The investment costs figure used in calculating the investment income does not include the
investment income transferred from the non-technical to technical division.
18
Financial Analysis Ratios
Capital Adequacy Ratios (%)
Written Premiums / Equity
2010
2009
304
307
Equity / Total Assets
31
32
Equity / Technical Reserves (Net)
58
64
2010
2009
Liquid Assets / Total Assets
65
68
Liquidity Ratio
96
104
Current Ratio
96
104
Ratios Regarding Asset Quality&Liquidity (%)
Premium and Reinsurance Receivables/ Total Assets
33
38
Agent Receivables / Equity
74
86
2010
2009
Retention ratio
56
54
Claims Paid / (Claims Paid + Outstanding Claims)
55
61
2010
2009
108
100
3
5
-4
-2
5
2
-4
-2
-13
-6
Operational Ratios (%)
Profitability Ratios (%)
Loss Ratio (Net)
Technical Profit / Written Premiums
Pretax Profit / Written Premiums
Investment Profit / Written Premiums
Net Profit / Written Premiums
Net Profit / Equity
19
Güneş Sigorta in General
With its 54-year long experience, embracing the principle of offering the richest product
range to all the customers and sources it is offering service to, Güneş Sigorta is one of the
leading companies of its sector.
Having one of the widest insurance organizations in Turkey, with its Head Office in
Esentepe, Istanbul, 11 regional offices, 7 rep offices and almost 2500 agents, Güneş Sigorta
structured its production resources to meet the demand and need for relevant products
and services. Güneş Sigorta supports its customer-oriented service approach with the
informatics systems of latest technology and offers service to its customers with the help
of its efficient operational power.
Güneş Sigorta has been employing the newest and most innovative practices since the day
it was founded. The Company has become a respected member of its sector with its rich
product portfolio, designed to understand and meet the customer needs, its flexibility in
policies, fast adaptation to changes and the importance it attaches on innovation.
Güneş Sigorta stands as a sector locomotive with its strong capital structure and production
volume. Its meticulous approach and precise timing in claim payments made Güneş Sigorta
a well-trusted brand from past to present.
Today, Güneş Sigorta is the guarantor of the most notable public and private institutions
of Turkey and of their projects, which need substantial expertise. Main stakeholders of
Güneş Sigorta are Türkiye Vakıflar Bankası T.A.O, one of the renowned banks of our
country and Groupama S.A, a leading insurance company of France. Güneş Sigorta holds
ISO 9001:2008 Quality Management System Certificate and ISO 10002:2004 Customer
Complaints Management System Certificate.
Strategic Targets
Through 2010 Güneş Sigorta worked pursuing the following five strategic targets,
determined during the strategy planning studies:
•
•
•
•
•
Growth
Profitability and productivity
Sustainable competitive structure
Customer satisfaction and loyalty
Employee satisfaction and loyalty
Having one of the widest insurance organizations in Turkey,
Güneş Sigorta structured its production resources to meet the
demand and need for relevant products and services.
20
Updated according to the economic, political and social developments, prevailing
conditions and certain feedbacks received from the sector, these strategic targets, defined
under the abovementioned topics, served as a guideline for the studies carried out by the
responsible units for one year. Operations regarding these targets were implemented by
taking critical performance indicators into account.
Sales and Marketing Activities and New Products
Eskişehir Rep Office was founded to expand and fortify the sales organization. In the
meantime, Thrace Regional Office was restructured and named as Istanbul West Regional
Office, including Beylikdüzü-Avcılar zone. Various campaigns and promotional activities
were carried out through the year, with the aim of increasing the premium production.
In these campaigns automobile, house and office insurance segments were put special
emphasis. Meetings were held with the attendance of the head office team members of the
banks, which are among our distribution channels, with the aim of increasing the policy
sales and improving the operational processes.
In 2010, Güneş Sigorta’s diesel oil campaign addressed to the Thracian farmers, within the
scope of agricultural insurance segment, received considerable attention.
Among the other product development activities we see the office insurance offered to
VakıfBank SME customers, breach of trust policy offered to business card holders and a
new personal accident insurance product.
Effective Communication with Stakeholders
The “GüneşNet” agent portal, designed to activate the relations with the agents and to gather
the Güneş Sigorta agents and employees under a single virtual roof, was put into service
in October. Via GüneşNet, it is aimed to build an efficient and effectual communication
among all company stakeholders and to inform the Güneş Sigorta family members about
the units’ developments as quickly as possible. GüneşNet portal is designed to enable
communication not only between the Güneş Sigorta team members and agents but also
among the agents themselves.
Various services are offered to our customers on our official website, designed in
coordination with GüneşNet. Moreover, customers are enabled to contact Güneş Sigorta
agents and sales points using their iPhone or Blackberry cellphones at any time via our
mobile website.
Relations with Corporate Customers
Güneş Sigorta continued to attach special importance on its corporate customers in 2010.
Large-scale corporate customers, including Turkish Airlines, MNG Airlines and Cargo, ULS
Airlines Cargo, Yıldız Holding, Eren Holding, Nuh Çimento (Cement), Sönmez Holding,
Ekinciler Iron & Steel Industries and Şölen Chocolate preferred to work with Güneş Sigorta
for their insurance transactions.
The main public institutions offered service in 2010 are: ferries and peers of IDO Istanbul
Deniz Otobüsleri, ferries and peers of Istanbul Conventional Ferry Lines and the vessels of
Coastal Safety.
21
Strategic Damage Management
Güneş Sigorta views damage management as one of the key elements of customer
satisfaction. Its meticulous, guiding, solution-oriented and fast approach in damage
management forms the competitive edge of Güneş Sigorta. In case of damage, the company
receives the applications via its Customer Satisfaction hotline (444 1957) and immediately
enters the incident in its file follow-up system.
Additionally, a “Damage Informing Center” is founded to provide fast and efficient service
through the problem. The team members of the center inform the customers or business
partners on the file at hand. In order to handle the damage transactions from a single point,
“Istanbul Damage Management Directorate” was established and started to serve under
Damage and Judicial Processes Management Division, formed by uniting the damage units
at the Central, Kadıköy and Istanbul West District Offices.
Organizational Structuring Projects
With the purpose of expanding the service area, maintaining a more efficient and productive
operational management and a coordinated execution and creating a synergy, in 2010,
the company organization was restructured in the scope of “Sustainable Competitive
Structure” strategic target. In this frame:
•
•
•
Management Information Systems Department was found. The unit reports to Strategy
and System Management.
Güneş Sigorta Istanbul West Regional Office was put into service.
HR Department and Training and Competence Improvement Department were merged.
The new unit was named HR and Training Department.
Process Improvement Studies
In line with the efforts of pursuing the defined strategic targets, throughout the year process
improvement and development studies were carried out in areas like sales, operations,
informatics and human resources.
In 2010, after taking the views of the head office units on the practices employed by the
sales management teams and regional offices, “Sales Management Satisfaction Survey”
was conducted in order to determine the areas to be improved at sales management level.
Accordingly, the action plans were formulated and the necessary improvements were
speedily put into practice.
Establishment of the Health Provision Center
On 1 December 2010, the Health Provision Center was put into service. Designed to handle
the health provision and indemnification transactions the Center directly reports to the
Health Insurances Group Department. The objective was to provide faster and quality
service to the customers and maintain cost control. Accessible 24/7 and on 365 days,
the provision center houses a team of 25 experts. Furthermore, the center offers medical
consultancy service 24/7 via the hotline shown on the insurance cards of the customers.
Defined as the greatest IT project of the insurance sector, the
Pusula software provides remarkable speed, flexibility and
technological superiority to our company under the continuously
changing market conditions.
22
Quality Management System
Quality audits were continued through 2010. As a result of the studies conducted by an
independent auditing company under the scope of the ISO 9001:2008 Quality Management
System Certification control, the Quality Management System Certificate was renewed for
another 3 years.
In the scope of the policies employed and studies made regarding the Customer Services
processes, Güneş Sigorta was entitled to receive the ISO 10002:2004 Customer Satisfaction
Complaint Management certificate, given to only a few companies in Turkey.
Information Technologies Practices & the New Technological Infrastructure
Designed by Güneş Sigorta and defined as the most exclusive IT project of the insurance
sector, Pusula was publicly introduced with a press meeting held in December.
Pusula is integrated insurance software to be used through all the business flows by all the
members of Güneş Sigorta family. The software will be started to be used progressively,
after the completion of the testing and improvement studies.
Pusula will enable time saving in transactions like policy issuing, retail pricing,
efficient use of CRM. Moreover, the software will provide immediate profit/loss
monitoring with reference to sales sources.
Pusula is expected to offer our company great speed, flexibility and technological
superiority under the changing market conditions. The software will bring efficacy
in every step of our customer-oriented approach and will clearly strengthen Güneş
Sigorta’s position in this intensely competitive environment.
23
No of Policies
Gross Claims Paid (TL)
Company Growth Rate (%)
Elementary Sector Rank
Elementary Sector Market Share (%)
Technical Profit (TL)
Net Profit (TL)
No of Agents
2010
2009
3.093.601
3.038.702
737.368.263
727.074.961
(439.169.040)
(438.878.201)
1.4
2.5
6
5
6.40
7.22
19.335.478
34.177.927
(32.445.443)
(15.138.120)
2.654
2.439
Improvement in Premium Production
In 2010 Güneş Sigorta’s premium production increased 1% and reached 737.378.263 TL.
With an expansion of 10%, the highest increase in premium production has been in motor third
party liability insurance branch, which is followed by the Other Insurances category (5%), covering
Engineering, Marine, Agriculture, Compulsory Earthquake, Legal Protection and Loan branches.
The highest premium production volume was obtained by Motor own Damage and Miscellaneous Accidents branch, which covers motor accidents, theft, glass breakdown, personal accidents
and breach of trust segments.
In 2010 Güneş Sigorta ranked 6th in the sector with respect to premium production. The company stands as one of the top three companies in the following branches: Aircrafts, Breach of
Trust, General Loss, Traffic and Motor Vehicles Liability.
2010
2009
Fire
107.059.126
107.838.563
Motor and Miscellaneous Accidents
246.450.202
258.118.465
Motor Third Party Liability
185.994.659
168.344.839
Health
56.208.419
58.012.183
Other
141.655.857
134.760.911
Total
737.368.263
727.094.668
No of Agents
Total premium production
(million TL)
24
2.439
2.654
727.1
737.4
2009
2010
2009
2010
Fire Insurances
In 2010, the premium production in the fire branch has been 107.6 million TL, presenting a
decrease of 1%.
65.0 million of this amount was transferred to the re-insurers. The retention premium amount
has been 42.55 million TL, which represents a retention ratio of 39%.
The loss/premium rate for the year 2010 has been 28%. The total amount of earned premium has
been 40.52 million, while the net losses incurred was recorded as 11.46 million TL.
Fire
2010
2009
219.356
204.165
7
Premium Production
107.059.126
107.838.563
-1
Retention Premium
42.055.340
39.109.429
8
Retention Ratio (%)
39
36
8
No of Policies
Earned Premium (net)
Growth %
40.520.517
35.456.376
14
(11.464.557)
(12.785.401)
-10
23.323.420
19.618.536
19
Loss/Premium (net) %
28
36
-22
(4.683.725)
(6.383.316)
-27
Losses Incurred (net)
General Expenses Distributed
Among Branches
Motor and Miscellaneous Accidents Insurances
In 2010, the premium production in motor and miscellaneous accidents branch decreased
5% and has been recorded as 246.45 million TL, 90.89 million of which was transferred to reinsurance companies. The retention premium amount has been 155.56 million, presenting a
retention ratio of 63%.
In 2010 the loss/premium rate for motor and miscellaneous accidents branch in 2010 has been
74%. The total amount of earned premium has been 162.92 million, while the total of net losses
incurred has been 120.40 million TL.
Motor and Miscellaneous Accidents
2010
2009
697.257
741.105
-6
Premium Production
246.450.202
258.118.465
-5
Retention Premium
155.561.342
158.559.489
-2
No of Policies
Retention Ratio (%)
Growth %
63
61
3
162.927.864
158.066.763
3
(120.398.139)
(131.003.325)
-8
24.485.777
18.025.670
36
74
83
-11
(19.015.363)
(16.183.192)
18
Among Branches
Fire premium production
(million TL)
Motor and Miscillaneous
Accidents branch covers
the premium production
made by motor
accidents, miscillaneous
accidents, personal
accidents and breach of
trust sub-segments.
Accident premium production
(million TL)
107.8
107.1
258.1
246.5
2009
2010
2009
2010
25
Motor Vehicles Liability Insurances
In 2010, the premium production in the motor vehicles liability branch has been 185.99 million
TL, showing an increase of 10%. 34.74 million of this amount was transferred to the re-insurers.
The retention premium amount has been 151.25 million TL, which represents a retention ratio
of 81%.
In motor vehicles liability branch the loss/premium rate for the year 2010 has been 113%. The
total amount of earned premium has been 138.38 million, while the net losses incurred was
recorded as 156.69 million TL.
Motor Vehicles Liability
2010
2009
1.181.100
1.169.542
10
Premium Production
185.994.659
168.344.839
10
Retention Premium
151.250.544
135.749.424
11
No of Policies
Retention Ratio (%)
Growth %
81
81
1
138.385.820
120.464.827
15
(156.690.244)
(155.829.339)
35
(44.113.061)
(16.756.161)
163
113
96
18
(18.279.148)
(17.649.849)
4
Among Branches
Health Insurances
In 2010, the premium production in the health branch has been 56.21 million TL, presenting a
decrease of 3%. 6.89 million of this amount was transferred to the re-insurers. The retention
premium amount has been 49.32 million TL, which represents a retention ratio of 88%.
The loss/premium rate for the year 2010 has been 88%. The total amount of earned premium has
been 52.17 million, while the net losses incurred was recorded as 46.09 million TL.
Health
2010
2009
37.326
20.963
78
Premium Production
56.208.419
58.012.183
-3
Retention Premium
49.318.304
46.023.664
7
No of Policies
Retention Ratio (%)
88
79
11
52.169.020
46.134.910
13
(46.084.686)
(41.751.925)
10
(2.853.869)
(5.519.516)
48
Among Branches
Motor Vehicles Liability
premium production
(million TL)
168.3
2009
26
Growth %
88
90
-2
(16.112.575)
(13.157.270)
22
Health premium production
(million TL)
Other premium production
(million TL)
186.0
58.0
56.2
134.8
141.7
2010
2009
2010
2009
2010
Other Insurances
Under Other Insurances category, we find the total of Engineering, Marine, Agriculture,
Compulsory earthquake, Legal Protection and Loan branches.
In 2010, the total premium production of the mentioned branches has been 141.66 million TL,
with an increase of 5%. 124.23 million of this amount was transferred to the re-insurers. The
retention premium amount has been 17.42 million TL, which shows a retention ratio of 12%. The
loss/premium rate for this category in 2010 has been 46%. The total amount of earned premium
has been 15.73 million, while the net losses incurred was recorded as 7.16 million TL.
Other Insurances
2010
2009
858.562
902.927
Premium Production
141.655.857
134.760.911
5
Retention Premium
17.423.075
15.627.653
11
No of Policies
Retention Ratio (%)
Growth %
-5
12
12
6
15.724.848
14.370.021
9
(7.163.122)
(7.274.323)
-2
18.493.211
18.809.399
-2
46
51
-10
(12.017.821)
(9.015.978)
33
Among Branches
Under Other Insurances
category, we find the
total of Engineering,
Transportation,
Agriculture, Natural
Disasters, Legal
Protection and Loan
branches.
In 2010 Güneş Sigorta’s premium production increased 1.4% and
our company ranked 6th with regard to premium production
volume.
27
Aware of the fact that it has to take more responsibility for social welfare, Güneş Sigorta believes that the relevant steps to be taken should be viewed as a part of corporate social responsibility.
Operating under the light of its corporate vision and mission, Güneş Sigorta focuses on sustainable economic development and puts education, environment, sports and arts in the
center of its corporate social responsibility activities.
Güneş Sigorta is a corporate citizen spending effort to create safer tomorrows by investing
in the future. Being one of the leading insurance companies of Turkey since its establishment in 1957 Güneş Sigorta continued to support projects regarding arts, education, sports
and environment through 2010.
CONTRIBUTION to SPORTS
VakıfBank Güneş Sigorta Türk Telekom Women’s Volleyball Team
VakıfBank Güneş Sigorta Türk Telekom Women’s Volleyball Team has recorded great success since its foundation in 1986. In its 25-year-long past the team won the local championship for 7 times and also been successful in the international arena. With the studies conducted by the team throughout the country, every year thousands of youngsters are encouraged to be volleyball players. The team enjoys the benefits of the investment made in the
youth setup by achieving greater success every year.
By winning the Women’s Volleyball European Champions League cup VakıfBank Güneş Sigorta Türk Telekom Women’s Volleyball Team has achieved a phenomenal success. The
team has been to first Turkish team to be the champion in the 50-year-long history of the
champions’ league.
28
Güneş Sigorta Sailing Team
The Sailing Team, carrying the light of Güneş Sigorta over the waves, has achieved great success also in 2010 and offered pleasurable moments to the company
staff and sailing fans. The Sailing Team has ranked the second in Fahir Çelikbaş
Cup, which was held in three series on 27 March, 10 April and 2 May. In Çanakkale Triumph Yacht Race, realized in two laps, and held for the 7th time in 2010, the
Sailing Team ranked 3rd in the IRC 3 class. The team also gained the first and third
places in the Grand Race series started in Çengelköy, Istanbul on 23 July. With these ranks, the Sailing Team continued its leader position in Turkey Open Sea Racing
Club Trophy, the most prestigious yacht race of Turkey.
CONTRIBUTION to ENVIRONMENT
Solar Energy Plant
With the solar energy panels placed on the head office building in Esentepe, Güneş Sigorta is producing a part of its energy need. The one and only example in
the private sector in Turkey, our solar energy collector has enabled 13.739,32 kwh
power economy since 2009.
The solar energy panels are annually maintaining a decrease in greenhouse gas
emissions, which equals to 7.19 tons of carbon dioxide. The panels are making sizable environmental contribution, equivalent of 719 trees.
Güneş Sigorta believes in the importance of widespread use of alternative energy
resources for sustainable economic development. The daily production volumes
and the avoided carbon-dioxide emission amounts provided by its solar energy
collector, a humble yet important step taken by Güneş Sigorta for livable tomorrows, can be followed at www.gunessigorta.com.tr
CONTRIBUTION to EDUCATION
“No more schools without libraries and no more children deprived of books!”
Güneş Sigorta hit the road in 2009 with the aim of enriching 100 schools with thousands of books along with the library bookshelves. The campaign slogan was “No
more schools without libraries and no more children deprived of books!” Through 2010, Güneş Sigorta provided many
schools, failing to meet the reading needs of students with its limited book source or schools simply without libraries,
with books, selected among those recommended by the Ministry of Education. This meaningful project is a true reflection of the company’s vision and mission involving investment in the future.
Through 2011 Güneş Sigorta is going to
continue reaching disadvantaged primary schools throughout the country to
be selected by its district offices.
Güneş Sigorta focuses on sustainable economic development and puts
education, environment, sports and arts in the center of its corporate
social responsibility activities.
29
Board of Directors
Süleyman Kalkan, Chairman
Süleyman Kalkan is a graduate of Ankara
University, Faculty of Political Sciences,
Department of International Relations. Mr
Kalkan began his career in 1983 as an assistant bank inspector at Türkiye İş Bankası,
subsequently serving as an assistant retail
loan manager, commercial credit regional
manager, nonperforming loan manager,
and branch manager at the same bank. Mr
Kalkan currently serves on the boards of a
number of concerns and has been the executive Member of the Board of Directors and
CEO of VakıfBank since 19 March 2010.
Ahmet Candan, Vice Chairman
Candan graduated from Ankara University
Faculty of Political Sciences Department of
Finance in 1987. In the same year, he began
his professional life at the Ministry of Finance as an assistant inspector in the Board
of Finance Inspectors. He served as finance
inspector and tax and legislation consultant
at Kuveyt Türk Private Finance Corporation.
After continuing his career in various private sector companies and serving as the
Assistant General Manager and General
Manager at Ziraat Leasing A.Ş, Mr. Candan
was appointed as a BoD member and a permanent member to the Credit Committee at
Ziraat Bank A.Ş. Candan has been serving
our company as the Deputy Chairman of
VakıfBank and a permanent member of the
Credit Committee since 19 March 2010.
Serhat S. Çetin,
CEO and Member
Mr. Çetin is graduated from the Department
of Sociology of Ankara University. Holding
a BA degree, Çetin worked as intendant at
Turkish Airlines, portfolio manager at Yapı
Kredi Bank and General Manager at Çevtem
Group. Çetin’s career at Güneş Sigorta
started in 2006 as the Assistant General
Manager Responsible for Marketing & Sales
Management. On 9 February 2001 Çetin was
appointed as the General Manager of our
company.
İsmail Alptekin, Member
Feyzi Özcan, Member
Feyzi Özcan is a graduate of Gazi University,
Faculty of Economics and Administrative
Sciences, Department of Public Finance. He
began his career in 1989 as an assistant bank
inspector at VakıfBank and subsequently
served as manager, vice president, and
president in a number of branches and units
of the same bank. Mr Özcan has been an assistant general manager of VakıfBank since
2005.
M. Recep Zafer, Member
Mr. Zafer is graduated from Department
of Economics, Faculty of Economics and
Administrative Sciences at Marmara
University. He holds a BA degree on
econometrics and doctorate on banking
and insurance studies, both received from
the same university. Mr. Zafer has been
serving in many positions in the banking
sector since 1992. He has been working as
an Assistant General Manager at VakıfBank
since 13 June 2006.
İsmail Alptekin is a graduate of İstanbul University, Faculty of Law. He began his career with an
independent law practice in 1968-1975 and subsequently served as an attorney for Türkiye Zirai Donatım Kurumu and as a comptroller for TÜBİTAK
(Scientific and Technical Research Council of Turkey). He held a seat on the VakıfBank Board of Directors for two terms and was a member of the Ankara Metropolitan Municipal Council. He served for
two terms as an MP: the first in the 21st parliament
representing Bolu and the second in the 22nd representing Ankara, during the latter of which he was
also vice president of the Grand National Assembly
of Turkey. Mr Alptekin has been a member of the
VakıfBank Board of Directors since 3 April 2010.
30
Board of Directors
Abdülkerim Emek, Member
Mr. Emek is graduated from the department
of Public Administration – Faculty of Political Sciences at Istanbul University. Later he
received his BA degree at Hull University,
UK on financial management and doctorate from the Department of Banking at the
banking and Insurance Institute of Marmara
University. He began his professional life in
1987 as an assistant specialist at the Board
of Capital Markets, directly reporting to the
Prime Minister.After serving the Board of
Capital Markets as a specialist and senior
specialist he became a board member on
2 February 2005. On 9 September 2009 he
was appointed as the second chairman of
the Board, where he served until 2 February 2011. On 4 February 2011 Emek was appointed as the deputy undersecretary for the
prime ministry and has been serving at this
position since then.
Haluk Tarakçıoğlu, Member
Haluk Tarakçıoğlu is a graduate of Ankara
University Faculty of Languages, History and
Geography, Department of Italian Language
and Literature. Working as a journalist at
the Union of Chambers and Commodity Exchanges of Turkey and for the newspapers
İktisat and Sabah, he was later appointed to
the staff of the Prime Ministerial Press and
Public Relations Department as Ministerial
Consultant. He is presently a Prime Ministerial Consultant and Principal Clerk.
Kemal Şahin, Statutory Auditor
Kemal Şahin is a graduate of Ankara University Faculty of Political Sciences, Department of International Relations. He began his career at VakıfBank as a deputy internal auditor and subsequently served as a
deputy manager at İstanbul Stock Exchange,
manager and assistant general manager at
Vakıf Yatırım. He also worked at VakıfBank
as Levent branch manager and Marmara region manager. Mr Şahin is currently regional manager of the bank’s İstanbul 4th regional office.
Necmi Alper, Statutory Auditor
Necmi Alper is a graduate of Dokuz Eylül
University Faculty of Economics and Administrative Sciences, Department of Public Administration. Mr Alper has been VakıfBank retail banking president since 2007.
Participation in Board of
Directors Meetings 2010
25.01.2010
19.02.2010
24.02.2010
15.03.2010
30.03.2010
26.04.2010
29.04.2010
13.05.2010
24.05.2010
21.06.2010
19.07.2010
13.08.2010
23.08.2010
27.08.2010
07.09.2010
20.09.2010
12.10.2010
11.11.2010
29.11.2010
10.12.2010
23.12.2010
Mr. Jean François Lemoux could not attend the Board
of Directors meetings dated 25 Jan, 26 Apr, 29 Apr, 24
May, 21 Jun and 19 Jul.
Mr. Jean Rene de Charette could not attend the Board
of Directors meetings dated 19 Feb, 24 Feb, 21 Jun, 19
Jul, 23 Aug, 12 Oct, 11 Nov, 29 Nov and 23 Dec 2010.
Changes in Board of Directors Membership
• As of 3 January 2011 M. İlker Avcı resigned from
his offices as Güneş Sigorta General Manager and
Member of the Board of Directors.
• As of 24 December 2010 Jean Rene de Charette resigned from his office as Güneş Sigorta Board of
Directors member.
• As of 31 March 2011 Jean François Lemoux departed from his office upon a Board of Directors decision.
• As of 31 March 2011 Pierre Lefevre departed from
his office upon a Board of Directors decision.
• On 31 March 2011 Ahmet Candan was assigned as
the Deputy Chairman of the Board of Directors.
• On 31 March 2011 Abdülkerim Emek was assigned
as a member of the Board of Directors.
31
Senior Management
Changes in Senior
Management
• As of 3 January 2011 M. İlker
Avcı resigned from his offices
as Güneş Sigorta General Manager and member of the Board
of Directors.
• As of 29 December 2010, Mehmet Bostan resigned from his
office as Assistant General Manager Responsible for Financial Affairs.
32
Serhat S. Çetin,
CEO
Mr. Çetin is graduated from the Department
of Sociology of Ankara University. Holding
a BA degree, Çetin worked as intendant at
Turkish Airlines, portfolio manager at Yapı
Kredi Bank and General Manager at Çevtem
Group. Çetin’s career at Güneş Sigorta
started in 2006 as the Assistant General
Manager Responsible for Marketing & Sales
Management. On 9 February 2001 Çetin was
appointed as the General Manager of our
company.
Ömer F. Ergin,
Deputy Chief Executive Officer
Ömer F. Ergin is a graduate of İstanbul
University Faculty of Law. He began his
career in 1979 as a practicing attorney and
has been working at Güneş Sigorta since
1981. Mr Ergin is currently a Deputy CEO
responsible for legal affairs and claims
management at the company.
Hasan Altaner, Deputy Chief Executive Officer
Hasan Altaner is a graduate of Eskişehir
Academy of Economics and Administrative
Sciences of Business Administration. He
began his career in 1980 at the Güneş Sigorta
Treaty Service, subsequently working as
Marine Insurance Manager, and Technical
Services Deputy CEO. After 2004 Mr Altaner
worked as Turkish executive director for Willis
Re and then as assistant general manager
and vice general manager at HDI Sigorta
before joining Güneş Sigorta as a Deputy
CEO responsible for technical management
at Güneş Sigorta on 1 May 2009.
M. Taner Senseven,
Assistant General Manager
Mr. Senseven is graduated from Kuleli
Military High School and Military Academy.
He holds a BA degree on accountancy
and finance received from the Social
Sciences Institute at Marmara University.
He is continuing his doctorate studies on
management and organization sciences.
Mr. Senseven served as the Director of
Advertising and PR for the Turkish National
Olympic Committee. Since 2006, he has
been serving our company as the Assistant
General Manager Responsible for Strategy
and System Management.
Senior Management
M. Levent Özer, Assistant General Manager
Graduated from the Department of Economics of the Faculty of Economics at Istanbul
University, Mr. Özer received a BA degree
on monetary management and banking and
doctorate on finance from the same university. Mr. Özer started his professional life in
1987 and worked as an Assistant General
Manager Responsible for Financial Affairs in
various companies. His latest position was
Insurance Sector Consultant at KPMG. On
15 April 2011 Özer started to serve Güneş
Sigorta as the Assistant General Manager
Responsible for Management of Financial
Affairs.
Internal Auditing
Gürcan Tüfekçi
Gürcan Tüfekçi is a graduate of Gazi
University Department of Finance. He
joined Güneş Sigorta as Internal Auditing Deputy Manager in 1993. Mr Tüfekçi
was appointed to the position of Internal Auditing manager in 1997 and currently holds that position.
F. Mehmet Batumlu
F. Mehmet Batumlu is a graduate of
İstanbul Technical University Department of Management Science and Engineering. He joined Güneş Sigorta in 2002
as a specialist at the company’s Marketing Department also served under the
same title for the Funds Management
(2003) and Internal Auditing (2005) departments. In 2007, Mr Batumlu became
Internal Auditing Department deputy
manager in 2007. He was appointed as a
deputy manager of Internal Control and
Risk Management Department which
was establiahed in 2009 and he currently
holds that position.
33
Organization Chart
BoardDirectors
Internal Control and
Risk Department
Mehmet Batumlu
Internal Auditing
Gürcan Tüfekçi
C.E.O.
Serhat S. Çetin
Quality Department
Representative
M. Taner Senseven
Strategy and System
Management Deputy
Executive Officer
M. Taner Senseven
Technical Management
Deputy Executive Officer
Hasan Altaner
Strategic Planning
and Department
Systems Development
Department
Risk Engineering
Department
Fire and Engineering
Insurance Department
Human and Training
Department
Marine Insurance
Department
Advertising Public
Relations Department
Reinsurance and
Special Risks
Department
Procurement and
Administrative
Services Department
Actuarial and
Technical Data
Analysis Department
Management
Information System
Department
Technical Group
Department
Group Department
Information
Technology
Miscellaneous
Accident Insurance
Department
Information
Technology System
Support Department
Motor and Personal
Accident Insurance
Department
Information
Technology Project
Department
34
Marketing and Sales
Management Deputy
Executive Officer
Marketing and Sales
Group Department
Business
Development
and Customer
Segmentation
Department
Agency Sales
Department
Corporate Sales
Department
Financial
Institutions Sales
Department
Corporate
and Financial
Institutions
Technical Sales
Support Deputy
Department
Customer Relations
Department
Group Department
Health Insurance
Health Insurance
Technical
Department
Health Insurance
Sales Department
Health Insurance
Direct Sales
Department
Agricultural Insurance
Department
Financial Affairs
Management Deputy
Executive Officer
M. Levent Özer
Legal Affairs and Claims
Department Deputy
Executive Officer
Ömer F. Ergin
Group Department
Financial Affairs
Department
Legal Consultancy
Claims Department
General Accounting
Claims Control and
Training Department
Budget Planning and
Investor Relations
Department
İstanbul Claims
Department
Department
Technical Accounting
and Financial Control
Department
Recourse Department
Regional Offices
Organization Chart, Headquaters and Regional Office Managers
Headquaters and
Regional Office Managers
Gürcan Tüfekçi
F. Mehmet Batumlu
Internal Auditing Manager
Internal Control and Risk Department
Deputy Manager
Grup Müdürlükleri
Tayfun Alıntaş
Elvan Atalay
Deniz Kanijali
Can Saka
A. Serdar Yakut
Yurdakan Tarhan
Tanzer Yaramanoğlu
Murat Güler
Barış Fettahoğlu
Technical Management Group Director
Health Insurance Group Director
Marketing and Sales Group Director
Black Sea Region Group Director
Information Technology Management Group Director
Bölge Yöneticileri
Zeliha Alkoç
Fulya Argat
A. Cenk Gezer
Selman Çintiriz
A. İlker Yaman S. Somer Orhan
Hamza Çağlar
Bülent H. Aysalan
Beyler Yıldız
Hakan Emerce
İstanbul Central Region Manager
Kadıköy Region Manager
İstanbul West Region Manager
Central Anatolia Region Manager
Aegean Region Manager
Marmara Region Manager
Mediterranean Region Manager
South Anatolia Region Manager
East Anatolia Region Manager
T.R.N.C. Region Manager
Pazarlama ve Satış Yönetimi
Murat Konca
Agency Sales Manager
Figen Gürgen
Agency Sales Deputy Manager
Selma Bekoğlu
Corporate Sales Deputy Manager
Mete Albayrak
Financial Institutions Sales Manager
Oktay Öztürk
Corporate and Financial Institutions
Technical Support Deputy Manager
Emine Kemer
Health Insurance Technical Manager
Nihat Yavuz
Health Insurance Sales
Deputy Manager
Barış Tabakoğlu
Health Insurance Direct Sales Director
Tolga Dülger
Agricultural Insurance
Deputy Manager
İsmail Volkan Saraç Business Development and Customer
Segmentation Deputy Manager
Strateji ve Sistem Yönetimi
Selma Kalkavan
Strategic Planning ve Management Systems Development Manager
Gürkan Emecan
Human Resources Manager
Dilek Alaeddinoğlu
Human Resources Deputy Manager
Çetin Çelik
Technical and
Support Services Manager
A. Bilgin Günay
Information Technology
System Support Manager
Olcay Şahin Information Technology Project
Deputy Manager
Şeyda Köksal
Management Information System
Deputy Manager
Teknik Yönetimi
Paşa Hüseyin Altın
Kıymet Dallı
Nazan Mert
Yıldıray Alkoç
Arzu Sungur
Cenk O. Uzunoğlu
Ayten Çakmak
Ö. Ece Gürbüzoğlu
Kadri Solmaz
Fire and Engineering Insurance
Manager
Deputy Manager
Deputy Manager
Motor and Personal Accident Insurance
Manager
Motor and Personal Accident Insurance
Deputy Manager
Marine Insurance Manager
Marine Insurance Deputy Manager
Accident Insurance
Deputy Manager
Reinsurance and
Special Risks Manager
Risk Engineering Manager
Risk Engineering Deputy Manager
Hukuk ve Hasar Yönetimi
Filiz Karadan
Legal Consultant
Atilla Büyükünsal
Claims Department Manager
A. Dilek Nazdan
Non-Motor Claims Deputy Manager
Yavuz Akar
Motor Claims Deputy Manager
Levent İ. Dönmez
Claims Logistics and
Procurement Deputy Manager
Türkay Uslu
Tramer Bodily Injury Claims Statistics
Deputy Manager
Tezcan Akarsu
Agriculture Claims Deputy Manager
Fikri Gürsoy
Claims Control and Training
Deputy Manager
Mehmet Tan
İstanbul Claims Management Manager
Göksel Baş
İstanbul Claims Management
Deputy Manager
Bülent Pınarlı
İstanbul Claims Operation
Deputy Manager
Atilla Gülbağ
Recourse Manager
Mali İşler Yönetimi
Gürkan İpek
Firdevs Günday
A. Şenay Cansız
Gözde A. Şenyurt
Fulden Pehlivan
General Accounting Manager
Technical Accounting Deputy Manager
Financial Control and Reporting
Deputy Manager
Receivables Collection
Deputy Manager
Budget Planning and
Investor Relations Deputy Manager
35
In 2010, the number of employees of Güneş Sigorta increased 0.8% compared to the previous year and reached 525. As of
the year-end, the number of employees recruited at the head office was 259. The total number of team members recruited
at 11 regional offices and 7 other rep offices throughout the country was 266.
78% of our company staff is university graduates and holding BA degrees.
Number of employees & branches
Head Office
2009
2008
259
211
District Offices
266
310
No of Employees
525
521
11
11
2009
2008
No of District Offices
No of employees
Male
282
290
Female
243
231
2009
2008
31
29
Educational background of staff members
BA/Doctorate
University
377
381
High School
106
101
Primary education
11
10
No of employees speaking a foreign language
46
35
6
5
No of employees speaking more than
one foreign languages
Güneş Sigorta embraces the principle of taking the employee satisfaction as a priority and offering the opportunities
needed for a productive working environment to its team members, whom are regarded as the primary asset of the
company. Among these opportunities offered by Güneş Sigorta, training stands in the first rank.
Application and Recruitment
As one of the leading and well-established companies of the insurance sector, our aim is to add members to our team, who will
be pursuing our common goals. We wish to work with success-oriented team workers open to innovations and development.
In this frame, Güneş Sigorta recruits staff members through tests and interviews. The assessments are made to understand
to which degree the candidates are compatible with our company and with the position in question.
Performance Management
The objective of Güneş Sigorta Performance Management is to evaluate the performance of individuals in the frame of
the corporate and individual targets and competences in line with the strategic targets of our company and to maintain a
coordinated team work among individuals and groups, to help the company achieve its targets.
In this scope, Güneş Sigorta conducts competence-based performance evaluations once a year, within the first two months.
Moreover, 3-month target achievements are assessed at the end of each quarter. These assessments are gathered to form
a “Corporate Report”, covering the target achievement rates of the divisions, units and individuals. Accordingly, the
performances found to be successful in competence- and target-based evaluations are rewarded.
36
Career Development
With the aim of increasing the professional and corporate efficacy, by enabling its team members use their skills,
knowledge and experience in the best possible way, Güneş Sigorta offers management support and employs the Career
Development System.
In this context, business evaluations are made for the available positions and the qualities needed for these positions are
determined. Currently, the career planning of our staff members is shaped according to their ability to meet the position
requirements and needs and to their success within the department.
Employees with the desired qualities are followed by our Human Resources and Training Department and are offered
the trainings they need for improvement. With the promotion exam held at certain times, our team members are offered
the chance of taking their careers one step further. Moreover, studies are conducted to determine the department-based
key positions and key staff. Intra-corporate rotation is another preferred method since the mechanism helps our team
members gain experiences at different departments and expertise on multiple branches.
Wages Policy
Our company signs collective labor agreements. In this context, our wages policy determined with reference to: the
negotiations made with Bank and Insurance Workers Union (BASS), sector-based researches, studies made based on the
business value of the positions and the relevant wage classifications.
Union members working in our company are given 12 gross salaries and a bonus equivalent of 4 salaries per year.
Monthly salaries are paid in cash on the first day of every month. The employees are given a document showing the
income details and any kind of deductions and cuts. Furthermore, other allowances are offered to the staff members, such
as the title or the language allowance given to the employees, who succeed in the foreign language tests. Among other
benefits are: the child benefit, kindergarten benefit, heating expenses benefit, and transportation benefit, given to those
who do not use the staff service buses.
Our company is aware of its responsibilities regarding its team members. We are designing new projects to improve our
human resources systems and increase the employer satisfaction.
Education
Embracing the principle that our employees present the most valuable resource of our company, we attach great importance
on and heartily support their improvement and development. We are helping them access the training programs they
need for managerial, technical and personal development. In addition to the professional trainings we offer according to
the specialty fields, regardless of their divisions, all the staff members, without and insurance experience, are given the
Basics of Insurance course in order to create sector awareness.
The following table shows the number of attending staff members and the trainings held in 2010.
Training Topic
Duration (Days)
No of Participants
Claims Management Development
5
40
Income-Expense, Claims/Loss, Reserves and
Profitability of Insurance Companies
1
63
Technical Reserves & Financial Analysis
3
30
Agriculture Insurance
Managing Difficult People and
Challenging Situations on the Phone
0,5
89
2
21
IIBA CBAP International Business Analyst
3
13
Java
2
20
Insurance for IT staff
3
31
Miscellaneous Open Programs (20 programs)
42
43
In 2010, a total of 350 staff members were given 28 different trainings. The “Codes of Practice 2010” booklet, covering the
basics of risk selection, risk acceptance and collection was published. The booklet is a reference guide for all at agents and
our staff members working in any division at regional offices, rep offices and the head office.
37
1. Statement of Compliance with Corporate Governance Principles
There has been no application performed on the part of the Company that is in contradiction to any of the principles at
Corporate Governance Principles which was first published in July, 2003 and re-published after some regulation done
in February, 2005, by the Capital Markets Board (CMB).
Investor Relations unit was founded at the end of the 2009, in order to establish a regular and reliable bridge between
company and potential investors by providing stakeholders to get actual company information easily and reliably.
SECTION I - SHAREHOLDERS
2. Shareholders Relations Unit
Relations with shareholders are under the responsibility of Deputy Chief Executive Officer, M. Levent Özer and these
relations are executed by the Financial Affairs Group Management, whose contact information has been given below:
Name, Surname
Title
Phone
E-mail
M. Levent Özer
0 212 355 6975
levent.ozer@gunessigorta.com.tr
Gürkan İpek
0 212 355 6800
gipek@gunessigorta.com.tr
Fulden Pehlivan
Deputy Manager
0 212 355 6820
fpehlivan@gunessigorta.com.tr
The main activities of the unit is to provide investors, upon their request during the operational year of the Company,
with publicly disclosed information about the Company and to ensure the distribution to shareholders of dividends and
bonus shares. Responsibility for keeping the share register is another task undertaken by the same unit.
Since 2009, with the estalishment of Investor Relations Unit, The Company is aiming to show development at corporate
governance and to have more transparent structure according to CMB legislations and Corporate Governance Principles.
Investor Relations presents the last actual information to the investors according to CMB legislations and Corporate
Governance Principles. By gaining confidence of the investors, it gets long term relations with them.
3. Shareholders’ Exercise of Their Right to Obtain Information
Copies of the Company’s publicly disclosed three-month financial tables and the decisions of its Board of Directors
are sent to shareholders T. Vakıflar Bankası T.A.O. and Groupama S.A. All other requests for information about the
Company are answered in order of urgency as quickly as possible, first via the electronic media and later by fax.
There is no provision in the Articles of Association stipulating that a request for the appointment of a private auditor is
an individual right.
4. Information about General Shareholders’ Meetings
The Company’s General Shareholders’ Meetings are held at the Company head office and at a venue that facilitates the
participation of all shareholders. Shareholders are categorized and listed on the list of attendants, which is offered to
the shareholders for their information.
Questions posed by shareholders to the Board of Directors or the Auditors are answered with the provision that the
question is necessary for the shareholder’s exercise of his/her shareholders’ rights and that it does not involve a trade
secret. The officials and auditors of the Company who are in charge of preparing financial tables for the General Meetings
are enlisted to be present at the meetings.
The General Shareholders’ Meeting for 2010 was held on March 31, 2011 with the participation of shareholder
representatives, an observer from the CMB, a Ministry of Industry commissioner, shareholders and representatives
of intermediary agencies. The date, place, time of the General Shareholders’ Meeting as well as an invitation for the
38
meeting, the agenda of the meeting, a model proxy letter and information about exercising votes were announced in
the Daily Bulletin of the Istanbul Stock Exchange (ISE) and in daily newspapers published in Turkey. However, upon the
postpone of the balance sheet request of Groupama S.A., foreign partner, accordance with the Article TTK 337, General
Meeting related to postponed balance sheet, will be held on 16.05.2011, Monday.
No provision has been included in the Articles of Association stipulating that important decisions such as division, purchase,
sale or leasing of a substantial quantity of assets must be passed at General Shareholders’ Meetings. This matter has been
included in the Articles of Association as within the powers of the Board of Directors. Following the meeting, minutes of the
General Shareholders’ Meeting were immediately provided to those who requested them; shareholders and interested parties
were sent the minutes through the mail. In addition, the minutes have been kept continuously available for shareholders.
The minutes of the General Shareholders’ Meeting and the list of attendants that were sent to the ISE after the meeting
and published in the daily bulletin; in addition, they were placed on the Company’s website, www.gunessigorta.com.tr
in the section on Investor Relations.
Moreover, the decisions of the General Shareholders’ Meetings of previous years are also published on the Company’s
website.
5. Voting Rights and Minority Rights
Shareholders of the Company have no special voting rights. Affiliates have no voting right in the General Shareholders’
Meeting. Minority interests are not represented in the board and the company doesn’t allow the cumulative voting
method.
6. Dividend Policy and Timing
At the Articles of Association, Article no.24 the dividend policy is described. The Board of Directors presents a dividend
payment proposal to the General Shareholders’ Meeting of Shareholders that is based on the Company’s profitability
status, its investment needs and its financial structure, taking into consideration the fine balance that should exist
between the expectations of shareholders and the need of the company to grow. This proposal is presented for
ratification of the General Shareholders’ Meeting within the legally required time.
Shareholders do not hold special privileges with respect to participation in Company profit.
7. Transfer of Shares
The Company’s Articles of Association do not contain any provision that impede the transfer of shares. According to
Article 7 of the Articles of Association, the Company’s shares are registered shares with the right of blank endorsement
in the case of transfers and assignments. According to Article 10 of Insurance Law No. 5684 and Article 10 of the
Regulations on the Foundation and Operation Principles of Insurance and Reinsurance Companies, share transfers are
subject to the written consent of the Undersecretariat of Treasury Directorate General of Insurance.
SECTION II - PUBLIC DISCLOSURE AND TRANSPARENCY
8. Company Disclosure Policy
Information about the Company is disclosed to the public within the knowledge and under the responsibility of Chief
Executive Officer, M. İlker Aycı and Deputy Chief Financial Officer, Mehmet Bostan. In its adherence to the CMB’s
Corporate Governance Principles, the Company has drawn up a “Disclosure Policy” which it has been approved by the
Board of Directors, announced to shareholders, stakeholders and the general public through its website.
9. Material Disclosures
The Company made 17 material disclosures in 2010 pursuant to CMB legislations. There are no material disclosures
that have not been promptly made with respect to the Company’s activities.
10. The Company’s Website and Its Content
The Company’s web address is www.gunessigorta.com.tr. The website, within the scope of Corporate Management
Principles, Article 1.11.5 of Capital Markets Board of Turkey, contains commercial registration information, the Company’s
shareholding structure, management structure and organization, preferred stocks, the Articles of Association, special
event announcements, independent auditor reports, annual reports, financial tables and footnotes, plus general
shareholders’ meetings (agenda, list of participants, sample of power of attorney, general meeting’s record) and the
Company’s corporate governance compliance report, its vision and its mission.
The website is actively used to disclose information and enlighten the public. The site moreover includes general
information about the Company, its products, agencies, online transactions, investment relations, human resources
and communication. In its effort to facilitate communication with customers over the Internet, the Company has also
provided customers with a menu for submitting their opinions and recommendations. Divided into categories under
“Your Opinions and Recommendations”, the e-mails that reach the site are answered by the department concerned
39
within two business days. The Company website offers clients updated information and press releases on the Company,
agency addresses, contact information for contracted and support services and general information on insurance and
insurance branches.In order to have any question or view of the investors or contact easily with the investors, e-mail
adresse of yatirimci.iliskileri@gunessigorta.com.tr is informed under the title of contact with the investors.
11. Disclosure of Non-corporate Ultimate Controlling Individual Shareholders
Company capital structure is presented at website, financial reports and at other related documents. The Company has
no non-corporate ultimate controlling individual shareholders with a controlling interest. The Company’s shareholding
structure is as indicated below.
12. Public Disclosure of Those Who May Have Access to Insider Information
The Company draws up and maintains, a list of real and legal persons who act on behalf of and in the name of the
Company and of persons who work for the Company through a work contract or otherwise and who have regular
access to insider information. These lists are submitted to the Board or to the Stock Exchange upon request. Some of
the executives on these lists who work in the interests of the employer are listed below.
Name, Surname
Position
Serhat S. Çetin
Chief Executive Officer
Ömer F. Ergin
M. Taner Senseven
Hasan Altaner
M. Levent Özer
Can Saka
Group Director
Tayfun Altıntaş
Group Director
Elvan Atalay
Group Director
Deniz Kanijali
Group Director
A. Serdar Yakut
Group Director
Gürkan İpek
Fulden Pehlivan
Budget Planning and Investor Relations Deputy Manager
SECTION III - STAKEHOLDERS
13. Keeping Stakeholders Informed
Stakeholders in the Company are provided with every kind of information in their areas of interest. Stakeholders are furnished
with all of the information that has been publicly disclosed by way of the Company’s internal meetings or through the bulletins
it publishes. The stakeholders are informed about the various telecommunications tools and intranet which took place by end
of 2010. The disclosures of the public are made by the media and through press conferences. Management changes and some
important announcements are informed to employees by various meetings, events as well as through the company by e-mail.
14. Stakeholders’ Participation in Company Management
The Company has formulated different models to accommodate the participation of stakeholders in management.
a) Agency Coordination Meetings: The decisions taken at the annual Agency Coordination Meeting are implemented
by the Company after evaluation.
b) Suggestion System: With this system, employees present their suggestions for improvements and development in
all matters concerning
the Company; suggestions deemed suitable are implemented accordingly.
15. Company Policy on Human Resources
The Company plays an important role in the success and development of the sector with its human resources policy.
Güneş Sigorta places special emphasis on providing and improving the equipment and disciplined processes,
particularly education, that are required in the achievement of productive work. The Company considers its human
resources its most valuable asset and seeks to create a firm foundation in insurance for young people with explorative
minds, creativity, problem-solving skills and vision. There are numerous insurance executives in the insurance sector
who have gathered both their experience and their skills at Güneş Sigorta.
All of the Company’s employees are conscious of the corporate mission and vision. They are knowledgeable regarding
the Company’s effective process management policy. All employees are aware of the contribution of each of their jobs
40
to the excellence of Güneş Sigorta as an organization. All personnel cooperate and promote the spirit of teamwork,
boasting at the same time of high levels of innovative creativity.
Administrative relations between the Company’s senior management and employees are executed by the Department of
Human Resources and Training. Among the jobs of the Department of Human Resources and Training are recruitment,
orientation, performance evaluation, career planning, salary management, individual or group technical training
activities and other procedures regarding personnel.
Employment and promotion at Güneş Sigorta are handled in two phases with a written examination and an interview.
The Company practices no discrimination among its employees. All employees are considered complete equal.
Our staff is a member of Bank and Insurance Employees Union.
16. Information about Relations with Customers and Suppliers
Since 1997, Güneş Sigorta A.Ş. has uninterruptedly implemented ISO 9000 Quality Management Systems, constantly
developing its services to achieve excellence in unconditional customer satisfaction in all aspects of business.
Güneş Sigorta A.Ş. documented its new Quality Management System, established on the basis of the ISO 9001:2008 Standard,
through a documentation check that was conducted by the ASR (American Systems Registrar) on December 10-11-12, 2003.
On January 25 and 26, 2007, the certification was extended for another three years following the inspection conducted by ASR.
17. Corporate Responsibility
Gunes Sigorta, besides its insurance operations, aims to contribute to environmental, sportive, social, cultural and
artistic life with its corporate social responsibility projects. Güneş Sigorta is aware of its corporate responsibility toward
customers, employees and society and makes every effort to perform its duties appropriately. The Company adheres to all
laws and regulations governing business and stands behind the commitments it makes through its services to the public.
Every year, a new plan is drawn up to organize different activities that will allow Güneş Sigorta to fulfill its corporate
responsibility in the community.
For many years, Güneş Sigorta has worked to develop amateur sports and train successful athletes in the country.
Supporting different sports teams and events, the Company has particularly aimed at making sports a part of all young
people’s lives. The Company sponsors the VakıfBank-Güneş Sigorta Sports Club, which is active in volleyball and also
gymnastics and athletics.
Companies today strive to make a difference in the communities in which they work, thus contributing to the achievement
of sustained growth and development. The Company continues to add other projects to its roster of endeavors in the
area of corporate responsibility.
Our company, which aims to make a habit of reading at children from early ages, by donating thousands of books to
100 elementary school throughout the country under the campaign of “Kütüphanesiz Okul, Kitap Okumayan Çocuk
Kalmasın”, school libraries were built.
In January 2011 within the framework of universal principles in the business world to contribute to the formation of
a common culture, United Nations Global Compact which is the most important document of the corporate social
responsibility in the world has been signed as the first non-life insurance company in the Turkish insurance sector.
With this agreement, the company owns 10 bacis principles about the human rights, labor standards, environment and
anti-corruption issues. It was stipulated that our commitment to these principles and Company’s values and corporate
culture with these principles would adapt perfectly to business processes.
Güneş Sigorta thus is not only active in the field of insurance but, with its policies fostering corporate responsibility,
aims to contribute to the efforts to protect the environment, promote social life and culture and the arts.
SECTION IV - BOARD OF DIRECTORS
18. Structure and Formation of the Board of Directors and Independent Members
The business management of the Company is the job of a Board of Directors, made up of seven members excluding
the General Manager, who is elected from among the shareholders or representatives of entities that are shareholders
of the company by the General Shareholders’ Meeting, as stipulated in the Turkish Commercial Code and in laws and
regulations on insurance procedures.
The names, Board membership, positions and terms of office of the Chairman and members of the Board are presented
below.
41
Name
Position
Date of Appointment
Süleyman Kalkan
Chairman
30.03.2010
Ahmet Candan
Vice Chairman
31.03.2011
İsmail Alptekin
Board Member
30.03.2010
Feyzi Özcan
Board Member
07.07.2006
M. Recep Zafer
Board Member
09.03.2007
Abdülkerim Emek
Board Member
31.03.2011
Haluk Tarakçıoğlu
Board Member
01.04.2008
Serhat S. Çetin
Chief Executive Officer and Board Member
09.02.2011
The General Manager of the Company is a natural member of the Board of Directors and has voting rights. The members of the
Board are elected for a maximum term of three years. Members may be re-elected at the end of their terms of office. The amount
of remuneration of members of the Board is decided upon by the General Shareholders’ Meeting. Members of the Board may
be replaced at any time that the General Shareholders’ Meeting deems it necessary. In the event of a vacancy on the Board,
the Board of Directors elects a temporary member to the Board from among legally qualified candidates nominated by the
shareholders represented on the Board. A member of the Board elected in this way serves until the next General Shareholders’
Meeting and if this election is ratified by the General Shareholders’ Meeting, the member completes the term of the member that
has been replaced. The term of office of the General Manager is independent of the terms of office of the members of the Board.
Name
Position
Date of Appointment
Kemal Şahin
Auditor
19.10.2007
Necmi Alper
Auditor
19.10.2007
19. Qualifications of Members of the Board
The General Manager and Deputy General Managers of the enterprises which are shareholders of our Company comprise
our Board of Directors. Members have the qualifications specified in Articles 3.1.1, 3.1.2 and 3.1.5 of Section IV of the CMB
Corporate Governance Principles; this matter has not been additionally specified in the Company’s Articles of Association.
Resumes of board of directors and auditors are presented both in annual report and company website.
20. The Company’s Mission, Vision and Basic Values
On October 4, 1996, Güneş Sigorta A.Ş. adopted and disclosed a quality policy that is in keeping with the goals of the
corporation, in compliance with the Quality Management System and well-positioned to ensure that the Company’s
commitment to continuous improvement is effectively undertaken.
Our Mission is to contribute to development of standards in the sector, making insurance a widespread practice by
increasing awareness within the population and increasing corporate value by providing customer-focused services.
Our vision is to produce value as a pioneering and innovative company that is a leader in Turkey, a corporation that is
everywhere wherever need be, the most preferred enterprise which operates in the region.
Basic Corporate Values
Deeply-rooted
• A stable structure geared to carry the Company forward based on a half-century of experience.
• A robust capital and shareholding structure.
• The synergy resulting from the century-old experience of Vakıflar and the partnership with VakıfBank.
Reliability
• We engage in all activities using the same objective criteria.
• In the awareness of our responsibilities, we act consistently and fulfill our obligations promptly and completely.
Transparency: Güneş Sigorta management subscribes to a participatory and transparent management philosophy and
adheres to the corporate governance principles.
Pioneering: Güneş Sigorta places importance on developing products and services and pushing the boundaries in the sector.
Loyalty: All of our business partners and employees have confidence and pride in the role they play under the Güneş Sigorta roof.
42
Focus on Growth
• The importance we place on the professional and personal development of all of our business partners and
employees is of strategic significance in terms of the ability of our corporation to contribute to the development of
professional standards in the sector.
• One of our fundamental principles in striving to increase the quality of our services is a close monitoring of
technology and pioneering in the implementation of technological advances.
Focus on Solutions
• Güneş Sigorta employees adhere to the tenet of working in a team as professionals to provide effective and prompt services.
• Güneş Sigorta employees practice good judgment.
• Güneş Sigorta employees approach problem-solving with flexibility.
Accessibility
• All our business partners and customers are provided prompt and direct accessibility to the appropriate authorized official of the
Company who will assist them in their requests and needs.
• Technological advances that facilitate effective and efficient communication are monitored and implemented in the
various corporate processes.
21. Risk Management and Internal Control Mechanisms
As of February 1, 2009 Internal Control and Risk Management department was established, which is an additional unit
to Internal Auditing Management within the Internal Systems of Insurance, Reinsurance and Pensions Companies
relating regulation, which was published in the official journal no. 26913 as at June 21, 2008. Internal Control and Risk
Management department is subordinated by the Board of Directors, and executed by the Deputy Chief Executive Officer
responsible from Financial Affairs Group Management.
Main risks that the Company may be exposed are financial risks ( credit, foreign Exchange, interest, liquidity and
capital risk), operational risks ( claims management, prodcut design, reinsurance and contract risk, tarif and technical
applications risks, etc.), strategic risks (human resources, market and competition, outsource management, information
technılogies, performance budget risks, etc.),
22. Powers and Responsibilities of Members of the Board of Directors and Executives
The Company’s Articles of Association has made wide reference to the powers and responsibilities of the members of
the Board of Directors and of executives. According to Article 14 of the Articles of Association, the Board of Directors is
authorized to make decisions concerning all matters that remain outside the exclusive jurisdiction of the General
23. Operating Principles of the Board of Directors
Board meeting agendas are drawn up according to the stipulations and powers indicated in the Articles of Association. During
the past period, 21 Board Meetings have taken place. The Board of Directors convenes no less that once a month depending
upon company business needs and upon the invitation of the Chairman or the request of at least two members. Meetings are
held at company head office or at another location decided upon. A quorum of one more than half of the number of members
must be achieved for Board decisions to be considered. Decisions are taken with a majority vote of the members in attendance
at the meeting. In the event of a tie in the voting, the matter at hand is discussed once again at the next meeting. If a tie
occurs in that meeting as well, the proposal under question is considered dismissed. The Board Secretariat is responsible for
notifying and communicating with Board Members. Decisions on matters that fall within the scope of Article 2.17.4 of Section
IV of the CMB Corporate Governance Principles are publicly announced immediately after the meeting.
24. Prohibition on Doing Business or Competing with the Company
In each period of operation, the Company’s Board of Directors meticulously complies with the prohibition on doing
business or acting in competition with the Company.
25. Ethical Rules
Our Ethical Rules including all staff were issued under the Rights and Stakes Procedure, which were approved on February, 2009.
26. Numbers, Structures and Independence of Committees Formed within the Board of Directors
An auditing committee composed of two members exists to fulfill the tasks and responsibilities of the Board of Directors
and to be responsible for auditing. A Corporate Governance Committee is in the process of formation.
27. Remuneration of the Board of Directors
There is no remuneration for Board members outside of the honorarium established by the decision of the General
Shareholders’ Meeting. Information on the remuneration decided upon by the General Shareholders’ Meeting is
published each year in the Minutes of the General Shareholders’ Meeting and thereby presented to the attention of
investors.
43
Financial Information and
Assessment on Risk Management
44
The agenda of general assembly meeting of Güneş Sigorta A.Ş. to be convened on
Thursday, 31.03.2010 at 14:00
1.
Opening the meeting and electing the Presidential Board,
2.
Authorizing the Presidential Board to sign the minutes of the General Assembly
Meeting,
3.
Reading the Board of Directors’ and Auditors’ Reports related to the transactions and
accounts of 2010
4.
Reading the Independent Auditors’ Report related to the activities performed in 2010,
5.
Presenting information to the Shareholders related to the aids and donations granted
within the year, as per Article 7 of the Communiqué Serial IV., No.
27 issued
under the Capital Market Law,
6.
Examining the activities realized in 2010, the Balance Sheet and Profit and Loss
Account, and passing resolutions in this respect,
7.
Passing a resolution about the distribution of the profit obtained in 2010,
8.
Approving the changes occurred in the membership of the Board of Directors and
Board of Auditors within the year,
9.
Passing a resolution about the release of the Members of the Board of Directors and
Auditors from their respective liabilities,
10. Electing the Members of the Board of Directors to replace the members whose duty
periods have expired,
11. Electing the auditors to replace the auditors whose duty periods have expired,
12. Determining remuneration to be paid to the members of the Board of Directors and
Auditors,
13. Approving the resolution of the Board of Directors related to the appointment of
Independent Auditing Company as per the Regulations of Capital Market Board,
14. Authorizing the members of the Board of Directors to perform the transactions
specified under Articles 334 and 335 of the Turkish Commercial Code,
15. Miscellaneous Subjects and Wishes.
45
Message from the Board of Directors
to the Partners
From the BoD,
Dear Partners,
In 2010, when the world economy showed significant signs of recovery following the global
crisis and when Turkey recorded a remarkable growth, structural problems continued to
affect the insurance sector, despite the noticeable uptrend. These problems pushed the
technical profitability of the entire sector down to highly worrisome levels.
Under these challenging circumstances, Güneş Sigorta expanded its premium production
to 737.368.263 TL, which indicates an increase of 1.4%, compared to 2009. By timely
realizing a total claim payment of 439.169.040, our Company reinforced the deserved trust
of its customers. The total profit of this operational year has been 19.335.478 TL.
Having rapidly overcome the cyclical and sector-related difficulties, our Company is
continuing its efforts to fortify its leader position. With your invaluable support we are
going to accelerate our operations with the objective of pursuing our strategic targets.
For your attention, we are presenting the balance sheet and profit-loss calculations,
reflecting the financial state of our Company for 2010.
Faithfully yours,
Board of Directors
46
Message from the Board of Directors to the Partners, Annual Report Compliance Statement
Annual Report Compliance Statement
Annual General Meeting, Güneş Sigorta A.Ş.,
We have been entrusted with the auditing of the annual report of Güneş Sigorta A.Ş.
(“Company”), to be presented on 31 December 2010 to the Annual General Meeting. The
management of the Company is solely responsible for the drafting of the annual report
that constitutes the subject of this report. As independent auditors, our responsibility
is to assess the compliance of the financial information in the annual report with the
unconsolidated financial tables subject to independent auditing, as presented in the audit
report of 11 March 2011.
The audit has been carried out in accordance with the Insurance Law No. 5684 describing
procedures and principles pertaining to the drafting and publication of annual reports.
This legislation requires auditing in order to offer reasonable assurance that there are no
material misrepresentations in the financial information in the annual report that depart
from the audited unconsolidated financial tables. We believe that the audit constitutes
reasonable and sufficient basis for forming our opinion concerning compliance.
In our opinion, all the important aspects of the financial information presented in the
accompanying annual report are in compliance with the information found in the
independently audited unconsolidated financial tables of Güneş Sigorta, Inc. dated 31
December 2010.
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of
PriceWaterhouseCoopers
Talar Gül, SMMM
Partner
47
SUMMARY OF STATUTORY
AUDITORS’ REPORT
•
•
•
•
•
The Corporation’s Title
Head Office
Registered Capital
Issued Capital
Field of Activities
• Names and Office terms of the Auditor or
Auditors and whether they are shareholders or
employees of the Company or not
: GÜNEŞ SİGORTA A.Ş.
: İSTANBUL
: TRL.300.000.000.: TRL.150.000.000.: INSURANCE BUSINESS
: Kemal ŞAHİN 19.10.2007 - Continuing
: Necmi ALPER 19.10.2007 - Continuing
The Auditors are not either shareholders or
employees of the Company.
• Number of Board of Directors’ Meetings Attended and
Number of Board of Auditors’ Meetings Held
: 7 Meetings of the Board of Directors were attended.
: 6 Meetings of the Board of Auditors were held.
The scope of audits made on corporation accounts,
books and documents, dates of audits and
the conclusions drawn
•
: The audits were made on 29.01.2010,
22.02.2010, 15.04.2010, 14.06.2010,
17.08.2010 and 27.09.2010 and it was determined
that all records were kept in accordance with the
provisions of the Turkish Commercial Code.
Number of countings made in the Company cashier’s
Office as per paragraph 3 of subarticle 1 of article
353 of the Turkish Commercial Code and
the results obtained
: The countings were made in the safebox on
29.01.2010, 26.02.2010, 31.03.2010, 30.04.2010,
31.05.2010, 30.06.2010, 30.07.2010, 31.08.2010,
30.09.2010, 28.10.2010, 30.11.2010 and
31.12.2010 and it was determined that the results
of the countings were in compliance with the records.
•
•
The dates of audits made as per paragraph
4 of subarticle 1 of article 353 of the
Turkish Commercial Code and
the results obtained
: The audits were made on 29.01.2010,
26.02.2010, 31.03.2010, 30.04.2010,
31.05.2010, 30.06.2010, 30.07.2010, 31.08.2010,
30.09.2010, 28.10.2010, 30.11.2010, 31.08.2010
and 31.12.2010 it was detetrmined that the account
books were kept in compliance with the
provisions of the Turkish Commercial Code,
Income Tax Law, Tax Procedure Law, Corporate
Tax Law and the other relevant laws
•
Complaints and malpractices reported
to us and the actions taken
: No complaints were reported to us.
We audited the accounts and transactions of GÜNEŞ SİGORTA ANONİM ŞİRKETİ for the period ending at 31.12.2010 as per the provisions of the
Turkish Commercial Code, the Main Articles of Association of the said Company, other relevant legislation and generally accepted accounting
principles and the standards.
In our opinion, the enclosed Balance Sheet issued as at 31.12.2010, the contents of which were approved by us, reflects the true and correct
financial standing of the Company as at the mentioned date and the income statement for the period of 01.01.2010 - 31.12.2010 reflects the true
and correct results of the activities of the Company in the said period; the proposal for distribution of profit complies with legal requirements and
the Main Articles of Association of the said Company.
We present to your kind approval the balance sheet, the income statement and the release of the Board of Directors from their respective liabilities.
Kemal ŞAHİN
48
Necmi ALPER
CONVENIENCE TRANSLATION OF THE INDEPENDENT AUDITOR’S REPORT OF
GÜNES SIGORTA A.Ş.
FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2010
(ORIGINALLY ISSUED IN TURKISH)
To the Board of Directors of
Gunes Sigorta A.Ş.
1. We have audited the accompanying unconsolidated balance sheet of Gunes Sigorta A.Ş. (“the Company”) as of 31 December 2010
and the unconsolidated statement of income, statement of changes in equity and statement of cash flows for the year then ended,
a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
2. Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting
principles and standards as set out in the insurance legislation. This responsibility includes: designing, implementing and maintaining internal systems relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; making accounting estimates that are reasonable in the circumstances; and selecting and
applying appropriate accounting policies.
Auditor’s Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit. Except for the matter described in paragraph 4, we conducted our audit in accordance with the regulations related to the principles on auditing as set out in the insurance
legislation of Turkey. Those regulations require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from material misstatement.
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 assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal systems relevant to the
Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal systems. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
Company’s management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for qualified opinion
4. As discussed in Note 2.8, the Company has calculated and accounted for a provision of TL 3.502.473 for its overdue receivables
which are not under legal follow-up for the first time as of 31 December 2010. The total amount of this provision is charged to current year income statement since the necessary provision amount for the prior years could not be determined.
Qualified opinion
5. In our opinion, except for the possible effects of the matter described in paragraph 4, the accompanying unconsolidated financial statements
give a true and fair view of the financial position of Güneş Sigorta A.Ş. as of 31 December 2010, and of its financial performance and its cash
flows for the year then ended in accordance with the accounting principles and standards as set out in the insurance legislation (Note 2).
Other matter
6. The unconsolidated financial statements of the Company, prepared and published, as of 31 December 2009, were audited by another auditor whose report dated 24 February 2010, expressed a qualified opinion including a qualification paragraph with respect
to lack of determination of provision for doubtful receivables.
Additional Paragraph for Convenience Translation into English
7. As discussed in Note 2.25 to the accompanying financial statements, the effects of differences between the accounting principles as set
out by the insurance legislation and 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 in the accompanying
financial statements. Accordingly, the accompanying financial statements are not intended to present the financial position and results of
operations and changes in equity and cash flows in accordance with accounting principles generally accepted in such countries and IFRS.
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of PricewaterhouseCoopers
Talar Gül, SMMM
Partner
Istanbul, 11 March 2011
49
CONVENIENCE TRANSLATION OF THE COMPANY’S REPRESENTATION ON
THE UNCONSOLIDATED FINANCIAL STATEMENTS PREPARED AS AT 31 DECEMBER 2010
We confirm that the accompanying financial statements and notes to these financial statements as of 31 December
2010 are prepared in accordance with the accounting principles and standards as set out in the insurance legislation and in conformity with the related regulations and the Company’s accounting records.
Güneş Sigorta A.Ş.
İstanbul, 11 March 2011
Serhat Süreyya Çetin
M. Taner Senseven
Celal Küsmen
A Member of Board of Directors,
General Manager
Assistant General Manager
Chief Financial Officer
Orhun Emre Çelik
Kemal Şahin
Necmi Alper
Actuary
Legal Auditor
Legal Auditor
50
CONVENIENCE TRANSLATION OF THE UNCONSOLIDATED
BALANCE SHEETS AT 31 DECEMBER 2010 AND 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)
ASSETS
Audited Note
31 December 2010
I- Current Assets
A- Cash and Cash Equivalents
2.12
1- Cash
2.12
2- C
heques Received
3- Banks
2.12 and 14
4- Cheques Given and Payment Orders (-)
5- Other Cash and Cash Equivalents
2.12 and 14
B- Financial Assets and Financial Investments at Insurees’ Risk
11.1
1- Available-for-Sale Investments
2- Held to Maturity Investments
3- Trading Investments
11.1 and 11.4
4- Loans
5- Provision for Loans (-)
6- Financial Assets at Insurees’ Risk
7- Company’s Shares
8- Provision for Diminution in Value (-)
C- Receivables from Main Operations
2.8, 11.1 and 12.1
1- Due from Insurance Operations
12.1
2- Provision for Due from Insurance Operations (-)
3- Due from Reinsurance Operations
10 and 12.1
4- Provision for Due from Reinsurance Operations (-)
5- Premium Reserves
6- Loans to Insurees
7- Provision for Loans to Insurees (-)
8- Due from Private Pension Fund Operations
9- Doubtful Receivables from Main Operations
12
10- Provision for Doubtful Receivables from Main Operations (-)
12
D- Due from Related Parties
1- Due from Shareholders
2- Due from Associates
3- Due from Subsidiaries
45
4- D
ue from Joint-Ventures
5- Due from Personnel
6- Due from Other Related Parties
7- Rediscount on Due from Related Parties (-)
8- Doubtful Receivables from Related Parties
9- Provision for Doubtful Receivables from Related Parties (-)
E- Other Receivables
1- Leasing Receivables
2- Unearned Leasing Interest Income (-)
3- Deposits and Guarantees Given
4- O
ther Receivables
47.1
5- Rediscount on Other Receivables (-)
47.1
6- Other Doubtful Receivables
7- Provision for Other Doubtful Receivables (-)
F- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Accrued Interest and Rent Income
3- Income Accruals
4- Other Prepaid Expenses and Income Accruals
G- O
ther Current Assets
1- Prepaid Office Supplies
2- Prepaid Taxes and Funds
2.18 and 35
3- Deferred Tax Assets
4- Job Advances
5- Advances to Personnel
6- Count Shortages
7- Other Current Assets
47.1
8- Provision for Other Current Assets (-)
I- Total Current Assets
Restated (*)
Audited
31 December 2009
176.689.908
101.056
-
148.392.448
-
28.196.404
-
-
-
-
-
-
-
-
-
259.164.973
254.873.090
(3.814.760)
1.529.948
-
-
-
-
-
19.273.363
(12.696.668)
43.691
-
-
43.691
-
-
-
-
-
-
21.277.721
-
-
-
22.000.000
(722.279)
-
-
46.259.195
46.259.195
-
-
-
2.947.550
-
1.708.226
-
661.641
30.953
-
546.730
-
506.383.038
162.423.683
269.092
134.485.935
(50.099)
27.718.755
776.309
776.309
283.202.507
276.935.009
694.946
14.256.079
(8.683.527)
52.322
52.322
48.188.068
48.188.068
5.569.183
5.237
4.940.002
498.914
9.095
115.935
500.212.072
(*) Note 2.1.
The accompanying notes form an integral part of these unconsolidated financial statements.
51
ASSETS
Audited Note
31 December 2010
Restated (*)
Audited
31 December 2009
II- Non-Current Assets
A- Receivables from Operations
1- D
ue from Insurance Operations
12
2- Provision for Due from Insurance Operations (-)
12
3- Due from Reinsurance Operations
4- Provision for Due from Reinsurance Operations
5- Premium Reserves
6- Loans to Insurees
7- Provision for Loans to Insurees (-)
8- Due from Private Pension Fund Operations
9- Doubtful Receivables from Main Operations
10- Provision for Doubtful Receivables from Main Operations (-)
B- Due from Related Parties
1- D
ue from Shareholders
2- Due from Associates
3- Due from Subsidiaries
4- Due from Joint-Ventures
5- Due from Personnel
6- Due from Other Related Parties
7- Rediscount on Due from Related Parties (-)
8- Doubtful Receivables from Related Parties
9- Provision for Doubtful Receivables from Related Parties (-)
C- Other Receivables
1- Leasing Receivables
2- U
nearned Leasing Interest Income (-)
3- Deposits and Guarantees Given
4- Other Receivables
5- Rediscount on Other Receivables (-)
6- Other Doubtful Receivables
7- Provision for Other Doubtful Receivables (-)
D- Financial Assets
1- Investment Securities
11.4
2- Associates
9
3- Capital Commitments to Associates (-)
4- Subsidiaries
11
5- Capital Commitments to Subsidiaries (-)
6- Joint-Ventures
7- Capital Commitments to Joint-Ventures (-)
8- Financial Assets and Financial Investments at Insurees’ Risk
9- Other Financial Assets
10- Provision for Diminution in Value (-)
11.4
E- Tangible Assets
2.5 and 2.6
1- Investment Property
7
2- Provision for Diminution in Value of Investment Property (-)
3- P
roperty for Operational Use
6
4- Machinery and Equipment
6
5- Furniture and Fixtures
6
6- Motor Vehicles
6
7- Other Tangible Assets (Leasehold Improvements incl.)
6
8- Leased Assets
6
9- Accumulated Depreciation (-)
6
10- Advances Given for Tangible Assets (Construction in Progress incl.)
F- Intangible Assets
8
1- Rights
2.7 and 8
2- G
oodwill
-
3- Start-up Costs
4- Research and Development Expenses
5- Other Intangible Assets
8
6- Accumulated Amortization (-)
8
7- Advances Given for Intangible Assets
G- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Income Accruals
3- Other Prepaid Expenses and Income Accruals
H- Other Non-Current Assets
1- Effective Foreign Currency Accounts
2- Foreign currency Accounts
3- Prepaid Office Supplies
4- Prepaid Taxes and Funds
5- Deferred Tax Assets
6- Other Non-Current Assets
7- Other Non-Current Assets Depreciation (-)
8- Provision for Diminution in Value of Other Non-Current Assets
II- Total Non-Current Assets
-
24.738.601
(24.738.601)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
125.352.152
60.278.842
88.716.010
-
-
-
-
-
-
-
(23.642.700)
147.001.190
64.802.403
-
77.145.000
8.393.076
5.124.720
617.692
1.993.549
259.500
(11.334.750)
-
3.990.511
1.421.583
-
-
3.705.629
(1.136.701)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
276.343.853
16.110.217
(16.110.217)
96.469.809
50.550.815
70.300.000
(24.381.006)
136.548.955
58.024.279
74.835.216
8.581.208
4.150.344
644.877
1.091.537
254.750
(11.033.256)
3.449.581
1.316.309
Total Assets (I+II)
782.726.891
736.680.417
(*) Note 2.1.
52
2.895.435
(762.163)
236.468.345
LIABILITIES
Audited Note
31 December 2010
III- Current Liabilities
A- Financial Liabilities
1- D
ue to Credit Institutions
2- Leasing Payables
3- Deferred Leasing Costs (-)
4- Short Term Installments of Long Term Borrowings
5- Issued Debt Securities
6- Other Issued Debt Securities
7- Value Differences of Other Issued Debt Securities (-)
8- Other Financial Payables (Liabilities)
B- Payables from Main Operations
4, 10 and 19
1- Payables from Insurance Operations
4, 10 and 19
2- Payables from Reinsurance Operations
3- Premium Deposits
4- Payables from Private Pension Operations
5- Payables from Other Operations
6- Rediscount on Payables from Other Operations (-)
C-Due to Related Parties
1- Due to Shareholders
45
2- Due to Associates
3- Due to Subsidiaries
4- Due to Joint-Ventures
5- Due to Personnel
6- D
ue to Other Related Parties
D- Other Payables
1- Deposits and Guarantees Received
2- Other Payables
19 and 47.1
3- Rediscount on Other Payables (-)
E-Insurance Technical Provisions
2.24, 4 and 17
1- Unearned Premium Reserve - Net
2.24, 4 and 17
2- Unexpired Risks Reserve - Net
2.24, 4 and 17
3- Life Mathematical Reserve - Net
4- Outstanding Claim Provision - Net
2.24, 4 and 17
5- Bonus and Rebate Provision - Net
6- Provision for Life Policies at Insuree’s Risk - Net
7- Other Technical Reserves - Net
F- Taxes and Other Fiscal Liabilities
1- Taxes and Funds Payable
2- Social Security Withholdings Payable
3- Overdue, Deferred or Restructured Taxes and
Other Fiscal Liabilities
4- Other Taxes and Fiscal Liabilities
5- Corporate Tax Provision and Other Fiscal Liabilities
6- Prepaid Corporate Tax and Other Fiscal Liabilities (-)
7- Other Taxes and Fiscal Liabilities Provision
G- P
rovisions for Other Risks
1- Provision for Employment Termination Benefits
2- Provision for Social Aid Fund Asset Shortage
3- Provision for Expense Accruals
H- Deferred Income and Expense Accruals
1- Deferred Income
2- Expenses Accruals
3- Other Deferred Income and Expense Accruals
I- Other Current Liabilities
47.1
1- Deferred Tax Liabilities
2- Count Overages
3- Other Current Liabilities
47.1
III-Total Current Liabilities
Restated (*)
Audited
31 December 2009
-
-
-
-
-
-
-
-
-
64.781.008
64.781.008
-
-
-
-
-
52.975
1.409
-
-
-
51.566
-
8.305.333
1.119.621
7.185.712
-
411.956.352
214.591.040
14.386.220
-
182.979.092
-
-
-
11.642.880
10.773.152
869.728
65.360.492
65.360.492
20.700
1.444
19.256
4.743.261
983.180
3.760.081
365.655.195
220.262.646
2.834.079
142.558.470
11.587.106
10.814.517
772.589
-
-
-
-
-
-
-
-
-
30.414.982
30.414.982
-
-
1.879.073
-
-
1.879.073
529.032.603
32.868.025
32.868.025
1.637.918
1.637.918
481.872.697
(*) Note 2.1.
53
LIABILITIES
Audited Note
31 December 2010
IV-Non-Current Liabilities
A-Financial Liabilities
1- Due to Credit Institutions
2- Leasing Payables
3- Deferred Leasing Costs (-)
4- Issued Debt Securities
5- Other Issued Debt Securities
6- Value Differences of Other Issued Debt Securities (-)
7- Other Financial Payables (Liabilities)
B- Payables from Operations
1- Payables from Insurance Operations
2- P
ayables from Reinsurance Operations
3- Premium Deposits
4- Payables from Private Pension Operations
5- Payables from Other Operations
6- Rediscount on Payables from Other Operations (-)
C- Due to Related Parties
1- Due to Shareholders
2- Due to Subsidiaries
3- Due to Equity Investments
4- Due to Joint-Ventures
5- D
ue to Personnel
6- Due to Other Related Parties
D- Other Payables
-
1- Deposits and Guarantees Received
2- Other Payables
3- Rediscount on Other Payables
E- Insurance Technical Provisions
2.24, 4, 17.15 - 17.19 and 47.1
1- Unearned Premium Reserve - Net
2- Unexpired Risks Reserve - Net
3- Life Mathematical Reserve - Net
4- O
utstanding Claim Provision - Net
5- Bonus and Rebate Provision - Net
6-Provision for Life Policies at Insuree’s Risk - Net
7- Other Technical Reserves - Net
2.24, 4, 17.15 - 17.19 and 47.1
F-Other Liabilities and Related Provisions
1- Other Payables 2- Overdue, Deferred or Restructured Taxes and Other Fiscal Liabilities
3-Other Payables and Expense Accruals
G- Provisions for Other Risks
22
1- P
rovision for Employment Termination Benefits
2.19 and 22
2- Provision for Social Aid Fund Asset Shortage
H-Deferred Income and Expense Accruals
1- Deferred Income
2- Expenses Accruals
3- Other Deferred Income and Expense Accruals
I- Other Non-Current Liabilities
1- Deferred Tax Liabilities
2.18 and 21
2- Other Non-Current Liabilities
IV- T
otal Non-Current Liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5.863.901
-
-
-
-
-
-
5.863.901
-
-
-
-
5.404.037
5.404.037
-
-
-
-
-
109.793
109.793
-
11.377.731
(*) N
ote 2.1.
54
Restated (*)
Audited
31 December 2009
4.036.984
4.036.984
4.974.510
4.974.510
9.208.836
9.208.836
18.220.330
SHAREHOLDERS’ EQUITY
Audited Note
31 December 2010
Restated (*)
Audited
31 December 2009
V- Shareholders’ Equity
A- Share Capital
2.13 and 15
1- Nominal Capital
2.13 and 15
2- Unpaid Capital (-)
3- Adjustments to Share Capital
4- Adjustments to Share Capital (-)
B- Capital Reserves
15
1- Share Premium
2- Profit from Stock Abrogation
3- Sales Profits to be Added to the Capital
4- F
oreign Currency Translation Differences
5- Other Capital Reserves
15
C- Profit Reserves
1- Legal Reserves
15
2- Statutory Reserves
3- Extraordinary Reserves
4- Special Funds (Reserves)
5- Valuation of Financial Assets
15
6- Other Profit Reserves
D- Retained Earnings2.1
1- Retained Earnings
E-Accumulated Deficit (-)
2.1
1- Previous Years’ Losses
F-Net Profit for the Period
37
1- Net Profit for the Period
2- Net Loss for the Period (-)
2.1
3- Profit not Subject to Distribution
15
V- Total Shareholders’ Equity
150.000.000
150.000.000
-
-
-
25.893.004
-
-
-
-
25.893.004
101.351.353
4.949.441
-
-
-
77.344.031
19.057.881
-
-
(2.482.357)
(2.482.357)
(32.445.443)
-
(39.945.443)
7.500.000
242.316.557
150.000.000
150.000.000
22.570.074
22.570.074
67.276.447
4.949.441
43.269.125
19.057.881
11.878.989
11.878.989
(15.138.120)
(15.138.120)
236.587.390
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (III+IV+V)
782.726.891
736.680.417
Commitments, contingent assets and contingent liabilities
(*) Note 2.1
55
CONVENIENCE TRANSLATION OF THE UNCONSOLIDATED STATEMENTS OF
INCOME FOR THE PERIODS 1 JANUARY – 31 DECEMBER 2010 AND 2009
I- TECHNICAL PART
Audited 01.01.2010 -
Note
31. 12. 2010
Restated (*)
Audited
01.01.2009 31. 12. 2009
A- Non-Life Technical Income
460.481.967
1- Earned Premiums – (Net of Reinsurer’s Share)
2.21
409.728.070
1.1- Written Premiums – (Net of Reinsurer’s Share)
2.21
415.608.605
1.1.1- Gross Written Premium (+)
2.21
737.368.263
1.1.2 - Reinsurer’s Share of Gross Written Premium (-)
10 and 24
(321.759.658)
1.2- Change in Unearned Premiums Reserve
(Net of Reinsurer’s Share and Reserves Carried Forward) (+/-)
5.671.606
1.2.1- U
nearned Premiums Reserve (-)
17.15 - 17.19
8.483.598
1.2.2- R
einsurer’s Share of Unearned Premiums Reserve (+)
10 and 17.15-17.19
(2.811.992)
1.3- Change in Unexpired Risks Reserve
47.5
(11.552.141)
1.3.1- Unexpired Risks Reserve (-)
47.5
(11.552.141)
1.3.2- Reinsurer’s Share of Unexpired Risks Reserve (+)
-
2- Investment Income Transferred from Non-Technical Part
43.165.138
3- O
ther Technical Income - (Net of Reinsurer’s Share)
-
3.1- Other Gross Technical Income (+)
-
3.2- Reinsurer’s Share of Other Gross Technical Income (-)
-
4-Salvage and subrogation gain accruals (+)
7.588.759
B- N
on-Life Technical Expense (-)
(469.034.694)
1- Incurred Losses - (Net of Reinsurer’s Share)
(341.800.748)
1.1- Paid Claims – (Net of Reinsurer’s Share)
(310.621.583)
1.1.1- Gross Paid Claims (-)
(439.169.040)
1.1.2- R
einsurer’s Share of Gross Paid Claims (+)
10
128.547.457
1.2- Change in Outstanding Claims
(Net of Reinsurer’s Share and Returned Reserve) (+/-)
(31.179.165)
1.2.1- O
utstanding Claims Provision (-)
(84.857.606) 1.2.2- Reinsurer’s Share of Outstanding Claims Provision (+)
10
53.678.441
2- Change in Bonus and Rebate Provision
-
2.1- Bonus and Rebate Provision (-)
-
2.2- Reinsurer’s Share of Bonus and Rebate Provisions (+)
-
3- Change in Other Technical Reserves
17.15 - 17.19 and 47.5
(1.826.917)
4- Operating Expenses (-)
31 and 32
(125.407.029)
C- N
et Technical Income- Non-Life (A - B)
(8.552.727)
D- Life Technical Income
-
1- E
arned Premiums – (Net of Reinsurer’s Share)
-
1.1- Written Premiums – (Net of Reinsurer’s Share)
-
1.2- Change in Unearned Premiums Reserve
(Net of Reinsurer’s Share and Returned Reserve) (+/-) -
1.3- Change in Unexpired Risks Reserve
-
-
2- L
ife Investment Income
-
3- Unrealized Investment Income
-
4- O
ther Technical Income - (Net of Reinsurer’s Share)
-
E- Life Technical Expense
-
1- Incurred Losses - (Net of Reinsurer’s Share)
-
1.1- P
aid Claims (Net of Reinsurer’s Share) -
1.1.1- G
ross Paid Claims (-)
-
1.1.2- R
einsurer’s Share of Gross Paid Claims (+)
-
1.2- Change in Outstanding Claims
-
-
1.2.1- Outstanding Claim Provisions (-)
-
1.2.2- R
einsurer’s Share of Outstanding Claim Provisions (+)
-
2- C
hange in Bonus and Rebate Provision
-
-
2.1- B
onus and Rebate Provisions (-)
-
2.2- Reinsurer’s Share of Bonus and Rebate Provisions (+)
-
3- Change in Life Mathematical Reserves
(Net of Reinsurer’s Share and Returned Reserve) (+/-) -
3.1- L
ife Mathematical Reserves (-)
-
3.2- Reinsurer’s Share of Life Mathematical Reserves (+)
-
4- C
hange in Provision for Policies at Life Insurees’ Risk
-
4.1- Provision for Life Policies at Insuree’s Risk (-) -
4.2- R
einsurer’s Share of Provision for Life Policies at Insuree’s Risk (+)
-
5- Change in Other Technical Reserves
-
-
7- Investment Expenses (-)
-
8- Unrealized Investment Expense (-)
-
9- Investment Income Transferred to Non-Life Technical Part (-)
-
F- Net Technical Income- Non-Life (D -E)
-
G- Pension Funds Technical Income
-
1- F
und Management Income
-
2- Management Expense Charge
-
3- E
ntrance Fee Income
-
4- Management Expense Charge in case of Suspension
-
5- Special Service Expense Charge
-
6- C
apital Allowance Value Increase Income
-
7- Other Technical Income
-
H-Pension Funds Technical Expense
-
1- Fund Management Expense (-) -
2- C
apital Allowance Value Decrease Expense (-)
-
-
4- Other Technical Expenses (-)
-
I- N
et Technical Income - Pension Funds (G - H)
-
400.855.751
371.506.152
395.016.708
727.022.010
(332.005.302)
(*)Note 2.1
56
(22.944.791)
(57.559.584)
34.614.793
(565.765)
(565.765)
20.180.589
9.169.010
(408.940.478)
(305.499.884)
(295.768.040)
(438.878.201)
143.110.161
(9.731.844)
(46.641.348)
36.909.504
(2.202.423)
(101.238.171)
(8.084.727)
72.658
54.700
52.951
1.749
17.958
(19.022)
(3.144.429)
(3.909.101)
(3.909.101)
764.672
764.672
3.146.785
3.146.785
(21.378)
53.636
-
II- NON-TECHNIC PART
Audited 01.01.2010 -
Note
31. 12. 2010
C- N
et Technical Income-Non-Life (A-B)
F- Net Technical Income-Life (D-E)
I-N
et Technical Income-Pension Funds (G-H)
J- T
otal Net Technical Income (C+F+I)
K- Investment Income
1- Income from Financial Investments
2- Income from Sales of Financial Investments
3- Valuation of Financial Investments
4- Foreign Exchange Gains
36
5- Income from Associates
26 and 45
6- Income from Equity Subsidiaries and Joint-Ventures
7- Income from Land and Buildings
8- Income from Derivatives
9- O
ther Investments
10- Investment Income Transferred from Life Technical Part
L- Investment Expense (-)
1- Investment Management Expenses (Interest incl.) (-)
2- Diminution in Value of Investments (-)
3- Loss from Realization of Financial Investments (-)
6- F
oreign Exchange Losses (-)
36
7- D
epreciation Expenses (-)
6
8- O
ther Investment Expenses (-)
M- Income and Expenses from Other Operations and
Extraordinary Operations (+/-)
1- P
rovisions (+/-)
2- Rediscounts (+/-)
47.5
3- S
pecial Insurance Account (+/-)
4- Inflation Adjustment (+/-)
5- Deferred Tax Assets (+/-)
21, 35 and 47.5
6- D
eferred Tax Liabilities Expenses (-)
7- Other Income
8- Other Expenses (-)
9- Prior Year’s Income
10- Prior Year’s Expenses (-)
N- Net Profit/(Loss) for the Period
37
1- Profit/(Loss) for the Period
2- Corporate Tax Provision and Other Fiscal Liabilities (-)
3- Net Profit/(Loss) for the Period
4- Inflation Adjustment
Restated (*)
Audited
01.01.2009 31. 12. 2009
(8.552.727)
-
-
(8.552.727)
50.465.615
11.513.463
-
-
-
6.589.127
-
32.344.858
-
18.167
-
(54.165.267)
(4.153.525)
(365.974)
-
(43.165.138)
-
(268.767)
(4.136.983)
(2.074.880)
(8.084.727)
53.636
(8.031.091)
22.968.036
21.029.286
154.581
1.237.351
539.991
6.827
(25.064.398)
(3.075.158)
(20.180.589)
(4.023.523)
2.214.872
(20.193.064) (27.173.883) 208.717
-
-
5.103.186
-
1.899.574
(230.658)
-
-
(32.445.443) (32.445.443) -
(32.445.443) -
(5.010.667)
(8.998.888)
2.074.657
164.930
2.246.926
(498.292)
(15.138.120)
(15.138.120)
(15.138.120)
-
(*) Note 2.1.
57
Note
Audited 01.01.2010 -
31. 12. 2010
A. CASH GENERATED FROM MAIN OPERATIONS
1. Cash inflows from insurance operations
691.684.672
2. Cash inflows from reinsurance operations
-
3. Cash inflows from private pension operations
-
4. Cash outflows from insurance operations (-)
(439.169.040)
5. Cash outflows from reinsurance operations (-)
(134.720.863)
6. Cash outflows from private pension operations (-)
-
7. Net Cash from main operations (A1+A2+A3-A4-A5-A6)
117.794.769
8. Interest payments (-)
-
9. Income tax payments (-)
-
10. Other cash inflows
-
11. Other cash outflows (-)
(129.293.790)
12. Net cash used in main operations (11.499.021)
B. CASH FLOWS FROM INVESTING OPERATIONS
1. Sales of tangible assets
2.888.240
2. Tangible assets purchases (-)
(3.357.789)
3. Financial assets purchases (-)
-
4. Sales of financial assets
-
5. Interest received
18.579.794
6. Dividends received
6.589.127
-
-
9. Net cash from investing activities 24.699.372
C. CASH FLOWS FROM FINANCING OPERATIONS
1. Issue of shares
-
2. Cash flows from the borrowings
-
3. Leasing payments (-)
-
4. Dividends paid (-)
-
-
-
7. Net cash generated from financing operations
-
D. EFFECT OF EXCHANGE DIFFERENCES ON
CASH AND CASH EQUIVALENTS
(268.766)
E. Net increase in cash and cash equivalents
12.931.585
F. Cash and cash equivalents at the beginning of the period
75.914.415
G. Cash and cash equivalents at the end of the period (E+F)
2.12
88.846.000
58
Audited
01.01.2009 31. 12. 2009
669.826.800
(447.053.743)
(114.783.714)
107.989.343
(113.517.055)
(5.527.712)
13.786
(5.504.053)
22.619.386
429.901
701.400
18.260.420
154.581
12.887.289
63.027.126
75.914.415
59
-
-
77.344.031
4.949.441
-
-
42.228.917 10.881.726
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(15.138.120)
-
(10.881.726)
-
-
-
-
1.671.984
-
-
-
-
-
(32.445.443) -
15.138.120
-
-
-
44.950.885 (32.445.443) -
3.944.350
-
155.354
-
-
-
(776.774)
-
-
-
41.627.955 (15.138.120)
(45.526)
41.673.481 (16.810.104)
41.627.955 (15.138.120)
-
-
-
150.244
-
-
-
(751.206)
-
-
-
-
42.228.917 10.881.726 246.057
-
-
Other
Reserves and
Retained
the Period (**)
(2.482.357)
-
-
-
-
-
-
-
(14.361.346)
-
-
-
11.878.989
35.775.670
(23.896.681)
11.878.989
-
-
-
-
-
-
-
11.632.932
-
-
-
-
244.320.582
35.024.464
(34.778.407)
Net
Profit/
(Loss) for
Deficit)
242.316.557
38.856.807
(682.197)
(32.445.443)
-
-
236.587.390
37.402.128
199.185.262
236.587.390
7.254.684
150.244
(15.138.120)
-
-
35.024.464
209.296.118
Retained
Earnings/
(Accumulated
Total
(*) Detailed explanations for the shareholders’ equity items are disclosed in Note 15
(**) In accordance with the regulation of the Treasury dated 27 October 2008, numbered 2008/41, the Company classified TL7.500.000 which consists of 75% of investment sales income, amounting to TL 10.000.000, generated from the sales of the investment property, the land in Çengelköy realised
in 2010 and calculated using the book values as determined by Tax Procedural Law, in “Profit not Subject to Distribution” included in “Net Profit for the Period” account group under shareholders’ equity whereas total investment sales income is recognised in the statement of income (Note 15).
-
IV- Balances at the period end (31/12/2010)
(III + A+B+C+D+E+F+G+H+I+J)
150.000.000
-
-
-
-
-
-
-
-
4.949.441
-
-
-
-
-
-
-
-
43.269.125
-
-
-
-
-
-
4.949.441
4.949.441
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.949.441
-
150.000.000
III- New Balance (I + II) (31/12/2009)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.949.441
-
-
A- Capital Increase (A1 + A2)
-
-
-
-
1- Cash
-
-
-
-
2- From internal resources
-
-
-
-
B- Treasury shares
C- Gain and losses not recognised
in the income statement
-
-
-
-
D- Value Increase in the Assets
-
-
34.912.457
-
E- Foreign currency translation differences
-
-
-
-
F- Other income and losses
-
-
(837.551)
-
G- Inflation adjustments
-
-
-
-
H- Net profit for the period (-) (Note 37)
-
-
-
-
I- Dividends paid
-
-
-
-
J- Transfers
-
-
-
-
-
43.269.125
43.269.125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7.254.684
-
-
-
-
-
-
-
-
-
-
-
-
36.014.441
Foreign
Currency
Translation
Legal
Statutory
Differences
Reserves
Reserves Profit
Unconsolidated Statements of Changes in Shareholders’ Equity - Audited (*)
Inflation
Adjustment
to the Share
Capital
-
150.000.000
II- Changes in the Accounting
Policy (Note 2.1 )
150.000.000
IV- Balances at the period end (31/12/2009)
(III + A+B+C+D+E+F+G+H+I+J)
Balances at the prior
period end (31/12/2009)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
I-
-
-
-
-
-
-
-
-
A- Capital increase (A1 + A2)
1- Cash
2- From internal resources
B- Treasury shares
C- Gain and losses not recognised
in the income statement
D- Value increase in the assets
E- Foreign currency translation differences
F- Other income and losses
G- Inflation adjustments
H- Net Loss fort he Period (-) (Note 37)
I- Dividends paid
J- Transfers
-
36.014.441
-
-
-
III- New Balance (I + II) (31/12/2008)150.000.000
150.000.000
Balances at the Prior
Period End (31/12/2008)
II- Changes in the Accounting
Policy (Note 2.1 )
I-
Own Shares
Valuation
of the
Increase
Capital
Company(-)
in Assets
CONVENIENCE TRANSLATION OF THE UNCONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY FOR THE PERIODS 1 JANUARY - 31 DECEMBER 2010 AND 2009
CONVENIENCE TRANSLATION OF THE NOTES TO THE UNCONSOLIDATED
FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2010
1. General information
1.1 Name of the parent company: As of 31 December 2010 and 2009 the main shareholders of Gunes Sigorta
(“The Company”) are Turkiye Vakıflar Bankası T.A.O. (“Vakıflar Bankası”) and Groupama S.A (Note 2.13).
1.2 Legal residence of the Company, its legal structure, the country of incorporation and the address of its
registered office: The company was estabhlished at 1957 and registered in Istanbul-Turkey. It’s headquarters are located in “Güneş Plaza Büyükdere Cad. No: 110 Esentepe Şişli 34394 İstanbul”. Apart from the
headquarters, the Company has regional head offices in İstanbul-Merkez, İstanbul-Kadıköy, İstanbul-Batı,
Orta Anadolu, Ege, Güney Anadolu, Karadeniz, Akdeniz, Marmara, Trakya, Doğu Anadolu, Kuzey Kıbrıs Türk
Cumhuriyeti representative offices in Denizli, Gaziantep, Kayseri, Kocaeli, Konya, Samsun ve Eskişehir.
1.3 Nature of operations: The Company operates in motor and other accident, fire, marine, engineering, health,
agriculture, legal liability and credit insurance branches.
1.4 Explanation of the activities and characteristics of main operations of the corporation: Disclosed in Notes
1.2 and 1.3
1.5 Average number of employees during the period by category:
31 December 2010
31 December 2009
Top and middle management
190
186
Other Personnel
609
608
Total
799
794
1.6 Total salaries and benefits paid to the chairman and members of the board of directors, general manager, general coordinator, assistant general managers and other executive management during the current period: TL 2.749.079 (1 January - 31 December 2009:
TL 2.235.467).
1.7 Criteria set for the allocation of investment income and operating expenses (personnel, management,
research and development, marketing and sales, outsourcing utilities and services and other operating expenses) in the financial statements: All the income that is generated by the Company investment of assets
backing non-life technical provisions, is transferred from non-technical to technical part. Other investment
income is classified under non-technical part. The Company allocates general expenses transferred to technical part to branches based on the weighted average of the number of policies, amount of premium and
number of claim notifications in last three years.
1.8 Whether financial statements include only one firm or group of firms: The unconsolidated financial statements include one company (Güneş Sigorta A.Ş.). The consolidated financial statements will also be published separately, in accordance with “The Communiqué on the Preparation of the Consolidated Financial
Statement of Insurance and Reinsurance Companies and Pension Companies” dated 31 December 2008 and
numbered 27097.
1.9 Name and other identification information of the reporting firm and changes in this information since the
previous balance sheet date: Name and other identification information of the Company are disclosed in
Notes 1.1, 1.2, and 1.3 and there have been no changes in this information after the prior balance sheet date.
1.10Events occurred after the balance sheet date: The unconsolidated financial statements for the year ended
31 December 2010 are authorized by Board of Directors on 11 March 2011. Events occurred after the balance
sheet date are explained in Note 46.
60
2. Summary of significant accounting policies
2.1 Basis of preparation
In accordance with the Capital Market Law part (VII.) article (a) of clause 50, insurance companies are subject to
their specific legislation in respect of establishment, audit, supervision, accounting, financial statements and financial reporting standards. The Company prepares its unconsolidated financial statements in accordance with
the Insurance Law numbered 5684 and the regulations issued for insurance and reinsurance companies by the
Undersecretariat of Treasury (the “Treasury”).
The financial statements are prepared in accordance with the Insurance Chart of Accounts included in the communiqué issued by the Treasury regarding the Insurance Chart of Accounts and Prospects, published in the Official
Gazette (No:25686) dated 30 December 2004 (Insurance Accounting System Communiqué No.1). Content and the
format of the financial statements prepared and explanations and notes thereof are determined in accordance with
the Communiqué on Presentation of Financial Statements published in the Official Gazette numbered 26851 dated
18 April 2008.
According to the “Regulation on Financial Reporting of Insurance and Reinsurance Companies and Pension Companies” issued on 14 July 2007 and effective from 1 January 2008, except for the communiqués which may be
issued by the Treasury, operations of insurance companies shall be accounted for in accordance with the Turkish
Accounting Standards (“TMS”) and the Turkish Financial Reporting Standards (“TFRS”) as issued by the Turkish
Accounting Standards Board (“TMSK”) and other regulations, communiqués and explanations issued by the Treasury regarding accounting and financial reporting issues. With reference to the notice of the Treasury No. 9 dated
18 February 2008, “TMS 1- Financial Statements and Presentation”, “TMS 27- Consolidated and Non-consolidated
Financial Statements”, “TFRS 1- Transition to TFRS” and “TFRS 4- Insurance Contracts” have been scoped out
of this application. In addition, starting from 31 March 2009, insurance companies are obliged to comply with the
Communiqué on the Preparation of the Consolidated Financial Statements of Insurance, Reinsurance and Pension
Companies published in Official Gazette dated 31 December 2008 and numbered 27097. Accordingly, the Company
will also publish its consolidated financial statements separately.
Unconsolidated financial statements were prepared on a TL and historical cost basis, being adjusted for inflation
until 31 December 2004, other than the financial assets, property for operational use and investment property
which are measured based on their fair values.
It was announced with the article of the Treasury numbered 19387, dated 4 April 2005, insurance companies are
required to restate their financial statements as of 31 December 2004 in accordance with “Financial Reporting
in Hyperinflationary Economies” included in the regulations of Capital Markets Board (‘‘CMB’’) Communiqué XI
No.25 (which came into force as published in the Official Gazette No:25290 dated 15 January 2003). In line with the
decree of CMB dated 17 March 2005, the Treasury also announced that inflation accounting is not required effective from 1 January 2005. Based on the above mentioned notification of the Treasury, the Company has restated its
financial statements as of 31 December 2004 in accordance with the regulations regarding “Financial Reporting in
Hyperinflationary Economies” and not continued to apply standard No. 29 “Financial Reporting in Hyperinflationary Economies” issued by TMSK.
The Company accounts and recognizes its insurance technical provisions in its financial statements in accordance
with the “Regulation Regarding the Technical Reserves of Insurance, Reinsurance and Pension Companies and
the Assets to which These Reserves Are Invested,” (“Regulation on Technical Reserves”) dated 28 July 2010 and
published in official gazette numbered 27655 effective from 30 September 2010 and the regulations issued for insurance and reinsurance companies by the Treasury. As such changes regarding technical provisions have been
applied for the first time in financial statements prepared as of 30 September 2010, the effects of such changes
have been recognized in the financial statements as of 31 December 2010 (Note 2.24).
61
2.1 Basis of preparation (Continued)
The Company restated its balance sheets as of 31 December 2009 and 2008 and the income statement for the
period 1 January - 31 December 2009 due to change in the accounting policy related to investment properties
and other adjustments made in the previous year financial statements in accordance with “TMS 8 - Accounting
policies, changes in accounting estimates and errors” as explained below:
31 December 2009
31 December 2008
Reported Equity
199.185.262
209.296.118
Investment properties (1)
Deferred tax effect of adjustments
made on investment properties (2)
Deferred tax related to financial assets (3)
Cancellation of deferral of assistance premiums (4)
Other
39.223.035
35.584.647
(1.961.152)
1.219.049
(1.062.130)
(16.674)
(1.779.232)
1.219.049
-
Net effect of adjustments
37.402.128
35.024.464
236.587.390
244.320.582
1 January 31 December 2009
Reported net loss for the period (-)
(16.810.104)
Increase in value of investment properties (1)
Tax effect of increase in value of investment properties (2)
Cancellation of deferral of assistance premiums (4)
Depreciation expense adjustment (5)
Other
3.638.388
(181.920)
(1.062.130)
(592.132)
(130.222)
Restated net loss for the period (-)
(15.138.120)
Restated equity
(1) Investment properties have been measured at their fair values in accordance with TMS 40 (Note 2.6).
(2)Deferred tax liability arising from measurement of investment properties at fair value has been accounted
for.
(3)Deferred tax related to impairment of financial assets has been calculated and accounted for.
(4) Deferral of the payments made to the assistance companies as of 31 December 2009 has been cancelled.
(5)Depreciation expense over revalued amounts of the related fixed assets and consequent adjustments and
reclassifications have been accounted for.
Where necessary, comparative figures have been reclassified to conform to the presentation of the current year
unconsolidated financial statements.
Accounting policies and measurement principles that are used in the preparation of the financial statements are
explained in the notes from 2.4 to 2.24 below.
62
2.1 Basis of preparation (Continued)
Changes in Turkish Financial Reporting Standards:
Changes and interpretations in TMS/TFRS those are effective for the periods and the year starting from 1 January 2010 and not relevant for the financial statements of the Company:
• TFRS 3 (revised), “Business combinations” (Effective for annual periods starting on or after 1 July 2009),
• TMS 27 (revised), “Consolidated and separate financial statements”, (Effective for annual periods starting on
or after 1 July 2009),
• TFRYK 17, “Distribution of non-cash assets to owners” (Effective for annual periods starting on or after 1 July
2009),
• TFRYK 18, “Transfers of assets from customers”, (Effective for annual periods starting on or after 1 July
2009),
• TFRYK 9, “Reassessment of embedded derivatives” (Effective for annual periods starting on or after 1 July
2009),
• TFRYK 16, “Hedges of a net investment in a foreign operation” (Effective for annual periods starting on or
after 1 July 2009),
• TMS 38 (amendment), “Intangible assets”, (Effective for annual periods starting on or after 1 January 2010),
• TMS 1 (amendment), “Presentation of financial statements” (Effective for annual periods starting on or after
1 January 2010),
• TMS 36 (amendment), “Impairment of assets”, (Effective for annual periods starting on or after 1 January
2010),
• TFRS 2 (amendment), “Group cash-settled share-based payment transactions” (Effective for annual periods
starting on or after 1 January 2010),
• TFRS 5 (amendment), “Non-current assets held for sale and discontinued operations” (Effective for annual
periods starting on or after 1 January 2010).
Changes and interpretations in the standards that are not yet effective and have not been adopted early by the
Company:
• TFRS 9 “Financial instruments”, (Effective for annual periods starting on or after 1 January 2013), This standard is the first step in the process to replace TMS 39 “Financial instruments: recognition and measurement”.
UFRS 9, introduces new requirements for classifying and measuring financial assets and is likely to affect the
Company’s accounting for its financial assets,
• TMS 24 (revised), “Related party disclosures”, (Effective for annual periods starting on or after 1 January
2011) clarifies and simplifies the definition of a related party. When the revised standard is applied, the group
and the parent will need to disclose any transactions between its subsidiaries and its associates,
• TMS 32 (amendment), “Classification of rights issues”, (Effective for annual periods starting on or after 1 February 2010), The amendment addresses the accounting for rights issues that are denominated in a currency
other than the functional currency of the issuer,
• TFRYK19, “Extinguishing financial liabilities with equity instruments”, (Effective for annual periods starting
on or after 1 July 2010),
• TFRYK 14 (amendment), “The limit on a defined benefit asset, minimum fun ing requirements and their interaction”, (Effective for annual periods starting on or after 1 January 2011).
The Company management expects that the above standards and interpretations will not have any significant
impact on the Company’s financial statements in the future periods.
63
2.2 Consolidation
“The Communiqué on Preparation of the Consolidated Financial Statements of Insurance and Reinsurance Companies and Pension Companies” was published in the Official Gazette numbered 27097 and dated 31 December
2008. Based on this communiqué, the insurance companies are required to consolidate the financial statements
of its subsidiaries starting from 31 March 2009. Therefore, the Company will also publish its consolidated financial statements separately.
2.3 Segment Reporting
Operating segments are settled compatible with the segmentation in internal reports. Details related to the segment reporting are disclosed in the Note 5.
2.4 Foreign Currency Translation
The functional currency of the Company is TL. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at the period end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale
are analysed between translation differences resulting from changes in the amortised cost of the security and
other changes in the carrying amount of the security. Translation differences related to changes in amortised
cost are recognised in profit or loss, and other changes in carrying amount are recognised in equity.
Foreign exchange differences arising from the translation of non monetary financial assets and liabilities are
considered as part of the fair value changes and those differences are accounted for in the accounts in which the
fair value changes are accounted for.
2.5 Property, Plant and Equipment
All property and equipment except for buildings for operational use are carried at cost less accumulated depreciation. Buildings for operational use are carried at their revalued amount on the basis of a valuation made by an
independent valuation expert less subsequent depreciation for buildings. Any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the asset, and the net carrying amount is
restated to the revalued amount.
Increases in the carrying amounts arising on revaluation of land and buildings, net of tax effects, are credited to
“Other Capital Reserves” under shareholders’ equity. Any subsequent decrease in value offsetting previous increases in the carrying value of the same asset is charged against the funds in the equity; and all other decreases
are charged to the income statement. At each accounting period, the difference between depreciation based on
the revalued carrying amount of the asset (charged to the income statement) and the depreciation based on the
asset’s original cost is transferred from “Other Capital reserves” to retained earnings.
Depreciation on tangible assets is calculated using straight-line method to allocate their cost or revalued amounts
over their estimated useful lives. The depreciation periods estimated considering useful lives of tangible assets
are as follows:
Property for operational Use (Buildings)
Furniture and fixture
Motor vehicles
Leasehold improvements
50 years
5 years
4-5 years
3-5 years
If there are indicators of impairment on tangible assets (except for buildings), a review is made in order to
determine possible impairment and as a result of the review, if an asset’s carrying amount is greater than its
estimated recoverable amount, the asset’s carrying amount is written down immediately to its recoverable
amount by accounting for a provision for impairment. Gains and losses on disposals of property and equipment
are included in the other investment expenses account.When revalued assets are sold, the amounts included in
“Other Capital Reserves” are transferred to the retained earnings (Note 6).
Disclosures related with share capital are included in Note 15.
64
2.6 Investment Properties
The company has changed accounting policy about investment properties as of 1 January 2010 and has revalued related properties. The buildings held to earn rental income or for capital appreciation or both,
rather than for use in the main operations or for administrative purposes; or sale in the ordinary course of
business are classified as investment property. Investment properties are carried at their fair value on the
basis of a valuation made by an independent valuation expert. Changes in fair values of investment properties are recognised in the income statement under investment income. Accounting policy change related
to the investment properties which were carried at cost in the unconsolidated financial statements before
1 January 2010 has been applied retrospectively (Notes 2.1 and 7).
2.7 Intangible Assets
Intangible assets consist of the information systems and software acquired or generated by the Company. Intangible assets are recognised at acquisition cost and amortised by the straight-line method over their estimated
useful lives after their acquisition date. If impairment exists, carrying amounts of the intangible assets are written down immediately to their recoverable amounts. The amortisation periods of intangible assets vary between
3 to 5 years (Note 8).
2.8 Financial Assets
The Company classifies and accounts for its financial assets as “Loans and receivables (Receivables from main
operations)” and “Available-for-sale financial assets”. Receivables from main operations are the receivables
arising from insurance agreements and they are classified as financial assets in the financial statements.
Purchases and sales of the financial assets are recognised and derecognised based on “Settlement date”. The
classification of the financial assets is determined by the Company management at inception by considering the
purpose for which the financial assets are acquired.
Loans and receivables (Receivables from Main Operations):
Loans and receivables are financial assets which are generated by providing money or service to the debtor
Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method. Fees and other charges paid related to assets obtained as guarantee for the above
mentioned receivables are not deemed as transaction costs and they are recognised as expense in the income
statement.
The Company has calculated and accounted for a provision of TL3.502.473 thousand for its overdue receivables
which are not under legal follow-up for the first time as of 31 December 2010 (Note 12.1). The total amount of this
provision is charged to current year income statement since the necessary provision amount for the prior years
could not be determined. The mentioned provision has been classified under “Provision for Due from Insurance
Operations” on the balance sheet. The Company has not accounted for any provision for its overdue receivables
other than the receivables under legal follow-up as of 31 December 2009.
In addition to the provision for due from insurance operations, in line with the Tax Procedure Law article No: 323,
the Company accounts for a “Provision for doubtful receivables under legal follow-up” regarding its doubtful
receivables which are not included in provision for due from insurance operations stated above, by considering the amount and nature of these receivables. This provision is classified as “Doubtful receivables from main
operations” on the balance sheet.
65
2.8 Financial Assets (Continued)
Provision for doubtful receivables is charged to the income statement for the related year. Recoveries from
doubtful receivables previously provided for are treated as a reduction from related provision and accounted for
in the “Other income” account. Such receivables are written off after all necessary legal proceedings have been
completed (Note 12).
Available-for-sale financial assets:
Available-for-sale financial assets are composed of the financial assets except for the “Loans and receivables”.
Based on “The Communiqué on Preparation of the Consolidated Financial Statements of Insurance and Reinsurance Companies and Pension Companies” published in the Official Gazette numbered 27097 and dated 31
December 2008, the Company has accounted for the financial assets classified under the non-current assets as
available-for-sale financial assets in accordance with TMS 39 – “Financial Instruments: Recognition and Measurement”.
Available-for-sale financial assets are subsequently measured at fair value after their recognition. Equity securities classified as available-for-sale are carried at fair values if they have quoted market prices in active markets
and/or if their fair value can be reliably measured. The financial assets that do not have a quoted market price
in an active market, and if their fair value cannot be reliably measured, are carried at cost less the provision for
impairment.
“Unrealised gains and losses” arising from the change in the fair value of available-for-sale financial assets is
accounted for under “Valuation of Financial Assets” account in the shareholders’ equity and not reflected in the
statement of income until the financial asset is sold, derecognised or impaired. The unrealised gains and losses
arising from the change in the fair value is removed from shareholders’ equity and recognised in the income
statement when the financial assets mature or are derecognised.
The Company assesses at each balance sheet date whether there is objective evidence that financial assets
are impaired. For equity investments classified as available-for-sale financial assets, a significant or prolonged
decline in the fair value of the security below its cost is considered as impairment. If any objective evidence for
impairment exists for available-for-sale financial assets, the difference between the acquisition cost and fair
value is deducted from shareholders’ equity and recognised in the income statement. The impairment losses
on available-for-sale equity instruments previously recognised in the profit or loss cannot be reversed through
profit or loss.
In such condition that there’s not a risk of collection in the financial assets classified under available-for-sale
financial assets, the Company does not account for a provision for impairment based on the short-term market
fluctuations (Notes 9 and 11).
2.9 Impairment of Assets
The details about the impairment of assets are explained in the notes in which the accounting policies of the
relevant assets are explained.
Total amount of mortgages or guarantees on assets are explained in Notes 6, 7 and 43; provisions for doubtfull
receiveables are explained in Note 12.1 and current period’s rediscount and provision expenses are explained in
Note 47.5.
66
2.10 Derivative Financial Instruments
None (31 December 2009: None).
2.11 Offsetting Financial Instruments
Financial assets and liabilities are offset only when there is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis, or when the realisation of the asset and the settlement
of the liability take place simultaneously.
2.12 Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, bank deposits and other identified short-term highly liquid investments which are subject to an insignificant risk of changes in value with original maturities of three months
or less.
Cash and cash equivalents included in the statements of cash flows are as follows:
Cash
Banks
Credit card receiveables (Note 14)
Less - Interest accrual
Less - Blocked time deposits (*) (Note 43)
Total cash and cash equivalents
31 December 2010
31 December 2009
101.056
148.392.448
28.196.404
(552.069)
(87.291.839)
269.092
134.485.935
27.718.755
(430.400)
(86.128.967)
88.846.000
75.914.415
(*) Change in blocked time deposits is included in other cash inflows or outflows from main operations in the statements of cash
flows.
2.13 Share Capital
The composition of the Company’s share capital at 31 December 2010 and 2009 is as follows:
31 December 2010
Share (%)
Share Amount
31 December 2009
Share (%)
Share Amount
Vakıflar Bankası
Groupama S.A. Public Shares (*)
Güvenlik Hizmetleri Vakfı
Memur ve Hiz. Emekli ve
Sağlık Yardım Sandığı Vak. 34,22
30,00
20,77
10,00
51.336.301
45.000.000
31.148.699
15.000.000
34,22
30,00
20,77
10,00
51.336.301
45.000.000
31.148.699
15.000.000
5,01
7.515.000
5,01
7.515.000
Total
100,00
150.000.000
100,00
150.000.000
Name of shareholders
(*) Public shares includes additional shares of Groupama S.A at a rate of 6% and of Vakıflar Bankası a rate of 2,13%.
There has been no change in the shareholding structure of the Company during 2010 and 2009.
As of 31 December 2010 and 2009, no privileges are granted to any class of shares representing the share capital.
The ceiling of the Company’s registered share capital has been increased from TL120.000.000 to TL300.000.000
as declared in Trade Registry Gazette dated 10 April 2008 and numbered 7039.
Other information about the Company’s share capital is explained in Note 15.
67
2.14 Insurance and Investment Contracts - Classification
The insurance contracts are those contracts that transfer insurance risk. Insurance contracts protect policyholders against the adverse financial consequences of loss event under the terms and conditions stipulated in the
insurance policy.
The main insurance contracts produced by the Company, as stated below, are insurance contracts in non-life
branches such as fire, marine, auto and non-auto accident, accident, engineering,health.
Fire insurance contracts provide mainly fire and theft coverage for houses and offices, and additional coverages for earthquake, financial liability, loss of rent, plate glass and loss of profit. The risks of cargo, hull, hull
construction and marine liability are accepted under the coverage of marine branch. Construction all risk, erection all risk, machinery breakdown, electronic equipment and loss of profit coverages are provided under engineering branch whereas motor own damage, motor third party liability, non-auto accident, auto and non- auto
accident, miscellaneous liability, fidelity, plate glass, theft and credit insurance coverages are given under accident branch. The aviation risks are also insured under miscellaneous accident branch. Under health branch,
group and individual policies are issued. Diagnosis and treatment expenses are covered by such contracts that
have also domestic and foreign distinctions. Besides, the Company underwrites the agriculture policies that are
produced by Agricultural Insurance Pool (“TARSİM”) and obligatory earthquake insurance contracts that are
produced by Turkish Catastrophe Insurance Pool (“DASK”). The basis of calculation of the income and liabilities
arising from the insurance contracts is explained in Notes 2.21 and 2.24.
Reinsurance Agreements
Reinsurance agreements are the agreements enforced by the Company and the reinsurer, in exchange for a certain compensation, to cede the losses which may occur in relation to one or more insurance policies produced
by the Company.
In fire and engineering branches, there are excess of loss agreements, a type of non-proportional reinsurance
agreements, by which the reinsurer covers the predetermined excess amount of the losses incurred up to its
liability limit, in return for a certain portion of related premiums written and surplus agreements, a type of proportional reinsurance agreements. In surplus agreements, the Company automatically cedes the risks above a
predetermined limit and the reinsurer is required to accept the risks ceded. In this type of reinsurance agreements whereby premiums and losses are shared on the basis of a determined rate for each policy, ceded portions to the reinsurer are determined in accordance with the layers called line, also representing the retention
rate of the Company.
The Company has surplus and excess of loss agreements in marine branch and quota share, surplus and excess
of loss agreements in accident branch. Medium and small size aviation risks are ceded by quota share agreements. The Company and the reinsurers agree on the automatical cession of all risks in the related branch based
on a certain share by quota share reinsurance agreements.
The Company has had an annual proportional quota-share reinsurance agreement for motor own damage and
motor third party liability branches which is valid until 31 December 2010. This quota-share agreement is based
on the transfer of written premiums and paid claims during the period covered by the agreement, and therefore;
the Company continues to be exposed to the insurance risk under the insurance contracts whereas the liability
of the reinsurer ceases by the end of the agreement period. The Company has terminated the mentioned reinsurance agreement as of 31 December 2010; and at 1 January 2011, this agreement has been transformed to a runoff basis reinsurance agreement by which the claim liabilities of reinsurers are carried forward to the following
periods. In accordance with the new reinsurance agreement, the liabilities related to the prior years have also
been transferred to the reinsurers with respect to the new ceding rates (Note 10).
The Company has quota-share reinsurance agreements in health and agriculture branches.
Additionally, the Company has facultative reinsurance agreements signed separately for certain risks on a policy
basis.
Major reinsurers of the Company are Milli Reasürans T.A.Ş., Munich Re and Scor Re.
68
2.15 Insurance Contracts and Investment Contracts with Discretionary Participation Feature
2.16 Investment Contracts without Discretionary Participation Feature
2.17 Borrowings
2.18 Taxes
Corporate Tax
Corporate tax for 2010 is payable at a rate of 20% in Turkey (2009: 20%). Corporate tax rate is applied on tax
base which is the income of the Company adjusted for certain disallowable expenses, exempt income (such as
dividend income) and other deductions in accordance with tax legislation. No further tax is payable unless the
profit is distributed.
Dividends paid to non-resident corporations, which have a place of business in Turkey or resident corporations
are not subject to withholding tax. Otherwise, dividends paid are subject to withholding tax at the rate of 15%.
An increase in capital via issuing bonus shares is not considered as a profit distribution and thus does not incur
withholding tax.
Corporations are required to pay advance corporation tax quarterly at the rate of 20% on their corporate income.
Advance Tax is declared by 14th and is payable by the 17th of the second month following each calendar quarter end. Advance tax paid by the corporations is credited against the annual corporation tax liability. If, despite
offsetting, there remains a paid advance tax amount, it may be refunded or offset against other liabilities to the
government.
A 75% portion of profits from sale of participation shares and property which have been in assets for at least two
years is exempt from corporate tax provided that these profits are added to share capital or are not withdrawn
from the equity within 5 years, as prestated in Corporate Tax Law.
According to Turkish tax legislation, tax losses on the returns can be offset against period income for up to 5
years. However, tax losses cannot be offset against retained earnings.
There is no such application for the reconciliation of payable taxes with the tax authority. Corporate tax returns
are submitted to the related tax office by the 25th day of the 4th month following the month when the accounting period ends. In tax reviews authorized bodies can review the accounting records for the past five years and
if errors are detected, tax amounts may change due to tax assessment.
In accordance with Law Related to Changes in Tax Procedure Law, Income Tax Law and Corporate Tax Law
numbered 5024 (“Law No. 5024”) published in the Official Gazette on 30 December 2003, effective from 1 January 2004 income and corporate taxpayers are required to adjust the financial statements for the changes in the
general purchasing power of the Turkish lira. In accordance with the Law in question, the cumulative inflation
rate for the last 36 months and the inflation rate for the last 12 months must exceed 100% and 10%, respectively
(TÜİK TEFE increase rate). Since these conditions in question were not fulfilled in 2010 and 2009, no inflation
adjustments were performed (Note 35).
69
2.18 Taxes (Continued)
Deferred Income Tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are determined using tax rates and tax laws that have been enacted or substantively enacted
by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised (Note 21).
2.19 Employee Benefits
The Company accounts for its liability related to employment termination and vacation benefits in accordance
with TMS 19, “Employee Benefits” and classifies under the account “Provision for employment termination
benefits” on the balance sheet.
According to the Turkish labour legislation, the Company is required to pay termination benefits to each employee whose jobs are terminated except for the reasons such as resignation, retirement and attitudes determined
in the Labour Law. The provision for employment termination benefits is calculated over present value of the
possible liability in accordance with the Labour Law by considering determined actuarial estimates (Note 22).
2.20 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can
be reliably estimated. Provision amounts are estimated over expenditures expected to be required to settle the
obligation at the balance sheet date by considering the risks and uncertainties related to the obligation. When
the provision is measured by using the estimated cash outflows that are required to settle the obligation, the
carrying value of the provision is equal to the present value of the related cash outflows.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, the reimbursement is recognised as an asset if and only it is virtually certain that reimbursement will be
received and the reimbursement can be reliably estimated.
Liabilities that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the entity are classified as
contingent liabilities and not included in the financial statements (Note 23).
2.21 Accounting for Revenues
Written Premiums
Written premiums represent premiums on policies written during the year, net of cancellations. As disclosed in
Note 2.24, premium income is recognised in the financial statements on accrual basis by allocating the unearned
premium provision over written premiums
Reinsurance Commissions
Commission income received in relation to ceded premiums to reinsurance companies is accrued in the related
period and classified in technical part under operating expenses in the income statement. As disclosed in Note
2.24, reinsurance commission income is recognised in the financial statements on an accrual basis by allocating
the deferred commission income over commissions received.
70
2.21 Accounting for Revenues (Continued)
Claim Recovery and Salvage Income
In the unconsolidated financial statements prepared as of 31 December 2010, in accordance with “The Circular
on Salvage and Subrogation Income” issued by the Treasury, dated 20 September 2010 and numbered 2010/13,
the Company recognizes the subrogation receivables, as limited to the coverage amount of the debtor insurance
company, provided that the claim payment has been performed, the acquittance or the statement of payment
has been received from the policyholders; and related individuals or insurance companies have been notified. A
provision is recorded for those receivables which are not collected from insurance companies after six months
and from individuals after four months following the payment of claim. Accordingly, as of 31 December 2010,
accrued subrogation receivables, net of reinsurance share, and the provision amount for such receivables are
TL5.888.512 and TL312.287, respectively. In the unconsolidated financial statements prepared as of 31 December
2009, in line with the declaration of the Treasury dated 18 January 2005 and numbered B.02.1.HM.O.SGM.0.3.1.1,
the Company has accounted for net subrogation receivables amounting to TL 6.812.108 from insurance companies and natural and legal persons with whom the Company has agreed on an accrual basis and subrogation receivables from individuals and legal entities with whom the Company has not agreed have been followed under
off-balance sheet items (Note 12.1).
Interest Income
Interest income is recognised by using the effective interest rate method on an accrual basis.
Dividend Income
Dividend income is recognised as an income in the financial statements when the right to receive payment is
established.
2.22 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lesser are classified as financial leases while other leases are classified as operational leases.
Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property
and the present value of the minimum lease payments. The liability to lesser is classified as the leasing payables
in the balance sheet. Each lease payment is allocated between the liability and finance charges so as to achieve a
constant rate on the finance balance outstanding. The interest element of the finance cost except for capitalised
portion is charged to the income statement.
The payment of the operational lease is charged to the income statement on a straight-line basis over the lease
period (The incentives received or to be received from the lessor are also charged to the income statement on a
straight-line basis over the lease period) (Note 6).
2.23 Dividend Distribution
Dividend liabilities are recognised as a liability in the financial statements in the period in which the dividends
are declared as a component of dividend distribution.
71
2.24 Technical Provisions
Unearned Premium Reserve
Unearned premium reserve is calculated on a daily basis for all policies in force as of 31 December 2010 for unearned portions of premiums written, except for marine and earthquake premiums issued before 14 June 2007.
During the calculation of unearned portion of premiums written on a daily basis, it is supposed that the policies start at 12:00 noon and end at 12:00 noon again. In accordance with the Regulation on Technical Reserves,
unearned premium reserve and the reinsurers’ share of the unearned premium reserve for policies issued after
1 January 2008, are calculated and recorded as the deferred portion of the accrued premiums related to the
policies in force and ceded premiums to reinsurers without deducting commissions or any other deduction, on
a daily and gross basis. The Company has continued to deduct the commissions from the premiums for the calculation of unearned premium reserve regarding the policies issued before 1 January 2008. For cargo insurance
policies with unspecified termination date, unearned premium reserve is accounted for as the 50% of premiums
written in the last three months (Note 17).
Deferred Commission Expense and Income
Within the framework of the Circular numbered 2007/25 and dated 28 December 2007 published by Treasury, the
unearned portion of commissions paid to agencies for the written premiums and commissions received from reinsurers for the ceded premium after 1 January 2008, are recorded as in deferred expenses and deferred income,
respectively on the balance sheet, and as operating expenses on a net basis in the income statement (Note 17).
The Company has deferred TL1.028.265 of the payments made to companies providing assistance services in
the current period under prepaid expenses account on the balance sheet as of 31 December 2010 as they relate
to the future period.
Unexpired Risks Reserve
Within the framework of Regulation on Technical Reserves, effective from 1 January 2008, insurance companies
are required to account for an unexpired risk reserve against the probability that future losses incurred from
in force policies may exceed the unearned premium reserve accounted for the related policies considering expected loss ratios. Expected loss ratio is calculated by dividing the incurred losses to earned premiums. If the
loss ratio calculated for a branch is higher than 95%, net unexpired risk reserve for that branch is calculated by
multiplying the ratio in excess of 95% with net unearned premium reserve for the related branch and gross unexpired risk reserve for that branch is calculated by multiplying the ratio in excess of 95% with gross unearned
premium reserve for the related branch. The difference between gross amount and net amount is recognized as
reinsurers’ share.
The opening outstanding claims provision amount used in the derivation of expected loss ratio determined for
the calculation of unexpired risk reserve as of 31 December 2010 has been recalculated to conform to the current
period.
The Company has calculated and accounted for a net unexpired risk reserve amounting to TL 14.386.220 at 31
December 2010 (31 December 2009: TL 2.834.079) (Note 17).
72
2.24 Technical Provisions (Continued)
Outstanding Claims Provision
The Company accounts for accrued and calculated outstanding claim provision for ultimate cost of the claims
incurred, but not paid in the current or prior periods or for the estimated ultimate cost if the cost is not certain
yet, and for the incurred but not reported claims. The Company accounts for accrued and calculated outstanding
claim provision for ultimate cost of the claims incurred, but not paid in the current or prior periods or for the estimated ultimate cost if the cost is not certain yet, and for the incurred but not reported claims. As of 31 December
2010 claim provisions are accounted for based on reports of experts or initial assessments of policyholders and
experts, and in the calculations related to the claims provision, claim recoveries, salvage and similar gains are
deducted (As of 31 December 2009, salvage, subrogation and similar gains have been deducted in calculations
related to outstanding claim provisions).
The difference between the reported outstanding claims and the ultimate amount determined within the framework of “The Communiqué related to the Actuarial Chain Ladder Method” (the “Communiqué”) dated 20 September 2010 and numbered with 2010/12, effective from 30 September 2010, the difference between the reported outstanding claims is taken into account as incurred but not reported claim amount.
In accordance with the Communique which is effective from 30 September 2010, the insurance companies has to
make the calculations on each branch based on actuarial chain ladder method (“new ACLM”) with using 5 methods which are mentioned in the Communique which are all based on incurred loss (total of outstanding and paid
claims). The right of choosing one of the methods is given to the insurance companies which will make the calculations for the first time as at 30 September 2010. The companies will determine the method for each branch as at
31 December 2010 by evaluating the best adequate method for the portfolio of the company and will not change
the method for 3 years. The peak claims which are mentioned as big claims are eliminated in a separate file by
using prescribed statistical methods in the Communique in order to make the ACLM calculations with a more
homogeneous data set. Additionally, the ACLM calculations are performed on gross basis and the net amounts
are determined according to the in-force or related reinsurance treaties of the Company. The method which was
chosen by the Company for each branch for the new ACLM, the gross and net of reinsurance results and the
limits which are used for the big claims eliminations are represented in Note 17.
Another calculation is performed for testing the adequacy of the result for incurred but reported claims amount
determined by new ACLM calculations. In the calculation of incurred but reported claims amount performed for
this test, the claims occurred in the last 5 years, but notified after that date, deducted by related the salvage, subrogation and other similar collections; and the premium income of the respective years have been considered.
The result of the calculation is compared to the new ACLM calculation result on an aggregate basis for all branches and the higher one is determined as the incurred but not reported claims amount. The Company made the
mentioned comparison and determined its incurred but reported claims amount in accordance with the result
of new ACLM calculations. Nonetheless, with respect to the Communique, 80% of result the incurred but not reported claim calculations may be taken into account for only year 2010 for the determination of the amount to be
accounted for in the financial statements. The amounts will be taken into account at minimum 90% of the result
of the new incurred but not reported claims for 2011, and all of the amount has to be taken into account in 2012.
73
2.24 Technical Provisions (Continued)
In this respect, the Company has taken 80% of the provision for claims incurred but not reported into account
and has accounted for a net additional outstanding claim provision amounting to TL61.246.857 at 31 December
2010 (Note 17).
Within the framework of the regulations applicable before the aforementioned changes in Regulation on Technical Reserves, the Company has accounted for additional outstanding claims provisions as a provision for claims
incurred but not reported amounting to TL34.429.710, a provision for claim adequacy difference amounting to
TL6.910.942 and a provision for old ACLM calculation based on paid claims amounting to TL12.948.380; and a net
expected salvage and subrogation income amounting to TL9.241.458 has been deducted from the outstanding
claims provision as of 31 December 2009. As of 31 December 2009, had the Company been accounted for the outstanding claims provision in accordance with the changes in the “Regulation on Technical Reserves” and other
related regulations, outstanding claims provision at 31 December 2009 would have decreased by TL6.562.271.
In accordance with the Circular dated 18 October 2010 and numbered 2010/16, as expected salvage and subrogation income amounting to TL9.241.458 deducted from the outstanding claims provision as of 31 December 2009
has not been mentioned in the “Regulation on Technical Reserves” which is effective from 30 September 2010,
the mentioned amount calculated as of 31 December 2009 and carried forward to 2010, has been classified under
“Provisions” in the income statement as of 31 December 2010 (Notes 17 and 47.5).
Equalisation Reserve
In accordance with the Regulation on Technical Reserves, as of 01 January 2008 insurance companies are required to record an equalisation reserve for the insurance contracts including earthquake and credit coverage, in order to cover the catastrophic risks and in order to equalise the fluctuations within the claim ratios
that may occur during the following accounting periods. Such reserve is calculated over 12% of net earthquake and credit premiums corresponding to each year. In the calculation of the net premium, the amounts
paid for the non-proportional reinsurance agreements are regarded as ceded premiums. The Company has
accounted for an equalisation reserve amounting to TL5.863.901 as of 31 December 2010 (31 December 2009:
TL4.036.984) (Notes 17 and 47.1).
2.25 Convenience translation into English
The effects of differences between the accounting principles as set out by the insurance legislation and accounting principles generally accepted in countries in which the financial statements are to be distributed and
International Financial Reporting Standards (“IFRS”) have not been quantified in the financial statements. Accordingly, the financial statements are not intended to present the financial position and results of operations
and changes in financial position and cash flows in accordance with accounting principles generally accepted in
such countries and IFRS.
3. Critical Accounting Estimates and Judgments
Preparation of financial statements requires the use of estimations and assumptions which may affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the balance sheet
date and reported amounts of income and expenses during the financial period. Accounting estimates and assumptions are continuously evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under current circumstances. Although the estimations
and assumptions are based on the best knowledge of the management for existing events and operations, they
may differ from the actual results.
The estimation of the ultimate liability for technical expenses that can be incurred for the existing insurance
contracts is the one of the most critical accounting estimates. Estimation of the insurance liabilities, by nature,
includes the evaluation of several uncertainties.
74
3. Critical Accounting Estimates and Judgments (Continued)
Other estimations and assumptions for financial statement items that might result in significant changes to the
carrying amount of assets and liabilities in future financial reporting periods are stated below:
Fair value of properties for operational use and investment properties
The fair value of properties for operational use and investment properties are determined by the independent
professionally qualified valuation companies at 31 December 2010 (Notes 6 and 7).
Estimation of fair values of the financial assets
Investments in equity instruments classified as available-for-sale financial assets are measured at fair value
when they are traded in an active market and/or their fair value can be reliably measured. In this respect, the fair
value of financial assets traded in active markets is based on quoted market prices at the balance sheet date.
The fair value of financial assets that are not traded in an active market is based on the valuation reports, if exist,
prepared by independent valuation experts. Investments in equity instruments classified as available-for-sale
financial assets are measured at cost less cumulative impairment losses, if any, when they are not traded in an
active market and their fair value cannot be reliably measured (Note 11).
4. Management of Insurance and Financial Risk
Insurance risk
The risk under any insurance contact is the possibility that the insured event occurs and the uncertainty of the
amount of the resulting claim. By the very nature of the insurance contracts, this risk is random and therefore
unpredictable.
For a portfolio of insurance contracts where the theory of probability is applied to pricing and reserving, the
principal risk that the Company faces under its insurance contracts is that the actual claims and benefit payments
exceed the carrying amount of insurance liabilities. The Company determines its insurance underwriting strategy
based on the type of insurance risk accepted and the claims incurred.
The Company manages the aforementioned risks by its overall underwriting strategy and via reinsurance
agreements, which the Company is a party to.
The Company determines annual “risk acceptance policies” for the main products and revised these policies
during the year, if necessary. Based on the risk acceptance policies, for each product, the maximum and minimum
limits for risk analysis and the risks which will be excluded from the coverage are determined during the period
beginning from order process and ending with the issuance of the policy. Furthermore, the Company uses
reinsurance agreements to obtain coverage for the high risks and catastrophic claims by considering financial
position.
The distribution of net insurance risk (insured minimum amount) for each branch summarized below:
31 December 2010
31 December 2009
Land vehicles liability
Fire and natural disasters
Accident
Marine
General Liability
Land Vehicles
General Losses
Legal Protection
Water Crafts Air Crafts Liability
1.829.440.374.038
26.980.988.605
25.203.151.718
8.496.833.033
8.059.038.867
6.221.001.403
1.706.497.384
878.268.750
113.173.863
-
1.495.892.648.064
26.178.425.398
12.952.627.602
7.206.037.281
6.259.301.565
6.817.157.652
1.577.065.961
646.071.200
152.628.980
100
1.907.099.327.661
1.557.681.963.803
75
4. Management of Insurance and Financial Risk (Continued)
Sensitivity analysis
Financial risk
The Company is exposed to financial risk through its financial assets, reinsurance assets and insurance liabilities. In particular the key financial risk is that the proceeds from its financial assets are not sufficient to fund the
obligations arising from its insurance contracts. The most important components of the financial risk are market
risk (including foreign exchange risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit
risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimize potential negative effects on the Company’s financial performance. The
Company does not use derivative financial instruments. Risk management is carried out by management under
policies approved by the Board of Directors.
(a) Market Risk
i. Cash flow, market interest rate and price risk
The Company has no interest bearing assets and liabilities with floating (variable) interest rates.
ii. Foreign currency risk
The Company is exposed to foreign exchange risk through the impact of rate changes at the translation of
Turkish Lira pertaining to foreign currency denominated receiveables and payables. These risks are monitored
and limited by the analysis of the foreign currency position.
At 31 December 2010, if Euro appreciated/depreciated by 10% against TL, with all other variables held constant,
net assets before tax would be higher/lower by TL37.947 (31 December 2009: TL423.035), as a result of foreign
exchange gains/losses on the translation of Euro denominated assets and liabilities.
At 31 December 2010, if USD appreciated/depreciated by 10% against TL, with all other variables held constant,
net assets before tax would be higher/lower by TL1.810.356 (31 December 2009: TL596.557), as a result of foreign
exchange gains/losses on the translation of USD denominated assets and liabilities.
The company’s foreign assets and liabilities are disclosed in related notes.
iii. Price risk
The Company’s financial assets expose the Company to price risk
The Company’s available-for-sale financial assets have been stated at fair value as of 31 December 2010. If
market price of available for-sale financial assets had been decreased/increased by 5% holding all other variables constant, impact on net asset for the period would have been equal to TL 774.147 (31 December 2009: TL
639.849). If the value of the financial assets which are carried at their fair values according to the independent
valuation reports increased/decreased by %5 all other variables held constant, impact on net assets for the period would be higher/lower by TL 5.184.700 (31 December 2009: TL 4.169.026).
(b) Credit Risk
Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their
agreements. The Company’s exposure to credit risk arises mainly from cash and cash equivalents and bank deposits, financial assets, reinsurers’ share of insurance liabilities, due from reinsurers and premium receivables
from policyholders and intermediaries. The Company management deems these risks as total credit risk to the
counterparty.
The Company follows and monitors the credit risk of financial assets classified as loans and receivables and receivables from insurance operations (including reinsurance receivables) by guarantees received and procedures
applied for the selection of the counterparties. Other explanations in relation to these receivables are disclosed
in Note 12.
76
The Company’s financial assets which are subject to credit risk, except for loans and receivables, generally consist of time and demand deposits held in banks and other financial institutions in Turkey; and such receivables
are not deemed to have a high credit risk
(c) Liquidity risk
The Company uses its available cash resources to pay claims arising from insurance contracts. Liquidity risk is
the risk that cash may not be available to pay obligations when due at a reasonable cost. Management sets limits
on the minimum portion of funds available to meet such liabilities.
The table below analyses the Company’s financial liabilities and insurance liabilities into relevant maturity
groups based on the remaining period at the balance sheet date to the expected or contractual maturity date.
The amounts disclosed in the tables are the undiscounted cash (payables to reinsurance companies are excluded) flows:
Contractual cash flows
31 December 2010
Up to
3 months
3 months
1 year 1 year - 5 year
Over
5 years
Total
Payables from insurance operations
29.153.217
22.165.854
13.461.937
-
64.781.008
29.153.217
22.165.854
13.461.937
-
64.781.008
Expected cash flows
31 December 2010
Up to
3 months
3 months
Over
5 years
Total
Unearned premiums
reserve, net (*)
Outstanding claim provision - net (*)
Unexpired risks reserve - net
Equalisation reserve 89.217.801
114.285.703
8.985.394
-
125.279.038
24.963.636
1.962.696
-
94.201
43.729.753
3.438.130
5.863.901
-
-
-
-
214.591.040
182.979.092
14.386.220
5.863.901
212.488.898
152.205.370
53.125.985
-
417.820.253
Contractual cash flows
31 December 2009
Up to
3 months
3 months
Over
5 years
Total
Payables from insurance operations
44.339.691
21.020.801
-
-
65.360.492
44.339.691
21.020.801
-
-
65.360.492
Expected cash flows
31 December 2009
Up to
3 months
3 months
Over
5 years
Total
Unearned premiums
reserve, net (*)
Outstanding claim provision - net (*)
Unexpired risks reserve - net
Equalisation reserve
10.456.467
51.278.602
136.357
-
207.890.990
26.331.576
2.672.748
-
1.915.189
64.948.292
24.974
4.036.984
-
-
-
-
220.262.646
142.558.470
2.834.079
4.036.984
61.871.426
236.895.314
70.925.439
-
369.692.179
(*) The Company expects to realise the payments of outstanding claims under legal follow-up and claims under certain branches; and claims incurred but not reported in a period exceeding one year. Unearned premium reserves calculated on the policies with periods over one year are presented as long-term in the table above. Outstanding claim provisions and unearned
premium reserves are totally classified as short-term on the balance sheet.
The Company foresees to fulfil the abovementioned liabilities by its financial assets and cash or cash equivalents included in the
assets.
77
Fair value of the financial assets
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Company using available market
information and appropriate valuation methodologies.
The following methods and assumptions were used to estimate the fair value of the financial instruments for which
it is practicable to estimate fair value:
Financial Assets
The fair values of balances denominated in foreign currencies, which are translated at period end exchange rates,
are considered to approximate carrying values. The fair values of cash and cash equivalents are considered to
approximate their respective carrying values carried at amortised cost due to their short-term nature. The carrying
value of receivables from main operations along with related provision for overdue receivables is considered to
approximate respective fair values. The fair value of financial assets traded in active markets has been accepted as
their quoted market prices. The fair value of financial assets that are not traded in an active market is based on the
valuation reports, if exist, prepared by independent valuation experts. Investments in equity instruments classified
as available-for-sale financial assets are measured at cost less cumulative impairment losses, if any, when they are
not traded in an active market and their fair value cannot be reliably measured (Note 11).
Financial liabilities
The fair values of liabilities on main operations and other financial liabilities are considered to approximate to their
respective carrying values.
Capital Management
The Company’s objectives when managing the capital are:
• to comply with the capital requirements of the Treasury,
• to safeguard the Company’s ability to continue as a going concern so that it can continue the operations.
The insurance companies are required to comply with the regulations related to capital adequacy as issued by
Treasury. As of 31 December 2010, the Company has not completed the calculation to be performed with respect
to the minimum required shareholders’ equity amount in accordance with the “Evaluation and Assessment of the
Capital Adequacy of the Insurance, Reinsurance and Pension Companies” as of date of the preparation of financial
statements. Based on the best estimate of the Company, the requirements of the minimum required shareholders’
equity are expected to be fulfilled as of 31 December 2010 (31 December 2009: TL202.083.768).
78
5. Segment information
Information related to the operational reporting of the Company in the accordance with the “TFRS 8 - Operating
Segments” is disclosed in this part.
Fire Insurance
This insurance policy covers mainly direct material damages on properties of the policyholders generated by fire,
lightening, explosion or fumes, vapour and heat as a result of fire and explosion within the policy coverage.
Accident
This segment consists of policies in casco, personal accident and glass break branches. This policy provides guarantee for the material damages to policyholders’ interests on motor and non-motor vehicles, trailers, caravans,
construction equipments and tractors, generated by a collision with motor or non-motor vehicles or a collision
between an object and the insured vehicle while the insured vehicle is in motion or stagnant out of control of the
policyholder or spinning, turning over or falling down of the insured vehicle as a result of an accident or as a result
of third party’s bad intention, or in case of a theft or a fire.
Land Vehicles Liability (Compulsory Traffic) Insurance
In accordance with the Highway Law, numbered 2918, insurance company provides guarantee the liability of the
policyholder for death or injury of a third party or any damage occured during the usage of the insured vehicle
within the compulsory coverage.
Damages occured by a towed vehicle or towing vehicle is in the coverage of the insurance of the towing vehicle.
However, towing vehicles used for human transportation may be within this insurance’s coverage in case of an
additional special clause.
Compulsory expenses incurred by the policyholder by the purpose of prevention of loss or decreasing the loss is
compensated by the insurance company. This insurance ensures that the insurer defends against unfair claims.
Health Insurance
Health insurance provide guarantees for sickness or expenses incurred due to injuries and indemnities if applicable and on the ground of general and special conditions if any during the policy period. Geographical area that
the guarantee is given is disclosed on the policy.
79
80
Fire
Accident
170.011.305
162.927.864
155.561.342
8.214.217
(847.695)
7.083.441
40.520.518
40.520.518
42.055.340
(1.534.822)
-
-
TECHNICAL INCOME
1- Earned Premiums (Net of Reinsurance share)
1.1- Written premiums (Net of Reinsurance share) 1.2- Change in Unearned Premiums Reserve 1.3 - Unexpired Risks Provision
2- Other Technical Income (Net of Reinsurance share)
3- Accrued Claims Recovery Income
4.890.022
(25.127.389)
260.401
(5.732.541)
23.323.420
-
-
-
-
Financial Income
Personnel Expenses
General Expenses
Other and financial expense
-
-
-
-
(44.113.061)
(32.476.451)
(26.133.649)
(182.823.893)
(156.690.244)
(124.213.793)
325.012
138.710.832
138.385.820
151.250.544
(2.241.944)
(10.622.780)
-
-
-
-
(2.853.869)
(2.692.082)
(8.938.203)
(55.022.889)
(46.084.686)
(43.392.604)
-
52.169.020
52.169.020
49.318.304
2.793.666
57.050
-
-
-
-
18.493.211
(1.161.054)
9.751.178
2.588.057
(7.163.121)
(6.002.067)
180.306
15.905.154
15.724.848
17.423.075
(1.559.511)
(138.716)
Land Vehicle
Liability
Health
Other
27.729.822
(39.652.179)
(30.463.465)
(9.395.099)
-
-
-
-
-
-
-
-
-
-
-
-
Undistributed
The Company does not distribute the assets to the branches and evaluates assets on an aggregate basis.
Net Period Loss (-)
-
-
-
-
24.485.777
(145.525.528)
(120.398.139)
(125.288.161)
(17.197.098)
(11.464.557)
(11.724.958)
TECHNICAL EXPENSE
1- Incurred Losses (Net of Reinsurance share)
1.1- Paid Claims (Net of Reinsurance share) 1.2- Change in Outstanding Claims (Net of Reinsurance Share
and Returned Reserve) (+/-)
2- Other Technical Expense
1 January - 31 December 2010 period segment results:
5. Segment information (Continued)
1 OCAK - 31 ARALIK 2010 VE 2009 HESAP DÖNEMLERİNE AİT KONSOLİDE
OLMAYAN FİNANSAL TABLOLARA İLİŞKİN AÇIKLAYICI DİPNOTLAR
(Para birimi aksi belirtilmedikçe Türk Lirası (“TL”) olarak gösterilmiştir.)
(32.445.443)
27.729.822
(39.652.179)
(30.463.465)
(9.395.099)
19.335.478
(31.179.164)
(56.180.604)
(397.981.351)
(341.800.747)
(310.621.583)
7.588.759
417.316.829
409.728.070
415.608.605
5.671.606
(11.552.141)
Total
81
2.033.889
(18.071.357)
(420.701)
(3.054.669)
19.618.536
-
-
-
-
Financial Income
Personnel Expenses
General Expenses
Other and financial expense
-
-
-
-
(16.756.161)
(10.122.615)
(21.391.649)
(137.220.988)
(115.829.339)
(105.706.724)
-
-
-
-
-
(5.519.516)
(820.212)
(6.970.456)
(48.722.381)
(41.751.925)
(40.931.713)
-
-
-
-
-
18.809.399
362.468
11.562.552
4.288.228
(7.274.324)
(7.636.792)
151.149
14.521.171
14.370.022
15.627.653
(1.128.152)
(129.479)
32.376.745
(36.351.301)
(26.038.305)
(19.303.186)
-
-
-
-
-
-
-
-
-
-
-
-
Undistributed
Net Period Loss (-)
-
-
-
-
18.025.670
(149.074.682)
(131.003.325)
(133.037.214)
(15.840.069)
(12.785.401)
(12.364.699)
TECHNICAL EXPENSE
1- Incurred Losses (Net of Reinsurance share)
1.1- Paid Claims (Net of Reinsurance share)
1.2- Change in Outstanding Claims (Net of Reinsurance Share
and Returned Reserve) (+/-)
2- Other Technical Expense
9.033.590
2.229
43.202.865
43.202.865
46.023.664
(5.032.063)
2.211.264
120.464.827
120.464.827
135.749.424
(12.715.094)
(2.569.503)
167.100.352
158.066.762
158.559.489
(414.680)
(78.047)
TECHNICAL INCOME
1- Earned Premiums (Net of Reinsurance Share)
1.1- Written premiums (Net of Reinsurance Share) 1.2- Change in Unearned Premiums Reserve 1.3 - Unexpired Risks Reserve 2- Other Technical Income - (Net of Reinsurance Share)
3- Accrued Subrogation Income
35.458.605
35.456.376
39.109.429
(3.653.053)
-
Land Vehicle
Liability
Health
Other
Fire
Accident
1 January - 31 December 2009 period segment results:
5. Segment information (Continued)
1 OCAK - 31 ARALIK 2010 VE 2009 HESAP DÖNEMLERİNE AİT KONSOLİDE
OLMAYAN FİNANSAL TABLOLARA İLİŞKİN AÇIKLAYICI DİPNOTLAR
(Para birimi aksi belirtilmedikçe Türk Lirası (“TL”) olarak gösterilmiştir.)
(15.138.120)
32.376.745
(36.351.301)
(26.038.305)
(19.303.186)
34.177.927
(8.967.172)
(37.925.580)
(346.569.893)
(308.644.313)
(299.677.141)
9.186.968
380.747.820
371.560.852
395.069.659
(22.943.042)
(565.765)
Total
6. Property, plant and equipment
6.1 Depreciation and amortisation expenses for the period: TL 4.136.983 (1 January - 31 December 2009: TL
4.023.523).
6.1.1 Amortisation expenses: TL 3.762.445 (1 January- 31 December 2009: TL 3.598.839).
6.1.2 Depreciation: TL 374.538 (1 January- 31 December 2009: TL 424.684).
6.2 Changes in depreciation calculation methods and effect of such changes on depreciation expenses for the
year: None (1 January- 31 December 2009: None).
6.3 Movements of property and equipment in the current period:
6.3.1 Cost of property and equipment purchased: TL 2.490.546 (1 January - 31 December 2009: TL 3.847.773).
6.3.2 Cost of property and equipment sold or used as scrap: TL 773.348 (1 January-31 December 2009: TL
227.545).
6.3.3 Revaluation increases in the current period:
6.3.3.1 Cost of fixed assets (+): TL2.258.407 (1 January- 31 December 2009: None).
6.3.3.2 Accumulated depreciation (-): TL2.732.317 (1 January- 31 December 2009: None).
6.3.4 Nature, amount, beginning and ending dates of construction-in-progress: None (1 January- 31 December 2009: None).
Movement table of tangible assets is as follows:
Cost/Revalued
Amount:
Properties for
operational use
Machinery and equipment
Furniture and fixtures
Motor vehicles
Special costs
Leased assets
74.835.216
8.581.208
4.150.344
644.877
1.091.537
254.750
51.377
548.317
974.376
9.714
902.012
4.750
-
(736.449)
-
(36.899)
-
-
2.258.407
-
-
-
-
-
77.145.000
8.393.076
5.124.720
617.692
1.993.549
259.500
Total
89.557.932
2.490.546
(773.348)
2.258.407
93.533.537
Accumulated Depreciation:
Properties for
operational use
Machinery and equipment
Motor vehicles
Special costs
Leased assets (1.820.440)
(5.369.105)
(2.653.487)
(371.813)
(612.868)
(205.543)
(1.889.450)
(976.661)
(507.755)
(86.433)
(252.939)
(49.207)
-
702.421
-
26.213
-
-
2.732.317
-
-
-
-
-
(977.573)
(5.643.345)
(3.161.242)
(432.033)
(865.807)
(254.750)
(11.033.256)
(3.762.445)
728.634
2.732.317
(11.334.750)
78.524.676
82.198.787
Total
Net book value
82
1 January Increase in 31 December
2010
Additions
Disposals
Value
2010
6. Property, plant and equipment (Continued)
Cost/Revalued
Amount:
Properties for
operational use Machinery and equipment
Motor vehicles
Special costs
Leased assets 1 January 31 December
2009
Additions
Disposals Transfers
2009
73.950.266
6.398.963
3.688.252
626.976
1.016.572
256.675
884.950
2.399.790
460.167
27.901
74.965
-
-
(217.545)
-
(10.000)
-
-
-
-
1.925
-
-
(1.925)
74.835.216
8.581.208
4.150.344
644.877
1.091.537
254.750
Total
85.937.704
3.847.773
(227.545)
-
89.557.932
Properties for
operational use Machinery and equipment
Motor vehicles
Special costs
Leased assets -
(4.613.663)
(2.180.037)
(260.281)
(439.602)
(154.593)
(1.820.440)
(961.035)
(473.450)
(119.698)
(173.266)
(50.950)
-
205.593
-
8.166
-
-
-
-
-
-
-
-
(1.820.440)
(5.369.105)
(2.653.487)
(371.813)
(612.868)
(205.543)
Total
(7.648.176)
(3.598.839)
213.759
-
(11.033.256)
Net book value
78.289.528
78.524.676
The Company’s buildings for operational use are revalued. The fair value of the buildings as of 31 December
2010, is determined in accordance with the values defined by comparison of sales method in valuation reports
dated 22 January 2010 prepared by independent professional valuation company named Lotus Gayrimenkul
Değerleme ve Danışmanlık A.Ş.:
31 December 2010
31 December 2009
Güneş Plaza
Ankara Building
Antalya Building
Kabataş Building
Trabzon Building
Adana Building
Erzurum Building
Samsun Building 70.370.000
2.700.000
1.290.000
1.230.000
750.000
455.000
185.000
165.000
67.000.000
3.149.066
1.265.000
1.140.000
600.000
420.000
190.000
140.000
Total
77.145.000
73.904.066
Revaluation increases arising from valuation of land and buildings, net of deferred tax effects, are credited to
“Other Capital Reserves” under shareholders’ equity. Revaluation decreases arising from valuation of land and
buildings are charged against “Other Capital Reserves” for the corresponding asset under shareholders’ equity.
Revaluation decreases regarding the assets without balances in “Other Capital Reserves” under shareholders’
equity are charged to the income statement.
83
6. Property, plant and equipment (Continued)
The movement of the revaluation increases for the buildings accounted for using revaluation model, for the year
ended 31 December 2010 and 2009, is as follows:
Beginning of the period - 1 January
Increase in value due to revaluation
Amortisation differences classified in accumulated profit
Deferred tax due to
revaluation differences (Note 21)
End of period- 31 December
2010
2009
22.510.637
23.111.599
4.930.438
(776.774)
(751.202)
(830.733)
150.240
25.833.568
22.510.637
Cost and accumulated depreciations amounts of the buildings before revaluation as of 31 December 2010 and
2009 are stated below:
Cost
Accumulated Depreciation
Net Book Value
31 December 2010
31 December 2009
55.925.736
(11.580.801)
55.874.359
(10.444.136)
44.344.935
45.430.223
As of 31 December 2010 and 2009, the reconciliation between net book values of property for operational use
calculated over cost and revalued amounts is as follows:
31 December 2010
31 December 2009
Revalued amount
Less - Accumulated depreciation (-)
77.145.000
(970.226)
74.835.216
(1.813.093)
Accumulated depreciation deducted
revaluated amount
76.174.774
73.022.123
(44.344.935)
462.121
(45.430.223)
546.396
Revaluation fund before tax (Note 21)
32.291.960
28.138.296
Calculated deferred tax liability (Note 21)
(6.458.392)
(5.627.659)
Revaluation fund- net
25.833.568
22.510.637
Net book value calculated
based on cost
Impairment
There is no mortgage on property for operational use (31 December 2009: TL 22.435.395).
7. Investment Properties
1 January
2010
Additions
Disposals
Increase in
Value
31 December
2010
(15.046.200)
21.767.275
64.802.403
1 January
2009
Additions
Disposals
Increase in
Value
31 December
2009
3.638.389
58.024.279
Fair Value:
Investment
properties
58.024.279
57.049
Fair Value:
Investment
properties
54.188.078
84
197.812
-
7. Investment Properties (Continued)
The lands and buildings held to earn rental income or for capital appreciation or both, rather than for use in
the main operations or for administrative purposes; or sale in the ordinary course of business are classified as
investment property. The fair value of Tekirdağ Farm and the land in İzmir Konak presented in unconsolidated
financial statements is determined in accordance with the valuation reports prepared by independent professional valuation company named Lotus Gayrimenkul Değerleme ve Danışmanlık A.Ş. and independent valuation
expert, İbrahim Özdemir, respectively:
31 December 2010
31 December 2009
İzmir Konak Land(1)
Tekirdağ Farm (2)
Land in Çengelköy (3)
Other land and buildings (4)
61.767.275
2.790.000
-
245.128
40.000.000
2.790.000
15.000.000
234.279
Total
64.802.403
58.024.279
(1) The fair value of the property as of 31 December 2010 and 31 December 2009, is determined in accordance with the values
defined by comparison of sales method in valuation reports dated 19 December 2010 (prepared by independent valuation
expert, İbrahim Özdemir) and 25 January 2010 (prepared by independent, professional valuation company named Lotus
Gayrimenkul Değerleme ve Danışmanlık A.Ş.) respectively.
(2) The fair value of the property as of 31 December 2010 and 31 December 2009, is determined in accordance with the values
defined by comparison of sales method in valuation reports dated 22 January 2010 and 27 January 2011 respectively.
(3) This investment property has been sold at a sales price of TL25.000.000 based on the decision of the Istanbul Metropolitan
Municipality Committee dated 13 October 2010, registry transfer dated 27 October 2010 and the act of expropriation by Istanbul Metropolitan Municipality (31 December 2009: The expertise value of this investment property has been determined
based on real estate tax declaration amounts in 2008 and price increases afterwards as indicated in the expertise report dated
20 January 2010. The use of other valuation techniques was not feasible as the mentioned property has been located in frontview zone and due to zone planning status of the property).
(4) The lands and buildings are carried at cost and determined that their costs are close to their fair values.
Cost value and accumulated depreciations of investment properties as of 31 December 2010 and 2009 are
stated below:
31 December 2010
31 December 2009
Cost
Accumulated Depreciation
23.989.484
(5.293.622)
25.332.780
(4.876.051)
Net book value
18.695.862
20.456.729
As of 31 December 2010 fair value income related to investment properties is TL 21.767.275. which consists of
fair value increase of Izmir Konak Land (1 January - 31 December 2009: TL3.638.389).
As of 31 December 2010 there are no rent income generated from investment properties (1 January - 31 December 2009: None).
There are no mortgages on investment properties (1 January - 31 December 2009: TL 270.022).
85
8. Intangible Assets
Cost:
1 January 2010
Additions
31 December 2010
Rights
Software (*)
1.316.309
2.895.435
105.274
810.194
1.421.583
3.705.629
Total
4.211.744
915.468
5.127.212
Rights
(762.163)
(374.538)
(1.136.701)
Net book value
3.449.581
3.990.511
Cost:
1 January 2010
Additions
31 December 2010
Rights
Software (*)
934.560
1.818.716
381.749
1.076.719
1.316.309
2.895.435
Total
2.753.276
1.458.468
4.211.744
Rights
(337.479)
(424.684)
(762.163)
Net book value
2.415.797
3.449.581
(*) As the software has not been started to be used by the Company as of 31 December 2010 and 2009,
depreciation has been charged as of these dates.
no
9. Investments in Associates
The Company accounts for its associate, Vakıf Emeklilik A.Ş. is available for sale financial assets in accordance
with TMS 39 - “Financial instruments: recognition and measurement” and as stated in the Communiqué on the
Preparation of the Consolidated Financial Statement of Insurance and Reinsurance Companies and Pension
Companies dated 31 December 2008 and numbered 27097:
Share (%)
37,00
Restated 31 December 2010
Cost
Fair Value
26.554.375
88.716.010
31 December 2009
Fair Value
70.300.000
Fair value of Vakıf Emeklilik A.Ş. as of 31 December 2010 and 2009 is determined according to the valuation reports dated 11 August 2010 and 30 September 2008 respectively.
Movements of the subsidiaries is as follows:
2010
2009
Beginning of period - 1 January
70.300.000
70.300.000
Fair value increase classified in equity
18.416.010
-
End of Period - 31 December
88.716.010
70.300.000
As of 31 December 2010, the dividend income received from Vakıf Emeklililik is TL 5.709.073 (1 January- 31 December 2009: None.) (Note 45).
86
10. Reinsurance assets
Reinsurance Assets /(Liability)
31 December 2010
31 December 2009
165.341.892
168.153.884
173.317.350
140.712.102
1.529.948
(64.781.008)
694.946
(65.360.492)
(30.414.982)
(32.868.025)
Reinsurer’s share of unearned premium reserve (*)
(Notes 17.15 - 17.19)
Reinsurer’s share of outstanding claims provision (*)
(Notes 17.15 - 17.19)
Receiveables from insurance and
reinsurance companies (Note 12.1) Payables to reinsurance companies (Note 19)
Deferred reinsurance commission income (*)
(Notes 17.15 - 17.19 and 19)
(*) As discussed in Note 2.14, the annual proportional quota-share reinsurance agreement signed for motor own damage and motor
third party liability branches based on the transfer of written premiums and paid claims during the period covered by the agreement has not been renewed as of 31 December 2010; and at 1 January 2011, this agreement has been transformed to a run-off
basis reinsurance agreement by which the claim liabilities of reinsurers are carried forward to the following periods. As the new
quota-share reinsurance agreement has been transformed to a run-off basis reinsurance agreement by which the claim liabilities
of reinsurers are carried forward starting from 2011, the reinsurance shares of outstanding claims provision and unearned premium reserve accounted for in the financial statements prepared as of 31 December 2010 have been calculated based on the ceding
ratio of 16,8% determined in accordance with the new reinsurance agreement. In this respect, reinsurance share of outstanding
claims provision amounting to TL32.079.084, reinsurance share of unearned premium reserve amounting to TL30.800.104 and deferred commision income amounting to TL7.626.387 have been accounted for in the financial statements as of 31 December 2010
(31 December 2009: In accordance with the quota-share reinsurance agreement signed for motor own damage and motor third
party liability branches which is valid as of 31 December 2009, reinsurance share of outstanding claims provision amounting
to TL22.001.713, reinsurance share of unearned premium reserve amounting to TL32.492.167 and deferred commision income
amounting to TL10.127.116 have been accounted for in the financial statements as of 31 December 2009).
Reinsurance Income/(Expense)
1 January -
31 December 2010
1January31 December 2009
128.547.457
59.070.822
143.110.161
62.418.214
53.678.441
36.909.504
(2.811.992)
34.614.793
(321.759.658)
(332.005.302)
2.453.043
5.987.222
Reinsurer’s share of gross paid claims
Commissions received from reinsurance companies (gross)
Reinsurers’ share of change in outstanding
claim provisions
Reinsurers’ share of change in
unearned premiums reserve
Premiums ceded to reinsurers
(Note 24)
Change in deferred commission income
received from reinsurers
Information about reinsurance agreements are disclosed in note 2.14.
11. Financial assets
11.1 The Company’s financial assets are summarised below by measurement category in the table below:
31 December 2010
Free
Total
Financial assets available-for-sale
- Non-current financial assets
3.960.247
32.675.895
Loans and Receiveables (Note 12)
-
259.164.973
36.636.142
259.164.973
Total
Financial assets available-for-sale
- Non-current financial assets
Financial assets fair value through
profit and loss
- Investment Funds
Loans and Receiveables (Note 12)
Total
Blocked
3.960.247
291.840.868
295.801.115
Blocked
31 December 2009
Free
Total
3.960.247
22.209.562
26.169.809
-
-
776.309
283.202.507
776.309
283.202.507
3.960.247
306.188.378
310.148.625
As of 31 December 2009 the Company has liquid fund amounting to TL 776.309, classified in available-for sale
financial assets.
87
11.2 Marketable securities issued during the year other than share certificates: None (31 December 2009: None).
11.3 Debt securities redeemed during the year: None (31 December 2009: None).
11.4 Market value of marketable securities and financial assets carried at cost and carrying value of marketable
securities and financial assets carried at market value:
Financial Assets:
Share (%)
Restated31 December 201031 December 2009
Cost
Fair value
Fair value
Subsidiaries:
Güneş Tur. End. ve Tic. A.Ş. (1)
100,00
1.076.713
-
-
15,65
11,00
1,67
3.912.319
825.000
379.842
17.253.008
2.161.500
1.185.600
10.367.454
1.056.000
1.373.517
13,71
1,43
10,00
10,00
1,77
9,71
0,25
4,54
7.229.553
3.836.957
908.983
5.915.332
4.703.224
13.080.699
130.801
130.565
9.597.000
3.690.929
1.200.000
896.300
221.250
161.746
138.244
130.565
6.717.900
3.098.302
1.650.000
896.300
587.224
161.746
130.801
130.565
Total
42.129.988
36.636.142
26.169.809
Investments in listed companies:
Vakıf Finansal Kiralama A.Ş. (2)
Vakıf Menk. Kıy. Yat. Ort. A.Ş. (2)
Vakıf Gayrimenkul Yatı. Ort. A.Ş. (2)
Other financial assets:
Vakıf Finans Faktoring A.Ş. (3)
Taksim Otelcilik A.Ş. (3)
Vakıf Sistem Pazarlama Yazılım A.Ş. (3)
Vakıf İnşaat Restorasyon Tic. A.Ş. (4)
Vakıf Enerji ve Madencilik A.Ş. (3)
Vakıf Pazarlama Ticaret A.Ş. (5)
Vakıf Yatırım Menkul Değerler A.Ş. (3)
Tarım Sigortaları Havuz İşl. A.Ş. (6)
(1) The Company accounts for its subsidiary, Güneş Tur. End. ve Tic. A.Ş. as available for sale financial assets in accordance with TMS 39 - “Financial instruments: recognition and measurement” as stated in the Communiqué on the Preparation of the Consolidated Financial Statement of Insurance and Reinsurance Companies and Pension Companies dated
31 December 2008 and numbered 27097 and measures it at cost less cumulative impairment losses as of 31 December 2010
and 2009.
(2) Fair value of the investments in listed companies are accounted for with their market prices.
(3) Fair value of the investments as of 31 December 2010 and 2009 is determined in accordance with the valuation analysis performed as of 31 December 2009 and 30 June 2008 respectively.
(4) Fair value of the investments as of 31 December 2010 and 2009 is determined in accordance with the valuation analysis performed as of 30 June 2008.
(5) Fair value of the investments as of 31 December 2010 and 2009 is determined accordance with the net asset value of the
financial statements of the investment as of 31 December 2008.
(6) The investment is carried at cost since it does not have a quoted market price in active markets.
The company does not have any other marketable securities other than non-current financial assets as of 31 December 2010.
Marketable Securities:
Investment fund
88
Cost
776.309
31 December 2009
Book Value
776.309
Fair value
776.309
11.4 Market value of marketable securities and financial assets carried at cost and carrying value of marketable
securities and financial assets carried at market value (Continued):
The movement of non-curent financial assets is as follows:
2010
Financial
assets
Impairment (-)
Financial
assets, net
Opening balance - 1 January
Valuation gains
classified under equity
Valuation losses
charged to profit and loss
50.550.815
(24.381.006)
26.169.809
9.728.027
1.104.280
10.832.307
-
(365.974)
(365.974)
Closing balance - 31 December
60.278.842
(23.642.700)
36.636.142
2009
Financial
assets
Impairment (-)
Financial
assets, net
Increases in the period
Valuation gains
classified under equity
42.489.532
806.599
(24.381.006)
-
18.108.526
806.599
7.254.684
-
7.254.684
50.550.815
(24.381.006)
26.169.809
11.5 Amounts of marketable securities classified under marketable securities and investment securities accounts
issued by the Company’s shareholders, associates and subsidiaries and the issuers: None (31 December 2009:
None).
11.6 Value increase on financial assets in the last three years: TL 12.497.307 (31 December 2009: TL 7.254.684).
11.7 - 11.9 Other information about financial assets:
The unrealised fair value changes from financial assets amounting to TL 12.497.307 is classified under account
“Valuation of Financial Assets” (31 December 2009: TL 7.254.684 increase in fair value).
Maturity of financial assets:
Financial assets of the Company as of 31 December 2010 are composed of financial assets amounting to
TL36.636.142 with no defined maturities.
Financial assets of the Company as of 31 December 2009 are composed of financial assets amounting to
TL26.169.809 with no defined maturities and investment funds amounting to TL776.309.
The Company has no foreign currency denominated financial assets as of 31 December 2010 and 2009.
89
12. Loans and Receivables
12.1 Classification of the receivables as receivables from customers, receivables from related parties, advance
payments (short-term and long-term prepayments) and others:
31 December 2010
31 December 2009
178.150.825
72.116.504
204.377.429
68.192.717
5.888.512
(1.282.751)
(2.447.245)
Receivables from agencies
Receivables from policyholders
Claim recovery and salvage receivables - net
Rediscount on receivables (-)
Due from insurance operations
6.812.108
254.873.090
276.935.009
19.273.363
1.529.948
24.738.601
14.256.079
694.946
16.110.217
Receivables from main operations - gross
300.415.002
307.996.251
Provision for subrogation receivables under legal follow-up
(24.738.601)
(16.110.217)
(12.696.668)
(8.683.527)
(3.502.473)
(312.287)
-
259.164.973
283.202.507
31 December 2010
31 December 2009
30.627.113
(24.738.601)
(312.287)
22.922.325
(16.110.217)
-
5.576.225
6.812.108
Doubtful receivables from main operations
Receivables from insurance and reinsurance companies
Claim recovery receivables under legal follow-up- net
Provision for doubtful receivables from
main operations
Provision for doubtful receivables from
agencies and policyholders
Provision for claim recovery receivables
Receivables from main operations - net
The details of claim recovery and salvage receivables are as follows:
Receivables for salvage and claim recovery
Provision for subrogation receivables under legal follow-up
Provision for receivables for salvage and claim recovery
Receivables for salvage and claim recovery - net
12.2 Due from/due to shareholders, associates and subsidiaries:
The transactions and balances with the related parties are disclosed in Note 45.
12.3 Total mortgages and collaterals obtained for receivables:
Details of the mortgages and collaterals obtained are as follows:
Guarantees and collaterals received
31 December 2010
31 December 2009
Mortgages received
Letters of guarantee
Treasury bills and government bonds
Cash guarantees
Other guarantees and collaterals
73.694.226
18.027.080
1.354.450
1.119.621
893.205
68.490.993
13.363.030
206.249
874.673
95.088.582
82.934.945
90
12.4 Receivables and payables denominated in foreign currencies having no foreign exchange rate guarantees,
assets in foreign currencies and conversion rates:
Balances of receivables denominated in foreign currencies is as follows:
31 December 2010
Foreign Currency
Foreign Currecy
Exchange
Type
Amount
Rate
USD
13.996.244
1,5460
EUR
3.059.124
2,0491
GBP
29.350
2,3886
CHF
9.577
1,6438
JPY
77.131
0,0189
JD
12
2,1762
21.638.194
6.268.450
70.106
15.742
1.460
26
Total
27.993.978
Foreign Currency
Type
Amount
in TL
31 December 2009
Foreign Currecy
Exchange
Amount
Rate
USD
EUR
GBP
CHF
JPY
NOK
SEK
JD
28.627.604
4.171.191
58.058
39.695
218.405
77
95
12
Amount
in TL
1,5057
2,1603
2,3892
1,4492
0,0163
0,2589
0,2082
2,1378
43.104.583
9.011.024
138.712
57.526
3.560
20
20
26
Total
52.315.471
12.5 - 12.7 Other information about loans and receivables:
The maturity analysis of due from insurance operations is as follows:
31 December 2010 31 December 2009
Overdue receivables
Up to 3 months
3 - 6 months
94.127.519
82.617.037
60.519.762
6 months - 1 year
More than 1 year
12.800.300
202.711
87.677.409
101.334.472
69.378.802
13.581.214
598.249
250.267.329
272.570.146
The movement of provision for receivables from policyholders and intermediaries is as follows:
Additions during the period
Collections
Receivables writen off
2010
2009
8.683.527
5.044.143
(987.345)
(43.657)
6.398.558
3.594.870
(1.247.164)
(62.737)
12.696.668
8.683.527
91
12.5 - 12.7 Other information about loans and receivables (Continued):
The movement of provision for doubtful receivables from main operations is as follows (*):
2010
2009
-
3.502.473
-
3.502.473
-
(*) The Company has calculated and accounted for a provision of TL 3.502.473 for its overdue receivables which
are not under legal follow-up for the first time as of 31 December 2010. The Company has not accounted for any
provision for its overdue receivables which are not under legal follow-up as of 31 December 2009 (Note 2.8).
Movement of the provision for subrogation and salvage receivables is as follows:
2010
2009
16.110.217
8.628.384
10.888.080
5.222.137
24.738.601
16.110.217
Overdue but not impaired receivables from policyholders and agencies:
Up to 3 months
3 - 6 months
6 - 12 months
More than 1 year
70.968.445
7.537.349
8.177.614
3.941.637
45.286.379
36.301.236
1.978.701
4.111.093
Total
90.625.045
87.677.409
The guarantees received for the abovementioned receivables are follows:
Mortgages received
Cash guarantees and Letter of guarantees
24.004.463
3.857.849
24.797.243
4.070.412
Total
27.862.312
28.867.655
Considering the intermediaries from which collaterals received are higher than receivable amounts, utilisable collaterals for overdue receivables are calculated as TL7.347.126 (31 December 2009: TL 6.843.457).
13. Derivative financial instruments
92
14. Cash and Cash Equivalents
Cash and cash equivalents that are included the statement of cash flows for 31 December 2010 and
31 December 2009 are presented in Note 2.12 and the details of bank deposits of the Company are as follows:
Bank deposits in TL
- demand deposits
6.308.217
- time deposits
- credit card receivables
5.764.506
125.270.170
139.684.695
28.196.404
27.718.755
174.189.316
158.753.431
Foreign currency denominated bank deposits
- demand deposits
2.399.536
3.451.259
2.399.536
3.451.259
176.588.852
162.204.690
Total
As of 31 December 2010, deposits amounting to TL83.059.308, TL4.131.276 and TL101.255 are blocked in favor of
the Treasury, TARSİM and KKTC Central Bank, respectively (31 December 2009: TL84.018.234, TL2.000.000 and
TL110.733, respectively).
The maturities of the Company’s time deposits as of 31 December 2010 and 2009 are less than three months.
Weighted average interest rates time deposits are as follows:
TL
8,72%
Foreign currency denominated demand deposits are as follows:
31 December 2010
FC
TL
USD
EUR
GBP
JPY
CHF
1.240.270
231.409
3.296
1.367
-
Total
1.917.457
474.180
7.873
26
-
9,84%
31 December 2009
FC
TL
1.203.394
740.693
16.109
1.350
470
1.811.950
1.600.119
38.487
22
681
2.399.536
3.451.259
93
15. Share Capital
The Company has 1.500.000.000 units of shares which are fully paid as of 31 December 2010 and 2009.
The movement of shares between opening and closing balances is as follows:
1 January 2010
Issued
31 December 2010
Nominal
Nominal
Nominal
Unit
TL
Unit
TL
Unit
TL
Paid-in capital
1.500.000.000 150.000.000
-
-
1.500.000.000
150.000.000
Total
1.500.000.000 150.000.000
-
-
1.500.000.000
150.000.000
1 January 2009
Issued
31 December 2009
Nominal
Nominal
Nominal
Unit
TL
Unit
TL
Unit
TL
Paid-in capital
1.500.000.000 150.000.000
-
-
1.500.000.000
150.000.000
Total
1.500.000.000 150.000.000
-
-
1.500.000.000
150.000.000
Capital reserves:
The movement of capital reserves is as follows:
Increase /(decrease) in revaluation fund, net (*)
Closing Balance - 31 December
2010
2009
22.570.074
23.171.036
3.322.930
(600.962)
25.893.004
22.570.074
(*)In accordance with “TMS 16 - Tangible Assets”, the Company accounts for property for operational use (land
and buildings) using the revaluation model. Increases in the carrying amounts arising on revaluation of land
and buildings, net of tax, are accounted for in “Other capital reserves” under shareholders’ equity. At each
accounting period, the difference between depreciation based on the revalued carrying amount of the asset
(charged to the statement of income) and the depreciation based on the asset’s original cost is transferred from
“Other Capital reserves” to retained earnings. In accordance with the current regulation, revaluation increases
arising from the revaluation of property for operational use are not allowed to be used in capital increases. The
movements in the current period related to revaluation increases are disclosed in Note 6.
Legal Reserves:
Retained earnings as per the statutory financial statements, other than legal reserve requirements as referred
below, are available for distribution. The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code. The Turkish Commercial Code stipulates that the first legal reserve
is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the
Company’s paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash
distributions in excess of 5% of the paid-in share capital. Under the Turkish Commercial Code, the legal reserves
can only be used to offset losses unless they exceed 50% of paid-in share capital and are not available for any other
usage. There is no movement in the legal reserves in the current period.
Valuation of Financial Assets:
The unrealized gains and losses on available-for-sale financial assets is credited to “Valuation of financial assets”
account in shareholders’ equity.
Movement of valuation of financial assets in the year is as follows:
2010
2009
Opening balance - 1 January (net of tax)
43.269.125
36.014.441
Fair value increase / (decrease) Tax effect of fair value changes (Note 35)
29.248.317
4.826.589
7.254.684
-
Closing balance - 31 December (net of tax )
77.344.031
43.269.125
94
15. Share Capital (Continued)
Other Profit Reserves:
The earthquake provision amounting to TL 12.464.935 as of 30 June 2007 has been transferred to other profit reserves under equity in accordance with the related regulation, as of 3 September 2007.
Accounting of profit generated from the sales of the properties in the profit not subject to distribution account
under equity:
In accordance with the Corporate Tax Law article 5.1.e, 75% of the profit obtained from the sales of the properties
of the Company is considered as tax exempt in such condition that the amount is kept in capital reserves under liabilities for 5 years. The profit assumed as tax exemption cannot be transferred to any account except for the capital
account or retrieved from the Company. The Company classified TL 7.500.000 which consists of 75% of investment
income from sale of an investment property, land in Çengelköy of TL 10.000.000 realised in 2010 and calculated using the book values as determined by Tax Procedural Law, in “Profit not Subject to Distribution” included in “Net
Profit for the Period” account group under shareholders’ equity whereas total investment sales income is recognised in the statement of income in accordance with regulation dated 27 October 2008 and numbered 2008/41.
16. Other Reserves and Equity Component of Discretionary Participation Feature
Information about other reserves classified under the equity is explained in Note 15.
17. Insurance liabilities and reinsurance assets
17.1 Guarantees to be provided and guarantees provided for life and non-life branches:
Required guarantee amount to be
provided for non-life branch (*)
Guarantees provided for non-life branch
67.023.358
87.019.555
67.562.260
87.978.481
(*)Under the article 4 of the “The Communiqué on the Financial Structure of Insurance, Reinsurance and Pension Companies”, published in accordance with the Insurance Law, in the Official Gazette dated 7 August 2007
and numbered 26606, the insurance companies and private pension companies operating in life and personal
accident branches are required to provide guarantees that equal to one third of required capital amount as
determined by capital adequacy calculation, as Minimum Guarantee Fund, in each capital adequacy calculation period. Since the capital adequecy calculation has not been completed as of the date of preparation of the
financial statements, required guarantee amount to be provided for non-life branches is calcuated based on the
minimum required capital amount calculated as of 30 June 2010.
17.2 Number of life policies, the number and mathematical reserve amount of the life policies that enter and exit
during the year and current status: None (31 December 2009: None).
17.3 Guarantee amount to be provided for life branch
Disclosed in Note 4.
17.4 Unit prices of pension funds and savings founded by the Company: None (31 December 2009: None).
17.5 Units and amounts of share certificates in portfolio and in circulation: None (31 December 2009: None).
17.6 Numbers and portfolio amounts of the individual and group pension funds’ participants (entered, left, cancelled during the period and the current participants): None (31 December 2009: None).
17.7 Valuation methods of profit share calculation for life insurance: None (31 December 2009: None).
95
17.8 Number of units and individual/group allocation of gross/net contribution amounts of the private pension
fund participants at the Company during the period: None (31 December 2009: None).
fund participants transferred from another company during the period: None (31 December 2009: None).
fund participants transferred from the life insurance portfolio to the private pension fund portfolio during the
period: None (31 December 2009: None).
fund participants that left the Company and transferred to another company or that left the Company but did not
transfer to another company: None (31 December 2009: None).
17.12 Number of units, gross/net premiums and individual/group allocation for life policyholders that joined the
portfolio during the period: None (31 December 2009: None).
17.13 Number of units, gross/net premiums and individual/group allocation of mathematical reserves for life
policyholders that left the portfolio during the period:
1 January - 31 December 2010
Number of Gross Contracts (*) PremiumPremium
Individual
-
-
NetMathematical
Number of
Reserves
Contracts
-
1.101
-
Gross
Net Mathematical
Premium Premium
1.951
1.795
Reserves
-
The Company has transferred all of the life portfolio to its associate Vakıf Emeklilik A.Ş.in accordance with the
agreement dated 9 April 2009. This transfer is approved at 24 November 2008 by the related governmental body
which the Treasury is affiliated.
17.14 Profit share allocation rate to the life policyholders: None (31 December 2009: None).
17.15 - 17.19 Other required information about liabilities from insurance agreements:
Outstanding claims provision:
Paid claims
Increase/(decrease)
- Outstanding claims
of current period
- Prior years’ outstanding claims
Additional reserve calculated
according to new ACLM
Closing balance -31 December
96
2010
Gross Reinsurer’s share
Net
212.456.975
(143.136.409)
(114.946.079)
49.102.986
97.510.896
(94.033.423)
128.371.713
65.400.115
(59.942.413)
(15.574.653)
68.429.300
49.825.462
263.092.394
93.204.048
356.296.442
(141.360.159)
(31.957.191)
(173.317.350)
121.732.235
61.246.857
182.979.092
17.15 - 17.19 Other required information about liabilities from insurance agreements (Continued):
Gross
2009
Reinsurer’s share
Net
Paid claims
Increase
- Outstanding claims
of the current period
- Prior years’ outstanding claims
190.751.388
(114.445.682)
(99.450.248)
53.653.309
91.301.140
(60.792.373)
132.572.146
3.579.123
(69.044.881)
(104.259)
63.527.265
3.474.864
212.456.975
(114.946.079)
97.510.896
51.388.198
(16.958.488)
34.429.710
Claims incurred but not reported
Additional outstanding claim
provision calculated from actuarial
chain ladder method
Outstanding claims adequacy provision
Expected salvage and
claim recovery income accrual
13.727.883
17.166.794
(779.503)
(10.255.852)
12.948.380
6.910.942
(11.469.277)
2.227.819
(9.241.458)
Closing balance -31 December
283.270.573
(140.712.102)
142.558.470
Gross
2010
Reinsurer’s share
Net
Net change 388.416.530
(8.483.598)
(168.153.884)
2.811.992
220.262.646
(5.671.606)
379.932.932
(165.341.892)
214.591.040
Gross
2009
Reinsurer’s share
Net
Net change 330.856.945
57.559.585
(133.539.091)
(34.614.793)
197.317.854
22.944.791
388.416.530
(168.153.884)
220.262.646
Unearned premium reserve:
As of 31 December 2010, deferred commission income and deferred commission expenses amount to TL 30.732.748
and TL 45.034.820 (31 December 2009: TL 32.868.025 and TL 47.597.273) and recorded in deferred income and
prepaid expenses accounts, respectively on the balance sheet
Unexpired risks reserve:
Gross
2010
Reinsurer’s share
Net
Opening balance - 1 January Net change
2.834.079
11.552.141
-
-
2.834.079
11.552.141
14.386.220
-
14.386.220
Gross
2009
Reinsurer’s share
Net
Net change
2.268.314
565.765
-
-
2.268.314
565.765
2.834.079
-
2.834.079
97
Equalisation reserve (*):
Net change Gross
4.036.984
1.826.917
2010
Reinsurers’ share
-
-
Net
4.036.984
1.826.917
5.863.901
-
5.863.901
Net change Gross
1.834.561
2.202.423
2009
Reinsurers’ share
-
-
Net
1.834.561
2.202.423
4.036.984
-
4.036.984
Foreign
exchange
rate
1,5535
2,0590
2,4011
Amount
in TL
70.321.508
7.841.935
110.357
78.273.800
(*) As disclosed in Note 2.24, related provision is calculated on a net basis.
Foreign currency denominated outstanding claims provision are as follows:
31 December 2010
Foreign
currency
amount
45.266.500
3.808.614
45.961
Foreign currency
Type
USD
EUR
GBP
31 December 2009
Foreign
currency
amount
30.572.773
4.605.257
152.427
Foreign currency
Type
USD
EUR
GBP
Foreign
exchange
rate
1,5130
2,1707
2,4017
Amount
in TL
46.256.606
9.996.631
366.085
56.619.322
Salvage and subrogation income:
The amounts of the net salvage and subrogation income which are collected and the accrued income amounts
from salvage and subrogation receivables as at 31.12.2010 for the claims paid by the Company are as follows:
Collections
GrossReinsurers’ share
31 December 2010
Accrual
Net
Net
Land vehicles
Fire and natural disasters General liability
Health
Marine
General losses
Accident
Water vehicles
42.765.436
2.997.214
2.148.764
1.202.063
786.835
1.017.998
314.174
1.620
4.342
(7.483.951)
(526.757)
(587.915)
(105.262)
(118.025)
(387.796)
(285.267)
(1.204)
(4.319)
35.281.485
2.470.457
1.560.849
1.096.801
668.810
630.202
28.907
416
23
6.703.905
373.634
-
-
-
-
-
-
-
(1.126.256)
(62.771)
-
-
-
-
-
-
-
5.577.649
310.863
-
Total 51.238.446
(9.500.496)
41.737.950
7.077.539
(1.189.027)
5.888.512
Collections
31 December 2009
Accrual
Net
Net
Land vehicles
Fire and natural disasters General liability
Health
Marine
General losses
Accident
Water vehicles
39.892.595
2.526.496
767.534
103.638
445.420
1.719.452
141.588
35.719
17.373
(6.981.204)
(443.700)
(420.482)
(98.707)
(134.546)
(126.024)
(116.209)
(15.717)
(10.669)
32.911.391
2.082.796
347.052
4.931
310.874
1.593.428
25.380
20.002
6.704
8.257.100
-
-
-
-
-
-
-
-
(1.444.993)
-
-
-
-
-
-
-
-
6.812.108
-
Total
45.649.815
(8.347.257)
37.302.557
8.257.100
(1.444.993)
6.812.108
98
99
5.298.502.027
4.684.304.959
3.930.707.105
628.853.223
1.089.750.860
1.100.835.720
1.111.267.302
-
-
-
3.229.301.886
755.216.360
1.235.793.709
1.238.291.817
-
-
-
-
2.208.308.512
832.306.762
1.376.001.750
-
-
-
-
-
863.644.084
863.644.084
-
-
-
-
-
-
24.684.026.654
4.552.878.100
6.316.172.036
4.980.075.172
3.778.194.204
2.693.474.987
1.665.720.416
697.511.739
241.823.177
421.134.614
428.840.853
433.847.961
434.832.706
437.713.603
440.034.999
Total gross incurred claim 2.838.227.913
Claims incurred
in the year of claim
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
3.932.688.948
377.611.604
700.744.445
705.797.210
713.263.488
715.416.820
719.855.381
-
4.525.902.734
552.881.357
979.347.277
987.812.248
997.456.390
1.008.405.462
-
-
3.922.184.122
623.812.122
1.086.125.557
1.099.829.713
1.112.416.730
-
-
-
3.145.783.622
699.170.153
1.217.242.410
1.229.371.059
-
-
-
-
2.236.600.602
839.869.612
1.396.730.990
-
-
-
-
-
975.347.548
975.347.548
-
-
-
-
-
-
21.576.735.489
4.310.515.573
5.801.325.293
4.451.651.083
3.256.984.569
2.158.654.988
1.157.568.984
440.034.999
1 January 2002 - 1 January 2003 - 1 January 2004 - 1 January 2005 - 1 January 2006 - 1 January 2007 - 1 January 2008 - Total Gross
Accident year
30 December2003 30 December2004 30 December2005 30 December2006 30 December2007 30 December2008 30 December2009 Incurred Claim
Claim development table as of 31 December 2009 on gross incurred claims basis in accordance with the regulation in force as of 31 December 2010:
Total gross incurred claim 4.469.258.081
581.407.921
1.005.955.384
1.019.431.403
1.031.424.405
1.046.085.846
-
-
364.002.643
673.304.501
677.905.590
682.463.095
683.661.541
690.408.972
697.511.739
Claims incurred
in the year of claim
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
527.447.107
935.365.832
943.610.642
953.039.402
963.727.600
975.311.444
-
1 January 2003 - 1 January 2004 - 1 January 2005 - 1 January 2006 - 1 January 2007 - 1 January 2008 - 1 January 2009 - Total Gross
30 December2004 30 December2005 30 December2006 30 December2007 30 December2008 30 December2009 31 December2010 Incurred Claim
Accident year
Claim development table on gross incurred claims basis as of 31 December 2010:
The Company prepares the claim development table in accordance with the Regulation on Technical Reserves:
In respect to Circular aforementioned in note 2.24, the Company determined the New ACLM calculation methods
used for each branch by considering the characteristics of the branches and Company’s portfolio in accordance
with the considerations of the Company’s actuary. Methods used in ACLM calculations for each branch and additional gross and net provision amounts are as follows:
Gross Additional Net AdditionalGross Additional Net Additonal
Branch
Method
Provision
Provision Provision (%80) Provision (%80)
Compulsory Traffic
General Liability
Financial Liability
Air Vehicles Liability
General Losses
Accident
Health
Fire and Natural Disasters
Security Corruption
Transportation
Air Vehicles
Legal Protection
Land Vehicles
Water Vehicles
Financial Losses
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Standart
Munich
Standart
Standart
84.720.539
18.401.879
5.740.188
5.653.227
3.089.619
2.652.135
2.581.071
653.874
469.301
388.343
89.520
1.855 (6.844.035)
(1.076.817)
(15.639)
70.487.488
6.550.280
4.775.836
-
153.300
1.158.400
2.193.910
255.534
90.387
105.474
-
1.855
(5.694.237)
(128.787)
(1.564)
67.776.431
14.721.503
4.592.150
4.522.582
2.471.695
2.121.708
2.064.857
523.099
375.440
310.674
71.616
1.484
(5.475.228)
(861.454)
(12.509)
56.389.991
2.690.966
3.820.669
122.640
926.720
1.755.128
42.240
72.310
84.379
1.484
(4.555.390)
(103.030)
(1.250)
Total 116.505.060
79.947.876
93.204.048
61.246.857
(*) For the branches with negative results according to the ACLM calculation, 50% of the negative results is taken
into account according to the Communique dated 14 January 2011 numbered 2011/1.
ACLM amounts are calculated on gross basis and net ACLM amounts are determined with the related reinsurance
agreements in force. The methods determined to calculate the net additional reserve amount is presented below.
Branch
Retention method
Land Vehicles
Water Vehicles
Compulsory Traffic
Financial Liability
Air Vehicles Liability
Air Vehicles
Accident
General Losses
Financial Losses
Health
Transportation
General Liability
Security Corruption Legal Protection
Conservation rate in the related reinsurance agreement in force
Conservation rate of the period end outstanding claims
The peak claims which are mentioned as big claims are eliminated in a seperate calculation file by using prescribed
statistical methods in the Circular aforementioned in note 2.24 to calculate ACLM with more homogeneous data
set. Big claim limits used to determination of big claims eliminated in related calculations for each branch are as
follows:
100
Branch
Big Claims Limit
Land Vehicles
Water vehicles
Compulsory traffic
Financial liability
Accident
General Losses
Marine
General Responsibility
Health
283.694
21.467.005
101.924
1.047.033
485.142
75.771.083
1.543.586
9.698.265
786.137
19.758
18. Investment Contract Liabilities
19. Trade and Other Payables, Deferred Income
Payables to reinsurance companies (Note 10)
Deferred reinsurance commission income
(Notes 10 and 17.15 - 17.19)
Other miscellaneous payables (Note 47.1)
Payables to personnel
Payables to shareholders
64.781.008
65.360.492
30.414.982
7.185.712
51.566
1.409
32.868.025
3.760.081
19.256
1.444
102.434.677
102.009.298
31 December 2010
Foreign Currency
Exchange
Amount
Rate
Amount
in TL
Total
Related party transactions are disclosed in Note 45.
Foreign currency denominated payables to reinsurance companies is as follows:
Foreign Currency
Type
USD
Euro
1,5460
2,0491
51.543.748
7.520.195
Total
59.063.943
Foreign Currency
Type
USD
Euro
GBP
33.340.070
3.669.999
31 December 2009
Foreign Currency
Exchange
Amount
Rate
28.517.422
3.300.566
5.578
Amount
in TL
1,5057
2,1603
2,3892
42.938.682
7.130.212
13.326
Total
50.082.220
20. Borrowings
101
21. Deferred income tax
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
In accordance with the current tax regulations, the tax rate is determined as 20% and 5% for the deferred income tax
assets and liabilities calculated in the financial statements (31 December 2009: 20% and 5%).
As of 31 December 2010 and 31 December 2009 the temporary differences giving rise to deferred income tax assets
and deferred income tax liabilities with using appropriate tax rates are as follows:
Cumulative temporary
differences
Deferred income tax
assets/(liabilities)
31 December
31 December
31 December
31 December
2010
2009
2010
2009
21.227.041
14.386.220
12.948.380
2.834.079
4.245.408
2.877.244
2.589.676
566.816
7.283.110
23.642.700
4.980.975
4.036.984
6.612.428
24.381.006
4.571.645
502.677
1.456.622
1.182.135
996.195
807.397
1.322.486
1.219.050
914.329
100.535
3.814.760
2.477.679
-
2.787.768
762.952
495.536
557.554
12.823.489
7.270.446
(28.138.296)
(44.486.642)
(37.567.549)
(379.584)
(6.458.392)
(4.070.738)
(2.344.850)
(59.302)
(5.627.659)
(8.897.329)
(1.878.377)
(75.917)
(12.933.282)
(16.479.282)
Net deferred income tax assets (-) (Note 35)
(109.793)
(9.208.836)
Deferred tax assets
Additional provision accounted for
under chain ladder method
Unexpired risks reserve
Provision for employment termination
benefits and unused vacation
Impairment on non-current financial assets
Fixed asset book value difference
Equalisation reserve
Provision for receivables from
policyholders and intermediaries
Rediscount on receivables
Deferred tax liabilities
Revaluation fund of property
for operational use
Fair value adjustments of investments
Investment properties
Rediscount on payables
(32.291.960)
(81.414.769)
(46.897.005)
(296.504)
The movement of deferred tax assets in the current period is as follows:
2010
2009
(9.208.836)
(9.524.006)
Deferred income tax charge (Note 35)
Deferred tax liability accounted for in the equity associated
with revaluation fund of property for operational use (Note 6)
Deferred tax liability accounted for in the equity associated
with the valuation increase of non-current
financial assets (*) (Note 15)
5.103.186
164.930
(830.733)
150.240
4.826.589
-
(109.793)
(9.208.836)
(*) Tax rate used in the deferred tax calculation of non-current financial statements was 20% in prior years’ financial statements. The Company has determined the tax rate of the investments as 5% assuming that these
gains will be classified under the reserve account in equity and will not be subject to distribution as required
in tax regulations. The effect this estimation change on account “Valuation of Financial Assets” under equity is
TL6.289.006.
In the financial statements prepared for the period ended 31 December 2010, the Company has recognised deferred tax assets amounting to TL 7.469.566 (31 December 2010: TL 2.576.045) over carry forward tax losses of TL
37.347.829 (31 December 2009: TL 12.880.224). The Company will be able to utilise the deductible carry forward tax
losses using the estimated profits in the following years. The amounts of the carry forward tax losses over which
the deferred tax assets are calculated as distributed to the last fiscal periods that they can be utilised are presented
below:
31 December 2010
31 December 2009
2014
2015
12.880.224
24.467.605
12.880.224
-
37.347.829
12.880.224
102
22. Retirement Benefit Obligations
Provision for employment termination benefits
5.404.037
4.974.510
5.404.037
4.974.510
Under Turkish Labor Law, the Company is required to pay termination benefits to each employee who has completed one year of service and whose employment is terminated without due cause, is called up for military service, dies or who retires after completing 25 years of service (20 years for women) and achieves the retirement age
(58 for women and 60 for men).
The amount payable consists of one month’s salary limited to a maximum of TL 2.517,01 for each year of service
at 31 December 2010 (31 December 2009: TL 2.365,16)
Provision for employment termination benefits is not funded as there is no legal funding requirement.
Provision for employment termination benefits has been calculated by estimating the present value of the future
probable obligation of the Company arising from the retirement of the employees.
TMS 19 requires actuarial valuation methods to be developed to estimate the Company’s obligation. Accordingly,
the following actuarial assumptions are used in the calculation of the total liability:
Discount rate (%)
Turnover rate to estimate the probability of retirement (%)
4,66
96,71
5,92
95,67
The principal assumption is that the maximum liability will increase in line with inflation. Thus, the discount
rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. As the
maximum liability is revised semi-annually, the maximum amount of TL 2,623.23 which is effective from 1 January 2010, has been taken into consideration in calculating the provision for employment termination benefits. (1
January 2010: TL 2.427,04).
Movement in the provision for employment termination benefits in the current period is as follows:
Paid during the period (Note 33)
Provision for the current period
2010
2009
4.974.510
4.677.388
(1.244.127)
1.673.654
(1.291.064)
1.588.186
5.404.037
4.974.510
23. Provisions for Other Liabilities and Charges
Commitments not recognised as liabilities are disclosed in Note 43.
Guarantees received are disclosed in Note 12.3.
Provisions for expense accruals on the balance sheet are disclosed in Note 47.1
103
24. Net Insurance Premium Revenue
Distribution of premium income is as follows:
Reinsurers’
Reinsurers’
Gross
share
Net
Gross
share
Net
Land vehicles
Land Vehicles Liability
Fire
General losses
Health
Air vehicles liability
Air vehicles
Marine
Accident
General liability
Water vehicles
Legal protection
Other
185.994.659
170.915.777
128.725.398
99.461.272
56.208.419
24.520.206
17.380.629
14.021.249
12.385.895
12.263.724
7.867.247
3.615.494
4.008.294
(34.744.115)
(28.874.852)
(86.692.705)
(89.157.473)
(6.890.114)
(24.511.452)
(17.380.629)
(8.544.608)
(3.404.559)
(9.550.223)
(7.490.611)
(665.538)
(3.852.779)
151.250.544
142.040.925
42.032.693
10.303.799
49.318.305
8.754
-
5.476.641
8.981.336
2.713.501
376.636
2.949.956
155.515
168.344.839
186.817.241
131.446.919
81.864.538
58.012.183
22.641.888
16.110.728
12.407.099
11.766.597
11.351.825
13.789.280
3.671.127
8.797.746
(32.595.415)
(39.486.690)
(92.361.662)
(75.038.937)
(11.988.519)
(22.641.888)
(16.108.519)
(7.546.202)
(4.502.895)
(9.239.220)
(13.290.829)
(670.493)
(6.534.033)
135.749.424
147.330.551
39.085.257
6.825.601
46.023.664
2.209
4.860.898
7.263.702
2.112.604
498.451
3.000.634
2.263.713
Total
737.368.263
(321.759.658)
415.608.605
727.022.010
(332.005.302)
395.016.708
25. Fee Income
None (1 January - 31 December 2010: None).
26. Investment Income
1 January -
1 January31 December 2010 31 December 2009
Cash and cash equilavents
Interest income
Non-current finansal assets
Dividend profits (Note 45)
Interest income from held to maturity
financial assets
Total
11.513.463
3.727.400
6.589.127
1.237.351
-
17.301.886
18.102.590
22.266.637
27. Net Realised Gains on Financial Assets
Information about realised gains and losses on available-for-sale financial assets is disclosed in Note 11 and 15.
28. Net Fair Value Gains on Assets at Fair Value through Income
29. Insurance Benefits and Claims
Disclosed in Note 17.
30. Investment Contract Benefits
104
31. Other Expenses by Destination
Operating expenses classified
under technical part
1 January -
1 January 31 December 2010 31 December2009
Total (Note 32)
125.407.029
101.238.171
125.407.029
101.238.171
32. Expenses by Nature
Details of operating expenses included in the income statement are as follows:
1 January -
1 January 31 December 2010 31 December 2009
Commission expenses
Personnel expenses (Note 33)
Other technical expenses
Outsourced personnel
Advertising and marketing expenses
Office expenses
Travelling and vehicles espense
Outsourcing expenses
Other
Reinsurance commission income
103.470.946
39.652.179
13.344.304
9.337.631
7.497.070
4.680.134
2.466.815
1.570.811
4.911.004
(61.523.865)
95.943.557
36.351.300
11.299.756
4.508.518
8.422.650
5.072.608
1.066.373
1.680.379
5.298.467
(68.405.437)
Total (Note 31)
125.407.029
101.238.171
33. Employee Benefit Expenses
1 January -
Salary payments
Bonus payments
Social benefit expenses
Social security payments
Insurance payments
Employment termination benefit payments (Note 22)
Other
20.534.479
6.615.621
4.234.931
3.885.861
1.352.129
1.244.127
1.785.031
18.786.546
5.171.756
4.972.453
3.379.255
426.162
1.291.064
2.324.064
Total (Note 32)
39.652.179
36.351.300
Total amount of the salaries and the benefits provided to top management such as the chairman and the members
of the board of directors, general manager, general coordinator, assistant general managers and other executive
management in the current period are disclosed in Note 1.6.
The Company does not have any shared-based payments.
34. Finance Costs
34.1 Total financial expenses for the period: TL 48.092 (1 January - 31 December 2009: TL 6.821).
34.1.1 Expenses related to production cost: None (1 January - 31 December 2009: None).
34.1.2 Expenses related to fixed assets: None (1 January - 31 December 2009: None).
34.1.3 Direct expenses: TL 48.092 (1 January - 31 December 2009: TL 6.821).
34.2 Financial expenses related to shareholders, subsidiaries and associates (Any amount exceeding 20% of total will
be disclosed separately):
Related party transactions and balances are disclosed in Note 45 in details.
105
34.3 Sales to/purchases from shareholders, subsidiaries and associates (Any amount exceeding 20% of total will
be disclosed separately.):
34.4 Sales to/purchases from shareholders, subsidiaries and associates (Any amount exceeding 20% of total will
be disclosed separately.):
35. Income Taxes
Tax income and expenses recognised in the statements of income for the periods 1 January - 31 December 2010
and 2009 are summarised below:
1 January -
Current period corporate tax
Deferred tax income (Note 21)
-
5.103.186
164.930
Net Income Tax
5.103.186
164.930
Current period corporate tax provision
Prepaid taxes -
1.708.226
4.940.002
Prepaid taxes
1.708.226
4.940.002
12.823.489
(12.933.282)
7.270.446
(16.479.282)
(109.793)
(9.208.836)
Deferred tax asset
Deferred tax liability
Net deferred tax asset (Note 21)
The reconciliation of the actual taxation charge is as follows:
Loss before deferred and current tax (-)
Tax rate
Tax calculated
Income not subject to tax
Disallowable expenses
Carry forward tax losses over which
deferred tax asset has not been recognised
Current period tax income
(37.548.629)
%20
7.509.726
2.817.825
(330.844)
(15.303.050)
%20
3.060.610
(649.495)
(4.893.521)
(2.576.045)
5.103.186
164.930
36. Net Foreign Exchange Gains
1 January -
Investment (expense)/income
Technical income/(expense)
(873.083)
604.316
392.408
(237.827)
Net foreign Exchange (expense)/income
(268.767)
154.581
106
37. Earnings per Share
Earnings per share is calculated by dividing net profit for the period into weighted average number of shares of
the Company.
1 January -
Net loss for the period (-)
Weighted average number
of shares with nominal
value of Kr 1 per share
Losses per share (-) (Kr)
(32.445.443) (15.138.120)
1.500.000.000
(2,16)
1.500.000.000
(1,01)
38. Losses per Share
The Company’s loss per share is Kr 2,16 (1 January - 31 December 2009: Kr 1,01 loss per share). The company has
no dividend distribution for the periods ended 31 December 2010 and 2009.
39. Cash Generated from Operations
Disclosed in the statement of cash flows.
40. Convertible Bonds
41. Redeemable Preference Shares
42. Contingencies
Claim litigations against the Company (*)
92.205.403
53.323.278
(*)They are accounted for in outstanding claims provision and the movement table of outstanding claims provision
is disclosed in Note 17. Net amount of related provisions is TL 43.729.753 (31 December 2009: TL 30.388.318).
43. Commitments
The amount of guarantees and pledges details are as follows:
Letter of guarantees
16.372.932
14.191.343
Total
16.372.932
14.191.343
The Company has no foreign currency denominated commitments.
Amount of mortgages or restrictions on assets:
Deposits
Investments (Note 11.1)
Mortgages (Note 6)
87.291.839
3.960.247
-
86.128.967
3.960.247
22.705.417
Total
91.252.086
112.794.631
44. Business Combinations
None. (31 December 2009: None).
107
45. Related-party transactions
The shareholders, subsidiaries, Groupama Group companies and Vakıflar Bankası Group companies are considered as related parties in these financial statements.
Total salaries and benefits paid to executive management in the current period are disclosed in Note 1.6.
Payables to insurance and reinsurance companies
Groupama Sigorta A.Ş.
67.165
720.445
43.691
52.322
1.409
1.444
Receivables from subsidiaries
Güneş Turizm Otelcilik
Payables to shareholders
Dividend payables
Written premiums
1 January -
Vakıflar Bankası
Vakıf Sigorta Aracılık
Hizmetleri Ltd.
Vakıf İnşaat ve Restorasyon
56.260.073
59.280.348
7.348.666
340.856
131.774
2.580
7.244.855
269.104
3.648
Total
64.083.949
66.797.955
Commission expense
Vakıflar Bankası
Vakıf Sigorta Aracılık
Hizmetleri Ltd.
Vakıf İnşaat Restorasyon A.Ş.
6.192.020
6.051.309
1.032.284
138.480
-
1.029.143
434
Total
7.362.784
7.080.886
577.583
539.991
Vakıflar Bankası
227.965
178.364
172.341
178.364
Total
406.329
350.705
4.749.741
17.301.886
46.131
-
Rent income
Vakıflar Bankası
Rent expenses
Financing income
Vakıflar Bankası
Financing expenses
Vakıflar Bankası 108
45. Related-party transactions (Continued) :
Dividends received
1 January -
Vakıf Finans Faktoring A.Ş.
Vakıf Sistem Paz. Yazılım A.Ş.
Vakıf Yatırım Menkul
Taksim Otelcilik
Vakıf Finansal Kiralama
Vakıf Gayrimenkul Yatırım
5.709.073
787.651
79.714
12.689
-
-
-
241.419
188.483
782.449
25.000
Total
6.589.127
1.237.351
45.1 Doubtful receivables from shareholders, investments, subsidiaries: None (31 December 2009: None).
45.2 Breakdown of associates and subsidiaries having an indirect shareholding and management relationship
with the Company; names, participation rates and amounts of associates and subsidiaries; profit/loss and net
profit/loss in the latest financial statements, the period of these financial statements, whether these financial
statements are prepared in accordance with the accounting principles and standards as set out in the insurance
legislation, whether they are independently audited and the opinion type of the independent audit report:
31 December 2010
Independent
Financial
Restated
Book
audit
statement
Total
Total
Cost
Value
opinion
period
asset
liability
Subsidiaries
Güneş Tur. End. ve Tic. A.Ş.
Associates
Net profit/
(loss)
1.076.713
-
Not audited
31.12.2008
40.523
46.491
6.960
26.554.375
88.716.010
Not audited
30.09.2010
1.152.858
1.035.794
7.608.121
Other financial assets
Vakıf Menk. Kıy. Yat. Ort. A.Ş.
Vakıf Gayrimenkul Yatı. Ort. A.Ş.
4.960.262
Vakıf Sistem Pazarlama Yazılım A.Ş.
Vakıf İnşaat Restorasyon Tic. A.Ş.
Vakıf Pazarlama Ticaret A.Ş.
Tarım Sigortaları Havuz İşl. A.Ş. 3.912.319
825.000
379.842
17.253.008
2.161.500
1.185.600
Unqualified
Unqualified
Unqualified
31.12.2010
31.12.2010
31.12.2010
575.589.000
16.381.125
83.244.909
489.462.000
17.393.000
874.314
1.186.920
591.333
7.229.553
3.836.957
908.983
5.915.332
4.703.224
13.080.699
130.801
130.565
9.597.000
3.690.929
1.200.000
896.300
221.250
161.746
138.244
130.565
Unqualified
Not audited
Not audited
Not audited
Not audited
Not audited
Unqualified
Not audited
31.12.2009
31.12.2009
31.12.2009
31.12.2010
31.12.2009
30.06.2009
31.12.2010
31.12.2009
570.390.000
214.953.907
13.786.042
7.434.405
61.437.242
85.832.072
97.293.035
4.805.631
502.695.000
2.270.559
6.025.196
566.175
16.282.817
84.265.422
34.712.071
1.399.282
68.684.363
125.352.152
31 December 2009
Independent
Financial
Restated
Book
audit
statement
Total
Total
Cost
Value
opinion
period
asset
liability
Subsidiaries
Güneş Tur. End. ve Tic. A.Ş.
13.876.000
(894.536)
869.043
(422.736)
23.437
2.564.527
5.760.765
(5.789)
Net profit/
(loss)
1.076.713
-
Not audited
31.12.2008
40.523
46.491
6.960
Associates
26.554.375
70.300.000
Unqualified
31.12.2009 1.012.199.965
887.885.214
17.981.728
Other financial assets
Vakıf Menk. Kıy. Yat. Ort. A.Ş.
Vakıf Gayrimenkul Yatı. Ort. A.Ş.
Vakıf Sistem Pazarlama Yazılım A.Ş.
Vakıf İnşaat Restorasyon Tic. A.Ş.
Vakıf Pazarlama Ticaret A.Ş.
Tarım Sigortaları Havuz İşl. A.Ş. 3.912.319
825.000
379.842
7.229.553
3.836.957
908.983
5.915.332
4.703.224
13.080.699
130.801
130.565
10.367.454
1.056.000
1.373.517
6.717.900
3.098.302
1.650.000
896.300
587.224
161.746
130.801
130.565
Not audited
Unqualified
Unqualified
Unqualified
Not audited
Not audited
Not audited
Not audited
Not audited
Unqualified
Not audited
30.09.2009
30.09.2009
31.12.2009
31.12.2009
31.12.2009
31.12.2009
31.12.2008
31.12.2009
30.06.2009
30.09.2009
31.12.2009
215.397.000
939.553
140.774
502.695.000
2.270.559
6.025.196
1.731.658
16.282.817
84.265.422
23.499.694
1.399.282
4.892.000
2.275.179
6.879.007
13.876.000
(894.536)
869.043
(484.955)
23.437
2.564.527
4.339.475
(5.789)
68.684.363
96.469.809
268.387.000
14.761.805
77.834.088
570.390.000
214.953.907
13.786.042
10.568.813
61.437.242
85.832.072
77.412.224
4.805.631
109
45.3 Bonus shares obtained through internally funded capital increases of equity investments and subsidiaries:
None (1 January - 31 December 2009: None).
45.4 Rights on immovable and their value: None (31 December 2009: None).
45.5 Guarantees, commitments and securities given for shareholders, investments and subsidiaries: TL 4.131.276
amount is blocked in favor of TARSİM (31 December 2009: TL 2.000.000) (Note 14).
46. Events after the balance sheet date
The employment termination benefit ceiling has been increased to TL 2.623,23 effective from 1 January 2011.
47. Other
47.1 Details of “Other” items in the balance sheet which exceed 20% of its respective account group or 5% of total
assets:
a) Other Payables:
Payables to contractual services
Payables to suppliers
Other
3.072.679
2.214.708
1.898.325
2.143.462
1.616.619
Total
7.185.712
3.760.081
Equalisation reserve (Note 17.15 - 17.19)
5.863.901
4.036.984
Total
5.863.901
4.036.984
Credit card receivables
28.196.404
27.718.755
Total
28.196.404
27.718.755
Tax receivables from tax office
Baggage claims receivables
Guarantees and pledges given
Other
285.454
145.235
94.099
21.942
77.897
38.038
Total
546.730
115.935
Vacation payments provisions
1.879.073
1.637.918
Total
1.879.073
1.637.918
Receivables from sales of land in Çengelköy
Rediscount on receivables from sales of land in Çengelköy
22.000.000
(722.279)
-
Total
21.277.721
-
b) Other technical provisions - Long term:
c) Other Cash and Cash Equivalents:
d) Other current assets
e) Other Short Term Liabilities
f) Other miscellaneous payables:
110
47.2 Due from and due to personnel classified in “Other receivables” and “Other short-term or long-term payables” that exceed 1% of total assets: None (31 December 2009: None).
47.3 Receivables from claim recoveries followed under off-balance sheet items: None (31 December 2009: None).
47.4 Income and expenses related to prior periods and the amounts and sources of expenses and losses: None (1
January - 31 December 2010: None).
47.5 Information that Treasury necessitates to be presented:
Provision and rediscount expenses for the period:
1 January -
Technical provisions expenses/( income)
Outstanding claim provision
Deferred commission expense
Deferred commission income
Unearned premium reserve
(Note 17.15 - 17.19)
Unexpired risks reserve
(Note 17.15 - 17.19)
Equalisation reserve (Note 17.15 - 17.19)
31.179.165
2.562.454
(2.453.043)
9.731.844
(2.003.514)
(5.987.222)
(5.671.605)
22.944.791
11.552.141
1.826.917
565.765
2.202.423
9.241.458
(5.103.186)
(164.930)
13.759.269
(208.717)
3.594.870
(2.074.657)
429.527
297.122
241.155
(115.241)
Other provisions (income)/expenses:
Accrual of subrogation income in 2009
Deferred tax provision(Note 35 and 21)
Provision for doubtful receivables
from main operations
Rediscount (income)/expense, net
Provision for employment
termination benefits
Other Deferred Income and Expense Accruals
(Provision for unused vacation)
111
APPENDIX I - CONVENIENCE TRANSLATION OF THE STATEMENTS OF PROFIT DISTRIBUTION
Note
I.
1.1.
1.2.
1.2.1.
1.2.2.
1.2.3.
DISTRIBUTION OF PROFIT FOR THE PERIOD
PROFIT FOR THE PERIOD
TAXES PAYABLE AND LEGAL LIABILITIES
Corporation tax (Income tax)
Income tax deduction
Other taxes and legal liabilities
II.
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.
DISTRIBUTION FROM RESERVES
DISTRIBUTED RESERVES
SECOND LEGAL RESERVE (-)
DIVIDENDS TO SHAREHOLDERS (-)
To common shareholders
To preferred shareholders
To owners of participating redeemed shares To owners of profit-sharing securities To owners of profit and loss sharing securities
DIVIDENDS TO EMPLOYEES (-)
DIVIDENDS TO BOARD OF DIRECTORS (-)
III.
3.1.
3.2.
3.3.
3.4.
PROFIT PER SHARE
TO COMMON SHAREHOLDERS
TO COMMON SHAREHOLDERS (%)
TO PREFERRED SHAREHOLDERS
TO PREFERRED SHAREHOLDERS (%)
IV.
4.1.
4.2.
4.3.
4.4.
DIVIDENDS PER SHARE
TO COMMON SHAREHOLDERS
TO COMMON SHAREHOLDERS (%)
TO PREFERRED SHAREHOLDERS
TO PREFERRED SHAREHOLDERS (%)
Current period
Previous
period
A NET PROFIT FOR THE PERIOD (1.1 - 1.2) 1.3. PREVIOUS YEARS’ LOSSES (-)
1.4. FIRST LEGAL RESERVE
1.5. LEGAL RESERVES KEPT IN THE COMPANY(-)
B NET DISTRIBUTABLE
PROFIT FOR THE PERIOD [ (A - (1.3 + 1.4 + 1.5) 1.6. FIRST DIVIDEND TO SHAREHOLDERS (-)
1.6.1. To common shareholders
1.6.2. To preferred shareholders
1.6.3. To owners of participating redeemed shares
1.6.4. To owners of profit-sharing securities
1.6.5. To owners of profit and loss sharing securities
1.7. DIVIDENDS TO PERSONNEL (-)
1.8. DIVIDENDS TO FOUNDERS (-)
1.9. DIVIDENDS TO BOARD OF DIRECTORS (-)
1.10. SECOND DIVIDENDS TO SHAREHOLDERS (-)
1.10.1. To common shareholders
1.10.2. To preferred shareholders
1.10.3. To owners of participating redeemed shares
1.10.4. To owners of profit-sharing securities
1.10.5. To owners of profit and loss sharing securities
1.11. SECOND LEGAL RESERVE (-)
1.12. STATUTORY RESERVES (-)
1.13. EXTRAORDINARY RESERVES
1.14. OTHER RESERVES
1.15. SPECIAL FUNDS
-
-
Since there is no profit distribution for the periods 1 January - 31 December 2010 and 2009, the statements of profit
distribution have not been prepared.
112
Assessment of financial state, profitability
and indemnity solvency
Five-year summary of operational data are shown blow:
2010
Asset size
782.726.891
Equity
242.316.557
Pain-in Capital
150.000.000
Written Gross Premiums
737.368.263
Gross Claims Paid
(439.169.040)
Gross Outstanding Claims
(356.296.442)
Retention Premium
415.608.605
19.335.478
Retention Ratio
56%
Loss Ratio
83%
General Expenses
(70.115.644)
Investment Incomes
50.465.615
Investment Expenses *
(11.000.129)
Investment Profit
39.465.486
Gross Profit/Loss for the Term
(32.445.443)
Tax Provisions
0
Net Profit/Loss for the Term
(32.445.443)
Return on Equity %
(13,39)
Return on Assets
(4,15)
Technical Profit/ Written Premiums
2,62
Net Profit/ Written Premiums
(4,40)
2009
736.680.417
236.587.390
150.000.000
727.094.668
(438.878.201)
(283.270.573)
395.069.659
34.177.927
54%
83%
(62.389.606)
22.968.036
(4.883.809)
18.084.227
(15.138.120)
0
(15.138.120)
(6,40)
(2,05)
4,70
(2,08)
2008
655.557.982
230.102.331
150.000.000
709.619.300
(361.176.226)
(211.188.600)
373.857.534
57.001.769
53%
79%
(59.466.924)
39.854.486
(35.033.702)
24.639.912
15.745.825
(4.664.460)
11.081.365
4,82
1,69
8,03
1,56
2007
498.716.436
196.984.012
150.000.000
638.136.263
(326.007.984)
(158.367.974)
343.399.362
49.660.019
54%
81%
(43.766.899)
20.575.773
(15.414.496)
5.161.277
10.432.782
3.183.557
7.249.225
3,68
1,45
7,78
1,14
2006
401.757.718
161.168.550
75.000.000
513.293.060
(277.567.200)
(120.796.642)
261.783.630
29.354.938
51%
81%
(31.329.296)
15.404.269
(7.908.061)
7.496.208
2.533.478
0
2.533.478
1,57
0,63
5,72
0,49
* The investment expenses figure used in the Investment Profit calculation does not include the investment income item transferred to technical from non-technical section.
As of end-2010, Güneş Sigorta’s asset size reached 782.726.891 TL, presenting a growth of 6.25%. In 2010, our
Company raised its premium production by 1.4% to 737.368.263 TL. This performance brought us to the 6th place
in the sector with regard to premium production.
In compliance with the regulations, which the insurance, reinsurance and retirement companies are subject to, our
Company reserved its collaterals to meet its present and possible liabilities at the Treasury. With its strong –mainly
liquid- asset and the maturity distribution of invested assets Güneş Sigorta never had financial difficulties and
timely fulfilled all its legal and commercial responsibilities. As a result of the effective end efficient management
of its liquid assets, Güneş Sigorta maintained its balance and strength with regard to indemnity solvency, while
prioritizing customer satisfaction. Timely realization of the claim payments is another issue our Company shows
sensitivity about, as we are keen on compensating our customers’ financial losses as quickly as possible.
With the effect of the calculated ACLM, the net loss premium ratio has been 83%. Concordantly, there has been a
fall in profitability.
The branch-based reinsurance agreements minimized the impacts on Company assets.
Parallel to the production increase targeted for the new year, Güneş Sigorta is planning to expand its current
assets.
113
The objective of the Risk Management System is to define, measure, monitor and
control risk through policies that are drawn up to track, keep under control and
if necessary, change the structure of risk and earnings that will be yielded by the
Company’s future cash flow and related activities, through the use of different
methods and limits.
Insurance Risk
These are insurance policy risks and can be classified as risk related to the choice of
assets to be insured, to whether insurance premiums have been determined at a level
that will cover future claims, the occurrence of unforeseen risks in the preparation
stage of the policy or an inaccurate estimation made regarding claims on expected
risk, changes in the conditions of the economic environment, claims to be retained by
the Company due to catastrophic risks or concentrated risks arising from insufficient
spreading of risk, unforeseen behavior of the insured or the inadequacy of provisions
set aside in the financial statement to cover the claims of insurance company policyholders.
Market conditions, reinsurance agreements, endorsements, profitability and
sustainable growth goals are considered in their entirety in the drawing up of
insurance payment schedules and individual pricing. Based on the experience gained
from reinsurance treaties and previous claims each year, the Company’s technical
service departments determine a set of Risk Acceptance Principles by which the
conditions for accepting risk are determined on the agency, regional office and Head
Office levels.
The principles of implementation, which include the principles of risk acceptance, are
then set out in a booklet defining the conditions under which insurance products can
be sold and not sold as well as to whom and how. The booklet is distributed to the
sales channels.
Compliance Audit is carried out the principles, which were determined by audit
activities during the year. Before coverage is provided at business branches or in
areas of settlement that have exceeded predetermined amounts and/or are seen
to represent a risk, upon the request of the technical departments, specialized risk
engineers provide support in creating the appropriate insurance conditions by
carrying out a risk analysis and reviewing every kind of insurable asset which will be
under coverage, if necessary, reassessing insurance value. The sole method of risk
transfer is reinsurance. After reviewing the Company’s customer portfolio, insurance
policies, previous claim statistics, the volume of business expected for the next year,
the structure of shareholder’s equity and current market conditions, the Reinsurance
and Special Risks Department and senior management together determine retention
ratios and treaty conditions on the basis of each branch.
Risks that exceed the treaty conditions and capacities that are within the scope of
reinsurance agreements or risks that have the potential of disrupting the treaty
balance of the Company are covered with the support of domestic and international
facultative reinsurances.
Minimally potential risks with significant impact beyond the control of the Company
(as in the case of earthquakes, floods, fires, etc.) are reviewed in terms of concentrated
114
risk status, a possible risk estimate is made and transferred to reinsurers. Provisions
for unearned premiums, outstanding claims reserves and the reinsurer shares and
balancing provisions shown among the technical insurance accounts on the financial
statements, are set aside in accordance with Insurance Law and the Regulations on
the Technical Provisions of Insurance, Reinsurance and Pension Companies and the
Assets for which these Provisions are to be invested.
Credit Risk
These are risks related to insured entities and agencies that have premium or claim
debts to the Company, or risks related to fulfillment of obligations of the insured,
insurers abroad or co-assurers in the case of fronting transactions, or risks related to
the payment ability of the third parties in the case of non-insurance-based movables
or immovables or equity investments.
Since the best interests of the insured may only be protected with a strong financial
structure, collection on premium receivables from the insured and from the agencies
is promptly carried out by the Collections Department which has been reorganized
as the Collection Service under the Financial Affairs Group Management in the head
office. In the reorganization, the processes and limits of authority in the head office
and in the regional offices have been redefined.
Credit grades are considered in the selection of reinsurers as well as the effects of
market conditions on these credit grades. Redundant cashes are assessed in terms,
which not causing to delay in compensation payments, on the other hand they are
invested in domestic government bonds and assessed in repos and deposits to get
maximum return.
Market Risk
This refers to risks that arise from changes in financial market interest rates, stock
prices, foreign exchange rates, etc. which have an effect on the receivables and debts
of the insurer. This type of risk may also stem from the time elapsing between the
collection of receivables and the fulfillment of obligations.
The cash flow of the Company is monitored on a daily and monthly basis and assets
and liabilities management is carried out through the monitoring of the balance sheet
in terms of maturity mismatches and foreign currency positions. Claims payments
that exceed a determined significant part of the Company’s cash flow are carefully
reviewed by the Claims Management Department. Claims are paid out as soon as
possible, avoiding the ballooning impact of inflation on claim costs. Expanding
agency network across the country, has been further strengthened.
Liquidity Risk
This is the risk that stems from the inadequacy of liquid assets in the payment of
claims. While resources set aside for this purpose are invested in time deposits to
avoid delays in claims payments, on the other hand, some investments are made in
domestic government bonds, repos and deposits that bring in maximum yield.
Operational Risk
This is risk of loss that arises from inadequate or unsuccessful internal processes,
people, systems and external events. Strategic, operational and financial risks were
rated with Güneş Sigorta Risk Matrix, risk measurement criteria have been identified,
certain measures have been taken to reduce current risks.
In order to measure impact of Directive No. 2009/138/EC (Solvency II), which is active
since 25 November 2009 on capital adequacy and risk management at Insurance and
reinsurance sector, a working group was established to carry out an activity in 2011
which is called 5th Numerical Effect Study on behalf of our company.
All transactions carried out throughout the Company have been described and
updated in written procedures. Powers and responsibilities have been determined
and employees are notified through the channels of communication of strategic
decisions made by the Company.
115
Laundering Proceeds of Crime and Preventing of Terrorist Financing
A company policy has been drawn up with respect to identifying customers connected
with transactions involving money laundering and the financing of terrorism.
Transactions carrying probable risk in this respect have been pinpointed and training
in this area has been organized for employees and agencies. Under the Regulations
on Laundering Proceeds of Crime and Preventing of Terrorist Financing,
An accordance employee was assigned and company employees as well as agencies
were trained. Customer acceptance guidelines and doubtful transactions have been
determined and a system of internal control, reporting and communication set up to
facilitate the operations of the Internal Auditing Department and compliance officer
in their identification, uncovering and avoidance of doubtful transactions before they
occur.
116
Independent External Auditing Firm:
Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.( a member
of Pricewaterhouse Coopers)
Contact Information of the Auditing Firm:
S. Seba cad. No:48 BJK Plaza B blok Kat : 10 Akaretler 34357 Beşiktaş / İSTANBUL
Tel : 0 212 326 6060
According to resolution in Board of Director Meeting which occurred on 24th January,
2011, Akis Bağımsız Denetim ve SMMM A.Ş. was assigned in order to audit our
bookkeeping entries in accordance with the law Capital Market. It was approved at the
General Shareholders’ Meeting which was held on 31.03.2011.
Relations with shareholders are executed by the Financial Affairs Group Management
under the supervision of Deputy Chief Executive Officer, M. Levent Özer.
The enterprises that participate in Güneş Sigorta’s TL 300 million registered capital, of
which TL 150 million is paid in, are leading companies in their respective sectors with
strong financial structures. The majority shareholder, Türkiye Vakıflar Bankası, with
deposits and capital of TL 2.5 billion, is among Turkey’s largest banks and an enterprise
that is rapidly advancing to the prime ranks within the banking sector.
Groupama S.A. with 30% of Güneş Sigorta’s shares is the second largest insurance
group in France with a 10% market share. Active in 21 countries, the group adds
strength to Güneş Sigorta in its path toward becoming a more effective organization in
the future in terms of strength and services provided, bolstered by the power of years
of international experience. With 20.77% of its shares open to public trading, Güneş
Sigorta looks toward the future with confidence.
The General Shareholders’ Meeting of the Company for the operating period of 2010
took place on 31 March, 2011, with the attendance of shareholder representatives, the
Commissioner of the Minister of Industry, shareholders and the representatives of
intermediary agencies. The General Shareholders’ Meeting’s date, venue, invitation,
agenda, proxy letter and information concerning voting were announced to the public in
the Daily Bulletin of the İstanbul Stock Exchange and in the daily newspapers published
in Turkey under the heading, Announcement for our Shareholders. All this information is
posted on our website under the investor relations section. The shareholders attending
the General Shareholders’ Meeting were presented with proposals regarding the items
on the agenda and discussions were held accordingly. The members of the Board of
Directors and the Board of Auditors during the previous period were re-elected to the
same posts.
117
Addresses
HEADQUARTERS
Güneş Plaza Büyükdere Cad. No:110 34394 Esentepe Şişli/İSTANBUL
Tel: (0212) 444 1957
www.gunessigorta.com.tr
Fax Numbers
General Transactions
Policy Proposal Transactions
Claims Transactions
Collection Transactions
Health Insurance Transactions
: (0212) 355 6464
: (0212) 355 6870
: (0212) 355 6871
: (0212) 355 6872
: (0212) 355 6873
Customer Complaints and Information:
E-mail: musterimemnuniyeti@gunessigorta.com.tr
Tel: (0212) 444 1957 Faks: (0212) 355 6876
Investor Relations:
E-mail: yatirimci.iliskileri@gunessigorta.com.tr
Central Regional Office
Güneş Plaza Büyükdere Cad. No: 110
34394 Esentepe Şişli / İSTANBUL
Tel: (0212)355 6565
Kadıköy Regional Office
Saniye Ermutlu Sk. Şaşmaz Plaza No: 6 Kat: 1
34742 Kadıköy / İSTANBUL
Tel: (0216) 571 5353
İstanbul West Regional Office
Yavuz Sultan Selim Bulvarı,Gürpınar Yolu, Keleş Plaza No:11 Kat: 6
34500 Beykent Büyükçekmece / İSTANBUL
Tel: (0212) 867 1700
Central Anatolia Regional Office
Atatürk Bulvarı No: 97 Gama İşhanı Kat: 2
06650 Kızılay / ANKARA
Tel: (0312) 410 4646
Aegean Regional Office
Şehit Fethibey Cad. No: 55 Heris Tower İş Merkezi Kat: 9-10
35210 Pasaport / İZMİR
Tel: (0232) 497 4141
Mediterranean Regional Office
Metin Kasapoğlu Cad. Ayhan Kadam İş Merkezi Kat: 1, A Blok No: 3-4-5
07100 ANTALYA
Tel: (0242) 311 9500 (10 Hat)
Sount Anatolia Regional Office
Yeni Döşeme Mah. Karaisalı Cad. Baysan İş Merkezi A Blok Kat: 2
01120 Seyhan / ADANA
Tel: (0322) 459 7800 (10 hat)
118
Addresses
Black Sea Regional Office
K. Maraş Cad. Zorlu Otel Karşısı Bordo İşhanı No: 4 Kat: 3
61200 TRABZON
Tel: (0462) 323 1300 (9 Hat)
Marmara Regional Office
Atatürk Cad. No: 70 Vakıf İşhanı Kat: 3 No: 304-310
16000 Heykel / BURSA
Tel: (0224) 275 4200
East Anatolia Regional Office
Yukarı Mumcu Cad. Akçay Apt. No: 4 Kat: 5
25200 ERZURUM
Tel: (0442) 235 1957 - (0442) 235 4758-59
T.R.N.C. Regional Office
Selver Somuncuoğlu Sok. No:14
Köşklüçiftlik Lefkoşa / KIBRIS
Tel: (0392) 228 6690 - (0392) 227 9513 - (0392) 228 6482
Denizli Representative Office
Atatürk Bulvarı Ağa Han No: 27 Kat: 3
20300 DENİZLİ
Tel: (0258) 241 1268
Eskişehir Representative Office
Cumhuriye Mah. Cengiz Topel Cad. Zeytinoğlu Apt. No:12/2
26010 Odunpazarı / ESKİŞEHİR
Tel: (0222) 220 4550 - (0222) 220 4548 - (0222) 220 4560 - (0222) 220 4572
Gaziantep Representative Office
İncirlipınar Mah. Gazi Muhtarpaşa Bulvarı, Nişantaşı Sok. Tekerekoğlu İş Merkezi Kat: 3 No: 91
27090 Şehitkâmil / GAZİANTEP
Tel: (0342) 215 1930
Kayseri Representative Office
Erdem Plaza, Gevher Nesibe Mah. Gök Sok. Avrupa Hastanesi Yanı No: 17 Kat: 1/1
38010 Kocasinan / KAYSERİ
Tel: (0352) 222 5645
Kocaeli Representative Office
İstiklal Cad. İlhan İş Merkezi No: 8 Kat: 2
41040 İzmit / KOCAELİ
Tel: (0262) 331 2666
Konya Representative Office
Mahmuriye Mah. Feritpaşa Cad. Esencan Apt. No: 25/A
42040 Meram / KONYA
Tel: (0332) 321 8889
Samsun Representative Office
Kale Mah. Kazımpaşa Cad. Adnan Kefeli İşhanı No: 2 Kat: 4
55030 SAMSUN
Tel: (0362) 432 4663 - (0362) 432 8033 - (0362) 435 9600
119

annual report 2010

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