2002 Annual Report - Turkish Airlines

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62 • 2002 TURKISH AIRLINES annual reportTURKISH AIRLINES INC.NOTES TO INCOME STATEMENT1- Total depreciation and amortization expenses for the period are:31.12.2002 31.12.2001a) Depreciation Expense 56,541,891 44,140,994aa) Depreciation expense 16,544,989 15,917,450ab) Revaluation of depreciation 39,996,902 28,223,544b) Amortization Expense 2,261,349 1,479,5372- Provision expenses are as follows:31.12.2002 31.12.2001Retirement pay provision charge 33,666,786 30,213,677In-house insurance risk provision 1,024,888 437,169Provision for doubtful receivables 2,303,622 5,292,166Discount on receivables 216,537 619,167Allowance for diminution in value of Inventory 2,556,481 836,227Mileage liability provision expense 7,370,021 2,030,902Provision for diminution of value of investments portfolio 1,527,420 565,503Provision for legal claims 660,004 1,267,609Provision for diminution in value of France Telecom 5,422,545 -TOTAL 54,748,344 41,262,4203- Finance expenses are as follows:31.12.2002 31.12.2001a) Allocated to production costs 419,554,309 418,467,747b) Allocated to fixed assets 26,375 6,890,537c) Recorded directly as expense 249,208 21,417,159TOTAL 419,829,892 446,775,4434- No finance expenses related to shareholders, equity participations and subsidiaries have been incurred.5- Income from services provided to equity participations and subsidiaries is TL 2,042,479. (31.12.2001: 2,528,783 TL) Expenses have been incurredfor the services received are TL 48,458,161. (31.12.2001:-)6- Total interests received from shareholders, equity participations and subsidiaries are TL 240.960.7- Salaries and benefits to Board of Directors, and top management such as, general manager, assistant general managers, general coordinator in thecurrent period amount to TL 809,228 (2001 - TL 621,336)8- Fixed assets (except buildings and components) are depreciated from revalued amounts, buildings and components are depreciated from theirhistorical cost amount. Depreciation is on a straight-line basis. Annual depreciation rates are 2% for buildings, 6.6% for aircraft and spare engines, 10%for simulator, and 20% for other fixed assets.There is no change in the depreciation calculation method in the current period.9- The stock valuation method is the weighted moving average method.10- Since the Company has various kinds of stocks, cycle stocks counts are performed on a sample basis everyday rather than performing a full yearendstock-takes.11- There is no sale of scrap materials or semi finished goods, which exceeds 20% of gross sales.12- The company does not have any incentives and subventions related to the sales.
2002 • 63TURKISH AIRLINES INC.NOTES TO INCOME STATEMENT13- Gains and Losses related to the prior year is as follows:31.12.2002 31.12.2001Previous Period IncomeReclassification of prior periods education expenses 1,976,916 -Credit notes dated to 2001 received from CFM INTL, HAMILTON, AIRBUS INDUSTRIE 994,298 -Prior year revenues coming from KTHY invoices 686,133 306,485Cancellation of incentive premium given by Telaviv Office in 2001 374,416 -The misrecord of the purchase invoice issued by Air France 374,287 -Türksan Turizm sales commission amount 313,944 -Return commission of Zurich Office in 2001 262,838 -Amount expensed in 2001 but realized as manufacturers’ credit revenue later on. 253,178 -Aeroflot royalty expense 2001 period accrual-invoice difference 149,494 -Prior year traveler income 140,834 -Discount on catering services for the year 2001 197,318 177,887Receivable amount from Transword Air for year 2001 109,399 -Paris handling discount for the year 2001 100,494 -Income from the rejection of invoices of companies that rendered services through Clearing House 99,338 428,523Credit note obtained at the delivery of aircraft with a serial number of 25372 75,974 -Closing of Chicago agency car insurance, fuel tax return and prior year credit notes 70,462 -Biflkek and Amman agencies tax receivables 87,909 -Recording of EB‹ support services invoices for the previous period 42,671 -Over calculation of New York Head Office technical office rent expense 39,829 -Technical material warehouse movement corrections 38,983 -Difference between expenses accrued and realized by fiam Office 37,893 33,168Recording of manufacturers’ credit note of Boeing 34,388 -Ticket, cargo and other revenues - 475,131Cancellation of Brussels year 2000 fuel expense - 48,321Total credit notes issued for the spare parts purchased in 2001 from foreign companies. - 1,539,331Discount made by ILFC in 2000, for the leasing of the plane TC-JDI - 61,177Prior year cheque collection (NTS company) - 65,078Correction for the fixed assets purchased in 2000 - 66,723Over collected VAT in Lyon for year 2000 - 61,164Estimation for the damage the cargo containing dangerous materials gave to the plane - 106,784Swissair cargo handling ULD apparatus usage invoice - 849,336Prior year VAT receivable from Bakü - 217,010Write off of year 2000 income accruals. - 210,845Other 481,567 894,2966,942,563 5,541,259
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contentsHighlights of the Year 2002
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