2002 Annual Report - Turkish Airlines

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64 • 2002 TURKISH AIRLINES annual reportTURKISH AIRLINES INC.NOTES TO INCOME STATEMENT31.12.2002 31.12.2001Previous Period LossesEffect of flight basis accounting on year 2001 39,972,080 -Prior year operational expenses 448,224 2,672,923Overseas bureau expenses of previous period 35,076 54,294Commission expenses 8,180 55,557Air safety expense 5,285 -Interline expenses 169,311 1,935,931Interest expenses 27,073 9,924Code share expenses 16,056 -Recollection, cancellation and reclassification of missing items 116,898 1,032,828Prior year repair expense 436,668 780,474Education expenses 72,956 67,202JEPPESEN payment for year 2001 15,408 -Prior year return invoices issued by various companies to THY 568,946 317,193Prior year manufacturers’ credit cancellation 58,373 -Prior year objections to the post administration 114,306 -Prior year insurance expense 27,702 72,535Personnel travel expenses for year 2001 based on agreement with Lufthansa 43,345 -Meteorological service taken from the company Atraxis in 2001 27,339 -Corrections made on technical material warehouse movements 72,274 -2000-2001 surveillance fee of 7 planes delivered in 2000 28,604 -Fee that is paid to BOTAfi for the service of removing wreck aircraft TC-JEP which crashed in 1999 - 50,462Prior year incentive premium expenses - 1,778,559Royalty expense - 37,804Portion of UN compensation that belongs toTurkish Air Force - 91,390K.T.H.Y. technical service expense - 155,785Tripoli July, August, September 2000 corporate tax - 27,817Returns related to Visa/MasterCard penalties for year 2000 - 110,702Other expenses 102,228 487,634Total 42,366,332 9,739,01414- The profit after tax is TL 104,919,324 for the year then ended December 31, 2002 (2001: TL 8,127,303).2002 2001Earnings per Share (TL/%)a. Common Stockholders 599,54/59.95% 46,44/4.64%b. Preferred Stockholders 599,54/59.95% 46,44/4.64%15- Changes in the volume of services provided in the current period:Seats provided /KmJanuary - December 2001 : 24,889,653,667January - December 2001 : 24,071,004,377Change : (3)%16- Changes in the volume of service sales quantity provided in the current period:Passenger/ KmJanuary - December 2001 : 15.679.266.179January - December 2002 : 16.593.898.265Change : 6%
2002 • 65INDEPENDENT AUDITORS' REPORTTo the Board of Directors ofTürk Hava Yollar› Anonim Ortakl›¤›1. We have audited the accompanying balance sheet of Türk Hava Yollar› Anonim Ortakl›¤› (the “Company”) as at December 31, 2002, and the relatedstatements of income, changes in shareholders’ equity and cash flows for the year then ended December 31, 2002 all expressed in the equivalentpurchasing power of the Turkish Lira as of December 31, 2002. These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements based on our audit.2. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide areasonable basis for our opinion.3. In our report dated April 16, 2002, we expressed an opinion that the 2001 financial statements presented fairly the financial position, results ofoperations, and cash flows in conformity with International Financial Reporting Standards (IFRS), except for the possible effect of the non-applicationof International Accounting Standard No: 36 “Impairment of Assets”. As a result of the terrorist attack which occurred in the United States inSeptember 2001, it was not yet certain whether the decline in market prices of some of its aircraft, were permanent or temporary. Because marketprices of used aircraft have not recovered as of December 31, 2002 and the Company’s management is of the opinion that the decline in marketprices is permanent, the Company decreased the carrying amount of its aircraft and recorded TL 249 Trillion (before taxation effect) as impairmentloss on aircraft under operating expense. This amount also includes the impairment expense of TL 145 Trillion that would have been recorded inthe year 2001. Consequently, if the impairment had been recorded in the 2001 financial statements, the net book value of fixed assets and deferredtax liabilities as of December 31, 2001 would have been TL 145 Trillion and TL 29 Trillion lower respectively and the net loss for the year endedDecember 31, 2001, net profit for the year ended December 31, 2002 and accumulated loss as of December 31, 2001 would have been TL 116Trillion higher.4. In our opinion, except for such adjustments as may be necessary in respect of the matters set out in paragraph 3 above, the financial statementsreferred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2002, the results of its operationsand its cash flows for the year then ended in accordance with International Financial Reporting Standards.DRT DENET‹M REV‹ZYON TASD‹KYEM‹NL‹ MAL‹ MÜfiAV‹RL‹K A.fi.Member Firm of DELOITTE TOUCHE TOHMATSUIstanbul, May 7, 2003
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contentsHighlights of the Year 2002
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2002 • 05utilization also went up
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2002 • 11flight and traffic devel
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