2002 Annual Report - Turkish Airlines

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