2002 Annual Report - Turkish Airlines

2002 • 85TURKISH AIRLINES INC.NOTES TO THE FINANCIAL STATEMENTS / continued(all figures are restated to TL money values at December 31, 2002 pursuant to IAS 29)Movements in the provision for termination benefit in the balance sheet are as follows:December 31, 2002 December 31, 2001TL 000,000 TL 000,000Provision at the beginning of the year 67,569,483 81,245,805Expense in the income statement 12,594,723 11,020,706Payments (3,442,455) (24,697,028)Provision at the end of the year 76,721,751 67,569,483The estimated value of the vested benefit obligation is discounted with an approximate rate of 6% per annum after considering the effect of increasein eligible pay and its limit.25- CAPITALThe Company’s share capital was held in each period as follows:December 31, 2002 December 31,2002Class % TL 000,000 TL000,000Turkish Republic Privatization Administration A,B,C 98 (*) 224,768,511 224,768,511Others A 2 4,201,338 4,201,338Historic Capital (Nominal) 228,969,849 228,969,849Restatement Effect 1,246,608,013 1,246,608,013Restated 1,475,577,862 1,475,577,862As at December 31, 2002, the Company’s issued and paid-in share capital consists of 104,999,999,999 class A shares, 70,000,000,000 class B sharesand 1 class C share, all with a par value of 1,000 TL each. Class A shares are ordinary shares. Class B shares are issued to name. The Class C share,which belongs to the Privatization Administration (P.A.), is a unique share with a par value of 1,000 TL with the following privileges:The main agreement of the Company has been amended in Extraordinary Shareholders Meeting held on January 17, 2003.Main Agreement Article 7: The Directors elected to represent C shareholders should have an affirmative vote for recording the transfer of ordinaryshares on the share register.Main Agreement Article 10: The Board of Directors of the Company consists of seven members of which one member has to be nominated by the classC shareholder.Main Agreement Article 14: The following Board of Directors' decisions are subject to the class C Shareholder’s affirmative vote:- Taking decisions that are determined in the Main Agreement article 3.1. to have direct adverse affects- Suggesting a change in the Main Agreement in the Shareholders Meeting- Increase in the share capital- Registration of the transfer of the shares issued to name in the ‘Register of the Company’- Making contractual agreements that exceed 5% of the total assets figure stated in the last annual financial statements which is presented toCapital Markets Board and making any transactions that will make the Company directly or indirectly liable (this clause will beautomatically terminated when the shares held by Turkish State in the Company falls below 20%).- Making decisions on merger with other companies and litigation of the Company.- Making decisions towards the closing of routes or significantly decreasing the number of flights except cases where market conditionsrequire or closing of certain routes which do not even recover their operational costs.