MILLIRE 2021 ANNUAL REPORT

NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) Dividends Dividend income is recognized when the Company’s right to receive payment is ascertained. 2.22 Leasing transaction Tangible assets acquired by way of finance leasing are recognised in tangible assets and the obligations under finance leases arising from the lease contracts are presented under finance lease payables account in the financial statements. In the determination of the related assets and liabilities, the lower of the fair value of the leased asset and the present value of leasing payments is considered. Financial costs of leasing agreements are expanded in lease periods at a fixed interest rate. If there is impairment in the value of the assets obtained through financial lease and in the expected future benefits, the leased assets are valued with net realisable value. Depreciation for assets obtained through financial lease is calculated in the same manner as tangible assets. Set out below are the new accounting policies of the Company upon adoption of TFRS 16. Right-of-use assets The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. The right of use which is calculated on leasing agreements is accounted under “Property, Plant and Equipment” account. The interest expense on the lease obligation is accounted under “Investment Management Expense - Including Interest’’, and the depreciation expense of the usage right asset is accounted under “Depreciation and Amortization Expenses” 2.23 Dividend distribution It is decided in Ordinary General Assembly Meeting of the Company held on March 30, 2021, from the net profit of the period amounting to TL 348.598.908 resulting from the activities of the Company for the year 2020, TL 43.000.000 will be paid to the shareholders as cash dividends, after the legal reserves are set aside, and the remaining amount will be paid to the shareholders according to the Tax Procedure Law. Within the framework of the provisions of Article 325/A of the Law and Article 10 of the Corporate Tax Law, it has been decided to allocate TL 17.000.000 of funds for the purchase of venture capital investment fund participation shares, and the remaining amount will be set aside as previous year’s profit, and TL 42.986.569 of it. paid in cash and TL 13.431 has been recognized in due to shareholders account under short term liabilities. Circular No. 2016/22 Amending the Circular No. 2016/22 on the Discounting of Net Cash Flows Arising from Outstanding Claims 114 MİLLÎ REASÜRANS ANNUAL REPORT 2021 ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RESEARCH & DEVELOPMENT ACTIVITIES