MILLIRE 2021 ANNUAL REPORT

NOTES TO THE CONSOLIDATED 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) Credit risk is measured by both quantitative and qualitative methods and the weighted reinsurers in retrocession programs, credit ratings of them that indicate their financial strengths and their financial positions are analysed. Reinsurance contracts are the most common method to manage insurance risk. This does not, however, discharge the Group’s liability as the primary insurer. If a reinsurer fails to pay a claim for any reason, the Group remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior to finalization of the reinsurance contract. Doubtful receivables are monitored quarterly. In addition, concentration of the investment portfolio is assessed quarterly. The results evaluated by the Risk Committee and reported regularly to the Board of Directors. Action plan is determined by the Board of Directors in the case of having exposure higher than acceptable level of risk and probability. Net book value of the assets that is exposed to credit risk is shown in the table below. December 31, 2021 December 31, 2020 Cash and cash equivalents (Note 14) (*) 5.116.876.177 4.869.356.934 Receivables from main operations (Note 12) 4.294.808.607 2.737.409.366 Financial assets and financial investments with risks on policyholders (Note 11) (**) 8.836.894.794 5.292.019.331 Reinsurer share in outstanding claims reserves (Note 10), (Note 17) 2.957.988.891 2.179.921.969 Income accruals (Note 12) 169.041.598 209.572.327 Other prepaid expenses (***) 40.832.751 29.736.496 Other receivables (Note 12) 27.518.720 23.269.996 Prepaid taxes and funds (Note 12) 58.682.491 44.338.424 Other current asset (Note 12) 3.037.253 211.124 Total 21.505.681.282 15.385.835.967 (*) Cash on hands balance amounting to TL 103.408 are not included (December 31, 2020: TL 76.079). (**) Equity shares amounting to TL 493.172.581 are not included (December 31, 2020: TL 501.858.456). (***) TL 37.634.324 is the advance amount given by the Group. (December 31, 2020: TL 26.661.018). December 31, 2021 and 2020, the aging of the receivables from main operations and related provisions are as follows: December 31, 2021 December 31, 2020 Gross amount Provision Gross amount Provision Not past due 3.896.445.522 - 2.375.615.368 - Past due 0-30 days 290.746.378 (4.797.001) 279.536.920 (2.022.721) Past due 31-60 days 29.416.323 (1.848.701) 29.515.455 (19.386.963) Past due 61-90 days 15.716.450 (3.291.157) 26.160.907 (1.660.569) More than 90 days (*) 714.636.669 (642.215.876) 539.556.798 (489.905.829) Total 4.946.961.342 (652.152.735) 3.250.385.448 (512.976.082) (*) As per the February 3, 2005 dated and B.02.1.HM.O.SGM.0.3.1/01/05 numbered Circular issued by the Republic of Turkey Ministry of Treasury and Finance, in case where subrogation is subject to claim/legal action, related subrogation amount is recognized as doubtful receivables and allowance for doubtful receivables is provided by the same amount in the financial statements. Related amounts are presented in “More than 90 days” line in the above table. 214 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