MILLI_RE_ANNUAL REPORT 2022

1.7 Keys used in the distribution of investment income and operating expenses (personnel, administrative, research and development, marketing and selling, services rendered from third parties and other operating expenses) in the financial statements Procedures and principles related to keys used in the financial statements of the companies are determined in accordance with the January 4, 2008 dated and 2008/1 numbered “Communiqué Related to the Procedures and Principles for the Keys Used in the Financial Statements Being Prepared In Accordance With Insurance Accounting Plan” issued by Republic of Turkey Ministry of Treasury and Finance. In accordance with the above-mentioned Communiqué, insurance and reinsurance companies are allowed to transfer technical section operating expense to insurance section through methods determined by Republic of Turkey Ministry of Treasury and Finance or by the Company itself. In accordance with the approval of the Undersecretariat of Republic of Turkey Ministry of Treasury and Finance, dated March 6, 2008 and numbered 10222, known and exactly distinguishable operating expenses are distributed to related branches directly and services rendered from third parties and other operating expenses in accordance with the gross premiums written for the last three years. Income from the assets invested against non-life technical provisions is transferred to technical section from non-technical section; remaining income is transferred to the non-technical section. Income is distributed to the sub-branches in accordance with the percentage calculated by dividing “net cash flow” to the “total net cash flow”, net cash flow being net of reinsurer share and calculated by deducting net losses paid from net written premiums. Income from the assets invested against mathematical provisions is recorded under technical section; remaining income is transferred to the non-technical section. 1.8 Information on the financial statements as to whether they comprise an individual Company or a group of companies The accompanying financial statements comprise only the unconsolidated financial information of the Company. As further discussed in note 2.2 - Consolidation, the Company has prepared consolidated financial statements As of December 31, 2022 separately. 1.9 Name or other identity information about the reporting entity and the changes in this information after previous reporting date Trade name of the Company: Millî Reasürans Türk Anonim Şirketi Registered address of the head office: Maçka Cad. No: 35 34367 Şişli/İstanbul The web page of the Company: www.millire.com There has been no change in the aforementioned information subsequent to the previous reporting date. 1.10 Subsequent events Following the earthquake disaster that occured in Turkey on February 6, 2023, we conducted a financial analysis study in order to calculate the estimated loss amount that could arise from our domestic fire and engineering treaty and facultative book and its impact on our shareholders’ equity. The modelling was based on stochastic loss scenarios and earthquake accumulations provided by cedants and involved substantial assumptions, while it did not capture losses that could stem from fire following earthquake, volatility in macroeconomic indicators that could lead to increased costs and additional costs and expenses due to demand surge. The estimated loss amount does not include any amounts relating to lines of business such as personal accident, motor own damage, marine that might be covered under nonproportional catastrohe treaties, but cannot be modelled. For this reason, it is possible for the ultimate loss amount to exceed the estimated figure. On the other hand, Milli Re also provides capacity to nonproportional programme of TCIP, for which taking a conservative approach, full limit of liability was considered when estimating the total loss amount. In consequence of the above explanations; the estimated net loss amount that could arise from our fire and engineering treaty and facultative portfolio and capacity provided to TCIP programme is calculated as TL 761 million. TL 401 million of equilization reserve as at the end of 2022 will be utilized for the losses to be incurred. Considering the estimated recoveries from the retrocession programme and the relavant reinstatement premiums payable, we project TL 1 billion of impact to the shareholders’ equity, which is expected to be realized over a period of time depending on the loss pay outs. Considering that the total equity capital of Company is TL 5.055.935.663, therefore no issues identified related to the going concern. 113 MİLLİ RE 2022 ANNUAL REPORT Notes to the Unconsolidated Financial Statements As of December 31, 2022 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 RISKS AND ASSESSMENT OF THE GOVERNING BODY UNCONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON CONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON FINANCIAL STATUS