Milli Re 2025 Annual Report

Variable rent payouts that are not linked to an index or a rate are recorded as expenses during the period in which the event or condition that triggers the payment occurs. The Company determines the revised discount rate for the remaining part of the lease term as this rate if the implied interest rate on the lease can be easily determined, and if it cannot be determined easily, as the Company’s alternative borrowing interest rate on the date of the revaluation. After the actual commencement of the lease, the Company measures the lease obligation as follows: (a) Increases the carrying amount to reflect the interest on the lease obligation, and (b) Reduces the carrying amount to reflect the rental payments paid. 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 At the Company’s Ordinary General Assembly Meeting held on March 26, 2025, it was decided that from the net profit of 5.933.631.405 TL for the year 2024, 6.572.222 TL would be allocated as capitalized gains, 595.703.670 TL would be distributed as cash dividends to shareholders, and the remaining amount would be allocated as retained earnings. As of December 31, 2025, 595.522.716 TL of the dividends had been paid in cash, and 180.954 TL was accounted for in the “Due to Shareholders” account under Short-Term Liabilities. 2.24 Unearned premium reserve (UPR) In accordance with the “Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué on Technical Reserves”) which was issued in 26606 numbered and August 7, 2007 dated Official Gazette and put into effect starting from January 1, 2008, the unearned premiums reserve represents the proportions of the gross premiums written without deductions of commission or any other allowance, in a period that relate to the period of risk subsequent to the reporting date for all short-term insurance policies. Nonetheless; – Unearned premium reserve is calculated on the basis of 1/8 for reinsurance and retrocession transactions that are not subject to basis of day or 1/24 due to application limitations, – For commodity transportation policies with indefinite expiration dates, 50% of the remaining portion of the premiums accrued in the last three months, are also provided as unearned premium reserves. In this context, the Company calculates the unearned premium reserve for proportional reinsurance treaties based on the premiums ceded under treaty contracts, considering the record date when account summary notifications from ceding companies are recognized by the Company. As of the balance sheet date, the deferred amount is calculated on a 1/8 basis (see footnote 2.1.2). For commodity transportation policies with indefinite expiration dates, 50% of the remaining portion of the premiums accrued in the last three months, is also provided as unearned premium reserves and for facultative and non-proportional reinsurance contracts, on the basis on day by considering beginning and ending of the contracts. The reinsurance share of the unearned premium reserve for premiums transferred by the Company in a retrospective capacity is calculated in the same way. 142 MİLLÎ REASÜRANS 2025 Annual Report Notes to the Unconsolidated Financial Statements As of December 31, 2025 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TRY)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)