MILLI REASURANS ANNUAL REPORT 2018

Millî Reasürans Türk Anonim Şirketi NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018 (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. 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, 2018 December 31, 2017 Cash and cash equivalents (Note 14) (*) 1.742.194.280 1.223.126.571 Financial assets and financial investments with risks on policyholders (Note 11) (**) 109.875.291 378.829.902 Receivables from main operations (Note 12) 300.658.813 176.061.654 Reinsurer share in outstanding claims reserve (Note 10), (Note 17) 48.942.099 47.871.980 Income accruals 9.222.719 11.284.419 Other receivables (Note 12) 1.696.048 1.231.493 Other current asset (Note 12) 166.660 520.665 Total 2.212.755.910 1.838.926.684 (*) Cash on hands balance amounting to TL 19.945 are not included (December 31, 2017: TL 5.842). (**) Equity shares amounting to TL 50.113.456 are not included (December 31, 2017: TL 72.250.946) December 31, 2018 and 2017, the aging of the receivables from main operations and related provisions are as follows: December 31, 2018 December 31, 2017 Gross amount Provision Gross amount Provision Not past due 175.984.193 - 108.760.060 - Past due 0-30 days 67.566.798 - 43.221.659 - Past due 31-60 days 7.185.469 - 2.697.491 - Past due 61-90 days 4.329.297 - 835.469 - More than 90 days 70.945.090 (25.352.034) 38.520.418 (17.973.443) Total 326.010.847 (25.352.034) 194.035.097 (17.973.443) The movements of the allowances for impairment losses for receivables from main operations during the year are as follows: December 31, 2018 December 31, 2017 Provision for receivables from insurance operations at the beginning of the year 17.973.443 16.864.610 Collections during the period (Note 47) (11.831) (2.062) Provisions for doubtful receivables during the period ( Note 47) 292.830 - Foreign currency translation effect (Note 47) 7.097.592 1.110.895 Provision for receivables from insurance operations at the end of the year 25.352.03 4 17.973.443 The movements of the allowances for impairment losses for other receivables are as follows: December 31, 2018 December 31, 2017 Provision for other receivables at the beginning of the year 53.177 53.177 Impairment losses provided during the period (Note 47) 356.186 - Provision for other receivables at the end of the year 409.363 53.177 Millî Reasürans Annual Report 2018 126 / Unconsolidated Financial Statements and Independent Auditors’ Report