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) Distribution of new participants in terms of their numbers and gross and net contributions for individuals and groups None. Distribution of new participants in terms of their numbers and gross and net contributions for individuals and groups which were transferred from other insurance companies during the year None. Distribution of individual and group participants and their gross and net contributions which were transferred from life insurance portfolio to private pension portfolio during the year None. Distribution of individual and group participants which were cancelled or transferred to other insurance companies in terms of their numbers and gross and net contributions None. Profit share distribution rate of life insurances None. Deferred commission expenses The Company capitalizes commissions paid to the intermediaries related to policy production under short-term and long-term prepaid expenses. As of December 31, 2018, short-term deferred expenses amounting to TL 147.058.200 (December 31, 2017: TL 114.233.617) totally consist of deferred commission expenses. As of December 31, 2018 and 2017, the movement of deferred commission expenses is presented below: December 31, 2018 December 31, 2017 Deferred commission expenses at the beginning of the period 114.233.617 92.601.448 Commissions accrued during the period (Note 32) 316.773.909 262.282.352 Commissions expensed during the period (Note 32) (283.949.326) (240.650.183) Deferred commission expenses at the end of the period 147.058.200 114.233.617 18 Investment contract liabilities None. 19 Trade and other payables and deferred income December 31, 2018 December 31, 2017 Payables from reinsurance operations 63.770.093 36.392.472 Short/long term deferred income and expense accruals 6.829.179 5.892.150 Taxes and other liabilities and similar obligations 5.707.038 8.574.495 Due to related parties (Note 45) 109.359 106.310 Other payables 2.054.267 3.032.087 Total 78.469.936 53.997.514 Short-term liabilities 78.437.436 53.887.014 Medium and long-term liabilities 32.500 110.500 Total 78.469.936 53.997.514 As of December 31, 2018 and 2017, other payables largely consist of outsourced benefits and services. Millî Reasürans Annual Report 2018 Unconsolidated Financial Statements and Independent Auditors’ Report / 145