MILLI RE 2023 ANNUAL REPORT

Notes to the Unconsolidated Financial Statements As of December 31, 2023 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) 4.2 Management of financial risk Introduction and overview This note presents information about the Company’s exposure to each of the below risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. The Company has exposure to the following risks from its use of financial instruments: - credit risk - liquidity risk - market risk The Company is subject to credit risk, market risk (foreign currency risk, interest rate risk and price risk in relation with financial investments) and liquidity risk due to assets and liabilities. The Company’s exposure to each of the above risks is assessed according to “Application Principles in Respect of Risk Limits”. The Company monitors its receivables by obtaining comprehensive information about the debtors and debtors’ activities. The risk over investment portfolio is managed by measuring and reporting the market risk daily, reassessing the results validity and applying different scenario analyses. The Company’s exposure to each of the above risks is measured by Internal Control and Risk Management Service independently, reported to Board of Directors and units of İş Bankası through the Risk Committee. Credit risk Credit risk is the risk of financial loss to the Company if counterparties (parties issued financial instrument, insurance companies, reinsurance companies and other debtors) having business relationship with the Company fails to meet its contractual obligations. The Company manages this credit risk by regularly assessing reliability of the counterparties. 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, 2023 December 31, 2022 Cash and cash equivalents (Note 14) (*) 1.825.305.969 1.690.301.129 Financial assets and financial investments with risks on policyholders (Note 11) (**) 4.025.665.429 3.503.467.362 Receivables from main operations (Note 12) 4.088.255.641 1.023.493.863 Reinsurer share in outstanding claims reserve (Note 10), (Note 17) 5.807.404.091 129.947.122 Prepaid taxes and funds (Note 12) 9.170.386 13.673.790 Income accruals 64.668.644 43.874.686 Other Prepaid Expenses (***) 69.776.254 36.536.047 Other receivables (Note 12) 37.011.346 12.828.915 Other current asset (Note 12) 47.448 5.207.469 Total 15.927.305.208 6.459.330.383 (*) There is no cash balance. (December 31, 2022: TL 42.425). (**) Equity shares amounting to TL 424.271.505 are not included (December 31, 2022: TL 310.494.807) (***) TL 62.292.330 is the advance amount given by the Company. (December 31, 2022: TL 33.045.582). 129 2023 Annual Report GENERAL INFORMATION FINANCIAL RIGHTS PROVIDEDTOTHE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION