AKSİGORTA A.Ş. — Interim / Quarterly Report 2021

Aug 6, 2021

AKSİGORTA A.Ş.

CONDENSED INTERIM FINANCIAL INFORMATION FOR THE INTERIM PERIOD JANUARY 1 - JUNE 30, 2021 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT

To the Board of Directors of Aksigorta A.Ş.

Report on the audit of the condensed interim financial information

Our opinion

In our opinion, the accompanying condensed interim financial information of Aksigorta A.Ş. (“the Company”) as at 30 June 2021 and for the six - month period then ended is properly prepared, in all material respects, in accordance with International Accounting Standard (“IAS”) 34.

What we have audited

The Company’s condensed interim financial information comprises:

• the statement of financial position as at 30 June 2021;

• the statement of income for the six -month period then ended;

• the statement of comprehensive income for the six -month period then ended;

• the statement of changes in equity for the six -month period then ended;

• the statement of cash flows for the six -month period then ended; and

• the notes to the condensed interim financial information, which include a summary of significant accounting policies and other explanatory notes.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial information section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. BJK Plaza, Süleyman Seba Caddesi No:48 B Blok Kat:9 Akaretler Beşiktaş 34357 İstanbul-Turkey T: +90 212 326 6060, F: +90 212 326 6050, www.pwc.com.tr Mersis Numaramız: 0-1460-0224-0500015

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Independence

We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”) and “Independence Audit byLaw” published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and independent auditing requirements referred to in Article 400 of the Turkish Commercial Code (“TCC”) (collectively referred to as “Turkish Local Independence Rules”). We have fulfilled our other ethical responsibilities in accordance with IESBA Code and Turkish Local Independence Rules.

Our audit approach

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the condensed interim financial information. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the condensed interim financial information as a whole, taking into account the structure of the Company, the accounting processes and controls, and industry in which the Company operates.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the condensed interim financial information for the current period. These matters were addressed in the context of our audit of the condensed interim financial information as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key audit matter

How our audit addressed the key auditmatter

Claims provisionAs explained in Notes 2.4 and 11 to theaccompanying condensed interim financialinformation, the Company has significant grossinsurance liabilities of TL 8,130 millionrepresenting 80% of the Company’s total equityand liabilities as of 30 June 2021. Concerning theestimation of incurred but not reported claimsprovision accounted under insurance liabilitiesamounting to TL 1,317 million as of 30 June 2021,the Company uses actuarial methods. The choiceof selected methods and development factors foreach accident year for each class of businessdepends on the best estimate of the Company.The reason we focus on this area during our auditis the significance of the incurred but not reportedclaims provision for the condensed interimfinancial information and the significant actuarialjudgments and estimates required by the nature ofsuch provision in the condensed interim financialinformation.

We tested the design and operational effectivenessof the key controls implemented by the Company'smanagement in relation to the ultimate claimsused in the calculation of incurred but notreported claims provision. We performedreconciliation of the data used in the calculation ofincurred but not reported claims for selectedbranches with the condensed interim financialinformation. Our actuaries have assessed theestimated loss ratios and expected damagedevelopments trends together with the selectedactuarial techniques considering past damageexperiences and sector developments. Moreover,for selected branches, we made an estimation ofthe reasonable ranges for the incurred but notreported claims provision and compared themwith the Company’s records.We checked the adequacy and accuracy of thedisclosures in the accompanying condensedinterim financial information related to suchprovision.

Responsibilities of management and those charged with governance for the condensed interim financial information

Management is responsible for the proper preparation of the condensed interim financial information in accordance with IAS 34, and for such internal control as management determines is necessary to enable the preparation of condensed interim financial information that are free from material misstatement, whether due to fraud or error.

In preparing the condensed interim financial information, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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Auditor’s responsibilities for the audit of the condensed interim financial information

Our objectives are to obtain reasonable assurance about whether the condensed interim financial information as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these condensed interim financial information.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the condensed interim financial information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the condensed interim financial information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the condensed interim financial information, including the disclosures, and whether the condensed interim financial information represent the underlying transactions and events in a manner that achieves proper preparation.

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the condensed interim financial information of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.

Adnan Akan, SMMM Partner

Istanbul, 6 August 2021

AKSİGORTA A.Ş.

CONDENSED INTERIM FINANCIAL INFORMATION FOR THE PERIOD JANUARY 1 - JUNE 30, 2021

TABLE OF CONTENTSPAGE	TABLE OF CONTENTSPAGE
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION ...................................	1
CONDENSED INTERIM INCOME STATEMENT ....................................................................	2
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME .........................	3
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY ....................................	4
CONDENSED INTERIM STATEMENT OF CASH FLOWS ....................................................	5
SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION.....	6-32

AKSİGORTA A.Ş.

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION FOR THE PERIOD JANUARY 1 - JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

		Audited	Audited
Assets	Note	June 30, 2021	December 31, 2020
Total current assets		10,012,690,001	8,996,918,504
Cash and cash equivalents	9	2,510,972,632	2,270,224,400
Financial assets
Debt securities:
- Available for sale at company’s risk	8	1,170,421,725	1,472,808,484
- Held to maturity at company’s risk	8	626,164,208	205,527,370
- Held for trading at company’s risk	8	186,102,625	63,234,980
- Available for sale at insurees' risk	8	1,804,230	1,952,843
Premium receivables		936,730,102	1,056,877,634
Due from reinsurers		45,168,844	28,401,167
Reinsurance share of insurance liabilities	11	4,308,978,010	3,647,998,480
Deferred acquisition costs		174,464,613	184,523,983
Other current assets		51,883,012	65,369,163
Total non-current assets		212,916,622	168,396,544
Tangible assets	5	19,846,140	20,015,818
Right of use of assets	5	17,493,728	23,486,209
Intangible assets	6	75,763,702	57,223,537
Financial assets
Equity securities:
- Available for sale	8	686,078	722,156
Deferred income tax assets	13	99,074,487	66,887,355
Other non-current assets		52,487	61,469
Total assets		10,225,606,623	9,165,315,048
		Audited	Audited
Liabilities	Note	June 30, 2021	December 31, 2020
Total current liabilities		9,434,753,128	8,198,589,465
Insurance liabilities	11	8,129,696,302	7,047,271,201
Payables to reinsurers	12	820,479,238	811,188,810
Other financial liabilities		13,155,815	13,065,843
Obligations under repurchase agreements		76,278,770	59,562,359
Derivative financial liabilities		5,265,841	5,352,006
Provisions for other liabilities and charges		73,337,938	70,812,935
Trade and other payables	12	258,438,037	160,344,827
Current income tax liabilities	13	51,068,060	23,614,067
Short-term lease liabilities	12	7,033,127	7,377,417
Total non-current liabilities		27,454,339	30,609,684
Provision for retirement benefit obligation		11,230,424	9,095,078
Long-term lease liabilities	12	16,223,915	21,514,606
Total equity		763,399,156	936,115,899
Shareholders' equity	10	306,000,000	306,000,000
Legal and other reserves	10	428,631,014	302,288,128
Actuarial loss arising from employee benefit	10	(6,578,451)	(5,451,203)
Available-for-sale investments fund	10	(16,006,417)	1,441,549
Retained earnings/accumulated deficit		51,353,010	331,837,425
Total equity and liabilities		10,225,606,623	9,165,315,048

The accompanying notes form an integral part of these condensed interim financial information.

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AKSİGORTA A.Ş.

CONDENSED INTERIM INCOME STATEMENT FOR THE PERIOD JANUARY 1 - JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

		Audited	Reviewed
		January 1 -	January 1 -
IncomeStatement	Note	June 30, 2021	June 30, 2020
Insurance premium revenue	14	2,819,179,911	2,252,202,065
Insurance premium ceded to reinsurers	14	(1,255,146,381)	(953,363,997)
Net insurance premium revenue	14	1,564,033,530	1,298,838,068
Investment income		254,914,735	185,908,194
Commission income		152,877,967	121,742,830
Other operating income		12,459,153	4,924,368
Net income		1,984,285,385	1,611,413,460
Insurance claims	16	(2,353,811,972)	(1,263,457,417)
Insurance claims recovered from reinsurers	16	1,094,975,845	467,136,496
Net insurance claims	16	(1,258,836,127)	(796,320,921)
Commission expense		(381,600,529)	(322,235,393)
Expenses for marketing and administration	15	(153,566,232)	(126,606,082)
Other operating expenses		(33,594,908)	(56,520,707)
Insurance claims and expenses		(1,827,597,796)	(1,301,683,103)
Results of operating activities		156,687,589	309,730,357
Foreign exchange gain / (loss), net		36,611,299	(2,710,258)
Profit before tax		193,298,888	307,020,099
Income tax expense	13	(41,440,417)	(71,004,094)
Profit for theperiod		151,858,471	236,016,005
Earnings per share		0.0050	0.0077

The accompanying notes form an integral part of these condensed interim financial information.

2

AKSİGORTA A.Ş.

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD JANUARY 1 - JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

	Audited	Reviewed
	January 1 -	January 1 -
Statement of comprehensive income	June 30, 2021	June 30, 2020
Profit for the period	151,858,471	236,016,005
Other comprehensive income to be reclassified to profit
or loss in subsequent periods:
Change in available-for-sale financial assets fund, net off
deferred tax	(17,447,966)	(13,036,428)
Net other comprehensive (expense)/income to be
reclassified toprofit or loss in subsequentperiods	(17,447,966)	(13,036,428)
Other comprehensive income not being reclassified to
profit or loss in subsequent periods:
Actuarial loss, net off deferred tax	(1,127,248)	(649,024)
Net other comprehensive income not being reclassified
toprofit or loss in subsequentperiods	(1,127,248)	(649,024)
Other comprehensive income, net of tax	(18,575,214)	(13,685,452)
Total comprehensive income for theperiod, net of tax	133,283,257	222,330,553

The accompanying notes form an integral part of these condensed interim financial information.

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AKSİGORTA A.Ş.

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD JANUARY 1 - JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

June 30, 2021	Audited
			Available-for-sale		Actuarial loss arising
	Note	Share capital	investment funds	Legal reserves	from employee benefit	**Retained earnings **	Total
Balances at
December 31, 2020	10	306,000,000	1,441,549	302,288,128	(5,451,203)	331,837,425	936,115,899
Profit for the period		-	-	-	-	151,858,471	151,858,471
Transfer		-	-	126,342,886	-	(126,342,886)	-
Other comprehensive income		-	(17,447,966)	-	(1,127,248)	-	(18,575,214)
Total comprehensive income	10	-	(17,447,966)	126,342,886	(1,127,248)	25,515,585	133,283,257
Dividend payment	10	-	-	-	-	(306,000,000)	(306,000,000)
June 30, 2021	10	306,000,000	(16,006,417)	428,631,014	(6,578,451)	51,353,010	763,399,156
June 30, 2020	Reviewed
			Available-for-sale		Actuarial loss arising
	Note	Share capital	investment funds	Legal reserves	from employee benefit	**Retained earnings **	Total
Balances at
December 31, 2019	10	306,000,000	6,588,634	137,889,692	(4,518,213)	324,251,801	770,211,914
Profit for the period		-	-	-	-	236,016,005	236,016,005
Transfer		-	-	164,398,436	-	(164,398,436)	-
Other comprehensive income		-	(13,036,428)	-	(649,024)	-	(13,685,452)
Total comprehensive income	10	-	(13,036,428)	164,398,436	(649,024)	71,617,569	222,330,553
Dividend payment	10	-	-	-	-	(201,960,000)	(201,960,000)
June 30, 2020	10	306,000,000	(6,447,794)	302,288,128	(5,167,237)	193,909,370	790,582,467

The accompanying notes form an integral part of these condensed interim financial information.

4

AKSİGORTA A.Ş.

INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR PERIOD JANUARY 1 - JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

		Audited	Reviewed
		January 1 -	January 1 -
Cash FlowStatement	Note	June 30, 2021	June 30, 2020
Cash inflows from insurance operations		3,700,210,253	2,749,410,611
Cash outflows from insurance operations		(3,158,313,055)	(2,423,485,714)
Income tax payment		(40,750,219)	(71,352,599)
Cash outflows from operational expenses		(181,030,141)	(171,762,721)
Net cash flows from operating activities		320,116,838	82,809,577
Tangible and intangible asset acquisitions / disposals		(35,607,598)	(13,590,195)
Financial asset acquisitions / disposals		(173,799,719)	(695,663,644)
Interest received		241,137,930	146,750,008
Other cash inflows/(outflows)		35,418,405	(45,428,843)
Net cash flows(outflow)/inflow from investing activities		67,149,018	(607,932,674)
Dividends paid	10	(201,960,000)	(201,960,000)
Financial lease debtpayments	12	(7,403,428)	(7,775,170)
Net cash(outflow)/inflows from financing operations		(209,363,428)	(209,735,170)
Net increase/(decrease) in cash and cash equivalents		177,902,428	(734,858,267)
Cash and cash equivalents
at the beginning of theperiod		1,994,609,067	1,831,766,957
Cash and cash equivalents at the end of theperiod	9	2,172,511,495	1,096,908,690

The accompanying notes form an integral part of these condensed interim financial information.

5

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

1. General Information

Aksigorta A.Ş. (the “Company”) is a joint venture of Hacı Ömer Sabancı Holding A.Ş. and Ageas Insurance International N.V. as of June 30, 2021. 38.02% (December 31, 2020: 38.02%) of the Company is issued in Borsa İstanbul (“BİST”) (Note 2.3).

Agreement about the sale of 50% of 18,965,880,200 units of Aksigorta A.Ş. shares with TL 189,658,802 nominal value that belong to Hacı Ömer Sabancı Holding A.Ş. (“Holding”) portfolio was signed with Ageas Insurance International N.V. (“Ageas”) at February 18, 2011. At the date of July 29, 2011, 9,482,940,100 units of Aksigorta A.Ş. shares that correspond to 50% of the Holding’ s portfolio have been transferred to Ageas Insurance International N.V. with the sale price (except for adjustments to sale price) of USD 220,029,000. According to the joint administration agreement, which was signed between Holding and Ageas at February 18, 2011, Holding’s previous administrative controls over Aksigorta A.Ş. are going to remain equally with Ageas.

The Company is a corporation, which was established in accordance with the requirements of Turkish Commercial Code and registered in Turkey as at April 25, 1960. The Company is located at Poligon Cad. Buyaka 2 Sitesi No:8 Kule:1 Kat:0-6 Ümraniye 34771, İstanbul.

The Company’s main operations include insurance activities based on non-life insurance branches, including primarily motor third party liability, motor own damage, fire, marine, accident, personal accident, engineering, agriculture and health.

Average number of employees during the period by category are as follows:

	June 30, 2021	December 31, 2020
Top and middle management	155	144
Otherpersonnel	518	524
Total	673	668

Remuneration and fringe benefits provided to top management such as; chairman and members of the board of directors, managing director and assistant managing directors amount to TL 5,467,110 in total for January 1 - June 30, 2021 (January 1 - June 30, 2020: TL 4,173,680).

Condensed interim financial information includes only one company (Aksigorta A.Ş.) and the Company does not have any subsidiaries or affiliates as of June 30, 2021 (December 31, 2020: None).

The Company’s condensed interim financial information as of June 30, 2021 are approved and authorized for issuance as of August 6, 2021 by the Board of Directors.

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AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

2. Summary of significant accounting policies

2.1 Basis of preparation

The condensed interim financial information at June 30, 2021 have been properly prepared in accordance with International Financial Reporting Standard (“IFRS”) as defined by International Accounting Standard (“IAS”) 1. In accordance with the IAS 34 “Interim Financial Reporting”, entities are allowed to prepare a complete or condensed set of interim financial information. In this respect, the Company has preferred to prepare condensed interim financial information in the interim periods. Additionally, the accounting policies used in the preparation of the condensed interim financial information for the period ended June 30, 2021 are consistent with those used in the preparation of annual financial statements for the year ended December 31, 2020. Accordingly, the condensed interim financial information do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual financial statements as at December 31, 2020 and any public announcement made by the Company during the period.

The Company maintains its books of account and prepares its statutory financial statements in Turkish Lira (“TL”) in accordance with the Insurance Law numbered 5684 and the regulations issued for insurance and reinsurance companies by the Undersecretary of Treasury which is also the functional currency of the Company. This condensed interim financial information is based on the statutory records, with adjustments and reclassifications, for the purpose of proper preparation in accordance with IFRS.

The preparation of condensed interim financial information in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgements in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to condensed interim financial information are disclosed in Note 3.

Comparative information and restatement of prior period financial statements

The Company’s statement of financial position as of June 30, 2021 is presented in comparison with its statement of financial position as of December 31, 2020; statement of comprehensive income, statement of changes in equity and statement of cash flows for the period between January 1 - June 30, 2021 are presented in comparison with its statement of comprehensive income, statement of changes in equity and statement of cash flows for the period between January 1 - June 30, 2020.

2.2 Adoption of New and Revised Standards

The new standards, amendments and interpretations

The accounting policies applied in the preparation of the condensed interim financial information as of January 1 - June 30, 2021 are consistent with those applied in the preparation of the financial statements as of December 31, 2020, except for the new standards and amended IAS/IFRS standards which are valid as of January 1, 2021 and International Financial Reporting Interpretations Committee’s (“IFRIC”) interpretations summarized below.

Standards, amendments and interpretations applicable as at June30, 2021:

Amendment to IFRS 16, ‘Leases’ - Covid-19 related rent concessions Extension of the Practical expedient; as of March 2021, this amendment extended till June 2022 and effective from April 1, 2021. As a result of the coronavirus (COVID-19) pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments. On May 28, 2020, the IASB published an amendment to IFRS 16 that provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect to account for such rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition that triggers the reduced payment occurs.

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AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

2. Summary of significant accounting policies (Continued)

• 2.2 Adoption of New and Revised Standards (Continued)

The new standards, amendments and interpretations (Continued)

Amendments to IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform Phase 2; effective from annual periods beginning on or after January 1, 2021. The Phase 2 amendments address issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one.

Amendments IFRS 4, ‘Insurance contracts’, deferral of IFRS 9; effective from annual periods beginning on or after January 1, 2021. These amendments change the fixed date of the temporary exemption in IFRS 4 from applying IFRS 9, Financial Instrument until January 1, 2023.

Standards, amendments and interpretations that are issued but not effective as at June 30, 2021:

IFRS 17, ‘Insurance contracts’; effective from annual periods beginning on or after January 1, 2023. This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features.

Standard will be implemented for the periods after January 1, 2023. The Company assesses the effects of the standard on the financial situation and performance.

Amendments to IAS 1, Presentation of financial statements on classification of liabilities; effective from January 1, 2022. These narrow-scope amendments to IAS 1, ‘Presentation of financial statements’, clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (for example, the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability.

The Company assesses the effects of the standards above on the financial situation and performance.

A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16; effective from Annual periods beginning on or after January 1,2022.

• Amendments to IFRS 3, ‘Business combinations’ update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.

• Amendments to IAS 16, ‘Property, plant and equipment’ prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

• Amendments to IAS 37, ‘Provisions, contingent liabilities and contingent assets’ specify which costs a company includes when assessing whether a contract will be loss-making.

Annual improvements make minor amendments to IFRS 1, ‘First-time Adoption of IFRS’, IFRS 9, ‘Financial instruments’, IAS 41, ‘Agriculture’ and the Illustrative Examples accompanying IFRS 16, ‘Leases’.

8

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

2. Summary of significant accounting policies (Continued)

• 2.2 Adoption of New and Revised Standards (Continued)

The new standards, amendments and interpretations (Continued)

Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8; effective from annual periods beginning on or after January 1, 2023. The amendments aim to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes in accounting estimates and changes in accounting policies.

Amendment to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction; from annual periods beginning on or after January 1, 2023. These amendments require companies to recognize deferred tax on transactions that, on initial recognition give rise to equal amounts of taxable and deductible temporary differences.

2.3 Share capital

As of June 30, 2021, the Company’s nominal capital is TL 306,000,000 (December 31, 2020: TL 306,000,000). Share capital is represented by 30,600,000,000 of equity shares having a nominal amount of TL 0,01 each.

The share capital structure of the Company is as follows:

Name of shareholders	June 30, 2021December 31, 2020
	ShareShareamountShareShareamount
Hacı Ömer Sabancı Holding A.Ş.Ageas Insurance International NVPublicly quoted shares	36.00110,160,00036.00 110,160,00036.00110,160,00036.00 110,160,00028.0085,680,00028.0085,680,000
Total	100.00306,000,000100.00 306,000,000

Agreement about the sale of 50% of 18,965,880,200 units of Aksigorta A.Ş. shares with nominal value of TL 189,658,802 that belong to Hacı Ömer Sabancı Holding (“Holding”) portfolio, was signed with Ageas Insurance International N.V. at February 18, 2011. 9,482,940,100 units of Aksigorta A.Ş. shares that correspond to 50% of the Holding’ s portfolio has been transferred to Ageas Insurance International N.V. on July 29, 2011 with a sale price of USD 220,029,000 except for adjustments to sale price.

The Company has accepted the registered capital system set out in accordance with the provisions of Law No: 2499 and applied the system as of March 15, 2000 upon the permission no: 67/1039 granted by the Capital Markets Board. As of June 30, 2021, the company is listed in the permission letter of the Capital Markets Board dated February 10, 2021 and numbered E-29833736-110.03.03-1635 and the Ministry of Commerce, General Directorate of Domestic Trade, dated 5 March 2021 and numbered 62064027 and its annexes. has increased the registered capital ceiling to TL 750,000,000 with the decision of the Ordinary General Assembly dated March 16, 2021. (December 31, 2020: TL 500.000.000).

9

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

2. Summary of significant accounting policies (Continued)

2.4 Insurance Liabilities

Outstanding claims provision

Claims are charged to income as incurred based on the estimated liability for compensation owed to contract holders or third parties damaged by the contract holders. They include settlement costs and arise from events that have occurred up to the statement of financial position date even if they have not yet been reported to the Company. Outstanding claims are estimated using the input of assessments for individual cases reported and statistical analyses. The expected ultimate cost of claims is also affected by external factors such as court decisions.

Claims are payable on a claims-occurrence basis. The Company is liable for all insured events that occurred during the term of the contract, even if the loss is discovered after the end of the contract term. There are several variables that affect the amount and timing of cash flows from these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures they adopted.

For the estimation of the ultimate liability arising from claims made under insurance contracts, the Company uses Chain-Ladder and Frequency and Severity methods. The method for MTPL is based on frequency and severity method, for the rest of the branches, ultimate selections are made with ChainLadder method.

The appropriate development factors are then applied to cumulative claims data for each accident year that is not yet fully developed to produce an estimated ultimate claim cost for each accident year. The choice of selected factors for each accident year of each class of business depends on the best estimate of the Company. Considering the uncertainty about the amount and timing of claims, the Company made the estimation of claims development considering starting from the year of 2003 and a tail factor is used for some branches for future developments. The Company performs the ultimate liability estimation for large claims separately which are determined as large claims by using certain statistical methods since these claims have different claim development patterns. Additionally, the ultimate liability calculations are performed on gross basis and the net amounts are determined according to historical ceding rates on each accident quarter or applicable reinsurance treaties are applied to ultimate losses for each branch. A provision is calculated and accounted for unallocated loss adjustment expenses (“ULAE”) refer to general overhead expenses associated with the claims-handling process, and particularly the costs of investigating, handling, paying, and resolving claims. The estimation for ULAE is calculated using the rate of historical expenses to total claim amounts. The methods which were selected by the Company for each branch, the results of related calculations as of June 30, 2021 and December 31, 2020, the methods to calculate net of reinsurance results and the limits which are used for the big claims eliminations are disclosed in Note 11.

3. Critical accounting estimates and judgements

Preparation of condensed interim financial information requires the use of estimations and assumptions which may affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the statement of financial position date and reported amounts of income and expenses during the financial period. Accounting estimates and assumptions are continuously evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under current circumstances. Although the estimations and assumptions are based on the best knowledge of the management for existing events and operations, they may differ from the actual results. The estimation of the ultimate liability for technical expenses that can be incurred for the existing insurance contracts is one of the most critical accounting estimates. Estimation of the insurance liabilities, by nature, includes the evaluation of several uncertainties.

10

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

3. Critical accounting estimates and judgements (Continued)

Impact of Covid - 19

The impact of Covid-19 (Coronavirus) pandemic to the Company’s operations and financial results has been monitored and actions have been immediately taken for the Company to mitigate the impacts of the pandemic. In connection with the Covid-19 pandemic and parallel to the current conditions/slowdown in the global and Turkish economy. In the meantime, the Company has taken measures for savings on operational and capital expenditures. Cash management strategies have been reviewed for a stronger liquidity position.

In preparation of the condensed interim financial information as of June 30, 2021, the Company has assessed the possible impacts of Covid-19 pandemic on the condensed interim financial information and reviewed the critical estimates and assumptions. Within this scope, the Company has tested the financial assets, tangible and intangible assets for a possible impairment and no impairments were identified. The Company has also tested the assumptions for the measurement of insurance liabilities.

In accordance with the announcement issued on April 29, 2020, by the Ministry of Treasury and Finance - General Directorate of Insurance, the sixth clause of the article 4, titled “Principles for the determination of insurance premiums” of the Regulation on the Principles of Compulsory Financial Liability Tariffs, Undersecretary of Treasury may impose special rules for the sharing of premiums and claims among insurers with high risk. The premium of these insured is determined by the Undersecretary of Treasury, based on provision; it has been decided to extend the validity period of the policies in the scope of MTPL risk insured pool with an expiry date between April 30, 2020 and May 31, 2020 for a period of 1 month without additional premium.

4. Segment information

Information related to the operational reporting made by the Company to the chief operating decisionmaker in accordance with the “IFRS 8 - Operating Segments” is disclosed in this part.

Numerical limits in “IFRS 8 - Operating Segments” is also considered as the reporting to the chief operating decision-maker in the determination of segments and the premium production and net technical income of the segments are considered while determining a separate operating segment.

The Company has been operating in Turkey. Since the effect of the foreign operations on condensed interim financial information is extremely low, geographic segment information is not given.

11

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

4. Segment information (Continued)

Segment results for period January 1 - June 30, 2021 is as follows:

January 1 -June 30, 2021FireMarineMotor OwnDamage (MOD)Motor ThirdParty LiabilityGeneralLossesHealth	OtherUndistributedTotal
TECHNICAL INCOME38,379,98618,438,277596,440,274690,958,36536,148,82152,017,499Earned Premiums (Net of Reinsurer Share)38,379,98618,438,277596,440,274690,958,36536,148,82152,017,499Premiums (Net of Reinsurer Share)43,866,28920,609,120600,891,614732,397,10735,452,51658,871,685Change in Unearned Premiums Reserve(Net of Reinsurers Shares andReserves Carried Forward) (+/-)(5,486,303)(2,170,843)(4,451,340)(41,438,742)696,305(6,854,186)	131,650,308-1,564,033,530131,650,308-1,564,033,530148,638,659-1,640,726,990(16,988,351)-(76,693,460)
TECHNICAL EXPENSES(54,790,213)(17,407,368)(582,829,284)(773,214,110)(25,320,270)(23,983,725)Total Claims (Net of Reinsurer Share)(55,601,473)(13,002,515)(439,785,349)(642,099,256)1,777,9251,066,724Claims Paid (Net of Reinsurer Share)(49,166,020)(9,166,746)(366,037,590)(428,741,630)2,458,9981,158,578Changes in Outstanding Claims Reserve(Net of Reinsurer Share and ReservesCarried Forward) (+/-)(6,435,453)(3,835,769)(73,747,759)(213,357,626)(681,073)(91,854)Commission income/(expenses) (Net)11,738,744(2,231,479)(107,971,864)(71,190,224)(17,354,001)(14,921,824)Operating Expenses(14,009,784)(1,621,816)(23,814,001)(54,415,912)(8,684,326)(8,359,339)Other OperatingIncome / Expenses3,082,300(551,558)(11,258,070)(5,508,718)(1,059,868)(1,769,286)	(184,715,706)-(1,662,260,676)(111,192,183)-(1,258,836,127)(64,589,606)-(914,084,016)(46,602,577)-(344,752,111)(26,791,914)-(228,722,562)(42,661,054)-(153,566,232)(4,070,555)-(21,135,755)
Technical Profit(16,410,227)1,030,90913,610,990(82,255,745)10,828,55128,033,774	(53,065,398)-(98,227,146)
Investment income------Foreign exchange income------Tax expense------	-254,914,735254,914,735-36,611,29936,611,299-(41,440,417)(41,440,417)
Net Profit /(Loss)(16,410,227)1,030,90913,610,990(82,255,745)10,828,55128,033,774	(53,065,398)250,085,617151,858,471

12

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

4. Segment information (Continued)

Segment results for period January 1 - June 30, 2020 is as follows:

January 1 -June 30, 2020FireMarineMotor OwnDamage (MOD)Motor ThirdParty LiabilityGeneralLossesHealth	OtherUndistributedTotal
TECHNICAL INCOME82,334,36515,163,987413,661,117631,243,19851,282,58753,621,879Earned Premiums (Net of Reinsurer Share)82,334,36515,163,987413,661,117631,243,19851,282,58753,621,879Premiums (Net of Reinsurer Share)87,003,19015,403,318419,231,504593,827,61253,191,64942,962,736Change in Unearned Premiums Reserve(Net of Reinsurers Shares andReserves Carried Forward) (+/-)(4,668,825)(239,331)(5,570,387)37,415,586(1,909,062)10,659,143	51,530,935-1,298,838,06851,530,935-1,298,838,06847,032,163-1,258,652,1724,498,772-40,185,896
TECHNICAL EXPENSES(88,232,810)(7,806,175)(346,673,683)(597,412,434)(43,211,972)(32,401,282)Total Claims (Net of Reinsurer Share)(50,193,951)(3,854,823)(227,737,397)(455,418,115)(18,298,361)(4,629,113)Claims Paid (Net of Reinsurer Share)(29,104,245)(3,256,557)(209,869,685)(312,432,603)(11,420,752)(2,776,114)Changes in Outstanding Claims Reserve(Net of Reinsurer Share and ReservesCarried Forward) (+/-)(21,089,706)(598,266)(17,867,712)(142,985,512)(6,877,609)(1,852,999)Commission income/(expenses) (Net)(11,498,537)(2,604,492)(77,776,476)(65,105,651)(14,580,395)(20,515,896)Operating Expenses(23,503,083)(787,474)(28,172,267)(47,363,480)(8,441,448)(5,561,992)Other OperatingIncome / Expenses(3,037,239)(559,386)(12,987,543)(29,525,188)(1,891,768)(1,694,281)	(59,277,549)-(1,175,015,905)(36,189,161)-(796,320,921)(11,809,155)-(580,669,111)(24,380,006)-(215,651,810)(8,411,116)-(200,492,563)(12,776,338)-(126,606,082)(1,900,934)-(51,596,339)
Technical Profit(5,898,445)7,357,81266,987,43433,830,7648,070,61521,220,597	(7,746,614)-123,822,163
Investment income------Foreign exchange income------Tax expense------	-185,908,194185,908,194-(2,710,258)(2,710,258)-(71,004,094)(71,004,094)
Net Profit /(Loss)(5,898,445)7,357,81266,987,43433,830,7648,070,61521,220,597	(7,746,614)112,193,842236,016,005

13

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

5. Tangible assets

As of June 30, 2021 and 2020 tangible assets movement and its accumulated depreciation is as follows:

Costs:January 1, 2021AdditionsDisposals	June 30, 2021
Property for operational use1,598,569--Motor vehicles2,720,001963,243-Furniture and fixtures and leased tangible assets30,431,1712,000,375(314,879)Other tangible assets (including leasehold improvements)21,682,557239,285-Right of use of asset41,129,2714,642,011(6,225,532)Advances on tangible assets-106,455-	1,598,5693,683,24432,116,66721,921,84239,545,750106,455
Total97,561,5697,951,369(6,540,411)	98,972,527
Accumulated depreciation:(-)
Property for operational use(633,191)(15,854)-Motor vehicles(1,093,962)(352,101)-Furniture and fixtures and leased tangible assets(20,847,952)(2,074,419)306,196Other tangible assets(13,841,375)(1,027,979)-Right of use of asset(17,643,062)(4,408,960)-	(649,045)(1,446,063)(22,616,175)(14,869,354)(22,052,022)
Total(54,059,542)(7,879,313)306,196	(61,632,659)
Net book value43,502,027	37,339,868
Costs:January 1, 2020AdditionsDisposals	June 30, 2020
Property for operational use1,598,569--Motor vehicles2,720,001--Furniture and fixtures and leased tangible assets27,612,7502,479,080(539,580)Other tangible assets (including leasehold improvements)21,347,617334,940-Right ofuse ofasset34,372,8856,272,195-	1,598,5692,720,00129,552,25021,682,55740,645,080
Total87,651,8229,086,215(539,580)	96,198,457
Accumulated depreciation:(-)
Property for operational use(601,219)(15,898)-Motor vehicles(549,962)(270,514)-Furniture and fixtures and leased tangible assets(17,306,145)(2,022,459)529,072Other tangible assets(11,657,802)(1,126,490)-Right of use of asset(8,243,981)(4,813,797)-	(617,117)(820,476)(18,799,532)(12,784,292)(13,057,778)
Total(38,359,109)(8,249,158)529,072	(46,079,195)
Net book value49,292,713	50,119,262

The Company has not accounted for any impairment provision for tangible fixed assets in the current period.

Total depreciation expense is TL 21,952,267 (January 1 - June 30, 2020: TL 23,112,700).

14

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

6. Intangible assets

Costs:January 1,2021AdditionsDisposalsTransfers	June 30,2021
Rights161,424,84422,058,438-3,315,525Advancesgiven for intangible assets9,163,79510,554,681-(3,315,525)	186,798,80716,402,951
Total170,588,63932,613,119--	203,201,758
Accumulated depreciation:(-)
Rights(113,365,102)(14,072,954)--	(127,438,056)
Total(113,365,102)(14,072,954)--	(127,438,056)
Net book value57,223,537	75,763,702
Costs:January 1,2020AdditionsDisposalsTransfers	June 30,2020
Rights134,184,2587,435,492(2,250)1,492,986Advancesgiven for intangible assets3,489,0883,882,513-(1,492,986)	143,110,4865,878,615
Total137,673,34611,318,005(2,250)-	148,989,101
Accumulated depreciation:(-)
Rights(77,104,087)(14,855,040)125-	(91,959,002)
Total(77,104,087)(14,855,040)125-	(91,959,002)
Net book value60,569,259	57,030,099

7. Management of insurance and financial risk

Foreign currency risk

The Company is exposed to foreign exchange risk through the impact of rate changes at the translation of Turkish Lira pertaining to foreign currency denominated assets and liabilities. These risks are monitored by the analysis foreign exchange position. The details of the Company’s foreign currency denominated assets and liabilities as of June 30, 2021 and December 31, 2020 are disclosed below:

June 30, 2021
	Amount in Foreign
Banks (Foreign Currency)	Currency	Exchange Rate	Amount (TL)
USD	18,003,411	8.6803	156,275,009
EUR	1,745,886	10.3249	18,026,098
GBP	160,866	12.0008	1,930,521
CHF	119,255	9.3894	1,119,733
Total			177,351,361

	Amount in Foreign
Marketable Securities	Currency	Exchange Rate	Amount (TL)
USD	24,748,867	8.6803	214,827,590
Total			214,827,590

15

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

7. Management of insurance and financial risk (Continued)

Receivables from Insurance OperationsAmount in ForeignCurrencyExchange Rate	Receivables from Insurance OperationsAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD51,583,5588.6803EUR15,684,53510.3249GBP124,41012.0008CHF9,8979.3894		447,760,759161,941,2551,493,02092,927
Total		611,287,961
Outstanding Claims ReserveAmount in ForeignCurrencyExchange Rate		Amount (TL)
USD(7,711,705)8.6959EUR(1,008,581)10.3435		(67,060,216)(10,432,258)
Total		(77,492,474)
Payables to Insurance OperationsAmount in ForeignCurrencyExchange Rate		Amount (TL)
USD(62,767,465)8.6959EUR(16,463,338)10.3435Other		(545,819,599)(170,288,537)(2,138,051)
Total		(718,246,187)
Payables to SuppliersAmount in ForeignCurrencyExchange Rate		Amount (TL)
USD(72,353)8.6959EUR(4,292)10.3435		(629,174)(44,394)
Total		(673,568)
Net Foreign Currency Position		207,054,683

16

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

7. Management of insurance and financial risk (Continued)

December 31, 2020Banks (Foreign Currency)Amount inForeign CurrencyExchange Rate	Amount (TL)
USD20,805,1227.3405EUR1,536,1609.0079GBP100,0409.9438CHF79,0668.2841	152,719,99813,837,576994,778654,991
Total	168,207,343
Receivables from Insurance OperationsAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD47,616,0887.3405EUR18,785,7299.0079GBP98,0849.9438CHF68,2868.2841	349,525,894169,219,968975,328565,688
Total	520,286,878
Marketable SecuritiesAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD24,956,0347.3405	183,189,768
Total	183,189,768
Outstanding Claims ReserveAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD(9,473,467)7.3405EUR(1,134,957)9.0079	(69,539,985)(10,223,579)
Total	(79,763,564)
Payables to Insurance OperationsAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD(60,000,422)7.3405EUR(11,572,916)9.0079Other	(440,433,098)(104,247,670)(1,379,856)
Total	(546,060,624)
Payables to suppliersAmount in ForeignCurrencyExchange Rate	Amount (TL)
USD(899,254)7.3405EUR(63,701)9.0079	(6,600,974)(573,812)
Total	(7,174,786)
Net foreign currency position	238,685,015

17

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

7. Management of insurance and financial risk (Continued)

Liquidity risk

Liquidity risk is the possibility of non-performance of the Company’s due liabilities. Events that give rise to funding shortages, such as; market deteriorations and decrease in credit ratings, are the main reasons of liquidity risk. The Company manages its liquidity risk through having adequate cash and cash equivalents in order to fulfill its current and possible liabilities by allocating its funds.

Table of liquidity risk as of June 30, 2021 is as follows:

June 30, 2021	Up to 1 month	1 - 3 months	3 months to 1year	1 - 5years	5years and over	No maturity	Total
Cash and cash equivalents	741,460,928	1,288,595,826	355,157,060	-	-	125,758,818	2,510,972,632
Financial assets available for sale	128,856,190	85,041,248	409,126,466	348,595,489	97,050,129	101,752,203	1,170,421,725
Financial assets held for trading	-	-	-	-	-	186,102,625	186,102,625
Financial assets held to maturity	-	60,938,315	276,400,147	262,531,849	26,293,897	-	626,164,208
Investments on policyholders’ risk	-	-	-	1,804,230	-	-	1,804,230
Receivables from main operations	245,658,219	360,300,855	323,149,217	7,621,811	-	-	936,730,102
Due from reinsurance companies	-	45,168,844	-		-	-	45,168,844
Reinsurers’ share of insurance liabilities	1,583,213,310	1,583,283,358	895,043,232	228,168,914	19,269,196	-	4,308,978,010
Equity securities	-	-	-	-	-	686,078	686,078
Other assets	10,677,084	213,280,228	2,390,313	-	-	-	226,347,625
Assets	2,709,865,731	3,636,608,674	2,261,266,435	848,722,293	142,613,222	414,299,724	10,013,376,079
Obligations under repurchase agreements	76,278,770	-	-	-	-	-	76,278,770
Financial liabilities	1,283,824	15,294,084	8,589,663	20,475,702	-	-	45,643,273
Insurance liabilities	2,838,972,662	2,941,407,655	1,915,454,453	401,221,639	32,639,893	-	8,129,696,302
Provisions for other liabilities and charges	-	-	68,678,022	810,398	-	3,849,518	73,337,938
Due to reinsurers	387,660,206	328,239,362	104,579,670	-	-	-	820,479,238
Trade and other payables	-	-	314,771,938	-	-	-	314,771,938
Liabilities	3,304,195,462	3,284,941,101	2,412,073,746	422,507,739	32,639,893	3,849,518	9,460,207,459

18

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

7. Management of insurance and financial risk (Continued)

Table of liquidity risk as of December 31, 2020 is as follows:

December 31, 2020Up to 1 month1- 3 months3 months to 1 year1- 5 years	5 years andoverNo maturityTotal
Cash and cash equivalents1,221,480,537864,266,192105,247,617-Financial assets available for sale31,037,645112,580,873640,723,212466,432,369Financial assets held for trading56,027,437---Financial assets held to maturity-150,513,07721,937,90833,076,385Investments on policyholders’ risk---1,952,843Receivables from main operations229,586,738237,049,716582,974,6907,266,490Due from reinsurance companies-28,401,167--Reinsurers’ share of insurance liabilities1,495,075,7811,121,736,407844,537,744171,376,464Equity securities----Otherassets-249,893,146--	-79,230,0542,270,224,40085,564,805136,469,5801,472,808,484-7,207,54363,234,980--205,527,370--1,952,843 --1,056,877,634--28,401,16715,272,084-3,647,998,480-722,156722,156--249,893,146
Total Assets3,033,208,1382,764,440,5782,195,421,171680,104,551	100,836,889223,629,3338,997,640,660
Obligations under repurchase agreements59,562,359---Financial liabilities1,236,70115,517,7079,835,52328,360,104Insurance liabilities2,720,038,2132,162,241,8251,831,409,475307,130,352Due to reinsurers229,913,55758,629,635522,645,618-Provisions for other liabilities and charges--67,020,7001,633,654Trade and other payables--189,310,900-	--59,562,359--54,950,03526,451,336-7,047,271,201--811,188,810-2,158,58170,812,935--189,310,900
Total liabilities3,010,750,8302,236,389,1672,620,222,216337,124,110	26,451,3362,158,5818,233,096,240

19

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

8. Financial assets

Available for sale debt securities:

	June 30, 2021
	Cost ValueFair ValueBook Value
EurobondsPrivate bondsGovernment bondsEquitiesTotal	475,625,200489,334,663489,334,663447,600,674464,500,974464,500,974119,483,446114,833,885114,833,885118,032,878101,752,203101,752,2031,160,742,1981,170,421,7251,170,421,725
	December 31, 2020
	Cost ValueFair ValueBook Value
EurobondsPrivate bondsGovernment bondsEquities	651,580,189658,081,546658,081,546466,632,308476,919,365476,919,365200,278,369201,337,991201,337,991126,165,411136,469,582136,469,582
Total	1,444,656,2771,472,808,4841,472,808,484

Held to maturity:

	June 30, 2021
	Cost ValueFair ValueBook Value
EurobondGovernment bondsPrivate bonds	266,877,525273,947,511273,916,470194,076,754191,827,508197,778,965150,815,590154,058,375154,468,773
Total	611,769,869619,833,394626,164,208
	December 31, 2020
	Cost ValueFair ValueBook Value
EurobondGovernment bonds	136,087,693139,192,396138,255,89862,670,79168,812,56767,271,472
Total	198,758,484208,004,963205,527,370
Held for trading:	June 30, 2021
	Cost ValueFair ValueBook Value
Reverse repoInvestmentfunds	99,999,882100,052,759100,052,75980,619,37186,049,86686,049,866
Total	180,619,253186,102,625186,102,625
	December 31, 2020
	Cost ValueFair ValueBook Value
Reverse repoInvestmentfunds	55,999,88256,027,43756,027,4376,466,9027,207,5437,207,543
Total	62,466,78463,234,98063,234,980
Available for sale financial assets at insurees’ risk:June 30, 2021Cost ValueFair ValueBook Value
	Cost ValueFair ValueBook Value
Government bonds	1,734,8321,804,2301,804,230
Total	1,734,8321,804,2301,804,230
	December 31, 2020
	Cost ValueFair ValueBook Value
Government bonds	1,647,6651,952,8431,952,843
Total	1,647,6651,952,8431,952,843

20

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

8. Financial assets (Continued)

Equity shares under available-for-sale investments:

List of the investments and fair values is as below:

		June 30, 2021
	Cost Value	FairValue	Book Value
Equity investments
Tarsim	686,078	-	686,078
Total	686,078	-	686,078
		December 31, 2020
	Cost Value	FairValue	Book Value
Equity investments
Tarsim	722,156	-	722,156
Total	722,156	-	722,156

Fair Value Hierarchy

Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists. Fair value measurements are performed in accordance with the following fair value measurement hierarchy.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3: Inputs for the asset or liability that is not based on observable market data (that is, unobservable inputs).

inputs).
June 30, 2021Level 1Level2	Level 3
Available for sale at company’s risk1,170,421,7251,170,421,725-Held to maturity at company’s risk626,164,208626,164,208-Held for trading at company's risk186,102,625186,102,625-Available for sale at insurees' risk1,804,2301,804,230-Equity securities, net686,078--	----686,078
Total1,985,178,8661,984,492,788-	686,078
December 31, 2020Level 1Level2	Level 3
Available for sale at company’s risk1,472,808,4841,472,808,484-Held to maturity at company’s risk205,527,370205,527,370-Held for trading at company's risk63,234,98063,234,980-Available for sale at insurees' risk1,952,8431,952,843-Equity securities, net722,156--	----722,156
Total1,744,245,8331,743,523,677-	722,156

21

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

9. Cash and cash equivalents

The details of cash and cash equivalents of the Company are as follows:

	June 30, 2021	December 31, 2020
Cash at banks	1,767,594,860	1,600,368,638
-time deposits	1,641,836,041	1,521,138,584
-demand deposits	125,758,819	79,230,054
Bank guaranteed credit card receivables
with maturity less than 3 months	743,377,772	669,855,762
Total cash and cash equivalents	2,510,972,632	2,270,224,400

The maturities of the Company’s time deposit as of June 30, 2021 are less than six months (December 31, 2020: Less than six months).

Cash and cash equivalents that are included in the statements of cash flows for the periods January 1 - June 30, 2021 and January 1 - December 31, 2020 are as follows:

	June 30, 2021	December 31, 2020
Total cash and cash equivalents	2,510,972,632	2,270,224,400
Interest accrual on cash at banks (-)	(22,322,134)	(11,553,673)
Blocked time deposits	(141,139,003)	(89,061,660)
Blocked credit card receivables	(175,000,000)	(175,000,000)
Cash and cash equivalentsper statement of cash flow	2,172,511,495	1,994,609,067

Weighted average interest rates of time deposits:

	June 30, 2021	December 31, 2020
TL	15,00 - 20,40	13,65 - 22,25
USD	0,17 - 2,00	0,20 - 3,10
EUR	-	0,01 - 0,05

10. Equity

As of June 30, 2021, the Company’s total amount of nominal shares is 30,600,000,000 (December 31, 2020: 30,600,000,000) which has all been paid. The face value of the Company’s common stocks is TL 0,01 each and the total nominal amount is TL 306,000,000 (December 31, 2020: TL 306,000,000).

Movement of common stocks at opening balance and closing balance is as follows:

Paid	January 1, 2021UnitNominalTL30,600,000,000306,000,000	**Issued Capital **UnitNominalTL --	AmortisedUnitNominalTL --	**June 30, **	2021
				Unit	NominalTL
				30,600,000,000	306,000,000
Total	30,600,000,000306,000,000	--	--	30,600,000,000	306,000,000
Paid	January 1, 2020UnitNominalTL30,600,000,000306,000,000	**Issued Capital **UnitNominalTL --	AmortisedUnitNominalTL--	**June 30, **	2020
				Unit	NominalTL
				30,600,000,000	306,000,000
Total	30,600,000,000306,000,000	--	--	30,600,000,000	306,000,000

22

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

10. Equity (Continued)

Movement of legal reserves is as follows:

Legal Reserves	2021	2020
Opening balance, January 1	302,288,128	137,889,692
Transfers from retained earnings	126,342,886	164,398,436
Closing balance, June 30	428,631,014	302,288,128

Actuarial gain / (loss)

In accordance with changes regarding “IAS 19 - Employee Benefits” effective as of January 1, 2013, actuarial loss amounting to TL 8,223,064 (net-off deferred tax: TL 6,578,451) resulting from retirement pay liability calculation has been accounted to extraordinary reserves under equity.

Movement of actuarial loss arising from employee benefit is as follows:

Actuarial Loss	2021	2020
Opening balance, January 1	(5,451,203)	(4,518,213)
Change for the period	(1,127,248)	(649,024)
Closing balance, June 30	(6,578,451)	(5,167,237)

Available for sale investments fund:

Available for sale investments fund:
Available for sale investments fund	2021	2020
Opening balance, January 1	1,441,549	6,588,634
Increase/decrease in value recognized under the
shareholders’equity in the current period	(17,447,966)	(13,036,428)
Closing balance, June 30	(16,006,417)	(6,447,794)

Dividend payment

At the Ordinary General Assembly Meeting held on March 16, 2021, the Company decided to distribute a gross dividend of TL 306,000,000 from the net profit of TL 432,342,886 for the period January 1 - December 31, 2020, in line with the profit distribution proposal of the Board of Directors. TL 201,960,000 of this amount was distributed in cash on March 18, 2021. The remaining TL 104,040,000 dividend will be distributed as of September 6, 2021 (December 31, 2020: TL 201,960,000).

23

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

11. Insurance liabilities

Gross	June 30, 2021	December 31, 2020
Outstanding claims provision	5,020,310,462	4,118,631,648
Reserve for unearned premiums	3,107,626,278	2,926,765,514
Life actuarial mathematical reserves	1,231,828	1,276,448
Life profit share provision	136,870	141,828
Bonus andrebates provision	390,864	455,763
Total	8,129,696,302	7,047,271,201
Reinsurance Share	June 30, 2021	December 31, 2020
Reinsurers’ share of outstanding claims	2,905,370,686	2,348,492,639
Reinsurers’ share of unearned premiums	1,403,220,978	1,299,053,674
Reinsurers'share of bonus and rebates provision	386,346	452,167
Total	4,308,978,010	3,647,998,480
Net	June 30, 2021	December 31, 2020
Net outstanding claims	2,114,939,776	1,770,139,009
Net unearned premiums	1,704,405,300	1,627,711,840
Life actuarial mathematical reserves	1,231,828	1,276,448
Life profit share provision	136,870	141,828
Bonus andrebates provision	4,518	3,596
Total	3,820,718,292	3,399,272,721

24

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION

AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

11. Insurance liabilities (Continued)

Claims development tables

The Company prepares the claim development table in accordance with the Regulation on Technical Reserves. As of June 30, 2021 and December 31, 2020, claim development table of the Company is as follows:

	2014 and earlier	2015	2016	2017	2018	2019	2020	2021	Total
Claims realized in the accident period	5,052,312,637	921,276,704	771,427,801	1,143,101,874	1,339,731,936	1,771,798,732	1,925,624,707	2,576,067,470	15,501,341,861
1 year later	1,207,813,115	267,970,503	203,985,590	853,337,768	513,978,660	979,401,528	1,156,729,107	-	5,183,216,271
2 years later	450,021,413	153,366,603	130,022,115	790,654,711	278,460,096	682,274,867	-	-	2,484,799,805
3 years later	345,407,350	159,801,362	100,927,480	785,795,693	276,473,932	-	-	-	1,668,405,817
4 years later	303,957,165	170,623,840	107,006,756	841,542,822	-	-	-	-	1,423,130,583
5 years later	272,829,430	183,449,939	118,597,239	-	-	-	-	-	574,876,608
6 years later	281,531,610	211,468,481	-	-	-	-	-	-	493,000,091
7 years later	290,917,742	-	-	-	-	-	-	-	290,917,742
8 years later	193,725,871	-	-	-	-	-	-	-	193,725,871
9 years later	118,960,577	-	-	-	-	-	-	-	118,960,577
10 years later	85,813,040	-	-	-	-	-	-	-	85,813,040
11 year later	57,542,716	-	-	-	-	-	-	-	57,542,716
12 year later	38,879,016	-	-	-	-	-	-	-	38,879,016
13 year later	21,791,463	-	-	-	-	-	-	-	21,791,463
14year later	7,222,904	-	-	-	-	-	-	-	7,222,904
Total incurred gross provision for
outstanding claims as at
June 30, 2021	8,728,726,049	2,067,957,432	1,431,966,981	4,414,432,868	2,408,644,624	3,433,475,127	3,082,353,814	2,576,067,470	28,143,624,365

25

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

11. Insurance liabilities (Continued)

	2013 and earlier	2014	2015	2016	2017	2018	2019	2020	Total
Claims realized in the accident period	4,779,251,521	838,172,102	841,913,192	930,621,837	1,366,238,878	1,564,047,984	2,299,878,599	2,069,675,810	14,689,799,923
1 year later	1,159,099,782	239,937,131	216,699,946	420,934,178	793,577,616	606,370,322	939,075,198	-	4,375,694,173
2 years later	400,912,984	144,014,862	126,303,760	345,579,004	633,208,482	352,446,584	-	-	2,002,465,676
3 years later	302,651,215	120,606,234	110,917,361	344,631,786	602,343,698	-	-	-	1,481,150,294
4 years later	281,287,386	133,086,346	113,024,946	398,378,186	-	-	-	-	925,776,864
5 years later	242,522,017	151,210,707	120,467,564	-	-	-	-	-	514,200,288
6 years later	244,332,048	174,627,627	-	-	-	-	-	-	418,959,675
7 years later	253,370,080	-	-	-	-	-	-	-	253,370,080
8 years later	168,934,219	-	-	-	-	-	-	-	168,934,219
9 years later	113,505,061	-	-	-	-	-	-	-	113,505,061
10 years later	81,299,639	-	-	-	-	-	-	-	81,299,639
11 year later	51,476,156	-	-	-	-	-	-	-	51,476,156
12 year later	34,545,785	-	-	-	-	-	-	-	34,545,785
13 year later	18,752,259	-	-	-	-	-	-	-	18,752,259
14 year later	5,273,107	-	-	-	-	-	-	-	5,273,107
Total incurred gross provision for
outstanding claims as at
December 31, 2020	8,137,213,259	1,801,655,009	1,529,326,769	2,440,144,991	3,395,368,674	2,522,864,890	3,238,953,797	2,069,675,810	25,135,203,199

26

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

11. Insurance liabilities (Continued)

Incurred but not reported reserves in accordance with ultimate liability calculations:

	June 30, 2021December 31, 2020	June 30, 2021December 31, 2020
	GrossAdditionalNetAdditionalGrossAdditional	NetAdditional
Line of Businesses	AppliedMethodProvisionProvisionAppliedMethodProvision	Provision
Motor Third PartyLiabilityGeneral LiabilityFireMarineGeneral LossHealthMotor Own DamageOther	FS969,009,672969,009,672FS892,470,020SCL355,744,37133,630,780SCL323,240,038SCL25,286,7701,624,774BF22,845,897SCL5,430,390705,353BF(767,587)SCL8,447,071651,451BF12,739,115SCL1,028,09314,735SCL813,472SCL(60,510,674)(60,510,674)SCL(28,150,777)SCL12,921,4802,659,810SCL8,193,187	892,470,02041,736,1513,394,607(474,757)990,478127,099(28,150,777)1,366,635
Total	1,317,357,173947,785,9011,231,383,365	911,459,456

The Company actuary determined the threshold values regarding the peak claims considered as large claims using the plot analysis. With this method the files, which exceeds the determined limits considered as significant claims. The claim process of these files is different from other files. For these files, additional provision calculations were performed and added to the provisions. As of June 30, 2021 and December 31, 2020, large claim limits are as follows;

Line of Businesses	June 30, 2021December 31, 2020
	Ultimate LossLarge Claim LevelUltimate LossLarge Claim Level
General LiabilityEmployers LiabilityThird Liability GLOtherGeneral LossesFireMarinePersonal AccidentMotor Vehicle FacultativeThird Party LiabilityFinancial Losses	1,650,0001,650,000SCL650,000BF650,000SCL600,000BF600,000SCL400,000BF400,000SCL999,999BF999,999SCL999,999BF999,999SCL499,999BF499,999SCL299,999BF299,999FS149,999FS149,999SCL50,000SCL50,000

In branches where significant claim determination is performed, additional provision calculations were performed for these files added to the Outstanding Claims Provisions. Additional gross amounts, as the LoBs are as follows.

Line of Businesses	June 31, 2021
	Gross Additional Amount**Net IBNR **
General LiabilityFacultative Public LiabilityFireMarineFinancial LossesGeneral LossesAccident	53,224,9953,611,3223,263,0423,263,04225,706,9372,319,3152,481,129367,9095,168,909136,9086,170,96478,612581,21344,701

27

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

12. Payables to reinsurers, trade and other payables and lease liabilities

	June 30, 2021	December 31, 2020
Payables to reinsurers	783,669,304	765,628,607
Payables to SSI regarding medical expenses	36,809,934	45,560,203
Payables due to main operations	820,479,238	811,188,810
Payables to Shareholders	104,041,143	-
Taxes payable	47,986,594	53,532,316
Payables to contracted institutions	47,460,550	40,496,161
Payables to suppliers	21,832,026	29,576,727
Payables to Turkish Catastrophe Insurance Pool	23,545,421	26,540,034
Other	13,572,303	10,199,589
Total other short termpayables	**258,438,037 **	160,344,827
Total financial liabilities trade and
otherpayables, deferred income	1,078,917,275	971,533,637
Lease Liabilities

As at June 30, 2021 and December 31, 2020; lease liabilities are as follows:

	June 30, 2021	December 31, 2020
Short-term lease liabilities (undiscounted)	12,011,756	13,524,088
Long term lease liabilities (undiscounted)	20,475,702	28,360,104
Discount amount with lease’s incremental
borrowingrate of interest	(9,230,416)	(12,992,169)
Total	23,257,042	28,892,023

Movement of lease liabilities for the period ended June 30, 2021 and 2020 are as follows:

	June 30,2021	June 30, 2020
Opening balance, January 1	28,892,023	29,750,241
Changes in lease contracts	(1,583,521)	6,272,195
Lease payments	(7,403,428)	(7,775,170)
Interestpayments	3,351,968	4,004,052
Total	23,257,042	32,251,318

28

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

13. Taxes

As at June 30, 2021 and December 31, 2020 prepaid income taxes are netted off with the current income tax payable as stated below:

tax payable as stated below:
	June 30, 2021	December 31, 2020
Income taxes payable	68,204,212	117,630,688
Prepaid income taxes	(17,136,152)	(94,016,621)
Taxpayable/(asset)	51,068,060	23,614,067

Deferred tax

The Company recognizes deferred tax assets and liabilities based upon temporary differences arising between its condensed interim financial information as reported for IAS 34 purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for IAS.

The details of deferred tax are presented in the following statements:

	Cumulativetemporary differencesDeferred tax assets/(liabilities)
	June 30,2021December 31,2020June 30,2021December 31,2020
Discounting in outstanding claimsGeneral expense provisionDoubtful receivable provisionsClaim handlingBonus provisionFinancial assets valuation effect accountedunder equityDonation provisionEmployment termination benefitDerivative asset valuationLeased assetsUseful life of tangible and intangible assetsUnused vacation provisionExchange rate valuation effectBonus and rebates provisionFinancial assets valuation effectEqualization reserve	367,345,305332,370,50578,252,82266,474,10148,798,91422,348,56012,199,7294,469,71227,234,77618,369,4836,808,6943,673,89723,208,94521,629,6804,641,7894,325,93616,319,81010,544,2084,079,9532,108,84220,787,555(1,801,925)4,781,138(360,385)10,150,000-2,537,500-11,230,4249,095,0782,246,0851,819,0165,265,8415,352,0061,316,4601,070,4015,763,3155,405,8141,152,6631,081,1635,631,8011,421,9901,126,360284,3973,849,5182,158,581962,380431,7162,328,778-582,195-4,5183,5961,130719(11,078,632)(3,565,507)(2,215,726)(713,102)(96,993,427)(88,895,290)(19,398,685)(17,779,058)
Total	439,847,441334,436,77999,074,48766,887,355

In accordance with the regulation numbered 7316, published in Official Gazette on April 22, 2021, “Law on the Amendment of Some Tax Acts and Some Other Laws”, corporate tax rate for the year 2021, 2022 has increased from %22 to %25 and %23 respectively, Therefore, deferred tax assets and liabilities as of June 30, 2021 are calculated with 25% and 23% tax rate for the temporary differences which will be realized in 2021, and 2022, and with 20% tax for those which will be realized after 2022 and onwards (December 31, 2020: In accordance with the regulation numbered 7061, published in Official Gazette on December 5, 2017, “Law on the Amendment of Some Tax Acts and Some Other Laws”, corporate tax rate for the years 2018, 2019 and 2020 has increased from 20% to 22%. Therefore, deferred tax assets and liabilities as of December 31, 2020 are calculated with 22% tax rate for the temporary differences which will be realized in 2018, 2019 and 2020, and with 20% tax for those which will be realized after 2021 and onwards).

realized after 2021 and onwards).
	June 30, 2021	June 30, 2020
Profit before taxes	193,298,888	307,020,099
Tax rate	25%	22%
Taxes on income per statutory tax rate	(48,324,722)	(67,544,422)
The rate change effect	9,807,962	-
The effect of non-deductible expenses	(2,923,657)	(3,459,672)
Tax expense	(41,440,417)	(71,004,094)

29

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

14. Net insurance premium income

The distribution of premium income is as follows:

	January 1 -June 30, 2021January 1 -June 30, 2020
	GrossReinsurers’shareNetGrossReinsurers’share	Net
Written premiumChange in unearnedpremium reserve	3,000,040,675(1,359,313,685)1,640,726,9902,265,938,945(1,007,286,773)(180,860,764)104,167,304(76,693,460)(13,736,880)53,922,776	1,258,652,17240,185,896
Totalpremium revenue	2,819,179,911(1,255,146,381)1,564,033,5302,252,202,065**(953,363,997) **	1,298,838,068
Motor Third Party LiabilityMotor Own DamageHealthFireGeneral LossesMarineOther	914,432,569(182,035,462)732,397,107754,148,617(160,373,872)643,590,801(42,699,187)600,891,614421,948,400(2,716,907)244,707,555(185,835,870)58,871,685246,864,900(203,902,164)455,487,631(411,621,342)43,866,289427,174,681(340,392,749)72,733,456(37,280,940)35,452,516162,640,822(109,449,241)85,014,152(64,405,032)20,609,12044,188,816(30,498,707)584,074,511(435,435,852)148,638,659208,972,709(159,953,133)	593,774,745419,231,49342,962,73686,781,93253,191,58113,690,10949,019,576
Total	3,000,040,675(1,359,313,685)1,640,726,9902,265,938,945**(1,007,286,773) **	1,258,652,172

15. Expenses by nature

15.Expenses by nature
	January 1 -	January 1 -
	June 30, 2021	June 30, 2020
Personnel expenses	(75,017,834)	(62,724,188)
Depreciation expenses	(21,952,267)	(23,112,700)
Assistance expenses	(21,321,919)	(13,968,994)
Information technology expenses	(13,961,008)	(11,162,811)
Outsourcing service expenses	(5,239,983)	(1,100,893)
Advertisement expenses	(4,211,222)	(2,783,402)
Meeting and training expenses	(2,320,887)	(2,697,989)
Social relief expenses	(1,775,055)	(1,794,833)
Repair and maintenance	(1,594,936)	(2,073,302)
Communication expenses	(1,283,830)	(930,361)
Legal expenses	(1,251,662)	(771,258)
Corporate communication expenses	(860,470)	(407,835)
Transportation expenses	(538,032)	(967,277)
Other	(2,237,127)	(2,110,239)
Total	(153,566,232)	(126,606,082)

16. Insurance claims and claims recovered from reinsurers

June 30, 2021	Gross	Reinsurers'Share	Net
Paid Claims	1,452,247,634	(538,163,618)	914,084,016
Change in outstanding claims	901,678,815	(556,878,048)	344,800,767
Change in mathematical reserves	(49,578)	-	(49,578)
Bonus and rebates provision	(64,899)	65,821	922
Total	2,353,811,972	(1,094,975,845)	1,258,836,127
June 30, 2020	Gross	Reinsurers'Share	Net
Paid Claims	846,118,043	(265,448,932)	580,669,111
Change in outstanding claims	417,304,906	(201,640,163)	215,664,743
Change in mathematical reserves	(10,440)	-	(10,440)
Bonus and rebates provision	44,908	(47,401)	(2,493)
Total	1,263,457,417	(467,136,496)	796,320,921

30

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

17. Related parties

The details of transactions between the Company and other related parties are disclosed below:

Banks
	June 30, 2021	December 31, 2020
Shareholder’s subsidiaries	308,309,712	409,450,889
Total	308,309,712	409,450,889
Marketable securities
	June 30, 2021	December 31, 2020
Shareholder’s subsidiaries	25,043,726	28,642,016
Total	25,043,726	28,642,016
Investment funds
	June 30, 2021	December 31, 2020
Shareholder’s subsidiaries	103,598,131	95,998,460
**Total **	**103,598,131 **	95,998,460
Due from /to related parties
	June 30, 2021	December 31, 2020
Shareholder’s subsidiaries	58,601,361	91,461,912
Shareholders	1,428,735	2,254,915
**Total **	60,030,096	93,716,827
Written Premium
	June 30, 2021	June 30, 2020
Shareholder’s subsidiaries	90,194,894	65,577,402
Shareholders	1,191,369	1,076,136
**Total **	91,386,263	66,653,538
Claims Paid
	June 30, 2021	June 30, 2020
Shareholder’s subsidiaries	7,860,400	4,294,198
**Total **	7,860,400	4,294,198
Investment Income
	June 30, 2021	June 30, 2020
Shareholder’s subsidiaries	17,259,051	39,736,728
**Total **	17,259,051	39,736,728
Commission paid
	June 30, 2021	June 30, 2020
Shareholder’s subsidiaries	69,862,197	49,944,754
**Total **	**69,862,197 **	49,944,754

31

AKSİGORTA A.Ş.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION AS AT JUNE 30, 2021

(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

18. Contingencies

As of June 24, 2014, Tax Inspection Board of T.C. Ministry of Finance has launched a limited tax investigation related to the Banking and Insurance Transaction Tax for the years 2009, 2010, 2011 and 2012 and as a consequence of the tax inspection, tax of TL 1,8 million and tax penalty of TL 2,8 million for the year 2009, tax of TL 2 million and tax penalty of TL 3 million for the year 2010, tax of TL 3 million and tax penalty of TL 4,6 million for the year 2011 and tax of TL 4,3 million and tax penalty of TL 6,4 million for the year 2012 and in total tax and tax penalty of TL 27,9 million related to Banking Insurance Transaction Tax were imposed to the Company. There is no accrued interest on this amount as of report date. The Company has not booked any provision in the condensed interim financial information since the Company believes that its practice is in compliance with the regulations. On January 16, 2015, the Company filed a reconciliation request for the year 2009 and on February 20, 2015 filed a reconciliation request for the years 2010, 2011 and 2012 to the Large Taxpayers Office Commission of Reconciliation. The reconciliation meeting took place on February 15, 2018; however, parties could not reach a consensus. As a consequence, the Company sued Large Taxpayers Office on February 27, 2018. Tax courts decided in favor of the Company for the years 2009, 2010, 2011 and 2012.

19. Subsequent events

None.

…………………….

32