Yapı Kredi Sigorta Anonim Şirketi

Transcription

1 (Convenience translation of independent auditors review report and financial statements originally issued in Turkish) Yapı Kredi Sigorta Anonim Şirketi Unconsolidated financial statements for the interim period January 1 June 30, 2012 together with independent auditors' review report

2 (Convenience translation of independent auditors review report originally issued in Turkish) Yapı Kredi Sigorta Anonim Şirketi Independent auditors review report as of June 30, 2012 To the Board of Directors of Yapı Kredi Sigorta Anonim Şirketi. Introduction 1. We have reviewed the accompanying unconsolidated interim balance sheet of Yapı Kredi Sigorta Anonim Şirketi ( the Company ) as of June 30, 2012 and the related unconsolidated statement of income, unconsolidated statement of changes in equity, unconsolidated cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. The Company management is responsible for the preparation and fair presentation of these interim financial statements in accordance with the prevailing accounting principles and standards set out as per the insurance legislation. Our responsibility is to express a conclusion on the interim financial statements based on our review. Scope of the review 2. We have conducted our review in accordance with regulation regarding limited review policies in force due to the insurance legislation. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with related insurance legistlation. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion 3. Based on our review, nothing has come to our attention that causes us to believe that unconsolidated interim financial statements do not give a true and fair view of the financial position of Yapı Kredi Sigorta Anonim Şirketi as of June 30, 2012 and its financial performance and its cash flows regarding to the sixmonths period during the same period ended in accordance with the prevailing accounting principles and standards (see financial statement Note 2) set out by the insurance legislation. Additional paragraph for convenience translation to English: 4. As of June 30, 2012, the accounting principles described in Note 2 to the accompanying unconsolidated interim financial statements differ from International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. The effects of differences between accounting principles and standards described in Note 2 and IFRS have not been quantified in the accompanying unconsolidated interim financial statements. Accordingly, the accompanying unconsolidated interim financial statements are not intended to present the financial position and results of operations of the Company in accordance with IFRS. Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi A member firm of Ernst & Young Global Limited Şeyda Oltulu, SMMM Engagement Partner August 1, 2012 Istanbul, Turkey

3 Convenience translation of the unconsolidated Financial statements for the period January 1 - June 30, 2012 Table of contents Pages Unconsolidated balance sheet Unconsolidated statement of income Unconsolidated statement of cash flows... 8 Unconsolidated statement of changes in shareholders equity... 9 Notes to the unconsolidated financial statements Appendix i - statements of profit distribution... 74

4 Convenience translation of the unconsolidated Balance sheet at June 30, 2012 ASSETS Reviewed Audited Notes 30 June December 2011 I-Current Assets A-Cash and Cash Equivalents Cash Cheques Received Banks Cheques Given and Payment Orders (-) Bank Guaranteed Credit Card Receivables Less than Three Months Other Cash and Cash Equivalents - - B-Financial Assets and Financial Investments at Insurees' Risk Available for Sale Investments 2.8 ve Held to Maturity Investments Trading Investments 11.1 ve Loans Provision for Loans (-) Financial Assets at Insuree's Risk Company's Shares Provision for impairment of financial assets (-) - - C- Receivables from Operations 2.8, 11.1 ve Due from Insurance Operations Provision for Due from Insurance Operations (-) 12.1 ( ) ( ) 3- Due from Reinsurance Operations Provision for Due from Reinsurance Operations Reserve Positions in Insurace and Reinsurance Companies Loans to Insurees Provision for Loans to Insurees (-) Due from Private Pension Fund Operations Doubtful Receivables from Main Operations Provision for Doubtful Receivables from Main Operations (-) 12.1 ( ) ( ) D- Due from Related Parties Due from Shareholders Due from Subsidiaries Due from Equity Investments Due from Joint-Ventures Due from Personnel Due from other Related Parties 45, Rediscount on Due from Related Parties (-) Doubtful Receivables from Related Parties Provision for Doubtful Receivables from Related Parties (-) - - E- Other Receivables Leasing Receivables Unearned Leasing Interest Income (-) Deposits and Guarantees Given Other Receivables Rediscount on Other Receivables (-) Other Doubtful Receivables Provision for Other Doubtful Receivables (-) (41.528) (41.528) F- Deferred Expenses and Income Accruals Deferred Expenses 2.24, T Accrued Interest and Rent Income Deferred Income Other Deferred Expenses and Income Accruals G- Other Current Assets Prepaid Office Supplies Prepaid Taxes and Funds Deferred Tax Assets Job Advances Advances to Personnel Count Shortages Other Current Assets Other Current Assets - - I- Total Non-Current Assets The accompanying notes form an integral part of these unconsolidated financial statements. (1)

5 Convenience translation of the unconsolidated Balance sheet at June 30, 2012 ASSETS Reviewed Audited 31 December Notes 30 June II-Non-current Assets A- Esas Faaliyetlerden Alacaklar Due from Insurance Operations Provision for Due from Insurance Operations (-) Due from Reinsurance Operations Provision for Due from Reinsurance Operations (-) Provision for Due from Reinsurance Operations (-) Loans to Insurees Provision for Loans to Insurees (-) Due from Private Pension Fund Operations Doubtful Receivables from Main Operations Provision for Doubtful Receivables from Main Operations (-) - - B- Due from Related Parties Due from Shareholders Due from Subsidiaries Due from Equity Investments Due from Joint-Ventures Due from Personnel Due from Other Related Parties Rediscount on Due from Related Parties (-) Doubtful Receivables from Related Parties Provision for Doubtful Receivables from Related Parties (-) - - C- Other Receivables Leasing Receivables Unearned Leasing Interest Income (-) Deposits and Guarantees Given Other Receivables Rediscount on Other Receivables (-) Other Doubtful Receivables Provision for Other Doubtful Receivables (-) - - D- Financial Assets Investment Securities Subsidiaries Subsidiaries Capital Commitments (-) Equity Investments 11.4 ve Equity Investments Capital Commitments (-) (-) Joint-Ventures Joint-Ventures Capital Commitments (-) Financial Assets and Financial Investments at Insurees' Risk Other Financial Assets Provision for impairment of financial assets - - E- Tangible Assets 2.5 ve Investment Properties Provision for Diminution in Value of Investment Property (-) (-) Property for Operational Usage Machinery and Equipment Furniture and Fixtures Motor Vehicles Other Tangible Assets (including leasehold improvements) Leased Assets Accumulated Depreciation (-) ( ) ( ) 10- Advances Given for Tangible Assets(including construction in progress) - - F- Intangible Assets Rights - 2-Start-up Costs Goodwill Research and Development Expenses Other Intangible Assets Accumulated Amortization (-) 8 ( ) ( ) 7-Advances Given for Intangible Assets Deferred Expenses and Income Accruals Deferred Expenses Income Accruals Other Deferred Expenses and Income Accruals H- Other Non-current Assets Effective Foreign Currency Accounts Foreign Currency Accounts Prepaid Office Supplies Prepaid Taxes and Funds Deferred Tax Assets 2.18, 21 ve Other Non-Current Assets Other Non-Current Assets Depreciation (-) Provision for Diminution in Value of Other Non-Current Assets (-) - - II- Total Non-Current Assets TOTAL ASSETS (I+II) The accompanying notes form an integral part of these unconsolidated financial statements. (2)

6 Convenience translation of the unconsolidated Balance sheet at June 30, 2012 Liabilities Reviewed Notes 30 June 2012 Audited 31 December 2011 III- Current Liabilities A- Financial Liabilities Due to Credit Institutions Leasing Payables Deferred Leasing Costs (-) Short Term Installments of Long Term Borrowings Issued Debt Securities Other Issued Debt Securities Value Differences of Other Issued Debt Securities (-) Other Financial Payables (Liabilities) 13, B-Payables from Main Operations Payables from Insurance Operations Payables from Reinsurance Operations Premium Deposits Payables from Private Pension Operations Payables from Other Operations 19 ve Rediscount on Payables from Other Operations (-) - - C-Due to Related Parties Due to Shareholders Due to Associates Due to Subsidiaries Due to Joint-Ventures Due to Personnel Due to Other Related Parties 45, D- Other Payables Deposits and Guarantees Received Payables to SSI related to Treatment Expenses Rediscount on Other Payables (-) 2.25, 19 ve Other Payables ( ) ( ) E- Insurance Technical Provisions Unearned Premium Reserve - Net 2.24, 4 ve Unexpired Risks Reserve - Net 2.24, 4 ve Life Mathematical Reserve - Net Outstanding Claim Provision - Net 2.24, 4 ve Bonus and Rebate Provision - Net 2.24, 4 ve Provision for Life Policies at Insuree's Risk Net 7-Other Technical Reserves - Net Unearned Premium Reserve - Net - - F- Taxes and Other Fiscal Liabilities Taxes and Funds Payable Social Security Withholdings Payable Overdue, Deferred or Restructured Taxes and 4-Other Fiscal Liabilities Other Taxes and Fiscal Liabilities Corporate Tax Provision and Other Fiscal Liabilities 2.18 ve Prepaid Corporate Tax and Other Fiscal Liabilities 2.18 ve 35 ( ) ( ) 8-Other Taxes and Fiscal Liabilities Provision G- Provisions for Other Risks - - Provision for Employment Termination Benefits Provision for Social Aid Fund Asset Shortage - - Provision for Expense Accruals - - H-Deferred Income and Expense Accruals Deferred Income 2-Expenses Accruals 2.24, 17, Other Deferred Income and Expense Accruals Other Current Liabilities Deferred Tax Liabilities Count Overages Other Current Liabilities Deferred Income III-Total Current Liabilities The accompanying notes form an integral part of these unconsolidated financial statements. (3)

7 Convenience translation of the unconsolidated Balance sheet at June 30, 2012 LIABILITIES Reviewed Notes 30 June 2012 Audited 31 December 2011 IV- Non-Current Liabilities A- Financial Liabilities Due to Credit Institutions Leasing Payables Deferred Leasing Costs (-) Issued Debt Securities Other Issued Debt Securities Value Differences of Other Issued Debt Securities (-) Other Financial Payables (Liabilities) - - B- Payables from Operations Payables from Insurance Operations Payables from Reinsurance Operations Premium Deposits Payables from Private Pension Operations Payables from Other Operations Rediscount on Payables from Other Operations (-) - - C- Due to Related Parties Due to Shareholders Due to Subsidiaries Due to Equity Investments Due to Joint-Ventures Due to Personnel Due to Other Related Parties - - D-Other Payables Deposits and Guarantees Received Other Payables Rediscount on Other Payables - - E-Insurance Technical Provisions ( ) ( ) 1-Unearned Premium Reserve - Net Unexpired Risks Reserve Net Life Mathematical Reserve Net Outstanding Claim Provision - Net Bonus and Rebate Provision Net Provision for Life Policies at Insuree's Risk - Net Other Technical Reserves Net 8-Due to Shareholders Due to Subsidiaries 2.24, 4, 17 ve F- Other Liabilities and Related Provisions Other Payables Overdue, Deferred or Restructured Taxes and Other Fiscal Liabilities Other Payables and Expense Accruals - - G- Provisions for Other Risks Provision for Employment Termination Benefits 2.Provision for Social Aid Fund Asset Shortage 2.19 ve H-Deferred Income and Expense Accruals Deferred Income Expense Accruals 3-Other Deferred Income and Expense Accruals - - I- Other Current Liabilities Deferred Tax Liabilities Other Non-Current Liabilities - - IV- Total Non-Current Liabilities The accompanying notes form an integral part of these unconsolidated financial statements. (4)

8 Convenience translation of the unconsolidated Balance sheet at June 30, 2012 SHAREHOLDERS EQUITY Reviewed Audited Notes 30 June December 2011 V- Shareholders Equity A-Share Capital Nominal Capital 2.13 ve Unpaid Capital (-) Adjustments to Share Capital Adjustments to Share Capital (-) - - B- Capital Reserves Share Premium 2-Sales Profits to be Added to the Capital Profit from Stock Abrogation Foreign Currency Translation Differences Other Capital Reserves C- Profit Reserves Legal Reserves 2-Statutory Reserves Extraordinary Reserves Special Funds (Reserves) Valuation of Financial Assets ( ) 6-Other Profit Reserves D- Retained Earnings Retained Earnings E- Accumulated Deficit (-) Previous Years' Losses - - F- Net Profit for the Period Net Profit for the Period Net Loss for the Period (-) Profit for he period-not subject to distribution 6.3 ve V-Total Share Holders Equity Total Liabilities And Shareholders Equity (III+IV+V) The accompanying notes form an integral part of these unconsolidated financial statements. (5)

9 Convenience translation of the unconsolidated statement of income for the period January 1 - June 30, 2012 I- TECHNICAL PART Reviewed Reviewed Notes 1 January - 30 Haziran April - 30 June January - 30 June April- 30 June 2011 A- Non-Life Technical Income Earned Premiums - (Net of Reinsurer's Share) Written Premiums - (Net of Reinsurer's Share) 2.21 ve Gross Written Premium (+) Reinsurer s Share of Gross Written Premium (-) 10 ve 24 ( ) ( ) ( ) ( ) SSI s Shares of Gross Written Premium (-) 2.25 ve 24 ( ) ( ) Change in Unearned Premiums Reserve (Net of Reinsurer's Share and Reserves Carried Forward)(+/-) 47.5 ( ) ( ) ( ) ( ) Unearned Premiums Reserve (-) ( ) ( ) ( ) ( ) Reinsurer s Share of Unearned Premiums Reserve (+) SSI s Share of Unearned Premium Reserve (-) 10 ve Change in Unexpired Risks Reserve (Net of Reinsurer's Share and Reserves Carried Forward)(+/-) 47.5 ( ) ( ) ( ) ( ) Unexpired Risks Reserve (-) ( ) ( ) ( ) ( ) Reinsurer s Share of Unexpired Risks Reserve (+) Investment Income Transferred from Non-Technical Part Other Technical Income - (Net of Reinsurer's Share) Other Gross Technical Income (+) Reinsurer s Share of Other Gross Technical Income (-) Accrued Subrogation and Salvage Income (-) ( ) ( ) ( ) B- Non-Life Technical Expense ( ) ( ) ( ) ( ) 1- Incurred Losses - (Net of Reinsurer's Share) ( ) ( ) ( ) ( ) 1.1- Paid Claims (Net of Reinsurer's Share) ( ) ( ) ( ) ( ) Gross Paid Claims (-) ( ) ( ) ( ) ( ) Reinsurer s Share of Gross Paid Claims (+) Change in Outstanding Claims (Net of Reinsurer's Share and Returned Reserve) (+/-) 47.5 ( ) ( ) ( ) ( ) Outstanding Claims Provision (-) ( ) ( ) Reinsurer s Share of Outstanding Claims Provision (+) 10 ( ) ( ) 2- Change in Bonus and Rebate Provision (Net of Reinsurer's Share and Reserves Carried Forward) (+/-) ( ) ( ) (99.696) (99.696) 2.1 Bonus and Rebate Provision (-) 2.2- Reinsurer s Share of Bonus and Rebate Provisions (+) 47.5 ( ) - ( ) - (99.696) - (99.696) - 3- Change in Other Technical Reserves ((Net of Reinsurer's Share and Reserves Carried Forward) (+/-) 47.5 ( ) ( ) ( ) ( ) 4- Operating Expenses (-) 31 ve 32 ( ) ( ) ( ) ( ) C- Net Technical Income- Non-Life (A - B) D- Life Technical Income Earned Premiums (Net of Reinsurer's Share) Written Premiums (Net of Reinsurer's Share) Gross Written Premiums (+) Reinsurer s Share of Gross Written Premiums (-) Change in Unearned Premiums Reserve (Net of Reinsurer's Share and Reserves Carried Forward) (+/-) Unearned Premiums Reserve (-) Reinsurer s Share of Unearned Premiums Reserve (+) Change in Unexpired Risks Reserve Net of Reinsurer's Share and Reserves Carried Forward) (+/-) Unexpired Risks Reserve (-) Reinsurer s Share of Unexpired Risks (+) Life Investment Income Unrealised Investment Income Other Technical Income - (Net of Reinsurer's Share) E- Life Technical Expense Incurred Losses - (Net of Reinsurer's Share) Paid Claims (Net of Reinsurer's Share) Brüt Ödenen Tazminatlar (-) Reinsurer s Share of Gross Paid Claims (+) Change in Outstanding Claims (Net of Reinsurer's Share and Reserves Carried Forward (+/-) Outstanding Claim Provisions (-) Reinsurer s Share of Outstanding Claim Provisions (+) (+) Change in Bonus and Rebate Provision (Net of Reinsurer's Share and Reserves Carried Forward) (+/-) Bonus and Rebate Provisions (-) Reinsurer s Share of Bonus and Rebate Provisions (+) Change in Life Mathematical Reserves (Reasürör Payı ve Devreden Kısım Düşülmüş Olarak)(+/-) Life Mathematical (-) Reinsurer s Share of Life Mathematical Reserves (+) Change in Provision for Policies at Life Insurees' Risk (Net of Reinsurer's Share and Reserves Carried Forward)(+/-) Provision for Life Policies at Insuree's Risk (-) 4.2- Reinsurer s Share of Provision for Life Policies at Insuree's Risk (+) Change in Other Technical Reserves (Net of Reinsurer's Share and Reserves Carried Forward) (+/-) Operating Expenses (-) Investment Expenses (-) Unrealised Investment Expense (-) Investment Income Transferred to Non-Life Technical Part (-) F- Net Technical Income- Non-Life (D -E) G- Fund Management Income Fund Management Income Management Expense Charge Entrance Fee Income Management Expense Charge in case of Suspension Special Service Expense Charge Capital Allowance Value Increase Income Other Technical Income H- Pension Funds Technical Expense Fund Management Expense (-) Capital Allowance Value Decrease Expense (-) Operating Expenses (-) Other Technical Expenses (-) I- Net Technical Income - Pension Funds (G - H) The accompanying notes form an integral part of these unconsolidated financial statements. (6)

10 Convenience translation of the unconsolidated statements of cash flows for the period January - June 30, 2012 II- NON-TECHNICAL PART Reviewed Reviewed Dipnot 1 January - 30 June April - 30 June January - 30 Haziran April - 30 June 2011 C- Net Technical Income-Non-Life (A-B) F- Net Technical Income-Life (D-E) I- Net Technical Income-Life (D-E) J- Total Net Technical Income (C+F+I) K- Investment Income Income from Financial Investments Income from Sales of Financial Investments Valuation of Financial Investments Foreign Exchange Gains Income from Associates 26 ve Income from Equity Subsidiaries and Joint-Ventures Income from Land and Buildings Income from Derivatives ( ) 9-Other Investments Investment Income Transferred from Life Technical Part L- Investment Expense (-) ( ) ( ) ( ) ( ) 1-Investment Management Expenses (Interest incl.) (-) - - (438) (147) 2-Diminution in Value of Investments (-) - - (3.510) - 3-Loss from Realization of Financial Investments (-) Investment Income Transferred to Non-Life Technical Part (-) ( ) ( ) ( ) ( ) 5-Loss from Derivatives (-) Foreign Exchange Losses ( ) ( ) ( ) ( ) 7-Depreciation Expenses (-) 6.1 ( ) ( ) ( ) ( ) 8- Other Investment Expenses (-) M- Income and Expenses from Other Operations and Extraordinary Operations (+/-) Provisions (+/-) 47.5 ( ) ( ) (36.179) 2-Rediscounts (+/-) ( ) ( ) ( ) 3-Special Insurance Account (+/-) Inflation Adjustment (+/-) Deferred Tax Assets (+/-) 35, ( ) Deferred Tax Liabilities Expenses (-) Other Income ( ) Other Expenses (-) 47.1 ( ) ( ) ( ) ( ) 9-Prior Year's Income Prior Year's Expenses (-) N- Profit/(Loss) for the Period Profit/(Loss) for the Period Corporate Tax Provision and Other Fiscal Liabilities 35 ve 47.5 ( ) ( ) ( ) ( ) 3-Net Profit/(Loss) for the Period Inflation Adjustment - - The accompanying notes form an integral part of these unconsolidated financial statements. (7)

11 Convenience translation of the unconsolidated statements of cash flows for the period January - June 30, 2012 Notes Reviewed 1 January 30 June 2012 Reviewed 1 January 30 June 2011 A- CASH GENERATED FROM MAIN OPERATIONS 1-Cash flows from insurance operations Cash flows from reinsurance operations Cash flows from private pension funds operations Cash outflows from insurance operations (-) ( ) ( ) 5- Cash outflows from reinsurance operations (-) ( ) ( ) 6- Cash outflows from private pension funds operations (-) Net Cash from main operations (A1+A2+A3-A4-A5-A6) Interest payment (-) Other cash inflows ( ) ( ) 10- Other cash inflows Other cash outflows ( ) ( ) 12- Net cash provided by main operations ( ) B- CASH FLOWS FROM INVESTING OPERATIONS 1- Sale of tangible assets Sale of tangible assets (-) ( ) ( ) 3-Financial assets purchases ( ( ) ( ) 4-Sales of financial assets Interest received Dividends received Other cash inflows Other cash outflows (-) ( ) (27.640) 9- Net Cash from investing activities ( ) C- CASH FLOWS FROM FINANCING OPERATIONS 1- Issue of shares Cash inflows due to the borrowings Leasing payments (-) Dividends paid (-) 38 ( ) ( ) 5- Other cash inflows Other cash outflows (-) Net cash used in financing activities ( ) ( ) D- EFFECT OF EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS ( ) E- Net increase in cash and cash equivalents ( ) F- Cash and cash equivalents at the beginning of the period G- Cash and cash equivalents at the end of the (E+F) The accompanying notes form an integral part of these unconsolidated financial statements. (8)

12 Convenience translation of the unconsolidated statement of changes in shareholders equity for the period January 1 - June 30, 2012 Capital Own Shares Of the company(-) Financial Assets Fair Value Reserve Statements of changes in Shareholders Equity - Reviewed (*) Foreign Currency Translation Legal Statutory Differences Reserves Reserves Inflation Adjustment to the Share Capital Other Reserves and Retained Profit Net Profit/ (Loss) for (the Period Retained (Earnings Total I Balances at the prior period end (31/12/2009) (31/12/2010) ( ) A-Due from new accounting standarts and policy B- Balance to be brought forward C- Capital Increase (A1 + A2)) Cash From Internal Resources D- Own Shares of the Company E- in the Income Statement (Note 15) Gain and Losses Not Included - - ( ) ( ) F- Value Increase in the Assets G- Foreign Currency Translation Differences H- Other Income and Losses I- Inflation Adjustments J- Net Profit for the Period (veya zararı) K- Dividends Paid ( ) - ( ) L- Transfer ( ) II- Balances at the period (30/06/2011) (I+ A+B+C+D+E+F+G+H+I+J) I - Balances at the period (31/12/2011) ( ) A- Due from new accounting standarts and policy B- Balance to be brought forward C- Capital Increase (A1 + A2)) Cash 2- From Internal Resources D- Own Shares of the Company E- in the Income Statement (Note 15) Gain and Losses Not Included F- Value Increase in the Assets G- Foreign Currency Translation Differences H- Other Income and Losses I- Inflation Adjustments J- Net Profit for the Period K- Dividends Paid ( ) - ( ) L- Transfer ( ) ( ) - - II- Balances at the period (30/06/2012) (I+ A+B+C+D+E+F+G+H+I+J) (**) (*) Detailed explanations regarding the Shareholders Equity items are disclosed in Note 15. (**)Regarding to decision number of 69/20 of the Board of Directors dated June 7, 2012, it has decided to increase issued capital from TL to TL on condition that this is compensated from Other Profit Reserves, and related transactions have been approved with article numbered B.02.6.SPK and dated July 24, 2012 and registration procedures have being continued. The accompanying notes form an integral part of these unconsolidated financial statements. (9)

13 1. General information 1.1 Name of the parent company: As of June 30, 2012 and December 31, 2011, the immediate parent of Yapı Kredi Sigorta A.Ş. ( the Company ) is Yapı ve Kredi Bankası A.Ş. and the ultimate parents are Koç Holding A.Ş. and Unicredit S.P.A 1.2 Legal residence of the Company, its legal structure, the country of incorporation and the address of it s registered office: The Company was established on 24 December The headquarters of the Company is in Istanbul and it operates as a joint stock company at the address Yapı Kredi Plaza A Blok Büyükdere Cad Levent-İstanbul. The Company has Istanbul, Middle Anatolia, Marmara, South, Agean, Mediterranean, Bakırköy and Kadıköy regional offices. 1.3 Nature of operations: The Company mainly operates in fire, marine, accident, personal accident, engineering, agriculture, health branches. 1.4 Explanation of the activities and characteristics of main operations of the corporation: Disclosed in Notes 1.2 and Average number of employees during the period by category: 1 January - 1 January - June 30, 2012 December 31, 2011 Top and middle management Other personnel Total Total salaries and benefits paid to the members of the Board of Directors, General Manager, General Coordinator, Assistant General Managers and other executive management during the current period: January 1 - April 1 - January 1 - April 1 - June 30, June 30, June 30, June 30, Short-term benefits provided to top and middle management Salary and other short-term payments Bonuses Company pension plan Total Total benefits provided to top and middle management Provison for employee termination benefits Toplam Provision for employee termination benefits in balance sheet (10)

14 1. General information (continued) 1.7 Criteria set for the allocation of investment income and operating expenses (personnel, management, research and development, marketing and sales, outsourcing utilities and services and other operating expenses) in the financial statements: All the income that is generated by the Company investment of assets backing non-life technical reserve is transferred from non-technical to technical part. Other investment income is classified under non-technical part. The Company allocates general expenses transferred to technical part to branches based on the weighted average of the number of policies, amount of premium and number of claim notifications in last three years. 1.8 Whether financial statements include only one firm or company of firms: The financial statements include the accounts of one company (Yapı Kredi Sigorta A.Ş.). The consolidated financial statements including Yapı Kredi Emeklilik A.Ş., the subsidiary of the Company, will also be published separately. 1.9 Name and other identification information of the reporting firm and changes in this information since the previous balance sheet date: Name and other identification information of the Company are disclosed in Notes 1.1, 1.2 and 1.3 and there are no changes in this information since the previous balance sheet date Events occurred after the balance sheet date: Unconsolidated financial statements for the period of 1 January - June 30, 2012 have been approved by the Board of Directors on 1 August The events that occurred after the balance sheet date are explained in Note Summary of significant accounting policies Basis of preparation In accordance with the Capital Market Law part (VII.) article (a) of clause 50, insurance companies are subject to their specific legislation in respect of establishment, audit, supervision, accounting, financial statements and financial reporting standards. Therefore, the Company prepares its unconsolidated financial statements in accordance with the Insurance Law numbered 5684 and the regulations issued for insurance and reinsurance companies by the Undersecretariat of Treasury ( The Treasury ). The financial statements are prepared in accordance with the Insurance Chart of Accounts included in the communiqué issued by the Treasury regarding the Insurance Chart of Accounts and Prospects, published in the Official Gazette (No:25686) dated 30 December 2004 (Insurance Accounting System Communiqué No.1). Content and the format of the financial statements prepared and explanations and notes thereof are determined in accordance with the Communiqué on Presentation of Financial Statements published in the Official Gazette numbered dated 18 April (11)

15 2. Summary of significant accounting policies (continued) According to the Regulation on Financial Reporting of Insurance and Reinsurance Companies and Pension Companies issued on 14 July 2007 and effective from 1 January 2008, except for the communiqués which may be issued by the Treasury, operations of insurance companies shall be accounted for in accordance with the Turkish Accounting Standards ( TMS ) and the Turkish Financial Reporting Standards ( TFRS ) as issued by the Turkish Accounting Standards Board ( TMSK ) and other regulations, communiqués and explanations issued by the Treasury regarding accounting and financial reporting issues. With reference to the notice of the Treasury No. 9 dated 18 February 2008, TMS 1- Financial Statements and Presentation, TMS 27- Unconsolidated and Separate Financial Statements, TFRS 1 - Transition to TFRS and TFRS 4- Insurance Contracts have been scoped out of this application. In addition, the companies are obliged to comply with the Communiqué on the Preparation of the Consolidated Financial Statement of Insurance and Reinsurance Companies and Pension Companies" ( Consolidation Communiqué ) dated December 31, 2008 and published in official gazette numbered effective from 31 March Unconsolidated financial statements were prepared on a TL and historical cost basis, being adjusted for inflation until December 31, 2004, other than the financial assets and derivatives which are measured at their fair values. It was announced with the article of the Treasury numbered 19387, dated 4 April 2005, insurance companies are required to restate their financial statements as of December 31, 2004 in accordance with Financial Reporting in Hyperinflationary Economies included in the regulations of Capital Markets Board ( CMB ) Communiqué XI No.25 (which came into force as published in the Official Gazette No: dated 15 January 2003). In line with the decree of CMB dated 17 March 2005, the Treasury also announced that inflation accounting is not required effective from 1 January Based on the above mentioned notification of the Treasury, the Company has restated its financial statements as of December 31, 2004 in accordance with the regulations regarding Financial Reporting in Hyperinflationary Economies and not continued to apply standard No. 29 Financial Reporting in Hyperinflationary Economies issued by TMSK. The Company calculated insurance technical reserve and accounted for in the unconsolidated financial statements in accordance with the Regulation Regarding the Technical Reserves of Insurance, Reinsurance and Pension Companies and the Assets to which These Reserves are Invested dated 1 January 2008 and related legislations issued in accordance with Insurance Law numbered Accounting policies and measurement principles that are used in the preparation of the unconsolidated financial statements are explained in the notes from 2.4 to 2.24 below. 2.1 Comparative Information In accordance with the Sector Announcement issued in May 31, 2012 and numbered 2012/27 related to New Account Numbers and Presentation of Financial Statements, credit card receivables longer than three months amounting to TL in the financial statements as of December 31, 2011 have been classified to the account of due from insurance operations from the account of cash and cash equivalent in order to be comparable with the. Furthermore, in the financial statements as of December 31, 2011, short-term portion of the amount of TL of rediscount of payables to Social Security Instution (SSI) related to treatment expenses has been classified from payables from insurance operations to other current liabilities, and long term portion of the amount of TL has been classified to the account of rediscount of other noncurrent payables. (12)

16 2. Summary of significant accounting policies (continued) In the financial statements as of June 30, 2011, accrued subrogation and salvage income in the account of other gross technical amounting to TL (April 1 June 30, 2011: TL ) has been disclosed as separately in the financial statements of June 30, 2011 to be comparable with the according to announcement of sector numbered 2012/ Consolidation Yapı Kredi Emeklilik A.Ş., the subsidiary of the Company, which is in the scope of TMS 27- Consolidated and Separate is not fully consolidated and measured at the historical cost in the unconsolidated financial statements at date of June 30, 2012 and December 31, 2011 (Notes 2, 11.4 and 45.2). The Company will prepare consolidated financial statements of Yapı Kredi Emeklilik A.Ş., a subsidiary of the Company's. The consolidated financial statements of the Company as of the date of December 31, 2011, was published on 24 February Segment reporting Operating segments are settled compatible with the segments on information reported to the chief operating decision-maker. Chief operating decision-maker of the Company is responsible for the uses of resources and evaluation of the performance of the segments. General Manager, who makes the strategic decisions, is determined as the chief operating decision-maker. Details related to the segment reporting are disclosed in the Note Foreign currency translation The functional currency of the Company is TL. Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in equity. Foreign exchange differences arising from the translation of non monetary financial assets and liabilities are considered as part of the fair value changes and those differences are accounted for in the accounts in which the fair value changes are accounted for. 2.5 Property and equipment Property and equipment are carried at cost less accumulated depreciation. Land is not subject to depreciation due to its infinite years of useful life. Depreciation is calculated using the straight-line method based on the useful lives of properties. The depreciation periods estimated considering useful lives of tangible assets are as follows: Property for Operational Usage (Buildings) Furniture and fixtures Machinery and equipment Motor vehicles Other tangible assets 50 years 3-15 years years 5 years 5 years (13)

17 2. Summary of significant accounting policies (continued) If there are indicators of impairment on tangible assets, a review is made in order to determine possible impairment and as a result of the review, if an asset s carrying amount is greater than its estimated recoverable amount, the asset s carrying amount is written down immediately to its recoverable amount by accounting for a provision for impairment. Gains and losses on disposals of property and equipment are included in other operational income and expenses accounts (Note 6). 2.6 Investment properties The buildings of the Company held for the purpose of receiving rent or an increase in value or both instead of being used in the operations of the Company or being sold within the normal business course are classified as investment properties. The investment properties are carried at acquisition cost by deducting the accumulated depreciation. Investment properties are amortised by the straightline method over their estimated useful lives. If there are indicators of impairment on investment properties, a review is made in order to determine possible impairment and as a result of this review, if the property s carrying amount is greater than its estimated recoverable amount, the property s carrying amount is written down immediately to its recoverable amount by accounting for an impairment provision. The recoverable amount is the higher of the future cash inflows from the existing use of the investment property and the fair value of the property after cost of sale. The Company have an impairment booking for its investment properties as of June 30, 2012 amount of TL (December 31, 2011: TL ) (Note 7). The depreciation period of investment properties is 50 years. 2.7 Intangible assets Intangible assets consist of the acquired information systems, franchise rights and software. Intangible assets are carried at acquisition cost and amortized by the straight-line method over their estimated useful lives after their acquisition date. If impairment exists, carrying amount is written down immediately to its recoverable amount (Note 8). The Company has assessed depreciation periods of licenses which have 15 years useful lives according to Turkish Tax Legislation within the scope of TAS 16 and has changed as 5 years. As a result of the fact that the Company has changes useful lives of licenses acquired in previous years as 5 years, amortization expense of TL has been booked in the statements in the year of Furthermore, intangible assets amounting to TL that have completed their useful lives but not been redeemed has been amortized by transferring to records as amortization expense in 2011 The amortisation periods of intangible assets as the date of financial statements are as follows: June 30, 2012 December 31, 2011 Software 3 years 3 years License 5 years 5 years 2.8 Financial assets The Company classifies and accounts for its financial assets as Financial assets at fair value through profit or loss (Held-for-trading financial assets), Available-for-sale financial assets and Loans and receivables (Receivables from main operations). (14)

18 2. Summary of significant accounting policies (continued) Receivables from main operating activities that receivables arising from insurance contracts and in spite of all receivables arising TAS 39 out of scope to hold the insurance contracts, since did not applied to TFRS 4, as a facultative company of receivables arising from the insurance contract are classified as financial assets in the financial statements and company applies TMS 39 principles of the measurement. Purchases and sales of the financial assets are recognised and derecognised based on Settlement date. The classification of the financial assets is determined by the Company management at inception by considering the purpose for which the financial assets are acquired. Financial assets at fair value through profit or loss (Held-for-trading financial assets): Financial assets at fair value through profit or loss consist of financial instruments that are acquired principally for the purpose of generating a profit from short-term fluctuations in prices or other parameters or formed as a part of a portfolio of financial assets that are managed together for the purpose of short-term profit taking, and classified as financial assets designated at fair value through profit or loss at inception since they are managed and their performance is evaluated on fair value basis, regardless of purpose for acquisition. Financial assets at fair value through profit or loss are accounted for at fair value at inception and are measured at fair value after initial recognition. It is concluded that the fair value cannot be reliably measured if the price that provides a basis for fair value is not set in active market conditions and amortized cost value that is calculated using the effective interest method is assumed as fair value. Gains or losses generated as a result of the valuation are recognized in the income statement. The valuation gains and losses on financial assets at fair value through profit or loss are classified in investment income and investment losses, respectively. Loans and Receivables together with Policy Loans (Receivables from Main Operations): Loans and receivables are financial assets which are generated by providing money or service to the debtor. Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Fees and other charges paid related to assets obtained as guarantee for the above mentioned receivables are not deemed as transaction costs and they are recognised as expense in the income statement. The Company accounts for an impairment provision for its receivables based on Management s evaluation and estimations according to the Regulation on Financial Reporting of Insurance and Reinsurance Companies and Pension Companies issued on 14 July 2007 and effective from 1 January This provision is classified as provision for due from insurance operations on the balance sheet. Management sets its estimations within the risk policies and the prudency principle by considering the overall position of is receivable portfolio, financial and non-financial data regarding its insurees and its intermediaries and the general economic developments. In addition to provision for receivables from insurance operations, the Company, the above-mentioned "Receivables from insurance operations" is not in the provision for doubtful debts taking into account value and quality of receivable and make provision as administrative andlegal proceeding provision. In the financial statements as of December 31, 2010 the Company, according to principles of Treasury circulars dated January 14, 2011 and September 20, 2010 numbered 2010/16 and 2011 / 1 underlying claim of subrogation receivable over the 6 months from the date of payment (Due from insurance company) and 4 months (the actual claims and other legal entities), booked receivable provision in addition to this amounts. In addition to the amounts for the first time that the circular No. 2010/16 dated 20 September 2010 the parties agreed to assets connected with the method mentioned in reserve to claims of recourse for amounts of optional unallocated reserved for additional provision. (15)