MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) Extraordinary reserves The movement of extraordinary reserves is as follows: December 31, 2020 December 31, 2019 Extraordinary reserves at the beginning of the period 588.605.356 284.629.618 Transfer from profit 104.265.568 303.975.738 Extraordinary reserves at the end of the period 692.870.924 588.605.356 Subsidiary capital correction On September 30, 2010, the Company purchased 35.53% shares of Anadolu Sigorta Anonim Şirketi with nominal value of TL 177.650.110 from İş Bankası amounting to TL 248.710.154. As Anadolu Sigorta and the Company are under common control and when information transfer and structure is considered, Anadolu Sigorta is accepted as a part of the Company’s operations. This subsidiary under common control is recorded at cost in the financial statements. In the business combination of subsidiary under common control, the purchasing company is not obliged to, but has the permission to reflect the effects of business combination the prior year financial statements. In business combinations under common control, shares are transferred from one company to the other in the same group and independent third parties are not included in the transaction and purchasing price is not determined on fair value, the application is determined by the management’s decision. The Company management decided not to reflect the effects of the business combination in the comparative financial statements. The difference between purchase price and net asset value amounting to TL (71.060.049), is recorded under “Subsidiary Capital Correction” account under equity. Special funds (reserves) As of December 31, 2020, special funds accounted according to the equity method is amounting to TL 16.900.903 (December 31, 2019: None). The movements of special funds are as follows: December 31, 2020 December 31, 2019 Special funds at the beginning of the period - - Accounted according to the equity method 16.900.903 - Special funds at the end of the period 16.900.903 - Other profit reserves In accordance with the July 4, 2007 dated and 2007/3 numbered Compliance Circular issued by the Republic of Turkey Ministry of Treasury and Finance, it was stated that the companies would not further provide earthquake provision for the year 2007. However, it was also stated that earthquake provisions provided in previous periods (earthquake provision in the financial statements as at December 31, 2006) should be transferred to the reserve accounts under equity in accordance with the 5 th Temporary Article of the Insurance Law. The companies had to transfer total amount of provisions, including earthquake provisions reserved as at December 31, 2006 and related gains obtained from investment of these amounts, to the account called as “549.01 - transferred earthquake provisions” which would be opened as at September 1, 2007 within Uniform Chart of Account and the reserves amount should not be subject to dividend distribution or should not be transferred to other accounts. According to revision on TAS 19, actuarial profit and losses that recognized in income statement in termination indemnity calculation before, is recognized in “Other Profit Reserves” account under equity in current period financial statements. As of December 31, 2020, TL (4.294.111) (31 December 2019: TL (2.758.065) TL), of actuarial gains and losses, which are presented in profit or loss is presented under “other profit reserves”. As of 31 December 2020, other profit reserves amount recognized according to the equity method is TL 23.673.789 (December 31, 2019: TL 24.424.400). Activities and Major Developments Related to Activities General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Milli Re Annual Report 2020 230