MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE UNCONSOLIDATED 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) Equity share price risk Equity share price risk is defined as the risk of decreasing the market price of equity shares as a result of a decline in index. The effect of changes in fair values of the associates and the available-for-sale financial assets on equity that is resulted from the fluctuations on index (all of the other variables are assumed to be fixed) are as follows as of December 31, 2020 and 2019: Change in index December 31, 2020 December 31,2019 Market price of equity 10% 15.757.084 7.711.589 Gain and losses from financial assets Gains and losses recognized in the statement of income, net: December 31, 2020 December 31, 2019 Gains transferred from the statement of equity to the statement of income on disposal of available for sale financial assets ( Note 15) 20.321.227 1.902.905 Interest income from bank deposits 127.604.439 255.763.639 Interest income from debt securities classified as available-for-sale financial assets 48.832.056 25.390.236 Income from equity shares - 48.591 Foreign exchange gains 94.862.946 61.769.977 Income from mutual funds classified as trading financial assets 18.233.969 - Income from investment funds 16.362.189 8.234.701 Interest income from repos 50 53.026 Income from derivative products - 18.985 Income from subsidiaries 231.971.961 216.410.793 Income from affiliates 65.656.632 44.942.194 Other 216.110 - Investment income 624.061.579 614.535.047 Foreign exchange losses (20.493.502) (31.632.288) Loss from disposal of financial assets (1.586.173) (1.345.499) Investment management expenses (including interest) (78.988) (44.377) Investment expenses (22.158.663) (33.022.164) Investment income, net 601.902.916 581.512.883 Gains and losses recognized in the statement of equity, net: December 31, 2020 December 31, 2019 Fair value changes in available for sale financial assets (Note 15) 204.918.992 139.770.632 Gains transferred from the statement of equity to the statement of income on disposal of available for sale financial assets ( Note 15) (20.321.227) (1.902.905) Total 184.597.765 137.867.727 Capital management The Company’s capital management policies include the following: - To comply with the insurance capital requirements required by Republic of Turkey Ministry of Treasury and Finance - To safeguard the Company’s ability to continue as a going concern In accordance with the “Communiqué on Measurement and Assessment of Capital Adequacy for Insurance, Reinsurance and Individual Pension Companies” issued by Republic of Turkey Ministry of Treasury and Finance on August 23, 2015 dated and 29454 numbered; the Company measured its minimum capital requirement as TL 720.762.903 (December 31, 2019: 581.406.867) as of December 31, 2020. As of December 31, 2020, and 2019, the capital amount of the Company presented in the unconsolidated financial statements are TL 2.638.633.525 and TL 2.135.840.889 respectively and capital surplus of the Company is amounting to TL 1.811.692.867 (December 31, 2019: TL 1.403.336.796) according to the communiqué. Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon Milli Re Annual Report 2020 133