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) Legal reserves The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code. The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the entity’s share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the entity’s share capital. The first and second legal reserves are not available for distribution unless they exceed 50% of the share capital but may be used to absorb losses in the event that the general reserve is exhausted. The movements of legal reserves are as follows: December 31, 2020 December 31, 2019 Legal reserves at the beginning of the period 155.933.971 123.041.466 Transfer from profit 17.060.060 17.117.473 Accounted according to the equity method 21.950.991 15.775.032 Legal reserves at the end of the period 194.945.022 155.933.971 As of December 31, 2020, and December 31, 2019, “Other Reserves and Retained Earnings” includes extraordinary reserves, gains to be added to equity and buildings for own use revaluation differences and other profit reserves. Extraordinary reserves The movement of extraordinary reserves is as follows: December 31, 2020 December 31, 2019 Extraordinary reserves at the beginning of the period 588.605.263 284.629.561 Transfer from profit - 201.095.939 Accounted according to the equity method 104.265.661 102.879.763 Extraordinary reserves at the end of the period 692.870.924 588.605.263 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 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. The amount of TL (4.294.111) (December 31, 2019: TL (2.758.065)) regarding actuarial calculation is presented in other profit reserves account, in calculation of termination indemnity as of December 31, 2020. Movement of other profit reserves is presented below: December 31, 2020 December 31, 2019 Other profit reserves at the beginning of the period 21.666.327 22.407.942 Actuarial gains/losses (1.536.046) (684.257) Accounted according to the equity method (750.603) (57.358) Other profit reserves at the end of the period 19.379.678 21.666.327 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 143