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) Distribution of new participants in terms of their numbers and gross and net contributions for individuals and groups which were transferred from other insurance companies during the year None. Distribution of individual and group participants and their gross and net contributions which were transferred from life insurance portfolio to private pension portfolio during the year None. Distribution of individual and group participants which were cancelled or transferred to other insurance companies in terms of their numbers and gross and net contributions None. Profit share distribution rate of life insurances None. Deferred commission expenses The Company capitalizes commissions paid to the intermediaries related to policy production under short-term and long-term prepaid expenses. As of December 31, 2020, deferred production expenses amounting to TL 200.379.888, deferred production commissions amounting to TL 199.751.582 (31 December 2019: TL 186.668.623) and deferred loss surplus amounting to TL 628.306 (31 December 2020: None) It consists of premiums. As of December 31, 2020, and 2019, the movement of deferred commission expenses is presented below: December 31, 2020 December 31, 2019 Deferred commission expenses at the beginning of the period 186.668.623 147.058.200 Commissions accrued during the period (Note 32) 411.965.745 394.855.067 Commissions expensed during the period (Note 32) (398.882.786) (355.244.644) Deferred commission expenses at the end of the period 199.751.582 186.668.623 18 Investment contract liabilities None. 19 Trade and other payables and deferred income December 31, 2020 December 31, 2019 Financial Liabilities - 1.392.078 Payables from reinsurance operations 75.120.811 61.264.524 Short/long term deferred income and expense accruals 10.087.217 7.246.691 Taxes and other liabilities and similar obligations 2.358.902 2.273.036 Due to related parties (Note 45) 136.214 141.374 Other payables 1.321.982 2.411.894 Total 89.025.126 74.729.597 Short-term liabilities 75.731.534 69.707.056 Medium and long-term liabilities 13.293.592 5.022.541 Total 89.025.126 74.729.597 As of December 31, 2020, and 2019, other payables largely consist of outsourced benefits and services. Short/long term deferred income and expense accruals include deferred commission income (Note 10) amounting to TL 2.760.960 (December 31, 2019: TL 1.018.666). 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 147