MILLI REASURANS ANNUAL REPORT 2018

Millî Reasürans Türk Anonim Şirketi NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018 (Currency: Turkish Lira (TL)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) Restatement of the detailed balance sheet as of January 01, 2017: Detailed Balance Sheet Previously Reported Restated Effects (*) January 01, 2017 January 01, 2017 B- Financial Assets and Investments with Risks on Policy Holders 379.491.869 358.120.872 (21.370.997) B 1- Financial Assets Available for Sale 386.347.109 364.976.112 (21.370.997) B I- Total Current Assets 1.780.604.203 1.759.233.207 (21.370.996) B D- Financial Assets 551.268.910 567.098.842 15.829.932 B 2- Affiliates - 107.983.889 107.983.889 B 4- Subsidiaries 551.268.910 459.114.953 (92.153.957) B II- Total Non-current Assets 1.041.875.459 1.057.705.391 15.829.932 B Total Assets 2.822.479.662 2.816.938.598 (5.541.064) B III- Short-Term Liabilities 1.387.435.503 1.282.054.435 105.381.068 A E- Insurance Technical Reserves 1.341.749.642 1.236.368.574 105.381.068 A 2- Unexpired Risk Reserves - Net 11.121.932 3.285.325 7.836.607 A 4- Outstanding Claims Reserve - Net 959.351.982 861.807.521 97.544.461 A I- Other Long Term Liabilities 17.039.884 28.810.281 11.770.397 A-B 1- Deferred Tax Liability 17.039.884 28.810.281 11.770.397 A-B IV- Total Long Term Liabilities 99.137.540 110.907.937 11.770.397 A-B B- Capital Reserves 121.258.386 137.993.457 16.735.071 B 5- Other Capital Reserves 123.562.155 140.297.226 16.735.071 B C- Profit Reserves 259.066.470 239.186.631 (19.879.839) B 1- Legal Reserves 55.535.403 90.368.821 34.833.418 B 2- Statutory Reserves - 10.220.993 10.220.993 B 3- Extraordinary Reserves 15.545.335 81.426.607 65.881.272 B 5- Revaluation of Financial Assets 189.009.992 31.358.130 (157.651.862) B 6- Other Profit Reserves (1.024.260) 25.812.080 26.836.340 B D- Previous Years’ Profits 166.338.531 183.184.796 16.846.265 A-B 1- Previous Years’ Profits 166.338.531 183.184.796 16.846.265 A-B F- Net Profit of the Period 129.243.232 203.611.340 74.368.108 A-B 1- Net Profit of the Period 129.243.232 203.602.690 74.359.458 A-B 3- Net Income not subject to distribution - 8.650 8.650 B Total Shareholders’ Equity 1.335.906.619 1.423.976.225 88.069.606 A-B Total Liabilities and Shareholders’ Equity 2.822.479.662 2.816.938.598 (5.541.064) A-B (*) The effects of the restatements are described in paragraphs A and B below. A. Effects of restatements according to the Circular 2017/7 announced by Republic of Turkey Ministry of Treasury and Finance are as follows With the Circular 2017/7 announced by Republic of Turkey Ministry of Tresuary and Finance regarding “the discount of net cash flow from outstanding claim files”. Since the discount of “Land Vehicle Liability” and “General Liability” branches has become compulsory, according to the Article 1 of the circular, this is considered as a change of accounting policies and financial statements have been retrospectively restated. Companies are able to discount net cash flow from outstanding claim files according to the methods outlined by the circular. B. “Impact of amendments regarding TAS 27 - “Consolidated and Separate Financial Statements” The company recognizes its subsidiaries and affiliates through using equity method, defined in TAS 27 - “Consolidated and Separate Financial Statements”, while preparing its non-consolidated financial statements. Millî Reasürans Annual Report 2018 Unconsolidated Financial Statements and Independent Auditors’ Report / 105