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) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset as a result of the imbalance between the Company’s cash inflows and outflows in terms of maturity and volume. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities . In respect of this risk which is measured by quantitative methods, any liquidity deficit is observed via the maturity analysis of assets and liabilities in the statement of balance sheet. Furthermore, liquidity structure of the Company is monitored by using the following basic indicators in respect of liquidity ratios: -- Liquid Assets/ Total Assets -- Liquidity Ratio -- Current Ratio -- Premium and Reinsurance Receivables/ Total Assets The results evaluated by the Risk Committee and reported regularly to the Board of Directors. Action plan is determined by the Board of Directors in the case of having exposure higher than acceptable level of risk and probability. Management of the liquidity risk The Company considers the maturity match between asset and liabilities for the purpose of avoiding liquidity risk and ensure that it will always have sufficient liquidity to meet its liabilities when due . Maturity distribution of monetary assets and liabilities: December 31, 2018 Carrying amount Up to 1 month 1 to 3 months 3 to 6 months 6 to 12 months Unallocated Cash and cash equivalents 1.742.214.225 1.062.334.568 568.874.461 32.667.559 78.337.637 - Financial assets (*) 109.875.291 109.875.291 - - - - Receivables from main operations 300.658.813 154.061.872 17.567.782 4.224.997 124.804.162 - Other receivables and current assets 11.085.427 10.562.675 - - 522.752 - Total monetary assets 2.163.833.756 1.336.834.406 586.442.243 36.892.556 203.664.551 - Financial liabilities and other liabilities 2.054.267 2.054.267 Payables arising from main operations 63.770.093 54.959.881 1.532.162 1.256.141 6.021.909 - Due to related parties 109.359 109.359 - - - - Insurance technical reserves (**) 1.159.082.038 - - - - 1.159.082.038 Provisions for taxes and other similar obligations 5.707.038 5.707.038 - - - - Provisions for other risks and expense accruals 59.763.498 2.423.719 3.378.675 - 53.961.104 Total monetary liabilities 1.290.486.293 65.254.264 4.910.837 1.256.141 6.021.909 1.213.043.142 (*) Equity shares amounting to TL 50.113.456 are not included. (**) Net of outstanding claims reserve not subject to consistent distribution is presented in the “unallocated” column. Millî Reasürans Annual Report 2018 Unconsolidated Financial Statements and Independent Auditors’ Report / 127