MILLI REASURANS ANNUAL REPORT 2018

Millî Reasürans Türk Anonim Şirketi NOTES TO THE CONSOLIDATED 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) Impairment on tangible and intangible assets On each balance sheet date, the Group evaluates whether there is an indication of impairment of fixed assets. If there is an objective evidence of impairment, the asset’s recoverable amount is estimated in accordance with the “ TAS 36 - Impairment of Assets” and if the recoverable amount is less than the carrying value of the related asset, a provision for impairment loss is made. Rediscount and provision expenses of the year are detailed in Note 47 . 2.10 Derivative financial instruments Derivative instruments are treated as held for trading financial assets in compliance with the standard TAS 39 - Financial Instruments: Recognition and measurement. Derivative financial instruments are initially recognized at their fair value. The receivables and liabilities arising from the derivative transactions are recognized under the off-balance sheet accounts through the contract amounts. Derivative financial instruments are subsequently remeasured at fair value and positive fair value differences are presented either as “ income accruals” and negative fair value differences are presented as “other financial liabilities” in the accompanying financial statements. All unrealized gains and losses on these instruments are included in the statement of income. 2.11 Offsetting of financial assets Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by the Reporting Standards, or for gains and losses arising from a group of transactions resulting from the Group’s similar activities like trading transactions. 2.12 Cash and cash equivalents Cash and cash equivalents, which is the basis for the preparation of the statement of cash flows includes cash on hand, cheques received, other cash and cash equivalents, demand deposits and time deposits at banks having an original maturity less than 3 months which are ready to be used by the Group or not blocked for any other purpose. 2.13 Capital The shareholder having direct or indirect control over the shares of the Company is İş Bankası Group. As of December 31, 2018 and 2017, the share capital and ownership structure of the Company are as follows: Name December 31, 2018 December 31, 2017 Shareholding amount (TL) Shareholding rate (%) Shareholding amount (TL) Shareholding rate (%) Türkiye İş Bankası A.Ş. 505.810.925 76,64 505.810.925 76,64 Millî Reasürans TAŞ Mensupları Yardımlaşma Sandığı Vakfı 69.604.854 10,55 69.604.854 10,55 Groupama Emeklilik A.Ş. 38.809.894 5,88 38.809.894 5,88 Ankara Doğal Elektrik Üretim ve Ticaret A.Ş. 22.240.456 3,37 22.240.456 3,37 T.C. Ziraat Bankası A.Ş. 16.430.944 2,49 16.430.944 2,49 Other 7.102.927 1,07 7.102.927 1,07 Paid Capital 660.000.000 100,00 660.000.000 100,00 Sources of capital increases during the period The company has not performed capital increase as of December 31, 2018 (December 31, 2017: None). Privileges on common shares representing share capital There are no privileges on common shares representing share capital. Millî Reasürans Annual Report 2018 186 / Consolidated Financial Statements and Independent Auditors’ Report