MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE CONSOLIDATED 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) 21 Deferred taxes As of December 31, 2020, and 2019, deferred tax assets and liabilities are attributable to the following: December 31, 2020 December 31, 2019 Deferred tax assets/(liabilities)) Deferred tax assets/(liabilities)) Unexpired risk reserves 66.200.287 53.535.621 Provision for the pension fund deficits 21.175.193 19.583.644 Equalization reserves 23.643.134 16.241.991 Provisions for employee termination benefits 13.912.211 10.643.391 Other provisions 9.892.432 8.307.197 Subrogation provision 4.948.889 6.198.312 Discount of receivables and payables 2.087.204 1.866.480 TAS adjustment differences in depreciation 123.787 91.793 Profit commission accruals (18.888) (336.314) Subrogation receivables from third parties (4.178.574) (2.723.769) Valuation differences in financial assets (66.990.503) (3.022.005) Time deposits (5.783.669) (6.931.925) Other (13.976.045) (10.658.223) Valuation of real estate (68.628.739) (63.004.554) Deferred tax assets/(liabilities), net (17.593.281) 29.791.639 As of December 31, 2020, the Group does not have deductible tax losses. (December 31, 2019: None.) Movement of deferred tax assets as of December 31, 2020 and 2019 are given below: December 31, 2020 December 31, 2019 Opening balance at January 1 29.791.639 7.144.002 Recognized in profit or loss (6.193.250) 69.039.680 Recognized in equity (25.453.192) (32.303.842) Cancellation corporate tax provision (*) (15.738.478) (14.088.201) Closing balance at December 31 (17.593.281) 29.791.639 (*) Cancellation of corporate tax provision is included in deferred tax income. 22 Retirement benefit obligations Employees of the Company are the members of “Milli Reasürans Türk Anonim Şirketi Emekli ve Sağlık Sandığı Vakfı (“Milli Reasürans Pension Fund”) and the employees of Anadolu Sigorta are the members of Anadolu Anonim Türk Sigorta Şirketi Memurları Emekli Sandığı (“Pension Fund of Anadolu Anonim Türk Sigorta Şirketi”) which has been founded in accordance with the Article 20 of the Social Securities Act No: 506. As per the provisional article No: 23 of the Banking Law No: 5411, pension funds of the banks which were established within the framework of Social Security Institution Law, should be transferred to the Social Security Institution within three years after the publication of the prevailing Banking Law enacted on November 1, 2005. However, the said article of the Banking Law has been vetoed by the President on November 2, 2005 and the execution of the article was ceased based on the Supreme Court’s decision numbered E.2005/39, K.2007/33 and dated March 22, 2007 effective from March 31, 2007. Supreme Court asserted possible losses on acquired rights of employees of pension fund as reason for cancellation decision. Activities and Major Developments Related to Activities General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Milli Re Annual Report 2020 236