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) An actuarial report has been obtained from registered actuary regarding calculation of the amount to be paid to the Social Security Institution by the Company in accordance with the new law. The CSO 1980 mortality table for December 31,2019 and the TSI 2013 mortality table for December 31, 20199.8% of technical deficit interest rate are taken into account in the calculation of the said technical deficit. No real increase/decrease is anticipated in salary and health expenses. The health benefits to be paid will be considered by the Group management due to the changes in the Social Security Institution legislation and other regulations. As of December 31, 2020, and 2019, technical deficit from pension funds comprised the following. December 31, 2020 December 31, 2019 Net present value of total liabilities other than health (176.277.838) (154.412.630) Net present value of insurance premiums 42.294.833 36.399.424 Net present value of total liabilities other than health (133.983.005) (118.013.206) Net present value of health liabilities (20.228.903) (18.531.186) Net present value of health premiums 23.199.132 19.953.802 Net present value of health liabilities 2.970.229 1.422.616 Pension fund assets 61.451.721 63.373.635 Amount of actuarial and technical deficit (69.561.055) (53.216.955) Plan assets are comprised of the following items: December 31, 2020 December 31, 2019 Cash and cash equivalents 47.150.065 51.228.641 Associates 12.431.247 10.648.699 Other 1.870.409 1.496.295 Total plan assets 61.451.721 63.373.635 Up to date, as per the actuarial calculation performed, there has not been any deficit in Anadolu Anonim Türk Sigorta Şirketi Memurları Emekli Sandığı and Anadolu Sigorta has made no payment for this purpose. It is believed that the assets of this institution are adequate enough to cover its total obligations; therefore, this shall not constitute any additional liability on Anadolu Sigorta. 23 Provision for other liabilities and expense accruals As of December 31, 2020, and 2019, the provisions for other risks are disclosed as follows: December 31, 2020 December 31, 2019 Provision for pension fund deficits (Note 22) 69.561.055 53.216.955 Provision for employee termination benefits 45.465.115 38.340.411 Provision for unused vacation 3.997.046 2.905.069 Total provision for other risks 119.023.216 94.462.435 Movement of provision for employee termination benefits during the period is presented below: December 31, 2020 December 31, 2019 Provision at the beginning of the period 38.340.411 35.080.373 Interest cost (Note 47) 4.380.388 4.280.225 Service cost (Note 47) 4.015.240 2.429.854 Payments during the period (Note 47) (4.865.371) (4.378.995) Actuarial gain/loss 3.594.447 928.954 Provision at the end of the period 45.465.115 38.340.411 24 Net insurance premium revenue Net insurance premium revenue for non-life branches is presented in detailed in the accompanying consolidated statement of income. 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 238