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) In accordance with the law; after fund affiliates along with monthly salary and/or revenue endowed people and their rights holder transfer to Social Security Intuition, these people’ uncovered social rights and payments is paid, even if it is written in the foundation’s obligation which they are belong to, by funds and fund affiliate’s employer institutions. The benefits stated in the settlement deeds of pension fund but not subject to transfer will continue to be covered by the pension funds. The technical financial position of the Milli Reasürans Pension Fund is audited by the registered actuary in accordance with the Article 21 of the Insurance Law and Actuary Act. As per the calculations based on the above mentioned assumptions, actuarial and technical deficit amounting to TL 44.736.812 (December 31, 2017: TL 39.335.115) is accounted as “Provision for pension fund deficits” in the accompanying unconsolidated financial statements. 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, 2018 9.8% 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. At December 31, 2018 and 2017, technical deficit from pension funds comprised the following. December 31, 2018 December 31, 2017 Net present value of total liabilities other than health (133.663.392) (120.115.748) Net present value of insurance premiums 29.450.709 25.469.048 Net present value of total liabilities other than health (104.212.683) (94.646.700) Net present value of health liabilities (16.741.096) (14.756.726) Net present value of health premiums 16.332.152 13.918.802 Net present value of health liabilities (408.944) (837.924) Pension fund assets 59.884.815 56.149.509 Amount of actuarial and technical deficit (44.736.812) (39.335.115) Pension fund’s assets are comprised of the following items: December 31, 2018 December 31, 2017 Cash and cash equivalents 48.840.924 46.869.599 Associates 9.682.845 8.356.885 Other 1.361.046 923.025 Total plan assets 59.884.815 56.149.509 23 Other liabilities and expense accruals As of December 31, 2018 and 2017; the provisions for other risks are disclosed as follows: December 31, 2018 December 31, 2017 Provision for pension fund deficits (Note 22) 44.736.812 39.335.115 Provision for employee termination benefits 9.224.292 8.293.551 Total provision for other risks 53.961.104 47.628.666 Millî Reasürans Annual Report 2018 148 / Unconsolidated Financial Statements and Independent Auditors’ Report