MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE UNCONSOLIDATED 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) Exposure to foreign currency risk 20 percent depreciation of the TL against the following currencies as of December 31, 2020 would have increased or decreased equity and profit or loss (excluding tax effects) by the amounts shown below (December 31, 2019: 20 percent depreciation of the TL). This analysis assumes that all other variables, in particular interest rates, remain constant. In case of a 20 percent appreciation of the TL against the following currencies, the effect will be in opposite direction. December 31, 2020 December 31, 2019 Profit or loss Equity (*) Profit or loss Equity (*) US Dollar 64.277.067 64.277.067 46.482.429 46.482.429 Euro (5.490.550) (5.490.550) (18.061.545) (18.061.545) Others 1.310.357 1.310.357 3.669.897 3.669.897 Total, net 60.096.874 60.096.874 32.090.781 32.090.781 (*) Equity effect also includes profit or loss effect of 20% depreciation of TL against related currencies (December 31, 2019: 20% depreciation of TL). Exposure to interest rate risk The principal risk to which non-trading portfolios are exposed is the risk of loss from fluctuations in the future cash flows or fair values of financial instrument because of a change in market interest rates. Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for repricing bands. As of reporting date; the interest rate profile of the Company’s interest earning financial assets and interest-bearing financial liabilities are detailed as below: December 31, 2020 December 31, 2019 Financial assets Financial assets with fixed interest rates : 2.207.520.461 1.895.523.007 Cash at banks (Note 14) 1.554.163.504 1.737.350.019 Available for sale financial assets - Government bonds - FC (Note 11) 201.272.717 79.700.480 Available for sale financial assets - Private sector bonds - FC (Note 11) 194.846.716 74.327.048 Available for sale financial assets - Private sector bonds - TL (Note 11) 257.237.524 4.145.460 Financial assets with variable interest rate: 87.447.351 57.132.050 Available for sale financial assets - Private sector bonds - TL (Note 11) 87.447.351 57.132.050 Fair value information The estimated fair values of financial instruments have been determined using available market information, and where it exists, appropriate valuation methodologies. The Company has classified its financial assets as held for trading or available for sale. As of the reporting date, available for sale financial assets and financial assets held for trading are measured at their fair values based on their quoted prices or fair value information obtained from brokers in the accompanying unconsolidated financial statements. Management estimates that the fair value of other financial assets and liabilities are not materially different than their carrying values. Classification relevant to fair value information TFRS 7 - Financial instruments: Disclosures requires the classification of fair value measurements into a fair value hierarchy by reference to the observability and significance of the inputs used in measuring fair value of financial instruments measured at fair value to be disclosed. This classification basically relies on whether the relevant inputs are observable or not. Observable inputs refer to the use of market data obtained from independent sources, whereas unobservable inputs refer to the use of predictions and assumptions about the market made by the Company. This distinction brings about a fair value measurement classification generally as follows. Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon Milli Re Annual Report 2020 131