MILLI RE 2020 ANNUAL REPORT

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 71 Milli Re Annual Report 2020 2020 Financial Results The Company’s financial investments are made in accordance with the Asset Investment Guidelines formulated under the provisions of the “Regulation Amending the Regulation on the Financial Structures of Insurance, Reinsurance and Pension Companies” published in the Official Gazette issue 27877 dated 17 March 2011. The Company prefers to invest in liquid instruments with high yield and minimum risk, while part of the portfolio is managed by İş Portföy Yönetimi A.Ş. (İş Asset Management). The Company’s financial results are presented in detail below. Investment Income In relation to the investment portfolio predominantly consisting of time deposits, income on time deposits declined due to the deposit interest rates that were lower during the current period compared to the previous year, and due to the fact that the portfolio was directed towards other security rather than time deposits; as a result there was a decline in the “income from financial assets” item. In the current period, there was a significant rise in the income from disposal of financial assets with the effect of disposal of mutual funds. Valuation of financial assets increased significantly, in connection with the valuation of investments in TL deposit accounts, corporate bonds and bills, Eurobonds and mutual funds, despite the decline in the valuation of government bonds. On a year‑over‑year basis, the rise in exchange rates reflected positively on foreign exchange gains in 2020. The rise in income from subsidiaries item was driven by the dividend income from Anadolu Hayat Emeklilik, the Company’s subsidiary. There was an increase in the income from subsidiaries and joint ventures item in the reporting period due to the rise in the dividend income from the Company’s subsidiary, Anadolu Anonim Türk Sigorta Şirketi. Although rental fees were partially collected in order to support tenants of the Company’s properties during the challenging circumstances imposed by the Covid-19 pandemic, the market values of the properties held for investment increased remarkably over the prior period as per survey reports leading to an increase in income from property plant and equipment. (TL) 2020 2019 Change (%) Investment Income 685,087,147 661,184,678 3.62 Income from Financial Assets 155,278,239 288,894,987 (46.25) Income from Disposal of Financial Assets 48,320,501 10,190,719 374.16 Valuation of Financial Assets 27,971,300 (7,692,608) + Foreign Exchange Gains 94,862,946 61,769,977 53.57 Income from Subsidiaries 65,656,632 44,942,194 46.09 Income from Subsidiaries and Joint Ventures 2331,971,961 216,410,793 7.19 Income from Property Plant and Equipment 60,771,090 46,591,631 30.43 Income from Derivative Transactions - 18,985 - Other Investments 254,478 58,000 338.76