MILLIRE_2019_Annual Report

Milli Re Annual Report 2019 137 Activities and Major Developments Related to Activities 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 General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Millî Reasürans Türk Anonim Şirketi NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) (Currency: Turkish Lira (TL)) Exposure to foreign currency risk 20 percent depreciation of the TL against the following currencies as of December 31, 2019 would have increased or decreased equity and profit or loss (excluding tax effects) by the amounts shown below (December 31, 2018: 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, 2019 December 31, 2018 Profit or loss Equity (*) Profit or loss Equity (*) US Dollar 46.482.429 46.482.429 42.764.487 42.764.487 Euro (18.061.545) (18.061.545) (17.467.368) (17.467.368) Others 3.948.313 3.948.313 2.468.427 2.468.427 Total, net 32.369.197 32.369.197 27.765.546 27.765.546 (*) Equity effect also includes profit or loss effect of 20% depreciation of TL against related currencies (December 31, 2018: 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, 2019 December 31, 2018 Financial assets Financial assets with fixed interest rates : 1.895.523.007 1.735.789.236 Cash at banks (Note 14) 1.737.350.019 1.727.884.076 Available for sale financial assets - Government bonds - FC (Note 11) 79.700.480 - Available for sale financial assets - Private sector bonds - FC (Note 11) 74.327.048 - Available for sale financial assets - Private sector bonds - TL (Note 11) 4.145.460 7.905.160 Financial assets with variable interest rate: 57.132.050 - Available for sale financial assets - Private sector bonds - TL (Note 11) 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.