MILLI REASURANS ANNUAL REPORT 2018

Millî Reasürans Türk Anonim Şirketi NOTES TO THE CONSOLIDATED 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) December 31, 2017 Book value Up to 1 month 1 to 3 months 3 to 6 months 6 to 12 months Over 1 year Assets Cash and cash equivalents 4.727.809.372 2.340.765.964 1.225.315.897 1.161.727.511 - - Financial assets and financial investments with risks on policyholders (*) 1.322.268.089 896.682.036 6.072.043 3.093.332 3.636.781 412.783.897 Receivables from main operations 1.355.731.258 209.414.249 465.095.198 422.146.562 240.288.180 18.787.069 Other receivables and current assets 55.476.635 47.514.629 400.486 1.671.027 3.684.789 2.205.704 Total monetary assets 7.461.285.354 3.494.376.878 1.696.883.624 1.588.638.432 247.609.750 433.776.670 Liabilities Financial liabilities 110.802.339 108.072.424 - 2.729.915 - - Payables arising from main operations 518.869.894 187.645.069 78.034.089 93.428.986 159.761.750 - Due to related parties 362.820 362.820 - - - - Other liabilities 116.595.290 64.928.832 45.384.376 - - 6.282.082 Insurance technical reserves (**) 3.547.643.833 202.561.915 381.060.259 226.832.656 287.309.067 2.449.879.936 Provisions for taxes and other similar obligations 59.324.763 59.324.763 - - - - Provisions for other risks and expense accruals 126.182.410 5.631.417 17.357.441 - 29.067.524 74.126.028 Total monetary liabilities 4.479.781.349 628.527.240 521.836.165 322.991.557 476.138.341 2.520.288.046 (*) Equity shares amounting to TL 232.333.099 are not included. (**) Outstanding claims reserve is presented as short term liabilities in the accompanying consolidated financial statements whereas maturity distribution is presented according to projected payment dated in the above table. Market risk Market risk is the risk that changes in market prices, such as interest rate, foreign exchange rates and credit spreads will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk. Foreign currency risk The Group is exposed to foreign currency risk through insurance and reinsurance transactions in foreign currencies. Foreign exchange gains and losses arising from foreign currency transactions are recorded at transaction dates. At the end of the reporting periods, foreign currency assets and liabilities evaluated by the Central Bank of the Republic of Turkey’s spot purchase rates and the differences arising from foreign currency rates are recorded as foreign exchange gain or loss in the statement of operations. Millî Reasürans Annual Report 2018 210 / Consolidated Financial Statements and Independent Auditors’ Report