MILLI REASURANS ANNUAL REPORT 2018

Milli Re Annual Report 2018 Financial Status / 69 2018 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 2018, income from financial assets rose by 55.32%, mainly by the increase in interest income accrued from time deposits. Income from disposal of financial assets increased by 120.74%. This is due basically to the income from sale of investment funds during the current year. Valuation of financial assets increased reflecting the revaluation differences related to time deposits. The Company registered a 237.32% increase in foreign exchange gains due to the rise in the income obtained from evaluation transactions of Company’s foreign currency assets reflecting the movements in rates of exchange during the reporting period. In 2018, subsidiaries of the Company Anadolu Anonim Türk Sigorta Şirketi and Miltaş, as well as the equity of Anadolu Hayat Emeklilik Anonim Şirketi (Anadolu Hayat) which is an affiliate, are accounted in line with equity method and accordingly, owing to the profit of these companies, income from affiliates and income from subsidiaries and joint ventures increased. The Company recognises its subsidiaries and affiliates using equity method with respect to TAS 27. As a result of the comparably lower appreciation in the value of investment properties accounted in line with fair value method, there was a decrease of 21.64% in income from property, plant and equipment during the reporting period. Milli Re’s total investment income increased by 70.44% and amounted to TL 644,537,098 in 2018. (TL) 2018 2017 Change (%) Investment Income 644,537,098 378,157,716 70.44 Income From Financial Assets 214,039,085 137,801,432 55.32 Income From Disposal of Financial Assets 50,373242 22,820,237 120.74 Valuation of Financial Assets 7,026,454 1,328,966 428.72 Foreign Exchange Gains 139,716,863 41,419,317 237.32 Income from Subsidiaries 31,731,033 28,233,340 12.39 Income from Subsidiaries and Joint Ventures 157,046,405 89,674,722 75.13 Income From Property Plant and Equipment 44,371,016 56,622,702 (21.64) Other Investments 233,000 257,000 (9.34)