MILLI REASURANS ANNUAL REPORT 2018

Milli Re Annual Report 2018 70 / Financial Status Investment Expenses Losses from the disposal of financial assets increased during the reporting period due to the fluctuations in the market. Investment income transferred to non-life technical account increased by 115.87% due to higher technical provisions and increase in investment income as at 31.12.2018. Due the movements in rates of exchange, foreign exchange losses increased. Further to the expenditure calculated in accordance with the increase in the income subject to expenditure tax, other investment expenses increased by 58.39%. There was an increase of 121.73% in the Company’s total investment expenses in 2018. (TL) 2018 2017 Change (%) Investment Expenses (425,812,893) (192,041,506) 121.73 Investment Management Expenses - (Incl. Interest) (511,981) (846,635) (39.53) Loss from Disposal of Financial Assets (11,907,041) (996,561) 1,094.81 Investment Income Transferred to Non-Life Technical Account (338,043,300) (156,592,562) 115.87 Foreign Exchange Losses (57,759,377) (21,942,845) 163.23 Depreciation and Amortization Expenses (2,297,422) (2,007,230) 14.46 Other Investment Expenses (15,293,772) (9,655,673) 58.39 Income and Expenses from Other and Extraordinary Operations Income and expenses from other operations and extraordinary operations account increased as a result of the absence of deferred tax income accrued in 2018 which was accounted in 2017 in deferred tax asset account due to the discounting of net cash flows of outstanding loss reserves. (TL) 2018 2017 Change (%) Income and Expenses From Other and Extraordinary Operations (13,488,014) (2,143,249) 529.33 Provisions (13,191,358) (11,519,265) 14.52 Rediscounts (727,787) (271,769) 167.80 Deferred Taxation (Deferred Tax Assets) 1,814,922 9,420,780 (80.73) Other Income 379,572 499,542 (24.02) Other Expenses and Losses (1,763,363) (272,537) 547.02 Corporate Tax Liability Provision on Period Profit The decrease in the corporate tax liability provision on period profit account is caused by the prepaid taxes related to previous years’ profit and the profit for the period of 01 January-31 December 2017 accounted as a result of the discounting of net cash flows of outstanding loss reserves during the previous period. As a result, the Company posted a net profit of TL 278,213,412 in 2018. 2018 FINANCIAL RESULTS