CELEBI GROUND HANDLING ANNUAL REPORT 2018

18 Çelebi Ground Handling 2018 Annual Report Our subsidiary, Çelebi Airport Services India Private Limited (formerly known as Çelebi Ground Handling Delhi Private Limited), which started to provide services at the Indira Gandhi International Airport in Delhi, India from June 2010, served 15,046 flights at the Delhi and Ahmedabad airports in the January-December 2017 period. In addition, with the initiation of services at the Kochin and Bangalore stations in the January-December 2018 period, it provided services to 28,524 flights, marking a 90% increase when compared to the previous year. Services have been provided at the Kochin station since 8 January 2018, and at the Bangalore station since 18 September 2018. Our Celebi Delhi Cargo Terminal Management India Pvt. Ltd subsidiary has been providing cargo warehousing and handling services in 77,000 m 2 of space at Delhi International Indira Gandhi Airport since November 2009. While the company had handled 522,322 tons of cargo in 2017, the same went up by 0.1% to 523,009 tons in 2018. Celebi NAS, another subsidiary that began services at Chhatrapati Shivaji International Airport in Mumbai (Bombay) in July 2009, serviced 25,743 flights during 2017 and 23,743 flights during 2018. Çelebi Ground Handling’s first international subsidiary, Celebi Ground Handling Hungary served a total of 24,684 flights in 2018, up 13% as compared with 21,912 flights serviced in 2017. The main reason behind this rise is the increased number of flights by Ryanair. Celebi Ground Handling Hungary started cargo handling operations in January 2011 in its new warehouse located outside the airport. While the company had provided service for a total of 64,672 tons during 2017, the same rose by 23% to 79,863 tons in 2018. The rise in the cargo quantity was driven mainly by the restarted cargo flights by Air France, KLM, Qatar Airways and Silkway Airlines. Celebi Cargo GmbH entered operation in 2011 to offer air cargo storage and handling services in its storage facilities at the International Frankfurt Airport’s “Cargo City Süd”. Having handled 131,224 tons of cargo in 2017, that figure went up by 10% to 144,295 tons in 2018. The Group’s consolidated gross profit for 2018 was up by 70.24% to TL 457,100,932 (2017: TL 268,496,164). In 2018, the Company posted an operating profit of TL 275,930,515 (2016 operating profit: TL 148,362,023). As of 31 December 2018, the total amount set aside for legal and compensation provisions of our Company was TL 5,942,066 (31 December 2017: TL 5,173,420). There was no legal action or demands for compensation against the Company during the period which would significantly affect the Company’s financial status or activities. 7. DEVELOPMENTS IN INVESTMENTS; INVESTMENT INCENTIVES USED Tangible fixed asset investments realized by the Group during the year ended on 31 December 2018 amounted to TL 204,586,286 (31 December 2017: TL 19,610,527). 16% of this amount consisted of investments in machinery, 76% in investments in progress equipment and appliances, 9% in leasehold improvements, 5% in vehicles, and 1% in fixtures. Total consolidated investment outlays of the Group in tangible and intangible assets as of 31 December 2018 were worth TL 226,921,893. (2017: TL 44,678,508). Our Company holds the Large Scale Investments incentive certificate obtained from the Ministry of the Economy, the General Directorate of Incentive Implementation and Foreign Investment based on the buildings, facilities, machinery and equipment investments that our Company undertook at the Istanbul Airport. The total amount of investment undertaken by our Company under this incentive certificate until 31 December 2018 stood at TL 146,194,959, and the tax deduction obtained in the relevant period stood at TL 12,323,943.61. 8. DIRECT OR INDIRECT ASSOCIATES OF THE COMPANY AND INFORMATION ON SHAREHOLDING THEREIN The Company holds a 94.8% stake in Çelebi Güvenlik Sistemleri ve Danışmanlık A.Ş. (“Çelebi Security”), a joint stock company engaged in airport terminal security and providing security service to airlines. The liquidation process has been initiated for Çelebi Güvenlik Sistemleri ve Danışmanlık A.Ş. in accordance with the decision of its General Assembly and the company’s title has been changed into Çelebi Güvenlik Sistemleri ve Danışmanlık A.Ş. in Liquidation. BOARD OF DIRECTORS - 2018 ANNUAL REPORT