CELEBI GROUND HANDLING ANNUAL REPORT 2018

19 Çelebi Ground Handling 2018 Annual Report The Company has been awarded the contract for the acquisition of the shares in Budapest Airport Handling Kereskedelmi es Szolgaltato Korlátolt Felelősségű Társaság (“BAGH”), a company which has been providing ground handling service at Budapest Airport, and participated as the founding partner in Celebi Tanacsado Korlátolt Felelősségű Társaság (“Celebi Kft”), which has been incorporated on 22 September 2006 to perform the said share transfer. On 26 October 2006, Celebi Kft acquired the shares in BAGH in their entirety and the company name of BAGH was changed to Celebi Ground Handling Hungary Földi Kiszolgáló Korlátolt Felelősségű Társaság (“CGHH”). Celebi Kft has been taken over by CGHH, in which the Company held 70% stake, together with all of its assets and liabilities, and merged with CGHH on 31 October 2007 under the provisions of the applicable legislation in Hungary. In 2011, shares representing 30% of CGHH’s capital have been acquired from Çelebi Ground Handling for an amount of TL 33,712,020, bringing the Company’s share in CGHH to 100%. As at 31 December 2018, the paid in capital of CGHH is HUF 200,000,000. As a result of the tender put out for the performance of ground handling services for a period of 10 years at the Mumbai Chhatrapati Shivaji International Airport in India, which has been contracted out to a consortium that also included the Company, a company with the name “Celebi Nas Airport Services India Private Limited (“Celebi Nas”) and based in the Maharashtra state in Mumbai has been incorporated on 12 December 2008 to provide ground handling services at the said airport. Celebi Nas has a capital of INR 100,000,000, in which the Company controls 57% stake as a founding partner. The paid-in capital of Celebi Nas is INR 552,000,000. Besides, INR 228,000,000 has been paid as advance capital by the shareholders in Celebi Nas. Although the Group holds a 57% stake in Çelebi Nas, the relevant investment is a partnership subject to joint management in line with the terms of the contract. It is accounted for under the equity method in the interim period condensed consolidated financial statements of the Group. On 8 April 2015, Celebi Nas signed a “concession agreement” with Mumbai International Airport Private Limited (“MIAL”), the operator of the Chhatrapati Shivaji International Airport (“CSIA”) residing in Mumbai where Celebi Nas operates, concerning the rendering of services regarding air conditioners and generators mounted on passenger boarding bridges in the passenger terminal of that airport. Under the contract, Celebi Nas has been granted the concession rights until May 2036. In addition, the ten (10) year ground handling concession of Celebi Nas for carrying out ground handling services at the CSIA international airport since 2009 shall expire on 31 December 2019. Celebi Nas participated in the tender opened by the MIAL company, the international airport operator of CSIA, to extend the concession that it holds from 1 January 2020 to 31 December 2029 for 10 (ten) years. The bid was submitted to MIAL on 29 January 2018. The concession contract between Celebi Nas and the tender authority MIAL was signed on 19 May 2018. Thus, Celebi Nas, a subsidiary of Celebi, will continue to provide ground handling services for a period of 10 (ten) years from 1 January 2020 to 31 December 2029 following the expiry of the current concession period on 31 December 2019 at the CSIA airport in Mumbai, India. The Company established Celebi Delhi Cargo Terminal Management India Private Limited (“Celebi Delhi Cargo”) with an initial capital of INR 100,000, in which it controls a 74% share as a founding partner and which will be engaged in the brownfield development, modernization and financing of the existing cargo terminal in the airport in New Delhi, India, and in its operation for a period of 25 years. The paid-in capital of Celebi Delhi Cargo as of 31 December 2018 is INR 1,120,000,000. Upon winning the contract for the execution of airport ground handling services for a period of 10 years at the Delhi International Airport, a total of INR 1,380,897,000 has been paid in premium share capital to fulfill the funding need of Celebi Ground Handling Delhi Private Limited (“Celebi GH Delhi”), the Company’s 74%-owned subsidiary founded on 18 November 2009 with a paid- in capital of INR 23,890,000, through premium capital increase as per the governing legislation in India in order to fulfill the obligations arising from the Concession Agreement concluded with the tender authority and to ensure realization of planned investments. Through the acquisition of 25.9% of shares in Celebi GH Delhi on 22 May 2017, the Company’s share in Celebi GH Delhi’s capital reached 99.9%. Celebi GH Delhi executed a concession agreement for a total period of 7 years, including a potential 2-year extension on a definitive 5-year period, to provide ground handling service at Cochin International Airport in India. On 15 March 2018, the company’s name was changed as Celebi Airport Services India Private Limited (“CASI”). Celebi GH Delhi, a subsidiary of the Group, participated in DASPL by acquiring 16.66% stake in the company. DASPL resides in New Delhi, India, has a paid-in capital of INR 250,000,000 and was set up to ensure execution of air conditioning units installed on passenger bridges in the airport’s passenger terminal, generator and utility water services in compliance with international standards. On 14 November 2016, Celebi GH Delhi acquired an additional 8.33% share in DASPL, and the Group’s shareholding interest in DASPL rose to 24.9%. The Group began to recognize DASPL in its consolidated financial statements by equity method.