CELEBI GROUND HANDLING ANNUAL REPORT 2018

ÇELEBİ HAVA SERVİSİ A.Ş. 77 Çelebi Ground Handling 2018 Annual Report Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2018 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) As of December 31, 2018, the Group has reviewed possible tax fines which may source from its subsidiaries and subsidiaries subject to joint control and has not considered to make any provisions. (e) Calculated deferred tax assets over tax deductions to be used Tax receivable due to unused taxable losses is reflected on the records in the case of being most likely to have sufficient taxable profit in future periods. (f) Investments made in the framework of concession arrangements in scope of TFRIC 12 Celebi Delhi Cargo, subsidiary of the Group resident in India, has signed a concession arrangement with Delhi International Airport Private Limited (“DIAL”) on May 6, 2009 in order to operate in development, modernization, financing and management for 25 years of current cargo terminal in the airport located in New Delhi city of India. Investment expenditures made by the Group within scope of aforementioned arrangement and concession arrangement signed by Çelebi Nas, which is a joint venture of the Group subject to joint control and resident in India, on April 8, 2015, are recognized in accordance with International Financial Reporting Interpretations Committee 12 (“TFRIC 12”) Service Concession Arrangements. Preparation of consolidated financial statements in accordance with TAS requires the management to make decisions, estimations and assumptions affecting the implementation of policies and amounts of assets, liabilities, income and expense which are reported. Actual results may differ from those estimates. Estimations and assumptions forming a basis for estimations are continuously reviewed. Updates made in accounting estimates are recorded in the period of update and following periods affected from the aforementioned updates. Information on significant decisions applied to accounting policies which have the most significant impact on amounts recorded in consolidated financial statements is explained in the following notes: Not 2.5 (f) - Application of profit margin to construction costs made in scope of TFRIC 12 “Service Concession Arrangements” Information on estimates having significant impact on amounts recorded in consolidated financial statements is explained in the notes below: Not 11 - Property, plant and equipment Not 12 - Intangible assets Not 17 - Employee benefit obligations Not 28 - Tax assets and liabilities Not 8 - Trade receivables and payables NOTE 3 - SEGMENT REPORTING Management has determined the operating segments based on the reports reviewed by the Company’s senior management and effective in making strategic decisions. Management evaluates the Group in two different ways: geographical and operating segments. Management analyzes The Group’s performance according to their departments; Ground Handling Services, Security Services and Cargo and Warehouse Services. Since the Group’s revenues consist primarily of these operating segments, Ground Handling, Cargo and Warehouse Services are evaluated as reportable operating segments. Management follows the operating segments performanceas (“EBITDA”) after deduction of Operating lease equalization, effect of TFRIC 4-12, currenct year part of prepaid allocation cost expense, Retirement pay liability and unused vacation provisions from earnings before interest, tax, depreciation and amortization