CELEBI GROUND HANDLING ANNUAL REPORT 2018

ÇELEBİ HAVA SERVİSİ A.Ş. 92 Çelebi Ground Handling 2018 Annual Report 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.) Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish Movements in other intangible assets for the period ended December 31, 2017 are as follows: Currency Opening January 1, 2017 Additions Transfers Translation Differences Closing December 31, 2017 Cost Rights 10.688.549 7.506 (545.455) - 10.150.600 Customer relations 47.785.826 - - 10.327.824 58.113.650 Software 14.349.206 1.084.211 596.439 885.138 16.914.994 Concession rights (**) 103.273.865 20.163.446 - 14.758.453 138.195.764 Build-operate-transfer investments (*) 80.738.245 3.812.818 - 12.280.376 96.831.439 256.835.691 25.067.981 50.984 38.251.791 320.206.447 Accumulated depreciation Rights (4.147.904) (48.119) 556.687 - (3.639.336) Customer relations (47.785.826) - - (10.327.824) (58.113.650) Software (10.771.187) (1.327.164) - (970.882) (13.069.233) Concession rights (**) (29.548.221) (5.465.012) - (4.395.039) (39.408.272) Build-operate-transfer investments (*) (27.410.525) (4.720.293) - (4.043.371) (36.174.189) (119.663.663) (11.560.588) 556.687 (19.737.116) (150.404.680) Net book value 137.172.028 169.801.767 (*) The difference amounting to TL 56.631.176 between the discounted value of the deposit payment made amounting to INR 1.453.873.935 which is discounted with a discount rate of 11,46%, within the scope of the concession agreement signed for the development, modernization and the operation for 25 years of the existing cargo terminal of the New Delhi Airport, India is recognised as build-operate-transfer investment and will be amortised during the concession period of 25 years. In addition, the difference amounting to TL 4.107.209 between the discounted value of the deposit payment made amounting to INR 400.000.000 which is discounted with a discount rate of 10,82%, within the scope of the concession agreement signed for rendering ground handling services for both 10 years in New Delhi Airport, India and 5+2 years in Cochin Airport is recognised as build-operate-transfer investment and will be amortised during the concession period of 10 years. (**) Refers to fixed asset expenditures made within within the scope of the concession agreement signed between DIAL Celebi Delhi Cargo and are recognized in accordance with TFRIC 12 and TFRIC 4. As of December 31, 2017, there are financial lease assets in the concession rights with the net book value of TL 7.945.665. Amortization expense for the period ended December 31, 2018 in the amount of TL 1.547.141 and TL 10.013.447 are included in operating expenses and cost of sales. Goodwill Positive goodwill at December 31, 2018 and December 31, 2017 is as follows: December 31, 2018 December 31, 2017 Goodwill due to acquisition of CGHH 43.925.159 34.112.091 43.925.159 34.112.091 Goodwill due to acquisition of CGHH Group has won the bid to acquire BAGH shares, which is providing airport ground handling services at Budapest Airport, and participated as a founding partner to Celebi Kft established on September 22, 2006 in order to realize the share transfer. On October 26, 2006, Celebi Kft acquired all of its BAGH shares and the commercial title of BAGH changed to Celebi Ground Handling Hungary Földi Kiszolgáló Korlátolt Felelősségű Társaság (“CGHH”). Celebi Kft merged with CGHH with all assets and liabilities in Hungary on October 31, 2007, within the framework of related legislative provisions, through taking over by CGHH which has 70% share of the Company.