ÇELEBİ AR19-270720 (1)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2019 ÇELEBİ HAVA SERVİSİ ANONİM ŞİRKETİ (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish 98 Çelebi Ground Handling Inc. 2019 Annual Report Short-term provision for employee benefits December 31, 2019 December 31, 2018 Provision for employee termination benefits (*) 9.056.853 5.961.921 Provision for unused vacation rights 7.939.669 6.512.563 16.996.522 12.474.484 (*) Consists of employee termination benefits of the outsourced employees of CASI, Celebi Delhi Cargo and Çelebi Cargo, the subsidiaries of the Group. b) Long-term provisions Long-term provision for employee benefits December 31, 2019 December 31, 2018 Provision for employee termination benefits 28.354.292 27.467.482 28.354.292 22.006.598 Provision for employment termination benefits is recorded based on the explanations below. The Group does not have any other defined benefit plans except for the legally mandatory one explained below. The provision has been calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of employees. Under the Turkish Labour Law, the Group is required to pay termination benefits to each employee who has completed one year of service, who achieves the retirement age (58 for women and 60 for men), who has charged 25 years of services (20 years for women) and whose employment is terminated without due cause, is called up for military service or who dies. Since the legislation was changed on May 23, 2002, there are certain transitional provisions relating to length of service prior to retirement. The amount payable as at December 31, 2019 consists of one month’s salary limited to a maximum of TL 6.379,86 (December 31, 2018: TL 5.434,42) for each year of service. The liability is not funded, as there is no funding requirement. In accordance with local regulations in India, the Group is required to make employee termination benefit payments to each employee in its subsidiaries, joint ventures and associate, who has completed five year of service, who is called up for military service, who achieves the retirement age, who early retires, or who dies. . TAS/TFRS require actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined benefit plans. The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Group calculates the reserve for employment termination benefits every six months the maximum amount of TL 6.730,15 which is effective from January 1, 2020 (January 1, 2019: TL 6.017,60) has been taken into consideration in the calculations. 2019 2018 As of January 1 33.429.403 25.968.784 Payments of provisions during the year (18.569.486) (10.497.227) Service cost of employee termination benefits 18.081.261 6.859.839 Interest cost of employee termination benefits 3.199.608 2.190.014 Actuarial (gain)/loss (148.054) 6.698.169 Currency translation differences 1.418.413 2.209.824 As of period end 37.411.145 33.429.403