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 Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) 119 Çelebi Ground Handling Inc. 2019 Annual Report The net debt/(equity + net debt) ratio as of December 31, 2019 and 2018 is as follows December 31, 2019 December 31, 2018 Total financial liabilities (*) 1.260.961.494 721.814.428 Less: Cash and cash equivalents (209.130.875) (197.023.791) Less: Restricted cash (57.747.115) (51.444.157) Net debt 994.083.504 473.346.480 Net debt (Except for the impact of new and revised accounting policies) (*) 535.336.665 473.346.480 Shareholder’s equity 575.945.325 353.087.514 Capital invested 1.570.028.829 826.433.994 Net debt/capital invested 0,63 0,57 (*) As of December 31, 2019, TL 458.746.839 of the net debt consists of the lease amounts discounted in accordance with TFRS 16. NOTE 33 - FINANCIAL INSTRUMENTS Fair value of financial instruments The fair value is defined as the price received from an asset sale or paid at a payback period that will be earned between a market participants in a transaction at a measurement date. The estimated fair values of financial instruments have been determined by the Group, using available market information and appropriate valuation methodologies. However, judgment is necessarily required to interpret market data to estimate the fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Group could realize in a current market exchange. The following methods and assumptions are used to estimate the fair value of the financial instruments: Financial assets It is projected that the carrying values of financial assets, which are presented at their cost value including cash and cash equivalents, are equal to their fair value due to their short term nature. The carrying values of trade receivables are estimated to reflect the fair value with related impairment. Financial liabilities Short-term bank loans and other monetary liabilities are foreseen to approximate their carrying values due to their short-term nature and the significant portion of long-term bank loans and other monetary liabilities having variable interest rates. Group classifies the fair value measurements of financial instruments at fair value on the financial statements into the following categories, using three levels of hierarchy, according to the sources of each class of financial instruments. - Level 1: Valuation techniques using market prices (unadjusted) in the active market for the identified financial instruments. - Level 2: Other valuation techniques, including indirect or direct observable input. The fair value of financial assets that are not traded in an active market is calculated using the observations on the market at the highest level that can be used and the assumptions at the lowest level for the company. - Level 3: Valuation techniques that do not include observable market inputs.