ÇELEBİ AR19-270720 (1)

18 Çelebi Ground Handling Inc. 2019 Annual Report Our subsidiary, Çelebi Airport Services India Private Limited (formerly known as Çelebi Ground Handling Delhi Private Limited), which started to provide services at the Indira Gandhi International Airport in Delhi, India from June 2010, served 28,452 flights at the Delhi, Ahmedabad an Kochin airports in the January-December 2018 period. In addition, with the initiation of services at the Bangalore and Hyderabat stations in the January-December 2019 period, it provided services to 43,886 flights, marking a 54% increase when compared to the previous year. Services have been provided at the Kochin station since 8 January 2018, at the Bangalore station since 18 September 2018, and at the Hyderabat station since 1 April 2019. Our Celebi Delhi Cargo Terminal Management India Pvt. Ltd subsidiary has been providing cargo warehousing and handling services in 77,000 m 2 of space at Delhi International Indira Gandhi Airport since November 2009. While the company had handled 522,992 tons of cargo in 2018, the same went down by 12.5% to 457,732 tons in 2019. Celebi NAS, another subsidiary that began services at Chhatrapati Shivaji International Airport in Mumbai (Bombay) in July 2009, serviced 23,743 flights during 2018 and 28,887 flights during 2019 with an increase of 22% year-on-year. Çelebi Ground Handling’s first international subsidiary, Celebi Ground Handling Hungary served a total of 28,000 flights in 2019, up 13% as compared with 24,684 flights serviced in 2018. The main reason behind this rise is the increased number of flights by Ryanair. Celebi Ground Handling Hungary started cargo handling operations in January 2011 in its new warehouse located outside the airport. While the company had provided service for a total of 79,863 tons during 2018, the same declined by 10% to 72,029 tons in 2019. The decline in the cargo quantity was driven mainly by the tonnage decrease in general throughout Europe. Celebi Cargo GmbH entered operation in 2011 to offer air cargo storage and handling services in its storage facilities at the International Frankfurt Airport’s “Cargo City Süd”. Having handled 144,295 tons of cargo in 2018, that figure went down by 2% to 141,501 tons in 2019. The Group’s consolidated gross profit as of the end of the fourth quarter of 2019 was up by 18.85% to TL 543,272,694 (2018: TL 457,100,932). As of the end of the fourth quarter of 2019, the Company posted an operating profit of TL 295,423,078 (2018 operating profit: TL 275,930,515). As of the end of the fourth quarter of 2019, the total amount set aside for legal and compensation provisions of our Company was TL 6,782,526 (31 December 2018: TL 5,942,066). There was no legal action or demands for compensation against the Company during the period which would significantly affect the Company’s financial status or activities. 7. DEVELOPMENTS IN INVESTMENTS; INVESTMENT INCENTIVES USED Tangible fixed asset investments realized by the Group during the year ended on 31 December 2019 amounted to TL 175,742,802 (31 December 2018: TL 204,586,286). 37% of this amount consisted of investments in machinery, equipment and appliances, 45% in investments in progress, 8% in in investments vehicles, 5% in investments in leasehold improvements, and 5% in investments in fixtures. Total consolidated investment outlays of the Group in tangible and intangible assets as of 31 December 2019 were worth TL 190,877,547. (2018: TL 226,921,893). Our Company holds the Large Scale Investments incentive certificate obtained from the Ministry of the Economy, the General Directorate of Incentive Implementation and Foreign Investment based on the buildings, facilities, machinery and equipment investments that our Company undertook at the Istanbul Airport. The total amount of investment undertaken by our Company under this incentive certificate until 31 December 2019 stood at TL 225,865,494. 8. DIRECT OR INDIRECT ASSOCIATES OF THE COMPANY AND INFORMATION ON SHAREHOLDING THEREIN 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”). BOARD OF DIRECTORS - 2019 ANNUAL REPORT