ÇELEBİ AR19-270720 (1)

20 Çelebi Ground Handling Inc. 2019 Annual Report On 25 March 2010, the Company participated as the founding partner with 100% stake in the capital of the company set up with the company name Celebi Ground Handling Europe SL (“Celebi Europe”) with a capital of EUR 10,000 in Madrid, Spain, for the purpose of undertaking an overseas venture in the EU countries. Currently, Celebi Spain is not operational. Çelebi Cargo is engaged in air cargo storage and handling at the storage/warehouse facility in Frankfurt Cargo City Süd located in Frankfurt International Airport. Çelebi Cargo rented the facility from Celebi Cargo GmbH (“Celebi Cargo”). Residing in Frankfurt, Germany, Celebi Cargo GmbH is a wholly owned subsidiary of the Company founded in November 2009, and has a paid-in capital of EUR 32,100,000. The capital of Celebi Cargo is TL 114,000,000 as of 31 December 2019, which is fully paid-in. On 8 May 2019, the Company signed a shareholding agreement with Mr. Ashwani Khanna and Ms. Zaheda Khanna, the founders and owners of the entirety of the shares in the capital of the India-based KSU Aviation Private Limited (“KSU”), incorporated for providing “taxiing” service to aircraft in the airports in India, for becoming a 50% shareholder in KSU by participating in the capital increase to be carried out for this company. For this purpose, the Company made a capital payment of INR 320 million (approximately equivalent to EUR 4.25 million) on 20 May 2019. 9. INFORMATION ABOUT FINANCIAL STATEMENTS AND REPORTS The summary consolidated financial statements of the Group are issued in compliance with the Capital Markets Board of Turkey (CMB) Communiqué Serial: II, No: 14.1 on Principles of Financial Reporting in the Capital Markets, which is published in the Official Gazette no. 28676 and dated 13 June 2013. In accordance with Article 5 of the communiqué, the Turkish Accounting Standards/Turkish Financial Reporting Standards (TAS/TFRS) released by the Public Oversight Accounting and Auditing Standards Authority (KGK) and the related annexes and comments were taken as a basis in the publication of the consolidated financial statements. By a decision it has adopted on 17 March 2005, the CMB announced that publicly-floated companies operating in Turkey are not obliged to implement inflation accounting effective 1 January 2005. The Company prepared its consolidated financial statements in accordance with this decision. When keeping their accounting records and preparing their mandatory financial statements, the Group and the Group companies located in Turkey conform to the principles and conditions set forth by KGK, as well as the Turkish Commercial Code (TCC), tax legislation, and the requirements of the Uniform Chart of Accounts issued by the Republic of Turkey Ministry of Finance (Ministry of Finance). The accounting records and financial statements of the subsidiaries, joint venture and associate operating in foreign countries, on the other hand, have been drawn up in accordance with the laws and regulations applicable in the countries where they are active. Consolidated financial statements for the interim periods are based on the statutory records of the Company, its subsidiaries, JV and associate, and have been issued to incorporate the required adjustments and reclassifications for the purpose of fair presentation pursuant to the Turkish Financial Reporting Standards. Assets and liabilities of consolidated foreign partnerships have been translated into Turkish lira using the exchange rate on the date of the consolidated financial condition statement, whereas income and expenses have been translated using the average exchange rate. Exchange differences resulting from the closing and the use of average exchange rate are followed up under the FC translation differences account under shareholders’ equity. These consolidated financial statements drawn up in accordance with the Turkish Financial Reporting Standards have been issued in Turkish lira on the basis of historic cost principle, apart from the valuations resulting from the differences between the financial assets and liabilities shown at their fair values and book value versus fair value of fixed assets that arise during business combinations. The Companies Incorporated into Consolidation The Company’s consolidated financial statements for the period ending 31 December 2019 include the results of the Company, Celebi Nas, CGHH, Çelebi Security in Liquidation, Celebi Delhi Cargo, CASI, Çelebi Cargo, DASPL, Celebi Cargo GmbH and KSU, which are jointly referred to as the “Group”. 10. DONATIONS In the year ending 31 December 2019, the Group’s donations and grants to various foundations, associations, chambers, public institutions and organizations amounted to TL 3,321,322. Out of this donation amount, the portion of TL 2,925,000 BOARD OF DIRECTORS - 2019 ANNUAL REPORT