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 60 Çelebi Ground Handling Inc. 2019 Annual Report NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS OF THE GROUP Çelebi Hava Servisi A.Ş. (referred as the “Company” or “Çelebi Hava”) established in 1958 was the first private ground handling service company in the Turkish aviation sector. The Company provides ground handling services (representation, traffic, ramp, cargo, flight operations and aircraft maintenance etc) and fuel supplies to domestic and foreign airlines and private cargo companies. The Company operates in İstanbul Airport, İzmir, Ankara, Adana, Antalya, Dalaman, Bodrum, Çorlu, Bursa Yenişehir, Diyarbakır, Erzurum, Kayseri, Samsun, Trabzon, Van, Malatya, Kars, Mardin, Denizli, Hatay, Kahramanmaraş, Isparta, Erzincan, Çanakkale, Balıkesir Edremit, Iğdır, Kocaeli, Bingöl, Hakkari, Uşak airports, which are under the control of the State Airports Administration (“DHMI”) and Istanbul Sabiha Gokcen airport which is under the control of the Airport Administration and Aviation Industries A.Ş. (“HEAS”). The company is controlled by Çelebi Havacılık Holding Anonim Şirketi, the parent company which is jointly controlled by Çelebioğlu Family and Zeus Aviation Services Investments B.V.. The company is registered in Capital Markets Board (“CMB”) and has been listed in Borsa Istanbul (“BIST”) since November 18, 1996. As of December 31, 2019, the Company’s free float rate is 10,09% (December 31, 2018: 12,61%). The address of the Company is as follows: Tayakadın Mahallesi Nuri Demirağ Caddesi No:39 Aranvutköy/İstanbul The Group consists of the Company and its subsidiaries, joint ventures and associate. The average number of employees employed by the Group for the year ended December 31, 2019 is 13.475 (December 31, 2018: 13.031). Information on Subsidiaries, Joint Ventures, and Associate: The nature of the business, their respective geographical segments, and the registered country of the subsidiaries, joint venture and associate of the Group are as follows. - Subsidiaries of the Group are as below: Subsidiary Registered Country Geographical region Nature of business CGHH Hungary Hungary Ground handling services Celebi Delhi Cargo India India Warehouse and cargo services CASI India India Ground handling services Çelebi Kargo Turkey Turkey Warehouse and cargo services Celebi Cargo Germany Germany Warehouse and cargo services Celebi Spain (*) Spain Spain Ground handling services Celebi Tanzania (*) Tanzanian Tanzanian Ground handling services Celebi GH India Private Limited (*) India India Ground handling services KSU (**) India India Ground handling services (*) Celebi Spain, Celebi GH India Private Limited ve Celebi Tanzania have no operational activity as of December 31, 2019 and they are inactive. (**) The company signed a partnership agreements with Mr. Ashwani Khanna and Ms. Zaheda Khanna to become a 50% partner in KSU Aviation Pvt Ltd (“KSU”), a company established in India on May 8, 2019, to provide “taxiing” services to aircrafts in India. For this purpose, a capital payment of 320 million Indian Rupees (approximately EUR 4,25 million) is made by the Company on May 20, 2019. The Company won the tender offer on acquisition of Budapest Airport Handling Kereskedelmi es Szolgaltato Korlatolt Felelössegü Tarsasag (“BAGH”) which provides ground handling service in Budapest Airport, and participated in the Celebi Tanacsado Korlatolt Felelossegu Tarsasag” (“Celebi Kft”) that was founded on September 22, 2006 as founding shareholder for the realization of the above mentioned share transfer. Celebi Kft acquired all the shares of BAGH on October 26, 2006 and the trade name of BAGH has been changed to Celebi Ground Handling Hungary Foldi Kiszolgalo Korlatolt Felelossegu Tarsasag (“CGHH”). Celebi Kft was been taken over by CGHH with all assets and liabilities and merger transactions have been completed at October 31, 2007 in accordance with the legal framework effective in Hungary. Since Celebi Kft owned 100% of CGHH shares before the merger, the Company’s share has remained 70% in CGHH share capital. At 2011, shares representing 30% of CGHH were purchased from Çelebi Havacılık Holding Anonim Şirketi for a consideration of TL 33.712.020. As of December 31, 2019, total paid in capital of CGHH is 200.000.000 Hungarian forint.