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.) 61 Çelebi Ground Handling Inc. 2019 Annual Report The Company participated as a co-founder in the company with capital of 100.000 Indian Rupee under the title Celebi Delhi Cargo Terminal Management India Private Limited (“Celebi Delhi Cargo”) to carry out activities relating to the development, modernization and 25-year operation of the existing cargo terminal in the airport (“Brownfield”) in New Delhi in India on May 6, 2009 with a shareholding rate of 74%. The paid capital of the Celebi Delhi Cargo is 1.120.000.000 Indian Rupee. As a result of the winning the tender for providing ground handling services at Delhi International Airport for a 10 years period in order to fulfill the requirements to meet the obligations and make the planned investments outlined in the Concession Agreement signed between Celebi GH Delhi and the tender to authority, the Company has made a premium capital increase amounting to 1.380.897.000 Indian Rupee on its subsidiary of Çelebi Ground Handling Delhi Private Limited (“Celebi GH Delhi”), which is established on November 18, 2009 with a shareholding rate of 74%. On May 22, 2017, the Company acquired 25,9% share of Çelebi GH Delhi and reached to an ownership rate of 99,9% and share capital of 23.890.000 Indian Rupee. The Company currently operates ground handling services in New Delhi, Ahmedabad, Cochin and Bangalore Airports in India as part of the ongoing concession agreements. On March 15, 2018, the company’s title was changed to Celebi Airport Services India Private Limited (“CASI”). With the authorization granted on December 9, 2019, CASI will continue to provide ground handling services for an additional 10 years after the end of the existing concession period at Delhi International Airport. Çelebi Kargo Depolama ve Dağıtım Hizmetleri A.Ş. (“Çelebi Kargo”) was established on November 20, 2008 to carry out transportation, cargo storage and distribution activities. Celebi Cargo GmbH (“Celebi Cargo”), the subsidiary of Çelebi Kargo with a 100% ownership, was established on November 2009 and has share capital amounting to EUR 32.100.000, rented storage and warehouse facilities at International Frankfurt Airport Cargo (Frankfurt Cargo City Süd) and carry out flight cargo storage and handling services. On March 25, 2010, the Company participated as a founding partner to the Celebi Ground Handling Spain S.L.U (“Celebi Spain”) with a capital of EUR 10.000 and an ownership rate of 100% as a founding partner for the purpose of entrepreneurship in abroad including European Union. Celebi Spain is a non-operatig company. 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. - Joint venture: The joint venture of the Group accounted using the equity method is as below: Joint Venture Registered Country Geographical region Nature of business Celebi Nas India India Ground handling services In the sequel of winning the tender of rendering ground handling services for a 10 years period in Mumbai Chhatrapati Shivaji International Airport (CSIA) in Mumbai, India by the consortium in which the Company takes part, a joint venture of the Company has been established on December 12, 2008 with the trade name of “Celebi Nas Airport Services India Private Limited (“Celebi Nas”) resident in Maharashtra, Mumbai, India. The Company has particiapated as the founding partner in Çelebi Nas and has 57% shareholding where the share capital of Çelebi Nas is 552.000.000 Indian Rupee. A premium capital increase of 228.000.000 Indian Rupee has been paid by the shareholders of Çelebi Nas in previous years. Although the Company has 57% shareholding, in accordance with the conditions in Articles of Association signed between the Company and the counterpary shareholder, Çelebi Nas is accounted using the equity method and treated as a joint venture. On April 8, 2015, Çelebi Nas has signed a “concession agreement” with Mumbai International Airport Private Limited (“MIAL”), the operator of the CSIA International Airport, for rendering services of air conditioners and generators mounted on passenger boarding bridges in the passenger terminal. With this agreement, Celebi Nas has been granted the concession rights until May, 2036. In addition, the ten (10) year ground handling privilege of Celebi NAS, which has been in place since 2009 to carry out ground handling services at the CSIA international airport, expires in December 2019. Celebi Nas participated in the tender by CSIA international airport operator MIAL for the extension of its concession from January 1, 2020 to December 31, 2029 for 10 (ten) years.