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.) 65 Çelebi Ground Handling Inc. 2019 Annual Report Finance leases The main differences between TFRS 16 and TAS 17 with respect to assets formerly held under a finance lease is the measurement of the residual value guarantees provided by the lessee to the lessor. TFRS 16 requires that the Group recognises as part of its lease liability only the amount expected to be payable under a residual value guarantee, rather than the maximum amount guaranteed as required by TAS 17. Impact on Lessor Accounting Under TFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. However, TFRS 16 has changed and expanded the disclosures required, in particular regarding how a lessor manages the risks arising from its residual interest in leased assets. a) Effect of transition During the transition to TFRS 16, the effect of transition on additional right of use assets including the Group additional lease liabilities is summarized below. January 1, 2019 Right of use assets 468.722.568 Right of use assets (previously classified as financial leasing in accordance with TAS 17) 13.860.864 Total right of use assets 482.583.432 January 1, 2019 Lease obligation 468.722.568 Lease obligation (previously classified as financial leasing in accordance with TAS 17) 215.965 Total lease obligations 468.938.533 In measuring the lease payables, the Group discounted lease payments by using the alternative borrowing rate as of January 1, 2019. The weighted average rate applied is 28% for lease contracts in Turkish Lira, 3,50% for lease contracts in Euros, 1,9% for lease contracts in Hungarian Forint, and 9,16%-11,87% for lease contracts in Indian Rupee. The amortization period for the right of use assets varies between 3 and 25 years.