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 78 Çelebi Ground Handling Inc. 2019 Annual Report 2.4.16 Related Parties Related party is the person or entity related to Company which is preparing financial statements (“reporting Company). (Note 31) a) A person or a close member of that person’s family is related to a reporting entity: If that person; i) has control or joint control over the reporting entity; ii) has significant influence over the reporting entity; or iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. b) An entity is related to a reporting entity if any of the following conditions applies: i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). iii) Both entities are joint ventures of the same third party. iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. vi) The entity is controlled or jointly controlled by a person identified in (a). vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). 2.4.17 Segment Reporting The operating segments are evaluated in parallel to the internal reporting and strategic sections presented to the organs or persons authorized to make decisions regarding the activities of the Group. The organs and persons authorized to make strategic decisions regarding the Group’s activities with respect to the resources to be allocated to these sections and their evaluation are defined as the Group’s senior managers of the Group. The Group’s senior managers follow up the Group’s activities on activity basis as ground handling services and cargo and warehouse services. 2.4.18 Taxes on Income Current tax expense and deferred tax Tax expense includes current tax expense and deferred tax expense. The tax is included in the income statement, provided that it is not directly related to an operation accounted under equity. Otherwise, the tax is accounted under equity as well as the related transaction. Current tax expense is calculated by taking into account the tax laws applicable in the countries where the Group’s subsidiaries and investments accounted by using the equity method are active as of the date of statement of financial position. Income tax The Company and its subsidiaries established in Turkey and other countries in the scope of consolidation, associates, and joint ventures are subject to the tax legislation and practices in force in the countries they are operating.