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 82 Çelebi Ground Handling Inc. 2019 Annual Report Preparation of consolidated financial statements in accordance with TAS requires the management to make decisions, estimations and assumptions affecting the implementation of policies and amounts of assets, liabilities, income and expense which are reported. Actual results may differ from those estimates. Estimations and assumptions forming a basis for estimations are continuously reviewed. Updates made in accounting estimates are recorded in the period of update and following periods affected from the aforementioned updates. Information on significant decisions applied to accounting policies which have the most significant impact on amounts recorded in consolidated financial statements is explained in the following notes: Note 2.5 (f) - Application of profit margin to construction costs made in scope of TFRIC 12 “Service Concession Arrangements” Information on estimates having significant impact on amounts recorded in consolidated financial statements is explained in the notes below: Note 11 - Property, plant and equipment Note 12 - Right-of-use assets Note 13 - Intangible assets Note 14 - Employee benefit obligations Note 29 - Tax assets and liabilities Note 31 - Related party disclosures NOTE 3 - SEGMENT REPORTING Management has determined the operating segments based on the reports reviewed by the Company’s senior management and effective in making strategic decisions. Management evaluates the Group in two different ways: geographical and operating segments. Management analyzes The Group’s performance according to their departments; Ground Handling Services, Security Services and Cargo and Warehouse Services. Since the Group’s revenues consist primarily of these operating segments, Ground Handling, Cargo and Warehouse Services are evaluated as reportable operating segments. Management follows the operating segments performance as (“EBITDA”) after deduction of Operating lease equalization, effect of TFRIC 12, currenct year part of prepaid allocation cost expense, Retirement pay liability and unused vacation provisions from earnings before interest, tax, depreciation and amortization