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 96 Çelebi Ground Handling Inc. 2019 Annual Report Movements in other intangible assets for the period ended December 31, 2018 are as follows: Opening January 1, 2018 Additions Transfers Currency Translation Differences Closing December 31, 2018 Cost Rights 10.150.600 - - - 10.150.600 Software 16.914.994 3.352.299 200.599 2.003.890 22.471.782 Concession rights (**) 138.195.764 4.819.989 - 38.223.885 181.239.638 Build-operate-transfer investments (*) 96.831.439 14.163.319 - 29.631.436 140.626.194 262.092.797 22.335.607 200.599 69.859.211 354.488.214 Accumulated depreciation Rights (3.639.336) (594.424) - - (4.233.760) Software (13.069.233) (1.816.471) (39.489) (1.767.860) (16.693.053) Concession rights (**) (39.408.272) (9.827.000) - (11.500.842) (60.736.114) Build-operate-transfer investments (*) (36.174.189) (7.147.106) - (10.395.330) (53.716.625) (92.291.030) (19.385.001) (39.489) (23.664.032) (135.379.552) Net book value 169.801.767 219.108.662 (*) The difference amounting to TL 82.094.114 between the discounted value of the deposit payment made amounting to INR 1.691.135.907 which is discounted with a discount rate of 11,46%, within the scope of the concession agreement signed for the development, modernization and the operation for 25 years of the existing cargo terminal of the New Delhi Airport, India is recognised as build-operate-transfer investment and will be amortised during the concession period of 25 years. In addition, the difference amounting to TL 4.815.455 between the discounted value of the deposit payment made amounting to INR 532.220.000 which is discounted with a discount rate of - 6,25% - 10,82%, within the scope of the concession agreement signed for rendering ground handling services for 10 years in New Delhi Airport, India and 5+2 years in Cochin and Kannur Airport and 10 years in Bangalore Airport is recognised as build-operate-transfer investment and will be amortised during the concession period of 10 years. (**) Refers to fixed asset expenditures made within within the scope of the concession agreement signed between DIAL Celebi Delhi Cargo and are recognized in accordance with TFRIC 12 and TFRIC 4. As of December 31, 2018, there are financial lease assets in the concession rights with the net book value of TL 9.500.958. Amortization expense for the period ended December 31, 2018 in the amount of TL 1.627.902 and TL 17.757.099 are included in operating expenses and cost of sales respectively. Goodwill Goodwill at December 31, 2019 and December 31, 2018 is as follows: December 31, 2019 December 31, 2018 Goodwill due to acquisition of CGHH 47.009.266 43.925.159 Goodwill due to acquisition of KSU (*) 13.923.000 - 60.932.266 43.925.159 (*) 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 is made by the Company on May 20, 2019 and the Company has control power on KSU. As a result of the provisional purchase price allocation, TL 13.923.000 is recorded as goodwill in the consolidated financial statements. Goodwill at December 31, 2019 is as follows: December 31, 2019 December 31, 2018 As of January 1 43.925.159 34.112.091 Goodwill due to acquisition of KSU 13.923.000 - Foreign currency translation differences 3.084.107 9.813.068 Goodwill 60.932.266 43.925.159