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.) 97 Çelebi Ground Handling Inc. 2019 Annual Report Goodwill Impairment Test The Group tests goodwill at least once a year for the risk of impairment. A valuation report prepared by an independent valuation firm is based on for ordinary goodwill impairment test. December 31, 2019 Ground handling services - Hungary 47.009.266 The recoverable value of the aforementioned cash generating unit, has been determined by taking the usage calculations as a basis. For the purposes of carrying out impairment tests, detailed forecasts for the next 7 years have been used which are based on approved annual budgets and strategic projections of the management representing the best estimate of future performance. Growth rate used in the projections to be realized after 7 years ensured to be 1%. The fair value of Euro amount is calculated in terms of Hungarian Forint which converted with the exchange rates at the balance sheet date. Therefore, the said fair value model is affected by the fluctuations in the foreign exchange market. Other important assumptions in the fair value calculation model are as follows; Discount Rate 9% The Group management determined the budgeted gross profit margin by taking into consideration the previous performance of the Company and the market growth expectations. The weighted average growth rates used are in line with the estimation stated in industry reports. The discount rate used is the before tax discount rate and includes the Company specific risk factors. December 31, 2019 Ground handling services - KSU 13.923.000 As a result of the initial temporary purchase accounting, TL 13.923.000 is recorded as goodwill in the consolidated financial statements as of December 31, 2019. NOTE 14 - PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES a) Short term provisions Other short-term provisions December 31, 2019 December 31, 2018 Provision for litigation and indemnity 6.782.526 5.942.066 6.782.526 5.942.066 Movements of other short term provisions for the periods ended December 31, 2019 is as follows: 2019 2018 January 1, 2019 5.942.066 5.173.420 Addition during the year 2.594.771 863.124 Payments during the year (394.799) (242.504) Currency translation differences 127.853 407.547 Provision reversal (1.487.365) (259.521) December 31, 2019 6.782.526 5.942.066