ÇHS AR21-ENG-030622

19 Çelebi Ground Handling Inc. 2021 Annual Report Çelebi Ground Handling’s first international subsidiary, Celebi Ground Handling Hungary served a total of 17,614 flights in January-December 2021 period, as compared with 13,204 flights serviced in 2020. Celebi Ground Handling Hungary started cargo handling operations in January 2011 in its new warehouse located outside the airport. While the company had provided service for a total of 67,503 tons during 2020, the same registered as 67,148 tons in January-December 2021 period. Celebi Cargo GmbH entered operation in 2011 to offer air cargo storage and handling services in its storage facilities at the International Frankfurt Airport’s “Cargo City Süd”. Having handled 141,433 tons of cargo in 2020, that figure went up to 184,893 tons in January-December 2021 period. The Group’s consolidated gross profit as of the end of 2021 was up by 113.4% to TL 831,869,475 (2020: TL 389,861,407). As of the end of 2021, the Company posted an operating profit of TL 525,755,696 (2020 operating profit: TL 205,735,543). As of the end of 2021, the total amount set aside for legal and compensation provisions of our Company was TL 9,047,150 (31 December 2020: TL 8,094,479). There was no legal action or demands for compensation against the Company during the period which would significantly affect the Company’s financial status or activities. 7. DEVELOPMENTS IN INVESTMENTS; INVESTMENT INCENTIVES USED Tangible fixed asset investments realized by the Group during the year ended on 31 December 2021 amounted to TL 86,876,891 (31 December 2020: TL 49,567,215). 45.9% of these investments consisted of investments in progress, 37.1% of investments in machinery, equipment and appliances, 8.3% in investments in vehicles, 5.7% in investments in leasehold improvements, and 3% in investments in fixtures. Total consolidated investment outlays of the Group in tangible and intangible assets as of 31 December 2021 were worth TL 90,471,984. (2020: TL 72,868,016). Our Company holds the Large Scale Investments incentive certificate obtained from the Ministry of the Trade, the General Directorate of Incentive Implementation and Foreign Investment based on the buildings, facilities, machinery and equipment investments that our Company undertook at the Istanbul Airport. The total amount of investment undertaken by our Company under this incentive certificate until 31 December 2021 stood at TL 227,981,615. 8. DIRECT OR INDIRECT ASSOCIATES OF THE COMPANY AND INFORMATION ON SHAREHOLDING THEREIN In 2006, the Company has acquired the shares in Budapest Airport Handling, a company which has been providing ground handling service at Budapest Airport, and the company’s name was changed to Celebi Ground Handling Hungary (“CGHH”). As at 31 December 2021, the paid in capital of CGHH is HUF 200,000,000, while the Company holds 100% of the shares. As a result of the tender put out for the performance of ground handling services for a period of 10 years at the Mumbai Chhatrapati Shivaji International Airport in India, which has been contracted out to a consortium that also included the Company, a company with the name “Celebi Nas Airport Services India Private Limited (“Celebi Nas”) and based in the Maharashtra state in Mumbai has been incorporated on 12 December 2008 to provide ground handling services at the said airport. Celebi Nas has a capital of INR 100,000,000, in which the Company controls 57% stake as a founding partner. The paid-in capital of Celebi Nas is INR 552,000,000. Besides, INR 228,000,000 has been paid as advance capital by the shareholders in Celebi Nas. Celebi Nas has been granted the concession rights concerning the rendering of services regarding air conditioners and generators mounted on passenger boarding bridges in the passenger terminal of that airport until May 2036. As per the concession contract between Celebi Nas and the tender authority MIAL, Celebi Nas will continue to provide ground handling services for a period of 10 (ten) years from 1 January 2020 to 31 December 2029 following the expiry of the current concession period on 31 December 2019 at the CSIA airport in Mumbai, India. The additional protocol that concerns Celebi Nas and that came into force upon its registration on 8 February 2021 made various modifications to the “Reserve Matters” articles. These modifications created changes in favor of the Company in the Company’s controlling power in connection with its possessing a power on the company/asset that is being invested in, its being open or entitled to variable returns to be derived on the company/asset being invested in, and its capability to exercise its power so as to have impact on these returns. In this framework, Celebi Nas started to be consolidated in 2021 using the full consolidation method from the date control was handed over to the Company.