CELEBİ 2021 ANNUAL REPORT

128 Çelebi Ground Handling Inc. 2022 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022 ÇELEBİ HAVA SERVİSİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) NOTE 32 - NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS Financial risk management The Group focused to manage miscellaneous financial risks including changes in foreign currency exchange rates and interest rates because of activities of the Group. The Group purposes to minimize potential adverse effects arising from fluctuations in financial markets with overall risk management program. Risk management is carried out under policies approved by the Boards of Directors. Interest rate risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. These exposures are managed using natural hedges that arise from offsetting interest rate sensitive assets and liabilities. Interest rate positions of the Group as of 31 December 2022 and 2021 are as follows: 31 December 2022 31 December 2021 Fixed interest rate financial instruments Financial Assets 1.312.565.502 758.744.245 - Cash and cash equivalents 1.312.565.502 758.744.245 Financial Liabilities 2.604.347.369 2.407.738.052 Floating interest rate financial instruments Financial Liabilities 405.043.722 332.938.754 If other variables are kept constant and the interest rates were 1% higher/lower, interest expense due to financial liabilities would have been TL 1.074.096 higher or lower for the period ended 31 December 2022 (2021: TL 921.227). Expected repricing and maturity dates are not disclosed in an additional table because they are not different from contractual maturity dates for non-credit financial assets and liabilities. Credit risk Credit risk consists of cash and cash equivalents, bank deposits and receivables from customers exposed to credit risk. Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their agreements. The Group management meets these risks by restricting the average risk for each counterparty (excluding related parties) and receiving collateral if necessary. Explanations for credit risk are disclosed in Note 8. Liquidity risk Cash flow generated through amount and term of borrowing back payments is managed by considering the amount of unreserved cash flow from its operations. Hence, on one hand it is possible to pay debts with the cash generated from operating activities if necessary and on the other hand sufficient and reliable sources of high-quality loans are accessible. The Group has long-term financial liabilities with maturity more than one year amounting to TL 1.999.554.338 as at 31 December 2022 (31 December 2021: TL 1.697.489.920) (Note 7).