ÇHS AR21-ENG-030622

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 ÇELEBİ HAVA SERVİSİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) 62 Çelebi Ground Handling Inc. 2021 Annual Report Covid-19 Effects Due to the crisis and pandemic situation caused by the worldwide effective Covid-19 virus, although measures were taken by governments, borders were opened in certain regions in the following months in June-December period and flights started. In addition, the operating unit of Warehouse and Cargo Services was much less affected by the pandemic process and provided services in their normal activities under changing conditions. The Group Management has stopped all non-urgent expenditures, postponed investments and directed employees to paid and unpaid leave since March 2020. In order to reduce fixed costs, the supports provided by the governments of the countries in which the Group operates were evaluated, necessary applications were made and various supports were used. In addition, waiver, discount or postponement of license and lease payments was provided with airport operators and country aviation authorities. The Group Management closely monitors cash flow in order to maintain the strength of its liquidity position. As of 31 December 2021, with the increase in the vaccination rate against Covid-19 in Turkey and in the world, an increase in travel demand has been observed, and this development has positively affected the aviation industry. While preparing the consolidated financial statements as at 31 December 2021, the Group evaluated the possible effects of the Covid-19 outbreak on the financial statements and reviewed the estimates and assumptions used in the preparation of the consolidated financial statements. In this context, possible impairment losses in the consolidated financial statements as at 31 December 2021 were evaluated and no significant impact was detected. NOTE 2 - BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS 2.1. Basis of Presentation 2.1.1 Accounting standards applied The Group’s consolidated financial statements have been prepared in accordance with the communiqué numbered II-14.1 “Communiqué on the Principles of Financial Reporting In Capital Markets” (“the Communiqué”) announced by the Capital Markets Board (“CMB”) on 13 June 2013, which is published on Official Gazette numbered 28676, and according to Article 5 of the Communiqué, financial statements are prepared in accordance with the Turkish Accounting Standards / Turkish Financial Reporting Standards (“TAS/TFRS”) issued by Public Oversight Accounting and Auditing Standards Authority (“POA”) and appendix and interpretations related to them. In addition, the financial statements are presented in accordance with the formats determined in the “Announcement on TFRS Taxonomy” published by the POA on 15 April 2019 and the Financial Statement Examples and User Guide published by the CMB. The Company and the Group companies registered in Turkey maintain their books of account and prepare their statutory financial statements in accordance with the principles and standards issued by POA, Turkish Commercial Code (“TCC”), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance of Turkey (“Ministry of Finance”). Foreign subsidiaries, joint venture and associate maintain their books of account in accordance with the laws and regulations in force in the countries in which they are registered. The consolidated financial statements are based on the legal records of the Company, its subsidiaries, joint ventures and associates, and have been prepared in accordance with Turkish Financial Reporting Standards, reflecting the necessary adjustments and classifications for accurate presentation. Assets and liabilities of the joint ventures within the scope of consolidation are translated into Turkish Lira using the exchange rate, income and expenses are translated by using the average exchange rate on the date of the consolidated statement of financial position. Exchange differences resulting from the use of closing and average exchange rates are followed under the foreign currency translation differences account in shareholders’ equity. These consolidated financial statements which have been prepared in accordance with Turkish Financial Reporting Standards, have been prepared in TL and under the historical cost conversion except for the financial assets and liabilities presented at fair values, and the revaluations related to the differences between the carrying value and fair value of the non-current assets recognized in business combinations.