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.) 80 Çelebi Ground Handling Inc. 2021 Annual Report Preparation of the consolidated financial statements in accordance with TFRS requires the management to make decisions, estimations and assumptions affecting the implementation of policies and amounts of assets, liabilities, income and expense which are reported. Actual results may differ from those estimates. Estimations and assumptions forming a basis for estimations are continuously reviewed. Updates made in accounting estimates are recorded in the period of update and following periods affected from the aforementioned updates. Information on significant decisions applied to accounting policies which have the most significant impact on amounts recorded in consolidated financial statements is explained in the following notes: Note 2.5 (f) - Application of profit margin to construction costs made in scope of TFRIC 12 “Service Concession Arrangements” Information on estimates having significant impact on amounts recorded in consolidated financial statements is explained in the notes below: Note 11 - Property, plant and equipment Note 12 - Right-of-use assets Note 13 - Intangible assets Note 14 - Provision for employee benefits Note 29 - Tax assets and liabilities Note 31 - Related party disclosures NOTE 3 - SEGMENT REPORTING Management has determined the operating segments based on the reports reviewed by the Company’s senior management and effective in making strategic decisions. Management evaluates the Group’s performance as operating segments, and Ground handling services and Cargo and Warehouse services are evaluated according to their activity segments. The management monitors the performance of the operating segments with the profit before interest tax and depreciation (“EBITDA”), which is the amount after deducting the expense equalization amount, the effect of TFRIC 12, severance pay and leave provisions, which do not create a cash movement related to operational leases from the profit before interest tax and depreciation. The operational segment information provided to the board of directors as of 31 December 2021 and 2020 is as follows: Operation Groups 1 January - 31 December 2021 Ground Handling Cargo and Warehouse Services Consolidation Adjustments Consolidated Revenue 1.357.651.028 1.216.065.914 (13.528.107) 2.560.188.835 Cost of sales (911.136.650) (824.822.022) 7.639.312 (1.728.319.360) Gross profit 446.514.378 391.243.892 (5.888.795) 831.869.475 General administrative expenses (207.015.461) (78.712.535) 7.526.541 (278.201.455) Addition: Depreciation and amortization 127.634.504 78.417.534 - 206.052.038 Addition: TFRIC -12 effect shares - 12.647.486 - 12.647.486 Addition: Provision for employment termination benefit and unused vacation 20.747.420 8.382.575 - 29.129.995 EBITDA effect of investments accounted by using equity method 11.746.974 - - 11.746.974 EBITDA 399.627.815 411.978.952 1.637.746 813.244.513 Lease expenses under TFRS 16 (71.579.125) (23.351.867) - (94.930.992) EBITDA (Except for TFRS 16) 328.048.690 388.627.085 1.637.746 718.313.521