Page 84 - Annual_Report_2016
P. 84
Financial Statements aia.gr
3.2 Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as
a going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, use excess cash to repay its borrowings
(subject to the termination provisions of the respective loan agreements) or sell assets not pledged as
security, to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including
“Current and non-current borrowings” as shown in the statement of financial position) less cash and cash
equivalents and current held-to-maturity financial assets. Total capital is calculated as ‘equity’ as shown in
the statement of financial position plus net debt.
The gearing ratios at 31 December 2016 and 2015 were as follows:
Gearing ratio 2016 2015
Total borrowings 369,271,797 438,626,204
Less: Cash & cash equivalent and current financial assets (373,376,995) (247,327,659)
Net debt (4,105,198) 191,298,545
Total capital – (equity plus net debt) 483,842,886 661,982,578
Gearing ratio -1% 29%
Current held-to-maturity financial assets are also included in the above calculation, as they are an integral part of the Company’s
overall cash management strategy.
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates
will by definition, seldom equal the related actual results. The accounting estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next year are disclosed below.
4.1.1 Taxes
The internal control procedures for the related tax risks are part of Company’s control system. The general
tax risk for the Company concerns the timely submission of complete tax returns, the payment of the tax
amounts concerned as well as compliance with all tax laws and regulations and reporting rules specifically
relating to corporate income tax.
The Company is subject to income tax, VAT and other taxes in Greece. Significant judgment is sometimes
required in determining the Company’s tax position for such taxes in certain instances due to the particular
tax regime, under the Airport Development Agreement, applicable to the Company’s operations, which is
subject to challenge by the tax authorities on the grounds of ambiguity or different interpretation with tax
laws. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether
additional taxes will arise or tax losses reduced. Where that final tax outcome of these matters is different
from the amounts that were initially recorded, such differences will impact the current tax, deferred tax and
other tax assets and liabilities in the period during which such determination is made.
4.1.2 Provision for restoration cost
Provision for restoration cost includes future expenses for the major overhauls of roads, runways, taxiways
and replacement of airfield lighting and baggage handling equipment. Significant estimates are required
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
37 of 57
3.2 Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as
a going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, use excess cash to repay its borrowings
(subject to the termination provisions of the respective loan agreements) or sell assets not pledged as
security, to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including
“Current and non-current borrowings” as shown in the statement of financial position) less cash and cash
equivalents and current held-to-maturity financial assets. Total capital is calculated as ‘equity’ as shown in
the statement of financial position plus net debt.
The gearing ratios at 31 December 2016 and 2015 were as follows:
Gearing ratio 2016 2015
Total borrowings 369,271,797 438,626,204
Less: Cash & cash equivalent and current financial assets (373,376,995) (247,327,659)
Net debt (4,105,198) 191,298,545
Total capital – (equity plus net debt) 483,842,886 661,982,578
Gearing ratio -1% 29%
Current held-to-maturity financial assets are also included in the above calculation, as they are an integral part of the Company’s
overall cash management strategy.
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates
will by definition, seldom equal the related actual results. The accounting estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next year are disclosed below.
4.1.1 Taxes
The internal control procedures for the related tax risks are part of Company’s control system. The general
tax risk for the Company concerns the timely submission of complete tax returns, the payment of the tax
amounts concerned as well as compliance with all tax laws and regulations and reporting rules specifically
relating to corporate income tax.
The Company is subject to income tax, VAT and other taxes in Greece. Significant judgment is sometimes
required in determining the Company’s tax position for such taxes in certain instances due to the particular
tax regime, under the Airport Development Agreement, applicable to the Company’s operations, which is
subject to challenge by the tax authorities on the grounds of ambiguity or different interpretation with tax
laws. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether
additional taxes will arise or tax losses reduced. Where that final tax outcome of these matters is different
from the amounts that were initially recorded, such differences will impact the current tax, deferred tax and
other tax assets and liabilities in the period during which such determination is made.
4.1.2 Provision for restoration cost
Provision for restoration cost includes future expenses for the major overhauls of roads, runways, taxiways
and replacement of airfield lighting and baggage handling equipment. Significant estimates are required
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
37 of 57
