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ANNUAL REPORT 2010
The art of service...
TAV Airports employees whose photographs are
featured in the Annual Report 2010
Özlem Akşahin Tav Istanbul,
Executive Assistant
Suna Gürer Tav Security,
Human Resources Supervisor
Tahsin Atalar Tav Istanbul,
BHS Maintenance Technician
Yasemin Enç Tav Airports,
Executive Assistant
Özlem Gümüş
Havaş, Passenger Services Officer
Mustafa Yolasığmaz
Tgs, Ramp Worker
Baiba Urtane North Hub Services (NHS),
Business Lounge Executive
Neriman Aslan
AtÜ, Product Representative
Öner Erdoğan
Bta, Waiter
Yunus Özcan TAV Operations Services,
Passport Card Operation Officer
Nilhan Kolay TAV Operations Services,
CIP Officer
Seda Osten TAV Operations Services,
Commercial Affairs Assistant Specialist
Seyhan Kahraman
Tav Security, Security Guard
Semra Hacı
Tav Security, Security Guard
A human being enriched with art is a refined, crystal clear
individual.
Fearing or avoiding art is a refusal to achieve such
refinement or clarity.
Dance is a person’s conduct of his or her own body, just
like a maestro conducts an orchestra.
Dance is a person’s composition of his or her movements
like a musical piece.
Dance is the reflection of the music of a person’s spirit in
his or her movements.
If people are laughing or crying; getting excited or
thinking of similar things at the same time, besides setting
the butterflies in their hands free at the same time; then
that is a shrine.
The Fisherman of Halicarnassus, Cevat Şakir, used to say
“Hello” when he came across a friend, and “HELLO” as he
took leave.
In reality, we try to construct a large part of our lives
around the emotions we feel in the text above. That is
because creating is a process. Especially in performing
arts… And in collective arts... I could not believe it at first
when TAV Airports requested a project like this from us.
First and foremost, I was so happy to feel that we were not
all alone. When the photo shoots were conducted with
professional people who were proficient in their jobs,
and as we found harmony with TAV Airports employees,
who we were able to convince to pose for us in front
of the camera and who really impressed us with their
performance and enthusiasm; the only logical outcome
was a project that we all cared about and valued. I hope
that the excitement we felt came across in the snapshots.
With my love to all my friends with whom I shared a
common excitement…
Tan Sağtürk
Ballet Dancer and Choreographer
Tan Sağtürk Academy
TABLE OF CONTENTS
TAV AT A GLANCE
4 Who We Are
8 What We Do
12 Where We Operate
14 How 2010 Unfolded
22 Outlook for 2011
ASSESSMENTS
28 Board of Directors’ Message
30 CEO’s Message
32 Strategy and Objectives
34 Operational and Financial Performance
38 Investor Relations and Stock Performance
42 Risk Management
44 Human Resources
REVIEW OF OPERATIONS IN 2010
48 Airport Operations
Istanbul Atatürk Airport
Ankara Esenboğa Airport
Izmir Adnan Menderes Airport
Antalya Gazipaşa Airport
georgıa, Tbilisi Airport
georgıa, batumı Airport
tunısıa, monastır and enfıdha ınternatıonal Airports
macedonıa, skopje and ohrıd aırports
82 Service Companies
Ground Handling servıces
Duty Free
food and beverage Services
Operations Services
Information Technology Services
Private Security Services
118 Marketing Activities
119 Internal Audit
120 Sustainability and the Environment
122 Corporate Social Responsibility (csr)
REPORTS AND FINANCIAL INFORMATION
126 Corporate Governance Principles complıance report
143 Board of Directors and Senior Management
154 Committees
155 Agenda for the Ordinary General Assembly meetıng
156 Statutory Auditors’ Report
157 Statement of Responsibility
159 Consolidated Financial Statements and Independent Auditors’ Report
259 Glossary
QR codes have been embedded on certain pages of this report in order to allow you to obtain more comprehensive
information on TAV Airports and its subsidiaries via new mobile technologies. After installing the QR Code Reader on
your mobile device, you can direct its camera towards the code image on the page to be directed to the web site which
will offer you further information on the topic. For example, the QR code on this page allows you to easily access the
TAV Airports Investor Relations web page (http//ir.tav.aero).
Proud and happy to have
attained the target of “10
airports in 10 years” it had
set for itself in 2000, TAV
Airports’ new target is to
increase the number of
passengers it serves “at its
exemplary, contemporary
airports with its art of
service” approach to 100
million by 2020.
4
TAV AT A GLANCE
ASSESSMENTS
Who We Are
Strategy
Our Strategy
Our Priorities
• Generating value through
organic & inorganic growth
• Keeping cost increase below revenue
growth (operational leverage effect)
• Adding new airports to our portfolio in the
target region consisting of Europe, Russia
and the Commonwealth of Independent
States, Baltic Nations and Georgia, Middle
East, Africa and India
• Expanding into countries outside our
target region through management
service contracts
• Increasing the income of subsidiaries
operating in the services industry (duty
free, food & beverage, IT, ground handling
and security)
• Expanding the services network: Also
undertaking commercial activities in
airports not operated by TAV Aiports
• Enhancing productivity: Increasing
commercial income, expanding
commercial areas and increasing
penetration
The Focus Point
• Integrated services model, offering complementary services through a wide range of
business lines
• Joint ventures that facilitate the optimization of resource utilization and resource allocation
• Investment opportunities in niche markets of the developing economies
• Seizing upon opportunities involving airports with significant growth potential and
Public-Private Partnership (PPP) projects
We grow by rapidly adapting to the developments in the aviation industry and pioneering
the industry. In order to leverage the sustainable foundation we have built to continue with
our long-term, healthy, profitable and smart growth; we are constantly competing against
ourselves. In the period ahead, we will continue to forge ahead with our quick and effective
decision-making capability in order to maintain our domestic market leadership and reinforce
our international market position. Our objective is to raise the number of passengers that we
serve from around 48 million in 2010 to 100 million within the next ten years.
5
TAV AIrports HoldIng Annual Report 2010
Shareholder Structure
Shareholder
Number of Shares (1)
Share (%)
Tepe İnşaat Sanayi A.Ş.
94,664,477
26.1
Akfen Holding A.Ş.
94,886,071
26.1
Sera Yapı Endüstrisi ve Ticaret A.Ş.
15,139,046
4.2
Non-float
12,775,048
3.5
Free-float
145,816,608
40.1
Total
363,281,250
100.0
(1) As of December 31, 2010
Founding Shareholders
Akfen Holding A.Ş. is a conglomerate that positions
itself as a business development company and that
is active particularly in infrastructure investments
but also operates in the construction seaport, energy
and real estate investment industries.
Established in 1997 in Istanbul as a joint venture
of Tepe Group and Akfen Group, TAV Airports
commenced its operations by completing the
construction of the Istanbul Atatürk Airport
International Terminal in only 22 months. Making
new achievements ever since, the Company
represented Turkey in the best manner by becoming
a global brand in both airport construction and
operation. The Holding underwent restructuring
in 2006 in line with its strategic objectives.
The operation and construction services were
reorganized under “TAV Havalimanları Holding A.Ş.”
(TAV Airports) and “TAV İnşaat” (TAV Construction)
as two separate holding companies.
Sera Yapı Endüstrisi ve Ticaret A.Ş. undertakes
construction projects in Turkey, Middle East and
North Africa.
TAV Airports, Turkey’s leading airport operator
according to the 2010 passenger statistics of the
Turkish State Airports Authority (DHMİ), continues
to enhance its position and pursue sustainable
growth with operations on three continents.
Tepe İnşaat Sanayi A.Ş. is an experienced and
distinguished construction company that carries
out its operations ranging from infrastructure to
construction with an integrated approach, and
employs its experience on an international scale.
26.1%
26.1%
4.2%
Other Shareholders
Free-float
40.1%
Non-float
3.5%
6
TAV AT A GLANCE
ASSESSMENTS
Who We Are
Organizational Structure
Shareholder Value
Airport Operations
Shares of TAV Airports are traded on the Istanbul
Stock Exchange since February 23, 2007.
• Istanbul Atatürk Airport
• Ankara Esenboğa Airport
• Izmir Adnan Menderes Airport/
International Terminal
• Antalya Gazipaşa Airport
• Georgia, Tbilisi Airport
• Georgia, Batumi Airport
• Tunisia, Monastir Airport
• Tunisia, Enfidha Airport
• Macedonia, Skopje Airport
• Macedonia, Ohrid Airport
Service Companies
• Ground Handling: Havaş, TGS and NHS
• Duty Free: ATÜ
• Food & Beverage Services: BTA
• Operations Services: TAV Operations
Services Co.
• Information Technology Services: TAV IT
• Security Services: TAV Security
TAV Airports increased the number
of passengers it serves by 13% to
approximately 48 million in 2010, further
strengthening its presence in the Balkans
and in Europe by commencing operations at
the Skopje and Ohrid Airports in Macedonia.
Handling approximately 420 thousand
flights in conjunction with its subsidiaries,
TAV Airports continues to increase its global
recognition, prestige and brand value with
new investments.
TAV Airports provides an unparalleled
flight experience to its customers with its
subsidiary operating companies that strive
to meet every need -from ground handling
services and duty free shops to personal
services and security- that can be expected
from an airport, and earns more than half
of its consolidated income from such nonaviation activities.
In 2010 TAV Airports shares gained 58%, making
them the third best performer in the ISE 30 Index.
Capital Increases
Year
Amount
%
Capital (TL)
2010
-
-
-
2009 121,093,750
50
363,281,250
-
242,187,500
2008
-
As of Year-end 2010
Closing price
TL
7.48
Market Capitalisation
USD 1.8
billion
Free Float
44%
2010
Highest price of the share
TL
8.15
Lowest price of the share
TL
4.68
Annual return
58%
Average daily trading volume
USD 12
million
Note: The average daily trading volume is the average for 2010.
The effective free float is 40%.
7
5 Years of TAV in Figures
Revenue(*) (€ million)
EBITDA(*) (€ million)
785
2010
640
77
2007
402
48
23
Average number of employees
2010
2009
2008
30
2007
2006
2007
2006
Number of passengers (million)
41
2008
29
2006
42
2009
141
2008
508
2010
167
2009
627
212
17,535
2010
12,194
2009
11,289
9,473
8,146
2008
2007
2006
(*) Excludes construction revenue and expenses, but includes guaranteed passenger revenue from the airports operated in Ankara and Izmir.
8
TAV AT A GLANCE
ASSESSMENTS
What We Do
Airport Operations
Turkey
Georgia
Istanbul
100%
Atatürk Airport
66%(*)
100%
60%(*) Batumi
Airport
Ankara
Esenboğa Airport
Tbilisi
Airport
Izmir
Adnan Menderes
100%
antalya
Gazipaşa
100%
Airport (1)
Tunisia
Macedonia
67%
Monastir Airport
67%
Enfidha Airport(2)
(2)
100%
Skopje Airport(3)
100%
Ohrid Airport(3)
(1) The agreement for the Gazipaşa Airport was signed on January 7, 2008.
(2) TAV Airports assumed the operation of the Monastir Airport on January 1, 2008. The Enfidha Airport is operated by TAV Airports since December 2009.
(3) TAV Airports assumed the operation of the airport on March 1, 2010.
(*) Pursuant to the agreement reached on March 25, 2011, TAV Airports will increase its shareholding to 76%.
9
Duty Free
food & beverage servıces(5)
ATÜ
BTA
ATÜ is Turkey’s largest duty free store chain. It
carries out its operations jointly with Unifree, a
subsidiary of the German company Heinemann, the
leading global travel retailer. ATÜ holds a diversified
operations portfolio spanning a large geography
consisting of Turkey, Georgia, Tunisia, Macedonia and
Latvia.
BTA operates in a vast geographic region comprised
of Turkey, Georgia, Tunisia, Macedonia and Latvia,
offering catering services at 144 locations with a
seating capacity for 12,500 people at the airports it
is active in. In addition, BTA operates the 131-room
Istanbul Airport Hotel and supplies bakery products
to various chains in Turkey.
Revenue(*)
Revenue(*)
50%
€ 340.0
67%
million
€ 75.0
(*) Before the elimination of sales revenue. (100% of the revenue of ATÜ is taken.)
million
10
TAV AT A GLANCE
ASSESSMENTS
What We Do
Ground Handling
Other
Havaş
TAV Operations Services
Turkey’s leading ground handling services company
with a 65%(1) market share, Havaş provides
continuous traffic, ramp and cargo services to
around 200 airlines at 22 airports in Turkey.
TAV Operations Services provides commercial space
allocation, CIP and travel agency services.
65%
100%
Revenue(*)
€ 163.5
million
TGS(2)
50%
Revenue
€ 30.1
million
TAV IT
99%
TAV IT provides airport information technology
services such as FIDS and FMS.
Turkish Ground Services (TGS) renders ground handling
services at Istanbul’s Atatürk and Sabiha Gökçen,
Ankara’s Esenboğa, Izmir’s Adnan Menderes airports,
as well as at the airports of Antalya and Adana.
Revenue
Revenue(*)
TAV Security
€ 39.8
million
€ 9.7
million
67%(**)
nhs
TAV Security is a security services provider at
Istanbul Atatürk, Ankara Esenboğa, Izmir Adnan
Menderes and Antalya Gazipaşa airports.
North Hub Services (NHS) provides ground handling
services at the Riga and Helsinki airports.
Revenue
50%
Revenue(*)
€ 2.8
€ 8.6
million
million
(1) Calculated according to the number of flights catered to in 2010.
(2) TGS commenced operations on January 1, 2010.
(*) Calculated in proportion to the ownership stake in the proportionally consolidated companies prior to the elimination of sales revenue. (50% of TGS and NHS)
(**)TAV Airports has concluded an agreement to increase its shareholding to 100% on March 25, 2011.
11
12
TAV AT A GLANCE
ASSESSMENTS
Where We Operate
bir bakışta tav
Macedonia
725.5 THOUSAND
12.8 THOUSAND
TAV’S 2010 PASSENGER TRAFFIC
TAV’S 2010 COMMERCIAL FLIGHT TRAFFIC
Tunisia
3.9 MILLION
31.8 THOUSAND
416 THOUSAND
TAV’S TOTAL COMMERCIAL FLIGHT TRAFFIC
13
Georgia
910.2 THOUSAND
18.7 THOUSAND
Turkey
42.0 MILLION
353.2 THOUSAND
47.6 MILLION
TAV’S TOTAL PASSENGER TRAFFIC
14
TAV AT A GLANCE
ASSESSMENTS
How 2010 Unfolded
SOARING PASSENGER TRAFFIC
Passenger Traffic and Growth Rate 2005
2006
2007
2008
2009
2010
Passenger Traffic in Turkey (million)
57
65
70
79
86
103
International
36
34
38
44
44
52
21
31
32
36
41
51
26
14
9
13
8
20
Passenger Traffic of TAV Airports (million)
17
23
30
41
42
48
International
12
13
17
25
26
29
5
10
13
16
16
18
63
37
33
35
3
13
1
3
5
6
8
10
Domestic
Passenger Traffic Growth Rate in Turkey (%)
Domestic
TAV Passenger Traffic Growth Rate (%)
Number of Airports Operated by TAV
Source: DHMİ
SURPASSING
THE WORLD AVERAGES
Passenger Traffic Growth
2009 (%)
TAV
3
13
Source: ACI
World
Europe
Fraport
Aeroports de Paris
BAA
Aena
Schiphol
(3)
(6)
(3)
(5)
(5)
(8)
(8)
2010 (%)
TAV
World
Europe
Fraport
Aeroports de Paris
BAA
Aena
Schiphol
6
4
9
0
(3)
6
4
15
MISSION ACCOMPLISHED:
“10 AIRPORTS IN 10 YEARS”
THE HIGHEST CORPORATE
GOVERNANCE RATING SCORE
Setting itself the target of “operating
10 airports in 10 years” in 2000, TAV
accomplished this target by commencing
operation in two more airports during the
year. Beginning to operate Tunisia’s Enfidha
Airport in late 2009 and Macedonia’s Skopje
and Ohrid airports in March 2010, the
Company continues to seek new investment
opportunities as part of its inorganic growth
strategy. Focusing on new projects in its
target region in 2010, TAV is also expanding
its operation map with new investments in
other service areas such as ground handling
and duty free.
As a result of the RiskMetrics Group’s
(ISS) latest rating report, TAV’s Corporate
Governance Rating Score was raised from
8.5 in 2009 to 9 in 2010.
As a company that embraced compliance
with corporate governance principles as
an indispensable part of its corporate
culture, TAV came first in the category of
“Companies with the Highest Corporate
Governance Rating” in the Corporate
Governance Awards, organized for the first
time during the Corporate Governance
Summit.
16
TAV AT A GLANCE
ASSESSMENTS
fınancıal ındıcators
Summary Income Stratement (€)
2009
2010 Construction Revenue 284,491,359
41,627,967
Operating Revenue
608,927,597
752,906,389
(271,354,562)
(41,410,646)
Operating Expenses
(509,485,854)
(632,373,203)
Net Operating Profit
112,578,540
120,750,515
(59,467,933)
(57,284,470)
Profit/(Loss) Before Tax
53,110,607
63,466,045
Income Tax Benefit/(Expense)
(1,645,831)
(11,826,115)
Net Profit/(Loss)
51,464,776
51,639,930
941,643
1,859,405
EBITDA
136,666,335
180,077,771
EBITDAR
280,287,974
309,716,617
Construction Expenditure
Net Financial Expenses
Profit/(Loss) Attributable to Minority Interests
Summary Cash Flow Statement (€) Net Cash Generated from Operating Activities
Net Cash Generated from/(Used in) Investment Activities
Net Cash Generated from/(Used in) Financing Activities
209,677,505
336,290,587
(284,941,050)
35,896,039
(374,240,555)
86,166,944
Summary Balance Sheet (€) Cash, Cash Equivalents and Securities
34,010,922
32,442,373
313,849,601
382,444,797
1,923,116,435
2,039,474,431
1,288,663,264
1,236,322,769
Total Liabilities
1,510,117,420
1,499,088,978
Shareholders’ Equity
412,999,015
540,385,453
Net Debt
940,802,741
821,435,599
Restricted Bank Balances
Total Assets
Financial Liabilities
17
Operating Revenue
(€)
Net Profit
(€)
752,906,389
608,927,597
2010
2009
EBITDA
(€)
136,666,335
2010
51,464,776
2009
336,290,587
309,077,771
280,287,974
2009
Net Cash Generated from Operating
Activities (€)
2010
2010
2009
Total Assets
(€)
2,039,474,431
1,923,116,435
2009
Shareholders’ Equity
(€)
2010
2009
Net Debt
(€)
540,385,453
412,999,015
2010
EBITDAR
(€)
180,077,771
209,677,505
51,639,930
2009
2010
821,435,599
940,802,741
2010
2009
18
TAV AT A GLANCE
ASSESSMENTS
Operational Indicators
Passenger Traffic(1)
January - December
2009
32,145,619
8
18,396,050 20,344,620
11
11,416,838
11,800,999
3
6,084,404
7,759,479
28
International
1,094,270
1,325,989
21
Domestic
4,990,134
6,433,490
29
1,667,455
2,127,457
28
3,781,256
3,916,977
4
Tbilisi Airport (5)
702,714
821,606
17
Batumi Airport (6)
69,282
88,627
28
Skopje & Ohrid Airports(7)
636,171
725,543
14
TAV Airports Total
42,117,999 47,585,308
13
International
25,684,626
29,302,851
14
16,433,488
18,282,454
11
29,812,888
2010 Change %
International
Domestic Ankara Esenboğa Airport (2)
Izmir Adnan Menderes Airport International Terminal(3)
Monastir & Enfidha Airports (4)
Domestic Source: Turkish State Airports Authority (DHMİ), Civil Aviation Administration of Georgia, TAV Tunisie and TAV Macedonia
Note: January-December 2010 DHMİ data are provisional. Transfer passengers are included in DHMİ figures.
(1) Arriving and departing passenger totals, excluding transit passengers.
(2) Operation commenced on October 16, 2006 under the TAV Airports corporate structure.
(3) International Terminal only; operation commenced on September 13, 2006 under the TAV Airports corporate structure.
(4) Operation commenced on January 1, 2008 under the TAV Airports corporate structure (including Enfidha).
(5) The new terminal commenced operation on February 7, 2007.
(6) Operation commenced on May 26, 2007 (includes Hopa Terminal).
(7) Operating right was acquired by TAV on March 1, 2010.
19
ıstanbul ATATÜRK AIRPORT
PASSENGER TRAFFIC
ankara ESENBOĞA AIRPORT
PASSENGER TRAFFIC
32,145,619
2010
29,812,888
2009
IZMIR adnan menderes AIRPORT
INTERNATIONAL TERMINAL PASSENGER TRAFFIC
2,127,457
1,667,455
2010
TBILISI AIRPORT
PASSENGER TRAFFIC
2009
MONASTIR & ENFIDHA AIRPORTS
PASSENGER TRAFFIC
3,916,977
2010
2009
BATUMI AIRPORT
PASSENGER TRAFFIC
821,606
2010
2009
88,627
69,282
2010
2009
TAV aırports TOTAL
PASSENGER TRAFFIC
SKOPJE & OHRID AIRPORTS
PASSENGER TRAFFIC
725,543
636,171
6,084,404
2010
3,781,256
2009
702,714
7,759,479
2010
2009
47,585,308
42,117,999
2010
2009
20
TAV AT A GLANCE
ASSESSMENTS
Operational Indicators
Commercial Flight Traffic(1)
January - December
2009
2010
Change %
265,759
273,704
3
169,943
178,817
5
Domestic
95,816
94,887
(1)
Ankara Esenboğa Airport (2)
51,281
63,385
24
10,131
11,742
16
41,150
51,643
25
13,145
16,149
23
30,393
31,801
5
13,842
16,470
19
1,806
2,276
26
12,793
12,798
0
376,226
416,583
11
International
237,428
267,919
13
Domestic
138,792
148,666
7
International
International
Domestic
Izmir Adnan Menderes Airport International Terminal(3)
Monastir & Enfidha Airports(4)
Tbilisi Airport(5)
Batumi Airport(6)
Skopje & Ohrid Airports(7)
TAV Airports Total(8)
Source: Turkish State Airports Authority (DHMİ), Civil Aviation Administration of Georgia, TAV Tunisie and TAV Macedonia
Note: January-December 2010 DHMİ data are provisional.
(1) Commercial flights only.
(2) Operation commenced on October 16, 2006 under the TAV Airports corporate structure.
(3) International Terminal only; operation commenced on September 13, 2006 under the TAV Airports corporate structure.
(4) Operation commenced on January 1, 2008 under the TAV Airports corporate structure (including Enfidha).
(5) The new terminal commenced operation on February 7, 2007.
(6) Operation commenced on May 26, 2007 (includes Hopa Terminal).
(7) Operating right was acquired by TAV on March 1, 2010.
(8) TAV 2009 traffic data do not include the passenger traffic and flight traffic data from Macedonia.
21
tav aırports Total Commercial Flight Traffic
416,583
376,226
2010
2009
22
TAV AT A GLANCE
ASSESSMENTS
Outlook for 2011...
WORLD PASSENGER TRAFFIC IN THE LAST DECADE (million)
5,093
2010
4,796
2009
4,882
2008
4,796
2007
4,381
2006
4,170
2005
3,912
3,531
2004
2003
3,471
2002
3,478
2001
3,567
2000
International Air Transport Association (IATA) stated that it expects Available Seat
Kilometers (ASK) to grow by an average of 5.3% annually between 2009 and 2014, whereas
International Civil Aviation Organization (ICAO) predicts 4.7% growth from 2010 to 2030.
According to forecasts by Boeing, one of the largest aircraft manufacturers in the world, the
European aviation industry will constitute 1.9% of the European economy between 2009
and 2029. Over the same period, Boeing predicts a 4.4% annual growth rate in the world
passenger traffic. Another major aircraft manufacturer, Airbus, predicts an average ASK
growth rate of 4.8% between 2010 and 2030.
Source: ACI
23
ADVANTAGES OF THE TURKISH
AVIATION INDUSTRY
• Market conditions conducive to growth
• The sixth largest economy in Europe
• The 16th largest economy in the world
• Growth trend above the sector average
• Young population and intensive service
basin
• The second largest population in Europe
THE TURKISH AVIATION
INDUSTRY CONTINUES ITS
RAPID EXPANSION
In 2010, the number of companies active in
the civil aviation sector rose to 155 and the
total turnover of the sector to USD 12 billion.
The Turkish aviation industry continues to
add to its long list of accomplishments and
takes decisive strides towards raising the
number of aircrafts to 750 from 350 today,
and passenger traffic to 350 million from
100 million today, by 2023, when we will
be celebrating the 100th anniversary of the
Republic.
TURKEY’S DECADE OF ACCOMPLISHMENTS
Turkey
2000
2010
Total Passenger Traffic (million)
35
103
International
22
52
13
51
Number of Airports
35
46
Number of Aircrafts
110
347
Domestic
TAV’S DECADE OF ACCOMPLISHMENTS
2000
2010
Number of Airports Operated
Ten-Year Growth (%) Annual Average
Growth (%)
1
10
900
26
Passenger Traffic (million)
9.5
47.6
403
18
Revenue (USD million)
145
1,080
644
22
24
TAV AT A GLANCE
ASSESSMENTS
Milestones
1997
TAV was founded and it was awarded the tender for
the Istanbul Atatürk Airport.
1999
ATÜ, which was established as a TAV Airports
venture to provide duty free shopping services, was
incorporated into the TAV corporate structure; BTA,
which provides food and beverage services, was
established.
2000
TAV began operating the Istanbul Atatürk Airport
International Terminal.
2001
”primeclass” CIP Service was launched.
2004
• BTA began operating the Istanbul International
Airport Hotel.
• TAV assumed construction and operation of the
Esenboğa Airport Domestic and International
Terminals.
• TAV İşletme Hizmetleri (TAV Operations Services)
was founded.
2005
• TAV Airports was awarded the tender to operate
the Atatürk Airport International and Domestic
Terminal Buildings, Parking Garage and General
Aviation Terminal for 15 and a half years.
• 60% of Havaş shares were acquired.
• Construction and operation of the Izmir Adnan
Menderes International Terminal was assumed
by TAV. TAV Bilişim Hizmetleri A.Ş. (TAV IT) was
founded and the information technology services
developed during the course of construction and
operation of airport terminals were consolidated
under this company.
• TAV was awarded the tender for the Tbilisi
International Airport in Georgia.
2006
• Operation and construction services were
restructured under “TAV Havalimanları Holding
A.Ş.” (TAV Airports) and “TAV İnşaat” (TAV
Construction) as two separate holding companies.
• Izmir Adnan Menderes Airport International
Terminal commenced service.
• Esenboğa Airport Domestic and International
Terminal commenced operation.
• TAV Özel Güvenlik Hizmetleri A.Ş. (TAV Security)
was founded and the private security services
developed during the course of construction
and operation of the airport terminals were
consolidated under this company.
25
2007
• TAV Airports shares were floated.
• Tbilisi International Airport’s new passenger
terminal commenced service.
• Batumi International Airport commenced operation.
• TAV Airports was awarded the tender for the
Monastir Habib Bourguiba and Enfidha Zine El
Abidine Ben Ali International Airports in Tunisia.
• 40% minority shares of Havaş were acquired. Havaş
became a wholly-owned subsidiary of TAV Airports.
• TAV Airports became 100% owner of TAV Izmir and
TAV Esenboğa.
operation of the Antalya Gazipaşa Airport.
• The Hopa Terminal operated by Havaş commenced
service.
2008
• TAV Airports assumed operation of Tunisia’s
Monastir Habib Bourguiba International Airport.
• TAV Gazipaşa Yatırım-Yapım ve İşletme A.Ş. (TAV
Gazipaşa) was founded to operate the Antalya
Gazipaşa Airport.
operation of the Alexander the Great International
Airport in Macedonia’s capital Skopje and St. Paul
the Apostle International Airport in Ohrid, as well
as the construction of the Shtip Cargo Airport, of
which TAV Airports also retains optional rights to
operate. The related concession contracts were
signed.
• Havaş was awarded the tender for a 50%shareholding partnership in TGS (Turkish Ground
Services Co.), a subsidiary of Turkish Airlines.
2009
• TAV Airports increased its issued capital by TL 121
million.
• TAV Gazipaşa commenced operation at the Antalya
Gazipaşa Airport.
• The Enfidha Airport investment was completed.
• Agreement was reached for the sale of Havaş
shares to HSBC (28%) and İş Private Equity (7%).
• Havaş acquired a 50% equity stake in TGS.
• IFC (International Finance Corporation), a World
Bank establishment, acquired a 15% equity stake in
TAV Tunisie.
26
TAV AT A GLANCE
ASSESSMENTS
Highlights from 2010
TAV Airports assumed the
operation of Macedonia’s
Skopje and Ohrid airports for
20 years.
A memorandum of
understanding was signed
for the construction and
operation of the new
terminal building at Latvia’s
Riga Airport. TAV Airports
and Latvia’s leading airline
company Air Baltic decided
to become equal partners in
this joint venture.
TAV Airports was awarded
the tender for the operation
of duty free, catering and
other commercial spaces at
Latvia’s Riga Airport.
The sale of 18% minority
shares of TAV Tunisie SA to
Pan African Infrastructure
Development Fund was
completed.
Antalya Gazipaşa Airport
was upgraded from the 2C
category to the 3C category.
The operation of five service
points (Kantin, Beerport,
Kokpit Cafe, Kokpit Brasserie
and İç Hatlar Botanik Cafe)
at the Istanbul Atatürk
Airport Domestic Terminal
was assumed by BTA as of
July 1, 2010.
The sale of the minority
shares of Havaş to HSBC
and İş Private Equity was
completed.
A memorandum of
understanding was signed
with the Indonesia-based
company Sigma Group/PT
Wira Cipta Sukses and the
Indonesian Government for
cooperation on potential
airport projects in this
country.
TAV signed a “Global
Training Center” agreement
with Airports Council
International (ACI), whose
membership includes more
than 1,600 airports from
around the world.
Havaş acquired a 50%
equity stake in North Hub
Services (NHS), a provider of
ground handling services at
Latvia’s Riga Airport.
TAV Airports’ Corporate
Governance Rating Score
was raised from 83.3 (8.5) in
2009 to 9.03.
The expansion project of the
Istanbul Atatürk Airport’s
Domestic and International
Terminals was completed.
launched the TAV Passport
Card, which offers many
services and privileges at
the airports operated by
TAV.
27
DEVELOPMENTS IN 2010
Tender for
commercial
spaces in Riga
awarded to TAV
9
8
NHS share purchase
agreement
Memorandum of
understanding
signed with
the Indonesian
Government
Memorandum of
understanding
signed with Air
Baltic
7
6
Corporate
Governance
Rating Score
raised
5
Operations
of the Skopje
and Ohrid
Airports
4
4.12.2010
4.11.2010
4.10.2010
4.9.2010
4.8.2010
4.7.2010
4.6.2010
4.5.2010
4.4.2010
4.3.2010
4.2.2010
4.1.2010
3
TAV AT A GLANCE
28
ASSESSMENTS
Board of Directors’ Message
Operational performance solidified
by financial achievements
Esteemed Shareholders,
Across the world and in Turkey, the airport operation
industry continues to expand rapidly against the
backdrop of the global crisis. Today’s major airports
have become crucial hubs for business, commerce,
information exchange and leisure activities with the
shopping malls, art galleries, hotels and recreational
areas located in the airport premises as well as
neighboring congress, trade and fair centers. According
to the February 2011 issue of ACI World Report,
passenger traffic increased by 6.2% across the world in
2010. According to the forecasts of the Turkish Ministry
of Transport, passenger traffic in Turkey is expected to
grow by an annual compound rate of 10% from 2010 to
2023.
Having expanded its know-how and vision beyond
the national borders and gained rightful recognition
in the global arena, TAV Airports added to its list of
accomplishments in 2010. In the first quarter of 2010,
the Holding assumed the operation of Macedonia’s
Skopje and Ohrid Airports for a period of twenty years.
With the commencement of operations in Macedonia,
TAV Airports now operates a total of 10 airports,
including those in the three major cities of Turkey.
As of January 1, 2011, the Holding assumed the
operation of duty free, catering and other commercial
areas at Latvia’s Riga Airport for a period of 10 years.
Havaş’s acquisition of a 50% equity stake in NHS, which
provides ground handling services at Latvia’s Riga
Airport, was one of the most significant developments
of the year. Launching activities first in Riga, and then
in Finland’s capital Helsinki as of July 1, 2010, NHS aims
to become the largest ground handling company in
Northern Europe.
The Holding’s subsidiary TAV IT, which was awarded
two tenders in Turkey and one tender in Saudi Arabia
during the year, expanded its services and experience
beyond TAV Airports for the first time. In addition, TAV
Airports signed a memorandum of understanding for
the construction and operation of the new terminal
building at Riga Airport and decided to establish a joint
venture with Air Baltic for this project. The Holding’s
other important initiatives in pursuit of its inorganic
growth targets were participation in the Medina Airport
tender and the memorandum of understanding signed
with the Indonesian government.
Another important development of 2010 was the sale
of an equity stake in Havaş to HSBC and İş Private
Equity, as well as the sale of minority shares in TAV
Tunisie to Pan African Infrastructure Development
Fund. The funds generated from these divestitures
served to strengthen the financial position of the
Holding.
The Antalya Gazipaşa Airport, for which the Holding
holds the operation rights until 2034, was upgraded
from the 2C (small airport) category to the 3C (mediumsized airport) category. Designed as a boutique airport
serving the tourism potential of its region, Gazipaşa
Airport had its runway expanded from 1,825 meters to
2,000 meters in 2011.
The Holding continued to add financial and managerial
achievements on top of its superior airport operation
performance, and became the third best performing
stock in the ISE 30 Index in 2010. In addition to
continuing to rise in the list of best managed
companies in Turkey, TAV Airports also had its
Corporate Governance Rating Score raised to 9 and
positioned itself at the top of the ISE by this measure.
As the innovative force of its industry, TAV Airports will
continue to register new accomplishments in the period
ahead with its entrepreneurial spirit. The Holding’s
most important asset is its employees’ passion for
success and superior performance. TAV Airports
will continue to create value for Turkey and for its
shareholders while maintaining its sustainable growth
approach and robust financial structure.
29
Ali Haydar Kurtdarcan
Vice Chairman of the Board of
Directors
Dr. M. Sani Şener
Member of the Board of Directors,
President & CEO
Hamdi Akın
Chairman of the Board of Directors
TAV AT A GLANCE
30
ASSESSMENTS
CEO’S MESSAGE
We attained our target of
“10 airports in 10 years”.
Esteemed Shareholders,
As the world economy grew by 5% in 2010, Turkey
achieved an economic growth rate of 8.9% and became
one of the best-managed countries during the global
crisis. As the aviation industry’s center of gravity shifts
east, it is becoming clear that the industry is recovering
much more quickly than expected. According to ACI
data, world passenger traffic increased by 6.2% over
the previous year in 2010.
The airport operation sector requires companies to
race against time and display a significant coordination
capacity commensurate with the volume of circulation.
2010 has been a particularly challenging year for
the sector. Operators maintained their superior
performance despite extraordinary factors such as
the volcano eruption in Iceland that sent clouds of
ash across entire Europe, massive strikes especially
in Europe, unfavorable weather conditions in North
America and Europe, and political instability in North
Africa. From TAV Airports perspective, these adverse
developments were exacerbated by the closure of
Atatürk Airport’s third runway from March 8th to June
30th, 2010 due to expansion and repair work. It was
especially significant and meaningful for TAV Airports
to continue to increase its passenger traffic and attain
double-digit growth in 2010 in the face of such adverse
conditions.
Turkey proved its strong potential in the aviation
industry with the 103 million passengers it reached
in 2010. The country has a young population and a
dynamic market, which inspire optimism for the future
of the industry. Forecasts call for the passenger traffic
to grow by an average of 10% per year to reach 350
million in 2023 and the number of aircraft to reach 750,
from 347 today, over the same period. TAV Airports, one
of the most important airport operators in the region,
continues to invest in accordance with this rapid growth
and potential.
In 2010, TAV stood out as an unshakeable company
that has proven the sustainability of its success.
The Holding continues on its path of combining the
right strategies with qualified human resources with
the same excitement and determination as ever.
Commencing operation at the Skopje and Ohrid airports
in Macedonia in the first quarter of 2010, TAV reached
its target of “10 airports in 10 years”. The Holding’s next
target is to increase total passenger traffic, which grew
by 13% in 2010 to reach 48 million, to 100 million within
the next ten years.
The Holding’s double digit growth in passenger traffic,
its focus on the growth of service companies, and the
operational achievements of its various joint ventures
allowed EBITDA growth to outpace increase in revenue.
As a result of the completion of the construction work
and the commencement of operations in Tunisia, the
free cash flow increased from minus € 102 million in
2009 to € 217 million in 2010.
The key to success in the airport operation industry
is the sharing of experience and know-how. We have
always stated that TAV Airports is not just a workplace,
but also a school for its employees. With this mission in
mind, we continue to bring up highly qualified human
resources, a crucial element for the sector. Airports
Council International (ACI) designated Istanbul Atatürk
Airport as the 11th training center for the Global Training
Hubs it operates across the world. As of year-end 2010,
TAV Airports employs around 18 thousand people,
including its subsidiaries. In 2010, the Holding created
new employment opportunities for 8,049 people.
The Holding’s airports and subsidiaries continued to
receive many national and international awards this
year. Undoubtedly, the most meaningful achievement
among these was the first place TAV Airports took
in the ISE Corporate Governance Index with its rating
score, in only the fourth year of its initial public
offering. Raising its Corporate Governance Rating score
31
from 8.5 in 2009 to 9 in 2010, the Holding was deemed
worthy of the “Company with the Highest Corporate
Governance Rating Score” award at the Corporate
Governance Awards.
We believe that sustainable growth is possible only
if social responsibility awareness and respect for the
environment are coupled with financial success. In this
respect, we continued our efforts to ensure that all
operating companies of the Holding are equipped with
environmentally friendly technologies. In addition, in
line with our belief that Turkey’s future will be shaped
by art, culture and education, we organized scores of
events and sponsored many projects throughout the
year.
We will continue to add to our accomplishments in
the coming decades by offering our customers high
quality services while also being mindful of the society
and the environment we live in. I would like to express
my deepest gratitude to all TAV employees who made
this outcome possible, to you, our business partners,
who trusted us and believed in the future of TAV, to
our customers, and to all of our social and economic
stakeholders.
Dr. M. Sani Şener
President & CEO
TAV AT A GLANCE
32
ASSESSMENTS
STRATEGY AND OBJECTIVES
TAV continues to constantly create value
in line with its growth strategy.
A global player in the industry with competent human
resources and operations encompassing a vast
geography both in Turkey and abroad, TAV implements
the right strategies at the right time. TAV displayed a
noticeable growth performance even during the global
crisis and continues to sharpen its competitive edge in
the sector by duly taking advantage of opportunities.
TAV’s growth strategy consists of increasing traffic
at the airports that it already operates while taking
advantage of opportunities for the construction and
operation of new airports in Turkey and abroad. Thanks
to its extensive network of airports and comprehensive
airport operations and services, the Company will
continue to benefit from economies of scale and
economies of scope. In addition, in order to further
reinforce its growth strategy, TAV Airports will continue
to pursue long-term strategic partnerships at both the
local and regional levels.
A Unique Business Model
TAV conducts its activities with a unique business
model. As part of this model, the Company’s
subsidiaries provide a diverse range of services that
complement airport operations including ground
handling, duty free retailing, food & beverage, IT and
security services. TAV stepped up its efforts to further
enhance the value it creates by strengthening the
integration between business lines and redefining and
redesigning the relationships among its subsidiary
companies. In order to take full advantage of this
integrated model, the Company will continue to
reinforce the connectivity among these business lines
and increase the synergy among them. With the goal
of increasing overall efficiency and productivity, TAV
will also continue to undertake initiatives to improve its
business and operational processes and to increase the
number of passengers it caters to as well as enhancing
its commercial productivity.
TAV’s general strategy is based on creating value
via organic and inorganic growth, and increasing the
revenue of its subsidiaries active in the fields of duty
free, food & beverage, IT, ground handling and security.
Organic growth is achieved through an increase in the
passenger traffic of the airports currently operated
by TAV. While the Holding’s revenues grow in parallel
with the soaring passenger traffic, expenditures
increase relatively slower since airport operation is
mainly a business with fixed costs. Thus the Holding
takes advantage of an operational leverage effect and
generates higher EBITDA.
Inorganic growth, on the other hand, comes about with
investments in airport and business operations. The
Holding continues to add new airports to its portfolio
in its target region consisting of Europe, Russia and
the Commonwealth of Independent States, Baltic
Nations and Georgia, Middle East, Africa and India. In
addition, the Holding also aims to expand into countries
outside of its target region via consulting contracts.
This approach envisions contracts where TAV experts
experienced in airport operations will assume various
positions in the management of airports outside of the
Holding’s target region.
The Holding continues to expand its commercial
revenue via its service companies, which account for a
large share of its total revenues.
TAV’s subsidiaries are active in duty free retailing, food
& beverage, IT, security and ground handling. Each
new investment in the field of airport operation serves
the purpose of expanding the service network of the
subsidiaries. The subsidiaries also offer services in
some locations where the Holding is not in charge of
the airport operation. For example, TAV Airports was
awarded a tender for operating the duty free,
33
food & beverage and other commercial areas at Latvia’s
Riga Airport in 2010. Another example is the operations
of North Hub Services, which is a Havaş subsidiary that
strives to become the largest ground handling company
in Northern Europe.
also made growth-oriented investments including the
share purchase agreement with Latvia-based NHS to
deliver ground handling services and the assumption
of commercial activities at Riga Airport’s existing
terminal.
Increasing profitability and service diversity of the
existing companies is just as important as making
new investments. The Holding continues to open
new stores, develop new products, and increase the
business intensity of its commercial activities via
modernization efforts and innovative approaches.
In the coming period, TAV will continue to focus on
new airport projects and establish new companies,
and to devise effective strategies to modernize the
existing airports in order to boost their productivity and
profitability.
In 2010, the passenger traffic grew by 13%. TAV Airports
commenced operation at the Skopje and Ohrid airports
while taking inorganic growth initiatives by signing
memoranda of understanding with Air Baltic and the
Indonesian government. The Holding’s subsidiaries
Proud and pleased to have attained the target of “10
airports in 10 years” it had set for itself in 2000, TAV
Airports new target is to increase its passenger traffic
to 100 million by 2020.
TAV AT A GLANCE
34
ASSESSMENTS
OPERATIONAL AND FINANCIAL PERFORMANCE
TAV generated a net profit of € 52 million
in the year ended December 31, 2010.
OPERATIONAL PERFORMANCE
While analyzing the Company’s operational
performance, construction income and expenses were
excluded while guaranteed passenger income from
airports operated in Ankara and Izmir were included.
• In 2010 passenger traffic at the airports operated
by TAV Airports increased by 13% over the previous
year to reach 47.6 million. According to the Turkish
State Airports Authority (DHMİ) statistics, which are
inclusive of transit passengers, passenger traffic at
the Istanbul Atatürk Airport International Terminal
grew by 11% in 2010 to 20.3 million.
• The Company’s adjusted revenue, calculated by
including guaranteed passenger income from airports
operated in Ankara and Izmir, increased by 23%, from
€ 640 million in 2009 to € 785 million in 2010.
• The share of aviation income (including ground
handling income and guaranteed passenger income
from the Ankara and Izmir airports) rose to 45%
of total income during this period, up from 43% in
2009. Aviation income constituted the largest share
of total income due in part to the commencement of
operation of TGS in the beginning of 2010, while duty
free sales revenue was the second largest item in the
Company’s total revenues with a 31% share.
• Adjusted EBITDA rose 27% in 2010 to € 212 million
(EBITDA margin: 27%), up from € 167 million in 2009.
• Adjusted EBITDAR increased by 10% in 2010 to
€ 342 million, but it underperformed the growth in
EBITDA. The primary reason for this was the decline
in concession rent payments as a result of exchange
rate movements.
• Net profit rose from € 51 million in 2009 to
€ 52 million in 2010. Due to € 9 million in income
generated from the sale of 15% of TAV Tunisie
shares to IFC in 2009, as well as the positive € 13
million difference between construction revenue and
expenditure owing to IFRIC (International Financial
Reporting Interpretations Committee) practice, the
net profit figures of 2009 and 2010 are not directly
comparable.
• The completion of the airport construction in Tunisia
and the commencement of operations raised the free
cash flow from minus € 102 million in 2009 to € 217
million in 2010.
• As a result of organic and inorganic growth, adjusted
revenue rose 23% in 2010 to € 785 million from € 640
million in 2009.
• Most of the Company’s revenue is denominated
in foreign currency (euros and US dollars). In 2010,
the Company’s aviation income (including ground
handling) constituted 45% of its total operating
income, whereas non-aviation income made up the
remaining 55%.
• Adjusted aviation income (excluding ground
handling) increased from € 162 million in 2009
to € 202 million in 2010. Pursuant to the IFRIC 12
Practice, guaranteed passenger income of € 15.1
million from the Ankara Esenboğa Airport and
€ 17 million from the Izmir Adnan Menderes
Airport were not included in aviation income in the
income statement prepared in accordance with
the IFRS during this period. The adjusted aviation
income figures presented in this report are
inclusive of these guaranteed passenger income.
• Sales of duty free goods increased by 17% in
2010 to € 166 million from € 142 million in 2009
thanks to the increase in passenger traffic. Duty
free sales, which were negatively impacted by
the limits put in place by the Undersecretariat
of Customs in October 2009, made a positive
contribution to the revenue growth in the last
quarter of the year after the duty free limits were
revised as of the beginning of September of this
year. Average duty free spending per passenger
declined by 2% to € 14.5 in 2010 from € 14.7 in
2009 due in large part to the increased number of
transfer/transit passengers after the operations
35
in Macedonia and Tunisia commenced. Spending
per passenger rose 3% from € 15.7 to € 16.3 in
2010 despite the 13% year-on-year increase in the
international transit passenger traffic at Istanbul
Atatürk Airport.
• Ground handling income rose 34% in 2009 to
€ 152 million, up from € 113 million in 2009. The
start of operations of TGS in Istanbul, Ankara,
Izmir, Antalya and Adana contributed to the
income. During the same period, the number
of aircrafts served by Havaş (excluding TGS)
increased by 13% to 109 thousand. TGS took
over the Turkish Airlines ramp operations at the
Istanbul Atatürk Airport from Havaş as of the
beginning of 2010 and the number of flights
served increased from 87 thousand in 2009 to 134
thousand in 2010.
• Concession fees from duty free sales increased by
14% in 2010 to € 78 million from € 68 million in
2009.
• Income from food and beverage services was up
from € 38 million in 2009 to € 48 million in 2010
for a 25% increase.
• Other income increased by 20% in 2010 to € 139
million from € 116 million in 2009.
• Operating expenses rose by 24% in 2010 to
€ 632 million from € 509 million in 2009. This was
due primarily to the increases in personnel and
depreciation and amortization expenses.
• Concession rent expenses declined by 10% in 2010
to € 130 million as a result of the drop in rent
payments made for the Istanbul Atatürk Airport.
Concession rent expenses consist primarily of
rent payments made to the Turkish State Airports
Authority (DHMİ) pursuant to Atatürk Airport’s
lease agreement (€ 117 million), and rent payments
(€ 10 million) made to the Tunisian Civil Aviation
and Airports Authority (OACA) for the Monastir
Airport, which the Company began operating on
January 1, 2008 and for the Enfidha Airport, which
commenced service on December 2009.
• The cost of duty free inventory sold increased by
17% over the previous year to € 65 million.
• The cost of food and beverage inventory sold,
which was € 14 million in 2009, rose 19% to € 16
million in 2010.
• Personnel expenses were up from € 153 million in
2009 to € 219 million in 2010, for a 43% increase.
This increase was a result of the commencement
of operations at TGS, NHS, TAV Macedonia and
Enfidha Airport, and the takeover of BTA’s service
points at the Atatürk Airport’s Domestic Terminal.
The average number of employees was higher by
44% over the same period.
• The cost of services outsourced increased by 23%
to € 42 million in 2010, up from € 34 million in
2009. This outsourced services expense item is
comprised of the consolidated operating expenses
of ATÜ, BTA, TAV Operations Services and Havaş.
• Amortization and depreciation expenses grew to
€ 60 million in 2010, up 60% from € 37 million in
2009, due to the start of operations at Tunisia’s
Enfidha Airport.
• Other operating expenses rose 39% to € 100
million in 2010 from € 72 million in 2009.
• Adjusted operating profit (excluding construction
income and expenses, including guaranteed
passenger income) increased from € 130 million in
2009 to € 153 million in 2010, corresponding to an
increase of 17%. • Adjusted EBITDA reached € 212 million in 2010, up
27% from € 167 million in 2009.
• Adjusted EBITDAR (adjusted EBITDA before
concession rent payments) rose 10% in 2010 to
€ 342 million from € 311 million in 2009.
• Net finance costs dropped from € 60 million in
2009 to € 57 million in 2010.
• Total tax benefit (expense) consists of deferred
taxes and corporate taxes. TAV’s tax expense rose
from € 10 million in 2009 to € 33 million in 2010, a
large share of which accrued to TAV Istanbul.
• Net profit rose from € 51 million in 2009 to € 52
million in 2009.
(€ million)
2010 2009
Net cash generated from
operating activities 336.3 209.7
— Tangible fixed asset purchases (79.8)
(52.5)
— Airport operation concession inflows (38.0) (259.0)
— Intangible fixed asset purchases (1.0)
(0.6)
Free Cash Flow (FCF) 217.4 (102.4)
TAV AT A GLANCE
36
ASSESSMENTS
OPERATIONAL AND FINANCIAL PERFORMANCE
Consolidated Cash Flow Summary
Net cash generated from operating activities
TAV Airports generated € 336 million of cash from its
operating activities in 2010, whereas it had generated
€ 210 million in 2009. Cash generated from operating
activities before working capital rose from € 293 million
in 2009 to € 340 million in 2010.
Net cash generated from investment activities
In 2010, TAV Airports generated € 36 million of cash
from operations. This increase was due to the start
of operations in Tunisia and the resulting decrease in
investment expenditure, as well as the cash obtained
from the sale of minority shares in Havaş (€ 102 million)
and Tunisia (€ 40 million).
Net cash generated from financing activities
Cash flows from financing activities are generally
related to borrowings from banks, project finance
loans and their repayments. TAV Airports, which has a
65% ownership share in the newly established Havaş
Holding, borrowed approximately € 60 million in the
(€ million) acquisition of Havaalanları Yer Hizmetleri (Havaş). The
cash generated from the sale of Havaş shares to Havaş
Holding was used to pay down debt at the Holding
level. In 2009, there was a cash inflow of € 86 million
due to financing activities. The portion of the project
finance loan secured for the Tunisia Enfidha Airport
investment that was drawn down, as well as the cash
inflow from the rights issue (€ 57 million) were included
in this figure.
Free Cash Flow
Free cash flow (net cash generated from operations cash used in investments) in 2010 was € 217 million, up
from minus € 102 million in 2009.
Net Debt
As a result of the cash generated by the sale of an 18%
equity stake in TAV Tunisie, total debt at the Holding
level fell from € 200 million at year-end 2008 to € 35
million as of December 31, 2010. The consolidated debt
for 2010 stood at € 822 million as of December 31, 2010.
Revenues EBITDA EBITDA Margin (%)
Net Debt (Cash)
Airports
471.0 170.2 36
697
Istanbul
318.6 110.7 35
160
Ankara 37.9 15.3 40
110
Izmir
32.7 19.4 59
26
Tunisia 45.7 12.2 27
343
0.0 (1.2)
a.d.
16
22.0 11.3 51
23
Gazipaşa Tbilisi & Batumi Macedonia 14.1 2.5 18
18
Service Companies
469.2 43.5 9
125
ATÜ (50%) 170.0 15.4 9
21
75.0 7.2 10
(3)
BTA Havaş 163.5 Other 60.7 Total 940.3 Eliminations Consolidated 25.5 16
76
a.d.
32
213.7 23
822
(155.3)
(1.5)
-
-
785.0 212.2 27
822
(4.6)
37
TAV AT A GLANCE
38
ASSESSMENTS
INVESTOR RELATIONS AND STOCK PERFORMANCE
The third best performing
stock in ISE 30 in 2010...
TAV Airports strives to increase shareholder value
through investor relations practices at international
standards. The Investor Relations Department of TAV
Airports was established in September 2006, prior to
the Company’s initial public offering. The Department
has been operating with an expanded role since the
public offering in February 2007. Acting as a transparent,
two-way bridge between investors and the Company,
TAV Investor Relations Department aspires to disclose all
information about TAV Airports to the public in the most
accurate, timely and complete manner.
Armed with the awareness of its responsibility to serve
as a gateway to TAV Airports for investors and all other
stakeholders, the Investor Relations Department shares
the most accurate information and data about the
Company in the most transparent and prompt manner
on the Public Disclosure Platform (PDP). The Department
posts these announcements on its web site at
http://ir.tav.aero and updates the information on the
PDP as well as on its web site as changes occur.
The Holding won first place in the categories of “Best
Investor Relations CEO”, “Best Investor Relations CFO”
and “Best Investor Relations Officer” at the Investor
Relations Awards, organized jointly by Thomson Reuters
and Acclaro for the second year in Turkey. In addition, in
the Turkey Investor Relations Awards 2010, TAV Airports
received prizes in the categories of Investor Relations
Web Site and Investor Relations Department.
In 2010, TAV Investor Relations attended a total of 13
road shows and conferences, eight of which were abroad,
and had face-to-face meetings with over 400 investors,
shareholders and analysts in regards to the Holding’s
operations, performance and other developments.
In addition, pursuant to the Capital Markets Law, 34
material disclosures were issued in 2010 to the PDP
in order to inform shareholders and the public; these
disclosures were also posted on the Company’s web site,
which was overhauled to become more interactive.
Stock Performance
The Company’s shares are traded on the ISE since
February 23, 2007 under the ticker “TAVHL”. The year’s
low was TL 4.68 and the year’s high was TL 8.15 for TAV
Airports shares, which became the third best performing
stock in the ISE 30 in 2010. TAVHL share price gained
58% in 2010, and yielded returns well above the
ISE 100 and ISE 30 indices, which rose by 25% and 21%,
respectively. The daily average trading volume of the
shares was USD 12 million and according to the Central
Registry Agency data, percentage held by foreign
investors stands at 83% as of December 31, 2010.
Price Performance of TAVHL Shares (TL)
Share
TAVHL
31.12.2009
31.12.2010
Change (%)
4.74
7.48
58
39
Subcategories Weight
Score
Rating
Shareholders
0.25 9.05 9.0
Public Disclosure and Transparency 0.35 9.26 9.0
Stakeholders
0.15 9.54 9.5
Board of Directors 0.25 8.40 8.5
Total
1.00 9.03 9.0
Corporate Governance Rating
The international corporate governance rating agency
RiskMetrics Group (ISS), which is authorized by the
Capital Markets Board (CMB) to conduct corporate
governing rating activities in Turkey in accordance with
the CMB’s Corporate Governance Principles, issued its
second Corporate Governance Rating Report for TAV
Airports in 2010.
In its second year of assessment, TAV Airports increased
its rating score from 8.5 to 9. TAV Airports, which had
joined the index in the third position last year, ranked
first in its second year. In this respect, according to the
CMB’s guidelines on the issue; the weighted assessment
results in the subcategories of Shareholders, Public
Disclosure and Transparency, Stakeholders, and Board of
Directors are as shown above.
Profit Distribution Policy
The Company’s profit distribution policy does not a
allow for any privileges.
The Company determines its profit distribution
decisions according to the provisions of the Turkish
Commercial Code, Capital Markets Law, CMB resolutions
and regulations, taxation laws, other related legislation,
as well as its Articles of Association.
One of the main objectives of the Company is to
ensure that the profit distribution policy is continued
except in special cases such as investment and funding
requirements of the Company’s and its subsidiaries’
long-term growth, as well as extraordinary economic
developments.
All information and data about TAV Airports can be
found on the web site under the Investor Relations
Department section. In addition, information regarding
shares, financial reports, the General Assembly and
other related matters can be obtained from the
Department through the contact information provided
below.
Phone: +90 212 463 30 00 / 2120-2122-2123-2124
Fax: +90 212 465 31 00
Website: http://ir.tav.aero
TAV AT A GLANCE
40
ASSESSMENTS
INVESTOR RELATIONS AND STOCK PERFORMANCE
TAV received five awards at Turkey
Investor Relations Awards.
Thomson Reuters and Acclaro /
May 2010
“Best Investor Relations CEO”,
“Best Investor Relations CFO”,
“Best Investor Relations Officer”,
“Best Investor Relations Website”
and “Best Investor Relations
Team” at the Turkey Investor
Relations Awards 2010 organized
jointly by Thomson Reuters and
Acclaro in Turkey.
TKYD / January 2011
In the Corporate Governance
Awards Ceremony organized for
the first time by the Corporate
Governance Association of
Turkey (TKYD), TAV Airports
received prizes in the categories
of “Company with the Highest
Corporate Governance Rating
Score” and “Company with the
Highest Board of Directors Score”.
Mercury / February 2011
TAV Airports Annual Report 2009
received a “Silver” award for its
content and design at the 24th
International Mercury Awards in
the category of Annual Reports/
Overall Presentation that is
organized to promote excellence
in public relations and corporate
communications.
League of American
Communication Professionals
(LACP) / March 2011
TAV Airports Annual Report 2009
ranked 10th among 50 annual
reports in the 2009/10 Vision
Awards held by the League
of American Communication
Professionals and received a
“Platinum” award for its content
and design in the category
of Annual Reports / Overall
Presentation.
World Finance / March 2011
TAV Airports was designated
by the World Finance Magazine
as the company with the Best
Corporate Governance in Turkey.
Interactive Media Awards (IMA) /
March 2011
The Investor Relations Website
received the “IMA Outstanding
Achievement Award” in the
Transportation & Investor
Relations categories.
41
Relative
1.4
Price (USD)
Maximum Market Capitalization:
USD 2,626 million
8
1.3
7
1.2
1.1
6
1.0
5
0.9
4
0.8
3
0.7
0.6
2
Minimum Market Capitalization:
USD 402 million
0.5
1
0.4
TAVHL (USD)
Source: ISE
31.12.10
01.10.10
06.07.10
01.04.10
06.01.10
08.10.09
04.07.09
16.04.09
22.01.09
22.10.08
25.07.08
01.05.08
06.02.08
09.11.07
14.08.07
22.05.07
26.02.07
0
Relative to ISE
Millions (Number of Shares)
%
180
100
90
80
70
60
50
40
30
160
140
120
100
80
60
40
Source: Central Registry Agency (CRA).
% Held by Foreign Investors
Total Float
31.12.10
15.11.10
12.07.10
07.05.10
16.02.10
31.12.09
30.10.09
30.07.09
19.05.09
07.04.09
06.02.09
23.12.08
17.10.08
04.07.08
01.04.08
31.12.07
03.08.07
26.04.07
0
28.02.07
20
20
10
0
TAV AT A GLANCE
42
ASSESSMENTS
RISK MANAGEMENT
TAV is one of the first Turkish companies
to launch the Enterprise Risk Management
(ERM) practice.
Enterprise Risk Management
In 2010, TAV Airports completed the project to form
its Enterprise Risk Management (ERM) structure,
which was launched in December 2009. Under this
structure, ERM commenced operation as a Coordination
Department that reports directly to the Finance
Director, while the CEO was designated as the ultimate
responsible authority for ERM at the Holding. The new
draft Turkish Commercial Code has been completed,
and is expected to take effect in 2012. Well aware
that public companies will be required to establish
risk monitoring committees on the level of Board of
Directors, TAV completed the necessary preparation
and structuring for monitoring risks and reporting them
to the management prior to this legal obligation, thus
demonstrating the importance that it attaches to its
shareholders and the share value.
As a result of the ERM project undertaken with the
assistance of an independent audit company, TAV
Airports identified 269 risks which might arise from
the activities of the companies and subsidiaries under
the Holding umbrella. Following the assessment of
these risks by executives, around 60 risks were deemed
necessary for monitoring by the senior management
and were reported to the CEO and to the Board of
Directors. The risk inventory will be revised on an
annual basis in the coming period and the reports will
be updated.
After the ERM structuring is completed in all Group
companies, the Holding will launch the Control
Self-Assessment (CSA) initiative, which encompasses
the analysis of operational processes, testing and
evaluation of the functioning of the current controls in
the process flows by the authorized employees, and the
improvement and redesign of the controls according
to the results. As a result, the relation between macro
level risks and operational process risks will be revealed
and the error and loss rates in the processes will be
minimized. The Holding’s Internal Audit function will
increase its productivity and effectiveness thanks to
the reports that will be generated as a result of this
initiative.
Enterprise Risk Management Approach and Risk
Assessment Method
The Holding’s risk management approach can be
defined as “integrated risk management”. Under the
coordination of TAV Airports’ ERM Department, all
Group companies and operations are encompassed
by this risk management approach. In contrast to
the conventional risk management method, which
evaluates the risks in various business units separately;
the Holding aims to implement a risk management
which can oversee the general risks of the Company,
puts the general interest of the Company before that
of the business unit the risk is stemming from, and
functions in a continuous manner.
At TAV Airports, risk management is synonymous with
being able to visualize opportunities and threats at the
same time, and to correctly determine the cost of it
and accurately price it when taking a risk. The Holding
evaluates risks according to two criteria, that is, by
posing the following questions:
• What is the probability or the frequency of
materialization of a risk?
• What would be the impact if it materializes?
The Holding classifies risks under the categories of
strategic, financial, operational and legal/compliance
and assesses the impact of the risk not only in
financial terms, but also along the dimensions of
service continuity, prestige, loss of customers and
legal/regulatory effect. The Holding determines the
methodology, while the executive or the business unit
that carries the risk undertakes self-assessment. If, as
a result of this assessment, a certain risk is deemed
43
Identification & Measurement
CONTINUITY
Identification & Measurement
Prioritization
Prioritization
Corporate
Performance
Action
TERMINAL ENTERPRISES &
SERVICE COMPANIES
HOLDING ERM
Action
Risk Reduction
Monitoring & Reporting
Efficient Use of
Resources
Monitoring & Reporting
to be higher than the targeted level despite allocated
resources and managerial capabilities, the department
carrying the risk determines an action plan and
designates a deadline and an officer to bring the risk
down to the targeted level.
companies. Nevertheless, COSO (The Committee of
Sponsoring Organizations of the Treadway Commission)
and ISO 31000 attempt to offer a general framework
of and establish standards for enterprise risk
management.
The Legal Framework for Enterprise Risk Management
The expansion of regulations and the increase in
sanctions/obligations in response to the recent global
economic crises pushed the financial institutions, which
have pioneered in this field due to the very nature
of their business, as well as real sector companies
to adopt enterprise risk management practices at
a greater scope. The draft Turkish Commercial Code
approved by the Turkish Grand National Assembly
in early 2011 requires companies, starting with
publicly traded firms, to implement enterprise risk
management functions and report the risks periodically
to the management.
TAV’s Main Distinction in Enterprise Risk
Management
TAV is among the first corporations to initiate ERM
practices in Turkey and the key to its success in this
area is the support of its senior management for the
ERM structure.
However, unlike audit, risk management is not a
regulated function yet. One reason for this is the
fact that risk management is an unbounded issue
that needs to be developed with the awareness of
Since the structure is relatively new, it has not
been assessed by an independent rating agency,
and accordingly has yet to receive a certificate or a
rating score. However, after the completion of the
integration of the Holding’s recent ERM system to
Group companies and the completion of at least a full
cycle, the Holding will make applications to be rated.
It is predicted that an adequate rating score for the
functioning of TAV’s Enterprise Risk Management will
naturally have a positive effect on its borrowing costs.
TAV AT A GLANCE
44
ASSESSMENTS
HUMAN RESOURCES
TAV created new employment opportunities
for a total of 8,049 people in 2010.
TAV Airports has adopted principle of managing its
human capital, the key to its success, in accordance
with an equal opportunity principle at international
standards, striving to become a company preferred
by its employees. In addition, the Company embraced
it as an indispensable component of its corporate
governance approach to become a pioneer in the sector,
in Turkey and in the world with its integrated human
resources practices.
At TAV, Human Resources Department plans its
operations in parallel with the Holding’s business
strategies so as to provide strategic support to all
departments in improving business results, to nourish
and promote a high performance culture and to create
value for all stakeholders.
TAV’s human capital strategy has been structured in
accordance with a corporate learning approach. As a
pioneer and leader of airport operations in Turkey, TAV
Airports positions it as one of its main strategies to
streamline the acquired information, experience and
know-how, and to spread this across all levels of the
Company.
In order to standardize human resources practices
across the Company and to ensure that overseas
facilities are integrated with the TAV culture,
critical processes such as orientation, performance
management and employee satisfaction have begun
to be implemented in the overseas facilities in 2010.
Again in 2010, TAV Macedonia’s Human Resources
Department was established and efforts for the
development of corporate processes were stepped up.
TAV Airports shares its corporate vision, mission, values
and ethical principles with the employees through
classroom trainings as part of the orientation process,
as well as other development programs, the corporate
portal and internal publications. In 2010, “Corporate
Values” training was launched across the Company with
the participation of employees from all levels of the
echelon so as to ensure the adoption of TAV values by
all employees.
Performance Management
In the performance management process, the
Company’s and its departments’ annual strategic
objectives and business plans are shared with the
employees. The employees’ views on the objectives
and the business plans are considered as valuable
feedback by the management and are integrated
into the system. Executives are responsible for
tracking employees’ performance, assessing their
competencies, identifying their strong traits and areas
for improvement, improving the staff via training,
applications, transfer of know-how and on-the-job
training, as well as guiding and monitoring their
development plans. In this respect, each department
of TAV functions as a training and development center.
The executives, who are in a sense development
and training officers expected to set an example for
their staff with their personality and knowledge, are
supported via managerial skills trainings. Following the
performance evaluation meetings, both the managers
and the employees fill out a survey where they can
share their views on the process.
Focus on Employee Satisfaction
At TAV, in addition to quality of service, the relationship
between the managers and their staff, as well as the
strong interaction between employee satisfaction and
engagement have a crucial effect on customer loyalty
and sustained profitability. Well aware that competitive
edge and success stem largely from the human
resources, TAV Airports takes heed of employees’
viewpoints. For this purpose, “Employee Satisfaction”,
one of the major factors that affects employee
motivation and performance, is measured and reported
annually. Employee Satisfaction score increased by
five points over the previous year to reach 86 out of
100 in 2010. The results were presented to the senior
management in the form of detailed and comparative
reports and were also shared with the employees via
the corporate portal.
45
In 2010 opinion-sharing meetings were launched in
order to conduct face-to-face conversations with
employees and learn about their satisfaction levels,
career and development plans, opinions about and
expectations from the Company and the human
resources practices, and to get to know them better.
Taking into consideration the suggestions for the
improvement of the work environment, The Company
constructed the TAV Administration Building that
increases teamwork, cooperation and transparency, and
the administrative staff moved into their new offices
in 2010.
Contribution to Employment
In 2010, TAV created employment opportunities
for a total of 8,049 people and offered 780 interns
the chance to learn about professional life and gain
experience.
In its overseas investments, TAV Airports establishes
organizations where, for the most part, the local
population is employed in order to support the
development of the local community. TAV operates
10 airports in four countries spread across a vast
geography and employs people from numerous nations
working in harmony on the basis of common values,
ethical principles and mission.
TAV also offers rich internship opportunities to
ensure that students, who constitute the potential
workforce of the future, learn about professional life
and the aviation sector, assess themselves, and gain
awareness on professional life and skills. To support the
cooperation between the academic and business circles
and to increase employment in the sector, priority is
given to students from civil aviation departments of
universities. The performance of interns is evaluated
by the managers of the related departments and
Human Resources Department and the ones deemed
successful are offered positions at the Company. To this
end, “Professionals of the Future Internship Program”
was initiated in 2010 and the interns who completed
the program successfully and embraced the corporate
culture were invited to work at the Holding after their
graduation.
Training and Development Initiatives
TAV Airports carries out its efforts to become the
international aviation industry’s “company school”
with its corporate learning approach under the TAV
Academy umbrella, which is the Company’s corporate
development center, and supports personal and
professional development through comprehensive
programs.
TAV Academy supports the management with its
international training experience by offering choices
that meet the current and potential skills expected
from the human resources. Areas of development
identified by performance evaluation meetings and
demands received during the year are analyzed by the
TAV Academy and the development program catalogue
is updated each year. Demands for training are received
via information systems and participation is reported
automatically.
Between January and December of 2010, TAV Academy
administered 409 days (379.5 days of which by TAV
Academy instructors) of training on 92 different
subjects with 7,975 participants.
In 2010 a total of 406 employees from TAV Tunisie,
TAV Macedonia and TAV Georgia participated in TAV
Academy’s Customer-Oriented Service, Performance
Management and Intercultural Management Skills
development programs that are conducted in order to
integrate TAV corporate culture in the business conduct
of the employees of TAV’s overseas subsidiaries and to
support their development.
TAV Academy Becomes a “Global Training Center”
Established in 1991 in order to organize programs and
conferences across the world in line with the principle of
TAV AT A GLANCE
46
ASSESSMENTS
HUMAN RESOURCES
A company whose intellectual capital
inspires admiration in its sector
“contributing to excellent management and operation
of airports”, Airports Council International (ACI) Global
Training Hub launched its 11th global training center at
the Istanbul Atatürk Airport.
The collaboration between TAV Academy and ACI
had started in March 2008 with the “Aviation English
Operational” program, and became official with the
“Global Training Center” cooperation agreement signed
in September 2010. Up until now, a total of 166 Turkish
and foreign aviation industry staff, most of whom
are senior executives, participated in the programs
administered jointly by the TAV Academy and the ACI.
The choice of the uniquely positioned city of Istanbul
as the new ACI development hub means that the ACI
training of aviation industry employees especially from
Europe, Asia, Middle East and North Africa will be
hosted by TAV Airports and the TAV Academy.
Number of
Employees
TAV Istanbul
2,188
Corporate Mentoring
Under the TAV Airports Corporate Mentoring Program
that was designed within the framework of TAV’s
development and back-up plans in accordance with the
corporate vision and strategic targets, senior executives
and TAV Academy consultants mentor to a total of
46 employees consisting of mid-level managers and
graduates of the Airport Operations Management
Trainee Development Program. The program’s objective
is to transfer the corporate heritage, know-how and
personal experiences to the high-potential, upwardbound managers and management trainees of TAV,
to ensure the continuity of intellectual capital and
corporate learning, and to support the professional
career development of the employees.
Tenure- Age
Sex
Marital Status
Average
Tenure
Average
Age
Male
%
Female
%
Single
%
Married
%
4.8
31.1
70
30
51
49
TAV Esenboğa
822
3.9
31.2
71
29
45
55
TAV Izmir
441
3.6
31.1
67
33
64
36
TAV Tunisie
679
11.0
39.4
88
12
34
66
TAV Gazipaşa
18
2.4
37.8
89
11
46
54
TAV Georgia
718
2.6
38.4
73
27
33
67
697
1.3
44.0
73
27
46
54
9,688
2.1
31.4
79
21
46
54
TAV Macedonia
Havaş
ATÜ
1,205
4.3
34.3
56
44
48
52
BTA
1,649
3.0
31.0
80
20
47
53
TAV Holding
124
4.7
35.0
54
46
57
43
253
3.6
30.5
63
37
71
29
TAV IT
126
3.2
32.5
80
20
51
49
TAV Security
160
4.6
28.6
62
38
56
44
18,768
3.1
32.6
75
25
47
53
TOTAL
47
Airport Operations
Özlem Akşahin, Tav Istanbul, Executive Assistant
TAV AT A GLANCE
ASSESSMENTS
52
Istanbul Atatürk
Airport
Istanbul’s gateway
to the world
Expiration of operation
January 2021
2010 Passenger traffic
20,344,620
2010 Commercial flight traffic
178,817
Domestic Terminal
January 2021
11,800,999
94,887
Total Traffic
32,145,619
273,704
Source: State Airports Authority (DHMİ)
Istanbul Atatürk Airport, which is the starting point
of the Turkish aviation history, is not only the Turkish
airport with the highest passenger traffic, but also
one of Europe’s most commended major airports.
Also the first airport operated by TAV Airports,
Istanbul Atatürk Airport represents Turkey’s modern
face.
As one of the major metropolitan areas of the
world, Istanbul attracts an increasing number of
people due to its large population and high tourism
and commercial potential. Consequently, it is an
indispensable requirement to expand the Airport
at the same rate while preserving its healthy,
sustainable and high quality services. The Airport
is also a center of attraction for transit flights. The
Development and Expansion Project continues at
full speed at the Airport’s passenger terminals to
respond to this soaring potential.
Investments for a Sustainable Future
Thanks to the project that entered 2010 in its
final phase, the number of passenger bridges was
increased from 9 to 12 at the Domestic Terminal,
and from 23 to 26 at the International Terminal. The
project yielded 18,770 square meters of additional
indoor space. At the International Terminal,
Remote-Bus lounges with four boarding gates were
constructed for aircrafts that park in uncovered
spaces. The current VIP lounge was modernized
and expanded. 46 more rooms were added to the
Airport Hotel’s existing 85 rooms. In addition to the
duty free and commercial areas, new CIP lounges
ranging between 315 square meters and 500 square
meters are being launched for the airlines that
conveyed their need for them. In addition to the
53
The improvement of the passenger terminals that was undertaken
as part of the Development and Expansion Project initiated last
year at the Istanbul Atatürk Airport is completed. Thanks to
the project that entered 2010 in its final phase, the number of
passenger bridges was increased from 9 to 12 at the Domestic
Terminal, and from 23 to 26 at the International Terminal.
2009
32,145,619
29,812,888
Total Passenger Traffic
2010
TAV AT A GLANCE
ASSESSMENTS
54
Istanbul Atatürk
Airport
Flights to 219 destinations from the
International Terminal and to 38
destinations from the Domestic Terminal
existing 7,076-vehicle multi-storey car park, 36 bus
parks and a 161-vehicle VIP car park; a 1,034-vehicle,
28,300 square-meter outdoor car park was also put
in service.
Istanbul Atatürk Airport started to cater to eight
more airlines in 2010; the International Terminal
served 219 destinations and the Domestic Terminal
served 38. Seven airlines that operate at the
International Terminal increased their passenger
traffic by more than 100%.
The Baggage Handling System, one of the
investments launched in 2010, features measures
to facilitate baggage transfers. In order to offer
an operational solution for the soaring baggage
volume that grew by around 15-22% within the
last two years, three new baggage transfer lines
were added to the two existing lines. As a result,
capacity increased by 200% while the capacity of
the automatic baggage sorting unit rose by 88%. As
part of the security investments, new EDS devices
were installed on the itinerary of the baggage loaded
at transfer lines for automatic sorting.
Parking Area and Vehicle Capacity
Indoor Car Park
180,000 m²
7,076 vehicles
Outdoor Car Park
28,578 m²
1,034 vehicles
Duty Free Area and Number of Stores
Store Area
6,204 m²
Number of Stores
25
Catering Area and Capacity
Catering Areas
16,254 m²
Number of Check-in Counters
International
Domestic
224
96
Passport Counters
Departures Floor
48
Arrivals Floor
42
Number of Bridges
International
26
Domestic
12
Number of Bus Gates
Departures Floor
16
Arrivals Floor
8
Number and Specifications of Runways
17R/35L 3,000x45 m
05/23 2,600x60 m
17/35R 3,000X45 M
55
“Highly Commended
Award”, 2010
5th European Route
Development Forum, Routes
“The Best Airport Operator of
the Year”, 2010
Quality in Tourism-Skalite
2010 Awards
“Center of Attraction for
Transit Flights”, 2009-2010
The 50 Best Travel
Destinations Awards, Monocle
Magazine
“The Second Best Airport of
Southern Europe”, 2009
Skytrax World Airport Awards
“Highly Commended
Award”, 2007
13th World Route Development
Forum, Routes
“Second Best Airport”, 2003
www.travelquality.com
“Europe’s Most Comfortable
International Terminal”, 2002
Deutsche Aeroconsult
Engineering Academy
Award, 2002
ACEC-American Council of
Engineering Companies
(TAV was the first Turkish
company to receive this award.)
“Safest Airport in the Middle
East and Balkans”, 2001
USA Federal Aviation
Administration (FAA)
Suna Gürer, Tav Security, Human Resources Supervisor
TAV AT A GLANCE
ASSESSMENTS
58
Ankara Esenboğa
aırport
Turkey’s protocol and
diplomacy gateway
May 2023
1,325,989
11,742
Domestic Terminal
May 2023
6,433,490
51,643
Total Traffic
7,759,479
63,385
Having achieved an exemplary accomplishment in
its sector with Istanbul Atatürk Airport, TAV applied
its experience in airport operation to the the Ankara
Esenboğa Airport in 2006. The Airport commenced
operation one year before the set deadline and it has
now become the new and modern face of Ankara
thanks to its unique architectural design.
Designated “Best Airport” in 2009 by ACI Europe,
Ankara Esenboğa Airport also has a strategic
significance as Turkey’s protocol and diplomacy
gateway.
Fast and Effective Operations, Impeccable Security
Ankara Esenboğa Airport also has the distinction
of being the only airport in Turkey to combine
domestic and international terminals under a single
roof. Its architectural characteristics shorten the
distances covered by passengers and facilitate very
fast and effective operations at the Airport. Ankara
Esenboğa Airport has a total terminal area of 182
thousand square meters and is equipped with the
latest technological security systems, such that each
baggage loaded on the aircraft is scanned by the
Explosive Detection System (EDS) and goes through a
very extensive security check.
In 2010, Ankara Esenboğa Airport catered to 32
airlines. The International Terminal hosted flights
to 43 destinations and the Domestic Terminal to 30
destinations.
ACI Europe, 2009
“Best Airport”
With the objective of becoming a hub in the Middle
East and Eastern Europe, the Airport continues
efforts to increase the number of flights, particularly
international routes. Providing information to
all state and private companies in the city about
developments in direct flights, TAV shares the rapid
progress of the Airport with all residents of Ankara.
59
Considered to be one of the most modern and secure
airports in Europe, Ankara Esenboğa Airport strives to
become a hub in the Middle East and Eastern Europe.
Ankara Esenboğa Airport also has a strategic significance
as Turkey’s protocol and diplomacy gateway.
2009
7,759,479
2010
6,084,404
car park
108,000 m²
4,069 vehicles
Store Area
2,387 m²
Number of Stores
7
Catering Area 5,200 m²
International
Domestic
102
27
In addition, the Airport has two large-scale
baggage counters.
Passport Counters
Departures Floor
18
Arrivals Floor
18
Number of Bridges
18
Number of Bus Gates
10
2 2RWY runways
03/21 3,750x45, 3,750x60 m
TAV AT A GLANCE
ASSESSMENTS
60
Izmir Adnan Menderes
Airport
The gateway to the Aegean...
January 2015
2,127,457
16,149
Indoor Car Park
69,168 m²
2,237 vehicles
Store Area
2,403 m²
Number of Stores
11
Catering Area
6,119 m²
66
Passport Counters
Departures Floor
18
Arrivals Floor
16
Number of Bridges
9
Number of Bus Gates
8
34R – 16L 3,240x45 m
34L – 16R 3,240x45 m
Boasting great tourism potential together with
its hinterland, Izmir is Turkey’s third largest city,
well-known for its natural beauty and modern
disposition. Izmir also stands out as the commercial
and artistic hub of the Aegean Region.
Completed by TAV Airports eight months ahead
of schedule, Izmir Adnan Menderes Airport’s
International Terminal commenced service on
September 13, 2006. TAV constructed this new
Terminal that was needed desperately by the
tourism sector on a 118 thousand square-meter lot.
TAV also assumed the operation of the Terminal in
order to provide impeccable services in a safe and
exquisite environment, and as such makes diligent
efforts to solidify the well-earned image of this city,
also known as the Aegean Region’s gateway to the
world.
Soaring Passenger Traffic
The International Terminal, which serves 69 airlines,
hosted flights to a total of 88 destinations in 2010.
The total passenger traffic and number of flights
rose well above expectations. In parallel with the
rising passenger numbers, aviation income and
non-aviation income both increased significantly.
Despite the spike in operational traffic, effective use
of resources translated into an increase in customer
satisfaction, and the targets set for 2010 were
exceeded.
The double-digit growth in passenger traffic in
2010 signified an important step forward on the
path to transforming Izmir Adnan Menderes Airport
into the hub of the Aegean. The Holding continues
to increase its flight connections by adding new
airlines.
61
The double-digit growth in passenger traffic in 2010 signified an
important step forward on the path to transforming Izmir Adnan
Menderes Airport into the hub of the Aegean. The International
Terminal, which serves 69 airlines, hosted flights to a total of 88
destinations in 2010.
2009
2,127,457
2010
1,667,455
ACI Europe, 2010
“ACI
Eco-Innovation
Award”
Doha Aviation
Summit, 2009
“The Most
EnvironmentallyFriendly Airport of
the Year’’
European Steel
Design Award,
2007
“European Steel
Design Award”
Turkish
Construction
and Steelwork
Association
(TUCSA)
Izmir Adnan
Menderes Airport
International
Terminal and Car
Park project won
first place among
implemented
structures.
Aegean Region
Chamber of
Industry (EBSO),
2008
“Special
Environmental
Award”
Aegean Region
Chamber of
Industry (EBSO),
2009
“Special Jury
Award”
Tahsin Atalar, Tav Istanbul, BHS Maintenance Technician
TAV AT A GLANCE
ASSESSMENTS
64
Antalya Gazipaşa
Airport
A boutique airport at the heart
of the tourism region
July 2034
Distance between antalya Gazipaşa Airport
and some major tourist destinations (km)
Alanya
Anamur
Manavgat
Side
Beldibi
Silifke
Serik/Belek
Kundu
Kemer
Kumluca
40
80
95
105
135
140
143
170
219
269
TAV Airports was awarded the tender for the
operation of the Antalya Gazipaşa Airport, located
in the Gazipaşa municipality of Antalya, considered
to be the tourism capital of Turkey, in August 2007.
TAV Airports retains the right to operate this facility
for 25 years pursuant to the contract signed on
January 4, 2008. The Airport aims to serve the area’s
great tourism potential, especially from Eastern
Europe and the Commonwealth of Independent
States. Gazipaşa is a center of attraction where
many foreigners buy real estate and is preferred
particularly by German tourists. The Airport is an
important air transport hub for the tourism region
that encompasses districts on the eastern side of
Antalya, including Alanya.
An international boutique airport with 2,144
square meters of terminal usage area, the Antalya
Gazipaşa Airport became the new transportation
hub of the Eastern Mediterranean, with an annual
capacity of 500,000 passengers thanks to its
existing infrastructure. The runway of the airport
was expanded from 1,825 meters to 2,000 meters
thanks to the diligent efforts of TAV Airports.
Antalya Gazipaşa Airport also counts a 136x76 meter
apron space, which covers 14,200 square meters and
has the capacity to accommodate three aircrafts
simultaneously. Antalya Gazipaşa Airport also has a
150-vehicle car park.
Antalya Gazipaşa Airport, a significant step in the
Company’s objective of continuous growth and
expansion, is the first domestic airport that TAV
Airports will be operating in its entirety, except for
air traffic control services.
TAV Airports is applying its experience and expertise
in airport operations gained from the Antalya
Gazipaşa Airport toward building and improving
boutique airports in Turkey and in the surrounding
region, and to create new international flight
destinations. By expanding the existing runway,
the Company is aiming to transform the Antalya
Gazipaşa Airport, where commercial flights began in
July 2009, into an international hub serving Alanya
and the surrounding region.
65
Car Park
4,400 m²
150 vehicles
Store Area
94 m²
Number of Stores
2
Catering Area
57 m²
8
Passport Counters
Departures Terminals
2
Arrivals Terminals
3
Departures Gates
1
Arrivals Gates
1
PCN 77/R/X/T 2,000 x 30 m
TAV AT A GLANCE
ASSESSMENTS
66
Georgia, Tbilisi Airport
TAV’s first project
outside of Turkey
February 2027
821,606
16,470
Emerging Markets Airport Awards, 2010
“The best airport in the region of Russia, The
Caucasus, Eastern Europe and Baltic States”
Operated by TAV Urban Georgia LLC. (TAV Georgia)
since October 31, 2005, after the construction of
the new passenger terminal which commenced
operations on February 7, 2007, Tbilisi International
Airport was improved to a level that represents
the strategic significance of Georgia. The Tbilisi
International Airport is not only the main entry and
exit point of the capital, a city of 1.5 million people,
but of the country as a whole. Tbilisi International
Airport is also the Holding’s first project abroad. The
Tbilisi International Airport Terminal is a product of
contemporary and functional design and is equipped
with advanced technology; the terminal was
designed to provide the best route for passengers
and their baggage from the parking lot to the
departure gates. In addition, its flexible architectural
structure allows for expansion in the future without
interrupting the existing operations. With its
functional, contemporary spaces, the terminal
building is equipped with the most advanced
systems, with a special focus on passenger
comfort and efficiency of terminal operations. The
Tbilisi International Airport provides safe landing,
takeoff and maneuvering space for aircraft with an
expanded runway and recently built apron areas and
taxi routes.
At the Tbilisi International Airport, where TAV
Airports applied its experience in the aviation
sector to boost the development of Georgia’s civil
aviation sector and to contribute to the Georgian
economy; all operations inside and outside the
terminal, ground handling services, operations and
maintenance services, duty free as well as regular
retail shops and catering services, are administered
by TAV Airports with a comprehensive and
integrated approach.
Note: TAV Airports has concluded an agreement to increase its shareholding to 76% on March 25, 2011.
67
At the Tbilisi International Airport, where TAV Airports boosted the
development of Georgia’s civil aviation sector and contributed to the Georgian
economy; all operations inside and outside the terminal, ground handling
services, operations and maintenance services, duty free as well as regular
retail shops and catering services, are administered by TAV Airports with a
comprehensive and integrated approach.
2009
821,606
2010
702,714
Tbilisi Airport Total Passenger Traffic
car park
750 m²
370 vehicles
Store Area
294 m²
Number of Stores
3
Catering Area
1,100 m²
24
Passport Counters
Departures Floor
16
Arrivals Floor
16
Number of Bridges
3
Number of Bus Gates
4
CIP Area
Arrivals-Departure
488 m2
13R / 31L 3,000x45 m
Yasemin Enç, Tav Airports, Executive Assistant
TAV AT A GLANCE
ASSESSMENTS
70
Georgia, Batumi Airport
Our gateway to the Black Sea and
the Caucasus
August 2027
88,627
2,276
100 vehicles
store area
64 m²
Number of Stores
1
Catering Area
65 m²
6
Passport Counter
Departures Floor
4
Arrivals Floor
4
Number of Bus Gates
4
13/31 2,500x45 m
Source: Civil Aviation Administration of Georgia
Note: TAV Airports has concluded an agreement
to increase its shareholding to 76% on March
25, 2011.
The Batumi International Airport, too, has been
operated by TAV Airports since 2007. The Airport
is located in Batumi, the major tourism hotspot of
Georgia thanks to its stunning beauty and
five-star hotels. Breaking new ground in the region,
the Batumi International Airport is an airport used
jointly by Turkey and Georgia. This cooperation plays
a significant role in the development of the region,
as well as reinforcing strong ties between the two
countries.
Operated by TAV Batumi Operations, LLC (TAV
Batumi), with its new runway, taxi route, apron
and terminal building; the Batumi International
Airport caters to passengers’ needs with advanced
technology and functional design. The Airport’s
flexibility allows for the future expansion to
accommodate anticipated growth in passenger
traffic. In 2010, the IT investment to upgrade the
Airport’s check-in system was completed, as a result
of which it became possible to undertake faster and
healthier operations in the face of soaring passenger
traffic.
Record Increase in Passenger Traffic
In 2010, the domestic flight traffic in Georgia
increased due to the establishment of a new
national airline company. Direct flights between
Russia and Georgia, interrupted due to the 2008
war between the two nations, resumed as of June
2010. In the final quarter of 2010, three more airlines
added Tbilisi to their flight destinations.
71
Breaking new ground in the region, the Batumi International Airport is
an airport used jointly by Turkey and Georgia. This cooperation plays a
significant role in the development of the region, as well as reinforcing
strong ties between the two countries.
2009
88,627
2010
69,282
batumı Airport Total Passenger Traffic
As of year-end 2010, TAV Georgia serves 24 airlines’
scheduled flights. During the year, a total of 257
different airlines organized flights; 2 domestic and
26 international destinations were served with
scheduled flights. Including chartered flights, the
total number of destinations reached 222. TAV
Batumi, on the other hand, served a total of 25
airlines that fly to one domestic destination and
62 international destinations, four of which are
scheduled flights.
In order to respond to the traffic that continued
its upward trend throughout 2010, TAV Georgia
and TAV Batumi focused on employee training;
the companies also took effective measures for
occupational safety. Aiming to transform the Tbilisi
Airport into a prominent hub in the Caucasus region,
TAV Georgia also strives to increase its share of
technical and cargo flight revenues in the short
term.
TAV AT A GLANCE
ASSESSMENTS
72
Tunisia, Monastir and Enfidha
International Airports
The secret paradises of the
Mediterranean...
Tunisia, Monastir International Airport
May 2047
Tunisia, Enfidha International Airport
May 2047
Monastir and Enfidha Total Traffic
3,916,977
31,801
As one of the principal tourism destinations in North
Africa, Tunisia ranks among the most preferred
destinations in the Mediterranean thanks to its
natural and cultural heritage.
Throughout the public unrest of early 2011, the
airspace of the Monastir and Enfidha Airports
operated by TAV Tunisie SA remained open and no
security problems occurred. With its vast experience
in risk management, TAV Airports successfully
managed this process and contributed to the safe
evacuation of the tourists in the country. After the
crisis ended, Tunisia reopened its doors to tourists
and life returned to normal.
High Potential for Passenger and Cargo Traffic
TAV Airports holds the right of operation of the
two Tunisian airports for 40 years. Except for
air traffic control, all operations at the Monastir
International Airport, which is located merely
two hours away from many European capitals,
are being administered by TAV Tunisie SA (TAV
Tunisie), a wholly-owned subsidiary of TAV Airports.
The Enfidha International Airport, on the other
hand, is located 65 kilometers from the Monastir
International Airport and has the potential to
become one of the major air travel hubs in Africa and
is a crucial facility for Tunisia’s tourism industry due
to its proximity to major tourist destinations.
Source: Tunisian Civil Aviation and Airports Authority (OACA)
73
In 2010, Monastir International Airport was designated
Best Airport in Africa at the Emerging Market Airports
Awards. With its 28 thousand square-meter terminal
usage area, Monastir International Airport served over
63 airlines flying to 82 different destinations in 2010.
2009
3,781,256
Featuring a terminal usage area of 28 thousand
square meters, Monastir International Airport served
to over 63 airlines flying to 82 different destinations
in 2010. The Enfidha International Airport, on the
other hand, worked together with 38 airlines serving
a total of 61 destinations, with its 90 thousand
square meters of terminal usage area.
In addition, TAV Tunisie reached agreements with
many prominent airlines and tourism agencies of the
region to increase the traffic at Enfidha. As a result
of intensive marketing efforts, ground handling
contracts were signed with nearly 30 airlines, and
an agreement was reached with the world’s leading
cargo operator DHL for the operation of the cargo
center at Enfidha. It is predicted that the deep sea
port being constructed in the region will boost cargo
traffic.
3,916,977
2010
Monastir and Enfidha International
Airports Total passenger traffic
Major investments of 2010 at Enfidha were
the procurement of the equipment necessary
to ensure highly secure and safe operations at
international standards, and the commencement
of the construction of the trigeneration system. On
September 23, 2010, Enfidha International Airport
received an airport certificate documenting its
compliance with civil airport operation regulations.
In addition, efforts were initiated to complete all
infrastructure, systems and criteria required to
obtain the ISO 9001 Quality Management System
certification for both airports.
Suna Gürer, Tav Security, Human Resources Supervisor
TAV AT A GLANCE
ASSESSMENTS
76
Tunisia, Monastir and Enfidha
International Airports
Enfidha car park
130,000
Enfidha Passport Counters
Departures Floor
Arrivals Floor 28
28
Monastır car park
13,077
Monastir Passport Counters
Departures Floor
Arrivals Floor 16
20
Enfidha
1,930 m² / 6 stores
Monastır
1,431 m² / 3 stores
enfidha 9 sales points / 950 m²
Monastır 7 sales points / 1,019 m²
Enfidha
Monastır
62
46
Enfidha Number of Bridges
18
Number of Bus Gates
EnfIdha
3
Monastır
12
Enfidha Number and Specifications of Runways
PCN: 104 3,300 x 60 m; asphalt
Monastir Number and Specifications of Runways
PCN: 45 2,950 x 45 m; asphalt
Awards Received by TAV Tunisie
Airports Catering to Emerging
Markets, Awards 2010
Monastir Airport, the Best
Airport in Africa
Africa Investor
“Infrastructure Awards,
2008” Developer of The
Year Award: In the same
context, TAV Tunisie SA was a
finalist for the Public-Private
Partnership of the Year
category, and TAV Airports
was a finalist in the Sponsor
of the Year category.
Euromoney Project Finance
Magazine, 2008 “Deal of the
Year 2008 - Project Finance of
the Year” award
77
TAV AT A GLANCE
ASSESSMENTS
78
Macedonia, Skopje and Ohrid Airports
Gateways from the Balkans into
the European Union
Macedonia, Skopje Airport
681,619
12,161
Macedonia, Ohrid Airport
43,924
637
Taking an important step in its target region of
Europe, TAV Airports assumed for a period of 20
years the operation of two international airports
located in Macedonia, a country expected to join
the European Union in the near future whose
citizens can already travel to the European Union
without the Schengen Visa. Consequently, the
Holding attained its target of “10 airports in 10
years”. The airports are located in the two most
important transportation hubs of the country;
namely Skopje which has deep historical connections
with Turkey and stills harbors large populations of
Turks and Albanians, as well as Ohrid, a city on the
Mediterranean.
Ongoing Improvement and Development
Investments
TAV Airports assumed the operation of the
Alexander the Great Airport in Macedonia’s capital
Skopje, along with Ohrid St. Paul the Apostle
International Airport, on March 1, 2010, and kick
started investments to improve and expand the
airports. TAV Macedonia DOOEL plans to increase
Source: TAV Macedonia
the passenger traffic and service quality of the
facilities with the completion of the modernization
and technical infrastructure works, and has already
made great accomplishments in its short period
of operation. ATÜ and BTA completely renovated
the restaurants and shops that they took over and
increased product diversity, whereas revenue was
augmented significantly with the expansion of
advertisement spaces and the organization of the
car park services.
In line with the objective of increasing the number of
flights of the existing airlines catered to and getting
new airlines to launch service, Bora Jet started to
offer flights from Bursa to Skopje. An agreement
was reached with Corendon Airlines to begin flights
between Amsterdam and Ohrid as of the summer
of 2011.
As of year-end 2010, 11 airlines offer scheduled
flights and seven airlines offer chartered flights
from Alexander the Great Airport. Ohrid is also
the location of Lake Ohrid, considered to be one of
Europe’s oldest lakes and declared a World Heritage
site by UNESCO. From Ohrid’s St. Paul the Apostle
Airport, three airlines offer scheduled flights and
12 airlines offer chartered flights. While In 2010,
three new airlines started flights, there are regular
flights to 14 destinations from Skopje and to three
destinations from Ohrid.
TAV set out with the objective of making Skopje
one of the prominent hubs in the Balkans. After
the completion of the buildings included in the
investment projects, TAV plans to conduct its
operations from these buildings, which are equipped
with modern infrastructures, by March 2011 in Ohrid,
and by the last quarter of 2011 in Skopje.
79
By assuming the operation of two international airports in
Macedonia for twenty years, TAV Airports attained its target “10
airports in 10 years”. The airports are located in the two most
important transportation hubs of the country; namely Skopje which
has deep historical connections with Turkey, and Ohrid, a city on the
Mediterranean.
2009
636,171
725,543
2010
Skopje and Ohrid Airports
Skopje car park
334 vehicles
SkopjeOhrid
8
4
Ohrid car park
230 vehicles / 11,000 m²
Skopje Passport Counters
Departures Floor
Arrivals Floor
4
4
Skopje
90 m² / 2 stores
Ohrid
20 m² / 1 stores
Skopje 350 m²
Ohrid 90 m²
Ohrid Passport Counters
Departures Floor
Arrivals Floor
3
3
Number of Bus Gates
Skopje
2
ohrid
2
Skopje Number and Specifications of Runways
Code E / ILS CAT I 2,450 m
Ohrid Number and Specifications of Runways
Code E / ILS CAT I 2,550 m
Yasemin Enç, Tav Airports, Executive Assistant
Service Companies
TAV HAVALİMANLARI HOLDİNG 2010 FAALİYET RAPORU
Özlem Gümüş, Havaş, Passenger Services Officer
TAV AT A GLANCE
ASSESSMENTS
86
Havaş
The unrivaled leader in ground
handling
Havaş
Revenue
€ 163.5 million
EBITDA
€ 25.5 million
Number of flights served
108,796
TAV’s Ownership share
65%
Havaş, Turkey’s leading ground handling company,
offers world-class services with its extensive
equipment assets and technological infrastructure.
Havaş is organized to meet all airport ground handling
needs of its airline customers, and constantly improves
its service quality and continues to grow in a healthy
manner. Havaş, which has received many awards
from the world’s leading airline companies, is also
Turkey’s oldest ground handling company. Havaş is
the continuation of the Ground Handling and Catering
Company founded as a state enterprise in 1933. The
catering services division was spun off as a separate
company in 1987, whereas the ground handling services
division continued its operations under the Havaş name
as the most experienced ground handling services
company in Turkey.
Havaş provides passenger and baggage
transactions, ramp, aircraft cleaning, load control
and communications, cargo, flight operation,
transportation, representation and monitoring services.
In order to deliver better, higher quality and faster
service to its customers, Havaş also provides import
warehousing services. Its warehouse capacity is
approximately 1,500 tons/day.
Robust Corporate Culture, Successful Results
Through its training policies that go beyond the
minimum legal requirements, Havaş managed to make
quality awareness an indispensable part of corporate
culture. Its experienced staff and the synergy created
with the TAV Group are the key factors distinguishing
Havaş from its rivals.
In 2010, Havaş catered to 200 airlines offering
scheduled and chartered flights in a total of 22 airports.
Havaş also signed agreements with 25 new airlines that
recently entered the market and added British Airways
and Aeroflot to its customer portfolio of its warehouse
business.
The Company provides passenger transportation
services between the airport and the city center at
the Istanbul Atatürk, Sabiha Gökçen, Ankara, Izmir,
Antalya, Bodrum, Dalaman, Çorlu, Gaziantep, Hatay,
Hopa, İzmit, Konya, Malatya, Trabzon, Samsun and
Şanlıurfa airports, as well as parking services at the
Bodrum Airport. Havaş has also been operating the
Hopa Passenger Terminal since December 2007. The
Hopa Terminal is connected to the Batumi International
Airport, operated by TAV Airports, and provides an easy
travel option to the Eastern Black Sea region due to its
proximity to the area.
Havaş prioritizes the environment in all of its
operations and was designated “Green Company” by
Directorate General of Civil Aviation (SHGM) on May 21,
2010 in recognition of its practices at the Milas Bodrum
Airport.
In mid-2010, Havaş launched efforts for the
implementation of the Safety Management System.
The planned system will function like a security manual
against apron accidents and occupational accidents.
The project is planned to be completed by March 2011.
In addition, by year-end 2011 tractor and aircraft tractor
87
Swiss International Air
Lines, February and April
2010
Istanbul Station, “Station
of the Month”
Qatar Airways, August,
September and October
2010
Istanbul Station, “Best
Station for 100% OTP”
SAS Scandinavian
Airlines, Q1 2009
Istanbul Station, “Most
Improved Station”
Delta Air Lines, Q1 and Q2
2009
Istanbul Station, “Safety
and On Time Award in the
Atlantic Region the Grand
Slam”
Swiss International Air
Lines, April and June
2009
Istanbul Station, “STAR of
the Month”
British Airways, 2008
Izmir Station, “Most
Improved Station Summer
Bronze Award”
Austrian Airlines, 2008
Istanbul Station, “Best
Station, Short & Middle
Range Flights”
British Airways, 2007 and
2008 summer seasons
Izmir Station, “First prize
among countries served
by British Airways”
SAS Norge Airlines, 2007
“Excellence Award”
TÜV, 2004
“The Best Quality
Management in the
World”
KLM Royal Dutch
Airlines, 2004
“Five Crown Award”
British Airways, 2004
“One of Top Three Ground
Handling Companies”
First Choice Air Lines,
2004
“The World’s Best Ground
Handling Company”
(Havaş won the first prize
with Dalaman Station
and second prize with the
Bodrum Station)
First Choice Air Lines,
2003
“The World’s Best Ground
Handling Company”
KLM Royal Dutch
Airlines, 2002
“Four Crown Award” (the
second best award of the
airline)
Privatization
Administration of
Turkey, 2000
“Best Privatization
Certificate”
Mustafa Yolasığmaz, Tgs, Ramp Worker
TAV AT A GLANCE
ASSESSMENTS
90
Havaş
simulators will be installed at the Istanbul and Antalya
airports, where operations are busy. The simulators
will allow tractor drivers to gain experience before
starting to drive these vehicles in the apron. Havaş has
also started a pilot practice for the transportation of
passengers with disabilities in 2011.
Certifications
ISO 9001:2008 Quality Management System
OHSAS 18001:2007 Occupational Health and Safety
Management System
ISO 14001:2004 Environmental Management System
Subsidiaries
Turkish Ground Services (TGS)
Turkish Ground Services (TGS) was established by
Turkish Airlines in order to organize and provide its
ground handling services under a separate company.
Havaş was awarded the tender, held on November 28,
2008, to select the ground handling services company
to participate in this company and became a 50%
shareholder.
TGS commenced operation at Istanbul Atatürk, Ankara
Esenboğa, Izmir Adnan Menderes, Antalya and Adana
airports in January 2010, and at Sabiha Gökçen Airport
as of July 9, 2010. TGS also provided services to airlines
such as Turkish Airlines, AnadoluJet, Transavia, SKY and
Moldovian Air in 2010.
North Hub Services (NHS)
Reaching an agreement with Baltic Aviation Systems,
Havaş acquired a 50% ownership stake in North
Hub Services (NHS), which was then a fully-owned
subsidiary of BAS. Headquartered in Latvia’s capital
Riga, NHS began providing passenger services to
Air Baltic flights on January 1, 2010; soon after the
beginning of this partnership, Havaş was awarded
the Ramp License tender and obtained the necessary
authorization to offer ramp services at the Riga Airport.
NHS started delivering ground handling services in
Finland’s capital Helsinki as of July 1, 2010; the Company
also plans to launch operations in Sweden’s capital
Stockholm and in Gothenburg.
Setting out to become the largest ground handling
company in Northern Europe, NHS offers a
diverse range of services including representation,
management, supervision, passenger services and
apron services. A member of the International Aviation
Handlers Association (IAHA) and the IATA Ground
Handling Council (IGHC), NHS operates with the mission
of supporting the accomplishments of its clients
by offering them ground handling services at high
standards.
In 2010, NHS rendered services to Air Baltic, Turkish
Airlines, Transaero and Air Bulgaria in Riga and to Air
Baltic, City Airline and Primera Air in Helsinki. Havaş
continues to transfer its nearly 80 years of experience
and know-how in ground handling to NHS and to fully
support the rapidly-growing NHS.
Cyprus Airport Services (CAS) Ltd.
A 50%-50% partnership of Cyprus Turkish Airlines
and Havaş, CAS has been providing ground handling
services at the Ercan Airport since December 2008.
TAV Gözen
TAV Gözen was founded by Havaş, Gözen Aviation
and Türkmen Aviation in June 2008 to provide hangar,
technical support, staff recreation, and aircraft cleaning
services to private jets in two hangars, hangars number
2 and 14, at apron A14 of the Istanbul Atatürk Airport.
The Company, which is a 32.4%-owned subsidiary of
Havaş, commenced operation in March 2009.
91
Baiba Urtane
North Hub Services (NHS),
Business Lounge Executive
TGS
Revenue
€ 39.8 million
NHS
Revenue
€ 2.8 million
EBITDA
€ (4.7) million
EBITDA
(0.2) million
133,941
26,322
50%
50%
Neriman Aslan, AtÜ, Product Representative
TAV AT A GLANCE
ASSESSMENTS
94
Duty Free
ATÜ
A philosophy of excellence in service
across three continents
Revenue
€ 340 million
EBITDA
€ 30.7 million
Number of Employees
1,205
50%
Established as a joint venture of TAV Airports and
Unifree, ATÜ began operating the duty free stores
following the commencement of operation of Istanbul
Atatürk Airport International Terminal. In 2006, when
TAV Airports began operating the new international
terminals of the Izmir Adnan Menderes and Ankara
Esenboğa Airports, ATÜ added these two airports to
its operations. ATÜ later commenced operation at the
Tbilisi International Airport and then at the Batumi
International Airport in Georgia in 2007, at the Enfidha
Airport in Tunisia in 2009, and at the Skopje and Ohrid
Airports in Macedonia in March 2010. ATÜ was also
awarded the Riga tender in Latvia. The Company will
finalize its efforts and begin delivering its services in a
European Union member state in the near future.
Creative Practices and Increasing Product Diversity
at the Stores
ATÜ, Turkey’s largest operator of duty free stores,
offers passengers the opportunity to shop for over
50 thousand products in 52 outlets from among the
world’s most famous brands at attractive prices in
a total area of 13,000 square meters. In an effort to
expand the reach of duty free services and provide ease
of shopping for passengers, ATÜ also offers a
pre-ordering service on its web site.
With the launch of the TAV Passport card in 2010,
ATÜ stores on the arrivals and departures floors of
Istanbul, Ankara and Izmir airports started to offer
special discounts and other payment advantages to
cardholders. ATÜ made yet another breakthrough
by opening land side stores in Macedonia, and also
displays a high revenue performance in its shops at the
Tbilisi and Batumi airports.
Reinventing itself with each passing day and constantly
increasing its product diversity in order to provide
world-class service, ATÜ made renovations in its stores
on the arrivals floor of the Istanbul Atatürk Airport
95
in 2010 and opened its A3 store. New shops were
also opened on the departures floor of the Airport.
During the year, ATÜ started the use of mobile hand
terminals to ensure flawless inventory management
in the stores. The Company launched the LTC+ Project,
a sales staff system devised by Gebr. Heinemann and
implemented in all of its large outlets, which resulted
in increased efficiency. ATÜ continues to undertake
comprehensive training projects for its employees.
ATÜ’s renewed arrivals floor premium shop concept
at the Istanbul Atatürk Airport was designated “The
Special Concept of the Year” by Frontier, the respected
global duty free industry magazine. Dubai, Larnaca,
Paris Orly, London Heathrow, Hawaii, Bali, Miami and
New York airports competed at the Frontier Awards,
which are referred widely to as “Duty Free Oscars”.
Certifications
TÜV Rheinland International Standards Certification
and Audits
Airports Served by ATÜ
Duty Free
Area (m2)
6,030
2,311
Tbilisi Airport
2,353
294
Batumi Airport
67
Enfidha Airport
1,564
Skopje Airport
104
Ohrid Airport
44
Öner Erdoğan, Bta, Waiter
TAV AT A GLANCE
ASSESSMENTS
98
food & beverage Services
BTA
The perfect blend of
flavor, quality and rigor
Revenue
€ 75.0 million
ebıtda
€ 7.2 million
number of employees
1,649
TAV’s Ownership Share
67%
Combining the diverse flavors of the world cuisines
with the traditional Turkish hospitality, BTA offers
passengers at TAV airports premium and healthy
meals that conform to international food standards
in accordance with its contemporary service approach
based on comfort and safety.
As of year-end 2010, BTA delivers services in 144
locations covering 33,000 square meters at the
Istanbul Atatürk Airport, Izmir Adnan Menderes Airport
International Terminal, Ankara Esenboğa Airport,
Alanya Gazipaşa Airport, Georgia’s Tbilisi and Batumi
Airports, Tunisia’s Monastir and Enfidha Airports and
Macedonia’s Skopje Alexander the Great Airport.
Well aware that quality in food & beverage services
depends on delicious food as well as hygienic conditions
of preparation, and making the utmost effort in this
sense since its inception; BTA offers its products and
services with modern technology supervised by food
engineers, and with well-trained personnel. At its main
kitchen BTA utilizes the Cook and Chill technology,
which allows the cooked meal to be rapidly chilled and
stored to avoid bacteria growth and to deliver the same
flavor and quality once reheated.
On July 1, 2010 BTA took over from USAŞ the operation
of the restaurant, café, kitchen and storage areas
covering 1,388 square meters at the Istanbul Atatürk
Airport Domestic Terminal and started to provide
service at these locations. One of the facilities taken
over from USAŞ, Liman Café, was renovated and its
name changed to Kantin. Kantin is designed with a
self-service outlet concept where quickly-prepared
products are offered at convenient prices. As a result
99
of the efforts to invite international brands to the
Domestic Terminal of the Airport, Starbucks opened a
store while agreements were signed for Burger King
and Sbarro to open restaurants at the mezzanine floor.
In order to compensate for the losses caused by the
smoking ban, a smoking lounge was opened beyond the
security check point. One outlet at Ankara Esenboğa
Airport’s Domestic Terminal changed its name to
“Tadında Anadolu” and started offering Anatolian
cuisine.
Sharing the extensive vision of TAV Airports, BTA
expanded beyond the boundaries of the airports it
caters in and is on its way to becoming an international
brand in the catering sector. The most important
steps in this direction are the ISO 9001:2000 Quality
Management System certification, as well as the ISO
22000:Food Safety Management System certification,
an indicator of 100% food safety and flawless food
production in the food production sector; both of which
BTA has obtained.
Expanding Operations Map
BTA has assumed the food & beverage operations at
Latvia’s Riga Airport as of January 1, 2011 for a period
of ten years. One of the 2011 objectives of BTA is to
undertake an extensive renovation of the Food Court
area before the passport control at the Istanbul Atatürk
Airport in order to be able to respond to the rising
transit passenger traffic. This investment, the project
and planning phases of which were conducted in 2010,
is expected to be completed by the first quarter of 2011.
Cakes&Bakes
In recent years, Turkish consumers have been dining out
more often, which has led world catering professionals
to increase their presence in Turkey. Founded in 2006 by
BTA to meet the need for companies that produce food
at high standards, and arising as a direct consequence
of recent developments; Cakes&Bakes is now a supplier
to world-renowned fast food and coffee house chains.
Initially established over an area of 2,500 square
meters and producing 9 million products a year,
Cake&Bakes now covers 4,500 square meters and is
the main product supplier of many prominent brands in
Turkey with an annual production volume of 18 million
units. Cakes&Bakes also exports its products to the
Middle East and the Arabian Peninsula.
In 2010 BTA received an award at Association for
Popular Anatolian Cuisine’s “Ateşbaz-ı Veli” Cuisine
Awards, which brings together the best names of the
gastronomic world to promote Turkish cuisine. BTA was
acknowledged with this prize in the Kitchen Service
Sector category for offering the leading cuisines from
the seven regions of Anatolia with the concept of
themed meals at the airports, which are the first places
tourists set foot in Turkey.
Producing bread, cakes, pastry products, sandwiches
and salads; Cakes&Bakes supplies 200 stores of
internationally known food and beverage chains
throughout Turkey, as well as catering units and
Cakes&Bakes cafés at airports operated by BTA.
TAV AT A GLANCE
ASSESSMENTS
100
BTA
Cannes Gala Dinner
menu from BTA...
International Airport Food and
Beverage Conference (FAB 2010)
organized by The Moodie Report
in Manchester, 2010
BTA received the “Best Supplier”
award for its Cakes&Bakes brand.
Trade Leaders’ Club, 2007
BTA was acknowledged with the
International Award for Tourist,
Hotel and Catering Industry.
7th Istanbul International
Gastronomy Festival, 2009
The chefs of BTA and
Cakes&Bakes won two gold, four
silver and two merit awards.
62nd Cannes Film Festival, 2009
At the 62nd Cannes Film Festival,
where Turkey was the guest
country, the Gala Dinner menu
was prepared by BTA, which was
also in charge of the catering
operations.
www.thestreet.com, 2010
İş Bankası Millennium Lounge,
operated by BTA, was designated
“The World’s 10th Best Lounge”.
8th Istanbul International
Gastronomy Festival, 2010
The chefs of BTA and
Cakes&Bakes won one gold, one
silver, one bronze and two merit
awards.
101
TAV AT A GLANCE
ASSESSMENTS
102
BTA
Istanbul International Airport Hotel
Airport hotels are designed to provide the fastest and
most comfortable service to passengers. Like most
of the leading airports in the world, Istanbul Atatürk
Airport has an elegant hotel designed for the comfort
and convenience of passengers. At the Airport Hotel,
TAV Airports provides its customers with all the
comforts of a home away from home.
Operated by BTA, a TAV Airports service company, the
Istanbul International Airport Hotel consists of an air
side and a land side. With the expansion in 2010, the
number of rooms at the Airport Hotel rose from 85 to
131. 85 rooms are located at the land side and 46 rooms
at the air side.
The rooms are designed to offer full comfort to
passengers and feature monitors with flight details,
music system, internet access and mini bars.
Airport Hotel meets all the needs of businesspeople
and companies including dinner and meeting
organizations, thanks to its vast meeting area. Airport
Hotel serves guests with Turkish hospitality, healthy
products, high-quality service and a selection of
delicious menus.
103
Yunus Özcan, TAV Operations Services, Passport Card Operation Officer
Nilhan Kolay, Tav Operations Services, CIP Officer
TAV AT A GLANCE
ASSESSMENTS
106
Other Services
TAV operatıons servıces
TAV’s creative and
innovative power
Revenue
€ 30.1 million
EBITDA
€ 4.5 million
Number of Employees
253
100%
TAV Operations Services delivers many different valueadded services with a customer-oriented approach.
TAV Operations Services undertakes innovative
projects with its advanced technology and robust
infrastructure. Since its establishment in 2004, the
Company is in charge of non-aviation sources of income
at all terminals operated by TAV Airports. As part of
this responsibility, TAV Operations Services provides
services such as commercial area allocation, leasing of
advertisement and promotion areas, “primeclass” CIP
Service, CIP Lounge operation, Havaş Tourism & Travel
Agency and the management of The Gate magazine.
Basing its business development efforts on a global
perspective, TAV Operations Services’ operations
map encompasses a wide region. Offering privileged
services to the Istanbul Atatürk Airport, Ankara
Esenboğa Airport, and Izmir Adnan Menderes Airport
International Terminal passengers; TAV Operations
Services also delivers 24/7 service with its specialist
staff at Georgia’s Tbilisi and Batumi Airports, Tunisia’s
Enfidha Airport and Macedonia’s Skopje and Ohrid
Airports. For a period of 10 years starting from January
1, 2011; TAV Operations Services has also assumed the
operation of Latvia’s Riga Airport’s commercial areas
including currency exchange offices, car rental services,
banks, pharmacy and CIP Lounges.
An Innovative Company Competent in Project Design
These unprecedented services, used every year by
millions of people visiting the airports, are a result
of TAV Operations Services’ customer-oriented
management approach, as well as the team spirit
of the Company’s young staff of highly qualified
professionals. The key element of all implemented
projects is the data obtained through know-how. Each
new airport added to TAV Airports operation portfolio
brings along innovative new approaches in terms of
107
new customer profile analyses, propensities, needs and,
consequently, non-aviation income. TAV Operations
Services’ staff continues to attain successful results
by assessing the data correctly and offering the right
services in the right areas.
TAV Passport Card
Launched in July 2010, TAV Passport exceeded 1,000
members as of year-end 2010. Valid at all airports
operated by TAV and based on annual membership,
TAV Passport was unveiled following a very meticulous
market survey and product development project. TAV
Passport offers its guests complimentary parking
and valet services, discounts in transfer services,
complimentary lounge services, discounts in car rental,
exclusive discounts and cash registers at duty free
shops, discounts in accommodation at Istanbul Atatürk
Airport’s Airport Hotel and quick access to the customs
area after entering the airport.
Thanks to TAV Passport, TAV Operations Services plans
to get a better understanding of the amount of time its
customers spend at the airport as well as their traveling
habits in order to devise products and services that
will make traveling a more practical and stress-free
experience for them in the future.
Renting out Offices and Retail Stores
TAV Operations Services allocates offices and retail
stores to distinguished companies from Turkey, as well
as from around the world, to cater to their needs at the
airports. In the process, TAV Operations Services also
allows passengers easy access to select retail outlets in
many areas.
Marketing of Advertisement Areas Geared towards
Target Audiences
Visited by tens of thousands of people daily, airports
constitute a major channel for advertisement
campaigns geared towards enhancing brand prestige.
TAV Operations Services is in charge of marketing
advertisement and promotion areas. Taking into
account the circulation areas of passengers and visitors
in the positioning of advertisement channels, TAV
Operations Services chooses the best locations for
effectively reaching target audiences. As a result of this
detailed positioning process, companies choose many
different areas at the airports TAV Operations Services
operates in, in order to increase their brand recognition
or inform passengers of new campaigns. The widely
preferred areas for placing advertisements are check-in
areas, catering areas, aircraft bridge zones, duty free
areas, passport-baggage claim areas, meeting areas
and parking lots.
Tailor Made Solutions with“primeclass” CIP Service
The ”primeclass” CIP Service was designed by TAV
Operations Services to deliver unlimited, high-quality
service to passengers and to provide them with the
utmost level of comfort and luxury. The ”primeclass”
CIP Service was launched to cater to the niche service
demands of passengers after the Istanbul Atatürk
Airport International Terminal commenced service as
part of the TAV Airports family in 2000. Commencing
operation towards the end of 2001, “primeclass” Service
has been offering a world of privileged services to
special clients of TAV Airports since then.
Designed for busy, time-strapped passengers who seek
comfort and stress-free travel; ”primeclass” CIP Service
saves time, simplifies all flight transactions, eliminates
pre- and post-flight stress and provides luxury with
services that make a difference. The ”primeclass” CIP
Service simplifies the lives of passengers, regardless of
which airline they are flying with, before and after the
flight, at every step of their way.
Passengers who prefer the privileged world of
”primeclass” CIP Service can relax away from the
crowds in the “primeclass” lounges specially designed
TAV AT A GLANCE
ASSESSMENTS
108
Other Services
for comfort and quality at domestic and international
terminals. Accompanied by a professional assistant
at many points, ”primeclass” CIP Service guests
enjoy the privilege of being “primeclass” at every step
of the way. Offered in two categories as Prime Pack
and Prime Select, ”primeclass” CIP Service currently
caters to passengers at the Istanbul Atatürk and
Ankara Esenboğa airports in Turkey, Tbilisi and Batumi
International airports in Georgia, Enfidha Airport in
Tunisia, and Alexander the Great Airport in Skopje.
CIP Lounge Service
“primeclass” CIP Service begins to operate exclusive
passenger lounges at the airports for airlines, banks
and other companies that choose to provide their
clients with special facilities at the airports.
As part of “primeclass” CIP Service, “primeclass” guests
are provided with all sorts of luxury services including
Internet access, television, daily newspapers, children’s
play rooms, diligently prepared buffet food service
and showers. As of 2010, CIP Lounge serves clients
at the Turkish Airlines domestic and international,
Akbank Wings domestic and international, Garanti
Zone domestic and international, Yapı Kredi World
international, and “primeclass” international lounges
at the Istanbul Atatürk Airport; Akbank Wings
domestic lounge at the Ankara Esenboğa Airport; and
“primeclass” international lounge at the Tbilisi and
Batumi airports. CIP Lounges at Tunisia’s Enfidha and
Macedonia’s Skopje and Ohrid airports have also started
meeting the comfort and luxury needs of guests.
Havaş Tourism & Travel Agency
Founded with the assurance of TAV Operations Services
under Havaş, the ground handling company with deep
roots in Turkey, Havaş Tourism & Travel Agency provides
services as a Class A travel agency. Combining the
strength of its parent company, TAV Airports, with
its own energy; Havaş Tourism & Travel Agency has
become one of the best known brands in the tourism
sector in short order. Thanks to this market position,
the Company was admitted as a member of many
domestic and international associations, including IATA,
TÜRSAB, ASTA, MPI, UFTAA and SITE.
Aiming primarily to provide special services to its clients
and make them feel privileged, Havaş Tourism & Travel
Agency accommodates all of its guests with excellent
service in the trips that it plans and the organizations
that it holds. Havaş Tourism & Travel Agency’s greatest
goal is to provide its clients with the value they deserve
and become their first preference.
Havaş Tourism & Travel Agency has become the unique
solution partner for the tourism and travel operations
of Turkey’s major private sector companies. The Agency
generates innovative, creative and out-of-the-ordinary
services for its retail and corporate clients through
seamless collaboration with many international tourism
and travel companies. The Company meets every one
of its clients’ needs with an extensive range of diverse
and professional services including plane ticket and
hotel reservations, private jet and helicopter rentals,
airport transfers and car rentals, cruises, blue cruises,
golf tourism, spa and wellness, honeymoon packages,
gourmet tours, M.I.C.E. tourism, meetings, incentive,
congress tourism and events.
Among the nearly 60 events organized by the Agency
in 2010, especially those for TÜBİTAK, ACI and GES
attracted ample interest. As a result of diligent efforts
throughout the year, the infrastructure of the online
travel portal TAVPORT has reached its final phase.
The Gate Airport Magazine
Reaching almost everyone visiting TAV airports, The
Gate is among Turkey’s highest circulation magazines.
A magazine that is making a difference with its
distinguished readership, The Gate is also available to
its readers on the Internet.
109
Seda Osten, Tav Operations Services, Commercial Affairs Assistant Specialist
TAV AT A GLANCE
ASSESSMENTS
112
Information Technology Services
TAV IT
The key factor underlying
flawless operations
Revenue
€ 9.7 million
EBITDA
€ 1.5 million
Number of Employees
126
99%
Founded in 2005, TAV IT underwent a restructuring
in 2008 by adopting the ITIL framework of standards.
Along with providing services for all the IT integrations
required within airports, TAV IT also renders
development and consulting services regarding other
applications demanded by the TAV Airports. Creating
turnkey solutions for airport systems, TAV IT delivers
services for a wide range of processes from system
design to installation and from setup to after-sales
support.
Ensuring the uninterrupted flow of services in all
operations of TAV, with airports being the primary
area of activity, through the 24/7 support approach,
call center, maintenance and repair center, car park
solutions, and process consulting and application
support with regard to logistics and financial processes
run by ERP, TAV IT plays a significant strategic role
within TAV. In addition to the ongoing operations, TAV
IT has completed 118 new projects in 2010 with the
objective of reducing operational costs at the airports.
Targeting Maximimum Operational Efficiency
With its specialist staff, TAV IT strives to provide
valuable services in airport management -a highly
sophisticated sector that requires experience in
operations- while reducing costs and enhancing
service quality. Operational management is also
simplified by minimizing personnel involvement in
the transactions. TAV IT provides consulting, support
and project management in financial affairs, logistics,
human resources and financial reporting processes
conducted within the companies under the TAV
umbrella through the Oracle ERP system, which is used
by the group affiliates as a means of corporate resource
planning. By integrating the various processes run by
Oracle, the business units are provided with access
to the information stored in the common database.
In addition to enhancing operational efficiency, this
113
approach also forms an essential medium that enables
fast, up-to-date and consistent financial reporting.
TAV IT has accomplished a significant achievement in
2010 by winning three tenders, two in Turkey and one in
Saudi Arabia. By launching the operation process of the
Batman Airport, TAV IT has, for the first time, offered
services at an airport not operated by TAV. Flight
Information Display System (TAV FIDS), CCTV, Card Pass
System, Fire Detection System, Central Announcement
System, Central Time systems, and CUTE and BRS
systems have been installed at the Batman Airport.
TAV IT was awarded the tender for aviation systems
of the KKIA and KFIA airports of Saudi Arabia, and the
DHMİ tender for the aviation systems of the Erzincan
Airport. TAV IT has redesigned its web site in 2010,
thereby leading to a rise in the percentage of tender
invitations issued through the company web site.
With the virtualization technology, TAV IT has reduced
the number of servers in use, which led to savings in
the total amount of electrical energy needed to cool
the servers. The Company intends to employ this
technology for the new airports to be operated.
TAV IT aims to expand its cost-effective and advanced
technology solutions throughout the entire sector.
Increasing the revenues through sales to non-affiliates
of the TAV Airports, and reducing the IT expenditures
of the TAV Group companies are also among the
future objectives of TAV IT. With its specialist staff
and flexible infrastructure, TAV IT creates software
applications that can be customized to fulfill a wide
range of requirements. Standing out amongst the
competitors in the aviation sector with the highly
sophisticated services it provides by employing the Flex
technology, TAV IT offers great advantages to clients in
terms of the price/performance criteria.
Certifications
Seyhan Kahraman, Tav Security, Security Guard
Semra Hacı, Tav Security, Security Guard
TAV AT A GLANCE
ASSESSMENTS
116
Private Security Services
TAV Security
World-class
security services
Revenue
€ 8.6 million
EBITDA
€ 2.4 million
Number of Employees
160
TAV’s Ownership Share (*)
67%
Operating primarily in the area of civil aviation security,
TAV Security also provides project-based services
for cargo security, physical security (store, facility,
company) and authorized arms transportation to
several companies outside of TAV Airports. Setting high
standards, TAV Security operates in the civil aviation
security business line in compliance with the principles
stipulated by the National Civil Aviation Security
Program, international standards/directives and Law
No. 5188 Regarding Private Security Services and the
related Directive.
Providing services in accordance with national and
international security standards with its experienced
and qualified staff, TAV Security combines the
experience and know-how of the public sector with
the advantages of the private sector. TAV Security
staff consists of expert employees who are police and
military retirees, as well as highly qualified civilians
with international professional experience, trained
in domestic and international programs in the civil
aviation security area.
Smart Solutions in Airport Security
Developing smart solutions that achieve customer
satisfaction without compromising security measures
is of utmost importance for airports where there is
a trade-off between convenience and security. TAV
Security strives to provide modern and high-class
security service while achieving the satisfaction of
customers. In addition to developing rational solutions
to facilitate the security control process –not the
favorite experience for the passengers-, the Company
also conducts efforts to improve the positioning of the
security control points, taking into consideration the
elements of speed and comfort.
Note: TAV Airports has concluded an agreement to increase its shareholding to 100% on March 25, 2011.
117
TAV Security also takes an active role in the
international investments of TAV Airports. All local
legislations on security are analyzed to provide and
sustain the appropriate conditions through all stages
of the investment process, and effective measures are
taken after the security risk analyses that evaluate all
existing and potential threats.
In addition to serving TAV Airports, the Company also
provides physical security services and hotel security
services for the Savings Deposit Insurance Fund (SDIF).
Pursuant to Law No. 5188 and the related Directive,
TAV Security provides Private Security Training Services,
thereby continuing to share its know-how as in previous
years. Administering training activities for the Turkish
State Airports Authority (DHMİ) personnel in 2010, TAV
Security contributes to the sector by taking a role in
the training of better equipped and more skilled staff,
with the training modules it designs, its experienced
team of instructors, and comprehensive and efficient
training materials. In order to enhance its active role in
security services industry, TAV Security also conducts
business development and infrastructure activities
regarding more specific areas of the sector. Evaluating
new opportunities by feasibility studies and closely
following the tenders, TAV Security attains healthy
growth by developing itself with each passing day.
TAV Security has completed its application process
to the General Directorate of Civil Aviation (SHGM)
to be awarded the “Plane Private Security Service
and Monitoring” license within the scope of SHY-22.
Activities in this area are envisioned to start in the first
half of 2011, after the license is awarded.
TAV AT A GLANCE
ASSESSMENTS
118
MARKETING ACTIVITIES
Effective marketing activities
on an international scale
Aviation Conferences
In 2010, TAV continued to participate in aviation
conferences where the players of the aviation industry
such as airport operation companies, airlines and
tour operators come together to create new business
opportunities. Istanbul Atatürk Airport received the
“Highly Commended Award in the Southern Europe
Region” in the Europe Routes Development Forum held
in May in Toulouse, France.
The conferences attended throughout the year are as
follows:
• ITB Tourism Fair - Berlin, Germany (March 2010)
• MITT Tourism Fair - Moscow, Russia (March 2010)
• Europe Routes Development Forum - Toulouse,
France (May 2010)
• IATA Schedules Conference - Berlin, Germany (June
2010)
• World Routes Development Forum - Vancouver,
Canada (September 2010)
• World Travel Market - London, UK (November 2010)
• German Tour Operators Conference - Agadir, Morocco
(November 2010)
Passenger Traffic Analyses - Forecasts
TAV Marketing team regularly conducts potential route
analyses for each airport in light of the airport traffic
data. The analyses occupy a highly significant place in
TAV’s relationship with airlines. Sharing these analyses
with airlines and tour operators, TAV Marketing has
established communication with more than 100 airlines
in 2010 to introduce flights on previously unserved
routes.
Evaluating the past traffic data, TAV Marketing
regularly tracks the kinds of changes made at the
airports on an airline basis. The periodic forecasts
prepared for all airports are updated to include the new
developments and are presented in the form of reports
to the related units within TAV Airports.
Communication with Airlines and Tour Operators
TAV Marketing has started to prepare marketing
catalogues in 2010 that highlight the distinctive
features of all airports, their strong aspects and
significant issues for the growth in passenger numbers,
and shared these catalogues with various airlines and
tour operators.
TAV Marketing also initiated activities to prepare news
bulletins to announce the developments at the airports
on a regular basis. The first news bulletin was published
in the final quarter of 2010 to cover the Enfidha Airport
and was delivered to all airlines and tour operators
TAV is in contact with. The Enfidha news bulletin will
continue to be published quarterly.
In 2010, TAV Marketing created profiles for all airports
within TAV Airports to be posted on the Routeshop.com
and Routesonline.com web sites, which are among the
most visited and prominent aviation sites worldwide.
Additionally, various posters and advertisements
were prepared to be delivered at the conferences the
Company attends and to be published in international
magazines.
Support for New Projects and Tenders
TAV Marketing generates the traffic forecasts of
the related airports for the tenders and projects
participated by TAV Airports, in accordance with the
process specifications. These traffic forecasts provide
the data for the financial model, which is another stage
of the tender process.
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Internal Audit
Internal Audit to promote
the efficient use of resources…
The TAV Internal Audit Directorate conducts periodic
audits to monitor compliance with the Group Risk
Policy at TAV Airports and its subsidiaries. The Internal
Audit Directorate identifies and reports the deficiencies
in risk management and governance processes, and
the practices that are causing inefficiencies and
waste of resources through internal audits and/or
recommendations. Additionally, efforts are carried out
to enhance organizational functionality and service
quality.
TAV Holding Internal Audit Directorate has successfully
completed the Internal Audit Quality Assurance
Review carried out by PwC. The audit report, dated
February 14, 2009, verified the Unit’s compliance with
the International Internal Audit Standards and Ethical
Principles. Thus, TAV Holding Internal Audit Directorate
became the youngest unit to be qualified for this title.
To enhance their knowledge, skills and competence, the
members of the Audit team hold various certificates
such as “CISA, CIA, CFE, SMMM, CCSA, CFSA, CEH, ITIL
V3 Foundation’’ and initiatives in this area are carried
out on an ongoing basis.
The Internal Audit Directorate identifies the business
units to be audited and conducts structural risk analysis
for the Holding and its subsidiaries.
Activities in 2010
Along with the process audits conducted in Turkey,
branch audits were conducted in 2010 for locations
outside Turkey and for companies with a low value
of financial scope/turnover. Although TAV Airports’
operational structure remained unchanged in 2010,
the scope of the audit activities expanded as the
operation rights were obtained for Macedonia and Riga
airports. Legal risks and regulatory risks also increased
due to the compliance requirements the concession
agreement and the laws and regulations of the related
countries. No legislative amendments were effected
during the year. 12 process audits, seven process
consulting assignments and two company audits were
conducted, and three special inspection reports were
drafted. As a result of these efforts, the following areas
were identified as needing improvement:
• Formulation of policies
• Raising control awareness
• Improvement of system-security controls
For the areas of improvement identified in 2010,
the security requirements of the systems were
monitored and the required consulting services were
provided within the scope of IT audits. Support has
been provided for the units to form and improve
Holding-wide policies, and efforts were carried out in
collaboration with the units at the stage of mitigating
identified issues in order to increase the effectiveness
of the controls. The Internal Audit Directorate also
administered training for executive candidates in order
to raise control and risk awareness. Recommendations
have been provided for the management to ensure that
insurance and agreement processes operate adequately
and effectively.
In order to document all rules in writing and in an
accessible format to all employees, the “TAV Policies
Handbook” was published for the first time in 2010,
ensuring that the management preferences of TAV
Holding are uniformly comprehended and embraced by
all employees.
TAV AT A GLANCE
ASSESSMENTS
120
SUSTAINABILITY AND THE ENVIRONMENT
Mindful and intelligent use
of limited natural resources
The TAV Airports Sustainability Report uses the Global
Reporting Initiative (GRI) standards as a reference for
presenting its contents.
public health through investments that improve quality
of life and fulfills its responsibilities to leave a more
habitable world behind for future generations.
The dynamic, or to be more exact, aerodynamic
nature of aviation propels TAV Airports to adopt more
effective and efficient risk management models that
are strong in terms of sustainability. The Holding’s
main mission is to identify the economically, socially
and environmentally positive and negative aspects of
its activities. Climate change is a significant issue that
shapes the environmental sustainability program of
TAV. TAV also continues to pursue an aggressive yet
stable growth strategy, which enables the Company
to serve as a catalyst for robust economic growth
on a local, regional and national scale. TAV operates
with a particular focus on employee satisfaction and
professional development of its staff. In summary,
TAV Airports pays close attention to operating in
transparency and being open to audits in all of its
activities, in accordance with the principle of mutual
respect and understanding with the groups it is part of
and with its stakeholders.
The Holding adopts an attitude of respect for the
environment in accordance with its corporate principles,
TAV performs its activities in line with international
environmental standards.
As part of its environmental vision, TAV Airports aims
to identify the environmental impacts of its activities,
and to eliminate or minimize these impacts in
accordance with its sense of responsibility.
All executives and employees of TAV Airports assume
joint responsibility to ensure utmost compliance with
national and international environmental laws and
regulations and to attain the identified objectives.
All business units are responsible for taking on and
fulfilling the liabilities in their areas of operation.
The objective of TAV Airports Environmental Policy is
to promote the mindful and intelligent use of limited
natural resources. Along with its environmental
protection goals, TAV Airports also aims to protect
Environmental investments at the Airport continued
at full speed in 2010. Many new systems that conserve
significant amounts of energy and water have been
implemented. The comprehensive efforts to sort and
recycle wastes also yielded fruitful results and the
amount of recycled wastes reached a record-breaking
level of 70 tons per month by the end of the year from
nine tons per month at the beginning of the year.
Participating in the Carbon Accreditation Program
administered by the Airports Council International
(ACI), the Airport attained the level 1 accreditation
and was granted the Accreditation Certification. As a
result of these efforts, TAV Istanbul became the first
airport operator in Turkey to be designated as a “Green
Company” as part of of the “Green Airport” project
initiated by the General Directorate of Civil Aviation
(SHGM).
The architectural features of the Airport allow natural
daylight to reach every corner of the facility, which
results in major energy conservation levels. At Ankara
Esenboğa Aiport, the first airport in Turkey with a
cogeneration system; electricity is generated from
natural gas using the cogeneration plant while the
heat captured by a waste heat recapture boiler is
used for terminal air conditioning. These measures
provide a 25% reduction in energy costs. Continuing its
environmental investments in 2010, Ankara Esenboğa
Airport participated in the Carbon Accreditation
121
Program administered by the Airport Council
International (ACI) and was awarded the Accreditation
Certification.
the airports. The wastes are disposed of by a certified
subcontractor while the Company heeds rational water
consumption practices.
As the first terminal in Turkey and the second one in
Europe to be admitted to the Carbon Accreditation
Program launched by the European Region of Airport
Council International (ACI Europe) in 2009, Izmir Adnan
Menderes Airport’s International Terminal serves as a
pioneering example for the environmental projects of
other terminals operated by TAV Airports. As part of
this program, all projects carried out by the Company
to raise environmental awareness are documented
and registered. Thanks to this project, the Company
offsets its carbon emissions and contributes to the
minimization of the global carbon dioxide level.
Havaş
Regarding environmental awareness as a priority in
the entirety of its operations, Havaş was designated
as a “Green Company” on May 21, 2010 by the General
Directorate of Civil Aviation (SHGM) for its applications
at the Milas Bodrum Airport. Stepping up its efforts
to qualify the Dalaman, Adana and Antalya stations,
respectively, for the same designation in the near
future; Havaş pays special attention to selecting
environment-friendly materials for its operations and
has been purchasing battery electric vehicles for the
last two years.
TAV Izmir, which has an Environmental Management
Plan that encompasses major environmental issues
such as water quality, waste water discharge, waste
management, green area landscaping, air quality and
noise control; turned 150 tons of recycled waste into
economically useful resources in 2010. Breaking new
ground in Turkey with its Waste Management System,
application pioneering practice in the country; TAV
Izmir continues to win award after award thanks to its
successful environment-friendly projects.
TAV Georgia
Having set the Environmental Management System,
TAV Georgia also holds the ISO 14001:2004 certification.
The Company, which also has the ISO 9001:2008
certification, regards environmental awareness as a
priority in all of its business processes.
TAV Tunisie
Initiating a 4 MW natural gas-fired trigeneration plant
investment to increase energy efficiency, TAV Tunisie
also makes use of solar energy in all possible areas of
The wastes are delivered to the certified institutions
that are capable of performing the most efficient
recycling operations; the Company has ongoing projects
for using solar energy at the stations and verification
of its operations for compliance with the ISO 14064-1
greenhouse gas standard in 2011. Having calculated
the carbon footprint of its Shuttle Bus Operations,
the Company accelerated its offsetting activities and
planted 5,000 calabrian pines on a 5-hectare area in
the town of Mazı in Bodrum, which suffered a major
damage in 2010.
Making significant progress toward obtaining the
ISO 9001 certification in 2010, TAV Operations Services
pays particular attention to using environmentallyfriendly products in its passenger transfer and lounge
operation activities. Making investments to use
electrical cars in passenger transfer services, TAV
Operations Services regards environmental awareness
as a priority in all of its activities.
TAV AT A GLANCE
ASSESSMENTS
122
CORPORATE SOCIAL RESPONSIBILITY (csr)
Environmental, cultural and social
investments continued in 2010.
Supporting a Brighter Future
Regarding social responsibility as an integral part of
its management and business culture, TAV Airports
puts its full support behind environmental, cultural
and social development in order to contribute to a
brighter future and to create lasting values for the
society. TAV’s corporate social responsibility approach
consists of its commitments in the area of “sustainable
development”. While it acts with the awareness of
using the world’s limited resources responsibly as well
as protecting and developing them in all of its business
processes, the Company plays an active role in social
development with its social responsibility projects.
TAV Airports’ investments in the area of social
responsibility focus on projects that are sustainable,
open to development and change, transparent and easy
to comprehend and accepted internationally and that
create value and provide guidance for the society, set an
example, and promote the participation of volunteers.
TAV Airports strives to support social responsibility
projects in all areas. The Holding’s priority will be the
environment and education in 2011. TAV will also ensure
the continuity of its projects in various branches of art.
Over the medium-term, TAV Airports aims to launch
projects geared toward its own industry, with a
particular focus on the regions it operates in, via various
social, environmental and economic sustainability
practices.
Projects Carried Out in 2010
Aviation Industry Pulsates at Istanbul Hosted by
TAV Airports
Representatives of the Airports Council International
(ACI), which manages more than 96% of the global
passenger traffic, met at the Airport Exchange 2010
that was held in Istanbul under the sponsorship of
TAV Airports. As part of the Airport Exchange 2010,
the leading figures in the industry participated in
conferences organized under five main headings:
“Airport operations”, “Airport infrastructure and the
environment”, “Economic regulations”, “Security”, and
“Facilitating solutions in information technology and
customer service”. In addition to the conferences, 32
international organizations took part in the fair section
with their stands. Airport sector executives also held
their ACI Committee Meetings in Istanbul during this
organization. Organized by the cooperation of ACI
Europe and ACI Asia-Pacific, Airport Exchange 2010 was
attended by around 800 aviation industry executives
from round the world.
Global Economic Symposium (GES) was Held in
Istanbul
Organized traditionally in Germany as an initiative of
the Kiel Institute, the Global Economic Symposium
was held at the Istanbul Congress Center between
September 27 and 29, 2010, for the first time outside
of Germany. Hosted by the Central Bank of Turkey and
123
sponsored also by TAV Airports, the Global Economic
Symposium’s opening speech was delivered by Abdullah
Gül, the President of Turkey. Major economic, political,
social and environmental issues facing the world were
analyzed in-depth during the course of the symposium;
innovative strategies and solutions were put forth in
order to create a common vision for the future and to
achieve this vision. Politicians, corporate executives,
academicians and non-governmental organizations
from round the world attended the symposium. Global
problems were identified and tangible solutions were
advanced in the sessions.
TAV Airports at AIREX 2010
International Civil Aviation and Airports Exhibition
AIREX 2010, which is regarded as one of the leading
global aviation organizations, was held at the General
Aviation Apron at Istanbul Atatürk Airport under the
main sponsorship of TAV Airports. Over 150 firms from
30 countries participated in AIREX 2010. At the event,
Aircraft manufacturer Airbus presented its favorite new
product A 380. A 380, which was parked at the General
Aviation Apron at Istanbul Atatürk Airport, provided the
visitors of Airex 2010 a chance to get a glimpse of the
largest passenger aircraft in the world.
TAV Airports Became an Airports Council International
(ACI) Training Center…
Airports Council International (ACI), whose objectives
include the development of airports on a global scale
and raising their quality standards, has signed a
“Global Training Center” agreement with TAV Airports.
Under the agreement, ACI, which has more than 1,600
airports worldwide as its members, will be working
in cooperation with the TAV Academy, a training
institution owned by TAV Airports, in the training of
aviation professionals.
Sustainability Initiatives at TAV
The applications of two subsidiaries of TAV Airports,
TAV Istanbul (operator of the Istanbul Atatürk
Airport) and TAV Esenboğa (operator of the Ankara
Esenboğa Airport), were accepted for the “Airport
Carbon Accreditation” program, which was initiated
by Airports Council International (ACI) Europe, one of
the most notable organizations in the world aviation
sector, as part of the environmental awareness
project. As a result of the efforts conducted within
TAV Istanbul and TAV Esenboğa in order to obtain the
“Level 1 Airport Carbon Accreditation”issued by the
ACI, both TAV Istanbul and TAV Esenboğa qualified
for the certification by reporting the source of their
carbon dioxide emissions during this first “Mapping”
stage of the Program. The Program provided a
common framework for reporting and reducing carbon
emissions from airport operations. For the first
time, it sets standards for the reporting of carbon
emissions according to a framework that is specifically
adapted to the unique complexity of the airport
sites. These standards are fully compatible with the
World Business Council for Sustainable Development
(WBCSD) and the World Resources Institute (WRI)
“Greenhouse Gas Protocol” Corporate Accounting
and Reporting Standards. In the first level Airport
Carbon Accreditation Program, which is comprised of
four levels, the carbon dioxide emission levels of an
organization or a company due to electricity, natural
gas and fuel consumption are verified by internationally
accepted institutions according to the internationally
accepted standards.
TAV AT A GLANCE
ASSESSMENTS
124
CORPORATE SOCIAL RESPONSIBILITY
TAV considers social responsibility as an
integral part of its corporate culture.
TAV Became the Activity Sponsor of the World
Basketball Championship and the Sponsor of the
Tunisia Basketball Team
TAV Airports became the activity sponsor of the
2010 World Basketball Championship organized by
FIBA from August 28 to September 12. As one of the
main sponsors of the Tunisia Basketball Team, which
participated in the championship for the first time, TAV
Airports supported the Tunisia Basketball Team during
their matches in Turkey, with contributions from the
TAV family. Having undertaken and supported a wide
range of social and cultural projects to this day, TAV
Airports once again carried out a project in the social
and cultural platform through these sponsorships it has
assumed.
TAV Gallery-Ankara Launched at TAV Esenboğa
The TAV Gallery of TAV Airports, a culture and arts
platform, opened at Ankara Esenboğa Airport as
the second venue after the first one at the Istanbul
Atatürk Airport. The opening ceremony of TAV GalleryAnkara, which attracted great interest with its first
exhibition “Photographs of Esenboğa Airport from
Past to Present”, was honored with the participation
of Esenboğa Airport Civilian Administration Manager
Hayrettin Balcıoğlu, Turkish State Airports Authority
(DHMİ) General Manager Orhan Birdal, Ankara Esenboğa
Airport General Director Yılmaz Keleş and TAV Esenboğa
General Manager Nuray Demirer. The “Photographs
of Esenboğa Airport from Past to Present” exhibition
aimed to tell the story of Ankara Esenboğa Airport in
pictures, beginning with its opening in 1955 until the
present. Composed of 68 photos, the exhibition was
held in the TAV Gallery-Ankara located on the Ankara
Esenboğa Airport Domestic Terminal Departures Floor
and remained open to visitors for one month.
“Snapshots of Our Future” Exhibition Brought
Children Together at TAV Gallery-Istanbul
At its art platform TAV Gallery-Istanbul, TAV Airports
launched the exhibition titled “Snapshot of Our
Future”, the theme for the Annual Report 2009,
consisting of airport photographs taken by the
children of TAV employees. Developed in conjunction
with the Photography Department of Mimar Sinan
University and displaying the airports through children’s
perspective, the “Snapshots of Our Future” exhibition
was launched by Turkish State Airports Authority
(DHMİ) General Manager Orhan Birdal, and TAV Airports
President & CEO M. Sani Şener. Adopting a different
branch of art as the theme in each of its Annual
Reports, TAV Airports had chosen photography for
the 2009 Annual Report after literature and music in
previous years. As part of the project, children aged
7 - 12 carried out photography shootings at the airports;
Istanbul Atatürk, Ankara Esenboğa, Izmir Adnan
Menderes, Antalya Gazipaşa in Turkey, Enfidha and
Monastir in Tunisia, and Skopje and Ohrid in Macedonia.
“Transformation of the Cocoon” Showcases the Secret
World of Butterflies at TAV Gallery…
TAV Gallery-Istanbul opened a window on the colorful
world of butterflies with the “Transformation of
the Cocoon” exhibition, the first butterfly collection
exhibition held in Turkey. The exhibition, which
represented Dr. Oktay Onaran’s protest against the
threat of extinction of different species of butterflies,
consisted of over 100 different species of approximately
15 thousand butterflies. Lepidopterist Dr. Onaran aimed
to support the efforts to help the butterflies’ struggle
against extinction through his “Transformation of the
Cocoon” exhibition, which brought together a variety of
butterflies that had completed their life cycles.
125
“Sultans of Poetry” Exhibition at TAV Gallery-Istanbul
TAV Gallery-Istanbul held the “Sultans of Poetry”
exhibition consisting of the poems written by the
Ottoman sultans. The exhibition displayed the poetic
works by 23 Ottoman sultans, including Sultan Selim
I, Mehmet II and Yıldırım Bayezid, which depicted the
events of their era.
TAV Gallery-Istanbul Hosted Children from around the
World
TAV Gallery-Istanbul hosted the 8th Turkish Olympiad
Exhibition. Consisting of vibrant photographs taken
during the Olympiads held in the previous years with
the participation of 600 children from approximately
120 countries, the exhibition was opened at TAV Gallery
with the performances staged by the child contestants
of the Olympiads. Opening with folk dances native to
seven regions throughout Turkey, the exhibition was
colored with the recitation of poems and songs in
Turkish by children from Mozambique, Northern Iraq
and Moldova.
“Presidential Cycling Tour Photography Exhibition”
Opened at TAV Gallery-Istanbul
TAV Gallery-Istanbul hosted the photography
exhibition prepared by the Turkish Photojournalists
Society to mark the 46th Presidential Cycling Tour.
70 photographs taken during last year’s tour by the
Turkish Photojournalists Society (TFMD) members from
several newspapers and agencies were displayed at the
exhibition.
“Istanbul Photo Contest” at TAV Gallery-Istanbul…
TAV Gallery-Istanbul displayed the photographs taken
by foreign tourists who have visited Istanbul and
entered the “Istanbul Photo Contest”. The exhibition
hosted 70 works selected from the 1,500 applications
made to the Istanbul Photo Contest held in 2009.
Students Flied to Their Dreams by BTA …
BTA, a subsidiary food and beverage service company
of TAV Airports, brought the students of Haluk Gökalp
Kılınç Primary School from Elbistan’s village of Kalealtı
in Kahramanmaraş to Ankara in cooperation with
Anadolujet as part of a social responsibility project.
Coming to Ankara from Kahramanmaraş in two
groups, the students visited the historical and cultural
attractions of Ankara during their three-day visit.
TAV Airports Supports garajistanbul’s Alternative
Approach to Art
TAV Airports supports garajistanbul, a group formed
by Övül and Mustafa Avkıran that strives for a
distinct approach to the arts. The Avkıran brothers
are also the founders of 5. Sokak Tiyatrosu (5th Street
Theatre), which is one of the first examples of modern
performing arts in Turkey. As its first production, with
the support of TAV Airports, garajistanbul staged
the play “A Trial in Istanbul”, an adaptation of Kafka’s
famous novel “The Trial”. Continuing to showcase its
distinct perspective to theatre enthusiasts in Istanbul,
garajistanbul’s subsequent plays, “Ashura”, “Histanbul”
and “And God Said” were also met with great interest.
TAV AT A GLANCE
ASSESSMENTS
126
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
1. Statement of Compliance with Corporate
Governance Principles
TAV Airports (“the Company”) makes every effort
to comply with the Capital Markets Board’s (CBM)
Corporate Governance Principles (“Corporate
Governance Principles”). To this end, the Company
continually strives to achieve the highest corporate
governance standards and is working diligently towards
implementing some of the stipulations specified
as recommendations in the Corporate Governance
Principles. TAV Airports considers ethics rules, as well
as principles of transparency, equality, responsibility
and accountability, to be part of the Company’s culture.
The Company’s efforts with respect to the Corporate
Governance Principles are evaluated in the “Corporate
Governance Rating Report”, prepared by RiskMetrics
Group (ISS), an international corporate governance
rating agency that is also licensed to conduct corporate
governing rating activities in Turkey in accordance
with the Capital Markets Boards Corporate Governance
Principles. As a result of this report, the Company’s
Corporate Governance Rating Score, which was 83.3
(8.5) as of 2009 has been raised to 90.35 (9.03)
in 2010, taking into consideration the continual
development and improvement of Company’s activities
since the previous rating, as well as the Company’s
great sensitivity and determination about corporate
governance and its implementation.
As part of its corporate governance rating process,
ISS performed evaluations at the Company and
conducted numerous interviews. The final rating
score was calculated based on the respective weight
coefficients of the four subcategories stipulated in the
CMB’s related principle resolution. Within this scope,
the Company’s Corporate Governance Ratings by
subcategory are presented in the table below.
Subcategories
The Company’s information disclosure policy, which
was formed in accordance with the Capital Markets
Board’s Corporate Governance Principles, was discussed
and approved at the General Assembly Meeting dated
May 24, 2010. The information disclosure policy was
documented in writing and announced through the web
site, ir.tav.aero
An amendment was approved at the General Assembly
Meeting held on May 24, 2010, changing the number
of members required for the Board of Directors from
15 to “at least 9”. The requirement of incorporating at
least 2 Independent Members in the Board of Directors,
which is stipulated by the Company’s Corporate
Governance Principles, has already been fulfilled since
the initial public offering. Thus, another step has been
taken toward implementing the recommendation of
constituting at least 1/3 of the Board of Directors from
Independent Members.
As of the reporting period ending December 31, 2010,
the Company complies with and implements the
Corporate Governance Principles, with the exception
of matters stipulated in sections 18.3.4 (“Using a
cumulative voting system in the election of members
of the Board of Directors”) and 26.5.2 (“The number,
structure and independence of the Board committees”
- “committee chairmen are elected from among
independent members of the Board of Directors”)
of the Report. These aforementioned issues are not
believed to cause any significant conflict of interest
as of the present time. While the exercise of minority
rights were made possible via the two independent
members on the Company’s Board of Directors, the
Company will assess the advantages and disadvantages
of using the cumulative voting system in the election
of the members of the Board of Directors. The two
independent members of the Board of Directors
Weight
Score
Rating
Shareholders
0.25
9.05
9.0
Public Disclosure and Transparency
0.35
9.26
9.0
Stakeholders
0.15
9.54
9.5
Board of Directors
0.25
8.40
8.5
Total
1.00
9.03
9.0
127
of the Company, Mehmet Cem Kozlu and Pierre de
Champfleury, also serve as Corporate Governance
Committee Chairman and Audit Committee Member,
respectively.
The Board of Directors, senior management and all
employees of TAV Airports have always supported the
adoption of the Corporate Governance Principles within
the Company at every stage of the process. Following
the adoption of the Corporate Governance Principles,
Corporate Governance Principles Compliance Report was
announced to the public, in which the Company declares
that all activities shall be undertaken in line with the
principles of equality, transparency, accountability and
responsibility.
SECTION I - SHAREHOLDERS
2. Shareholder Relations Unit
The Company complies with the legislation, Articles
of Association and other Company regulations on
the matter of exercise of shareholder rights and
takes necessary measures to facilitate the exercise
of these rights. In order to oversee all relations with
shareholders and establish channels of communication
between the Company and its shareholders, the
Investor Relations Department was established
within the Company in September 2006, before the
initial public offering in February 2007. The Investors
Relations Department operates for the purpose of
presenting accurate, timely and consistent information
to existing and potential investors about TAV
Airports, increasing the recognition and credibility
of the Company, positioning the Company among
the publicly-traded airport operation companies in
the world, lowering the Company’s cost of capital by
implementing the Corporate Governance Principles and
establishing communications between the Board of
Directors and capital markets participants. In line with
this objective, the Company strives to maintain close
communication with its shareholders and investors and
conducts an active investor relations program.
TAV Airports Investor Relations Department won first
place in the “Investor Relations Web site” category at
the Investor Relations Awards organized by Thomson
Reuters and Acclaro in 2009 for the first time in Turkey.
M. Sani Şener, TAV’s CEO, was the recipient of the “Best
Investor Relations CEO Award”, and Nursel İlgen, TAV
Investor Relations Coordinator, won the second place
award in the “Best Investor Relations Officer” category.
TAV Airports was the winner in three categories; “Best
Investor Relations CEO,” “Best Investor Relations CFO”
and “Best Investor Relations Officer”, at Turkey’s 2nd
Investor Relations Awards, organized by Thomson
Reuters and Acclaro in 2010. TAV Airports also won
awards in the categories of Investor Relations Web
site and Investor Relations Department at Turkey’s
Investor Relations Awards 2010. TAV Investor Relations
Department is carrying on with its efforts to sustain
this level of recognition and prestige.
Per the organization of the Company, the Investor
Relations Department reports directly to the Chief
Executive Officer (CEO), who is also an Executive
Member of the Board of Directors. The Head of Investor
Relations Department attends Board of Directors
meetings in order to establish duplex communication
between the Board of Directors and shareholders.
Primary responsibilities of the Investor Relations
Department, which serves as the communication bridge
between the Board of Directors and the financial world,
consist of:
• Ensuring that shareholder records are kept
accurately, reliably and up-to-date;
• Responding to written or verbal information
requests from shareholders, potential investors,
stock analysts, legal bodies (Capital Markets Board,
Istanbul Stock Exchange, Central Registry Agency,
etc.) and financial publication houses about the
Company, unless the requested information is
publicly unavailable, confidential or a trade secret;
ensuring that information is simultaneously made
available to everyone in a consistent manner and
updating existing information;
• Preparing and sending out material disclosures to
the Public Disclosure Platform (PDP) in both Turkish
and English simultaneously;
• Reviewing all Company announcements and
preparing the announcements about financial results
in both Turkish and English simultaneously;
TAV AT A GLANCE
ASSESSMENTS
128
• Updating the Investor Relations website, which
was created in order to provide information to
shareholders and potential investors; and using
electronic communication resources;
• Creating a database of domestic and foreign
institutional investors and equity and industry
analysts;
• Representing the Company in investor relations
meetings with existing and potential investors and
analysts in Turkey and abroad;
• Examining and monitoring analyst reports;
• Monitoring significant developments and statistics
about the sector;
• Taking necessary measures to ensure that the
General Assembly meetings are held in compliance
with legislation in force, the Company’s Articles of
Association and other Company regulations;
• Preparing the documents that will be beneficial to
shareholders for General Assembly meetings;
• Ensuring that meeting minutes are sent to
shareholders;
• Monitoring and overseeing every aspect of the public
disclosure process for compliance with legislation.
Investor Relations Department makes every effort to
use electronic communication tools and the Company
web site in all of its endeavors. Contact information
for the Investor Relations Department is posted on the
web site, ir.tav.aero and published in the annual reports.
The Investor Relations Department can be reached at
[email protected] for all requests and questions. Enhancing
its design and content in 2010, the internet site of TAV
Investor Relations has been renovated to provide an
interactive experience, and various new features were
adapted into the web site facilitating easier user access
to information and data.
The transactions of the Investor Relations Department
are conducted by Nursel İlgen, who holds CMB
Advanced Level and the Corporate Governance Rating
Licenses, and by Besim Meriç, who holds CMB Advanced
Level, Derivatives and Corporate Governance Rating
Licenses.
The persons in charge of the Investor Relations
Department are listed below:
As of April 2011, 44% of the Company’s outstanding
shares are publicly held, approximately 80% of which
reside in the portfolios of foreign investors. In 2010, the
Investor Relations Department attended 13 domestic
and foreign conferences that were organized to provide
information to shareholders and investors. 425 face-toface meetings were held with investors, shareholders
and analysts about the Company’s operating results,
performance and other developments. In addition,
pursuant to Capital Markets Law, 34 material
disclosures were made in 2010 and these material
disclosures were also posted on the Company website.
The Department responded to inquiries from many
investors and analysts via telephone and e-mail during
2010, while detailed presentations were prepared
about the Company’s financial results during financial
reporting periods (quarterly).
3. Exercise of Shareholders’ Right to Obtain
Information
Pursuant to its Information Disclosure Policy, it is
the Company’s principle to treat all shareholders,
potential investors and analysts equally with respect to
exercise of the right to obtain and analyze information,
as well as to make all information disclosures to
everyone simultaneously and with identical content.
All information sharing is performed within the scope
of the content previously disclosed to the public. As
part of the information sharing effort, all information
of interest to shareholders and market participants
is announced via material disclosures; the English
translations of these disclosures are transmitted
electronically to all people and entities who give their
TAV Investor Relations Department
Name
Title
Phone
E-mail
Nursel İlgen
Investor Relations Coordinator
+90 (212) 463 30 00 ext. 2122
[email protected]
Besim Meriç
Investor Relations Senior Specialist
+90 (212) 463 30 00 ext. 2123
[email protected]
129
e-mail addresses to the Company and past material
disclosures are posted on the Company’s website in
both Turkish and English.
Many written and verbal information requests from
shareholders were responded to on an expedited
basis under the supervision of the Investor Relations
Department and in compliance with the Capital Markets
Law. In an effort to enhance shareholders’ rights to
obtain information, all necessary information that is
stipulated in Section II, Article 1.11.5 of the Corporate
Governance Principles and that can impact the exercise
of shareholder rights is presented to shareholders in
an up-to-date manner on the Company website. All
information on the Company website is presented
in Turkish, as well as in English, in order to treat all
shareholders, domestic and foreign, equally.
The activities of the Company are regularly audited on
a periodic basis by Independent Auditor and Auditors
assigned by the General Assembly. In the fiscal year
2010, the independent audit activities were conducted
by KPMG under the legal entity Akis Bağımsız Denetim
ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
The Articles of Association currently do not recognize
requests for assignment of a special auditor as an
individual right. The Company did not receive any
requests for the appointment of special auditors.
However, Article 20.1 of the Company’s Articles of
Association authorizes shareholders to direct the
attention of auditors to doubtful matters and request
necessary explanations.
4. Information on the General Assembly
The Ordinary General Assembly meeting of
shareholders regarding the Company’s 2009 activities
was held on Monday May 24, 2010, at 10 a.m. at the
Akfen Meeting Hall, located in the Company’s Istanbul
Office at the Atatürk Airport International Terminal,
Yeşilköy-Istanbul. The announcement for the Ordinary
General Assembly, including the necessary information
about the meeting date, time and location, agenda
items, procedures for the attendance of shareholders at
the meeting, proxy forms and arrangement procedures
were published on page 856 of the Turkish Trade
Registry Gazette, issue no. 7560, dated May 10, 2010.
The announcement was also published in the daily
Radikal and Dünya Newspapers, dated May 8, 2010. Of
the 363,281,250 shares representing the Company’s
share capital as of the date of the meeting, 227,061,597
shares (62.5%) were represented at the Ordinary
General Assembly meeting. In addition to procedures
stipulated by legislation, the General Assembly
meeting announcement was also made available at the
Company Headquarters and on the Company website
(ir.tav.aero) 17 days prior to the meeting in an attempt
to reach the maximum number of shareholders
possible.
The General Assembly meeting announcement with
the General Assembly information document posted
on the Company website included the meeting date
and time, meeting location, agenda, the fact that
the invitation was being extended by the Board of
Directors and the procedures for the attendance of
shareholders. Since the Company does not have any
registered shares, no accommodations were made to
facilitate the participation of this class of shareholders
in the General Assembly meetings. As of the date of
the announcement inviting shareholders to the General
Assembly meeting, financial statements and reports
and the General Assembly agenda items were made
available for examination at locations easily accessible
by shareholders.
There have been no major changes in the management
or operational organization of the Company during the
previous reporting period, nor are any such changes
planned for subsequent periods. In case of such change
occurs,it will be shared with public within the scope
of legislative requirements. The Company did not
receive any requests from shareholders for adding
items to the agenda of the General Assembly meetings
held during the year. The meeting procedure of the
General Assembly facilitates maximum participation
by shareholders. General Assembly meetings are
carried out with the simplest possible procedures,
at the lowest possible cost for the shareholders
and in a manner that does not create any inequality
among them. The Akfen Meeting Hall, where the
General Assembly meetings take place, is located at
the Atatürk Airport International Terminal and it can
accommodate all shareholders. The Company’s General
TAV AT A GLANCE
ASSESSMENTS
130
Assembly meetings are open to the public and are held
under the supervision of a Ministry of Industry and
Commerce Government Official. During the General
Assembly meeting, agenda items were presented in an
objective, detailed, clear and comprehensible manner
and the language and expressions used did not allow
for misinterpretations. Shareholders were given equal
opportunity to voice their opinions and ask questions,
thus creating a healthy environment for discussion;
however, shareholders did not exercise this right
during the General Assembly meeting regarding 2009
activities, or during the Extraordinary General Assembly
meeting. Minutes of the General Assembly meeting are
available on the Company website (http://ir.tav.aero).
Pursuant to a provision in the Company’s Articles of
Association, the Board of Directors, without prejudice to
the resolutions of the General Assembly, is authorized
to take and give motions of waiver at the land registries
on behalf of the Company regarding the purchase
and sale of immovable property and assets, qualified
as immovable pursuant to the Turkish Civil Code
and associated rights. Furthermore, the Board may
establish mortgages in favor of third parties on such
immovable property and real assets -and associated
rights for short, medium and long-term borrowings-by
presenting them as collateral and accept all mortgages
granted by third parties in favor of the Company at any
level and grade at the land registry office. It may also
sign documents associated with such transactions and
terminate such mortgages as necessary. Conversely,
without prejudice to the provisions of the Turkish
Commercial Code with respect to the non-transferrable
powers of the General Assembly, there are no provisions
in the Company’s Articles of Association requiring a
General Assembly resolution for important decisions
such as the purchase, sale or leasing of significant
amounts of property. In fact, the Company is of the
opinion that if General Assembly resolutions were
required for the abovementioned or other similarly
significant decisions, the Company’s activities would
be significantly impeded and management’s ability
to react to dynamic and fluid business opportunities
would be reduced, thus harming the partners of the
Company.
5. Voting Rights and Minority Rights
Voting Rights
The Company avoids practices that make it difficult
to exercise voting rights. All shareholders are given
the opportunity to exercise their voting rights in the
easiest and most convenient manner possible. Each
share is entitled to one vote in the Company. According
to the Company’s Articles of Association, there are
no privileges associated with voting rights. Therefore,
there are no preferred stocks or different classes of
shares in the Company. There is no Company regulation
that restricts the exercise of shareholders’ voting rights
for a certain time period following the acquisition
date of the shares. The Company’s Articles of
Association do not contain any provision that
prevents non-shareholders from voting in proxy as a
representative of a shareholder. The share capital of the
Company does not involve any cross-shareholdings.
Minority Rights
The Company’s Articles of Association contain a
provision which stipulates that minority rights shall be
exercised by shareholders collectively holding at least
5% of the share capital. Exercise of minority rights
in the Company is subject to the Turkish Commercial
Code, the Capital Markets Law and related legislation,
communiqués and resolutions of the Capital Markets
Board. The Company’s Articles of Association do not
contain any provisions in addition to the provisions
mentioned above. The Company facilitates the exercise
of minority rights in accordance with the relevant
legislation and, if necessary, by the Independent Board
Members. As the cumulative voting right is left to the
discretion of Publicly Listed Joint Stock Companies
pursuant to Communiqué Series: IV, No. 29 of the
CMB; the Company’s Articles of Association do not
(yet) provide for cumulative voting. However, within
the scope of legislative developments, the Company
will assess the advantages and disadvantages of this
method.
Principle of Equal Treatment of Shareholders
As it is included in Company Information Policy,
all shareholders, including minority and foreign
shareholders, are treated equally.
131
6. Dividend Policy and Timing of Distribution
There are no privileges with respect to participation in
the Company’s profit. The Company makes its dividend
distribution decisions taking into account the Turkish
Commercial Code, Capital Markets Law, Capital Markets
Board communiqués and resolutions, the Tax Laws
and the provisions of other relevant legislation, as well
as the Company’s Articles of Association. Accordingly,
pursuant to CMB’s resolution no. 02/51 dated January
27, 2010; publicly-listed joint stock companies are
not obligated to pay any dividends from the profits
they made from their activities in 2009 (there was a
20% minimum threshold for 2008). The corporations
that resolve to distribute profits may make dividend
payments based on the resolution of their general
assemblies; either in cash or as gratis shares issued by
adding that amount to the Company’s paid-in capital,
or a combination of the two.
This dividend policy adopted by the Company’s
Board of Directors can also be found in the annual
report and on the Investor Relations web site. It is
among the Company’s primary goals to adhere to
this dividend policy, except for special circumstances
when investments and other funds are required for
the long-term growth prospects of the Company or its
subsidiaries and affiliates, as well as for extraordinarily
unfavorable developments in the economy. As
stated by item 5 on the Agenda of the Company’s
Ordinary General Assembly Meeting held on May 24,
2010; since the Company has no distributable profit
when the losses from previous years are netted
out with the profit that accrued at year-end 2009
based on the Company’s legal records, the General
Assembly unanimously resolved that no dividend
should be distributed to the shareholders and that
the consolidated net profit should be set aside as
extraordinary reserve pursuant to the Capital Markets
Board’s principle resolution regarding the issue and
related regulations.
7. Transfer of Shares
The Company’s Articles of Association do not
contain any provisions that make it difficult for the
shareholders to freely transfer their shares.
SECTION II - PUBLIC DISCLOSURE AND
TRANSPARENCY
8. Information Disclosure Policy of the Company
The Information Disclosure Policy of the Company,
prepared pursuant to the Capital Markets Board
Corporate Governance Principles, was discussed and
approved at the Board of Directors meeting dated
24.05.2010. The Information Disclosure Policy was also
produced as a written declaration and posted on the
http://ir.tav.aero website.
The Board of Directors is responsible for overseeing,
reviewing and improving the Information Disclosure
Policy. The Corporate Governance Committee provides
information and recommendations to the Board of
Directors, the Audit Committee and the Investor
Relations Department on matters regarding the
Information Disclosure Policy. The Investor Relations
Department is charged with overseeing and monitoring
all matters regarding public disclosures. The
Information Disclosure Policy aims to establish active
and transparent communication by sharing the past
performance and future outlook of the Company with
shareholders, investors and capital markets experts
(capital markets participants) equally within the
framework of generally-accepted accounting principles
and Capital Markets Law provisions, in a complete, fair,
accurate, timely and comprehensible manner.
Public Disclosure Principles and Tools
The information to be disclosed to the public is
disseminated in a prompt, accurate, complete,
comprehensible and easy to interpret manner.
Attention is also focused on easy and equal access to
information, with little cost, that will assist persons
and companies who will benefit from the disclosure in
their decision making. TAV Airports complies with the
Capital Markets legislation and Istanbul Stock Exchange
regulations in all of its public disclosure practices.
Information about the public disclosure principles and
tools adopted by the Company are presented below:
• T
he Investor Relations Department is responsible for
overseeing and monitoring all issues related to public
disclosures. Questions received from outside the
Company are responded to in the shortest amount
of time possible by the CEO, the Finance Director
TAV AT A GLANCE
ASSESSMENTS
132
•
•
•
•
(CFO), or within the knowledge of and authorization
limits set by the CEO and the CFO, by the Investor
Relations Department. The Company keeps a record
of all questions received in writing and the responses
provided by the Company. All correspondence and
meetings with capital markets participants are
carried out by the Investor Relations Department.
In addition to the channels stipulated by legislation,
other public disclosure tools and methods such as
press bulletins, electronic data distribution channels,
e-mail messages, meetings with shareholders and
potential investors, as well as announcements
posted on the Company website, are effectively
utilized in the Company’s public disclosures.
The Code of Ethics stipulated within TAV Airports
spells out the principles and rules that all managers
and employees are obligated to comply with. These
rules of conduct are posted on the Company website
for public information.
Without prejudice to any of the provisions in the
relevant regulations, the Company informs the public
when a material change occurs, or is expected to
occur in the near future, in the financial position and/
or activities of the Company.
The Company continually updates and publicly
announces any changes or developments that
arise regarding public announcements made by the
Company.
With the assistance of a domestic company retained
for monitoring the media, TAV Airports follows all
the news reported by the prominent national and
international media outlets; including television, print
media, the Internet and radio. Within this framework,
TAV Airports executives, Investor Relations Department
and Corporate Communications Department are
informed each morning of the related news published
or broadcasted. If non-factual news reports are
identified, the Investor Relations Department assesses
the situation and makes the necessary announcements
in accordance with the TAV Airports Information
Disclosure Policy, in response to an announcement
request from the Istanbul Stock Exchange or from the
CMB, or in some cases, without waiting for a request
for information.
Periodic Financial Statements and Reports and
Independent Audit in Public Disclosures
The Company’s financial statements and accompanying
notes are prepared on a consolidated basis in
accordance with CMB Communiqué Series: XI, No. 29, as
well as the International Financial Reporting Standards
(IFRS), independently audited in accordance with the
International Audit Standards (IAS); and are announced
to the public.
9. Material Disclosures
Developments that have the potential to impact the
value of the Company’s capital markets instruments
are announced to the public in an expedited basis
within the timeframe stipulated by legislation. The
Company made 34 material disclosures during 2010,
none of which were additional disclosures requested
by the CMB or the Istanbul Stock Exchange. The
Company has no additional disclosure obligations
since the Company does not have any capital markets
instruments listed on foreign exchanges.
10. The Company Website and its Contents
As stipulated by CMB Corporate Governance Principles,
the Company website is actively used in public
disclosures. All matters related to the Investors
Relations Department are posted on the http://ir.tav.
aero website. In addition to Turkish, all information
on the Company website is also presented in English
for the benefit of foreign investors. The website
won the first place in the “Best Website” category
at the Investor Relations Awards organized jointly
by Thomson Reuters and Acclaro for the first time in
2009 and second time in 2010. All publicly disclosed
information by the Company is also available on the
Company website. The Company letterhead clearly
indicates the address of its website Of the information
provided in Article 1.11.5 of Section II the of Capital
Markets Board’s Corporate Governance Principles,
all parts revelant to the Company are posted and
updated on the web site. With the activities conducted
throughout 2010, the content of the Investor Relations
web site has been enhanced, and the web site was
redesigned to provide an interactive experience that
enables easy access to information and data. Organized
to address four different groups of users; General
User, Institutional Investors, Individual Investors, and
133
Analysts, the content of the Company’s web site differs
depending on the choice the user makes among the
categories appearing on the main page.
Thanks to the new features included in the Company’s
web site, investors can submit all kinds of questions
to the TAV Investor Relations Department, as well as
establishing active communication with the Company’s
management by sending messages to the Company’s
Board of Directors. By joining the Company’s mail
delivery list, users can have regular access to the
reports and information regarding the Company; and
institutional investors can send meeting requests
through the related section of the web site. Analysts
drafting reports regarding the Company can also enter
the web site and post their reports, major financial
and operational forecasts regarding the Company, and
their expectations of the macroeconomic outlook for
the coming years by using the personal user IDs and
passwords provided to them.
The following information can be accessed through the
Company’s internet site, www.tavyatirimciiliskileri.com:
• Company history
• Current management and shareholder structure
• Summary balance sheet, income statement and cash
flow statement
• Summary operational data
• Company’s Corporate Governance Guidelines
• Company’s Code of Ethics
• Board of Directors and Board Committees
• Most recent version of the Articles of Association
and the dates and issue numbers of theTrade
Registry Gazette in which the amendments were
published
• Prospectuses and public offering circulars
• Trade registry information
• General Assembly meeting agenda, General
Assembly Information Document, proxy voting form,
meeting minutes
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Corporate Governance Principles Compliance Report
List of people with insider information
Information disclosure policy
Annual reports
Periodic financial statements and reports
Financial calendar
Material disclosures
Presentations
Stock price and performance information and charts
News updated by the data provider company
Frequently asked questions
Analyst contact information
Company contact information
Contact with the Board of Directors
Distribution list registration
Meeting requests
Report requests
Investor Feedback Form
11. Disclosure of Ultimate Controlling Shareholders
There is no individual in the Company with ultimate
controlling shares.
The shareholder structure of the Company as of
December 31, 2010 is presented below.
Shareholder
Share (TL)
Share (%)
Tepe İnşaat
Sanayi A.Ş.
94,664,477
26.1
Akfen Holding A.Ş.
94,886,071
26.1
Sera Yapı Endüstrisi
ve Ticaret A.Ş.
15,139,046
4.2
Other non-floating
12,775,048
3.5
Other free-floating
145,816,608
40.1
TOTAL
363,281,250
100.00%
TAV AT A GLANCE
ASSESSMENTS
134
12. Public Disclosure of Insiders
Pursuant to the relevant legislation, as well as the
employment contracts entered into with Company
employees, persons who hold key positions and fall
within this category are listed below:
Abdullah Atalar Member of the Board of Directors
Ali Haydar Kurtdarcan Vice Chairman of the Board of
Directors, Chairman of the Audit Committee
Ali Said Yavuz Internal Audit Manager
Alkan Özyayla Project and Structured Finance
Specialist
Alper Topçu Corporate Communications Design
Manager
Altuğ Koraltan Internal Audit Director
Asaf Kirazoğlu Budget and Planning Specialist
Aslıhan Çörtük Marketing Coordinator
Aslıhan Manaş Executive Assistant of the Board of
Directors
Ayşe Kefli Project and Structured Finance Specialist
Aytekin Bektaş Accounting Manager, TAV Istanbul
Aziz Murat Uluğ Finance Director, Member of the
Corporate Management Committee
Banu Pektaş General Counsel
Bengi Vargül Corporate Communications Coordinator
Berk Kayserli Corporate Communications Assistant
Specialist
Besim Meriç Investor Relations Senior Specialist
Bilde Bilen Legal Counsel
Binnur Onaran Deputy General Manager, TAV IT
Burak Birhekimoğlu Management Systems Coordinator
Burcu Geriş Project and Structured Finance Coordinator
Burcu Sarıoğlu Corporate Communications Manager
Burcu Yar Gürhan Internal Audit Manager
Bülent Özütürk Investments Coordinator
Cenk Laçin Accounting Assistant Manager, TAV Airports
Ceyda Akbal Legal Counsel
Defne Sertel Translator
Demet Sözmen Tax Manager
Deniz Aydın Financial Affairs Director
Doruk Karabulut Project and Structured Finance
Specialist
Eda Bildiricioğlu General Manager, TAV Operations
Services
Elif Yılmaz Project and Structured Finance Specialist
Ersagun Yücel Member of the Board of Directors,
General Secretary
Ersan Arcan General Manager, ATÜ
Ersel Göral General Manager, TAV Tunisie
Esin Rodoplu Risk Management and Research
Assistant Manager
Fatih Ömür Business Development Specialist
Fırat Erkan Balcı General Manager, TAV Izmir
Gamze Şen Financial Reporting Specialist
Giray Çolpan Business Development Specialist
Gökçe Atasoy Project and Structured Finance Specialist
Göker Köse Project and Structured Finance Manager
Gökhan Aygör Budget and Planning Coordinator
Gökhan Doğan Strategic Analysis and Reporting
Manager
Güçlü Batkın Business Development Coordinator
Gülçin Bulan Tax Specialist
Haluk Bilgi Tunisia Country Director, Business
Development Director in charge of Subsidiaries
Hamdi Akın Chairman of the Board of Directors
Hasan Yeşilyurt Corporate Communications Specialist
Hilal Doğru Administrative Bureau Staff
İbrahim Süha Güçsav Member of the Board of Directors
İsmail Varlı Financial Reporting Specialist
Kaan Sertcan Budget and Planning Manager
Kadri Mete Erkal Deputy General Manager, TAV Georgia
Kemal Ünlü General Manager, TAV Istanbul
Kerem Aran Budget and Planning Specialist
Mahmut Miraç Pekmezci Financial Reporting Assistant
Manager
Mehmet Cem Kozlu Member of the Board of Directors,
Chairman of the Corporate Governance Committee
Mehmet Erdoğan, External Relations Coordinator
Mehmet Sina Avşar Process Development and
Reporting Coordinator
Melek Tan Executive Board Office Manager
Melis Erkun Legal Counsel
Mete Erkal General Manager, TAV Georgia
Müjdat Yücel General Manager, Havas
Murat Altıkardeşler Budget and Planning Coordinator
Murat Cevher Tax Manager
Murat Örnekol Operations Director
Mustafa Ayvaz Accounting Chief, TAV Izmir
Mustafa Sani Şener Member of the Board of Directors
and President & CEO
Nazım Yaprak Finance Coordinator
Nazmi Hugül Systems Analysis Coordinator
Neşe Kerimoğlu Risk Management and Research
Coordinator
135
Nihat Akkaya Administrative Bureau Chief
Nuray Demirer General Manager, TAV Esenboğa
Nursel İlgen Investor Relations Coordinator
Onur Aygüneş Business Development Assistant
Specialist
Önder Sezgi Member of the Board of Directors, Member
of the Audit Committee
Özlem Tekay Human Resources Director, Member of
the Corporate Governance Committee
Pierre de Champfleury Member of the Board of
Directors, Member of the Audit Committee
Pınar Tanılkan Legal Counsel
Sadettin Cesur General Manager, BTA
Sertay Sargın Budget and Planning Senior Specialist
Sıla Usta Corporate Event Management Manager
Sibel Arı Financial Reporting Senior Specialist
Şafak Özbay Financial Reporting Senior Specialist
Şaziye Çevik Administrative Bureau Manager
Turgay Şahan General Manager, TAV Security
Umut Ercevahir Financial Reporting Manager
Vehbi Serkan Kaptan Business Development Director,
Member of the Board of Directors
Waleed Ahmed Youssef Strategy Director
Yaşar Kerem Gökyer Tax Senior Specialist
Zoran Krstevski General Manager, TAV Macedonia
All employment contracts contain the following clause:
“The employee understands that ‘insider trading’
transactions are prohibited (“Insider trading” means
stock trading in violation of competition and honesty,
using information on the financial position of a publicly
traded company or any other information that can
affect the share price of the company before other
investors can learn of it). Therefore, the employee
accepts and commits to not using any information or
documents on the Company’s financial position, or
any other information that can affect the value of the
Company’s publicly traded shares, acquired as a result
of managerial position, or any other position in the
Company, or through other means in or outside of stock
market trading for the purpose of making a profit on
his/her own behalf or on behalf of another person.”
Pursuant to the Corporate Governance Principles,
whenever the list of insiders is reconstituted, the
latest version of the list is announced on the Company
website.
SECTION III - STAKEHOLDERS
13. Informing Stakeholders
The Company’s corporate governance practices and
code of ethics ensure the protection of the rights of
stakeholders as stipulated in legislation or mutual
agreements. Stakeholders are continually kept
informed within the framework of the Company’s
Information Disclosure Policy, established with respect
to governing legislation and the Company’s code
of ethics. In addition, the Company aims to provide
information to all stakeholders via press bulletins,
annual reports, Company website and other practices
within the framework of the Company’s transparencyoriented Information Disclosure Policy. For the
Company’s employees, the Intranet, which is the
intra-Company information sharing platform, is used
actively and the “NewsPORT” magazine is published
quarterly and “Gate” magazine is published monthly.
The Company’s employees are expected to fulfill their
responsibilities and hold the Company’s interests
above their own interests and the interests of their
families or acquaintances while performing their jobs.
The employees shall avoid any conduct that may be
construed as pursuing their own or acquaintances’
interests. Foreseeable conflict of interest situations
as well as situations, defined by the Company
management in such manner are shared with the
employees and Company management takes necessary
measures when required.
14. Participation of Stakeholders in Management
The Company does not have a formal model or
mechanism for the participation of stakeholders in
management. However, Independent Board Members
allow the representation of all stakeholders, as well as
the Company and the shareholders, in management.
15. Human Resources Policy
• Organizational structures are developed, human
resources requirements are identified and workforce
plans are formed in accordance with the strategic
plans, areas of business and needs of TAV Airports.
• All operations within TAV Airports are conducted
on the basis of achieving personal and professional
development through customer-oriented and
innovative approaches. All managers and employees
TAV AT A GLANCE
ASSESSMENTS
136
•
•
•
•
•
•
•
•
•
are expected to create and support an environment
that makes a difference and creates value.
Producing high quality products and services,
managing the processes on the basis of data,
satisfaction of internal and external customers, and
establishing interactions to enhance the productivity
of the processes are adopted as the main principles
in all activities.
It is necessary to implement the systems and
processes that relate the Company’s objectives
to business results by means of observable and
measurable parameters. Achieving business
excellence and sustained success is only possible by
conducting effective efforts toward attaining the
Company’s objectives.
It is essential to manage and evaluate corporate and
individual performance. Employees are evaluated
on the basis of their responsibilities, qualifications,
work development and contribution to the
Company’s objectives. Outstanding performance
is differentiated from all others and rewarded by
various benefits.
The Company does not discriminate on any basis
in the recruitment and placement processes and
employees suitable for the requirements of the job
are recruited from local and international sources.
Employees are expected to improve themselves
and their jobs. The Company’s objective in this
regard is to provide the basic means needed in the
development process. All employees are provided
with equal opportunities in terms of personal
development.
The salary for a given position is determined by
evaluating the description and responsibilities of and
the necessary qualifications required for the job as
well as the prevailing market wages.
Corporate Governance Principles are embraced by
all employees. Respect for the people and the job,
open and honest communication, and business
ethics principles constitute the basic management
principles.
As of December 31, 2010, TAV Airports, including all
of its subsidiaries, has a total of 18,768 employees.
No complaints related to discrimination were
received from the employees.
16. Information about Relations with Customers and
Suppliers
Since the Company is a holding company, it is not
directly involved in any operation. Therefore, it does
not have any direct relationships with customers
or suppliers. As a holding company, TAV Airports
determines the general policies for regulations and
practices geared towards achieving the satisfaction
of customers of its subsidiaries. It provides maximum
support to its subsidiaries and, in some circumstances,
enters into contracts with third parties on these
matters, continually striving to enhance customer
satisfaction. In this respect, surveys are conducted
for quality control, as well as enhanced customer
satisfaction. Customers are provided with opportunities
to easily communicate their needs and complaints are
responded to and resolved as quickly as possible.
17. Social Responsibility
The Company expends maximum effort to be sensitive
to its social responsibilities in its operations. It complies
with all regulations regarding the environment,
consumer and public health, as well as ethics rules,
and directs and supports its subsidiaries to behave in
the same manner. The Company’s terminal operating
subsidiaries conduct their operations in compliance
with environmental legislation, directives and
guidelines of international aviation organizations such
as the ICAO, ECAC, EUROCONTROL and IATA, as well as
the Equator Principles of the World Bank.
Due to the nature of their operations, the Company
and its subsidiaries are not legally obligated, within the
scope of Environment Law and its related legislation,
to produce environmental impact assessment reports.
Nevertheless, the Company’s relevant subsidiaries
prepare environmental reports and environmental
management plans during both the construction and
operation phases of terminals and comply with updated
environmental management plans.
Furthermore, the Company’s subsidiaries have
international quality control plans for their operation
areas and quality control audits are conducted in
compliance with international standards.
137
There is currently no investigation, lawsuit, other legal
proceeding or sanction initiated against the Company
or its subsidiaries related to the matters mentioned
above.
Information regarding the awards and certificates the
Company has received in 2010 is presented below.
THE FIRST AIRPORT OPERATOR TO BE DESIGNATED
AS “GREEN COMPANY”
TAV Istanbul has become the first airport operator
to earn the “Green Company” certificate as part of
the “Green Airport” project of the Turkish Ministry of
Transportation’s Directorate General of Civil Aviation
(SHGM). As part of the same project, Havas was also
designated as a Green Company as a result of its
activities at TAV İzmir and at the Milas-Bodrum Airport.
THE MOST ENVIRONMENTALLY-FRIENDLY AIRPORT
IN EUROPE
As a result of the environmental projects, successful
ecological implementations and environmentallyfriendly management policies at Adnan Menderes
Airport’s International Terminal, TAV Izmir has been
presented the first “Eco-Innovation Award” in 2010 by
the Airports Council International Europe (ACI Europe).
The first Eco-Innovation Award that has been
presented to TAV Izmir by ACI Europe as a result of the
sucessful implementation of environmental policies at
Izmir Adnan Menderes Airport’s International Terminal
became a solid proof of the environmetal awareness,
not only of TAV, but of Turkey as well.
SECTION IV – BOARD OF DIRECTORS
18. The Structure and Formation of the Board of
Directors and Independent Members
The formation and election of the Board of Directors
conform to the Corporate Governance Principles and
the principles governing this issue are set forth in the
Company’s Articles of Association.
Accordingly;
Following the resolution of the General Assembly
Meeting dated May 24, 2010; the article stipulating
that the Company is governed by a Board of Directors
comprised of at least 15 members elected by the
General Assembly from among shareholders has been
amended to state that the Company is governed by a
Board of Directors comprised of at least 9 members.
As stipulated in the Company’s Articles of Association,
two Board Members are required to be independent
members as defined by the Capital Markets Board’s
Corporate Governance Principles.
The names of the Members of the Board of Directors
who were appointed in accordance with the Company’s
Articles of Association are presented below:
Board of Directors of TAV Airports
Hamdi Akın Chairman of the Board of Directors (Nonexecutive)
Ali Haydar Kurtdarcan Vice Chairman of the Board of
Directors (Non-executive)
Mustafa Sani Şener Member of the Board of Directors,
President & CEO
Mehmet Cem Kozlu Member of the Board of Directors,
Independent
Pierre de Champfleury Member of the Board of
Directors, Independent
Ahmet Ersagun Yücel Member of the Board of
Directors, General Secretary
Abdullah Atalar Member of the Board of Directors
(Non-executive)
İbrahim Süha Güçsav Member of the Board of Directors
(Non-executive)
Önder Sezgi Member of the Board of Directors (Nonexecutive)
Non-executive members comprise 7 of the 9 Board
Members (more than half of the Board of Directors), the
remaining two being executive members. The Chairman
is not the same person as the President and CEO. Six
Board Members are empowered to represent and bind
the Company.
TAV AT A GLANCE
ASSESSMENTS
138
Of the Board Members, Mr. Mehmet Cem Kozlu and Mr.
Pierre de Champfleury qualify as independent members
according to the independence criteria stipulated in
the CMB Corporate Governance Principles. No situation
arose in the reporting period that would cease the
independent status of the Company’s Independent
Board Members.
Independent Board Members are obligated to submit
a written statement of independence to the Board of
Directors and immediately inform the Board of Directors
when their independent status ceases. An individual
who serves a total of seven years on the Company’s
Board of Directors cannot be appointed Independent
Board Member.
The Company does not impose any rules or restrictions
on its Board Members for assuming additional duties
outside of the Company.
19. Qualifications of Board Members
All of the nominated and appointed members of the
Company’s Board of Directors possess the qualifications
stipulated in Articles 3.1.1, 3.1.2 and 3.1.5 of Section IV of
the CMB’s Corporate Governance Principles.
The Board of Directors is structured to ensure
maximum influence and effectiveness. Article 13 of
the Company’s Articles of Association stipulates the
principles regarding this matter. It is the Company’s
principal aim to appoint Board Members who possess
the fundamental knowledge regarding the legal
principles governing the Company’s transactions and
business, are qualified and experienced in corporate
management, possess the capability of examining
financial statements and reports, and preferably have
graduate degrees. Background information of the
members of the Board of Directors are included in the
annual report and company website.
20. Mission, Vision and Strategic Goals of the
Company
Our Mission
To create the highest value for all stakeholders
in airport operations with a customer-oriented
management approach.
Our Vision
To become the leader and the pioneer airport operating
company in our target regions (Europe, Russia and the
Commonwealth of Independent States, Baltic States
and Georgia, the Middle East, Africa and India).
Our Strategic Goals
The Company’s general strategic goals are specified
below:
• To achieve long-term, sustainable and profitable
growth,
• To maintain and solidify our leadership in the
domestic market and to become the leader, or one
of the leaders, at the international level in the near
future.
The Board of Directors sets strategic goals for relevant
periods through discussions with the Executive Member
(CEO) and the Group Directors.
21. Risk Management and Internal Audit Mechanism
Internal Audit
TAV Airports The Internal Audit Directorate that is
audited by the Institute of Internal Auidtors (IIA),
provides assistance to the Audit Committee in the
Committee’s supervision role. The mission of the
Internal Audit Directorate is to assist the Board of
Directors and Senior Management in their management
and operational responsibilities by identifying
and reporting deficiencies in internal audit, risk
management and governance processes, as well as
practices that are causing inefficiencies and waste of
resources.
The Internal Audit Director reports to the CEO
hierarchically. Internal audit plans are formulated by
taking into account risk analyses, as well as matters
highlighted by the Audit Committee and management.
Risk analyses are conducted regularly to identify
both existing and newly emerging risks. Officially, risk
analyses are performed annually; however, they may be
performed more frequently if deemed necessary.
Studies have been conducted in the critical processes
at locations in Turkey and abroad and the results have
been reported to the senior management. The Internal
139
Audit Directorate continuously examines its systems
and methods of operation in order to to identify all
risks in a precise and timely fashion, and implements
new approaches and methodologies to conduct more
effective and efficient audits. In this regard, the
Directorate implemented two new methods, “Control
Self-Assessment and Continuous Audit”, in 2010.
Risk Management
Along with Internal Audit, the Risk Management
and Research Coordination Department is also a part
of the Finance Directorate and it is responsible for
identifying the risk factors that may have an impact
on the processes carried out to attain TAV’s corporate
objectives, determining the risk-taking appetite
compatible with this goal, and assessing these risks.
The Holding’s risk management approach can be
defined as “integrated risk management”. Under
the coordination of TAV Airports Enterprise Risk
Management (ERM) Department, all Group companies
and operations are encompassed by this risk
management approach. In contrast to the classical risk
management method, which evaluates the risks in
various business units separately; the Holding aims to
implement a risk management which can oversee the
general risks of the Company, puts the general interest
of the Company before that of the business unit the
risk is stemming from, and functions in a continuous
manner.
22. Authorities and Responsibilities of the Board
Members and Executives
The authorities and responsibilities of the Board
of Directors are defined in the Company’s Articles
of Association in a manner that is consistent with
the Board’s functions, that does not leave room for
any doubt and that is clearly distinguishable and
identifiable from the authorities and responsibilities of
the General Assembly.
All partners are obligated to keep confidential
the Company secrets forever, regardless of how
they learned those secrets, even after losing their
shareholding rights. Partners who fail to meet this
obligation are liable to the Company for the damages
this may cause. However, the provisions of this article
are not applicable for information that needs to be
disclosed pursuant to the Capital Markets Law.
23. Operating Principles of the Board of Directors
Board Members are provided with timely access to any
information they need to fully execute their duties. The
Board of Directors issues a separate resolution for the
approval of financial statements and accompanying
notes, the independent audit report, the “Corporate
Governance Principles Compliance Report” and the
annual report. According to the Company’s Articles of
Association, a quorum for the meetings is the majority
(half the number of directors plus one) of the Board of
Directors. A Board of Directors Secretariat, which serves
all Board Members and reports to the Chairman, has
been formed to properly maintain documents related to
Board meetings.
Board of Directors meetings are planned and held in
an effective and efficient manner. As stipulated in the
Company’s Articles of Association;
• The Board of Directors shall meet as the business
and transactions of the Company require. However,
the Board of Directors attempts to meet at least
once every three months. Four Board of Directors
meetings were held during 2009.
• The Chairman, Vice Chairman or any Member of the
Board of Directors has the right to call the Board of
Directors for a meeting and/or include any subject in
the agenda that he/she wants discussed by inviting
all Board Members at least seven days in advance.
• Such meeting invitations shall be made via facsimile.
However, Board Members may waive these meeting
formalities in writing.
• All meetings of the Board of Directors in 2010 were
held at the Company Headquarters, as it was not
decided otherwise by the Board of Directors.
• Alternative opinions expressed, opposing votes cast
(with their reasons) and deliberate questions posed
by Members of the Board of Directors at the Board
meetings are also recorded in the resolution book.
However, such opposition or alternative opinion has
not been expressed in Board meetings; therefore, no
announcement to this effect has been made to the
public.
• Every Board Member is entitled to one vote. Board
Members do not have weighted voting rights or
affirmative/negative veto rights.
TAV AT A GLANCE
ASSESSMENTS
140
The Board of Directors executes the duties stipulated in
the Articles of Association and the relevant legislation.
24. Prohibited Dealings and Competition with the
Company
At the General Assembly meeting that took place on
May 24, 2010, the proposal that was presented for
shareholder approval to authorize the Chairman and the
Board Members to perform the transactions stipulated
in articles 334 and 335 of the Turkish Commercial Code
regarding the ban on doing business and competing
with the Company was approved by the General
Assembly.
25. Code of Ethics
TAV Airports Code of Ethics sets out the rules and
principles that all executives and employees are
obligated to comply with in order to add financial value
to its shareholders and to enhance its corporate value.
The Company has publicly announced the Code of
Ethics on the Company website within the framework
of its disclosure policy, published it on the Company’s
Intranet and shared it with its employees through
workplace programs and performance evaluation
forms. The Code of Ethics is designed to ensure that
the conduct of TAV executives and employees is of
the highest standard and that they are aware of the
impact of their conduct and attitudes on the Company.
Furthermore, the Code ensures that ethics of the
highest standards are upheld and the best actions
are employed regarding Company activities and
shareholders.
The members of the Board of Directors, executives and
employees are expected to comply with all provisions of
TAV Airports Code of Ethics presented below.
Conflict of Interest
A conflict of interest arises when there is an existing
or potential conflict between the personal interests of
an employee and those of the Company. TAV Airports
employees are obliged to consider the interests of
the Company over their personal interests or over the
interests of their families or relatives in their conduct.
Employees shall avoid all kinds of conduct that may be
construed as benefiting themselves or their relatives.
Conflict of Interest Situations
It is essential that the employees prioritize the interest
of the Company in all of the business activities.
The situations described below are regarded as
situations that constitute conflict of interest:
• A
family member or a relative within third degree of
consanguinity has a business relationship with the
Company;
• A family member or a relative within third degree of
consanguinity has an ownership in or relationship of
interest with the competitors of the Company;
• An employee contracts work to a company where a
family member or a relative within third degree of
consanguinity is employed;
• An employee borrows money from or establishes
private business relationship with the firms working
with the Company.
Prevention of Conflicts of Interest
Predictable potential conflict of interest situations
and others defined by the Company Management
are communicated to the employees and necessary
measures are taken by the Company’s management.
The Company’s executives and employees are obliged
to report the conflict of interest situations they come
across to the Management. Once a conflict of interest
comes about, Corporate Governance Committee takes
the necessary actions after evaluating the matter.
Responsibility of Diligence on Duty
Employees are obliged to perform the jobs they assume
by the employment contract diligently and to make
efforts to acquire and develop the competencies
and to obtain the information required by their jobs.
Employees are responsible for the damages caused to
the Company as result of misconduct, recklessness or
negligence. Employees are responsible for completing
the jobs in a timely manner by delegating work to
subordinates when necessary and for making every
effort to comply with the instructions of their seniors
and supervisors. As the representatives of the
Company, all employees are responsible for protecting
the Company’s reputation against third parties.
Employees are obliged to avoid all conduct and actions
that may put the Company in a difficult position. All
employees are obligated to manage their professional
141
relationships with colleagues, business partners and
stakeholders within the framework of business ethics
and codes of conduct. Employees are strictly barred
from receiving benefits from third parties regarding
their jobs, establishing private business relationships
with them, and demanding making payments.
Reponsibility of Compliance with Workplace
Principles and Rules
Employees are obliged to comply with the Company’s
rules regarding management, harmony, discipline,
occupational health and safety, as well as the
instructions, regulations and procedures on these rules.
Responsibility of Being Mindful in Conduct and
Relationships
Employees are obligated to work in harmony with
their colleagues and managers, to form good personal
relationships with private or official persons or entities
associated with the workplace, and to perform their
duties quickly and honestly. Employees have the
responsibility of reporting the persons acting in breach
of the principles of business ethics to the Management
together with the supporting documents.
Obligation of Confidentiality and Keeping Secrets
Employees are obligated to keep the information
and secrets regarding their jobs or the Company
confidential, whether they are related to the position
of the employee or not. Employees cannot disclose
the secrets, information and related documents to
unauthorized persons or entities. This obligation
continues even after the job agreement between the
employee and the Company is terminated.
Responsibility of Protecting the Interests of the
Company
Employees are obliged to protect the Company’s
interests related to the business and the workplace run
by the Company and avoid all conduct that may harm
these interests. Employees cannot use the Company’s
resources for their personal interests.
Prohibition of Working in Another Job
Employees cannot accept another job -public or private,
permanent or temporary, paid or unpaid- or engage in
commerce without the consent of the Company.
Responsibility of Reporting the Changes in Personal
Information
Employees are obigated to provide the Personnel
Department with prompt information and supporting
documents regarding all changes in their family status,
marital status and address;as well as all changes
in the information regarding the employee, his/her
family or relatives that form the basis for the rights
and obligations stipulated in the agreements and/or
regulations.
26. The Number, Structure and Independence of
Board Committees
In line with the Capital Markets Board Corporate
Governance Principles, a Corporate Governance
Committee and an Audit Committee, which report
to the Board of Directors, were formed within the
Company. General principles regarding the Corporate
Governance Committee and the Audit Committee were
stipulated in Article 34.A of the Company’s Articles of
Association that was published in the Turkish Trade
Registry Gazette, dated December 17, 2008.
Corporate Governance Committee
Directly reporting to the Board of Directors, the
Corporate Governance Committee’s function is to assist
the Board of Directors in creating and improving the
structure and practices necessary for the governance
of the Company in accordance with the internationally
accepted Corporate Governance Principles, as well as
remuneration, professional development and career
planning of the senior executives. The duties and
responsibilities of the Corporate Governance Committee
are stipulated in the Company’s Articles of Association.
The Corporate Governance Committee is responsible of
overseeing the Company’s compliance with corporate
governance principles, and its primary duties include:
• Overseeing the implementation of corporate
governance principles by the Company,
identifying the reasons if they are not being fully
implemented and the consequences of inadequate
implementation, and recommending measures for
improvement;
• Determining methods that ensure transparency in
the process of identifying candidates for the Board of
Directors membership;
TAV AT A GLANCE
ASSESSMENTS
142
• Conducting studies on the number of Board members
and executives and making recommendations;
• Developing and overseeing the principles and
practices regarding performance evaluation and
remuneration of Board members and executives.
Mehmet Cem Kozlu is the Chairman of the Corporate
Governance Committee and was elected from among
the Independent Board members.
Members of the Corporate Governance Committee are
listed below:
TAV Airports Holding Co. Corporate Governance
Committee
Mehmet Cem Member of the Board of Directors,
Kozlu
TAV Airports (Independent)
Members of the Corporate Governance Committee
(Independent)
Özlem Tekay
TAV Learning and Innovation Center
Director, TAV Airports
Murat Uluğ
Finance Director (CFO), Member of
the Board of Directors, TAV Airports
Audit Committee
Reporting directly to the Board of Directors, the
Audit Committee assists the Board of Directors in
ensuring that Company practices are in compliance
with domestic and international laws and regulations,
contributing to the improvement of business processes
through their audits and coordinating activities to be
undertaken for ensuring information transparency.
The Audit Committee is responsible for taking all
measures to ensure the adequacy and transparency of
all internal and independent external audit activities
and executing the duties stipulated in the Capital
Markets Law. Its primary duties and responsibilities
include:
• Auditing and approving the compliance of financial
statements and accompanying notes to be publicly
reported in accordance with current legislation and
international accounting standards;
• Overseeing the operation and effectiveness of the
Company’s accounting system, public disclosure of
financial information, independent audit and internal
control and risk management systems;
• Examining and resolving complaints about the
Company’s accounting, internal control system and
independent audit;
• Preventing conflicts of interest that may arise among
Board members, executives and other employees and
identifying regulations that may prevent the abuse
of the Company’s commercial secrets.
The Company’s Articles of Association stipulate that
the Audit Committee shall meet at least once every
three months upon the invitation of the Committee
Chairman. Senior executives responsible for financial
affairs are not allowed to be Audit Committee
members. Pierre de Champfleury, one of the members
of the Audit Committee, is also an Independent Board
Member.
Members of the Audit Committee are listed below:
TAV Airports Holding Co. Audit Committee
Chairman of the Audit Committee
A. Haydar
Kurtdarcan
Vice Chairman of the Board of
Directors, TAV Airports
Members of the Audit Committee
Önder Sezgi
Financial Affairs and Audit Director,
Bilkent Holding Co.
H. Kadri
Samsunlu
Executive Vice President of
Financial Affairs Akfen Holding
Pierre de
Champfleyry
TAV Airports (Independent)
27. Remuneration of the Board of Directors
Within the framework of the Capital Markets Board’s
Corporate Governance Principles, the Company
pays a salary to each Independent Board Member
commensurate with the time investment and efforts
necessary for Board membership. However, it was
resolved by the General Assembly that the Company
shall not pay any salary or attendance fee to the other
Board Members or the statutory auditors.
143
BOARD OF DIRECTORS
Hamdi Akın
Chairman of the Board of Directors
Hamdi Akın assumed his current position as the
Chairman of the Board of Directors of TAV Airports in
2005. One of the founders and shareholders of TAV
Airports, Akın is also the founder and the Chairman of
Akfen Holding. After graduating from Gazi University,
Department of Mechanical Engineering, Akın founded
Akfen Holding in 1975, a company that operates
in construction, tourism, commerce and service
industries. Undertaking infrastructure, energy and
investment projects within the scope of privatization
efforts, in addition to private entrepreneurial
activities, Akın served as a founder and executive
in many associations, foundations and NGOs. Akın
served as the Vice President of Fenerbahçe Sports
Club from 2000 to 2002, the President of Ankara
Region Representative Council of the Turkish Metal
Industrialists’ Union (MESS) from 1992 to 2004, the
Chairman of the Board of Directors of Turkish Young
Businessmen’s Association (TÜGİAD) from 1998 to
2000, Member of the Board of Directors of Turkish
Confederation of Employer Associations (TİSK) from
1995 to 2001, Member of the Board of Directors of
Turkish Industrialists’ and Businessmen’s Association
(TÜSİAD) and the President of Information Society and
New Technologies Committee from 2008 to 2009. He
is one of the founders of the Chair in Contemporary
Turkish Studies at the London School of Economics
and currently serves as the Founding Member and
the Honorary Chairman of the Human Resources
Foundation of Turkey (TİKAV), which has been active
since 1999 in order to provide well-educated human
resources for Turkey.
Vice Chairman of the Board of Directors
Ali Haydar Kurtdarcan assumed his current position
as the Vice Chairman of the Board of Directors of TAV
Airports in 2000 and is also the Chairman of the Audit
Committee. A 1973 graduate of Middle East Technical
University, Department of Civil Engineering, Kurtdarcan
is the Chairman of the Board of Directors of Tepe
Construction, a shareholder of TAV Airports. He served
in various managerial positions, including General
Manager and Assistant General Manager, at Tepe
Construction for the last 22 years.
Mustafa Sani Şener
Member of the Board of Directors and
President & CEO
Mustafa Sani Şener was appointed Member of
the Board of Directors, President and CEO of TAV
Airports in 1997. After graduating from Black Sea
Technical University (BTU), Department of Mechanical
Engineering in 1977, Şener earned his Master’s degree in
fluid mechanics in 1979 from the Department of Applied
Sciences, University of Sussex in the UK. He has been
awarded an Honorary Doctorate from BTU for his
invaluable contributions to the development of Turkish
engineering at the international level. Prior to his career
at TAV Airports, he served in various positions, from
project manager to general manager, in national and
international projects. Mustafa Sani Şener is currently
a Member of the Board of Directors of the Airports
Council International (ACI) Europe.
TAV AT A GLANCE
ASSESSMENTS
144
BOARD OF DIRECTORS
Abdullah Atalar
Abdullah Atalar was appointed a Member of the Board
of Directors of TAV Airports in 2009. After graduating
from Middle East Technical University, Department
of Electrical Engineering in 1974, Atalar received his
Master’s and PhD degrees from the Department of
Electrical Engineering, Stanford University in the
USA, respectively in 1976 and 1978. Beginning his
career at the Hewlett Packard Research Labs in 1979,
Atalar returned to Turkey as an Assistant Professor at
Middle East Technical University in 1980. In 1982 he led
the project to develop the first commercial acoustic
microscope at Ernst Leitz Wetzlar, Germany. In 1986
he served as the Chair of the Department of Electrical
and Electronics Engineering and as Associate Professor
at the newly established Bilkent University and he
was promoted to Professorship in 1990. He worked as
Visiting Professor at Stanford University in 1996. Atalar
received the Scientific Encouragement and Science
Awards of TÜBİTAK in 1982 and 1994, respectively.
He was also elected as a full-member of the Turkish
Academy of Sciences in 1997 and has been awarded
a Fellow Degree by the IEEE in 2007. He led research
projects for companies such as ASELSAN, Teletaş and
Hitachi. Atalar has 17 international patents, 76 scientific
papers and 108 conference proceedings and there are
more than 1,500 citations referring to his papers. He is
currently the President of Bilkent University, Member of
the Science Board of TÜBİTAK, and Vice Chairman and
Executive Director of Bilkent Holding.
Ersagun Yücel
Member of the Board of Directors and General
Secretary
Ersagun Yücel was appointed the General Secretary of
TAV Airports in 2002 and as a Member of the Board of
Directors in 2009. He graduated from the Department
of Business Administration, California Newport
University in 1999. Yücel is currently pursuing his MBA
degree at the same university. He also graduated from
Yıldız Technical University, Department of Serigraphy in
1994 and attended the New York University Advertising
and Marketing Program in 1997. Beginning his career as
a graphic artist in MR Com Graphics in 1993, Ersagun
Yücel worked as manager in Rifle Jeans and Calvin Klein
Jeans between 1995 and 1998. He joined TAV Airports
in 1999 as the Assistant to the President & CEO. In
addition to his responsibilities as General Secretary
of TAV Airports, Yücel also oversees the activities of
the Corporate Communications and External Relations
departments that report to the Holding’s General
Secretary as well as Board of Directors Administrative
Affairs Department.
İbrahim Süha Güçsav
İbrahim Süha Güçsav was appointed a Member of the
Board of Directors of TAV Airports in 2000 and as the
CEO of Akfen Holding in March 2010. Güçsav graduated
from Istanbul University, Department of Economics
in 1992 and earned his Master’s degree from Gazi
University, Institute of Social Sciences, Department
of Business Administration. Beginning his career
at Alexander&Alexander Insurance Brokerage Co. in
1992, Güçsav joined Akfen Group in 1994. Serving at
Akfen Holding as Finance Group President and then as
President of the Executive Board, Güçsav was the Vice
Chairman of the Board of Directors of Akfen Holding
between 2003 and March 2010. He also serves as a
Member of the Board of Directors at various affiliates
including TAV Airports, Executive Member of the Board
of Directors at Akfen GYO (Real Estate Investment
Partnership) and the CEO at IBS Insurance Brokerage
Services.
145
Mehmet Cem Kozlu
Mehmet Cem Kozlu was appointed an Independent
Member of the Board of Directors of TAV Airports
in 2006 and is also the Chairman of the Corporate
Governance Committee. He received his BA from
Denison University, Department of Economics in 1969,
MBA from Stanford University and PhD from Boğaziçi
University in Administrative Sciences. He has been
awarded an Honorary Doctorate Degree by Denison
University. Kozlu held various positions at National Cash
Register Co. in Ohio, Procter&Gamble in Switzerland
and Komili, and served as a Member of the Parliament
between 1991 and 1995. He served as the President
and CEO of Turkish Airlines, and President of Central
Europe, Eurasia and Middle East Group in The CocaCola Company. He currently serves as Consultant to
Coca-Cola Eurasia and Africa Group and he is currently
a Board Member of The Coca-Cola Bottling Company
of Saudi Arabia and Trader Media East Limited,
Amsterdam. He is the President of International
Airlines Training Fund (IATF), Geneva and the Chairman
of the Turkish-Russian Business Council of Foreign
Economic Relations Board, in which he also serves
as a Board Member. He also serves on the boards of
Hürriyet Newspaper and Printing Co., Coca-Cola İçecek
(Bottling) Co., Evyap Soap, Oil and Glycerine Industry
and Trading Co., Godiva, Anadolu Industry Holding, Efes
Brewery and Malt Industry, Kamil Yazıcı Management
and Consulting Co. and Council of Foreign Economic
Relations. Kozlu is also a Member of the Board of
Trustee of Anadolu-Johns Hopkins Health Center and
Istanbul Modern Arts Foundation.
Önder Sezgi
Önder Sezgi was appointed a Member of the Board
of Directors of TAV Airports in 2009. After graduating
from Ankara University, Faculty of Political Sciences,
Department of Public Administration in 1988, Sezgi
served as a Tax Inspector at the Ministry of Finance
until 1998. He joined Tepe Group the same year and is
currently serving as the Financial Affairs Coordinator
(CFO) at Bilkent Holding. Having more than 35 articles
about economics, tax, law and finance published in
various newspapers and journals, Sezgi participated
as a speaker in more than 20 conferences and panels
regarding these topics. Being certified as a Swornin Certified Public Accountant, he served in various
positions and operations in Tax Council, Turkish
Industrialists’ and Businessmen’s Association,
International Investors Association, Foundation of Tax
Inspectors and TÜRMOB.
Pierre de Champfleury
Pierre de Champfleury was appointed an Independent
Member of the Board of Directors of TAV Airports in
2007 and is also a Member of the Audit Committee.
After graduating from Paris École des Hautes Études
Commerciales in Paris in 1967, Champfleury earned his
MBA degree from Stanford University in 1971. Beginning
his 30-year career in luxury goods at Eli Lilly, he served
as the CEO of various companies such as Yves Saint
Laurent Parfums, Austin Nichols and Co., and Manuel
Canovas.
TAV AT A GLANCE
ASSESSMENTS
146
SENIOR MANAGEMENT
Mustafa Sani Şener
Murat Uluğ
Serkan Kaptan
Finance Director (CFO)
Business Development & Investments
President & CEO
Murat Uluğ was appointed the CFO of TAV
Director
Mustafa Sani Şener was appointed Member of
Airports in 2006. He is also a Member of the
Serkan Kaptan was appointed the Business
the Board of Directors, President and CEO of TAV
Corporate Governance Committee, and has
Development Director of TAV Airports in
Airports in 1997. After graduating from Black
been a Member of the Board of Directors
2003. Kaptan is also the Chairman of the
Sea Technical University (BTU), Department of
of Havaş Ground Handling since 2007. He
Board of Directors of North Hub Services, Vice
Mechanical Engineering in 1977, Şener earned his
graduated from Istanbul Technical University,
Chairman of the Board of Directors of Cyprus
Master’s degree in fluid mechanics in 1979 from
Faculty of Electrical and Electronic Engineering,
Airport Services, and Executive Committee
the Department of Applied Sciences, University
Department of Electronic and Communication
Member for TAV Georgia and TAV Macedonia.
of Sussex in the UK. He has been awarded an
Engineering in 1992. Uluğ received his Executive
He graduated from Istanbul University,
Honorary Doctorate from BTU for his invaluable
MBA degree from the joint program of Istanbul
Department of Business Administration in
contributions to the development of Turkish
Bilgi University and Manchester Business School
1995. Kaptan received his MBA degree from
engineering at the international level. Prior to
in 2003. After 11 years of banking experience
Marmara University in 2002. Before joining
his career at TAV Airports, he served in various
in ABN AMRO, HSBC and Garanti Bank, Uluğ
TAV Airports in 1998, he worked at Birgenair
positions, from project manager to general
served as the Finance Coordinator at Akfen
Charter Group as dispatcher and operations
manager, in national and international projects.
Holding before joining TAV Airports.
supervisor. He served as an airport operations
Mustafa Sani Şener is currently a Member of
consultant at Airport Consulting Vienna from
the Board of Directors of the Airports Council
1998 to 2001. Having a wealth of experience in
International (ACI) Europe.
airport and airline operations, privatization and
public-private partnerships, acquisitions, new
businesses spanning 18 years, Kaptan managed
the Iran and Georgia operations. He has served
as a Member of the Board of Directors at TAV
Airports, Havaş, and Turkish Ground Services
(TGS). He has also been the Chairman of the
Turkish-Latvian Business Council and a Member
of the Board of Directors of the Turkish-Czech
Business Council in the Foreign Economic
Relations Board of Turkey (DEİK) since 2010.
147
Altuğ Koraltan
Murat Örnekol
Waleed Ahmed Youssef
Internal Audit Director
Operations Director
Strategy Director
Altuğ Koraltan was appointed the Internal
Murat Örnekol was appointed the Operations
Waleed Ahmed Youssef was appointed the
Audit Director of TAV Airports in 2007.
Director of TAV Airports in 2008. He graduated
Strategy Director of TAV Airports in 2008.
After graduating from Istanbul University,
from Middle East Technical University,
A graduate of the University of California at
Department of Business Administration, in
Department of Industrial Engineering in 1980.
Berkeley’s Department of Civil Engineering,
1986, Koraltan began his career as an External
Örnekol served as the General Manager of TAV
he subsequently earned his Master’s degree
Auditor at Peat Marwick&Mitchell between 1986
Esenboğa between 2006 and 2008. Before
in transportation economics and PhD in air
and 1988. He served as a sales representative at
joining TAV Airports, Örnekol worked for Beretta
transport finance from Berkeley. Prior to joining
the Baghdad office of ENKA Marketing. Working
Holding as the General Manager between 2000
TAV Airports, Youssef served as Director at
at Effemex-Mars as a Finance Manager in 1990,
and 2006, and from 1991 to 2000 served as
Abu Dhabi Airports Company, and as Aviation
Koraltan served as Internal Auditor, Securities
Deputy CEO of Bayındır Holding Co., President
Specialist at the International Finance
Department Assistant Manager and Dealer
of Health Care Division, Director of Telecom
Corporation (IFC), the private sector arm of
at the foreign exchange desk of the Treasury
Project, Logistics and Business Development
the World Bank Group. Having vast experience
Department at Ottoman Bank during the
Coordinator at Bayındır Group. In his early career,
in airport privatization, Youssef managed the
following five years. Serving as the Chairman
Örnekol worked as General Manager at Bordata,
JFK Terminal 4 (the US), Brisbane International
of the Internal Audit Board of OYAK Bank for a
an IT company and as Planning Engineer,
Airport (Australia), and Bangalore International
one-year term in 1997, Koraltan was the head of
IT Manager and Trade Manager at Kutlutaş
Airport (India) operations, and served as
Internal Audit in charge of Turkey and Greece
Holding.
privatization advisor to the governments of
at ABN AMRO Bank for ten years, from 1997 to
Jordan (Amman), Saudi Arabia (Hajj Terminal),
2007, before joining TAV Airports.
Nigeria (Abuja) and Panama (Howard). Youssef
is a member of the World Economics Standing
Committee at Airports Council International
(ACI) and a member of the Committee on
Airfield and Airspace Capacity and Delay
at the US National Academy of Sciences’
Transportation Research Board.
TAV AT A GLANCE
ASSESSMENTS
148
SENIOR MANAGEMENT
Haluk Bilgi
Deniz Aydın
Ersagun Yücel
Business Development Director (Subsidiaries)
Financial Affairs Director
and TAV Tunisie Country Director
Deniz Aydın, who was appointed TAV Airports
General Secretary
Haluk Bilgi was appointed the Business
Financial Affairs Director in July 2010, originally
Ersagun Yücel was appointed the General
Development Director Responsible for
joined TAV in 2006 as Financial Affairs
Secretary of TAV Airports in 2002 and as the
Subsidiaries of TAV Airports in 2008 and also
Coordinator. She graduated from Middle East
Member of the Board of Directors in 2009. He
serves as TAV Tunisie Country Director. He
Technical University, Department of Economics
graduated from the Department of Business
graduated from Istanbul University, Faculty of
in 1988. Prior to joining TAV Airports, Aydın
Administration, California Newport University in
Economics, Department of Economics in 1992.
served in the financial affairs departments
1999. Yücel is currently pursuing his MBA degree
Bilgi received his MBA degree from Middle East
of companies such as Ernst & Young, Akfen
at the same university. He also graduated
Technical University in 1999, and attended the
Holding, Bobcock & Wilcox Gama Kazan and
from Yıldız Technical University, Department of
Structuring Effective Private Equity Partnership
FMC Nurol Savunma Sanayi in establishing
Serigraphy in 1994 and attended the New York
Program of Harvard Business School. He began
cost systems, management and international
University Advertising and Marketing Program
his career as a Foreign Relations Specialist
reporting systems, and other similar systems.
in 1997. Beginning his career as a graphic artist in
at BBBAG in 1991. Assuming his first position
Obtaining a CPA qualification in 2004, Aydın is
MR Com Graphics in 1993, Ersagun Yücel worked
abroad in 1993 with Sibkon Siberia, Bilgi joined
currently a member of the Istanbul TURMOB
as manager in Rifle Jeans and Calvin Klein Jeans
Tepe Group in 1995, and served as Senior
Independent Accountant and Financial Advisors’
between 1995 and 1998. He joined TAV Airports
Executive in the Russian Federation, the UK, the
Chamber (SMMM).
in 1999 as the Assistant to the President & CEO.
US and Iraq at Tepe Group and its subsidiaries
In addition to his responsibilities as General
for ten years. Before joining TAV Airports as
Secretary of TAV Airports, Yücel also oversees
Business Development Group Manager in 2005,
the activities of the Corporate Communications
Bilgi served as the Business Development
and External Relations departments that report
Coordinator at Tepe Construction and has served
to the Holding’s General Secretary as well
as a Member of the American Management
as Board of Directors Administrative Affairs
Association, Foreign Economic Relations Board’s
Department.
Turkish American Business Council International
Contracting Committee, Central Anatolia
Exporters Union Board of Directors, and Member
of Global Ethics.
149
Banu Pektaş
Kemal Ünlü
Nuray Demirer
General Counsel
General Manager, TAV Istanbul
General Manager, TAV Esenboğa
Banu Pektaş was appointed the General Counsel
Kemal Ünlü was appointed the General Manager
Nuray Demirer was appointed the General
of TAV Airports in 2007. She graduated from
of TAV Istanbul in 2005. He graduated from Gazi
Manager of TAV Esenboğa in 2008. She
Istanbul University, Faculty of Law in 1964.
University, Department of Electrical Engineering
graduated from Istanbul Technical University,
Pektaş worked as a freelance attorney between
in 1983. Ünlü joined TAV Airports in 2004 after
Department of Architecture in 1988. Demirer
1965 and 1987. During the same period, she
leaving his post as the Principal in Charge of
joined TAV Airports for the construction of
also served as a lecturer at Istanbul University,
Atatürk Airport at the Turkish State Airports
the Atatürk Airport International Terminal in
School of Foreign Languages. Between 1987 and
Authority (DHMİ). He held various positions at
1999. Demirer was the Project Manager of TAV
2006, she was the Legal Counsel of Coca-Cola
the Turkish State Airports Authority Esenboğa,
Esenboğa Domestic and International Terminals.
Turkey and served as the Head Counsel over
Antalya and Atatürk Airports between 1978 and
She served as the Assistant General Manager
these years with responsibilities increasing to
2004.
of TAV Esenboğa between 2006 and 2008.
cover 36 countries in the Eurasia and the Middle
Beginning her career at Atölye T Architecture in
East Group of the company.
1988, Demirer served in both the construction
and the operation of Eczacıbaşı Pharmaceuticals
Factory, as well as Site Manager, Construction
Manager and Project Manager at Tepe
Construction.
TAV AT A GLANCE
ASSESSMENTS
150
SENIOR MANAGEMENT
Fırat Erkan Balcı
Ersel Göral
K. Mete Erkal
General Manager, TAV Izmir
General Manager, TAV Tunisie
General Manager, TAV Georgia
Fırat Erkan Balcı was appointed the General
Ersel Göral was appointed the General Manager
K. Mete Erkal was appointed the General
Manager of TAV Izmir in 2009. Balcı was
of TAV Tunisie in 2007. He graduated from
Manager of TAV Georgia in June 2010. He
appointed as the Assistant General Manager
Istanbul University, Department of Business
graduated from the Southern Illinois University,
of TAV Izmir in 2006 and served as the Acting
Administration in 1998. He served at Tbilisi and
Department of Finance in 1993. Erkal served
General Manager from March 2008 to January
Batumi International Airports as the General
as the Operations Coordination Manager of
2009. He graduated from Middle East Technical
Manager of TAV Georgia between 2005 and
TAV Airports from 2008 to 2009. He was a
University, Department of Civil Engineering
2007. Göral joined TAV Istanbul in 1999 and
Management Trainee at the Blinder&Robinson
in 1996. He served as the Assistant General
worked as Terminal Operations Manager and
Co., in St. Louis, the US and served as the
Manager of TAV Izmir between 2006 and 2008.
Assistant General Manager. Beginning his
New York and Paris Lines Manager at Turkish
Before joining TAV Airports, Balcı worked as
career as an Operations Chief at Çelebi Ground
Airlines before 1995. He served as the Assistant
the Operations Manager at the Antalya Airport
Handling in 1993, he later served as Assistant
General Manager, responsible from Sales and
International Terminal I, IT Project Manager at
Station Manager at Gözen Air.
Services in the privatization of Havaş and in
Fraport, and IT Chief at Bayındır Antalya Airport.
the partnership with Swissport from 1995 to
1999, and from 1999 to 2002, he served as
the Commerce Director at Çelebi Air Services.
Erkal, who served as the Marketing Director at
ATA Holding for three years before joining TAV
Airports, is also a Member of the American
Marketing Association.
151
Zoran Krstevski
Eda Bildiricioğlu
Binnur Güleryüz Onaran
General Manager, TAV Macedonia
General Manager, TAV Operations Services
General Manager, TAV IT
Zoran Krstevski was appointed the General
Eda Bildiricioğlu was appointed the General
Binnur Güleryüz Onaran assumed her current
Manager of TAV Macedonia in January
Manager of TAV Operations Services in
position as the General Manager of TAV IT
2011. He graduated from the University St.
2006. She graduated from the Eastern
in July 2010. She was appointed the System
“Cyril & Methodius”, Faculty of Law in 1985.
Mediterranean University, Department of
Support and Application Assistant General
Krstevski served as the General Director of
Business Administration and Economics in 1991.
Manager of TAV IT in 2006 and served as the
the Civil Aviation Agency of the Republic of
Bildiricioğlu served as marketing manager at
Acting General Manager from October 2009
Macedonia from 2008 to 2010 before joining
various companies before joining TAV Airports in
to July 2010. Having attended the Computer
TAV Airports. During his mandate he was
1997 as the Commercial Affairs Manager.
Programmer/Analyst Program at Conestoga
a member of the Provisional Council of the
College from 1990 to 1993, Onaran administered
Eurocontrol Management Board, member of
trainings on computer programming and
the Enlarged Committee, member of ECAC, and
network administration as the Training Manager
EASA Management Board Observer. Krstevski
at Vancouver, CDI College from 1993 to 1995.
worked as the General Director of JSC Airports
She worked as Manager at the Information
Macedonia between 2006 and 2008, where he
Technology and Organization Department of
was a member of the ACI Policy Committee. He
Mercedes Benz Turkey from 1995 to 2002. After
was a Member of Parliament of the Republic
completing the executive training program
of Macedonia from 2002 to 2006 and served
at Daimler Chrysler, she was appointed the
as the Deputy Prime Minister for European
Manager of Organization & IT Administration of
Affairs from 2000 to 2002. Krstevski, who
Mercedes Benz Turkey in 2002. Having worked
worked as the Vice President and Assistant
as IT Director of TÜVTURK before joining TAV
General Director of JSC Makpetrol from 1996 to
Airports, Onaran carried out various network,
2000, was the General Director of PEAS Airport
telecommunication, software, ERP and
Services for three years, and a Senior Expert
infrastructure system projects, and served in
Associated with Aviation Law between 1986
organizational structuring, process optimization
and 1990.
and system development projects.
TAV AT A GLANCE
ASSESSMENTS
152
SENIOR MANAGEMENT
Turgay Şahan
Müjdat Yücel
Ersan Arcan
General Manager, TAV Security
General Manager, Havaş
General Manager, ATÜ
Turgay Şahan was appointed the General
Müjdat Yücel was appointed the General
Ersan Arcan was appointed the General Manager
Manager of TAV Security in April 2011. Joining
Manager of Havaş in 2005 after joining Havaş
of ATÜ in October 2007. He graduated from
TAV Security in 2006 as the Esenboğa Airport
as Assistant General Manager in 2004. He
Schiller University (Heidelberg), Department of
Security Manager, Şahan served as the
worked for Turkish Airlines from 1972 to 2003.
Business Administration in 1994. Arcan served
Assistant General Manager and the Esenboğa
During his tenure at Turkish Airlines, Yücel
as Operations Manager between 1999 and 2006,
Airport Private Security Coordinator from
served in Singapore, Iran, the US, and the
and as Assistant General Manager between
January 2010 to April 2011. He graduated from
UK internationally, as well as serving as the
2006 and 2007 at ATÜ. Before joining TAV
the Police Academy in 1989. Şahan attended the
Head of Ground Operations for two years and
Airports, Arcan worked as Sales Representative
Scotland Yard Police Department Occupational
as the Assistant General Manager of Ground
at A.T.A s.a.r.l in Switzerland and as Sales
Collaboration Program between 1989 and 1990
Operations for four years in Turkey.
Manager at A.R.E.X Ltd. in Luxembourg.
and the European Union Integration Course in
Ankara University between 1999 and 2000. He
served at various positions in different units
of Izmir, Tunceli, Ankara Police departments
and he also served in Haiti, Bosnia, Kosovo,
United Nations Peacekeeping Force, Belgium
ECAC and as Airports Security Branch Manager
at Security General Directorate of National
Police Protection Department and Chairman of
Training, Inspection and Investigation Experts
Committee (EADUK).
153
Sadettin Cesur
General Manager, BTA
Sadettin Cesur was appointed the General
Manager of BTA in 2000. He graduated from the
Istanbul Tourism and Hotel Management School
and attended Managing Successfully Program in
the US. Before joining TAV Airports, Cesur also
worked for five-star hotels including Çınar Hotel,
Parksa Hilton, Conrad Istanbul and the Four
Seasons Hotel.
TAV AT A GLANCE
ASSESSMENTS
COMMITTEES
Audit Committee
Chairman of the Audit Committee
Vice Chairman of the Board of Directors
TAV Airports
Members of the Audit Committee
Önder Sezgi
TAV Airports
Hüseyin Kadri Samsunlu
Executive Vice President of Financial Affairs
Akfen Holding
Pierre de Champfleury (Independent)
TAV Airports
Corporate Governance Committee
Mehmet Cem Kozlu (Independent)
TAV Airports
Members of the Corporate Governance Committee
Özlem Tekay
President of TAV Learning and Innovation Center
TAV Airports
Murat Uluğ
Finance Director
TAV Airports
154
155
AGENDA FOR THE ORDINARY GENERAL ASSEMBLY MEETING
Agenda for the Ordinary General Assembly Meeting of TAV AIRPORTS HOLDING CO. for 2010, to be held on
Friday, May 13, 2011:
1. Opening and formation of the Presidential Council
2. Granting the Presidential Council the authority to sign the Minutes of the General Assembly Meeting
3. Reading, discussion and approval of the Annual Report of the Board of Directors and the Report of the
Statutory Auditors of the Company for 2010
4. Reading, discussion and approval of the Balance Sheet and the Profit and Loss Statements of the Company
for 2010
5. Submission for the information and approval of the General Assembly of the fact that the Company has no
distributable profit when the net profit for the period (TL 99,952,661 profit) is netted out with the losses from
previous years (TL 100,150,613 loss); therefore no dividend should be distributed to the shareholders and the
consolidated net profit should be set aside as extraordinary reserve
6. Releasing members of the Board of Directors and the Statutory Auditors from their duties for 2010
7. Election of new statutory auditors in place of the statutory auditors whose terms of office have expired and
determination of the terms of office and remuneration of the newly elected statutory auditors
8. Submission of the elected Independent Audit Company for the approval of the General Assembly
9. Presentation of information to the General Assembly about transactions conducted with “Related Parties”
pursuant to Article 5 of the Communiqué of Capital Markets Board Series: IV No: 41
10. Presenting information to the shareholders of the donations made by the Company in 2010
11. Presenting information to the shareholders regarding the pledges, collaterals and mortgages granted by the
Company pursuant to Decision No. 28/780 of the Capital Markets Board dated September 9, 2009
12. Granting the Chairman and the Members of the Board of Directors the authority to perform the transactions
stipulated in Articles 334 and 335 of the Turkish Commercial Code,
13. Wishes and requests
14. Closing
TAV AT A GLANCE
ASSESSMENTS
156
Statutory Auditors’ Report
TO THE ORDINARY GENERAL ASSEMBLY OF TAV AIRPORTS HOLDING CO.
Title
Head Ofice
Capital
Area of Operation
:
:
:
:
TAV Airports Holding Co.
Istanbul
TL 363,281,250 (as of December 31, 2010)
Airports, Investment and Operation Activities regarding Airport Terminal
Construction and Operation, participation in companies engaged in such
activities and provision of management and financing services.
Names and Terms of Office of the Statutory
Auditors,and whether they are shareholders or
employees of the Company
:
Murat AŞKAR, Meral ALTINOK, Belgin BERKER Our term of office is two
years. We are not shareholders of the Company. We are not employees of
the Company.
Number of Board of Directors Meetings Attended
and Board of Statutory Auditors Meetings Held
:
The Scope of the Examination Performed on the
Company’s Accounts, Books and Documents,
Dates of such Examinations, and Conclusion
Reached
:
We performed examinations and audits during the first weeks of the 3rd,
6th, 9th and 12th months, in accordance with the Tax Laws and the Turkish
Commercial Code; we have not encountered any issue to critique.
Number and Conclusions of the Counts Performed :
in the Company’s Treasury Pursuant to Article
353, Section 1.3 of the Turkish Commercial Code
Inventory counts were performed and count reports were created
during the audit; as a result of the counts, we determined that actual
inventories agree with the records.
Number and Dates of the Audits Pursuant to
Article 353, Section 1.4 of the Turkish Commercial
Code
:
As a result of the examinations we performed on the first day of each
month, we determined that securities present agree with the records.
Complaints and Frauds Reported and Actions
Taken in Response
:
No complaints were reported to the statutory auditors.
We have audited the transactions and accounts of TAV Airports for the fiscal year from January 1, 2010 to December 31, 2010 in
accordance with the Turkish Commercial Code, the Company’s Articles of Association, other laws and applicable legislation and
generally accepted Accounting Principles and Standards.
In our opinion, the balance sheet prepared as of December 31, 2010 factually and accurately reflects the Company’s true financial
position as of this date; and the income statement prepared for the period from January 1, 2010 to December 31, 2010 factually and
accurately reflects the Company’s operations results for this period; the profit distribution proposal is in accord with the laws and the
Company’s Articles of Association.
We recommend the approval of the balance sheet and the income statement and the acquittal of the Board of Directors from its
fiduciary duties.
AUDIT COMMITTEE
Murat AŞKAR
Meral ALTINOK
Belgin BERKER
157
STATEMENT OF RESPONSIBILITY
STATEMENT OF RESPONSIBILITY PURSUANT TO ARTICLE 9 OF SECTION THREE OF THE COMMUNIQUÉ
SERIAL: XI NO: 29 OF THE CAPITAL MARKETS BOARD
Approved by the Board of Directors and the Audit Committee, the consolidated financial statements of the
Company regarding the period of January-December 2010, which were prepared in accordance with the mandatory
format stipulated by the Capital Markets Board (CMB) on December 20, 2004, to comply with the CMB resolution
11/367, dated March 17, 2005 and the International Financial Reporting Standards stipulated by the Communiqué
Serial: XI No: 29 of the CMB on “Principles of Financial Reporting in Capital Markets” are enclosed herewith.
We hereby declare that;
a) We have reviewed the consolidated financial statements dated December 31, 2010,
b) To the best of our knowledge, the consolidated financial statements do not contain any untrue statement or
any omission of material facts that may result in misleading conclusion as of the date of issuance,
c) Prepared in accordance with the financial reporting standards in effect, the financial statements give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and the annual report includes a fair review
of the development and performance of the business and the financial position of the Company and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks
and uncertainties faced.
With Kind Regards,
M. Sani ŞENER
President & CEO
Deniz AYDIN
Financial Affairs Director
TAV HAVALİMANLARI HOLDİNG A.Ş.
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2010
3 March 2011
This report contains the “Independent Auditors’ Report” comprising 1 page and
“Consolidated Financial Statements and their explanatory notes” comprising 97 pages.
Independent Auditors’ Report
To the Board of Directors of
TAV Havalimanları Holding Anonim Şirketi
We have audited the accompanying consolidated financial statements of TAV Havalimanları Holding Anonim Şirketi and its
subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31 December 2010, the consolidated
statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of
significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at
31 December 2010, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards.
İstanbul, Turkey
3 March 2011
TAV AT A GLANCE
ASSESSMENTS
162
TAV HAVALİMANLARI HOLDİNG A.Ş. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
(Amounts expressed in Euro unless otherwise stated)
Notes 31 December 2010 31 December 2009
ASSETS
Property and equipment
Intangible assets
Airport operation right
Other investments
Goodwill
Prepaid rent expenses
Trade receivables
Other non-current assets
Deferred tax assets
Total non-current assets
Inventories
Trade receivables
Due from related parties
Derivative financial instruments
Other receivables and current assets
Cash and cash equivalents
Restricted bank balances
Total current assets
TOTAL ASSETS
17
18
19
20
18
21
25
24
22
169,534,780
37,877,865
734,271,656
24,238
154,019,707
82,283,714
113,810,957
601,680
79,492,563
1,371,917,160
117,527,566
41,320,152
723,041,011
24,238
151,402,835
107,413,971
134,457,502
8,930,598
54,254,039
1,338,371,912
23
21
25
40
36
24
26
27
13,966,730
122,592,025
77,681,614
5,124,375
33,305,357
32,442,373
382,444,797
667,557,271
11,403,317
117,275,560
62,044,641
10,482,379
6,390,781
29,287,322
34,010,922
313,849,601
584,744,523
2,039,474,431
1,923,116,435
The accompanying notes form an integral part of these consolidated financial statements.
163
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
Notes 31 December 2010 31 December 2009
EQUITY
Share capital
Share premium
Legal reserves
Other reserves
Revaluation surplus
Purchase of shares of entities under common control
Cash flow hedge reserve
Translation reserves
Retained earnings / (accumulated losses)
Total equity attributable to equity holders of the Company
28
162,383,978
220,286,470
21,655,917
14,622,932
1,982,718
40,063,860
(61,729,366)
849,301
37,209,526
437,325,336
162,383,978
220,286,470
18,385,795
2,324,325
40,063,860
(59,776,657)
(2,056,517)
(9,168,016)
372,443,238
103,060,117
40,555,777
540,385,453
412,999,015
30
31
40
33
22
1,008,094,394
7,451,972
14,130,564
21,688,366
6,281,310
1,057,646,606
1,089,524,346
4,645,483
19,082,385
14,339,463
7,335,962
1,134,927,639
26
30
35
40
36
16
32
34
33
2,865,313
225,363,062
34,158,389
14,021,181
104,968,109
9,920,571
38,074,621
4,832,799
7,238,327
441,442,372
2,379,933
196,758,985
29,306,087
12,285,718
85,400,809
1,391,675
39,264,452
2,695,918
5,706,204
375,189,781
Total Liabilities
1,499,088,978
1,510,117,420
TOTAL EQUITY AND LIABILITIES
2,039,474,431
1,923,116,435
Non-controlling interests
Total Equity
LIABILITIES
Loans and borrowings
Reserve for employee severence indemnity
Due to related parties
Deferred income
Deferred tax liabilities
Total non-current liabilities
Bank overdraft
Trade payables
Current tax liabilities
Other payables
Provisions
Deferred income
Total current liabilities
TAV AT A GLANCE
ASSESSMENTS
164
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010
2010
41,627,967
713,278,533
39,627,856
(41,410,646)
(16,466,156)
(64,892,061)
(42,097,025)
(219,294,927)
(129,638,846)
(59,544,585)
(100,439,595)
120,750,515
2009
284,491,359
572,957,180
35,970,417
(271,354,562)
(13,865,759)
(55,306,456)
(34,309,570)
(152,826,421)
(143,621,639)
(37,224,592)
(72,331,417)
112,578,540
31,885,484
(89,169,954)
(57,284,470)
25,120,947
(84,588,880)
(59,467,933)
63,466,045
53,110,607
(11,826,115)
51,639,930
(1,645,831)
51,464,776
68,320
(13,594,103)
3,237,686
4,868,363
(5,419,734)
68,320
(36,225,843)
(1,365,484)
7,299,593
(30,223,414)
Total comprehensive income for the year
46,220,196
21,241,362
Profit attributable to:
Owners of the Company
Profit for the year
49,780,525
1,859,405
51,639,930
50,523,133
941,643
51,464,776
Total comprehensive income attributable to:
Owners of the Company
50,801,954
(4,581,758)
46,220,196
20,932,633
308,729
21,241,362
363,281,250
346,693,065
0.14
0.15
Construction revenue
Operating revenue
Other operating income
Construction expenditure
Cost of catering inventory sold
Cost of duty free inventory sold
Cost of services rendered
Personnel expenses
Concession and rent expenses
Depreciation and amortisation expenses
Other operating expenses
Operating profit
Finance income
Finance costs
Net finance costs
Notes
8
9
10
8
11
12
14
13
15
Profit before income tax
Income tax expense
Profit for the year
16
Other comprehensive income
Revaluation of intangible assets
Effective portion of changes in fair value of cash flow hedges
Foreign currency translation differences for foreign operations
Income tax on cash flow hedge reserves
Other comprehensive income for the year, net of tax
Weighted average number of shares outstanding
Basic and diluted earnings per share
29
Balanceat 1 January 2009
Profit for the year
Effective portion of changes in fair value
ofcash hedges, net of tax
Foreign currency translation differences
for foreign operations
Total other comprehensive income
Transactions with owners of the Company,
recognized directly in equity
Contributions by and distributions to owners
of the Company
Issue of share capital
Dividend distributions
Changes in ownership interests in
subsidiaries
Group structure change
Sale of non-controlling interest
Total transactions with owners of the Company
Transfers
Balance at31 December 2009
Balance at 1 January 2010
Profit for the year
Effective portion of changes in fair value
of cash hedges, net of tax
Foreign currency translation differences
for foreign operations
Total other comprehensive income
Transactions with owners of the Company,
recognized directly in equity
Contributions by and distributions to owners
of the Company
Issue of share capital
Dividend distributions
Changes in ownership interests in
subsidiaries
Sale of non-controlling interest, net
Total transactions with owners of the Company
Transfers
Balance at 31 December 2010
103,989
-
103,989
220,286,470
220,286,470
-
57,473,711
-
57,473,711
162,383,978
162,383,978
-
-
-
220,286,470
-
-
-
162,383,978
15
15
3,270,122
21,655,917
-
-
-
-
-
3,323,726
18,385,795
18,385,795
-
-
-
-
-
Legal
Reserves
15,062,069
14,622,932
14,622,932
14,622,932
-
-
-
-
-
-
-
-
-
-
-
-
Other
Reserves
-
1,982,718
-
(341,607)
(341,607)
-
(341,607)
-
2,324,325
2,324,325
-
-
(341,607)
(341,607)
-
(341,607)
-
40,063,860
-
-
-
-
-
40,063,860
40,063,860
-
-
-
-
-
(61,729,366)
-
(1,952,709)
(1,952,709)
(1,952,709)
-
-
(59,776,657)
(59,776,657)
-
(28,474,854)
(28,474,854)
(28,474,854)
-
-
849,301
-
2,905,818
2,905,818
2,905,818
-
-
-
(2,056,517)
(2,056,517)
-
-
(1,183,966)
(1,183,966)
(1,183,966)
-
-
-
(3,812,910)
37,209,526
-
409,927
50,190,452
-
409,927
49,780,525
(3,412,927)
(9,168,016)
(9,168,016)
-
409,927
50,933,060
-
409,927
50,523,133
Retained
Earnings /
(Accumulated
Losses)
(56,688,149)
-
-
16
-
-
-
15
-
-
15
-
-
-
Share Capital
104,910,267
16
Note
Share
Premium
220,182,481
Attributable to owners of the Company
Purchase
of Shares
of Entities
Under
Cash Flow
Revaluation
Common
Translation
Hedge
Surplus
Control
Reserve
Reserves
2,665,932
40,063,860
(31,301,803)
(872,551)
14,622,932
14,622,932
(542,788)
437,325,336
-
2,905,818
1,021,429
50,801,954
(1,952,709)
68,320
49,780,525
57,577,700
(89,201)
372,443,238
372,443,238
57,577,700
-
(1,183,966)
(29,590,500)
20,932,633
(28,474,854)
68,320
50,523,133
Total
294,022,106
66,981,047
66,543,310
542,788
103,060,117
202,808
(640,545)
331,868
(6,441,163)
(4,581,758)
(6,773,031)
-
1,859,405
9,878,983
15,646,415
25,140,653
89,201
40,555,777
40,555,777
19,975
(404,720)
(181,518)
(632,914)
308,729
(451,396)
-
941,643
NonControlling
Interests
15,017,194
81,603,979
81,166,242
540,385,453
202,808
(640,545)
3,237,686
(5,419,734)
46,220,196
(8,725,740)
68,320
51,639,930
9,878,983
15,646,415
82,718,353
412,999,015
412,999,015
57,597,675
(404,720)
(1,365,484)
(30,223,414)
21,241,362
(28,926,250)
68,320
51,464,776
Total
Equity
309,039,300
165
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
TAV AT A GLANCE
ASSESSMENTS
166
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period
Adjustments for:
Amortisation of airport operation right
Depreciation of property and equipment
Amortisation of intangible assets
Amortisation of prepaid rent
Provision for employment termination benefits
Provision set for doubtful receivables
Provision set for tax penalties
Other provisions set
Gain on sale of non-controlling interest in a subsidiary
Discount on receivables and payables, net
Impairment losses on property and equipment
Gain on sale of property and equipment
Provision set / (reversal) for unused vacation
Provision for slow moving inventory
Accrued insurance income
Interest income
Interest expense on financial liabilities
Income tax expense
Discount income from concession receivable
Unrealised foreign exchange differences on statement of financial position items
Cash flows from operating activities
Change in trade receivables
Change in non-current trade receivables
Change in inventories
Change in due from related parties
Change in restricted bank balances
Change in other receivables and current assets
Change in trade payables
Change in due to related parties
Change in other payables and provisions
Change in other long term assets
Additions to prepaid rent expenses
Cash generated from operations
Income taxes paid
Interest paid
Retirement benefits paid
Net cash from operating activities
14-19
14-17
14-18
12
38
34
10
17
34
24
15
15
16
21
16
31
2010
2009
51,639,930
51,464,776
32,765,582
21,218,211
5,560,792
129,638,846
4,393,388
1,336,568
204,048
(22,078)
6,638,910
(386,413)
1,802,934
53,749
(6,924,254)
(14,619,447)
81,804,039
11,826,115
(10,242,300)
23,649,535
340,338,155
(16,948,645)
30,888,845
(2,617,149)
5,358,004
159,245,338
17,525,665
(7,513,802)
(3,216,358)
7,691,195
8,328,918
(97,461,768)
441,618,398
(24,797,818)
(78,695,629)
(1,834,364)
336,290,587
19,266,667
13,464,997
4,492,928
143,621,639
5,640,693
306,451
444,174
172,277
(8,993,461)
9,937
(67,121)
(47,067)
31,887
(17,514,462)
68,068,857
1,645,831
(7,542,366)
18,182,260
292,648,897
(6,315,574)
29,391,720
(1,664,482)
4,677,867
84,032,565
34,959,996
(13,193,070)
(30,652,508)
9,000,296
5,960,467
(104,458,368)
304,387,806
(11,158,291)
(79,336,425)
(4,215,585)
209,677,505
167
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Proceeds from sale of property and equipment and intangible assets
Proceeds from sale of non-controlling interest in a subsidiary
Acquisition of subsidiary net of cash acquired
Acquisition of property and equipment
Additions to airport operation right
Acquisition of intangible assets
Net cash provided from / (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
New borrowings raised
Repayment of borrowings
Change in restricted bank balances
Non-controlling interest change
Addition to / (repayment of) finance lease liabilities
Increase in share premium
Proceeds from issue of share capital
Net cash (used in) / provided from financing activities
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 1 JANUARY
CASH AND CASH EQUIVALENTS AT 31 DECEMBER
26
26
2010
2009
14,509,566
1,863,704
141,668,682
(3,241,766)
(79,841,910)
(38,015,639)
(1,046,598)
35,896,039
16,952,284
350,517
27,999,826
(18,164,878)
(52,459,245)
(259,025,519)
(594,035)
(284,941,050)
140,991,003
(215,050,661)
(242,350,100)
(59,633,892)
1,803,095
(374,240,555)
378,969,675
(198,880,814)
(136,500,200)
(14,952,311)
(47,106)
103,989
57,473,711
86,166,944
(2,053,929)
31,630,989
29,577,060
10,903,399
20,727,590
31,630,989
TAV AT A GLANCE
ASSESSMENTS
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. REPORTING ENTITY
TAV Havalimanları Holding A.Ş. (“TAV”, “TAV Holding” or “the Company”) was established in 1997 under the name of Tepe Akfen Vie
Yatırım Yapım ve İşletme A.Ş. in Turkey for the purpose of reconstructing the İstanbul Atatürk Airport (International Lines Building)
and operating it for a limited period of 66 months. On 7 August 2006, the Company’s name has been changed to TAV Havalimanları
Holding A.Ş.. The address of the Company’s registered office is İstanbul Atatürk Havalimanı Dış Hatlar Terminali 34149 Yeşilköy,
İstanbul, Turkey.
The Company is listed in İstanbul Stock Exchange since 23 February 2007 and the Company’s shares are traded as “TAVHL”.
The immediate parents and ultimate controlling parties of TAV and its subsidiaries are Tepe Group and Akfen Group. As explained in
Note 3, Significant accounting policies, in years 2005, 2006 and 2007, the ultimate shareholders of the Company transferred their
shares in certain companies and joint ventures to the Company. As a result of these share transfers, the Company became the parent
company of these subsidiaries.
TAV, its subsidiaries and its joint ventures are collectively referred to as “the Group” in this report. The Company’s subsidiaries as at 31
December 2010 and 2009 are as follows:
Name of Subsidiary
TAV İstanbul Terminal İşletmeciliği A.Ş.
(“TAV İstanbul”)
TAV Esenboğa Yatırım Yapım ve İşletme
A.Ş. (“TAV Esenboğa”)
TAV İzmir Terminal İşletmeciliği A.Ş.
(“TAV İzmir”)
TAV Tunisie S.A. (“ TAV Tunisie”)
TAV Batumi Operations LLC (“TAV
Batumi”)
TAV Urban Georgia LLC (“TAV Tbilisi”)
Batumi Airport LLC
TAV Macedonia Dooel Petrovec (“TAV
Macedonia”)
TAV Gazipaşa Yapım, Yatırım ve İşletme
A.Ş. (“TAV Gazipaşa”)
SIA TAV Latvia (“TAV Latvia”)
HAVAŞ Havaalanları Yer Hizmetleri A.Ş.
(“HAVAŞ”)
BTA Havalimanları Yiyecek ve İçecek
Hizmetleri A.Ş. (“BTA”)
BTA Georgia LLC (“BTA Georgia”)
BTA Tunisie SARL (“BTA Tunisia”)
BTA Macedonia Dooel Petrovec
(“BTA Macedonia”)
Principal Activity
İstanbul Airport
Terminal Services
Ankara Airport
Terminal Services
İzmir Airport
Terminal Services
Airport Operator
Airport
Management
Service Provider
Airport Operator
Airport Operator
Airport Operator
Airport Operator
Airport Operator
Ground Handling
Services
Food and
Beverage Services
Food and
Beverage Services
Food and
Beverage Services
Food and
Beverage Services
Place of operation
31 December 2010
31 December 2009
Ownership
Voting Ownership
Voting
interest power held
interest power held
%
%
%
%
Turkey
100.00
100.00
100.00
100.00
Turkey
100.00
100.00
100.00
100.00
Turkey
Tunisia
100.00
67.00
100.00
67.00
100.00
85.00
100.00
85.00
Georgia
Georgia
Georgia
60.00
66.00
-
100.00
66.00
100.00
60.00
66.00
-
100.00
66.00
100.00
Macedonia
100.00
100.00
100.00
100.00
Turkey
Latvia
100.00
100.00
100.00
100.00
100.00
-
100.00
-
Turkey
65.00
65.00
100.00
100.00
Turkey
66.66
66.66
66.66
66.66
Georgia
66.66
66.66
66.66
66.66
Tunisia
66.66
66.66
66.66
66.66
Macedonia
66.66
66.66
-
-
169
Name of Subsidiary
BTA Unlu Mamülleri Pasta Üretim
Turizm Gıda Yiyecek İçecek Hizmetleri
San. ve Tic. A.Ş. (“Cakes & Bakes”)
TAV İşletme Hizmetleri A.Ş.
(“TAV İşletme”)
TAV Georgia Operation Services LLC
(“TAV İşletme Georgia”)
TAV Tunisie Operation Services SARL
(“TAV İşletme Tunisia”)
TAV Tunisie Operation Services Plus
SARL (“TAV İşletme Tunisia Plus”)
TAV Bilişim Hizmetleri A.Ş.
(“TAV Bilişim”)
TAV Özel Güvenlik Hizmetleri A.Ş.
(“TAV Güvenlik”)
Principal Activity
Place of operation
Food and
Beverage Services Turkey
Operations &
Maintenance
(“O&M”), Lounge
Services
Turkey
31 December 2010
31 December 2009
Ownership
Voting Ownership
Voting
interest power held
interest power held
%
%
%
%
66.66
66.66
66.66
66.66
100.00
100.00
100.00
100.00
Lounge Services
Georgia
99.99
99.99
99.99
99.99
Lounge Services
Tunisia
99.99
99.99
99.99
99.99
Lounge Services
Software and
System Services
Tunisia
99.99
99.99
-
-
Turkey
98.53
98.53
97.00
97.00
Security Services
Turkey
66.67
66.67
66.67
66.67
The entities that are jointly controlled by the Company as at 31 December 2010 and 2009 are as follows:
Name of joint venture
ATÜ Turizm İşletmeciliği A.Ş. (“ATÜ”)
ATÜ Georgia Operation Services LLC
(“ATÜ Georgia”)
ATÜ Tunisie SARL (“ATÜ Tunisia”)
ATÜ Macedonia Dooel
(“ATÜ Macedonia“)
AS Riga Airport Commercial
Development (“ATÜ Latvia”)
TAV Gözen Havacılık İşletme ve Ticaret
A.Ş. (“TAV Gözen”)
Cyprus Airport Services Ltd. (“CAS”)
TGS Yer Hizmetleri A.Ş. (“TGS”)
North Hub Services SIA (“NHS”)
Principal Activity Place of operation
Duty Free Services Turkey
31 December 2010
31 December 2009
Ownership
Voting Ownership
Voting
interest power held
interest power held
%
%
%
%
49.98
50.00
49.98
50.00
Duty Free Services Georgia
Duty Free Services Tunisia
49.98
49.98
50.00
50.00
49.98
49.98
50.00
50.00
Duty Free Services Macedonia
49.98
50.00
-
-
Duty Free Services
Operating Special
Hangar
Management and
Ground Handling
Ground Handling
Ground Handling
Latvia
49.98
50.00
-
-
Turkey
32.40
32.40
32.40
32.40
KKTC
Turkey
Latvia
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
-
50.00
50.00
-
HAVAŞ, Gözen Havacılık ve Ticaret A.Ş. and Türkmen Havacılık Taşımacılık ve Ticaret A.Ş. formed a joint venture under the name of
TAV Gözen on 10 June 2008. HAVAŞ has 32.4% ownership in TAV Gözen as at 31 December 2010. TAV Gözen is engaged in management
of all operational inventory, machinery and system in the special hangar of İstanbul Atatürk Airport, and any construction and
investment related to its subject.
HAVAŞ and Kıbrıs Türk Havayolları Limited Şirketi (“KTHY”) formed a joint venture as 50% + 1 of participation for KTHY under the
name of CAS according to the protocol signed on 1 September 2006 to construct an airport terminal and to undertake its management
for ground handling operations in the Turkish Republic of Northern Cyprus (“KKTC”). CAS started its operations on 1 August 2008.
TAV AT A GLANCE
ASSESSMENTS
170
On 28 November 2008, HAVAŞ has become the preferred bidder for the tender held by Türk Hava Yolları A.O. (“THY”) to participate
in the 50% share in TGS. For the acquisition of TGS see note 7. On 1 January 2010, TGS started its operations in five airports and it
continues its operations in six airports as at 31 December 2010.
On 12 April 2010, HAVAŞ signed the agreement regarding the purchase of 50% shares of NHS. For the acquisition of NHS, see note 7.
Description of Operations
The Group’s core businesses are related to the construction of terminal buildings, management and operation of terminals or airports.
TAV Esenboğa, TAV İzmir and TAV Gazipaşa enter into Build-Operate-Transfer (“BOT”) Agreements with Devlet Hava Meydanları
İşletmesi Genel Müdürlüğü (General Directorate of State Airports Authority) (“DHMİ”), TAV Tbilisi with JSC Tbilisi International Airport
(“JSC”), TAV Batumi with Georgian Ministry of Economic Development (“GMED”), TAV Tunisie with Tunisian Airport Authority (Office
De L’Aviation Civil Et Des Aeroports) (“OACA”) and TAV Macedonia with Macedonian Ministry of Transportation and Communication
(“MOTC”). Under these agreements, the Group agrees to build or renovate or manage an airport or terminal within a specified period
of time and in exchange receives the right to operate the airport and terminal for a preestablished period of time. At the end of the
contracts, the Group will transfer the ownership of the terminal buildings or airports back to the related public authority, DHMİ, JSC,
GMED, OACA or MOTC accordingly. In addition, the Group enters into subsequent stand alone contracts for the operation of airports
and terminals.
BOT Agreements
The airport terminals operated by the Group are as follows:
İstanbul Atatürk International Airport
A BOT agreement was executed between TAV and DHMİ regulating the reconstruction, investment and operations of Atatürk
International Airport International Lines Building (referred to as “Atatürk International Airport Terminal” or “AIAT”) in year 1998. TAV
was required to complete the construction by August 2000 and then had the right to operate the facilities of the International Lines
Building for 3 years, 8 months and 20 days. TAV completed the reconstruction of the International Lines Building in January 2000 and
started the operation seven months early, after completion of a significant portion of the construction. Construction of the remaining
parts of the project was finalised in August 2000. DHMİ and the Undersecretariat of Treasury gave their acceptance of the project in
August 2000 when the investment period was formally completed.
An addendum to the agreement was made in September 2000. Under the terms of the addendum, TAV committed to enlarge the
International Lines Building by 30% by year 2004. In return for extending the International Lines Building, the operation period of
TAV was extended by 13 months 12 days (approximately 66 months in total) through June 2005. The contract expired in June 2005 and
TAV transferred AIAT to DHMİ. On 3 September 2005, TAV İstanbul signed a rent agreement to operate AIAT and Atatürk Domestic
Airport Terminal (referred to as “ADAT”) for 15.5 years until year 2021. The rent agreement requires TAV İstanbul to make annual rent
payments totaling US Dollar (“USD”) 2,543,000,000 plus VAT (18%) over the life of the rent agreement, of which USD 584,890,000
plus VAT has been prepaid at the beginning of the rent period under the terms of the rent agreement. In addition, TAV İstanbul is
required to maintain the facilities throughout the rent period.
An addendum has been signed on 4 November 2008, namely Atatürk Airport Development Project, covering installation of new
passenger boarding bridges and construction of new commercial areas. Through this addendum TAV has undertaken approximately
EUR 36 million of investment in exchange of the operation right of newly created commercial areas.
171
Ankara Esenboğa International Airport
A BOT agreement was executed between TAV Esenboğa and DHMİ on 18 August 2004 regulating the reconstruction, investment
and operations of the Ankara Esenboğa International Airport (international and domestic terminals) for the period until May 2023.
According to the Agreement, TAV Esenboğa was required to complete the construction within 36 months after the agreement date
and would then have the right to operate the facilities of the Ankara Esenboğa International Airport Terminal for a period of 15 years
and 8 months. TAV Esenboğa is providing terminal, car park and passenger boarding services since the beginning of operations on 16
October 2006.
İzmir Adnan Menderes International Airport
A BOT agreement was executed between TAV İzmir and DHMİ on 20 May 2005 regulating the reconstruction, investment and
operations of İzmir Adnan Menderes Airport International Terminal. According to the Agreement, TAV İzmir was required to complete
the construction within 24 months after the agreement date and would then have the right to operate the facilities of İzmir Adnan
Menderes Airport International Terminal for a period of 6 years, 7 months and 29 days. An addendum to the Agreement was signed
on 21 August 2006. Under the terms of the addendum, in return for additional works, the operation period of TAV İzmir was extended
by 11 months 17 days through January 2015. TAV İzmir has been providing terminal, car park and passenger boarding services since the
beginning of operations on 13 September 2006.
Tbilisi International Airport
A BOT agreement was executed between TAV Tbilisi and JSC on 6 September 2005 for the operations of Tblisi International Airport
(both international, domestic terminals and parking-apron-taxi ways). The BOT agreement undertakes the design, engineering,
financing, construction, testing, commissioning and maintenance of the new terminal for Tbilisi International Airport, for an initially
agreed term of 10 years and 6 months from the commencement date of the new terminal operations. Subsequently, this period was
extended by another 9.5 years until August 2027, in exchange for an obligation by TAV Tbilisi to invest an additional amount for the
construction of the terminal (including construction of additional runways, extension of apron etc.) for Batumi airport. TAV Tbilisi
is providing a wide range of airport activities such as terminal, car-park, cargo, ground handling, aircraft parking, apron and runway
services-excluding air traffic control-in New Tbilisi International Airport since the beginning of operations on 8 February 2007.
Batumi International Airport
On 9 August 2007, TAV Batumi Operations signed an agreement with the Georgian Ministry of Economic Development to transfer
the management rights of all shares of the Batumi Airport LLC to TAV Batumi for 20 years. According to such share management
agreement, all airport operations (excluding only the air traffic control and aviation security services) of the Batumi International
Airport will be carried out by TAV Batumi until August 2027.
Tunisia Monastir and Enfidha International Airports
A BOT agreement was executed between TAV Tunisie and OACA on 18 May 2007, for the operation of existing Monastir Habib
Bourguiba Airport and new Enfidha Airport (International, domestic terminals and parking-apron-taxi-ways). Through the BOT
agreement TAV Tunisie undertakes the operation of the existing Monastir Habib Bourguiba Airport and design, engineering, financing,
construction, testing, commissioning and maintenance of the new Enfidha Airport. The operations of Monastir Habib Bourguiba
Airport and Enfidha Airport were undertaken in January 2008 and December 2009, respectively. The concession periods of both
airports will end in May 2047. The operations of the Monastir and Enfidha Airports cover a wide range of airport activities such as
terminal, car-park, cargo, ground handling, aircraft parking, apron and runway services services excluding air traffic control services.
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Gazipaşa Airport
Relating to the transfer of the operational rights of Antalya-Gazipaşa Airport via a lease, the concession agreement between TAV
Gazipaşa and DHMİ was signed on 4 January 2008. The operation period of Antalya-Gazipaşa Airport, which currently has 500,000
annual passenger capacity, is 25 years until January 2033, and the operation of the airport covers activities within airside and landside
facilities and area of runway, apron and taxiway. TAV Gazipaşa shall make an annual rent payment of USD 50,000 plus VAT as a fixed
amount, until the end of the operation period; as well as a share of 65% of the net profit to DHMİ.
Macedonia Skopje, Ohrid and Shtip Airports
On 24 September 2008, the 20-year Concession Agreement for the construction and operation of Alexander the Great Airport in
Skopje, renovation and operation of the St. Paul the Apostle Airport in Ohrid, and the construction and optional operation of the New
Cargo Airport in Shtip airports was signed between TAV Macedonia and the Ministry of Transport and Communication of Macedonia.
The operation of the airports shall cover all airport activities with the exception of air traffic control, and modernisation activities are
contemplated to include the technical infrastructure. The effective date of the concession contract for Alexander the Great Airport and
St. Paul the Apostle Airport is 1 March 2010 and final date of Concession Agreement is 1 March 2030. The effective date for initiating
construction of New Cargo Airport in Shtip will be decided after meteorological and technical measurements which will last for at least
10 years after the effective date.
Operations Contracts
BOT operations and management contracts include the following:
Terminal and airport services-The Group has the right to operate the terminals and airports as mentioned in the preceding
paragraphs. This includes passenger, ramp and check-in counter services and services for parking-apron-taxi ways (for airport
operations). A fee is charged to each airline based on the number of passengers that utilise the airport, based on the number of
aircrafts that utilize ramps and runways and based on the number of check-in counters utilised by the airlines.
Duty free goods-The Group has the right to manage duty free operations within the terminals which the Group operates. Duty free
shopping is available to both arriving and departing passengers. The duty free shops are either operated by the Group or, in certain
circumstances, subcontracted to other companies in exchange for a commission based on sales.
Catering and airport hotel services-The Group has the right to manage all food and beverage operations within the terminals both
for the passengers and the terminal personnel. The Group subcontracts certain food and beverage operations in exchange for a
commission based on sales.
Area allocation services-As a lessor, the Group leases office space in the airport terminal including the offices leased to the airlines for
ticket office and banks.
Ground handling-The Group has the right to provide all ground handling operations. Ground handling involves providing traffic, ramp,
flight operation, cargo and all other ground handling services for domestic and international flights under the Civil Aviation Legislation
License (“SHY 22”). Additional activities include shuttle bus and car parking.
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Lounge services-The Group has the right to operate or rent the lounges to provide CIP services to the passengers who have the
membership.
Bus and car parking services-The Group has the right to operate the car park and render valet parking services. Revenues from bus
operations include shuttle services running from airports to city centers.
Software and system services-The Group develops software and systems on operational and financial optimisation in aviation,
particularly terminal, flight management system and software programs and to meet the information systems requirements of group
companies and certain third parties.
Security services-The Group operates the security services within the domestic terminals.
The Group employs approximately 18,768 (average: 17,535) people as at 31 December 2010 (31 December 2009: 10,719 (average: 12,194)
people).
2. BASIS OF PREPARATION
a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”).
The Group’s consolidated financial statements were authorized for issue by the Board of Directors on 3 March 2011. The power to
change the consolidated financial statements after the issuing of the consolidated financial statements is held by the General
Assembly.
b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for derivative financial instruments
which are measured at fair value.
The methods used to measure fair values are discussed further in note 4.
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c) Functional and presentation currency
TAV Holding and its subsidiaries operating in Turkey maintain their books of account and prepare their statutory financial statements
in Turkish Lira (“TRL”) in accordance with the accounting principles as promulgated by the Turkish Commercial Code and tax
legislation. The foreign subsidiaries and jointly controlled entities maintain their books of account in accordance with the laws and
regulations in force in the countries in which they are registered. The accompanying consolidated financial statements expressed in
EUR, the functional currency of TAV Holding, are based on the statutory records, with adjustments and reclassifications, including remeasurement from TRL to EUR for the purpose of fair presentation in accordance with IFRSs.
Although the currency of the country in which the majority of the Group entities are domiciled is TRL, most of the Group entities’
functional currency and reporting currency is EUR. The table below summarizes the functional currencies of the Group entities:
Company
TAV Holding
TAV Istanbul
TAV Esenboğa
TAV Izmir
TAV Tunisie
TAV Batumi
TAV Tbilisi
Batumi Airport LLC
TAV Macedonia
TAV Gazipaşa
TAV Latvia
HAVAŞ
BTA
BTA Georgia
BTA Tunisie
BTA Macedonia
Cakes & Bakes
TAV İşletme
TAV İşletme Georgia
TAV İşletme Tunisia
TAV İşletme Tunisia Plus
TAV Bilişim
TAV Güvenlik
ATÜ
ATÜ Georgia
ATÜ Tunisia
ATÜ Macedonia
ATÜ Latvia
TAV Gözen
CAS
TGS
NHS
Functional Currency
EUR
EUR
EUR
EUR
EUR
Georgian Lari (“GEL”)
GEL
GEL
EUR
EUR
EUR
EUR
TRL
GEL
Tunisian Dinar (“TND”)
Macedonian Denar (“MKD”)
TRL
TRL
GEL
TND
TND
EUR
TRL
EUR
GEL
EUR
EUR
EUR
USD
USD
TRL
EUR
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d) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the consolidated financial statements is included in the following notes:
Note 3(f)-mark-up applied to construction cost incurred under IFRIC 12.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within
the next financial year are included in the following notes:
Note 17 and 18-useful life of tangible and intangible assets
Note 18-key assumptions used in discounted cash flow projections
Note 22-utilisation of tax losses
Note 31-measurement of reserve for employee severance indemnity
Notes 34 and 39-provisions and contingencies
Note 38-valuation of financial instruments
e) Changes in accounting policies
i) Overview
Strarting as of 1 January 2010, the Group has changed its accounting policies in the following areas:
• Accounting for business combinations
• Accounting for increases in non-controlling interests
ii) Accounting for business combinations
From 1 January 2010, the Group has applied IFRS 3 Business Combinations (2008) in accounting for business combinations. The
change in accounting policy is applied prospectively and had no material impact on earnings per share (“EPS”).
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is
transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from
its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.
Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the
fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
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When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of preexisting relationships. Such amounts are
generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in profit or loss.
Acquisitions before 1 January 2010
For acquisitions before 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the
recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the
excess was negative, a bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with
business combinations were capitalised as part of the cost of the acquisition.
iii) Accounting for increases in non-controlling interests
From 1 January 2010, the Group has applied IAS 27 Consolidated and Separate Financial Statements (2008) in accounting for
acquisitions of non-controlling interests. The change in accounting policy has beeen applied prospectively and has had no material
impact on EPS.
Under the new accounting policy, acquisitions of non-controlling interests are accounted for as transactions with owners in their
capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling
interests are based on a proportionate amount of the net assets of the subsidiary.
Previously, goodwill was recognised on the acquisition of non-controlling interests in a subsidiary, which represented the excess of the
cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction.
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3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by Group entities, except as explained in note 2(e), which addresses changes in
accounting policies.
a) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and entities controlled or jointly controlled
by the Company (its subsidiaries and jointly controlled entities). Control is achieved where the Company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities.
Each entity is consolidated based on the following methods:
• TAV İstanbul, TAV Esenboğa, TAV İzmir, TAV Macedonia, TAV Gazipaşa, TAV Latvia and TAV İşletme are fully consolidated without
non-controlling interest’s ownership.
• TAV Tunisie, TAV Tbilisi, TAV Batumi, Batumi Airport LLC, HAVAŞ, BTA, BTA Georgia, BTA Tunisie, BTA Macedonia, Cakes & Bakes,
TAV İşletme Georgia, TAV İşletme Tunisia, TAV İşletme Tunisia Plus, TAV Bilişim and TAV Güvenlik are fully consolidated with
the non-controlling interest’s ownership reflected as a non-controlling interest. The share capital of Batumi Airport LLC is fully
allocated as non-controlling interest due to the transfer of right on shares to JSC at the end of share management agreement
period. In 2009, TAV Holding acquired 6% shareholding of TAV Tbilisi, increasing its total share from 60% to 66% and its voting
power from 50% to 66%. After the transfer of 6% shares, TAV Tbilisi is fully consolidated with the non-controlling interest’s
ownership of 34% reflected as a non-controlling interest.
• ATÜ, ATÜ Georgia, ATÜ Tunisia, ATÜ Macedonia, ATÜ Latvia, TAV Gözen, CAS, TGS and NHS are proportionately consolidated.
i) Business combinations
The Group has changed its accounting policy with respect to accounting for business combinations. See note 2(e)(ii) for further details.
ii) Subsidiaries:
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes
the non-controlling interests to have a deficit balance.
iii) Acquisitions from entities under common control:
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the
Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative year presented or, if later, at
the date that common control was established; for this purpose comparatives are restated. The assets and liabilities acquired are
recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial statements.
The components of equity of the acquired entities are added to the same components within the Group equity and any gain/loss
arising is recognised directly in equity.
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iv) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary,vany non-controlling interests and the
other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss.
If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of
influence retained.
v) Jointly controlled entities:
Joint ventures are those entities over whose activities the Group has joint control established by contractual agreement and requiring
unanimous consent for strategic financial and operating decisions. The Group reports its interests in jointly controlled entities
using proportionate consolidation. The Group’s share of the assets, liabilities, income and expenses of jointly controlled entities are
combined with the equivalent items in the consolidated financial statements on a line-by-line basis.
vi) Transactions eliminated on consolidation:
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements. Unrealised gains arising from transactions with jointly controlled entities are
eliminated to the extent of the Group’s interest in the jointly controlled entity. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
vii) Effect of group structure change:
After the acquisition of 6% shares of TAV Tbilisi in 2009, TAV Holding obtained control of TAV Tbilisi and accordingly TAV Tbilisi, which
was previously proportionally consolidated, has started to be fully consolidated from the effective date of share transfer (Note 7).
The effects of such changes are presented as “effect of group structure change” in the notes to the consolidated financial
statements.
viii) Acquisitions through business combinations
As stated in the joint venture agreement which was approved by the Competition Board on 27 August 2009, 50% of TGS was acquired
by HAVAŞ in 2009. TGS is jointly controlled by HAVAŞ and THY and is proportionately consolidated (Note 7).
In April 2010, 50% of NHS was acquired by HAVAŞ. NHS is jointly controlled by HAVAŞ and Baltic Aviation Services and is
proportionately consolidated (Note 7).
The effects of such changes are presented as “acquisitions through business combinations” in the notes to the consolidated financial
statements.
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b) Foreign currency
i) Foreign currency transactions:
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during
the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on
retranslation are recognised in profit or loss, except for differences arising on qualifying cash flow hedges, which are recognised in
other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
ii) Foreign operations:
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to
Euro at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Euro at exchange rates
at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve
(translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of
the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control,
significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary
that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign
operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to
profit or loss.
The Group entities use either EUR, TRL, USD, TND or GEL as functional currencies since these currencies are used to a significant
extent in, or have a significant impact on, the operations of the related Group entities and reflect the economic substance of the
underlying events and circumstances relevant to these entities. All currencies other than the currency selected for measuring items
in the financial statements are treated as foreign currencies. Accordingly, transactions and balances not already measured in the
functional currency have been re-measured to the related functional currencies in accordance with the relevant provisions of IAS 21
(“The Effects of Changes in Foreign Exchange Rates”). The Group uses EUR as the reporting currency.
The financial statements of subsidiaries that report in the currency of a hyperinflationary economy (Turkey) are restated in terms of
the measuring unit current at the reporting dates until 31 December 2005 before they are translated into EUR. Turkey came off highly
inflationary status for the period beginning after 15 December 2005, therefore restatement for IAS 29 has not been applied since 1
January 2006.
The financial statements of subsidiaries, namely BTA, TAV İşletme and TAV Güvenlik, which have the TRL as their functional currency,
were restated to compensate for the effect of changes in the general purchasing power of the TRL until 31 December 2005, in
accordance with IAS 29 as TRL was the currency of a hyperinflationary economy. Financial statements of such subsidiaries are then
translated into Euro, the main reporting currency of the Group, by the exchange rate ruling at reporting date.
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The EUR / TRL, EUR / GEL, EUR / TND, EUR / MKD, EUR / USD and exchange rates as of the related periods are as follows:
EUR / TRL
EUR / GEL
EUR / TND
EUR / MKD
EUR / USD
31 December 2010 31 December 2009
2.0491
2.1603
2.3500
2.4195
1.9221
1.8985
61.5050
61.1732
1.3254
1.4347
c) Financial instruments
i) Non-derivative financial assets:
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes
a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
Non-derivative financial assets of the Group comprise loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and
receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise cash and cash equivalents, trade and other receivables, due from related parties, guaranteed
passenger fee receivable from DHMİ (Concession receivables) (see note 25).
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
The Group’s use of Project Accounts or Reserve Accounts or Funding Accounts is dependent upon the lenders’ consent according
to financial agreements. Therefore, bank balances included in these accounts are presented as restricted bank balances in the
consolidated statement of financial position.
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Service concession arrangements
The Group recognises a financial asset arising from a service concession arrangement when it has an unconditional contractual right
to receive cash or another financial asset from or at the direction of the grantor for the construction or upgrade services provided.
Such financial assets are measured at fair value upon initial recognition. Subsequent to initial recognition, the financial assets are
measured at amortised cost.
If the Group is paid for the construction services partly by a financial asset and partly by an intangible asset, then each component of
the consideration is accounted for separately and is recognised initially at the fair value of the consideration (see also note 3(e)(vi)).
ii) Non-derivative financial liabilities:
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at
which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial
liabilities are measured at amortised cost using the effective interest method.
The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, trade and other payables and
due to related parties.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
iii) Share capital:
Ordinary shares are classified as equity.
iv) Derivative financial instruments, including hedge accounting:
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between the
hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge
transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes
an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are
expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable
to the hedged risk, and whether the actual results of each hedge are within a range of 80-125 percent. For a cash flow hedge of a
forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows
that could ultimately affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
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Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk
associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective
portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging
reserve in equity. The amount recognised in other comprehensive income is removed and included in profit or loss in the same period
as the hedged cash flows affect profit or loss under the same line item in the statement of comprehensive income as the hedged
item. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset
when the asset is recognised. In other cases the amount accumulated in equity is reclassified to profit or loss in the same period that
the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold,
terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction
is no longer expected to occur, then the balance in equity is reclassified in profit or loss.
Other non-trading derivatives
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all changes in its
fair value are recognised immediately in profit or loss.
d) Property and equipment
i) Recognition and measurement:
Items of property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the
cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended
use, and the costs of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing
costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major
components) of property and equipment.
Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property and equipment and are recognised net within “other operating income” in profit or loss.
ii) Subsequent costs:
The cost of replacing a component of an item of property and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property and equipment are
recognised in profit or loss as incurred.
183
iii) Depreciation:
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a
component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of
property and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative years are as follows:
Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
50 years
4-15 years
5 years
2-15 years
1-15 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
e) Intangible assets
i) Goodwill:
Goodwill that arises upon the acquisition of subsidiaries and joint ventures is included in intangible assets. For the measurement of
goodwill at initial recognition, see note 2(e)(ii).
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
ii) Intangible assets recognised in a business combination:
Customer relationships are the intangible assets recognised during the purchase of HAVAŞ shares in years 2006 and 2007, purchase
of TGS shares in 2009 and purchase of NHS shares in 2010. DHMİ license is the intangible asset recognised during the purchase of
HAVAŞ shares in years 2006 and 2007 and purchase of TGS shares in 2009. In a business combination or acquisition, the acquirer
recognises separately an intangible asset of the acquiree at the acquisition date only if it meets the definition of an intangible asset
in IAS 38 Intangible Assets and its fair value can be measured reliably.
The fair values of DHMİ licence and customer relationship are determined by an independent external third party expert.
The Group applied proportionate consolidation method to account for its 60% ownership interest in HAVAŞ until 30 September 2007.
Therefore, intangible assets arising from the initial acquisition of HAVAŞ were reflected by 60%, being the shareholding of the Group,
in the consolidated financial statements. In accordance with IFRS 3, the Group applied step acquisition during the purchase of the
remaining 40% shareholding in HAVAŞ. Customer relationship and DHMİ licence were remeasured to their fair values. The fair value
change attributable to 60% portion was recorded to the revaluation reserve under equity. This figure reflected the change in fair value
of intangible assets which were already carried in the consolidated financial statements prior to the acquisition of the additional 40%
shareholding.
50% share purchase of TGS and 50% share purchase of NHS are accounted by applying IFRS 3 in 2009 and 2010, respectively.
DHMİ license and customer relations arising from the share purchase are revalued at their fair values which are determined by the
independent valuation experts.
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iii) Internally generated software:
Internally generated software consists of airport software developed by TAV Bilişim. Internally generated software with finite useful
lives is measured at cost less accumulated amortisation and permanent impairment losses.
iv) Other intangible assets:
Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated
amortisation and accumulated impairment losses.
v) Subsequent expenditure:
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as
incurred.
vi) Amortisation:
Amortisation is based on the cost of an asset less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date that they are available for use.
Purchased software is amortised over estimated useful lives, which is between 3-5 years. Intangible assets recognized in HAVAŞ,
TGS and NHS acquisitions are customer relationships and DHMİ licence. Customer relationships have 10 years useful life and DHMİ
licence has indefinite useful life since the duration of net cash inflow arising from DHMİ licence to the Company does not have any
foreseeable limit. DHMİ licence is tested for impairment annually.
Amortisation methods, useful lives and residual values are reviewed at each reporting and adjusted if appropriate.
The estimated useful life of an intangible asset in a service concession arrangement is the period from when the Group is able to
charge the public for the use of the infrastructure to the end of the concession period.
vii) Service concession arrangements
TAV Esenboğa and TAV İzmir are bound by the terms of the BOT Agreements made with DHMİ. According to the BOT agreements, TAV
Esenboğa and TAV İzmir have guaranteed passenger fee to be received from DHMİ. The agreements cover a period up to January 2015
for TAV İzmir and May 2023 for TAV Esenboğa.
A BOT agreement was executed between TAV Tbilisi and JSC on 6 September 2005 for the operations of airport (both international,
domestic terminals and parking-apron-taxi ways). The agreement covers a period up to August 2027.
A BOT agreement was executed between TAV Tunisie and OACA on 18 May 2007, for the operation of existing Monastir Habib
Bourguiba Airport and new Enfidha Airport (International, domestic terminals and parking-apron-taxi-ways). The concession periods
of both airports will end in May 2047.
A concession agreement was executed between TAV Gazipaşa and DHMİ on 4 January 2008 for the operation of Antalya Gazipaşa
Airport (air side, land side, parking-apron-taxi ways). The agreement covers a period up to July 2034.
On 24 September 2008, the 20-year Concession Agreement for the construction and operation of Alexander the Great Airport in
Skopje, renovation and operation of the St. Paul the Apostle Airport in Ohrid, and the construction and optional operation of the New
Cargo Airport in Shtip airports was signed between TAV Macedonia and the Ministry of Transport and Communication of Macedonia.
The agreement covers a period up to March 2030.
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i) Intangible assets:
The Group recognizes an intangible asset arising from a service concession agreement when it has a right to charge for usage of
concession infrastructure. Intangible assets received as consideration for providing construction or upgrade services in a service
concession agreement are measured at fair value upon initial recognition. Subsequent to initial recognition the intangible asset is
measured at cost less accumulated amortisation and accumulated impairment losses.
The airport operation right as an intangible asset is initially recognised at cost, being the fair value of consideration transferred to
acquire the asset, which is the fair value of the consideration received or receivable for the construction services delivered. The fair
value of the consideration received or receivable for the construction services delivered includes a mark-up on the actual costs incurred
to reflect a margin consistent with other similar construction work. Mark-up rates for TAV İzmir, TAV Esenboğa, TAV Tbilisi, TAV
Tunisie, TAV Macedonia and TAV Gazipaşa are 0%, 0%, 15%, 5%, 0% and 0% respectively.
The consideration receivable for the construction services delivered includes direct costs of construction and borrowing and other
similar costs that are directly related to the construction of the airport and related infrastructure.
ii) Financial assets:
The Group recognizes the guaranteed passenger fee amount due from DHMİ as financial asset which is determined by the agreements
with TAV Esenboğa and TAV İzmir. Financial assets are initially recognised at fair value. Fair value of financial assets is estimated as
the present value of all future cash receipts discounted using the prevailing market rate of instrument.
iii) Accounting for operations contract (TAV İstanbul):
The costs associated with the operations contract primarily include rental payments and payments made to enhance and improve
ADAT. TAV İstanbul prepaid certain rental amounts and the prepayment is deferred as prepaid rent and is recognised over the life of
the prepayment period. The expenditures TAV İstanbul incurs to enhance and improve the domestic terminal are recorded as prepaid
development expenditures and are being amortised over the life of the associated contract. Any other costs associated with regular
maintenance are expensed in the period in which they are incurred.
Under IFRIC 12 “Service Concession Arrangements” an operator recognizes an intangible asset or financial asset received as
consideration for providing construction or upgrade services or other items. In TAV İstanbul there is neither construction nor
significant upgrade service provided and the contract is in operating phase. Therefore, no intangible asset or financial asset is
recognised in TAV İstanbul’s financial statements and the revenue and costs relating to the operation services are recognised in
accordance with IAS 18 as required by IFRIC 12.
Amortisation of the airport operation right is calculated on a straight line basis over the BOT periods of each project from the date of
commencement of physical construction of the terminal.
f) Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.
Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Other leases are operating leases and the leased assets are not recognised on the Group’s consolidated statement of financial
position.
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g) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out (FIFO)
principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in
bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
h) Impairment
i) Non-derivative financial assets:
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is any
objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after
the initial recognition of the asset, and the loss event had a negative effect on the estimated future cash flows of that asset that can
be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or
issuer will enter bankruptcy, the disappearance of an active market for a security. In addition, for an investment in an equity security, a
significant or prolonged decline in its fair value below its cost is objective evidence of impairment.
Loans and receivables and held-to-maturity investment securities
The Group considers evidence of impairment for loans and receivables and held-to-maturity investment securities at both a specific
asset and collective level. All individually significant receivables and held-to-maturity investment securities are assessed for specific
impairment. All individually significant receivables and held-to-maturity investment securities found not to be specifically impaired
are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables and held-to-maturity
investment securities that are not individually significant are collectively assessed for impairment by grouping together receivables
and held-to-maturity investment securities with similar risk characteristics.
In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount
of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual
losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset
continues to be recognised. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
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ii) Non-financial assets:
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. For goodwill and intangible assets that have indefinite lives or that one not yet available for use, the
recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or
its related cash-generating unit (“CGU”) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that
cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets (the “CGU”). Goodwill acquired in a business combinationis allocated
to groups of CGU’s that are expected to benefit from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are
allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the
corporate asset is allocated.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in
the CGU (group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
i) Reserve for employee severance indemnity
In accordance with the existing labour law in Turkey, the Group entities operating in Turkey are required to make lump-sum payments
to employees who have completed one year of service and whose employment is terminated without cause or who retire, are called
up for military service or die. Such payments are calculated on the basis of 30 days’ pay maximum TRL 2,517 as at 31 December 2010
(equivalent to EUR 1,228 as at 31 December 2010) (31 December 2009: TRL 2,365 (equivalent to EUR 1,095 as at 31 December 2009))
per year of employment at the rate of pay applicable at the date of retirement or termination. Reserve for retirement pay is computed
and reflected in the accompanying consolidated financial statements on a current basis. The management of the Group used some
assumptions (detailed in Note 31) in the calculation of the retirement pay provision. The calculation was based upon the retirement
pay ceiling announced by the Government.
j) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
where appropriate and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
TAV AT A GLANCE
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188
k) Revenue
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade
discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales
agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration
is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and
the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
Construction revenue and costs: Construction revenue and costs are recognised by reference to the stage of completion of the
contract activity at the reporting date, as measured by the proportion that contract costs incurred for work performed to date bear to
the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that they
have been agreed with the customer.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract
costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are
incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately.
Service concession agreements: Revenue relating to construction services under a service concession arrangement is recognised
based on the stage of completion of the work performed, consistent with the Group’s accounting policy on recognising revenue on
construction contracts. Operation or service revenue is recognised in the period in which the services are provided by the Group. When
the Group provides more than one service in a service concession arrangement the consideration received is allocated by reference to
the relative fair values of the services delivered.
Aviation income: Aviation income is recognised based on the daily reports obtained from related airline companies for terminal service
income charged to passengers, as well as for ramps utilised by aircraft and check-in counters utilised by the airlines.
Area allocation income: Area allocation income is recognised by the issuance of monthly invoices based on the contracts made for
allocated areas in the terminal.
Sales of duty free goods: Sales of goods are recognised when goods are delivered and title passes.
Catering services income: Catering services income is recognised when services are provided. The Group defers revenue for collections
from long-term contracts until the services are provided. There are no deferred costs related to these revenues since these are related
with the selling rights given to food and beverage companies to sell their products at domestic and international lines terminals as
well as third parties out of the terminals where the subsidiaries operate.
Ground handling income: Ground handling income is recognised when the services are provided.
Commission: The Group subcontracts the right to operate certain duty free operations and the catering services to third parties. The
third parties pay the Group a specified percentage of their sales for the right to operate these concessions. The commission revenue is
recognised based on the sales reports provided from the subcontractor entities in every 2 to 3 days.
Software and system sales: Software and system sales are recognised when goods are delivered and title has passed or when services
are provided.
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Lounge services: Lounge service income is recognised when services are provided.
Bus and car parking operations: Income from bus and car parking operations is recognised when services are provided.
l) Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when
the lease adjustment is confirmed.
m) Finance income and finance costs
Finance income comprises interest income on funds invested and unwinding of discount on guaranteed passenger fee receivable from
DHMİ arising from the application of IFRIC 12 and gains on hedging instruments that are recognised in profit or loss. Interest income
is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the
date that the Group’s right to receive payment is established.
Finance costs comprise interest expense on borrowings, changes in the fair value of financial assets at fair value through profit or
loss, impairment losses recognised on financial assets, (other than trade receivables) and losses on hedging instruments that are
recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis as either finance income or finance cost Depending on whether foreign
currency movements are in net gain or loss position.
n) Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that
it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary
differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based
on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
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190
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore,
provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity
basis.
o) Earnings per share
The Group presents basic and diluted EPS data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable
to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. There are
no dilutive potential shares.
p) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are regularly reviewed by the Group Management to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.
Segment results that are reported to the Group management include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters),
head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets
other than goodwill.
q) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for annual periods beginning after
1 January 2010, and have not been applied in preparing these consolidated financial statements. None of these will have an effect
on the consolidated financial statements of the Group, except for IFRS 9 Financial Instruments, which becomes mandatory for the
Group’s 2013 consolidated financial statements and could change the classification and measurement of financial assets. The Group
does not plan to adopt this standard early and the extent of the impact has not been determined.
4. DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and nonfinancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following
methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability.
i) Property and equipment:specific to that asset or liability.
The fair value of property and equipment recognised as a result of a business combination is the estimated amount for which a
property could be exchanged on the date of acquisition between a willing buyer and a willing seller in an arm’s length transaction
after proper marketing wherein the parties had each acted knowledgeably and willingly. The fair value of items of equipment, fixtures
and fittings is based on the market approach and cost approaches using quoted market prices for similar items when available and
replacement cost when appropriate.
191
ii) Intangible assets:
The fair value of intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the
assets.
The fair values of customer relationship and DHMİ licence acquired in a business combination are determined according to the excess
earnings method and replacement cost approach, respectively.
The airport operation right as an intangible asset is initially recognised at cost, being the fair value of consideration transferred to
acquire the asset, which is the fair value of the consideration received or receivable for the construction services delivered. The fair
value of the consideration received or receivable for the construction services delivered includes a mark-up on the actual costs incurred
to reflect a margin consistent with other similar construction work. Mark-up rates for TAV İzmir, TAV Esenboğa, TAV Tbilisi, TAV
Tunisie, TAV Gazipaşa and TAV Macedonia are 0%, 0%, 15%, 5%, 0% and 0% respectively.
iii) Trade and other receivables:
The fair value of trade and other receivables is estimated as the present value of future cash flows discounted at the market rate of
interest at the reporting date. This fair value is determined for disclosure purposes.
iv) Derivatives:
The fair value of forward exchange contracts is based on their quoted market price, if available. If a quoted price is not available, then
fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the
residual maturity of the contract using a risk-free interest rate (based on government bonds) or option pricing models.
The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated
future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the
measurement date.
Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and
counterparty when appropriate.
v) Non-derivative financial liabilities:
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by
reference to similar lease agreements.
5. FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from its use of financial instruments:
•
•
•
•
credit risk
liquidity risk
market risk
operational risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes
for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout
these consolidated financial statements.
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Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group has established a Risk Management Department and the Group aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
All directors act to ensure an effective internal control, providing assurance in relation to control, governance and the risk
management process.
The Group Audit Committee is assisted in its oversight role by Internal Audit. The mission of the Internal Audit Directorate of
the Group is to assist TAV Holding Board of Directors and Management (including subsidiaries) in their oversight, management
and operating responsibilities by identifying; ineffectivenesses of internal control, risk management and governance processes
inefficiencies that cause waste of its resources and making professional recommendations through independent audits (reports) and
/ or advisory services.
Internal audit plans are based on risk assessments as well as the issues highlighted by the Audit Committee and the management.
Risk assessment is conducted on a continuous basis so as to identify not only existing risks but also emerging risks. Formally, risk
assessment is made annually but more often if required.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers and bank balances.
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables.
Credit risk on liquid funds is limited because the counterparties are banks with high credit ratings.
The Group has procedures in place to ensure that services are provided to customers with an appropriate credit history. The carrying
amount of trade and other receivables, net of provision for impairment of receivables, and the total of cash and cash equivalents,
represents the maximum amount exposed to credit risk. The main customer is Turkish Airlines (“THY”). Based on past history with
this customer, the Group management believes there is no significant credit risk for this customer. Although collection of receivables
could be influenced by economic factors, management believes that there is no significant risk of loss to the Group beyond the
provisions already recorded due to reputation and type of customers for the airlines (well-known reputable, international and flag
carrier companies), method of sales which is cash or credit card basis for duty free sales.
In addition, the Group receives letters of guarantee, and notes from some customers whose credibilities are low.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and
optimising its cash return on investments. Typically the Group ensures that it has sufficient cash on demand to meet expected
operational and financial expenses, including the servicing of financial obligations; this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
193
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are
carried out within the guidelines set by lenders and executives of the Group as mentioned in Note 36.
The Group applies hedge accounting in order to manage volatility in profit or loss.
i) Currency risk:
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group
has exposure to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows.
As at 31 December 2010, the Group had balances that are denominated in a currency other than the respective functional currencies
of Group entities, primarily the Euro, but also USD, GEL, TND, MKD and TRL which are disclosed within the relevant notes to these
consolidated financial statements. The Group manages this currency risk by maintaining foreign currency cash balances and using
some financial instruments as mentioned in Note 38.
ii) Interest rate risk:
The Group adopts a policy of ensuring that between 50 and 100 percent of its exposure to changes in interest rates on borrowings is
on a fixed rate basis. This is achieved by entering into interest rate swaps as mentioned in Note 38.
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes,
personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising
from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of
the Group’s operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group’s
reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior
management within each business unit. This responsibility is supported by the development of overall Group standards for the
management of operational risk in the following areas:
•
•
•
•
•
•
•
•
•
•
requirements for appropriate segregation of duties, including the independent authorisation of transactions
requirements for the reconciliation and monitoring of transactions
compliance with regulatory and other legal requirements
documentation of controls and procedures
requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the
risks identified
requirements for the reporting of operational losses and proposed remedial action
development of contingency plans
training and professional development
ethical and business standards
risk mitigation, including insurance where this is effective.
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Compliance with Group standards is supported by a programme of periodic reviews undertaken by Internal Audit. The results of
Internal Audit reviews are discussed with the management of the business unit to which they relate, with summaries submitted to
the Audit Committee and senior management of the Group.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence; to sustain future
development of the business and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
6. SEGMENT REPORTING
Operating Segments:
For management purposes, the Group is currently organised into five divisions; Terminal Operations, Catering Operations, Duty Free
Operations, Ground Handling and Bus Operations and Other Operations. These divisions are the basis on which the Group reports its
primary segment information, the principal activities of each are as follows:
• Terminal operations: Operating terminal buildings, the car park and the general aviation terminal, the Group companies included in
this segment are TAV İstanbul, TAV Esenboğa, TAV İzmir, TAV Tunisie, TAV Batumi, TAV Tbilisi, Batumi Airport LLC, TAV Macedonia
and TAV Gazipaşa. TAV Tbilisi and TAV Batumi also include the ground handling operations, and parking-apron-taxi ways as they are
not outsourced and are run by the airport.
• Catering operations: Managing all food and beverage operations of the terminal, both for the passengers and the terminal
personnel, which is run by BTA, BTA Georgia, BTA Tunisie, BTA Macedonia and Cakes & Bakes.
• Duty free operations: Sales of duty free goods for the international arriving and departing passengers. The Group operates its duty
free services through ATÜ, ATÜ Georgia, ATÜ Tunisie, ATÜ Macedonia and ATÜ Latvia.
• Ground handling and bus operations: Providing traffic, ramp, flight operation, cargo and all other ground handling services for
domestic and international flights under the Civil Aviation Legislation License. The Group operates the ground handling services
through HAVAŞ, CAS, TAV Gözen, TGS and NHS. HAVAŞ also provides bus operations.
• Other: Providing lounge services, IT and Security services, the Group companies included in this segment are TAV Holding, TAV
İşletme, TAV İşletme Georgia, TAV İşletme Tunisia, TAV İşletme Tunisia Plus, TAV Bilişim, TAV Güvenlik and TAV Latvia.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment
operating profit, as included in the internal management reports that are reviewed by the Group’s Management. Segment profit is
used to measure performance as management believes that such information is the most relevant in evaluating the results of certain
segments relative to other entities that operate within these industries. Inter-segment pricing is determined on arm’s length basis.
101,630,926
41,627,967
(41,410,646)
15,205,488
(70,458,919)
(41,945,246)
96,399,806
Construction
revenue
Construction
expenditure
Interest income
Interest expense
Depreciation and
amortization
Reportable segment
operating profit /
(loss)
62,101,860
(23,663,645)
(55,136,665)
16,713,083
(271,354,562)
284,491,359
85,547,980
238,537,119
2009
4,847,132
(2,367,477)
(257,860)
431,672
-
-
13,377,867
53,218,141
2010
2009
4,452,689
(2,028,175)
(214,649)
48,863
-
-
10,259,973
42,214,883
Catering Operations
14,434,623
(936,237)
(1,330,650)
867,561
-
-
-
165,835,658
2010
2009
13,157,841
(682,355)
(1,491,663)
834,705
-
-
-
141,975,330
Duty Free Operations
12,573,364
(12,964,912)
(6,454,905)
593,162
-
-
255,266
161,894,686
2010
14,366,397
(9,260,084)
(581,596)
1,030,011
-
-
51,333
125,070,365
2009
Ground Handling and Bus
Operations
Year ended 31 December
(5,968,298)
(1,330,713)
(8,762,614)
2,959,624
-
-
19,051,288
27,535,702
2010
2009
18,762,461
(1,590,333)
(14,976,173)
3,217,367
-
-
13,828,726
25,159,483
Other Operations
-
87,589,802
1,238,131,234
Capital expenditure
Reportable segment
liabilities
1,663,658,919
Other investments
Reportable segment
assets
2010
2009
1,216,366,204
299,898,526
-
1,587,946,633
Terminal Operations
13,153,062
2,817,956
-
21,120,961
2010
2009
8,053,339
2,957,487
-
13,284,018
Catering Operations
37,727,069
927,064
-
24,174,029
2010
2009
33,217,536
3,313,287
-
21,970,303
Duty Free Operations
133,053,540
30,788,076
-
147,782,385
2010
56,582,199
4,642,469
-
120,978,799
2009
Ground Handling and Bus
Operations
As at 31 December 2010 and 2009
77,024,073
1,538,257
24,238
182,738,137
2010
2009
195,898,142
1,267,030
24,238
178,936,682
Other Operations
Total
2010
1,499,088,978
123,661,155
24,238
2,039,474,431
2010
Total
122,286,627
(59,544,585)
(87,264,948)
20,057,507
(41,410,646)
41,627,967
134,315,347
713,278,533
304,794,346
Inter-segment
revenue
2010
Terminal Operations
Total external
revenues
Operating Segments
1,510,117,420
312,078,799
24,238
1,923,116,435
2009
112,841,248
(37,224,592)
(72,400,746)
21,844,029
(271,354,562)
284,491,359
109,688,012
572,957,180
2009
195
TAV AT A GLANCE
ASSESSMENTS
196
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items
Revenues
Total revenue for reportable segments
Other revenue
Elimination of inter-segment revenue
Consolidated revenue
2010
842,634,857
46,586,990
(134,315,347)
754,906,500
2009
928,148,342
38,988,209
(109,688,012)
857,448,539
Operating profit
Segment operating profit
Other operating profit / (loss)
Elimination of inter-segment operating profit
Consolidated operating profit
Finance income
Finance expense
Consolidated profit before tax
2010
128,254,925
(5,968,298)
(1,536,112)
120,750,515
31,885,484
(89,169,954)
63,466,045
2009
94,078,787
18,762,461
(262,708)
112,578,540
25,120,947
(84,588,880)
53,110,607
Assets
Total assets for reportable segments
Other assets
Consolidated total assets
1,856,736,294
1,744,179,753
182,738,137
178,936,682
2,039,474,431
1,923,116,435
Liabilities
Total liabilities for reportable segments
Other liabilities
Consolidated total liabilities
1,422,064,905
1,314,219,278
77,024,073
195,898,142
1,499,088,978
1,510,117,420
Interest income
Total interest income for reportable segments
Other interest income
Elimination of inter-segment interest income
Consolidated interest income
2010
17,097,883
2,959,624
(5,438,060)
14,619,447
2009
18,626,662
3,217,367
(4,329,567)
17,514,462
Interest expense
Total interest expense for reportable segments
Other interest expense
Elimination of inter-segment interest expense
Consolidated interest expense
2010
(78,502,334)
(8,762,614)
5,460,909
(81,804,039)
2009
(57,424,573)
(14,976,173)
4,331,889
(68,068,857)
197
Geographical information
The main geographical segments of the Group are comprised of Turkey, Tunisia, Georgia and Macedonia.
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of
customers. Segment assets are based on the geographical location of the assets.
Revenue
Turkey
Tunisia
Macedonia
Georgia
Other
Consolidated revenue
Non-current assets
Turkey
Tunisia
Georgia
Macedonia
Other
Consolidated non-current assets
2010
644,092,838
47,998,041
41,291,630
19,945,184
1,578,807
754,906,500
2009
531,315,126
312,952,745
11,079,776
2,100,892
857,448,539
31 December 2010
749,020,034
511,310,316
82,944,828
28,301,813
340,169
1,371,917,160
31 Decembe 2009
735,374,262
510,195,397
92,462,026
963
339,264
1,338,371,912
TAV AT A GLANCE
ASSESSMENTS
198
7. ACQUISITIONS OF JOINTLY CONTROLLED ENTITIES AND ADDITIONAL INTERESTS
Acquisitions of jointly controlled entities
Acquisition of 50% shares of NHS:
On 12 April 2010, HAVAŞ acquired 50% shareholding of NHS for a consideration of EUR 3,250,000 from Baltic Aviation. After the
transfer of 50% of shares, NHS, which provides ground services at Latvia Riga International Airport, is proportionately consolidated in
the Group’s consolidated financial statements.
Pre-acquisition carrying amounts were determined based on the applicable IFRSs immediately before the acquisition. The values of
assets, liabilities and contingent liabilities recognized on acquisition are their estimated fair values.
The fair value of the customer relationship acquired is based on the excess earnings method.
Under IFRS 3, customer relationships at the amount of EUR 637,000 have been recognized as intangible assets arising from the
acquisition of 50% share of NHS.
Identifiable assets acquired and liabilities assumed
Intangible assets
Other investments
Deferred tax liabilities
Inventories
Trade receivables
Other assets
Trade payables
Other liabilities and tax payables
Total identifiable net assets
Recognized values on acquisition
89,068
637,483
713
131,434
(95,550)
22,177
83,662
8,234
64,622
(53,223)
(141,341)
(114,151)
633,128
Goodwill
Total consideration, satisfied by cash
2,616,872
3,250,000
Cash consideration paid
Cash and cash equivalents acquired
Net cash outflow arising on acquisition
3,250,000
(8,234)
3,241,766
199
Acquisition of 50% share of TGS:
On 12 March 2009, THY and HAVAŞ signed a joint venture agreement which sets the terms and the conditions for the sale of 50%
share capital of TGS to HAVAŞ as well as the basic principles of the engagement between THY and TGS. The joint venture was
approved by the Competition Board on 27 August 2009. As stated in the joint venture agreement, 50% of TGS’ capital which has
a nominal value of TRL 6,000,000 was acquired by HAVAŞ for TRL 119,000,000 (equivalent to EUR 54,737,811) including a share
premium of TRL 113,000,000. The first installment amounting to TRL 58,000,000 (equivalent to EUR 26,678,933) in 2009 and the
second installment amounting to TRL 19,713,791 (equivalent to EUR 9,067,981) were paid as of 31 December 2010. As of 31 December
2010, the remaining payments amounting to TRL 41,286,209 (equivalent to EUR 18,990,897) will be made in two installments on 31
October 2011 and 31 October 2012.
TGS had no operation before the acquisition date.
Pre-acquisition carrying amounts were determined based on the applicable IFRSs immediately before the acquisition. The values of
assets, liabilities and contingent liabilities recognised on acquisition are their estimated fair values.
The fair value of the customer relationship acquired is based on the excess earnings method whereas the fair value of licenses is
based on the replacement cost approach.
TGS signed a Service Agreement with THY. According to this agreement TGS provides ground handling services to THY in six main
airports of Turkey, i.e. İstanbul Atatürk, İstanbul Sabiha Gökçen, Ankara, İzmir, Antalya and Adana Airports. Under IFRS 3, customer
relationships at the amount of EUR 9,480,000 and DHMI license at the amount of EUR 2,420,000 have been recognized as intangible
assets arising from the acquisition of 50% share of TGS.
Intangible assets
Deferred tax liability
Goodwill
Total consideration
Total consideration
Unpaid portion at acquisition
11,900,000
14,868,005
13,885,834
(1,896,000)
38,757,839
15,979,972
54,737,811
54,737,811
(28,058,878)
26,678,933
(13,885,834)
12,793,099
TAV AT A GLANCE
ASSESSMENTS
200
Acquisition of additional interest
Acquisition of 6% share of TAV Tbilisi:
In 2009, TAV Holding acquired 6% shareholding of TAV Tbilisi, increasing its total share from 60% to 66% and its voting power from
50% to 66%. The sales price of the relevant shares has been calculated through the investment amount. After the transfer of 6%
shares, TAV Tbilisi is fully consolidated with the non-controlling interest’s ownership reflected as a non-controlling interest.
Intangible assets
Airport operation right
Deferred tax asset
Inventories
Trade receivables
Other assets
Trade payables
Other liabilities and tax payables
Provisions
278,671
1,398
3,980,592
493,813
73,838
27,181
173,189
12,776
2,313
224,887
28,999
(2,002,568)
(31,017)
(1,320,092)
(415,821)
(12,391)
1,515,768
Goodwill
Total consideration, satisfied by cash
3,858,324
5,374,092
5,374,092
(2,313)
5,371,779
8. CONSTRUCTION REVENUE AND EXPENDITURE
An analysis of the Group’s construction revenue and expenditure for the years ended 31 December is as follows:
Construction expenditure
Mark up on construction expenditure
Construction revenue
2010
2009
41,410,646
217,321
41,627,967
271,354,562
13,136,797
284,491,359
Construction revenue and expenditure for the year ended 31 December 2010 relate to the construction of Enfidha International Airport,
Gazipaşa Airport, Skopje International Airport and Ohrid International Airport. (Construction revenue and expenditure for the year
ened 31 December 2009 relate to the construction of Enfidha International Airport and Gazipaşa Airport.)
201
9. OPERATING REVENUE
An analysis of the Group’s operating revenue for the years ended 31 December is as follows:
Aviation income
Sales of duty free goods
Ground handling income
Commission from sales of duty free goods
Catering services income
Income from car parking operations and valet service income
Income from lounge services
Bus services income
Area allocation income
Other operating revenue
Total operating revenue
2010
169,691,514
165,835,658
152,044,794
77,824,570
47,753,898
25,028,222
21,649,152
21,373,448
21,308,147
10,769,130
713,278,533
2009
131,376,756
141,975,330
113,198,961
68,216,782
38,057,891
20,067,876
17,111,654
14,075,264
17,724,204
11,152,462
572,957,180
2010
13,045,190
9,678,898
9,672,529
7,231,239
39,627,856
2009
10,710,258
7,545,402
8,993,461
8,721,296
35,970,417
10. OTHER OPERATING INCOME
An analysis of the Group’s other operating income for the years ended 31 December is as follows:
Advertising income
Rent income from sublease
Insurance income (*)
Net gain on sale of non-controlling interest in a subsidiary (**)
Utility and general participation income and other income (***)
Total other operating income
(*) For the damage occurred on the generators of the Trigeneration Project of TAV İstanbul, insurance income is accrued for the
receivables from insurance companies (See note 17).
(**) Net gain on sale of non-controlling interest in a subsidiary comprises the sale of 15% of shares of TAV Tunisia at a sales price of
EUR 27,999,825 to International Finance Corporation (“IFC”), a World Bank entity, in 2009.
(***) Utility and general participation income consists of electricity, water supplies, heat, natural gas expenses which are initially paid
by the Group and charged to the tenants of the terminal according to the m2 of the areas rented.
11. PERSONNEL EXPENSES
An analysis of the Group’s personnel expenses for the years ended 31 December is as follows:
Wages and salaries
Compulsory social security contributions
Employment termination benefit expenses
Other personnel expenses
Total personnel expenses
2010
173,096,264
25,642,117
4,393,388
16,163,158
219,294,927
2009
112,951,633
17,061,205
5,640,693
17,172,890
152,826,421
TAV AT A GLANCE
ASSESSMENTS
202
12. CONCESSION AND RENT EXPENSES
An analysis of the Group’s concession and rent expenses for the years ended 31 December is as follows:
TAV İstanbul
TAV Tunisia (*)
TAV Macedonia (**)
Total rent expenses
2010
117,275,560
10,250,799
2,112,487
129,638,846
Rent expense is related with TAV İstanbul, concession rent expense is reated with TAV Tunusia and TAV Macedonia.
2009
128,743,101
14,878,538
143,621,639
(*) TAV Tunisia has a concession period of 40 years with a concession rent fee that will increase in a linear rate between 11% and 26%
of the annual revenues of the Monastir and Enfidha Airports to be paid.
(**) The concession fee of TAV Macedonia is 15% of the gross annual turnover until the number of passengers using the two airports
reaches 1 million, and when the number of passengers exceeds 1 million, this percentage shall change between 4% and 2% depending
on the number of passengers.
13. OTHER OPERATING EXPENSES
An analysis of the Group’s other operating expenses for the years ended 31 December is as follows:
Utility costs
VAT non-recoverable
Insurance expense
Consultancy expense
Maintenance expenditures
Cleaning expense
Impairment loss on property and equipment (*)
Communication and stationary expenses
Traveling and transportation expenses
Taxes
Rent expense
Advertisement and marketing expenses
Representation expenses
Impairment loss on trade receivable
Security cost
Other operating expenses
Total other operating expenses
2010
13,366,931
12,349,059
11,105,294
10,707,134
9,785,423
8,982,899
6,638,910
3,893,859
3,674,701
3,431,711
3,168,748
2,984,281
1,612,240
1,336,568
937,438
6,464,399
100,439,595
(*) Impairment loss recognised is related with the fire in the Trigeneration Project of TAV İstanbul (See Note 17).
2009
11,802,439
11,615,371
7,715,387
3,705,736
7,954,739
6,406,389
2,506,001
2,447,717
7,359,822
1,983,277
1,813,854
1,220,663
306,451
561,833
4,931,738
72,331,417
203
14. DEPRECIATION AND AMORTISATION
An analysis of the Group’s accumulated depreciation and amortisation for the years ended 31 December is as follows:
Effect of movements in exchange rates
Charge for the year
Disposals
Effect of group structure change (*)
Airport operation
right
44,000,202
(187,522)
19,266,667
5,728,827
68,808,174
Property and
equipment
64,079,963
(128,522)
13,464,997
(737,430)
1,477,321
78,156,329
Other intangible
assets
10,081,126
(112,198)
4,492,928
(25)
60,451
14,522,282
Total
118,161,291
(428,242)
37,224,592
(737,455)
7,266,599
161,486,785
Charge for the year
Disposals
68,808,174
481,595
32,765,582
102,055,351
78,156,329
474,441
21,218,211
(2,354,352)
97,494,629
14,522,282
43,156
5,560,792
(75,063)
20,051,167
161,486,785
999,192
59,544,585
(2,429,415)
219,601,147
(*) Effect of acquisition of 6% of TAV Tbilisi shares in 2009. See note 3(a)(vii).
15. FINANCE INCOME AND FINANCE COSTS
Recognised in profit or loss
An analysis of the Group’s finance income and finance costs for the years ended 31 December are as follows:
2010
14,619,447
10,264,378
6,179,665
821,994
31,885,484
2009
17,514,462
7,532,429
74,056
25,120,947
Interest expense on financial liabilities and intercompany loans
Commission expense
Foreign exchange loss, net
Other finance costs (**)
Finance costs
(81,804,039)
(1,979,851)
(5,386,064)
(89,169,954)
(68,068,857)
(1,408,191)
(7,062,018)
(8,049,814)
(84,588,880)
Net finance costs recognised in profit or loss
(57,284,470)
(59,467,933)
Interest income on bank deposits and intercompany loans
Discount income (*)
Foreign exchange gain, net
Other finance income
Finance income
(*) Discount income mainly includes unwinding of discount on guaranteed passenger fee receivables from DHMİ (concession
receivables).
(**) Other finance costs include bank charges and consultancy expenses charged in accordance with the requirements of project
financing facilities.
TAV AT A GLANCE
ASSESSMENTS
204
Recognised in other comprehensive income
Effective portion of changes in fair value of cash flow hedges
Foreign currency translation differences for foreign operations
Income tax on cash flow hedge reserves
Finance costs recognised in other comprehensive income, net of tax
2010
(13,594,103)
3,237,686
4,868,363
(5,488,054)
2009
(36,225,843)
(1,365,484)
7,299,593
(30,291,734)
2010
2009
33,632,939
(306,225)
33,326,714
10,061,625
10,061,625
(18,047,173)
6,383,194
(9,836,620)
(21,500,599)
11,826,115
380,001
(424,605)
(22,828,079)
14,456,889
(8,415,794)
1,645,831
16. INCOME TAX EXPENSE
An analysis of the Group’s income tax expense for the years ended 31 December is as follows:
Income tax recognised in profit or loss Current tax expense
Current year tax expense
Adjustments for prior years
Deferred tax expense
Origination and reversal of temporary differences
Change in unrecognised deductible temporary differences
Change in previously recognised investment incentives
Recognition of previously unrecognised tax losses
Total income tax expense
Income tax recognised in other comprehensive income Revaluation of intangible assets
Effective portion of changes in fair value of
cash flow hedges
Foreign currency translation differences for
foreign operations
Before tax
68,320
2010
Tax benefit
-
(13,594,103)
4,868,363
(8,725,740) (36,225,843)
7,299,593 (28,926,250)
3,237,686
(10,288,097)
4,868,363
3,237,686 (1,365,484)
(5,419,734) (37,523,007)
- (1,365,484)
7,299,593 (30,223,414)
Net of tax
68,320
Before tax
68,320
2009
Tax benefit
-
Net of tax
68,320
205
Reconciliation of effective tax rate
The reported income tax expenses for the years ended 31 December 2010 and 2009 are different than the amounts computed by
applying the statutory tax rate to profit before income tax of the Group, as shown in the following reconciliation:
%
2010
51,639,930
11,826,115
63,466,045
%
2009
51,464,776
1,645,831
53,110,607
20
12,693,209
20
10,622,121
2
1,298,371
5
2,491,458
14
8,510,047
-
(113,651)
10
(1)
(2)
6,383,194
(405,953)
(1,117,220)
(43)
(1)
-
(22,828,079)
(716,099)
(129,483)
(16)
-
(9,836,620)
-
(12)
4
(6,304,082)
2,139,946
3
2,062,178
5
2,798,396
-
306,225
16
-
8,345,193
-
(5)
1
(3,047,108)
411,902
5
2,591,348
(4)
(2,284,108)
4
2,227,320
(7)
2
19
(4,416,944)
1,268,942
11,826,115
1
3
521,443
1,645,831
Total income tax expense
Profit before income tax
Income tax using the Company’s domestic tax rate
Tax effects of:
-not deductible expenses
-translation of non-monetary items according to
IAS 21
-change in previously recognised investment
incentives
-tax exempt income
-translation effect on tax losses
-recognition of previously unrecognised tax
losses
-change in previously recognized tax losses
-current year tax losses which no deferred tax
asset was recognized
-derecognition of previously recognised tax
losses
-under / (over) provided in prior years
-utilization of previously not recognised carry
forward losses
-change in unrecognised temporary differences
-effect of different tax rates for foreign
juristictions
-tax effect of sale of investments recognised in
equity
-other consolidation adjustments
Income tax expense
Corporate tax:
Corporate tax provision
Adjustments for prior periods
Add: taxes payable from previous period
Less: corporation taxes paid during the period
Current tax liabilities
33,632,939
10,061,625
(306,225)
1,391,675
2,488,341
(24,797,818)
(11,158,291)
9,920,571
1,391,675
The Turkish entities within the Group are subject to Turkish corporate taxes. Provision is made in the accompanying consolidated
financial statements for the estimated charge based on the each of the Group entities’ results for the year.
TAV AT A GLANCE
ASSESSMENTS
206
Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back nondeductible expenses, and by deducting dividends received from resident companies, other exempt income and investment incentives
utilised.
In Turkey, advance tax returns are filed on a quarterly basis. The advance corporate income tax rate at 31 December 2010 is 20% (31
December 2009: 20%). Losses can be carried forward for offsetting against future taxable income for up to 5 years. Losses cannot be
carried back.
Georgian corporate income tax is levied at a rate of 15% on income less deductible expenses.
Tunisian corporate income tax is levied at a rate of 30% on income less deductible expenses. According to concession agreement, TAV
Tunisia is exempt from corporate tax for a period of 5 years starting from the concession agreement date.
Macedonian corporate income tax is levied at a rate of 10% on income less deductible expenses. Unless there is a dividend
distribution, no corporate tax is levied. Corporate taxpayers should pay tax on their non-deductible expenses at a rate of %10
regardless of their loss. Losses cannot be carried forward.
Latvian corporate income is levied at a rate of 15% on income less deductible expenses.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns between
1-25 April following the close of the accounting year to which they relate. Tax authorities may, however, examine such returns and the
underlying accounting records and may revise assessments within five years.
Investment allowance:
The Temporary Article 69 added to the Income Tax Law no.193 with the Law no.5479, which became effective starting from 1 January
2006, upon being promulgated in the Official Gazette no. 26133 dated 8 April 2006, stating that taxpayers can deduct the amount
of the investment allowance exemption which they are entitled to according to legislative provisions effective at 31 December 2005
(including rulings on the tax rate) only from the taxable income of 2006, 2007 and 2008. Accordingly, the investment incentive
allowance practice was ended as of 1 January 2006. At this perspective, an investment allowance which cannot be deducted partially
or fully in three years time was not allowed to be carried forward to the following years and became unavailable as of 31 December
2008. On the other hand, the Article 19 of the Income Tax Law was annulled and the investment allowance practice was ended as of
1 January 2006 with effectiveness of the Article 2 and the Article 15 of the Law no. 5479 and the investment allowance rights on the
investment expenditures incurred during the period of 1 January 2006 and 8 April 2006 became unavailable.
However, at 15 October 2009, the Turkish Constitutional Court decided to cancel the clause no. 2 of the Article 15 of the Law no.
5479 and the expressions of “2006, 2007, 2008” in the Temporary Article 69 related to investment allowance mentioned above that
enables effectiveness of the Law as of 1 January 2006 rather than 8 April 2006, since it is against the Constitution. Accordingly, the
time limitations for the carried forward investment allowances that were entitled to in the previous period of mentioned date and
the limitations related with the investments expenditures incurred between the issuance date of the Law promulgated and 1 January
2006 were eliminated. According to the decision of Turkish Constitutional Court, cancellation related with the investment allowance
became effective with promulgation of the decision on the Official Gazette and the decision of the Turkish Constitutional Court was
promulgated in the Official Gazette no. 27456 dated 8 January 2010.
According to the decision mentioned above, the investment allowances carried forward to the year 2006 due to the lack of taxable
income and the investment allowances earned through the investments started before 1 January 2006 and continued after that
date constituting economic and technical integrity will be used not only in 2006, 2007 and 2008, but also in the following years.
In addition, 40% of investment expenditures that are realized between 1 January 2006 and 8 April 2006, within the context of the
Article 19 of the Income Tax Law will have the right for investment allowance exemption.
207
New treatment on investment incentive was introduced by the Law no. 6009 “Law on the Amendment of the Income Tax Law and
Certain Laws and Decree Laws” which was promulgated in the Official Gazette on 1 August 2010. The Article 5 of the Law regulates
the amount of investment incentive to be benefited in computing the corporate tax base after the cancellation of the clause no.2 of
the Article of the Law no. 5479. According to the Law no. 6009, the taxpayers are allowed to benefit from the investment incentive
stemming from the periods before the promulgation of the Law no. 5479 up to 25% of the taxable income of the respective tax
period.
Income withholding tax:
In addition to corporate taxes, companies should also calculate income withholding taxes on any dividends distributed, except for
companies receiving dividends who are resident companies in Turkey. The rate of income withholding tax is 10% starting from 24
April 2003. This rate was changed to 15% with the code numbered 5520 article 15 commencing from 21 September 2006. After the
resolution, declared in Official Gazette on 23 July 2006, this rate was changed to 15% thereafter. Undistributed dividends incorporated
in share capital are not subject to income withholding taxes.
Transfer pricing regulations:
In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of “disguised
profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated 18
November 2007 sets details about implementation.
If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not
set in accordance with arm’s length principle, then related profits are considered to be distributed in a disguised manner through
transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible for corporate income
tax purposes.
Research and development incentives:
TAV Bilişim is qualified for the incentives and exemptions provided by Support of Research and Development Act, numbered 5746
effective from 24 November 2008. For the year ended 31 December 2010, TAV Bilişim utilized a corporate tax benefit of EUR 113,860
due to research and development expenses.
TAV AT A GLANCE
ASSESSMENTS
208
17. PROPERTY AND EQUIPMENT
Cost
Effect of movements in
exchange rates
Additions (*)
Disposals
Transfers (**)
Effect of group structure
change (***)
exchange rates
Additions (*)
Disposals
Impairment losses (****)
Transfers (**)
Acquisitions through business
combinations (*****)
Land
Buildings
Machinery and
equipment
Vehicles
Furniture and
Leaseholds
fixtures improvements
Construction
in progress
Total
14,336,908
94,701
51,250,566
16,603,763
16,124,474
28,143,964
15,637,085
142,191,461
(310,886)
-
(1,500)
230,449
-
(45,947)
4,414,876
(60,608)
(69,166)
(50,771)
1,164,657
(137,134)
-
(80,978)
2,257,049
(201,490)
93,888
(68,592)
3,155,024
(616,226)
4,731,530
(192,824)
41,237,190
(850)
(5,290,382)
(751,498)
52,459,245
(1,016,308)
(534,130)
14,026,022
56,977
380,627
824,657
56,314,378
1,793,156
19,373,671
660,335
18,853,278
35,345,700
51,390,219
3,335,125
195,683,895
14,026,022
380,627
56,314,378
19,373,671
18,853,278
35,345,700
51,390,219
195,683,895
397,489
-
6,076
-
143,410
25,458,541
(179,052)
1,003
153,924
3,479,288
(438,239)
25,157
398,892
5,170,049
(620,019)
6,195
488,235
3,932,187
(2,588,475)
54,091,069
(3,417)
42,503,008
(6,638,910)
(54,529,965)
1,584,609
80,543,073
(3,825,785)
(6,638,910)
(406,541)
14,423,511
386,703
87,554
81,825,834
22,593,801
23,808,395
1,514
91,270,230
32,720,935
89,068
267,029,409
(*) Borrowing costs amounting to EUR 701,163 is capitalised on property,plant and equipment in 2010 (2009: EUR 591,818).
(**) The remaining portion of transfer amounting to EUR 406,541 (2009: EUR 534,130) comprises intangible assets.
(***) Effect of acquisition of 6% of TAV Tbilisi shares in 2009. See note 3(a)(vii).
(****) There has been a fire in the Trigeneration Project of TAV İstanbul in March 2010 which is covered by an insurance policy.
Impairment loss amounting to EUR 6,638,910 is recognised in the consolidated financial statements for the damage occurred on the
generators. Additionally, an income accrual is booked for the amount that will be compensated by the insurance company for the
damage and loss of operations.
(*****) Effect of acquisition of 50% of NHS in 2010. See note 3(a)(viii).
209
Land
Buildings
Machinery and
equipment
Vehicles
-
24,688
39,381,757
6,654,941
9,219,041
-
(766)
35,902
-
(24,412)
2,940,324
(54,910)
(48,466)
(25,325)
3,031,059
(58,563)
-
-
21,757
81,581
431,694
42,625,987
-
81,581
-
Carrying amounts
At 31 December 2009
At 31 December 2010
Accumulated depreciation
exchange rates
Depreciation for the year
Disposals
Transfers
Effect of group structure
change (*)
exchange rates
Depreciation for the year
Disposals
Furniture and
Leaseholds
fixtures improvements
Construction
in progress
Total
8,799,536
-
64,079,963
(53,444)
2,718,662
(85,121)
48,466
(24,575)
4,739,050
(538,836)
-
-
(128,522)
13,464,997
(737,430)
-
690,947
10,293,059
332,923
12,180,527
12,975,175
-
1,477,321
78,156,329
42,625,987
10,293,059
12,180,527
12,975,175
-
78,156,329
2,037
37,143
120,761
42,456
4,702,936
(62,912)
47,308,467
50,611
3,518,019
(340,270)
13,521,419
251,295
3,200,982
(296,201)
15,336,603
128,042
9,759,131
(1,654,969)
21,207,379
-
474,441
21,218,211
(2,354,352)
97,494,629
14,026,022
299,046
13,688,391
9,080,612
6,672,751
22,370,525
51,390,219
117,527,566
14,423,511
265,942
34,517,367
9,072,382
8,471,792
70,062,851
32,720,935
169,534,780
There is a pledge on vehicles of HAVAŞ amounting to EUR 2,037,126 (31 December 2009: EUR 1,869,948) for the outstanding notes
payable amounting to EUR 633,560 (31 December 2009: EUR 82,084).
There is a pledge on property and equipment of TAV Tunisia amounting to EUR 3,389,113 (31 December 2009: EUR 3,075,511) with
respect to the borrowings from financial institutions.
TAV AT A GLANCE
ASSESSMENTS
210
18. INTANGIBLE ASSETS
Purchased
software and
brandmarks
Internally
generated
software
Customer
relationships
DHMİ license
Total
10,454,602
(11,919)
594,035
3,754,038
-
23,228,550
-
5,323,771
-
42,760,961
(11,919)
594,035
69,770
(4,543)
534,130
11,636,075
3,754,038
9,480,000
32,708,550
2,420,000
7,743,771
11,900,000
69,770
(4,543)
534,130
55,842,434
11,636,075
76,896
1,046,598
(80,921)
483
69,090
12,748,221
3,754,038
337,451
4,091,489
32,708,550
637,001
33,345,551
7,743,771
7,743,771
55,842,434
76,896
1,046,598
(80,921)
637,484
406,541
57,929,032
Amortisation
Amortisation for the year
Disposals
3,953,154
(112,198)
2,224,477
60,451
(25)
6,125,859
558,766
250,269
809,035
5,569,206
2,018,182
7,587,388
-
10,081,126
(112,198)
4,492,928
60,451
(25)
14,522,282
Disposals
6,125,859
43,156
2,226,294
(75,063)
8,320,246
809,035
272,766
1,081,801
7,587,388
3,061,732
10,649,120
-
14,522,282
43,156
5,560,792
(75,063)
20,051,167
Carrying amounts
At 31 December 2009
5,510,216
2,945,003
25,121,162
7,743,771
41,320,152
At 31 December 2010
4,427,975
3,009,688
22,696,431
7,743,771
37,877,865
Cost
Additions
Acquisitions through business
combinations (***)
Disposals
Transfers from construction in progress(**)
Additions
Disposals
Acquisitions through business combinations (***)
Transfers from construction in progress (**)
(**) Transfers amounting to EUR 406,541 (31 December 2009: EUR 534,130) are related with construction in progress.
(***) Effect of acquisition 50% of TGS in 2009 and effect of acquisition 50% of NHS in 2010. See note 3(a)(viii).
211
There is a pledge on intangible assets of TAV Tunisia amounting to EUR 27,663 (31 December 2009: EUR 106,408) with respect to the
borrowings from financial institutions.
DHMİ licenses through the purchase of HAVAŞ shares in years 2006 and 2007 and purchase of TGS shares in year 2009 were
recognised with indefinite useful lives since there is no foreseeble limit to the period over which they are expected to generate net
cash inflows. The DHMİ license associated with the acqusitions of HAVAŞ and TGS were deemed indefinite lived intangible assets
since;
• without these licenses ground handling companies could not operate,
• it’s difficult to obtain the licence, which requires high pre-operational costs and procurement of workforce and equipment required
to deliver ground handling services
• the continuity of the license requires low annual payments compared to initial license cost.
The replacement cost method was used in order to determine the fair value of the DHMI licences for impairment testing. As a result
of the impairment testing no impairment was recognised.
An analysis of goodwill as at 31 December 2010 and 2009 is as follows:
Goodwill
Balance at 1 January
Addition during the year
Balance at 31 December
2010
151,402,835
2,616,872
154,019,707
2009
131,564,539
19,838,296
151,402,835
Goodwill is related with the CGU’s HAVAŞ, TGS, NHS and TAV Tbilisi as at 31 December 2010 (31 December 2009: HAVAŞ, TGS, and TAV
Tbilisi).
Impairment testing for CGU’s
For the purpose of impairment testing, goodwill is allocated to CGU’s. The aggregate carrying amounts of goodwill allocated to each
CGU are as follows:
HAVAŞ
TGS
TAV Tbilisi
NHS
2010
131,564,539
15,979,972
3,858,324
2,616,872
154,019,707
2009
131,564,539
15,979,972
3,858,324
151,402,835
A valuation of the fair value of equity for HAVAŞ, TGS and TAV Tbilisi as three seperate CGU’s was performed by an independent
valuation company. The income and market approaches were used to determine the fair value of equity of HAVAŞ and TAV Tbilisi.
In the analysis, income approach (discounted cash flow method) was mostly used, with lower weightings were applied to the value
of HAVAŞ and TAV Tbilisi resulting from the Guideline Transaction and Company methods. For the valuation of TGS, solely income
approach method was used since the TGS only became fully operational during 2010.
5-year business plan prepared by the management for HAVAŞ, and 10-year business plans prepared by the management for TGS
and TAV Tbilisi were used in the valuation of companies. The growth in business plan of HAVAŞ and TGS is driven by the increase in
number of passengers at Turkish airports establishing new air travel routes and a stronger TRL. Furthermore, since TAV Tbilisi has a
limited life, the forecast of TAV Tbilisi was extended until the end of the BOT period assuming a lower growth rate and maintaining
the margins estimated by the management.
As a result of the impairment testing performed on CGU basis, no impairment loss was recognised as at 31 December 2010.
TAV AT A GLANCE
ASSESSMENTS
212
Key assumptions used in discounted cash flow projections
Key assumptions used in calculation of recoverable amounts are discount rates and terminal growth rates. These assumptions are as
follows:
HAVAŞ
TGS
TAV Tbilisi
Discount rate
13%
12%
16%
Terminal growth
rate
2%
2%
n.a
Discount rate
The discount rates used in discounted cash flows are the weighted average cost of capitals (“WACC”) of the companies.
Terminal growth rates for HAVAŞ and TGS are determined as 2%. Since TAV Tbilisi has a limited life, terminal growth rate is not used
in the valuation.
Market Approach
The Guideline Transaction Method utilises valuation multiples based on actual transactions that have occurred in the subject
company’s industry. These derived multiples are then applied to the appropriate operating data of the subject company to arrive at
an indication of fair market value. Guideline Company Method focuses on comparing the subject company to guideline publicly-traded
companies.
213
19. AIRPORT OPERATION RIGHT
Ankara
Esenboğa
International
Airport
İzmir
Adnan
Menderes
International
Airport
Tbilisi
International
Airport
Enfidha
International
Airport
Antalya
Gazipaşa
Airport
Skopje
International
Airport
Total
Cost
Additions (**)
111,500,212
111,500,212
80,469,270
80,469,270
49,948,468
(853,477)
32,266,103
81,361,094
256,388,415
250,300,056
506,688,471
3,104,675
8,725,463
11,830,138
-
501,411,040
(853,477)
32,266,103
259,025,519
791,849,185
Additions (**)
111,500,212
111,500,212
80,469,270
80,469,270
81,361,094
2,406,338
83,767,432
506,688,471
4,973,614
511,662,085
11,830,138
8,974,248
20,804,386
28,123,622
28,123,622
791,849,185
2,406,338
42,071,484
836,327,007
(**) Borrowing costs amounting to EUR 4,055,845 are capitalised on airport operation right in 2010 (2009: EUR 28,975,484).
Ankara
Esenboğa
International
Airport
İzmir
Adnan
Menderes
International
Airport
Tbilisi
International
Airport
Enfidha
International
Airport
Antalya
Gazipaşa
Airport
Skopje
International
Airport
Total
Accumulated amortization
14,817,090
6,715,383
21,532,473
22,100,886
9,759,313
31,860,199
7,082,226
(187,522)
5,728,827
2,791,971
15,415,502
-
-
-
44,000,202
(187,522)
5,728,827
19,266,667
68,808,174
21,532,473
6,715,383
28,247,856
31,860,199
9,759,313
41,619,512
15,415,502
481,595
3,968,425
19,865,522
11,955,832
11,955,832
366,629
366,629
-
68,808,174
481,595
32,765,582
102,055,351
Carrying amounts
At 31 December 2009
89,967,739
48,609,071
65,945,592
506,688,471
11,830,138
-
723,041,011
At 31 December 2010
83,252,356
38,849,758
63,901,910
499,706,253
20,437,757
28,123,622
734,271,656
TAV AT A GLANCE
ASSESSMENTS
214
20. OTHER INVESTMENTS
Non-current investments
At 31 December, non-current investments comprised the following:
Ownership % 31 December 2010 31 December 2009
Unlisted entities
TAV Havacılık A.Ş. (“TAV Havacılık”)
1.00
24,238
24,238
24,238
24,238
Rent
190,777,674
97,461,768
(114,197,265)
174,042,177
119,513,728
54,528,449
Prepaid
development
expenditures
33,911,857
(3,078,295)
30,833,562
3,078,297
27,755,265
Total
224,689,531
97,461,768
(117,275,560)
204,875,739
122,592,025
82,283,714
Rent
211,984,112
104,458,368
(125,664,806)
190,777,674
114,197,264
76,580,410
Prepaid
development
expenditures
36,990,152
(3,078,295)
33,911,857
3,078,296
30,833,561
Total
248,974,264
104,458,368
(128,743,101)
224,689,531
117,275,560
107,413,971
21. PREPAID RENT EXPENSES
An analysis of the Group’s prepaid rent expenses as at 31 December 2010 and 2009 is as follows:
31 December 2010
Rent payments
Current period rent expense-TAV İstanbul
Represented as current prepaid rent expense
Represented as non-current prepaid rent expense
31 December 2009
Rent payments
Current period rent expense-TAV İstanbul
Presented as current prepaid rent expense
Presented as non-current prepaid rent expense
Rent:
The total rent associated with the rent agreement is USD 2,543,000,000 plus VAT (equivalent to EUR 1,918,636,475 as at 31 December
2010). TAV İstanbul paid in advance 23% of the total amount plus VAT as required by the Rent Agreement. A payment representing
5.5% of the total rent amount will be made within the first five workdays of each rental year following the first rental year. Below is
the payment schedule per the Rent Agreement, excluding VAT, as at 31 December 2010:
Year
2011
2012
2013
2014
After 2015 to 2020
Amount
(US Dollar)
139,865,000
139,865,000
139,865,000
139,865,000
839,190,000
1,398,650,000
Amount
(Euro)
105,525,006
105,525,006
105,525,006
105,525,006
633,150,037
1,055,250,061
215
Prepaid development expenditures:
Prepaid development expenditures represent costs incurred by TAV İstanbul related to the installation of EDS Security Systems
(“EDS”) for the International and Domestic Lines Terminals, and various re-design at the exterior of the Domestic Lines Terminal as
required by the Rent Agreement.
22. DEFERRED TAX ASSETS AND LIABILITIES
The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between its financial statements as
reported for IFRS purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue
and expenses in different reporting periods for IFRS and tax purposes and they are given below.
For calculation of deferred tax asset and liabilities, the rate of 20% for subsidiaries and joint ventures in Turkey (31 December
2009: 20%), the rate of 15% for subsidiaries and joint ventures in Georgia and Latvia (31 December 2009: 15%), the rate of 30% for
subsidiaries in Tunisia (31 December 2009: 30%) and the rate of 10% for subsidiaries in Macedonia (31 December 2009: 10%) are used.
In Turkey, companies cannot declare a consolidated tax return, therefore subsidiaries and joint ventures that have deferred tax assets
position were not netted off against subsidiaries and joint ventures that have deferred tax liabilities position and disclosed separately.
Recognised deferred tax assets and liabilities
As at 31 December 2010 and 2009, deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
31 December 31 December 31 December 31 December 31 December 31 December
2010
2009
2010
2009
2010
2009
Property and equipment, airport operation
right, and other intangible assets
Other investments
Derivatives
Reserve for employee severance indemnity
Provisions
Trade and other receivables and payables
Investment incentives
Tax loss carry-forwards
Other items
Deferred tax assets / (liabilities)
Set-off of tax
Net deferred tax assets / (liabilities)
13,613,639
19,749,109
3,437,327
1,400,546
833,383
38,280
16,444,885
37,115,082
2,896,494
95,528,745
(16,036,182)
79,492,563
9,413,198 (14,484,033) (18,435,510)
- (4,383,534)
(7,769,016)
(3,061,313)
12,407,950
2,629,130
(924,698)
(652,064)
893,095
484,426
(120)
103,422 (1,465,460)
(85,477)
22,828,079
27,278,462
985,547
(1,059,767)
(101,732)
77,023,309 (22,317,492) (30,105,232)
(22,769,270)
16,036,182
22,769,270
54,254,039
(6,281,310)
(7,335,962)
(870,394)
(4,383,534)
19,749,109
2,512,629
1,400,546
833,383
(1,427,180)
16,444,885
37,115,082
1,836,727
73,211,253
73,211,253
(9,022,312)
(7,769,016)
(3,061,313)
12,407,950
1,977,066
893,095
484,306
17,945
22,828,079
27,278,462
883,815
46,918,077
46,918,077
59,070
1,854,259
496,015
22,863
(14,456,889)
22,828,079
57,612
(4,826)
4,097,669
121,210
397,080
447,062
41,727,578
613,783
31,614,194
Tax assets / (liabilities)
473,808
14,381
7,773
212,420
(36,299)
1,597
273,936
-
7,299,593
-
7,299,593
-
-
Recognised
in other
comprehensive
income
1,010,688
-
1,010,688
-
-
Effect of
changes
in foreign
exchange
rate
(1,896,000)
-
-
(1,896,000)
-
46,918,077
893,095
484,306
27,278,462
22,828,079
883,815
17,945
12,407,950
1,977,066
(9,022,312)
(7,769,016)
(3,061,313)
Acquired in
business
Balance at
combi- 31 December
nations
2009
21,500,599
507,451
349,077
9,836,620
(6,383,194)
952,912
(1,445,125)
2,472,796
535,563
8,227,704
3,385,482
3,061,313
Recognised
in profit
or loss
4,868,363
-
4,868,363
-
-
Recognised
in other
comprehensive
income
19,764
-
-
19,764
-
Effect of
changes
in foreign
exchange
rate
(95,550)
-
-
(95,550)
-
Acquired in
business
combinations
73,211,253
1,400,546
833,383
37,115,082
16,444,885
1,836,727
(1,427,180)
19,749,109
2,512,629
(870,394)
(4,383,534)
-
Balance at
31
December
2010
ASSESSMENTS
8,415,794
(3,723,626)
942,884
335,527
(3,676,622)
(8,711,900)
(3,396,840)
Recognised
in profit or
loss
Property and equipment,
airport operation right andother
intangible assets
Other investments
Trade and other receivables and
payables
Derivatives
Reserve for employee
severance indemnity
Provisions
Other items
Balance at
1 January
2009
Effect
of group
structure
change
Movements in temporary differences during the year
TAV AT A GLANCE
216
217
Unrecognised deferred tax assets as at 31 December 2010 and 2009 are as follows:
11,726,497
22,830,830
11,390,736
22,830,830
23,117,233
At the reporting date, the Group has unused tax losses of EUR 164,213,148 (31 December 2009: EUR 195,485,819) available for
offset against future profits. Tax losses can be carried forward for five years under the current tax legislation. Deferred tax asset
amounting to EUR 37,115,082 (31 December 2009: EUR 27,278,462) which the Group can utilize for offsetting the against tax losses in
the following years, is recognised as at 31 December 2010. In 2009, it was assessed that EUR 58,915,967 of tax losses would not be
utilized because it was not probable that future taxable profits would be available against which the Group could utilize the benefits
therefrom and accordingly deffered tax asset on such amount was not recognised. Unutilised tax losses will expire as follows:
Expire in year 2010
Expire in year 2011
Expire in year 2012
Expire in year 2013
Expire in year 2014
Expire in year 2015
Total
20,619,294
23,920,603
5,331,234
11,889,039
122,729,071
112,136,247
25,475,637
26,920,636
10,677,206
164,213,148
195,485,819
In accordance with IAS 12 “Income Taxes”, at 31 December 2010, a deferred tax liability of EUR 20,925,379 (31 December 2009: EUR
31,061,488) related to investments in subsidiaries and joint ventures was not recognized since it is assessed as probable that the
temporary difference will not reverse in the foreseeable future.
As per the annulment decision of the Turkish Constitutional Court (see Note 16), TAV Esenboğa and TAV İzmir, consolidated
subsidiaries of the Company, are subject to investment allowance ruling and can use their available allowances to reduce their taxable
corporate income without any time limitations. Accordingly, deferred tax asset amounting EUR 16,444,885 (31 December 2009: EUR
22,828,079) is recorded in the accompanying consolidated financial statements as of 31 December 2010 considering the fact that TAV
Esenboğa and TAV İzmir may use their right of deducting investment allowances from their corporate income in the future.
Movements of deferred tax assets are as follows:
Restated balance at 1 January
Charged to profit or loss for the period
Recognised in other comprehensive income
Acquired in business combinations
Effect of group structure change
2010
46,918,077
21,500,599
4,868,363
19,764
(95,550)
73,211,253
2009
31,614,194
8,415,794
7,299,593
1,010,688
(1,896,000)
473,808
46,918,077
TAV AT A GLANCE
ASSESSMENTS
218
23. INVENTORIES
At 31 December 2010 and 2009, inventories comprised the following:
Duty free inventories
Spare parts and other inventories
Catering inventories
6,792,669
6,580,720
5,802,862
3,754,240
1,371,199
1,068,357
13,966,730
11,403,317
At 31 December 2010, the write-down of inventories to net realizable value amounted to EUR 221,502 (31 December 2009: EUR
167,753).
24. OTHER RECEIVABLES, CURRENT AND NON-CURRENT ASSETS
At 31 December 2010 and 2009, other receivables and current assets comprised the following:
Other receivables and current assets
Income accruals (*)
Prepaid insurance
VAT deductible (**)
Other prepaid expense
Business advances given
Prepaid taxes and funds
Advances to suppliers
Other receivables
9,910,349
918,872
6,156,491
6,856,484
6,026,244
13,750,599
4,123,586
2,977,911
2,178,747
104,109
1,918,552
1,318,494
698,478
551,219
2,292,910
2,809,634
33,305,357
29,287,322
At 31 December 2010 and 2009, non-current assets comprised the following:
Other non-current assets:
Advances to suppliers (***)
Non-current prepaid insurance expenses
VAT deductible and carried forward (**)
Other non-current receivables
239,385
34,616
25,976
7,036,169
327,679
1,868,453
601,680
8,930,598
(*) Income accruals include the accrued insurance income from insurance companies amounting to EUR 6,924,254 related with the
Trigeneration Project of TAV İstanbul. (See Note 17)
(**) VAT deductible is mainly attributable to the VAT of TAV Macedonia, TAV Tbilisi and TAV Tunisia according to local legislations.
(***) Advances to suppliers consist of advances given for property and equipment.
219
25. TRADE RECEIVABLES
At 31 December 2010 and 2009, trade receivables comprised the following:
Trade receivables:
Trade receivables (*)
Guaranteed passenger fee receivable from DHMİ (**)
Doubtful receivables
Allowance for doubtful receivables (-)
Notes receivable
Other
54,812,599
39,840,694
20,646,543
21,849,354
3,111,507
2,046,447
(3,111,507)
(2,046,447)
2,212,288
324,224
10,184
30,369
77,681,614
62,044,641
Non-current trade receivables:
Guaranteed passenger fee receivable from DHMİ (**)
113,810,957
113,810,957
134,457,502
134,457,502
Allowance for doubtful receivables has been determined by reference to past default experience.
The Group’s exposure to credit and currency risks and impairment losses related to trade receivables are disclosed in Note 38.
(*) Pledges on trade receivables are disclosed in Note 39.
(**) Guaranteed passenger fee receivable represents the remaining discounted guaranteed passenger fee to be received from DHMİ
according to the agreements made for the operations of Ankara Esenboğa Airport and İzmir Adnan Menderes Airport as a result of
IFRIC 12 application.
26. CASH AND CASH EQUIVALENTS
At 31 December 2010 and 2009, cash and cash equivalents comprised the following:
Cash on hand
Cash at banks
-Demand deposit
-Time deposits
Other liquid assets
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the statement of cash flows
591,338
556,765
7,431,550
23,830,600
588,885
32,442,373
(2,865,313)
29,577,060
3,732,314
27,624,667
2,097,176
34,010,922
(2,379,933)
31,630,989
TAV AT A GLANCE
ASSESSMENTS
220
The details of the Group’s time deposits, maturities and interest rates as at 31 December 2010 and 2009 are as follows:
31 December 2010
Original Currency
TRL
EUR
USD
MKD
Maturity
January 2011
January 2011
January 2011
January 2011
Interest rate %
6.00-9.00
0.15-0.50
0.50
0.50
Balance
17,899,934
5,261,075
603,219
66,372
23,830,600
31 December 2009
Original Currency
TRL
EUR
USD
Maturity
January 2010
January 2010
January 2010
Interest rate %
6.25-8.93
0.25-2.85
0.20-0.50
Balance
16,018,058
10,888,643
717,966
27,624,667
The Group’s exposure interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 38.
There is no blockage or restriction on the use of cash and cash equivalents as at 31 December 2010 and 2009.
27. RESTRICTED BANK BALANCES
At 31 December 2010 and 2009, restricted bank balances comprised the following:
Project reserve and funding accounts (*)
Cash collaterals (**)
369,914,807
303,178,589
12,529,990
10,671,012
382,444,797
313,849,601
(*) Certain subsidiaries, namely TAV İstanbul, TAV Esenboğa, TAV İzmir, TAV Tunisia, TAV Tbilisi and ATÜ (“the Borrowers”) opened
Project Accounts designated mainly in order to reserve required amount of debt services, lease payment to DHMİ based on
agreements with their lenders. As a result of pledges regarding the project bank loans as explained in Note 30, all cash except for
cash on hand are classified in these accounts for TAV İstanbul, TAV Esenboğa, TAV İzmir, TAV Tunisia and TAV Tbilisi. Based on these
agreements, the Group can access and use such restricted cash but all withdrawals from the project accounts are upon the lenders’
consent.
(**) Cash collaterals include the time deposit provided by HAVAŞ as guarantee for bank loan.
Interest rates are in the range of 0.10%-3.70% (31 December 2009: 0.10%-3.70%) for EUR reserves, in the range of 0.24%-3.00%
(31 December 2009: 0.17%-1.50%) for USD reserves, and in the range of 1.50%-9.00% (31 December 2009: 4.25%-10.50%) for TRL
reserves.
221
28. CAPITAL AND RESERVES
At 31 December 2010 and 2009, the shareholding structure of the Company was as follows:
Shareholders
Akfen Holding A.Ş. (“Akfen Holding”)
Tepe İnşaat Sanayi A.Ş. (“Tepe İnşaat”)
Sera Yapı Endüstrisi ve Tic. Ltd. Şti. (“Sera Yapı”)
Other non-floated
Free float
Paid in capital in TRL (nominal)
Paid in capital in EUR (nominal) as at 31 December 2010
Effect of non-cash increases and exchange rates
Paid in capital EUR
Shareholders
Tepe İnşaat
Akfen Holding
Sera Yapı
Other non-floated
Free float
Paid in capital in TRL (nominal)
Paid in capital in EUR (nominal) as at 31 December 2009
Effect of non-cash increases and exchange rates
Paid in capital EUR
(%) 31 December 2010
26.12
94,886,071
26.06
94,664,477
4.17
15,139,046
3.52
12,775,048
40.13
145,816,608
100.00
363,281,250
177,288,200
(14,904,222)
162,383,978
(%) 31 December 2009
26.12
94,890,026
26.12
94,886,071
4.43
16,101,375
3.89
14,113,087
39.44
143,290,691
100.00
363,281,250
168,162,407
(5,778,429)
162,383,978
The Company’s share capital consists of 363,281,250 shares amounting to TRL 363,281,250 as at 31 December 2010 (31 December
2009: 363,281,250 shares amounting to TRL 363,281,250).
On 20 February 2009, TAV Holding has increased its capital to TRL 363,281,250 from TRL 242,187,500 within the Company’s TRL 1.5
billion maximum registered capital limit and the amount was fully paid in February 2009.
Legal Reserves
According to the Turkish Commercial Code (“TCC”), legal reserves are comprised of first and legal reserves. The first legal reserves are
generated by annual appropriations amounting to 5 percent of income disclosed in the Company’s statutory accounts until it reaches
20 percent of paid-in share capital. If the dividend distribution is made in accordance with Communiqué XI-29, a further 1/10 of
dividend distributions, in excess of 5 percent of paid-in capital is to be appropriated to increase second legal reserves. If the dividend
distribution is made in accordance with statutory records, a further 1/11 of dividend distributions, in excess of 5 percent of paid-in
capitals are to be appropriated to increase second legal reserves. Under the TCC, the legal reserves can be used only to offset losses
and are not available for any other usage unless they exceed 50 percent of paid-in capital. At 31 December 2010, legal reserves of the
Company amount to EUR 21,655,917 (31 December 2009: EUR 18,385,795).
TAV AT A GLANCE
ASSESSMENTS
222
Dividend distribution
Publicly held companies distribute dividends based on the Capital Market Board (“CMB”) regulations explained below:
According to CMB’s decision on 27 January 2010 numbered 02/51, corporations traded on the stock exchange market are not obliged to
distribute a specified amount of dividends. For corporations that will distribute dividends, in relation to the resolutions in their general
meeting the dividends may be in cash, may be free by adding the profit into equity, or may be partially from both, it is also permitted
not to distribute determined first party dividends falling below 5 percent of the paid-in capital of the company but, corporations that
increased capital before distributing the previous year’s dividends and as a result their shares are separated as “old” and “new” are
obliged to distribute 1st party dividends in cash.
In the Ordinary General Shareholders’ Meeting for the year 2009, it was resolved that there would not be distribution of profit for
2009 fiscal year, mainly due to accumulated losses.
Share premium
Excess amount of selling price and nominal value for each share was recorded as share premium in equity.
Revaluation surplus
The revaluation surplus comprises the cumulative net change in the fair value of available-for-sale financial assets until the
investments are derecognised or impaired.
Purchase of shares of entities under common control
The purchase of the shares of entities that are under common control are accounted for at book values. The net amount of
consideration paid over the book value of the net assets acquired is recognized directly in equity.
Cash flow hedge reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments
related to hedged transactions that have not yet occurred.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
operations.
223
Other reserve
Other reserve comprises all gain or loss realized on sale of non-controlling interest in a subsidiary.
On 5 March 2010, an agreement regarding the sale of 18% of shares of TAV Tunisia to Pan African Infrastructure Development Fund
(“PAIDF”) was signed by the parties. Fore-mentioned shares have been transferred to PAIDF in June 2010 and PAIDF has gained the
control of these shares afterwards. As a result, as at 31 December 2010, TAV Holding’s share in TAV Tunisia has decreased to 67%
and the effect of this transaction amounting to EUR 20,402,679 is recognised as an equity transaction as other reserves in the
consolidated financial statements.
On 18 March 2010, HAVAŞ Holding has been established as per the laws of the Republic of Turkey in which TAV has 65%, HSBC
Investment Bank Holdings Plc (“HSBC”) has 28.33% and İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. (“İş Girişim”) has 6.67% ownership
interest. HAVAŞ Holding has taken over whole shares of HAVAŞ by paying EUR 180 million and in accordance with its ownership in
HAVAŞ Holding, TAV had transferred capital of EUR 78 million to HAVAŞ Holding, as HSBC and İş Girişim injected EUR 34 million
and EUR 8 million, respectively into HAVAŞ Holding, totaling to a capital of EUR 120 million. On 28 December 2010, share capital of
HAVAŞ increased from TRL 45,000,000 to TRL 182,632,211 as a result of the acquisition of HAVAŞ Holding by HAVAŞ as a whole with
all assets and liabilities. As a result, the Group’s share in HAVAŞ decreased to 65% and HAVAŞ is fully consolidated with the noncontrolling interest’s ownership reflected as a non-controlling interest and the effect of this transaction is recognised as an equity
transaction as other reserves in the consolidated financial statements.
29. EARNINGS PER SHARE
The calculation of basic and diluted EPS at 31 December 2010 was based on the profit attributable to ordinary shareholders of EUR
49,780,525 (31 December 2009: EUR 50,523,133) and a weighted average number of ordinary shares outstanding of 363,281,250 (31
December 2009: 346,693,065), calculated as follows:
Numerator:
Profit for the year
Denominator:
Weighted average number of shares
Basic profit per share
Issued ordinary shares at 1 January
Effect of shares issued during the period
Weighted average number of ordinary shares
2010
2009
49,780,525
50,523,133
363,281,250
346,693,065
0.14
0.15
2010
363,281,250
363,281,250
2009
242,187,500
104,505,565
346,693,065
TAV AT A GLANCE
ASSESSMENTS
224
30. LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured
at amortised cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risk, see Note 38.
Non-current liabilities
Unsecured bank loans
Secured bank loans (*)
Finance lease liabilities
Current liabilities
Short term unsecured bank loans
Short term secured bank loans (*)
Current portion of long term unsecured bank loans
Current portion of long term secured bank loans (*)
Current portion of finance lease liabilities
592,092
1,005,945,828
1,556,474
1,008,094,394
18,244,670
1,071,051,709
227,967
1,089,524,346
47,986,157
42,813,809
628,677
133,213,503
720,916
225,363,062
62,449,923
19,429,978
1,519,223
113,113,533
246,328
196,758,985
(*) Secured bank loans mainly consist of project finance loans that have been secured by pledges.
The Group’s total bank loans and finance lease liabilities as at 31 December 2010 and 2009 are as follows:
1,231,180,066
1,285,809,036
2,277,390
474,295
1,233,457,456
1,286,283,331
Bank loans
Total
The Group’s bank loans as at 31 December 2010 are as follows:
TAV İstanbul
TAV Tunisia
TAV Esenboğa
HAVAŞ
TAV İzmir
TAV Holding
ATÜ
TAV Tbilisi
TAV Macedonia
TAV Gazipaşa
TGS
Others
Current liabilities
66,454,425
17,751,562
10,220,401
7,446,835
19,236,918
42,223,876
6,194,360
5,909,002
19,834,878
16,958,210
11,783,002
628,677
224,642,146
Presented as
Non-current
liabilities
363,819,937
354,455,367
130,334,402
72,607,995
40,437,681
22,074,317
22,216,129
592,092
1,006,537,920
Total
430,274,362
372,206,929
140,554,803
80,054,830
59,674,599
42,223,876
28,268,677
28,125,131
19,834,878
16,958,210
11,783,002
1,220,769
1,231,180,066
225
The Group’s bank loans as at 31 December 2009 are as follows:
TAV İstanbul
TAV Tunisia
TAV Holding
TAV Esenboğa
TAV İzmir
TAV Tbilisi
ATÜ
HAVAŞ
TAV Gazipaşa
Others
Current liabilities
31,841,606
15,235,735
103,182,666
8,366,571
18,558,267
5,409,562
3,615,263
1,330,555
8,058,244
914,188
196,512,657
Presented as
Non-current
liabilities
414,020,732
358,451,695
56,823,518
135,681,647
57,323,568
26,108,300
20,457,758
18,442,788
928,133
1,058,240
1,089,296,379
Total
445,862,338
373,687,430
160,006,184
144,048,218
75,881,835
31,517,862
24,073,021
19,773,343
8,986,377
1,972,428
1,285,809,036
Redemption schedules of the Group’s bank loans according to original maturities as at 31 December 2010 and 2009 are as follows:
On demand or within one year
In the second year
In the third year
In the fourth year
In the fifth year
After five years
224,642,146
196,512,657
125,322,194
146,765,061
129,332,278
133,208,198
116,588,371
119,315,744
120,675,484
105,976,491
514,619,593
584,030,885
1,231,180,066
1,285,809,036
The majority of the borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. Spread for EUR
and USD denominated loans as at 31 December 2010 is between 1.50%-5.75% and 4.50%, respectively (31 December 2009: 1.54%5.75% and 1.20%-4.50%, respectively).
100%, 65%, 100% and 50% of floating bank loans for TAV İstanbul, TAV İzmir, TAV Esenboğa and HAVAŞ, respectively are fixed with
interest rate swaps, 100% of floating senior bank loans for TAV Tunisia was fixed with interest rate swap until 31 October 2009 and
85% of floating senior bank loans for TAV Tunisia is fixed with interest rate swap starting from 1 November 2009, as explained in Note
36.
TAV AT A GLANCE
ASSESSMENTS
226
The Group has obtained project loans to finance construction of its BOT concession projects, namely TAV Esenboğa, TAV İzmir, TAV
Tbilisi, TAV Macedonia and TAV Tunisia; and to be able to finance advance payments to DHMİ related to concession leasing project,
TAV İstanbul. Details of the loans are summarised for each project below:
TAV İstanbul
The breakdown of bank loans as at 31 December 2010 is as follows:
Original Currency
EUR
Year of Maturity
2018
Nominal Interest
Rate
Euribor + 2.50%
Face Value
431,220,000
431,220,000
Carrying Amount
430,274,362
430,274,362
TAV İstanbul has bank loan in the amount of EUR 430,274,362 under the facility agreement. The terms of the loan require monthly
principal and interest payments until 5 July 2010 and semi-annual principal and interest payments on 4 July and 4 January of each year
following 5 July 2010 according to the loan agreements.
(*) Interest rate is Euribor+2.50% until 4 January 2013, Euribor+2.65% between the period of 4 January 2013 and 4 January 2016 and
Euribor+2.75% between the period of 4 January 2016 and 4 July 2018.
Secured bank loans (**)
Original Currency
EUR
EUR
Year of Maturity
2018
2019
Nominal Interest
Rate
Euribor + 2.50%
Euribor + 2.50%
Face Value
415,800,000
40,000,000
455,800,000
Carrying Amount
406,756,931
39,105,407
445,862,338
(*) Interest rate is Euribor+2.50% until 4 January 2013, Euribor+2.65% between the period of 4 January 2013 and 4 January 2016 and
Euribor+2.75% between the period of 4 January 2016 and 4 July 2018.
(**) Interest rate is Euribor+2.50% until 4 January 2013, Euribor+2.65% between the period of 4 January 2013 and 4 January 2016 and
Euribor+2.75% between the period of 4 January 2016 and 4 January 2019.
Redemption schedules of TAV İstanbul bank loans according to the original maturities as at 31 December 2010 and 2009 are as
follows:
In the second year
In the third year
In the fourth year
In the fifth year
After five years
66,454,425
31,841,606
45,968,671
42,588,595
51,273,849
46,641,170
56,232,498
51,374,707
60,155,520
55,398,538
150,189,399
218,017,722
430,274,362
445,862,338
227
TAV Tunisia
Secured bank loan
Secured bank loan
Secured bank loan
Secured bank loan
Original Currency
EUR
EUR
EUR
EUR
Year of Maturity
2028
2022
2028
2028
Nominal Interest
Rate
Euribor + 2.28%
Euribor + 2.00%
Euribor + 1.54%
Euribor + 4.75%
Face Value
167,487,481
109,684,026
69,650,000
29,950,427
376,771,934
Carrying Amount
165,443,763
108,378,082
68,800,117
29,584,967
372,206,929
Face Value
168,329,132
110,235,201
70,000,000
29,950,427
378,514,760
Carrying Amount
165,951,425
108,330,795
69,910,379
29,494,831
373,687,430
Secured bank loan
Secured bank loan
Secured bank loan
Secured bank loan
Original Currency
EUR
EUR
EUR
EUR
Year of Maturity
2028
2022
2028
2028
Nominal Interest
Rate
Euribor + 2.28%
Euribor + 2.00%
Euribor + 1.54%
Euribor + 4.75%
Redemption schedules of TAV Tunisia bank loans as at 31 December 2010 and 2009 are as follows:
17,751,562
15,235,735
21,000,989
20,735,684
21,125,801
25,054,753
24,485,906
23,455,665
27,721,040
25,375,000
260,121,631
263,830,593
372,206,929
373,687,430
In the second year
In the third year
In the fourth year
In the fifth year
After five years
TAV Esenboğa
Secured bank loans
Original Currency
EUR
Year of Maturity
2021
Nominal Interest
Rate
Euribor + 2.35%
Face Value
143,250,000
143,250,000
Carrying Amount
140,554,803
140,554,803
TAV Esenboğa has a bank loan in the amount of EUR 140,554,803 under loan agreement. The terms of the loan require semi-annual
principal and interest payments at each 30 June and 31 December according to the loan agreements starting from 31 December 2007
for interest and 30 June 2008 for principal.
TAV AT A GLANCE
ASSESSMENTS
228
Secured bank loans
Original Currency
EUR
Year of Maturity
2021
Nominal Interest
Rate
Euribor + 2.35%
Face Value
147,000,000
147,000,000
Carrying Amount
144,048,218
144,048,218
Redemption schedules of TAV Esenboğa borrowings according to original maturities as at 31 December 2010 and 2009 are as follows:
10,220,401
8,366,571
11,628,863
10,481,986
12,886,545
11,857,442
14,165,252
12,866,252
15,134,935
13,893,880
76,518,807
86,582,087
140,554,803
144,048,218
In the second year
In the third year
In the fourth year
In the fifth year
After five years
HAVAŞ
Secured bank loan
Secured bank loan
Unsecured bank loan
Original Currency
EUR
EUR
EUR
Year of Maturity
2018
2017
2015
Nominal Interest
Rate
Euribor + 4.75%
Euribor + 5.75%
Euribor + 3.50%
Face Value
60,000,000
20,000,000
33,191
80,033,191
Carrying Amount
60,203,252
19,818,302
33,276
80,054,830
Face Value
20,000,000
20,000,000
Carrying Amount
19,773,343
19,773,343
The breakdown of bank loan as at 31 December 2009 is as follows:
Secured bank loan
Original Currency
EUR
Year of Maturity
2017
Nominal Interest
Rate
Euribor + 5.75%
Redemption schedules of the HAVAŞ bank loans as at 31 December 2010 and 2009 are as follows:
In the second year
In the third year
In the fourth year
In the fifth year
After five years
7,446,835
1,330,555
14,022,366
3,333,626
12,610,653
3,189,703
11,255,058
2,823,325
9,964,334
2,494,514
24,755,584
6,601,620
80,054,830
19,773,343
229
On 24 March 2010, HAVAŞ utilized a bank loan amounting to EUR 60,000,000 with an interest rate of Euribor + 4.75% and a maturity
of March 2018 from Türkiye İş Bankası A.Ş.. The following securities are provided in favor of the lender:
•
•
•
•
TAV Holding has provided surety of EUR 10,000,000.
Second ranking pledge was established on 50% of the shares in TGS.
Dividend receivables arising from subsidiaries and joint ventures of HAVAŞ are assigned to repayment of the outstanding loan.
Second ranking pledge was established on the shares of HAVAŞ.
The loan agreement includes covenants, including restrictions on the ability of HAVAŞ to incur additional indebtedness; to make
certain other restricted payments, loans; to create liens; to give guarantees; to dispose of assets, and to acquire a business or an
undertaking.
On 9 December 2009, HAVAŞ utilized a bank loan amounting to EUR 20,000,000 with an interest rate of Euribor + 5.75% and a
maturity of December 2017 from Türkiye İş Bankası A.Ş.. Following securities are provided in favor of the lender:
•
•
•
•
•
First ranking pledge was established on 50% of the shares in TGS.
Time and demand deposit amounting to EUR 12,529,990 is provided as guarantee.
TAV Holding was provided surety for the total outstanding loan amount.
Dividend receivables arising from subsidiaries and joint ventures are assigned to repayment of the outstanding loan.
Pledge has been registered with first priority against but not limited to business entity and entity name registered in trade register,
machinery and equipment, furnitures and fixtures and vehicles of HAVAŞ.
• First ranking pledge was established on the shares of HAVAŞ.
The loan agreement includes covenants, including restrictions on the ability of HAVAŞ to incur additional indebtedness; to make
certain other restricted payments, loans; to create liens; to give guarantees; to dispose of assets, and to acquire a business or an
undertaking.
Related with the bank loan amounting to EUR 60,000,000 with an interest rate of Euribor + 4.75% and a maturity of March 2018 and
the bank loan amounting to EUR 20,000,000 with an interest rate of Euribor + 5.75% and a maturity of December 2017 from Türkiye
İş Bankası A.Ş., 65% shares of HAVAŞ with a nominal amount of TRL 118,711,263 have been pledged in favour of Türkiye İş Bankası
A.Ş. by TAV Holding. However, the voting right for these shares remains at TAV Holding.
TAV İzmir
Secured bank loan
Original Currency
EUR
Year of Maturity
2013
Nominal Interest
Rate
Euribor + 3.00%
Face Value
58,522,448
58,522,448
Carrying Amount
59,674,599
59,674,599
TAV İzmir has bank loans in the amount of EUR 59,674,599 under loan agreements. The terms of the loan require semi-annual
principal and interest payments at each 23 January and 23 July according to the loan agreements.
TAV AT A GLANCE
ASSESSMENTS
230
Secured bank loan
Original Currency
EUR
Year of Maturity
2013
Nominal Interest
Rate
Euribor + 3.00%
Face Value
74,312,653
74,312,653
Carrying Amount
75,881,835
75,881,835
Redemption schedules of TAV İzmir bank loans according to original maturities as at 31 December 2010 and 2009 are as follows:
In the second year
In the third year
In the fourth year
19,236,918
18,558,267
19,833,326
18,652,964
20,604,355
19,074,871
19,595,733
59,674,599
75,881,835
Pledges regarding the project bank loans of TAV İstanbul, TAV İzmir and TAV Esenboğa:
a) Share pledge: In case of an event of default, the banks have the right to take control of the shares. Upon the occurrence of any
event of default, the banks can demand the sale of shares by way of public auction in accordance with the applicable provisions of the
Bankruptcy and Execution Law of the Republic of Turkey or by way of private auction among the nominees.
b) Receivable pledge: In case of an event of default, the banks have the right to take control of the receivables of project companies
(disclosed as the Borrowers in Note 27) in order to perform its obligations under the loan documents. Immediately upon the
occurrence of default, and all payments relating to assigned receivables shall be made to the banks which shall be entitled to collect
the assigned receivables and exercise all rights with respect to assigned receivables.
TAV İstanbul, TAV İzmir and TAV Esenboğa have pledged their receivables amounting to EUR 19,543,667, EUR 1,376,218, and EUR
3,077,029, respectively as at 31 December 2010 (31 December 2009: EUR 18,094,234, EUR 4,538,809 and EUR 3,215,325, respectively).
c) Pledge over bank accounts: In case of an event of default, the banks have the right to control the bank accounts of project
companies in order to perform its obligations under the loan documents. Upon the occurrence of event of default project companies
shall be entitled to set-off and apply the whole or any part of the cash standing to the credit of the accounts and any interests,
proceeds and other income that may accrue or arise from the accounts.
TAV İstanbul, TAV İzmir and TAV Esenboğa have pledges over bank accounts amounting to EUR 271,216,672, EUR 33,426,426, and
EUR 30,759,515, respectively as at 31 December 2010 (31 December 2009: EUR 443,818,979, EUR 65,575,948 and EUR 55,413,765,
respectively).
With the consent of the facility agent, TAV İstanbul, TAV İzmir and TAV Esenboğa have a right to have an additional;
• subordinated debt approved in advance by the Facility Agent,
• indebtedness up to USD 0.5 million for the acquisition cost of any assets or leases of assets,
• indebtedness up to USD 3 million for the payment of tax and social security liabilities.
231
Pledges regarding the project bank loan of TAV Tunisia:
Similar to above, TAV Tunisia has granted share pledge, account pledge and pledge of rights from the Concession Agreement to the
lenders. TAV Tunisia has a right to have additional indebtedness;
• with a maturity of less than one year for an aggregate amount not exceeding EUR 3,000,000 (up to 1 January 2020) and not
exceeding EUR 5,000,000 (thereafter),
• under finance or capital leases of equipment if the aggregate capital value of the equipment leased does not exceed EUR
5,000,000,
• incurred by, or committed in favour of, TAV Tunisia under an Equity Subordinated Loan Agreement,
• disclosed in writing by TAV Tunisia to the Intercreditor Agent and in respect of which it has given its prior written consent.
TAV Holding
Unsecured bank loan
Unsecured bank loan
Secured bank loan
Original Currency
USD
EUR
EUR
Year of Maturity
2011
2011
2011
Nominal Interest
Rate
5.50%
4.10%-8.00%
6.00%
Face Value
18,861,939
17,000,000
6,000,000
41,861,939
Carrying Amount
19,189,843
17,013,312
6,020,721
42,223,876
Face Value
Carrying Amount
62,341,573
32,500,000
20,500,000
12,336,250
10,000,000
8,000,000
6,969,865
5,808,221
158,455,909
62,615,071
32,610,000
20,634,037
13,255,196
10,041,179
8,036,679
6,975,037
5,838,985
160,006,184
Secured bank loan
Unsecured bank loan
Unsecured bank loan
Unsecured bank loan
Secured bank loan
Secured bank loan
Unsecured bank loan
Unsecured bank loan
Original Currency
Year of Maturity
USD
EUR
EUR
TRL
EUR
EUR
USD
USD
2012
2010
2010-2011
2010
2010
2011
2010
2010
Nominal Interest
Rate
Libor + 1.85%
Euribor + 4.00%
Euribor + 5.00%
4.10%-8.00%
8.75% + 16.50%
Euribor + 4.00%
8.00%
4.50%
Libor + 1.20%
Redemption schedules of TAV Holding bank loans as at 31 December 2010 and 2009 are as follows:
In the second year
In the third year
42,223,876
103,182,666
39,859,003
16,964,515
42,223,876
160,006,184
TAV AT A GLANCE
ASSESSMENTS
232
ATÜ
Secured bank loan
Secured bank loan
Secured bank loan
Secured bank loan
Secured bank loan
Secured bank loan
Original Currency
EUR
EUR
EUR
EUR
EUR
TND
Year of Maturity
2015
2018
2015
2012
2012
2013
Nominal Interest
Rate
Euribor + 2.70%
6.00%
5.00%
5.20%
5.00%
5.93%
Face Value
10,522,368
9,996,250
4,998,125
1,072,915
819,974
630,601
28,040,233
Carrying Amount
10,476,144
10,240,432
5,004,604
1,117,576
822,021
607,900
28,268,677
Face Value
12,639,810
9,996,250
1,220,204
23,856,264
Carrying Amount
12,575,704
10,277,022
1,220,295
24,073,021
Secured bank loan
Secured bank loan
Secured bank loan
Original Currency
EUR
EUR
EUR
Year of Maturity
2015
2018
2012
Nominal Interest
Rate
Euribor + 2.70%
7.00%
5.00%
Redemption schedules of the ATÜ bank loans as at 31 December 2010 and 2009 are as follows:
6,194,360
3,615,263
6,258,254
3,997,476
4,694,988
4,227,506
4,238,714
3,509,338
3,848,187
3,169,492
3,034,174
5,553,946
28,268,677
24,073,021
In the second year
In the third year
In the fourth year
In the fifth year
After five years
TAV Tbilisi
Secured bank loan
Original Currency
USD
Year of Maturity
2015
Nominal Interest
Rate
Libor + 4.50%
Face Value
27,813,520
27,813,520
Carrying Amount
28,125,131
28,125,131
Face Value
31,456,290
31,456,290
Carrying Amount
31,517,862
31,517,862
Secured bank loan
Original Currency
USD
Year of Maturity
2015
Nominal Interest
Rate
Libor + 4.50%
233
Redemption schedules of the TAV Tbilisi bank loans as at 31 December 2010 and 2009 are as follows:
In the second year
In the third year
In the fourth year
In the fifth year
After five years
5,909,002
5,409,562
6,017,633
5,642,313
6,136,087
5,685,279
6,210,943
5,690,724
3,851,466
5,645,067
3,444,917
28,125,131
31,517,862
Pledges regarding the bank loans:
a) Share pledge-to take control of 75 percent plus one share of the charter capital of TAV Tbilisi;
b) Revenue pledge-to take control of the revenues derived from Tbilisi International Airport operations as stipulated in the BOT
Agreement;
c) Pledge over bank accounts-to take control of TAV Tbilisi’s bank accounts in JSC Bank of Georgia, JSC Bank Republic and JSC TBC
Bank and be entitled to set-off and apply the whole or any part of the cash standing to the credit of the accounts and any interests,
proceeds and other income that may accrue or arise from the accounts;
d) Pledge over insurance proceeds-to receive all insurance compensation and any other amounts payable under the insurance policies
of TAV Tbilisi;
e) Pledge over BOT rights-to control all interests and benefits of TAV Tbilisi pursuant to the BOT Agreement;
f) Pledge over rights under the construction guarantees-to control all right, title and interest under each construction guarantee;
g) Pledge over project reserve account-to control the project reserve account.
The shareholders of TAV Tbilisi, TAV Holding, Akfen İnşaat, Urban İnşaat Sanayi ve Ticaret A.Ş., Sera Yapı Endüstrisi ve Ticaret A.Ş.,
and Aeroser International Holding (UK) Limited concluded Guarantee, Share Retention, Support and Subordination Deed with EBRD
and IFC in respect with the loans extended to TAV Tbilisi. Accordingly, all shareholders irrevocably and unconditionally guarantee, on
joint and several basis:
• to pay to EBRD and IFC on demand, and in the currency in which the same falls due for payment by TAV Tbilisi, all monies and
liabilities which shall have been advanced to, become due, owing or incurred by TAV Tbilisi to or in favour of EBRD and IFC;
• to indemnify EBRD and IFC in full on demand against all losses, costs and expenses suffered or incurred by EBRD and IFC arising
from or in connection with any one or more of the purported liabilities or obligations of TAV Tbilisi to EBRD and IFC under the loan
and related agreements.
TAV AT A GLANCE
ASSESSMENTS
234
TAV Macedonia
Secured bank loan
Original Currency
EUR
Year of Maturity
2011
Nominal Interest
Rate
Euribor + 1.50%
Face Value
20,000,000
20,000,000
Carrying Amount
19,834,878
19,834,878
Redemption schedules of TAV Macedonia bank loans as at 31 December 2010 and 2009 are as follows:
19,834,878
19,834,878
-
TAV Gazipaşa
Secured bank loan
Secured bank loan
Original Currency
EUR
TL
Year of Maturity
2011
2011
Nominal Interest
Rate
4.00%-7.00%
8.50%
Face Value
10,450,000
6,100,239
16,550,239
Carrying Amount
10,755,767
6,202,443
16,958,210
Face Value
4,985,419
2,950,000
925,797
8,861,216
Carrying Amount
5,035,827
3,022,417
928,133
8,986,377
Secured bank loan
Secured bank loan
Unsecured bank loan
Original Currency
TL
EUR
TL
Year of Maturity
2010
2010
2011
Nominal Interest
Rate
13.40%-14.38%
7.00%-7.80%
10.37%
Redemption schedules of TAV Gazipaşa bank loans as at 31 December 2010 and 2009 are as follows:
In the second year
16,958,210
8,058,244
928,133
16,958,210
8,986,377
235
TGS
Unsecured bank loan
Original Currency
TL
Year of Maturity
2011
Nominal Interest
Rate
6.95%-7.95%
Face Value
11,712,460
11,712,460
Carrying Amount
11,783,002
11,783,002
Redemption schedules of TGS bank loans as at 31 December 2010 and 2009 are as follows:
11,783,002
11,783,002
-
2010
1 year
1-5 year
Total
Future
minimum
lease
payments
748,758
1,572,058
2,320,816
Interest
27,842
15,584
43,426
2009
Present
value of
minimum
lease
payments
720,916
1,556,474
2,277,390
1 year
1-5 year
Total
Future
minimum
lease
payments
275,216
243,486
518,702
Interest
28,888
15,519
44,407
Present
value of
minimum
lease
payments
246,328
227,967
474,295
It is the Group’s policy to lease certain of its fixtures and equipment under finance leases. The average remaining lease term is three
years as at 31 December 2010. For the year ended 31 December 2010, the average effective borrowing rate was 6.60% (31 December
2009: 6.09%). Interest rates are fixed at the contract date, and thus expose the Group to fair value interest rate risk. All leases are on
a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
31. RESERVE FOR EMPLOYEE SEVERANCE INDEMNITY
Under the Turkish Labour Law, the Company and its Turkish subsidiaries and joint ventures are required to pay termination benefits
to each employee who has completed one year of service and whose employment is terminated without due cause, is called up for
military service, dies or who retires after completing 25 years of service (20 years for women) and reaches the retirement age (58 for
women and 60 for men). Since the legislation was changed on 8 September 1999, there are certain transitional provisions relating to
length of service prior to retirement.
Such payments are calculated on the basis of 30 days’ pay maximum full TRL 2,517 as at 31 December 2010 (equivalent to EUR 1,228
as at 31 December 2010) (31 December 2009: TRL 2,365 (equivalent to EUR 1,095 as at 31 December 2009)) per year of employment
at the rate of pay applicable at the date of retirement or termination. Reserve for retirement pay is computed and reflected in the
financial statements on a current basis. The reserve has been calculated by estimating the present value of future probable obligation
of the Company and its Turkish subsidiaries and joint ventures arising from the retirement of the employees. The calculation was
based upon the retirement pay ceiling announced by the government.
The provision has been calculated by estimating the present value of the future probable obligation of the Company and its
subsidiaries and joint venture registered in Turkey arising from the retirement of employees. IFRSs require actuarial valuation
methods to be developed to estimate the enterprise’s obligation under defined benefit plans. Accordingly, the following actuarial
assumptions were used in the calculation of the total liability:
TAV AT A GLANCE
ASSESSMENTS
236
The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount
rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Consequently, in the
accompanying consolidated financial statements as at 31 December 2010, the provision has been calculated by estimating the present
value of the future probable obligation of the Group arising from the retirement of the employees. The provision at 31 December 2010
has been calculated assuming an annual inflation rate of 5.10% and a discount rate of 10.00% resulting in a real discount rate of
approximately 4.66% (31 December 2009: annual inflation rate of 4.80% and a discount rate of 11.00% resulting in a real discount rate
of approximately 5.92%). It is planned that retirement rights will be paid to employees at the end of concession periods. Accordingly,
present value of the future probable obligation has been calculated based on the concession periods.
2010
4,645,483
699,279
2,106,677
(1,834,364)
247,465
1,587,432
7,451,972
Interest cost
Service cost
Payment made during the year (*)
Effects of change in foreign exchange rate
Actuarial difference
2009
3,247,519
2,123,752
2,330,760
(4,215,585)
(27,144)
1,186,181
4,645,483
(*) 1,161 of total personnel transferred from TGS to HAVAŞ have obtained termination benefits amountingto EUR 3 million in 2009.
32. OTHER PAYABLES
At 31 December 2010 and 2009, other payables comprised the following:
Concession payable (*)
Due to personnel
Taxes and duties payable
Social security premiums payable
Expense accruals
Advances received
Other accruals and liabilities
18,706,708
11,450,078
6,626,054
7,664,301
4,574,775
11,067,818
4,516,272
3,198,013
2,137,509
1,116,835
678,847
464,355
834,456
4,303,052
38,074,621
39,264,452
(*) TAV Tunisia has a concession period of 40 years with a concession rent fee that will increase in a linear rate between 11% and 26%
of the annual revenues of the Monastir and Enfidha Airports to be paid. TAV Macedonia has a concession period of 20 years with a
concession rent fee that will increase in a linear rate between 2.21% and 15.02% of the annual revenues to be paid.
The Group’s exposure to currency and liquidity risk is related to other payables is disclosed in Note 38.
33. DEFERRED INCOME
The breakdown of deferred income as at 31 December 2010 and 2009 is as follows:
Deferred income
Short-term deferred income
Long-term deferred income
7,238,327
21,688,366
28,926,693
5,706,204
14,339,463
20,045,667
EUR 19,275,195 (31 December 2009: EUR 15,784,295) of deferred income is related with the unearned concession rent income from
ATÜ.
237
34. PROVISIONS
At 31 December 2010 and 2009, provisions comprised the following:
Unused vacation provision
Other provisions
Unused vacation
Provision set / (released) during the year, net
Tax penalty
Provision set during the year, net
Payments during the year
4,401,279
2,468,446
431,520
227,472
4,832,799
2,695,918
2010
2,468,446
1,802,934
129,899
4,401,279
2009
2,538,425
(47,067)
(22,912)
2,468,446
2010
-
2009
1,168,501
444,174
(1,609,354)
(3,321)
-
35. TRADE PAYABLES
At 31 December 2010 and 2009, trade payables comprised the following:
Trade payables
Deposits and guarantees received
Other
33,260,277
28,613,929
818,738
631,027
79,374
61,131
34,158,389
29,306,087
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The Group’s exposure to currency
and liquidity risk related to trade payables is disclosed in Note 38.
TAV AT A GLANCE
ASSESSMENTS
238
36. DERIVATIVE FINANCIAL INSTRUMENTS
At 31 December 2010 and 2009, derivative financial instruments comprised the following:
Interest rate swap
Cross currency swap
Assets
-
31 December 2010
Liabilities
(99,485,643)
(5,482,466)
(104,968,109)
Net Amount
(99,485,643)
(5,482,466)
(104,968,109)
Interest rate swap
Cross currency swap
Assets
6,390,781
6,390,781
31 December 2009
Liabilities
(85,400,809)
(85,400,809)
Net Amount
(85,400,809)
6,390,781
(79,010,028)
Interest rate swap:
TAV Esenboğa uses interest rate derivatives to manage its exposure to interest rate fluctuations on its bank borrowings. As at 31
December 2010, 100% of project finance loan is hedged through Interest Rate Swap (“IRS”) contract during the life of the loan with an
amortising schedule depending on repayment of the loan (31 December 2009: 100%).
TAV Tunisia uses interest rate derivatives to manage its exposure to interest rate fluctuations on its bank borrowings. As at 31
December 2010, 85% of floating senior bank loan is hedged through IRS contract during the life of the loan with an amortising
schedule depending on repayment of the loan (31 December 2009: 85%).
TAV İstanbul uses interest rate derivatives to manage its exposure to interest rate fluctuations on its bank borrowings. As at 31
December 2010, 100% of project finance loan is hedged through IRS contract during the life of the loan with an amortising schedule
depending on repayment of the loan (31 December 2009: 100%).
TAV İzmir uses interest rate derivative to manage its exposure to interest rate fluctuations on its bank borrowings. As at 31 December
2010, 65% of total project finance loan is hedged through IRS contract (31 December 2009: 74%).
HAVAŞ uses interest rate derivative to manage its exposure to interest rate fluctuations on its bank borrowings. As at 31 December
2010, 50% of total loan is hedged through IRS contract (31 December 2009: None).
Cross currency swap:
TAV İstanbul uses cross currency derivatives to manage its exposure to foreign currency exchange rates on its rent installments that
will be paid to DHMİ.
TAV İstanbul had signed a derivative contract with Dexia Credit Local (“DCL”) on 12 March 2008 to manage and fix its exposure to
foreign currency exchange rates between USD and EUR on the rent installments that will be paid to DHMİ till 2018. TAV İstanbul has
terminated the hedge relationship in 2010 and new two cross currency swap contracts have been signed by and between TAV İstanbul,
DCL, and ING Bank N.V. on 16 December 2010. The total notional amount of the contract is EUR 316,004,183 (in exchange of USD
416,493,513) as at 31 December 2010 (31 December 2009: EUR 317,474,667 (in exchange of USD 470,814,932)).
The fair value of derivatives at 31 December 2010 is estimated at EUR 104,968,109 (31 December 2009: EUR 79,010,028). This
amount is based on market values of equivalent instruments at the reporting date. Since the Group applied hedge accounting as
at 31 December 2010 changes in the fair value of these interest rate derivatives and cross currency swaps were reflected to other
comprehensive income amounting to a loss of EUR 8,725,740 (31 December 2009: a loss of EUR 28,926,250) net of tax.
239
Fair value disclosures:
The Group has determined the estimated fair values of the financial instruments by using current market information and appropriate
valuation methods.
Since the book values of the foreign exchange denominated monetary items are estimated to approximate their fair values, these
monetary items are translated to EUR by using the foreign exchange rates as at the reporting date. Since the financial assets and
liabilities are short term in nature, it is accepted that their fair values approximate to their carrying amounts.
37. OPERATING LEASES
The Group entered into various operating lease agreements (excluding rent agreement for TAV İstanbul, TAV Macedonia and TAV
Tunisia). For the year ended 31 December 2010, total rent expenses for operating leases amounted to EUR 3,168,748 (31 December
2009: EUR 1,983,277).
38. FINANCIAL INSTRUMENTS
Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s business. However, most of the Group’s
revenues are denominated in hard currency. The gap between hard currency assets and liabilities are hedged by derivative financial
instruments such as cross currency swaps. In addition to hedging of the currency risk, TAV İstanbul, TAV İzmir, TAV Esenboğa, TAV
Tunisia and HAVAŞ use interest rate swaps as to hedge the fluctuations in Euribor and Libor rates (i.e. 100%, 65%, 100%, 85% and
50% of floating loans of TAV İstanbul, TAV İzmir, TAV Esenboğa, TAV Tunisia and HAVAŞ, respectively are fixed).
Credit risk
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date is:
Trade receivables-non-current
Trade receivables-current
Other receivables and current assets (*)
Cash and cash equivalents (**)
Interest rate and cross currency swaps used forhedging
Note 31 December 2010 31 December 2009
25
113,810,957
134,457,502
25
77,681,614
62,044,641
40
5,124,375
10,482,379
24
7,112,588
1,535,893
27
382,444,797
313,849,601
26
31,851,035
33,454,157
36
6,390,781
618,025,366
562,214,954
(*) Non-financial instruments such as VAT deductible and carried forward, prepaid expenses and advances given are excluded from
other current assets and other non-current assets.
(**) Cash on hand is excluded from cash and cash equivalents.
TAV AT A GLANCE
ASSESSMENTS
240
Impairment losses
The movements in the allowance for impairment in respect of trade receivables during the years ended 31 December were as follows:
1 January1 January31 December 2010 31 December 2009
(2,046,447)
(1,846,399)
414,944
89,736
(1,336,568)
(306,451)
(143,436)
16,667
(3,111,507)
(2,046,447)
Collections during the year
Impairment loss recognized
Effect of changes in foreign exchange rates
Allowance for doubtful receivables is determined by reference to past default experience. The allowance account in respect of trade
receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that
point the amount considered irrecoverable is written off against the trade receivable directly.
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of
netting agreements:
31 December 2010
Carrying
Amount
Non-derivative financial
liabilities
Secured bank loans
Financial lease liabilities
Bank overdraft
Trade payables (*)
Other payables (*)
Derivative financial liabilities
Interest rate swaps used for
hedging
Currency swaps
Outflow
Inflow
Contractual
cash flows
3 months
or less
3-12
months
1-5
years
More than
five years
1,181,973,140 (1,568,760,956)
49,206,926
(50,821,104)
2,277,390
(2,277,390)
2,865,313
(2,865,313)
33,339,651
(33,410,648)
28,151,745
(45,468,611)
37,395,774
(37,395,774)
(81,465,237)
(12,577,209)
(180,036)
(2,865,313)
(33,410,648)
(28,435,202)
(20,801,555)
(86,820,043)
(37,592,813)
(540,882)
(3,001,342)
(16,594,219)
(575,295,078)
(651,082)
(1,556,472)
(9,603,518)
-
(825,180,598)
(4,428,549)
-
99,485,643
(128,396,091)
(7,771,973)
(22,535,602)
(74,547,906)
(23,540,610)
5,482,466
1,440,178,048
(316,044,183)
309,982,153
(1,875,457,917)
(187,507,173)
(40,694,826)
40,633,167
(167,146,560)
(163,343,650)
161,594,590
(663,403,116)
(112,005,707)
107,754,396
(857,401,068)
241
31 December 2009
Carrying
Amount
Non-derivative financial
liabilities
Secured bank loans
Financial lease liabilities
Bank overdraft
Trade payables (*)
Other payables (*)
Derivative financial liabilities
Interest rate swaps used for
hedging
Currency swaps
Outflow
Inflow
Contractual
cash flows
3 months
or less
3-12
months
1-5
years
More than
five years
1,203,595,220 (1,695,934,414)
82,213,816
(85,543,037)
474,295
(494,862)
2,379,933
(2,379,933)
28,675,060
(28,748,874)
31,368,103
(32,865,946)
38,800,097
(38,800,097)
(34,032,256)
(13,089,720)
(66,438)
(2,379,933)
(28,748,874)
(6,650,611)
(38,358,333)
(103,320,641)
(52,507,767)
(196,563)
(7,132,950)
(441,764)
(573,585,146)
(19,945,550)
(231,861)
(19,082,385)
-
(984,996,371)
-
(114,995,377)
(2,365,800)
(23,339,016)
(66,743,806)
(22,546,755)
(317,474,668)
(6,390,781)
325,206,006
1,466,516,552 (1,992,031,202)
(20,244,609)
20,423,643
(125,512,931)
(16,384,804)
16,992,073
(186,331,432)
85,400,809
(144,084,516)
(136,760,739)
148,875,101
138,915,189
(674,798,163) (1,005,388,676)
(*) Non-financial instruments such as deposits on guarantees and advances received are excluded from trade payables and other
payables.
The following table indicates the periods in which the cash flows associated with the derivatives that are cash flow hedges expected
to occur.
31 December 2010
Interest rate swaps
Assets
Liabilities
Cross currency swaps
Assets
Liabilities
Carrying
Amount
Contractual
cash flows
3 months
or less
3-12
months
1-5
years
More than
five years
(99,485,643)
(128,396,091)
(7,771,973)
(22,535,602)
(74,547,906)
(23,540,610)
(5,482,466)
(6,062,030)
-
(61,659)
(1,749,060)
(4,251,311)
Carrying
Amount
Contractual
cash flows
3 months
or less
3-12
months
1-5
years
More than
five years
(85,400,809)
(114,995,377)
(2,365,800)
(23,339,016)
(66,743,806)
(22,546,755)
6,390,781
-
7,731,338
-
179,034
-
607,269
-
4,790,585
-
2,154,450
-
31 December 2009
Interest rate swaps
Assets
Liabilities
Cross currency swaps
Assets
Liabilities
TAV AT A GLANCE
ASSESSMENTS
242
Currency risk
Exposure to currency risk:
The Group’s exposure to foreign currency risk in Euro equivalent of their original currencies was as follows:
31 December 2010
Foreign currency denominated
financial assets
Trade receivables
Other receivables and current
assets
financial liabilities
Bank overdraft
Trade payables
Derivative financial
instruments
Other payables
Net exposure
USD
6,262
13,540,569
924,730
EUR (*)
575,824
-
TRL
46,073
3,350,067
1,510,813
Other
11,411
5,806,226
-
Total
63,746
23,272,686
2,435,543
48,008
11,857,494
1,547,022
27,924,085
1,797
44,739
81,651
704,011
8,095,835
101,838,200
7,515,141
122,356,129
5,083,236
2,081,289
1,857,146
14,839,308
13,228,876
115,821,722
11,000,960
165,823,533
(48,652,286)
(2,684,766)
(4,609,180)
(22,344)
(52,928)
(6,143,968)
(1,738,590)
(6,768,971)
(10,193,770)
(913,676)
(4,870)
(7,461,918)
-
(55,709,930)
(1,743,460)
(16,937,999)
(14,855,878)
(5,482,466)
(1,049,707)
(62,478,405)
(34,554,320)
(30,478)
(105,750)
598,261
(10,118,087)
(34,963,386)
87,392,743
(2,784,677)
(11,165,141)
3,674,167
(5,482,466)
(13,982,949)
(108,712,682)
57,110,851
(*) The figures in this column reflect the Euro position of subsidiaries and joint ventures that have functional currencies other than
Euro.
243
31 December 2009
financial assets
Trade receivables
Derivative financial
instruments
Other receivables and current
assets
financial liabilities
Bank overdraft
Trade payables
Other payables
Net exposure
USD
19,376
9,451,883
1,906,589
EUR (*)
711,409
663
TRL
102,819
6,829,672
2,252,010
Other
2,827
2,449,024
535,632
Total
125,022
19,441,988
4,694,894
6,390,781
-
-
-
6,390,781
56,982
105,508,839
1,103,130
124,437,580
415,285
1,127
1,098,235
2,226,719
3,274,415
74,029,307
2,152,926
88,641,149
12,912,103
4,013,945
1,203,127
21,116,658
16,658,785
183,553,218
5,557,418
236,422,106
(108,532,085)
(3,073,367)
(3,794,634)
(394,974)
(115,795,060)
8,642,520
(47,926)
(1,237)
(6,822)
(55,985)
2,170,734
(19,152,528)
(1,627,468)
(6,455,251)
(416,931)
(13,600,390)
(41,252,568)
47,388,581
(3,807,971)
(1,879,075)
(5,687,046)
15,429,612
(127,684,613)
(1,627,468)
(13,384,515)
(4,212,802)
(15,881,261)
(162,790,659)
73,631,447
(*) The figures in this column reflect the Euro position of subsidiaries and joint ventures that have functional currencies other than
Euro.
The following significant exchange rates applied during the year:
USD
TRL
GEL
Average Rate
Reporting Date Closing Rate
31 December 2010 31 December 2009 31 December 2010 31 December 2009
0.7538
0.7187
0.7545
0.6970
0.5029
0.4649
0.4880
0.4629
0.4228
0.4291
04255
0.4133
Sensitivity analysis:
The Group’s principal currency rate risk relates to changes in the value of the Euro relative to TRL and the USD. The Group manages its
exposure to foreign currency risk by entering into derivative contracts and, where possible, seek to incur expenses with respect to each
contract in the currency in which the contract is denominated and attempt to maintain its cash and cash equivalents in currencies
consistent with its obligations.
The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The
aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies, both short-term and
long-term purchase contracts. The analysis excludes net foreign currency investments.
TAV AT A GLANCE
ASSESSMENTS
244
A 10 percent strengthening (weakening) of EUR against the following currencies at 31 December 2010 and 2009 would have increased
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant.
Equity
Strengthening of
Weakening of
EUR
EUR
Profit or loss
Strengthening of
Weakening of
EUR
EUR
31 December 2010
USD
TRL
Other
Total
(25,972,195)
(25,972,195)
31,744,226
31,744,226
2,907,185
(8,739,274)
(367,417)
(6,199,506)
(2,907,185)
8,739,274
367,417
6,199,506
31 December 2009
USD
TRL
Other
Total
(26,023,783)
(26,023,783)
31,784,618
31,784,618
(225,174)
(4,738,858)
(1,542,961)
(6,506,993)
225,174
4,738,858
1,542,961
6,506,993
Interest rate risk
The Group has used material amounts of bank borrowings from foreign sources and banks. Although most of these loans used have
floating interest rates, the Group management and banks fixed interest rates by using derivative financial instruments. TAV İstanbul,
TAV İzmir, TAV Esenboğa, TAV Tunisia and HAVAŞ use interest rate swap to hedge of fluctuations in Euribor and Libor rates (i.e. 100%,
65%, 100%, 85% and 50% of floating loans of TAV İstanbul, TAV İzmir, TAV Esenboğa, TAV Tunisia and HAVAŞ, respectively are fixed).
Profile:
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Carrying amount
Fixed rate instruments
Financial assets
Financial liabilities
345,054,870
(209,071,088)
135,983,782
279,062,772
(172,684,670)
106,378,102
Carrying amount
Variable rate instruments
Financial assets
14,380,772
(1,130,956,789)
(1,116,576,017)
13,305,923
(1,224,728,989)
(1,211,423,066)
245
Fair value sensitivity analysis for fixed rate instruments:
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does
not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a
change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments:
Based on the Group’s current borrowing profile, a 50 basis points increase in Euribor or Libor would have resulted in additional interest
expense of approximately EUR 4.6 million on the Group’s variable rate debt when ignoring effect of derivative financial instruments.
EUR 3.9 million of the exposure is hedged through interest rate swap contracts. Therefore, the net exposure on statement of
comprehensive income would be EUR 0.7 million. A 50 basis points increase in Euribor or Libor would have resulted an increase in cash
flow hedge reserve in equity approximately by EUR 25.3 million and a 50 basis points decrease in Euribor or Libor would have resulted
an decrease in cash flow hedge reserve in equity approximately by EUR 26.5 million.
Fair values
Fair values versus carrying amounts:
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are
as follows:
Note
31 December 2010
Carrying
Fair
Amount
Value
31 December 2009
Carrying
Fair
Amount
Value
Financial assets
Trade receivables-non current
Trade receivables-current
Other receivables and current assets (*)
25
25
40
24
27
26
36
113,810,957
77,681,614
5,124,375
7,112,588
382,444,797
32,442,373
-
194,669,072
84,000,402
5,124,375
7,112,588
382,444,797
32,442,373
-
134,457,502
62,044,641
10,482,379
1,535,893
313,849,601
34,010,922
6,390,781
194,810,901
64,266,282
10,482,379
1,535,893
313,849,601
34,010,922
6,390,781
Bank overdraft
Trade payables (**)
Other payables (**)
26
30
35
40
36
32
(2,865,313)
(1,233,457,456)
(33,339,651)
(28,151,745)
(104,968,109)
(37,395,774)
(821,561,344)
(2,865,313)
(1,233,457,456)
(33,339,651)
(28,151,745)
(104,968,109)
(37,395,774)
(734,384,441)
(2,379,933)
(1,286,283,331)
(28,675,060)
(31,368,103)
(85,400,809)
(38,800,097)
(910,135,614)
(2,379,933)
(1,286,283,331)
(28,675,060)
(31,368,103)
(85,400,809)
(38,800,097)
(847,560,574)
(*) Non-financial instruments such as prepaid expenses, prepaid taxes and dues and advances given are excluded from other noncurrent assets and other receivables and current assets.
(**) Non-financial instruments such as advances received are excluded from trade payables and other payables.
The methods used in determining the fair values of financial instruments are discussed in Note 4.
TAV AT A GLANCE
ASSESSMENTS
246
Fair value hierarchy:
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as
follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices).
• Level 3: input for the asset or liability that are not based on observable market data (unobservable inputs).
31 December 2010
Interest rate swap
Cross currency swap
Level 1
-
Level 2
(99,485,643)
(5,482,466)
(104,968,109)
Level 3
-
31 December 2009
Interest rate swap
Cross currency swap
Level 1
-
Level 2
(85,400,809)
6,390,781
(79,010,028)
Level 3
-
39. COMMITMENTS, CONTINGENCIES AND CONTRACTUAL OBLIGATIONS
Commitments and contingencies
Letters of guarantee given to DHMİ
Letters of guarantee given to third parties
Letters of guarantee given to Macedonian Government
Letters of guarantee given to Tunisian Government
122,819,761
112,246,397
54,776,983
46,321,988
20,250,000
6,000,000
8,421,230
57,921,230
206,267,974
222,489,615
The Group is obliged to give 6% of the total rent amount of USD 152,580,000 of TAV İstanbul as a letter of guarantee according to the
rent agreement made with DHMİ. The total obligation has been provided by TAV İstanbul.
The Group is obliged to give a letter of guarantee at an amount equivalent of EUR 7,971,230 (2009: EUR 41,421,230) to the Ministry of
Transport and EUR 450,000 (2009: EUR 16,500,000) to OACA according to the BOT agreement signed with OACA in Tunisia. The total
obligation has been provided by the Group.
Majority of letters of guarantee given to third parties includes the guarantees given to customs and some customers.
Contractual obligations
TAV İstanbul
TAV İstanbul is bound by the terms of the Rent Agreement made with DHMİ. If TAV İstanbul does not follow the rules and regulations
set forth in the Rent Agreement, this might lead to the forced cessation of TAV İstanbul’s operation.
At the end of the contract period, TAV İstanbul will be responsible for one year for the maintenance and repair of the devices, system
and equipment supplied for the contractual facilities. In case the necessary maintenance and repairs are not made, DHMİ will have
this maintenance and repair made, and the cost will be charged to TAV İstanbul.
247
Pursuant to the provisions of this agreement, the contractual obligations of TAV İstanbul include the rental of the above mentioned
facilities for a period of fifteen and a half years beginning on 3 July 2005; the operation of the facilities in compliance with
international norms and standards within the rental (operation) period; the performance of periodic repair and maintenance activities
on the facilities and the transfer of the facilities in question including the supporting systems, equipment, furniture and fixtures in a
proper and usable condition to DHMİ upon the expiry of the rental period.
In the case where TAV İstanbul as the lessee performs a delayed and/or incomplete rent payment to DHMİ, TAV İstanbul is charged a
penalty of 10% of the rent amount to be paid. TAV İstanbul is then obliged to perform the payment latest within five days. Otherwise,
DHMİ shall be entitled to terminate the rent agreement. TAV İstanbul is not entitled to claim the rent payments performed to DHMİ
prior to the termination of the contract.
TAV Esenboğa and TAV İzmir
TAV Esenboğa and TAV İzmir are bound by the terms of the BOT Agreements made with DHMİ. If these companies do not follow the
rules and regulations set forth in the concession agreement, this might lead to the forced cessation of these companies’ operations
according to the BOT Agreements. According to the BOT agreements:
• The share capital of the companies cannot be less than 20% of fixed investment amount.
• The companies have a commitment to make additional investment up to 20% of the initial BOT investment upon request of DHMİ.
DHMİ has requested an extension of EUR 13,900,000 (13% of the initial investment) from TAV İzmir on 21 August 2006 which
extended the construction period by 2 months and 20 days, and operation period by 8 months and 27 days. TAV İzmir completed the
construction for such extension on 10 May 2007. After granting of temporary acceptance by DHMİ in year 2007, final acceptance was
granted by DHMİ at 21 March 2008.
Final acceptance for BOT investments of TAV Esenboğa was granted by DHMİ on 5 June 2008.
At the end of the contract period, the companies will be responsible for one year for the maintenance and repair of the devices,
system and equipment supplied for the contractual facilities. In case the necessary maintenance and repairs are not made, DHMİ will
have this maintenance and repair made and the cost will be charged to TAV İzmir and TAV Esenboğa.
All equipment used by TAV Esenboğa and TAV İzmir must be in a good condition and under warranty and need to meetthe
international standards and Turkish Standards as well.
If the need shall arise to replace fixed assets subject to depreciation, which become unusable within the rent period and the
depreciation rates of which are not delineated in the Tax Application Law, the operator is obliged to perform the replacement.
All fixed assets covered by the implementation contract will be transferred to DHMİ free of charge. Transferred items must be in
working conditions and should not be damaged. TAV Esenboğa and TAV İzmir have the responsibility of repair and maintenance of all
fixed assets under the investment period.
TAV AT A GLANCE
ASSESSMENTS
248
HAVAŞ and TGS
In accordance with the general ground handling agreement (an integral part of the ground handling operation A Group license) signed
with DHMİ, HAVAŞ and TGS undertake the liability of all losses incurred by their personnel to DHMİ or to third parties. They also take
the responsibility of the training facilities given to the personnel and the quality of the service provided by its personnel together
with the repair and maintenance of the ground handling vehicles and equipment. HAVAŞ and TGS are required to provide DHMİ with
letters of guarantee each amounting to USD 1,000,000. Fines received from losses incurred by the ground handling personnel or fines
arising from the violation of the related agreement will be charged to HAVAŞ and TGS. Fines which are overdue in accordance with the
appointed agreement / period declared by DHMİ will be settled by the liquidation of the letter of guarantee. If DHMİ liquidates the
collateral, HAVAŞ and TGS are obliged to complete the collateral at its original amount which is USD 1,000,000 within 15 days.
In accordance with the rental agreements signed with DHMİ regarding several parking areas, land, buildings, offices at the Atatürk,
Esenboğa, Adnan Menderes, Dalaman, Adana, Trabzon, Milas, Nevşehir, Antalya, Gaziantep, Kayseri, Urfa, Batman, Adıyaman, Elazığ,
Muş, Sivas, İzmir and Konya airports; when the rent period ends, DHMİ will have the right to retain the immovables in the area free of
charge.
TAV Tbilisi
TAV Tbilisi is bound by the terms of the BOT Agreement. In case TAV Tbilisi fails to comply with the rules and regulations set forth in
the agreement, it may be forced to cease its operations.
With regards to the BOT Agreement, TAV Tbilisi is required to;
• comply with all applicable safety standards and ensure that the airport and all other ancillary equipment are operated in a manner
safe to passengers, workers and general public, as well as to comply with the technical and operational requirements of Tbilisi
International Airport and environmental standards of Georgia;
• maintain and operate the new terminal and infrastructure at Tbilisi International Airport in accordance with the applicable
requirements of the BOT Agreement and IATA, ICAO or ECAC;
• ensure that its subcontractors and TAV Tbilisi itself obtain and maintain relevant insurance policies from financially strong and
internationally reputable insurance companies;
• remedy accidents that might occur upon mechanical damage inflicted by TAV Tbilisi to existing communication networks or
inappropriate use or operation thereof.
The commercial operation of the New Terminal is carried out based on the Provisional Acceptance Protocol concluded according to the
BOT Agreement for Tbilisi International Airport terminal building and related infrastructure. The Final Acceptance Protocol was not
concluded as of the date of approval for issue of the consolidated financial statements as at 31 December 2010, as the legal form of
transfer of the New Terminal was still under discussion among the parties to the BOT Agreement in order to be in compliance with the
Georgian legislation. The legal form of the final acceptance of the New Terminal may have various effects on the TAV Tbilisi’s financial
and/or tax positions.
249
Tax legislation and contingencies
Georgian commercial legislation and tax legislation in particular may give rise to varying interpretations and amendments. In addition,
as management’s interpretation of tax legislation may differ from that of the tax authorities, transactions may be challenged by the
tax authorities, and as a result TAV Tbilisi may be assessed additional taxes, penalties and interest. Tax periods remain open to review
by the tax authorities for six years. Management believe that their interpretation of the relevant legislation is appropriate and TAV
Tbilisi’s profit, currency and customs positions will be sustained.
On 4 June 2009, TAV Tbilisi received a Tax Request from Large Taxpayers Inspection of the Ministry of Finance of Georgia notifying
accrual of tax charges of GEL 5,479,370 (EUR 2,331,647) consisting of cancellation of recoverable VAT of GEL 5,091,451 (EUR 2,166,575)
and related fines of GEL 387,919 (EUR 165,072) reported in the interim report prepared by the Auditing Department of Ministry of
Finance of Georgia based on the tax audit of TAV Tbilisi. Upon the objection of the management to Ministry of Finance of Georgia, the
tax office made a reassessment and notified TAV Tbilisi that a tax liability and penalty of GEL 3,596,560 (EUR 1,530,451)as the VAT
amount of the reimbursement receivable of the company deducted. The amount was fully paid in 2009.
TAV Batumi
TAV Batumi is obliged to perform the terms agreed under the Agreement for Management of 100 percent of Shares in “Batumi
Airport LLC” (the “Agreement”) together with its Schedules annexed to the Agreement. In the event that TAV Batumi fails to fulfill its
material obligations under the Agreement and its Schedules, it may be forced to cease the management of the Batumi International
Airport and all operation rights generated at the Airport.
With regards to the Agreement, TAV Batumi is required to;
• comply with all requirements of the relevant statutes and the Applicable Laws of Georgia;
• prevent repatriation and transfer of the dividends distributable by Batumi Airport LLC from Georgia;
• comply with the terms of Permits that materially adversely affect the performance of TAV Batumi’s obligations under the
Agreement or achievement of the Revenues by Batumi Airport LLC and/or achievement of dividends by the TAV Batumi from
Batumi Airport LLC;
• protect, promote, develop and extend the business interests and reputation of Batumi Airport in connection with the Services
(reasonable effort basis);
• maintain and operate Batumi Airport in accordance with the international standards applicable to similar international airports, and
any other local standards that will be applicable to the operations of an international airport;
• recruit and train sufficient number of staff for the operation of Batumi Airport in accordance with standard, accepted operational
standards;
• perform regular, periodic and emergency maintenance and repair works of all the fixed assets, as well as the annexations and
accessories related thereto located on the territory of Batumi Airport; and
• procure and maintain insurance policies listed under the Agreement during the term of the operation.
TAV AT A GLANCE
ASSESSMENTS
250
TAV Tunisia
TAV Tunisia is bound by the terms of the Concession Agreements related to the building and operation of Enfidha Airport and to the
operation of Monastir Airport. In case TAV Tunisia fails to comply with the provisions of these Concession Agreements as well as the
Terms and Specifications annexed thereto, it may be forced to cease the operation of the said airports.
According to Enfidha Concession Agreement, TAV Tunisia is required to:
• design, construct, maintain, repair, renew, operate and improve at its own costs and risks and under its liabilities, the land made
available to it, infrastructures, buildings, facilities, equipments, networks and services necessary for the operation of Enfidha
Airport;
• complete the construction of the Airport and start operating it at the latest on 1 October 2009 which is then extended to 1
December 2009 through a notice from the Authority, unless the requirements by the Terms and Specifications of the Agreement
fails. The operation of the Airport was started in the specified date in 2009.
• finance up to 30% of the Project by Equity.
According to Monastir Concession Agreement, TAV Tunisia is required to maintain, repair, renew, operate and improve at its own
costs and risks and under its liabilities, the land made available to it, infrastructures, buildings, facilities, equipments, networks and
services necessary for the operation of Monastir Airport.
Pursuant to both Concession Agreements, TAV Tunisia is required to:
•
•
•
•
market and promote the activities operated in the Airports and perform the public service related with these activities;
provide with and maintain the bank guarantees in accordance with the Agreements;
pay the Concession Royalties to the Conceding Authorities (Tunisian State and OACA);
comply particularly with provisions of Appendix 2 to the Terms and Specifications annexed to the Agreements related to the
ownership of the shares by TAV Tunisia’s shareholders;
• require the approval of the Conceding Authority prior to the transfer of its rights under the Concession Agreements to any third
party or to the conclusion of any sub-contract during the operation phase of the Airports;
• comply with its obligations under the Agreements and with all applicable Tunisian Laws and International rules related particularly
but not limited to safety, security, technical, operational and environmental requirements;
• comply with its obligations related to insurance as provided for by the Agreements.
251
TAV Tunisia may also be obliged to cease the operation of the said airports if (i) it is declared insolvent or is subject to judicial
liquidation proceedings or (ii) it is forced to cease the operation of one of the Airports.
The Conceding Authority and TAV Tunisie shall, seven years prior to the expiry of the Concession Agreement, negotiate and agree
on a repair, maintenance and renewal program, with the assistance of specialists if applicable, which program includes the detailed
pricing of the works for the final five years of the concession which are necessary in order to ensure that the movable and immovable
concession property is transferred in good condition to the Conceding Authority, as well as the schedule of the tasks to be completed
prior to the transfer. In this context, TAV Tunisie anually performs repair and maintenance procedures for the operation of the
concession property according to the requirements set in the Concession Agreement.
TAV Gazipaşa
TAV Gazipaşa is bound by the terms of the Concession Agreement made with DHMİ for Antalya Gazipaşa Airport.
If TAV Gazipaşa violates the agreement and does not remedy the violation within the period granted by DHMİ, DHMİ may terminate
the Agreement.
The share transfers of the shareholders of TAV Gazipaşa are subject to the approval of DHMİ.
The Agreement is made for a period of twenty-five years effective from the date TAV Gazipaşa obtains the operation authorisation
from the Ministry of Transportation. The contractual obligations of TAV Gazipaşa include the operation of the facilities in compliance
with the international norms and standards subject to the supervision of the Ministry of Transportation Civil Aviation General
Directorate and DHMİ; obtaining maintenance and periodic maintenance and repairs of all systems and equipment requisite for
the operation and the transfer of the facilities together with the systems, equipment, furniture and fixtures in a proper and usable
condition to DHMİ, without any debt or liabilities, upon the expiry of the Agreement (if the economic lives of the systems, equipment,
furniture and fixtures have come to an end, they should be renewed before the transfer to DHMİ). Upon the expiry of the Agreement,
TAV Gazipaşa will be responsible for one year for the maintenance and repair of the systems and equipment in the facilities. In case
the necessary maintenance and repairs are not made, DHMİ will have this maintenance and repairs made and the cost will be charged
to TAV Gazipaşa.
TAV AT A GLANCE
ASSESSMENTS
252
If expropriation of land is required for construction of additional facilities or systems during the term of the Agreement, TAV Gazipaşa
will be responsible for the compensation for expropriation and will not demand any compensation and/or additional rent period from
DHMİ and the owner of the subject land will be DHMİ.
In the event that TAV Gazipaşa is delayed in paying the rent and/or the rent is not fully paid to DHMİ, TAV Gazipaşa will be charged a
monthly penalty in the amount of 10% of the outstanding amount. Facility usage amount represents the 50.000 USD fixed payment
that is paid as a usage amount of the airport facility, subsequent to rent period starting, within the last month of each rent payment
year.
Management believes that as at 31 December 2010, the Group has complied with the terms of the contingencies mentioned above.
TAV Macedonia
TAV Macedonia is bound by the terms of the Concession Agreement made with Macedonian Ministry of Transport and Communication
(“MOTC”).
If TAV Macedonia violates the agreement and does not remedy the violation within the period granted by MOTC, MOTC may terminate
the Agreement.
All equipment used by TAV Macedonia must need to meet the Concession Agreement’s standards.
All fixed assets covered by the implementation contract will be transferred to MOTC free of charge. Transferred items must be in
working conditions and should not be damaged. TAV Macedonia has the responsibility of repair and maintenance of all fixed assets
under the investment period.
253
Contingent asset
TAV İstanbul is able to expense VAT on rent payments upon the issuance of the related invoice and DHMİ issues the invoice monthly.
Cumulative VAT expense related with DHMİ invoices as at 31 December 2010 is EUR 77,046,084 (31 December 2009: EUR 54,779,378).
TAV İstanbul has opened a tax court case in February 2006 against the Ministry of Finance for the rent, which has been paid partially
and the remaining that will be paid to DHMİ, for not being subject to VAT. According to temporary VAT code number 12, TAV İstanbul
stated that airport privatisations are exempt from VAT. The resolution of the İstanbul First Tax Court has been declared to TAV
İstanbul on 9 April 2007. The resolution sets forth that the administrative transaction is not a tax error in the manner prescribed
in the Tax Procedures Law, and that no legal inappropriateness had been observed in the transaction that had been formed via the
rejection of the application made upon complaint. The decision does not assess whether there is an exemption from the VAT or not;
and it is judged that the application does involve a legal shortcoming; TAV İstanbul had submitted the case to the Court of Appeals.
With regard to the mentioned case, the Company had submitted a letter to the 4th Department of the Court of Appeals on 28 May
2007 and required a motion for stay. TAV İstanbul has brought a tax case against Ministry of Finance and Maltepe Tax Administration,
with the claim that the rent amounts paid to the State Airports Authority General Directorate are exempt from value added tax;
and the Tax Court dismissed the case on the grounds of incompetence. TAV İstanbul had applied against the dismissal decision of
the Tax Court. The award of the 4th Chamber of the Council of State (“Danistay”) had been declared to TAV İstanbul on 25 July 2007.
Accordingly, the Council of State approved the application of TAV İstanbul and decided to reverse the judgement of the Tax Court.
The case reverted to the Tax Court according to the Code of Administrative Procedures and the Tax Court rejected the case with the
decision notified to TAV İstanbul on 29 November 2007. An application for appeal has been made by TAV İstanbul. But according to the
last decision declared by 4th Chamber of the Danistay, the rejection decision of Tax Court was approved and TAV İstanbul appealed for
the correction of decision. Group management believes that this court will be finalised in Group’s favour.
Contingent liability
BTA and the Ministry of Finance were not able to reach an agreement upon a reconciliation requested for the corporate and value
added tax notified in the penalty report regarding the accounts of October 2007-December 2007. Ministry of Finance had determined
a value added tax of TRL 1,483,014, a corporate tax of TRL 222,523 and a tax loss penalty of 1.5 folds of the total tax amount in the
penalty report. The report stated that the food and beverage sales of BTA carried out at the customs zones of the airports (also
known as “airside”) must not be exempt from value added tax. In January 2010, BTA filed a lawsuit disputing the abovementioned
tax and penalty. The management, lawyers and tax auditors of BTA are in the opinion that the lawsuit will result in BTA’s favor, so no
provision is provided in the accompanying consolidated financial statements.
TAV AT A GLANCE
ASSESSMENTS
254
40. RELATED PARTIES
The major immediate parents and ultimate controlling parties of the Group are Tepe and Akfen Groups.
All other transactions not described in this footnote between the Company and its subsidiaries and joint ventures, which are related
parties of the Company, have been eliminated on consolidation. Details of balances between the Group and other related parties are
disclosed below.
Key management personnel compensation:
The remuneration of directors and other members of key management during the year comprised the following:
Short-term benefits (salaries, bonuses etc.)
2010
7,786,951
7,786,951
2009
6,040,670
6,040,670
As at 31 December 2010 and 2009, none of the Group’s directors and executive officers has outstanding personnel loans from the
Group.
The details of the transactions between the Group and any other related parties are disclosed below:
255
Other related party transactions:
Current loan to related parties
4,628,730
8,733,358
495,645
1,749,021
5,124,375
10,482,379
ATÜ
TAV G Otopark Yapım Yatırım ve İşletme A.Ş.
TAV Tepe Akfen Yat. İnş ve İşl. A.Ş. (“TAV İnşaat”)
Tepe Savunma ve Güvenlik Sistemleri A.Ş.
Other related parties
1,603,588
1,631,069
1,139,341
1,111,065
6,581,484
484,746
26,803
289,990
494,002
4,628,730
8,733,358
Loan to related parties
CAS
TAV Gözen
487,088
425,195
433,105
8,557
890,721
495,645
1,749,021
Current loan from related parties
Non-current loan from related parties
IBS Brokerlik ve Sigorta Hizmetleri A.Ş. (IBS Sigorta) (*)
TAV İnşaat
(*) IBS Sigorta provides insurance intermediatory services to the Group.
6,059,656
5,638,584
7,961,525
6,647,134
14,021,181
12,285,718
14,130,564
14,130,564
19,082,385
19,082,385
5,480,173
4,448,649
1,134,906
579,483
55,029
6,059,656
5,638,584
TAV AT A GLANCE
ASSESSMENTS
256
Current loan from related parties
TGS (*)
ATÜ
5,120,686
5,120,205
1,242,469
692,838
1,598,370
834,091
7,961,525
6,647,134
Non-current loan from related parties
ATÜ
TGS (*)
9,006,363
9,592,962
5,124,201
9,489,423
14,130,564
19,082,385
(*) Loan from TGS is related with HAVAŞ’s share of unpaid portion of the capital increase of TGS.
Services rendered to related parties
ATÜ (*)
2010
75,328,545
4,540,943
79,869,488
2009
64,738,336
5,756,444
70,494,780
(*) Services rendered to ATÜ comprise non-eliminated portion of concession fee duty-free per proportionate consolidation.
Services rendered by related parties
IBS Sigorta (*)
Tepe Servis ve Yönetim Hizmetleri A.Ş.
TAV Havacılık
TAV İnşaat
2010
7,849,041
609,758
516,136
448,327
436,363
9,859,625
2009
6,643,264
27,915
165,351
15,250
661,965
7,513,745
2010
(1,488,049)
(657,496)
(150,324)
22,199
(2,273,670)
2009
(967,652)
(692,800)
(1,199,831)
158,268
(2,702,015)
(*) IBS Sigorta provides insurance intermediatory services to the Group.
Interest (expense) / income from related parties (net)
TGS
ATÜ
TAV İnşaat
The average interest rate used within the Group is 3.81% per annum (31 December 2009: 3.82%). The Group converts related party
TRL loan receivable and payable balances to USD at month end using the Central Bank’s announced exchange rates and then charges
interest on the USD balances.
Construction work rendered by related parties
TAV İnşaat
2010
59,201,400
59,201,400
2009
224,497,490
224,497,490
(*) TAV İnşaat manly provided services relating to the construction of Skopje, Ohrid, and renovation of Gazipaşa, İstanbul Atatürk
Airports in 2010.
257
41. JOINT VENTURES
The Group has the following significant interests in joint ventures:
• 49.98% equity shareholding with 50% voting power in ATÜ, a jointly controlled entity established in Turkey. Summary of financial
information of ATÜ and its subsidiaries, not adjusted for the percentage ownership held by the Group is as follows:
Statement of Financial Position
Current assets
Non-current assets
Current liabilities
Statement of Comprehensive Income
Total revenues
Total expenses
42,713,446
34,465,038
64,682,272
61,609,187
(33,372,318)
(27,879,283)
(45,315,704)
(41,841,781)
2010
340,167,492
(319,368,809)
20,798,683
2009
292,185,590
(274,308,725)
17,876,865
• 50.00% equity shareholding with 50% voting power, in CAS, a joint venture established in KKTC. Summary of financial information
of CAS, not adjusted for the percentage ownership held by the Group is as follows:
Current assets
Non-current assets
Current liabilities
Total revenues
Total expenses
Loss for the period
760,987
690,833
674,211
678,530
(3,491,808)
(2,281,034)
2010
3,199,746
(4,268,521)
(1,068,775)
2009
4,224,901
(5,823,216)
(1,598,315)
• 32.40% equity shareholding with 32.40% voting power, in TAV Gözen, a joint venture established in Turkey. Summary of financial
information of TAV Gözen, not adjusted for the percentage ownership held by the Group is as follows:
Current assets
Non-current assets
Current liabilities
Total revenues
Total expenses
Profit / (loss) for the period
259,138
251,348
893,197
2,479,082
(27,216)
(2,020,030)
2010
1,370,675
(1,014,870)
355,805
2009
602,831
(1,268,287)
(665,456)
TAV AT A GLANCE
ASSESSMENTS
258
• 50.00% equity shareholding with 50.00% voting power, in TGS, a joint venture established in Turkey. HAVAŞ acquired 50% of
shares of TGS in 2009. Summary of financial information of TGS, not adjusted for the percentage ownership held by the Group is as
follows:
Current assets
Non-current assets
Current liabilities
Total revenues
Total expenses
(Loss) / profit for the period
46,524,398
35,423,947
47,707,553
2,417,653
(38,172,947)
(7,352,202)
(947,188)
-
2010
79,575,316
(86,583,575)
(7,008,259)
2009
1,689,098
(785,769)
903,329
• 50.00% equity shareholding with 50.00% voting power in NHS, a joint venture established in Latvia. HAVAŞ acquired 50% of
shares of NHS in 2010. Summary of financial information of NHS, not adjusted for the percentage ownership held by the Group is as
follows:
Current assets
Non-current assets
Current liabilities
Total revenues
Total expenses
Loss for the period
42. SUBSEQUENT EVENTS
None
1,264,056
5,981,050
(4,300,495)
(2,543,048)
-
2010
5,666,644
(6,265,338)
(598,694)
2009
-
259
GLOSSARY
ACI
Airports Council International
APRON
Apron is a designated area at an airport where aircraft
are parked, refueled, loaded, unloaded, boarded and
maintenance is performed.
ISOLATED AREAS
Isolated lounges are zones at airports that are open to
international flights, where passengers are taken before
making entry and exit and after declaration and control
process in terms of the customs regulations, as well as
lounges where passengers, who come from abroad without
entering into customs and will go to another airport of the
same country or to another country, are taken and isolated.
Baggage Handling System (BHS)
A conveyor belt system that transports checked baggage
to areas where the bags are loaded onto airplanes.
CHARTER TERMINAL
Terminal building reserved for passengers who travel with
flights other than the scheduled or regular flights.
CHECK-IN
Check-in is the process where ticket and baggage
transactions and passenger control are conducted at
airport terminals by airline or ground handling company
representatives.
CHECK-IN COUNTER
Equipped tables at terminals used for passenger check-in
procedures.
CHECK-IN LOUNGES
Sections at terminals hosting groups of check-in counters.
GUARANTEED PASSENGER INCOME
Guaranteed passenger income is the passenger revenue
guaranteed by the related entity, based on the expected
number of passengers per year, pursuant to the concession
contract signed with the authorized entity. It can vary
based on the contract as well as the period covered by the
contract.
DUTY-PAID LOUNGE
Isolated lounges at airports that are open to international
flights, where passengers are taken before making entry
and exit and after declaration and control process in terms
of the customs regulations.
CUSTOMS ENFORCEMENT
The organization that inspects or confiscates the baggage
or other freight, cargo or postal belongings of passengers
at airports that are open to international flights, which
are used with respect to customs regulations , or used to
enforce customs regulations provisions in the process of
sending or receiving all kinds of commodities and materials
that will go-come abroad.
HANGAR
Mostly large structures at airports to shelter or conduct
maintenance and repair activities of aircraft
AVIATION INCOME
Income earned from services rendered to passengers and
aircraft at the airports.
NON-AVIATION INCOME
Income derived from activities other than services rendered
to passengers and aircraft at the airports, such as duty
free.
CIP PASSENGER
Commercially important person
HAVAŞ
Havaalanları Yer Hizmetleri A.Ş. , (Ground Handling
Services Co.), the company that performs ground handling
services at the airports.
DUTY FREE SHOP
Shops at airports where passenger can make purchases
without paying customs tax.
AIRPORT
A large area, on land or water, with buildings, facilities and
equipment where aircraft can take off, land and taxi.
CARRY-ON BAGGAGE HANDCARTS
Portable, mechanical transporters used at airports to carry
passenger properties.
EBITDA
Acronym for “Earnings before Interest, Taxes, Depreciation
and Amortization”.
EBITDAR
Acronym for “Earnings before Interest, Taxes, Depreciation,
Amortization and Rent”.
EARNING PER SHARE (EPS)
An indicator calculated by dividing a company’s net (aftertax) profit by its number of outstanding shares.
HUB
Main Center
ICAA
International Civil Airports Association
ICAN
International Commission for Air Navigation
TAV AT A GLANCE
ASSESSMENTS
260
GLOSSARY
ICAO
International Civil Aviation Organization
INORGANIC GROWTH
Inorganic growth is revenue growth achieved by a company
by acquiring another firm and consolidating the production
and revenue of the acquired firm.
SUBSIDIARY
A direct or indirect capital and management relationship
that creates a permanent tie between a partnership and a
company in terms of participation in the management of
the partnership and the formulation of the partnership’s
policies.
COMPOSITE COVER
A mixture of concrete and asphalt used for covering
runways.
CONVEYOR
A mechanical apparatus with a moving belt that carries the
passengers’ baggage from check-in counter to the aircraft
and back to the baggage-claim area.
LIQUIDITY
Liquidity is the degree of speed and ease to which an asset
can be exchanged for cash.
ORGANIC GROWTH
Organic growth is the growth achieved via a company’s
own activities. It expresses production increase, as well as
the increase in revenue attained by selling this output.
OVERFLIGHT
An aircraft flight passing over a foreign territory without
landing.
PROJECT FINANCE
Project finance is a method of securing the financing
needed for long-term infrastructure and industrial
investments at the maximum possible level and with
the minimum possible impact on the company’s balance
sheets. Posting the project’s income stream or the asset
itself as collateral may be needed as a condition of
financing.
PEAK DAY, PEAK HOUR
Maximum number of passengers, aircraft, cargo, etc. at
an airport during one day or one hour within a given period
(generally a calendar year).
RUNWAY
Designated rectangular areas on which aircraft take off
and land.
RAMP
Ramp is the area at the airports where aircraft are parked
and attended to.
TAXI
The movements of an aircraft on the ground.
TAXIWAY
Standard-sized paths at airports along which the aircrafts
taxi to or from a runway, apron, etc.
SCHEDULED FLIGHT
Scheduled flight is the flight service with a pre-determined
departure-arrival time and route.
CHARTER FLIGHT
Charter flight is a non-scheduled flight service offered
in certain periods, mostly in summer months, where
departure time is determined based on airport traffic and
passenger demand.
TRANSIT PASSENGER
Transit passengers are those who continue their travel
in the same aircraft or with the same flight number
shortly after arriving at an airport on an airplane. These
passengers are not allowed to take advantage of duty free,
catering and accommodation services at the airport.
TRANSFER PASSENGER
Transfer passengers are those who continue their travel
with a different aircraft or in the same aircraft but with a
different flight number shortly after arriving at an airport
on an airplane. These passengers are allowed to take
advantage of duty free, catering and accommodation
services at the airport.
VIP
A very important person. VIPs are mostly the top managers
of public organizations listed by the Prime Ministry.
VIP LOUNGE
Places reserved at airports for VIP Passengers.
BUILD-OPERATE-TRANSFER
This is the process where a private company provides the
financing for a public infrastructure investment or service,
undertakes the project, operates it for a period determined
by the public authorities and transfers the facility at the
end of the designated period to the related public authority
in an intact, operating and well-maintained condition.
PASSENGER
All individuals traveling on the aircraft that are not part
of the flight personnel or cabin crew are referred to as
passengers.
TAV AIRPORTS HOLDING
International Terminal (Gate A – Next to VIP)
34149 Yeşilköy, Istanbul, Turkey
Tel: +90 212 463 30 00 Fax: +90 212 465 50 50
www.tavairports.com
http://ir.tav.aero

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