TAV IT

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146 TAV Airports Holding Annual Report 2008 TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008 (Amounts expressed in Euro unless otherwise stated) 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 The fair value of property and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of equipment, fixtures and fittings is based on the quoted market prices for similar items. 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 were computed according to the cost approach method. 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 and TAV Tunisie are 0%, 0%, 15% and 5%, respectively. iii) Investments in equity securities The fair value of financial assets at fair value through profit or loss and available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date. iv) 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. v) Derivatives The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market 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.
TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008 (Amounts expressed in Euro unless otherwise stated) vi) 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 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. 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 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. The Internal Audit Director has a dual reporting line to the CEO and Board of Directors. Functionally, the Internal Audit Director reports to Board of Directors via Internal Audit Committee, and hierarchically reports to the CEO. 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, trade and other receivables, and investments. Credit risk on liquid funds is limited because the counterparties are banks with high credit ratings.
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annual report 2008
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Bringing people together...
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Batumi Tbilisi İstanbul GEORGIA An
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TAV Value Chain Value Creation: As
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Decisive strides on the way from lo
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Organizational Structure Board of D
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2006 >> Operation and construction
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After undertaking successful projec
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İlhan İl, Board Member, TAV Airpo
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senıor management Mustafa Sani Şe
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Ersagun Yücel, General Secretary,
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commıttees Müjdat Yücel, General
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key operatıonal ındıcators Passe
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€ 627,349 2008 € 507,529 2007
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40,948,987* 2008 34,646,216 2007 Ca
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368,810 2008 355,007 2007 TAV Airpo
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primarily from aviation income from
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(EUR million) 2008 2007 Net cash ge
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36 TAV Airports Holding Annual Repo
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Esenboğa is the first airport in T
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TAV Airports Holding is seeking to
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At the Tbilisi International Airpor
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Meeting the customers’ needs with
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All operations, except for air traf
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Currently under construction, and p
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Operating the airport of the capita
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Macedonia, Shtip Cargo Airport Mace
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TAV O&M serves passengers with many
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TAV Security staff consists of expe
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TAV IT at Passenger Terminal Expo 2
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