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In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, use excess cash to repay its borrowings (subject to the termination
provisions of the respective loan agreements) or sell assets not pledged as security, to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “Current and non-
current borrowings” as shown in the balance sheet but excluding any subordinated loan) less cash and cash equivalents.
Total capital is calculated as ‘equity’ as shown in the balance sheet plus net debt.
The gearing ratios at 31December 2010 and 2009 were as follows:
Gearing ratio 2010 2009
Total borrowings 729,043,391 777,365,636
Less: Cash & cash equivalent (220,476,040) (243,911,992)
Net debt 508,567,351 533,453,644
Total capital – (equity plus net debt) 945,190,901 1,041,527,188
Gearing ratio
54% 51%
4 Critical accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will by
definition, seldom equal the related actual results. The accounting estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are
disclosed below:
a) Taxes
The internal control procedures for the related tax risks are part of Company’s control system. The general tax risk for the
Company concerns the timely submission of complete tax returns, the payment of the tax amounts concerned as well as
compliance with all tax laws and regulations and reporting rules specifically relating to corporate income tax.
The Company is subject to income tax, VAT and other taxes in Greece. Significant judgement is sometimes required
in determining the Company’s tax position for such taxes in certain instances due to the particular tax regime, under
the Airport Development Agreement, applicable to the Company’s operations, which is subject to challenge by the tax
authorities on the grounds of ambiguity or different interpretation with tax laws. The Company recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will arise or tax losses reduced. Where that
final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact
the current tax, deferred tax and other tax assets and liabilities in the period during which such determination is made.
b) Provision for restoration cost
Provision for restoration cost includes future expenses for the major overhauls of roads, runways, taxiways and
replacement of airfield lighting and baggage handling equipment. Significant estimates are required to determine
the level of provision such as the timing of the expenditure, the extension of the works and the amount that it
will be expensed in the future. The nominal value of the provision for restoration cost is annually determined by a
qualified department within the Company based on international experience and the specific conditions relating to
the operations of the airport. The amount of the provision is discounted at balance sheet date by using the risk free
rate for similar time duration.
Financial Statements as at 31 December 2010 (Amounts in Euros unless otherwise stated) Page 30 of 51
return capital to shareholders, issue new shares, use excess cash to repay its borrowings (subject to the termination
provisions of the respective loan agreements) or sell assets not pledged as security, to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “Current and non-
current borrowings” as shown in the balance sheet but excluding any subordinated loan) less cash and cash equivalents.
Total capital is calculated as ‘equity’ as shown in the balance sheet plus net debt.
The gearing ratios at 31December 2010 and 2009 were as follows:
Gearing ratio 2010 2009
Total borrowings 729,043,391 777,365,636
Less: Cash & cash equivalent (220,476,040) (243,911,992)
Net debt 508,567,351 533,453,644
Total capital – (equity plus net debt) 945,190,901 1,041,527,188
Gearing ratio
54% 51%
4 Critical accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will by
definition, seldom equal the related actual results. The accounting estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are
disclosed below:
a) Taxes
The internal control procedures for the related tax risks are part of Company’s control system. The general tax risk for the
Company concerns the timely submission of complete tax returns, the payment of the tax amounts concerned as well as
compliance with all tax laws and regulations and reporting rules specifically relating to corporate income tax.
The Company is subject to income tax, VAT and other taxes in Greece. Significant judgement is sometimes required
in determining the Company’s tax position for such taxes in certain instances due to the particular tax regime, under
the Airport Development Agreement, applicable to the Company’s operations, which is subject to challenge by the tax
authorities on the grounds of ambiguity or different interpretation with tax laws. The Company recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will arise or tax losses reduced. Where that
final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact
the current tax, deferred tax and other tax assets and liabilities in the period during which such determination is made.
b) Provision for restoration cost
Provision for restoration cost includes future expenses for the major overhauls of roads, runways, taxiways and
replacement of airfield lighting and baggage handling equipment. Significant estimates are required to determine
the level of provision such as the timing of the expenditure, the extension of the works and the amount that it
will be expensed in the future. The nominal value of the provision for restoration cost is annually determined by a
qualified department within the Company based on international experience and the specific conditions relating to
the operations of the airport. The amount of the provision is discounted at balance sheet date by using the risk free
rate for similar time duration.
Financial Statements as at 31 December 2010 (Amounts in Euros unless otherwise stated) Page 30 of 51
