prishtina international airport adem jashari … · mr. bahri nuredini mr. valon grabovci ......

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI"

Independent Auditors' Report and

Financial Statements for the year ended December 31, 2011

CONTENTS

INDEPENDENT AUDITORS' REPORT

STATEMENT OF FINANCIAL POSITION

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors of Prishtina International Airport "Adem Jashari" J.S.C.

We have audited the accompanying financial statements of Kosovo Prishtina InternationalAirport J.S.0 (the "Company"), which comprise the statement of financial position as atDecember 31, 2011 and statement of comprehensive income, statement of changes inequity and statement of cash flows for the year then ended, and a summary of significantaccounting policies and other explanatory notes.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financialstatements in accordance with International Financial Reporting Standards. Thisresponsibility includes: designing, implementing and maintaining internal controlrelevant to the preparation and fair presentation of financial statements that are freefrom material misstatement, whether due to fraud or error; selecting and applyingappropriate accounting policies; and making accounting estimates that are reasonable inthe circumstances.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. Except for the matters discussed in paragraphs below, we conducted our audit inaccordance with International Standards on Auditing. Those standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

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Basis for Qualified Opinion

As it is disclosed in note 5 to the accompanying financial statements, at 31 December2011, the net carrying Value of Company's property, plant and equipment amounts to Euro4,083 thousands. According to the accepted accounting policy disclosed further in notesto these financial statements, items of property, plant and equipment existing on 1January 2005 the date of Company's incorporation and opening balance sheet date, wererecognized in the Company's accounts at their revalued amounts determined byindependent external valuers. The accepted revaluation model requires revaluations to bemade with sufficient regularity to ensure that the carrying amounts of revalued assets donot differ materially from that which would be determined using fair value at the end ofthe reporting period. Owing to the nature of the Company's records, we were not able tosatisfy ourselves with the management assessments of the fair values of Company'sproperty, plant and equipment as of 31 December 2011.

In addition, the accepted accounting policy regarding the impairment of non financialassets disclosed further in note 2.7 requires at each balance sheet date items of property,plant and equipment to be reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be recoverable, Wewere not provided with any evidence that such impairment test has been performed as ofthe balance sheet date.

Due to the matters disclosed above, we were not able to obtain reasonable assurance forthe carrying amount of Company's property, plant and equipment as of 31 December2011.

Qualified Opinion

II

In our opinion, except for the effects of such adjustments, if any, as might have beendetermined to be necessary had we been able to satisfy ourselves' as to the mattersreferred to in paragraph above, the accompanying financial statements present fairly, inall material respects, the financial position of the Company as at 31 December 2011, andof its financial performance and its cash flows for the year then ended in accordance withInternational Financial Reporting Standards.

BOO Kosova L.L.C.Prishtina, Kosova

II April 20, 2012

Chief Executive Officer

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Chief FinanctafOfficer

1PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Statement of financial position as at December 31, 2011

I!

Notes

As atDecember31, 2011

(in EUR 000)


(in EUR 000)ASSETSNon-current assetsProperty, plant and equipment 5 4,083 39,626Intangible assets 6 26 173

4,109 39,799

Current assets,Inventories1 7 69 948Trade and other receivables 8 4,153 3,986Cash on hand and at banks4 9 6,015 11,319

16,25310,237

TOTAL ASSETS 14,346 56,052

EQUITY AND LIABILITIESShareholders' equityShare capital 10 12,657 18,000Share premium 10 179 13,706

Accumulated profits 396 22,04613,232 _ 53,752

Non-current liabilitiesDeferred tax liabilities 16 219 161

219 161Current LiabilitiesTrade and other payables 11 895 2,139

895 2,139Total liabilities 1,114 2,300

TOTAL EQUITY AND LIABILITIES 14,346 56,052

Authorized for issue by the management and signed on its behalf on April 20, 2012.

Mr. Bahri Nuredini Mr. Valon Grabovci

The accompanying notes from 1 to 20 form an integral part of these financial st einents.

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PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Statement of comprehensive income for the year ended December 31, 2011

Year endedDecember 31,

Notes 2011(in EUR 000)


2010(in EUR 000)

Sales revenues 12 8,005 24,221Other operating income 13 717 3,453

8,722 27,674

Operating costs 14 (8,400) 121263)Operating profit 322 6,411

Financial income 15 236 390Financial costs 15 (5) (13)Profit before taxation 553 6,788

Taxation 16 (157) (610)Net profit for the year 396 6,178

Other comprehensive income

Total comprehensive income 396 6,178

The accompanying notes from 1 to 20 form an integral part of these financial statements.

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PRISHTINA INTERNATfONAL AIRPORT "ADEM JASHARI" J.S.C.Statement of changes in equity for the year ended December 31, 2011

_

Share capitalShare Retained Total

premium earnings(in EUR 000) (in EUR 000) (in EUR 000)(in EUR 000)

Balance as at January 1, 2010 18,000 13,706 20,709 52,415Dividends paid to shareholders (5,000) (5,000)Profit for the year 6,178 6,178

Other comprehensive income (r4 11) , 159 159

Balance as at December 31, 2010 _18,000 13,706 22,046 53,752

Balance as at January 1, 2011 18,000 13,706 22,046 53,752

Dividends paid to shareholders (5,000) (5,000)Effects on transfer of assets toLimak (5,343) (13,527) 117,046) (35,916)Profit for the year 396 396

Other comprehensive income

Balance as at December 31, 2011 12,657 179 396 13,232

I The accompanying notes from 1 to 20 form an integral. part of these financial statements.

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Statement of cash flows for the year ended December 31, 2011

Notes


2011

(in EUR 000)


2010

(in EUR 000)

Cash flows from operating activitiesNet profit before taxation 553 6,788

Adjustments for non-cash items:Depreciation and amortization 5-6 1,688 4,220

Provision for doubtful debts 225

Gains recognized in equity 159

Reconciliation of property plant and equipment 128

Deferred tax expense 16 58 56Operating gain before changes in operatingassets and liabilities 2,299 11,576

Changes in inventories 445 (482)

Changes in trade and other receivables (167) 721

Changes e in trade and other payables (1,243) (400)

Cash generated in operating activities 1,334 11,415

Income taxes paid (65) (610)

Net cash generated in operations 1,269 10,805

Cash flows from investing activitiesPurchase of property, plant and equipment 5 (1,573) (3,357)

Cash used in investing activities (1,573) (3,357)

Cash flows from financing activities:Dividends paid (5,000) (5,000)

Cash used in financing activities (5,000) (5,000)

Net increase in cash and cash equivalents (5,304) 2,448Cash and cash equivalents at the beginning of theyear 11,319 8,871Cash and cash equivalents at the end of theyear 9 6,015 11,319

The accompanying notes from 1 to 20 form an integ al part of these financial statements

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PRISHT1NA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011

1. GENERAL

Prishtina Airport (Public Enterprise) was transformed into a joint Stock Company (J.S.C.) underUnited Nations Interim Administration Mission in Kosovo IUNMIK") regulation No. 2001/6 andits name was changed to Prishtina International Airport I holding J.S.C. (further referred as to"Holding"! on 23 June 2005 and with effect from 01 January 2005. A wholly owned subsidiary,Prishtina International Airport J.S.C. (the "Subsidiary") was established on the same date.

On 13 June 2008, the Assembly of the Republic of Kosovo adopted the Law on Publicly OwnedEnterprises (Law No.031L-087), and based on provision of section 3 of this Law, centralpublicly owned enterprises, including PIA Moldings J.S.C., are owned by the Republic ofKosovo. Government of the Republic of Kosovo, through the Ministry of Economy and Finance,has the exclusive authority to exercise the shareholder's rights over the publicly ownedenterprises.

The charter capital of the biding Company amounts to Euro 18 million divided into 18 millionordinary shares with face value of Euro 1 which was issued to Kosovo Trust Agency (KTA). astrustee for UNMIK in accordance with UNMIK regulation No 2002/12 as amended by UNMIKregulation No 2005/18 on the establishment of KTA.

The initial charter capital of the Subsidiary amounts to Euro 25 thousand and is fullycontributed in kind by the Holding Company through a resolution dated 28 June 2005. On thesame date the capital was increased to Euro 18 million in exchange for the transfer of thetrade, contracts, all assets and liabilities effective from 01 January 2003 through thedeclaration of subscription and agreement for Prishtina International Airport J.S.C. and theexecution of a deed of transfer of real property dated 30 June 2005-

On 30 September 2009, the 'Ministry of Economy decided all Holding Enterprises to betransformed in Public Company J.S.C. and further the Holding Companies to terminate. TheCompany changed its business registration file regarding to the ownership at 23 December2009.

As at 01 January 2005 the cur rent assets were valued at fair value and non-current assets atdepreciated cost less impairment to form the opening net assets of the Group (the HoldingCompany and the Subsidiary).

Since November 1999 UNMIK has overall financial and strategic management of PrishtinaAirport. With the establishment of the KTA in the mid of 2002, it took over responsibility forthe administration of the airport. All operation on the airfield arid airspace had been run byKFOR (Kosovo Force, a NATO - led international force responsible for establishing andmaintaining security in Kosovo).

A handover to civil UNMIK authority occurred on 01 April 2004. In addition, at that time it wasdetermined that KFOR should be charged for landing and handling military flights. Theseservices were not chargeable previously.

In accordance with the agreement between UNMIK and Government of the Republic of Icelandacting through Civil Aviation Administration (ICAA), signed on 01 April 2004 the latter isresponsible to ensure, in cooperation with Civil Aviation Regulatory Office for Kosovo CCARO")established by UNMIK, that Prishtina International Airport J.S.C. is in compliance with relevantIC AO (International Civil Aviation Organization) standards and recommended practices.

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011

1. GENERAL (CONTINUED)

On 12 August 2010, based on the Law no. 03/L-090 on Public Private Partnerships andconcessions in infrastructure and the procedures for their award, the shareholder of theCompany - Republic of Kosovo has signed an Agreement with consortium Limak Aerport deLyon to donation a concession for operating Prishtina International Airport for a period of 20years. According to the concession agreement, 'Limak Holding ' and "Aerport de Lyon' arerequired to modernize and expand the Company, investing over Euro 100 million in newinfrastructure, including construction of new terminal building. The consortium have to pay tothe Republic of Kosovo 39,42' /n from annual gross revenues of the Company for the next 20years, as a yearly concession fee.

On August 16, 2010 the International Airport was renamed in Prishtina International Airport"Adem Jashari".

On April 2011 net fixed assets of Euro 35,575 thousand, inventories of 432 thousand and 609employees were transferred to consortium Limak Aerport de Lyon.

At the date of this report the Company has 159 employees.

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2 ACCOUNTING POLICIES

Following are the principal accounting policies adopted in the preparation of these financialstatements:

2.1 Basis of preparationThese financial statements are prepared in accordance with the International FinancialReporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).The financial statements have been prepared using the measurement bases specified by IFRSfor each type of asset, liability, income and expense. The measurement bases are more fullydescribed in the accounting policies below.

These financial statements have been prepared on the assumption that the Company willcontinue as a going concern. The Company's operations are largely dependent andsupported by various grant funds. Management considers that sufficient outside funds willbe also available in the foreseeable future so as to enable the Company to pay its debts asthey fall due. These financial statements do not reflect any adjustments, which might berequired to be made on the carrying amounts of the Company's assets and liabilities if goingconcern assumption is no longer valid.The preparation of financial statements in conformity with IFRS requires the use of certaincritical accounting estimates. It also requires management to exercise its judgment in theprocess of applying the Company's accounting policies. The areas involving a higher degree ofjudgment or complexity, or areas where assumptions and estimates are significant to thefinancial statements are disclosed in Note 4: Critical accounting estimates and judgments.

These financial statements are prepared as of and for the years ended 31 December 2011and 2010. Current and comparative data are expressed in Euro thousands (000 EUR) unlessotherwise stated.

2.2. Corresponding figures

Comparative figures are not comparable due to the effect of the agreement Public PrivatePartnerships and concessions in infrastructure.

2.3 Changes in accounting policies and disclosures2.3.1 New and amended standards and interpretation of existing standards adopted

by the Company

During the current year, the Company has adopted the following new interpretations,revisions and amendments issued by the International Accounting Standards Board that arerelevant for its business activities and that become effective for the annual reportingperiods as of 01 January 2011

• IFRS 7 'Financial instruments - Disclosures' (amendment) - effective 1 January2010. The amendment requires enhanced disclosures about fair value measurementand liquidity risk. In particular, the amendment requires disclosure of fair valuemeasurements of assets and liabilities recorded at their fair value in the Statementof financial position, according to levels of fair value measurement hierarchy. Asthe change in accounting policy only results in additional disclosures, there is noimpact on earnings per share.

• IFRS 8 'Operating segments' - effective 1 January 2010. This standard introducesthe "managerial approach" in segment reporting, pursuant to this, segmentinformation is disclosed on the same basis as the basis used for reporting purposes.The application of IFRS 8 does not have any material effect on the publishedCompany's Statement of comprehensive income or the Statement of changes inequity.

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2 ACCOUNTING POLICIES (CONTINUED)

2.3.1 New and amended standards and interpretation of existing standards adoptedby the Company (Continued

IAS 1 (revised) 'Presentation of financial statements' - effective 1 January 2010.The revised standard prohibits the presentation of items of income and expenses(that is, 'non-owner changes in equity') in the statement of changes in equity,requiring 'non-owner changes in equity' to be presented separately from ownerchanges in equity in a statement of comprehensive income. All non-owner changesin equity will be required to be shown in a performance statement, but entities canchoose whether to present one performance statement (the statement ofcomprehensive income) or two statements (the income statement and statementof comprehensive income). Comparative information has been re-presented so thatit also is in conformity with the revised standard. As the change in accounting policyonly impacts presentation aspects, there is no impact on earnings per share.

IFRS 2 (amendment), 'Share-based payment' (effective 1 January 2010). TheIASB has issued an amendment to IFRS 2 regarding vesting conditions andcancellations. Management does not consider the amendments to have an impact onthe Companys accounting policies since the Company does not operate any share -based payment schemes.

IAS 23 'Borrowing Costs' (Revised) - effective 1 January 2010. The principalchange to the Standard was to eliminate the option to expense all borrowing costswhen incurred and requires that the entity capitalize its borrowing cost as expensesreferring to procurement, creation or production of the appropriate asset, as part ofthe asset's costs. This change has had no impact on the Company's financialstatements for the year 2011.

•• IFRIC 13, 'Customer loyalty programs'. IFRIC 13 clarifies that where goods orservices are sold together with a customer loyalty incentive (for example, loyaltypoints or free products), the arrangement is a multiple-element arrangement andthe consideration receivable from the customer is allocated between thecomponents of the arrangement in using fair values. IFRIC 13 is not relevant to theCompany's operations because the Company does not operate any loyalty programs.

2.3.2 Standards amendments and interpretations to existing standards that are notyet effective and have not been early adopted by the Company

At the date of authorization of these financial statements, certain new standards,amendments and interpretations to existing standards have been published but are riot yeteffective, and have not been adopted early by the company.

• Amendments to IAS 24 —Related Party Disclosures Simplifying the disclosurerequirements for government-related entities and clarifying the definition of arelated party (effective for annual periods beginning on or after 1 January 2011).

• Amendments to IAS 32 —Financial Instruments: Presentation - Accounting forrights issues (effective for annual periods beginning on or after 1 February 2011).

• Amendments to IFRIC 14 —IAS 19 — The Limit on a defined benefit Asset,Minimum Funding Requirements and their Interaction - Prepayments of aMinimum Funding Requirement (effective for annual periods beginning on or after1 January 2011).

10



2.3.2 Standards amendments and interpretations to existing standards that are notyet effective and have not been early adopted by the Company (Continued)

• IFRS 9 'Financial Instruments' (effective from 1 January 2013). The IASB aims toreplace IAS 39 Financial Instruments: Recognition and Measurement in its entiretyby the end of 2011, with the replacement standard to be effective for annualperiods beginning 1 January 2013.IFRS 9 is the first part of Phase 1 of this project.Management has yet to assess the impact that this amendment is likely to have onthe financial statements of the Company. However, they do not expect toimplement the amendments until all chapters of the IAS 39 replacement have beenpublished and they can comprehensively assess the impact of all changes.

• Classification of rights issues (Amendment to IAS 32), issued in October 2009. Fortights issues offered for a fixed amount of foreign currency, current practiceappears to require such issues to be accounted for as derivative liabilities. Theamendment states that if such rights are issued pro rata to all the entity's existingshareholders in the same class for a Fixed amount of currency, they should beclassified as equity regardless of the currency in which the exercise price isdenominated. The amendment should be applied for annual periods beginning on orafter 1 February 2010. Earlier application is permitted.

• "Prepayments of a minimum funding requirement" (Amendments to IFRIC 14),issued in November 2009. The amendments correct an unintended consequence ofIFRIC 14, "1 AS 19 -The limit on a defined benefit asset, minimum fundingrequirements and their interaction". Without the amendments, entities are notpermitted to recognize as an asset some voluntary prepayments for minimumfunding contributions. This was not intended when IFRIC. 14 was issued and theamendments correct the problem. The amendments are effective for annual periodsbeginning 1 January 2011. Earlier application is permitted. "The amendments shouldbe applied retrospectively to the earliest comparative period presented.

• IFRIC 19, "Extinguishing financial liabilities with equity instruments". Thisclarifies the requirements of I FRSs when an entity renegotiates the terms of afinancial liability with its creditor and the creditor agrees to accept the entitysshares or other equity instruments to settle the financial liability fully or partially.The interpretation is effective for annual periods beginning on or after 1 July 2010.Earlier application is permitted.

• Improvements to International Financial Reporting Standards 2010 were issued inMay 2010. The effective dates van' standard by standard but most are effective 1July 2010.

2.4 Foreign currency translation

Foreign currency transactions are translated into the functional currency using theexchange rates prevailing at the dates of the transactions. Foreign exchange gains andlosses resulting from the settlement of such transactions and from the re-measurement ofmonetary items at year-end exchange rates are recognized in profit or loss. Non-monetaryitems measured at historical cost are translated using the exchange rates at the date of thetransaction (not retranslated). Non-monetary items measured at fair value are translatedusing the exchange rates at the date when fair value was determined.

11


!!!i 2 ACCOUNTING POLICIES (CONTINUED)

2.5 Property, plant and equipment

Property, plant and equipment existing as at 1 January 2005 are stated at deemed cost lessaccumulated depreciation and impairment, if any, whereas items of property, plant andequipment purchased subsequent to 1 January. 2005 are stated at cost less accumulateddepreciation and impairment, if any. Deemed cost represents revalued cost of items ofproperty, plant and equipment determined based on the valuation performed byindependent authorized appraisers at 1 January 2005 the date of Company's incorporation asa joint stock company (CSC).Subsequent costs are included in the assets carrying amount or are recognized as a separateasset, as appropriate, only when it is probable that future economic benefits associatedwith the item will flow to the Company and the cost of the item can be measured reliable.All other repairs and maintenance are charged to the income statement during the financialperiod in which they are incurred.

Land is carried at deemed cost and is not depreciated.Depreciation is charged on a straight-line basis at prescribed rates in order to allocate therevalued cost of property. plant and equipment over their useful lives. In determining thedepreciated replacement cost as at 1 January 2005 each asset was assigned a remaininguseful life and is being depreciated over the revised estimated life.

The following are approximations of the annual depreciation rates applied to significantitems of property, plant and equipment acquired after January 2005:

Land improvements 5-25%Buildings 5%Machinery and equipment 15-25%Apartments 5%Leasehold improvements 5-25%

Assets in construction were brought into the opening balance sheet at 01 January 2005 atcost less impairment and are to be depreciated from the time the assets are completed orready to use.

Assets that are subject to depreciation are reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount may not be recoverable. Anasset's carrying amount is written down immediately to its recoverable amount if the asset'scarrying amount is greater than its estimated recoverable amount. The recoverable amountis the higher of the assets fair value less costs to sell and value in use.

Gains and losses on disposals are determined by comparing proceeds with carrying amount.These are included in the income statement.

On April 2011 net assets of Euro 35,575 thousand were transferred to consortium LimakAerport de Lyon.

2.6 Leasehold improvements

The Company does not hold legal title to certain major assets, such as the runways,taxiways and aprons. The Company has invested significant amounts in the maintenance ofthese facilities and plans to invest significant amounts in the future. The expenditure todate is classified as leasehold improvements and is stated at depreciated replacement costremaining useful life assigned at 1 January 2005. The leasehold improvements subsequent tothis date are being depreciated at 5-25%, on a straight line basis.

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PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011_


2.7 Intangible assets

Intangible assets, which comprise of software licenses, arc stated at depredatedreplacement cost less impairment. These costs are amortized on a straight-line basis overtheir estimated remaining useful lives. The annual amortization rates used for intangibleacquired after 1 January 2005 are 11% to 20%.

2.8 Impairment of non - financial assets

Property, plant and equipment are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be recoverable.Whenever the carrying amount of an asset exceeds its recoverable amount, an impairmentloss is recognized in income. The recoverable amount is the higher of an asset's net sellingprice and value in use. The net selling price is the amount obtainable from the sale of anasset in an arm's length transaction while value in use is the present value of estimatedfuture cash flows expected to arise from the continuing use of an asset and from itsdisposal at the end of its useful Life. Recoverable amounts are estimated for individualassets or, if it is not possible, for the cash-generating unit.

2.9 Financial assets

The Company classifies its financial assets in the following categories: financial assets atfair value through profit and loss, loans and receivables and available for sale financialassets. Management determines the classification of its investments at initial recognition.

Financial assets at fair value through profit or lossThis category of financial assets consists of securities held for trading. A financial assetis classified as available for sale if it is acquired or incurred principally for the purpose ofgenerating profit through short-term fluctuations in the price or if it is included in theportfolio for which a short term actual form of profit gain exists. The Company has noassets classified in this category.

Available for saleAvailable for sale investments are those in tended to be held for an indefinite period oftime, which may be sold in response to needs for liquidity or changes in interest rates,exchange rates or equip prices. The Company has no assets classified in this category.

Loans and receivablesLoans and receivables are non derivative financial assets with fixed or determinablepayments that are not quoted in an active market. They arise when the Company providesmoney or services directly to a debtor with no intention of trading the receivable.

Held to maturity financial assetsHeld to maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturities that the Company's management has the positive intentionand ability to hold to maturity. Were the Company to sell other than an insignificantamount of held to maturity assets, the entire category would be tainted and reclassified asavailable for sale. The Company has no assets classified in this category.

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PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011. _


2.9 Financial instruments (Continued)

Initial recognition of the financial assets recognizedFinancial assets are on trade date the date on which the Company commits to purchase orsell the asset. All financial assets different from the financial assets carried at fair valuethrough profit and loss are initially recognized at fair value plus transaction costs. Financialassets carried at fair value through profit and loss art initially recognized at fair value, andtransaction costs are expensed in the income statement.

Financial assets are derecognized when the rights to receive cash flows from the financialassets have expired or where the Company has transferred substantially all risks andrewards of ownership. Financial liabilities are derecognized when they are extinguishedthat is, when the obligation is discharged, cancelled or expired.

Subsequent measurement of the financial assetsFinancial assets at fair value through profit or loss are subsequently carried at fair valuebased on their market price. Available-for-sale financial assets are subsequently carried atfair value. Loans and receivables are carried at amortized cost using the effective interestmethod. Gains and losses arising from changes in the fair value of available-for-salefinancial assets are recognized directly in equity, until the financial asset is derecognized orimpaired at which time the cumulative gain or toss previously recognized in equity shouldbe recognized in profit or loss. However, interest calculated using the effective interestmethod and foreign currency gains and losses on monetary assets classified as available forsale are recognized in the income statement. Dividends on available-for-sale equityinstruments are recognized in the income statement when the entity's right to receivepayment is established.

The fair values of quoted investments in active markets are based on current bid prices. Ifthe marker for a financial asset is not active (and for unlisted securitiesi, the Companyestablishes fair value by using valuation techniques commonly used by market participants.

Impairment of financial assetsFinancial assets, other than those at fair value through profit or loss, are assessed forindicators of impairment at each balance sheet date. Financial assets are impaired wherethere is objective evidence that, as a result of one or more events that occurred after theinitial recognition of the financial asset, the estimated future cash flows of the financialasset have been impacted.

For financial assets carried at amortized cost, the amount of the impairment is thedifference between the asset's carrying amount and the present value of estimated futurecash flows, discounted at the original effective interest rate. The carrying amount of thefinancial asset is reduced by the impairment loss directly for all financial assets with theexception of trade and other receivables where the carrying amount is reduced through theuse of an allowance account.

With the exception of available for sale equity instruments, if, in a subsequent period, theamount of the impairment loss decreases and the decrease can be related objectively to anevent occurring after the impairment was recognized, the previously recognizedimpairment loss is reversed through profit or loss to the extent that the carrying amount ofthe financial asset at the date the impairment is reversed does not exceed what theamortized cost would have been had the impairment not been recognized. In respect ofavailable-for-sale equity securities, any increase in fair value subsequent to an impairmentloss is recognized directly in equity.

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PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011_

2. ACCOUNTING POLICIES (CONTINUED)

2.10 Inventories

Material, spare parts and consumables are stated at lower of cost and net realizable value.Net realizable value is the estimated selling price in the ordinary course of the business,less applicable variable selling expenses. Cost of supplies and spare parts are determinedusing the weighted average method and includes expenditure incurred in acquiring theinventories and bringing them to their existing location and condition. On April 2011inventories of Euro 432 thousand were transferred to Limak.

2.11 Trade and other receivables

Trade receivables are recognized initially at fair value and subsequently measured atamortized cost using the effective interest method, less provision for impairment. Aprovision for impairment of trade receivables is established when there is objectiveevidence that the group wilt not be able to collect all amounts due according to the originalterms of the receivables. Significant financial difficulties of the debtor, probability that thedebtor will enter bankruptcy or financial reorganization, and default or delinquency inpayments are considered indicators that the trade receivable is impaired.

The amount of the provision is the difference between the assets carrying amount and thepresent value of estimated future cash flows, discounted at the original effective interestrate. Assets with a short maturity are not discounted. The carrying amount of the asset isreduced through the use of an allowance account, and the amount of the loss is recognizedin the Income statement. When a trade receivable is uncollectible, it is written off againstthe allowance account for trade receivables. Subsequent recoveries of amounts previouslywritten off are recognized as current income in the income statement.

2.12 Cash and cash equivalents

Cash and cash equivalents compromise cash on hand and deposits with banks. For cash flowstatement, cash and cash equivalents comprise cash on hand and unrestricted deposits atbanks with maturity period of three months or less.

2.13 Equity, reserves, retained earnings and dividend payments

Shareholders capitalShare capital represents the nominal value of shares that have been issued.

Share issue costsIncremental costs directly attributable to the issue of new shares or options or to theacquisition of a business are shown in equity as a deduction, net of tax, from the proceeds.

Treasury sharesWhere the Company purchases equity share capital, the consideration paid is deductedfrom total shareholders' equity as treasury shares until they are cancelled. Where suchshares are subsequently sold or reissued, any consideration received is included inshareholders' equity.

ReservesReserves, which comprise of revaluation, statutory and reserves for treasury shares aregenerated throughout the period, based on gains/losses from revaluing tangible assets andavailable for sale financial assets in the case of revaluated reserves, as well as distributingaccumulated gains based on legal regulation and decisions by the Company's managementand dividends distribution.

Retained earningsRetained earnings comprise of non-distributed earnings from the current and past periods.

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PRISHT1NA INTERNATIONAL AIRPORT "ADEM JASHAR1" J.S.C.I Notes to the financial statements for the year ended December 31, 2011


2.14 Trade payables

Trade payables are carried at their fair value and subsequently measured at their amortizedcost by applying the effective interest rate method.

2.15 Employee benefits

The Company, in the normal course of its business, makes payments on its overt behalf andon behalf of its employees to contribute to the mandatory pensions according to the locallegislation. The costs incurred on behalf of the Company are charged to Income Statement.There is no additional liability regarding these plans and thus such schemes are consideredas defined contribution plans. The Company has no post retirement benefits to itsemployees.

2.16 Current and deferred income tax

Income tax expense represents the sun of the tax currently payable and deferred tax.

The tax currently payable is calculated and paid in accordance with Income Corporate LawNo 03/L-162 entered into force commencing on 1 January 2010. Final taxes on profit at arate of 10% are payable based on the annual profit shown in the statutory statement ofincome as adjusted for items, which are non-assessable or disallowed. According to the

, current tax legislation, tax tosses may be carried forward within a period seven yearsfollowing the year in which the tax toss was incurred.

Deferred income tax is provided in full, using the liability method, on temporary differencesarising between the tax base assets and liabilities and their carrying values of financialreporting purposes. Currently enacted tax rates are used in determination of deferredincome tax. Deferred tax is charged or credited in the income statement except when

, it relates to items charged or credited directly to equity, in which case the deferred tax isI also dealt with in equity.

Deferred tax assets are recognized to the extent that it is probable that future taxableprofit will be available against which the temporary differences can he utilized.

2.17 Provisions

A provision is recognized when the Company has a present obligation as a result of pastevent and it is probable that an outflow of resources embodying economic benefits will berequired to settle the obligation, and a reliable estimate can be made of the amount of theobligation. Provisions arc reviewed at each balance sheet date and adjusted to reflect thecurrent best estimate. Where the effect of the time value of money is material, the amountof provision is the present value of the expenditures expected to be required to settle theobligation.

2.18 Revenues and expenses recognition

Revenue is recognized when it is probable that future economic benefits will flow to theCompany and these benefits can be measured reliably. Sates of services are recognized inthe accounting period in which the services are rendered.

Operating expenses are recognized in the income statement upon utilization of the serviceor at the date of the origin.

16

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI” J.S.C.Notes to the financial statements for the year ended December 31, 2011

2. ACCOUNTING POLICIES (CONTINUED)

2.19 Transactions with related parties

Related parties are defined as those parties which have control over each other or have aninfluence on the financial and operational decisions of each other.

2.20 Subsequent events

Post year end events that provide additional information about a company's position at thebalance sheet date (adjusting events) are reflected in the financial statements. Post yearend events that are not adjusting events are disclosed in the notes when material.

3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Company's activities expose it to a variety of financial risks, including market risk,credit risk and liquidity risk. The Company's risk management focuses on unpredictability ofmarkets and seeks to minimize potential adverse effects over the Group's businessperformance.

Risk management is carried out by the Board of Directors based on certain pre - approvedwritten policies and procedures that cover overall risk management, as well as specificareas, such as foreign exchange risk, interest rate risk, credit risk, use of appropriatesecurities and investing excess liquidity.

3.2 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 Company's income or the value of itsholdings of financial instruments, The objective of market risk management is to manageand control market risk exposures within acceptable parameters, while optimizing thereturn.

Currency riskIn general, the Company is not exposed to currency risk since the majority of its sales,purchases and borrowings are denominated in Euro.

Interest rate riskThe Company is exposed to interest rate risk through its borrowings having variable interestrate (linked with EURIBOR).

r Cash flow and fair value interest rate risk; The Company takes on exposure to effects of fluctuations in the prevailing levels of market

interest rates on its financial position and cash flows. The Company's management isprimarily responsible for daily monitoring of the net interest rate risk position and it setslimits to reduce the potential of interest rate mismatch. Fluctuations in market interestrates under which, the funds are borrowed could have adverse effect over the Company'sfinancial performance there is no interest bearing funds borrowed from local and foreignfinancial institutions at the financial position date. At the same time, the Corripany has nosignificant placements of its assets in time deposits and highly liquid securities, bearingadditional interest income.

17

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI"Notes to the financial statements for the year ended December 31, 2011

3 FINANCIAL RISK MANAGEMENT (CONTINUED)

3.3 Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to afinancial instrument fails to meet its contractual obligations, and arises principally from theCompany's receivables from customers and investment securities.

Trade receivablesThe Company has no significant concentration of credit risk. The Company has policies inplace to ensure that sales of goods and services are made to customers with an appropriatecredit history. The Company has policies that limit the amount of credit exposure to anycounter party. The Company's maximum exposure to credit risk is represented by thecarrying amount of each financial asset in the balance sheet.

The Company establishes an allowance for impairment that represents its estimate ofincurred losses in respect of trade and other receivables and investments. The maincomponents of this allowance are a specific loss component that relates to individuallysignificant exposures, and a collective loss component established for Companies of similarassets in respect of losses that have been incurred but not yet identified. The collective lossallowance is determined based upon the aged structure of the receivables balance andapplying certain percentages over the pre - determined age categories.

InvestmentsThe Company limits its exposure to credit risk by only investing in bank deposits withmaturity less than three months.

Credit risk analysisThe Company's maximum exposure to credit risk is limited to the carrying amount offinancial assets recognized at the reporting date, as summarized below (in I Euro thousand

2011 2010

Trade and other receivables 4,153 2,818Cash and cash equivalents 6,015 11,317

10,168 14,135

The credit risk for cash and cash equivalents is considered negligible, since thecounterparties are reputable banks.

3.4 Liquidity risk

• The Company manages its liquidity needs by carefully monitoring scheduled debt servicingpayments for long-term financial liabilities as well as forecast cash inflows and outflows duein day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified monthly. Netcash requirement are compared to available borrowing facilities in order to determineheadroom or any shortfalls. This analysis shows if available borrowing facilities areexpected to be sufficient over the lookout period.

The Company maintains cash to meet its liquidity requirements for 30-day periods at aminimum. Funding for long-term liquidity needs is additionally secured by an adequateamount of committed credit facilities and the ability to sell long-term financial assets

18


3 FINANCIAL RISK MANAGEMENT (CONTINUED)

3.5 Capital management policies and procedures

The Company's objectives when managing capital are to safeguard the Company's ability tocontinue as a going concern in order to provide returns for shareholders and benefits forother stakeholders and to maintain an optimal capital structure to reduce the cost ofcapital.

In order to maintain or adjust the capital structure, the Company may adjust the amount ofdividends paid to shareholders, return capital to shareholders, issue new shares or sellassets to reduce debt,

3.6 Fair value estimation

The fair value of financial assets, such as available for sale securities that are traded inactive markets is based on quoted market prices, which are current bid prices. The fairvalue of financial assets that are not traded in an active market is determined usingassumptions based on market conditions existing at each balance sheet date. The nominalvalue less estimated credit adjustments of trade receivables and payables are assumed toapproximate their fair values.

3.7 Financial instruments by categories

The carrying amounts of the Company's financial assets and liabilities as recognized at thebalance sheet date of the reporting periods under review may also be categorized asfollows:


(in EUR 000)

As atDecember

1, 20103(in EUR 000)

Financial assets

- Trade and other receivables 4,153 2,818- Cash and cash equivalents 6,01,5 11,317

Total 10,168 14,135

Financial liabilities- Trade and other liabilities 895 I 1 31Total 895 1.131

Trade and other receivables and payables

; Nominal value, less provision for impairment of trade and financial receivables, as well as, nominal value of trade liabilities are assumed to approximate their fain values due to

their short-term nature.

19

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI"Notes to the financial statements for the year ended December 31, 2011

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Company's accounting policies, which are described in Note 2,management is required to make judgments, estimates and assumptions about the carryingamounts of assets and liabilities that are not readily apparent from other sources. Theestimates and associated assumptions are based on historical experience and other factorsthat are considered to be relevant. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimate is revised if therevision affects only that period or in the period of the revision and future periods if therevision affects both current and future periods.

4.1 Estimation of uncertainty

Impairment of non- financial assetsImpairment losses are recognized in the amount for which the carrying value of the asset orthe cash generating unit -exceeds the recoverable amount. When determining therecoverable amount, the Management evaluates expected prices and cash flows from eachcash generating unit and determines an appropriate interest rate when calculating thepresent value of such cash flows.

4L2 Impairment of financial assets

Impairment of trade and other receivablesCompany calculates impairment of trade and other receivables based on estimated lossesresulting from the inability of customers to settle their obligations. The estimation is basedon the aging of account receivables balance and historical write-off experience, customercredit-worthiness and changes in customer payment terms when evaluating the adequacy ofthe impairment loss for doubtful accounts. These involve assumptions about futurecustomer behavior and the resulting future cash proceeds. If the financial condition ofcustomers were to deteriorate, actual write-offs of currently existing receivables may behigher than expected and may exceed the level of the impairment losses recognized so far.

Useful life of depreciated assetsManagement regularly reviews the useful lives of amortized assets as at 31 December 2011.Management estimates that the determined useful life of assets represents the expectedusefulness (utility) of assets. The carrying values of such assets are analyzed in Note 5 and6. However, the factual results may differ due to the technological obsoleteness, especiallyin the IT equipment and software segment.

InventoriesInventories are measured at the lower of cost and net realizable value. In estimating netrealizable values, management takes into account the most reliable evidence available atthe times the estimates are made.

20

11J(0,13‘PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011

L.,.! j J

LandLand

improvements BuildingsMachinery and

equipment ApartmentsConstructionin progress

Leaseholdimprovements Total

COST (EUR 000) (EUR 000) (EUR 000) (EUR 000) (EUR 000) (EUR 000) (EUR 000) (EUR 000)As at January 1, 2010 7.225 14,296 5,768 21,498 1,162 1,611 1,693 53,253Additions during the year 460 162 50 2,679 6 3,357Reconciliation (4) (141) (145)Transfers 27 38 (65)As at December 31, 2010 7,685 14,458 5,841 24,074 1,162 1,552 1,693 56,465

As at January 1, 2011 7,685 14,458 5,841 24,074 1.162 1,552 1.693 56.465Additions during the year 787 63 723 1,573Transfers to Limak (7,720) (14,438) (5,529) (17,544) (1,523) (1,693) (48,447)As at December 31, 201 752 20 375 7,253 1,162 29 9,591

DEPRECIATIONAs at January 1, 2010 1,076 1,202 9,405 290 723 12,696ReconciliationDepreciation for the year

(70)718

,359

532,960 58 65

(17)4,160

As at December 31, 2010 1,724 1,561 12,418 348 788 16,839

As at January 1, 7011 1,724 1.561 12,418 348 788 16,839Elimination on transfer ofassets (1,718) (1,559) (8,943) (788) (13,008)Depreciation for the year 1 113 1,505 58 1,677As at December 31, 2011 7 115 4,980 406 - 5,508

NET CARRYING VALUEAs at December 31, 2011 752 13 260 2,273 756 29 4,083As at December 31, 2010 7,685 12,734 4,280 11,656 814 1,552 905 39,626

On April 2011 net assets of Euro 35.575 thousand were transferred to consortium Limak Aerport de Lyon.

21

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" ,J.S.C,1 Notes to the financial statements for the year ended December 31, 2011

6 INTANGIBLE ASSETS

Software Total

COST (EUR 000) (EUR 000)As at January 1, 2010 426 426Additions during the year

Mat December 31, 2010 426 426

As at January 1, 2011 426 426Transfer to Limak (291) 1291)Additions during the year -

As at December 31, 2011 135 135

AMORTIZATIONAs at January 1, 2010 193 193Amortization for the year 60 60

As at December 31, 2010 253 253

As at January 1, 2011 253 253Elimination on transfer of assets 1155) (155)Amortization for the year 11 11

As at December 31, 2011 109 109

NET CARRYING VALUE

As at December 31, 2011

26 26

As at December 31, 2010

173 173

7 INVENTORIESAs at December As at December

31, 2011 31, 2010

(in EUR 000) (in EUR 000)MET Equipment spare parts 69 585De-Icing liquid and solids 252Fuel 53Spare parts for equipment and IT 23Helium, gas, foam and powder 2Other 33_Total inventories 69 948

On April 2011 inventories of Euro 432 thousand were transferred to Limak.

22


' 8 TRADE AND OTHER RECEIVABLESAs at December As at December

31, 2011 31, 2010(in EUR 000) (in EUR 000)

Trade receivables 1,698 3,446

Less: impairment provision (628) 1628)

1,070 2,818

VAT receivables 801 391

Prepaid income tax 423 325

1 Other receivables 1,859 452

r; 3,083 1,168

4,153 3,986

At 31 December 2011 and 2010 the age structure of trade receivables is as follows:

As at December31, 2011

(in EUR 000)


(in EUR 000)

Undue 188 1,891Up to 30 days 220 446

From 1-3 months 167 339From 3-6 months 379 770From 6-12 months 501Over 1 year 243Total 1,698 3,446Provision for impairment (628) (628)

Total 1,070 2,818

At 31 December 2011 and 2010 the credit quality of the company's trade receivables canbe analyzed as follows:

2011

Neither pastdue norimpaired

Past due butnot

impaired Impaired Total

Cost 407 663 628 1,698Provision for impairment (628) (628)

Total 407 663 1,070

2010Cost 2,337 481 628 3,446Provision for impairment (628) (6281

1 Total 2,337 481 2,818

23


8 TRADE AND OTHER RECEIVABLES (CONTINUED)

The movement in the impairment provision account is as follows:

As at December As at December31, 2011 31, 2010

(in EUR 000) (in EUR 000)

Balance 1 January 628

667Recoveries (2641Charge for the year 225

Balance as of 31 December

628

628

• 9 CASH ON HAND AND AT BANKSAs at December As at December

31, 2011 31, 2010(in EUR 000) (in EUR 000)

Current accounts 5,892 11,096Airline deposit guarantee account 122 221

6,014 11,317, I Cash on hand 1 2

I Total cash on hand and at banks 6,015 11,319

10. EQUITY

; Share capital

The charter Capital of the Company amounts to Euro 12,726 thousand reduced from itsregistered capital of 18,000 due to the agreement on Public Private Partnerships andconcessions in infrastructure and the procedures for their award, the shareholder of the

, Company Government of Republic of Kosovo has signed an Agreement with consortium LimaklAerport de Lyon to donation a concession for operating Pnshtina International Airport for aperiod of 20 years where transfer of the assets has been done. On April 2011 net fixed assetsof Euro 35,575 thousand, inventories of Euro 432 thousand and 609 employees weretransferred to consortium Limak Aerport de Lyon.

Share premiumd Share premium of EUR 17,274 thousand as of 31 December 2010 which have been initiallyI accounted for in the Company's books as difference between the registered share capitaland the value of Company's net assets as determined by independent valuation at the dateof its incorporation, as of 31 December 2011 has been reduced to Euro 179 thousand toreflect the impact of the transfer of the assets to Limak,

DividendsDuring 2011 the Company has declared in accordance with Decision from Board of Directorsand fully Paid to the shareholders dividends in amount of Euro 5,000 thousand.

24

, PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.

1 Notes to the financial statements for the year ended December 31, 2011

_ _

11 TRADE AND OTHER PAYABLESAs at December

31, 2011(in EUR 000)

Trade payables 467

Customer deposits

122

Employees taxes and pension payables

Accrued LiabilityProvision for litigations

165

Retention money from suppliers

123

Deferred rent incomePayable to I(CAOther

18


(in EUR 000)

1,131

221

218174164

122

868

15

895

2,139

r—

12 SALES REVENUESYear ended

December 31,2011

(in EUR 000)


2010(in EUR 000)

Passenger feesHandling feesApproach feeLanding feesMilitary trafficCargo

3,1421,9111,826

9658972

11,791

4,287415311

7,728

8,005 24,532

13 OTHER OPERATING INCOME

Duty free shop salesRecovery of provided for bad debts

Other income


2011(in EUR 000)

56

661

717


2010(in EUR 000)

184264

2,694

3,142

T- 7

25

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.1Notes to the financial statements for the year ended December 31, 2011

14

OPERATING COSTS

' Year endedDecember 31,

,, 2011(in EUR 000)

,


2010in EUR 000)

Staff costs 4,217 10,162

Depreciation and amortization 1,688 4,220'CA Regulatory office 306 1,912

Insurance and perimeter security 317 309

' IT 240 4181, p Fuel 234 424'i Electricity 193 288

IF De-icing liquids and solid 182 307

, Training 182 664

' Advertisement and marketing expenses 176 706

' Maintenance and equipment 169 211

'Other supplies and spare parts 142 370

1Traveling 105 102

' Restaurant and bar supplies 68 267

' Telephone and communication 56 112,, Property tax 42 278

Consultancy costs 3 121,Provision for doubtful receivables and legal cases 225

't Uniforms 50

; Other 80 117, 8,400 .. 21,263,

, 15 FINANCIAL RESULT, NET,,'


2011(in EUR 000)


2010(in EUR 000)

IncomeInterest income 236 390

236 390

CostsBank charges 5 13

5 13

231 377

:41

•

26

1PRISFITINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011

16 INCOME TAXYear ended Year ended

December 31, December2011 31, 2010

(in EUR 000) (in EUR 000)

Deferred tax expense 58 56

Current tax expense 99 554

157 610

, Following is the reconciliation of the total income tax expense to the profit as per incomestatement for the year ended 31 December 2011 and 2010:

2011 2010

Net profit before income tax 553 6,778,'Tax at statutory income tax rate 10%d Adjusted for:4

67855

, Tax effect on income and expense not deductablefor tax purposes 133 9

; Withholding taxes (31) (77)

Income tax for the year 157 610

Movement of temporary differences during 2011 and 2010 is as follows:

2011 2010

As at 1 January 1 161 105Recognized in profit and loss of the year 58 56

As at 31 December 219 161

17 RELATED PARTIES

Related parties consist of shareholders, board of directors of the Company, together withentities which they control or who can exert significant influence over the operations andmanagement of the Company.

Since November 1999 UNMIK has assumed overall financial and strategic management ofthe enterprise. During 2000, UNMTK enacted the regulation for establishment of KTA,further on 13 June 2008, the Assembly of the Republic of Kosovo approved the Law onpublicly owned enterprises (Law No.03/1.-087), and based on provision of section 3 of thisLaw, Central publicly owned Enterprises including PIA JSC are declared to be assets of theRepublic of Kosovo.

Government of the Republic of Kosovo has through the Ministry of Economy and Finance theexclusive authority to exercise the shareholder rights over the publicly owned Enterpriseswhich took over the responsibility for administration of the airport.

Compensation of the key management 2011 2010Short term benefits 124 175Contribution to Kosovo pension fund 6 18

130 193

27

28

. 1

PRISHTINA INTERNATIONAL AIRPORT "ADEM JASHARI" J.S.C.Notes to the financial statements for the year ended December 31, 2011_18 PENSION PLANS

The Company does not operate any defined contribution plans or share-based remunerationOptions as of 31 December 2011. The management believes that the present Value of thefuture obligations to employees with respect to retirement and other benefits and awardsare not material to these financial statements as of 31 December 2011.

19 COMMITMENTS AND CONTINGENCIES

Tax liabilitiesCompany's books and records are being audited but there is no report issued yet by thedate of this report by the Tax Administration of Kosovo for 2011. Therefore, the Company'stax liabilities may not be considered finalized. A provision for additional taxes andpenalties, if any, that may be levied, at this stage, cannot be determined with anyreasonable accuracy.

Legal proceedingsThe project for building of perimeter fence and the new road to the Airport has given riseto pending and potential legal cases for expropriation of the land by Company.

.1Capital commitmentsThere are no significant capital commitments contracted at the balance sheet date thatare not already recognized in the financial statements.

20 SUBSEQUENT EVENTS

The Government of Kosovo is planning to transform the Company in to Agency for AirNavigation Service which is expected to happen during this year, the first initial readingof the taw on creation of the Agency has passed by Kosova Parliament in 13 January 2012.

After December 31, 2011 and the reporting date until the approval of these financialrePorts, there are no adjusting events reflected in the financial statements or events thatare materially significant for disclosure in these financial statements.

prishtina international airport adem jashari … · mr. bahri nuredini mr. valon grabovci ......

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